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Oral Answers to Questions
(6 years ago)
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Kevin Hollinrake (Thirsk and Malton) (Con)
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Richard Graham (Gloucester) (Con)
The Minister for Energy and Clean Growth (Claire Perry)
The Government and my Department remain enthusiastic about the role of solar generation and its role in decarbonisng power in the UK. However, as the market matures and installation is now possible without Government subsidy, we believe that it is the right time to close the feed-in tariff scheme. We already have 13 GW of solar capacity supported under current schemes. Indeed, at one point in May this year, solar provided more power generation than any other source.
Kevin Hollinrake
Rooftop solar is set to lose support from the feed-in tariff and the export tariff, which help to pay for clean power to the grid. Does my right hon. Friend agree that householders should expect some form of payment rather than simply subsidising large energy companies?
Claire Perry
My hon. Friend will know that the FIT scheme has been a huge success, supporting over 800,000 installations nationally, including almost 3,000 in his constituency. It has cost consumers over £4.5 billion to date and is scheduled to cost more than £2 billion a year for at least the next decade. It is therefore right that we consider a new scheme, as the cost has fallen. However, I do completely agree that solar power should not be provided to the grid for free, and that is why I will shortly be announcing the next steps for small-scale renewables.
Mr Speaker
I call Daniel Kawczynski. He is not here. Mr Richard Graham. Not here. I hope that neither of the Members concerned is indisposed. It is most unlike them not to be present, but they were informed of the grouping, I am sure, by the Government. [Interruption.] Okay—thank you. Well, never mind—they are not here and we cannot take them, but other Members are here, and we are delighted to see it. Mr David Hanson.
David Hanson (Delyn) (Lab)
Thank you, Mr Speaker.
The number of installations under solar has fallen by 90% in the past two years. Taking up the point made by the hon. Member for Thirsk and Malton (Kevin Hollinrake), what steps is the Minister taking to ensure, first, that providers are still in place next year to continue to grow this sector; and secondly, that customers are not subsidising large energy companies?
Claire Perry
The good news, as I mentioned, is that we have moved from a position of heavy—very expensive—subsidy for many of these small-scale schemes. Because the cost of solar installations has dropped by more than two thirds, we think it is right to change that. I am sure the right hon. Gentleman will be pleased to welcome the news that a string of private sector subsidy-free solar funds is set to open this year, particularly with business premises now taking advantage of the benefits that solar can provide in balancing their own systems. We are going through that transition with the expectation that we will see more solar deployed next year than we have previously.
Mr Philip Hollobone (Kettering) (Con)
If we are really serious about rooftop solar, why do we not insist that it is fitted on all new build properties?
Claire Perry
My hon. Friend is a doughty campaigner for all forms of renewable energy in Kettering, and he is right. There are many ways to bring forward better low-carbon generation—but, equally, better energy efficiency measures—in new builds. We have set out plans under the clean growth strategy to try to achieve those ends, and I am looking forward to delivering them.
Sir Edward Davey (Kingston and Surbiton) (LD)
I invite the Minister to be far more ambitious for rooftop solar as PV prices continue to fall and as batteries to store surplus solar power become ever more competitively priced. The opportunity for many homes to become their own power station has arrived. Should we not therefore be planning and encouraging such an exciting outcome?
Claire Perry
I pay tribute to the right hon. Gentleman, whose activities in coalition contributed to a boom in some of the cheapest forms of renewable energy, including offshore wind. We are now able to generate over 30% of our energy supply from renewables, which is much cheaper than putting it on individual rooftops. He raises a really important point. As our energy system migrates to a much more decentralised, much more intelligent system—helped, I might add, by the roll-out of smart meters—there is real value in that micro-generation, and that is what I am hoping to support when I bring proposals to the House shortly.
Mr Speaker
It is very heartwarming to see that the hon. Member for Gloucester (Richard Graham) has now beetled into the Chamber. I am sure that the House and an expectant nation wish to hear him.
Richard Graham
I am very grateful, Mr Speaker.
I think my right hon. Friend the Minister, who has done a lot to support renewable energy, may have covered my key point. However, does she agree that there are hundreds of churches, schools, local authorities and co-operative groups around the country, not least in my own constituency of Gloucester, that will benefit hugely from her announcement of what will replace the current system, and that it would be totally wrong for energy companies to benefit from free energy were there not to be a replacement system?
Claire Perry
I hope my hon. Friend caught my point that I agree it would be wrong to have power provided to the grid for free. In his constituency, there are now more than 1,300 feed-in tariff installations, and he should be proud of that. He is right; there are many such organisations. I was lucky to meet a group of people from all different faiths who were really committed to a zero-carbon future in many places of worship. That is happening right across the country. There is value in that, and we want to see it continue.
Carol Monaghan (Glasgow North West) (SNP)
Scotland is the home of energy innovation, and a lot of that is down to EU funding for the innovation and research that is taking place. What steps will the Minister take to ensure that funding for the Scottish renewables sector is protected after Brexit?
Claire Perry
I encourage the hon. Lady to move away from defining success as the amount of subsidy that renewable energy receives. In fact, thanks to incredible policy work and innovation by the suppliers, Scotland, like other areas, has benefited from a rapid decline in energy costs. We will continue to invest in clean growth—more than £2.5 billion over the course of this Parliament—and we will all benefit from those jobs and the renewable energy that those installations provide.
Mr Speaker
Before I call the shadow Minister, I know the House will want to join me in welcoming Speaker Elisabetta Casellati of the Italian Senate—a distinguished parliamentarian and the first female holder of that office. Madam Speaker, we wish you and your colleagues well on this visit and in all the important work that you do.
Dr Alan Whitehead (Southampton, Test) (Lab)
The Government say in their clean growth plan—indeed, the Minister has said it this morning—that they want to see more people investing in solar without Government support. I cannot think of a better way to discourage people who might be thinking of investing in solar than telling them that they will be expected to give away to the national grid half the electricity they generate from their investment. When we talk about the export tariff, we are not talking about a subsidy; we are talking about a payment for goods supplied. The Minister has elided the feed-in tariff and the export tariff. Can she just accept that she has messed things up on this occasion, call off talk of removing the export tariff and get on with using that tariff to support future subsidy-free solar investment?
Claire Perry
I am invited to say buongiorno to our visitor in the Gallery.
The hon. Gentleman and I are, as in many cases, in violent agreement. We signalled clearly several years ago the closure of this scheme. It is a very expensive scheme; it was going to cost £2 billion a year for decades to come to bring forward microgeneration. We now have much more energy-efficient and cost-effective ways of generating renewables. As I said, I absolutely agree that people who have gone through the installation process should not be captive takers, should someone want to buy their energy. I look forward to announcing further deliberations on this shortly.
Trudy Harrison (Copeland) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Government believe that nuclear power has an important role to play in our energy system as part of a diverse range of low-carbon technologies. Our intent is clearly visible in the form of Hinkley Point C—the first new nuclear power station to be built in this country in a generation—as well as in the launch in June of our landmark nuclear sector deal at Trawsfynydd.
Trudy Harrison
I thank the Secretary of State for his response. It is reassuring to me to understand this Government’s commitment to new nuclear, but with Toshiba’s recent decision to wind down NuGen, can he assure me that he will meet any developer who is interested in building their reactors at Moorside in Copeland?
Greg Clark
I can indeed give that assurance to my hon. Friend, who is a great champion of one of the bastions of skills and innovation in the nuclear sector in this country. The circumstances behind Toshiba’s wind-down of NuGen are well known—it was because of the move to chapter 11 bankruptcy of its subsidiary—but that site is now available for other investors.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The future of nuclear power is not just about building reactors; it is about having people with the skills to work in those reactors as well. As we have a skills gap in defence nuclear, can the Secretary of State set out what actions the Government are taking to support the growth of nuclear skills in both defence nuclear and civil nuclear?
Greg Clark
I am delighted that the hon. Gentleman takes such an interest in this. He will know that the nuclear sector deal provides for training, new institutions and new apprenticeship and scholarship opportunities for nuclear engineers in both the civil and defence sectors. This is all part of an agreement across the industry with Government to ensure that the next generation of nuclear power is supported by new-generation nuclear engineers and technicians.
John Stevenson (Carlisle) (Con)
The Government were very keen to emphasise that the Toshiba-Korea Electric Power Corporation negotiations over NuGen were a commercial matter. If the Chinese nuclear company CGN—China General Nuclear Power Group—agrees to develop Moorside on a commercial basis, with no Government subsidy, would the Government support it?
Greg Clark
As my hon. Friend knows, in each case the proposals are developer-led, so it is for proponents to come forward. As I have said to our hon. Friend the Member for Copeland (Trudy Harrison), I am very happy, with my officials, to meet anyone who has an interest in doing so.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The demise of Moorside and NuGen underlines how the Government’s nuclear policy hinges on overseas investment, particularly from energy companies that are owned wholly by other states. Is the Secretary of State having a really good look at the other planned nuclear power stations to make sure that there will be enough nuclear power to maintain energy integrity in the UK in future?
Greg Clark
The answer is yes. I am grateful to the hon. Lady’s Public Accounts Committee for examining the model for financing nuclear new build. With her colleagues, she has made some helpful suggestions, which she knows we are committed to taking forward to see whether they can be viable.
Stewart Malcolm McDonald (Glasgow South) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
We are committed to ensuring all employers pay their workers correctly. As part of our enforcement strategy, Her Majesty’s Revenue and Customs targets employers with information and advice. In April 2018, we launched a £1.48 million campaign to raise awareness of the national minimum wage rules, particularly in sectors with a high risk of non-compliance. HMRC contacted over 617,000 employers prior to April 2018, reminding them of their responsibilities to pay the higher rate.
Stewart Malcolm McDonald
The Government are failing thousands of workers who are falling victim to unpaid trial shifts. The law is extremely grey, and despite my efforts to clear it up, the hon. Lady’s Government talked out my Bill. We know that the guidance the Government produce and reminding employers is not enough. As we go into this Christmas period, when this will be another employment epidemic, will she pledge to make this the last Christmas of the unpaid trial shift?
Kelly Tolhurst
Short unpaid trials as part of a genuine recruitment process can be legal. However, longer trials with no prospect of employment are illegal. Individuals working on illegal trials are workers and they are entitled to the minimum wage. I can inform the hon. Gentleman that, as per the communication I have had with him in recent months, I have indeed, with my Department, just reviewed and finalised new guidance on unpaid work trials and work experience for interns, which will be published in the next few weeks.
Stephen Kerr (Stirling) (Con)
Does the Minister agree with me that the payment of a living wage is actually in the best interests of employers because it encourages engagement, loyalty and productivity?
Kelly Tolhurst
I thank my hon. Friend for highlighting that point, and it is absolutely true. This Government are committed to increasing the rate of pay for the lowest-paid workers. I do agree with him that this of course encourages employee loyalty to employers that do so.
Ruth George (High Peak) (Lab)
Kelly Tolhurst
Let me be clear: it is illegal not to pay the national minimum wage to workers who are entitled to it. This Government have been very clear. We are looking at and currently reviewing the Taylor review recommendations—we will be implementing the majority of them—and the Government will be responding soon with what we will do.
Rachel Reeves (Leeds West) (Lab)
Following on from the question from my hon. Friend the Member for High Peak (Ruth George), last week yet another employment tribunal found in favour of workers getting the minimum wage and other workplace rights—in this instance, at Addison Lee—but too many firms continue to label workers as self-employed when they are not. When will the Government finally bring forward this long overdue legislation and—as the Taylor review, the GMB union and the Business, Energy and Industrial Strategy Committee have argued—ensure that all workers are paid the minimum wage?
Kelly Tolhurst
The hon. Lady will remember that it was this Government that set up the Taylor review. We have been very clear. We are committed to enforcement; we have doubled the enforcement budget for the national minimum wage. In fact, the arrears recovered in the last year totalled £15.6 million, affecting more than 200,000 workers. This Government are committed and we will respond in due course. We are committed to making all workplaces fair for all.
Mr Dennis Skinner (Bolsover) (Lab)
If the Minister is very keen on the national minimum wage, what is she saying to Mike Ashley, who has 3,000 workers at Shirebrook, most of them on zero-hours contracts? They do not get the national minimum wage. There are only a handful. Is it not time that this Government, instead of talking about the national minimum wage, did something about it?
Kelly Tolhurst
I say again: we are committed to enforcing on underpayments of the national minimum wage. We have doubled the enforcement budget. We are delivering for those individuals. And zero-hours contracts do not necessarily mean that there will be a breach of the national minimum wage. We are committed to delivering.
Sarah Jones (Croydon Central) (Lab)
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
The declaration on the future relationship with the EU sets out a joint ambition for zero tariffs and restrictions in goods trade, and an ambitious customs arrangement. Our industrial strategy will ensure that the UK remains one of the most competitive locations in the world for manufacturing. We have committed £140 million to the “Made Smarter” industrial digitalisation programme, which will help our manufacturing sector adopt new technologies and skills.
Sarah Jones
The Minister mentions the declaration, but of course it is seven pages long and offers no reassurance to businesses in Croydon. Recently I visited a Croydon business that is currently looking to move to Amsterdam. What more can the Government provide to ensure that that business and many more stay in the UK?
Richard Harrington
The hon. Lady’s constituency must contain businesses different from those I heard at the CBI yesterday, where the Prime Minister was applauded for precisely this approach; different from businesses in my constituency; and different from all the business leaders who have supported the Government’s proposed deal with the European Union.
Preet Kaur Gill
Manufacturing accounts for 11% of jobs in the west midlands, one of the highest percentages for any region, and the region has one of the highest shares of goods imports and exports— 47% of its goods go to the EU. Does the Minister agree that Labour’s plan for Brexit, guaranteeing a new, comprehensive and permanent customs union and a strong single market relationship that allows British business continued access to European markets for both goods and services, is the deal that UK manufacturers need to thrive?
Richard Harrington
As far as I am aware, the Society of Motor Manufacturers and Traders and the EEF, the manufacturers’ organisation, and all other organisations representing those industries in the midlands, in the hon. Lady’s constituency and surrounding constituencies, are very much in support of the Government’s policy for frictionless trade in the future.
Mark Pawsey (Rugby) (Con)
The Secretary of State is aware of the threat to 190 skilled engineering jobs at GE Energy in Rugby. This has nothing to do with Brexit; rather, it is to do with a downturn in activity of the company’s traditional base. What advice can the Minister provide to the workforce and the local management team to secure this manufacturing activity in Rugby?
Richard Harrington
As ever, my hon. Friend is fully in support of so many businesses in his constituency. As he knows, my door is open to him and the company, to discuss any possibilities of helping them. I have seen many very good businesses in his constituency and I am excited about the prospects there for high-quality employment for his constituents.
Philip Davies (Shipley) (Con)
The question is really whether we leave the EU at all. Yesterday, on the “Today” programme, the Secretary of State was arguing in favour of a proposal by the EU to extend the implementation period to the end of 2022. Was the Secretary of State doing his usual EU freelancing, or is that now the official policy of the UK Government?
Richard Harrington
The Government want to finalise the future trading relationship with the EU as quickly as possible. My right hon. Friend the Secretary of State mentioned one alternative to achieve that.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
In addition to the threat that leaving the EU poses to skilled manufacturing jobs, the Minister will be aware of the devastating news that Michelin plans to close its factory in Dundee, threatening 850 such jobs. Will the Minister work closely with the Scottish Government to ensure a future for that plant?
Richard Harrington
I reassure the hon. Gentleman that I have spoken to the company and I have sought assurances about support available to staff. The Secretary of State and I have spoken with the Scottish Government’s Cabinet Secretary for Finance, Economy and Fair Work and with the Secretary of State for Scotland. The Department is playing an active role in the Dundee action group.
Drew Hendry
I thank the Minister for that answer, but his Government can do one thing right away to give immediate and future help. The UK Government are currently £50 million short on matching the Scottish Government on the Tay cities deal. Is this to be, like Aberdeen, Inverness and Stirling, part of a near £400 million shortage of match funding and a failure of the UK Government on city deals, or will he do the right thing and fight for match funding to support Dundee at this challenging time?
Richard Harrington
As the hon. Gentleman knows, each deal with each city is an individual one based on the circumstances of that city. I see him regularly, and it would be a pleasure to meet him to discuss his constituency and the proposed city deal.
Matt Western (Warwick and Leamington) (Lab)
Richard Harrington
The hon. Gentleman must be aware that the EEF has warmly accepted the Government’s proposals for a future trading relationship that will provide the kind of frictionless trade essential for his constituents and everyone else who works in the motor vehicle industry and the manufacturing sector.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
“High tech manufacturing in every part of the country”—the Secretary of State’s words. General Electric is closing in Rugby and Michelin is closing in Dundee. From Swansea to Copeland to Lowestoft, his energy policies destroy more jobs than they create. By ending the enhanced capital allowance, the Budget took hundreds of millions of pounds from manufacturers, while doling out billions in corporate tax cuts. Manufacturing demand is now dropping at its fastest rate since 2015, yet the Cabinet is in meltdown over whether to walk out on the customs union in four months with no deal or in 24 months with the Prime Minister’s plan. Does the Minister agree that a permanent customs union is essential for British manufacturing and British jobs?
Richard Harrington
It will come as no surprise to you, Mr Speaker, that I disagree with a lot of what the hon. Lady has said. She says the Cabinet is in meltdown. It is not. [Interruption.] The Cabinet is not in meltdown. On her substantive question about energy, to the best of my knowledge, offshore energy is producing a lot of jobs, including in Tyneside. [Interruption.] It very much is. She must be aware, as far as the customs union part of her question is concerned, of the importance of the Government’s proposals, which provide the benefit of a very close relationship with all the countries in the EU. They also mean that this country will be able to enter into negotiations to sign free trade agreements with countries all over the world.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
Sainsbury’s has confirmed that there are no planned store closures as a result of the merger. The independent Competition and Markets Authority is investigating the effects on competition and has until 5 March 2019 to report. The CMA’s investigation is independent of Government and we must not pre-judge the inquiry. The Secretary of State wrote to the CMA in May on this issue and I met with the CEO of Sainsbury’s last month.
Gerald Jones
Sainsbury’s has indicated that it will look at price cuts of 10% under a merger with Asda, but it has also indicated that it would make efficiency savings of around £500 million. I know from this Government’s record that efficiency savings often mean cuts somewhere down the line, so what discussions has the Minister or the Department had with trade unions to ensure that all jobs—not just in store, but in distribution and warehousing—are safeguarded?
Kelly Tolhurst
The hon. Gentleman is right to raise concerns, because any merger and change will of course concern the workers in the organisations, but I have spoken with Sainsbury’s and it has been clear that the pay and reward structure that is already in place is not affected as part of the merger. We will continue our communications with the stores. As he will know, the CMA is currently looking at the merger and is due to report. We will be monitoring this, as we would in any such circumstances.
James Cleverly (Braintree) (Con)
The National Farmers Union has expressed disquiet at this proposed merger. Will my hon. Friend give an assurance to me and to the House more generally that the Government will always promote competition both to improve choice for the consumer and to improve options for people in the supply chain, particularly in farming?
Kelly Tolhurst
I thank my hon. Friend for his question. He is absolutely right: one of the things that we are committed to is making sure that we continue with our world-renowned competition regime. It is right that, even at a ministerial level, we are independent of the CMA, but we work very closely with the CMA on priorities, and looking at supply chains is a key area for all mergers, as is how we protect consumers and markets in future.
Kevin Brennan (Cardiff West) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
My Department and the Department for Work and Pensions recently met Parental Pay Equality, which is campaigning to extend shared parental pay to self-employed parents through changes to maternity allowance. We are exploring ways to support self-employed parents further.
Kevin Brennan
I thank the Minister for that answer. Has she read the recent “Balancing Act” report from Birkbeck University and Parents in Performing Arts, which shows that 72% of freelancers would like to take shared parental leave if they were allowed to? This policy would not cost anything, but it would improve equality and productivity at the same time. Will she—not just officials—undertake to meet the parental pay and leave campaign and listen to my hon. Friend the Member for Batley and Spen (Tracy Brabin), who has a ten-minute rule Bill on this issue?
Kelly Tolhurst
I will always engage with anyone who has a view on this particular issue. We are evaluating shared parental leave and pay to look at the barriers to take-up, including those affecting self-employed people and mothers, particularly, who qualify for maternity allowance. We are currently evaluating that and we will be reporting on that next year. However, I will meet with those people.
Ben Bradley (Mansfield) (Con)
I recently met Mike Watkinson from Nottinghamshire’s Federation of Small Businesses to discuss a number of challenges facing business in Mansfield, one of which was support and access to benefits for self-employed people. Does my hon. Friend agree that, as the party of business, it is absolutely vital that we help small business owners and support them to keep the show on the road when they need it?
Kelly Tolhurst
Self-employment does allow the flexibility that some employed workers are unable to take advantage of, but it is right that we work on this and consider the consequences for the self-employed and small businesses. When we are evaluating and looking at how we move forward—as this Government are committed to doing—it is right that we look at this in the round, in the context of tax, benefit and other such things, but particularly, to support small businesses to continue providing the employment that we need.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
I thank my colleague and friend, my hon. Friend the Member for Cardiff West (Kevin Brennan), for raising this question. On my ten-minute rule Bill on shared parental leave, the Minister will have heard across the House the frustration with the Taylor review—that it has been a year and a half and we have not had any implementations of those recommendations. This was one of them; it is cost-neutral. Does the Minister agree that this could be the engine of change—it could be the outlier—that actually gets those recommendations put into place?
Kelly Tolhurst
I am grateful to the hon. Lady for highlighting this issue through her Bill. We have not yet had the opportunity to debate it, but I know she met Ministers earlier in the year to discuss it. She has mentioned the Taylor review. We are committed in the very near future to doing that, and we are considering self-employment, especially with regard to shared parental leave, how we can benefit and more people taking it up.
Damien Moore (Southport) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
Sector deals are part of our industrial strategy and vital in building strategic partnerships with the Government and mutual commitments to boost productivity in specific sectors. We have already concluded seven and we are working on more. Under the auspices of Steve Ridgway, whom I thank for his leadership, we have a lot of interest from the tourism sector in exploring a sector deal and we are doing so.
Damien Moore
Could my hon. Friend elaborate on whether there will be a similar deal for the hospitality industry in the new year?
Richard Harrington
Before I saw the light and went into politics, I spent 25 years in the tourism and hospitality industry, and there is nothing I would like more than to conclude a sector deal with it. I have met with officials and industry leaders, have the full support of my right hon. and learned Friend the Secretary of State for Digital, Culture, Media and Sport and look forward to concluding a deal in the new year.
Stephanie Peacock (Barnsley East) (Lab)
Tourists spend a lot of money in this country in tips, yet it is two years since the Government said they would act to stop rogue bosses swiping tips. I raised this at Business questions last week, and it was suggested that I come here, raise it with the Minister and ask when the Government will bring forward primary legislation to stop bosses swiping tips that should be going to hard-working staff.
Richard Harrington
I am delighted to confirm to the hon. Lady that we are definitely introducing legislation on this subject. We will do so as soon as we possibly can within the parliamentary timetable.
Sir Patrick McLoughlin (Derbyshire Dales) (Con)
In his first answer, the Minister said that seven sector deals had been concluded. How many are still under negotiation and why are they taking so long?
Richard Harrington
Actually, I correct my right hon. Friend. I said that six sector deals had been concluded and more are in the pipeline. They are very complex. They involve a lot of industry money and many industrial partners who have never been involved in deals with the Government before. I would be delighted to meet him at any time to discuss how I am pushing these on as quickly as I can.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Minister aware that tourism, just like the manufacturing sector, particularly in Yorkshire, is finding it very difficult to get skilled people, especially as more Europeans go back to their home countries in fear of Brexit? What is he going to do about attracting and retaining skilled workers in tourism and manufacturing?
Richard Harrington
I am very aware of the hon. Gentleman’s point. Only last week, I met with Hilton Hotels and Resorts, a big employer in this sector, while the Grove, in my own constituency, has raised exactly the same point. The industry has a high turnover of labour and, as he says, has depended for some time on labour from abroad. I hope that more UK people will enter the hotel and hospitality industry, but the fact is that in many areas there is almost full employment.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
James Frith (Bury North) (Lab)
Ian C. Lucas (Wrexham) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
While the Government set the strategic direction for the Post Office, they allow the company the commercial freedom to deliver this strategy as an independent business. The 74 Crown branches are being franchised to WHSmith, either on-site or through relocation to a WHSmith store. There will be no reduction in the number of branches from the franchising with WHSmith.
Hugh Gaffney
I am a proud member of the Communication Workers Union and a former postal worker. The Minister has said in written answers to Members that the privatisation of the Post Office is a commercial decision for the Post Office and that the Government only set the strategic direction. Nevertheless, the Post Office has decided to privatise these Crown branches and is using tens of millions of pounds of public money to bankroll it. This is a disgraceful situation. When will the Government start exercising some basic financial oversight?
Kelly Tolhurst
I am sorry, but I entirely disagree with the hon. Gentleman. We have no closure programmes. I should add that under Labour’s management of the Post Office its network shrank by 37%, which resulted in 7,000 closures, and that in the first five years of Labour Government the Post Office went from being in profit to having losses of more than £1 billion.
James Frith
Let us have another look at this, shall we? Seventy-four of the public’s post offices are being privatised without the permission of the public. WHSmith is already advertising minimum wage part-time roles to take over post office counters, while consultations on those jobs have yet to be completed. Can the Minister imagine what it must feel like for your job to be under consultation and to face possible redundancy, with the job already advertised for someone else? Will she intervene and call this practice out, as a matter of principle?
Kelly Tolhurst
Let me first highlight the fact that there are no Crown post offices in the hon. Gentleman’s constituency.
Franchising is one of the measures to support and maintain the long-term sustainability of our network of 11,500 post offices throughout the country. As I said, the network was reduced under the last Labour Government, but we are committed to the Post Office and to keeping those branches open.
Ian C. Lucas
Restrictive practices are preventing my constituent Mr Avi Bungar from providing various post office services because he runs a sub-post office. Why are the Government giving big business WHSmith a sweetheart deal and preferential Crown post office terms, and preventing sub-postmasters from having the same?
Kelly Tolhurst
I respect the fact that the hon. Gentleman has experienced issues in his constituency in relation to a particular post office, but to set a long-term sustainability programme for the Post Office against potential postmasters is quite frankly wrong. This is part of a sustainable programme that will enable us—this Government—to keep 11,500 post offices open, to increase, via the Post Office, the pay to which post office workers are entitled, and to give them longer hours and better locations.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
As the Secretary of State said in his statement to the House on 4 June, in our negotiations with nuclear developers, a key focus of discussions will be achieving value for money and lower electricity costs for consumers.
Alan Brown
The National Audit Office has already confirmed that Hinkley Point C was a bad deal. Half the existing nuclear power stations will have closed by 2024 and the rest by 2028, and no nuclear power stations can be built in time to replace them. Why are the UK Government tying up energy policy for the next 50 years in deals that are poor value for money?
Richard Harrington
As far as I know, the hon. Gentleman and his party are against nuclear power altogether, so his is an interesting question. The Government, on the other hand, are committed to a diverse energy mix in which nuclear power plays a crucial part. Nuclear power is critical to our transmission to a low-carbon society, providing continuous, reliable, low-carbon electricity. We are also leaders in cutting emissions by renewables, and nearly 30% of our electricity comes from renewable sources.
Mr Jim Cunningham (Coventry South) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
It is always a pleasure to answer a question from my mother-in-law’s MP. As he knows, we have always made it clear that any hydraulic fracturing that takes place under current licences must be consistent with our regulatory regime, including the traffic light system, which is the toughest in the world. The Preston New Road site is the most monitored site for seismic activity, and among the 36 events recorded, the 1.1 local magnitude event was the equivalent at the surface of a bag of flour being dropped to the floor.
Mr Speaker
I hope that the hon. Gentleman is looking after the Minister’s mother-in-law, because I have a feeling that he will hear about it if he is not.
Mr Cunningham
I always do my best for all my constituents, Mr Speaker; I do not have any favourites. On fracking in the Blackpool area, there have been 47 minor earthquakes in that area and Cuadrilla has now ceased operations. Does that signal a change in Government policy?
Claire Perry
Not at all. Thanks to the superb seismic monitoring and the work of some excellent students at Liverpool University, it is clear that the most significant of the micro tremors that we are seeing is the equivalent of dropping a kilogram of flour on my mother-in-law’s floor in Earlsdon and feeling the vibration from that.
We are calmly and soberly going through the process of seeing whether this potentially valuable resource that can reduce our energy dependency on imports can be exploited, but it has to be done in a way that is consistent with our world-beating and tough regulatory regime.
Sir Desmond Swayne (New Forest West) (Con)
How come we have been using exactly the same technology without difficulty, fracking at hundreds of sites, for years for thermal energy?
Claire Perry
My right hon. Friend makes a valuable point. It is said that fracking is this new thing, but in fact we have been doing it for many years, including using it to extract oil from sites close to both of our constituencies. It is a perfectly safe technology. We have to be clear, however, that we are doing this in an environmentally sensitive way. Of course nobody wants environmental regulations that they cannot defend to their constituents, but we are going through this calmly and soberly; we have excellent science and so far the process is delivering shale gas from these very exploratory fracks, which is something we should all welcome.
Barry Gardiner (Brent North) (Lab)
On 21 May this year the Minister met a number of renewable energy companies. That meeting was properly recorded on the ministerial register of meetings to ensure transparency. On the same day the Minister also met all the key fracking companies including Cuadrilla, INEOS, iGas and Third Energy. That meeting somehow failed to make it on to the transparency register. Would the Minister like to take this opportunity to apologise for the concealment of that information, and by way of penance would she like to confirm when she will finally visit local residents at Preston New Road to explain why the 36 earthquakes that have occurred since Caudrilla began fracking operations are simply the equivalent of dropping a bag of flour on their kitchen floors?
Claire Perry
I am glad the pantomime season is coming up as there is some good auditioning going on. Let me explain. I know that the hon. Gentleman is aware of the ministerial code, and I am told by my officials that when they did not disclose the meeting of 21 May it was because the ministerial code does not require Ministers to disclose meetings that they drop in on, as opposed to host in their office. I have made it clear to my officials that any meeting ever held with anyone related to shale gas should be recorded, whether or not that is in accordance with current guidance. The hon. Gentleman will also know that at that so-called secret meeting with the fracking companies were the Coalfields Regeneration Trust, the GMB union, representatives of local government and UK100 chaired by the doughty Polly Billington, former special adviser to the right hon. Member for Doncaster North (Edward Miliband). The idea that I would hold secret meetings with an industry that is so potentially vital is, frankly, ridiculous. I have also appointed a superb former colleague of the hon. Gentleman’s, Natascha Engel, as my commissioner for shale gas, and she has been out there very consistently meeting local groups and residents in all of these fracking areas. I would be delighted to visit Preston New Road. Unfortunately, however, as I was aggressively approached by a protestor who threatened to visit my home because he knew my children were home alone, I have been advised for security reasons to be very careful about engaging with the protestors. Of course when I go, unlike some Opposition Members, I will make sure to visit the protestors and also those exploiting the resource to create jobs. Those of us on the Government Benches believe in jobs, not mobs.
Mrs Sheryll Murray (South East Cornwall) (Con)
Rachel Maclean (Redditch) (Con)
Victoria Prentis (Banbury) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Our business environment is among the best in the world for small businesses. We have 16.3 million people employed in small businesses and the British Business Bank is supporting small businesses with over £5.5 billion of finance—and colleagues on all sides of the House will wish to support small business Saturday on 1 December.
Mrs Murray
Earlier this year, Ideal Foods, a small business in my constituency, celebrated a huge milestone when it achieved a turnover of £10 million in just one year. Another business, the Cornish Cheese Company, has just been awarded the super gold award for its Cornish blue cheese. Does my right hon. Friend agree that these are shining examples of the importance of embracing global trade after we leave the European Union?
Greg Clark
I do indeed, and I congratulate Ideal Foods and the Cornish Cheese Company. Perhaps I can add one of my own: Cornish Charcuterie, based just outside Bude, is one of my favourites, and I know that it has many satisfied customers across the UK and Europe, and increasingly around the world. This shows that, of all the manifold assets that Cornwall has, its food and indeed its drink are something to boast about.
Rachel Maclean
More than 355 new businesses have been started up in my constituency since 2010. Many of them are microbusinesses with only one or two employees, and their needs are very different from those of the larger small and medium-sized businesses. What additional support can the Department give to those microbusinesses to help them to thrive?
Greg Clark
My hon. Friend is absolutely right to suggest that microbusinesses, and indeed start-ups, sometimes face challenges in accessing finance. The British Business Bank has a programme to focus on microbusinesses. Start-up loans, from which 44 businesses in her constituency have benefited, are also important.
Victoria Prentis
Late payments are a real problem for small businesses. What steps is the Secretary of State taking to tackle that?
Greg Clark
My hon. Friend is absolutely right, and she will know that we are taking steps to reinforce in statute some of the measures that have been good practice across the industry. Indeed, the small business commissioner has been appointed to the prompt payment code compliance board to help with that.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Does the Secretary of State truly believe that what has been negotiated with the European Union will be better for jobs and business than the deal we have now?
Greg Clark
If the hon. Lady was at the CBI conference yesterday, and if she has read the responses from businesses small and large up and down the country, she will know that they are very clear that this deal will help to create the confidence that will allow investment to be made and jobs to be created and preserved across the country.
Neil Gray (Airdrie and Shotts) (SNP)
The small businesses and manufacturers in my constituency are telling me that their biggest challenge right now is recruiting skilled labour. That challenge is set to get worse for them as we approach Brexit. Will the Secretary of State explain to them how stopping freedom of movement is going to help them with access to skilled labour for their manufacturing and their research and development?
Greg Clark
One of the reasons why companies up and down the country sometimes find it a struggle to recruit people is that we have such a low level of unemployment in this country. I would have thought that the hon. Gentleman would recognise that. He knows that one of the benefits of leaving the European Union is that our migration policy will be set in this country according to the needs of our economy—so it’s over to us.
Bill Esterson (Sefton Central) (Lab)
The Prime Minister’s botched Brexit deal creates uncertainty for business. The lack of any commitment to permanent customs arrangements means that there is no guarantee of tariff-free, frictionless trade. Frankly, I am amazed that any Business Secretary would put their name to this deal. Without any commitments to frictionless trade, how can the Government claim to be helping business?
Greg Clark
I do not know whether the hon. Gentleman has read the proposed agreement, but business leaders certainly have, and they have been warmly supportive of it. There are good reasons for that. One of the things that businesses have asked for is a transition period leading up to an agreement that we should be able to trade without tariffs, without quotas and without frictions. This agreement provides for that, which is one reason why it has been endorsed by businesses up and down the country.
Several hon. Members rose—
Mr Speaker
Last question in this section, very briefly. I call Toby Perkins.
Toby Perkins (Chesterfield) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
Pubs make a major contribution to the economy and to community life. That is why the Government are supporting pubs through measures such as the beer duty freeze and the business rates retail discount announced in the Budget.
Toby Perkins
That does not really answer the question of why 7,000 pubs have closed since 2010, so I encourage the Minister to address that when she returns to the Dispatch Box. To be more positive, she will have seen that the all-party parliamentary group on pubs is bringing about a parliamentary pub of the year award, so I encourage her to nominate a pub in her constituency and to join us and the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Rossendale and Darwen (Jake Berry), on 15 January to find out which is Britain’s greatest parliamentary pub.
Kelly Tolhurst
I recognise the hon. Gentleman’s concern and his work in this area over a long period of time. He is a champion for the sector. There are several reasons why there may be pub closures, which is why we are acting to freeze beer duty and address small business rate relief. We estimate that 75% of pubs will benefit from the reductions announced in the Budget. To answer his second point, I will happily attend the event on 15 January, if possible.
Several hon. Members rose—
Mr Speaker
Order. We come now to topical questions, and I gently remind the House that topicals are supposed to be much shorter than substantives, so we do not want preambles. Members who start to engage in preambles will be asked to resume their seat. With straightforward questions and straightforward replies, we will rip through as many as we possibly can.
Theresa Villiers (Chipping Barnet) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The recent Budget confirmed our unwavering commitment to the technologies of the future. We have set up a national quantum computing centre and five new technology centres in Leeds, Oxford, Coventry, Glasgow and London. At the national level, the Prime Minister joined the first meeting of the Industrial Strategy Council. Internationally, I travelled to Japan to discuss how we can work together on our industrial strategy.
Theresa Villiers
Has any estimate been made of the number of businesses on local high streets that can benefit from the business rate cut announced in the Budget, including businesses in my constituency of Chipping Barnet?
Greg Clark
My right hon. Friend will be aware that up to 90% of retail properties in England could be eligible, and I understand that up to around 3,000 properties in her borough could qualify for the relief made available in the Budget.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Brexit cannot result in a race to the bottom for workers’ rights and protections but, sadly, the EU withdrawal agreement does not guarantee that it will not. Thompsons Solicitors says that the non-regression clause will be “ineffective” and the Institute for Public Policy Research states that it is
“not sufficient to maintain current protections”.
Individuals will not even be able to bring about proceedings, and if the EU raises standards, the UK is permitted simply to fall behind. When the Secretary of State called stakeholders after agreeing the deal last week, were trade unions on that call? Will he confirm exactly how he intends to maintain current standards and enforceability and to prevent Britain from falling behind the EU’s standards?
Greg Clark
I note that the hon. Lady dismissed the withdrawal agreement on the airwaves before she had even read it, so it does not surprise me that her question is so misplaced. As for the trade unions, I met Frances O’Grady, the general secretary of the TUC, to discuss the provisions of the agreement in person. When it comes to our record of protecting employees’ rights, the hon. Lady should have more confidence in this country and in this House. We are perfectly capable. We have been leaders in protecting and promoting workplace rights for many generations. We do not need to be required to do so by the European Union; this House can do that itself.
Rebecca Long Bailey
The trade unions were not on that call, which is telling. However, many workers are being treated shamefully even before we leave the EU. There is a bank branch where male workers were expected to urinate in a bucket, and cleaners and security staff are on poverty wages with few rights and protections. The first case was highlighted by Unite yesterday, but the second can be found in the Government’s own Departments under the watch of this Secretary of State, who is responsible for employment rights and protections. Given that the Taylor review was published nearly 500 days ago and yet we still have no update on Government policy and that two months have passed without action since I wrote to the Secretary of State about the treatment of his own staff, how can we trust him to protect workers in the UK now, let alone stop a race to the bottom?
Greg Clark
We value highly the colleagues in our Department and across Government who do important work in public service, and I have made a commitment that we will always treat them well, including on pay and conditions. I am glad that the hon. Lady is looking forward with anticipation to the publication of the response to the Taylor review. It was a landmark report to which this Government committed, and I look forward to her endorsing this Government when we enact Taylor’s recommendations in the weeks ahead.
Giles Watling (Clacton) (Con)
Greg Clark
Businesses up and down the country have been very clear: they want an agreement; they want a deal so that they have the certainty to be able to make investments; they want a transition period so that they are able to make the necessary adjustments; and they want frictionless trade. The proposed deal comprises all those qualities, which is why it has had such a warm endorsement. It will give businesses in my hon. Friend’s constituency and elsewhere the confidence to invest.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
I applaud the hon. Gentleman for his long-standing interest in this important area. It is going better by the day. Over 400,000 smart meters are now being installed every month. As of the end of October, some 97,500 SMETS2 meters, including one in my home in Devizes, have been installed. He will know better than many about the long-term benefits that this brings, both to people’s ability to control and reduce their energy use, and to delivering the most efficient and digitised energy system in the world.
Rebecca Pow (Taunton Deane) (Con)
Stephen Timms (East Ham) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
The right hon. Gentleman raises a great question, and this is one of the things we are working on. The British Business Bank is working on start-up loans, and there are initiatives that work on enterprise in the school setting. I left school and went into an unofficial apprenticeship, and I think that we should all get behind such schemes and apprenticeships, because getting into work really can deliver the entrepreneurial spirit that people need.
Kevin Foster (Torbay) (Con)
Last week, the first new major hotel to be built on Paignton seafront in decades was approved, bringing with it £40 million of investment. What role does my right hon. Friend see the industrial strategy playing in supporting more high-value investment in Torbay’s tourism industry?
Neil Gray (Airdrie and Shotts) (SNP)
Kelly Tolhurst
I thank the hon. Gentleman for his question, which is timely just after fireworks night. The Government do not have any plans to change the legislation, but I am always willing to look at new evidence and to discuss the issue with hon. Members.
Steve Double (St Austell and Newquay) (Con)
Lithium extraction has the potential to make a significant contribution to the aims of our industrial strategy, as well as being a huge boost to the Cornish economy. May I invite the Secretary of State to meet businesses that are seeking to exploit this new opportunity? If he would like to come to Cornwall to do that, he would be very welcome.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
My hon. Friend should know that I would be delighted to meet him, and anybody he thinks is suitable, in order to achieve the exploitation of the luxurious resources deep in his constituency.
James Frith (Bury North) (Lab)
Greg Clark
As I said in response to an earlier question, prompt payment is very important for businesses large and small, and supply chains rely on that. My colleagues across the Government and in the Cabinet Office have close relationships with all the suppliers to the Government so that we can be aware of the prospects, and we have nothing further to report.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), has given us a welcome update on progress on the tourism sector deal, and I was wondering whether we could get a similar update on the oil and gas sector deal.
Claire Perry
My hon. Friend will know from the recent visit to Aberdeen that these conversations continue, as this is a vital sector. Let me pivot slightly by saying that in this Offshore Wind Week—that sector is equally vital to the Scottish economy—I wanted to announce to the House that we are in the final stages of concluding our offshore wind sector deal. It will include both £60 million for the contract for difference auction next spring and a series of substantial commitments from the operators in the sectors to increase the UK content that will be spent—
Dan Carden (Liverpool, Walton) (Lab)
Richard Harrington
I assure the hon. Gentleman that I have met the chief executive of Cammell Laird, and I am in discussions with the Ministry of Defence and all other interested parties.
Dominic Raab (Esher and Walton) (Con)
I welcome my right hon. Friend the Secretary of State’s Green Paper “Modernising consumer markets”. When is a Government response expected? Does he agree that, from mobile phone bills to foreign currency exchange, we should use transparency and competition to end consumer rip-offs?
Greg Clark
I agree with my right hon. Friend and I welcome his distinguished contribution to that consultation. We will be responding during the weeks ahead. It is very important that we build on our tradition of being one of the most open markets in the world, in which incumbents should not be protected from competition.
Melanie Onn (Great Grimsby) (Lab)
Claire Perry
I was worried that the hon. Lady would not be called; I wanted to save the announcement up for her.
The hon. Lady will know, along with her neighbours, the vital role this industry has played in rejuvenating businesses in her constituency and next door. One ask of this sector deal, on which we are in the final stages, is to ensure that the operators, which are benefiting from the Government’s contribution to the auctions, are making substantial commitments to bring back technology and investment, as we see with the Siemens wind turbine factory in her next-door constituency and today’s announcement on the Vestas plant, with another 1,100 jobs being created thanks to the expansion of this industry.
Martin Vickers (Cleethorpes) (Con)
Ministers might have been too busy to see last night’s TV reports about the port of Immingham in my constituency and the opportunities that have been created there. Would the Secretary of State or one of his Ministers care to comment on how we can promote free port status for Immingham post Brexit?
Greg Clark
I am familiar with Immingham from numerous dealings with my hon. Friend. It is a very enterprising port that is already doing well, but I am happy to meet him to explore further possibilities.
Several hon. Members rose—
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The post office in my home town of Tain was closed and moved into a newsagent. There is not room to swing a cat there, although the staff are excellent. Will Her Majesty’s Government look again at the dimensions and layout of post offices as and when they are amalgamated with retail businesses?
Kelly Tolhurst
I do not know the particular setting that the hon. Gentleman refers to, but I am more than happy to meet him to discuss the matter so that I can raise his concerns directly with the Post Office.
Kirstene Hair (Angus) (Con)
We recently heard the disappointing news of the closure of the Michelin factory in Dundee, with the company citing cheaper imports as the reason. It will cause the loss of 845 jobs, many of which will be in my constituency. Will my hon. Friend assure me that the industrial strategy will look into ways to support traditional industries as well as new technologies?
Several hon. Members rose—
Mr Speaker
Order. Just a gentle reminder of the request—the exhortation; the polite appeal—for 20 words. I call Jim Shannon.
Jim Shannon (Strangford) (DUP)
What a challenge, Mr Speaker. Small and medium-sized enterprises create lots of employment throughout the whole United Kingdom of Great Britain and Northern Ireland. What is the Minister doing to improve broadband so that SMEs can improve and employ even more people?
Kelly Tolhurst
The hon. Gentleman is quite right that we need to improve broadband, which is an integral part of delivering our productivity challenge. We are making sure that businesses have in place all the infrastructure they need to thrive and survive.
Tom Pursglove (Corby) (Con)
Will the Minister update the House on recent progress towards a steel sector deal?
Richard Harrington
I have regular discussions with the steel sector and hope in future to have news that will please my hon. Friend.
Dan Jarvis (Barnsley Central) (Lab)
It was good to see the Secretary of State in South Yorkshire, where we have a strong advanced manufacturing offer. Will he continue to work with us in future?
Greg Clark
I certainly will. It was a delight to be with the hon. Gentleman and others to celebrate the opening of Boeing’s first European manufacturing facility. It is in South Yorkshire because there is a thriving hub of advanced manufacturing there. The industrial strategy is all about reinforcing that.
James Cartlidge (South Suffolk) (Con)
I welcome the tax on tech giants that was announced at the Budget, but will my right hon. Friend liaise with the Chancellor to ensure that it does not have a wider detrimental impact on investment in our tech start-ups?
Greg Clark
I will indeed. It is important that the tech sector maintains the progress that it has made in recent years, and I will do everything I can, with the Chancellor, to secure that.
Lisa Nandy (Wigan) (Lab)
For 134 years, Wigan Crown post office has been the anchor of our high street and the beating heart of our community. It survived two world wars and one global financial crash; why can it not survive eight years of Tory Government?
Kelly Tolhurst
As I have said repeatedly during this questions session, we are not closing post offices. If the hon. Lady has a particular problem in her constituency, I am more than happy to hear her concerns about that individual case, but we are not closing post offices. We are taking a sustainable approach to make sure that we achieve and maintain those 11,500 branches throughout the UK.
Bob Blackman (Harrow East) (Con)
What action is the Minister taking to promote the development of small-scale modular nuclear reactors so that we can diversify the energy supply?
Richard Harrington
Not that small, though. I am sure that you could do with a personal one sometimes, Mr Speaker.
I assure my hon. Friend the Member for Harrow East (Bob Blackman) that the Government are treating the development of small modular reactors very seriously. A successful conference on the subject was held recently. I am happy to inform the House of future progress.
Several hon. Members rose—
Mr Gregory Campbell (East Londonderry) (DUP)
Does the Minister think that it would be a good idea to incorporate into the tourism sector deal a fantastic one-off event that occurs next year, after 68 years’ absence, when the Open championship returns to the Royal Portrush golf club?
Several hon. Members rose—
Mr Speaker
Order. I am sorry to those colleagues remaining, but exciting though the session was, all good things come to an end.
Interpol Presidency Election
(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir Vince Cable (Twickenham) (LD)
(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Interpol presidency election tomorrow.
The Minister for Africa (Harriett Baldwin)
Interpol is currently holding its general assembly in Dubai, and a UK delegation, led by Lynne Owens, the director general of the National Crime Agency, is there at the moment. Interpol is electing a new president at the general assembly after former Interpol president and Chinese Vice-Minister of Public Security, Meng Hongwei, resigned from the position on Sunday 7 October after Chinese authorities confirmed that he had been detained and is being investigated on anti-corruption charges.
Two candidates have formally declared for the post and remain in the running as candidates. They are current acting president South Korean Kim Jong Yang and Russian vice-president—one of four vice-presidents—Alexander Prokopchuk. Members of Interpol at the general assembly will vote on the next president on Wednesday. We do not speculate on the outcome of the election, but the UK supports the candidacy of acting president Kim Jong Yang.
Sir Vince Cable
Can the Minister confirm that the British Government are doing all they can to campaign against the candidacy of Mr Prokopchuk? Will she confirm that, until recently, he was head of the central bureau in Russia and was directly responsible for the issuing of red notices, which have been abused and used against opponents of the Putin regime—such as Mr Bill Browder, the proponent of the Magnitsky sanctions? Does she not agree that if this Russian gentleman were to become head of Interpol, it would be an absolute insult to the victims of the Salisbury incident?
Will the Minister explain how the Government intend to pursue their own pursuit of red notices in Russia with that gentleman in this post? Does she not accept that, if this gentleman were to succeed in his election, this would be a massive propaganda victory for the Putin regime, just ahead of a vote in the European Union on fresh sanctions? Would it, in effect, not amount to accepting that Interpol has become a branch of the Russian mafia? I use my words carefully when I say that. Finally, does this not underline the absolute folly of undermining in any way Europol at a time when Interpol is becoming totally dysfunctional and potentially corrupted?
Harriett Baldwin
The right hon. Gentleman raises a number of points. The central point is to clarify for the House the role of the secretary general of Interpol, who, of course, is the German Jürgen Stock. He has the executive role of day-to-day responsibility for the conduct of Interpol, and the UK confirms that it has a very good working relationship with him.
The right hon. Gentleman also raises the question about the candidacy of the current vice-president of the organisation. The UK, as I said in my opening remarks, will be supporting the candidacy of the acting vice-president, Kim Yong Yang. We always seek to endorse candidates who have a history of observing standards of international behaviour.
With regard to the point that the right hon. Gentleman makes about the potential for misuse of Interpol, red notices are a very important point. He will be aware of the systems that are in place to protect individuals’ rights and, indeed, of article 3 of the Interpol constitution, which forbids any organisation to undertake any intervention or activities of a political, military, religious or racial character. Of course, there need to be safeguards, and this Government take any misuse of Interpol notices very, very seriously.
Tom Tugendhat (Tonbridge and Malling) (Con)
I very much welcome the statement that my hon. Friend the Minister has made today. This is really quite an extraordinary situation: to find ourselves with the possibility of not just a fox in charge of a hen coop, but the assassin in charge of the murder investigation. This is a man who has corrupted the rule of law through the use of red notices and undermined the international order by trying to subvert Interpol as an arm of his own state’s propaganda network, and now he is trying to run to lead it. This is truly extraordinary. Will she join me in saying that, should this outcome happen, we will have to look very, very seriously at our co-operation with an organisation so discredited and so corrupted?
Harriett Baldwin
My hon. Friend the Chair of the Foreign Affairs Committee has very extensive experience of scrutinising these matters, and I very much welcome the scrutiny that his Committee has been giving to them. The UK has, as I have said, a very strong working relationship with the secretary general, who, of course, holds the executive role. I reassure the House that the National Crime Agency’s experience to date is that the processes adopted by Interpol are robust enough to deal with any concerns of misuse. Of course, this is something that needs to remain under scrutiny. I am sure that the Foreign Affairs Committee, as well as the Government, will continue to make sure that that scrutiny continues to take place.
Emily Thornberry (Islington South and Finsbury) (Lab)
Mr Speaker, thank you for granting this urgent question; I congratulate the right hon. Member for Twickenham (Sir Vince Cable) on securing it. On this day a fortnight ago, the right hon. Gentleman and I found ourselves on opposite sides of the table at the Cambridge Union in a debate about whether the special relationship with America was dead. I am glad to say that the students sided with me in saying that it was not, but today, on the subject of Interpol, the right hon. Gentleman and I are very much on the same side.
As a matter of principle, I am sure that we would all want to make clear that when an individual is put forward for a leadership role in an international body, the judgment of their fitness for office should always be based on their integrity, their expertise and their record, not on their nationality. Therefore, by itself the fact that Major General Prokopchuk is Russian should not disqualify him from this role any more than the fact that Martin Griffiths and Mark Lowcock are British should disqualify them from their role regarding Yemen. However, the fact that, as the head of Russia’s national central bureau for the last seven years, the major general has directly orchestrated Russia’s abuse of Interpol’s international arrest warrant system to target Putin’s Government’s enemies in both business and politics is in itself enough to disqualify him. It would be extremely concerning for the future functioning of Interpol as a credible international organisation if he were to be elected to the presidency.
The Minister says that Britain will be supporting an alternative candidate, but the question is what diplomatic efforts will she be making in the next 24 hours, particularly in respect of our European and Commonwealth counter- parts, to build a majority against the election of the Russian candidate. In the unfortunate scenario that the major general is elected, will she say what that will mean for the future of Interpol, for the continued abuse of the arrest warrant system and for Britain’s continued participation in Interpol?
Harriett Baldwin
I thank the shadow Foreign Secretary for a very measured set of questions. She is right that one should look at the qualification of candidates to these different organisations and make one’s judgment accordingly, rather than making a knee-jerk reaction on the basis of nationality. Let me also underline that the special relationship that the right hon. Lady mentioned in the preamble to her questions is obviously extremely strong and is not in any way affected by the matters we are discussing in the House today.
I should clarify for the House again that, as with any international organisation, other factors often need to be taken into account—for example, geographical balance among roles in the organisation. For example, one factor taken into account was the geographical breakdown of the current vice-presidents. As the right hon. Lady will know, Mr Prokopchuk has been in the role of vice-president for some time, and there is a vacancy in terms of representatives from Asia because the previous president has departed. That needs to be taken into account.
The executive responsibility of the day-to-day operation of Interpol falls to Secretary General Jürgen Stock, who is of course a German national. The presidency of Interpol has a range of important roles in terms of presiding at meetings. The previous president had wanted to make some changes to the way in which the organisation runs but was unsuccessful. The right hon. Lady is right that there are a range of different factors to take into account. I have made the UK’s position clear. Of course, between the time that the previous president went back to China and the election tomorrow, the UK has been fully engaged in consulting with our allies on this role through our diplomatic network.
Dominic Raab (Esher and Walton) (Con)
After the Salisbury nerve agent attack and the abuse of red notices by the Kremlin, including in relation to Bill Browder, may I urge the Government to recognise that the election of a Putin-appointed police general would not only weaken the operational effectiveness of Interpol, but undermine our ability to rely on it and shred its credibility as a pillar upholding the international rule of law?
Harriett Baldwin
As my right hon. Friend is aware, the Russian candidate is currently a vice-president of Interpol, and the general assembly will make its decision tomorrow. I have made the UK’s position clear. My right hon. Friend should also be aware that the National Crime Agency hosts the UK international crime bureau, which is responsible for handling any Interpol requests into the UK, and the NCA is very supportive of the overall processes of Interpol. In terms of any concerns it might have about requests received, it feels that it has the ability to refer requests to the Commission for the Control of Files, which provides independent oversight and some checks and balances of Interpol’s processes.
Stewart Malcolm McDonald (Glasgow South) (SNP)
Mr Prokopchuk may be the candidate on the ballot paper, but let us be under no illusion that it will be President Putin who calls the shots should Mr Prokopchuk be successful at the general assembly. If Mr Prokopchuk is successful and does become the president of Interpol, does the Minister agree that it will be a slap in the face not just to this country and in particular to the people of Salisbury, but to the people of Georgia, the people of Ukraine—including eastern Ukraine and Crimea—as well as to the civil society activists, opposition politicians and journalists in Russia who have been hunted down by the Putin regime? Will she tell the House what she expects to happen, if the Russian candidate is successful, to the red notices against Alexander Petrov and Ruslan Boshirov, who were responsible for the nerve assault in Salisbury?
Although the Scottish National party holds no candle for this man and no candle for the Russian Government, may I urge the Minister to resist calls to withdraw from Interpol at this stage? Of course we have to monitor what happens if the Russian candidate is successful, but to pull out from Interpol so soon and so quickly would undermine further the rule of law that we all wish to see upheld.
Harriett Baldwin
The hon. Gentleman makes a range of very sensible points, but I do not think that he would want me to conflate a range of different issues from the Dispatch Box. As he knows, this particular candidate is currently a vice-president of Interpol. I have mentioned the important role of the secretary general when it comes to executive responsibility within the organisation. I have also mentioned some of the roles of the presidency and the checks and balances that exist regarding this important international organisation.
I am glad that the hon. Gentleman welcomes the importance of Interpol and its work. We do not believe that any possible outcome of this election will have an impact on the issues to which he rightly draws the attention of the House, but since he has raised these issues I reiterate that we continue to want the Russian Government to come clean about their role in Salisbury, to account for their use of Novichok on British soil and to declare their chemical weapons programme to the Organisation for the Prohibition of Chemical Weapons. I hope that he and the House will be reassured that there are a range of different ways in which we will continue to pursue those ends, while recognising the important role that Interpol can play for our police force here in the UK.
Mr John Whittingdale (Maldon) (Con)
Is my hon. Friend aware of the concerns expressed by a number of organisations campaigning for media freedom, such as Reporters Sans Frontières, that the Interpol wanted person alert system is being abused by countries that are opposed to a free press, to target and silence journalists? Does she agree with these organisations that there needs to be a review of the thousands of alerts currently sitting on that system and that countries that abuse the system should be held to account? Does she also share my concern that this is hardly likely to happen under the Russian candidate for the presidency?
Harriett Baldwin
I pay tribute to my right hon. Friend’s extensive work in this area and thank him very much for putting those important points before the House today. As he knows, article 3 of Interpol’s constitution forbids the organisation to undertake any intervention or activity of a political nature. Any such misuse of Interpol notices is taken very, very seriously by this Government. The UK continues to take a strongly supportive stance in relation to Interpol’s efforts to ensure that systems are in place to protect human rights—indeed, the Home Office has been highly proactive in its engagement with Interpol on this matter. I appreciate the important work that my right hon. Friend mentioned. I assure him that the UK will continue to be a staunch friend of those who are on the side of human rights and media freedom around the world.
Ian Austin (Dudley North) (Lab)
It is clearly absurd to put into this position the representative of what has become, under Putin, a criminal enterprise that has looted Russia, impoverished its people, and locks up and murders its opponents at home and abroad. What assurances can the Minister give us about what would happen to the sharing of information, access to databases and all the other arrangements that exist between Britain and Interpol if this man were to be put in charge of the current assembly meeting?
Harriett Baldwin
As I tried to explain earlier, two of the current vice-presidents are the declared candidates for the presidency; one of them is acting president and the other is currently a vice-president. The hon. Gentleman will be aware that while the presidency of Interpol is an important role, it is none the less one that has more of a ceremonial aspect with regard to meetings of the general assembly and the executive committee. The executive work of Interpol is led by the secretary-general and his executive committee. Obviously, in an international organisation like this, it is very important to have checks and balances as well as regionally balanced representation. I am reassured by the fact that the National Crime Agency, from its experience so far with the organisation, believes that the right checks and balances are in place, but of course that will continue to be scrutinised by this House.
Greg Hands (Chelsea and Fulham) (Con)
My hon. Friend knows a lot about Russia—she is, if I am not mistaken, one of the few Members of this House who has a degree in the Russian language, so we know that her approach is not, per se, anti-Russian. Does she agree with the assessment of Fair Trials, the UK-based rights campaign, which says:
“It would not be appropriate for a country with a record of violations of Interpol’s rules to be given a leadership role in a key oversight institution”?
Harriett Baldwin
I thank my right hon. Friend for his question. As he rightly points out, there is a distinction to be made here. I have set out the UK Government’s position with regard to tomorrow’s election and our judgment regarding the candidate that we support. He is absolutely right that, in the Prime Minister’s words, we have absolutely no quarrel with the people of Russia. I take this opportunity at the Dispatch Box to reiterate the UK Government’s desire to see Russia behave as a responsible member of the international community and to end its illegal annexation of Crimea, to end the destabilisation of eastern Ukraine, and, indeed, to account for the reckless actions of the GRU on British soil and to rein in GRU activities. That, as my right hon. Friend rightly points out, does not mean that the British people cannot, through cultural relations and ongoing diplomatic relations, engage with the Russian Government.
Mr Ben Bradshaw (Exeter) (Lab)
What contingency plan do the Government have, in the event that this Putin stooge is elected, to work with our western democracy allies—who, after all, mainly fund Interpol—to set up an alternative democratic, transparent and non-corrupt organisation?
Harriett Baldwin
I hope that I have already set out for the House both the character of the role of the presidency and the checks and balances that exist within this international organisation, Interpol, in terms of geographical balance, the ability to query domestically any particular request that might come through Interpol processes, and the protections of article 3. I expect the matter to remain under scrutiny in this House in the foreseeable future, but I reiterate that the UK Government’s and the National Crime Agency’s view is that the safeguards I outlined earlier, and the ability to question some of the procedures, are checks and processes that we believe are working well. Of course that will be kept continuously under review.
Sir Desmond Swayne (New Forest West) (Con)
What action has the organisation taken to challenge Russia over its recent abuse of the rules?
Harriett Baldwin
Without my right hon. Friend being more specific about the examples to which he alludes, I can only say that I think he will be aware that we are talking about two different processes. There is the one relating to Interpol, where I have outlined the way in which the National Crime Agency is able to invoke checks and balances and to ensure that article 3 is not violated. Separately, as he will also be aware, the UK has very much been leading the international efforts at the OPCW to challenge the egregious use of chemical weapons and violations of the chemical weapons convention, including the use of chemical weapons on UK soil that has been attributed to Russia. We have, as he knows, worked very closely with the OPCW to ensure that a special conference of the state parties has been held and that the state parties can now attribute responsibility for chemical weapons attacks in Syria and, if needed, elsewhere in the future.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Interpol’s reputation for the enforcement of international law is already being undermined by its silence over the disappearance in China of its former president, and it will be undermined further if its new president is someone who in Russia has been involved in also trying to undermine international law and abuse Interpol processes. Given that the police have given evidence to the Home Affairs Committee that the Brexit process may make us more dependent on Interpol processes, databases and institutions, what is the Foreign Office doing to strengthen the Europol relationship and to look at reforms, through Interpol and through new additional processes, to strengthen the rule of international law?
Harriett Baldwin
I am sure that the right hon. Lady would support the UK view, which is that the issue of the arrest of the former Chinese president is very much a matter for the Chinese state. She rightly draws attention to the importance of international law and of our rules-based international order. I assure her that in all instances the UK Government will take the opportunity in international forums to support the observance of international law and due process, and, indeed, human rights. That is very much part of what the UK stands for in these international forums. We recognise the importance of upholding the precious rules-based international order on which the safety and security of the UK has been based since the second world war.
Huw Merriman (Bexhill and Battle) (Con)
The difficulty for many Members is that Russia keeps getting away with it at international level. It got away with it by being able to host a successful World cup, and there is frustration that it may get away with it again. Will our delegate have the opportunity to say to other countries that if this election goes the way we hope it does not, we will form a new body automatically?
Harriett Baldwin
I am glad that my hon. Friend raised the World cup, because it is a good example of where UK police and Russian police were able to work closely together to ensure that all fans from the UK who travelled to Russia were able to enjoy World cup matches, and those processes worked well. He refers to the importance of international police co-operation, for which Interpol is an important mechanism. The National Crime Agency believes that it is an effective forum for it to work with, so that the delegation at Interpol and the current conference in Dubai can reassure themselves that there is a range of checks and balances, including article 3, that means they are confident that Interpol will continue to be an important part of the UK’s relation with international policing matters.
Sir Edward Davey (Kingston and Surbiton) (LD)
Everyone knows that with a rising threat from organised crime internationally, we have to co-operate internationally, but evidence and the weaknesses that have been described today show that Interpol is really not up to the job. Can the Minister reassure the House that Britain’s relationship with Europol and European co-operation against international crime will be kept and strengthened? People are really worried, given the threat that Brexit poses to that co-operation.
Harriett Baldwin
I can reassure the right hon. Gentleman that the UK continues to believe that it is very important to co-operate internationally. Where I perhaps differ from him is that I am reassured that Interpol will continue to be an important part of the UK’s ability to co-operate internationally on police matters.
Victoria Prentis (Banbury) (Con)
Given what happened to the previous president of Interpol, can the Minister update us on conversations she has had with China on the importance of multilateral organisations?
Harriett Baldwin
As my hon. Friend heard me say earlier, we believe that the situation surrounding the arrest of the former Interpol president is very much a matter for the Chinese state. In terms of the latter part of her question, we have the opportunity to interact with the Chinese Government on an ongoing and constant basis in a range of multilateral forums. That is an important part of the UK’s diplomatic work and includes the UK delegation to the United Nations, where we work on a range of issues as permanent members of the Security Council. It would be hard for me at the Dispatch Box to list the range of different international forums in which we are co-operating with the Chinese Government, but I assure her that it is extensive.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Can the Minister help me? I might be becoming a bit paranoid after watching too much John le Carré on television recently, but what we see unfolding seems extraordinary. First, the president disappears in China—even his wife does not know where he is, and she says he never resigned—and almost no action is taken by the secretary-general of Interpol to find out what happened to him. Secondly, a Russian vice-president now looks likely to become president, at a time when we all know that Russia is hellbent on undermining international institutions all over the world, including democratic Governments, the European Union and everything else. Is that not the reality of the backdrop, and would it not be a disastrous development to have this man as president?
Harriett Baldwin
Without digressing into the wider universe—some of it fictional—in which the hon. Gentleman prefaced his question, I draw his attention to the UK Government’s position on both tomorrow’s election for this presidency and the checks and balances in terms of Interpol’s work, with a continuing assurance from our National Crime Agency that it regards those checks and balances and article 3 as important underpinnings that continue to have its full support in its ongoing work with Interpol.
Mr Philip Hollobone (Kettering) (Con)
The more I am learning about the governance of Interpol, the more worried I am becoming. Why on earth are member states that use their police for internal political repression allowed into this organisation in the first place?
Harriett Baldwin
It is a UN organisation with a very wide membership—193 states, if I remember the figure correctly—but it is also possible to be a member of Interpol without necessarily being accepted internationally as a state, through observer status. The point I will make to my hon. Friend is that organised crime does not have boundaries, so it is really important that Interpol’s coverage is wide. We would not want parts of the world to be safe havens or exempt from the ability of police forces to co-operate with each other. It is an important aspiration that Interpol’s coverage be as wide as possible
Tom Brake (Carshalton and Wallington) (LD)
Given the concerns that already exist about the way in which Interpol red notices work, will the Government undertake to secure confirmation in advance from countries that people like Mr Browder will visit that they will not seek to apply any spurious or bogus red notices that might be issued through Interpol at the instigation of, for instance, the Russians?
Harriett Baldwin
I am sure that the right hon. Gentleman will appreciate that I cannot possibly make a sweeping statement of that nature from the Dispatch Box about all possible future examples. That would be too wide, but I think that, in terms of the use of the red notices, one can refer to the framework with which one is dealing, the reassurance given by article 3 of the constitution of Interpol and the checks and balances that I referred to.
John Howell (Henley) (Con)
Does the Minister agree that the election of this Russian will undermine the work we are doing at the Council of Europe and will undermine the European Court of Human Rights, which the Council looks after and where the cases against Russia mount daily?
Harriett Baldwin
I pay tribute to the fantastic work that my hon. Friend does as part of the UK delegation to the Council of Europe. We value that strongly. This question is tightly constrained around the topic of the Interpol presidency election. A wide number of international organisations form an important part of the rules-based international order, and it will be the UK’s position to support the working of that rules-based international order in all those organisations.
Alison Thewliss (Glasgow Central) (SNP)
Russia has tried to abuse Interpol no fewer than seven times to arrest Bill Browder. What assurance can the Minister give and what protection can her Government offer Mr Browder and all others currently facing pursuit from the Russian state, should the Russian candidate get elected?
Harriett Baldwin
I hope that I have been able to draw the House’s attention to several safeguards. First, the presidency, while an important role, is not an executive role; that role is held by the secretary-general and the executive committee. Secondly, I have drawn attention to the protections that article 3 of Interpol’s constitution gives, and thirdly, to the checks and balances that exist when, for example, a red notice is given to the UK National Crime Agency. There is a range of different checks and balances. Of course, every country that is a member of Interpol will perhaps approach things differently, but that is the position of the UK Government.
Jack Brereton (Stoke-on-Trent South) (Con)
Does my hon. Friend agree that it is totally wrong for a state actor such as Russia to use Interpol in a politicised way to fulfil its own political ambitions, and we should condemn in the strongest terms any attempt by Russia to do so?
Harriett Baldwin
I have strongly condemned a range of different activities, on which the UK has been holding Russia to account, particularly with regard to chemical weapons. Specifically on the situation of Interpol, I reiterate the important protections brought about by the existence of article 3. I would also point to, within the UK, the checks and balances that exist in terms of the red notices. As I have said in response to earlier questions from Members, that is obviously something that the UK Government will continue to keep under review.
David Linden (Glasgow East) (SNP)
The future credibility of Interpol is absolutely essential, never more so than when it comes to investigating violations of human rights, particularly lesbian, gay, bisexual and transgender rights, so may I ask the Minister: what kind of message would it send to the LGBT community if Mr Prokopchuk were elected as president of this organisation?
Harriett Baldwin
On what the UK Government have tried to do, I have outlined the UK Government’s position as far as this election is concerned. The hon. Gentleman opens up this question to wider issues. I highlight the importance that the UK Government place, in their discussions with countries around the world, on LGBT rights and human rights. That will form part of our diplomatic engagement.
The hon. Gentleman should pass on his appreciation to the teams and the supporters who travelled to Russia during the World cup over the summer. Work was done by a range of volunteers, but also, importantly, by the police to ensure that they all had the opportunity to enjoy a safe World cup.
James Cleverly (Braintree) (Con)
In her question, the shadow Foreign Secretary, the right hon. Member for Islington South and Finsbury (Emily Thornberry), drew a comparison between diplomatic work by British diplomats in Yemen and the involvement of Russia in Interpol. Will my hon. Friend make it absolutely clear that there is no moral equivalence between the UK Government and Putin’s Russia? Furthermore, will she make it clear that the election of Alexander Prokopchuk could permanently undermine the credibility of Interpol? If he is elected, will we immediately take steps to build alternative international policing responses?
Harriett Baldwin
I find myself in the slightly unusual position of perhaps slightly defending the right hon. Lady because I did not see quite the angle that my hon. Friend saw in the question she posed. However, it is important that the UK, where appropriate, seeks to have the right representation in these international organisations. It is also very important—I assure my hon. Friend of this—that the UK will always seek and campaign to have the right representatives in these international organisations. He is absolutely right that the role the UK plays will often have the support of the rules-based international order through our membership of the United Nations, Interpol or other organisations. It is important that the UK Government reiterate at this Dispatch Box that we will always seek to work with the international rules-based order and uphold the values that have kept the country safe since the second world war.
Rebecca Pow (Taunton Deane) (Con)
There are shades here of what happened at FIFA, with voters being picked off one by one—this is actually scary. Given Russia’s recent violations of international law and the allegations regarding its influence via Facebook on elections around the world via fake news—we highlight that in our Digital, Culture, Media and Sport Committee inquiry—does not the Minister agree that it is completely and utterly inappropriate to have a Russian at the helm of Interpol?
Harriett Baldwin
I pay tribute to my hon. Friend and to the Committee of which she is a member for the important work and scrutiny that it is undertaking at the moment. I encourage colleagues on other Committees with some locus in relation to this urgent question to continue the important work of scrutinising what the UK Government do.
I point out to my hon. Friend what I pointed out earlier: the gentleman in question is currently a vice-president of Interpol; the presidency is not an executive role; and we have huge confidence in the ongoing work of Secretary-General Jürgen Stock—a German national—and his executive committee in terms of the daily conduct of Interpol and the execution of the organisation’s strategic objectives.
Kevin Foster (Torbay) (Con)
Russia’s attempts to discredit international organisations through its behaviour with Interpol and its consistent use of its veto to neuter the use of the International Criminal Court set a very worrying trend for the future. Will the Minister reassure me that, if this appointment is made—we hope it is not—she will work with our traditional allies to look at what we can do to strengthen the international rules-based order and ensure that it does not become so discredited that we head towards some of the disastrous situations we saw in the past when it did not exist?
Harriett Baldwin
Despite the narrowness of the defined subject of the urgent question, perhaps you will allow me, Mr Speaker, to make the wider point that the UK will commit, along with our international partners and allies, to send clear messages, where appropriate, about the consequences of Russia’s malign activity. I can give the recent example of our shining a light on the reckless and irresponsible cyber activities of the Russian military intelligence unit, the GRU.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Is not it of critical importance that Interpol is able to act transparently and that it is not manipulated by the Russian Government?
Harriett Baldwin
Of course, it is very important that the National Crime Agency continues to feel confidence in terms of its co-operation with Interpol. I can report to my hon. Friend and to the House that the National Crime Agency continues to have a very good working relationship with Interpol, to value that international co-operation and to feel that the checks and balances in terms of Interpol activity, including the existence of article 3, provide important protections.
Giles Watling (Clacton) (Con)
In my youth, Interpol was a byword: it put the fear of God into criminals who wanted to operate across borders and it meant that there was no hiding place. It was known for its openness and transparency in the old days. Does my hon. Friend agree that that reputation would be thrown out of the window if this appointment went ahead and that we might lose a police force of inestimable value?
Harriett Baldwin
I point out to my hon. Friend that there are two candidates and I have made it clear at the Dispatch Box which candidate the UK prefers. It is important to continue to have the same kind of geographical balance and to make sure that an organisation that has a wide international membership continues to have a good geographical balance across the roles of the president, the vice-presidents, the secretary-general and the executive. I hope I have made clear the value that the National Crime Agency puts on this international co-operation, as well as the checks and balances that exist. We must continue to maintain scrutiny of all these things, but that international co-operation is valuable and we will continue to be a member of Interpol, despite what may be the outcome of tomorrow’s election.
Ebola Response Update
(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Africa (Harriett Baldwin)
With permission, Mr Speaker, I will make a statement on the current outbreak of Ebola in the Democratic Republic of the Congo and how the UK Government are continuing to support the response and preparedness activities in neighbouring countries.
Miraculously, I have put on a different hat. Since the last update to the House on 10 October by my right hon. Friend the Secretary of State for International Development, the number of confirmed Ebola cases in this outbreak has continued to rise. As of 18 November, there were 326 confirmed cases and a further 47 probable cases, making this Ebola outbreak the biggest in the history of the DRC.
The DRC Government are leading the response with the support of the World Health Organisation. The DRC Government issued a revised response plan in late October, which projected that the outbreak would be contained and declared over by the end of January 2019. However, it is now clear that that will take several more months to achieve.
The WHO judges that ending the outbreak could take a further six months, under a best-case scenario. That reflects the very challenging operating environment in eastern DRC, which is a heavily populated area affected by insecurity. For example, last weekend an attack by armed groups on a MONUSCO base was close to where a vaccination team were staying. Thankfully, none of the Ebola responders was injured, but they were moved to Goma for a short period and vaccination activities had to be paused for a day.
The scale of the response is also challenging. In addition to the 373 confirmed and probable cases, the DRC Government, supported by WHO and other implementing partners, is trying to trace some 4,400 contacts on a daily basis.
However, there is some encouraging news. The response is enabling faster detection of cases, laboratory diagnosis and monitoring of the spread of the disease. The WHO-led support is improving Government medical facilities and their capacity to manage patients and treat them safely. That includes vaccination of health workers, provision of personal protection equipment, and advice on safe practices for dealing with suspect and confirmed cases. Part of the response involves raising awareness of the disease within local communities and putting in place measures to prevent cross-border spread. So far, 110 people have recovered.
The UK responded quickly to support the international response as the second largest donor to the strategic response plan, as well as deploying epidemiological experts to support the WHO response on the ground. UK support has helped to improve leadership and co-ordination, surveillance, infection prevention control and preparedness measures.
In view of recent developments, we have increased our support for the response and preparedness activities in DRC and neighbouring countries. Our funding will support a range of activities including surveillance, vaccinations, infection prevention and control, community engagement and safe and dignified burials.
In addition, the UK is supporting neighbouring countries to prepare to tackle the disease should it spread, by funding key UN posts in Uganda, Rwanda, and South Sudan to ensure they are as prepared as possible. We are applying the lessons of previous experience in tackling Ebola. An experimental vaccine, the development of which was supported by UK aid following the west Africa outbreak, is being given to frontline health workers and contacts of confirmed cases. In the DRC, over 31,000 people, more than 10,000 of whom are health workers, have already been vaccinated during this outbreak. The UK is also supporting training in preparation for clinical trials of several of the new therapeutic drugs for Ebola.
The UK Government are also drawing on all available scientific data about the latest outbreak. We will continue to liaise closely with WHO and others to ensure that the available scientific evidence is reflected in scenario planning. An international Ebola preparedness and co-ordination meeting is due to take place in Goma shortly, which will be attended by Ministers from the DRC and Uganda, to discuss cross-border co-ordination.
So far, the UK has contributed £25 million to the Ebola response. This is supporting WHO to work on screening, surveillance and preparedness, not only in the DRC but in neighbouring countries. Of this, some £20 million is from the crisis reserve of the Department for International Development, and £5 million is from the country budget for Uganda. When I visited Uganda last month, I saw how UK aid is helping the Uganda national taskforce to be ready to deal with Ebola, as needed.
It is clear that the response will require a sustained effort over time and additional resources. The UK Government stand ready to provide additional assistance. Therefore, we have agreed a further £20 million from our central crisis reserve in 2018-19, to support Ebola responses in the affected region.
I am sure that my colleagues in the House will recognise the risk that Ebola responders face. The DRC Government have asked donors not to publicise figures for specific activities, to avoid putting implementing partners at risk from criminal elements. I hope that the House and members of the press will respect the need for discretion about this issue. Public Health England assesses the risk to the UK of this outbreak as negligible to very low. It will continue to monitor and assess the outbreak closely. Should that risk change, the UK Government remain at full readiness to respond, and I commend this statement to the House.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
First, I thank the Minister for giving me advance sight of her statement. I share the Government’s deep concern about the outbreak of Ebola in the Democratic Republic of the Congo, and I am pleased to hear that £25 million of UK aid has been given to the response. We hope that it goes some way to containing this deadly outbreak.
In addition, supporting neighbouring countries to prepare to tackle the disease is fundamental and welcome. In 2014, we learned the hard way what happens when action is not taken fast enough to halt the cruel and deadly Ebola virus. We all remember with great sadness how too many people tragically lost their lives in west Africa, and none of us will ever forget the fear and chaos that the virus wreaked on the affected communities, and indeed right across the globe. I am sure we all agree that we must act now to avoid a repeat of those horrific scenes, and help the DRC to contain this outbreak.
With the World Health Organisation reporting that 213 people have died since 1 August in the DRC, and the humanitarian agency Médecins sans Frontières confirming 366 cases, let us be sure that DFID steps up and ensures that the UK plays a crucial leadership role alongside the international community in responding to this outbreak, just as we did in Sierra Leone four years ago.
However, while emergency humanitarian response is an integral part of DFID’s work, I am sure the Minister agrees that prevention is better than emergency response. While we send aid to DRC, we cannot and must not turn our backs on providing the long-term support that will ensure countries across the global south have appropriate health systems set up in the first place.
It is deeply disappointing, therefore, that the Minister’s Department dropped health spending from 18% of DFID spend in 2014, to 12% in 2017. Meanwhile, spending on banking and financial services has been on the increase, as the Department appears to lose sight of its core work and instead increases spending on promoting private companies to expand their profits.
Just this year, the aid watchdog, the Independent Commission for Aid Impact, told DFID it really needs to improve its work on strengthening health systems. May I ask the Minister, therefore, if she feels that her Department has learned the lessons of the 2014 Ebola outbreak, and recognises that supporting countries to build strong, well-managed public services is the only way to ensure that we will not see these outbreaks again in the future?
Harriett Baldwin
I will come on to the lessons learnt since the outbreak in Sierra Leone in a moment. However, I am sure that I cannot possibly have heard from the Opposition Front Bench a statement to the effect that having a strong private sector is somehow in conflict with having the revenues needed to provide strong health systems around the world. I hope that that is not the considered position of those on the Labour Front Bench. While spending on strengthening health systems around the world, particularly in some of the poorest and most fragile affected countries, it is important that we in the UK recognise the important role of growth and job creation in the ability of those countries to generate their own tax revenues so that they can continue to strengthen their own health systems. We think that that is the most important way to approach worldwide development.
I digress from the topic at hand. The hon. Lady mentions the outbreak in west Africa. I draw the attention of the House to progress and lessons that have been learned since that outbreak. First, the importance of reacting quickly has been taken into account, both in the first outbreak in the DRC earlier this year, which I am glad to say has been brought under control, and in this outbreak. Importantly, the UK has ensured that the WHO has the resources it needs as soon as it needs them, because this is a clear case of where a quick reaction will save lives.
One major milestone that has occurred since the outbreak in west Africa is that the world has developed an experimental vaccine, which was deployed for the first time this year in the DRC. It proved to be effective in the first outbreak. As I said, 31,000 people have been given the experimental vaccine so far in this outbreak. One real challenge, however, is that this outbreak is in a conflict-affected area. That makes it very difficult to trace contacts and, as I mentioned, 4,400 contacts need to be traced daily. It also makes it very difficult to deliver the vaccine. The vaccine requires trained medical professionals to deliver it. It also requires a secure cold chain. The fact that this is a conflict-affected area is therefore significantly hampering the ability of the international community to do what it needs to do.
The third lesson learned from the outbreak in west Africa is that the WHO strengthened its own processes and has worked with a range of different countries to strengthen their health processes. Ensuring resilience in neighbouring countries is very much a part of the response at the moment—this outbreak is not far from the Ugandan border, just some 20 miles inside the DRC. Strengthening the reaction and response at borders is a lesson that has been learned.
Several hon. Members rose—
Mr Speaker
Order. There is some interest in this matter. We appreciate both the Minister’s statement and her desire to provide comprehensive replies, but I remind the House that there are several hours of debate upcoming on the Finance Bill and before we even get to that we have a further statement to follow. I want the next statement to start at two o’clock, so we need short questions and very short answers.
James Duddridge (Rochford and Southend East) (Con)
The Minister mentions Uganda, Rwanda and South Sudan. It is a good idea to be investing in those countries, but has the Minister also considered investing in Burundi, particularly given the economic and political instability, and the poor health system in that neighbouring country?
Harriett Baldwin
My hon. Friend is absolutely right to think about the implications further south. This outbreak is happening closer to the Ugandan border, but he is absolutely right that in due course it may be important to consider the impact on Burundi. He will be aware of the current very difficult situation for international non-governmental organisations in Burundi. Some NGOs have been asked to leave the country and the UK remains concerned about its ability to work with them there. However, I take on board his point that, should there be further movement to the south, it will be very important to ensure preparedness extends to Burundi.
Martyn Day (Linlithgow and East Falkirk) (SNP)
I thank the Minister for advance sight of her statement on what is a particularly unpleasant and serious illness. I was grateful to hear her update on the resources that are being provided to deal with the DRC’s largest ever outbreak of one of the most deadly strains of Ebola. I was also grateful to hear that increased support is being provided.
Can the Minister advise me on how many people are working in the region as part of the UK public health and support team? What measures are in place to protect their safety in what is effectively a war zone? It is estimated that more than 100 armed groups are active in the territory of North Kivu. A number of attacks in this province where Ebola has been witnessed are seriously hampering the Ebola outbreak response activities. What is being done to address such issues around instability, which are affecting the efforts to control the outbreak?
Finally, while I welcome the update on the numbers of people who have been provided with the experimental vaccine, may we have an update on the clinical trials of several new therapeutic drugs for Ebola that the Minister’s Department is supporting training for?
Harriett Baldwin
I welcome the hon. Gentleman’s comments. I want to reassure the House that from the very get-go—both with this outbreak and in the earlier outbreak—the UK made it clear that we will provide resources. What we really need is for the WHO and the DRC Government to co-operate on delivering them. He will be aware that some very brave people from Public Health England were able to fly out to the first outbreak, when the experimental vaccine was deployed for the first time. I want to take this opportunity to pay tribute to their amazing bravery, and indeed to the bravery of all health workers involved in this particular deployment.
I would also like to underline the other ways in which the UK is providing support. Financial support is obviously important, as was the initial support from Public Health England in terms of the cold chain. We helped to develop the vaccine and we also help in terms of widespread support to the health systems in poorer countries, including the DRC, where I was able to see some of the work that we have helped to support. We also support the MONUSCO peacekeeping operation, so there is a wide variety of ways in which the UK helps.
On the hon. Gentleman’s specific point about other experimental vaccines that we may be investigating, I will write to him.
Mr Speaker
We will now have an exemplification of brevity—I call Sir Desmond Swayne.
Sir Desmond Swayne (New Forest West) (Con)
Victims are at their most infectious when they are dead. A key intervention in Sierra Leone was burial teams; are they being deployed in the Congo?
Harriett Baldwin
My right hon. Friend is always a model of brevity. I can assure him that in my perhaps too verbose statement, I drew attention to the fact that we are supporting safe burial practices.
Dame Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Does the Minister recognise the importance of the work in this field of Professor Tom Solomon of the University of Liverpool, and of the Liverpool School of Tropical Medicine? Will she continue to support international funding so that their efforts, as part of a comprehensive approach to deal with this disease, are supported?
Harriett Baldwin
The hon. Lady is absolutely right to draw attention to the very important role that these key partnerships play around the world in strengthening health systems. She mentioned Liverpool which, as the House will know, does amazing work in this area and on neglected tropical diseases. When I was in Uganda, I saw the incredibly strong partnership between the Uganda Virus Research Institute and the University of London through its London School of Hygiene & Tropical Medicine. Those incredibly important partnerships are a win-win for the developing world, and a win for the UK.
Jeremy Lefroy (Stafford) (Con)
I declare an interest as a trustee of the Liverpool School of Tropical Medicine. Has my hon. Friend found that the amazing expertise gained by her Department as a result of that tragic situation in 2014 has been retained and enhanced in the meantime, or are we having to learn things again?
Harriett Baldwin
I mentioned some of the ways in which knowledge of dealing with these outbreaks has been acquired and improved on as a result of the outbreak in west Africa. Much of the expertise in Public Health England was drawn on very early in the previous outbreak in the Democratic Republic of the Congo. I reiterate that the response is running into challenges not because of a lack of expertise, a lack of vaccine or a lack of dedicated personnel willing to deliver it, but because of the conflict on the ground. People are attacking peacekeepers in the area. Therefore, we call on all participants to eschew violence and allow health workers to do the job that they need to do, because that is the real threat in this outbreak.
Paula Sherriff (Dewsbury) (Lab)
According to Médecins Sans Frontières, the delay in recognising the latest outbreak is in part due to a strike by health workers in the area over non-payment of salaries. Will the Minister elaborate on what her Department is doing to support the functioning of the health service in that country?
Harriett Baldwin
I pay tribute to the amazing work done by Médecins Sans Frontières, which is part of the delivery mechanism for the response. We have been very pleased with the co-operation that we have had from the DRC Government and their health system but, as the hon. Lady will know, that country is enormous. It is extremely heavily populated and conflict is being experienced in this particular area. Those factors, rather than a willingness of spirit or the desire to help, are the particular challenges in this outbreak.
Jack Lopresti (Filton and Bradley Stoke) (Con)
To what extent does my hon. Friend think that the security situation is hampering efforts to treat people in the region, and what are the solutions?
Harriett Baldwin
I underline that that is the fundamental challenge in the outbreak, because it has made it very difficult to trace contacts—I mentioned that over 4,000 people who are contacts of people who have tested positive for the disease need to be traced every day—and it is making it really difficult for health workers to do their job. The fact that MONUSCO has come under attack in the area underlines the very fragile security situation, which is causing untold harm to the response.
Christine Jardine (Edinburgh West) (LD)
The Minister mentioned the fragile security situation, and we know that the US Government will not allow their employees to go near the epicentre, because it is unstable. What assessment have the UK Government made of the security of UK employees there and of the circumstances in which they will be able to continue to work?
Harriett Baldwin
I draw the hon. Lady’s attention to the remark that I made towards the end of my statement, which was that, with respect to the House, we do not feel that it is helpful to the security of the individuals involved to comment on any specifics about the people who are currently working in that region on behalf of the UK Government.
Alex Chalk (Cheltenham) (Con)
I thank the Minister for the decisiveness of her Department’s response. Is she satisfied that all precautions are being taken to ensure that the disease is contained and not inadvertently exported to nearby countries or, indeed, even further afield by plane?
Harriett Baldwin
I thank my hon. Friend for his kind words. We constantly ask ourselves that question and we constantly ask our interlocutors from the relevant neighbouring countries whether there is anything else that should be done or that we can do to help. For example, when I was in Uganda, I was able to ask its Prime Minister whether the country would be able to approve the use of the experimental vaccine through their procedures as quickly as possible. I am glad to report to the House that, following that intervention, it has now been approved for use within Uganda.
Kevin Foster (Torbay) (Con)
I welcome the overall tone of the Minister’s statement. We previously saw with Operation Gritrock how our military, in an unarmed capacity—providing logistics and medical support—could make a real difference to fighting Ebola. What discussions has my hon. Friend had with the Ministry of Defence about how some of those capabilities could be used, given the situation on the ground?
Harriett Baldwin
My hon. Friend is absolutely right to pay tribute to the amazing work that UK forces did in Sierra Leone—words fail me in describing the amazing bravery that they showed in dealing with that outbreak. This particular example is within the boundaries of the Democratic Republic of the Congo, which is working with the forces that it believes are appropriate for that area. It is probably worth my saying on record that were the Government of the DRC to want to explore that approach with our Ministry of Defence, we would obviously be very happy to have that conversation.
Julian Knight (Solihull) (Con)
Given that it might take up to six months to contain the outbreak, what extra resource is being deployed by other major EU countries? Does that match up to the UK’s response?
Harriett Baldwin
I think I said that that was the best possible scenario. I reassure my hon. Friend that while the UK is the second largest contributor to funding the response so far, the World Health Organisation’s plan is fully funded, and other countries have stepped up to the plate to fund it. The issue is not a lack of funding or a lack of willingness from the international community to help out, and nor is it a lack of co-operation from the DRC Government in terms of the way in which the outbreak is continuing to grow. The issue is particularly the fact that this is a conflict-affected area, and that is hampering health professionals’ ability to do important work.
Mr Philip Hollobone (Kettering) (Con)
What is the size of the geographic area in which the 326 confirmed cases have been identified?
Harriett Baldwin
As my hon. Friend will know, the Democratic Republic of the Congo is one of the largest countries in Africa. Physically, it can sometimes be difficult to travel on the roads, and communications can be more challenging than they would be if such an outbreak happened here in the UK. The current outbreak is in the area of Beni—the previous outbreak happened in a completely different part of the DRC—which is 20 miles from the Ugandan border. Physically, the area is quite large and people also move, which is why it is important to trace the contacts that people have had, because those contacts can move easily across the country and across borders.
Rachel Maclean (Redditch) (Con)
Can my hon. Friend confirm that the actions of her Department are not only keeping people in the affected area safe but helping to keep UK citizens safe?
Harriett Baldwin
I can absolutely confirm that. I mentioned that Public Health England believes that the risk to the UK population is currently low, but obviously people travel around the world, and in this interconnected world, I strongly believe that a healthier world means a healthier UK.
Chris Philp (Croydon South) (Con)
The Minister has said repeatedly that the conflict has prevented efforts to contain the outbreak. What steps can the UK Government take to help bring the conflict to a rapid conclusion?
Harriett Baldwin
As my hon. Friend will know, there are many sources of conflict in the DRC. The UK, as a leading member of the UN, is a significant funder of the UN peacekeeping operation, MONUSCO, which has been there for a long time. Obviously, the UK supports it proportionately alongside our other obligations at the UN.
Huw Merriman (Bexhill and Battle) (Con)
World Health Organisation officials had to leave following an attack on a hotel in the Congo. Does the Minister anticipate more UN peacekeepers being in place to help officials stay in post?
Harriett Baldwin
I would like to put on the record my appreciation for the work of the MONUSCO peacekeepers in this very dangerous part of the world. Far too many of them have been victims of violence while doing their job. Given how prone this part of the Democratic Republic of the Congo is to violence and conflict, it is important that the relevant Government authorities work with MONUSCO to take whatever steps they believe necessary to protect those peacekeepers and ensure that the appropriate forces are there.
John Howell (Henley) (Con)
Terrorists and refugees are extremely mobile. How adequate are the plans the Minister has announced for neighbouring countries to meet that challenge?
Harriett Baldwin
My hon. Friend is right to draw attention to the risk of this outbreak being contagious across borders, given how close it is to the Ugandan border. The WHO and others are working with neighbouring countries to make sure that people are screened at the border, that there is a sufficient supply of vaccines and, as I mentioned earlier, that vaccines are approved for use within countries. We are taking all the steps we can, but what makes this outbreak so challenging is, as he rightly says, the prevalence of violent individuals disrupting the work of the health workers and peacekeepers.
Rebecca Pow (Taunton Deane) (Con)
With the outbreak predicted not to be under control for another six months, can my hon. Friend please assure us that everything is being done to protect our vital and much-valued health workers? Without them, we cannot deliver the programme, and with them, the consequences could extend far beyond the Congo. Will she join me in thanking these very brave workers?
Harriett Baldwin
My hon. Friend makes my point incredibly eloquently. I mentioned that 31,000 health workers, I think, had received the experimental vaccine so far. Think about how brave they have to be to receive an experimental Ebola vaccine; I do not like getting my flu jab. I therefore want to take this opportunity to draw the House’s attention to those strong words of appreciation for the brave work of both the peacekeepers and the health workers.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
As the Minister has just made clear, the outbreak is less than 20 miles from the Ugandan border, which is incredibly worrying. What practical help and support are the Government giving to the Ugandan Government to prevent what would be a major crisis should this cross the border into Uganda?
Harriett Baldwin
I had the great pleasure of visiting Uganda and was thoroughly impressed by the work of the Uganda Virus Research Institute and the reassurances I got from across the Ugandan system about its increased preparedness for the risk of Ebola crossing the border. People there had, for example, made sure the experimental vaccine was approved by the appropriate Ugandan authorities.
Centre for Data Ethics and Innovation
(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Digital and the Creative Industries (Margot James)
With permission, I would like to make a statement on the Centre for Data Ethics and Innovation.
The UK has a proud history of supporting the use of open data. Indeed, there has been a huge programme of work in recent years to make sure we are promoting the open and transparent use of data. The Government are in a privileged position, as we collect a vast quantity of high-quality data while delivering public services. As the UK moves rapidly towards a data-driven economy, we have an opportunity to improve decision making in many areas. The Government have already published over 44,000 datasets. Indeed, I pay tribute to the shadow Secretary of State, the hon. Member for West Bromwich East (Tom Watson), who was an early pioneer of open data while a Minister in the Cabinet Office.
This unprecedented openness has created many benefits. First, it has made the Government more accountable and transparent. Secondly, it can improve the effectiveness of public services. Thirdly, it has created the potential for new businesses to thrive. By making our data available to the public, we have been able to fuel businesses and applications that make life better and easier, and all this has paid dividends. We are now ranked joint first in the world on the open data barometer—an achievement of which we can be justly proud.
While open data is something we must aspire to, we also need to use it in a safe and ethical manner. The rise of artificial intelligence-driven products and services has posed new questions that will impact us all. What are the ethical implications of using technology to determine someone’s likelihood of reoffending? Is it right to use a programme powered by AI to make hiring decisions? Can it ever be right to have an algorithm influence who should be saved in a car crash? These are no longer questions for science fiction but real questions that require clear and definitive answers, where possible, from policy makers.
That is why we have recently established the Centre for Data Ethics and Innovation—ethics and innovation are not mutually exclusive, as strong ethics can be a driver of innovation. It is our intention that the centre becomes a world-class advisory body to make sure that data and AI deliver the best possible outcomes for society, in support of their ethical and innovative use. Following a consultation over the summer on the activities and work of the new centre, we are pleased to publish our response today.
This is the first body of its kind to be established anywhere in the world and represents a landmark moment for data ethics in the UK and internationally. Throughout the consultation, respondents recognised the urgent need for the centre, and there was widespread support for its objectives: to advise the Government on the necessary policy and regulatory action and to empower industry through the development of best practice. In turn, we can build public trust in data-driven technologies and make the most of the opportunities they present for society.
We have announced that Roger Taylor will chair the board. Roger has a background in consumer protection, founded Dr Foster, a healthcare data company, and is a passionate advocate for using data to improve lives. I know that he will do an excellent job. We have today announced the board members who will support Roger in this essential work. The board will include Lord Winston, a world-renowned expert in fertility and genetics, Kriti Sharma, vice president of AI at Sage and a leading global voice on data ethics, and Dame Patricia Hodgson, who was chair of Ofcom and brings a wealth of experience of regulatory affairs. The board will bring together some of our greatest minds and their immense and varied expertise to tackle these important issues.
Data is the fuel of any digital economy, and trust in that data is fundamental. As a nation, we have always been pioneers and advocates for transparency and freedom, and we will keep applying those values as we examine how we can make the most of data that is multiplying in scale and sophistication. The great challenge of the digital age is to ensure that data is used safely, ethically and, when possible, transparently. If we do that, we can help to power new technologies that will make life better and solve issues that are currently of grave concern. This truly is within our grasp, and if we work together, we can make it happen. I commend my statement to the House.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
This Government tend to have ambitious plans for us to be an also-ran in the data age. We have an infrastructure that is hopelessly out of date, an education system that most teachers think is not fit for the future and a voluntary approach to regulation that will not ensure that the online world is a world of trust or a safe space for our children.
We welcome the Minister’s statement, and I thank her for advance sight of it. I also thank her for her words of praise for my hon. Friend the Member for West Bromwich East (Tom Watson), the shadow Secretary of State, who was indeed a pioneer of open data and the Open Data Institute and the Power of Information Task Force. However, if the new centre is to be an establishment that simply writes voluntary codes and publishes best practice, it will not stop the online hate speech, the data breaches, or the risk of new algorithms coding old injustices into new injustices and inequalities. The centre joins 12 other regulators and advisory bodies with some oversight of the internet, so we now have 13 different regulators and advisers, and this one lacks any statutory basis for either its independence or its focus.
As a test case, will the Minister tell us whether the centre will advise her on the Google DeepMind deal, whereby British health data and its control were transferred to California despite all the assurances that were given to the Government and the public at the time? Will she tell us what specific guidance she is seeking on algorithmic unfairness, given that she voted down the amendments that we had proposed to create a legislative basis in the Data Protection Act 2018? Will she tell us what advice she is seeking on reforming the competition regulation regime, given that more companies, like Amazon, are using data to create monopolistic practices in this country? Finally, will she tell us what steps she will take to ensure that the centre builds on our proposal for a digital rights Bill in a new clause earlier this year?
We are not living through an era of change; we are now living through a change of era, and it is time that the Government rose to the challenge.
Margot James
I thank the right hon. Gentleman for his questions. First, I should make it clear that the centre is not a new regulator. It will be an advisory body, which, for its first year or so, will be in the business of advising the Government and leading public debate on serious ethical issues associated with artificial intelligence. However, I can give a positive response to his question about its independence. It will become independent, and it will be placed on a statutory footing as soon as parliamentary time is available for us to introduce the necessary legislation. We fully intend this body to be totally independent of the Government in due course. Only on that basis, I believe, will it become the world-leading authority on data ethics and innovation that we want it to be in the future.
The right hon. Gentleman asks what the centre will do about online hate speech and other well-known online harms, which my Department and, indeed, the whole Government take extremely seriously. Earlier this year, we published a response to the Green Paper on internet safety, in which we stated that we were working on a White Paper that would explore various options, including legislation and statutory regulation to hold internet companies, particularly social media platforms, to account, and that we intended to produce legislation when parliamentary time permitted. We regard that area as separate from the ethical issues on which the new centre will advise public debate and the Government.
The right hon. Gentleman mentions data protection. As he knows, that is regulated by the Information Commissioner, who has been involved in the development of the centre. He also mentions competition and the concentration of huge amounts of market power in the hands of a few companies. I am sure that many Members on both sides of the House share that concern, but it is very much a matter for the Competition and Markets Authority rather than for the new centre.
The right hon. Gentleman asks whether the centre will advise on Google’s decision to move parts of the healthcare practice of DeepMind to its Californian headquarters. As DeepMind and Google are private corporations, it is not up to the Government to pass comment on how they manage their affairs, but it is, of course, up to the new centre to opine on the practices and code of corporate governance of companies with which public services and Government contracts might work in the future. So there is a connection for the centre, albeit a rather tenuous one.
Sir Peter Bottomley (Worthing West) (Con)
I hope that the centre will work in collaboration with the Open Data Institute, founded by Sir Nigel Shadbolt and Sir Tim Berners-Lee. Work on open data can make a significant difference both to people with new industries and to us in the House. The Leasehold Knowledge Partnership, of which I am a patron, can use open data in a way that makes the Government start to change its approach to residential leasehold. I am sure that we can use information of this kind to make our job better, and to make a better economy.
Margot James
I thank my hon. Friend for his suggestions. The Open Data Institute is just the sort of organisation that the new centre will work with and consult.
Several hon. Members rose—
Mr Speaker
Order. We shall need to move on by 2.30 pm. I am sure that colleagues will factor that into their contributions.
Hannah Bardell (Livingston) (SNP)
I thank the Minister for her statement, although this data seems to be under particular protection. I did not receive an advance copy, although I am sure that that was an oversight on the part of her Department.
The Scottish National party welcomes the announcement of the establishment of the Centre for Data Ethics and Innovation. In the age of big data and tech firm power, it is vital for users to be confident that their data is being used in a safe and ethical manner. It is excellent—I hope I am right about this—to see a gender balance on the board, along with racial diversity. I hope that we may see appointments that ensure that LGBTI people and people with disabilities are properly represented and reflected.
I also hope that the Minister will do her best to ensure that the board makes every effort to bridge the gender data gap. I am sure that she is well aware of “Invisible Women”, a recent book by Caroline Criado-Perez. She may also be aware of the comments made by Mayra Buvinic, a United Nations Foundation senior fellow who is working on Data2X, an initiative aimed at closing the gender data gap. She has said:
“The dearth of data makes it difficult to set policies and gauge progress, preventing governments and organizations from taking measurable steps to empower women and improve lives”.
I am sure the Minister agrees that if our Governments are to design the right policies, we must ensure that we collect data on all parts of our society; otherwise, how can we track progress and evaluate developments? Will the Minister discuss those matters with the board and report back on progress? Will she also explain how the centre will work with the devolved nations and Governments on these issues?
There have been reports this week that airline booking algorithms are identifying families with the same surname who are travelling together on the same flight and then deliberately seating them in different parts of the aircraft, with the aim of encouraging them to pay extra to sit together. Does the Minister agree that that is an example of practices that constitute an unethical use of data and target poorer families, and will she confirm that it is exactly such practices that the centre will examine? Perhaps that is a starter for 10.
Margot James
I thank the hon. Lady for her questions and apologise that she did not have advance sight of the statement. I agree with many of her points. It is essential that users can have confidence about what is done with their data. That was one of the driving forces behind the introduction of the new data protection legislation earlier in the year. I am glad that she has noted the better diversity on the board of the new institute; in my view that is vital for the very reasons she sets out. It is extremely important that gender, LGBTI and other groups are well represented during the decision-making processes on how data are used as well as on the board of the new body. I will certainly discuss those matters with the new board, which I meet for the first time at its meeting on Monday next week.
Yes, we must continue our discussions with devolved Administrations, and I have already condemned in the strongest possible terms the practices of some airline companies on which she updated the House just now; that is outrageous. These are questions of corporate governance as well as the use of AI. One of the reasons we have set the centre up is to make sure that AI is a force for public good, rather than manipulation in such a cynical attempt at profiteering.
Robert Halfon (Harlow) (Con)
I strongly welcome the statement. The Select Committee on Education is conducting an inquiry into the impact of the fourth industrial revolution and AI on skills, education and our economy. Does my hon. Friend agree that studies suggesting that 28% of the jobs done by young people could be lost to AI reveal one of the most important challenges facing our nation? Should we not have a royal commission to look at the overall impact of AI, automation and robotics?
Margot James
I know my hon. Friend and his Select Committee are looking into these matters and I look forward to engaging with him on them. I encourage Roger Taylor and his team to do so as well. My hon. Friend is right. A recent NESTA report looking forward at the workforce of 2030 found that 20% of our current workforce are in occupations that are likely to be subject to automation and 10% are in occupations that are likely to expand, so this is an important issue and is right at the top of our agenda.
Tom Brake (Carshalton and Wallington) (LD)
The scandals of Cambridge Analytica and AggregateIQ show just how far behind Governments are in tackling data ethics and the manipulation of data. Does the Minister agree that such issues are often best tackled at EU level, and that this is precisely the wrong time for the Government to walk away from the EU if we are serious about addressing these problems?
Margot James
The matters to which the right hon. Gentleman refers were recently the subject, and continue to be the subject, of an Information Commissioner’s Office inquiry. I am confident that the ICO has the necessary resources and expertise to undertake these inquiries. Leaving the EU does not mean that we will be abandoning our data protection standards. We fully expect to maintain them and develop them further over time.
Julian Knight (Solihull) (Con)
Will the centre have the scope to look at AI and data usage in political campaigning and quasi-political campaigning?
Margot James
The inquiry I referred to in the previous answer has been reported on by the Information Commissioner, and she is setting forth a code of practice for political parties to sign up to on their use of data and how data are processed.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
A dating service that optimises short-term relationships to ensure repeat business. A taxi service that charges people more when their phone battery is low. A recruitment service that prioritises men for higher paid vacancies. I welcome the new centre but, with respect, those examples do not require ethical investigation; they require regulation and enforcement. When will we get that?
Margot James
In my answer to the shadow Minister, I set out that the Government are working on a White Paper that will be the precursor to various proposals and options for regulatory and legal reinforcement. Some of the examples the hon. Lady gives may well be the subject of that future legislation.
Paul Masterton (East Renfrewshire) (Con)
This area presents huge challenges for society in the future, but also real opportunities, particularly in highly skilled and well-paid jobs. How will the new centre assist in taking forward the AI sector deal, which is potentially of huge benefit across the country?
Margot James
This centre will play its part, but I also draw my hon. Friend’s attention to the AI Council—recently launched, and chaired by Tabitha Goldstaub, founder of CognitionX—which is charged with taking forward the AI sector deal so we have an industry that lives up to its potential.
Daniel Zeichner (Cambridge) (Lab)
I too welcome the new centre, but will it be accountable to the Government, or perhaps to Parliament through the Digital, Culture, Media and Sport Committee? Will the Minister also tell us a little more about its relationship with the ICO and rerun the answer to the question from my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) on DeepMind, because to suggest that because these are private companies there is no role for Government is, frankly, a complete abrogation of responsibility?
Mr Speaker
There were three inquiries there, but just one aggregated response is required.
Margot James
I am grateful to the hon. Member for Cambridge (Daniel Zeichner) for giving me the opportunity to clarify the last point he raised. Obviously private companies are subject to law and regulation. They are subject to the current laws and regulations on corporate governance, which have been strengthened by this Government in the last 18 months. I did not see that as a prime issue for the new centre, but corporations are of course subject to rules on corporate governance and so forth.
Mr Philip Hollobone (Kettering) (Con)
This sounds like a good idea, but we used to have a policy of reducing the number of quangos, so which quango is the Minister getting rid of to establish this new one?
Margot James
I thank my hon. Friend for his helpful question. This is being done in response to a new and growing need which perhaps was not anticipated when we established the policy to reduce the overall number of advisory bodies to the Government.
Paula Sherriff (Dewsbury) (Lab)
I was delighted to welcome Google to my constituency last Friday, when it delivered internet safety training and training on the appropriate use of data at Boothroyd Primary Academy. What specific ethical provisions will the board take into account in considering the impact of new technology on children?
Margot James
The impact of new technology on children is being examined by various other organisations. For example, the chief medical officer has been instructed by the Department of Health and Social Care to examine that matter, and the Children’s Commissioner is also looking into it. It is a vital subject, which our White Paper will also address.
Gillian Keegan (Chichester) (Con)
I welcome the establishment of this centre here in the UK. Does my hon. Friend agree that it is vital to ensure that the public have confidence in how their data are being used online, particularly with regard to algorithms for AI and deep machine learning?
Margot James
I thank my hon. Friend for that question, which goes to the heart of what we expect the new centre to be examining and advising on. She raises crucial questions, which are definitely within the remit of the new centre.
Norman Lamb (North Norfolk) (LD)
As Chair of the Science and Technology Committee, I can confirm that it warmly welcomes the establishment of the centre. One of the issues the Government response to the consultation did not really cover was whether the centre’s remit will include the ability to advise on the need for clearer guidelines on the sharing of public sector data, so that the enormous datasets within the NHS and other public services can be shared for the public benefit while also maintaining trust.
Margot James
I thank the Chair of the Science and Technology Committee for his question, particularly as it has reminded me of something I overlooked in my answer to the previous one. It is absolutely essential that public trust is earned and reinforced, because surveys that I have seen indicate that the public have something of a crisis of trust in the way in which personal data is currently being analysed—
Margot James
And shared, exactly. This is going to be a vital question for the new centre, but it also comes under the regulatory purview of the Information Commissioner.
James Cartlidge (South Suffolk) (Con)
Can my hon. Friend assure me that rural communities will have a voice at the centre, especially given the role that AI will play in driving up productivity for farms as we take back control of our agricultural policy when we leave the EU?
Margot James
I certainly think that rural areas have a key role to play and a voice that must be listened to as we develop policy in this area. If you will allow me, Mr Speaker, I also want to emphasise the fact that rural areas need better connectivity. Farms need to be able to connect to the coming 5G networks, so that they are able to take advantage of the internet of things and all the other positive benefits that AI will allow.
Mr Speaker
I thank the Minister and colleagues. I think that there is a lurking point of order, and if the hon. Member for Southampton, Test (Dr Whitehead) can overcome his natural shyness and leap to his feet, we will hear it.
Point of Order
Dr Alan Whitehead (Southampton, Test) (Lab)
On a point of order, Mr Speaker. I am afraid that leaping to my feet is a thing of the past. I am sure that you are aware of the recent European Court of Justice ruling on the future of the UK energy capacity market, and of the problems that this may cause for energy providers. I am aware that the Secretary of State for Business, Energy and Industrial Strategy has made an unsatisfactory and possibly misleading written statement on this matter. Have you received any indication that he will be making an oral statement to the House to enable hon. Members to ask him how he intends to respond to the ruling and how the capacity market might be reformed in order to comply with it?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order, and for his characteristic courtesy in giving me advance notice of his intention to raise it. The answer is twofold. First, I have received no indication that the Secretary of State or any other Minister in the Department intends to make an oral statement on the matter. Secondly, if the hon. Gentleman is dissatisfied, as he has indicated he is, there are avenues open to him to try to secure attention to the issue in the Chamber. As an experienced and versatile Member of this House, he will know what those avenues are. I suppose I should add, in parenthesis, in respect of his dissatisfaction, that every Member is responsible for the accuracy and veracity of what he or she says in the Chamber, and that if the Minister judges that an error has been made, it is incumbent on the Minister to correct the record. I feel sure that the hon. Gentleman, who is nothing if not a persistent scrutineer of the Executive, will keep his beady eye on this matter.
Bill Presented
Department for International Trade (Abolition) Bill
Presentation and First Reading (Standing Order No. 57)
Tom Brake, supported by Sir Vince Cable, Jo Swinson, Jonathan Edwards, Alistair Carmichael, Christine Jardine, Sir Edward Davey, Norman Lamb and Layla Moran, presented a Bill to make provision for the abolition of the Department for International Trade; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 25 January 2019, and to be printed (Bill 290).
Electric Vehicles (Standardised Recharging)
Tuesday 20th November 2018
(6 years ago)
Commons ChamberRead Full debate Electric Vehicles (Standardised Recharging) Bill 2017-19 View all Electric Vehicles (Standardised Recharging) Bill 2017-19 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Bill Wiggin (North Herefordshire) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision about standardised requirements for electric vehicle charge points; and for connected purposes.
I am delighted to see my neighbour, the Minister of State, Department for Transport, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), sitting in his place listening to this, because I bought an excellent Mitsubishi plug-in hybrid electric vehicle—lovingly know as a PHEV—from Fownhope Mitsubishi in Hereford as part of my personal commitment to a better environment and a more practical and cleaner way of travelling. However, we need to do much more to encourage the general population to invest in electric vehicles, whether fully electric or hybrid. There are some admirable policies, such as the zero rate of car tax, and some local authorities implement free parking for electric vehicles while charging, but there remain serious practical impediments to running an electric car.
The main problem is the charging points. Our goal must be for every car to be able to recharge at every charging point. If we can achieve this, we will allow more people to switch to electric vehicles. The first problem with the charging points is that there are various different connectors to attach an electric vehicle to the charging points. The two main connectors are the type 1 five-pin connector and the type 2 seven-pin connector. The combined charging system used in the rest of Europe is not currently in widespread use in the UK.
Charging points are often tethered, which means they already have cables attached to them, and that is great if someone does not have the right sort of cable, but it is no use if they have the wrong sort of card to pay with. Even when charging points are untethered, car owners have to go to great lengths and significant expense to be able to charge their car publicly. Herefordshire Council, for example, has implemented a policy of free parking for electric vehicle users while they are charging their cars. This is an excellent idea, but in order to use the charge points, people must first purchase a £400 connector lead. Many electric vehicles come fitted only with a three-pin plug for home charging, and not with the five-pin or seven-pin versions for public charging. This only adds to the confusion.
I believe it would be sensible to follow the approach that computer manufacturers took some time ago, and to create a universal standard for connectors to electric vehicles. Mobile phones, cameras and all manner of computer accessories have individualised ports on the devices themselves, but they all connect to a USB port at the power end. We should apply this to electric vehicles and create a universal standard for car chargers. Car manufacturers should conform to industry standards regarding the power-side connector not just in the UK but throughout Europe. This would mean that all cars would be able to connect to all charging points.
The power to create uniformity has already been enacted into law in the Automated and Electric Vehicles Act 2018, which states:
“Regulations may impose requirements on operators of public charging or refuelling points…in connection with the components of public charging or refuelling points that provide the means by which vehicles connect to such points”.
I believe that this power must now be used by the Secretary of State to create uniformity among charging points, and so make the lives of electric vehicle users easier. I hope that my Bill will form the basis of an amendment to the Act to ensure the creation of an industry standard, not merely to permit it.
The second problem with charging points is the disparate and patchy network available across the country. Each charging point is owned by a particular company, and each requires a particular card or key fob to operate it. This may be linked to a membership with a monthly or annual fee. Electric vehicle users in the UK are currently disadvantaged compared with our European neighbours due to our lack of an interoperable payment system for EV charging. EV drivers in the Netherlands, for example, are able to charge their cars using a common payment card system. I believe that we could make the current British model more effective and efficient by introducing a similar scheme here.
In some parts of the country, EV drivers who wish to make any significant journey may need up to three different charging cables and three different charging company memberships just to get to the other end of their trip. Of course, they cannot just go halfway; once they have a flat battery, it’s all over! An obvious solution, with the advent of contactless and mobile payment technology, is to ensure that each charging point has a pay-as-you-go option that does not require a membership or key fob. This would ensure that users who frequently use a certain charging point could still take advantage of the preferential rates that membership might bring, while users who wished to use the service as a one-off would be able to do so.
The goal is not to nationalise our network of charge points but simply to ensure that the free market is working for consumers. That is the job of Government in our society, and in this instance the local monopolies on charge points are not working for consumers. That is why the Government must use my Bill to force the implementation of pay as you go. The Alternative Fuels Infrastructure Regulations 2017 state:
“An infrastructure operator must provide to any person ad-hoc access to—
(a) all recharging points deployed after 17th November 2017; and
(b) all recharging points deployed on or before 17th November 2017, no later than 18th November 2018.”
As the House can see, this Bill is extremely timely as it falls just two days after the point at which every charging point in the country should theoretically provide ad hoc access to all users.
The Government have stated that they will ban the sale of non-electric cars from 2040. Existing incentives to drive electric vehicles, such as the congestion charge exemption, have shown that electric vehicle use is due to rise. If we are truly to be a nation of electric vehicle users, we must provide the appropriate infrastructure for their use. Car drivers must not and will not be forced to switch to electric unless there is evidence that it is not only cleaner, but equally as efficient and practical. The Bill is intended to create uniformity of charging point connectors, to compel charging point operators to offer a pay-as-you-go option, and to impose penalties on those who do not follow the rules.
I am extremely grateful to have the support of over 25 right hon. and hon. Members—I see some of them here—but I regret that I cannot add all of them as sponsors of the Bill. I hope that the Bill raises questions at the Department for Transport and that the show of support from across the House will lead to a meaningful change in the regulations that will futureproof the use of electric vehicles.
Question put and agreed to.
Ordered,
That Bill Wiggin, Michael Tomlinson, Helen Goodman, Mr Philip Dunne, Eddie Hughes, Dr Andrew Murrison, Scott Mann, Maria Caulfield, Maggie Throup, Sir Bernard Jenkin, Sir Graham Brady and Rebecca Pow present the Bill.
Bill Wiggin accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 8 March 2019, and to be printed (Bill 291).
Finance (No. 3) Bill
Tuesday 20th November 2018
(6 years ago)
Commons ChamberRead Full debate Finance Act 2019 View all Finance Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 20 November 2018 - (20 Nov 2018)
The Exchequer Secretary to the Treasury (Robert Jenrick)
I beg to move amendment 16, page 44, line 23, leave out “1 October 2019” and insert “1 April 2019”.
This amendment provides for the increase in the rate of remote gaming duty to take effect from 1 April 2019 instead of 1 October 2019.
The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)
With this it will be convenient to discuss the following:
Amendment 11, page 44, line 23, leave out “1 October 2019” and insert “the prescribed date”.
Government amendment 17.
Amendment 12, page 44, line 25, leave out “1 October 2019” and insert “the prescribed date”.
Amendment 13, page 44, line 32, at end insert—
“(4) In this section, ‘the prescribed date’ means the date prescribed in regulations made by statutory instrument by the Secretary of State
(5) The Secretary of State may not make regulations under subsection (4)—
(a) to prescribe a date before 1 October 2019, and
(b) unless regulations under section 236 of the Gambling Act 2005 have been made that amend the definition of sub-category B2 gaming machines so as to define such machines as having a maximum charge for use of no more than £2 with effect from a date no later than 1 April 2019.
(6) In this section, “sub-category B2 gaming machines” has the meaning given in regulation 5(5) of the Categories of Gaming Machine Regulations 2007/2158.”
Clause stand part.
Clause 62 stand part.
That schedule 18 be the Eighteenth schedule to the Bill.
New clause 12—Review of public health effects of gaming provisions—
“(1) The Chancellor of the Exchequer must review the public health effects of the provisions of section 61 of and Schedule 18 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the effects of those provisions in reducing the negative public health effects of gambling, and
(b) the implications for the public finances of the public health effects of—
(i) those provisions,
(ii) the operation of the law relating to remote gaming duty and gaming duty if those provisions were not given effect.”
This new clause would require a review of the public health effects of gaming provisions.
New clause 13—Report on consultation on certain provisions of this Act (No. 3)—
“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).
(2) Those provisions are—
(a) section 61, and
(b) Schedule 18.
(3) A report under this section must specify in respect of each provision listed in subsection (2)—
(a) whether a version of the provision was published in draft,
(b) if so, whether changes were made as a result of consultation on the draft,
(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”
This new clause would require a report on the consultation undertaken on certain provisions of this Act – alongside new clauses 9, 11 and 15.
New clause 16—Review of remote gambling duty—
“(1) The Treasury shall undertake a review of the increase in the rate of remote gambling duty introduced in section (Remote gambling duty (rate)) of this Act.
(2) The review shall consider, in particular, the effects of the rate increase on—
(a) the public revenue,
(b) betting shops, and
(c) gambling related harm.
(3) The Treasury review must include independent advice on the feasibility and impact of bringing forward the date of the increase in remote gaming duty to 1 April 2019.
(4) The Treasury review of the effects of the rate increase in remote gambling duty under subsections (2) and (3) must also take into account any effects of reducing to £2 the maximum stake on B2 machine games with effect from 1 April 2019.
(5) The Chancellor of the Exchequer must lay a copy of a report of the review under this section before the House of Commons no later than 28 days after this Act is passed.”
This new clause requires the Treasury to review the feasibility and impact of bringing forward from October 2019 the implementation of an increase in remote gambling duty, which is linked in paragraph 3.68 of the Budget 2018 Red Book to the implementation of a £2 maximum stake on B2 machine games (fixed-odds betting terminals).
Robert Jenrick
As you have just described, Dame Eleanor, we begin today’s consideration of the Finance Bill with clauses 61 and 62 and schedule 18. The parts of the Bill that we are about to discuss concern rates of remote gaming duty and other gaming duty measures. Gambling policy more generally and its related legislation, such as the Gambling Act, are matters for the Department for Digital, Culture, Media and Sport and lie outside the scope of a Finance Bill, but I want to explain both the fiscal measures in this Bill and how they interact with wider important matters, such as fixed-odds betting terminals.
Turning briefly to clause 62 and schedule 18, which deal with changes to gambling duty accounting periods, this Government are committed to reducing administrative burdens on businesses and to making the tax system more effective, efficient and simpler. The changes will bring gaming duty paid by land-based casinos in line with other gambling duties. They will allow casinos to roll forward losses and will remove the requirement to pay duty on account, reducing administration for businesses and for Her Majesty’s Revenue and Customs. The changes are expected to have a negligible impact on the tax take from casinos, which will continue to be subject to a tax structure that ensures that the most successful casinos pay up to 50% of their profit to support public services. That take will total £250 million to the Exchequer in the current financial year.
Sir Peter Bottomley (Worthing West) (Con)
I hope to speak later if possible, but this is a rare example of when parliamentary arithmetic has got the Government to do something that will be good for them and good for the population. I pay tribute to the hon. Member for Swansea East (Carolyn Harris), the chair of the all-party parliamentary group on fixed odds betting terminals, who has led a cross-party group over the years—this is not just about those who have come in lately—to ensure that the arguments are right, as well as the parliamentary arithmetic.
Robert Jenrick
I praise my hon. Friend for his role in this matter, and I will come in due course to the hon. Member for Swansea East and other colleagues who have played a decisive role in these events.
In deciding on a date for implementation, the Government were obliged to consider not just those who would have been harmed by FOBTs, but the impact on wider society—the tens of thousands whose livelihoods would be at risk following the new stake. Stakeholder evidence varied considerably, but it was widely acknowledged that there would be a significant impact, whether as a result of the cap in itself or because the decision to change the cap would bring forward wider changes that were already likely to occur in a sector undergoing a great deal of change as a result of new technology. The Government have not wavered from their commitment to set a £2 stake and considered the best way to mitigate the negative impacts of the policy on the individuals and their employers, giving them time to prepare for the impact if possible. Accordingly, my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport published a written statement confirming that a £2 maximum stake will be implemented from April 2019, and we have tabled Government amendment 16 to reflect that.
I will now briefly describe the events leading up to this point. When we announced the decision to reduce the stake, implementation in April 2020 was a date that I discussed with the hon. Member for Swansea East when she came to the Treasury in late spring to talk about the matter. A decision was then taken by the Department for Digital, Culture, Media and Sport to consult informally with stakeholders and it was then proposed in the Budget to bring forward the date to October 2019. The decision was, I believe, intended in good faith to represent a balance between expeditiously bringing an end to the harm caused by FOBTs and enabling those working in the sector to prepare for the implications for them. None the less, it became abundantly clear that a large number of colleagues disagreed and wished to see the stake change implemented sooner, which is exactly what we have done.
I am grateful for the counsel and the campaigning zeal of a number of Members on both sides of the Chamber, including my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the hon. Member for Inverclyde (Ronnie Cowan) and, of course, the hon. Member for Swansea East, whom I respect and whom I have enjoyed working alongside throughout this process.
I admire my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who was an outstanding Sports Minister and is a great Member of Parliament. She clearly played a decisive role in the Government’s decision to reduce the stake in the first place and, indeed, to do so expeditiously in April 2019. I have always believed that, in politics as in life, all we have is our reputation, and she chose her principled belief that this change must be implemented as soon as possible over her role in government. I respect that, and I am sure Members on both sides of the Committee do so, too.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I fully accept what the Minister says about the reputation of my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), but does he agree that these things should not have necessitated her departure when she was doing such a good job? I do not expect the Minister to express an opinion, just that it would have been better otherwise.
Robert Jenrick
I clearly hear my right hon. Friend’s point, and I have fairly set out the chain of events that led to this moment. As I said, I enormously respect my hon. Friend the Member for Chatham and Aylesford and her decision. When I was first elected to Parliament, an elderly constituent sent me a quote by John Quincy Adams:
“Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost.”
On this occasion, of course, my hon. Friend is not alone, and I am grateful for her work in this area.
Government amendment 17 complements Government amendment 16, both of which relate to amendments 12 and 13. As I have just set out, the Government recognise the strong will of the House that the implementation date for the new maximum stake for fixed odds betting terminals be brought forward to April 2019. The Treasury has been clear throughout the process that we do not seek to use the issue of FOBTs to increase Exchequer revenues, but we do have a responsibility, which I hope Members on both sides of the Committee will recognise, to protect the public finances and to ensure that we have the means to fund our public services. The cost of eliminating the damage caused by FOBTs must not be paid for by our having fewer doctors, fewer teachers and fewer people working in mental healthcare.
Paul Masterton (East Renfrewshire) (Con)
I welcome this change. In my constituency there are betting shops sandwiched between pubs and chemists giving out substitution treatments. Does the Minister not agree that the savings to the public purse from preventing people from falling into problematic debt, and preventing highly addicted people from falling into other troubles and needing to rely on the NHS and other services, will be far greater than the tax received from these gambling machines?
Robert Jenrick
My hon. Friend makes an important point that has been raised by many others and that I am sure was a significant contributor to the decision of the Department for Digital, Culture, Media and Sport to take this action.
The point I am making is a separate one; that in making the decision to reduce the cap on FOBTs, we want to ensure that the Exchequer can protect its revenues so it can continue to fund public services. To do so, clause 61 increases the rate of remote gaming duty to 21% from 15%, and amendment 17 complements amendment 16 by ensuring that both changes are implemented at the same time in April 2019.
Throughout this process the Treasury has been clear that we want to raise only a commensurate sum of money to protect public services, and that we want to ensure that both the stake change and the change in taxation occur at the same time. That is exactly what we intend to do. This increase applies to anyone who offers online games of chance to UK players, including online roulette, online poker and online slots. This change should ensure that we take decisive action on FOBTs without having to cut services or raise taxes on those outside the gambling sector. To recognise this, I ask the Committee not to press amendments 12 and 13 and to support Government amendment 17.
New clause 12 would require the Chancellor to prepare a report describing the public health effects of the gambling clauses in this Finance Bill, for publication before the House within six months of Royal Assent. The Government take the impact of gambling on individuals’ health seriously, which is why we have listened to Members on both sides of the House and taken the action we have on FOBTs. This summer the Gambling Commission published a well-received paper on how to measure gambling-related harms, setting out how it intends to move forward in such a large and vital area of analysis. I hope that colleagues on both sides of the Committee agree that the Gambling Commission should be left to carry out its important work in this area without the Treasury attempting to carry out its own competing analysis on the very limited effect on public health of a change in accounting periods, which is what the new clause would bring into effect.
Graham P. Jones (Hyndburn) (Lab)
I welcome that assessment, but does the Minister accept that the assessment needs to look at the various forms of gambling and that it also needs to consider the amount of gambling advertising presented to people on our television screens?
Robert Jenrick
As a parent and as a citizen I am concerned, like the hon. Gentleman is, about the amount of gambling advertising on television and elsewhere, but that is not a matter for the Finance Bill; it is a matter for the Department for Digital, Culture, Media and Sport and for the Gambling Commission.
As I have just described, new clause 12 would achieve only the Treasury producing a very limited analysis of the public health impact of the change in accounting period set out in the Finance Bill. I therefore urge the Committee not to press new clause 12.
New clause 13 proposes a report on the consultation undertaken on the detail of clause 61 on remote gaming duty and of schedule 18 on gaming duty. Although we have had much debate on the content and implications of clause 61, it is in fact very simple: it is a rate change, and the Government would not normally consult on such a change. I reassure the Committee that we have gone over and above the usual convention in such cases. The increase was originally proposed in May 2018, and my officials, alongside the Department for Digital, Culture, Media and Sport, have since worked with interested parties on its detail. We believe we are in a good position.
I fully reassure the Committee that the change made by clause 61 was consulted on last year. In addition, schedule 18 was published as a clause in the draft Finance Bill in July 2018. It has therefore been subject to scrutiny and comment by stakeholders ever since. I hope my comments will reassure the Committee that there is no need for a further report into our consultation on these issues, and I therefore ask that new clause 13 not be pressed.
New clause 16 returns to an issue with which I began this debate. The new clause asks for a review of the feasibility of bringing forward the rise in remote gaming duty in clause 61 to April 2019. As I have tried to reassure right hon. and hon. Members, we have already covered these matters—they were considered before my right hon. Friend the Chancellor tabled amendments 16 and 17, which will bring forward the date to April 2019—and I therefore respectfully ask that new clause 16 not be pressed.
I look forward to listening to the contributions of right hon. and hon. Members to this debate. The Government amendments to these clauses represent the action on FOBTs that the country demanded and for which Members on both sides of the House have campaigned assiduously over many years. The changes will now be delivered as expeditiously as possible and in a fiscally responsible manner that protects public services. I commend these changes to the Committee.
Clive Lewis (Norwich South) (Lab)
Well, where to begin? I can sum up the Minister’s speech as, “Nothing to see here.”
Before I move on to the detail of this issue, I want to pay tribute to Members on both sides of the House who forced the Government to bring forward the FOBT stake reduction from October 2019 to April 2019, which will be implemented through the amendment before the Committee. Particular recognition goes to my hon. Friend the Member for Swansea East (Carolyn Harris), who is to be warmly congratulated on her tireless work for social justice, in all its incarnations, and to my hon. Friend the Member for West Bromwich East (Tom Watson), the shadow Secretary of State, who is not in the Chamber, but has spoken about this issue many times from the Dispatch Box.
Graham P. Jones
My hon. Friend is making a powerful point. If the gambling industry was so concerned about employees, perhaps it ought to have given consideration to the number of single-staffed bookmakers that have arisen because of FOBTs. We are talking about young and vulnerable female staff working late at night in the bookmaking industry. It is too late for the industry to complain about the staff now when it did not care about them in the first place. Does he share that view?
Clive Lewis
My hon. Friend makes his excellent point well, and I agree with it entirely.
Page 11 of that report describes what “at risk of closure” actually means. It means that once the £2 cap is implemented, just under half of those shops would make a net annual profit of £20,000 or less. Are we seriously to believe that a net profit of £20,000 a year is terminal? KPMG did not think so. The report concludes that these shops would not close, but would simply be “less profitable”. The threat was not to our constituents’ jobs, but to corporate profits. Can the Minister assure Members that the Treasury will never again seek to justify resisting evidence-based policy on the basis of secret reports and clandestine meetings?
By choosing to take such an approach, the Treasury ignored the recommendation in the May 2018 gambling review that the £2 limit should be adopted within nine to 12 months. Let us remember that that policy was designed to reduce the harm caused by gambling addiction. The evidence of harm associated with FOBTs is overwhelming, with that harm disproportionately felt by the poorest in our society. Put simply, there are twice as many betting shops in the poorest 55 boroughs of the UK as there are in the most affluent 115.
Even in narrow economic terms, viewing the delay as merely a reduction in tax income to the Exchequer makes little sense. As we have heard today, the social cost of addiction, crime and debt that accompanies the ever-increasing losses on FOBTs is estimated by the Centre for Economics and Business Research to cost the UK £1.5 billion a year. It has an impact on many aspects of social welfare, including employment, mental health and financial stability, so the awful human cost, about which we have heard so powerfully, is matched by an economic cost that we all bear as a society and as an economy as well. Perhaps the Minister would address whether the Government have factored into any of their fiscal calculations the prospect of alleviating the cost to public services, given a decline in gambling-related harm and crime?
Of course, the most important reason for an immediate stake reduction is a moral one—an issue of social justice that must be resolved. Lives are being destroyed, and this policy change is a milestone on our journey to tackle this harm. Labour Members are proud be part of taking that step forward, and we will keep striving to carry on making these changes until eventually we get to the bottom of what the gambling industry actually is: something that preys on people’s vulnerabilities. Labour Members recognise that quite clearly.
Mr Duncan Smith
I want to summarise some of the issues relating to the amendments standing in my name and those of many others, including, most importantly, my hon. Friends the Members for Swansea East (Carolyn Harris) and for Inverclyde (Ronnie Cowan)—they are hon. Friends in this case, although I am not sure they will want to be pursuing that one further. This genuinely was a very cross-party process. Interestingly, the list of names of Members who support the amendments tells us everything we need to know about the strength of feeling that existed in the House.
We accept the Government’s change, to which I shall come back in a moment, but it is worth reminding ourselves that this process has had a long gestation. I remember having conversations with my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) probably two years ago, at least—
Mr Duncan Smith
It was a long time ago, and even then we discussed the specific problems with fixed odds betting terminals, along with wider issues. There was this long process of gestation, and then the hon. Members for Swansea East and for Inverclyde got involved and the all-party group was formed. I congratulate them on managing to get things on to a much more even keel in respect of this being a cross-party process, in which I played a part.
We arrived at the point when we had finally persuaded the Government, with massive internal support from my hon. Friend the Member for Chatham and Aylesford, that it was necessary for us to make this change, given that these machines, although not alone in this, were peculiarly addictive. It was accepted that they led to a higher level of addiction and had dramatically changed the nature of betting shops. Years ago, when gambling was liberalised under a previous Government, I said, given my involvement in some of the studies, that I thought that was a mistake. When it comes to widening and liberalising gambling, the situation is not like in any other industry. It really is not just about jobs and businesses, because change involves people making decisions that are not about positive life outcomes. Thus, the situation needs to be treated separately. I remember the discussions about super-casinos, when I said that I was appalled by the idea that establishing a super-casino would somehow regenerate a town. I said, “It won’t regenerate the town. It will make it descend, and everything will then hinge around the behaviour of people in and around the massive casino.” That is by the by; liberalisation became the process.
I was really pleased when the Government finally agreed to reduce the stake to £2. My goodness, what a peculiar argument we had. We heard the Gambling Commission and the gambling industry asking many times why we would not go to £30 rather than £2. The slow extraction of teeth in this process was fascinating to behold. The worst bit for me and, I am sure, for my colleagues, was hearing the endless testimony about the families’ lives that had been blighted by this terrible addiction. Even though I was opposed to FOBTs, I had not been aware of the real human harm being caused, because one does not see it, but, as my hon. Friend the Member for Chatham and Aylesford knows, that was the real driver behind why we wanted to act. It was really quite moving to hear the stories at first hand and to see families’ dedication to never allowing others to get into such a situation.
I was really proud of my Government for making the decision and accepting that there was a need for change. We thought the process was done. I argued for making the change this October, because there was no point in hanging around. I thought that we did not need to worry about the gambling industry, because it would make whatever changes were necessary and it gets a lot of money anyway, so I was not that bothered about it. I remember the discussion about why we were not acting in October, and we reluctantly agreed that perhaps 1 April would give the industry time. The next thing we heard was that the date had gone back to 1 April 2020 —the following year—which was never agreed.
All of a sudden, the Government then said that they had agreed to make the change in October 2019, which they said was an advance of six months, and we said was a delay of six months. We established that the gambling industry would make well over a billion pounds during that six months. The real problem was why there was a delay, as it was clear that, as the hon. Member for Norwich South (Clive Lewis) said on behalf of the Opposition, the gambling report said nine to 12 months, and nine to 12 months from the date of the original decision took us to approximately April or May the next year. All that was part of the consideration. We had debates about why the date had gone back and, although I will not make a big thing about this, I did say to my right hon. and hon. Friends in government that they needed to put it back to 1 April. At the time of the Budget, their date was rejected.
Carolyn Harris (Swansea East) (Lab)
May I say what a pleasure it is to speak today, Dame Eleanor? I am delighted to say that the Members who tabled and put their names to the amendments and new clause will not press them to a vote because—in case anybody has not heard—the Government finally saw sense and backed down on the implementation date for the reduction of stakes on fixed odds betting terminals. [Hon. Members: “Hear, hear!”] Thank you.
I stand instead to make a point: the power of the Back Benchers cannot be ignored. This House is fortunate to have so many Members, on all Benches, who are prepared to put principle before both profits and politics. I pay tribute to the many colleagues in this place and the other, and I pay special tribute to the hon. Members for Inverclyde (Ronnie Cowan) and for Strangford (Jim Shannon), to the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), to the hon. Member for Worthing West (Sir Peter Bottomley) and to the wonderful hon. Member for Chatham and Aylesford (Tracey Crouch), whose principles led to her resignation. I thank them all for their support, dedication and downright determination to force the Government’s hand.
The result has been a long time coming, but this issue has demonstrated the very best of this House, where politicians of all persuasions came together, united in seeking to make sure that the Government were held to account for their reluctance to put people’s lives ahead of company profits. The Government had so many opportunities to do the right thing, but they seemed determined to pander to the whim of an industry set to make nearly £1 billion of profit in the six-month period between April and October 2019. It is regrettable that it took strong-arm tactics by Members to convince them to make the change and that they did not come to a principled decision on the morality of the problem—the devastation that these machines have caused to individuals, communities and families.
Bob Stewart (Beckenham) (Con)
I thank the hon. Lady and everyone who has played a part in this campaign. Is it not tragic that it has taken this House 17 years to sort out the matter? We are congratulating ourselves on having achieved something, but, in those 17 years, we are fully aware of the lives that have been wrecked by our inactivity. Thank goodness that we have got it right now.
Carolyn Harris
I certainly agree with the hon. Gentleman.
May I just say that I cannot thank the Government? As much as I respect and like the Minister, I can say only one thing: learn lessons from this and never underestimate the power of principle.
Tracey Crouch
I wish to take only a few minutes of the Chamber’s time on amendments 11, 12 and 13, which I signed, and on the Government’s amendments 16 and 17 that relate to the reduction in stake for fixed odds betting terminals and the increase in remote gaming duty.
I am relieved that the Chancellor reconsidered his position on the timeframe for the increase for RGD and therefore the reduction in stakes from £100 to £2. Although it was not technically necessary to link the two, the whole House does, I think, understand the financial challenge that the Treasury faces and therefore the need for fiscal responsibility.
The Government made the right decision to reduce stakes on B2 machines as part of their gambling review, not least because it was proven throughout the review that players of these machines have the highest rates of problem gambling and that 32% of players are considered at risk of harm. Concerns around problem and harmful gambling were further amplified by the location of B2 gaming machines in areas of high deprivation. The review also found that those who are unemployed are more likely to most often stake £100 than any other socioeconomic group.
Although the review looked at very many aspects of gambling, it was right that there was a wider public and parliamentary focus on FOBTs and that we took decisive action. The impact assessment made it clear that we expected an implementation date within nine to 12 months and the Government’s amendments honour that expectation.
I am grateful that the Chancellor listened to the House on this matter, although I am sorry that it needed the much louder collective voice for the message to be heard. All that needs to be said has been said, except my personal thanks to the 3,000-plus people who have contacted me since my resignation, the faith leaders who spoke out, the 100-plus colleagues who put their name to the all-party group’s amendments and the brilliant Clerks who helped to craft them.
I have just one other question for the Minister, and it relates to new clause 12. Although the new clause is very limited and there is already a strong framework within the Gambling Commission, I ask that, as an extra protection, the Minister consider supporting this additional review today.
I have no intention of shadow-boxing the new Minister, my hon. Friend the Member for Eastleigh (Mims Davies), who is a friend and will be excellent in her job, but others have noted that there are many challenges on gambling, including harm to children, online harms and advertising. The review sets out many recommendations to tackle those issues, and I look forward to watching her progress with interest.
I have met many people over the past few years who themselves have been addicted to gambling or who have lost loved ones to gambling. The treatment services that are there for them are very good and are run and supported by excellent people, many of whom are volunteers, but they are still the Cinderella service. I am pleased that the Health Secretary has continued his interest in this matter. I am sure that new clause 12 will help further that public health aspect.
I am in no doubt that what this Government have done today with these amendments will save lives from devastation and that is surely what we all go into politics for.
Ronnie Cowan (Inverclyde) (SNP)
I rise to speak to new clauses 12 and 13. We are all fully aware that the Government have declared their intention to introduce a new £2 maximum stake on fixed odds betting terminals, as has been documented already this afternoon. Getting the Government to this stage has not been easy, but thankfully they have seen the light. After considerable cross-party pressure, they have also agreed that the date of implementation will be in April 2019. That is extremely welcome news, and it came about because they were forced to look at the evidence gathered by the all-party group on FOBTs and not rely on the flawed KPMG report that was steered by the bookmakers’ parameters.
I now expect the Government to do the decent thing and amend the Bill accordingly. This would not have happened without the superb work and commitment of the hon. Member for Swansea East (Carolyn Harris), the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) and the hon. Member for Chatham and Aylesford (Tracey Crouch). That brings us nicely to new clause 12, entitled, “A review of public health effects on gaming provisions”, which stands in my name. Not that long ago, gambling was restricted to on-course and off-course bookmakers. Other types of gambling existed, but, for the majority of people, casinos were the stuff of James Bond movies, while bingo and the football pools were once a week and deemed to be sociable and aspirational.
Over time and with the advent of new technology, the face of gambling has changed. Through our mobile phones, we have access to gambling 24 hours a day, every day of the year. The first and most obvious outcome is that there is no cooling-off period. Gamblers caught up in the heat of the moment will not run out of races or be asked to leave the premises; quite the reverse, pernicious advertising with offers of free spins and money-back guarantees are used as bait to lure the most vulnerable gamblers, and eventually many are hooked. When I googled “Gambling Clinics UK”, the first two hits on the list were not organisations offering me help, but paid-for adverts for casino sites.
Graham P. Jones
I am very grateful to the hon. Gentleman for giving way. He is making a very powerful point, and I did not want to interrupt him mid-flow, but will he add to that list of problems the misuse of gambling accounts? That needs to be looked at, because gambling accounts are misused so that people become addicted. When people fall away and manage their addiction, they are dragged back in through gambling accounts, and that should be something that this House considers.
Ronnie Cowan
I absolutely agree with the hon. Gentleman. A second point is that there are dormant betting accounts with money in them but we cannot access them. If that money could be released and freed up for gambling care, there would be more money in the pot to do some good.
Meanwhile, our TVs are haunted by advertising aimed at the most vulnerable. We even have products aimed at grooming children to be the next generation of gamblers. The gambling industry has to ask itself some very serious questions about its marketing strategy. I wish to thank Hamleys toy store for moving swiftly to remove a product deemed undesirable from its shops across the UK when I brought it to its attention. Our children must be protected. For the majority of adults, gambling is fun.
Paul Masterton
I thank the hon. Gentleman for giving way and also for all the work that he has done as part of the all-party group. Does he share my concern about the number of apps aimed at young children, which are effectively based around the concept of gambling? Although they may not be what he or I would consider to be gambling, the sort of behaviour and the risk-reward elements involved seem to ingrain that behaviour from a very young age, which is deeply concerning.
Ronnie Cowan
It is particularly disturbing when we know that people are sitting back and designing these apps in precisely that manner. They know exactly what they are doing, but they do not seem to have any conscience that will stop them from doing it.
For the majority of adults, gambling is fun—if it is under control. Many people can set a limit and not go beyond it. While I would pay for a ticket to a concert or a rugby match, their chosen form of expenditure for entertainment is gambling, and I am not questioning their choice. However, when we offer a licensed product that has the potential to damage the customer, we need to take steps to ensure that the possibility of damage and the consequences of that damage are as limited as possible. Gambling-related harm caused by an addiction to gambling is as much a public health issue as damage caused by drugs and alcohol, but it is not always seen that way.
Paul Blomfield (Sheffield Central) (Lab)
The hon. Gentleman, together with every Member who has spoken so far, joined me at the launch of Gambling with Lives, a charity set up by two of my constituents who lost their son to suicide as a result of gambling addiction. Does the hon. Gentleman recognise the significance of suicide as a consequence for many who are addicted to gambling, given that half those who are addicted consider suicide at some stage? Set within the range of public health issues, this simply underlines the powerful points made by every Member so far.
Ronnie Cowan
I categorically agree with the hon. Gentleman’s sentiments. I will briefly touch on that matter later. It is a very sensitive subject; the wonderful new organisation, Gambling with Lives, should not have to exist in the first place, but we all recognise the terrible need for it.
People with drug or alcohol addictions are often more visible in society. Problematic gamblers often seem to be living perfectly normal lives, even to those closest to them, yet we know that suicide due to gambling debt and/or addiction is all too common.
Tracey Crouch
Further to the point made by the hon. Member for Sheffield Central (Paul Blomfield), it is worth remembering that Thursday will be the anniversary of Jack Ritchie taking his own life. It is therefore really important that we think about suicide as an important issue in this debate. It is certainly one of the issues that drove my position for many years.
Ronnie Cowan
I thank the hon. Lady for making that point.
A report issued by the Gambling Commission in August 2017 found that more than 2 million people in the UK are either problem gamblers or are at risk of addiction, that the number of over-16s deemed to be problem gamblers has grown by a third in three years and that at-risk gamblers are most likely to be aged between 16 and 24. The National Problem Gambling Clinic—there is only one—is based in Fulham, under the watchful eye of Henrietta Bowden-Jones. I have visited the clinic, but I wonder how many Ministers with responsibility pertaining to gambling have? I believe that the Health Secretary has and all credit to him for doing so. The evidence is out there, but we must go looking for it.
GamCare tells me there are plans to create a gambling clinic in Leeds. I applaud that and hope that such a network can be built across the UK. That brings us to funding. The current funding model is not adequate or robust enough. Relying on a voluntary levy means that long-term planning is, ironically, a gamble. The practicality of a statutory levy must be investigated and realistic sums of money must be guaranteed if we are to take the necessary action to support and guide those affected by problematic gambling.
The new legislation around fixed odds betting terminals is proof that with the proper evidence, a little persuasion and the desire to do the right thing, this Government can improve the situation. That is why the Scottish National party is calling for a review of the public health effects of gaming provisions and a report to be laid before the House of Commons within six months. Only by gathering valid data from independent sources can the Government take an evidence-based approach to gambling legislation and thus ensure that the industry can continue, while fulfilling its moral duty to protect vulnerable gamblers.
Sir Peter Bottomley
Early-day motion 61 of the 2016-17 Session, tabled on 23 May 2016, welcomed the all-party parliamentary group on fixed odds betting terminals, and early-day motion 174 in this Session welcomed the re-establishment of the group. I pay tribute to those who have supported the group from outside, including those who campaigned non-stop to reduce the number of victims of the pernicious spread of fixed odds betting terminals.
Although this situation started during the time of the last Labour Government, none of us was awake to what was happening. Although Labour can take responsibility, we should all share it for allowing that to happen. We can also share some of the credit for the way in which the Government, without too much pressure, disregarded the rather wishy-washy advice of the Gambling Commission, which proposed a minimum stake of “£30 or less”. I hope that the commission will review why it did not come forward with a straightforward recommendation of £2.
There was a time when the Government announced that they would bring the stake down to £2, but it was likely that that would take place in April 2020. Then the announcement came that the change would be introduced in October 2019, prompting the resignation of my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), because although the newly announced date was an improvement on the expected date of 2020, it was not as good as it could have been. We all ought to recognise that a combination of events—the powerful way in which my hon. Friend expressed her view, both inside Government and outside Government, having to change her status to do that, and the way that the Government recognised the reality of parliamentary arithmetic—means that we can now welcome the fact that the terrible effect of these high stakes will be reduced earlier than it otherwise would have been.
Graham P. Jones
I agree with the hon. Gentleman wholeheartedly. I am sure that he would add that our concern extends to the people of Northern Ireland, who are not covered by the measure and where this affliction persists.
Sir Peter Bottomley
The hon. Gentleman raises a point that I was going to come on to indirectly, but I will now make it directly. These fixed odds betting terminals were not allowed in betting shops in the Republic of Ireland, so how could the Association of British Bookmakers go around thinking that it was normal? That leaves open the question that he has raised: how can we make sure that people in Northern Ireland get the change they need? If it is a devolved matter and we need a Northern Ireland Government to solve the problem, I do not have an instant solution.
Jim Shannon (Strangford) (DUP)
Yes, it is a devolved matter and it would take the Assembly to make those decisions. We do not have a working Assembly, as the hon. Gentleman knows. In the meantime, therefore, nothing happens in relation to legislation that is passing here. It is my intention, after discussions with the Minister involved and with the support of the House, of course, to try to ensure that this legislation is Northern Ireland-bound, as it should be.
Sir Peter Bottomley
The Committee will recognise the importance of what the hon. Gentleman has said, and I am very grateful for it.
Some of the tactics used by the betting shop owners have been disgraceful. I hope that some investigative journalist will write it up, page by page, date by date, and explain how it has been counterproductive for these companies’ own shareholders. GVC, which in March this year confirmed the takeover of Ladbrokes Coral, will pay £800 million less because of the date of the change to £2. Three years ago, William Hill’s share price was about 400p a share. At the time of the discussion about whether the fixed odds betting terminal limit would come down to £2 either in October next year or in April the year after, its share price fluctuated between 300p and 220p per share. It is now less than 180p. For every month it went on with its campaign, it destroyed the value of its shareholders’ stake in the companies that were taking profits—as was the Treasury, in tax—from these unbelievably unjustified machines.
When Paddy Power said that these machines were not needed for betting shops, other gambling companies should have paid attention. When people write up this failure of lobbying and the counterproductive tactics used, I hope that they will take it as a role model. We need a word to describe Parliament asserting itself to Government, but another two words to respond to the way in which Government have reacted to that, and those words should be, “Thank you.”
Patricia Gibson (North Ayrshire and Arran) (SNP)
I rise to speak in support of new clause 12. I begin by thanking the hon. Member for Swansea East (Carolyn Harris) and my hon. Friend the Member for Inverclyde (Ronnie Cowan), who have done a power of work on this issue.
I very much welcome the UK Government’s decision to abandon the delay in implementing a maximum £2 stake on fixed odds betting terminals. It is a cause of great regret that this delay was even considered,
“due to commitments made by others to those with registered interests”,
according to the former Minister, the hon. Member for Chatham and Aylesford (Tracey Crouch), to whom I pay tribute for the stand that she has taken on this issue throughout. It is truly disappointing that it has taken so long to achieve the reduction in the maximum stake for these machines—so much time, despite the cross-party support for it across the House, and the loss of a Minister. Parliament has the power to do good, and when it decides to do good it should do so as quickly as it can without fuss or drama—even more so when vulnerable people’s lives literally depend on it.
Like many Members, I am sure, I have a particular constituency interest in this issue. In North Ayrshire, most of which I represent, there are 137 of these machines in 37 betting shops, with £5 million lost in 2016 alone. Two problem gamblers take their own life every single day in the UK. Any delay to serve vested interests would be unforgiveable. Many of us have been profoundly impatient, but I am really grateful, as so many people are, that this Government have at last seen sense and that these machines, which truly are the crack cocaine of gambling, will now be the focus of targeted action.
Conducting a public health review of gaming provisions is absolutely the right thing to do. Gambling-related harm is simply not accorded the attention that it needs. It is a profoundly serious public health issue, and a public health approach is essential. New clause 12 would require a review of the public health effects of gambling. Public health and gambling are issues that cannot be separated, and that is why new clause 12 is so important.
I used to work in a high street bookmaker, long before the advent of fixed odds betting terminals, and despite what bookmakers might tell us now, I have yet to meet a bookmaker who is living in poverty. These shops are open simply to house these machines. Bookmakers might talk about the threat to jobs posed by the reduction in the maximum stake, but the biggest threat to jobs in the betting industry is the use of self-service machines for people to put their bets on, which does away with frontline staff.
The Gambling Commission has pointed that out that any public health approach needs to address not only those who have lived with the addiction of gambling for some time, but the effects on young and vulnerable people. According to the Gambling Commission, children and young people need a specific focus among those who are potentially vulnerable. Their needs are different, and we may need a different approach to reducing gambling-related harm. We have heard today about apps targeted at children. Primary prevention efforts can be targeted at young people, often aiming to reach them before they have gambled. Treatment for young people with gambling problems needs serious and separate consideration from adult treatment. In most cases, it is likely to require a lower threshold for intervention and other co-occurring problematic behaviours to be addressed.
It is also essential that a public health approach addresses the effects of gambling on the families and close associates of gamblers and on the wider community, as well as on those who suffer harm from their own gambling. The approach needs to recognise that a successful strategy cannot focus solely on individual gamblers, but needs to encompass products, environments, marketing and the wider context in which gambling occurs. It needs to understand that restrictions on, or interventions related to, any of those aspects can form part of a balanced approach, backed up by accurate, objective, accessible and understandable information. It should seek to ensure efficient distribution of resources for prevention and treatment based on need.
It is important to remember that we are not starting from scratch. Vital work in this field has already been done by the Gambling Commission, among others. We know that most people gamble responsibly with no difficulties. However, some individuals experience significant harm as a result of their gambling. It is estimated that there are around 373,000 problem gamblers in England, 30,000 in Scotland and 27,000 in Wales. According to the Gambling Commission, those estimates are likely to be conservative. For problem gamblers, harm can include higher levels of physical and mental illness, debt problems, relationship breakdown and, in some cases, criminality. It can also be associated with substance misuse.
In many cases, it is difficult to attribute those negative effects solely or directly to gambling, but according to the Gambling Commission, the association is far too strong to ignore. Younger males and people from certain social and ethnic groups are potentially more vulnerable than others. About 1.7 million individuals in England, 180,000 in Scotland and 95,000 in Wales are classified as being at risk of problem gambling. There are also some gamblers who would not be classified as problem or at-risk gamblers, but who may on occasion experience harm as a result of their gambling.
Gambling-related harms are not all directly health harms, but many of the harms, such as debt, are connected with poor health status. A public health approach is absolutely integral to any war on the effects of problem gambling. All the evidence suggests that this is a significant public health issue. It has not yet received the attention it should have relative to other population-level concerns, but that is now in order—the time has come.
Alison Thewliss (Glasgow Central) (SNP)
My hon. Friend is making a very good point about the public health impact. Does she agree that people in some of the communities that she and I represent are already struggling with multiple deprivation, and gambling being concentrated in their areas only makes that worse and worsens their life chances?
Patricia Gibson
Absolutely. There is a correlation between multiple social deprivation factors and problem gambling, which is why certain communities have a higher concentration of betting shops housing these machines—the crack cocaine machines of gambling—than there otherwise would be.
I say to the Minister, and I know he is listening, that we absolutely and urgently need a review of the public health effects of gaming provisions. On that basis, I urge the House to support new clause 12—
Patricia Gibson
I was about to finish, but obviously I will let the Minister speak.
Robert Jenrick
Before the hon. Lady concludes her remarks, may I draw her attention to two things? I am told that Public Health England has been asked by the Department of Health and Social Care to inform and support action on gambling and its related harms as part of its follow-up to the DCMS review of gaming machines and social responsibility. Public Health England is also being commissioned by the Gambling Commission to do an evidence review on problem gaming, which I hope will go some way to answering the questions that she and others have raised today.
On new clause 12, which the hon. Lady raised—other hon. Members have also done so, including my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch)—I am content for the Government to support it, but I would simply say that it is very limited in scope. I would not want to raise expectations that it will achieve all of the goals that the hon. Lady seeks. However, that, allied to Public Health England’s work, will perhaps help to continue the public debate on this matter.
Patricia Gibson
I am glad that the Minister has given us that clarification. As he says, I would be more comfortable with a broadbrush approach encompassing lots and lots of factors, such as I those I set out in my speech. However, I have listened to what the Minister has said, and I will certainly give it some thought.
Jim Shannon
I thought the hon. Member for Torbay (Kevin Foster) was going to go before me, but he has not bobbed, so he is obviously not going to. I always follow in his footsteps—I am always glad to do so, by the way, as he knows—but on this occasion I miss his comments, which I am sure would be more than helpful to us.
We are all very aware of the reason for these amendments. It is tremendous to be in the Chamber among many Members from across the House who are of the same opinion, including—he will forgive me if I say this, but I have to say it—perhaps a wee bit belatedly, the Minister, who is also committed to where we are on this.
If she does not mind my saying so, I would like to commend the hon. Member for Chatham and Aylesford (Tracey Crouch) for her principled stand, her courage and what she has done to make this happen. The commitment she has shown does my heart good and does the heart of everybody else good. By the way, I am not surprised that she said 3,000 people had contacted her afterwards. I did not have 3,000 people contact me afterwards, but I had a large number and, for the record, every one of them commended the hon. Lady for her obvious commitment. The reason for the amendment is simple: the need for a massive lowering of stakes is clear.
I also thank my good friend, the hon. Member for Swansea East (Carolyn Harris), for all her endeavours through the all-party group on FOBTs, which has done tremendous work. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) and the hon. Member for Inverclyde (Ronnie Cowan) have also endeavoured, through the APPG, to ensure all that hard work came to fruition.
The one thing that sits in my mind is this: why was it important to have those six months slip back from October to April? It is very simple: as has been said, 300 lives—maybe more—were saved. That is a fact.
I am mindful that last week we had the Gambling with Lives event, which the hon. Member for Sheffield Central (Paul Blomfield) referred to. I thank him for initiating that event. I was very glad to be there with other Members and to support him. There were two people there who I knew long before the start of this FOBT campaign, which began about 18 months or two years ago. They are Mr and Mrs Peter Keogh from Enniskillen, who lost their son, Lewis, to a gambling addiction and who even today feel the heartache of that event.
It is for those people that we do these things. It is for our constituents whose lives will be saved because of it, and for those who have lost loved ones and feel the great pain of the loss of someone close to them, that today we can collectively make this legislative change in this House. That is why we make the effort.
The Government accept that they need to lower the stakes; they accept that damage has been done to individuals and families; they accept the fact that the ability to bet as much as £100 every 20 seconds on electronic casino games such as roulette is shocking; and they accept the campaign by anti-gambling campaigners that highlights the fact that machines let people lose money too quickly, leading to addiction and social, mental and financial problems.
The Minister responded to the previous speaker, the hon. Member for North Ayrshire and Arran (Patricia Gibson), about things we must address, including online gambling and how it is promoted on TV. At this early stage, I would also like to put down a marker about scratchcards. I was just telling a story to my hon. Friend the Member for South Antrim (Paul Girvan). One day, I saw a lady with two children in a shop. She probably did not have £5 to spare. She was ahead of me in the queue and she put down £5. I was not being nosy, but her wallet probably only had two fivers in it, yet she spent £5 on scratchcards. She went outside to rub the numbers off them and by the time I went outside I saw that not one of the cards was successful.
I thought to myself, “How very sad.” That lady was probably looking at her financial needs for that week being provided by the turn of a scratchcard, which did not deliver. Other things need to be done, but I look forward to the things that the Minister referred to in his intervention on the hon. Lady.
Those arguments had all been accepted, but rather than looking at the human cost it appears that the Government wished to shore up the finances and allow thousands more people to gamble everything away. The situation is like cancer research finding a cure to cancer and the NHS saying, “Well, we have all the chemotherapy, which needs to be used, so we won’t pay for the life-saving drugs until stocks are down. We can’t afford to do this.” That is horrific. I say to the Minister, with respect, that the more I see of this Government's ability to put blinkers on and look only at one aspect—the pounds and the pence—rather than at the entire argument about the need to lower stakes, the more disheartened I become.
The Salvation Army, which deals with the problems that gambling brings to the community, has said:
“It is well acknowledged that FOBTs have caused concern across the political and social spectrum. FOBTs have been labelled the ‘crack cocaine’ of gambling. One gambler told us that he spent £2,000 a day on FOBTs at bookies without being challenged.”
Paul Girvan (South Antrim) (DUP)
I appreciate my hon. Friend’s reference to the Salvation Army. One of the other issues that I have major concerns about—I wonder whether my hon. Friend agrees—is the accounts of people being given a line of credit of £1,500 without any credit checks on their ability to pay it back. People have been given a £1,500 line of credit and unfortunately it ends up being a potential noose—and I mean that—around their neck. That problem is arising and it is caused by those who do not do checks. Any other financial industry would do checks to ensure the person had the ability to pay the money back.
Jim Shannon
I thank my hon. Friend for his wise intervention.
The Salvation Army also says:
“Another man who became homeless as a result of his addiction and who was helped by the Salvation Army lost over £30,000 on gambling machines.”
I do not think that there is one Member in this Chamber who would not be able to recollect a story of this kind from their constituencies. It is the story of the man who plays on a FOBT machine on a Friday night and puts all his wages on it, before going home to his wife, who is looking for the money to buy the groceries, and their children. Those are the stories of real life; those are the stories of addiction; and those are the stories that we want to stop in this Chamber today.
That is why we are keen for the Government to implement as soon as practicable the proposed maximum stake limit of £2 for FOBTs. It is of some concern that in the Budget the timeframe for implementation was to have been delayed to October 2019. We note that some campaigners said it would be possible to implement it in April 2019 and that the Government have acceded to that. That apparent delay was deeply disappointing. The right hon. Member for Chingford and Woodford Green referred to the amendment with over 100 Members’ names on it. What changed the Government’s opinion was those 100 names from across the Chamber. I am very pleased that we have achieved that change.
I agree with the change and I ask the Government simply to do the right thing. They seem to have been held to ransom by the gaming industry. Therefore, it should not have surprised me to see how the EU—I use this comparison; I am sure many Members will understand it—has held this proud nation of the United Kingdom of Great Britain and Northern Ireland to ransom, and how our Government have capitulated at the cost not of £400 million, the estimated lost tax revenue, but £39 billion, and, most importantly, the sovereignty of Northern Ireland and the sanctity of the Union.
You may not believe that the two are linked, Dame Eleanor, but they are. You may not believe that that should be mentioned in this debate, but it has been. The Government’s decision making is as flawed here as it is in selling Northern Ireland and the backstop. Do the right thing, stop allowing gambling addictions to destroy families and protect people from themselves, in the same way that people must wear a seatbelt whether they want to or not. Step in and step up. I support the amendment and I look forward to working with hon. Members to do even more in this Chamber to address gambling addiction in the years to come.
Amendment 16 agreed to.
Clause 61
Remote Gaming Duty: Rate
Amendment made: 17, page 44, line 25, leave out “1 October 2019” and insert “1 April 2019”.—(Gareth Johnson.)
This amendment is consequential on Amendment 16.
Clause 61, as amended, ordered to stand part of the Bill.
Clause 62 ordered to stand part of the Bill.
Schedule 18 agreed to.
New Clause 12
Review of public health effects of gaming provisions
“(1) The Chancellor of the Exchequer must review the public health effects of the provisions of section 61 of and Schedule 18 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the effects of those provisions in reducing the negative public health effects of gambling, and
(b) the implications for the public finances of the public health effects of—
(i) those provisions,
(ii) the operation of the law relating to remote gaming duty and gaming duty if those provisions were not given effect.”—(Ronnie Cowan.)
This new clause would require a review of the public health effects of gaming provisions.
Brought up, read the First and Second time, and added to the Bill.
Clause 15
Offshore Receipts in Respect of Intangible Property
Question proposed, That the clause stand part of the Bill.
The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)
With this it will be convenient to discuss the following:
That schedule 3 be the Third schedule to the Bill.
Clause 16 stand part.
That schedule 4 be the Fourth schedule to the Bill.
Clause 19 stand part.
Amendment 19, in clause 20, page 12, line 26, at end insert—
“(8) The Chancellor of the Exchequer must, no later than six months after the passing of this Act, lay before the House of Commons a review of the effects of the changes to the controlled foreign companies regime made by this section.
(9) In circumstances in which the United Kingdom has left the European Union without a negotiated withdrawal agreement, the review in subsection (8) must consider the impact of this on those changes.”
Clause 20 stand part.
Clauses 21 and 22 stand part.
Amendment 3, in schedule 7, page 223, line 27, in schedule 7, at end insert—
“(5) The Treasury shall by regulations require that a CGT exit charge payment plan be published on a public register.”
This amendment would require the beneficiary of a trust entering a CGT exit charge payment plan to provide information about the source of its income on a public register.
Amendment 4, page 227, line 13, at end insert—
“(2B) The Treasury shall by regulations prescribe a CGT exit charge payment plan be published on a public register.”
This amendment would require the beneficiary of a trust entering a CGT exit charge payment plan to provide information about the source of its income on a public register.
That schedule 7 be the Seventh schedule to the Bill.
Clause 23 stand part.
That schedule 8 be the Eighth schedule to the Bill.
Clauses 46 and 47 stand part.
Amendment 23, in clause 83, page 60, line 8, at end insert—
“(8) No regulations made be made under this section unless the Chancellor of the Exchequer has laid before the House of Commons a report on how the powers in this section are to be exercised in each of the scenarios in subsection (9).
(9) The scenarios to be considered in the report under subsection (8) are—
(a) if either of a—
(i) negotiated withdrawal agreement, or
(ii) framework for the future relationship with the European Union have not been ratified under section 13 of the European Union (Withdrawal) Act at the time of the United Kingdom ceasing to the a member of the European Union, and
(b) if both of a—
(i) negotiated withdrawal agreement, or
(ii) framework for the future relationship with the European Union have been ratified under section 13 of the European Union (Withdrawal) Act at the time of the United Kingdom ceasing to the a member of the European Union.”
Clause 83 stand part.
New clause 5—Impact analyses of the anti-avoidance provisions of this Act—
“(1) The Chancellor of the Exchequer must review the impact of—
(a) section 15 and Schedule 3,
(b) section 16 and Schedule 4,
(c) sections 19 and 20,
(d) section 22 and Schedule 7,
(e) section 23 and Schedule 8,
(f) sections 46 and 47, and
(g) section 83
of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the impact of those provisions on child poverty,
(b) households at different levels of income,
(c) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010), and
(d) the impact of those provisions on different parts of the United Kingdom and different regions of England.
(3) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland.
“regions of England” has the same meaning as that used by the Office for National Statistics.”
This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of the tax avoidance provisions of the Bill on households with different levels of income, on child poverty, people with protected characteristics and on a regional basis.
New clause 6—Analysis of effectiveness of provisions on tax avoidance and evasion—
“(1) The Chancellor of the Exchequer must review the effectiveness of—
(a) section 15 and Schedule 3,
(b) section 16 and Schedule 4,
(c) sections 19 and 20,
(d) section 22 and Schedule 7,
(e) section 23 and Schedule 8,
(f) sections 46 and 47, and
(g) section 83
of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the effects of the provisions in reducing levels of artificial tax avoidance,
(b) the effects of the provisions in combating tax evasion, and
(c) estimates of the role of the provisions of this Act in reducing the tax gap in each tax year from 2019 to 2022.”
This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effectiveness of the provisions of the Bill in tackling artificial tax avoidance and tax evasion, and in reducing the tax gap.
New clause 14—Review of effectiveness of provisions on tax avoidance—
“(1) The Chancellor of the Exchequer must review the effectiveness of the provisions of this Act relating to tax avoidance and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) In this section, “the provisions of this Act relating to tax avoidance” means—
(a) section 15 and Schedule 3,
(b) section 16 and Schedule 4,
(c) sections 19 and 20,
(d) section 22 and Schedule 7,
(e) section 23 and Schedule 8,
(f) sections 46 and 47,
(g) section 83.
(3) A review under this section must consider in particular—
(a) the effects of those provisions in reducing tax avoidance and evasion,
(b) the effect of those provisions in inducing new tax avoidance measures unanticipated by the Act, and
(c) estimates of the efficacy of the provisions in reducing the tax gap in each tax year from 2018-19 to 2028-29.”
This new clause would require a review of the effectiveness of provisions on tax avoidance.
New clause 15—Report on consultation on certain provisions of this Act (No. 4)—
“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).
(2) Those provisions are—
(a) section 15 and Schedule 3,
(b) section 16 and Schedule 4,
(c) sections 19 and 20,
(d) section 22 and Schedule 7,
(e) section 23 and Schedule 8,
(f) sections 46 and 47,
(g) section 83.
(3) A report under this section must specify in respect of each provision listed in subsection (2)—
(a) whether a version of the provision was published in draft,
(b) if so, whether changes were made as a result of consultation on the draft,
(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”
This amendment would require a report on consultation undertaken on certain provisions of this Act – alongside new clauses 9, 11 and 13.
The Financial Secretary to the Treasury (Mel Stride)
It is a great pleasure, again, to serve under your chairmanship, Dame Eleanor. The Government have always been clear that while taxes should be low, they must be paid, and that is exactly what we have delivered. Since 2010, we have secured and protected over £200 billion by clamping down on tax avoidance, evasion and non-compliance, and we have reduced the UK’s tax gap to less than 6%, which is one of the world’s lowest. In fact, if we were running at the level of the figures achieved under the last Labour Government in 2005-06, we would be deprived of sufficient income to employ every policeman and policewoman in England and Wales, so bringing in tax most certainly does matter.
We have led the way internationally in this respect, playing a leading role in the OECD’s base erosion and profit shifting project, and taking unprecedented action to secure funding for our vital public services and to ensure that everyone pays their fair share. It is worth reflecting on the fact that we do not just collect tax for the sake of collecting tax, because very few people enjoy paying tax. We do it for a purpose, which is to keep our financial affairs in good order and to fund the doctors and nurses in our national health service, and so on.
Kevin Foster (Torbay) (Con)
Does the Minister agree that we sometimes use tax to alter behaviour—for example, on tobacco and alcohol—as well as purely for funding? That is why measures to prevent the evasion of those duties are so vital to achieving public health gains, in addition to the obvious points in terms of the Treasury.
Mel Stride
My hon. Friend is entirely right. One thinks, for example, of the sugar levy to improve public health and to make sure that our young people, in particular, move towards a healthier diet. Tax can certainly have an effect in that respect. As my hon. Friend said, there is also the duty on cigarettes, tobacco, hand-rolling tobacco, and alcohol to make sure that as well as just raising revenues, we change behaviour in a way that is conducive to the public good.
Bob Stewart
My right hon. Friend has not mentioned fairness in taxation. That is another principle that we must use for taxation. Fairness implies that the people who have the least pay the least and that those who can afford it pay more. I am quite sure that the Government are fully aware of that point when raising taxation.
Mel Stride
I thank my hon. Friend for that important intervention. He is absolutely right: fairness has to be the heart and soul of any progressive taxation system, along with competitiveness—we want to keep rates down—and the importance of tax being paid, as I have been elaborating on. On his specific point, we were of course able to announce in the recent Budget—this forms part of the Bill—the increase in the personal allowance, which is now up to £12,500. Bear in mind that in 2010 the personal allowance was about £6,500. The personal allowance is, of course, the amount that an individual can receive by way of earnings without those earnings falling due to income tax. Any increase in the personal allowance does indeed have a disproportionately beneficial impact on the lowest-paid in our country. Since 2010, in fact, we have now removed some 4 million people in total from tax altogether.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Whatever the merits or otherwise of increasing the personal allowance, which we support in the Bill, surely the Minister recognises that the gain for every person taken out of the bottom rate of income tax in the personal allowance is worth double to people paying the top rate of income tax. Clearly, if someone is paying the top rate of income tax, every £1 of the personal allowance is a greater saving than at the basic rate.
Mel Stride
The hon. Gentleman says he supports our changes to the personal allowance in the Budget, but that was not reflected on Second Reading, when the Labour party voted to reject our tax measures. Indeed, it has been widely critical of our measures to reduce taxation for some 32 million people up and down the country. He will probably be tired of my rehearsing the very important fact that the wealthiest 1% are paying 28% of income tax—a far higher proportion than when Labour was in power, when the figure was 24%.
Mel Stride
It might be an answer the hon. Gentleman does not like, but it is most certainly an answer.
Jonathan Reynolds
Is it not a fact that everyone in the Chamber, because they pay the top rate of income tax, will disproportionately benefit from the rise in the personal allowance, because every pound of it will be taken out of income on which we pay that top rate? Clearly, then, the gain to all of us as top rate taxpayers will be greater than for people paying only the bottom rate of income tax.
Mel Stride
As I have already said, not only do the wealthiest in our society pay a very large proportion of all tax, but under this Government we have seen significant increases in the national living wage. It rose by 4.4% last April, and through the Bill—I am proud to say—we are putting on to the statute book an increase next April of 4.9%. That is well in excess of inflation and will help the very people that both our parties are committed, in our different ways, to assisting—although our measures are more practical than those suggested by the Labour party.
James Cartlidge (South Suffolk) (Con)
On the point about the higher rate, it was my experience as an employer that if, say, a member of sales staff paying basic rate tax did very well in a given month, got commission or a bonus and as a result experienced a sudden, sharp increase in their tax that month, it reduced the incentive on them next time. I welcome the changes to the higher rate because of the impact on incentives and therefore on productivity and so on.
Mel Stride
My hon. Friend makes an important general point about taxation. As we know, very high taxation has a number of undesirable impacts, not just on individuals and businesses, but on the economy and, through that, the general tax take and our ability as a society to fund our public services, and one of those impacts is that which he rightly raises: the disincentive to go out and produce and create the wealth upon which we all depend. It is the duty and mission of this Government, generally across the piece, to keep taxes as low as possible.
Since 2010, the Government have introduced more than 100 measures to combat avoidance, evasion and non-compliance, but this alone is not enough. To support these measures, it is vital that HMRC be well funded and well staffed. That is why we have invested an extra £2 billion since 2010 in HMRC and why we have 24,000 members of HMRC staff dedicated to tackling avoidance, evasion and non-compliance.
Chris Stephens (Glasgow South West) (SNP)
How many of those 24,000 members of staff are employed in the HMRC’s wealthy unit, which, as the Minister knows, is the key driver in tackling tax avoidance?
Mel Stride
It is one of the key drivers in tackling tax avoidance and the tax gap—the tax gap occurs not just with individuals but with large corporations and small businesses. I do not have the precise number, but I am happy to write to the hon. Gentleman with that information. What I can tell him is that, at any one time, about 50% of the largest 200 businesses in the country are under investigation, not necessarily because they have done anything wrong but because, logically, HMRC should be looking particularly carefully at the businesses that are making the largest profits and generating the most.
This investment is paying off. In 2017-18 alone, HMRC secured and protected more than £30 billion in additional tax revenues which otherwise would have gone unpaid. That was a year-on-year increase of £1.4 billion.
We know that some large multinationals have been able to avoid tax by exploiting gaps and mismatches in the international tax system. International leadership was required to address the situation, and that is exactly what the Government have provided. We were at the forefront of the OECD’s base erosion and profit shifting project, which agreed major reforms to the international tax system, and we have taken the lead in implementing these recommendations in domestic legislation. We have also been a strong supporter of the EU anti-tax avoidance directive, and we have helped to shape the common approach that it provides for tackling avoidance in the European Union.
Bob Stewart
I thank my right hon. Friend for giving way to me again. For the sake of fairness, we must of course ensure that multinational companies making profits in our country contribute properly to the economy of the country. I hope very much that we can somehow link the profits made in the United Kingdom very closely to the amount of tax that is paid. At the moment some international companies are behaving appallingly in the way in which they handle their tax affairs, and we must sort that out.
Mel Stride
As always, my hon. Friend has made a critical and important point. I took him to be alluding, at least, to the issue of technology businesses—typically, social media businesses, search engines and certain online marketplaces—which, while making substantial profits in our country as a consequence of the interaction of UK users with the digital platforms that they host, are not paying a commensurate level of tax. That led the Chancellor, in the recent Budget, to announce our move towards a digital services tax, whereby we will not be addressing a question of avoidance—it is important to make that point—but will be bringing the international tax regime into the 21st century, so that we can tax profits not just on the basis of where the bricks and mortar may be, where the staff may be, where the intellectual property may reside or where the commercial risks and decisions are being taken, but on the basis of where this particular type of value generation is occurring.
While we have said that we will seek to move forward in a multilateral manner, because we recognise the dangers of double taxation in the event that we move unilaterally, we have made it very clear that we will introduce this measure ourselves as a first mover, or one of the first movers, of the leading countries in the world. We think that it is only right, and we believe that the public feel that it is only right, for these very large businesses to pay an appropriate level of tax.
Eddie Hughes (Walsall North) (Con)
The Minister says that members of the public would expect that. Can he give some examples of intangible assets, so that people watching the debate at home in Willenhall and Bloxwich can be better informed?
Mel Stride
That is a very good question. In the case of the digital services tax, we are no so much talking about intangible assets, although elements of the Bill—indeed, clauses in this group—relate to ensuring that profits are not artificially shifted as a result of money being moved around in respect of such assets. Here we are talking more about digital platforms, and a particular method of value creation that results from the interaction of UK users with those platforms. However, in terms of intangible assets and intellectual property we might think, for example, of the rights of a particular business based in the UK to carry on business using the branding, know-how and knowledge of a particular piece of intellectual property held in a low or no tax jurisdiction. Any royalties moved from the UK out to that low or no tax jurisdiction will be a form of profit shifting that might be artificial and simply designed to reduce a corporation’s tax bill, which is why we have particular measures in this Bill to address exactly that situation.
Chris Stephens
The Minister gave me a written answer yesterday to a parliamentary question about higher rate Scottish taxpayers who register themselves elsewhere in the United Kingdom. He responded by saying that Her Majesty’s Revenue and Customs holds no data on that. On reflection, does he not think that HMRC should be tackling those trying to avoid tax, specifically the higher rate tax in Scotland?
Mel Stride
The hon. Gentleman will, of course, be very aware of the devolution of various elements of our tax system to Scotland, and the issue he identifies is fundamentally driven by the different relative rates of taxation in Scotland and in the rest of the United Kingdom. I would argue that it is incumbent upon the Scottish Government to do as the UK Government do where these matters are reserved, which is to keep taxes as low as possible. I know that Conservative Members representing Scottish constituencies are most keen to deliver that for their constituents.
As we announced at the autumn Budget in 2017, the Government are legislating in this Bill to tax income from intangible property held in low-tax jurisdictions to the extent that it is income that relates to UK sales. Today some large multinationals are able to unfairly reduce their tax bill by arranging to hold their intangible property in offshore entities. That is unacceptable, and we are now going further to level the playing field. Clause 15 requires multinationals that continue to earn intangible property income in low-tax jurisdictions to pay UK income tax on the proportion of that income that relates to UK sales.
Tax avoidance is not limited to large multinationals of course; businesses of all shapes and sizes attempt to unfairly shift UK profits to jurisdictions where they expect to pay less tax or perhaps no tax at all, so clause 16 introduces carefully targeted anti-avoidance rules to prevent these UK businesses from avoiding UK tax by shifting their profits to lower-tax jurisdictions. The clause targets contrived arrangements that, in broad terms, aim to avoid tax by transferring the profits of a UK’s business offshore in a way that would not be agreed between independent parties.
James Cartlidge
I very much agree with my right hon. Friend on this point. Is it not also true that our small and medium-sized enterprises, particularly those that are currently struggling, perhaps including high street businesses, do not have a cat in hell’s chance of running such schemes? They do not hide their profits and they do not mix and match around territories, so we need a level playing field.
Mel Stride
My hon. Friend is absolutely right. The tax avoidance activities that I am describing are way beyond the reach of many businesses of a certain size up and down the country. Thinking particularly of our high street businesses, we have a duty to ensure that fixed costs in the form of taxes represented by business rates are reduced to the extent that they can be, and the Chancellor was able to announce a 30% reduction in business rates for those smaller retailers that typically populate our high streets. That was an extremely important move as we work, through our future high streets fund and other approaches, to enable our high streets to transition and become more vibrant and successful places.
Luke Graham (Ochil and South Perthshire) (Con)
The Minister is talking about business rates. As a result of the Government’s action, Scotland should receive about £43 million in additional Barnettised revenues. What work will he be doing with the devolved Administration to ensure that that will help high streets in Scotland as much as the Government are helping high streets elsewhere in the UK?
Mel Stride
As a UK Government, we are always happy, and indeed keen, to work co-operatively with the devolved Administrations, including the Scottish Government, as my hon. Friend suggests. Ultimately, however, these will be decisions for the Scottish Government to make. It will be for them to decide how to spend the revenues that will come through by way of additional funding via the Barnett formula. I can only suggest once again—I think this echoes my hon. Friend’s thoughts—that the best way forward is to keep taxes down and, in the case of Scotland, to have a country that is known for low taxation, rather than gaining a reputation for higher taxation.
Clauses 46 and 47 address the use of contrived arrangements that seek to avoid stamp duty on shares. The Government are aware that some corporate groups are transferring shares to connected companies for an artificially low consideration. The clauses create a targeted marketed value rule for transfers of listed shares to connected companies. This rule will prevent the use of artificially low consideration by charging stamp taxes on shares on the higher of the market value of, or the sum paid for, the shares transferred.
The Bill also re-emphasises our commitment to leading the way in implementing internationally agreed initiatives to combat tax avoidance. Clauses 19, 20 and 23 make changes to the UK’s rules on controlled foreign companies, hybrid mismatches and corporation tax exit charges to ensure that they comply with the EU’s anti-tax avoidance directive. The UK is a strong supporter of the objectives of the directive, as it will ensure that member states take a common approach to tackling tax avoidance. The UK’s rules are already comprehensive, and they already meet or exceed most of the requirements set out by the directive, but some limited changes are needed to ensure that we are fully compliant in all areas.
Stewart Hosie (Dundee East) (SNP)
On a point of clarity, the Minister has said that stamp duty on shares will be charged at either the market rate or the actual rate, whichever is higher. Will he confirm that shares will still be able to be sold below the market rate so long as the tax is paid on a marked market basis? Is that correct?
Mel Stride
The Bill will ensure that businesses that typically trade in and acquire shares pay the correct level of stamp duty on those shares, rather than paying a certain market rate having transferred the shares, perhaps internally to another company in the same group, in return for shares from that other company that had been valued at a lower level compared with the original purchase price of the original shares. By doing that, some companies have been exploiting a loophole and paying less stamp duty than they would otherwise have done. In case the hon. Gentleman is wondering, the distinction between the two clauses relating to this matter is that one relates to paper shares and the other to the electronic trading of shares in that manner.
Amendment 19 would provide for a review of the changes required to the controlled foreign company rules, which protect against the artificial diversion of profits from UK companies to low-tax jurisdictions, including with regard to the impact of a no-deal scenario. While the Government always keep the general tax system under review, a specific review of those provisions would be disproportionate. They are minor changes to ensure that the UK’s anti-avoidance rules on controlled foreign companies are fully aligned with the direction with which the UK agreed during negotiations on the anti-tax avoidance directive, and there is no need for a review.
Clause 83 enables the introduction of new international rules requiring tax advisers to report to HMRC certain cross-border arrangements that could be used to avoid or evade tax. That information will allow HMRC to build up the full picture of such arrangements. Following a consultation next year, the Government will introduce secondary legislation containing further details of the rules. We have played a leading role in designing that approach, which forms part of our ongoing work to champion international tax transparency and to tackle offshore tax avoidance and evasion.
Amendment 23 would require the Government to publish a report on how clause 83 will be exercised under various EU exit scenarios before making the proposed regulations. However, the Government are already committed to a formal consultation on the proposed regulations, and all practical aspects of implementing the regulations and EU exit will be taken into consideration as part of that consultation.
As we depart from the EU, we must continue to honour existing commitments. That is why we are allowing capital gains tax in respect of exit charges to be paid in instalments. Exit charges can arise on unrealised capital gains when a trust ceases to be UK resident, or if a non-resident individual either ceases to trade through a UK branch or agency or moves trading assets abroad. Exit charges ensure that tax cannot be avoided by moving assets overseas. Clause 22 retains those rules. However, when such entities choose to move their place of residence within the European economic area, they will now be given the option to defer the payment of tax, paying in six equal annual instalments with interest, which will not reduce the amount of tax that is due.
Opposition amendments 3 and 4 would require the beneficiary of a trust that pays capital gains tax on an instalment basis to provide information about the source of its income in a public register. That requirement is disproportionate and unnecessary. Migrating trusts seeking to use the scheme will have paid UK tax, so their income sources will have been declared to HMRC. Information about the nature of the trust’s assets will also be held on the trust register, which applies to trusts with a UK tax liability and is available to law enforcement agencies. Consequently, there is no need for further reporting.
New clause 5 would require the Government to carry out a review of the equality impact of some of the Bill’s anti-avoidance provisions. The tax information and impact notes published alongside the measures already set out the impact of anti-avoidance measures in the Bill on those sharing protected characteristics. In general, they show that HMRC does not expect the measures to have notably different impacts on people according to their protected characteristics.
New clauses 6 and 14 would require the Government to publish a review of the effectiveness of the Bill’s provisions to tackle tax avoidance and tax evasion, and to reduce the tax gap. Such a review is unnecessary. The Government keep all taxes under review and will continue to measure and publish annual statistics on the tax gap. I have little doubt that those statistics will continue to show that the tax gap is lower than at any time under the previous Labour Government.
New clause 15 would require the Government to publish a report on the consultation that we have undertaken on some of the measures in the Bill. The Government are committed to creating a more predictable and stable tax system. Our move to a single fiscal event timetable and the new tax policy-making process ensure that there is more time available to consult on new tax changes. In July, we published draft legislation or detailed technical notes on the majority of the measures covered by the clauses in this group to allow for consultation with interested parties. However, that approach is simply not appropriate for all tax avoidance and evasion measures. Publishing draft legislation can give those targeted by legislation the opportunity to make provision to sidestep it. Although I agree with SNP Members that consulting on tax legislation is important, I do not agree that it is necessary for us to produce a report.
Conservative Members will continue to be ever mindful of the simple fact that wealth and money do not belong to the Government. In fact, there is no Government money, only that which is generated by hard-working people right across our country. As such, we recognise that we have a duty to keep tax as low as possible to reduce its burden, most especially on the poorest in our society, and so protect living standards and nurture a thriving economy.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to participate in this debate and to follow the Financial Secretary to the Treasury. I will speak to Labour amendments 3, 4, 19 and 23 and to new clauses 5 and 6.
As other Opposition Members have noted, it is disappointing, to say the least, that the Government have been unwilling to allow proper scrutiny and challenge of their proposals in this Finance Bill, as they have failed to introduce an amendment to the law resolution. Members will be aware that this approach has been used six times in the past century, each time necessitated by Budget provisions needing to be passed quickly.
Anneliese Dodds
Indeed. When we are unable to table amendments on provisions within a Budget, it is a severe restriction on the House’s ability appropriately to challenge the Government’s policies. In any case, if the Government can muster backing for their approach to prevent a change in policy, they can do so.
Kevin Foster
If the Labour party is so committed to scrutiny of this Bill, how come the Opposition Benches are virtually empty? The hon. Lady says that it is because Labour Members cannot table amendments, but they could come along and make speeches.
Anneliese Dodds
The hon. Gentleman has made the point for himself. It is precisely because we do not have the ability to table meaningful amendments that we are in this position. I am sure that he is aware that, when it was possible for Labour Members, often with other Members, to table meaningful amendments to Finance Bills, there was a huge amount of participation, such as when amendments were tabled on country-by-country reporting. Sadly, despite those amendments, we have not yet seen the change in Government policy that we would have liked. When the House is given the power, we exercise it; when we are not given the power, we are unable to exercise it.
As “Erskine May” sets out very clearly, in these circumstances, the only permissible amendments are
“strictly limited to what is authorized by the specific resolutions on which the bill is founded.”
Because of those restrictions, the Opposition cannot expand the scope of measures against tax avoidance and evasion beyond the very limited scope presented in the Bill.
There is a whole host of areas in which the Government should be taking action but where the Bill is completely silent. There has been no new approach from the Conservative Government on the verification of information supplied by companies when they register, despite widespread evidence of tax avoidance and money laundering being facilitated through the registration of fake companies via Companies House.
On shell companies, the Government have provided only a consultation on partnerships rather than action, and they have failed to use to any great extent their legal ability to impose fines on partnerships that fail to provide beneficial ownership information. Despite their consultation on a new offence of failure to prevent economic crime finishing more than a year ago, we still appear to have no more progress on that. Although our Government now have, as I mentioned, the legal means to require country-by-country reporting wholesale, following that amendment to a Finance Bill two years ago, when we were able properly to amend the Bill, they have refused to take up that option.
Despite this catalogue of failure, the Government continue to talk up their record. We saw this elevated to the level of farce last night, when Conservative central office—I assume—released a graphic on Facebook with the laughable claim that Labour had just voted against cracking down on tax avoidance. Labour has consistently advocated much stronger measures on tax avoidance than this Government have done. Indeed, the weakness of measures in the Bill is one of many reasons why we oppose it. The graphic included a background of palm trees, presumably a bizarre reference to our overseas territories. It is bizarre, given the woeful lack of action by our Government in this regard.
Chris Philp (Croydon South) (Con)
Would the shadow Minister like to join me in congratulating the Government on having reduced the tax gap from 8% under the last Labour Government to 6% today, which is the lowest level in the developed world?
Anneliese Dodds
I will go on to talk about the assumptions that the Government currently use to calculate that tax gap, and the hon. Gentleman will learn that their claims to have massively reduced the amount of tax avoidance through that measure are potentially questionable, to say the least. Perhaps after we have had that discussion, we will see whether he still holds to that assessment.
Julian Knight (Solihull) (Con)
While we wait for the hon. Lady to congratulate the Government on closing the tax gap, will she recognise that many of the steps taken in the Bill have to be taken in a way that is mindful of how international tax systems work and how we need to ensure that the tax we are gathering does not lead to companies leaving the UK and trading to it from international jurisdictions?
Anneliese Dodds
Of course we need a business-friendly tax environment, but we should also recognise, just as I find when I talk to many international businesses, as I do in my shadow ministerial position, that the vast majority of businesses want to be compliant. Sadly, a small number of firms are not necessarily complying with the letter of the law and some are also not complying with the spirit of the law. That is leading to a situation where our public services are starved of the funding we need, which has a huge impact on business, as I am sure the hon. Gentleman is aware through his discussions with businesses in his constituency.
Let me return to the matter of overseas territories, which strangely appear to be referred to in pictorial form in material released by Conservative central office. This Government were forced kicking and screaming by this House to require our overseas territories to produce public registers of beneficial ownership, but I understand that all that has happened since the vote that forced that change in policy is one conference call, leading to a vague commitment to convene a technical working group—but it is not going to meet until 2019. So we have had many months since that vote in this House but almost no action. In addition, rather than fulfil the commitments the Opposition were given that our Government would work with Crown dependencies towards transparency, tax treaties were presented to this House last week that included no such provisions whatsoever.
The Minister has, as ever, opined that his Government have reduced the tax gap, and indeed other Members have just referred to that. I am sure, however, that he will not illuminate us with the fact that his Government’s tax gap measure excludes the costs of profit shifting and that it starts from the assumption that companies are declaring the correct amount of tax, which surely begs the question. The tax gap for this Government is assessed on the basis of whether Her Majesty’s Revenue and Customs has found errors or evidence of avoidance on tax returns, an approach that has rightly been criticised by the Public Accounts Committee, given that it leads to a situation where much of the tax lost through avoidance simply does not count as part of the tax gap. The Government’s tax gap does not appear to include cases of avoidance or evasion that do not fall under existing legislation, so it fails to capture numerous loopholes that continue to be exploited simply because they are exactly that: loopholes.
Chris Philp
Did I detect a sigh when the hon. Lady gave way? She is questioning the basis of the tax gap as a sign of progress, so let me try a different statistic that she might feel better about. The amount of corporation tax collected has gone up from £35 billion a year to £55 billion a year; is that not evidence that these tax-raising measures are effective?
Anneliese Dodds
I am always delighted to hear from the hon. Gentleman, but when he talks about the tax-gap measurement, he is talking about his Government’s tax-gap measurement, not one that is universally accepted. In fact, it is quite the opposite, and many alternative measures suggest that much larger amounts of tax are being avoided and, indeed, that larger sums could be rectified if tax evasion was dealt with. Yet again, we hear this comment about the cut to the corporation tax rate. I am sorry to sound like a stuck record, but I have to remind the hon. Gentleman that every expert commentator on this matter has intimated that the rise in the corporation tax take is not because of the cut to the rate and that, in fact, had the rate not been cut, more revenue would have accrued to the Treasury. As I will go on to discuss, that revenue could have been used to support public services and social security for our constituents.
James Cartlidge
The hon. Lady will be sighing a bit more when I point this one out. It is very kind of her to give way. She said that the tax take has not gone up because of the rate cut, and she is absolutely right: above all, the reason the tax take has gone up is that the economy has been growing very strongly.
Anneliese Dodds
I am sorry that the hon. Gentleman views as a badge of pride the recent growth statistics. I would never talk down the British economy—it has a huge amount of promise—but I am deeply concerned about the fact that our growth statistics, particularly for the future, have been revised down. For next year and the following year, I believe that they are 1.6% and 1.4%, so they have been revised down. In the past, in normal times, we would have viewed growth statistics of that kind as a failure. Of course I am pleased that our economy is finally growing again—it was, of course, growing when Labour left office—but I am none the less deeply disappointed that we are not reaching the same levels of growth as many of our competitor countries.
Several hon. Members rose—
Anneliese Dodds
With the Committee’s permission, I shall continue with my comments.
We need a far more serious and engaged approach to countering tax avoidance and evasion. Our amendments are an attempt to provide that—at least within the scope of the limited measures in the Bill. First, with amendments 3 and 4, we are calling for public registers for beneficiaries of trusts who have relocated or plan to relocate to other EEA countries and who seek to defer their corporation tax exit charges, or those relating to capital gains tax, through a payment plan, as the Minister intimated. The Government’s action in this policy area has been necessitated by recent decisions of the European Court of Justice, which considered the compatibility of member state exit charges with article 49 of the treaty on the functioning of the European Union.
As the Minister intimated, the measures in the Bill will enable those who adopt an exit charge payment plan to pay in six equal instalments, albeit with interest. Given that this approach is necessitated by EU law and applies to individuals and trustees who move to another EU or EEA country, and given that some Government Members sadly flirt recklessly with the prospect of a no-deal Brexit, I would have expected the Government to explain what might happen in this policy area as our relationship with the EU changes. That was not the case in respect of the information about these measures that we were given; nor does anything in the Bill lead us towards greater transparency for trusts, which is desperately needed.
As of January this year, all trusts that pay beyond a very modest level of tax have had to register with HMRC through its trust registration service, but that is a private register, not a public one. The new iteration of the EU’s anti-money laundering legislation will require changes in the UK approach. First, it makes business-like trusts and those managed in the EU subject to reporting requirements, so potentially enlarging the category of trusts that have to register. Secondly, it enables parties with a legitimate interest to access information about those trusts—not just law enforcement agencies as currently—although the decision on who qualifies as having such a legitimate interest will be under the discretion of member states. Finally, this new legislation requires trusts owning EU companies to disclose full information about trustees, settlors and beneficiaries.
Helen Goodman (Bishop Auckland) (Lab)
My hon. Friend is making a fantastically good forensic case this afternoon, but I am still not sure whether I fully grasp the point. Is she saying that the Government have still not set out how they intend to collaborate with the European Union on information sharing for tax purposes, and/or is she saying that this will be an excuse for a lighter tax regime in this country and in the other EU member states, which will no doubt be taken into account when the future framework is being negotiated?
Anneliese Dodds
I am very grateful to my hon. Friend for her comments. In fact, I will go on to say both, because that is precisely our concern. So far, the Government have been incredibly vague about what commitments they will make on tax matters in relation to preventing avoidance and evasion. Furthermore, we have had some very, very unhelpful comments—to put it extremely mildly—from the Government about whether they might seek to undercut the rest of the EU on tax matters. I know that my hon. Friend follows these matters very closely, as she does money laundering matters, where I argue that we have not been clear enough about how we will collaborate with others into the future.
Our new clause 5 is directed at another Government blank spot: the distributional impact of their tax measures. It would require an equality impact assessment of the Government’s tax avoidance measures in relation to child poverty, household income levels, people with protected characteristics, and our nations and regions. That assessment is necessary because of the continuing leakage from our tax system owing to avoidance as well as evasion. Failure to deal with avoidance has put pressure on the rest of the tax system, which, as I have just mentioned, has been exacerbated by unnecessary tax cuts to the very best-off people and to profitable corporations. As many independent observers have noted, these tax cuts have tended to benefit the very best-off people and often men rather than women, while £4 out of every £5 cut from Government budgets has fallen on women’s shoulders. The Women’s Budget Group has shown how, out of all household types, lone mothers have been the hardest hit by cuts to services and tax and benefit changes, followed by lone fathers and single female pensioners. Among lone mothers, it is black and minority ethnic women who have lost the most.
Bim Afolami (Hitchin and Harpenden) (Con)
Is the hon. Lady suggesting that we should have differential tax rates for men, women and different ethnic groups?
Anneliese Dodds
I am grateful for the intervention, because it enables me to make the answer clear. Absolutely not. We are asking for something very simple. Sadly, it is something that this Government have not been willing to provide, which is the information about tax incidence. We do not have that information to the extent that the House needs. The process of analysis has been left to bodies such as the Women’s Budget Group and the Child Poverty Action Group. They have to crunch the data. That is an activity that should be carried out by Government, so that we as Members are able appropriately to scrutinise their policy and practice. We do not have that information at the moment.
James Cartlidge
The hon. Lady is being very generous in giving way. As a rejoinder and as a follow-up to the intervention by my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami), that is not the point he was making. He is saying that the implication is that, to change the system, we would need to have discriminatory tax policies to effect a different impact. We cannot just assess it; for it to be different in practice, the measures, by definition, would also have to be discriminatory.
Anneliese Dodds
I fear that the hon. Gentleman has yet again made the point for himself. This Government’s approach to taxation so far has affected different groups disproportionately. We can call that discrimination, unequal impact or whatever we like. The fact is that we found out about that not through Government figures, but due to analysis conducted by other bodies. We had a lengthy debate about this during the last Finance Bill, and I am very happy to run through all the arguments again. I suggest, however, that it might be easier for him to read analysis by those expert bodies, which will make the point more eloquently than I could.
Rachel Maclean (Redditch) (Con)
The hon. Lady is extremely generous in giving way. I wonder whether she will accept a point made by a member of one of the groups about which she is speaking—that is, by a woman. Does she accept that there are more women in work now due to this Government’s measures, making women better off compared with the legacy left by her party’s Government, of which I accept she was not a member?
Anneliese Dodds
I appreciate the hon. Lady’s comments, but is she aware that under her party’s Government, moving into work is sadly no longer the route out of poverty for huge numbers of working women? For example, two thirds of children living in poverty are in working households. Previously, someone who could obtain a job with enough hours would be able to climb out of poverty. That is no longer the case in the UK. Furthermore, as I just mentioned, those who have analysed the impact of tax and benefit changes on different genders have shown very clearly—it is simple to look at the statistics—that £4 out of every £5 cut by this Government have been cut from the pockets of women and from the services that women use.
Anneliese Dodds
The hon. Lady can shake her head at me, but she should shake her head at the Women’s Budget Group, which has shown this very clearly.
Chris Stephens
On seriously tackling the tax gap and the lack of analysis that the hon. Lady is identifying, could one of the reasons possibly be the meat cleaver that was taken to the HMRC office network, meaning that there is now a lack of local knowledge? Also, should not the Government employ as many people to tackle tax avoidance as they do for Department for Work and Pensions social security fraud?
Anneliese Dodds
I know that the hon. Gentleman has worked on the issue of cuts to HMRC’s capacity, as have many Members across the House. I will return to that important issue soon, because sadly the reality does not reflect the rather rosy picture that we were provided with by the Minister on that subject.
I return to the distributional impact of this Government’s tax measures. We had an interesting discussion about fairness following some comments by the hon. Member for Beckenham (Bob Stewart), who is no longer in his place. The Minister intimated that he was in favour of a fair tax system and said that the wealthiest people pay a large proportion of all tax. He is absolutely right: the wealthiest people do pay a large proportion of income tax. That is because of how wealthy they are. However, if we look at the impact of the tax system on different income groups, we find—I should not say “we” because it is the Office for National Statistics that has discovered this—that the best-off 10% of people pay less of their income in tax than the worst-off 10%. I note that the Conservatives did not contest this statistic when it was mentioned in the House yesterday. Surely that is a ringing indictment of their approach to taxation.
Chris Philp
I am delighted that the shadow Minister has given way once again, without sighing this time. The poorest in society are not in tax at all thanks to the increase in the threshold. The richest 1% do indeed pay 28% of tax, but they only earn about 12% of all income, so she will see that the amount of tax they pay is a great deal higher than their share of income.
Anneliese Dodds
It is always a pleasure to hear from the hon. Gentleman, who is always a very friendly face. Sadly, however—I feel bad doing this—I do have to correct him on two of the points that he mentioned. He stated that the poorest people will not pay any tax at all. That is simply not the case. Of course, they will pay—[Interruption.] No, no—he said “any tax”. Let us be clear: of course, large numbers of very badly off people pay a lot of value added tax, which is a regressive tax, even with the exemptions that apply to it.
In addition to that, increasing numbers of low-income people across this country are now paying council tax, many of them for the first time, because of the swingeing cuts that the hon. Gentleman’s Government have delivered to local authorities’ budgets for council tax relief. So we now have very large numbers of very-low-income people being taken to court because they are unable to pay their council tax. That situation is novel in our country but some might say it approximates things that happened back in the 1980s, which I am sure that the hon. Gentleman is too young to remember but which the history books have certainly not forgotten.
We also need a thorough understanding of how the failure to tackle tax avoidance affects our different regions, given that austerity’s impact on incomes has been strongest in areas that were already struggling economically. We need a thorough impact assessment of the impact that the failure to deal with tax avoidance is having on child poverty. Yesterday Ministers tried to deflect attention from their record on poverty by using only figures on absolute poverty. They never speak about the measure that is instead used by most academics and experts—relative poverty—because they know that more children are now living in relative poverty under their watch: almost a third of children, in fact. The problem is such that the chief executive of the Child Poverty Action Group has described the Conservative Government as being “in denial” on child poverty.
I will explain why we need to look at relative poverty. We should not look simply at whether people are destitute, as measured by absolute poverty, even though, sadly, many are having to resort to food banks for bare necessities; we also need to look at what people’s incomes are in relation to the living standards that everyone else enjoys. That is why the concept of relative poverty measures whether people are poor in relation to median-income people. Relative poverty matters because it shows whether people can afford to live a decent life.
Anneliese Dodds
No, it does not. Absolute poverty measures whether people can afford the bare necessities of life. To be able to participate in society—in their communities—they cannot fall so massively behind the median income. We are talking about families whose children cannot go to birthday parties for their friends because they cannot afford a card and a present. For me, that is a failure of our society, and it is to do with relative poverty, not absolute poverty. Over 4 million children in this country are classified as living in relative poverty, and that number is rising, not diminishing.
Anneliese Dodds
I will press on for now.
Labour’s new clause 6 would require a review of the Government’s measures presented in this Finance Bill on tackling avoidance, evasion and the tax gap. It would enable us to consider whether the Government’s reactive approach is sufficient, when many of us suspect that it is anything but. Here we are reminded of one of the biggest gaps in this Bill. Despite much fanfare in the Budget, and indeed in the Minister’s comments just now, there is no digital services tax presented in this Finance Bill. Instead, there will be a consultation on the Government’s approach. Of course, even what is in that consultation is less stringent than European-level proposals, and it includes giant loopholes in its safe harbour and double threshold elements.
The hon. Member for Walsall North (Eddie Hughes)—who is still in his place, which is fantastic—talked about the regime for intangible assets. He is absolutely right that we need tax authorities to deal with these issues more appropriately. When I think about the major strides that have been made on taxing profits arising out of those intangible assets, I think of the cases that have been taken by the European Commissioner for Competition against Starbucks and others. She showed, for example, that Starbucks’ intellectual property relating to its roasting processes was not based in the Netherlands, as it claimed, and that that was just a ruse to avoid tax.
Bim Afolami
Does the hon. Lady accept that, when we are dealing with the complexity of international tax treaties, judicial precedent and the rule of law, and given that those treaties and lots of judicial precedent were established at a time when we did not have multinationals in the way we do now, it is only prudent to consult properly before we put measures in place? Does she also accept that this Government have been a leader, according to the OECD and the IMF, in dealing with the problem that she outlines, and that she is not being fair at all?
Anneliese Dodds
I am grateful for the hon. Gentleman’s intervention. However, I am sorry to point out that he is slightly behind the times when it comes to the operation of tax treaties. Those are now multilateral, following the development of the OECD’s multilateral instrument, which aims to amend tax treaties for all signatories, including the UK, in a thorough manner.
Bim Afolami
I thank the hon. Lady for giving way again. The whole point is that this is all a work in progress, as she would accept.
Anneliese Dodds
That appears to be a slightly different point from the one the hon. Gentleman was making a moment ago. None the less, I agree that this is a work in progress. Sadly, our Government and Conservative Members in other jurisdictions have not always been promoting that process. I gently remind him that his colleagues in the European Parliament have consistently voted against measures that would increase tax transparency and have consistently not supported attempts to hold inquiries into, for example, the Panama papers and the Luxembourg leaks. I hope that, at some point, they will catch up with the need for more tax transparency and enforcement. Perhaps he could encourage them; that would be enormously helpful.
It is positive to see in this Finance Bill that the Government have adopted some of Labour’s proposed measures in our tax transparency and enforcement programme. They have finally seen the light on giving HMRC back preferred creditor status. They appear to be undertaking some action against umbrella agencies exploiting the employment allowance. They also appear to be looking towards creating an offshore property levy, although it is unclear to me, even following the Minister’s comments, how appropriately that will be targeted, given that it lacks the precision of Labour’s proposed oligarch property levy. But there are few additional measures in the Bill beyond what is already required by either the EU or the OECD, showing an abject lack of ambition and commitment from this Conservative Government.
Underlying all this, as the hon. Member for Glasgow South West (Chris Stephens) said, is the Government’s failure to appropriately staff HMRC to deal with tax avoidance and evasion and their determination to press ahead with its reorganisation, despite evidence that it is haemorrhaging experienced staff. Some additional money has been provided, which the Minister referred to in his speech. However, we still lack clarity on exactly where that money will go. The Government have committed to provide 5,000 additional customs staff. I still do not know where they will go. We are looking at a situation where, due to the regional reorganisation, there will not be a single HMRC hub along any of the south coast or beyond the central belt. Where customs officials will go is very unclear.
In addition, any additional money that is being provided by the Government, or at least much of it, will in any case just backfill what has been sucked out through the recruitment costs necessitated by the need to replace staff who have been lost due to the reorganisation process.
Rachel Maclean
The hon. Lady is painting a very negative picture, which I think is a shame. She should give this Government some credit for the fact that they have collected £71 billion more tax than would have been the case, given the tax regime, under Labour. That is £71 billion that has been collected. We all want to go further, but will she not welcome that money, which has gone into our public services?
Anneliese Dodds
I discussed a few moments ago how many of those measures are in fact disputed. It would be interesting if the hon. Lady could break down that figure. I suspect many of us would not agree that it reflects an accurate representation of the tax lost. In fact, as I mentioned, when profit shifting is taken into account, that figure is likely to be much larger.
I am very positive about the potential of our economy, and the potential of our tax officers, but I think they are being presented with an impossible task. I have talked to many of them—dozens of them—and they are very concerned about the future. They want to do a decent job, but they are being prevented from doing so a lot of the time, sadly, due to the Government’s determination to press ahead with this reorganisation programme.
Eddie Hughes
Is the hon. Lady aware that, following the Government’s consultation on their intentions for an increased tax take on intangible assets, they have introduced an allowance of £4 million to make amendments to computer systems and to employ more staff so that they can monitor compliance with these new tax regimes? Will she welcome that?
Anneliese Dodds
I am grateful to the hon. Gentleman for his intervention but, as I have said, some of the new staff coming in are replacing other staff who have been lost. In fact, when we look at those data, we see that over 17,000 staff years of experience in HMRC have been lost through redundancy. I find that many more experienced specialised staff are talking about leaving our Revenue in the future if the Government press ahead with their reorganisation scheme.
Mr Jim Cunningham (Coventry South) (Lab)
We have raised this many times and the hon. Member for Glasgow South West (Chris Stephens) has raised it as well. The Government are reducing the number of tax offices, in actual fact. They are closing the offices in Coventry. I do not know about the constituency of the hon. Member for Walsall North (Eddie Hughes), but people are having to go a long distance—16 miles to Birmingham—to deal with their tax problems.
Anneliese Dodds
As always, my hon. Friend has made an important point. We are seeing the loss of many experienced staff in these offices, which is not only a problem for HMRC, but an enormous problem for local economies.
Over the past couple of months, I have visited 10 of the locations where HMRC offices have either already closed or are set to close, and I must say that there is huge concern about the implications for those local areas. They are often ones where it takes a long time to travel to other destinations and where it is impossible to travel to work to the new regional centres. As a result, we are losing much expertise within our Revenue service.
That is reflected in the statistics from surveys of HMRC staff. We see that HMRC staff morale is incredibly low, but we have no recognition of that by the Government or any understanding of the implications of that for the services that HMRC provides. Indeed, as Members have mentioned, that would become even more of a problem if HMRC had to attempt to sort out the customs and VAT chaos that would be caused by a no-deal Brexit.
Our uncertain future relations with the EU are at the root of the penultimate Opposition amendment that I will speak to, amendment 23. The amendment requires a consideration of the implications for cross-border tax information sharing of no deal and of the Government’s withdrawal Bill arrangements. The European Scrutiny Committee asked for
“the Government’s view on the value of continued UK participation in the wider system of exchange of information created by the DAC Directive”—
the directive on administrative co-operation—
“after the post-Brexit transition period ends, and how it will seek to secure the desired level of cooperation when it becomes a third country for the purposes of EU law.”
The Financial Secretary to the Treasury, who is sitting on the Front Bench again today, sent a letter in response at the end of April. On this point, however, his letter simply said that
“the Government recognises the value of the exchange of information in tackling tax avoidance and evasion and will address procedures for ongoing administrative cooperation, including the exchange of information framework set up—”
under the directive—
“within the scope of the wider EU exit negotiations.”
It is one thing recognising the value of information exchange, but it is quite another ensuring that it will continue. We really need clarity from the Government, not only about administrative co-operation but about other forms of information exchange.
For example, will the Government continue to participate in the code of conduct group, potentially with observer status? I have asked about that repeatedly, but as of yet I have received no answer. Will we participate in the pan-EU database including information about trusts, which I referred to and which is due to be created as a result of the new iteration of the anti-money laundering directive? Will we continue to share information about tax rulings, those sweetheart deals concluded between HMRC and large taxpayers, which are not available to smaller taxpayers and which in some cases have rightly caused uproar when details of their provisions have leaked out?
The hon. Member for South Suffolk (James Cartlidge) referred to the need for a level playing field. Surely that applies in spades when it comes to transparency on tax rulings, so I am very disappointed that his Government have not yet provided that transparency. It is not clear how they will share that data with the EU27 in the future.
The Conservatives’ mood music on this issue so far has been worrying. Not only has the Chancellor damaged relations with the EU27 by threatening to turn our country into a tax haven, but his party’s MEPs—[Interruption.] He has. A number of Government Members are claiming, from a sedentary position, that that never happened, but many Opposition Members will recall precisely when he made those kinds of threats. I have talked to many colleagues from different political parties in EU27 countries who viewed those comments—
Anneliese Dodds
I will give way when I have finished my sentence. I am so pleased that the right hon. Gentleman is so excited about participating in this debate. As I have said, I have talked to many politicians in EU27 countries who interpreted those comments—discussing a shift towards a Singapore-style model—as a threat. Of course, often when Government Members talk about a Singapore-style model, they omit to mention the huge amount of social housing, for example, in that nation, and other aspects of its business model. I suspect they have a rather different approach in mind when they talk about it.
Sir Hugo Swire
The hon. Lady, who speaks for the Opposition, said she can specifically say when my right hon. Friend the Chancellor made these assertions or claims. When were they made?
Anneliese Dodds
I would be more than happy to look up that reference and send it to the right hon. Gentleman immediately. I regret that he cannot remember his own Chancellor’s words and that he is unaware that there have ever been comments from his Government suggesting that the UK may at some point shift towards a Singapore-style model. I regret that he is unaware of the comments that have so soured our relationship with the EU27, because I know that they have caused enormous problems for us. They have presented a picture of our country as seeking to undermine and undercut tax arrangements in the rest of the EU27. For that reason, it is enormously important that those comments should be counted.
If the right hon. Gentleman believes that his Government will no longer use that threat, I will be very pleased to hear it, and I would suggest that he perhaps has conversations with those members of his Government who have advocated that point of view.
Anneliese Dodds
I will not give way, because I fear that the Committee is losing patience with the length of my comments. [Hon. Members: “More!] It is wonderful to see so much interest in the topic of taxation; I only wish that were always the case.
The Conservatives’ mood music on this issue has been worrying, as I have said. As I have referred to previously, the Conservatives’ MEPs have consistently either voted against or abstained on EU-level measures to promote tax transparency, and the Conservative Government were, sadly, unwilling to meet representatives from the European Parliament’s Panama papers investigative committee when they came to the UK.
Our amendment 23 would force these issues into the open and require a proper consideration by Government of how they could act to ensure proper data sharing, in order to combat tax avoidance and evasion. It is paralleled by our amendment 19, which would require the Government to undertake a review of our controlled foreign companies regime, with particular consideration of how it would be affected in the event of a no-deal Brexit.
The Conservative Government appear to treat countering tax avoidance as a game of whack-a-mole, rather than the long-term strategic approach that is surely required. As a result, we wish to press new clause 5 and amendment 23 to a Division.
In conclusion, the Government have no long-term plan for protecting the revenue on which our public services rely and appear to have no clear idea of how they will co-ordinate, or otherwise, our measures on tax avoidance with the EU27. A different approach is needed and my party stands ready to implement it as soon as we get the chance.
Kevin Foster
It is a pleasure to speak in this debate, which is not the first I have ever taken part in on tax avoidance. We have all had some enjoyable banter across the Chamber, but I think it is worth paying tribute to the hon. Member for Oxford East (Anneliese Dodds) for the sheer number of interventions she was prepared to take when she knew they would be challenging. Not many Front Benchers are happy to do that, so it is worth putting it on record.
I spent two years as a member of the Public Accounts Committee, which looked at the details of HMRC’s performance and in particular what work was being done to ensure that the taxes we set by law in this Parliament are collected. We need to be clear about what we are talking about when we talk about tax avoidance. In theory, someone who has an ISA savings account avoids some tax. That is not what we are talking about. What we are talking about is those who seek to use lawful methods, but stretch them to the point of incredulity.
Helen Goodman
The hon. Gentleman has just made the absolutely ludicrous and childish suggestion that buying an ISA is engaging in tax avoidance. For the avoidance of doubt, does he believe that HMRC includes ISAs in its calculation of the tax gap?
Kevin Foster
Normally I thank Opposition Members for their interventions, but that really was quite churlish. My point was that when people transfer their money from an ordinary savings account to an ISA they do not pay tax on the income from their savings, so guess what? They avoid a level of income tax. That is something we all think is right. It is how we incentivise saving and how many millions of people in this country save. So yes, tax is avoided but perfectly legitimately. That is not the point I am making, as the hon. Lady full well knows.
James Cartlidge
My hon. Friend is spot on: an ISA is technically a form of tax avoidance. The point, however, is that what irks our constituents is when international companies and others take advantage of avoidance schemes that may be lawful at the time, but which no normal citizen could in any way take advantage of—unlike an ISA, which is commonly available.
Kevin Foster
I thank my hon. Friend for that intervention, which gets to the point of the debate. Tax avoidance is when people create a very complex legal structure, for example having something offshore and routing it through a shell company. That is what we are targeting. People will look to minimise their tax liability; that is natural. I am talking about when it is clear that fictional legal companies are being created that do pointless activity or pretend to do something that is not being done, or when a value transaction is actually nothing more than just a wooden dollars transaction made with the intention of avoiding stamp duty or a liability. That is the point being made. We could go through the record of the Opposition before 2010 if we really wanted to, but we should focus on the issue itself. Tax havens did not just appear the day David Cameron walked into Downing Street—far from it.
The PAC looked at Google’s affairs. Before I sat on the PAC, I thought that a double Irish might be a drink and that a Dutch sandwich might be something involving Edam cheese. Actually, they were both ways in which corporations sought to avoid tax and route their profits into tax haven jurisdictions where the level of tax paid versus GDP was rather suspicious, or into islands, particularly Bermuda, where the amount being declared versus what the real economic activity was likely to be was rather suspicious. I will talk more about intangible property areas in a minute. The Dutch sandwich was an idea created by the Dutch Government to try to get IT firms to invest in the Netherlands. That was perfectly reasonable as something that they would look to do, but courtesy of some loopholes, people were allowed to transfer profits through from activity elsewhere. The result was not investment and jobs in the Netherlands, but significant levels of tax avoidance.
In the Public Accounts Committee, we used to be very keen on hearing more details about and having more of a focus in HMRC on where genuine tax evasion had taken place—where people had lied and hidden assets in offshore jurisdictions and not declared them. That is not about people using some clever trick; they had just lied to evade tax. It was vital that penalties followed on from that once it was discovered. If people constantly avoided prosecution, it almost sent a message that if someone is caught, they can just pay up. However, I am conscious that we are not discussing that area of the law today.
It was interesting to go through the House of Commons Library report on today’s debate and particularly to look at some statistics on where the tax gap comes from. The report mentions that in 2016-17, small businesses were part of the tax gap. However, there were also large businesses, and criminals were in third place—depriving us of billions of pounds of taxation revenue—which is why I welcome some of the measures that the Government are looking to bring in as part of the Bill.
For me, the big one is the provisions on intangible property. Clause 15 looks really simple—it is two lines—but schedule 3, which is the meat of the proposal, really starts to get into some of the detail. How the provision is enforced and how it works will be interesting, but I welcome the fact that we are moving to bring it in. As my hon. Friend the Member for Walsall North (Eddie Hughes) said, it is worth making a point about what intangible properties we are talking about. We are certainly talking about things such as adverts on Facebook and adverts on a search engine being pushed to the top, when someone searches for a particular brand or product. In the debate on the previous of group on amendments, there was an example where someone looking for help with gambling found that—guess what?—“How to help you gamble” was boosted to the top of a search engine’s results, because a particular company had paid for that to happen. That is the type of intangible asset that we will look to target.
Rachel Maclean
My hon. Friend has considerable expertise in this area and I welcome him updating the House. He mentioned some unintended and wholly undesirable consequences of this type of intangible property. Will he enlighten us on whether there are also some beneficial aspects of intangible property, given that the UK is a centre for tech creativity and dynamism and that these are the industries of the future?
Kevin Foster
That is what we have to balance in considering this new tax, because we do not want to shut down the entrepreneurial spirit in many companies and see such provision affecting those who are looking to set out for the first time to get a business going and perhaps to do something that changes the marketplace and really makes a difference. Some of the largest tech companies literally grew out of someone’s garage 10 or 20 years ago. Twitter did not exist when I joined the Conservative party. Facebook did not exist when I first stood for a local council back in 2002. We can see the way that those companies have grown and exploded. We do not want to set up a tax that knocks back genuine entrepreneurialism, but we also have to have a debate about how we ensure that there is a level and fair basis of taxation.
Reference was made earlier to high streets. The point is that a small shop in the centre of a town is paying business rates, collecting VAT, paying its staff and paying corporation tax, and we have to get to a point at which economic activities are fairly taxed. If a large online platform is taking millions of pounds in revenue and paying next to nothing, that is when the annoyance comes and there is a sense of unfairness.
We must have a mature debate on the future of tax in the online space, where activity is much more moveable. My hon. Friend was right to allude to that. These industries can shift much more easily than those that need a physical presence to trade and reach out to customers. A digital service company could be based in New Zealand, and we could all be using its services today from this building via smartphones, tablets or a standard internet link, in a way that would have been unimaginable 30 years ago.
We have to distinguish between genuine activity—for example, paying a company in New Zealand for a website design service—and a fake transaction or transfer of profits, where no one did anything other than raise an invoice in a convenient jurisdiction, into which the money was paid, even though all the economic activity was done elsewhere, the reason being there was an opportunity to avoid a layer of taxation. In such cases, one might see structures set up that link the corporate shell in that jurisdiction to another jurisdiction that is a tax haven or a place with a very low rate of taxation. The Dutch sandwich, which I mentioned earlier, started out as a good idea to encourage tech investment and ended up as a way to reroute profits and, when combined with the so-called double Irish, as a way of strongly minimising taxation liabilities.
Sir Hugo Swire
My hon. Friend is making some extremely good points with which I agree, but it is not only online companies such as Amazon that we need to work out how best to tax, but others, such as offshore gambling companies, that retain huge revenues generated by doing things in this country. Is he convinced that the thinking is going on in the Treasury on a root-and-branch reform of all taxation? It seems to me we are trying to play catch-up but that the world is changing quicker than our ability to tax this changing economy.
Kevin Foster
I thank my right hon. Friend for his thoughtful intervention. Obviously, I cannot speak for the Treasury, as a mere Back Bencher—[Interruption.]. I appreciate the confidence that my hon. Friend the Member for Walsall North has in me, but I cannot speak for the Treasury. I do not want to say too much about gambling taxation, given that we have just debated it, but we do need to look at the situation in the round, so my right hon. Friend was right to mention it.
My right hon. Friend is a distinguished Member of the House. He has been here for I think 17 years, during which time the economy has changed remarkably. Who would have thought back then that companies such as Woolworths would have faced a challenge from online competitors? Who would have thought that every one of us would be sat in this Chamber with a device that would allow us to buy the entire contents of a department store, order virtually anything we want, and access casino-like gambling opportunities for which not that long ago we would have had to make a trip to Monaco? We now have that all in our pockets—we can literally walk out of the Chamber and do it.
I share my right hon. Friend’s concern, but the economy is moving on. As I said in response to my hon. Friend the Member for Redditch (Rachel Maclean), we must not destroy the good, and we have to be careful not to chuck out the baby with the bathwater. The Treasury will have to look at that. The nature of work is changing, too, and that raises not only challenges for employment rights, but questions of how we tax fairly, given that it will be less and less the case that there is a big employer with lots of staff who are paid regularly, to which it is easier to apply restrictions.
James Cartlidge
I was waiting patiently for my hon. Friend to get back to what he thought intangible property was. Is he aware that proposed new section 608H(1) in schedule 3 to the Bill states:
“In this Chapter ‘intangible property’ means any property except…tangible property”?
Kevin Foster
Yes, it is an interesting one. I suspect that if I dealt with that intervention fully, I would be like the vicar in the church who has 10 minutes to unpack the Holy Trinity in an easy and understandable way—[Interruption.] I appreciate my hon. Friends’ confidence in my abilities.
Kevin Foster
I will deal with the intervention made by my hon. Friend the Member for South Suffolk (James Cartlidge) and then I shall give way to my hon. Friend the Member for The Wrekin (Mark Pritchard).
The idea is that something intangible is something that we cannot see and cannot hold, whereas something tangible is something that we can literally have in our hands, such as a phone or the copy of the Bill that I am holding now, or something that we can wear. Something that is intangible can be something that we own and to which we have a right. A classic argument about something intangible once concerned a Star Wars computer game, of all things: if I busily bought lots of things in that game using money, and someone else playing the game then sent their forces, which they had bought, to raid that property, would my property be being stolen? That is an interesting legal argument, although it must be said that some people might have a little too much time on their hands if they can become so involved in a discussion of a Star Wars computer game.
There are things that we own but, of course, there are also our own identities and profiles. You probably do not want me to go too far down this path, Ms Dorries, but we have previously had debates about information that is created online, and a data trail can become an asset that is worth money.
Mark Pritchard
I am in danger of making one intervention in three—or three interventions in one—but let me develop the theological point raised by my hon. Friend. Steam, ice and water are, of course, all the same: they are three in one, and one in three. I hope that that clarifies his point.
Kevin Foster
I am very grateful. I am sure that a student of divinity is about to fire off an email to me and my hon. Friend saying, “Actually, I am not quite sure that that is the case,” but it is great to hear my hon. Friend’s explanation of how the “three in one” in the case of water could apply to the Holy Trinity. Nevertheless, a detailed unpacking of the Holy Trinity is not listed for consideration on today’s Order Paper, and I should be talking about anti-avoidance measures—[Interruption.] I am glad to hear that the hon. Member for Bootle (Peter Dowd) thinks that the former would be more interesting. I am sure that at some point he will accuse me of giving a sermon in this place, although I will probably not be covering that subject at the time.
My hon. Friend the Member for South Suffolk rightly pointed to the measure in which intangible property was defined. It is also worth while for us to consider some of the exemptions, and how their working will be monitored by the Treasury. I am conscious that the Minister is not present, but I am sure that those who are currently on the Treasury Bench will note my remarks.
Proposed new section 608J states:
“Section 608A does not apply in relation to a person for a tax year if the total value of the person’s UK sales in that tax year does not exceed £10,000,000.”
How will we make sure that we do not suddenly see lots of taxed persons with £9,999,999.99 who seem to know each other quite well, or at least seem to be engaging in similar activities? I understand that the provision is well intentioned, and I understand the need for a de minimis level so that we target the larger companies that are intended to be deal with. I also understand—this takes me back to the intervention from my hon. Friend the Member for Redditch—that smaller companies should not suddenly be burdened with having to deal with a very large piece of legislation. However, I should like to know how we can ensure that this does not become a way of avoiding tax.
Proposed new section 608L, which is on page 187 of the Bill, is entitled “Exemption where foreign tax at least half of UK tax”. Again, how can we be sure that that taxation provision is genuinely met so that it does not become an avoidance mechanism?
Most of the changes in the Bill are welcome, however. As we leave the European Union, I would expect that we will still seek to co-operate. I do not think any of us would argue that it would make sense for us not to ensure that we share information to prevent the excessive avoidance or evasion of taxation, just as we have sought to work with jurisdictions such as Liechtenstein, which is not in the EU but has a treaty agreement with us on sharing information to prevent tax avoidance. I am also interested in following the consultation on the digital services tax, which will consider how we can introduce it without snuffing out the entrepreneurialism that we wish to see.
I am conscious that I have detained the Committee for about 19 minutes—[Hon. Members: “More!”] I hear the requests from SNP Members, who are obviously keen to hear a lot more from me, but, sadly, I must disappoint them on this occasion.
This has been a worthwhile debate. Intangible property is a key area for the future, in terms of not just the straight issue of ensuring that one or two large corporations are not avoiding tax we might think that they are due to pay, but opening up the whole debate of how we arrange tax as we move into a digital economy, when we are less likely to have physical things we can put our hands on in respect of taxable activity.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The shadow Minister claimed earlier that our Chancellor has said that he wants to make the UK into a tax haven. For the sake of clarity and for the record, has my hon. Friend ever heard the Chancellor say that?
Kevin Foster
I have certainly heard my right hon. Friend the Chancellor talking about ensuring that Britain has competitive tax rates, that Britain is a competitive and good place to do business, and that we have a fair balance between raising taxation to pay for our public services and also ensuring that our tax system encourages rather than stymies economic activity in this country.
We heard earlier about the reactions of the EU27. I would point to the Republic of Ireland, which has a lower corporation tax rate than us. If we were to move towards the Republic of Ireland’s rate, it would be somewhat strange for it to say, “How dare you copy us.” This is not about encouraging a tax competition. States in Europe, whether they are inside or outside the EU, will look to provide the conditions for growth in their countries, and it is absolutely right that that is what the Chancellor and Treasury team in this country are looking to do. I certainly praise them for that. This is not about becoming a tax haven, although we might reflect on the fact that, judging by the actions of the Scottish National party and the Scottish Government, they are trying to turn England into a tax haven by shoving up tax rates in Scotland.
With that, I will draw my remarks to a close. I welcome what I see in this Budget. I do not think that the Opposition amendments and new clauses are necessary, for the reasons the Minister outlined at the Dispatch Box. This welcome Bill will bring in more tax, deal with avoidance and, at the same time, help to push our economy forward.
Alison Thewliss
The renowned Nobel laureate in economics Joseph Stiglitz has said that what we measure shapes what we strive to pursue. I tabled new clauses 14 and 15, in my name and the names of my hon. colleagues, to ensure that we are effectively striving to pursue the reduction in the tax gap and to consult fully on the provisions of this Bill. I support very much what the hon. Member for Oxford East (Anneliese Dodds) said and support her new clause 5 and amendment 23. She made some excellent points, most of which I fully agree with and endorse. I will not repeat what she said, however, as she made her points very clearly; she did a fantastic job in putting across the Labour party’s view.
It was bizarre to watch Government Back Benchers tie themselves in knots yesterday in opposing new clause 7, tabled by my hon. Friend the Member for Aberdeen North (Kirsty Blackman), in relation to entrepreneur’s relief. If the UK Government are confident that their policies are effective, they must not be afraid to review them. Indeed, reviewing them is all we can do under this Bill; as the hon. Member for Oxford East said, we are limited in what we can do here. So we do propose a review on that.
Likewise on the provisions on tax avoidance, we must gauge our progress by continually measuring the value and effectiveness of those policies. The hon. Member for Torbay (Kevin Foster) mentioned the Dutch sandwich. I am sure that was sensible when proposed and I am sure that the Dutch Government then looked at it and decided that actually it was not working. They then will have reviewed the policy and looked at the detail and clamped down on that loophole; I am sure they must have done that as otherwise it would still be an issue. Likewise, this Government should do better at reviewing their policies, testing them, seeing how effective they are and making changes as a result.
Our proposal is in the spirit of achieving better, more robust policies in the future. We should also look to the world to see where the best polices are and see what we can do to adapt them, and we should collaborate with our near-neighbours in Europe, particularly to make sure we are not allowing companies to move around at will seeking the best policies to save money, rather than paying the taxes that they ought to.
There are many reasons why HMRC does not always collect the tax that it ought to be paid, whether through criminal activity, through evasion or avoidance or just through human error, and there is much more that can be done to address that. While a greater focus on the non-compliance of corporations is welcome, there is still ample opportunity to avoid paying into the system, and we need to look at that very seriously.
The SNP has long argued that the tax system is unnecessarily cumbersome and complicated. There are layers and layers of regulations and exemptions, which lead to loopholes appearing. The system seems to get more complex every year when we look at the Finance Bill, and there also appear to be armies of tax avoidance specialists seeking to exploit whatever gaps they can find.
Chris Stephens
Was my hon. Friend not astonished when the Minister admitted that no data is held on any of the higher-rate Scottish taxpayers who are registering themselves elsewhere in the UK, as peddled and promoted by the Scottish Tories last week?
Alison Thewliss
That is indeed astonishing, and if it is a problem, the Government ought to be looking at it. People living in Scotland should pay the appropriate amount of tax, because that is the price we pay for living in a civilised society. That is what the Minister said in his speech earlier. We also have to look at what we get for our taxes in Scotland. We get a better, fairer society, which is good for us all. All the academics in this field recognise that a fair society is better for us all.
Last year, this Government opposed my amendment to the Sanctions and Anti-Money Laundering Bill that would have increased the transparency of Scottish limited partnerships by ensuring that those partnerships had bank accounts. We are still waiting for a response from the Department for Business, Energy and Industrial Strategy on the consultation that closed on 23 July this year.
Hannah Bardell (Livingston) (SNP)
I served on that Bill Committee with my hon. Friend, and the work that she did was excellent. Does she share my concern about the damage being done to Scotland’s reputation by Scottish limited partnerships? The partnerships are nothing to do with the Scottish Government, they have not been legislated for in Scotland and we have no power over them there, but they are doing serious damage to Scotland’s reputation internationally, and the UK Government need to act.
Alison Thewliss
This Government absolutely do need to act on this issue. It cannot be right that something we have no control over becomes a noose around our neck when it comes to our reputation internationally. I expect this Government to come forward with something on this soon, because their not doing so allows this to continue to happen. The Herald, whose journalist David Leask has been a constant campaigner on this issue, has reported that
“in the year to March 2016, 95% of SLPs were set up by offshore tax havens.”
That ought to ring alarm bells for this Government, given the likely sums of money involved in these tax havens. I have tabled more parliamentary questions on this today, but the last time I checked, no fines had been issued to those SLPs that have not yet registered a person of significant control. Even pursuing those fines against SLPs could have brought large sums of money into the strapped Treasury coffers, never mind dealing with the underlying lack of transparency surrounding SLPs.
It is no secret that SLPs are being abused to carry out crimes abroad and launder money and that the anonymity they provide enables all this, but this Government are simply not doing enough to stop it. There was some progress after the Salisbury attack, and there was talk of clamping down specifically on Russian dirty money, but we have not yet seen that happen. We need to know what the Government’s plans are, because we cannot allow this to continue. I commend to the Minister the investigation on Uzbekistan by David Leask and Richard Smith, because the sums of money and levels of corruption involved are absolutely hair-raising.
The SNP has put forward many sensible proposals to crack down on tax evasion and avoidance, but they have been rejected by this Government time after time. No action has been taken on enforcing the people of significant control rules governing SLPs. No action has been taken on the alternative investment market loophole that allows families to register homes as business properties, effectively overriding inheritance tax. No action has been taken to make online retailers liable for tax avoidance when they falsely classify their goods as gifts. And no action has been taken to create a legal framework to combat tech firms who avoid corporation tax by registering implausibly low profits in the UK.
Hannah Bardell
On top of all that inaction, does my hon. Friend share my concern about the centralisation of HMRC offices? Highly skilled staff will lose their jobs because of this Government’s centralising agenda. In my constituency, more than 1,000 jobs are being moved from West Lothian to Edinburgh, which will create huge issues.
Alison Thewliss
I agree that that loss of expertise is a huge issue. I have a constituency interest, because many of these centralised offices end up being in Glasgow Central, but this also comes at a significant cost to the taxpayer. It is no secret that city centre office space in Glasgow is expensive, and there would be greater benefits in keeping those services in areas such as the Clyde Gateway, which is also in my constituency but much cheaper, or in Livingston. That would provide better value for money for the taxpayer than having them all in city centre offices.
Luke Graham
I thank the hon. Lady for giving way. She is making some good points about decentralisation. Would the SNP join me in looking at some of the Scottish Government’s new powers? Instead of basing offices in Dundee, offices should be located in more affordable areas, such as Clackmannanshire or Perth and Kinross.
Alison Thewliss
Dundee is affordable. There is a balance—[Interruption.] The hon. Gentleman is not listening, but there is a balance here. We need local infrastructure, transport and so on to support such things, but there is an argument for doing all that. It used to be UK Government policy to decentralise large office blocks, but they have cut that back over the years, and offices are now disappearing. He can give me no lectures about that. There are countless examples of the UK Government cutting offices. So many jobcentres in the city of Glasgow have been cut that my constituents now have to take two buses just to get to one, and I do not see any Scottish Conservatives standing up for that.
Helen Goodman
I congratulate my hon. Friend the Member for Oxford East (Anneliese Dodds) on a tour de force. I know she really is on top of this subject, having worked with her on the Sanctions and Anti-Money Laundering Act 2018. I thought her speech this afternoon was very impressive.
I will speak to new clauses 5 and 6, which stand in the name of my right hon. Friend the Leader of the Opposition and deal with tax avoidance and evasion. I am sure Members on both sides of the Committee recall what happened on 1 May 2018, when there was a cross-party move, spearheaded by Back Benchers, to introduce public registers in the overseas territories. The Government, in the form of the Minister for Europe and the Americas, conceded that this was a change that should be made. We had tabled an amendment that would have required similar public registers in the Crown dependencies, but the right hon. Gentleman said he would prefer to take a voluntary approach and asked me not to press the amendment. In the spirit of co-operation I agreed not to do so. Today I ask the Government what progress they have made with the Crown dependencies on that voluntary approach. In public, the Crown dependencies are going around saying how delighted they are that the pressure is completely off and how nobody in this House is interested in having similar public registers for the Crown dependencies as for the overseas territories.
That is relevant to this tax debate because the OECD has estimated that, across the OECD countries, the tax lost to the secret jurisdictions is between $100 billion and $240 billion. An independent researcher, Tax Research LLP, has estimated that this country’s tax loss is £18.5 billion a year, which is a significant sum. I know the Treasury thinks everything is going well, but it is not so flush that it can just wave away £18.5 billion.
I thought I had better follow up with Ministers and ask what they were doing, so about three months later I asked the Foreign Office what discussions it was having with the Crown dependencies. This is the answer I received:
“The Foreign and Commonwealth Office is not responsible for UK engagement with the Crown Dependencies regarding existing beneficial ownership arrangements, and has therefore not had any discussions with the Crown Dependencies on this issue.
The Ministry of Justice is the UK Government Department responsible for the UK’s wider constitutional relationship with those jurisdictions.”
So obviously I asked the Ministry of Justice what it is doing to pursue public registers of beneficial ownership with the Crown dependencies. It said:
“The Crown Dependencies are not part of the UK.”
Okay, even I have latched on to that one. It continued by saying that they are self-governing and that:
“The Ministry of Justice manages the constitutional relationship between the UK and the Crown Dependencies. Ministers and officials routinely discuss a range of matters…but it is not my Department’s role to make specific recommendations”
on company registers of beneficial ownership. It went on to say:
“The Ministry of Justice also liaises with the Home Office as the lead UK Department for arrangements on sharing beneficial ownership information”
Blah-de-blah. Finally, it said:
“The Government intends to use its best endeavours, diplomatically”
—by which is meant, “Let’s hit the ball back over to the Foreign Office”—
“and with international partners, to promote public registers of company beneficial ownership as the global standard.”
That will not do. We were made a promise by Ministers on 1 May. This move would help us significantly to reduce tax avoidance.
I also asked Ministers at Treasury oral questions what their estimate was of the amount of money that would flow in from the changes we had made on the overseas territories—this was the part where we had a consensus. I asked that because I could not see anything in the Red Book on it. The Minister said, “Oh well, this was all pie in the sky. We have not done any work on it.” This is why new clauses 5 and 6 are really sensible. The fact is that if Ministers stand up and offer legislation or make promises but do not follow through, there is no point in this House doing anything. That is why requiring impact assessments in the legislation will enable us to keep track of what Ministers are doing and where they have got to. That is why I urge them to do this. It is in their interests, as they will be able to use the impact assessments to keep track and to manage their officials, who are doubtless beavering away to the best of their ability, given the political direction that they are getting.
Earlier, we debated distribution and the impact of the Budget. It is disappointing not to get information about the distributional impact of the Chancellor’s measures. For many years, the Treasury Committee was instrumental in ensuring that distributional analyses were undertaken. I am not clear where we are on this, but I urge Ministers to publish the proper distributional analyses. That will facilitate informed public debate, rather than the exchange of prejudices. I am sure that that is ultimately what Ministers want.
Eddie Hughes
It is a pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman), although I have to say that the contribution from the hon. Member for Glasgow Central (Alison Thewliss) was the speech by an Opposition Member that most excited me, not least because I wrote a paper on blockchain for the think tank Freer, where I considered the merits of the technology and how it might help us to improve the efficiency of government. I am delighted to say that on Thursday I am going to have lunch with Dr Craig Wright, one of the people associated with the creation of bitcoin, which celebrated its 10th birthday recently. I understand that the Government and the Treasury Committee have given some consideration to the use of crypto-currencies and crypto-assets and how they might be appropriately governed in the future. That is the job of the Government. They have to keep pace with improvements and diversity in technology and understand where money is being used and created, to make sure that their tax take is optimised while observing the general principle of low taxation. The second Roman emperor, Tiberius, said that a good shepherd shears his sheep but does not skin them. I think that is an appropriate maxim for us to follow, but sometimes the Government’s problem is that they need to find the sheep in order to shear them.
Patricia Gibson
I rise to speak in support of new clauses 14 and 15. The need for improved transparency over UK public finances is urgent and the case is compelling, which is why I was keen to speak on those new clauses. I note the other provisions dealing with tax avoidance that have been put forward and about which much has been said today.
There has been far too little consultation on the Bill with stakeholders, but what we do know is that we desperately need greater transparency over the UK’s public finances. I am deeply disappointed that amendment 24 was not selected, as there are particular issues of transparency around those companies that deliver public buildings at public expense. Particularly those engaged in public-private partnership projects need to be more open. There would have been cross-party support for that amendment, but the SNP was not asked to support it, which is a shame.
PPP projects need to be transparent and more accountable to the public in order to protect the public finances. They are a perfect demonstration of why that accountability and openness are so essential. So I have concerns about what is not in the Bill. We cannot talk in any context about openness in public finances without talking about the private finance initiative, and I believe that there is cross-party support to have that conversation. This was a Tory policy embraced by Labour. Indeed, George Monbiot has called the PFI situation:
“A racket, the legacy of 13 years of New Labour appeasement, triangulation and false accounting.”
The scheme was so enthusiastically embraced by the previous Labour Administrations, it was like a grand love affair. Scotland was not just the testing ground for this disaster—the first PFI project in Britain was the Skye bridge project—it also has a far higher proportion of such projects than anywhere else. Writer Gerry Hassan has pointed out:
“Scotland has 40% of PFI schools with 8.5% of the population.”
Why is that? Could it be that, like the poll tax, Scotland became the testing ground for the PFI nightmare? It certainly looks that way, although if anybody wants to contradict that, I am quite happy to hear what they have to say.
It is unacceptable that PFI companies often inhabit the shadows. Their tax arrangements need to be sufficiently transparent and open so that we can have proper transparency in our public finances and we can be confident that those being paid very lucrative sums—way over the odds for public buildings—are in turn paying their due in taxes and have financial arrangements that are transparent and open to the public. That is why these new clauses are important and why they need to be included in the Bill.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Is the hon. Lady aware that, in England, PFI schools under the control of local authorities can be taken away from the local authority and forced to academise, but the debt—the liability—stays on the books of the local authority? Does she believe that that is transparent and fair?
Patricia Gibson
It is absolutely not transparent and it is yet another example of how PFI has been nothing short of a disaster. It is our local authorities, our schools and our hospitals that are paying the price.
Carol Monaghan (Glasgow North West) (SNP)
My hon. Friend, like me, is a teacher by profession and has had to deal with working in a PFI school. Often these schools have been developed by companies that have questionable tax policies and produce a substandard product that parents, pupils and teachers have to deal with, and local authorities are saddled with the debt for many years to come.
Patricia Gibson
My hon. Friend makes an excellent point. I am just about to go on to talk about not only the crumbling PFI schools that we are now left with and which the local authorities are paying for—there is no transparency and accountability on these contracts—but alleged criminality that has taken place around these contracts in my constituency of North Ayrshire.
Alison Thewliss
I share my hon. Friend’s frustration with this. When I was a councillor in Labour-run Glasgow City Council, if we wanted to see a contract, we had to go and sit in a room and read the contract; we could not even take it away. When the council discovered that the company had managed to build IT and home economics rooms without ventilation, it cost the council a fortune to reopen the contract and get those things put right.
Patricia Gibson
Again, my hon. Friend points to the lack of accountability and the hotchpotch—the rushed contracts put together by PFI, which benefited somebody, but did not benefit our local authorities or our children, and they do not benefit the patients in hospitals.
There is no better example of the need for new clauses 14 and 15 than North Ayrshire Council in my constituency. This Labour-run council had a PFI process that was severely flawed and was uncovered by local journalist Campbell Martin. Some have even insisted that criminal activity was involved, since while the council appeared to have two bids for construction projects—therefore seeming to provide the genuine competition required by EU procurement rules—in fact, the evidence suggested that one of those bids was from a subsidiary of the other company submitting a bid, so there was actually no competition at all. The Labour council was made aware of this before the contracts were awarded, but awarded them regardless. In the opinion of one ex-detective, the evidence showed
“criminality from start to finish.”
Another former officer stated that a common law crime of forgery and uttering should have been pursued. Right there we see the need for more transparency. I for one would like to see more transparency on the tax arrangements of such companies, as this is very much in the interests of the UK’s public finances.
All this information relates to a public-private contract now costing taxpayers over £1 million every month in North Ayrshire. Add to that the schools that are crumbling across cities such as Edinburgh, and we have real questions about these PFI firms. For projects of a capital value of £4 billion in Scotland, we will repay £22 billion, with our schools spending 8% of their budgets on paying off these Labour PFI debts. Can we really allow any lack of transparency around the tax affairs of such companies?
It is absolutely essential that there is more transparency around how UK public finances finance public sector projects. The tax affairs of these companies and their wider financial affairs need to be open to scrutiny because they build or have built our public assets. I urge the Committee to support new clauses 14 and 15.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I want to discuss the clauses in the Bill that seek to tackle tax avoidance and evasion. Combined, these measures will seek to raise billions of pounds for our public services by further clamping down on this serious matter. My hon. Friend the Member for Walsall North (Eddie Hughes) identified clearly that these measures will raise much needed extra money for our public services.
Rather than raising taxes for businesses, this Government are focusing on making sure that tax liabilities are paid. They have a strong track record of clamping down on those seeking to avoid paying their fair share. This Budget builds on that track record, with no fewer than 21 measures to protect revenue and bring in more tax by tackling fraud, avoidance and unfair outcomes.
On a related point, I very much support the introduction of a new digital services tax, which is not technically a measure designed to tackle tax avoidance, but which will nevertheless make our tax system more fair and fit for purpose in the digital age. The Chancellor is right to try to find a global solution, but in the meantime this measure is a step in the right direction that will make the tax system fairer for small businesses in high streets in my constituency in the Scottish borders that are struggling to compete with the likes of online giants such as Amazon. Of course, in Scotland, these businesses are also struggling with the high tax regime imposed on them by the SNP Scottish Government in Holyrood.
Other clauses in the Bill, such as those to ensure that HMRC is a preferred creditor in business insolvencies, that more tax is paid to the public purse and that we crack down on insurance companies routing services through offshore territories, are certainly welcome.
Jim McMahon
Does the hon. Gentleman accept, though, that the trade-off with the digital sales tax and the relief being offered to some premises in town centres just is not enough? Take, for instance, the former Textiles Direct unit in my local shopping centre, which has been empty for some time, but has a rateable value of £500 per square metre. Compare that to the Amazon warehouse near Manchester airport that pays just £44 per square metre. How can it be right that the gap is so large?
John Lamont
Clearly, I cannot speak about the circumstances in the hon. Gentleman’s constituency, but these measures are clearly a step in the right direction. I know the number of businesses in my constituency that contact me. They are competing with online businesses and other digital platforms to provide the same or similar types of services. It is just not fair when businesses are able to run very profitably, making a big turnover from a garage or attic, when at the same time the same service or shop on the high street is paying significantly higher business rates. Of course, in Scotland, we have the additional challenge of the additional taxes that businesses are having to pay through the Scottish Government’s high-tax agenda.
Luke Graham
I refer the Committee to my entry in the Register of Members’ Financial Interests.
Several provisions in the Bill will help to deal with money laundering and tax avoidance, and I want to touch on a few of them, as well as on some of the comments that have been made by Labour and SNP Members, but first I would like to echo some of the Minister’s comments about tax in general. Conservative Members pride ourselves on having a low-tax but fair system that rewards work and enterprise, but ensures, in all things, that when someone has a tax liability, they should indeed pay it.
Tax should be low right across the United Kingdom. One of my Scottish colleagues referred to charges for higher-rate taxpayers in relation to the movement of residency between Scotland and England. As I am sure that SNP Members will appreciate, it is not just higher-rate taxpayers who are affected. As has been well documented over the past few months, anyone earning over £26,000 in Scotland is now worse off than if they were anywhere else in the United Kingdom. In fact, it had to be confirmed by one of the senior generals in the British military that because of the SNP’s changes, men and women in the British armed forces would pay more tax in Scotland than they would anywhere else in the world. These changes are disadvantaging my constituents and companies.
The counter-argument is that somehow those tax changes will make things fairer for my constituents, that they are providing huge opportunities, and that we should be ashamed of ourselves for not doing more. As my hon. Friend the Member for Walsall North (Eddie Hughes) said, the tax changes introduced by this Conservative Government have increased constituents’ income by £1,250. The tax changes made by the SNP in Scotland have given my constituents 38p a week. That is it—all this change, all this cost and all this disadvantage for 38p a week. If the SNP Government are going to make changes, they must make real changes that make people’s lives better and follow some of our copybook.
A key point has been raised about Scottish limited partnerships. I sat on the Committee that considered last year’s Finance Bill, and when we discussed that matter with several Opposition Members, I voiced my support for changing these partnerships. We saw a change in the law in 2017, and there are now disclosure requirements for those in a limited partnership, but I want to ensure that the context of these partnerships is understood. They were originally enabled under the Partnership Act 1890, and then confirmed again in 1907 by Scottish, English, Welsh and Northern Irish MPs, so this measure was not somehow imposed in Scotland.
Alison Thewliss
Does the hon. Gentleman acknowledge that the regime of persons with significant control has not been enforced to any extent? SLPs owe the UK Government £2 billion in fines. Would he not welcome that money for his constituents?
Luke Graham
I thank the hon. Lady for her intervention. Whenever we have made a law, we should enforce it. I recognise the Government’s contribution through investing more money in HMRC, but another key area is Companies House, where a lot of this information is held. I would argue that it certainly could do with extra resources to ensure that things can be properly cross-referenced. A number of issues in my constituency have revolved around significant control and ownership of different corporate entities across the United Kingdom. Companies House would benefit from additional resourcing to help to tackle some of these issues.
The hon. Member for North Ayrshire and Arran (Patricia Gibson) talked about PFI schemes. She was very critical of Labour’s schemes when it was in administration in Edinburgh. It is important that the SNP takes some responsibility for the fact that it has been in power for over a decade, as the implementation and management of a number of these PFI schemes was overseen by the SNP. Although they have now converted to the PPP scheme, there are still a number of criticisms, including of the healthcare facility in North Ayrshire. It is right to be critical, but that criticism should be even-handed.
Luke Graham
I will just make a bit more progress.
The successes that we have seen from this Government include lowering corporation tax, which has led to record income from corporation tax, and collecting an additional £185 billion of revenue since 2010, which we would not have been able to achieve were it not for the Government’s tightening of tax and tax avoidance measures.
The Conservative party prefers to have a low-tax and fair system. Some of the measures in the Bill are specifically fit for purpose in this more globalised and complicated economy. For example, schedule 4 is on profit fragmentation, which means that Government can focus on where profit is earned rather than getting caught between the different jurisdictions in which corporate bodies lie.
Clause 83, on international tax enforcement, is particularly important. Before I came to this place, I worked in international finance. With multinational companies, it is very difficult to track where income is earned and where it will finally end up, and that may not be due to deliberate action by such companies. New tax enforcement measures that give HMRC and the Treasury additional powers of disclosure will be very valuable and will increase transparency in our tax system.
The hon. Member for Oxford East (Anneliese Dodds), who is no longer in her place on the Labour Front Bench—
Luke Graham
I appreciate that; I am sure that it will be well recorded in Hansard.
I, too, was an active participant on the Sanctions and Anti-Money Laundering Bill, and I agreed with the hon. Member for Oxford East on many points, especially about looking at the actions taken on overseas territories and Crown territories. In accepting some of the amendments, the Government committed to a course of action, and I am sure they will be pushing that through.
Tax collection is one of the most important duties of the Government. Whether in central Government, the devolved Administrations among the nations or, indeed, down in local authorities within the devolved Administrations and right across the United Kingdom, tax collection and record keeping are incredibly important. I welcome some of the measures introduced by the Government to increase the resourcing to HMRC. I would hope to see from right hon. and hon. Members the sharing of best practice and that we ensure that some of the people working for our tax collection authorities around the United Kingdom are going right around the United Kingdom. A number of local authorities need additional support and help with tax collection, and the sharing of best practice in technology, to ensure that they are actually collecting the tax revenues they are due.
I have two local authorities in my constituency, Perth and Kinross Council and Clackmannanshire Council, both of which face very extreme council funding issues in terms of raising local funds and cuts imposed by Edinburgh. When we look at the local services that have had to be cut as a result of the reduction in funding from Edinburgh, despite the increase in the Scottish block grant, we see that it is having a significant impact on education services, health services and local street services in my constituency. I would hope that even SNP Members could put pressure on the devolved Administration to make sure that they focus on proper tax collection, and also on proper tax expenditure.
As I have said, action taken by this Government has helped to bring in over £185 billion of additional tax revenue that we would not otherwise have been able to collect. Corporate tax revenues have also increased.
A key point has been raised—many Labour Members have spoken about it—about inequality when talking about absolute and relative poverty. This is important to note, because I think that the House should look at more objective statistics. In last night’s debate, I talked about strengthening the OBR to make sure that we can have credible statistics that Members on both sides of the House recognise, acknowledge and accept.
One key aspect of that is to look at the Gini coefficient, which has been recognised as a measure of inequality for a long time. If we look at the Gini coefficient in 2010 compared with where we were in 2016-17, we see that there has been a reduction in the coefficient, which means an improvement in the living conditions of people in the United Kingdom. Inequality has actually reduced according to the Gini coefficient.
Luke Graham
I think that is a good thing that should be welcomed, as I am sure the hon. Gentleman agrees.
Jim McMahon
Statistics can always be massaged to fit the agenda of the person citing them, but what cannot be escaped is the fact that increasing numbers of people are queuing up to use food banks because they cannot afford to feed their families and put food on the table. That is my measure of whether this country is doing well. How does the hon. Gentleman respond to that?
Luke Graham
The hon. Gentleman proves my point. He disregards an objective Gini coefficient statistic, which is accepted worldwide, and instead puts forward a subjective view on food banks that is widely contested across the House.
I would say that the increase of food banks is a major issue that we have covered extensively in debates in the House. However, taking those on the lowest incomes out of income tax altogether, getting more people into work and introducing the national living wage are the kind of measures that really do improve things for the poorest in society, and they are exactly what the Government are delivering. Our Budget has not only prioritised expenditure elements—I welcome a city deal in my region, the Tay region, with £150 million of extra expenditure—but focused on how to get more tax collected.
As I said at the outset, it is important that we have a low-tax system that is also a fair system, and that the people who should pay tax are paying the right amount.
Kevin Foster
I am listening to my hon. Friend’s speech with great interest. What are his thoughts about intangible assets, which we were talking about earlier? Does he agree that we really need to address such issues and to start considering how we can make sure that tax is both collected and fair?
Luke Graham
I thank my hon. Friend for his intervention and I could not agree more. Intangible assets are becoming an increasing part of the global economy. Just a few years ago, I did a study in relation to the Prince’s Accounting for Sustainability project. When we looked at some of the figures, they clearly showed that up to 80% of the value of the Standard & Poor’s 500 index in the United States was being held in intangibles. In considering some of the accounting standards and taxation measures that we are introducing, we could be missing up to 80% of that value, which would not then be reflected in the share price or indeed in the tax revenues that could be captured. I agree with my hon. Friend that we should look at those measures.
Without giving the Prince’s Accounting for Sustainability project too much of a push here in the Chamber, I will say that a number of the reports that it has put forward, in partnership with businesses in the United Kingdom and internationally have been really positive. They look at how we can capture some of the value of intangibles, but they also consider human and social capital. The organisation has published a number of reports, and I encourage Members to read them, because they could help to inform our policy making not only on the digital services tax, but when it comes to evaluating the impact and true value of some of the companies and enterprises across our country. It does not matter whether it is the small enterprise on our high street or, indeed, the new multinational that is capturing funds from around the world. It is about our identifying value and then being able to show to shareholders, Government and the local community the social, human and physical capital contributions that are being made to our economy.
Some people find Budget debates dry, but I find them incredibly exciting. The hon. Member for Aberdeen North (Kirsty Blackman) said last night that she enjoyed a good read of the Budget documents at home—I could not agree more. This Budget gives us plenty to read and plenty of food for thought, which is why I will support the Bill today.
Chris Philp
It is a huge pleasure to follow my hon. Friend the Member for Ochil and South Perthshire (Luke Graham), who is always an incredibly eloquent and articulate commentator on matters financial.
I am delighted to see that news of my speech has spread to the office of the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), and that he has come to the Front Bench especially to hear it. I am delighted that he has chosen to come to the Chamber for this purpose; I eagerly await the imminent arrival of the Chancellor as well.
I want to speak to new clauses 5 and 6, which were tabled by the shadow Minister, the hon. Member for Oxford East (Anneliese Dodds). Their substance would require more analysis and reports on various aspects of the Government’s programme in the areas of avoidance and evasion. However, as so often in life, action and results speak much louder than reports and words. The Government’s actions and the results they have achieved are far more powerful than any call for evidence or any call for a report can demonstrate.
The hon. Lady posed some questions about whether the tax gap is the best measure. It is an internationally accepted measure and it provides for consistent comparison over time, so it is a good way of consistently comparing the record of one Government with that of another. There may be other measures, but it is at least a consistent measure and it is also a good way to compare different countries, as well as to make comparisons within a country over time.
The current tax gap in the United Kingdom is 5.7%, which is extraordinarily low by comparison with other major countries and significantly lower than it was when Labour was in office, when it was between 8% and 10%. Whatever quibbles the hon. Lady may have about the things that are included or excluded, what is clear is that the tax gap is low compared with what it was under Labour and low by comparison with other countries. That is not surprising.
Chris Philp
But before I lay out the reasons why it is not surprising, I will give way to my hon. Friend.
James Cartlidge
My hon. Friend is making an excellent speech on what action is happening, but does he agree that one thing not captured in the statistics is what I would call positive inducement as opposed to avoidance? If there are competitive rates of tax, people are encouraged to avoid avoidance and conduct legitimate activity by paying a standard tax.
Chris Philp
My hon. Friend is quite right. Having low and competitive rates of tax does attract people to this country, who then pay corporation tax they otherwise would not pay. I will come on to precisely that point in a few moments.
The reason I was explaining why it was not surprising that our tax gap has reduced is that the Government have taken quite a large number of measures to combat tax avoidance and tax evasion since 2010. In this Budget alone, there are 21 such measures. I was rather disappointed that by voting against the Budget on Second Reading, Opposition Front Benchers were expressing their disagreement with those 21 anti-avoidance and anti-evasion measures.
Anneliese Dodds
I fear, very sadly, that the hon. Member did not hear what I said on that point earlier. It is because those measures are far too weak and do not go far enough that we are voting against them. I set that out very clearly in my previous remarks.
Chris Philp
I am not sure that that is a very good basis for voting against something. A move forward is a move forward. I have yet to hear a detailed and coherent set of proposals that would take these measures further forward. I am sure that those on the Treasury Bench are always eager to receive ideas on measures that would raise revenue. If the hon. Lady wanted to propose ideas on the Floor of the House, I am pretty sure she would find a ready audience. One such measure, the diverted profit tax, has directly raised £700 million since 2015. In addition, it is interesting that businesses talk about not just the direct effect of the diverted profit tax. Some companies, realising that they might be caught by the diverted profit tax, choose to change their behaviour and effectively choose to pay ordinary corporation tax in a more compliant way. That does not appear in the diverted profit tax figures, but it is none the less successful in changing behaviour.
Anneliese Dodds
I am very grateful to the hon. Member for giving way; he is being very generous. I would like to mention, however, that I did refer in my speech to Labour’s tax transparency and enforcement plan. In fact, I referred to three cases where the Government have rightly learned from that plan, which is fabulous, and are either completely or partially adopting some of our suggestions. There are, however, many other areas where they need to take action. They should look at our plan and learn.
Chris Philp
The fact that the Government have adopted three measures shows that they are not only a Government who listen and adapt, but a Government who have taken more than 100 anti-avoidance and anti-evasion measures since 2010. That is a record the Government can be proud of, although there is always more that can be done. I will come on to one idea later.
The hon. Lady suggested in her very long and at times entertaining speech—perhaps inadvertently entertaining, but it was entertaining—that the Government had not shown leadership in the area of organising international co-operation to combat tax evasion. She also said it was a concern that we are leaving the European Union as we might lose that as a forum in which to combat tax evasion and tax avoidance. The most effective forum is the OECD’s BEPS initiative—the base erosion and profit shifting initiative. The UK Government have been a leader in this area—for example, on action five, which limited the deductibility of interest payments against corporation tax. That is another area where the UK Government have shown genuine global leadership.
Kevin Foster
Listening to my hon. Friend’s speech, I can see exactly why the shadow Chancellor rushed to the Chamber to enjoy it. On global co-operation, what does he make of the many treaties we have signed with other jurisdictions, such as Liechtenstein, which have allowed us to get hold of tax information and ensure there cannot be places where British taxpayers hide?
Chris Philp
That is an example of one of the many areas where we have taken action. Getting information from that jurisdiction and, I think, Switzerland has helped us to combat people who are not paying the tax they should. The proof of the pudding is ultimately—I can see the flood of hon. Members on to the Opposition Front Bench continuing—in the eating. The fact is that the amount of money collected in corporation tax has gone up from £35 billion to £55 billion.
The hon. Member for Stalybridge and Hyde (Jonathan Reynolds), who was in his place earlier, shook his head when that point was made and referred to an IFS report, which he said made the point that if corporation tax rates were higher, they would raise more money. I have had the opportunity to look up that report since then. The article was in The Guardian, which is hardly a Conservative or right-wing newspaper—it may be too right wing for the shadow Chancellor, but it is not too right wing for me—and although any amount of money that might be raised in the short term is one thing, it goes on to say the IFS stated that “substantially less” will be raised in the medium term as companies respond by investing less.
The hon. Member for Oxford East asked what the intellectual backing was for suggesting that lowering tax rates increases revenue. That backing comes, of course, in the form of the Laffer curve, named after Professor Arthur Laffer, who made the case very coherently that lowering rates can increase the take—my hon. Friend the Member for Solihull (Julian Knight) made this point earlier—by encouraging investment and encouraging companies to relocate to a jurisdiction where there are lower rates of tax. That is no theoretical thing—[Interruption.] It is not only a theoretical thing, but a practical thing.
Since the Government introduced lower rates of corporation tax, a number of companies have chosen to take advantage of them by locating into the UK. Most recently, in August this year, Panasonic moved its European headquarters from Amsterdam into the United Kingdom, and clearly, competitive rates of tax were part of that. Back in 2012, when the former Chancellor, George Osborne, set this course, a whole number of companies announced that they were locating back into the UK, including Aon, which located here from the United States, Starbucks, which located its corporate HQ here from the Netherlands, and WPP, which located its corporate HQ here from the USA. More recently, Unilever considered moving its corporate HQ out of the UK to the Netherlands, but there was a huge shareholder revolt and it chose to stay here. Those are practical examples of a competitive tax system in action. That is part of the reason why the tax yield has gone up so considerably.
Alex Chalk (Cheltenham) (Con)
Not just companies but entire sectors and industries might be attracted to come here. The UK film industry is so buoyant and world-leading in very large part because of the benign tax environment that it can enjoy.
Chris Philp
My hon. Friend is right to draw attention to the way in which very favourable tax systems can indeed attract companies to this country. We should be proud of the fact that we are attracting the world’s leading companies to the United Kingdom.
I am sorry to refer to the speech by the hon. Member for Oxford East so often, but it was a very full speech and there was a great deal to reply to. She suggested that the Chancellor of the Exchequer said that our plan was to become a tax haven. He never used the words “tax haven”, but he did say that we could be a tax competitive economy. There is nothing to apologise for in saying that we will be a tax competitive economy and attract companies to locate here. If there is a tax haven in Europe, it is Luxembourg, so the hon. Lady should reserve her ire for that jurisdiction.
Anneliese Dodds
I am very grateful to the hon. Gentleman for giving way; he is being very generous. I have not been reserved in showing my ire for Luxembourg; in fact, I have campaigned for a long time in relation to its tax practices. I am very glad that he has given me the opportunity to respond on this point, because I looked up exactly what the Chancellor did say. He was asked by the newspaper Die Welt in January 2017 whether the UK would become a “tax haven” for Europe, and he responded that the UK could be “forced” to abandon its European economy with European-style taxation. When the Prime Minister’s spokesperson was asked if she agreed with this assessment, she confirmed that the Prime Minister was in agreement and would stand by him.
Chris Philp
The words “tax haven” were not his, and what he clearly confirmed in response was the he intended to create a tax competitive economy, which we can all be proud of, and I will certainly support him in creating it.
I feel that I should move on—although I will happily take more interventions—to new clauses 14 and 15, which were spoken to by the hon. Member for Glasgow Central (Alison Thewliss), the SNP’s Front-Bench spokesman. In her speech, she drew attention to the importance of transparency, and she was right to do so. We have already made significant moves on limited companies and limited liability partnerships. Persons of significant control now have to be disclosed on the Companies House register, and I fully agree with her that that should be comprehensively enforced.
Alison Thewliss
The problem is that it is not being comprehensively enforced. About £2 billion is due in fines from SLPs. If the Government are not going to collect £2 billion, why on earth are they putting forward austerity cuts? They could have that money easily.
Chris Philp
It will not have escaped the hon. Lady’s notice that by the fifth year of the five-year period there is a fiscal loosening of £30 billion—that is hardly austerity—and that the NHS will receive a huge amount of extra money, including the NHS in Scotland via Barnett consequentials. I think that we can say very clearly that this was not an austerity Budget. I agree, however, with her more serious point. As my hon. Friend the Member for Ochil and South Perthshire said, where a law is passed, it should be properly enforced, and if there is more scope to enforce this law, it should certainly be done.
A further legislative measure was announced over the summer in relation to transparency. By 2021, we will start recording the ultimate beneficial ownership of property owned by companies, which is an important measure, because some properties, particularly very expensive, high-end properties, are often owned in offshore companies, but there is currently no transparency in respect of who owns those companies. As of 2021, we will know who the ultimate beneficial owners are, and that will also create an interesting taxation opportunity that I strongly commend to the Financial Secretary.
At the moment, when an ordinary property is bought or sold by an individual, it triggers residential stamp duty, but when a transaction takes place whereby the company owning the property is sold, no residential stamp duty is paid, because, as far as the Land Registry is concerned, no change of ownership has taken place. At the moment, we have no visibility over any change of ultimate beneficial ownership, because it is not registered, but from 2021 we will, because that change will have to be registered. I suggest, for a future Budget, that a change of ultimate beneficial ownership should trigger a stamp duty charge as though for a direct change of ownership, as would happen if any of us bought a property. That would yield significant extra residential stamp duty.
I will give an example. I am aware of a transaction in Belgravia, not far from here, that took place two or three years ago. It was a collection of luxury houses developed by an offshore company—based in the Cayman Islands or British Virgin Islands—and sold to a Chinese gentleman for £110 million, but he did not buy the property and therefore no stamp duty was payable. He bought the offshore company and no stamp duty was paid. Had that change of ultimate beneficial ownership been registered and had stamp duty been payable, a stamp duty charge of about £16 million would have been crystalised for the Exchequer’s benefit.
I suggest we collect that sort of money in the future. Of course, that property is liable for annual taxation on envelope dwellings, because it is held in a company, but that only levies at a rate of £226,000 a year, so the payback period is 73 years, and most of these properties are traded more frequently than that. I challenged the hon. Member for Oxford East earlier to come up with some ideas for raising revenue and combating non-compliance. There is my idea. I hope that a future Budget adopts it and takes it forward.
I will conclude—I know the shadow Chancellor wants to hear more, but I have to disappoint him—by briefly addressing Government clauses 15 and 16 on intellectual property charges and charges in relation to fragmented profits. This is an extremely important area, because a number of large corporates are using intellectual property charges to spirit away profits attributable to UK operating activities.
Most notoriously, Starbucks used this about five or six years ago. It managed to extract almost all its UK profits by levying an intellectual property charge in relation to its beans. It said the beans were special beans and had a very high charge on them, and it managed to register pretty much zero UK profit. That is precisely the kind of intellectual property charge that these measures are designed to combat. An arm’s-length, third-party intellectual property charge cannot possibly result in zero profit for the company paying that charge, and it is right that the Government are taking further action.
Multinationals take their profits out of the UK and into, typically, the Luxembourg, Swiss or Caribbean jurisdictions, and intellectual property charges are more often than not the means by which they do so. I strongly commend clauses 15 and 16 for taking direct action to prevent avoidance measures that have undoubtedly cost the Exchequer. I think that I have spoken long enough about these clauses, which I shall be extremely happy to support if there are Divisions in 10 minutes’ time.
Paul Masterton
It is a pleasure to follow my hon. Friend the Member for Croydon South (Chris Philp), although, as ever, the problem with following him is that he has done such a thorough and detailed job of going through the minutiae of pretty much every single piece of the Bill that there is not a huge amount left for me to say. However, I will do my best and raise a few points that I know are particularly important to people and businesses—particularly small businesses—in East Renfrewshire.
One reason why these measures are so important comes back to the perception of fairness. Action to deal with tax avoidance and evasion is important because people often perceive that they are playing by the rules and doing everything right, while other guys—often the big guys with lots of money, who can afford to pay the “big four” huge sums—are able to find clever ways of reducing their tax liability.
There have been many examples of companies diverting profits, in a way that is not fair and is not right, to other jurisdictions with much lower tax levels to save themselves money. They are taking money that was produced when taxpayers in this country went into their shops and bought their goods, supporting them and their products, but that money is not being kept in our economy or reinvested in our economy. It is being shunted offshore to other jurisdictions, where it is swept up and often manoeuvred around other areas, particularly when a global business is moving it around to prop up less competitive and less successful parts of that business offshore.
Since 2010, an extra £180 billion or so has been brought in as a result of some of the measures that we have introduced. That is a huge amount, which is being reinvested in the country in which it was produced. It means more money for our schools, hospitals and small businesses—the sort of money that can give people a bit of a break.
I want to touch briefly on the new clause tabled by the hon. Member for Glasgow Central (Alison Thewliss). She talks frequently, and with a great deal of knowledge, about Scottish limited partnerships—rightly, I think, because they are being increasingly scrutinised and are coming under the spotlight. They have been around for a long time, and previously no one paid much attention to them—no one really understood what they were being used for. They fall within a slightly odd grey area in terms of the Companies Act 2006. In my former job as a pensions lawyer, they were used as a vehicle to allow companies to put an extra step between them and an investment. They helped companies to reduce their tax in relation to employer contributions that they had made through the sweeping round of funds.
That was a legitimate funding mechanism, but there is no doubt that because of where Scottish limited partnerships sit in relation to the wider tax system, they are being used pretty unscrupulously. A lot more stuff has been coming out about them, and I think that the hon. Lady is right to go on probing and testing to establish whether their proper use is being properly enforced and checked.
Alison Thewliss
I am glad that the hon. Gentleman agrees with me about Scottish limited partnerships. Does he also agree that the whole scope of the issue needs to be investigated, and that the Government need to bring their consultation report back? It is clear that when one loophole is closed another opens, and there seems to be some evidence that people are now moving to Northern Ireland to try to get around the rules. The Government must do something very soon before people jump over and do something else.
Paul Masterton
The hon. Lady has highlighted the key point that I made at the beginning of my speech about highly trained and well-paid accountants. The Government are always playing catch-up because she is right: what happens is that a loophole is identified, it takes quite a long time to get a measure to close it through the process, and by then everybody has already moved on to the next thing. We need to get better at pinpointing—almost like in a game of chess, thinking two moves ahead and saying, “If we close this down, where are they going to move next?” These people working in the private sector are able to find these money-saving methods, so there is no reason not to have people working in government thinking along the same lines.
I support what the Government are doing to reduce the tax gap. It is important to bring in the extra money that is properly due in this country by closing loopholes and stopping the feeling that the big corporate guy is getting away with something while I, the guy struggling with my own small business, am paying what is due. There is a real sense of unfairness in the practices that these measures are designed to tackle, and I look forward to supporting them in four and a half minutes’ time.
James Cartlidge
It is a pleasure to be called to speak on this important subject of anti-avoidance, and to follow my hon. Friend the Member for East Renfrewshire (Paul Masterton). I will take up his underlying point about fairness. There are incredibly important measures in the Bill in relation to avoidance that also deliver other more positive outcomes. I am referring to the area of capital gains tax.
Earlier we discussed exit charges and CGT, but there is also an important measure in relation to foreign ownership of UK property. Non-residents will now have to pay CGT on the sales of UK commercial property, and under the way that property structures can operate, residential property could also be covered.
Anti-avoidance measures can have a positive impact. We should not underestimate the huge impact of inflows of foreign investment in pushing up property prices in this country, particularly in London, and thereby spreading out through the south-east and around the rest of the country.
Matt Warman (Boston and Skegness) (Con)
Does my hon. Friend agree that this is not simply about pushing up the value of property, but about changing the nature of neighbourhoods, and that there is a social dynamic as well as a purely financial one?
James Cartlidge
My hon. Friend makes a good point, and there are stats to prove this. In March, King’s College London published statistics estimating that foreign investment into the UK housing market had driven up prices in London by 20% over the last five years. That is a huge impact.
James Cartlidge
I am happy to take another intervention from a Lincolnshire MP—two on the trot.
Mr Hayes
My hon. Friend is making an important point. The measures in this clause are part of a suite of policies that allow us to deal with the abuse of international multinational monopoly capitalists, who are skewing our economy against the interests of our people and altering the character of both our economy and our society.
James Cartlidge
It is always interesting to hear attacks on capitalists from this side of the House. I simply say in terms of the way the property market has gone that we have often focused in the debate on housing on increasing the supply of homes—the statistics just published on new housing supply are incredibly positive—but I have been a mortgage broker and involved in the property sector, and I remember what happened in the wake of the crunch. The impact of fiscal and monetary policy and the stimulus we have had, and measures that have encouraged inward investment, have also been detrimental. We must not forget, as many people might, that in 2011-12 when the euro was facing an existential crisis—who knows, at some point in the future that might well return—huge inflows of capital came into UK residential property, particularly in London, pushing up prices and impacting on first-time buyers.
Having covered that specific point, I welcome anti-avoidance measures in this area. We need a level playing field, and not just in the same way that other anti-avoidance measures give a level playing field for small businesses; we need them for first-time buyers and those in Britain seeking to get on to the housing ladder. I support these measures and the others in the Bill.
Mel Stride
We have had a good, rounded and full debate, and I thank all Members for their contributions. I wish to touch briefly on the amendments and new clauses moved this evening. New clause 5 calls for a review of the impact of the clauses in this group on child poverty, on households at different levels of income, on those with protected characteristics and on the different parts of the United Kingdom. As I have stated, the Government already provide impact and distribution assessments and analysis in the Budget, as well as tax impact information and notes on individual tax measures.
Business without Debate
Delegated Legislation
Mr Deputy Speaker (Sir Lindsay Hoyle)
With the leave of the House, we shall take motions 3 to 5 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Exiting the European Union (Consumer Protection)
That the draft Textile Products (Amendment) (EU Exit) Regulations 2018, which were laid before this House on 10 October 2018, be approved.
Financial Services and Markets
That the draft Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018, which was laid before this House on 9 October 2018, be approved.
Exiting the European Union (Civil Aviation)
That the draft Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018, which were laid before this House on 17 October 2018, be approved.—(Amanda Milling.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Capital Gains Tax
That the draft Double Taxation Relief and International Tax Enforcement (Jersey) Order 2018, which was laid before this House on 4 September, be approved.—(Amanda Milling.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 21 November (Standing Order No. 41A).
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Capital Gains Tax
That the draft Double Taxation Relief and International Tax Enforcement (Isle of Man) Order 2018, which was laid before this House on 4 September, be approved.—(Amanda Milling.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 21 November (Standing Order No. 41A).
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Capital Gains Tax
That the draft Double Taxation Relief and International Tax Enforcement (Guernsey) Order 2018, which was laid before this House on 4 September, be approved.—(Amanda Milling.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 21 November (Standing Order No. 41A).
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Immigration
That the draft Immigration (Health Charge) (Amendment) Order 2018, which was laid before this House on 11 October, be approved.—(Amanda Milling.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 21 November (Standing Order No. 41A).
Petitions
Martyn Day (Linlithgow and East Falkirk) (SNP)
I rise to present a petition from my constituents regarding the regulation and control of fireworks. My office has seen a growing number of complaints about the issue each year. I have been inundated by videos of distressed pets that are clearly upset as a result of acoustic stress. In answer to my written question, the Government said that they have
“no plans to amend the regulations”
and that they are sticking to the 120 dB figure, so I hope that they will reconsider the matter—just as they reconsidered issues earlier tonight. As an example, the noise of a jet taking off is around 100 dB and the average human pain threshold is 110 dB, so this matter certainly needs to be looked at.
The petition states:
The petition of residents of Linlithgow and East Falkirk,
Declares that the petitioners believe that the use of fireworks is increasing in terms of frequency and that the resultant nuisance of noise and perceived danger from explosions are growing with the ever increasing size and power of fireworks available within the UK; further that fireworks can cause severe distress to people suffering from PTSD or other mental health issues and to animals.
The petitioners therefore request that the House of Commons urges the Government to review the existing legislation for the regulation and control of fireworks; further that consideration be given to legislating for a ban on private use and limited fireworks to licensed displays; and further that considerations be given to promoting the use of silent fireworks as an alternative
And the petitioners remain, etc.
[P002288]
Chris Stephens (Glasgow South West) (SNP)
I rise to present a petition on behalf of the constituents of Glasgow South West, the most sophisticated electorate in these islands.
The roll-out of universal credit is being felt by the constituents of Glasgow South West, and the Glasgow South West food bank reports an increase in food bank usage of 23% since 19 September, when universal credit arrived in the Govan jobcentre.
The petition states:
The petition of residents of Glasgow South West,
Declares that the proposed roll out of Universal Credit in the city of Glasgow will have a devastating impact on communities across the city and will lead to increased foodbank usage and financial misery for some of the most vulnerable people in Glasgow.
The petitioners therefore request that the House of Commons urges the Department of Work and Pensions to halt the roll out of Universal Credit in Glasgow and fix it without delay.
And the petitioners remain, etc.
[P002294]
British Exports
(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrea Jenkyns (Morley and Outwood) (Con)
I am proud of our great country. We have always been innovative global leaders. In Britain we have some excellent products, goods and services that the world wants to buy. The United States is the UK’s largest trading partner. The UK exported £112 billion of goods and services to the US in 2016, which is 18% of our total. That is slightly less than double the value of exports to Germany, which is the UK’s second largest export market, at £57 billion.
But it is the emerging economies where we are seeing the greatest growth. In 2017 the UK exported £22 billion of goods and services to China, making it the UK’s sixth largest export market. Trade with India has also increased, and India’s share of UK exports has increased from 0.9% to 1.7%. I hope to see that trade increase, and the British Government should be doing all they can to ensure that we can take advantage of our historical links with the Commonwealth, China and the USA.
The PricewaterhouseCoopers report “The World in 2050” looks at how the global economy is likely to change by 2050. Its key findings are that the world economy is due to double in size in just over 30 years, far outstripping the rate of population growth. Emerging markets in the E7 are expected to grow around twice as fast as the advanced developed nations of the G7. If that model is correct, current emerging economies are projected to be six of the world’s seven largest economies in 2050, led by China in first place, India in second and Indonesia in fourth.
Jim Shannon (Strangford) (DUP)
My constituency of Strangford has just secured a significant contract with China for dairy and milk products worth £250 million over five years. The Secretary of State for International Trade initiated the contract, with help from local people. Does the hon. Lady agree that China and the Pacific nations are markets where we can do more with agri-food? There is a lot of trade in that area on which we can build, and when we leave the EU we can do even better. We should look towards the good times when we leave the EU on 29 March 2019.
Andrea Jenkyns
The hon. Gentleman and I are clearly on the same page about the opportunities for the UK when we finally leave the EU.
The US will be down to third place in the global GDP rankings in 2050, and the EU27’s share of world GDP could fall below 10%. According to this report, the UK could be down to 10th place, France will be out of the top 10 and Italy will be out of the top 20, as it is overtaken by faster-growing emerging economies such as Mexico, Turkey and Vietnam.
We are at a crossroads, and not just for our country and Brexit. There is a shift in global economic power from the west to the east. This cannot be stopped. It is right that a country with a population the size of India should have a higher GDP, which is good for tackling extreme poverty. It has also been shown that it is only through capitalism and trade that these countries will grow. The UK, as an outward-looking trading nation, has a chance to forge strong links with the economic powerhouses of tomorrow. We need to get in there first, take advantage of our position now and be able to sign free trade deals to fully maximise our opportunities.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I congratulate my hon. Friend on securing this debate and making a brilliant speech. Will she join me in paying tribute to a great British company called Rolls-Royce, which employs nearly 3,000 people in my constituency and 22,000 people across the UK? It is responsible for 2% of our nation’s exports and makes a £12.2 billion contribution to our economy, which represents 0.7% of our GDP. It is a fantastic company, with global outreach. It is ambitious and is driving the way forward. Does she agree that companies such as Rolls-Royce are going to lead the way in a post-Brexit Britain?
Andrea Jenkyns
I thank my hon. Friend for his intervention. It is probably the only time I will ever give way to my husband. I thank him for his question and agree that Rolls-Royce is a fantastic company.
Alison Thewliss (Glasgow Central) (SNP)
The hon. Lady is making a good point about the trade deals with India and other countries, but does not she accept that there needs to be a re-examination of how the Home Office treats visa applications, too? There is a huge expectation in these countries that trade deals will come with a bargain in terms of people being able to visit and come to the UK.
Andrea Jenkyns
I thank the hon. Lady for her question and I agree; I am a Brexiteer because I think our immigration and visa system should be a level playing field.
The UK, as an outward-looking trading nation, has the chance to forge strong links with the economic powerhouses of tomorrow. We need to get in there first, take advantage of our position now and be able to sign free trade deals to fully maximise our opportunities. Brexit gives the UK an amazing opportunity to become, as the Prime Minister has said, “a truly global Britain”. However, I am sceptical about any agreement that we sign with the EU that will not allow Britain to export its goods and services freely to the world. I was impressed with the Prime Minister’s Lancaster House speech. That vision for Britain was one that I know the country could get behind, as I certainly did. The British people and I voted to leave and take back control of our future. I am disappointed for the 17.4 million people who voted to leave that this vision is currently only looking like a fantasy.
As I said earlier, by 2050, the EU27’s share of GDP is likely to fall significantly. The EU is fundamentally protectionist in its economic outlook, whereas the UK and its people can see a bright future. Protectionism is bad for growth and for trade. In a future where Italy is out of the top 20 and overtaken by countries that only a decade ago it would have seemed unbelievable for it to be overtaken by, we need to look further than the EU’s borders of Latvia or Romania.
Alex Chalk (Cheltenham) (Con)
My hon. Friend is making a powerful speech. Do we not also need to look at ourselves as a country, because the world’s third biggest exporter is Germany and it is more productive than us? We need to become more productive and invest more in the wherewithal to create the goods that the world wants to buy.
Andrea Jenkyns
I thank my hon. Friend for his question. This is why I am a keen Brexiteer; rather than sending money across to the EU, I would like to see it invested in our own industries, and in research and development, so that we can really have a bright future for this country.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
There are two elements to point out about that previous intervention. First, Germany has done significantly well, but a huge amount of that has been because its currency level at the moment is far lower than it would have been had it not been in the euro. Secondly, that has caused extraordinary damage to countries that were massive exporters, such as Italy and others, which are now literally finding themselves impoverished by the fact that so much of the Germans’ production is now dumped into their countries, at their expense. So we have to be careful when we recognise what Germany has achieved. There is much it has achieved. We need to recognise that we have to invest more and make sure we are more productive. There are plenty of ways to do that. We need to be careful when we extol the virtues of what has been going on in Europe.
Andrea Jenkyns
I thank my right hon. Friend for his strong contribution. He is second to none in his commitment and passion for this, and I thank him for all the work he has done for decades.
There is near consensus among economists that free trade generates more wealth than any system that restricts cross-border exchange. The great exporting businesses in my constituency want us to be able to trade freely around the world, not just with the EU27. Protectionism benefits producers over consumers, favours big business over small businesses and hurts lower-income consumers more than higher-income consumers. Trade barriers are simply taxes on consumers and businesses that impede the global division of labour and the creation of wealth. That certainly does not match Conservative values.
I am lucky to have some incredible small and medium-sized enterprises and big companies in my constituency that already export around the world, but they would like to see lower tariffs and free trade opportunities further afield. Ties Planet exports to 190 countries around the world, and Associated Waste Management exports 170 tonnes of refuse-derived fuel around the world. The Coca-Cola plant in my constituency is the biggest soft drinks plant in Europe, and it manufactures and distributes more than 100 million cases of soft drinks a year. I am sure that Coca-Cola, too, would like to see low tariffs, not only in Europe but globally. The British people voted to take back control and Brexit should now be supporting British exporters.
One third of the world’s population currently lives in the Commonwealth. Our close relationship with this wonderful organisation and its respect for Britain could easily be tapped.
Mr Duncan Smith
My hon. Friend mentioned soft drinks. Given that the Scottish nationalists are on the Benches opposite, will she also recognise that Scotch whisky is exported to places such as India that charge huge tariffs on it? One great benefit for that soft drink would be that it could be exported much more, and many of us who enjoy that soft drink occasionally in the evening would see that we had done a huge amount of good for businesses, even in Scotland.
Andrea Jenkyns
As somebody who gets tipsy on one glass of wine, I will leave the whisky drinking to my right hon. Friend and my husband.
Britain’s entry into the European Economic Community in 1973, and the EEC’s evolution into the European Union, has meant that it has been impossible for the UK to enter independently into negotiations with Commonwealth states to establish free trade agreements. However, after Britain’s decision on 23 June 2016 to leave the EU, and as article 50 of the EU’s Lisbon treaty has been invoked, Britain may be able to negotiate its own trade deals.
Chris Green (Bolton West) (Con)
Does my hon. Friend agree that around the world the direction of travel for trade has been towards bringing down barriers? When we joined the EEC in 1973, the barriers were much more substantial. The European Union ought to seek an opportunity to maintain, post Brexit, the zero barriers that we currently have.
Andrea Jenkyns
I thank my hon. Friend, who is another committed Brexiteer and visionary for our country.
In the Commonwealth, English is usually spoken as the first or second language. Our common law system has been inherited by many Commonwealth countries, and foreign countries encourage their people to study law in Britain. Even accounting principles and practices are usually similar to our own in the UK. In 2016, the UK exported goods and services to the Commonwealth worth £48.5 billion, which is only 8.9% of all UK exports. As a country, we have neglected this vital resource for too long, and as a nation and Government we should be doing more to actively encourage exports to these exciting economies.
In recent years, there have been some good-news stories from the Commonwealth. In my region, the number of exporters of goods in Yorkshire and the Humber that send products to Nigeria went up by 8.2%. Exports to India increased by 4.3% and exports to Australia by 1.8%. By contrast, the number of exporters to France has barely moved, at 0.2%, and the number of exporters to Italy fell by 0.4%, despite the drop in the value of the pound. Since the Canadian free trade deal with the EU, our export to Canada have increased by 9.9% compared with last year. That illustrates the benefits that new free trade agreements can have for the great exporters in Yorkshire and the Humber. Like them, I want to see more people exporting around the globe, and the Government play a large part in that ambition.
I fully agree with the Government’s industrial strategy. We need to back business and invest in skills, industries and infrastructure to ensure that we are ready for the 21st century. We need a geographically balanced economy; to encourage the UK to be the world’s most innovative economy; and to see greater earning power for all. We need continued investment and a strong business environment, guaranteeing that the UK is the best place in the world to start and grow a business.
As the Minister will confirm, research shows that companies that export have increased growth potential, are far more productive, and offer better-paid jobs. Last year, some £620 billion of goods and services exported by British companies accounted for 30% of our GDP, and UK exports are at a record high.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
I am listening to the hon. Lady’s speech, and the thing that worries me about Brexit is what happens if Britain becomes isolated from the rest of the world. What if Europe can do it cheaper? Where will all our exports go? That is my biggest fear about Brexit.
Andrea Jenkyns
I thank the hon. Gentleman for his question, but I, unlike him, have great belief in the British people and our businesses. I know and trust that we will continue to thrive and grow. There is no doubt that we will far outdo the performance of the EU—we will do far better, mark my words. I just wanted to put that on record.
The Department for International Trade estimates that 400,000 businesses believe that they could export but do not, and demand for British expertise and goods overseas is growing. I was pleased that the Secretary of State for International Trade recently set out ambitious plans to make Britain a 21st-century exporting powerhouse. This new export strategy aims to increase UK total exports as a proportion of GDP to 35%. We want SMEs to grow into the multinational corporations of tomorrow, and support from the Government can and will help.
I am glad that the Government are responding to a call from business. The export strategy outlines how the Government will produce smarter and more tailored support to UK companies. More support for companies selling overseas will be offered, encouraging and inspiring more businesses to export. The Government will assist businesses by providing information, advice and practical assistance on exporting, and they will connect UK businesses to overseas buyers and markets, and to each other. The policy sounds fantastic and I am sure that every hon. Member in this Chamber could get behind it—it is certainly one that I could get behind—but we need to address the elephant in the room of free trade agreements in the light of the restriction that the Prime Minister’s draft withdrawal agreement puts on our ability to be free and independent when we finally leave the EU.
Martin Howe QC has analysed the Prime Minister’s draft agreement and has come to this conclusion:
“This customs union arrangement would kill stone dead the chances of the UK following an independent trade policy after Brexit. We would not be able to offer tariff concession to free trade partners, so they would have no incentive to offer us concessions on, say, services, which we would want to export to them. Further, it will render the theoretical right to negotiate third country trade agreements during the transition period totally meaningless. Since we will be unable to tell prospective free trade partners when we will be free to implement such an agreement, or indeed whether we will ever be free to do so at all, they will have no interest in spending time and effort on serious negotiations with us.”
It is a lose-lose situation for the UK and our future.
Let me repeat what Martin Howe says:
“This customs union arrangement would kill stone dead the chances of the UK following an independent trade policy after Brexit.”
That is directly at odds with the Prime Minister’s Lancaster House speech, in which she said:
“I want us to be a truly Global Britain—the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new allies alike. I want Britain to be what we have the potential, talent and ambition to be. A great, global trading nation that is respected around the world and strong, confident and united at home.”
The Prime Minister’s draft agreement does not live up to her promises, and I will not support any agreement that does not allow the UK to take back control to export our goods freely around the globe. Only today, Global Britain and the European Research Group issued the joint publication “Exploding the myths of leaving the customs union”. Its foreword by Simon Boyd, the managing director of REIDsteel, rubbishes concerns that, when the UK leaves the EU single market and customs union, it will be harder to trade. Whether for imports or exports, his biggest criticism of the EU is the bureaucratic nature of the customs union, which is designed as a fortress to protect producers rather than to encourage free trade. Furthermore, he criticises an EU system that suits multinationals that have the means to lobby and to unfairly profit at the vast expense of the majority of UK businesses. We need to get as far away from this protectionist club as possible, which means that we should leave the customs union so that we support British small and medium-sized enterprises and exporters here at home.
I am a Conservative. We believe in liberalised trade, but we also believe in the determination and talent of British people and business. We believe in the benefits of a Government who support business and allow it to prosper. Some 200 years ago, Adam Smith argued in favour of free trade and against protectionism. That argument is as relevant and persuasive today as it was back then. Those arguing against free trade and for protectionism are arguing in favour of higher prices and fewer choices for the consumer, and therefore against a higher standard of living for the British public. I cannot support that. We need to be free of the EU’s protectionist bloc once and for all.
We have excellent exporters in my constituency, across Yorkshire and Humber, and throughout the UK. These are businesses that we should be proud of, and I am glad that the Government and the Secretary of State are working with businesses to support their needs and keeping exports high on the Department’s agenda. However, the Government’s draft agreement to keep the United Kingdom in the customs union with the EU will not help exporters in the medium to long term. Every day that we stay in the EU is another day when we are not able to take advantage of our historic ties with the world’s most exciting and fastest-growing economies.
Fears about our leaving the customs union have been greatly exaggerated. Brexit offers the opportunity to reduce red tape, to look beyond the bureaucratic nature of the customs union, and to establish our own free trade agreements with the rest of the world. Adam Smith may be about to be replaced on the £20 note, but that does not mean that we should forget his teachings about the importance of free markets. To echo the Prime Minister’s words, I want to see a truly global Britain, but we need to be out of the customs union to ensure that this happens. It is only when we are truly free, and we have control of our laws, our money and our borders, that Britain will be able to fulfil its destiny as the 21st-century exporting powerhouse that the Secretary of State himself wants the country to be.
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
I congratulate my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns) on securing the debate, and on her passionate defence of, and advocacy for, the beneficial effects of free trade.
Between 2010 and 2017, exports from this country grew by £170 billion, and we are determined to grow them further. As the Minister for investment, I am pleased to say that we have retained our position as the No. 1 foreign direct investment destination in Europe, and we are third globally. Through foreign investment, 76,000 new jobs were created last year alone—1,500 in every single week. More than 3.3 million more people are in work today than when the Labour party left office in 2010, which means that more people are able to support themselves and their families. Quite simply, exports and investment are important because the UK needs to pay its way in the world. That is the fundamental difference between the Government and the Opposition—Labour forgets that we have to earn our way. If we do not, we will end up as every single Labour Government in history always have—with more ordinary people on the dole queue at the end of their period in office than at the beginning.
The Institute of Economic Affairs recently published a report that found that, through an increased tax take, job creation and other factors, if the value of UK exports rose a further 10%—remember that exports from this country grew more than 10% in 2017 to nearly £620 billion—we could raise a further £20 billion in tax revenue, which would fund our schools, hospitals and other vital public services on which we all rely. I should say that those are not Government figures. Nevertheless, the IEA’s work highlights just how important exports are to the social and economic health of our country. That is one of the key reasons why we now have a dedicated international economic Department. Never before had there been a Department solely focused on exports, investment and bringing down trade barriers, but in the Department for International Trade, we now have exactly that.
It was also why in August, as my hon. Friend said, we launched the export strategy—a Government-led collaboration with business that was developed after extensive engagement with firms of various sizes in different sectors right across this United Kingdom. It aims to build on our existing exporting success by setting a UK export challenge to increase exports as a proportion of GDP from 30% to 35%, moving us towards the top of the G7. We will inform, connect with, encourage and finance UK businesses so that they realise their full exporting potential. The export strategy builds on the Government’s wider industrial strategy with the ambition of making exporting the norm, not the exception, for UK businesses, and of working with firms to give them the tools they need.
Graham Stuart
I have very limited time, so if my right hon. Friend will forgive me, I will press on and put my remarks on the record.
We are taking a whole-of-government approach as we seek to enthuse Departments, the devolved Administrations, local government and industry bodies alike. Increased exports are not just a public good in themselves, but provide so much more.
Our strategy recognises the need to find better ways to talk to exporters, business organisations and private sector providers of export support. That was why we ran a nationwide system of consultation involving roundtables, meetings, workshops, user surveys and the like to make sure that we understood the barriers that businesses faced, and to ensure that we never go back to the low levels of exports that were bequeathed by the previous Government. Many businesses said that they did not have the expertise to export, or that they lacked knowledge about local business cultures, regulations or consumer needs. That is why the Government are taking steps to use their unique position to help companies to connect into local markets and to overcome barriers to export. That can include supporting the creation of consortiums for UK firms, thereby convening businesses from throughout a supply chain to present overseas buyers with a complete, and expert, UK offer. One such example is the Infrastructure Exports: UK consortium.
We are developing new digital services to help companies to report trade barriers so that our growing trade policy function can prioritise dealing with the obstacles that are most damaging to UK businesses. We are building up—most importantly, I think—a national network of export champions involving businesses that have successfully exported and can give their expertise, advice and mentoring support so that other firms can do the same. After all, Conservative Members never forget that it is business that does business, not Government. We are simply there to facilitate and support. We have successful pilots in the midlands engine and the northern powerhouse, which represents a time-efficient and trusted way to gain the information and skills for businesses to begin to export overseas.
The Department for International Trade is leveraging its extensive overseas network in 108 countries worldwide to help to attract potential local customers. This includes participation in large expos such as Dubai 2020, or the DIT-inspired Great British festival of innovation and creativity held in Hong Kong in March this year. We are supporting the Small Business Saturday movement, as well as our annual Export Week, which we are currently in, and which my right hon. Friend the Secretary of State promoted in Bristol last week. I am hosting a food and drink export event in my constituency, and I hope that colleagues on both sides of the House will consider doing the same.
We are supporting supplier fairs where foreign buyers can bring specific opportunities directly to UK businesses. Through the Prime Minister’s trade envoys, we have focused missions to highlight specific areas of expertise to overseas buyers. Giving UK business world-class support in overseas markets is why we have appointed Her Majesty’s trade commissioners in nine regions of the world. They have the experience and independence to tailor our export offer to their region and meet its unique challenges.
I will move swiftly on through my speech as I am aware of the limited time. My hon. Friend the Member for Morley and Outwood talked about opportunities outside Europe—she is absolutely right. The IMF originally said that 90% of global growth is expected to be outside Europe in the next 10 to 15 years, and it now predicts that even in the shorter term. The Commonwealth offers enormous opportunities as well, and we have a strong record there. In the year to June 2018, UK exports to the Commonwealth amounted to £56.5 billion—a 9.5% increase from the year to 2017—which resulted in a trade surplus of £4.3 billion.
We have a very positive future to look forward to. It is a shame that the only Member from the Labour party to turn up for this debate had only one thing to say, and that was to preach doom and gloom. We are proud of the exporting record of this Government, proud of the fact that we have provided record employment, and proud of the fact that we, not the Labour party, will continue in government—
Draft Investigatory Powers Tribunal Rules 2018
(6 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Security and Economic Crime (Mr Ben Wallace)
I beg to move,
That the Committee has considered the draft Investigatory Powers Tribunal Rules 2018.
It is a pleasure to serve under your chairmanship, Sir David. I am pleased to have this opportunity to debate these important updates with the Committee. The Investigatory Powers Tribunal, which was established under the Regulation of Investigatory Powers Act 2000, investigates and determines complaints that allege that public authorities have used covert techniques unlawfully. The tribunal also investigates complaints against the security and intelligence agencies for conduct that breaches human rights.
The tribunal has delivered judgments on a number of landmark cases over the past 18 years. A notable example is its widely publicised 2015 judgment that the so-called Wilson doctrine, thought to protect the communications of parliamentarians from interception, was not enforceable in English law. That led to an emergency debate in Parliament and a statement from the Prime Minister, paving the way for the Wilson doctrine to be placed on a statutory footing in the Investigatory Powers Act 2016.
The tribunal’s rules set out the procedure that the tribunal should follow. They include details on such important matters as how complaints may be brought, how hearings should be conducted, how evidence should be received, in what circumstances sensitive information may be disclosed, and how complainants should be notified of the outcome of their case. The rules have not changed since the tribunal was established in 2000, so the time is ripe to update them to better reflect current tribunal practice.
I will briefly outline the changes that the statutory instrument will bring in. First, to improve the efficiency of decision making in the tribunal, we have amended the rules to allow further functions of the tribunal to be exercised by a single member of that tribunal. Secondly, to strengthen the power of the tribunal, we have added an explicit process for when the respondent refuses to consent to disclosure but the tribunal considers that disclosure is required. Thirdly, to further increase the transparency of the work of the tribunal, we have included the commitment to hold open hearings as far as is possible. Fourthly, to assist complainants and respondents to the tribunal, we have provided details of the function of counsel to the tribunal, including by listing the functions that a tribunal may request counsel to perform.
Finally, we have amended the rules to set out the process for the making and determination of applications to the tribunal for leave to appeal, as well as determining in which court the appeal should be heard. This is in preparation for the new right of appeal, which is coming into force as a result of the Investigatory Powers Act 2016. Appeals may be made in certain circumstances on a point of law against any determination or final decision of a preliminary issue made by the tribunal. Appeals will be heard in the Court of Appeal in England and Wales and in the Court of Session in Scotland. As is necessary, the tribunal undertakes much of its work behind closed doors and many of its judgments are not published in full. The introduction of an appeals route will allow for greater transparency and greater levels of reassurance that justice has been done.
Of course, it is important that the affected parties are properly consulted before such changes are made. For that reason, the Government held a public consultation on the proposed updates to the rules. We have considered the responses carefully with colleagues across Government and with the tribunal itself. We accepted a number of amendments proposed in the consultation responses and they have been subsequently incorporated in the rules we see before us today.
In summary, the updates to the rules make the work of the tribunal more transparent and ensure that the legislation accurately reflects how tribunal processes and proceedings have evolved over time. I commend the draft rules to the House.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Sir David. I am grateful to the Minister for setting out the position in the way he has. The Opposition welcome the work to update the tribunal. Through its work of investigating and determining complaints that allege that public authorities have used covert techniques unlawfully and infringed the right to privacy, as well as complaints against the security and intelligence services for conduct that breaches human rights, the tribunal is a fundamental part of the framework in this area.
The approach that I always take is that strong powers must be accompanied by strong safeguards. Taken together, I believe that the updated rules will provide us with greater reassurance that justice is both done and seen to be done in the tribunal, and that they will allow for a greater degree of transparency. I make it clear that the Opposition do not oppose the draft rules, and I am grateful to those who responded to the six-week consultation.
As the Minister set out, the rules are essentially being updated to amend the powers that can be exercised by a single tribunal member; implement a process for cases in which a respondent refuses to consent to a disclosure that the tribunal believes is necessary; reflect the practice that hearings are to be held in the open where possible, which is to be welcomed; and set out a list, which I appreciate is non-exhaustive, of the functions that the tribunal may ask its counsel to perform—another important aspect.
I ask the Minister to clarify one point. I understand that 17 amendments were proposed in response to the consultation, of which five have been accepted and incorporated into the rules. First, the function of a single tribunal member to decide on preliminary issues is being removed. Secondly, the tribunal is being given a power in respect of what can be relied upon in circumstances where a problem arises regarding disclosure. Thirdly, in circumstances in which an arguable error of law is identified by the counsel to the tribunal, the counsel must notify the tribunal, which must disclose it to the complainant. Fourthly, where the tribunal makes a determination that is not in favour of the complainant, it must provide a summary of the determination—a change that is to be welcomed in the interests of justice. Finally, the rules will remove the requirement for an application for leave to appeal to state the ground of appeal where there has already been a notification by counsel of an arguable error of law. Those measures are all welcome, but I ask the Minister to clarify why those five amendments have been incorporated, while the other 12 have not.
Mr Wallace
I am grateful to the Opposition spokesperson for his question. We received three substantive responses to the public consultation. We rejected the suggestion that an amendment should be made to allow the tribunal to make disclosures to the Investigatory Powers Commissioner, because section 237 of the 2016 Act already permits such disclosures. We also rejected the suggestion that the functions of the counsel to the tribunal should be specifically identified in the rules, because not all the counsel’s functions will be relevant in every case and the tribunal should have discretion over which functions would assist the counsel in each individual case.
We further rejected the suggestion that the tribunal should compel a witness to attend and give evidence; such a power could be counterproductive because the tribunal has functioned on the basis of voluntary co-operation. We rejected the use of special advocates in the tribunal, because there are considerable benefits to the tribunal employing its own counsel, which provides specific functions more suited to the tribunal’s work.
We have sought to allay concerns about the rule that the tribunal
“may receive evidence that would not be admissible in a court of law.”
Our response to the consultation states:
“It is important that the Tribunal has the flexibility to receive evidence in any form. However…it is inconceivable that a situation would arise wherein the admission of evidence that might have been obtained as a result of torture or inhuman or degrading treatment would not be subject to challenge—either by the complainant or by Counsel to the Tribunal.”
Those are the reasons that we have set out, but we accepted a considerable number of suggestions.
Overall, the draft rules are about improving access to the tribunal and setting out a clear appeals route, as is present in many other tribunal and court processes. They should therefore go some way towards continuing to reassure the public that there is good oversight. The tribunal is chaired by a judge of the Court of Appeal, Lord Justice Singh, so it is a solid court that can deal with some very weighty issues. It has dealt with a considerable range of matters, including challenges to the Investigatory Powers Act, as well as individuals’ concerns about whether their rights have been infringed either by the intelligence services or by the actions of an investigation that used investigatory powers.
We have to operate in a slightly different arena here. On some occasions we have to be in “neither confirm, nor deny” territory, to ensure that we can investigate whether someone has been under surveillance and, if so, whether it has been proportionate and necessary in accordance with the law, without tipping them off after the fact that they have definitely been under such surveillance. That is quite important, because otherwise lots of people could use the process for mischievous or indeed malevolent purposes.
The tribunal is a very important structure. I have every confidence that it is well advised and respected by the legal community in this country and that it protects the rights of citizens. Once again, I commend the draft rules to the Committee.
Question put and agreed to.
Draft Infrastructure Planning (Water Resources) (England) Order 2018
(6 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
I beg to move,
That the Committee has considered the draft Infrastructure Planning (Water Resources) (England) Order 2018.
It is a pleasure to serve under your chairmanship, Sir Henry. The purpose of the order is to amend the Planning Act 2008, which sets out a streamlined national planning process for important infrastructure projects that are nationally significant. If a project meets certain thresholds set out in the Act, it will be considered under the Act, with the Secretary of State as the decision maker.
The order will change the thresholds under which reservoirs, dams and water transfers will qualify as nationally significant. The order will also introduce a further infrastructure type—desalination plants—to which the Planning Act regime can apply. That reflects our conclusion that the criteria set out in the Act did not reflect water resource infrastructure that might be regarded as nationally significant.
We consulted on our initial proposals last November and on our more detailed proposals in April. There was general support for our broad approach among the major stakeholders that responded, which included water companies, environmental organisations and other interested organisations. Those who disagreed tended to consider the thresholds to be either too high or too low, or they thought that we should focus on reducing the demand for water.
In reaching a conclusion on the new thresholds, we considered several factors, including the physical size of the infrastructure in question, the size of the population that could be served by its output and the major infrastructure that the Government anticipate will be needed in future. That is likely to require developers to engage with a number of planning authorities and other regulatory regimes. We also wish to move towards a level playing field, so that different water resource schemes are all required to meet thresholds that are as consistent as possible to qualify for consideration under the Act. That should help to prevent developers from favouring one scheme over another just because they prefer one planning route to another.
In making this amendment, we are introducing a consistent metric to measure the output of each infrastructure type. That metric is known as deployable output, and it is commonly used by the water industry for water resource planning. Deployable output is an annual average measure of the number of litres of water that a particular piece of infrastructure can be expected to produce in a day under drought conditions. We concluded that a project that is expected to have a deployable output of 80 million litres a day—a level that can serve a population of around half a million people—is a nationally significant infrastructure project.
As I have explained, the order will amend qualifying thresholds for two existing infrastructure types that are mentioned in the Act and introduce a third: desalination plants. In the case of water transfers, the order will reduce the threshold that projects need to meet to qualify as nationally significant in line with the number of people served—for example, 80 million litres per day.
For reservoirs, there will now be two ways to qualify for the streamlined planning process under the Act. The order will introduce a deployable output measure consistent with transfers. However, we have chosen to retain a measure based on physical volume, recognising that the size of reservoirs matters to local communities, both because of the impact that they can have on neighbouring communities and because a large reservoir that takes a long time to drain down, and thus has a relatively low deployable output, can be an important part of overall water resource resilience. We have increased the volume for reservoirs to qualify under the Act from 10 million cubic metres to 30 million cubic metres.
We have also introduced desalination plants as a new infrastructure type. Consistent with the other infrastructure types, if the deployable output of a given desalination plant is expected to exceed 80 million litres per day, the project can be considered under the Act.
I turn to the benefits of the Planning Act 2008 regime. Although it is right for decisions on nationally significant infrastructure to be taken at a national level, it is vital that the communities that are directly affected have their say and are heard in the decision-making process. The Act and the regulations made under it set out the consultation requirements for development consent order applications. I assure the Committee that applicants will have to undertake extensive pre-application consultation and engagement with those who are affected. Furthermore, members of the public can participate in the examination process by registering their interests, giving evidence when they are called on to do so and submitting written evidence, thus ensuring that local views are heard.
The main benefit will be to enable nationally significant infrastructure projects to be developed at a reasonable speed, and the main benefit to the developer of the projects meeting the criteria in the Act is that the consenting process will be less complex with quicker decision making. Consent requirements such as planning permission, listed buildings consent and scheduled ancient monument consent will be replaced by a single consent issued by the Secretary of State, following advice provided by the Planning Inspectorate.
It is the Government’s intention to publish a national policy statement for water resources infrastructure under the Planning Act. The policy statement will summarise Government policy on water resource infrastructure, including setting out the need for nationally significant infrastructure. It will make clear what the Government expect a planning inspector should take into account when examining an application. We plan to lay a draft of that in Parliament by the end of the year and I look forward to engaging with the House on it in more detail next year.
The amendments in the order are part of how we make sure we have enough water now and in future. Population growth, climate change and making sure we leave enough water in the environment will become more challenging in future. We expect proposals for nationally significant infrastructure to originate from statutory water resource management plans as those are where options to reduce demand and increase supply have been assessed. We know that some new infrastructure will be needed to meet water demand in future. Our assessment of the current draft water resource management plans is that about half a dozen proposed projects, needing to start in the next decade or so, are likely to qualify as nationally significant if the Act is amended by the proposed order. For all those reasons, I commend the motion to the Committee.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Sir Henry.
The Opposition largely welcomes the introduction of legislation that recognises that the UK, along with the rest of the world, is experiencing a water crisis. We know that more people are living in areas of water stress, of more population growth and of house building planned in areas of water stress, and we know that climate change is changing predictability and the flows of water into the system. The water industry must adapt, and the Government must adopt a more ambitious policy than is currently in place to meet those challenges.
The Labour party broadly welcomes the proposed amendments to the 2008 Act as we believe they will lead to greater water resilience in the UK, but we need more and better infrastructure to deal with increased demand. However, we must make sure that the ways in which we build infrastructure and supply water are sustainable for the environment and for local communities, and not simply profitable for the water companies involved. We must urge developers to build infrastructure that works with the natural water system, rather than disrupting it in ways that are unsustainable.
The dangers of mismanaging water are grave. I am sure the Minister will have seen the report published by WWF, which states that in England and Wales only one in five rivers are deemed to be in good ecological health, and nearly 25% in England are at risk of unsustainable water abstraction. We must make sure we take into account the risks associated with a higher number of major water infrastructure projects. First, a huge amount of water is already lost through leaks in water resources operations. Can the Minister speak about the concerns that the Government’s priority, concurrent to this order, should be to reduce leakage in water operations and not simply to provide more water resources? What progress is being made? Will the Minister also touch on what action the Government can support the industry in taking to address the leaks in customers’ homes that are outside current company remits?
Secondly, the report by WWF estimates that 9% of rivers flowing into some of the water resources covered by the order are over-licensed. That means that if permits to abstract water from rivers were fully utilised, levels of water would be unable to sustain wildlife. Does the national policy statement on water resources take into account over-licensed and over-abstracted rivers in the planning process for the new national strategic projects, and how would the order impact on that?
Thirdly, the Chartered Institution of Water and Environmental Management has expressed concerns that the criteria for defining a nationally significant infrastructure project,
“do not consider any regional or supra-regional water resources issues”.
The Secretary of State for Environment, Food and Rural Affairs has let his views on experts be well known, but that view is not shared on this side of the House. Experts should be listened to as the powers in the order are used. Will the Minister’s Department provide support for regional multi-sector resources planning as well as co-ordination to ensure that the nationally significant solutions that are progressed are the right ones?
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Minister specified that each water company must produce a water resources plan, but the Department for Environment, Food and Rural Affairs does not integrate them. Is it not time for a national water resources plan in which water companies have a duty to co-operate with neighbouring companies in planning water resources for the next 25 years or so?
Luke Pollard
I thank my hon. Friend for that intervention. She is exactly right. At present, water companies have a responsibility to provide a water resources plan for the area that they cover, which largely covers the water catchment area that those companies are framed around. It seems that there is an opportunity to join up those water resources plans on a regional basis, to ensure that water companies co-operate because it is not only in their best interest, but in the environment’s best interest to join up the water resources next door. I think that is especially important when we are talking about areas of water stress. At heart, the order is about providing more water storage. If the powers in it are to be used, it is important not only that the water resources plan is for one water company, but that the neighbouring water companies all join up. I think there is an opportunity to create a national water resources plan, which is not being taken at the moment. I am grateful for that intervention from my hon. Friend.
Our efforts to increase water resilience must not have unintended consequences on local people and economies. If more projects are commissioned at a national level, we need to ensure that more local engagement is undertaken to balance out the fact that that national decision making has been taken from local communities. The whole Committee will recognise that nationally significant projects are more often than not best decided at a national level, but that should not dilute, devalue or dismiss the views of local people affected by the schemes, especially when nationally significant projects can cross local authority boundaries and cause significant disruption in their construction and operation.
I have heard from Dr Derek Stork, who is leading an action group against Thames Water’s plans to build a “nationally significant” reservoir in the south-east, which he says will significantly impact his community. He shared his concerns about the lack of democratic accountability for nationally significant infrastructure projects and the way in which they are determined, given that projects can be approved many years ahead of time. People who will be most affected by these infrastructure projects must retain the ability to be involved with decisions after a project has been approved, as well as leading up to that approval, and be able to hold those delivering those decisions accountable for their actions and commitments made to local communities. Those nationally significant infrastructure project commitments should not just be about getting through the planning committee, or in this case the Secretary of State—the projects should be held to them.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
On that point, Scotland has plenty of water, but down south all we see is floods. Does my hon. Friend think the community should be involved in positions on these big planning developments, which are important to communities?
Luke Pollard
Indeed. Government can sometimes underestimate just how much knowledge and expertise can be held in a local community, especially when there is such building on flood plains and changes in how our water resources are used on a local level. Taking into account the concerns of local people can get a better scheme at the end of it, if for nothing else than for those people that are taking that project forward. Too often, some water resources, flood management and water schemes have been incentivised by spending lots of money and not working out whether there are better ways of achieving the outcome without deploying that amount of capital or carbon in an end-of-pipe solution.
There are some examples where nationally significant infrastructure projects are being done incredibly well.
Luke Pollard
That is a very good question and one that I would be grateful if the Minister could pick up on in her remarks, in terms of how these powers will actually be used.
There are some good examples of where community engagement is done incredibly well. I know that hon. Members on both sides of the House will know about Thames Tideway, for example, where consultation with communities was done not only through the planning process—in their case, through a development consent order process—but from the moment the spades go in, with genuine engagement and not just consultation. When nationally significant projects are undertaken, they take many years, and that engagement has to be sustained throughout the entire process.
That needs to be the case for the nationally strategic infrastructure projects that are mentioned in the order, especially as a number of them take projects out of the remit of local decision making and move it to powers held by the Secretary of State at a national level. I say that because I think there is a real fear from some of the stakeholder groups and community groups, which responded to the consultation and have serious concerns about the order, that their concerns could be steamrolled over as part of removing decision making from that local level. I trust that the Minister can reassure Dr Stork and hon. Members that this will not be the case.
Although the proposed statutory instrument is potentially a step in the right direction, resilient infrastructure deals only with the fall-out of climate change, not the root of the problem. We must lower pressure and demand on water resources. That means taking more assertive steps to reduce demand, increase water efficiency, retrofit current housing and business stock, and ensure that new homes and commercial buildings are more water efficient in a meaningful way, and prescribing that in the regulatory regime.
The Opposition will not oppose the statutory instrument, but we would be grateful if the Minister could address the concerns that I and my hon. Friends have raised.
The Chair
In calling the right hon. Member for Wantage, may I inform him that, although he is not a member of the Committee, he is welcome to speak but he will not be able to vote in the unlikely event that there is a vote?
Mr Edward Vaizey (Wantage) (Con)
I am very sorry to hear that, Sir Henry, but hopefully my rhetoric will move the Committee.
It is a pleasure to appear under your chairmanship, Sir Henry, and to be here in the presence of the Minister, who is a legendary figure in our party. Last night she hosted her annual and widely celebrated karaoke evening and unfortunately, as I had to be at a Haydn concert at St John’s Smith Square, I could not join her and other members of the Cabinet in their renditions of “I Will Survive”. Instead, I was listening to the compositions of a European immigrant who made his home in London and produced works of outstanding culture at a time when free movement was celebrated.
But I digress. In between reading the withdrawal agreement for the second and third times, I have had a chance to read the statutory instrument, and you will be pleased to know, Sir Henry, that even if I could I would not move it to a vote. I am happy to accept it. I can see the Whip looking at me; he is happy about that as well.
I know that the entire Committee is perplexed as to why I am here and on my feet. The reason I am speaking is that for the past 20 or 25 years there has been a proposal to build a large reservoir in my constituency, known as the Abingdon reservoir, next to the large village of Steventon and on probably the last piece of large open land in southern England. I have worked closely over the many years since I became an MP with an organisation called GARD, which stands for Group Against Reservoir Development and is made up of various local luminaries, including the former director of technology at the UK Atomic Energy Authority, a former brigadier and a former wing commander. The group has provided me with lots of details and the Minister will be pleased to know that it, too, accepts the statutory instrument.
GARD has suggested that there could have been a higher threshold for desalination plants—perhaps 100 million litres. I would be interested to know the Minister’s views on that. It also suggests that the reservoir threshold should perhaps not be an either/or but 30 million cubic metres held back and at least 100 million litres per day output. I know the Minister will be keen to address those two technical points.
I will briefly outline what is proposed in Abingdon because it is relevant. The hon. Member for Plymouth, Sutton and Devonport, who spoke so well for the Opposition, and his colleagues have raised a number of relevant points about reservoir development. Let me say, to begin, that I am neutral about the proposed reservoir in my constituency. I have always made it plain to those campaigning against it that I do not propose to do so because it is a difficult position for a Member of Parliament. Where critically important infrastructure is needed for the country, one should not simply say no because it happens to be sited in one’s constituency.
What I have always called for is a proper public inquiry to ensure that the reservoir is genuinely needed, and in 2010 I succeeded in getting one. It was a good thing to campaign for because the inquiry, chaired by the elegantly named Mrs Wendy Burden, rejected the reservoir. At the time the reservoir was proposed, it was one of 100 million cubic metres—4 square miles—but it has now come back, under Thames Water’s proposals, as 50% bigger, at 150 million cubic metres. I can see my right hon. Friend the Member for Newbury, who will not be unaffected, taking a great deal of interest. Not only that, but the reservoir will have very high banks, a bit like that pile of mashed potato from “Close Encounters of the Third Kind”. It will be a very large land mass and will be built up with a great bund. Thames Water’s proposal is to start building it in 2025, so it is around the corner and, as Members can imagine, there is a lot of opposition to it.
I was grateful to the hon. Member for Coatbridge, Chryston and Bellshill for talking about the role of communities in his earlier intervention, as did the Opposition spokesman. I would be interested to hear more from the Minister about how she proposes to involve my constituents and local communities in huge infrastructure developments of this kind, because as can be imagined, the concerns are manifold. First, there is the immediate concern of planning blight—people not being able to sell their house, certainly not at market value, because the only buyer in town is Thames Water. I have already had to intervene in that area on behalf of some constituents. Nobody in their right mind would buy some of the properties near where this proposal is still hanging around, in case it does happen. Secondly, this location is an important part of the flood plain, and people are concerned about the impact that the development might have on flooding. We have had serious flooding in my constituency, particularly around 2007. Of course, there is also the visual impact, which I have already elegantly and very graphically described.
In addition, I would be particularly interested in the Minister’s views on alternatives to a large reservoir. One of the issues that did for the reservoir in the 2010 public inquiry was that the planning inspector felt that Thames Water had not analysed closely enough the opportunity to transfer water from the Severn. Thames Water, I think, estimates that it could get 180 million cubic metres from the Severn water transfer, but experts in my constituency estimate that the figure could be about 300 million. Thames Water also bases the need for a reservoir on projected population figures, which are now in some doubt, and I would be interested to know what the Minister’s views are on those projected population figures.
As the hon. Member for Plymouth, Sutton and Devonport and others have mentioned in great detail, there is also a need to tackle leakage problems in Thames Water’s network. Again, I do not hold that against Thames Water, if I can put it that way: there is a lot of Victorian infrastructure in London, and it is difficult to dig up the roads and replace the drains. However, I think the leakage figures are still around 600 million cubic metres a day. Considering that the reservoir was designed to hold 150 million cubic metres, that is the equivalent of four reservoirs a day leaking out of the drains in London.
Finally, there is, and has always been, a concern—it is really up to Thames Water to address it, and perhaps the Minister might have views on this—that this is simply an infrastructure project designed to please the shareholders of Thames Water. As proposed, the new reservoir will be built partly for Thames Water’s customers, but also for other water customers. There is a suspicion that this is the easy route: build a large piece of infrastructure to increase the value of Thames Water for the benefit of shareholders.
I echo some of the excellent contributions that have been made by hon. Members. I record my gratitude to them for raising the issue of local communities’ involvement in a project of this kind, and for making some very relevant points about water resources and water management in general. I look forward to the Minister’s exposition. If she wants a microphone, a speaker and some backing music as well, to take her back to last night, I am sure they could be supplied by you, Sir Henry.
Owen Smith (Pontypridd) (Lab)
It is a great pleasure to serve under your chairmanship, Sir Henry. In a moment, I will continue the musical theme started by the right hon. Member for Wantage with a reference to popular music. However—not to be outdone by the right hon. Gentleman, for fear of the Opposition being dismissed as lowbrow—I do not want to speak for too long, because I have tickets to see some Bach cantatas this evening at the Wigmore Hall, so I will have to get through this quite quickly.
My musical question is to ask the Minister, given her evident expertise, which band was playing at the top of the hit parade in 1976 when we last built a major reservoir in the south-east of England. The Minister is looking perplexed, so given that she is apparently such a legend, I will help her out and say that it was, in fact, “Dancing Queen” by ABBA—I kid you not—[Interruption.] Very good, although the Minister’s leader gives a far better rendition of that particular set of moves, if I may say so.
I say this with serious intent and in direct connection to the speech made by the right hon. Member for Wantage a moment ago: the serious point I wish to make is that we have been waiting since 1976 for the building of a major reservoir in the south-east of England. That is a period in which we have seen enormous growth in housing and population in the south-east. It is a period in which we have seen, as my hon. Friend on the Front Bench so eloquently described, growing crises in our rivers, growing environmental degradation and problems for our wildlife, in particular the fish in our rivers, as a result of over-abstraction by companies in both the public and private sector that have failed to invest, and a planning system that has been sclerotic.
Both for good reasons to do with the need to consult with communities and their concern about reservoirs, and for bad reasons, as privatised water companies have not invested anything like the amount of money they ought to have done in this infrastructure, we have not solved the problem. Now the Government are proposing to build another 1 million homes in south-east England in the coming period, and at the moment nobody is seriously asking the question, “Where is the water going to come from for these communities and these homes?”
While I agree with some of what the right hon. Gentleman said, the reality is that we need to get serious about building infrastructure that allows us to capture water in the winters in periods of heavy rainfall, and not do what we have done for generations, which is to allow that water to flood through our rivers into the seas and then abstract from those same rivers during the summer months, when they are much lower, and deplete them. That has been a pattern under successive Governments and one that we need to break.
I will conclude by saying that we need to get serious about building new infrastructure. The measures included in this instrument seem to me to be directed principally toward making it easier to build new reservoirs, and therefore I am pleased that our Front Bench spokesman is supporting it. However, I too have a specific question about the Abingdon reservoir. It is the one new reservoir that has been on the stocks now for over 20 years, sometimes apparently about to be built and at other times, as we have heard, being blocked. What would this measure do for the Abingdon reservoir? Can the Minister answer a serious question—one that is not about 1970s popular discotheque numbers—and tell us when she imagines we will be building Abingdon, or if not Abingdon, another reservoir or reservoirs, under these proposals to provide some of the water resources that we will need to fulfil the Government’s ambitions for new houses in the south-east of England?
Richard Benyon (Newbury) (Con)
I refer hon. Members to my entry in the Register of Members’ Financial Interests.
I will take a few moments of the Committee’s time to consider some vital facts here. When my hon. Friend the Minister’s boss was appointed as Secretary of State, I took him aside in the Lobby and said to him, “Do you realise, Michael, that if it doesn’t rain over the coming winter,”—this was about a year ago—“you will be in Cobra in the spring?” His eyes narrowed, as if to say, “What on earth is this man talking about?”, but six years after the last serious drought, we faced a very serious problem, and just about escaped it; our “get out of jail free” card was a fairly wet end to last winter.
What was a 30-year cycle now seems to be a six or seven-year cycle, which sees people such as my hon. Friend the Minister receiving into her office ashen-faced members of the Environment Agency and other organisations, saying, “Look, Minister, we have a problem.” Groups are convened and all sorts of good things are done with different stakeholders, but it does not deal with the major problem.
Yes, there are issues around leakage, which can be resolved. Technology is helping in a big way there; the relentless push on this by the Minister and her colleagues at the Department for Environment, Food and Rural Affairs is important, and Ofwat’s work on this is vital, but it does not take us away from the problem, which the hon. Member for Pontypridd put very clearly, that we need to look again at winter storage on a grand scale.
Like my neighbour, my right hon. Friend the Member for Wantage, I am not particularly for or against a particular solution here, but I want the Government to be really clear in driving forward the need for large-scale winter storage. I have looked into the eyes of water companies, not least on the Thames Tideway tunnel project, and I can tell the Committee that they do not want to do this. There is this idea that they are lining the pockets of their shareholders through big regulatory capital value items, from which they can skim off large sums of money. They do not want to do that, but they are concerned that in the fifth-largest economy in the world, they will be responsible for standpipes in the streets of a global city such as London. We need to work with them to make sure that we do this a lot quicker.
Will the Minister please have a word with other parts of Government, such as BEIS and those responsible for industrial strategy? Can she make them think that water is important? The industrial strategy challenge fund is a fantastic Government initiative that promotes certain sectors, but it does not treat water as important. A Faraday-style challenge could produce new and innovative techniques that would halve leakage and encourage the development of all sorts of technologies around aquifer recharge, but it is just not important out there.
The Minister and her Department can do an enormous amount, particularly given what will be going on in six months or so. After that, we will be in the driving seat in taking forward the son of the water framework directive and the son of the urban waste water treatment directive, as well as all the other areas of environmental management that we will be taking control of. Water is absolutely the basis of the continuance of our economy in a very competitive age, and the Minister has an enormous responsibility to take the matter forward. The order represents an excellent start, but I hope that she can get that message across to the rest of Government.
Dr Thérèse Coffey
It is a pleasure to respond to the many contributions from hon. and right hon. Members on this important order, which I hope will gain their support. The shadow Minister asked a series of questions. It is important to stress that we are very conscious of the impact of abstraction on the natural environment; that is why I referred to it in my opening remarks. We believe that it is sensible to use transfers and reservoirs to try to make sure that water companies create less strain with such abstraction.
When it comes to leaks, the shadow Minister will be aware that we set the water companies a target of, I think, 15% or 16% by 2025. He mentioned something about household indoor pipes. I think his proposal is interesting, but it is not—without wanting to be too rude—a new one. It would be unparalleled for a utility company to be responsible for infrastructure inside somebody’s house, whether we are talking about a dripping tap or leakage in a pipe, and we would have to think carefully about whether that was the right approach to take. That does not mean that we should not make people more aware of how much water they are using—or, indeed, losing—by not taking direct action.
Regional quotas are simply not practical, but I agree with the shadow Minister and I will say “watch this space” when it comes to getting water companies to work together on a regional basis, recognising that they cross catchments. On the point about considering local plans, what is happening between local councils and the need for water infrastructure, water companies input into the local plans and vice versa. When the water resource management plans are put out—I think they have just closed for consultation—councils get their opportunity to see whether the water companies’ proposals are sufficient or necessary for future housing or commercial development.
Regarding the amount of water that is used in homes, the Committee should be aware that there are already regulations on new housing, which has per capita consumption targets lower than the national average. Councils can go even lower than that if they want to, particularly if they are in water-stressed areas. There are already powers in place for councils to take account of. I also understand the aspect about leaks. Of course that would reduce the demand for water, but the National Infrastructure Commission indicated that even with the most ambitious reductions in consumption by people, and a reduction in leaks, there would still not be enough for future needs. That is another reason why the measure is important.
In response to my right hon. Friend the Member for Wantage, the figure of 80 million litres per day was chosen on the basis that that is the estimate of what is needed for about half a million people. We want to keep it consistent between infrastructure types. He mentioned having both a size and an output measure, but it is actually either/or. My understanding is that the reservoir that Thames Water has put in its plan for consultation achieves both. Some of the projects being considered by water companies such as Anglian Water and Severn Trent Water are examples of where the matter would come down to size only.
Understandably, transfer is an issue. I believe that Thames Water has put a transfer proposal in the plan, although admittedly for a later date. I also understand that United Utilities and Severn Trent Water are committed to looking at the transfers in more detail, which may answer another earlier question.
I am not aware of where any concept of population figures has come from, and I am not aware of any rumours about shareholders. Following on from the point made by my right hon. Friend the Member for Newbury, I genuinely do not believe that that is the motivating factor in trying to anticipate future needs. I am aware that Thames Water has put in for an additional desalination plant in its plan, which recognises that, as well as tackling leakage, its real challenge is to continue to provide water when somebody turns the tap on, rather than restricting what they can have.
I fully recognise how important the consultation process is to us all as MPs with our own constituents. I am sure that several hon. Members have experience of local planning and the NSIP process. On the NSIP process, it is fair to say that, as an MP, I find that the pre-consultation process is often much more substantial than for a planning application that is just going through the local council, but the extension of the process then comes into play.
It is absolutely clear that a comprehensive pre-consultation process has to happen. The planning inspector takes that into account during their consideration or examination of the development consent order that is put to them, and the Secretary of State can do the same at the same time. It is not just about the pre-planning consultation. Residents and businesses can then participate in the planning examination process, which is due to take a maximum of 12 months.
In regard to the various bodies that have been mentioned, there is no reason for people to feel excluded from consultation in any way. As was recognised when the previous Government introduced the regime, it is very important that that is still critical to taking such planning applications forward.
I think I have covered all the questions that were asked, apart from the one from the hon. Member for Pontypridd. When will we get on with it? Thames Water has put forward its proposal. Even if the order is not made—I hope it will be, because it will help us to get on with tackling the challenge—it has indicated that it proposes to do it in about 2024, but other processes are in place as well.
Finally, I fully understand the frustration of my right hon. Friend the Member for Newbury. I am conscious of the innovation of water companies and other suppliers to try to tackle it. The need to ensure that we have a good water supply, which is of a good quality for the environment, is a recognised challenge across Government, but I understand his point and I will continue to make constant efforts to ensure that it is high on the agenda of the Secretary of State for Business, Energy and Industrial Strategy. With that, I hope that the Committee will vote to support the motion.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Infrastructure Planning (Water Resources) (England) Order 2018.
Electoral Commission
(6 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Andrea Leadsom)
I beg to move,
That an humble address be presented to Her Majesty, praying that Her Majesty will appoint Lord Gilbert of Panteg and Joan Walley as Electoral Commissioners with effect from 1 November 2018 for the period ending on 31 October 2022; and Alastair Ross as an Electoral Commissioner with effect from 1 November 2018 for the period ending on 31 October 2020.
It is a pleasure to serve under your chairmanship, Ms Buck. The Speaker’s Committee on the Electoral Commission has produced a report—its third of 2018—in relation to this motion. It may help if I set out the key points for the record. Electoral commissioners are appointed under the Political Parties, Elections and Referendums Act 2000, as amended by the Political Parties and Elections Act 2009. Under the Act, the Speaker’s Committee has a responsibility to oversee the selection of candidates for appointment to the Electoral Commission, including the reappointment of commissioners.
Lord Gilbert, Alastair Ross and Joan Walley will be three of four nominated commissioners. Nominated commissioners are persons put forward to be a commissioner by the registered leader of a political party. Three of the four nominated commissioners are put forward by the leaders of the three largest parties in the House of Commons. The fourth commissioner is nominated by the leaders of the other parties with two or more seats in the House of Commons. The appointment of three new nominated commissioners is required because the term of office of John Horam, Bridget Prentice and David Howarth came to an end on 30 September 2018.
In November 2017, the Speaker wrote to the leaders of the Conservative party, the Labour party and all parties with two or more Members of the House of Commons asking for their nominations to replace the outgoing nominated commissioners. The Scottish National party, as the current third largest party in the House of Commons, was not written to on this occasion because its nominated commissioner’s term of office does not end until 2020.
Each party eligible to put forward nominations was asked to nominate three candidates who could be interviewed and assessed against criteria by an interview panel appointed by Mr Speaker. The panel consisted of Dame Denise Platt, the independent Chair; Sir John Holmes, the chair of the Electoral Commission; the hon. Member for Newport East (Jessica Morden), a member of the Speaker’s Committee on the Electoral Commission; and my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns), who is also a member of the Speaker’s Committee on the Electoral Commission.
The panel’s unanimous recommendation was that Lord Gilbert of Panteg go forward as the Conservative nominated commissioner. Lord Gilbert is a Member of the House of Lords and chairs the Communications Committee. He has over 30 years’ political service and has held a number of senior roles in the Conservative party, including director of campaigning, deputy chairman, and political secretary to the Prime Minister.
The panel’s unanimous recommendation was that Joan Walley should go forward as the Labour nominated commissioner. Joan Walley is a former MP for Stoke-on- Trent North, and a former Chair of the Environmental Audit Committee. Since leaving Parliament, Ms Walley has also taken on several non-executive roles.
The panel’s unanimous recommendation was that Alastair Ross should go forward as the nominated commissioner for the smaller parties. Mr Ross was a Member of the Northern Ireland Assembly until 2017 and held ministerial office in the Executive Office. He chaired the Committee for Justice and the Committee on Standards and Privileges. He has also been a member of the Northern Ireland policing commission.
The Speaker’s Committee on the Electoral Commission considered the panel’s report and recommendations, and agreed to recommend that Lord Gilbert of Panteg, Alastair Ross and Joan Walley be appointed as electoral commissioners. It is the usual practice of the Speaker’s Committee to recommend that electoral commissioners be appointed for a period of four years. In the case of the commissioner representing the smaller parties, the usual practice is for the committee to recommend that the commissioner be appointed for two years, to allow for more frequent rotation between the smaller parties, if desired.
Once the Speaker’s Committee has reached a decision, statute requires that the Speaker consult the leaders of political parties represented at Westminster on the proposed reappointments. The statutory consultation provides an opportunity for the party leaders to comment, but they are not required to do so. No objections to these candidates were received in response to this consultation.
Lucy Powell (Manchester Central) (Lab/Co-op)
Does the Leader of the House have any thoughts on why only the Labour party ever seems to put forward women for these roles, while the Conservative party and the smaller parties always seem to put men forward?
Andrea Leadsom
I absolutely share the hon. Lady’s desire to see more women in those roles. I cannot answer her question, but it is on the record and I am sure that we will see change over time.
In conclusion, should the House support the appointments, Lord Gilbert and Joan Walley will take up their new posts and serve as electoral commissioners for a period of four years and Alastair Ross for a period of two years. I commend the motion to the Committee.
Valerie Vaz (Walsall South) (Lab)
It is a pleasure to serve with you in the Chair, Ms Buck. I thank the Leader of the House for speaking to the motion and also the interview panel appointed by Mr Speaker, the independent chair, Dame Denise Platt, and the chair of the Electoral Commission, and the members of the Speaker’s Committee on the Electoral Commission, the hon. Member for Morley and Outwood and my hon. Friend the Member for Newport East. Let me also place on record our thanks to outgoing commissioners, John Horam, David Howarth and Bridget Prentice, whose term of office came to an end on 30 September 2018. I note that the report, to which the Leader of the House alluded, refers to a delay by the political parties in responding to the Speaker’s letter in November 2017.
The panel’s unanimous verdict was that Lord Gilbert of Panteg, Alastair Ross and Joan Walley be appointed as electoral commissioners. Her Majesty’s Opposition endorse the appointments. Lord Gilbert of Panteg has over 30 years’ experience of political service and has held a number of senior roles in the Conservative party, including political secretary to the Prime Minister. He is currently still in the legislature, albeit in the other place. Can the Leader of the House confirm there are no conflicts relating to his appointment, including his terms of office on any Joint Committees on which he serves?
All will have to abide by the Nolan principles, but can the Leader of the House confirm that, as a member of a lobbying company, Lord Gilbert does not currently represent any firms relating to data analytics, and whether he has had any dealings with firms currently or previously investigated by the Electoral Commission or that have broken electoral law?
Alastair Ross was a Member of the Northern Ireland Assembly until 2017 and held ministerial office in the Executive Office. Mr Ross has valuable experience as Chair of the Committee for Justice and the Committee on Standards and Privileges. As an elected representative in a different jurisdiction, his appointment will be beneficial to the Electoral Commission.
Those two candidates are not known to me, but Joan Walley is. She was the MP for Stoke-on-Trent North for 28 years, during which time she chaired the Environmental Audit Committee for five years. Her experience as Chair of that Committee will serve her well on the Electoral Commission. Since leaving Parliament, she has taken on several non-executive roles, which have obviously given her relevant board experience.
Subject to those questions, Her Majesty’s Opposition endorse the appointments of these three commissioners.
Andrea Leadsom
I thank the hon. Lady for her comments and for her question. The Speaker’s panel is set up by the Speaker. I am here as Leader of the House to put forward the recommendations of the panel. She has asked a very serious and sensible question, but I cannot answer it; it is not a matter that I was at all involved in. As I say, I am here to put forward the recommendations of the panel. As a fellow member of the House of Commons Commission, she will know that for each of those panels the Speaker does a significant amount of due diligence, so I am quite confident that any issues of conflict would have been addressed. I do not want to raise any doubts about that, but I cannot answer the question as I have not been involved in the matter. If she has reservations, she should take them up with the Speaker’s Office directly.
Valerie Vaz
The Leader of the House is speaking to a motion in her name, and I am sure she will be able to write to me or will have an answer to those questions when the House comes to endorse the appointments.
Ministerial Corrections
Cabinet Office
(6 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jeff Smith
Last month, the chair of the inquiry, Sir Brian Langstaff, said that many victims of the infected blood scandal are still living on the breadline today. The inquiry is not due to look at financial support until 2020, so what more now can the Government do to help the people affected?
Mr Lidington
As the hon. Gentleman knows, different compensation packages have been agreed by the Department of Health and Social Care in the different parts of the United Kingdom. Sir Brian did ask the Government to look at the case for some additional measures, which are being considered by the Secretary of State for Health and his ministerial team, and the Minister responsible for mental health, my hon. Friend the Member for Thurrock (Jackie Doyle-Price), is very willing to talk to the inquiry team about that.
[Official Report, 14 November 2018, Vol. 649, c. 297.]
Letter of correction from the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office:
An error has been identified in the response I gave to the hon. Member for Manchester, Withington (Jeff Smith).
The correct response should have been:
Mr Lidington
As the hon. Gentleman knows, different financial support packages have been agreed by the Department of Health and Social Care in the different parts of the United Kingdom. Sir Brian did ask the Government to look at the case for some additional measures, which are being considered by the Secretary of State for Health and his ministerial team, and the Minister responsible for mental health, my hon. Friend the Member for Thurrock (Jackie Doyle-Price), is very willing to talk to the inquiry team about that.
The following is a further extract from Questions to the Cabinet Office on Wednesday 14 November 2018.
Diana Johnson (Kingston upon Hull North) (Lab)
May I suggest to the Minister that one measure that he could take quite quickly is to level up all the payments that those who are infected and affected receive? There is a variation around the United Kingdom at the moment because of devolution, and such a move would go a long way to show good faith to this community.
Mr Lidington
The hon. Lady has always been the most ardent champion of those who have been affected by this scandal, but it is the legal and constitutional position that each part of the United Kingdom is responsible for its own compensation scheme, which reflects the devolution settlement as regards health policy.
[Official Report, 14 November 2018, Vol. 649, c. 298.]
Letter of correction from the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office:
An error has been identified in the response I gave to the hon. Member for Kingston upon Hull North (Diana Johnson)
The correct response should have been:
Mr Lidington
The hon. Lady has always been the most ardent champion of those who have been affected by this scandal, but it is the legal and constitutional position that each part of the United Kingdom is responsible for its own financial support scheme, which reflects the devolution settlement as regards health policy.
Agriculture Bill (Fourteenth sitting)
Tuesday 20th November 2018
(6 years ago)
Public Bill CommitteesRead Full debate Agriculture Bill 2017-19 View all Agriculture Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 20 November 2018 - (20 Nov 2018)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / 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 considering the following:
New clause 17—Primacy of public purposes—
“The Secretary of State must ensure the payment of public money delivers primarily the purposes in section 1(1) so that the natural environment is conserved, enhanced and managed for the benefit of present and future generations.”
This new clause is intended to ensure that the list of public purposes set out in Clause 1 are the primary objective for payments under the Bill.
New clause 19—Financial assistance: duty to provide advice—
“(1) The Secretary of State must make regulations to secure the provision of training, guidance and advice to persons receiving financial assistance under this Act, for the purpose of enabling those persons to deliver the purpose or purposes for which the financial assistance is given.
(2) Regulations under subsection (1) may include provision for advice on matters which include but are not limited to—
(a) the impact of any practice upon the environment,
(b) business management, including the development of business plans,
(c) the health and welfare of livestock,
(d) the safety and health of workers in any agricultural sector,
(e) innovation, including alternative methods of pest, disease and weed control,
(f) food safety, insofar as it relates to the production of food or any activity in, or in close connection with, an agri-food supply chain,
(g) the operation of any mechanism for applying for, or receiving, financial assistance under this Act,
(h) marketing of any product falling within an agricultural sector under Part 2 of Schedule 1.
(3) Regulations under this section are subject to affirmative resolution procedure.”
This new clause would require the Secretary of State to make provision for training, guidance and advice to be made available to persons receiving financial assistance.
New clause 27—Smallholdings estates: land management—
“(1) A smallholdings authority which immediately before the commencement of Part 1 of this Act holds any land for the purposes of smallholdings shall review the authority’s smallholdings estate and shall, before the end of the period of eighteen months beginning with the commencement of Part 1 of this Act, submit to the Secretary of State proposals with respect to the future management of that estate for the purposes of providing—
(a) opportunities for persons to be farmers on their own account;
(b) education or experience in environmental land management practices;
(c) opportunities for increasing public access to the natural environment and understanding of sustainable farming; and
(d) opportunities for innovation in sustainable land management practices.
(2) No land held by a smallholdings authority as a smallholding immediately before commencement of Part 1 of this Act is to be conveyed, transferred, leased or otherwise disposed of otherwise than—
(a) in connection with the purposes listed in subsection (1); and
(b) in accordance with proposals submitted under subsection (1).
(3) For the purposes of this section, ‘smallholdings authority’ has the same meaning as in section 38 of the Agriculture Act 1970.”
This new clause would limit the disposal of smallholdings (‘county farms’) by local authorities and would require local authorities to review their holding and submit proposals for future management to provide opportunities to extend access to farming, education, and innovation.
Dr David Drew (Stroud) (Lab/Co-op)
Welcome back to the Chair, Sir Roger. I hope that this will be the final session of our deliberations, but anything is possible with this Government. We have already lost one Committee sitting, so let me plough on with new clauses 19 and 27.
The whole point of new clause 19 is that farmers and landowners are being asked to make a dramatic shift in how they perform their duties. I hope that all farmers are to some extent environmentalists—that is why they are on the land and why they care for it—but unless they are among the small minority in stewardship, they have principally been paid for being what they are: farmers or landowners. We are now going to pay them to do environmental things.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
Does the hon. Gentleman recognise the many environmental schemes that are in place? Farmers are already doing quite a lot of this stuff.
Dr Drew
I agree that there have been schemes such as Blue Flag, but the point is that that was not what farmers were principally paid for. Under the Bill, they will principally be paid to look after the environment in whatever way is deemed fit, and they will need an enormous amount of advice. New clause 19 would implement a mechanism for that.
The Committee has already discussed the areas in which farmers might need support. We have certainly discussed the idea of people advising on land management contracts, whether they come in from local government or whether farmers and landowners bring them in and pay for their advice. The difficulty is that this is all rather fluid and open-ended, so the new clause would give it some substance.
As the Minister says, the advice will be given on a one-to-one basis, but who is going to give it? At the moment there are not many people who can give such advice, and they are very expensive. One might have thought that land agents would be interested, but at a recent event I spoke to land agents who made it very clear that rural is not really where the money or—dare I say it?—the interest is, because they have moved much more into the urban sphere. That will no doubt cause some difficulties.
The new clause covers a range of areas in which there is a need for advice. We do not want to talk in an alarmist way, but this is really important. We are asking people to completely change their business organisation over a very short period. How they operate and, in a sense, their whole reason for being on the land will have to change. I am not implying that it will change completely for everyone, but for some people the change will be dramatic.
Sandy Martin (Ipswich) (Lab)
Does my hon. Friend agree that if there is no duty to provide advice, there is a danger that smaller farms will be least likely to get the advice they need, since they cannot afford to pay for it? The ones that most need support are the most likely to lose out.
Dr Drew
Exactly. There may be less form filling than under the current arrangement, but it will involve some. It will also certainly involve inspection; otherwise, how can we guarantee that the public moneys are being used appropriately for those public goods?
That is the backcloth. As I say, I do not want to be alarmist but, sadly, as all those who have been involved with the land will know, the suicide rate among farmers and farm workers is very high. The rate is high because it is a very lonely occupation. It is also a very stressful occupation when people are losing money, which they often are. The arrangement will not necessarily solve that, because although it is transitionary they will lose money that in the past they have banked, guaranteeing that they can go forward.
On the suicide rate, we have all lost friends. I have particular regard for Gloucestershire Farming Friends, which my old friend Malcolm Whittaker set up many years ago. There are times when the organisation is inundated with phone calls, particularly when forms have to be filled in and people feel under incredible stress. We must be aware of that. I hope that the Minister will at least say something about what will be put in place, in a much more finite way than perhaps he has been able to so far. What people really want to know is, if they are going to make the changes, how they will be helped to do so.
On new clause 27, the Minister will not be surprised that I am going to say a little about smallholdings. He, like me, thinks that they are a wonderful part of British agriculture. The “Land for Heroes” scheme was put in place after the first world war, and people who had no other occupation were encouraged to take up smallholdings, organised largely, but not entirely, through county councils. Certainly over the past 20 years, we have sadly seen a decline in the smallholdings. They have been sold off, not necessarily in their entirety but in ever greater amounts of land. That matters because it is one of the few ways that younger people—certainly those without the means to buy land, or to rent it at the astronomical rents they are sometimes asked to pay—can get in.
Chris Davies (Brecon and Radnorshire) (Con)
I fully agree with the hon. Gentleman on many of those points. In fact, my local authority, Powys County Council, is investing in the county farm structure, which is really positive. Is the hon. Gentleman proposing that county councils—national Government, in fact—invest in smallholdings? Does he agree with the shadow Chancellor that we should do away with all private farms and have community farms?
Dr Drew
That would be a very good thing in the sense that we would have much more access to the land. I do talk to the shadow Chancellor from time to time, and he is very keen on the idea that land is available, not by sequestration, but by taking it into public ownership to give people the chance to farm. That is what we are about here. This is very important.
Chris Davies
Following on from the shadow Chancellor’s background, the hon. Gentleman says, “taking farms into public ownership”. I am very interested in that definition.
Dr Drew
I will be very careful. I will reword what I said. The hon. Gentleman will no doubt read what I said when the Official Report is published. I am very clear that there has always been a role for some public ownership of land through local authorities, because that is an avenue by which people can come into farming. It is simply much more difficult—I talk from some experience here. A long time ago, I chaired the county farms estate in Gloucestershire when I was a county councillor. I saw people coming through, desperate to get on the land, and it was always really sad that we had to turn down very good people because never enough holdings became available for the numbers chasing them. Too often, it was not necessarily the farmers themselves but who their partners were that was a vital factor in who got the holdings, which I always thought was grossly unfair. That was the reality of trying to make good what is a difficult operation.
I am merely making the point that we ought to do more to protect county farms and smallholdings. I want to grow them but, at the moment, there should be an embargo on the future sale. The old acre for acre policy was always sensible; somebody sold a bit of land and invested in a new bit of land. The problem is a wholesale reduction of the county farms estate, which precludes many people from coming into farming.
Colin Clark (Gordon) (Con)
Does the hon. Gentleman agree that Government legislation must be clear about land ownership? The tenancy market is important; many young farmers get in through a tenancy. The experience in Scotland is that, if there is any doubt cast upon the ownership of land or the right to buy, the tenancy market dries up. Would he agree that the best entry is through tenancies?
Dr Drew
I do not know enough about Scotland, so I will take the hon. Gentleman’s judgment on that. One of the arguments about the Bill and the changes it implies, is that rents will possibly fall. I do not necessarily agree with that, but it has been put to me by more than one person. That is due to the removal of the area payment, which has pushed up rents because people have more value in the land that they possess. We will have to see; it might become apparent only some years down the line.
At the moment, I am clear that we should go back to the Agriculture Act 1970, which put an obligation on local authorities that had land to protect that land and make it available for those who wished to farm or do other things appropriate to the land that would be within the environmental catch-all we are pushing for in the Bill.
Mr Goodwill
Will the hon. Gentleman give an indication of the size of unit he believes would be viable? Currently, some of the very small smallholdings are not viable businesses.
Dr Drew
That is a problem. Traditionally, the Gloucestershire smallholdings were about 100 acres. I accept that would be very difficult because a great many of them were dairy farms, although we also had some horticulture. That is probably too small. To counterweight that, the Landworkers Alliance argue that they can make a living out of much smaller pieces of land, farmed in a slightly different way, through agroecology and so on, and maybe they would not do that full time. No one is implying that being a farmer has to be a full-time occupation. It is something that people want to do as part of their portfolio of operating.
We need to protect these bits of land initially. I would love to grow them and see local authorities encourage them. That is important, not just for opportunities for people on the land. It is about strategic ownership and the fact that we should always think ahead. If the state is not prepared to put in some effort, where is the direction coming from?
The good thing about county farms estates, as most of them are known, is that they provided education and opportunities for people to look at the front end of farming and see ways in which to do things differently, by collaboration among the tenants and so on. We will come later to tenancy reform but this is all bound up in it. A third of our farmers are tenant farmers and many of them are on land not just owned by local authorities but by charities. In my area there is the Henry Smith charity, which owns considerable areas of land and has been very good. The Church is an important landowner in the way it encourages agriculture.
The Minister for Agriculture, Fisheries and Food (George Eustice)
I will start with new clause 16, tabled by the hon. Member for Bristol East, which seeks to add some environmental targets to the Bill. We discussed this topic earlier in the Committee’s deliberations. As I said earlier, the Government have clearly demonstrated our commitment to the environment through the 25-year environment plan. We are currently in the process of developing a detailed indicator framework so that we can accurately measure progress on those important environmental trends. Obviously, we have already consulted on the key element of our agriculture policy, which is to deliver payment for the delivery of public goods, but fundamentally I see this as an issue for the forthcoming environment Bill. We will be publishing a draft of that Bill later this year, which will deal with environmental governance and environmental principles. In the second Session of this Parliament there will be an environment Bill that will include some of these things.
I will address the point that the hon. Member for Bristol East made about whether there is some division between DEFRA and the Treasury.
Kerry McCarthy (Bristol East) (Lab)
Before the Minister gets on to that, nearly a year ago—I think it was December last year—we were dealing with amendments to the European Union (Withdrawal) Bill, and there was quite a controversial amendment about animal sentience. We were told then that the amendment did not need to go in the Bill because the Government were bringing forward an animal sentience Bill. We do not have an animal sentience Bill; we had a draft one, but that all went haywire. I know that there will definitely be an environment Bill, but how can the Minister reassure us that it will deal with the issue of targets?
George Eustice
There will definitely be a Bill dealing with animal sentience and sentencing. As I speak, we are considering where we might be able to fit those particular provisions into future legislation.
The hon. Lady asked whether there is a division between DEFRA and the Treasury. There is not. Within Government there are discussions, obviously, and then there is a consensus and an agreement. She kindly offered to protect the Secretary of State through the proposed new clause, but I can assure her that the Secretary of State needs no protecting; he is very good at making his case within Government. We already have some statutory targets through international agreements in areas such as climate change, but we believe that environmental targets and objectives should be picked up through the 25-year environment plan—there were some objectives in that plan—and are fundamentally a matter for the environment Bill. I am sure that she will be very engaged in discussions about that Bill when it comes forward.
I turn to new clause 19, tabled by the shadow Minister, the hon. Member for Stroud, which concerns the importance of advice and guidance. The Government agree with him about the importance of advice and guidance, particularly as we roll out a new scheme, but clause 1 is absolutely clear that we can already pay for advice and guidance. Subsection (1) of that clause states:
“The Secretary of State may give financial assistance for or in connection with any of the following”.
The term “in connection with” enables us to make financial assistance available to support advice, and I want to spend a little bit of time explaining what the Government intend to do in this area.
As I touched on during an earlier debate on other clauses, we envision the new environmental land management scheme as effectively a covenant or contract between individual farmers and the Government. We intend to support a system in which farmers would be able to receive advice on the design of an environmental land management contract. That advice might come from an agronomist accredited by a UCAS Government scheme or from one of our employees from Natural England, or a third-party organisation like the Wildlife Trust might develop a cohort of people who could provide that advice. Having worked with the farmer, visited the farm, walked to the farm and not got too obsessed by maps, form-filling and all the rest of it, they can sit around the table with the farmer, help them put together the agreement, and then sign it off with the presumption that it will be supported and paid for.
We want to get back to a system in which there is much more human interaction, and in which trusted agronomists, trusted advisers who are accredited by the Government, and Government officers from agencies such as Natural England work directly with farmers. We do not want everyone to get bogged down in paperwork, form-filling, mapping and having to spend hours on a helpline, only to find that nobody can help them with their query. We have got a great opportunity to redesign the system.
The hon. Member for Stroud said that, as this is a new scheme, there will potentially be challenges in getting farmers used to it. I understand his point, but until a couple of years ago about 70% of farmers were in either an entry-level stewardship or a higher-level stewardship scheme, so by and large they are very familiar with these types of agri-environment schemes. They have run similar schemes previously, so I think they will be able to pick up these schemes and adapt to them.
The other thing we are doing is having a seven-year transition in which we gradually wind down the single farm payment. During that time we will be piloting the new system. That gives us plenty of time to familiarise farmers with the new system, and to perfect the system, so that when we roll it out fully we do not have problems along the way, and to ensure that we have the capacity to give advice in the area to which the hon. Gentleman alludes.
The other point I want to address is about the holistic advice to farmers. We have been looking at projects run by a number of organisations, including the Agriculture and Horticulture Development Board, which gives a lot of technical advice and has a network of what it calls monitor farms so that it can share good practice and knowledge transfer, and the Prince’s Countryside Fund, which runs very good peer-to-peer support groups to help farmers with their business management and help them address change. It has had some success with that. We are keen to learn from that as we roll out support for farmers. As the hon. Gentleman pointed out, farming can be a very lonely business. I grew up in a farming community, so I am familiar with the issues. There has always been the great tragedy of high levels of suicide in agriculture—usually about 50 a year. That figure has been fairly constant for a number of decades. We want to ensure that, as we go through this period of change, we give farmers all the support we can to help them adjust and move to a new system.
New clause 27 is all about county farms, about which the hon. Member for Stroud and I share a passion. This is the first time today I have been able to mention the 1947 Act. As he is aware, sections 47 onwards and part 4 of the Act established county farms and the right of local authorities to buy them. The new clause looks familiar because, although we often say that this is the first Agriculture Bill since 1947, that is not quite true. It is the first major Agriculture Bill since 1947, but of course there was the Agriculture Act 1970, which rolled forward some of the provisions from the 1947 Act and changed others. It created the requirement for local authorities to submit a plan to the Department and seek our agreement for any consolidation and reorganisation. That was a time-limited power, and I understand that new clause 27 is effectively attempting to replicate it. Earlier this year we laid before Parliament—I have to sign these off every year—the 67th annual smallholdings report, under section 5 of the 1970 Act, so there are still some requirements under that Act.
I want to explain what we intend to do about county farms. My view is that we should create a financial incentive for local authorities to invest in and commit to their county farms in the long term. The idea that I have in mind is to create, under clause 1(2), a fund for investment in county farms that is open to local authorities, subject to their submitting to us a clear plan demonstrating their long-term commitment to their county farm estate. I would like to see more emphasis placed on turning county farms into what might be called incubator holdings, to genuinely support new entrants. At the moment the problem is that once people get on to a county farm, they often get stuck there for 20 or 30 years and do not have the ability to progress.
Our idea is to look at what we can learn from other parts of the economy where there are, for instance, innovation centres offering mentoring for setting up new businesses; where the local enterprise partnership might be involved, working with the local authority to draw down additional funding; where it might be made a requirement for local authorities to have partnership agreements with private estates, so that they have farms to move farmers on to after five years; and where we might also support the development of peri-urban farms on other parts of local authority land.
Chris Davies
I am pleased to hear the Minister’s proposals. Can he confirm that they will apply UK-wide and not just to England?
George Eustice
The scheme would be for England only, for the reasons I have outlined.
I hope that the hon. Member for Stroud understands that, rather than drafting a clause that requires that to be done, I believe that we can deliver the outcome we seek simply by establishing a fund to help local authorities invest in a county farm estate, subject to meeting conditions that demonstrate their long-term commitment to the scheme.
Question put, That the clause be read a Second time.
The Chair
I have had no indication that any of the other new clauses in this group are being pressed to a Division, so I will move on.
Before we come to new clause 18, I will clarify the procedure so that everyone understands. The Clerk left me a note saying that the lights go out at 5 o’clock, which is a polite way of saying that the knife comes down. At that point I have to put whatever is being debated to the vote—there is no choice and it cannot be withdrawn. After that, I will put the Question on any amendments that have already been discussed, of which there is one—it must be moved formally. Any other business then falls.
Let us do the maths: there are eight new clauses, with two and a half hours to go. Seven of the eight new clauses are in the name of the official Opposition, and one is in the name of the hon. Member for Edinburgh North and Leith. It is up to you to prioritise, but bear in mind that any new clauses that we do not reach can be re-tabled on Report.
Dr Drew
I beg to move, That the clause be read a Second time.
This is an important juncture in our consideration of the Bill, and it is probably going to be the most popular part, as we are giving the opportunity to those who wish to be consulted to get rid of the Rural Payments Agency.
It does not have to be that way. We could have a revitalised and reinvigorated payments agency, but a new agency this will have to be, because it will be doing fundamentally different things, and sadly the legacy that the RPA leaves is not necessarily a satisfactory one. That is nothing to do with this Government; previous Governments are responsible too. In my previous incarnation, we spent a lot of time on the Environment, Food and Rural Affairs Committee trying to sort out how the hell we got into such a mess over the area payments scheme involving Accenture and the computer system that was brought in. It was an unmitigated disaster, because it cost millions more and never did what it was supposed to do. We had to drag the chief executive, Johnston McNeill, back from Belfast, where he had managed to hide for a period of time, to get some clarity on why the agency got itself into such a mess. That is history. My dear late lamented friend David Taylor did an enormous amount of work on the computer system, and we were indebted to him for that work on the Select Committee. I just make the point that we are asking the new agency to do fundamentally different work.
Mr Goodwill
When it comes to who was to blame, the right hon. Member for Derby South (Margaret Beckett) might have had something to do with it, given that she chose such a complex way of enacting it under the previous Labour Government.
Dr Drew
I do not disagree that we were foolhardy. There should always be a de minimis and a de maximus in terms of how the payment system operated. As always, when the delightful EU Ministers came together they looked around the room for who was going to pilot this scheme, and somebody maybe put their hand up at the wrong time and said, “We’ll have a go at it.” It was not even a UK-driven scheme; it was England-driven. The other territorial Administrations went at their own pace, adding to the complexity and confusion.
I am merely making the point that we are asking for a consultation on the most appropriate agency to take forward this brand new scheme. It does not have to be rushed; it could be done over a period of time. It does not have to be just with farmers; it can be with the green groups, obviously, but also landowners, to get some clarity on what all those different parties expect from a payments agency. The Minister says that the way public moneys will be paid out will be more straightforward. We will only be able to tell that in due course.
Chris Davies
I have had concerns about the Rural Payments Agency. Does the hon. Gentleman not agree that opening up a consultation is just going to confuse and delay matters? Surely the Minister should just decide which organisation is going to administer it and then get on with it.
Dr Drew
If the Minister wants to say today that he has some brand spanking new agency in his back pocket that is going to take over and run this, we are more than happy to listen and give our support. I am merely the messenger saying that I still receive countless complaints about late payments, wrong payments and reasons unknown for people not receiving the moneys they thought they should have received. The field margins and the way in which the scheme was set up was unduly complicated, but this will potentially be as complicated, and some would say more complicated.
Why can we not just listen and learn from past mistakes and at least give people an opportunity to help frame what could replace the Rural Payments Agency? It has already taken on many Natural England employees, so it is ready for its new incarnation, but I am worried about skill levels, about the computer system and about how this will be perceived if we start on the back foot with an agency that has not been fit for purpose.
I will not cast aspersions on the people who work for the RPA—no doubt they work long hours to try to get things right—but there has been something integrally wrong with the way it has operated for a long time. I am giving the Minister an open goal to shoot at—a way for us to move forward across the party divide to try to get an agency that is fit for purpose for a very different type of agricultural scheme.
George Eustice
I will describe in a moment what we are doing on future regulation, including the enforcement of this scheme. However, the hon. Gentleman gave me an opportunity—an “open goal”, as he said—to, for want of a better term, shoot at the RPA. I am not going to do that. As I have said many times, the RPA and agencies such as Natural England are currently grappling with a truly hideous body of European regulations and an unbearable administration process. That causes huge problems for farmers, who are required to fill out and submit endless forms and do lots of mapping, and for our administrators, including the RPA.
The problems we had last year, for instance, were caused because EU law required us to re-map 2 million fields in one go. We would not have chosen to do that—there was not really a need to re-map the fields—but we were forced to, just to ensure that there were no ineligible trees littered around the landscape. The sheer scale of that task caused administrative problems. The problems we have had with our countryside stewardship schemes were caused primarily because the European Union passed a rule that said every scheme must start on the same day of the year, which caused a massive spike in workload, required us to employ 500 temps and created all the contingent problems that come with that. In the design of the new scheme, we can learn lessons from the past and jettison some of the muddled thinking that is imposed on us by the European Union and EU auditors.
I should also point out that the RPA has taken on some of the payment functions related to the pillar two countryside stewardship schemes, precisely because not only the RPA has had challenges. Natural England has had horrendous problems trying to implement the countryside stewardship scheme. Indeed, one of the reasons we moved the RPA in to take over that space was that it has a stronger track record of managing complex EU processes.
Let me turn to what we intend to do in the future. The substance of new clause 18 is very much being addressed by the work currently being undertaken by Dame Glenys Stacey, who has given early indications of her direction of travel. She argues that we should move away from the clunky clipboard-and-rulebook approach inherent in the EU system and towards a much more modern way of regulating farms so there is more of what she calls social regulation, more incentives, fewer arbitrary rules and more whole-farm assessment. The work she has started is very interesting. She is also looking at the issue of our having multiple agencies and whether there could be consolidation, and at the establishment of a new type of body to perform some of these functions.
I do not believe there is a need to consult now, as the new clause would require us to. The first step is for us to see the final report from Dame Glenys Stacey. If the Government decided at a future date to implement some of the recommendations in that report, perhaps including the consideration of a new body, that would be the time to consult.
Dr Drew
I hear what the Minister says. Again, I make the point that that is why we would have liked to hear from Dame Glenys about the direction of travel in the evidence sessions. Perhaps we can pick that up subsequently. I am not aware whether she has yet given evidence to the Select Committee on Environment, Food and Rural Affairs. I hope members of that Committee who are present heard that point, because it is important that we get an early idea of what the Government’s approach is likely to be.
I will not labour the point, because there are other new clauses that we want to get to before the bewitching hour, which you reminded us of, Sir Roger. However, it is crucial that whatever agency takes it on needs to be capable—I will not say “ of starting with a blank sheet of paper”, because the past cannot be washed away—of recognising the problems that there have been and still are with the way the current payment systems operate.
As much as new systems come with a certain élan and opportunity, the same people will operate the new system, so we have to ensure that training, empowerment and particularly a decent IT system that does what we want it to do are in place right at the start. That was what really damned the RPA when it took over the area payment scheme. It was trying to negotiate the system as it went along, and as we know that that was sadly an unmitigated failure. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 21
Agricultural co-operatives
“(1) The Secretary of State must promote agricultural co-operatives by—
(a) offering financial assistance for the creation or development of agricultural co-operatives, and
(b) establishing bodies to provide practical support and guidance for the development of new co-operatives.
(2) The Secretary of State shall examine any proposal for primary or secondary legislation to assess—
(a) its impact upon agricultural co-operatives, and
(b) whether that impact is disproportionate in relation to its impact upon other producer organisations or interbranch organisations.
(3) Financial assistance under subsection (1) may be given by way of grant, loan or guarantee, or in any other form.
(4) An organisation shall be recognised as an agricultural co-operative if it meets the conditions in subsections (5) and (6).
(5) Condition 1 is that the organisation—
(a) is registered with the Financial Conduct Authority as a co-operative, or
(b) is constituted under the Co-operatives and Community Benefit Societies Act 2014.
(6) Condition 2 is that the organisation—
(a) operates in a sector which is listed in Part 2 of Schedule 1 to this Act, and
(b) includes at least one member which is an agricultural or horticultural producer.
(7) The Secretary of State may by regulations make provision specifying the criteria under which financial assistance under subsection (1)(a) may be offered.
(8) Regulations under subsection (7) are subject to the negative resolution procedure.”—(Dr Drew.)
This new clause would require the Secretary of State to promote agricultural co-operatives.
Brought up, and read the First time.
Dr Drew
I beg to move, That the clause be read a Second time.
I am speeding up—but might slow down again. We have already mentioned agricultural co-operatives. Again, this is more of a probing amendment—I will say that from the outset—so I will not press it to a vote. However, we would like to insert in the Bill something that runs alongside the competition that is clearly central to aspects of how the new legislation will operate.
Why agricultural co-operatives? First, so many parties within the farming and landowning industry already belong to co-operatives. They may not necessarily always see it that way, but NFU Mutual is, of course, a form of co-operative. Many of the buy-in rings for equipment, and much of the sharing of pesticides and other inputs in to how agriculture operates, are done by a form of co-operative, formal or otherwise. The difficulty with the Bill is that it does not explicitly mention co-operatives. We have had some interchange, and I welcome what the Minister did in relation to Co-operatives UK, because its members were much happier once he gave them some assurances.
New clause 21 gives the Secretary of State a new duty to promote agriculture co-operatives and the ability to provide grant and loan funding to new and existing co-operatives. It also requires all future legislation and regulations to be checked to ensure no disproportionate negative effect on co-operatives. We see co-operatives as a way in which the new environmental world can operate. Many environmental organisations are, of course, charities or social enterprise bodies, so in a sense they are co-operating if not co-operatives.
The new clause flies in the Bill’s apparent direction of travel. It is about fairness and resilience, and recognising that as new people come into the industry the best way to bind them in is to give them the opportunity to be part of a co-operative so that they do not have the lonely existence that we mentioned when discussing a previous clause that causes so much heartache and pressure on those individuals.
In many areas of agriculture, the supply chain already operates on a co-operative basis, but it needs to be enshrined within the legislation. Such a provision is sadly not in the Bill, so we want to insert one. The new clause would not mean that the private sector would not be the main operating vehicle for agriculture; the provision would just sit alongside it, and farmers and landowners would have that opportunity. Environmental organisations will certainly want to look at that way of operating. As the Minister rightly said, they could be the advice givers and supporters of the new direction of agriculture, and it is important to have that debate now. Opposition Members are always worried that we will be promised that things will come about through secondary legislation. That may be the case with future Administrations, if not with this one, but that is leaving things to chance.
George Eustice
I am more than happy to take up the hon. Gentleman’s suggestion to say nice things about co-operatives. As I said in an earlier sitting, I am a supporter of collaborative working, joint working, joint ventures and co-operative approaches to help farmers deal with the fact that often they are fragmented and end up as price takers in the supply chain.
We have done a number of things already. Earlier this year, I announced a £10 million collaboration fund out of the rural development programme to support joint working and to support the formation of co-operatives. The hon. Member for Stroud will also remember from an earlier discussion on clause 22 and the recognition of producer organisations that we had meetings with the co-operatives’ representatives and have taken on board some of the suggestions that they made. We tabled a Government amendment to clause 22 to ensure that models other than that of a limited company, which is the requirement under current EU law, are recognised as producer organisations.
On the substance of new clause 21, which would ensure that there is financial assistance for co-operatives, I am happy to take the opportunity to confirm that, just like the existing rural development programme, clause 1(2) —the subsection on productivity—enables us to make available grant support, Government-backed loans or other guarantees to the co-operatives, should we want to support their endeavours. It is not only clauses 22 and 23, on exemption from competition law, that help certain co-operatives and recognised UK producer organisations; the very first clause of the Bill has provisions for our giving financial assistance to co-operatives. By establishing the £10 million collaboration fund earlier this year, I hope that I have demonstrated through my deeds rather than my words that I see this as important. Should the hon. Member for Stroud ever be in Government, I hope that he would do the same and continue to support these important organisations.
Dr Drew
Of course—I am a Co-operative MP. We would not see a conflict of interests; we would see a commonality of purpose, which we encourage. I find what the Minister said very encouraging, and I hope that he will continue his discussions with Co-operatives UK and other farming organisations to see how this can be developed. The UK farming and environmental sector will need to co-operate if we face Brexit, because it will be subject to many of the winds of change, some of which could be very turbulent. I hope that co-operation is one good thing that comes out of this. I beg leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 22
Import of foie gras
“(1) Foie gras may not be imported into the UK.
(2) “Foie gras”, for the purposes of this section, shall mean a product derived from the liver of any goose or duck which has been force-fed for the purpose of enlarging its liver.”—(Dr Drew.)
This new clause would prevent the import of foie gras into the UK.
Brought up, and read the First time.
Dr Drew
I beg to move, That the clause be read a Second time.
This simple clause is designed to do what various Members have sought: to stop foie gras being sold in this country. I attended the recent debate initiated by, I think, the hon. Member for Crawley (Henry Smith) , who referred to foie gras as
“cruel to produce, unhealthy to eat and expensive to purchase”. —[Official Report, 13 June 2018; Vol. 642, c. 1050.]
It is about time that we banned this outdated practice. I am not going to go into how it is produced—the innards, and so on, particularly as the hon. Member for North Dorset has probably had a good lunch and I do not want to spoil that in any way—[Interruption.] I shouldn’t have said that, should I?
Simon Hoare (North Dorset) (Con)
It was a small slice of corned beef, some grated carrot and an apple today, if the hon. Gentleman is interested.
Dr Drew
It is always a mistake to lead with your chin, as they say. We will pass on from that very quickly.
The new clause covers something that, as far as I know, most MPs want to do. Hon. Members may say that it is somewhat incongruous to bring this forward with this Bill, but given that Agriculture Bills come round about every 50 years, we will not necessarily be around to see this carried through.
Mr Goodwill
Does the hon. Gentleman intend it to be an offence for individuals to purchase the product while on holiday or does he merely mean the commercial importation of this product?
Dr Drew
Again, there are going to be commercial obligations, because the fact is that we are looking for a ban. As far as I know, both parties have talked about this quite openly. Certainly representatives of the parties have talked about it. We looked at it as regards the withdrawal agreement. From memory, and we will come on to live exports later, it is one of the things that certain people prayed in aid of the advantage of leaving the EU—that is, that we could bring about some of these animal welfare changes. It was a crucial argument. It was not quite as big an argument as the £350 million a week for the NHS, but it was nevertheless an argument.
Chris Davies
The hon. Gentleman mentions animal welfare. Is this an opportunity for Members on his side of the House to put animal rights views forward? Is this the place to be bringing this up?
Dr Drew
Again, I make the point that we have limited opportunity to consider legislative change. As far as I know, the hon. Member for Crawley is hardly some animal rights activist who has been out on demonstrations to demand that this practice ends. He is a Conservative MP whose constituents have no doubt written to him saying that it is not something that they wish to condone.
Kerry McCarthy
I know where the hon. Member for Brecon and Radnorshire is trying to come from. The fact is that we have already banned production in this country. All we are talking about is banning imports. We are not moving on to new radical territory. We are just trying to achieve a degree of consistency.
Sandy Martin
If any one of the amendments proposed earlier today that were so fulsomely supported by the hon. Member for North Dorset had been carried, we would not have needed this amendment.
Dr Drew
Of course, and that is something that we will no doubt have to revisit on Report. We are not doing anything other than what we have done in this place. We banned foie gras in the Houses of Parliament. That is a decision, and one might say that it is freedom of choice, but we banned the production of foie gras in this country, as my hon. Friend the Member for Bristol East said, because we see it as inherently cruel.
All we are saying is: “Let’s have a level playing field”. If we ban production here, why are we still allowing imports to a very small number of establishments that still condone something that we would put at the extremes of animal cruelty? It is not about animal rights; it is purely about animal cruelty. It is a terrible process and I am not going to upset the hon. Member for North Dorset by going through what is involved. I do not think anybody would say that is an acceptable way to treat livestock. If it is, why is it banned in this country?
I hope we will get support from the Government. This is one thing they could do, through legislation on animal sentencing or even animal sentience, whichever comes first. We do not have many opportunities to pass this type of legislation. It could be done by a private Member’s Bill but we know how uncertain that can be. That is why the proposal has been brought forward at this stage, and why we hope there is support. If not, the Government could at least say what their intentions are. This will not affect farmers in this country, because we have banned this practice. We just want a level playing field and we can now ensure that because we will not necessarily be part of the EEA.
George Eustice
This again highlights an important ethical issue, about which people in this country have strong views. However, in common with others, I do not think it fits in the Bill. This is not a trade Bill; it is an agriculture Bill about how we support agriculture and replace the common agricultural policy.
I do not think we have ever produced foie gras in this country. It has been illegal at least since the Protection of Animals Act 1911, and the Animal Welfare Act 2006 put it beyond doubt. There is no explicit ban on foie gras, in the way that there is on fur farming, which was introduced as a specific ban in Parliament, but it has always been understood that the production process involved in it, requiring as it does the force-feeding of ducks and geese, creates serious animal welfare concerns. If ever practised here, that would be in breach of our long-standing animal welfare legislation.
There is a small amount of production in some parts of the world, including France, of what is called “ethical foie gras”, where they use a particular breed of goose and do not force-feed them. They manage to get a product that is very similar to foie gras in a way that causes far less concern for the welfare of the animal.
Turning to the proposed new clause, the issue is important. If we leave the EU, depending on the nature of any agreement we have with the EU, a future Government would certainly be able to ban the import of foie gras. Some countries, notably India, do have ethical bans of this sort. India has one on fur and might already have one on foie gras.
We know that WTO case law means it is entirely in order to have bans on certain products of this sort, where there are ethical reasons to do so. There has been case law in the past regarding seal furs that has upheld that long-standing principle. It would be an option for a Government, depending on the nature of the agreement we finally have with the EU, to ban the import of foie gras, in much the same way as India does, but I do not believe the Bill is the right place for it.
It is the kind of thing that we would consider once we are clear about the type of trading relationship we will have with the EU and what concessions we might have to make as part of that settlement—until then we are not in a position to advance any policies of this sort.
Dr Drew
I hear what the Minister says but, given that the Bill looks to the future, it is entirely appropriate that we decide which animal welfare standards we believe should be in place to accommodate the type of agriculture and food chain we want. Although subject to whatever happens to our relationship with the EU, this is the sort of legislation, along with live exports, where we should draw a line in the sand. We do not accept this practice; we have banned it. It is inappropriate for agencies, shops and other retail establishments to be able to sell that product here. It is an entirely inappropriate method of force-feeding geese and ducks. This is a key animal welfare issue. It needs to be outlawed.
Dr Drew
I beg to move, That the clause be read a Second time.
We come now to the work clause. We make no apology for saying that this is our opportunity to pray in aid one of the things that the Government got completely wrong—the abolition of the Agricultural Wages Board. That happened under the coalition Government, and we hold the Liberal Democrats especially guilty.
I will not go into great detail. We know the issues, we know why we have tabled the new clause and I know why the Government are likely to oppose it, but we hope that they will at least think on this: there is a serious problem with the lack of labour in the agricultural sector.
A lot of agricultural labour is termed seasonal, although some aspects of what was the seasonal agricultural workers scheme was never seasonal—those who work in dairying or in aspects of the packing trade are not seasonal workers—and the reason why we rely so much on foreign migrant labour is because terms and conditions are not good. That is one of the reasons why we had the Agricultural Wages Board—to introduce a standard of terms and conditions that would encourage people to take that work—but it was not just about terms and conditions. The board also looked at future provision and training and investment in younger people to encourage them to come into the industry. Until one day when we are in power, we will carry on arguing that this is an important part of the way in which the agricultural sector could and should operate.
Martin Whitfield (East Lothian) (Lab)
As this Bill is looking holistically at the countryside, across the environment and workers, is it not exactly the right place for agricultural workers’ rights to be included?
Dr Drew
I agree entirely. In this brave new world, we are talking about supporting not just farmers and landowners, but the environmentalists who are going to come in and do some of the work. Again, this area is rife with exploitation. It is right that lots of people work as volunteers or are seconded from their companies, but there is the danger that that will become the norm. Unless we are careful, we have no regularity of employment structure.
The Government’s argument has always been, “Why is agriculture different? It is the same as any other sector.” Well, it is different. The nature of the work is different: it is hard and the hours are long. There is also the issue of loneliness, because most workers are by themselves. There will perhaps be only one or two of them if they work for a small holding. Larger holdings have more, of course, and are able to get protection through their numbers.
I understand the NFU’s position, but farmers tell me that one of the things they most regret is the loss of the negotiating apparatus. They say that quietly; they will not say it to a wider audience. There are those who believe strongly that losing the negotiating apparatus has taken agriculture backwards. When we lost it, we saw that agriculture was not valued enough for such a structure to be in place. If the Minister does not agree with this new clause, I hope he at least recognises that there is merit in putting in place a structure and systems to ensure stability in farm workers’ terms and conditions. Too often, they are not paid the going rate, which means that people are not attracted to the countryside, which we all accept is a tragedy.
George Eustice
We had a similar discussion about an amendment earlier. I do not intend to speak for too long, but the hon. Gentleman will be aware that I disagree with him for reasons that I have set out. As he knows, the Agricultural Wages Board was established way back in 1948. There were lots of other boards around at that time, covering different sectors. Most of them were phased out during the ’60s, ’70s and ’80s; the Agricultural Wages Board was the last one standing.
Things changed fundamentally. There was a review of the Agricultural Wages Board in the mid-1990s, and in the end a decision was made not to take action. After the national minimum wage was introduced by the previous Labour Government and adopted by the Conservative Government, and, more importantly, after this Conservative Government introduced the new national living wage, the Agricultural Wages Board’s raison d’être was no longer there. It has been superseded by other pieces of legislation and minimum wage requirements. We currently have a national minimum wage of £7.83, and the national living wage is soon to go to £8.75. We therefore already have protections through the National Minimum Wage Act 1998, the Employment Rights Act 1996 and the Equality Act 2010. There is lots of legislation to protect agricultural wages.
I do not share the hon. Gentleman’s view that the negotiating apparatus that operated alongside the Agricultural Wages Board is necessary. There were problems with the way that it worked. It did not, for instance, allow the payment of annual salaries to some management staff so hours and payments could be averaged across the year. That would help people get mortgages to buy homes. There were reports that, because people received a weekly wage based only on the hourly rate, it was difficult for them to demonstrate to mortgage lenders that they satisfied their criteria.
More importantly, the very formulaic tiers of wages did not enable people who were doing particularly well and were on their way to progression or to a management role to be rewarded, unless they had the right craftsman qualification. It took away employers’ flexibility to reward their staff, because everything was set in a very formulaic way. I do not share the hon. Gentleman’s romantic view of the Agricultural Wages Board; it was restrictive and stopped more progressive approaches to payments, including salary development. Insofar as it gave protection for minimum wages, its role has been superseded.
Dr Drew
My wife would say I was never romantic, although I do not want to disillusion the Minister too much. This is not about going back. There would have to be a new body, but it would perhaps take account of sectoral organisations—that was what was probably wrong with the old Agricultural Wages Board. The NFU always saw it as a one-size-fits-all.
A modern Agricultural Wages Board must take account of the different sectors and regions. Its whole point is that it underpins wages and conditions. We feel very strongly about that. We talked to Unite, the main representative body that came out of the old National Union of Agricultural and Allied Workers. Historically, Unite has always been linked to the Labour party, although it has not always agreed with it. Although we look back in this sense, we also recognise the modern world.
Mr Goodwill
On the more highly paid work in appointment grades one and two, would that not in some way create a cartel for the farmers? They would not be able to outbid each other for the more skilled staff because they would say they were paying the going rate. That would not mean that the more skilled people could do better.
Dr Drew
I hear what the right hon. Gentleman says. There is always a danger with some form of proportionality—how different groups would be paid. Those groups would not necessarily be encompassed by the Agricultural Wages Board anyway, because it is looking at a minimum structure. That is something that a modern, forward-looking wage board will have to take account of.
We have no magic answer: the NFU asks us what form things would take and hopefully we can have sensible and serious discussion with it. We are making the point that the industry is completely short of labour—yet again this year, sadly, the fruit and veg was ploughed back into the ground. There is something wrong when what has been produced cannot be brought to market because there is no one to pick it. From talking to my dairy farmers, I know that there is always a problem in getting milkers. That transcends any dairy-producing region; it is a real issue. All we continue to argue for is one way in which that can be recognised.
I will press this amendment to a vote; we hope the Government will gradually recognise that they must put a structure in place that transcends the normal minimum wage standards or the living wage. This industry is different, and that must be recognised.
Question put, That the clause be read a Second time.
The Chair
I was asked whether we get injury time if there is a Division on the Floor of the House. I consulted the Clerk to ensure I had the procedure correct, and the answer is no. However, if a Division runs past 5 o’clock, I would ask all hon. Members to return, because I will have formally to go through the procedure of reporting the Bill; otherwise, we will be in the position, which I have been in only once before, of the Bill’s having to be deemed to be reported, which is not satisfactory. Let us press on.
Dr Drew
I beg to move, That the clause be read a Second time.
Thank you for that advice, Sir Roger. My Whip is busily looking at her information source to see whether anything is coming our way. We will carry on regardless for the time being.
This is the second part of the foie gras debate. Some people fundamentally believed that our leaving the EU would free us to do some of the things that many people across the country believe we should have done a long time ago—in this case, ban live exports. The noble Lord Rooker always used to say we should export on the hook, not on the hoof—I remember him saying that 20-odd years ago—but we have not yet done it. Admittedly, this is a marginal trade that affects certain parts of the country, where there have long been demonstrations because of what is deemed to be cruelty and what is seen to be the British industry losing control of what happens to animals subsequently. I know there are downsides to banning live exports—what do we do with young male calves if we do not have an export market? However, this is where animal welfare comes to the fore.
Colin Clark
As the hon. Gentleman is probably very aware, moving livestock from Orkney, Shetland and the other islands in Scotland involves long journeys of eight to 12 hours. He is not proposing to ban those movements, is he?
Dr Drew
This is where I would always take advice; I know there are views in Scotland that are not necessarily held in England about whether that is good or bad. I sat in on a recent debate where there was a difference of opinion within the political parties, and certainly between them, about whether a ban would ever be achievable, whether it was enforceable and, indeed, whether it was a good thing. We must have that debate, because this is an agriculture Bill. If we did not have it, if nothing else, those who feel strongly about this issue would say, “You had an agriculture Bill but you didn’t discuss live exports, which is one of the dominant arguments that we have.”
I remember talking to a lady on the doorstep—a lifelong Labour supporter. She had voted to leave on the basis that live exports would be banned. When she heard that the Conservative party was very keen on banning live exports, I could not persuade her to vote Labour. She felt that was something a Conservative Government would deliver. Sadly, I can now go back to her and say she was slightly misinformed. I accept that this is a minority issue, but for people who feel strongly about it, it is a very important moral point.
Colin Clark
I am sorry to press the hon. Gentleman. It is important that we understand that cattle moved from Orkney and Shetland are moving from one part of the United Kingdom to another that has the same approach to animal welfare. I invite him to come to the north-east of Scotland any time he likes—we will show him how we do it. What I think the general public are against is the idea that we no longer control animals when we export them outwith this country. Will he clarify that?
Dr Drew
We are still in the United Kingdom. The new clause does not deal with movements within the United Kingdom; it deals with live exports outside the United Kingdom. I took my holiday in Orkney and Shetland this year to add to the Scottish economy, and very enjoyable it was. I did not see many animals being moved about, but no doubt that happens.
Jenny Chapman (Darlington) (Lab)
I had concerns about this issue in relation to the Irish border. Just in case colleagues are worried about that, I should say that the new clause would not ban the movement of livestock across the border between Northern Ireland and Ireland, which is vital for agriculture there.
Dr Drew
I thank my hon. Friend for that clarification. It is important because, as I have said, animals move backwards and forwards over that border for fattening purposes or other reasons. We do not intend to ban that.
We are debating this issue here because this is an agriculture Bill. If we do not, whatever one’s opinion on the issues are, people will cast aspersions that we have not done our job as Opposition Members and that the Government have not put on the record their current thinking. Until recently, the Government were using banning live exports as one argument for leaving the EU. Is that still the Government’s case or not?
Chris Davies
People voted to leave the EU for many different reasons; I do not think the hon. Gentleman’s putting his hat on that one necessarily makes it the reason for Brexit.
I ask for clarity, because proposed subsection (2)(a) suggests that the Opposition are quite happy for livestock to be exported from Northern Ireland and the Republic of Ireland. From what I remember of geography, it is about 50 miles across the Irish sea, whereas it is about 23 miles across the Bristol channel. It is interesting that the Opposition would allow animals to travel, say, 200 miles within the island of Ireland and to the Irish border, 50 miles across that sea and then to go on perhaps another 200 or 300 miles on the UK mainland, while seeming averse to allowing cattle or sheep from within the UK to go any further. The export of sheep is very important to Welsh farmers.
Dr Drew
I am not sure that I actually said that, but I re-emphasise that we would not stop any live exports within the United Kingdom, for so long as the United Kingdom exists. As my hon. Friend the Member for Darlington says, we would even allow live exports within the island of Ireland.
Jenny Chapman
I am going to help the hon. Member for Brecon and Radnorshire by reading proposed subsection (2)(a):
“The live export of livestock for slaughter or fattening is permitted after exit day if—(a) the livestock is exported from Northern Ireland to the Republic of Ireland”.
There are farms that cross that border, so trying to prevent any livestock from crossing it would be pretty difficult to enforce.
The Chair
Order. I am getting closer to the Front Bench so I can rap you over the knuckles. “You” means me, and I do not have an opinion on this. Allow me to rephrase that: when I am in the Chair, I do not have an opinion—I am strictly impartial.
Chris Davies
Thank you, Sir Roger—and I am thanking “you”.
I just want clarity on the reasons for the ban, that is all. Why do Opposition Members think that it is cruel for animals to travel 23 miles across the Bristol channel but not cruel for them to travel all that distance across the Irish sea?
Dr Drew
I will pass on that, because I have lost the plot at the moment. We can have this argument outside the room. However, the fact is that I am not talking about banning live exports to anywhere within the United Kingdom. We are looking purely at the trade. An argument during the referendum debate was whether live exports would end because we would leave the EU. All I am saying is that this is the opportunity for people to make their minds up on whether they want that put into legislation. It has been the subject of numerous Adjournment debates. As I said, I was quite interested in the degree to which there have been splits within political parties, as well as between political parties.
Mr Philip Dunne (Ludlow) (Con)
Will the hon. Gentleman clarify a remark he made before getting into this debate about the Bristol channel? If I heard him correctly, he said, “For as long as the United Kingdom continues to exist”. Is it now official Labour party policy to support the break-up of the United Kingdom?
Dr Drew
We really are getting away from the issue. I am making the point that the United Kingdom has a clear policy on allowing live exports. So long as that stays the case, it has nothing to do with what we are talking about here. We are talking about trade between the United Kingdom and other parts—principally Europe, of course, although livestock could be exported to various different parts of the world. We choose not to, because it would be very cruel and also probably economically illiterate to do so.
We are moving the new clause to allow the debate to take place for those who believe that the ban is going to happen as a matter of course when and if we leave the European Union, when we have the opportunity to do it under WTO rules. There is some debate about whether it is going to be that easy, but we will have to face up to that in due course.
The reality is that unless we have some legislation to enable us to implement the ban, we will never do it anyway. This is our opportunity to have a debate and to see whether this legislation can stand the test of time. Without the new clause or something like it, the ban will never happen. We can have as many Adjournment debates as we could possibly want: it will never take place until and unless we are able to put it into legislation.
Mr Goodwill
The fact is that this will not happen if we do not get the agreement voted through in the meaningful vote in Parliament. Will the hon. Gentleman make it clear that anyone who votes against the agreement is voting against our opportunity to ban live exports—and foie gras, for that matter?
Jenny Chapman
When we were discussing foie gras, the Minister said that the ability to ban its import depended on the type of agreement we get with the EU. That is fascinating to me, because the type of agreement that would not allow us to ban foie gras, if my understanding is correct, would be one that kept us in the customs union and probably with a very close relationship to the single market. That sounds familiar.
Dr Drew
I will let the Minister respond to that in due course. We started with a fairly narrow subject and we have probably been round every other subject possible. I am not going to take any more interventions.
We have a policy on this issue. We argued 20 years ago that we wanted to bring it forward. It has not happened because of our relationship with the EU. If that relationship remained or got to the issue of the customs union, it might still be precluded. However, if we were to leave the EU, we would have the opportunity to do this. That is why the Opposition have upheld the policy and will press the matter to a vote: so that there is some clarity, which has not been forthcoming from the Government because Government MPs have been arguing for the ban on live exports for some time. No doubt, we will continue this discourse outside. I make no apology for saying that this is the opportunity for us to do this. We will be taking that opportunity and pressing for a formal vote on live exports.
George Eustice
The Government have a policy on the issue as well. As the hon. Gentleman will be aware, in our manifesto we committed to control the export of live animals for slaughter. I will describe in a moment what we intend to do and what work we have already done.
Kerry McCarthy
I do not understand why there is a difference between banning live exports for slaughter and not for fattening. Surely it is the journey—the live export—that is deemed to be unacceptable. Does it really matter whether the animals are going to be killed at the end of it or given a few more meals before they are slaughtered?
George Eustice
I do not accept that. The hon. Lady has fallen into a counter-argument against the ban on live animals, which is that if you have the transport regulations right, or if you improve them, there is not necessarily a difference between a crossing by sea and a crossing by road. The reason why it particularly matters for slaughter is that we have the very clear principle that when you are moving animals for slaughter you should absolutely minimise the stress on those animals. It can be a stressful environment as it is, and having a long journey before slaughter is fundamentally different to transport for rearing.
Our position is that we want to control export for slaughter. We subsequently issued a call for evidence. We worked with the devolved Administrations on this because it obviously affects Northern Ireland and has implications for Scotland. Scotland exports live calves to Ireland, for instance. As my hon. Friend the Member for Gordon pointed out, there are also issues with some island communities, such as Shetland.
Dr Drew
I hear what the Minister says. The problem with this is the issue of how many bits of legislation will come around that can be includable in terms of this ban, or can be amended to allow this to carry through. I know this is complicated, and it is sad when newborn male calves are shot. Genetic modification might provide ways of dealing with the number of male calves at source. We would want to see improvements in many aspects of the dairy industry. This new clause is not a magical answer but live exports is a very political issue, and the general public felt—rightly or wrongly—that on our exit from the European Union, the UK would have much greater discretion on what it wanted to do with regard to live exports.
Mr Goodwill
I hear exactly what the hon. Gentleman is saying, but what he is saying in the amendment does not stack up with the second of the six Labour tests for the agreement, which asks:
“Does it deliver the ‘exact same benefits’ as we currently have as members of the Single Market and Customs Union?”
The hon. Gentleman is saying one thing here, but unfortunately the policy of the Labour party is to stay in the customs union and the single market, which would mean that we could not ban live exports.
Jenny Chapman
That test is very carefully worded and, as the hon. Gentleman knows, it was based on comments made by David Davis, the then Secretary of State, at the Dispatch Box. In case he thinks it a little bit rash to take the remarks of David Davis—sorry, the hon. Member for Haltemprice and Howden—as the basis of the test, the Prime Minister did go on to say that she was determined to meet that test herself. That test did not just come out of thin air; it came from the mouth of the then Secretary of State and the Prime Minister, and it carefully refers to the “benefits” of, not to being a “member” of.
Dr Drew
I am not going to engage with that argument; I am not sure whether there are any angels dancing on pinheads yet. This is a matter of principle. I am in two minds as to whether to press the new clause. I understand what the Minister says, and this is not straightforward. Having sat through at least a couple of Adjournment debates, I realise that people come at this from different angles. There is not an easy humanitarian moral case for live exports, certainly in a practical way.
I am probably minded not to press the new clause to a vote at this stage, but my worry is: if not now, when? There will be very few opportunities to see such a ban come forward, as I said in my initial remarks. It may be that what we have drafted here is not good or right, and those who have helped us in drafting it have to think a bit more clearly about the different exemptions brought forward. I stress again that this is not about moving for a ban within the United Kingdom, because that would be wrong and lacking in any sense whatsoever. I will not press the clause to a vote at this stage, but I hope that on Report we get some clarity. The issue probably will come back, because somebody somewhere will see that this is an opportunity to move for a ban.
If the clause is wrong, what will the Government be prepared to do? I know they are waiting for the Farm Animal Welfare Council to come back, but that clearly has to be within a timeframe of what is permissible in terms of future legislative opportunities. The worry is that there will be some ongoing demand to put such a ban in place, in whatever form, and yet there will be no opportunity to do so. On that basis, while I hear what the Minister says now, I hope that on Report the Government will clarify whether such a ban needs to be put to bed completely because it is not enforceable, or whether it can be moved forward and there is an opportunity to move it forward in future legislation. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 28
Monitoring pesticide use and alternatives
(1) The Secretary of State must, within six months of Royal Assent being given to this Act, publish proposals—
(a) to monitor the use and effects of pesticides in the management of livestock or land, to conduct research into alternative methods of pest control and to promote their take-up, and
(b) to conduct research into alternative methods of pest control and to promote their take-up, and
(c) to consult on a target to reduce the use of pesticides.
(2) The proposals shall include steps to measure—
(a) the effect of pesticides on environmental health,
(b) the effect of pesticides on human health,
(c) the frequency with which individual pesticides are applied,
(d) the areas to which individual pesticides are applied, and
(e) the take-up of alternative methods of pest control by land use and sector.
(3) “Environmental health” in subsection (2)(a) includes the health of flora, fauna, land, air or any inland water body.
(4) “Human health” in subsection (2)(b) means the health of farmers, farmworkers and their families, operators, bystanders, rural residents and the general public.—(Dr Drew.)
This new clause would require the Secretary of State to publish proposals to monitor the impact of pesticides, to conduct research into alternative methods of pest control, to promote their take-up, and to consult on proposals to set a target to reduce the use of pesticides.
Brought up, and read the First time.
Dr Drew
I beg to move, That the clause be read a Second time.
Now we are moving on to pesticides. Now that we have dealt with animals, we can go on to crops. Again, in its own way this new clause would not radically change the Bill, but the pesticides argument is important. We are all obliged to move toward higher environmental standards—dare I say it, that is the whole point of the Bill. One way in which we will measure those higher environmental standards is in terms of less pesticide use.
I accept that this is a very divisive issue. On the one hand we have the Pesticide Action Network UK and on the other we have the Crop Protection Association, each with radically different views on whether we are doing the right thing already or we should move in a different direction so that we see much less reliance on pesticides. Certainly, the agro-ecological approach would be to look at how we can substantially reduce, if not remove, the reliance on pesticides.
That matters because the British public seem overwhelmingly to want us to have less reliance on pesticides. We have had the big debate on neonicotinoids; we also have the debate on other pesticides. At the moment, that has been abdicated to Europe, and Members of the European Parliament voted on whether glyphosate should be banned. In the end I think both Conservative and Labour MEPs chose not to ban it, but if we leave the EU the decision will be fairly and squarely back with the United Kingdom Parliament. We cannot pretend that this is not something that we will have to make our opinion known on, and that will be subject to future legislative requirements.
We are not asking for the end of pesticides or necessarily for a dramatic change in policy. We are looking for an indication from the Government that they intend to look, through the environmental payments, at how pesticide use will be measured and monitored with a view to reduced dependence. That is important because the Bill is all about soil quality and water management, and if we do not control pesticides, we might as well give up on both those things, because they will not happen.
Again, it is not just about our environment per se, but about the impact on ourselves—human beings. Those of us who were involved historically with organophosphates know that they are sadly still an issue; I still have people coming to me to say that they feel that was never properly investigated. I know that there are research findings.
Sandy Martin
Is it not part of the point? If we do the research and carry out deep investigations now, it is entirely possible that we will be able to be at the forefront of the new range of pesticides that are more environmentally friendly, rather than being dragged kicking and screaming into the 21st century.
Dr Drew
Exactly. As I have made abundantly clear, we will get one chance to debate this in 50 years, because that is the likely length of time that this piece of legislation will last, if the Agriculture Act 1947 is anything to go by. These pieces of legislation do not come around very often, so we make no apology for bringing forward the debate on pesticides now. We are subject to correspondence on it and people want to know where we stand. I hope the Government are listening.
Tonia Antoniazzi (Gower) (Lab)
This is a very important point and I welcome the new clause. Local testing is going on in Gower and we have shocking levels of weedkiller in local rivers. I hope that my hon. Friend will press the new clause to a vote.
Dr Drew
I think that is a hint. Given we did not divide on live exports, we might divide on pesticides instead. It is important to have this debate and look at this opportunity. The new clause is not doing anything dramatic. It asks us to use this piece of legislation to review current pesticide use, to consult on it, and to monitor it better. It says that that is something that should be in land management contracts. If it is not included, how can we find a way to secure a measurable improvement in our environment? As my hon. Friend the Member for Gower says, we only have to look at our watercourses to know that pesticides get into them. Most of us see that as unacceptable and we have to do something about it.
George Eustice
I hope I will be able to persuade the shadow Minister that he does not need to press the new clause to a Division. We rehearsed in an earlier discussion on clause 1 the fact that the Government are actively looking at holistic schemes to support and incentivise what could be called integrated pest management. We are considering whether we can reduce our reliance on synthetic chemistry by using more natural predators and different agronomic approaches and being willing for the first time to incentivise farmers financially to do that.
One of the things we are looking at is an incentivised integrated pest management scheme to advance this policy agenda. We also set out in our 25-year environment plan the idea of moving forward and embracing integrated pest management more than we have done previously. The new clause deals with publishing reports and measuring impacts—I have said previously that DEFRA needs no encouragement to produce reports through statutory requirements; we love reports. As I explained, I regularly have to read and sign off reports and I sometimes question whether anyone else is reading them. For some reason, many reports seems to congregate around June, so during that month my box is weighed down with annual reports of one sort or another.
I will share with the hon. Gentleman some of the reports that we have received. I have a lot of reading here that he can take away as a memento of this Committee. The UK Expert Committee on Pesticides—the ECP—which gives us advice on emergency authorisations and on some of the tricky chemical issues. It is a standing advisory committee to the Chemicals Regulation Directorate. I have with me its annual report for 2017, all 22 pages of it. The Expert Committee on Pesticide Residues in Food produces a separate annual report, on top of the one by the Expert Committee on Pesticides, so we have two expert committees in the pesticides space, one on residues and one on broader environmental impacts, both of which produce a report. The report on pesticide residues lists all the findings and surveillance on residues on a wide range of imported products and products produced domestically. It runs to 48 pages and is an annual report.
If that is not enough for the hon. Gentleman, the pesticide usage survey report, is produced by the National Statistics Office and focuses on all sorts of different icrops. I have with me the 2016 report for arable crops, all 92 pages of it, with lots of tables demonstrating exactly what is produced. That key survey already monitors the use of pesticide-active substances on each crop.
Mr Goodwill
In addition to that, does my hon. Friend the Minister recognise that farm assurance schemes carry out detailed scrutiny of the records kept by farmers on the pesticides that they use within the rules?
George Eustice
My right hon. Friend is correct: schemes such as the red tractor assurance scheme have additional checks and enforcement to ensure that there is nothing out of order, and on top of that they generally require MOTs, for instance, for sprayer equipment.
The pesticide usage survey covers the frequency of application, which picks up the measures in subsection (1)(c) of the new clause, and the area treated, which covers subsection (2)(d), as well as the weight of active substance. It also includes figures on some of the alternatives to chemicals, such as the use of viruses that can target insect pests. In addition, the National Poisons Information Service collects and considers reports of possible harm to people, which covers subsection (2)(b). Results are not published, but they are reported to DEFRA and other interested Departments, as well as to the UK Expert Committee on Pesticides.
Finally, the Wildlife Incident Investigation Scheme looks at reported incidents of possible harm to wildlife, which I think is what subsection (2)(a) of the new clause is trying to get at. Results of the Wildlife Incident Investigation Scheme are published on the Health and Safety Executive website, and the Environment Agency also monitors levels of pesticides in water.
I understand that there are very good intentions behind the new clause, but I hope that I can reassure the hon. Member for Stroud that we have a plethora of reports that cover pesticide use and pesticide issues in great detail. I hope he will withdraw his new clause at this stage, take some time to read the reports, which I would be happy to leave with him, and consider whether he still feels the measure is necessary on Report.
Dr Drew
It was always a good teaching ploy, when someone was really stuck, to give the kids lots of reading on the basis that that person could try to escape from the fact that they did not really know what they were talking about, hoping that the kids might be able to tell them in due course. That is just me as an old-fashioned teacher. I look forward to receiving the documents the Minister will give me to read, but I will press this to a vote, because the Government need to understand that the direction of travel is about environmental moneys being paid for environmental goods, whatever an environmental good is—it will be interesting to define that in due course.
Like previous versions of the Department, DEFRA has undertaken huge amounts of consultation, but when it comes down to it, it is about the action on the ground. It is important that we know that pesticide use will be one of the features that will be measured. As my hon. Friend the Member for Gower says, one would assume that over a period of time, when pesticides get into watercourses, that will be picked up and dealt with under land management contracts, so that someone will lose their money if they are seen to be polluting the local brooks. Otherwise, what is the point of this particular bit of legislation? We have both to lay down the law and to see how it will be enforced in practice.
Pesticides are a pretty important aspect of what happens to our landscape. I have always bought the argument that farmers, for all sorts of reasons, would want to spend less money on them, because it is an imputed cost and they feel very strongly that they want to minimise their costs, but sadly we have seen that many aspects of the environmental degradation of our countryside were down to misuse of pesticides, which have been seen as a shortcut to getting more output from farms. That is why we will put this motion to a vote. We let the Government get away on live exports, although that will no doubt come back.
On this motion, what is the point of environmental moneys if they are not properly scrutinised on the ground? Whoever may be advising is one thing, but this is something that presumably the payments agency will have to measure. Unless we have something that sets that out in the Bill, it will come down to vague promises. That is not acceptable in legislation. We either do it properly or we do not do it at all. Let us do it properly.
Question put, That the clause be read a Second time.
Deidre Brock (Edinburgh North and Leith) (SNP)
I beg to move, That the clause be read a Second time.
The new clause will simply allow Ministers to measure their progress in implementing a promise made during the Brexit campaign that moneys available to support Scottish farmers will not decline in real terms as a result of our no longer being in the EU. The leave campaign made some real promises, which should be honoured. There will be plenty of hot air and confusion over the coming days, weeks, months and eternities, but can we at least get some clarity on how progress on this pledge will be measured?
Jenny Chapman
I have a few questions on this. It makes an awful lot of sense to me, and it matches what the First Minister of Wales has said repeatedly, which is that he wants all support to be matched penny for penny in the future, as was committed to by various voices during the referendum campaign. I do not think that there is anything unreasonable about that. If we agree to the new clause, it would open the door to similar amendments being made for the other devolved Administrations.
All the new clause seeks is transparent reporting that we would all benefit from being able to monitor, including in England. Agricultural payments will be something that we make decisions about, and doing so in the most up-front and clear way possible will help all of us. It is clear that the agriculture sector requires certainty going forward, and this is one way that we can assist in that. One key concern raised by stakeholders, particularly the farmers unions, is the continuation of funding that will be made available, particularly to the devolved Administrations.
Another key concern raised by the farmers unions is the ability of the devolved Administrations to make payments to farmers in 2020, due to the way that the Bill is structured. It would be helpful to hear the Minister’s thoughts on what will happen, particularly for Scotland. As Members will know, the Scottish Government’s continuity Bill is currently being considered by the Supreme Court. If it is deemed unlawful, what will happen to the payments to Scottish farmers? The Scottish Government intend that Bill to provide the vehicle by which payments could continue. What does the Minister consider the implications will be if that is not the case? It would be helpful to us all if we could use the consideration of this new clause to try to understand that issue.
I would like to ask the hon. Member for Edinburgh North and Leith about the progress the Scottish Government are making with their own agriculture Bill, which the Scottish Government’s Cabinet Secretary for the Rural Economy, Fergus Ewing, has said that they will implement. Scottish farmers need to know what the future holds for them.
George Eustice
I am grateful for this opportunity to set out our position on the funding of agriculture. As hon. Members will know, we have a manifesto commitment to keep the cash total spent on agriculture for the UK at exactly the same level until 2022—the end of this Parliament. That commitment goes further than the current spending review period. Not every other Department has that, but we made that commitment, because we recognise the importance of giving farmers clarity and certainty that the Government intend to still support them financially during this transition from the old system to the new.
Our manifesto also made a commitment that after 2022 we would roll out a new agri-environment policy, which would be funded. The Bill is explicit that there will be a transition period of seven years until 2028, as we gradually wind down the single farm payment—or basic payment scheme. It is implicit in the Bill and our manifesto commitment that there will be a funded agriculture policy after 2022. We have not put a precise figure on that, but we have done more than we do for most other Departments, which is to give a guarantee until 2022.
As the hon. Member for Edinburgh North and Leith will be aware, the allocations for Scotland have been a contentious issue as a result of the convergence uplift and debates around that. For that reason, we have asked Lord Bew to lead an independent review of intra-UK allocations. That review is now underway. The outcome of that review will inform allocations for 2020 onwards.
The answer to this particular new clause is that this work is already being done and it is being led by the review that Lord Bew is undertaking, which will inform intra-UK allocations after 2020. That will enable us to take account, for instance, of severely disadvantaged area and to take account of the emerging policies that we have in different parts of the UK, but also to have regard for the fact that probably every part of the UK will want to have a transition from the old system of the basic payment scheme to the new, so there would need to be some understanding of how much money people will need as they move in transition from the old scheme to the new.
The hon. Member for Darlington made points about the ability of the Scottish Government to make payments. We covered that in an earlier debate, but to clarify, we introduced new clause 3 to the Bill in Committee, as well as subsequent equivalent clauses for the schedule for Wales and the schedule for Northern Ireland. The purpose of new clause 3 and those two connected provisions for Wales and Northern Ireland was to give the Government the power to set financial ceilings, so that the legacy schemes that come across through retained EU law could still be paid. Unless the power exists to set financial ceilings, the existing financial ceilings that underpin the payment legislation in the EU scheme will fall away. Therefore, unless the Scottish Government took action to introduce a clause such as new clause 3, they would not have legal authority to make payments in 2020.
Colin Clark
May I seek clarification? Have the Scottish Government approached the Department to introduce a new clause 3, and is the Minister aware that NFU Scotland is supportive of a new clause 3 for Scotland?
George Eustice
Yes, I am aware that NFU Scotland has now said that it believes that, as a minimum, there should be something like new clause 3. I discussed the issue with Scottish Ministers yesterday at the meeting that we had in Wales, where it came up. We established that it is relatively easy to rectify. This is a single clause. We could put it in a schedule to this Bill if it were the wish of the Scottish Government for us to do so. We could add a schedule to the Bill that replicated new clause 3 for Scotland but did nothing else, and we could do that at later stages of the Bill, or of course it is open to the Scottish Government to add new clause 3 to an alternative piece of primary legislation, going through the Scottish Parliament. The issue is not complicated to fix; it does not necessarily need a fully worked-up, fully detailed Bill, but they do, as a minimum, need something equivalent to new clause 3. I think that they understand that now, and they are considering whether it is best to do it as a schedule to our Bill or as an addition to one of their own Bills.
I hope that I have been able to explain that we have a review under way that is looking at intra-UK allocations, that is designed to address the needs of every part of our United Kingdom as we consider funding the provisions in this Bill and provisions that other, devolved Administrations might bring forward in the future.
Deidre Brock
In response to questions regarding Scotland not taking powers through this Bill, I will repeat once again that that is because, in short, we do not need to do so. We do not need the Government here to legislate for us on devolved matters. We have been producing our own legislation in those areas since the Scottish Parliament began in 1999. There is no question of our not being able to make payments immediately after Brexit, because the existing common agricultural policy rules will become retained EU law; that has already been provided for.
If there is no deal, then in conjunction with the UK we are preparing the necessary adjustments, through statutory instruments and Scottish statutory instruments, to ensure that we will be able to continue to make payments under the existing CAP rules. If there is a deal, then along with what happens in the rest of the UK, provision will be made to ensure that we can continue to make payments during the agreed transition period. Whatever scenario we face, there will be provision to make payments and administer schemes from next March.
George Eustice
I agree that it is possible for the Scottish Government to include a clause similar to new clause 3 in primary legislation going through the Scottish Parliament, but the hon. Lady needs to understand that it requires the setting of a financial ceiling; that does not come across in retained EU law. That is why we have introduced those new clauses to the Bill for every other part of the UK. The hon. Lady is right: we are not saying that we have to legislate through this Bill. There is an offer if the Scottish Government would like us to include something equivalent to new clause 3, but if they would rather not have that, it is for them to add the provision to one of their pieces of primary legislation.
Deidre Brock
Indeed, and given that the withdrawal agreement, the European Union (Withdrawal) Act 2018 and the Scottish continuity Bill all give Scotland a legal basis on which to continue to make payments and administer schemes, we see no need to rush into the development of new legislation, but we are of course always open to that.
In our consultation document, “Stability and Simplicity: proposals for a rural funding transition period”, we have explained that the point at which we propose to start evolving our farm support arrangements is 2021. At that point, we will need new powers to amend the relevant retained EU law, and we are looking actively at all available options for taking those powers, including the possibility of legislating in the Scottish Parliament.
I hear what the Minister says about the review that is ongoing, but we want some certainty that an ability to check the promises that were made is hardwired into this Bill—as the hon. Member for Darlington said previously, that is in the interests of transparency—so I will press the new clause to a vote.
Question put, That the clause be read a Second time.
Dr Drew
I beg to move, That the clause be read a Second time.
We come to the end—almost. We shall say a few pleasantries in a minute or two, but this is an important new clause. That is because—I make no apology for putting some pressure on the Government here—the Tenancy Reform Industry Group, or TRIG, negotiations that took place almost two years ago now happened against a background of the Government making some rather nice noises about the importance of tenant farming and tenant farmers in particular. The Government have since gone quiet. There have been some noises off of late, with the Government saying that they intend to revisit the issue, but the Minister could make those noises more overt in his response, so that we know exactly where we are going.
The new clause provides a mechanism to ensure that tenant farmers are not disenfranchised from access to the new financial support mechanisms contained in the Bill. The tenancy sector of agriculture is responsible for farming about a third of agricultural land in England, and is a substantial part of farming business. There are about 13,000 wholly tenanted farm holdings, 41,000 predominantly tenanted farm holdings and 35,000 partly tenanted farm holdings. They are therefore an important part of the agricultural sector.
The tenancy sector has a greater preponderance of livestock—dairy in particular—upland and small-scale farming than in the wider agricultural sector. Furthermore, for those individuals who start in farming, most will start as tenant farmers, unless they are fortunate enough to inherit their father or mother’s holding. Often, however, it is not passed on to them so they become tenants of their family’s estate. Most farmers, when they start, are tenant farmers.
There are two principal types of tenancy agreement: those under the Agricultural Holdings Act 1986, which confers security of tenure, a regulated rent and in some cases a right of succession; and those known as farm business tenancies under the more recent Agricultural Tenancies Act 1995, which provides for a significant degree of freedom of contract so that there is no fixed term and no significant regulatory provisions on rent. I alert the Committee principally to that second one at this stage.
Although farm business tenancies have largely been welcomed, and overall have worked reasonably well, of late there has been a tendency for shorter FBTs, which are completely outwith the ability of new businesses to cope or to function effectively. Some FBTs have been for as short two years, and anyone who knows anything about farming knows that people cannot do anything in two years.
That is why we make no apology for raising the subject at this late stage. It is important for us to look at agriculture where it is not functioning as well as it could and should be. Those of us who represent rural or semi-rural constituencies know that that has been highlighted by the Tenant Farmers Association and the NFU, which want to make us recognise that basis of the TRIG reforms—which is what some of us thought that the Government would bring forward but have not yet happened. The Minister can do his best to allay our fears that the opportunity to look at that important sector will be dismissed, or at least missed. It is not just what is in the Bill that matters, but what could be in the Bill.
Dr Drew
In a second—just let me finish my peroration.
I thank Rob Wakely, who did a sterling job to keep us on the straight and narrow, and Jessica Cobbett from my office, who helped me on more than one occasion. I thank the civil servants, who have done a really good job, and the Minister. I feel sorry for him, because he will have to start all over again tomorrow with the Second Reading of the Fisheries Bill. As much as we think we have done our bit, he still has to do his.
I give way to the hon. Member for Brecon and Radnorshire.
Chris Davies
I thank the hon. Gentleman for giving way. I have nothing to add—I am just enjoying intervening on him.
Dr Drew
If nothing else, that gave me a chance to rest my voice.
This is an important Bill. We got it through in time—it is a good job we left enough. Although I am using this opportunity to thank everyone from both the Opposition and the Government, I hope that, to finish with, we will hear some good noises about tenancy reform. People will be watching, listening or reading even at this stage because their livelihoods depend on that, so the Minister should listen and, if nothing else, accept this final new clause.
Mr Dunne
On a point of order, Sir Roger. Will you advise me how I can add my thanks from the Government Back Benches to Opposition Members for the good natured way in which the Committee has functioned? On virtually every clause and amendment thus far, there has been a sense of consensus across the Committee that this is an important Bill and we need to get it right. I would also like to add my thanks to the 27 individuals who came to give evidence in our opening sessions last month and the countless more organisations outside this place with a committed interest, whatever their standpoint, to ensuring that the Bill sets out a new agricultural support framework that lasts for generations to come. I look forward to the Minister’s echoing those remarks.
The Chair
That is not strictly a point of order for the Chair, but the hon. Gentleman has already made it. There are a few formalities to complete. We had better get through those or we might be congratulating ourselves a little too early. Let us put new clause 31 and the Government amendment to the long title to bed and see where we go from there.
Jenny Chapman
Inspired by my hon. Friend the Member for Stroud, I want to put on the record my thanks to you, Sir Roger. We would very much appreciate it if you passed on our thanks to Mr Wilson, too.
I thank my hon. Friends, who all made substantial contributions to our proceedings. I have led on Bill Committees in the lead-up to Christmas where there has been lots of online shopping going on around the room, but that was not the case this time. Of the Government Members, I particularly thank the hon. Member for North Dorset for his good natured and at times very amusing contributions, and the right hon. Member for Scarborough and Whitby for his repeated challenge on the withdrawal agreement. All I say to him is that if he and his colleagues are banking on Labour Members coming to the rescue in the first week of December, they should not count their chickens.
I thank the Minister, who has conducted himself impeccably throughout all this. It cannot be an easy task. All the pressure has been on him, and he has dealt with everything with good grace. I do not think that he has declined a single intervention the whole time. He has our respect for that. I must also put on the record my thanks, respect and admiration for my hon. Friend the Member for Stroud. His knowledge of the sector is far greater than mine. As a townie who does not represent a rural or semi-rural constituency but who likes her food, I have learned an awful lot. I also need to thank James Metcalfe, from my office.
We do not like the Bill at all. We think it is far too vague and does not provide the clarity that we want. Having said all that, this has been a hopeful process, and I think we have left the Minister with a better knowledge of our position than when we started. We look forward to some changes at future stages, as has been hinted at a couple of times throughout our proceedings. Overall, I thank colleagues for the way that we have conducted the Committee. I obviously say that I support new clause 31, otherwise I suspect that my speech would be completely out of order.
George Eustice
New clause 31 is an important clause and an important point to end on. As the hon. Member for Stroud knows, our view is that changes to tenancy law go beyond the scope of the Bill, which concerns future agriculture schemes. However, he also knows that I take the issue very seriously.
While we do not want to throw the baby out with the bathwater when it comes to tenancy law, because the introduction of farm business tenancies was an important innovation and has brought more land to market, there are undoubtedly some problems with the way that both Agricultural Holdings Act tenancies and the farm businesses tenancies under the 1995 Act operate. That is why, around 18 months ago, I commissioned the Tenancy Reform Industry Group to do a detailed piece of work on what changes to tenancy law we ought to consider, in particular to address productivity and support structural change in the industry. It came back with a package of proposals, as the hon. Gentleman said.
Probably chief among the proposals was the idea that an Agricultural Holdings Act tenancy could be assignable, so that an older farmer who wanted to retire but did not have children to inherit the tenancy would have some kind of right to assign the tenancy at open market values to a third party or, indeed, to enter into surrender negotiations on the tenancy with their landlord on that basis. The Law Commission recommended reform of the rules of forfeiture for farm business tenancies many years ago, and tidying that up remains unfinished business.
Also included in those proposals was a recommendation for a provision to vary restrictive covenants within Agricultural Holdings Act tenancies. Farming practices have moved on, and having certain covenants that prevent modern investment on farms, or that might stand in the way of the type of environmental schemes envisaged in the Bill, are problematic. There should be a process for looking at that.
To end the Committee on a positive note, I can reassure the hon. Gentleman that we have by no means forgotten that package of measures. My officials are currently working on a draft consultation on tenancy law and some of those changes, which we intend to publish in the new year. The outcome of that consultation will inform a future piece of legislation on tenancy reform.
The consultation will probably look at one or two other areas where we believe changes are required. For instance, article 31 of the Agricultural Tenancies Act 1995 restricts the ability of landowners to issue tenancies on their land unless they have permission from a lender, who might have a charge over that land. That overturned decades of practice, where there was a presumption in favour of a landlord being able to grant a tenancy because the land needed to be farmed. We believe that that particular provision, article 31, needs to be looked at again.
We are also considering a call for evidence on the repossession of agricultural land. At the moment there is a gap in the law. Farm businesses tend to have their assets owned by individuals. Currently, if a bank wished to repossess a residential property, it would have to go to a court to get a possession order. There is no such requirement with agricultural land. A bank can simply seize land and auction it without any recourse to the courts. It is an outdated approach, and we are therefore considering amendments that would require a possession order from a lender before they could seize the land.
Martin Whitfield
Would that include the valuation of land by banks when they repossess, and the other professionals that are involved in taking over the land—it is not repossession at the moment—in that sequence of events?
George Eustice
A possession order would require a bank to justify its action to a court before being able to take anyone’s land. There have been a number of issues with secondary lenders, and mainstream banks, moving aggressively to seize and auction land, and selling it in a reckless way that is against the interests of the landowner and their creditors because they have that charge over the land. That area needs to be looked at.
With the confirmation that we have not forgotten those areas, and that we are looking at a consultation, I hope that the hon. Member for Stroud will not feel the need to press the new clause to a vote.
It has been a pleasure to serve under your chairmanship, Sir Roger, and that of Mr Wilson. We have had a good-natured debate on new clause 31 and all the other amendments and clauses in the Bill. We have done a thorough job of examining every clause and amendment in great detail. I thank every member of the Committee for giving up their time and diligently intervening and contributing to the discussion.
I also thank my officials in DEFRA, who have worked incredibly hard. The Bill is the first substantive piece of legislation on agriculture that we have had since 1947. It has been a huge piece of work. Finally, and by no means least, I thank the Clerks. We particularly tested their patience when changing the plan for evidence sessions at the beginning, but I hope that we have been less difficult since then. We are grateful for the time and effort that they have put in.
Dr Drew
On that note, I particularly thank Mr Fox, who has been so helpful to Rob, who has done the Opposition work in detail. It is important that we put that on the record. Without the Clerks, Bill proceedings would not go very far, or if they did, they would go in completely the wrong direction. I also pay due regard to the many contributors to the evidence sessions, which were illuminating, and those who have given us ideas and interesting amendments. Some of them caused us a few sleepless nights in deciding whether to table them. They were all suggested in the right spirit, to try to improve the legislation.
Clearly the Government have a different view to the Opposition about how the legislation will progress, but we will see whether we can further improve it on Report, on Third Reading and in the House of Lords. It is good that the arguments have been had. Others will read them and see whether the proposals can be introduced in a different way, if not necessarily one with which the Government will wholeheartedly agree. However, given what happened today with the Finance Bill, we live in hope, and in the expectation that a degree of consensus is breaking out across the House. That is the way that good Government can operate.
On tenancy reform, I was pleased by what the Minister said. New clause 31 was a probing amendment, and the Minister knows where it was coming from. Changes are needed in this area. I hear what he said about repossession, which has always been a bone of contention in wider agricultural areas, because people do not necessarily just think in terms of those directly affected. It can unhinge a wider part of the countryside when people think that what has happened has not been done in the right way. It is important that we heard what the Minister said, and that we see some progress on that.
Without more ado, we have managed to complete consideration within the timeframe thanks to the good chairmanship of our two Chairs. I will not press the new clause to a vote, but I hope that, now it is on the record, we will hear early in the new year what form the necessary legal changes, which will presumably be made through secondary legislation, can take. We will of course scrutinise them in the right way and hope that they improve what is happening out there. We need good tenants with good tenancy legislation. British farming will be stronger because of that. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Amendment made: 43, in title, line 14, after “Agriculture;” insert
“to make provision about red meat levy in Great Britain;”.—(George Eustice.)
An amendment to the long title is required to cover the content of NC4 which is not covered by any of the other specific limbs of the current text.
The Chair
As everybody else has been mostly out of order for the last half an hour, I too will say a few words. Mr Wilson and I would like to express our thanks to the Clerks, the Hansard writers, who work extremely hard, and of course to the Officers of the House who look after us. Without all those people, our work would be much harder, if not impossible.
Finally, I thank the Committee for the courtesy and good humour with which proceedings have been conducted. At a time when courtesy and good humour are at something of a premium in other parts of the House, it has been a pleasure to come into an oasis of tranquillity in Committee Room 12 and see people behaving properly, as colleagues ought to behave.
Bill, as amended, to be reported.
Agriculture Bill (Thirteenth sitting)
(6 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
Ben Lake (Ceredigion) (PC)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Mr Wilson. I rise to speak to new clause 11, tabled in my name and those of my Plaid Cymru colleagues, in the hope of probing the Government a little on their thinking about the need for and the operation of common UK-wide frameworks once the Bill—and the respective Welsh, Scottish and Northern Irish Bills—comes into effect. It was mentioned in an earlier sitting that the EU provided both the regulatory and financial frameworks within which each of the devolved nations has been able to tailor and operate some of their agricultural policies.
If we are to leave the European Union, I cannot see any clarity at present as to how the four respective industries and the four respective Administrations will continue to operate on such things as those listed in the new clause, including: the functioning of the UK internal market, which I am sure we are all quite keen to ensure, while allowing for some policy divergence for each Administration to tailor whatever agricultural policy best suits their specific needs; compliance with international obligations; the management of common resources; and—most importantly, perhaps, from my point of view—how finance and funding under the UK umbrella will be allocated to the four respective nations.
I am very much of the opinion that any proposed framework would have to be agreed by the three devolved Administrations and the UK Government. If we did not have such an agreement, I do not think anything would truly operate smoothly. We would open ourselves up to challenges, legal disputes and so on.
Chris Davies (Brecon and Radnorshire) (Con)
The hon. Gentleman has given me a great opportunity to come in. I sympathise with a lot of what he is saying, and my hon. Friend the Member for Gordon, sitting in front of me, has been nodding in agreement on various things. However, does the hon. Gentleman not have concerns, as I do, about certain things that come out of the DEFRA Department of the Welsh Government as a result of having too much authority in cases such as this? I understand his request for a framework, which we are all working towards, but if we give that Department too much power, Brecon and Radnorshire, and Ceredigion, will be in hot water indeed.
Ben Lake
I thank the hon. Gentleman for his intervention. I acknowledge and accept what he is saying: there is always a danger that we may not agree with what the Welsh Government want to do, particularly with regard to agriculture. I share that concern. However, I assure him that he need not worry and wait for too long—before long, my own party will be in government.
I fear that I have rambled on for long enough. This is a probing amendment, so I will not be pushing it to a Division—
Ben Lake
I might be tempted later.
We need to look at how the four industries and Administrations will work following the UK’s withdrawal from the EU, because the EU provided a sort of overarching framework within which we all knew the parameters and rules. Any new framework would have to be agreed by the four Administrations if they were to work effectively and smoothly. I am probing the Government to see what their thinking is on this matter. I may then bring it back for a vote on Report.
The Minister for Agriculture, Fisheries and Food (George Eustice)
The hon. Gentleman said that this is a probing amendment. He raises some important issues about how we co-ordinate policy around the UK. I will first explain why we do not agree with the approach taken in the new clause; secondly, I will outline some of the things we are doing.
First, we do not have a federal system in the UK. We have a devolved settlement. There is a good reason for that: federal systems tend to work best where there are a number of constituent parts all of roughly the same size. Our challenge in the UK is that England is so much bigger than the other parts of the UK; if we had some kind of qualified majority vote, England would end up dominating the decision making. Equally, if we had equal votes and effectively required unanimity, smaller parts of the UK would have a veto on what England did. That is why we have developed a devolution settlement where certain powers are clearly devolved and certain powers are clearly reserved. In the middle, where it makes sense to co-ordinate and work together, we have a good track record of putting together voluntary frameworks and memorandums of understanding.
The approach that we envisage taking is that there would be frameworks, in the form of memorandums of understanding or concordats, and that those would facilitate co-operation, collaboration and co-ordination so that we can work together on a number of key areas. As the hon. Gentleman highlighted, there are elements of the Bill that are devolved but on which we would probably want to work together, to co-ordinate the impacts. Notably, there needs to be some sort of administrative agreement in place to manage cross-border holdings. We have that already under the existing CAP so it would be relatively easy to roll something similar forward.
Perhaps most important is the use of powers in exceptional market conditions. Those intervention powers could have impacts on other parts of the UK, so having a memorandum of understanding about how we would use the powers is important. Other areas in which we believe that having an MOU would be important include approaches to data collection, contracts and market transparency, but also issues such as the changing of marketing standards.
We already have in the DEFRA family good examples of concordats working well. We have a number of them in relation to fisheries. Some of those have within them a dispute resolution mechanism. The Scottish Government have at times been in dispute with, for instance, the Isle of Man about scallop fishing—it is always scallops, for some reason—but a resolution process exists in the fisheries sphere to deal with that.
George Eustice
Well, they are similar. Neither has to have a dispute resolution process. Some do and some do not. We have a number of concordats in the fisheries sphere. A concordat tends to be slightly more formal than an MOU, which is a looser agreement.
Let me turn to the points made by the hon. Member for Ceredigion. On subsection (1) of the new clause, we envisage concordats and MOUs pulling Ministers together in the way that I have described. On subsection (2)(d), as I said, we already have processes for managing cross-border cases. On subsection (3), we already have, as I said, the devolution settlement. On subsection (3)(b), about maintaining,
“as a minimum, equivalent flexibility for tailoring policies”
to that which we have in the EU, that is not saying very much—we do not have a lot of flexibility, to be honest, and we would like to give more.
One of my most memorable experiences in DEFRA has been being informed of a dispute that the Welsh Government were having with the EU about ear tags. In Wales, where there are hedges, ear tags can sometimes be pulled off by the brambles in a hedge, so animals used to have one small tag—a metal clip tag—and one larger tag that could be read, but the EU said that that was not good enough and the two tags had to be the same size, so that there were two dangling tags. The matter ended up going to court, and we had to get involved to support the Welsh Government in arguing their case. That is the kind of flexibility that we have in the EU—not very much. We would like to have far more.
My final point is this. Yesterday I was in Cardiff: the occasion was a joint ministerial meeting with the DEFRA Ministers. The meeting was hosted by Lesley Griffiths of the Welsh Government. Lesley put forward a proposal, which we agreed yesterday, that we should put that group of, in effect, the Agriculture and DEFRA Ministers on to a more formal footing, with clear terms of reference established, so that it could manage the EU exit process and possibly have a role thereafter, but also work up a memorandum of understanding about how we approach some of these issues together. Therefore, in addition to the Joint Ministerial Committee process, which itself is being reviewed to try to iron out some of the difficulties and make it more effective, we have a memorandum of understanding under development through the meeting that has been convened with the DEFRA Ministers. As I said, I was in Cardiff discussing that only yesterday.
Chris Davies
I thank my hon. Friend the Minister for updating us. May I ask which organisation will take precedence?
George Eustice
Always, in a memorandum of understanding or concordat, we are in effect talking about issues that are devolved. They are issues that are technically devolved but on which we all recognise that there is sense in having common frameworks, so we voluntarily come back together for a concordat—to reach an agreement. We do that already in the veterinary sphere, for instance, in agriculture. There is a veterinary concordat whereby all parts of GB sign up to an Animal and Plant Health Agency surveillance programme, and it works very well, so we have demonstrated that we can do this. But ultimately these are areas of policy that are devolved and devolved provisions of the Bill.
Martin Whitfield (East Lothian) (Lab)
I should indicate that those policy areas may technically be devolved because they are devolved. That is important.
In the notice given by the policy paper “Agricultural framework progress update: September 2018”, the Government talked about a period of 18 months to reach that concordat with the Scottish Government. Can the Minister give us any indication of a firmer timescale for that, given how long the discussions have been going on and—if I may infer—some of the challenges that he has perhaps skipped over in reaching agreement on these concordats or memorandums?
George Eustice
There is a lot of work to do. There are 92 different statutory instruments that we have had to put down in preparation for Brexit. Each of the devolved Administrations have had to do a large number of SIs themselves, and there has been an enormous amount of joint working at official level to share clauses and the legal drafting that our own parliamentary counsel has done, with the assistance of other devolved officials. We also now have 54 different Brexit projects, all of them about areas where we effectively have to either agree joint approaches or concordats, or agree that we will leave things fully devolved.
There is a large number of those projects. We discussed them yesterday. About one third of them are rated as being in the green box—everything has to be red, amber or green these days—recognising that there is already an agreement about how to proceed. On a number of others, more discussions are still needed, but that was highlighted yesterday. In the month ahead, there will be a lot of detailed working between officials.
I hope I have been able to reassure the hon. Member for Ceredigion that, through both the review of the JMC and putting the group that the Welsh Government proposed yesterday on a more formal footing, together with our plan for concordats and memorandums of understanding, we will address his concern, and that on that basis he will consider withdrawing his amendment.
Dr David Drew (Stroud) (Lab/Co-op)
We think there is considerable merit in this new clause, and we hope that the hon. Member for Ceredigion will think hard before he gives away too much to the Government. The reality is that there is a need for a framework; if we are not careful, we will effectively have four different systems of agriculture developing, and I do not think we are very careful. I have waxed lyrical already about the problems in Northern Ireland, which have become more acute after yesterday. The Democratic Unionist party has already told me that it is not necessarily going to follow this particular bit of legislation—at the moment, it is not even going to follow this Government, so watch this space.
We must be very careful that there is some degree of co-ordination—dare I say it, a single market—within the United Kingdom, let alone a relationship with the Republic of Ireland, which is crucial for them but also important for us. We think the hon. Gentleman’s new clause deserves debate, and maybe more than debate. We must secure this agreement. It is interesting that the Fisheries Bill provides powers for Welsh Ministers, Northern Ireland Departments and Scottish Ministers in a more formal sense, yet this Agriculture Bill does not. Why not? I ask the Minister that—he can intervene, or sum up accordingly.
This is not just about farming. The new clause is strongly supported by Greener UK, which feels strongly that there is a real need for cross-border co-operation and collaboration to deliver on the environmental protection improvements that the Bill is all about. The Opposition advocated that during debate on the European Union (Withdrawal) Bill, because we feel strongly that there is a need to at least keep the four countries together in terms of the different provision. Unless that is done by consensus, it will have to be done by imposition; consensus is by far the better way.
The specific requirements set out in new clause 11 would provide those legislative safeguards. Otherwise, there is nothing in the Bill to make the issue something substantive—rather, it is just on a wing and a prayer: one of the criticisms we have advanced throughout this Committee. I hear what the Minister says about how the different conventions apply with regard to meetings with the other three countries. This is very much an England-only Bill, so of course the Government can say warm words and make gestures, but those will not necessarily be tied in by the Bill.
On the need for environmental collaboration, Greener UK’s view is that the new clause is important, because those environmental considerations do not respect national borders. Unless we do similar things—we will not do the same thing, but we might do similar things—agriculture will be not just devolved but different in each of the four countries, as I have said.
Jenny Chapman
What my hon. Friend is saying is important, especially when we think about the proposed backstop arrangements for Northern Ireland, which could lead to significant divergence in standards and regulations between Northern Ireland and the rest of the UK over time.
Dr Drew
That is true. Northern Ireland is the most acute case, because it has a land border with another country. The two countries have to have some sort of similar agricultural system because farmers farm on both sides and environmentalists want to see what is happening. While I was in Belfast, I talked to Friends of the Earth, which identified a serious and growing methane problem because of what has happened to farming in the north. I also talked to various parties in the south, which identified a similar problem. That indicates how much we need a common framework.
Deidre Brock (Edinburgh North and Leith) (SNP)
Will the hon. Gentleman acknowledge that different schemes already operate in the four different parts of the UK? There is already plenty of co-operation on agriculture and the environment, so I do not think that that sort of UK-wide framework is required at this point.
Deidre Brock
That is the point of devolution—that the different parts of the UK can do things differently according to their conditions and needs.
Dr Drew
I hear what the hon. Lady says, but for a farmer farming on the Scottish or the Welsh borders, of which we have some constituency examples here, that is not good news. They need to know that there is some certainty in the systems—not to put a straitjacket on what happens in those devolved parts of the UK, but because unless we are careful, we will end up with a hotch-potch of different systems.
Sandy Martin (Ipswich) (Lab)
Is there not another danger? If there is no framework for dealing with differences or for helping the Scottish and Welsh Administrations to create systems that work for their farmers, large supermarket chains, which often determine the conditions under which farmers can produce, might use those differences to undercut farmers trying to do the right thing.
Dr Drew
My hon. Friend is absolutely right—of course they will. There is a real danger that something akin to turf wars will develop. This is not just hypothetical; it is about the need for common frameworks because of issues such as soil erosion and water management. We have to have cognisance of the fact that border areas need to take account of one another and of what is happening. Otherwise, we will end up with a race to the bottom, which we all want to avoid.
Another issue that has not been raised yet is the way that we will meet our international obligations post Brexit. As much as we have devolved Administrations, as the hon. Member for Edinburgh North and Leith rightly says, we have signed up to many international conventions as the United Kingdom. We need some method. I hear what the Minister says about how regularly Ministers meet from the four Administrations—well, three; I do not know whether officials from Northern Ireland were there—
George Eustice
The hon. Gentleman is right to say we have international commitments, not the least of which, relevant to agriculture, is to the World Trade Organisation. I was somewhat surprised, therefore, that he decided not to vote with us on establishing the clauses that would enable us to deliver those commitments.
George Eustice
And we did, but I suppose the point I am making is that there are elements of the Bill that enable us to deliver the UK’s international commitments.
The hon. Gentleman asked whether I wanted to intervene on fisheries, and he is right that there are two areas in the Fisheries Bill where provision is made for joint working, but the difference with that Bill, which we will have time to debate in the future, is that it is very much to do with international negotiations. That is why we have committed to having a joint fisheries statement. It is all about international environmental commitments that are UK-wide. Secondly, there is provision for joined-up thinking when it comes to joint licensing, which, again, relates to an international agreement. We see agriculture policy as slightly different. There needs to be more scope for the devolved Administrations to do what works for their own landscape.
Dr Drew
I thank the Minister for that, and it is a perfectly valid case to make. That would be fine if we did not have a common border with another country that is going to remain in the EU. I do not quite understand. Although the seas are different in the sense that, yes, of course, there is a question of international access across all our waters, we have the same issue, whether we call it the backstop or just the border between Northern Ireland and the Republic. We have to face up to it and look at some commonality, which is best achieved by common frameworks.
Deidre Brock
Does the hon. Gentleman accept the Scottish Government’s point that the implementation of international obligations in devolved policy areas such as agriculture is in fact a devolved matter?
Dr Drew
That is the whole point. It is a devolved matter, but it is a question of whether, as I have said, there is some degree of agreement on how to take things forward. What we are considering is just a framework, not something that will demand that different parts of the UK follow exactly what other parts will do. The reality is that they will not. We know that. In farming policy, the word “policy” is important, because legislation is one thing, but the underlying policy equally needs to be scrutinised, which we have not really been able to do. We had a rushed series of evidence sittings, and the Government’s policy paper is, at best, fairly sketchy. We shall be looking at that.
The hon. Member for Ceredigion said he wanted to probe the question, and I hope that he will consider going further, having heard what has been said, to try to be clear about the future of British agriculture—if such a thing exists, given that the issue is devolved. The people in border areas really need to know that.
Colin Clark (Gordon) (Con)
The hon. Gentleman is generous in giving way. Does he think, particularly with regard to frameworks, that it is important that we protect the internal market, or unitary market, of the UK? It is important that potato farmers in Scotland, growing seed, can sell potatoes into England, and equally that livestock can move back and forth across the border. The east and west of the country have more in common with one another than, necessarily, north and south, and it is important that we recognise the unitary market.
Dr Drew
That is a point. We were talking about relationships with the EU post Brexit and about whether we have some form of common market, if not a single market. It would be helpful if we knew that that would happen within the four nations of the United Kingdom, let alone in the relationship with the Republic.
The issues are pretty important, and even more so in environmental terms, so I want not just to concentrate on farming but to talk about environmental requirements. On issues such as air quality, climate change and sustainable development obligations, unless we move forward with some degree of unity, we are pulled apart individually. I hear what the hon. Member for Edinburgh North and Leith says about agriculture being a devolved matter, but air pollution is not, because it comes from one country to another. That is the whole point about methane: the problems in Northern Ireland do not stay in Northern Ireland but affect the Republic, and that is why the Republic is worried about what is happening in the north, as well as dealing with its own problems in the south. These problems have to be identified through some degree of co-operation. Why not have a way to lay that down? This is not a straitjacket. This is not about shoehorning four nations’ agriculture into the same box. We cannot do that, as the Bill says. Instead, we are saying that there needs to be a proper framework.
Deidre Brock
I will be brief. I understand why the hon. Member for Ceredigion has brought the new clause forward, but I cannot agree to support it. In particular, the Scottish National party position is that there is no need for a legislative UK framework of this sort. There are different common agricultural policy schemes in operation at the moment, for example, that do not disrupt the ability to trade across the UK, and land management needs are, frankly, too disparate to be covered under a single framework.
Martin Whitfield
I want to make a few points about this and to split them into the political and the legislative aspects. We have an opportunity with the Agriculture Bill to do what the National Farmers Union in Scotland has been crying out for—namely, to shape the decision-making process and establish it within the field of agriculture, for production and the environment. It would be a missed opportunity not to pursue that, given the length of time between agriculture Bills in the United Kingdom. We have an opportunity to provide farmers with a level of certainty and confidence, both of which, from the reflections that I have come across, are deeply lacking.
I said on a previous matter that the Bill is a framework and that there is little to see within it. Unfortunately, a lot of people seem to be seeing in it whatever they want to see. In doing that, we run the risk of creating something that means different things to different people. Agriculture is, rightly, devolved, but it does straddle the borders. There are farmers who do not necessarily have farms that straddle the border, but who are landowners on both sides of the border. This is an opportunity to give some certainty through a UK-wide framework, so that all our farmers and land managers and those who take an interest in the land are able to decide how they want to move forward with that confidence and certainty.
Secondly, I would like to address the politics of the Bill. We are in this position regarding this new clause and the Bill because there has been an inability for politicians to come together, consider and reach an agreement. I was grateful to the Minister for indicating the uphill challenge with regard to the memorandums that sit in front of the three devolved nations and England. However, he has highlighted the great problem that people have been unable to sit down and come to an agreement. That agreement has been desperately sought by the National Farmers Union, landowners, farmers and others on both sides of the border. There is still an opportunity to achieve it. It would be very helpful, as the Bill progresses, if the politics of it could be removed, so that some reality, certainty and, most of all, confidence can be given to our farmers.
A UK-wide framework would give an overarching picture in which each devolved area and England can continue to develop its own agricultural practices and those nuances that make a farm in Northumberland different from a farm in the borders and East Lothian. However, both those farms actually need certainty.
Ben Lake
I thank all those who have participated in the consideration of the new clause. I emphasise just a couple of things. It is of course true that there are policy differences between the different nations at the moment. However, we should also remember that there is—in effect, if nothing else—a UK-wide framework: the EU framework within which all the different nations tailor, operate and administer their policies. I therefore think there is a need to look again at how the four industries and four nations will work and co-operate post Brexit.
I understand what the Minister said about the memorandums of understanding and the concordats. I am particularly interested in the proposed dispute resolution mechanisms, or at least the potential for such mechanisms. I still argue that it would probably be neater and easier to understand if we were to have a single dispute resolution mechanism. My preference would be some sort of council of Ministers for agriculture, in which the four devolved Administrations could come together and agree on a more formal basis.
However, the point about the decision-making process was very well made by the hon. Member for East Lothian. I reiterate that we now have the initial frameworks and memorandums of understanding. There will come a point, whether in three, five, seven or 10 years down the line, when we will need to renegotiate, whether on the tricky issue of regulations or the even trickier matter of funding. An approach that sees us have an array of static concordats and memorandums of understanding would possibly not be appropriate.
This was a probing motion. Having now listened to the points made by Members on both sides of the Committee, I am tempted to go back and draft something else for the next stage of the Bill’s passage, and to then push that to a vote. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 12
International trade agreements: agricultural and food products
“(1) A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 unless the agreement—
(a) includes an affirmation of the United Kingdom’s rights and obligations under the SPS Agreement, and
(b) prohibits the importation into the United Kingdom of agricultural and food products in relation to which the relevant standards are lower than the relevant standards in the United Kingdom.
(2) In subsection (1)—
‘international trade agreement’ means—
(a) an agreement that is or was notifiable under—
(i) paragraph 7(a) of Article XXIV of General Agreement on Tariffs and Trade, part of Annex 1A to the WTO Agreement (as modified from time to time), or
(ii) paragraph 7(a) of Article V of General Agreement on Trade in Services, part of Annex 1B to the WTO Agreement (as modified from time to time), or
(b) an international agreement that mainly relates to trade, other than an agreement mentioned in sub-paragraph (i) or (ii);
‘Minister of the Crown’ has the same meaning as in the Ministers of the Crown Act 1975;
‘relevant standards’ means standards relating to environmental protection, plant health and animal welfare applying in connection with the production of agricultural and food products;
‘SPS Agreement’ means the agreement on the Application of Sanitary and Phytosanitary Measures, part of Annex 1A to the WTO Agreement (as modified from time to time);
‘WTO Agreement’ means the agreement establishing the World Trade Organisation signed at Marrakesh on 15 April 1994.”.—(Deidre Brock.)
This new clause would ensure that HMG has a duty to protect the quality of the domestic food supply by ensuring that imported foodstuffs are held to the same standards as domestic foodstuffs are held to.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 14—Ratification of international trade agreements—
“(1) An international trade agreement shall not be ratified unless it enables the United Kingdom to require imports to—
(a) comply with the standards laid down by primary and subordinate legislation in the United Kingdom regarding food safety, the environment and animal welfare, or
(b) have been produced to standards that are no lower than the legislative standards of the United Kingdom in protecting food safety, the environment and animal welfare.
(2) In this section ‘international trade agreement’ has the same meaning as in section 2(2) of the Trade Act 2018.”
This new clause would prevent the Government from entering into trade agreements that allow food imports that do not meet the UK’s environmental, animal welfare and food safety standards.
New clause 23—Import of agricultural goods—
“(1) Agricultural goods may be imported into the UK only if import would not conflict with and would be consistent with—
(a) the UK’s commitments under international law on animal welfare, including but not restricted to the European Convention for the Protection of Animals kept for Farming Purposes.
(b) The UK’s commitments under international law on environmental protection, including but not restricted to—
(i) the Paris Agreement,
(ii) CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora),
(iii) the Convention on Biological Diversity, including the Cartagena Protocol on Biosafety to the Convention on Biological Diversity,
(iv) the Convention on the Law of the Sea, and
(v) the Sustainable Development Goals.
(c) Domestic legislation on—
(i) animal welfare,
(ii) environmental standards,
(iii) the protection of health and life of humans, animals or plants,
(iv) public morality,
(v) public security,
(vi) health and safety,
(vii) food safety standards.
(d) The section on animal welfare in the World Organisation for Animal Health (OIE) Terrestrial Animal Health Code and the section on the welfare of farmed fish in the World Organisation for Animal Health (OIE) Aquatic Animal Health Code.
(2) ‘Agricultural goods’, for the purposes of this section, means—
(a) any livestock within the meaning of section 1(4) or any product derived from livestock,
(b) any plants or seeds, within the meaning of section 13(6)
(c) any product derived from livestock, plants or seeds.”
This new clause would prevent the import of agricultural goods from other countries into the UK if they have been produced to lower standards than those of the UK.
Deidre Brock
There has been considerable concern from consumers about the quality of foodstuffs that will be available after Brexit, and particular concern about the possible reduction in quality that might come as a result of trade deals, with chlorinated chicken, hormone-pumped beef, genetically modified vegetables and so on. The concerns are wide ranging and cover many areas.
Chlorinated chicken, for example, has implications for food hygiene and nutrition. We prefer poultry with higher welfare and hygiene standards throughout the journey from hatching to plate, rather than its carcass being bleached to remove evidence of poor welfare and hygiene. Those consumer concerns are matched by producer concerns about high-quality products being undermined and undercut by poor-quality, cheap imports, whose adulterations are masked by later cosmetic measures, which is truly the modern-day purchase of a pig in a poke.
Consumers and producers have been protected thus far by the European Union and its rules and red tape, which we will shortly shed. It seems sensible to me to replace those EU protections with what protections can be offered from this place. Such protection will be a pale imitation—that is sure—but we should do what we can. New clause 12 would ensure that food standards and the protections offered do not plummet off the Brexit cliff to be dashed on the rocks of profiteering below. It is incumbent on us to offer what protections we can, and the new clause would do that. Likewise, new clauses 14 and 23 would offer some peace of mind and some protections, and I am minded to support them.
I have seen no movement from the Government in this direction so far. However, I hope that the Minister will see the wisdom of accepting the need for such protections to be written into the Bill.
Dr Drew
I am minded to support the hon. Lady on this, although we have tabled our own new clause 23. This is at the core of the Bill. Although we are talking about agriculture, we cannot exclude trade from that. We—I mean the great “we”, because no organisation that has commented on the Bill is not of a similar mind—need to know what guarantees there are that the animal welfare, environmental and food-quality standards that British agriculture prides itself on will not be undermined by a race to the bottom, and that we will not take on some mad trade deals to try to dig the UK out of its current dilemma of what it does if it shuts the door on the EU. This is very important.
We have reached a turning point in our debate on the Bill. We hope the Government will get the message, from not just the Opposition but the organisations that have commented on the Bill, many of which will have spoken to the Minister. They want security and the knowledge that there will be no attempt to undermine the standards that have been put in place over generations for British agriculture and the environment. Greener UK, which has been largely supportive of the Government’s approach, sees this as one of the major dividing lines. It wants new clause 23 or new clause 12 in the name of the hon. Member for Edinburgh North and Leith.
We can argue about the definitions—we think that our new clause is slightly more foolproof, but we will listen to the hon. Lady and my hon. Friend the Member for Bristol East, who will hopefully get the opportunity to speak to new clause 14. This issue is absolutely crucial to the way the Bill will be received in not just this country but the wider world. We have to send the wider world the message that this Bill rules out importing cheaper, poor-quality food.
I know there is a degree of disunity in the Government. The Secretary of State for International Trade has been going to all sorts of places, but I challenge him to name one place outside the EU—where he has not been—whose food standards are equal to the UK’s and the EU’s. The reality is that there are not any. Other countries are able to produce cheaper food because they undermine labour standards, sadly mistreat the animals and use all sorts of other methods.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
The hon. Gentleman is making some very valid points, but is it not the case that currently, in the EU, we are unable to ban the import of foie gras or veal produced under systems that are illegal in this country? We could improve animal welfare standards by disentangling ourselves from the single market with Europe.
Dr Drew
I hear what the right hon. Gentleman says. If we had been more effective, we might have got rid of those things. We have to pay due regard to our international obligations, and such issues should be tackled internationally. The problem is that we are going backwards to go forwards. I know that we get hung up on chlorinated chicken, but a whole range of things could be coming our way from the US, because the Americans have a fundamentally different attitude towards food. Their view of food is that it is more about price and availability, which is why they are able to do the things they do. Of course, much of the food produced in the US is good quality, but the problem is that the methods by which they produce much of their food are alien to the British way of producing food. We have to accept that.
I have already made the point that if Australia is able to break its sheep meat quota, it will completely undermine the lamb market in Wales and other parts of the United Kingdom. This really does matter. We know where the dilemma comes from. In much of the Bill, we have had arguments about powers and duties, the Henry VIII clauses and so on. My hon. Friend the Member for Darlington knows that the Trade Bill would give so much power to the Secretary of State to chip away our regulation, if they so choose, that it is deeply worrying if we do not hold the line in this area at least.
Martin Whitfield
Is it not the case that new clause 23 would give protection to the timber industry and, more importantly, address illegal logging? We would extend our protections even wider. One of the great environmental tragedies is the loss of rain forests and the continuous forests that are needed. This proposal would give protection there as well.
Dr Drew
My hon. Friend rightly chides me that we never bring timber into this discussion. That is, of course, as important as food and other areas, so we should be looking at an integrated approach. He is absolutely right. This is important because, unless we state in the Bill how we will approach trade, we will lose the opportunity for agriculture’s voice to be heard properly. More importantly, there are no safeguards or failsafes in place, because the Government did not listen to us on the Trade Bill.
I hope the Minister recognises that across the terrain of the farming and environmental organisations and the food lobby, security is what is wanted, in the form of a new clause that gives the certainty that we will keep to our word—that the standards of British food will be maintained and will not be subject to cheaper, poorer imports. That is why we make no apology for saying that this is a really important part of the Bill, and that we hope the Government will listen and accept what we are trying to do.
Kerry McCarthy (Bristol East) (Lab)
I would like to speak to my new clause 14 and to support new clauses 12 and 23.
As has been said, there is a great deal of consensus regarding support for the principle behind the motions. I was with the National Farmers Union in Gloucestershire during the mini-recess in early November, and members were adamant that all the benefits that would come from the new subsidies regime would count for nothing if they were undercut by cheaper imports that were produced to lower standards. That would mean their either somehow having to lower their own standards, which they are adamant they do not want to do—they are proud of the standards they work to—or simply going out of business. As has been said, the green groups are supportive of the measures for obvious reasons, as is anyone who is interested in food sustainability and anyone who thinks it important that we stick to the standards we have kept to for many years through our membership of the European Union.
We know there is a threat; for all the reassurances the Minister can give us about not lowering standards post Brexit, we know that many in his party are keen to see that happen. To start with, the response I was getting from the Department for Environment, Food and Rural Affairs was that there would be no lowering of British standards post Brexit, which obviously leads to the suspicion that we would allow lower-standard imports. The response has now moved, very late in the day: when the Secretary of State for Environment, Food and Rural Affairs and the farming Minister gave evidence to the EFRA Committee last week, they were keen to say that the measure would not apply to imports. The EFRA Secretary also gave me assurances that the Secretary of State for International Trade believed that as well. Given the record of the Secretary of State for International Trade on the matter—I was in Washington last year when he hit the headlines talking about chlorinated chicken and so on—I think that he is, to coin a phrase, “intensely relaxed” about the import of lower-standard foods.
There are certainly many in the Conservative party—the global Britain Brexiteers—who are keen to see us go to a no-deal scenario and, I believe, a race to the bottom. My constituency neighbour, the hon. Member for North East Somerset (Mr Rees-Mogg), has argued that as socialists we ought to welcome cheaper food imports because they would solve food poverty. He is also the person who said that food banks were a great thing because they show big society coming together and people helping each other. I have urged him, on a number of occasions, to cross the border into Bristol to see what food poverty actually looks like. From what I know of his constituents, I do not think they would welcome the bringing of chlorinated chicken into the country.
Martin Whitfield
Does my hon. Friend agree that if the Minister and the Secretary of State had the certainty that the minimum level was stated in the Bill, they would have some confidence and protection and the ability to say, when we come to trade agreements, “We can go no lower than this”? That certainty may help with the negotiations.
Kerry McCarthy
We know there will be huge pressure when the negotiations start. The US has made it clear that it wants to see its produce that is currently banned allowed into the country, and Australia and New Zealand have said something similar. The International Trade Committee has warned of the risk of an “agriculture for services trade-off” in a future deal with the US, and we know that when they get into the negotiating room that is what will happen.
During the passage of the Trade Bill, I tried to put in an amendment, and we were repeatedly told that the Bill was not about future trade deals and the scrutiny of them, despite there clearly being provisions in it that talked about such deals. When I tabled amendment 81, attempting to insert a non-regression clause into any new trade agreements, I was told that that was not the place for it, and Ministers now say that that would be outside the scope of the Agriculture Bill too—the farming Minister said that to the EFRA Committee last week. This Bill is about protecting farmers, our food standards and the fairness of the UK supply chain. This amendment is fundamental to everything the Government are trying to do to support and sustain high-quality British food, produced to high environmental food safety and animal welfare standards. I should have thought that the Minister would welcome its being enshrined in the Bill, so that the Bill matches those words.
We heard some concerns about the potential impact if we allowed American imports, for example, into this country. There are food safety issues; the Secretary of State for Environment, Food and Rural Affairs has said that chlorinated chicken is not about food safety standards but is just an animal welfare issue of how the animals are treated beforehand—the fact that a bucket of bleach is tipped over the chicken at the end deals with any hygiene issues. When he gave evidence to the Environment, Food and Rural Affairs Committee on 31 October, I pointed out that the incidence of food poisoning in the US is around 10 times higher than in the UK. On average, one in six people in the States will succumb to food poisoning each year, and about one in 66 in the UK. The Environment Secretary was quite taken aback by that, and said he would go away and look at that.
A total of 380 deaths each year are attributed to salmonella in the US; there were no deaths from salmonella in England and Wales between 2005 and 2015. The campylobacter infection rate in the US is more than 6,000 per 100,000 of the population. In the UK that rate is much lower, and falling. The US has an average of 1,591 cases of listeriosis a year, compared with 177 a year in England and Wales.
Unless Americans are particularly unhygienic in their homes, there is clearly a food safety issue in American food. We do not want that imported into this country. Most recent evidence published by microbiologists at Southampton University in the US journal mBio found that bacteria such as listeria and salmonella remain completely active after chlorine washing. The process merely makes it impossible to culture them in the lab, giving the false impression that chlorine washing has been effective.
It is not just the case that we do things slightly differently here, and that although the American system deals with all the hygiene issues at the end, we deal with them throughout the production chain and they have the same impact. There is a very clear difference in the produce there. The Minister said that in the US they
“turn a blind eye to what might happen on a farm, and then treat it when it gets to the abattoir.”
That is why he said it was an animal welfare issue. It is not just an animal welfare issue. Even if it was, we would not want to accept that here anyway. Colleagues of the farming Minister, such as Lord Deben, will be very interested in this issue when it comes to the House of Lords. He said recently that imports of US-standard food would lead to a huge decline in food safety.
The routine use of antibiotics on farms is contributing to the growth of antimicrobial resistance and the rise of superbugs and putting public health at serious risk. That is five times higher in the USA than in the UK. The Minister will probably say that we are making strides to reduce the routine use of antibiotics in UK farms. In America it is still much higher, and if we are forced to compete with American imports, inevitably that will lead to intensification of our farming system here. Many more animals will be crammed into mega-farms, which will mean that antibiotic use inevitably will go up because that is what it tends to be used for—as a pre-emptive measure against infection when lots of animals are crammed together.
I think we will return to this issue on Report, as there is cross-party support for that. It is not enough for the Minister to say, “We do not want a lowering of standards.” I do not cast doubt on the Minister’s credibility—I believe that he does not want that. I believe that the Secretary of State for Environment, Food and Rural Affairs does not want that. Unfortunately, I do not believe all his colleagues, or that there are enough safeguards to rely on warm words alone.
Simon Hoare (North Dorset) (Con)
It is a pleasure to serve under your chairmanship, Mr Wilson. I rise to speak very much in the spirit with which the hon. Member for Bristol East finished her remarks. She is absolutely right to have identified the cross-party interest in and concern about these issues.
Since the British people made the decision to leave the European Union, I have always said during my meetings with the National Farmers Union and farmers in my constituency that, as important as this Bill will be, the most pressing issue is probably the one raised by the hon. Member for Bristol East in relation to the new clauses. The Bill does important work: it is trying to sculpt and scope a framework of support, and triggers for that support, for UK agriculture. We all want that to be a success, we all understand the importance of the sector to our national economy, and we all want to see it flourish. We therefore understand the importance of the Bill.
We also understand entirely, from remarks made by my hon. Friend the Minister, that in many respects this is a skeleton Bill, or a Christmas tree Bill, upon which certain things will hang and from which future policies and initiatives will flow. I think that we have to be incredibly careful. I hope that we will be able to enter into trade agreements, because they will be good for UK plc, but we should not throw the baby out with the bathwater in their pursuit. We should not see a lowering of our standards in certain areas, particularly within the food sector. I have always had a concern that, for some in British politics, the pursuit of the “Brexit dividend”—to give it a handy moniker—could most readily manifest itself in the price of foodstuffs.
On several occasions I have heard my hon. Friend the Member for North East Somerset, as the hon. Lady for Bristol East referenced, talk about the lowering of food prices in the shopping basket, and likewise with shoes and clothing, although I appreciate that they are not part of the Bill. He may very well be right. I always point out that we are spending the lowest percentage of our household income on food than at any time in our history, so it is hard to see how food could become very much cheaper in real terms.
However, my concern is about the next step of the scenario. My concern has always resided on this point: if individual trade deals came back to this House to be voted upon in an affirmative way, whether through a statutory instrument or on the Floor of the House, this issue could be part of the checklist to establish whether one would be minded to support it. However, it looks as if trade agreements will not be subject to a vote in the House, so we would be wise to include in the Bill this precautionary principle—this little check—to provide comfort to consumers, who need as much information as possible. I do not believe in the sort of free market in which any old rubbish is put on the supermarket shelves and then people are allowed to make an informed decision. We have to have some standards so that people can have general confidence in the product they are purchasing, irrespective of the price that happens to have been set. There needs to be some underpinning and some general benchmark of standards.
On the “Brexit dividend”, I have always put it to my colleagues in this way: were trade agreements to be entered into that saw, as part of some spirit of reciprocity, new markets opened to what we might call the sexier sides of our economy—finance, IT, insurance, pharmaceutical and the like—the quid pro quo trade-off will be access to our large and growing consumer market, hungry for food, if the Committee will forgive the pun. We would find ourselves swamped with cheap imports, raised to all sorts of standards. Some may be higher than ours, which would be great. Some may be the same, which would be perfect. I think that we would all be keen to resist anything that was lower, for example in relation to chemical applications or animal welfare issues—I see those as equally important.
However, I have often made the point that those cheap imports would remain cheap only while a robust domestic production market formed a competitive market and challenge. I made that point on Second Reading, as did other colleagues. My fear, my hunch and my prediction would be that, as a result of a swamping of overly cheap imports—priced cheaply because the standards are lower and therefore the costs of production are less—that would see a rapid choking off of our domestic production market, either to the point of being barely recognisable, or to be non-existent.
Either of those scenarios could result in a situation whereby those who had distorted our food pricing market would then ride the crest of a non-competitive wave because domestic production would have diminished to a point at which it really only deals with the niche, farmers’ market type of market, but not large-scale domestic production. Having had two or three years of cheap prices, we would suddenly find prices going in an upward trajectory on a very fast escalator. It would be faster plus, because not only would they want to recoup the money for products sold cheaply then, but they would also want desperately to claw back the under-pricing that they had triggered as importers to our country—or exporters, depending which end of the telescope we care to look through—and regain that lost revenue, because they had deliberately distorted the market in order to choke off domestic competition.
I entirely take the point made by the hon. Member for Bristol East that the bona fides on this issue of my hon. Friend the Minister and my right hon. Friend the Secretary of State are beyond challenge. They have been absolutely and abundantly clear. If I could preserve my right hon. and hon. Friends in some sort of political aspic and presume that they would always be in office—I am not sure whether they would find that an attractive proposition—we could all take a step back and breathe a little more easily. We all know that legislation cannot bind our heirs and successors because it is subject to amendment by future Parliaments, but we should at least be setting some definitive benchmarks now. On something as important as this, it is in the Bill—although not necessarily in the wording of these new clauses—that we need to put down those important markers. Would it not be the most frustrating waste of the Committee’s time to have spent it talking about the importance of a sector and seeking to build a cross-party coalition in its support and furtherance, only to find all our work and good efforts coming to nought as a result of an overly laissez-faire approach to trading issues?
Before my hon. Friend the Member for Milton Keynes South has some sort of apoplectic fit, I assure him that, at this stage—because I am very conscious that our hon. Friend the Minister will need to go back and talk to colleagues—if the amendments are pushed to a vote, I will not support them, because further discussion is needed. I give my hon. Friend the Whip that assurance today, but I am afraid that I cannot give the same cast-iron guarantee on Report unless we see some movement on this.
I do not believe that I am alone. I noticed the sharp inhalation of breath by the hon. Member for Bristol West, in a theatrical, pantomime gesture. I hope that my hon. Friends on the Front Bench know that I have never rebelled—I have never voted against Her Majesty’s Government—and I hope that I do not have to. However, I think that the hon. Member for Bristol East was absolutely right that there is a broad coalition of interest in this on the Floor of the House. Whether Members come from a public health aspect or a fiercely pro-agricultural aspect, or whether they are concerned about better shaping and sculpting the post-Brexit environment, I am not sure.
Mr Goodwill
My hon. Friend makes some very valid points. Does he agree that adequate labelling is also part of this? For example, a lot of processed chicken comes in from Thailand and Brazil, but consumers are often not aware because it comes as part of a product. Does he agree that part of the solution to this problem is better labelling, so that people know what they are buying?
Simon Hoare
My right hon. Friend is absolutely right. At the appropriate time there needs to be a significant and radical overhaul of the red tractor. There needs to be much clearer labelling and information. However, information itself can be a bit of a blunt instrument. People need to know how to interpret and understand the information put in front of them. I can read a manual on how to wire a plug 17 times but I will still not understand how to do it. However, the information is there. I do not actually know how to rewire a plug. That is why candle consumption in the Hoare household is very high.
Jenny Chapman
I remember, during the ’70s, when I was a child, my dad having to put a plug on the end of every electric device we had. However, that is no longer needed, thanks to European Union regulations on the issue.
Simon Hoare
I hope I do not insult the hon. Lady by saying this, but I am rather guessing from those remarks that she and I are therefore of a similar vintage. Were those not simpler and happier days? That is where we are.
I do not wish to detain the Committee for any longer than I need to, but this is a pivotal thing that could dramatically affect our agricultural sector. It is not about protection or insulation. It is not about preserving our farming sector in some sort of legislative aspic, to create some sort of bucolic scene of smock-wearing, corn-chewing loveliness where sheep are clean and all the rest of it.
Simon Hoare
I shall leave the hon. Gentleman to polish his own sandals. I have never been a sandal wearer, apart from at school, I suppose.
However, we need to make sure that the sector is vital. It is not an old-fashioned sector; it is at the cutting edge of production and of using agritech and new sciences to farm and produce in more environmentally sensitive ways and to increase animal welfare and so on. It would be a tragedy if that all came to naught, and the work of the Committee came to naught, and we suddenly found that there was no agricultural sector, or such a small agricultural sector that, in actual fact, all this work was unnecessary.
I think that the hon. Member for Bristol East is right; there is a broad consensus and a growing coalition on these issues in the House. I urge my hon. Friend the Minister to convince colleagues across Government of the clear and compelling virtue that motivates both him and our right hon. Friend the Secretary of State.
Sandy Martin
I shall be brief, because most of what I would have said has been said by hon. Friends, and indeed by the hon. Member for North Dorset, with whom I absolutely concur. There has been a lot of discussion about whether we should be rule takers or rule makers, but there is no point in adhering to rules or in making them for ourselves if they are all then undercut by other people.
Other countries do not always adhere even to international agreements that they have signed up to. If we are going to adhere to them ourselves, as we should because they are good rules, we need to ensure that we have a legislative justification for refusing to take their goods. I am worried that without any legislative justification it will be extremely difficult for us, under either international trade agreements or World Trade Organisation rules, to prevent imports of goods that are produced without following those rules, undercutting what farmers can and should be doing in this country.
If we are to achieve any of the public goods set out in clause 1—healthy, sustainable food; a reduction in pollution and climate change emissions; protection of our countryside; and decent working conditions for people in agriculture—we need to have farming in this country that is not only ecologically, but financially sustainable, and it must not be undercut by other countries. A television programme I recently saw by chance included an appalling part about vegetables being produced in southern Spain. It showed just how bad some of the trashing of the environment and the treatment of people was. That was within the European Union, so we do not always get it right within the European Union, but at least while we are in the European Union there is a mechanism for trying to enforce rules in other countries. We will not have that once we leave the European Union, and we need to ensure that there is something in the Bill that will do that.
Pollution and climate change do not respect borders. There is no point in our trying to reduce the level of pollution and climate change emissions in agriculture in this country if we do not have some mechanism for ensuring that we can impose those high standards on producers in other parts of the world. If we do not have explicit rules in the Bill about what we will import, we are leaving ourselves open to undercutting and not only will farmers in this country suffer, but the environment will suffer in this country and in the rest of the world.
Jenny Chapman
I do know how to wire a plug; that is the first thing I want to say. I add my voice to this because we need to hammer home to the Minister the level and extent of the concern across the parties on this issue. I do not know whether my hon. Friend the Member for Bristol East wishes to press the clause to a vote today or whether there might be opportunities to express the view of parliamentarians in future stages of the Bill, but the Government need to take the hint provided by the excellent speech by the hon. Member for North Dorset, which put the point across incredibly well. It might be a good idea for the Government to come back with their own proposition at a later stage, perhaps in the other place, and propose something that we can all support.
This matter is of such great concern and importance because it is all happening in the context of the withdrawal agreement that we had sight of last week, which is unclear about the future of these kinds of standards, either in the backstop arrangement or in the political declaration about the future relationship. There is a huge row going on about that outside this Committee, so we do not need to go into it all here, but suffice it to say that the agreement is incredibly vague and non-specific about how the UK’s future standards and regulations on these issues would look. That is something that we are unhappy about anyway, but it is particularly important when we look at the issues that we are considering. The hon. Member for North Dorset put it well when he said that the impact may not be felt straightaway but that the erosion of the industry could be seen over time. We have spent so much time in Committee discussing how to protect, enhance, sustain and grow that industry so it will continue to be the best in the world, and it would be a tragedy to see it diminish because we did not have the foresight to put these safeguards in place.
In a way, I am reminded of what has happened to the high street. In not that long a time, we have seen the withdrawal of the vibrancy of our high streets, and it will be very difficult to get that back. Exactly the same thing could happen to our agricultural industries. As a generation of politicians, we would never be forgiven for that.
Obviously, we import food from the US now, but we do it carefully within a set of rules and we are mindful of the standards of what we import, so everybody knows that they can buy food that has been imported from the US with confidence and that it complies with the standards that we expect in this country. That needs to be the case in the future too. I think there would be widespread public support for that to happen in the Bill, and if it does not, I am not sure where in law that provision would be placed, particularly if we were to leave without a deal. I am pretty confident that we are not going to do that, actually, because I do not think the Government would take us down that catastrophic path, but we are here to deal with things that might happen as well as things that we expect to happen.
Mr Goodwill
Surely if the hon. Lady is keen for us to leave with a deal, her party should vote for the deal before us.
Jenny Chapman
I do not believe that the Government have any intention of leading us out without a deal, and if they tried, the vast majority of MPs would get in the way. According to the Government’s technical notices, leaving without a deal would require 51 pieces of legislation, and on day one of that legislation being introduced, an amendment would be tabled that said, “This Government may not lead us out without a deal.” Parliament would use the many opportunities that it would have to prevent it happening, but I do not believe that the Prime Minister has the slightest intention of going down that path. I think she wants a deal, but the argument we are having is whether it is this deal.
Simon Hoare
Following the comments of my right hon. Friend the Member for Scarborough and Whitby, I hear what the hon. Lady says—she and I have discussed it—but my right hon. Friend is right that at some point, the hon. Lady’s party will have to vote for a deal produced by the Government and not just hide behind process and everything else. To leave with a deal, we have to get a deal.
The Chair
Order. May I suggest that we stop the discussion there before we go down a rabbit hole from which we will never recover?
Jenny Chapman
I have been advised by the Chair not to respond, so I will resist, but there is nothing processy about our objection to the deal. The deal does not include that which we have told the Prime Minister we need in order to support it.
Our fourth test about preventing a race to the bottom is absolutely relevant to the new clause. Unless we have the new clause, or something like it that the Government have the opportunity to introduce—I have never seen a Minister stand up and say, “I accept your clause” to anybody across the way; I understand that they always want to bring back their own—we will see a race to the bottom. For about 18 months, we have set out the criteria by which we would assess a deal. Avoiding a race to the bottom is very important to us for the reasons we are discussing.
The withdrawal agreement and the political declaration mention non-regression measures. I have not got the agreement with me—this is the only time this week that I have not carried the damn thing around with me. Will non-regression measures apply to food standards, environmental protections and animal welfare? The agreement contains something about workers’ rights, but it would be helpful to know from the Minister whether non-regression measures will apply to the issues we are discussing.
Things look uncertain. We are not even sure whether the agreement published last week will be agreed by Parliament, or what steps the Government will take even if it is agreed. Which measures will apply to this industry, and what opportunities will there be to make this type of clause binding if we do not take the opportunity now? I am not certain that we will have the opportunity before the end of March next year. We have a duty to put this in place in some way, shape or form between now and then. If the Minister assures us that there will be an opportunity to do so, we will need to think about that, but for now, I think this is it. If the Government do not adopt these measures today, when will they do so? They are incredibly important, and there is clearly cross-party support for this kind of instrument. I think the Minister gets that. It would be useful to hear how he intends to proceed, how far he intends to go, and what form he thinks the protections need to be in.
George Eustice
The amendments all seek to achieve the same thing: to set out in statute a requirement that no trade deal can be done or put before Parliament unless its terms mean that no good can be imported that does not meet our standards.
Before talking about the approach that we intend to take on future trade deals, I want to say first and foremost that this is an incredibly important issue. As a number of hon. Members highlighted, the Secretary of State and I could not have been clearer that we will not water down our trade and animal welfare standards in pursuit of a trade deal. The Department for International Trade has now adopted that position unambiguously, despite what the hon. Member for Bristol East said. It is clear that we will not water down our food standards in pursuit of a trade deal.
I want to make a number of points. First, the EU regulations on chlorine-washed chicken, hormone-treated beef and other standards are coming across through the European Union (Withdrawal) Act 2018 and will sit as retained EU law. It will be unlawful to do a trade deal allowing hormone-treated beef or chlorine-washed chicken into the UK unless Parliament decides to repeal the legislation that bans its sale in the UK.
Secondly, we are obviously working on our future trade agreement with the European Union. The approach outlined in the Chequers proposal, which remains the basis for the UK’s approach in the development of a future economic partnership, is that we will have a common rulebook on issues pertinent to the border, which will include sanitary and phytosanitary issues. It is likely that a Bill giving effect to the future economic partnership will give additional protections in this space.
This is an important matter for another reason. The United Kingdom has been on a rather different journey from the United States—in particular, over the past 30 years. In the UK, there has been a growth of consumer interest in food provenance. Consumers want more labelling so they can understand how their food was produced. They want higher standards, and they have sought to purchase locally where possible. We have seen a growth in farmers’ markets and a much stronger consumer interest in the quality of food.
Dr Drew
Will the Minister tell me what the former Secretary of State, the right hon. Member for North Shropshire (Mr Paterson), was doing in Oklahoma, if not trying to talk about some trade deal? If he cannot pull it off in this country, let alone the US, what was he doing in Oklahoma?
George Eustice
I did not know that my right hon. Friend was in Oklahoma, but he is no longer the Secretary of State, and I have not had time to go to Oklahoma personally.
Smaller countries such as New Zealand and Australia have less parliamentary scrutiny—it is predominantly a prerogative for the Cabinet—but even Australia has a process whereby the final trade deal must be laid before Parliament for a period of 15 days. For us, this is an area led by the Department for International Trade. The hon. Member for Stroud said there were a number of amendments to the Trade Bill, which I know were debated. DIT has taken a position somewhere between the two. It envisages a 14-week consultation to run ahead of any new negotiation. There would then be a strategic trade advisory group, created to advise Ministers. As negotiations progressed there would be regular updates and statements with the International Trade Committee, so there would be a committee of MPs scrutinising the progress of negotiations. Finally, at the end of the negotiation, the terms of the Constitutional Reform and Governance Act 2010 would kick in. That would require the Government to lay the trade deal and the treaty that established it before Parliament. There would then be a period of 21 days during which Parliament could pray against that trade Bill and vote to refuse its ratification.
If that happened, the Government would have to go away and think again about what to do. If that process continued a number of times, it would obviously be possible to bring a motion before Parliament that would effectively veto the treaty. There would be lots of scrutiny during the development of the trade deals and then a parliamentary right to veto at the end.
Sandy Martin
Does the Minister accept that most trade deals involve various sectors? There is something unique about the agriculture sector and, in particular, the agriculture sector that will be created if this Bill is enacted. Farmers will be supported to do things other than the production of the substance that is the subject of trade. When we have a trade arrangement on agricultural products, we have a very different scenario from that we would have with a trade deal on products from producers who are not being supported to do other things. It is the support to do other things that needs the special protection in trade deals to do with agriculture.
George Eustice
The hon. Gentleman makes an important point, but it is broader than that. Agriculture is unique. There is a reason why most trade deals that fail founder over arguments around agriculture. Controversy around deals such as the Transatlantic Trade and Investment Partnership or any others, for that matter, always concern issues about food standards, food quality and animal welfare, and rightly so. The truth is that consumers care about those issues deeply and passionately. They are less interested in chapters on digital or financial services.
Sandy Martin
So does the Minister accept there is a very good reason for having a special trade clause in the Bill?
George Eustice
There is a very good reason for having the thorough process outlined by the Department for International Trade that I am describing to the hon. Gentleman.
Mr Goodwill
There has been much talk about trade deals in terms of what others might send us, but does the Minister not agree that trade is a two-way process? If, as he suggested, the Americans are becoming much more discerning in the quality of the products they buy, there are great opportunities to export products such as Wensleydale cheese or British beef to these new markets.
George Eustice
That is a very important point. We are working at the moment to try to get access for British beef to the United States because it is a premium product and their beef tends to be lower grade. There is also a good market for British dairy products, particularly our famous cheeses, in the United States where they largely have a standard cheddar that is not particularly good. There is a market for those. There are offensive opportunities in some of these trade deals, which we should always bear in mind.
Jenny Chapman
I would observe that not all American food is as dire as it might seem from our deliberations. There is a thriving organic, local food market in the United States.
I want to ask the Minister about process. Will there be an opportunity for Parliament at the mandate-setting stage to constrain the trade negotiations, so that it can be made clear to negotiators that Parliament will not accept anything that breaches the standards that we are trying to embed? The Minister seeks to do that agreement by agreement, but we are trying to put those constraints in the Bill.
George Eustice
The hard power, for want of a better term, that Parliament will have is the power to block ratification at the end of the process. As I outlined earlier, there will be a 14-week consultation process where anybody—consumer groups and whoever—can feed in.
As the negotiations progress, there will be regular scrutiny from the International Trade Committee, which will be a parliamentary Committee providing that scrutiny. Therefore, it will not be a mandate as such—in that sense, it is perhaps more akin to the Australian system—but it will have some of the features of the US system, in terms of parliamentary overview as the negotiations progress, but also the ability to block ratification at the end.
Martin Whitfield
Is not the danger with the procedure that the Minister is outlining that every time a trade Bill comes up with any country or group of countries, we will have a repetition of evidence and submissions from farmers, who will seek, rightly, to defend what we agree across the House about a bottom level. Removing that repetition would make life a lot more certain for farmers, in terms of how we are going forward in the agricultural community, but also, more importantly, it open ups space for other discussions that will be particular to an individual trade Bill, rather than something that I think we agree would apply to every trade discussion.
George Eustice
I think that that is right and it is why ultimately this area of policy is for the Department for International Trade, because it has to look at the whole trade piece. As the hon. Member for Ipswich pointed out, agriculture is unique and special, and that is why DEFRA has a special role in this—because there are complex issues in relation to tariff rate quotas, which a lot of people do not understand and which are very agriculture-specific, and lots of complex SPS issues. Agriculture is a unique and highly complex area of trade that we would need to get right.
In conclusion, a process has been set out; there is an ability for Parliament to block ratification and, if it so wanted, to make a resolution to strike down a treaty. However, in the light of the points made by my hon. Friend the Member for North Dorset, I will of course undertake to talk to Government colleagues to see whether anything could be refined in this process to reflect the agricultural context of trade agreements and to look at the role of scrutinising those agreements from a strictly agricultural perspective. I do not think that it would be within the scope of the Bill, but I hope that in Committee I can give some additional reassurance in this regard.
Deidre Brock
This has been a very good debate, with very good contributions from hon. Members on both sides of the Committee. I appreciate what the Minister has said about trying to refine this issue at some stage, when we go further into the Bill, but I am disappointed that he has not indicated that he will include a clause about trade in the Bill. We still come back to this question: where are the safeguards to prevent Ministers from signing up to trade deals that disadvantage UK food producers and potentially lower animal welfare, environmental protection and food standards? Farming, environmental, public health and food-producing organisations think that the strongest assurances are required in the Bill so, in the hope that the Minister and his colleagues will agree with me that it is important to make it clear now to all those organisations and to our constituents that their concerns are being taken seriously and listened to, I will push new clause 12 to a vote.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss the following:
New clause 17—Primacy of public purposes—
“The Secretary of State must ensure the payment of public money delivers primarily the purposes in section 1(1) so that the natural environment is conserved, enhanced and managed for the benefit of present and future generations.”
This new clause is intended to ensure that the list of public purposes set out in Clause 1 are the primary objective for payments under the Bill.
New clause 19—Financial assistance: duty to provide advice—
“(1) The Secretary of State must make regulations to secure the provision of training, guidance and advice to persons receiving financial assistance under this Act, for the purpose of enabling those persons to deliver the purpose or purposes for which the financial assistance is given.
(2) Regulations under subsection (1) may include provision for advice on matters which include but are not limited to—
(a) the impact of any practice upon the environment,
(b) business management, including the development of business plans,
(c) the health and welfare of livestock,
(d) the safety and health of workers in any agricultural sector,
(e) innovation, including alternative methods of pest, disease and weed control,
(f) food safety, insofar as it relates to the production of food or any activity in, or in close connection with, an agri-food supply chain,
(g) the operation of any mechanism for applying for, or receiving, financial assistance under this Act,
(h) marketing of any product falling within an agricultural sector under Part 2 of Schedule 1.
(3) Regulations under this section are subject to affirmative resolution procedure.”
This new clause would require the Secretary of State to make provision for training, guidance and advice to be made available to persons receiving financial assistance.
New clause 27—Smallholdings estates: land management—
“(1) A smallholdings authority which immediately before the commencement of Part 1 of this Act holds any land for the purposes of smallholdings shall review the authority’s smallholdings estate and shall, before the end of the period of eighteen months beginning with the commencement of Part 1 of this Act, submit to the Secretary of State proposals with respect to the future management of that estate for the purposes of providing—
(a) opportunities for persons to be farmers on their own account;
(b) education or experience in environmental land management practices;
(c) opportunities for increasing public access to the natural environment and understanding of sustainable farming; and
(d) opportunities for innovation in sustainable land management practices.
(2) No land held by a smallholdings authority as a smallholding immediately before commencement of Part 1 of this Act is to be conveyed, transferred, leased or otherwise disposed of otherwise than—
(a) in connection with the purposes listed in subsection (1); and
(b) in accordance with proposals submitted under subsection (1).
(3) For the purposes of this section, “smallholdings authority” has the same meaning as in section 38 of the Agriculture Act 1970.”
This new clause would limit the disposal of smallholdings (‘county farms’) by local authorities and would require local authorities to review their holding and submit proposals for future management to provide opportunities to extend access to farming, education, and innovation.
Kerry McCarthy
New clause 16 aims to get specific targets into the Bill, to ensure that it meets its objectives in relation to the public goods for which financial assistance is provided in clause 1. Those objectives are all laudable, but verge on the vague. The new clause would include targets and objectives to ensure that air quality is safe; that our fresh waters and seas are in good ecological and environmental status; that our soils are healthy and used sustainably; that the extent, quality and connectivity of habitats is increased, and natural processes are restored; and that the richness of species is maintained, and their abundance is restored to at least favourable conservation standards on land, in fresh water, and at sea.
We know from the Climate Change Act 2008 that legal targets with identified milestones have a proven track record in delivering environmental outcomes. We could have a separate debate about whether we are doing enough to meet the targets in that Act when it comes to future carbon budgets, but that is a matter for another day. We at least have targets that set out the future programme, and also provide farmers with policy certainty and a framework for future investment. I accept that setting out such targets on the face of the Bill would be rather complicated, particularly as we are still looking at quite a lot of the detail about how to measure some of the public goods, reward farmers for meeting them, and so on. Rather, new clause 16 would impose a duty on the Government to bring forward targets and objectives as soon as possible.
During this Committee’s fifth sitting, the Minister said that the Government would do that, and again, I believe he is genuine in wanting to take this forward. He said:
“we have a 25-year environment plan. An environment Bill will come from that, which will set out targets, objectives and commitments to get trends moving in a particular direction. It will give a longer term commitment and buy-in, which successive Governments will work towards.”––[Official Report, Agriculture Public Bill Committee, 30 October 2018; c. 149.]
However, we know—it has been on the front page of the papers—that the Secretary of State for Environment, Food and Rural Affairs has some differences with his colleagues in this area. In this case, those differences are not with the Secretary of State for International Trade, but with the Treasury. The Sun said that the Treasury was trying to block green targets from being enshrined in law. Perhaps when he responds the Minister can tell me whether there is any truth in that suggestion.
The Treasury certainly got its way in the Budget, with little more than tokenistic gestures on the environment. The biggest announcement, £10 million for tackling abandoned waste, seemed to be there only so that the Chancellor could set up a joke about the shadow Chancellor, who had fallen over some fly-tipping and bruised his face. In particular, despite great fanfare when the Chancellor referred in the 2017 Budget to the Government’s intention to deal with plastic pollution, and then re-announced it in the spring, that was a damp squib in this year’s Budget. The purpose of the new clause is to protect the Minister and his boss, the Secretary of State for Environment, Food and Rural Affairs, from their colleagues in the Treasury. We are on the Minister’s side: we want to make sure he can deliver a green Brexit, as we believe he wants to do. We want to help him with that.
The Chancellor’s view that any new laws should be kept to a minimum does not, I believe, represent the views of many businesses. In a letter published in The Sunday Telegraph—yes, I am a Sunday Telegraph and Sun reader; I hope Conservative Back Benchers are listening—members of the Aldersgate Group, including Siemens, Marks & Spencer and IKEA, called for the Bill to set
“measurable targets to cover improvements to air and water quality, soil health, peatland restoration, net biodiversity gain and resource efficiency.”
The group said that those targets
“provide a level playing field”,
which is what everyone wants,
“incentivise investment in innovation, support job creation and help businesses develop commercial strengths in fast-growing areas of the world economy.”
As the group’s executive director says:
“Where environmental protections are ambitious, well designed and properly implemented, they can actually deliver economic as well as environmental benefits”.
We hear a lot about red tape, regulation and targets being a burden on business. I included that to show that business likes targets and certainty. Businesses like to be able to plan, and to know that the Government are on their side.
Reassurances by the Minister will not be enough; we need the promises to be enshrined in law. We know that the Environment Secretary was offered another job just a couple of days ago. I never thought I would say that I was glad that he turned it down, but for the time being I am glad that he is still in post. However, given the current chaos on the Government Benches we do not know who will be in post perhaps even in hours, let alone days, weeks and months. It is important that we enshrine it in law, so that we can protect the noble ambitions of the farming Minister and his boss.
Kerry McCarthy
I should have said at the beginning that I will not press new clause 17 to a vote. I have had a change on that for the time being.
Dr Drew
Okay—left hand and right hand. I will speak to new clause 16, which was excellent, and which we fully support because it is about targets, which is largely what the group of new clauses is about.
Although we are losing new clause 17, new clause 16 is important. It tries to tie together the Bill with the environment plan, which is crucial to the Government’s way of thinking. It is about setting targets and putting meaningful arrangements in place so that we can look at where the Government’s joined-up thinking is taking us. We hope that the Government will look carefully at new clause 16. They might agree with what we are doing, but we will look at that on Report.
Again, there is universal support from farming organisations and, in particular, from the various green contributors to the Bill. They want ambitious and legally binding targets set “for nature’s recovery”. Those are not my words, but those of The Wildlife Trusts, which looks at the UN sustainable development goals. Goal two—“End hunger, achieve food security and improved nutrition and promote sustainable agriculture”—is highly relevant to the Bill. It is about setting ambitious targets by 2030, and indeed some by 2020, regarding the way in which we want to change agriculture across the world. If we do not do that in the UK, we will miss a real opportunity, and the Bill is the opportunity to do that.
I want to speak principally to the two new clauses in my name and in those of other hon. Friends. New clause 19 is about offering advice to those seeking to make dramatic changes to the way in which they farm or operate the land, which is important. We feel strongly about that because it is missing from the Bill. The Government have talked about land management contracts.
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Road Safety and the Legal Framework
(6 years ago)
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Ruth Cadbury (Brentford and Isleworth) (Lab)
I beg to move,
That this House has considered road safety and the legal framework.
It is a pleasure to serve under your chairmanship, Mr Betts.
I thank the Backbench Business Committee for enabling this important debate on road justice and the legal framework from the perspective of vulnerable road users, which follows two debates on road safety held in this House over the past few weeks. The first was led by the hon. Member for Stoke-on-Trent South (Jack Brereton), and the second was a Government debate led by the Minister of State, Department for Transport, the hon. Member for Hereford and South Herefordshire (Jesse Norman).
Those important debates highlighted a range of issues that lead to avoidable road death and serious injury, particularly to vulnerable road users, such as those on foot or riding pedal cycles, but also to motorcyclists, wheelchair users, horse riders and others. As well as raising concerns about issues such as investment in highways, road design, training and The Highway Code, Members present at both debates expressed concerns about gaps in the application of road traffic offences and penalties, highlighted by the experiences brought to them by constituents following deaths and serious injuries among vulnerable road users.
I thank Brake, RoadPeace, Cycling UK and the House of Commons Library for helping me to prepare for this debate by providing detailed briefings. I secured this debate jointly with the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont). We are both officers of the all-party parliamentary group on cycling, which last year held an inquiry entitled “Cycling and the Justice System”, culminating in a report that was published in May 2017. That report made 14 recommendations, but today we will focus on just four areas of road justice that we contend need review by Government: clarity over the distinction in charging and sentencing between dangerous and careless driving; misuse of the exceptional hardship rule in respect of driving bans; inadequate sentences for leaving the scene of an accident; and car-dooring.
All of those who are involved have no doubt that there is a need for a review. The wider context is that we and the Government share an ambition to make walking and cycling the natural choice for shorter journeys to reduce congestion, cut pollution, improve health, rejuvenate our shopping parades and save us all money. We also need to cut the cost of the effects of death and serious injury, including through lost futures and exorbitant health costs. Part of the solution is to address gaps in our road traffic laws.
The laws and their prosecution should be there to encourage safer driving, reduce casualties, improve road safety through the deterrent effect, and reduce irresponsible behaviour on our roads. The effectiveness of road traffic laws is of particular importance to vulnerable road users because irresponsible driving presents a disproportionate threat to them. It also puts people off travelling by foot or by bike, despite the huge health and environmental benefits of doing so. We generally expect high safety standards and strong obligations to avoid or minimise hazards in other risky professions, such as rail drivers and airline pilots, and other dangerous workplaces, such as construction sites. However, for drivers of vehicles, lapses of concentration that cause death or injury are regularly dismissed as accidents or carelessness, rather than something that is avoidable.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
My hon. Friend is making an extremely good speech in a very good debate, but will she bear it in mind that many employees in this country are put in a dangerous and vulnerable position because their employers force them to work untrained? I am thinking of Deliveroo, and those delivery people who get on a motorcycle or bicycle with no training and are put in a very vulnerable position. We have all seen it and we know that the accident rate is increasing. Employers are putting untrained people in a vulnerable position.
Ruth Cadbury
My hon. Friend makes an excellent point. There are strong standards in certain industries, such as for those who drive coaches and buses, and I agree that there should be a similar standard in that area. That is the only way to ensure that employers are not forcing their employees or contractors to drive too fast in order to get the job done.
We cannot afford to be relaxed about road deaths and serious injuries. The UK’s road death rate is relatively low, but sadly it is levelling off rather than continuing to decline. The legal framework and our justice system need to send the message that road crime is a real crime, and that it is unacceptable to endanger other road users. When I learned to drive 40 years ago, my teacher told me, “Always expect the unexpected,” because even if it is the fault of the dog or the child who runs out between the cars in front of the driver, ultimately it is the driver who will be responsible for their death. My teacher taught me to always drive with that in mind, whatever the driving conditions. That does not always mean driving at 20 mph; it is about appropriateness and safety within the conditions of the road, and always expecting the unexpected.
As I say, the legal framework and our justice system need to send the message that road crime is a real crime. The Government have taken notice of that need, but more action is awaited. In May 2014, the then Secretary of State for Justice, who is now the Secretary of State for Transport, responded to the road justice campaign run by Cycling UK and Brake by announcing plans for a comprehensive review of road traffic offences and sentencing. However, after substantial delays to that review, the Government announced a consultation in December 2016 on a much more limited set of proposals. Those proposals included increasing the maximum penalty for causing death by dangerous driving or death by careless driving while under the influence of drugs from 14 years to life imprisonment, and introducing a new sentence of causing serious injury by careless driving.
After further delays, the Government published a report on that consultation in October 2017. It recorded support for the above proposals, but noted that concerns had been expressed regarding a lack of clarity about the distinction between “dangerous” and “careless”. In response, the consultation said, the Government would work with criminal justice practitioners and victims’ groups to examine ways of improving the information available through the criminal justice process. To the best of our knowledge, no such work has yet been undertaken.
In the meantime, in September 2017, the Department for Transport announced plans for a separate consultation on cycling offences, following the death of Kim Briggs, who died when hit by a fixed-wheel bike ridden by Charlie Alliston that illegally lacked a front brake. That consultation was launched in August this year. Confusingly, it was initiated by the Department for Transport, even though the previous motor offences consultation was announced and conducted by the Ministry of Justice. There was a large response to that consultation, indicating the level of concern about singling out cycling offences based on a single fatality resulting from irresponsible cycling, when the law fails so spectacularly in hundreds, if not thousands, of cases every year in which people are killed or very seriously injured by irresponsible driving. The law is neither clear nor consistent.
Tim Farron (Westmorland and Lonsdale) (LD)
The hon. Lady is making an extremely good set of points. I represent an area where walking, road running, horse riding and cycling are probably even more prominent than in the rest of the country. Since 2014, when action was first mooted, 1,800 people have died on the roads from all four of those categories and others as well. Does the hon. Lady agree that it is time to stop navel-contemplating and to start acting to protect people’s lives?
Ruth Cadbury
I absolutely agree with the hon. Gentleman. Above all, by not taking action, the Government are failing to take irresponsible people off the roads in the interests of public protection.
Are death and serious injury caused by driving a roads issue or are they crimes? I would say that they are crimes and that this issue therefore falls under the remit of the Ministry of Justice. I am therefore glad that a Justice Minister is responding today—somebody who I believe to be honourable and diligent in his work, as I saw as a member of the Select Committee on Justice.
As I say, there is a need for clarity and consistency about the distinction between dangerous and careless driving. There is a perception, particularly among victims of road crashes and their families, as well as among Members who have spoken in previous debates in this place, that public prosecutors too often favour prosecuting motorists who have caused a death or serious injury with the lesser offence of careless driving, for which they are more likely to gain a conviction than on the charge of dangerous driving. That is particularly the case because there is such a stark difference in the penalties for those offences. For death by dangerous driving, the maximum penalty is 14 years in prison, although I think the Government are minded to increase that to life in certain circumstances.
Mr Sheerman
My hon. Friend has kindly referred twice to Brake, which is based in my constituency. She has not mentioned the Parliamentary Advisory Council for Transport Safety, whose watchword is basing good policy on good research. Is she going to say a little more about what the research needs are to make a clear correlation between what is happening on the roads and in the justice system?
Ruth Cadbury
I hope to be able to, but I realise that time is short, so I might not be able to go into the detail that my hon. Friend mentioned. He has just stepped down as chair of PACTS. I am also a member of PACTS, which has done an awful lot of excellent work in this place on road safety.
Due to the subjective nature of the definitions, too often we see the downgrading of cases from causing death by dangerous driving to other charges, simply because they are easier to prove. Using the term “careless” undermines and trivialises the gravitas of the offence and its impact on victims and their families. Cycling UK has done an excellent study called “Failure to see”, which expresses that stark difference in a range of different cases. I recommend that study to those involved in this subject.
Matt Western (Warwick and Leamington) (Lab)
Does my hon. Friend agree that there is increasing concern among road users, particularly cyclists and pedestrians, that greater numbers of cars are being fitted with tinted or almost smoked glass? That makes it incredibly difficult for other road users to see the face of the driver and know whether they have been seen and the driver is aware of the potential danger.
Ruth Cadbury
That is clearly of concern. My understanding is that there are standards for tinted glass, but whether all vehicle owners are abiding by those standards is an issue. Those cases need to be prosecuted, and we all know that the resources for finding those offences are declining.
The Government have said that they will create a new offence of causing serious injury by careless driving, and Ministers have said they will introduce new legislation as soon as parliamentary time allows. We look forward to that Bill. The charges and penalties for causing death or serious injury should be overhauled to ensure that prosecutors are not incentivised to opt for an easier won charge. We look to the Sentencing Council for that work, for which I believe the Ministry of Justice has responsibility. Overall, we ask for closer collaboration between the Ministry of Justice and the Department for Transport to ensure joined-up thinking on the definition of offences, with each consulted on the other’s work. I do not mind which Department leads; I just want to see action.
Finally, I will talk about driving bans. I agree with Brake that driving is a privilege, not a right, and that those who have shown disregard for the law should not be allowed to drive. We have a well-respected system of penalty points in this country, based on the expectation that people lose their licence when they reach 12 penalty points as they clearly have too often been driving dangerously, usually with speed violations. However, there is a loophole whereby many drivers who claim exceptional hardship in court manage to avoid losing their licence. That right is not accorded to most other offences with a risk to life, so the loophole should be closed. These people have already had a second chance in totting up points. The guidelines for magistrates need to be looked at in that respect.
In most high-risk occupations, someone’s licence to operate is removed immediately if there is a suspicion that they were responsible for an offence that causes death or serious injury. The same should occur for driving offences. Anyone arrested on suspicion of an offence that carries a mandatory driving ban should have their driving licence temporarily suspended until the case reaches a conclusion or is dropped. The advantages are that it keeps the issue out of court, is understandable, is instant and avoids the “innocent until proven guilty” problem. It would also have a deterrent effect. An alternative would be for anyone charged after killing or seriously injuring another to have their licence removed as a condition of bail. In the time it takes for a case to come to court, the driver charged can continue driving, potentially putting others in danger. The first option is the better one.
Thank you, Mr Betts. My colleague the hon. Member for Berwickshire, Roxburgh and Selkirk will cover the other issues.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank the hon. Member for Brentford and Isleworth (Ruth Cadbury) for leading this debate—I was delighted to co-sponsor the application for it. The fact that we are both here today, representing different parties and very different constituencies, goes to show how this issue affects all parts of the United Kingdom. My thanks also go to the road charity Brake, Sustrans and Cycling UK for providing helpful information on the topic ahead of today’s debate.
This is absolutely not a debate about motorists against cyclists. For the record, I am both. Road users are not tribes of people competing for space on our tarmac. Road users are simply people—our constituents, our friends and our relatives—trying only to get around, whether that be on foot, on bike or by car. If we want to make our roads a safer place, the statistics do not lie: more than 99% of pedestrian deaths in the UK are caused by motorised vehicles. It does not take a degree in physics to understand that 1 tonne of metal travelling at high speed has the potential to cause greater harm than a 15 kg bike going at 15 mph on a good day. In the face of that, it is abundantly clear that if we want to make our roads safer, cutting down on irresponsible driving must be the priority.
The hon. Lady has already spoken about the need for a review of road traffic laws, particularly on dangerous and careless driving, and I would like to associate myself with those remarks. Another area that we need to look at closely is the law on hit and run offences. The current maximum prison sentence for failing to stop is six months. There is already a presumption against short custodial sentences in Scotland, and offenders are automatically let out early across the UK. That means that someone convicted of a failure to stop offence often escapes a custodial sentence completely.
Mr Marcus Jones (Nuneaton) (Con)
I refer my hon. Friend to the case of Sean Morley, who was hit and killed on the A444 just outside Nuneaton. He survived for three hours after he was hit by a car. Regrettably, he was not discovered for several hours and he died. The driver was later convicted of failing to stop and failing to report an accident and was given a 16-week sentence. I do not think anyone would argue that that was not completely inadequate. Does my hon. Friend agree that it is not only sentencing that needs to be far stronger, but the sentencing guidelines given to judges?
John Lamont
My hon. Friend makes an excellent point. There are too many tragic cases like that involving our constituents. I will come to that point later in my contribution.
Failure to stop means a motorist was involved in an accident with another vehicle or person and was aware of the incident, but drove off anyway, with no thought about the damage or hurt caused. However, it can also be used as a means to escape a more serious punishment, such as if a drunk driver fails to stop in order to sober up. Failure to stop is a serious offence that should be treated seriously. It needs to end and we need to increase the maximum penalty to be in line with the maximum penalty for dangerous driving.
Another relatively simple measure to improve road safety would be to look at car-dooring. I think most cyclists are aware of the danger or have had to swerve to avoid a door opening in their path. I have had to do that on a number of occasions. I welcome the Government’s announcement that The Highway Code will be reviewed to include the so-called Dutch reach, where people open a car door with the hand furthest from the door. I hope that that will be included as a requirement so that learner drivers are taught it as a standard part of their lessons and test.
Matt Western
I congratulate the hon. Gentleman and my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on securing this important debate this morning. Does the hon. Gentleman agree that the standardisation of helmet cams for cyclists and dashboard-mounted cams would provide the sort of evidence that could help bring to justice cases such as he has described in his speech?
John Lamont
I am grateful for that intervention. We should look at anything that can gather more evidence to help prosecutors. Ultimately we want to make our roads as safe as possible for all road users and deter irresponsible behaviour. If cameras contribute towards that, they would be beneficial.
However, we need to also look at whether a new offence needs to be created. Between 2011 and 2015, more than 3,100 people were recorded as being injured or killed as a result of a vehicle door being opened negligently, including cyclist Sam Harding, who was killed in August 2012 when a driver opened his plastic-tinted door in Sam’s path, knocking him under a bus. The maximum penalty for opening a car door negligently was a £1,000 fine, so the Crown Prosecution Service tried, unsuccessfully, to prosecute for manslaughter. The driver responsible received only a £200 fine. Clearly, this area of the law might not be working and needs to be reviewed.
Mr Sheerman
I am a little worried. Emotionally I want to support the hon. Gentleman, but first, the research on exemplary sentencing and a reduction in casualties is not strong. Secondly, when it comes to car-dooring as a serious offence—a lot of young and inexperienced people do it—does he agree that technology is rapidly helping us? New cars can assist us and tell us if there is a car or motorcyclist overtaking.
John Lamont
The hon. Gentleman makes an important point, but for the sake of our justice system, it cannot be right that a life is lost and the person responsible for that loss of life faces only a £200 penalty as a consequence. There is surely something fundamentally wrong with our justice system if that is how it works. It is clearly not good either for the victim or for their friends and family if justice is not seen to be delivered, so I think there is a strong case to look at sentencing and the guidance given to the judiciary in such cases.
We are calling for a much wider review of road safety offences than is currently proposed. The Government have taken action, which is to be welcomed. The announcement of life sentences for causing death by dangerous driving while under the influence of drugs or alcohol was overdue, although it needs to be implemented soon. The Department for Transport also has plans for a pilot scheme that will offer driving instructors training to put cyclists’ safety at the forefront of their minds when teaching new drivers, and The Highway Code review, with a focus on cyclist and pedestrian safety, is also a good step forward. However, the Government need a wide-ranging review of motoring offences as a matter of urgency.
The Government are right to look again at the law surrounding injury or fatalities caused by cyclists. I have every sympathy with Matt Briggs, who lost his wife, Kim, when she was killed by a reckless cyclist. Kim’s father is a constituent of mine who lives in Coldstream, my own town. It makes no sense to focus on cycling offences without reviewing the much greater number of motorist offences. It is time for the Government to improve road safety for our most vulnerable road users, clear up the inconsistencies caused by the current dangerous and careless driving offences, and review the law on penalty points and hit and run offences.
My party rightly has a reputation for being tough on crime, but I feel we make an exception as a party—indeed, we make an exception as a society—if the crime is committed behind the wheel. Perhaps it is because cars are so commonplace and so central to our daily lives that their potential danger has become normalised. It is time to tackle this issue and send out a clear message to the small minority of irresponsible motorists that the safety of vulnerable road users is more important. I look forward to hearing from colleagues during this debate and from the Minister at the end.
Several hon. Members rose—
Mr Clive Betts (in the Chair)
Order. We have nine Back-Bench speakers to come, which means an absolute maximum of four minutes each. Please do not go any longer than that.
Liz McInnes (Heywood and Middleton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Betts. I am grateful for the opportunity to speak in this important debate. I want to talk about deaths and serious injuries caused by dangerous drivers and the legislation around sentencing.
Many Members will be aware that in response to pressure and campaigning from bereaved families, MPs and the road safety charity Brake with its “Roads to Justice” campaign, the Government finally agreed in December 2016 to hold a consultation on sentencing for those who cause death and serious injury by dangerous driving. The consultation ran until February 2017 and received more than 9,000 responses.
In October last year, the Government announced that, as a result of the consultation, they would introduce tougher sentences for those causing death and serious injury by dangerous driving, including the possibility of life sentences to replace the current maximum sentence of 14 years. When that was announced more than a year ago, there was much relief among campaigners and bereaved families that at last the Government were taking action to ensure that other families would not have to suffer the same injustices. Not only were those families sentenced to a lifetime of grief at the loss of a loved one, but they suffered the injustice of seeing their loved one’s killer receive a prison sentence of just a few years.
Ian and Dawn Brown-Lartey, in my constituency, had a 25-year-old son, Joseph, who was killed by a 19-year-old driving an uninsured and unlicensed hired Audi at 80 mph in a 30 mph zone. He ran through a red light and smashed into Joseph’s car, killing him outright. Joseph’s killer was imprisoned for six years in May 2015 and has since been released on licence after serving half his sentence. Joseph’s father, Ian, has accused the Government of paying lip service to their promises a year ago to impose stiffer punishments on the most dangerous offenders who cause fatal crashes, because nothing has happened since then. No draft legislation has appeared and, despite numerous questions, letters and debates, no changes have been made to the sentencing guidelines. The longer the Government drag their feet over implementing the changes, the more families will continue to suffer.
In just the past two weeks in my constituency we have had one fatality and two cases of serious injury to pedestrians on our roads. In two out of the three cases the drivers were arrested for dangerous driving. When I read those stories in the local paper, my heart sank at the thought of the anguish that the victims’ families must be going through, not only in dealing with death or serious injury, but knowing that, with the law as it stands, if the drivers are convicted of dangerous driving they will serve only a short sentence.
With the anniversary of the Government’s announcement that tougher sentences would be introduced, and with no action having yet been taken, I again wrote to the Ministry of Justice asking when the legislation would be passed. Disappointingly, the message I received yesterday was that there was no available legislative slot to introduce a Bill, or a suitable Bill that could be used to introduce the changes. So families continue to suffer, and the Government, having promised bereaved families more than a year ago that they would take action, have delivered nothing.
Derek Thomas (St Ives) (Con)
I thank the hon. Member for Brentford and Isleworth (Ruth Cadbury) and my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for bringing this important issue to the House’s attention. It is right that we adequately address the problem of accidents that lead to death and serious injury on our roads. I am grateful for the attention given to providing the safest possible road network through good legislation, and for the tangible impact it will have in saving lives in my constituency and across the country. That is to be welcomed.
However, I implore the Government to consider the safety of horses and their riders in any measures to improve the law for vulnerable road users. Having listened carefully to concerns raised by constituents in west Cornwall, and having worked closely with the British Horse Society over recent years, I am disappointed that the opportunity created by reviewing and altering both the guidance and the law has not been adequately used to consider the safety of horses and their riders.
Horses and their riders are often forgotten as vulnerable road users compared with cyclists and pedestrians. Given the direct similarities between the way in which drivers should view cyclists and horse riders when passing, it makes sense to link the two in the review of guidance and legislation. My friends in the British Horse Society recently provided me with the current statistics on horses and riders who have been injured or killed as a result of road traffic accidents, and they are truly damning. Some 237 horses have been killed, 40 riders have been killed and 899 horses have been seriously injured. Furthermore, 85% of those incidents have been a result of drivers passing too fast or too close. For a rural constituency such as mine where there are many horse riders, that is a wake-up call, and the Government should recognise it as such.
There have been improvements in the awareness and consideration given to horses and their riders, in large part as a result of education campaigns such as the British Horse Society’s “Dead Slow” campaign and partnerships with the police and driving institutions. However, that is not enough. More needs to be done at Government level to ensure that horses and their riders are a key part of the national debate on road safety. I call on the Government to include in any change to legislation strengthened sections relating to the safety of that important and vulnerable group.
Fresh advice and guidance should explain not only why drivers should take extra care and slow down when passing horses but the consequences of passing too close and too fast. At present, only section 3 of the Road Traffic Act 1988—“Careless, and inconsiderate, driving”—can be used if horses are passed too fast or too close. I am simply asking for a more conscious and deliberate effort across the nation to educate drivers on the needs and risks of those riding a horse, and for the definition of a road traffic offence to be strengthened. Those measures would save lives of drivers, riders and horses, and spare all those concerned the distress of dealing with such dreadful accidents.
More must be done. I urge the Minister to work with the Roads Minister to take seriously recent requests that the Government consider and then implement speed limits and minimum distances when drivers are passing horses. That is not a perfect answer, but it would be a significant step and a statement of intent that horses and their riders are recognised as a vulnerable group and will no longer be overlooked in this debate.
I urge the Minister not to overlook the matter of equestrian safety when exploring new road traffic offences and subsequent sentencing. The similarities to cyclists are stark. It therefore makes no sense to turn a blind eye to the matter of horse safety, given the opportunity to improve road safety for vulnerable road users.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to see you presiding over the debate, Mr Betts. I am pleased to follow the hon. Member for St Ives (Derek Thomas). I congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) and the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing this important debate. I also thank the Parliamentary Advisory Council for Transport Safety, Cycling UK and Brake for their briefings.
Today’s debate concerns the legal framework. First, the police need to catch those who break road safety laws, and to do that they need to be there. I would be grateful if the Minister advised us on what discussions he has had with Ministers in the Home Office about the loss of road traffic officers in recent years. Secondly, sentences need to be handed down. Thirdly, there need to be clear legal definitions and fair punishment.
As we have heard, Cycling UK, along with road crash victims’ charities Brake and RoadPeace, are calling for the Government to review road traffic offences and penalties to ensure that the law delivers just and safe outcomes for all road users. I was concerned to learn that the number of driving bans imposed by English and Welsh courts has declined by 60% in 11 years, from 155,000 in 2005 to just 62,000 in 2016. Will the Minister clarify what is happening?
In June 2017, more than 10,000 drivers in Britain were still allowed to drive despite having more than 12 points on their licence, as my hon. Friend the Member for Brentford and Isleworth mentioned. Will the Minister tell us whether that troubles him? Moreover, last year, police forces in England and Wales carried out the lowest number of breath tests since records began in 2002, according to Home Office figures. Is that indicative of a policy change from the Government, or does it also reflect a reduction in police traffic officer numbers?
The prevalence of uninsured drivers, which PACTS links to dangerous driving, road casualties and wider criminality, is also worrying. Will the Minister advise on whether that troubles him? What discussions have taken place with the Home Office and the National Police Chiefs Council to address those matters?
Along with PACTS, I support the establishment of a new offence of causing death or serious injury by dangerous and careless cycling. However, we would like the Government to commission a broader review covering a wider range of dangerous road behaviour, rather than focusing just on cyclists. Cycling UK has issued suggestions on what such a review, akin to what was promised in 2014, could examine. It advises that the review should clarify the definitions of “dangerous” and “careless”, review the accompanying maximum sentences, remove the ability of convicted drivers to avoid driving bans routinely, increase the £1,000 maximum penalty for car-dooring, and ensure that any revisions to cycling offences and penalties reflect key differences between driving and cycling.
Clearly we need a full review. As a cyclist myself, I see other cyclists ignoring the rules of the road. Some cyclists need a judicial shock, but other road users need one even more. The numbers killed and seriously injured on our roads have stagnated in recent years. The Ministry of Justice has an important role to play in protecting the vulnerable and reducing those figures. I look forward to hearing how the Minister intends to assist with that project.
Andrew Selous (South West Bedfordshire) (Con)
I associate myself completely with the comments made about the need for greater clarity on the definition of careless and dangerous driving, for tougher penalties and tougher action on driving disqualification, and for tougher penalties on hit and run drivers.
I will raise some issues that have not been mentioned so far, which are highly relevant to road safety. I have constituents who work in the haulage industry who tell me that the rest centres provided for them in retail distribution centres are often such that they cannot rest. They are noisy and crowded, and there is nowhere that is comfortable for them. They are prevented from lying down in the bed in the back of their trucks during rest periods. That says to me that many drivers who are getting back into their lorries after a supposed rest period are not rested, and that they could rest safely if they could sleep in quietness in the back of their cabs. That is not allowed in many retail distribution centres, which is a serious issue. I would like the Minister to take that back to the Department for Transport.
Another road safety issue is people registering their vehicles at addresses of convenience—a Post Office box address. When a letter comes through the door because the person has been speeding, the authorities cannot take action. Bedfordshire police did a major study of that a few years ago, and I pay tribute to Sergeant Sean Quinn. The study showed that thousands of penalties were not being acted on because cars were being registered at addresses of convenience. That is a serious issue that puts some drivers beyond the law and puts us all in danger.
There is a similar issue with foreign licence plates. So far this year, Central Bedfordshire Council has issued 335 parking enforcement notices to vehicles with foreign plates, 250 of which have been cancelled because they cannot trace the driver. That applies not only to parking but to speed cameras. Again, drivers can drive with impunity. It is an offence not to register a foreign vehicle if someone has been here for six months. The police cannot track that, and I do not believe that the Driver and Vehicle Licensing Agency is doing so either. That is another loophole in the law that makes the roads more dangerous for us all.
False number plates have also been drawn to my attention. People make up a false number plate, and then commit crime or drive dangerously. Again, they cannot be traced and are beyond the law. That too is a serious offence, which I do not think that the authorities have caught up with properly.
Potholes are highly relevant to the debate. A constituent told me about £500 of damage to his car recently. For a cyclist, of course, swerving to avoid a pothole can lead to serious injury or death, and has done on a number of occasions. That is why I welcome the extra money going towards our roads. We need to realise that potholes can lead to serious injury or death for cyclists.
I completely support the points that have been made about car-dooring. The Dutch reach should be standard; it should be taught by every driving instructor and made part of the driving test, because we all need to get used to using it. I speak as someone who drove into the open door of a council dustcart many years ago and was injured.
Finally, we need a degree of civility and understanding. Whether we are on a horse, in a car or on a bicycle, we need to show one another courtesy and civility. It is not difficult to slow down or pass wide. Motorists, cyclists and horse riders are all in different positions, but proper courtesy and consideration to all of us would keep us all safer.
Several hon. Members rose—
Mr Clive Betts (in the Chair)
Order. I have to reduce the time limit to three minutes because there seem to be more hon. Members who want to speak. I will need to call the winding-up speakers at 10.29 am.
Judith Cummins (Bradford South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Betts. I welcome this opportunity to debate road safety again. I have said on many occasions that although I do not think that any one approach alone can make our roads safer, an improved legal framework is essential if we are to reduce deaths and deliver justice for victims and their families.
In 2017, we saw the highest number of road deaths since 2011. In West Yorkshire, 815 people were killed or seriously injured in road traffic crashes last year. The child casualty rate in my constituency is 52% higher than the national average, and progress in reducing deaths and serious injuries has been 30% slower than elsewhere. Indeed, my constituency has one of the highest rates in the country of children being killed or seriously injured on our roads.
In the short time available, I would like to focus on a few areas in which we need to make changes; I hope the Minister will be able to respond to my points. First, as ever, I must raise the issue of how the law deals with drivers who cause death through dangerous or careless driving. As many hon. Members present will know, in October 2017, following a consultation, the Ministry of Justice announced a series of changes to the law on death by dangerous and careless driving, including life sentences for those who cause death by dangerous driving and for careless drivers who kill while under the influence of drink or drugs, as well as a new offence of causing serious injury through careless driving. The Government now claim that those changes will be incorporated into a review of cycle safety.
I have to say that that is completely unacceptable. It is right that the Government review cycle laws, but it is just not good enough that the changes already announced to sentencing are being rolled into an open-ended process. Those changes have still not been implemented, and we have not received a satisfactory answer about why there has been a delay. We still do not know when the changes will finally come into force. I appeal to the Minister to take the opportunity to finally give us some answers.
Finally, I turn to points and disqualification, in particular the “exceptional hardship” loophole. We must ensure that the exceptional hardship rule, which allows drivers to keep their licence even when they have reached 12 points, is not abused. Data from the DVLA shows that in Bradford alone, more than 200 people successfully used the exceptional hardship argument last year to escape a ban. Across Britain, 11,000 drivers still have their driving licences, despite passing the points limit of 12. Some have 40 or 50 points. We cannot allow drivers who have consistently broken the rules to continue driving. It makes a mockery of our laws and puts other road users at risk.
As always, I will end with a reminder of the immense human cost of dangerous driving. Every family who has lost a loved one in a road crash knows just how devastating it is. Anything that we can do to make our roads safer, including creating a stronger legal framework, must be done as a matter of urgency.
Dr Sarah Wollaston (Totnes) (Con)
Inactivity is far more dangerous to people’s health than cycling or walking. We need to get the message out loud and clear that cycling and walking are great for our health, and we need to get Britain moving. One of the greatest deterrents, however, particularly for parents, is fear of the danger of our roads.
I will add to points made by other hon. Members by speaking about those drivers who escape all consequences. I suggest to the Minister that we need to get across the immediacy and certainty of consequences. The line between careless and dangerous driving is a very blurred one; today’s careless driver is tomorrow’s dangerous driver. We need to ensure that people do not entirely escape consequences, and that they know what will follow. I agree that we need to close the exceptional hardship loophole. Merely inconveniencing and fining those who are at the beginning of their journey to becoming dangerous drivers is not enough.
I also ask the Minister to consider the role of restorative justice. To give an example, I got the phone call that no parent wants to get, telling me that my daughter was unconscious in the back of an ambulance. While wearing hi-vis in a cycle lane, she had been knocked off her bicycle by a careless or even dangerous driver who was in a hurry and was turning into a side road. If my daughter had not been wearing a cycle helmet, she would undoubtedly have been killed or very seriously injured. I was shocked that she was interviewed in the casualty department while she was still concussed.
There were no consequences whatever for the driver. My daughter is not a vindictive person and nor am I, but at the very least I would have expected someone to investigate the incident. Witnesses came forward and were happy to testify, but nothing happened. When someone has been very seriously injured in such a collision, restorative justice could play a role. I hope the Minister will consider how we can ensure that drivers meet the person whom they have injured. Until that takes place, they should face some immediate consequences—a ban, at least.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Betts. Let me take the opportunity to contextualise the debate by showing the real impact of unsafe road behaviour when appropriate action is not taken. We should all aim for zero deaths and injuries on our roads and pavements, and the only way to achieve that is by supporting road safety with practical investment and appropriate legislation.
On Saturday, I attended a beautiful service at St Martin’s church at Birmingham’s first World Day of Remembrance for Road Traffic Victims. I was extremely honoured to have been invited to the event by RoadPeace. It was touching to remember all those who have lost their lives. Since the day was first commemorated 25 years ago, more than 30 million people have died on the world’s roads, including in the horrific scenes in my constituency last year in which six people were killed.
To bring focus to the issue and to the need for strong and fair judicial structures around road safety, I would like to read an extract from the poem that I read this weekend alongside my hon. Friend the Member for Birmingham, Erdington (Jack Dromey):
“This is not the way things were supposed to be
To stare at a plaque with the words ‘Remember me’
And be filled with thoughts of you.
It had seemed that time was limitless, and there was still so much to say;
It had never occurred that one so full of life could be confined to yesterday.
Back then, road deaths were just stories to us,
small segments on the news,
And we never quite understood all the fuss;
Until we became the next family to walk in those shoes.”
Afzal Khan (Manchester, Gorton) (Lab)
In one terrible 24-hour period, three young people and four others were seriously injured on Greater Manchester roads. Our road traffic laws are failing to deliver justice or promote road safety. Does my hon. Friend agree that the Government must review road safety in its entirety and ensure that we have measures to protect vulnerable road users such as those who have been killed in Greater Manchester?
Preet Kaur Gill
I absolutely agree.
The poem that I have just read was written by Lucy Harrison, the sister of my constituent. She lost her brother when a car going at 93 mph hit him as he crossed the road. Having had him taken from them, his family had to go through a trial and the Court of Appeal before the driver who caused the crash, and who had failed to stop, was given a sentence of four and a half years. The driver is now due to be released after serving just two years.
One point that Lucy has raised is that people talk about the incident as an accident. These crashes are not accidents. Road safety legislation is in place to make sure that people feel safe on and around our roads. If someone breaks the law and commits a crime on the road, we must call it what it is. She is therefore calling for tougher sentencing and a change in society’s perception of death by dangerous driving.
Any road policy designed to keep all road and pavement users safe, regardless of their mode of transport, requires an effective road justice system. A year on from the announcement of tougher sentences for drivers who kill, the Government have failed to introduce legislation. Families of road crash victims across the UK are still waiting for justice. As Lucy says, people need to see that her brother
“was a human with a family, not just a statistic, because it can just be like another road death where he became a statistic or a story.”
On behalf of Lucy, Tony Worth and the many other families of victims, I urge the Government to deliver justice for road crash victims and keep the dangerous drivers off the road.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Brentford and Isleworth (Ruth Cadbury) for bringing this debate forward.
The Road Safety Foundation’s annual report, “Getting back on track”, which was launched in partnership with Ageas UK, clearly says that if we had been on track to halve road deaths in this decade, in line with international targets, an extra 2,549 people would not have lost their lives between 2010 and 2017. Some 1,793 people were killed in road crashes in 2017, and 73 people were killed or seriously injured every day. Motorcycle fatalities increased by 9% from 319 in 2016 to 349 in 2017. In comparison with what the UK Government spend on education and GP services, £35 billion, or nearly 2% of GDP, is lost as a result of road crashes each year. There is a financial cost.
As other hon. Members have done, I want to talk about how this issue has affected me. My brother Keith, who is 6 feet 2 inches, was involved in a motorbike accident. Now he has carers who come in four times a day. He cannot manage his money. He cannot walk without a cane. He cannot speak or think like he once did. My mother looks after him, and everyone tries to help. Sometimes, we see the accidents but not the effect on the families. An accident in a sport that Keith loved has had a very clear impact on him and our family.
Across our constituencies, there are those who have lost loved ones, or who have lost their limbs or their way of life in an accident. More than saving money, better road safety is about saving lives and the quality of those lives.
We have talked many times in Westminster Hall and in the main Chamber about road safety, and I want in particular to mention road safety around schools. Two schools in my constituency have 20 mph zones around them, but there are many others that still have a need for safety, such as Grey Abbey Primary School, which dates back to 1847 and sits on a 90° blind bend in the road. There needs to be help for that.
Ring-fenced funding would mean more traffic-calming schemes, and more traffic-calming schemes would mean fewer accidents; importantly, reduced speed means less damage to children. Texting while driving and distracting friends while driving also need to be addressed. It is estimated that if the Government were to invest £75 million per year over the next five years, 1,450 people would be spared the trauma of death or injury. The value of injury prevention exceeds half a billion over the same period. For every £1 invested in safer roads, £4.40 of economic value is created. The figures on the finances are very clear.
While we do not have a devolved Government in Northern Ireland due to the intransigence of Sinn Féin, I ask the Minister to ring-fence funding and ensure that the relevant Department in Northern Ireland understands what is expected from that additional funding.
Matt Western (Warwick and Leamington) (Lab)
I congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on securing this debate. As we have heard, this is an increasing problem and an ever present danger on our roads. Just two months ago in my constituency, over a four-week period there were three deaths on our streets—Emscote Road, Radford Road and Banbury Road—and numerous road traffic accidents.
We have to change attitudes on how we view and use road space. As was mentioned by the hon. Member for Totnes (Dr Wollaston), we need to encourage more people to use the road space, while making provision for the safety of all users. These are not motorways; they are roads for all to use. Alongside introducing changes to the legal framework, we need to ensure that we are changing behaviour at the same time.
Clearly, there are many causes. There are increasing pressures in modern life—pressures to get to work and to get the kids to school, and so on—but there are also a greater number of delivery drivers. More and more people are using the internet to shop and there are more and more deliveries to home and so on. Many of those delivery drivers, in the new gig economy, are being forced to work at such a pace that they are perhaps less observant of regulations and other road users than they might ordinarily be. They are under more and more pressure. Likewise, new housing developments around our towns put more pressure on the central town area infrastructure, with insufficient capacity to deal with the additional road use.
We also see a lack of enforcement of speed limits on our streets, with fewer police and the removal of cameras. When I served on the county council, I and other Labour councillors introduced a speed watch programme. It was great, but wearing high visibility jackets was hardly a deterrent to people speeding in our towns.
I would welcome more 20 mph zones in our town centres, which would send out a very clear message for more measured speeds in our town centres. I would like to see tougher sentences on people who fail to stop—the existing six months for leaving the scene of a crime is ridiculous. Likewise, the loophole for those who have 12 points on their licence is quite ridiculous, given the seriousness of their convictions. Finally, is it acceptable to have insurance products that insure someone against losing their licence? I would say not.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I recently stood down as chair of the all-party parliamentary group for transport safety, and retain my role as chair of the charity the Parliamentary Advisory Council for Transport Safety. I stood down because I now chair the World Health Organisation’s Global Network for Road Safety Legislators.
This issue is rightly called the greatest epidemic of our times by the United Nations. Some 1.3 million people are being killed on our roads, and 10 times that number are being seriously injured. It is an enormous challenge for all of us.
When I introduced my first private Member’s Bill, to ban children from being carried unrestrained in cars, and when we started PACTS and organised the seatbelt legislation, we had one mantra, which was to base all our work on great research. If there are good laws based on great research, enforced rigorously and fairly, that leads to results, and we have seen a reduction in deaths and serious injuries across most of Europe. We need to expand that further. This is a timely debate, as it is Road Safety Week. We have this fine organisation, PACTS, which has organised its work over many years on research, on good laws and on keeping the population of the country with us, which is very important. My plea today is that we keep our minds on evidence-based research.
I know about the feelings when someone is tragically killed. I came into this road safety area after a terrible accident on returning with my No. 2 daughter from her christening. It was a dreadful smash, and thank God we survived. Ever since then, I have been passionate about saving these lives, but we can get carried away. This is not about vengeance. The laws should be right and commensurate. Sometimes, we see appeals for tough legislation and tough penalties, and we can get carried away. I believe that if we look at getting the balance right and carrying the public with us, we will get a reduction and we will get better.
We are lucky to be seeing better technology, but I would add a word of caution. Technology in cars is improving all the time. People are safer and safer, in the safest of cars, but it is the vulnerable road users—the pedestrians, the cyclists, and those on little motorised two-wheelers most of all—who are being killed all over the world. This is a United Nations sustainable development goal, and it is as important here as it is all around the world.
Mr Clive Betts (in the Chair)
We have 10 minutes now for each of the Front-Bench spokespeople, and a short time for the mover of the motion to respond. I call Stuart McDonald for the Scottish National party.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is good to see you in the Chair, Mr Betts. I congratulate the hon. Members for Brentford and Isleworth (Ruth Cadbury) and for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing the debate, and thank all hon. Members for their contributions. It is clear that we have some long-standing road safety campaigners in the Chamber today.
This debate has clearly struck a chord with my constituents, if my inbox is anything to go by. Like many others, they are concerned that the legal system is not quite operating in a manner that is fair, just and consistent between different types of road users. We heard some tragic stories from hon. Members about families who have been affected by dangerous and careless driving through the loss of loved ones, and that of course reminds us what this debate is ultimately all about.
A number of consultations and initiatives have been announced by the Government, although, as the hon. Member for Brentford and Isleworth flagged up, they have tended to proceed in a rather slow, piecemeal fashion. This debate allows us to look at a number of the issues in the round.
Ultimately, as the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) said, what we want to see is a country where there are no fatalities on the road and where road users are as safe as we can make them. Clearly the legal framework has an important role to play. As the hon. Member for Berwickshire, Roxburgh and Selkirk rightly pointed out, this is not about drivers against cyclists or any other road users. The emails that I have received highlight that, as he pointed out, 99.4% of pedestrian deaths in the UK involve a motor vehicle. The key challenge that we have is to answer the question of how we protect other road users against cars and other motor vehicles.
A number of Members made compelling arguments for some of the reforms that are suggested in the report of the all-party parliamentary group on cycling, “Cycling and the Justice System”. From my reading of the report, it contains a lot of sensible ideas. Prevention is clearly better than a cure, and I have no difficulty in supporting revisions to The Highway Code to address ambiguities about the responsibilities of road users—for example, in situations where cars are turning into side roads. I welcome some of the Government announcements on that.
The hon. Member for St Ives (Derek Thomas) was absolutely right to mention horse riders’ safety, which constituents have contacted me about. He set out some of the alarming statistics about deaths—both of riders and horses—on the roads. Some 85% of such incidents are caused by drivers passing too fast or too close to horses. Campaigners argue that The Highway Code should include, at the very least, a strengthening of section 215 to include the British Horse Society’s “Dead Slow” advice to drivers on how to pass horses safely.
Among the other APPG suggestions, I would be happy to see changes to the format of driver testing to encourage better behaviour towards cyclists and pedestrians. I certainly would be sympathetic to, and supportive of, increased retesting of those who have committed offences. I am quite surprised that graduated driver licensing has not been brought up today, because I think there is still a strong argument for it. There is strong evidence that the benefits of such schemes outweigh any problems they might cause.
To come to the crux of the matter, the most difficult area of the debate is probably the adequacy of the offences that are applied to bad driving. I suppose that we aim to ensure that offences and the available punishments reflect both the level of blame or culpability in a driver’s behaviour and the impact that that culpable action has. A patchwork of offences seems to have developed over the years, and it is probably now time to consolidate them and ensure that they are comprehensive and fair.
It is absolutely true that there has to be a distinction between careless and dangerous driving, but perhaps those terms are not perfect. After all, careless driving is very often dangerous driving. The hon. Member for South West Bedfordshire (Andrew Selous) made the point that the term “careless” tends to sound trivial; perhaps words such as “negligent” or “reckless” would better reflect the legal distinction in driver behaviour. He also made some good points about the provision of road haulage rest facilities—the statistics show that many people involved in road traffic accidents are driving in the course of employment, so it is imperative that we ensure that those who drive for a living are supported in any way possible to do that safely.
While motor vehicles are the biggest challenge that we face, and cyclists are infinitely more sinned against than they are sinners, there are questions about how the law should deal with careless, reckless and dangerous cycling, as the hon. Member for Berwickshire, Roxburgh and Selkirk acknowledged. Given that we deal with serious cases by relying on Victorian laws that were designed for horses and carriages, it is probably time for an update to deal with the rare occasions when cyclists cause serious accidents, especially for pedestrians. In Scotland, there are offences such as culpable homicide and culpable and reckless conduct, but it is questionable how appropriate and practical those would be. A new statutory regime appears to be justified, but it is important to clarify that this is about ensuring justice—it is absolutely not about punishing cyclists. As the hon. Member for Totnes (Dr Wollaston) said, we absolutely want more people to cycle.
On the stage at which offences have been proven, generally I would not seek ever-increasing sentences if education, technology or enforcement can provide an answer. However, it is alarming and surprising that we have on our roads more than 10,000 motor vehicle drivers with 12 or more penalty points on their licence, and that there has been a 60% drop in driver disqualifications in the past 10 years. It is essential that there is research on the reasons for those trends, because certainly they raise concerns that the current legal framework is at risk of being undermined by how it is implemented.
The hon. Member for Berwickshire, Roxburgh and Selkirk raised the issue of hit and run. I am surprised to hear that the maximum sentence is six months, because that offence is akin to perverting the course of justice. That is something that perhaps has to be looked at again. I also sympathise with what he said about making car-dooring a specific offence. As the hon. Member for Huddersfield (Mr Sheerman) reminded us, all of this has to be based on research.
Our roads are certainly safer than in past times, but there is still plenty of room for improvement, and the justice system has a role to play. I thank all Members for their contributions today.
Yasmin Qureshi (Bolton South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) for securing the debate. I also thank Cycling UK, Brake and RoadPeace for the considerable campaigning that they have done in this area over the years.
I agree with the good doctor, the hon. Member for Totnes (Dr Wollaston): walking or cycling is clearly far better for people’s health than driving. From the contributions that we have heard today, it is clear that many aspects of our road traffic laws are uniquely problematic. I declare that I was a prosecutor for many years—one of those people who make a number of decisions about whether to charge somebody with reckless driving, driving without due care and attention, dangerous driving or other offences of that nature. I will explain some of the challenges that we faced as prosecutors.
We have heard that it is all too easy for someone who is not an inherently dangerous person to drive in a manner that none the less causes obvious and foreseeable danger, which explains the apparent reluctance of some jurors to convict drivers of offences that they can easily imagine committing themselves. That possibly also applies to justices of the peace and magistrates in the lower courts. Many colleagues have mentioned examples where it appears that the law has not been applied properly. The framework for dangerous and careless driving is unclear; more importantly, it is applied inconsistently. That obviously sends a poor message to people—it shows that our justice system is perhaps not operating effectively. As a result, it causes distress to the seriously injured and to bereaved road crash victims. It also reinforces the idea that road danger is to be tolerated rather than eliminated.
Cycling UK has highlighted a case of a driver seriously injuring a pedestrian outside east London’s Westfield shopping centre in February 2017, for which he received just nine points on his licence after pleading guilty to careless driving. He then sent his friends a bragging WhatsApp video saying, “Nine points ain’t stopping me from driving.” Nine months later, he was swerving in and out of traffic at 68 mph on a 30 mph south London street, killing a 19-year-old woman who had crossed the road in front of him. Other videos found on his phone included one captioned “ripping the road at 146 mph”, suggesting that he enjoyed driving dangerously and illegally on a regular basis. The failure to treat his first offence as dangerous driving allowed him to keep his licence, with fatal consequences. Obviously not everyone is in that situation—we have to keep perspective on this—but it demonstrates one of the problems that occurs in courts.
We know that the current distinction between careless and dangerous driving depends largely on whether the court believes that the accused person’s actions fell below, or far below, what would be expected of a competent and careful driver or cyclist. As we know, those terms are highly subjective, and they allow for huge variation in interpretation by individual magistrates and jurors. The distinction is supposed also to relate to whether a defendant’s actions objectively caused danger that should have been
“obvious to a competent and careful driver”.
Evidently, however, prosecutors and courts continue to act as if the defendant’s state of mind were still relevant, despite the removal of reckless driving from the legal framework in the Road Traffic Act 1991. That suggests to me that there is a need for a review into the definitions of “dangerous” and “careless” offences in order to clarify whether the distinction relates to the level of danger caused by the defendant’s actions—an objective test—or to their state of mind, a subjective test.
I hope hon. Members will forgive me for being a bit technical with some examples. An objective test would be clarified by retaining “dangerous driving” but defining it as that which had caused danger that should have been obvious to a competent driver paying due care and attention, without depending on whether the defendant’s actions fell below or far below the standard expected of such a driver.
The lower-tier offence should perhaps be renamed “unsafe” or “negligent” driving, to clarify that the distinction has nothing to do with the driver’s state of mind. The need for that has been demonstrated in the car-dooring offences that hon. Members have mentioned. One example is cyclist Sam Harding, who was killed in August 2012 when a driver opened his car door into Sam’s path, knocking him under a bus. The driver had darkened his car windows with plastic tinting film, reducing their transparency to about 17% of normal levels. The CPS, concerned at the inadequate £1000 maximum penalty, charged him with manslaughter, but was unsuccessful. He received just a £200 fine.
That and several other fatal car-dooring cases, in which the drivers received fines of between £30 and £955, clearly indicate the need for tougher penalties and perhaps a review of legislation on the issue. It is shocking that between 2011 and 2015, 3,108 people—including 2,009 cyclists—were recorded as being injured by a vehicle door being opened or closed negligently. Eight of those incidents resulted in fatalities.
We must be serious about strengthening the role of the justice system in deterring irresponsible road use and removing unsafe drivers from the roads. It is only right that the Government set up a review of road traffic offences and penalties. I remind the Minister that in 2014, the Ministry of Justice promised a comprehensive review of road traffic offences and sentencing, largely in response to the representations of various road crash victims’ groups. After substantial delays, however, the scope of that review was later reduced to two proposals. The first was to increase the maximum penalty for causing death by dangerous driving, or for causing death by careless driving while under the influence of drink or drugs, from 14 years to lifetime imprisonment. The second proposal was to introduce a new sentence of causing serious injury by careless driving. Has the Minister considered the concerns about that? Has the new offence been created, or has anything been done in relation to that?
When the offence of causing death by careless driving came into effect in 2008, prosecutions and convictions for causing death by dangerous driving fell over the following five years by 46% and 51% respectively, as that charge was rapidly overtaken by the lesser new charge, even though the definitions of careless and dangerous driving remained unchanged. There are serious concerns that the proposed introduction of the offence of causing serious injury by careless driving would again lower the bar between dangerous and careless driving, with yet more inadequate sentences. In any case, the proposals would cause huge numbers of problems. We ask that the Law Commission look into this area properly.
I will give some background explaining one of the reasons why we have these anomalies. I remember that when I first started prosecuting a long time ago, in 1987, lawyers, prosecutors and judges—they and their sentencing guidelines were what the law was about—would not often look at the injuries, but would put the emphasis on the actions. There was the feeling that at a small lapse in judgment could cause fatalities, yet people who drive recklessly might cause no injuries or damage and would be dealt with in a very different way. That dynamic is what has caused some of the problems with traffic legislation since then. I know that things have changed and the laws are different now. As a prosecutor, I remember when the new legislation came in and we could look at fatalities and injuries caused. A number of new offences were introduced in order to deal with that matter.
Will the Minister support calls to launch a wide-ranging review of road traffic offences and penalties, as was promised in 2014? I suggest that some of that review be carried out by the Law Commission, so that it can clarify the definitions of dangerous and careless offences, or replace them entirely. It needs to be made clear whether the distinction is supposed to relate to the level of danger caused by the defendant’s actions—an objective test—or their state of mind, which is a subjective test.
The review should also consider the accompanying maximum sentences, and perhaps make greater use of driving bans for offences where danger has been caused by someone who is not obviously a dangerous person, while retaining custody as a sentencing option for more obviously reckless behaviour or for repeat offenders.
Mr Sheerman
Does my hon. Friend agree that some unscrupulous members of her profession specialise in getting high-profile people—David Beckham, for example—off their driving charges, and does she think that is good or bad?
Mr Clive Betts (in the Chair)
Order. The hon. Lady should know that she has only a minute or two remaining.
Yasmin Qureshi
I will not comment on individual cases—the courts made their decisions, and it would be improper of me to comment on them.
Driving ban sentencing needs to be looked at again. Many hon. Members have referred to how the exceptional hardship plea is being used, and suggested that courts and magistrates have been granting it too readily. That clearly needs to be looked at. Maybe there needs to be a change in the sentencing guidelines that magistrates take into account when deciding whether to grant exceptional hardship. That area also needs to be revisited and reviewed. With respect to car-dooring offences, the Law Commission should perhaps consider whether there should be an accompanying offence that carries licence points.
I await the Minister’s response on a number of the issues I have raised, including the need for the Law Commission to look into these matters.
Mr Clive Betts (in the Chair)
If the Minister could finish by 10.58 am, that would allow two minutes for the mover of the motion to sum up. Thank you.
The Minister of State, Ministry of Justice (Rory Stewart)
I will do, Mr Betts; it is a great pleasure to serve under your chairmanship. It is also a pleasure to take part in the debate. It is extraordinary; some of our most active and fittest colleagues are gathered in the Chamber to debate something that is very close to their hearts, and close to the hearts of millions of people up and down the country.
I will begin by reflecting on the point made by my hon. Friend the Member for Totnes (Dr Wollaston), which was that, fundamentally, there is much more that we can do to protect cyclists, but we also need to reinforce the central message that immobility is much more dangerous for one’s health than walking or getting on a bicycle. In fact, the beginning of all this has to be our understanding of just how powerful and beneficial cycling and walking can be. Cycling is not only—as most of us who cycle know—the quickest way of getting to this place in the morning, it is also a way of moving that is much less damaging to the environment and much better for our health in the most astonishing range of ways. It is better for our weight, our bowels, our hearts, our skin, our sex lives—[Laughter.] Yes, much better for our sex lives; recent studies in the United States have shown that men who cycle regularly have the sex life of somebody five years younger than the average. Cycling is also much better for happiness. It should be greatly encouraged, and the more people we can get cycling and walking, the better.
The corollary is that if we are to encourage people to walk and cycle, we need to make sure that they can do so safely. Far too many people still are injured or killed while cycling. In any given year recently, more than 100 people on bicycles have been killed on the roads. We need to take that seriously, while also putting it in the context that, overall, we are making huge improvements in road safety.
Famously, for example, in 1926 when far fewer people owned motorcars, 5,000 people were killed on the roads. As recently as 1966, 8,000 people were killed in motor accidents in a year. Today, although still far too high, the number is 1,700—despite the fact that far more people own motorcars than in 1966 or, of course, 1926. We therefore should not be entirely gloomy. The second thing to put into context is that, as some right hon. and hon. Members have pointed out, it is not only cyclists whom we need to think about in terms of vulnerable road users.
My hon. Friend the Member for St Ives (Derek Thomas) pointed out that 40 people a year on horses are killed on the roads, and far fewer people ride horses than bicycles, so proportionately someone is much more likely to be killed on a horse. About 400 or 450 people are killed walking and, as the hon. Member for Huddersfield (Mr Sheerman) reminded us, a similar number are killed on motorcycles—people are extremely vulnerable on a motorcycle on the road. Finally, of course, the largest number of people are killed in a motor vehicle. We should not suggest that anyone killed in a motor vehicle somehow deserves it because many are innocent victims, including children and families, who just happen to be travelling in that vehicle when it is hit.
Any approach to the subject therefore has to be comprehensive. I want to pay particular tribute to the hon. Member for Brentford and Isleworth (Ruth Cadbury) and to my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont), the Member for the borders. They managed to provide a very comprehensive description of the range of things that need to happen if we are to protect cyclists. That begins right at the beginning in the way that we train people who drive motorcars, so with The Highway Code, and thinking about things such as the Dutch reach and how tests are conducted or professional drivers might be retested. It extends to road design and, as my hon. Friend the Member for Nuneaton (Mr Jones) pointed out, questions of enforcement, not only sentencing but how the police conduct themselves, how evidence is gathered and how prosecutions are brought. As my hon. Friend the Member for South West Bedfordshire (Andrew Selous) said, it also extends to thinking about rest periods for drivers, the potholes in the roads or, as the hon. Member for Warwick and Leamington (Matt Western) pointed out, questions of a changing gig economy and the kind of people travelling in our vehicles.
All of that needs to be the context, which is why we argue strongly that any real response must take into account not just us in the Ministry of Justice but the Department for Transport and the Home Office. Nevertheless, I am a Minister from the Ministry of Justice, so I will touch briefly on some of the legal issues raised by right hon. and hon. Members.
My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk emphasised the serious issue of failure to stop. In examining it and making progress, we need to take into account the fact that there is a fundamental difference between the expectations of someone to report a driving offence, and of a burglar or murderer to report their offence: the premise, or presupposition, is that the driving offence is an accidental act. We therefore expect an individual of good will to have a duty of care and a responsibility to help the vulnerable victim in a way that the individual involved in other types of crime might not. That fundamental understanding of the difference between this type of crime and others should inform the approach that we take to the question of the failure to stop and the strong arguments made by my hon. Friend from the borders and others that we should increase the penalty.
The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned hardship, again a very serious point. There seems to be a serious discrepancy in the number of people able to claim extreme hardship. A small footnote to that, however, a caveat, is that it is important to remember that not all those claims of extreme hardship relate to the individual driving the motorcar; they often relate to the dependants of that individual—for example, a child with special needs who requires motorcar travel. Extreme hardship can therefore extend beyond the individual to the family. Nevertheless, I recognise that the number of people making such claims seems disproportionately large.
My hon. Friend the Member for Totnes mentioned restorative justice, but at the centre of everything is the question of careless or dangerous driving. That was discussed by the hon. Member for Brentford and Isleworth, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), who reflected on those distinctions, and the hon. Member for Bolton South East (Yasmin Qureshi), who made some interesting jurisprudential points on culpability and consequence or, as she framed it, the objective test of the damage done compared with the subjective question of intent.
That is not something that should be trivialised or put aside—it is a fundamental principle of English law. On the one hand, we have the incredibly stark and horrifying impact on the victim and the victim’s family—the hon. Members for Birmingham, Edgbaston (Preet Kaur Gill) and for Strangford (Jim Shannon) talked about that eloquently and movingly. That death and its consequences are final, destroying a life and the families that surround it, with eddying ripples that extend into broader society. On the other hand, that has to be balanced, as the hon. Member for Huddersfield pointed out, with seriousness about the nature of what happened at that moment. Some situations are genuinely accidents, and in others some of us might feel, “There but for the grace of God go I.” There is an important distinction between a careless act and a dangerous act. All of that needs to be balanced with the impact on the victim.
We have therefore concluded that we must now extend the maximum penalty for causing death by dangerous driving to a life sentence, and the maximum penalty for causing death by careless driving under the influence of drink—alcohol—to a life sentence as well. That has been a difficult decision because of the question of balancing the impact on the victim with the culpability of the individual. However, in the end, the conclusion must be that someone who commits an extremely dangerous act in a vehicle is driving a weapon and committing an unlawful act. Ultimately, if a death results, that is morally equivalent to unlawful act manslaughter. Individuals under the influence of drink or drugs who get into a vehicle knowingly propel an extremely dangerous weapon, having consciously made a decision to incapacitate themselves. That is in direct contravention of their duty of care towards other road users and is therefore equivalent to gross negligence manslaughter. They should therefore face the penalty of a life sentence as a maximum.
In response to the questions asked by the hon. Member for Heywood and Middleton (Liz McInnes), therefore, we will be doing that. I will not delay people or waste their time with explanations about why, particularly in the middle of Brexit, parliamentary time has been limited, or why we feel that we need to take a comprehensive approach that brings in the Department for Transport and the Home Office, but we are determined to do it. That is because cycling is incredibly important for our health, our environment and our connections with landscape and society. We have a particular duty of care and obligation to vulnerable road users. With that, I thank all right hon. and hon. Members for their contributions to an extremely stimulating and important debate, which will change the law.
Mr Clive Betts (in the Chair)
I thank everyone for their co-operation on the timing. I ask Ruth Cadbury to wind up.
Ruth Cadbury
I, too, thank all Members who have spoken today. I will not have the chance to refer to everyone, so I will pick up on the issue of deterrence.
I am not a vindictive person and I am not generally into stiffer penalties, but driving is something we all do—most people drive—and we all want to avoid accidents. The deterrent of charges and penalties can be a factor in improving driver behaviour. I believe that that is why driver behaviour is better in Germany, in my experience. A different kind of deterrence to do with civil litigation is, I think, behind the much better driving that I experienced in the United States. This area of law is one in which deterrence is useful. Many Members also picked up on the inconsistency between penalties and sanctions, in particular when talking about the distinction between careless and dangerous driving.
I thank those Members who mentioned their constituents and families who have been affected by such tragedy, because that is, after all, what we are dealing with today. I welcome the fact that the Minister has again announced the increase in the maximum sentences and that there will be a review. He also mentioned that the MOJ and the Department for Transport will work closely together so that there is consistency in message, approach, consultation and response.
Question put and agreed to.
Resolved,
That this House has considered road safety and the legal framework.
Royal Navy Base: Bahrain
(6 years ago)
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Leo Docherty (Aldershot) (Con)
I beg to move,
That this House has considered the strategic importance of the new Royal Navy base in Bahrain.
I am pleased to introduce this debate about the strategic importance of the new Royal Navy base in Bahrain, HMS Juffair. I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests, which shows that I have a long-standing and significant interest in the Kingdom of Bahrain. I have been going there for a number of years, most recently in October to look at the new naval base.
Let me explain briefly what the base is and what it does. It is a small but perfectly formed facility that, in simple terms, allows ships to be tendered, administered and maintained more efficiently. Up to a company group of people can live on the base—there are around 500 bed spaces. I was honoured to receive tremendous hospitality on my interesting visit in October, which was led by Commodore Steve Dainton, commander of the UK maritime component. I was pleased to go aboard the mine countermeasures vessel HMS Blyth and to discuss its role with Captain Drewett and the ship’s company. I would also like to put on the record the tremendous work that is being done by the defence attaché, Commander Paul Windsar, and of course the overall leadership that is provided by our ambassador in Bahrain, Simon Martin.
Most importantly, the base will allow our fleet of mine countermeasures vessels to make their contribution to the Combined Maritime Forces. Type 23 frigates will be able to use the base, too—it is my understanding that a Type 23 will soon be based there permanently—and destroyers and other vessels will also be able to take advantage of what it offers. The base is a huge step forward. It is the first new naval base in the middle east since 1971, and we should all wholeheartedly welcome it.
The base is hugely important to our bilateral relationship with the Kingdom of Bahrain. Many of us know that we have a long-standing relationship of at least two centuries with the kingdom. Because of the pressures it faces due to its location vis-à-vis Iran, the Bahraini state feels a sense of existential insecurity. It therefore relies on its allies to stand with it through thick and thin, and I am proud that this country has done that. Our tangible, permanent commitment to having a Royal Navy presence in the kingdom is of huge importance to our Bahraini friends. In fact, it is so important that they have been prepared to pay most of the costs of the base. That is of huge advantage to us—it allows us merely to man the facility. The reassurance the base provides our ally should not be understated.
That reassurance has a regional element, too. I mentioned that the mine countermeasure vessels contribute to the Combined Maritime Forces. Not many people know about that, but it is hugely important. It is a multinational force of some 33 nations that promotes the free flow of commerce over a huge area of the ocean—3.2 million square miles of international waters, not just in the Gulf but in the Red sea, the gulf of Aden, the Somali basin and the Indian ocean. The mine countermeasures vessels that Commodore Dainton commands make a hugely important contribution to that, in one of the most important areas for global trade.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
My hon. Friend is bringing to the House’s attention an important part of the Royal Navy’s expanding programme. Does he agree that, in a post-Brexit world, we will continue to be a global maritime nation? Geography and the way our trade works dictate that. The work that we will be able to start from Bahrain to keep those difficult waters open is critical to the UK’s future economic growth.
Leo Docherty
Indeed. Our contribution to global free trade and the free flow of commerce around the world will be more important than ever, and we are uniquely well placed, along with our allies—the United States and others—to play a key role in that.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I believe we are the only European country with such a base in the Arabian Gulf. Will my hon. Friend use his expertise in the region to continue to probe the Government about what steps are being taken to work with other Gulf Co-operation Council countries to ensure that the base is supported and expanded, given that more than 60% of the world’s oil flows through the Arabian Gulf?
Leo Docherty
My hon. Friend makes a very good point. I will mention that shortly, but absolutely, we should see this base as a model for the way we work with other GCC allies. I know there is significant appetite in Oman and Kuwait, for example, for greater co-operation between our militaries.
As my hon. Friend points out, we must remember that some 20% of the world’s oil flows through the strait of Hormuz. That is astonishing. The area of operations of the Combined Maritime Forces is at the epicentre of global trade, and we have a disproportionately positive impact on that. We have four mine countermeasures vessels, whose value and contribution is out of all proportion to what they cost us.
The base represents a significant defence engagement win. I am pleased that the Government have a defence engagement strategy, which was published in 2017. Of course the naval base has been in gestation since 2014, but it is good to see these themes and intent formalised in that document. The strategy is just a reminder—what we see in Bahrain is an illustration of the fact—that defence can be a tremendously positive agent of foreign policy and is intertwined with our foreign policy objectives. Defence is not just about kinetic war-fighting operations; it can lead to tremendously important diplomatic and commercial outcomes.
Kevin Foster (Torbay) (Con)
I agree with what my hon. Friend is saying. Does he agree that we must remember that if we, as a western democracy, do not engage, others will be only too happy to fill the void, as we see with the Chinese military base in Djibouti?
Leo Docherty
My hon. Friend makes an extremely good point that runs to the heart of the matter. If we wish to project our global influence on a basis that suits us and represents the values we stand for, we must do so. If we do not, others will, and they will do it less well and the outcome for everyone in the region will be worse. The national security objectives are clearly laid out. They are to protect our people, promote prosperity, and project our global influence. I am confident that all those objectives are met by us having our base in Bahrain.
Carol Monaghan (Glasgow North West) (SNP)
Many people will be disturbed to hear the hon. Gentleman refer to a close friendship with a country that has such a dismal human rights record. Will he use his relationship and experience with the Bahraini authorities to press them? If we are talking about our global influence, we should press those authorities to review their human rights record.
Leo Docherty
The influence and close relationships that we have allow us to do exactly that, and I encourage the hon. Lady to visit the Kingdom of Bahrain at the earliest opportunity to see the reality for herself.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
My hon. Friend is being gracious with his time. I served in Bahrain and the Gulf in operations in 2009 on HMS Kent, and I agree with everything he says about our influence in the region. He ran through the practical opportunities that having a base in Bahrain gives us, but does he agree that it is also a physical embodiment of what we are all talking about, namely global Britain? As we leave the European Union, such things demonstrate that we are not retreating from the global stage, and they are a demonstration of our intent not just east of Suez but around the world.
Leo Docherty
My hon. Friend is right. This is a demonstration of a model that perhaps we should use in other places in future. This is not just about the Royal Navy, because the capacity for the Army to stay as a company group at the UK naval facility in Juffair presents tremendous training and partnership opportunities with the Bahraini army, which would be to its benefit and to ours. That spirit of enduring partnership is the driver behind all this.
Will the Minister give us his judgment on the success of the establishment of the UK naval facility, perhaps say whether he agrees that we should use this model in other Gulf Co-operation Council states, and say whether on a global basis we can perhaps do such things in other parts of the world? I conclude by reiterating my gratitude to all those currently serving in the UK naval service, not just the ship’s company of HMS Blyth, but those serving in the Combined Maritime Forces and the UK maritime component in Bahrain. Their daily vigilance contributes significantly to the freedom and prosperity that we in this country enjoy.
The Minister for the Armed Forces (Mark Lancaster)
It is a pleasure to serve under your chairmanship, Mr Betts, and I am particularly grateful to my hon. Friend the Member for Aldershot (Leo Docherty) for securing this debate. As we have heard, he and other colleagues take a keen interest in defence and security developments in Bahrain and the wider Gulf region.
His Royal Highness the Duke of York officially opened the United Kingdom naval support facility in Bahrain on 5 April this year. It epitomises the importance that the UK places on its relationship with Bahrain and the security of the Gulf region, and the emphasis that the Ministry of Defence is placing on global Britain. It is the first permanent overseas Royal Navy establishment operating east of Suez in almost half a century, and part of the commitment to the Gulf region that the Prime Minister promised in Manama in December 2016, when she underlined her undertaking that:
“Gulf security is our security”.
The UK NSF, which was a gracious gift of His Majesty King Hamad to mark the 200th anniversary in 2016 of our strong and enduring bilateral relationship, has increased the capabilities that already existed in Bahrain. It will allow the Royal Navy to provide better support for its vessels, including new aircraft carriers, and it has enabled the UK to permanently assign a Type 23 frigate to the Gulf from next spring. The UK NSF has been planned for long-term utility, strategically situated alongside the US navy 5th fleet, and it is one of our most advanced naval facilities. I stress that the complex is not a naval base as such because there are no dry docks, but we more recently opened a joint logistical support base at Duqm in Oman—I was honoured to be there for that opening—which will have dry docking capability for all Royal Navy ships.
The UK NSF is a joint asset and operates under Permanent Joint Headquarters command within the Operation Kipion joint operational area. The facility’s primary function is to provide appropriate levels of real-life support to personnel deployed to Bahrain, whether permanently shore-based, on contingent operations, on a deployed maritime unit or on short-term theatre visits. After PJHQ operational requirements have been met, UK NSF still has additional capacity to host around 100 visitors, with a surge capacity of an additional 300, up to a maximum site capacity of 549. It also provides engineering and logistics support to maritime units, and can host contingent forces for short periods. The capability is split into three broad categories: accommodation, welfare, and technical. Primarily, it supports our deployed naval force in the Gulf, providing maritime security for Bahrain, the wider region and the global economy.
As my hon. Friend said, the most important aspect of the UK NSF is what it enables our ships and people to deliver on operations. As I speak, five Royal Navy warships and two Royal Fleet Auxiliaries are deployed in the region, operated and supported by more than 1,500 personnel. They include our mine countermeasures force, which has been permanently based in Bahrain since 2006 and, as my hon. Friend said, is very much considered the jewel in the crown of the force by the Americans. The MCM force is made up of five ships—four mine countermeasures vessels supported by a Royal Fleet Auxiliary ship. That force conducts route survey and clears mines from the sea bed, as it did after the 2003 Iraq war, enabling the safe navigation of the waterways.
The Combined Maritime Forces, headquartered in Bahrain, is a coalition of 33 nations aligned in common purpose to conduct maritime security operations and provide security and stability. HMS Dragon, one of the UK’s Type 45 destroyers, is currently operating under the command of the CMF, as the latest example of the UK’s enduring commitment to the coalition. The CMF conducts operations to counter a broad range of threats to maritime security, from piracy to the transport of narcotics, weapons and other illicit cargoes that fund and fuel terrorism and criminal networks. It has had a great deal of success—this year alone it has seized more than 46 metric tonnes of heroin and hashish, with a combined estimated value in excess of £43 million, at wholesale destination ports in the Gulf region. The street value in the UK would be many times that figure. The CMF has helped to bring about a significant reduction in piracy incidents since they peaked in 2010. The UK NSF provides the UK with a maritime centre in the region from which to respond to future humanitarian crises or natural disasters, and to conduct operations to protect the waterways and ensure the continued free flow of commerce. It makes possible our commitment to the enduring task of maritime security operations in the region.
Reinforcing the Prime Minister’s undertaking in 2016 that Gulf security is our security, the then Foreign Secretary announced that the UK would be spending £3 billion on defence commitments in the region over the next 10 years. It is clear that we cannot afford not to do so—as has been said, 40% of global oil production is shipped through the strait of Hormuz between our close ally Oman on one side and Iran, which is a challenge, on the other. It is the world’s most important maritime choke point. The wider Gulf contains two more of the world’s eight recognised maritime choke points, with the Bab-el-Mandeb at risk of miscalculation emanating from the persistent and tragic conflict in Yemen.
Daniel Kawczynski
The Minister has outlined the important practical aspects of the base, and he referred to Iran as a “challenge”. Does he agree that the base also has an important political symbolic aspect, which is that the United Kingdom will never tolerate any interference in the sovereignty of Bahrain?
Mark Lancaster
Indeed. My hon. Friend makes a valuable point that returns to the Prime Minister’s statement that Gulf security is our security. We have a long-standing relationship with Bahrain. This facility is part of that historic relationship, and we will continue to play our part in the region, as I am demonstrating. The political statement is there for all to see.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The facility is of great importance to the Royal Navy, but I should be grateful if the Minister would touch on how it shapes changing deployments, and in particular how there can be greater crew rotation on ships when they are permanently forward-deployed in the Gulf rather than having to steam from Britain, including from such fantastic ports as Devonport, off to the Gulf and back again.
Mark Lancaster
That is a valuable point. Of course, historically, in the deployment of frigates and destroyers much time has been lost in transit to the region, and the time taken affects their ability to be on operations. The naval support facility will, as I mentioned earlier, enable us to forward-deploy in the first instance a Type 23 frigate for a sustained period—far longer than the initial six months, because the vessel itself will stay in the region, getting rid of those transit times. Because of the facilities that we have there, we shall simply be able to rotate the crew through by aircraft. That means that the facility is far better for the crews. The accommodation is far superior to that on a ship. Equally, there is more predictability about the deployment; from a family perspective deployments are more set, as they come without some of the challenges of having to move the ship around the world. All in all, not only is the facility great for our persistent presence in the region; it is of major benefit to crews and families, so I am grateful to the hon. Gentleman for making that point.
On 7 July 2015, the National Security Council agreed a Gulf strategy to protect and promote the UK’s interests in the six Gulf Co-operation Council states, recognising their importance in addressing direct threats to the UK from terrorism, extremism and organised crime, for our energy security and for wider regional stability. The NSC Gulf strategy is delivered through increased and integrated cross-Government engagement and activity, including working with partners, allies and international organisations. Aligned with the strategy, the MOD has a leading role in promoting regional security and stability, not least by its contribution to multinational forces engaged against Daesh and other violent extremist organisations and malign influences, thereby deterring aggression and combating transnational crime in the Gulf and beyond. We are working more often and more closely to build the capability of Gulf states’ security forces, promoting our high standards of operational effectiveness and conduct.
The UK’s commitment to Gulf security has been epitomised by Exercise Saif Sareea 3 in Oman, which I was privileged to open last month. It finished on 5 November with an impressive firepower demonstration attended by all GCC countries along with wider middle east and global partners. It was the UK’s largest bilateral exercise for 17 years, since Saif Sareea II, with 5,500 UK troops deployed alongside 70,000 Omanis. Elements of the UK force are now conducting defence engagement activity with our other GCC partners. Saif Sareea 3 has been a tremendous success, not only as a military exercise but also in view of the fact that it has involved cross-Government Ministries in Oman working in close co-operation with counterparts from Her Majesty’s Government on crisis response and resilience activity. It has been an exemplar of HMG fusion activity, underpinned by a detailed strategic communications campaign that has seen the exercise dominate Omani print and social media for almost its entire month-long duration, with extensive exposure across the Gulf.
I want to underline why the base has such an impact across the region, including with other nations. During his visit at the beginning of November the Secretary of State for Defence announced the Oman-British joint training base, further delivering on the Prime Minister’s Manama commitment. That relates to the point that my hon. Friend the Member for Aldershot made about how we can continue the process. The new training facility will be tested with its first joint exercise with the Omanis in March next year. It will be supported by the joint logistics support base at Duqm, which, as I mentioned, I had the honour of opening at the beginning of Saif Sareea 3 in October.
Saif Sareea 3 has been far more than just a bilateral military exercise. It has been a demonstration of our commitment to Oman and the wider Gulf region and will leave behind a legacy for decades to come. The Secretary of State for Defence underlined our commitment to the region when the UK NSF was opened in April:
“Our Armed Forces are the face of Global Britain and our presence in Bahrain will play a vital role in keeping Britain safe as well as underpinning security in the Gulf.”
He went on to say—and I agree wholeheartedly:
“Britain is a major player on the world stage and this new Naval Support Facility will help us tackle the growing threats to our nation wherever they are across the globe and protecting our way of life.”
That is exactly the point that many of my hon. Friends have made during the debate. Furthermore, in the context of global Britain, the UK NSF will be the hub of our naval operations across the Indian ocean and potentially further afield for decades to come. I hope I have given Members the assurance of the strategic importance of the Royal Navy’s new facility in Bahrain.
Question put and agreed to.
2019 Loan Charge
(6 years ago)
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Mr Steve Baker (Wycombe) (Con)
I beg to move,
That this House has considered the effect of the 2019 loan charge.
I will take a moment to say how glad I am to serve once again under your chairmanship from the Back Benches, Mr Walker.
It is right that everyone, both individuals and corporations, should pay the correct amount of tax, and I welcome the Government’s commitment to a fairer tax system. I was pleased to see that the UK’s tax gap has fallen to a record low of 5.7% in recent months.
I should start by explaining what the loan charge is. The gov.uk website explains:
“Loan schemes—otherwise known as ‘disguised remuneration’ schemes—are used to avoid paying Income Tax and National Insurance.”
The loan charge was announced at the 2016 Budget. The policy ensures that users of tax avoidance loan schemes pay their share of tax and is expected to protect £3.2 billion for the UK’s vital public services. The website also says:
“The loan charge works by adding together all outstanding loans and taxing them as income in one year.”
Therein lies the difficulty, and the fundamental cause of the impact on individuals and families.
In 2005, my right hon. Friend the Chancellor said:
“Certainty and transparency are the hallmarks of a fair, effective and competitive tax system. A taxpayer is entitled to know with certainty…what he may or may not do in planning his tax affairs.”—[Official Report, 7 June 2005; Vol. 434, c. 1139.]
That is why I object to retrospective legislation that undermines the rule of law.
The introduction of the 2019 loan charge has been beset by challenges, confusion and complications. Over 100 MPs have signed early-day motion 1239 calling on the Government to significantly revise this piece of legislation. I am glad we are meeting today in this well-attended debate to consider the impact of the loan charge.
In the 2016 Budget, the Government announced that they would introduce legislation to tackle disguised remuneration schemes. Statutory provision was included in the Finance (No. 2) Act 2017, with further provisions included in the Finance Bill introduced after the autumn Budget last November, now the Finance Act 2018. The Government say they will protect £3.2 billion by taking action to tackle both historic and continued use of these schemes. That is a not inconsiderable sum. It will include a new charge on loans paid through disguised remuneration schemes that have not been taxed and are still outstanding on 5 April 2019.
Her Majesty’s Revenue and Customs states that the schemes affected by the 2019 loan charge were not and never have been legal. However, that is disputed by the Loan Charge Action Group. I refer to a letter by the Chancellor of the 19th of this month, published today on the Treasury Committee website. The Chancellor writes:
“Finally, I would like to clarify my comments to the Committee in reference to the use of disguised remuneration (DR) schemes which I described as ‘tax evasion’. I should have said ‘tax avoidance,’ and that in the Government’s view, tax was always due.”
That is a very important distinction, because evasion is illegal, while avoidance is an undesirable and unintended use of Parliament’s legislation. In drawing that distinction and correcting the record to say “avoidance”, the Chancellor has made an important concession.
Julian Knight (Solihull) (Con)
My hon. Friend is making an interesting speech, and I congratulate him on securing this important debate. As a former personal finance editor before entering this place, I used to have many inquiries from readers about these schemes as they were offered to them. My advice was always, “Steer clear, because eventually the price will be paid.” Does he agree that there is a role for regulators to look at the poor and potentially dangerous advice given by accountants about these schemes?
Mr Baker
It is my intention in my concluding remarks to stridently condemn the promoters of these schemes, who have ended up luring people into misery through what they have done.
Before closing with this letter, I want to mention that the Chancellor also wrote:
“It is not normal, or indeed reasonable, to be paid in loans that are not repaid in practice. It is not fair to the vast majority of taxpayers who pay their taxes in full and on time for anyone to benefit from contrived avoidance of this sort and that is why this government has legislated the charge on DR loans.”
I agree with the Chancellor that it is not normal or reasonable, but I make it very clear that I place the blame on the promoters of these schemes.
HMRC initially expected 40,000 people to be affected, although in a recent parliamentary question, my right hon. Friend the Financial Secretary to the Treasury gave a new figure of 50,000. HMRC’s impact note stated:
“The government anticipates that some of these individuals will become insolvent as a result.”
The Loan Charge Action Group suggests that the loan charge will end up affecting probably upwards of 100,000 people and their families.
The hon. Member for Eastbourne (Stephen Lloyd) has tabled an EDM criticising the measure, arguing that
“retrospectively taxing something that was technically allowed at the time, is unfair”.
Of course, I would agree. HMRC has argued that the loan charge is a new tax on a new source, and described it as retroactive rather than retrospective. I would like the Minister, if he can, to explain both terms and any difference that the Treasury is implying.
Sir Edward Davey (Kingston and Surbiton) (LD)
The hon. Gentleman deserves a lot of credit for bringing this issue to the House. Does he agree that we should be working cross-party ahead of the Report stage of this year’s Finance Bill to put together a new clause that deals with the problem, under which any loan charge would come into effect only after Royal Assent of the Finance (No. 2) Act 2017?
Mr Baker
I certainly agree with the right hon. Gentleman that there is a job of work to be done across parties to uphold the rule of law, in particular the principle that legislation should not apply retrospectively. That is a subject on which I have made speeches over the years. We end up in a hideous cycle of undesired action, in particular to avoid taxation, followed by the injustice of retrospective action to protect other taxpayers and the misery that causes to large numbers of people. It must be brought to an end, but underpinning that we must be committed to the rule of law.
Dr Julian Lewis (New Forest East) (Con)
I am grateful to my hon. Friend for bringing this debate to the Chamber. Can I ask him about retrospection? My constituent, Alan Williams FCA, points out that HMRC already had sufficient power to recover tax from individuals, so it is rather its own convenience and its unwillingness to apply its existing powers that have led to this legislation. My constituent Andy Pocock points out that in his case, he has procedures under the existing legislation whereby he is allowed to appeal, but all that will be cut off retrospectively by the new legislation and he will not have a chance to fight and defend his corner.
Mr Baker
One of Parliament’s duties is to restrain the Executive and ensure that their powers are reasonable. We should look carefully at the subject that my right hon. Friend has just raised. It is important that HMRC treats people in a decent and civilised way, and certainly more powers ought not to be taken than are strictly necessary.
Mr Mark Prisk (Hertford and Stortford) (Con)
My hon. Friend is to be congratulated on securing a debate on this subject. One of the iniquities, in addition to the issue of retrospectivity, is that at least four of the constituents who have been to see me have said that they were told by their companies that unless they signed these new forms of contractual relationships, they would not continue to work for those companies. Given that, should not HMRC be pursuing the companies and not the individuals?
Mr Baker
I entirely agree with my hon. Friend. Toward the end of my remarks I will come on to the solutions that I propose, but I entirely agree with him that if any company insisted on people engaging in these arrangements it certainly should share the responsibility for what they did.
Teresa Pearce (Erith and Thamesmead) (Lab)
Will the hon. Gentleman give way?
Teresa Pearce
The hon. Gentleman is being very generous with his time and I thank him for securing this debate. On that last point, my constituent was a civil servant for 37 years. In 2010, his team was TUPE-ed from the Ministry of Defence to Hewlett-Packard. He retired in 2013. In 2014, they asked him back to oversee a Ministry of Defence contract, but refused to take him back on pay-as-you-earn and said they would only do it through one of these vehicles. Should my constituent not have had some comfort from the fact that this was an MOD contract? Surely the Government and Government Departments should look at who they are contracting with, to ensure that a man such as this, in his retirement years, is not stung by this charge?
Mr Baker
I obviously cannot comment on individual circumstances. However, this is a good opportunity to draw a distinction between taking people on as contractors and insisting that they join schemes that could end up with their using disguised remuneration arrangements. On the one hand, contracting is a legitimate way of going about business; on the other, engaging in disguised remuneration schemes—an aggressive form of tax avoidance—is not desirable.
Mr John Hayes (South Holland and The Deepings) (Con)
My hon. Friend is doing a sterling job of raising this matter in this place. On that basis, will he challenge the Minister on how many firms have been investigated, how many promoters have been pursued and prosecuted, and how many of those had some connection to Government contracts or payments?
Mr Baker
I join my right hon. Friend’s call for the Minister to set that out, which my hon. Friend the Minister will have heard. I will now make some progress.
The Loan Charge Action Group says that the human impact of receiving a bill for up to 10 years’ worth of tax will have a catastrophic effect on individuals and their families. On whom among us would it not have a catastrophic effect? It goes on to say that we are looking at thousands of bankruptcies, family break-ups and suicide attempts, as well as mental illness, unemployment, loss of abode and more. That is a catalogue of human suffering and misery.
HMRC’s impact assessment of the measure says:
“This package is not expected to have a material impact on family formation, stability or breakdown.”
However, that looks at aggregates, not the impact on individuals, which it seems to me is a common mistake of Government. As a Conservative, I wish to focus first and foremost on the individual, not the collective.
I will foreshorten my remarks, given the interventions I have taken. One specific complaint is the lack of warning. A freedom of information request revealed that HMRC has issued about 23,000 loan charge awareness letters, which were only issued from the second quarter of 2018. HMRC says that 50,000 individuals may be affected, so many will be unaware of the impending charge. The Loan Charge Action Group points out that the opportunities to settle new tax affairs with HMRC ahead of the charge were similarly not widely publicised, nor was the deadline of 31 May 2018, leaving people in a terrible fix, although I understand that the deadline has been quietly dropped.
The Loan Charge Action Group suggests that historical users of schemes who left many years ago are probably completely ignorant of this new legislation and will only hear of it after receiving a large bill some time in 2020. This is a dreadful risk, which the Government should forestall.
I am keen to conclude, so I will come to some solutions that I ask the Minister to consider. As I outlined in a letter to the Chancellor in September, there should be clarity about what DOTAS—disclosure of tax avoidance schemes—registration means. There should be a legally mandated text accompanying every advertisement of a DOTAS-registered scheme that explains that the purpose of registration is to enable HMRC to identify tax liabilities and to recover them when such schemes are proven not to work. It does not imply any kind of legitimacy, and registration with HMRC is not for the purpose of endorsing the schemes. When HMRC becomes aware that a taxpayer has subscribed to a DOTAS-registered scheme, it should contact the taxpayer and make them aware that registration has the purpose of enforcement and does not convey legitimacy. HMRC must take into account people’s circumstances, and the threat of insolvency should never be used as a kind of extrajudicial punishment.
Dr Phillip Lee (Bracknell) (Con)
On treating individuals fairly, it is pretty evident that the people who have been selling these questionable products are not being pursued in the way that they should be. In view of that, does my hon. Friend agree that the Government should start looking at mitigation, so that certain individuals—I know of a couple in my constituency—are not bankrupted by this whole sorry affair?
Mr Baker
The Minister will have heard my hon. Friend’s point, which I endorse.
The loan charge should apply from Royal Assent onwards. In other words, it should be prospective—a case I have made many times—not retroactive or retrospective. HMRC should be more proactive in advising that such schemes are likely to end in tax charges in the future, and perhaps far into the future. More steps should be taken against promoters and introducers of such schemes. They are the ones profiting from this misery. Finally, the issue of employment status and IR35 requires action at last, to bring the uncertainty to an end.
Joseph Johnson (Orpington) (Con)
My hon. Friend wants further action taken against the promoters of these schemes. Does he agree that we also need to take action against the Queen’s counsel who peddled rinky-dink advice that encouraged many of our constituents—including some of mine—to participate in these schemes, in the belief that a QC’s opinion rendered them beyond the reach of HMRC?
Mr Baker
My hon. Friend makes a very good point. I hesitate to trespass far beyond my expertise, but I make the point that it is often thought that the opinion of a QC determines the truth. That is not the case. QCs and barristers argue among themselves in court, and the court determines the facts. I am often struck by people relying on the opinions of lawyers when what they actually need is the judgment of a court.
Alex Chalk (Cheltenham) (Con)
On the judgment of courts, does my hon. Friend share my concern that individuals are sometimes effectively left without a remedy, because the person who gave them that advice so many years ago no longer continues to trade? There is then effectively no remedy for the individual and no ability for them to claw back their significant losses.
Mr Baker
My hon. Friend raises an important point. In concluding my remarks, I shall allow what he says to stand.
I really think that it is perfectly natural for people to want to pay less tax, but I would be failing in my duty if I did not say to all those paying attention to the debate that, when something seems too good to be true, it probably is. We ought not ever to allow ourselves to be lured into schemes that offer absurdly low rates of tax. However, I save my strident condemnation for the promoters of these schemes, who, in their advertisements, seek to persuade people that this is legitimate activity and to create the impression that DOTAS registration conveys some kind of legitimacy or endorsement by the state. That is an outrage, because of course it encourages people to participate. These promoters are, frankly, wicked. It is a great evil to encourage people into these schemes and to leave them in misery afterwards.
Finally, we must insist on the rule of law. Notwithstanding the wicked conduct of promoters, the greater wickedness in the end is to undermine the rule of law—the certainty that comes from someone knowing that if their actions were lawful at the time they were carried out, they will not subsequently be challenged through retrospective legislation. I feel most strongly about that, as I have throughout my time in Parliament. I urge the Government, whatever evils have been done by the promoters of these schemes, to abandon the practice of retrospective legislation.
Several hon. Members rose—
Mr Charles Walker (in the Chair)
A number of colleagues wish to speak. If colleagues can restrict themselves to speaking for no more than five minutes each, I will not put a timer on. However, if colleagues go over five minutes, I will have to start reducing other colleagues’ time.
Siobhain McDonagh (Mitcham and Morden) (Lab)
On behalf of all Members here, I congratulate the Loan Charge Action Group on its effective lobbying of so many MPs. I would not wish its members to think that this number of MPs normally turn up to such a debate. It has done very well and has clearly done its members proud.
I start by emphasising that I cannot defend tax avoidance in any form. I strongly believe that everyone should pay their fair share and that there should be repercussions for those who do not. However, the case at hand is not quite so simple. This loan charge will affect up to 100,000 people, many of whom acted in good faith and were acutely unaware that they were ever doing anything wrong. Several of those impacted were forced into schemes as prerequisites of taking up a job, following guidance given in good faith, rather than attempting to avoid their tax responsibility. They are being taxed retrospectively for something that was technically allowed at the time.
What is more, the proposed 20-year range is usually reserved for blatant acts of criminality. We are talking about life-changing amounts of money. For some people, the sums involved run into hundreds of thousands of pounds. This will lead to bankruptcy. This will lead to mental breakdown. This will lead, and has led, to suicide. I will quote directly from the letters and emails sent to me by my constituents, so that the Minister can hear the reality behind these excessive measures.
Mr M describes a dark cloud hanging over his head. He says:
“It has been hell and I have at times considered suicide. It will affect my kids’ entire lives, in that I will be unable to support them as they grow older and I may be unable to buy a property for the rest of my life.”
Mr M argues that governing with life-changing force and 20 years in the past is nothing short of grossly unfair, and that it sets a dangerous precedent that HMRC can, where it suits its need, change or create laws and retroactively and aggressively enforce them.
Mr C says that bankruptcy is his only option. He says that he took and followed professional advice and declared his arrangements at the time to HMRC, which did not act. Mr L describes the impact of the stress levels on his health since he was made aware of the legislation, particularly as he believed the scheme to be legitimate. He claims that these schemes are still freely available for contractors to sign up to.
My constituents are not alone. The Loan Charge Action Group has conducted analysis of those affected. It highlights the fact that 68% describe depression, 71% fear bankruptcy, 31% fear relationship breakdown and 39% have suicidal thoughts. The policy will cost lives.
Would it not be more sensible for HMRC to pursue the enablers of the schemes? I am talking about the client organisations, agencies and umbrella companies, all of which have benefited and which, I believe, hold the most responsibility. Perhaps HMRC does not do that because even HMRC itself was using and paying contracts now subject to the loan charge, working through arrangements that HMRC now declares to be tax avoidance schemes.
Let me re-emphasise that if and when an individual or organisation has purposely dodged tax, they must be penalised. But what strikes me is that HMRC is ruthlessly pursuing hard-working contractors, while rolling over in the face of obvious and aggressive tax avoidance by so many of the UK’s largest corporations. Why did Amazon pay just £1.7 million in taxes last year, despite profits almost trebling to £72.3 million? Why did Facebook pay just £15.8 million in taxes last year, despite collecting a record £1.3 billion in British sales? Why did Google pay just £49 million on UK sales of £7.6 billion? Richard Murphy, a professor of practice in international political economy, estimates that such tax avoidance costs the UK about £7 billion each year. That is enough to pay for 180,000 nurses or 150,000 secondary school teachers.
Tax avoidance in any form must not be tolerated. While the Government bankrupt unknowing individuals across the country, multibillion-pound corporations make a laughing stock of their tax collection efforts. It is high time that those organisations and those who have enabled the schemes described today were made to pay their fair share once and for all.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate my hon. Friend the Member for Wycombe (Mr Baker) on securing this debate, which gives us the opportunity to highlight the devastating impact that the 2019 loan charge is having on many individuals.
My constituent who has been affected by the loan charge is at his wits’ end. His family life has been turned upside down and, as he sees it, he has no alternative but to declare himself bankrupt. He is not a wealthy man. He is not a professional footballer; he is an IT contractor. When he and others were made redundant by BT, they were introduced to financial advisers who set up these schemes for them. He and they acted in good faith, only following the advice given so as to be IR35 compliant.
I want to highlight two issues. My first concern is that HMRC is pursuing the easy targets—individuals who have acted in good faith, are not well off and do not have their own bespoke financial advisers and accountants. My understanding is that the Glasgow Rangers Football Club case, on which the 2019 loan charge is based, concluded that the tax liability fell on the employers. That raises the question why HMRC is not pursuing the client organisations, agencies and umbrella groups that have benefited significantly from setting up these arrangements.
Bim Afolami (Hitchin and Harpenden) (Con)
I agree with my hon. Friend’s focus on the individuals involved. Does he agree that the retrospective nature of the measure is not just a matter for the rule of law in the abstract, but that it undermines the trust of those people and their families and communities in our Government and our legal system, and will do so for generations to come?
Peter Aldous
I thank my hon. Friend for his intervention—he has a crystal ball, because he has foretold the next item in my speech.
The people affected have become a target. They are vulnerable people. They are not well paid and do not receive many of the benefits and protections that payroll employees do: sick pay, holiday pay and maternity and paternity leave. I would be grateful if my hon. Friend the Minister could advise us when he sums up the debate of whether the impact assessment has looked at the personal circumstances of the individuals who are being pursued, whether they are able to pay and what the impact will be on their lives.
My second point, which my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) foretold, is that the basis on which the 2019 loan charge has been introduced and many individuals are now being pursued is that it is retrospective. It undermines the cornerstone of taxation, which is that a Government should not seek to impose or increase a tax charge on income earned, gains realised or transactions concluded at a time before the legislation was announced.
Peter Aldous
I sense that I should plough on, Mr Walker, so as to give others an opportunity to make a speech.
It is vital that any taxation system is equitable and progressive, and that those with the broadest shoulders pay their fair share.
Mr Charles Walker (in the Chair)
Order. I will not hold it against the hon. Gentleman if he would like to be generous to Mr Goldsmith.
Peter Aldous
Then I will allow my hon. Friend the Member for Richmond Park (Zac Goldsmith) to intervene before I continue.
Zac Goldsmith
I thank my hon. Friend for giving way and you, Mr Walker, for intervening in such a magnanimous way.
It is not just right hon. and hon. Members in this Chamber who take the view that my hon. Friend has just expressed in relation to retrospective taxation. The current Chancellor of the Exchequer said in 2005:
“A taxpayer…is entitled to be protected from retrospective or retroactive legislation.”—[Official Report, 7 June 2005; Vol. 434, c. 1139.]
And of course he was right. The measure that we are seeing and debating today is retrospective taxation, and it is abhorrent.
Peter Aldous
I thank my hon. Friend for that intervention: he reinforces what is the fundamental, fatal flaw of this injustice. What I and, I believe, all hon. Members in the Chamber are concerned about is that a group of people—often vulnerable people—who have acted in good faith are now being asked to bear an excessive burden, which will have a devastating impact on their lives and their families’ lives. For that reason, it is very important that we air these concerns to the Minister.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to see you in the Chair, Mr Walker. I am delighted to follow the hon. Member for Waveney (Peter Aldous). I offer my congratulations to the hon. Member for Wycombe (Mr Baker) on setting up this important debate. I, too, am grateful to the Loan Charge Action Group for its briefing and, in particular, to our former colleague in the House, Greg Mulholland, for his assistance in preparing for the debate.
A number of constituents have contacted me about this issue, and I will focus on the questions that they wish me to put to the Minister at the end of my remarks. I will make a few comments beforehand, though, first on the numbers of people affected, which seem to be in dispute. There has already been mention of several figures: 40,000, 50,000 and 100,000. If I read the Library briefing correctly, Mr David Richardson, director of customer strategy at HMRC, said to the Treasury Committee that there were 105,000 cases, 80,000 of which were unresolved. I would be grateful if the Minister could clarify exactly what the numbers are.
The second issue is the jobs that some of the victims have. The Loan Charge Action Group says:
“The Loan Charge affects many tens of thousands of professionals—contractors, freelancers, agency workers including social workers, supply teachers, locum nurses and doctors who were recommended to use umbrella companies by employers, professional advisers and employment agencies.
For many people the sums involved run into hundreds of thousands of pounds”.
The group goes on to say:
“Schemes were, and still are, legal and in most cases the motivation behind their use was not to reduce tax but simply to comply with the poorly drafted IR35 legislation, which”,
18 years on, “remains unclear.” It is misunderstood, and certainly the origin of this issue does seem to be the IR35 regulations. I have been dealing with cases for constituents about that for the past 18 years.
My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) made reference, as did the hon. Member for Wycombe, to the Loan Charge Action Group’s analysis of the impact. She quoted the figures about those who are affected. Some 68% were affected by depression or mental impact, 71% by bankruptcy, 49% by loss of resident home, 30% by divorce and relationship breakdown, 30% by loss of career, and 39% by suicide or self-harm thoughts. The biggest issue for all my constituents and the action group is the retrospective nature of the legislation, which the hon. Member for Wycombe focused on. That has been raised many times already, and the key question remains about the transparent unfairness of this decision.
My constituents have requested that I put a number of questions to the Minister. I recognise that he is not directly responsible for this policy, but I am sure he has a briefing that will cover at least some of the questions that my constituents have asked me to raise, because they are quite predictable.
Why did it take HMRC 20 years to take official action? Why did HMRC not email or write to loan users over the past 20 years, to ask them to come out of these schemes and the associated risks, when it had the relevant information on the yearly individual self-assessment tax returns? Why ask for 20 years’ retrospective payment for something that was and is legal? Why has an appeal format been refused to loan scheme users, leaving costly judicial review as the only alternative, which single individuals cannot afford by themselves?
Why cannot HMRC just admit that it did not perform due diligence on the loan schemes? Why, when public sector contractors were asked to move into IR35 in 2018 so that they could pay the right amount of tax, did they not get retroactive tax to pay? Why did PricewaterhouseCoopers get away with 35% early discount on a £10 million fine in 2017 for a failed BHS audit? Apart from going bankrupt or committing suicide, how does HMRC expect most individuals to be able to repay such sums at short notice?
My hon. Friend the Member for Mitcham and Morden also mentioned a letter the action group received saying that HMRC contractors are now being pursued by HMRC due to the loan charge. The Loan Charge Action Group has now discovered that HMRC itself was using and paying contractors who are now subject to the loan charge. The LCAG has been contacted by people in that situation reporting that they are working on important IT projects for HMRC, were security-cleared by HMRC, and were working through arrangements that HMRC has now declared to be tax avoidance schemes. In effect, that means that HMRC was itself involved in arrangements that it now says “never worked.” The action group commented:
“This turns this from fiasco into farce.”
Perhaps the Minister could comment on that.
More than 100 colleagues have signed the early-day motion. This is clearly an issue that the Government have to address. There is a massive impact on the lives of those affected, including my constituents. They look to HMRC for fairness, and I trust that the Minister’s response will indicate that that is a possibility. If it is not, I look forward to a cross-party, Back-Bench new clause to the Finance Bill, which, based on the numbers here today, would stand a good chance of passing through the House.
Ross Thomson (Aberdeen South) (Con)
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate my hon. Friend the Member for Wycombe (Mr Baker) on introducing the debate and being such a champion on this issue. My inbox and my surgeries have been inundated.
I represent Aberdeen South, which is the energy capital of Europe and the hub of our oil and gas industry. Many who worked in oil and gas were actively encouraged by their companies to get involved with such schemes, to set up a personal limited company and to get off the company books. Many did so for many years. Many felt assured that they were being advised by chartered accountants and tax advisers. Everything was above board. It was their belief that their professional accountant could not advise anything illegal; otherwise, their chartered status would be revoked.
Adam Holloway (Gravesham) (Con)
Of course it is a failure of successive Governments, but in 2011 the Government actually looked at this. They did not come up with a definitive answer and as a result these schemes proliferated.
Ross Thomson
My hon. Friend is absolutely right and I could not agree with him more. For many, this option seemed to be the obvious choice. The retrospective nature of this decision is causing great distress. As has been said, there is a huge human cost. I want to take this opportunity to share with the Minister and hon. Members the stories of my constituents.
One constituent wrote to me and said:
“It’s been going on for a few years now and taking its toll on my family. As we are unsure where we’ll get the money to pay any outstanding tax, their bullying tactics in getting you to sign up to pay and the fact they demand you to reach a settlement with them, even though when we have done everything they ask, they have still not come back with any settlement figures.
Not only that, they are saying even if you settle or pay back the loans, there’s a strong possibility it won’t end there, so we go back to their scaremongering tactics they’ve deployed for you to pay up front and ask questions later, it’s totally unjust for our future as being a democratic society”.
Another constituent said:
“I like to think I understood the risk I was taking and had every confidence in the scheme I was using, I did not entertain the prospect that the Government would be prepared to violate the core principle of the rule of ‘legal certainty’ by introducing retrospective legislation going back 20 years…This weekend I have received my settlement ‘offer’ under HMRC’s settlement offer and am currently in the process of deciding whether or not to accept their terms. Whilst I sincerely would like to settle and move on, I am deeply concerned that their CLSO2 is extremely unfair and punitive.”
Alex Chalk
My hon. Friend is making a powerful point. Does he agree that the fundamental unfairness is that HMRC is going after the easiest of targets, namely the individuals, rather than those who may be the most culpable?
Ross Thomson
I could not agree more. It seems to be easy pickings for HMRC. It is not going after those who are truly culpable. That is why such great distress is being expressed in our surgeries.
My constituent continued:
“This whole sorry affair has imposed life changing levels of stress on both me and my family, especially with the backdrop of the recent downturn in the oil and gas industry where I have been out of work for about 50% of the past two years.”
Another constituent wrote:
“This is a complicated situation, however fundamentally, HMRC have closed down the opportunity to use these ‘loan’ schemes.”
My constituent accepts that it is a positive move to end ambiguity.
“The retrospective nature of this legislation is going to place a large number of contractors under extreme financial duress. Bearing in mind HMRC’s failure to sort this situation out sooner”.
Another constituent—this is the last example I will give—emailed me to say that he was emailed by a company stating that he could retain 78% to 80% of his salary legally. He wrote:
“The scheme was QC approved and top tax counsel advised it was sound… I learnt during the latter part of last week that my retrospective tax charge is very likely to exceed £230,000. As for HMRC’s so-called ‘Impact Assessment’ apparently finding that such sums would lead to few, if any issues for those being expected to pay such, I can only comment that they must assume that we are all multi-millionaires. Of course, they know full well that we aren’t.
It’s very daunting when the full weight of government makes demands with threats of the law being brought to bear when, according to the law, no law has been broken. I doubt very much that I can simply ignore threats, be taken to court and stand there and say such. Thus individuals are placed in the position of hiring lawyers with costs running into six-figures and this will be beyond the means of most, if not all of us.”
This particular constituent says that he is single and has
“never had a second income from a partner to assist with cost of living”.
He is facing serious financial distress.
It is right that we condemn those who sold on and encouraged such schemes. It is deeply unfair that we seek to do this retrospectively. It absolutely violates the core principles of the rule of law. I could not agree more with colleagues who have already expressed that frustration. I think that this particular measure is disgraceful. I will go further-I think it is dishonourable and should be stopped.
Mr Charles Walker (in the Chair)
If colleagues could keep to five minutes, we might get everybody in.
Sir Edward Davey (Kingston and Surbiton) (LD)
This House has the chance and the opportunity to put this wrong right. As the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) said at the end of his speech, there will be a Report stage to the current Finance Bill. It will come to the Floor of the House and we—every Member here today of whatever party, whoever signed the early-day motion—have the power to come together, cross-party, and pass a new clause to right this wrong. Frankly, words in a Westminster Hall debate and signatures on an EDM mean nothing unless we are prepared to go through the Lobby to vote this tyrannous legislation down. Constituents, the Loan Charge Action Group and all the people affected will expect their Members of Parliament to vote and act and not simply talk. Today gives us a platform to make sure we send a powerful message to Treasury Ministers that this is a catalyst for the action that was not taken two years ago, but will be taken, I believe, when we get to the Report stage of the Finance Bill.
As has been said by the hon. Member for Wycombe (Mr Baker), there is a fundamental principle here that he and I can agree on: the rule of law. When we talk about British values, about which he and I agree, the rule of law is something the Department for Education says should be taught in every school up and down our country. Well, this is the test. Either Members of Parliament believe in the rule of law and what our children are taught, or they do not. When we vote on the new clause in the Finance Bill, as I am sure we will be asked to, we will see whether we really do believe in the rule of law.
Mr Baker
As one liberal to another, it is a delight to agree with the right hon. Gentleman. I hope members of the public will not think I am engaging in too much levity if I say that some of us are engaged in enough rebellion already. I should be very grateful indeed if the Government tabled their own amendment to deal with this matter, so that we do not find ourselves engaged in any sort of rebellion on the Finance Bill.
Sir Edward Davey
It was a pleasure to allow that intervention. I have no objection to the way in which the wrong is righted, as long as it is righted properly. If we stick to the principle of the rule of law, as I said in my intervention on the hon. Gentleman, ending retrospection in this tax change means that any charge prior to Royal Assent of the Finance (No. 2) Act 2017 must end. There can be no charges before Royal Assent of that Act; otherwise we are in the area of retrospection.
Like other colleagues, I have had constituents contacting me. Sixteen have contacted me directly, and in my experience that means there are many more out there who have not contacted me. I will read from just one, from Mr Garry Taylor, who talks about the “devastating consequences” that will destroy the finances of “me and my family”. I do not know about other colleagues, but I have had people almost in tears in my surgery over a tax matter, which has never happened before in 20 years.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Does the right hon. Gentleman agree that people are living in genuine fear of bankruptcy and losing their homes, and it is not acceptable that the Government have handled the matter in that way?
Sir Edward Davey
I could not agree more. I have never seen people so distressed and distraught by one particular measure, which appears to target pain on just a few people. Those people work hard in our NHS, our industry, our schools and our civil service. Why do the Government want to target so much pain on so relatively few people? The charges involved are massive: hundreds of thousands of pounds. It is completely iniquitous. I believe the Minister knows that and I hope he will therefore put it right. Everyone in this House is clearly against tax scams; we want to close them down, but as other hon. and right hon. Gentlemen have said, people were advised by professional accountants and HMRC appeared to be happy. It was notified of the tax schemes and did nothing. Yes, let us crack down on tax avoidance, but let us not go after victims, the people simply trying to earn a living for themselves and their families.
Tommy Sheppard (Edinburgh East) (SNP)
Will the right hon. Gentleman give way?
Sir Edward Davey
I will in a second.
I might be the only veteran of the 1999 Finance Bill Standing Committee. I am happy for colleagues to correct me, but in those early days of my parliamentary career, I had the pleasure of sitting on nine consecutive Finance Bills that dealt with the early history of IR35. We had huge arguments then that that was wrong. There is an inherent issue that needs to be tackled, but what is proposed is absolutely not the way. HMRC has got to learn from history. It appears to me to be acting vindictively because it did not get its way a few years ago on IR35. Because people found legitimate ways around it, it is coming back and acting in an outrageously draconian way, and this House has to say no.
Julia Lopez (Hornchurch and Upminster) (Con)
It is a pleasure to serve under your chairmanship, Mr Walker. I must begin with a little grovelling and apologise in advance for having to leave this debate for a Statutory Instrument Committee. I am grateful to you for allowing me to speak, and to my hon. Friend the Member for Wycombe (Mr Baker), who secured this debate. It is of great importance not only to my constituents, but to those of many other hon. Members.
My constituents are concerned about the 2019 loan charge. They have tended to work as contractors or freelancers in the IT and professional services sphere, and they are now deeply concerned that HMRC’s actions over the loan charge will place them in serious financial hardship, if not outright bankruptcy. They suggest to me that they were encouraged by professional advisers or the contracting companies themselves to enter special payment schemes, which were deemed legal and allowed for scheme users to be paid in the form of a loan rather than ordinary remuneration. Resulting from poorly drafted IR35 legislation, such schemes are now deemed by HMRC to be disguised remuneration that amounts to aggressive tax avoidance. HMRC is pursuing affected constituents at a time when many cannot easily recover their earnings.
My constituents fear that this action represents retrospective taxation, thereby undermining legal certainty and confidence in the tax system. They are also angry that the charge is being levied on contracting employees, despite a legal case involving Rangers, which judged the employer liable for any unpaid tax and national insurance. Given that for nearly two decades HMRC appeared to permit tax advisers and accountants to recommend the schemes without penalty, my constituents believe they have been let down by a system that should have alerted them to problems in a timely manner.
I have had a one-to-one meeting with the Financial Secretary on this issue in which he set out the Government’s position with clarity. I understand that scheme users will now be able to spread any payments to HMRC over five years should their taxable income this year be under £50,000. However, my constituents want to know why HMRC is not apparently being more robust in pursuing the tax advisers, accountants and contracting companies who took freelancers and contractors down this route in the first place.
One constituent told me:
“I decided to contract having been made redundant 3 times from what I considered safe and stable jobs. I have never in my life taken any state benefit. The only and main reason I signed up to a...scheme was because I felt that after a year as a self-employed person...the rewards did not justify the risks and with IR35...insisted upon by my employers”,
it seemed
“the only route open for me to improve my take home pay”.
He goes on:
“I am not justifying any shortfall in the tax...that I maybe should or could have paid, but Government and HMRC”
allowed
“schemes to flourish for years without redress...HMRC have chosen to inflict regular PAYE/NI rates, apply penalties and interest for open years and take no account of holidays, sickness benefits, pensions, training and out of contract time that freelancers have to finance themselves. Surely, even a concession on the rate being charged under the Loan Charge would be a fair and reasonable compromise?”
I must confess that without having access to the precise details of individual tax paid and the specifics of the schemes entered into, I have found myself caught between the concerns of constituents and the assurances of Ministers, who believe very strongly that the loan schemes clearly represented an illegitimate attempt to avoid tax. I fear, therefore, that the fairness and legality of HMRC’s actions will end up being determined in the courts by those with the tax expertise to look dispassionately at these matters. None the less, I wanted to raise these concerns in this afternoon’s debate in my role as a constituency MP, and I would be grateful if the Minister addressed the specific concerns that my residents have raised with me: namely, the apparent lack of action against culpable financial and legal advisers and employers, the calculation of tax owed, and retrospection in the tax system, which risks undermining wider confidence in the system.
Mr Charles Walker (in the Chair)
I call Janet Daby. You have four minutes, I am afraid.
Janet Daby (Lewisham East) (Lab)
Thank you for allowing me to speak in this debate, Mr Walker.
In 2000, the Government introduced legislation called IR35, which sought to class many freelancers as employees. It was designed to target “disguised employment” and the Government wanted to close a loophole that allowed companies to employ people without collecting NICs or paying other associated taxes. Unfortunately, “disguised employment” was not well defined. When people were engaged on very different terms to permanent employees, it was not clear whether they were subject to IR35. In that grey area, third-party scheme providers began to offer a service whereby contractors became employees of a third-party company, which was then engaged by the agency or client company. Remuneration was paid in the form of loans, which were often made by an offshore third party.
Those arrangements were marketed as HMRC-compliant and seemed to offer the certainty that many were looking for. The Government now claim that the arrangements did not work and, although they were within the law, were not in tune with what Parliament intended. That has led to a series of measures designed to recover the funds, which were not originally deemed taxable, in spite of the fact that the people affected legitimately completed tax returns, paid their dues and disclosed the arrangements to HMRC.
Many within the schemes have yet to be informed of the amount that they are due to pay, including my constituent Nick, who was involved in one of them. To say that Nick is worried about that is an understatement. I have met him, and he said that he is
“facing personal ruin, most likely bankruptcy with the loss of the family home”.
He feels that that will affect him and his family. He continued:
“While I have recently moved out of financial services…bankruptcy would make me ineligible to work for any financial services company again therefore severely limiting my potential employers”
and employment. To say that causes a great deal of stress is an understatement. Although he is grateful to have the support of his wife and family, there are days when he feels hopelessly overwhelmed by that looming over him.
Given the vast sums of money involved, and the various reasons and backgrounds behind people becoming involved in such schemes, we need a sense of the role of the companies who provided the contracts. They clearly played a role. I would also like to know from the Minister whether the time-to-pay arrangements will provide the people affected with any kind of practical support.
Mr John Hayes (South Holland and The Deepings) (Con)
The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) made it clear that the genesis of the matter was the change to IR35 in 2000, which led to many freelance, contracted and itinerant workers ordering their financial affairs, notably for the purpose of paying tax, in a way that they believed and were told was completely proper and in line with the new regulatory environment. Subsequently, umbrella schemes developed as some of those people’s tax and financial affairs led them to the point where they became liable for employer’s national insurance contributions. Those umbrella schemes have become mainstream in the subsequent 18 years.
The people concerned were largely acting in good faith, whether or not the people who were advising and promoting the schemes were. The architects and advocates of the schemes are the people who the Treasury should be pursuing with vigour and determination.
Fiona Bruce
Is my right hon. Friend aware that many of the organisations and advisers that encouraged our constituents, who are now suffering so much grief, to go into the schemes are the self-same ones putting themselves forward to give our constituents advice to address the challenges from HMRC? Does that not add insult to injury?
Tommy Sheppard
I am grateful, because I concur entirely with the point that the real villains are the companies that mis-sold the schemes in the first place—at times, for fees that can only be considered usurious. My constituent paid £138,000 in fees over three years to a company called AM Limited, which has changed its name but is still trading and registered in Panama. If HMRC were to assist my constituent in trying to recover that money, he would be much better able to pay his retrospective tax liability.
Mr Hayes
I have answered many debates in this Chamber as a Minister of various Departments, and I tell the Minister, who is a good and honourable man, that when this many hon. Members from both sides of the House come together in a single cause, he had better take action. The writing is on the wall and he has to respond. I know he will take that piece of sound advice in the spirit that it is offered to him.
I will briefly make three recommendations and then draw my remarks to a rapid conclusion. First, I would like the Minister to tell us what further impact assessment has been made by scale and detail on the families affected by the measures. Secondly, I would like him to give us an estimate of how many people who cannot or will not pay will be driven to bankruptcy, and what effect that will have on the Treasury’s revenue calculations on the matter. Thirdly, as I have already said twice—I make no apology for amplifying it—I would like him to tell us what steps he is taking in respect of the architects and advocates of the schemes, who have done so much damage.
I have no doubt that being a Treasury Minister is about churning figures, but it is also about changing lives. This matter affects the wellbeing of large numbers of our constituents. Families will be blighted and faith in fairness will be ruined. The Minister—an honourable gentleman, a good Treasury Minister, a valued colleague and friend—needs to see the writing on the wall and take action. Woe betide those who do not. They will rue the day that they failed to listen to the voices that have been aired today.
Mr Charles Walker (in the Chair)
I thank Mr Hayes for his generous and succinct contribution. Last but not least, I call Justin Madders.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate the hon. Member for Wycombe (Mr Baker) on securing the debate. It is clear from what we have heard that the issue has caused much consternation and anguish for many people, so it is right that those concerns have been aired here.
As much as the next person, I believe that if tax is due, it should be collected. Without the ability to raise funds, our public services would grind to a halt. I am sure there is unanimous agreement about that. My concern, and that of many hon. Members, lies in the way the recovery of the 2019 loan charge has been handled. It raises questions about whether HMRC can say, hand on heart, that all those who are subject to it have had what I would call a fair hearing. I want to make it absolutely clear that if, following due process, the money is owed, it should be paid, but what I have heard from a constituent does not give me confidence that that will be the case.
My constituent, Mr Crook, was working as a geologist in the oil industry when the agreements that are being scrutinised were set up. His work has dried up and he is now unemployed. He tells me that he is not in a position to repay everything he owes—not that he has been told how much that is—and that because of the uncertainty and the failure of HMRC to engage with him, he is concerned about the risk of bankruptcy.
I have corresponded with Ministers and officials to ask someone to look into Mr Crook’s case but I have had nothing back but the standard response. With Mr Crook understandably anxious to resolve matters, he has contacted HMRC at the email address provided on 9 April, 8 May, 30 August, 31 August and 28 September, and by post on 2 July. His emails have had an automated response and he has had no response to his letter at all.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
My hon. Friend is making a powerful argument on his constituent’s behalf. I have a constituent much like his who has been told that he may have to pay back more than £100,000 over the five years, which could cost him as much as £2,500 a month. Does my hon. Friend accept that even when people are still in work, if they are trying to provide for their families, those sorts of sums are simply unobtainable for most of our constituents and will lead to bankruptcy, whether that is what the Government intend or not?
Justin Madders
There is a lack of reality and a lack of genuine engagement with the individuals affected. As I said, my constituent has not had a discussion of the sort that my hon. Friend refers to, and until he does, he is in no position to know whether he will be able to repay anything at all. Will there be genuine discussions before the loan charges become due? Is the Minister confident that the Department has sufficient staff and resources to deal with all the inquiries that we have heard about?
My constituent tells me that although he submitted his tax returns each year when he was working they were never queried, and because of that HMRC has at the very least implicitly, if not explicitly, accepted that the moneys he received as a loan were indeed just that. He is concerned by the retrospective nature and long reach of the loan charge, and states:
“We really are normal people, who operated within the law at the time, itemising everything on our tax returns, paying benefits in kind tax on the loans and operating under a registered scheme with a reference number lodged with HMRC at the time.”
I contrast those words with what my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) said earlier about the string of multinational companies that are clearly paying less tax than they ought. When individuals are being driven to despair by the sort of hectoring we have heard about, it is perhaps right if they conclude that there seems to be one rule for the big corporations and another rule for the man on the street. If individuals are made bankrupt we will all lose, but it looks as if we could end up in that situation by default because of a lack of resources and engagement by HMRC. Will the Minister look carefully at how the recovery operation is working, so that we avoid that? Finally, I ask that HMRC acts with competence and compassion.
Kirsty Blackman (Aberdeen North) (SNP)
I appreciate being called in this debate, Mr Walker, and I thank the hon. Member for Wycombe (Mr Baker) for securing it.
In previous years, the SNP has raised concerns about the implementation of IR35 legislation, and during discussions on the Finance Bill I suggested a review into the way that it was being implemented. It was not necessarily that the legislation was a bad idea, but the way it was implemented did not work for people because they could not navigate the system appropriately. I raised that issue in 2016, just as my colleagues did previously.
I have been approached by many constituents about the loan charge. Some were recommended to join these schemes by the companies they worked for, which wanted them to move on and become contractors. One person told me that a presentation was given in the company’s boardroom by another company running one of the schemes. Individuals were encouraged to go to that presentation and transfer into one of the schemes rather than being employees of the company. That is a real concern.
I am concerned about the way that this measure is being implemented. I have a constituent who filled in his details before 30 September, as he was requested to do, but has not yet received a settlement figure from HMRC. Another constituent in the same boat has been told that they will receive a settlement figure by 5 April next year, although the Treasury promised that those figures would arrive by 30 November this year. People are being told that the settlement figures will not be calculated until 5 April, but they have also been told that they will need a payment plan in place by then in order to be compliant. If that settlement figure is not calculated until April and the payment plan will be required immediately, people do not have enough time to make the decisions they need to make on any settlement figure.
Clarity about timelines would be hugely appreciated. This has been a moveable feast, and the Treasury and HMRC have regularly changed the dates and times by which people have been required to submit information. It is important to have clarity so that people know when they need to have a payment plan in place.
It is important that people pay the tax they owe. At least one of my constituents is disputing the calculation made by HMRC. They have not been given a breakdown of the calculation and cannot work out why HMRC has come to that figure. There needs to be transparency so that people understand why HMRC thinks they owe what it says they owe, and they can then make rational and reasonable decisions about payment plans.
I have been clear with any constituent who has approached me, and with HMRC, that we need a mutually beneficial payment arrangement. We cannot have people being made bankrupt as a result of these payments. The change from 12 months to a five-year period for repayments is welcome, but if someone is being asked to pay back hundreds of thousands of pounds when they are existing on jobseeker’s allowance, it is not possible to pay that money back over five years.
I am also concerned about individuals who are being asked to sell or move out of their family home and have it repossessed. That causes problems for local councils as well as for the family involved, and just passes the buck. If HMRC wants to recoup the money, it would be sensible to do that in a way that means people can pay it, rather than having to be made bankrupt. We need give and take by HMRC, as well as transparency and clarity about dates.
Drew Hendry
Does my hon. Friend agree that one of the biggest problems facing people in this position is the uncertainty of not knowing how they will cope with paying these large amounts back over a period of time, when no assistance or guidance has been provided as to how they might make those payments?
Kirsty Blackman
As I said, this has been an incredibly moveble feast and HMRC keeps moving the goalposts. It is important to have clarity about the future timeline. Constituents need to understand what they will need to pay back, the timescale involved, and why they are being asked to pay back the amount requested.
Lyn Brown (West Ham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Walker. Today we have heard some awful stories from my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh), for Poplar and Limehouse (Jim Fitzpatrick), for Lewisham East (Janet Daby), and for Ellesmere Port and Neston (Justin Madders) and others, and I am grateful to everybody who has contributed to the debate and put the case so clearly.
There is no doubt that small business owners, contractors and others who have used these schemes will be significantly affected by the charge next year. Many are not wealthy people. They did not intend to avoid tax, and until recently many were not aware that there was even an issue. In some cases, the schemes were presented by agencies or employers as part of a standard contract. Some people could lose their livelihoods; some could lose their homes. The schemes we are talking about are a form of tax avoidance, and it is right that tax owed is collected. Avoidance should not pay—that is the principle. However, those who will be negatively affected by these schemes deserve our empathy and understanding, and many of the stories we have heard confirm that some of those affected are vulnerable and became caught up in these schemes without initially comprehending what they were all about.
If what is being reported is correct, it is an absolute disgrace that hospital cleaners, locum doctors, nurses, council workers, social workers and other people who work hard for the public on low or moderate pay were recruited into these schemes by tax advisers and bogus umbrella companies. It is an absolute disgrace that the Government are determined just to take on those individuals, rather than those who facilitated this avoidance for profit—those who fully knew what they were doing, and did it anyway.
If the reports are right, in some cases nurses or other public servants were made redundant by public sector organisations, only to be hired immediately as contractors through agencies who then facilitated these tax avoidance schemes. What action have the Government taken against those agencies? Some might say that this was fraud, because the schemes were not a genuine way to reduce tax liability. I have some sympathy with that view, because the schemes seem to have harmed many “clients”, and in my head I cannot justify a professional tax expert setting up such a scheme and getting a nurse, a social worker or someone else on a low or moderate wage involved in it. If it is not illegal for those tax experts to do that, it bally well should be.
Let me ask the Minister a direct question: if his Government maintain that these arrangements were illegal when entered into, why have they done nothing about the advisers who recommended them? Does he agree that when advisers promoted these schemes, they were promoting something illegal? The advisers get off scot-free while those who can ill afford it carry the can.
One of the employee benefit trust schemes we are talking about was created by Deloitte, which is one of the largest business services companies. It was put in place by Deutsche Bank, working with offshore entities in the Cayman Islands that were set up for this specific purpose. That was confirmed by the Supreme Court in 2016 following court rulings in 2014 and earlier. Two years on, however, there has been no investigation or prosecution, and no penalty for mass-marketing unlawful schemes. No accountancy firm has been disciplined by the professional body, the Institute of Chartered Accountants in England and Wales, and the Government did not even attempt to recover the legal costs spent fighting those cases. Why?
The Government’s priorities seem clear: they will not go after the enablers. We appear to be talking about advisers and employers who have exploited public service workers—workers who will see no benefit themselves—and at the same time directly reduced the tax that pays for those self-same public services. It is simply wrong, and it goes to show yet again how absurd, short-termist and unfair the outsourcing and privatisation policies have been.
We believe that clemency should be considered when businesses or people are at risk. As hon. Friends and other hon. Members have said today, if the loan charge causes businesses to go under next year, that will not help the Treasury recoup losses in the longer term. As the hon. Member for Aberdeen North (Kirsty Blackman) said, it will cost the public sector more if we have to evict people from their homes and rehouse them. I hope the Minister will tell us what the Government will do to treat everyone involved with compassion and care, particularly those who unintentionally fell foul of the schemes, including vulnerable people and those on low incomes. Campaigners say that the exact opposite is happening: people are being treated with little understanding or compassion by HMRC.
The impending deadline of April next year and the potentially severe consequences for anyone on a low wage who does not meet that deadline justify concerted outreach to those who have loan balances outstanding. We cannot let vulnerable people who have been exploited end up with massive tax debts hanging over their heads for many years to come. If we see bankruptcies, failing businesses, repossessions and even suicide, that will be because this Government have not done the outreach needed and not invested in adequate training. It will also be because the context for the charge is a cut to the HMRC workforce of 17% since 2010, even while they are rightly being asked to do more to tackle such complex problems.
We should not let the Government’s approach to loan schemes distract us from their absolute failure to deal with large-scale tax avoidance. Loan schemes are far from the only form that avoidance has taken in recent years, and are small in comparison with the tax avoidance methods used by the ultra-rich. Labour supports strong measures against tax avoidance. We want the Government to go much further. We want them to go after the enablers-those who knew that the schemes were tax avoidance and illegal, but who peddled them anyway. Thank you.
Mr Charles Walker (in the Chair)
And thank you, shadow Minister. This gives the Minister extra time to answer all the questions he has been asked. He will leave two minutes, because he is generous, for Mr Baker to wrap up at 3.58 pm.
The Economic Secretary to the Treasury (John Glen)
Thank you, Mr Walker. It is a pleasure to serve under your chairmanship.
I congratulate my hon. Friend the Member for Wycombe (Mr Baker) on bringing this debate to the Chamber. I acknowledge the 12 speeches from colleagues from across the House, who raised some very important issues on behalf of their constituents. Only last Friday, some of my constituents too came to raise the matter with me.
In the course of my response, I hope to address the significant issues discussed: time to pay; retrospection; whether HMRC is going after the promoters; what my hon. Friend said about the disclosure of tax avoidance schemes; the numbers involved; and the difference between retroactive and retrospective. I will also give some detail on the sums of money that we anticipate will be raised through the measure.
The responsibility of Government is to assess critically the impact of any tax reform, and to ensure that it is structured and implemented in the best possible way.
Mohammad Yasin (Bedford) (Lab)
The Government say not only that the loan charge is designed to treat loans as income, but that if the loans—now income—are written off, they will be subject to inheritance tax because the loan will not be repaid. Numerous court and tribunal findings agree that the loans were loans, not income, yet the Government press ahead regardless. Does the Minister agree that that is completely wrong and unfair?
John Glen
In the course of my speech, I will address that point. I am happy for the hon. Gentleman to come back to me later if he feels that I have not done so.
To be clear, I am the Economic Secretary; the Financial Secretary wanted to be here but he is in the main Chamber for the Finance Bill, so I am here in his place.
I acknowledge the early-day motion tabled by Members. It has attracted 103 signatures, and I also acknowledge the concern throughout the House on this matter. The concerns expressed are for people who have used a disguised remuneration scheme, who expect to have outstanding loans in April 2019, and who will be subject to the charge. I recognise that the Government need to be clear about why we legislated for this charge, which received Royal Assent following a full debate during the Finance Bill process in 2016-17. I will outline the steps that the Government have taken to help those individuals who may be affected.
The Government believe that it is not fair to ordinary taxpayers, who pay their tax on time and in full, to allow people who have used tax avoidance schemes to get away with it. Disguised remuneration tax avoidance schemes are contrived arrangements that use loans, often paid through offshore trusts, to avoid paying income tax and national insurance contributions. The schemes may have involved provision of a loan with no intention whatever to repay it. I spoke to the Financial Secretary this morning, while preparing for the debate, and he said, “Earnings are earnings, and a loan is a loan,” and that is what the issue boils down to.
Gareth Snell
I understand the Minister’s point, but before he progresses with his speech, will he clarify whether he accepts what many Members have asked this afternoon-that those who undertook the scheme did so in good faith, and therefore that the people ultimately in trouble for this system are those who perpetrated it, not those who signed up to it?
John Glen
I am happy to concede that for the 50,000 indivi-duals affected, there are obviously responsibilities for those who promoted this. It is absolutely the case that HMRC is pursuing those individuals. They often promoted the scheme to large numbers of individuals. Five cases are before the courts—that seems a small number, but each one covers a large number of individuals—and there has been a judgment in one, with the other four cases still moving through the courts. It is not right to say that HMRC is not engaged with those who promoted the scheme.
Lyn Brown
I will be gentle, because the Minister knows, as I do, the peope who are really responsible in our respective parties for this particular piece of legislation. I would, however, be grateful if he takes on the responsibility to ensure that we are written to about the actions that the Government take against the enablers.
Tommy Sheppard
Will the Minister confirm, either now or in any such letter, the Treasury’s objectives in pursuing those companies? Is it to take retrospective action against them to try to recover the great volume of money they received from selling those schemes?
John Glen
HMRC’s objective will be to secure the money owed, as per the rules of the tax system. HMRC has enormous power to levy charges of up to £1 million on those individuals who are not complying.
The schemes may have involved provision of a loan with no intention to repay it. The recipients of such payments enjoyed them no differently from the way any of us use our normal income. As such, in the eyes of HMRC, the payments have always been taxable.
I have acknowledged the comments of colleagues who said that the charge on disguised remuneration loans will apply to loans that were made as far back as 1999. It is fair to say that the schemes were never permitted. They were defective, going back to then.
Mr John Hayes
We now learn from the Minister that HMRC knew that the schemes were inappropriate from the outset. So is he saying that HMRC is not malevolent but indiligent, inefficient and ineffective? If HMRC knew that, and the schemes were mainstream for 20 years, why is it acting only now?
John Glen
I thank my right hon. Friend for his point. Every scheme will be taken individually. They were not one single scheme that was developed. It is for HMRC to open cases on the disguised schemes, which it has done—going back many years on some of them—and it will take action as appropriate. A concern has been raised in the debate about not determining an outcome, and my hon. Friend the Member for Wycombe raised the concern about the implication that, when a tax avoidance scheme has been disclosed, that is somehow a verification or an endorsement of it. That is a misleading perception that has been left, and something for which HMRC should be accountable.
Mr Hayes
Forgive me. I will not intervene more than twice on the Minister, because I know he wants to make progress. I have always regarded HMRC as an efficient organisation that goes about its business properly. Is this not about the Government? The Government took a view about all this and I suspect that, although it may be true that HMRC is implementing Government policy, this is really about the Government changing their mind. That is what we are asking for.
John Glen
The Government that my right hon. Friend was part of and, I believe, a Minister in at the time the legislation was passed. [Interruption.] Let me make some progress.
Although the measure subjects the loans to a tax charge, that 2019 charge applies only to current loan balances and does not arise until April 2019. Recipients of loans can still repay outstanding balances in full or settle with HMRC. The legislation is not retrospective because it sets out Parliament’s intention: payments subject to the loan charge should always have been, and will be, subject to tax. The announcement in the 2016 spring Budget by the former Member for Tatton provided scheme users with a three-year period in which to repay disguised remuneration loans or agree a settlement with HMRC to avoid the charge.
Kirstene Hair (Angus) (Con)
Nearly 50% of those who are liable for the loan charge have not had any communication with HMRC since June 2016. Some of them are my constituents. Does the Minister agree that HMRC must accelerate its communications, to take that cloud of uncertainty away from those who are affected?
John Glen
I thank my hon. Friend for that point. There have been 24,000 contacts with HMRC. The number of telephone calls has increased from 2,000 to 4,000 a week and extra resources have been made available by HMRC, but I am happy to take up any individual cases that my hon. Friend may wish to bring to me.
In the view of the Government and of HMRC, the payments were always taxable as income, and the new legislation reiterates and formalises that stance.
Anna Turley (Redcar) (Lab/Co-op)
The Minister is being very generous with his time. That final point reiterates the issue here. I have constituents who are employed in the construction industry and when they were taken on by the agencies—the umbrella companies—through which they had to go to access the work, they simply were not aware of their liabilities and were not made aware of them. This is a natural justice issue. The policy is harming people who are not particularly well paid, have done everything right and are being unfairly punished.
Several hon. Members rose—
John Glen
Let me make some more progress or, despite the time I have, I will not get to the end of my speech and I want to address the points raised.
Anyone who has been involved in legal action will be well aware that it can be protracted and expensive for all concerned. Agreeing a settlement with HMRC allows taxpayers to move on, and out of avoidance for good. In most cases, any users of schemes will be better off approaching HMRC and agreeing a settlement rather than waiting for the charge next April, and HMRC is encouraging anyone worried about being able to pay to get in touch as soon as possible.
Joseph Johnson
On the point about taxpayers wanting to move on, several of my constituents have requested settlement sums from HMRC but have not received a response, notwithstanding the passage of several months. That is prolonging their uncertainty and anxiety. Will the Minister take steps to ensure that HMRC responds to those requests for settlement as rapidly as possible?
John Glen
I certainly will. I took the precaution of speaking to the Financial Secretary again this morning, and I would like to clarify that, with the time-to-pay arrangements, the five-year period will automatically be put in place for those with incomes of less than £50,000. For those with larger incomes, there is an opportunity for dialogue with HMRC. With respect to individuals who have not had that settlement made known, I will be happy, as we all will as constituency MPs, to take those cases up with HMRC.
HMRC is helping thousands of scheme users to get out of avoidance for good.
John Glen
Just one moment. It will consider all personal circumstances to agree a manageable and sustainable payment plan wherever possible, and it has recently announced simplified payment terms for individuals looking to settle their tax affairs before 2019.
I want to address another issue of the debate. Those who oppose the legislation have made claims that the loan charge will bankrupt public sector workers, including teachers, nurses and social workers. It is my understanding that 1,500, or 3%, of individuals will be involved in the health and education sectors but that most of the scheme users worked in professional services. The average salary of the scheme users was £66,000, which is considerably higher than the average annual wage.
Mr Charles Walker (in the Chair)
There is no time, Minister. You have 40 seconds.
Kirsty Blackman
I have contacted HMRC on behalf of constituents and have been told that it cannot talk to me about those individuals and that they will get an answer by 5 April. That is not helpful.
John Glen
I obviously cannot respond on an individual’s situation, but what I will say is that disguised remuneration schemes are complex and contrived and, as my hon. Friend the Member for Wycombe said, fail the “too good to be true” test.
Although the Financial Secretary and I have tremendous sympathy for those facing large tax bills, it is unfair to let people get away with not paying the tax they owe. There is support for people who have used the schemes and now find themselves in difficult situations, which require those affected to approach HMRC and bring the matter to a close. I will now allow my hon. Friend the Member for Wycombe to make some concluding remarks.
Mr Baker
I am grateful to everyone who has come to the debate and participated. The debate has overwhelmingly avoided straying into the partisan, for which I am grateful. I listened carefully to all the speeches and I do not think anyone stood up and sided with those who think it is legitimate to be paid through loans that have been made with no intention of repayment—no one stood on that side of the argument. What we have seen is how people have been drawn, or even driven, into such schemes, and that is the heart of the injustice.
We have heard stories of human suffering that would melt any heart, which brings us on to the heart of the matter—the rule of law. Once again, my hon. Friend the Minister has earned my admiration, because he seems to get all the Treasury’s toughest gigs. I sometimes wonder whether he should have been promoted to the Department for Exiting the European Union for a little break.
Mr Baker
He will have heard the response of people present when he explained that the measure is not retrospective, and I really hope that the Treasury goes away, looks at the measure again and eliminates retrospection. When people have acted in good faith under advice and end up subject to injustice, we must uphold the principle of the rule of law. Some might then say that they had got away with it, but sometimes we have to say, “While we don’t stand on their side and we accept that it was not Parliament’s intent, we respect that there is a price to be paid for upholding the rule of law so that in the end we can preserve human liberty and justice.”
Motion lapsed (Standing Order No. 10(6)).
Housing Bodies: Accountability
(6 years ago)
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Mr Jim Cunningham (Coventry South) (Lab)
I beg to move,
That this House has considered the accountability of housing bodies.
You and I have known each other for a long time, Mr Hollobone, and I am not sure whether this is the first debate I have been at that you have chaired, but nevertheless, it is welcome to see you in the Chair.
I want to examine a number of core issues in this debate before giving some recommendations to the Government. First, I want to look at the adequacy of the assessment that is currently in place to examine the quality of the design and build of new houses. I also want to consider the accountability of housing organisations when they have made mistakes or are mistreating customers, as it is my opinion that currently, they are not adequately held to account. Lastly, I want to address the way in which data regulations apply to Members of Parliament. That issue has arisen in relation to a housing organisation through my casework, and I know that many other Members have encountered similar problems in their own casework.
We have had numerous debates on the urgent need for more, and better-quality housing. I support efforts to increase the number of houses being built, and that should be happening at a faster rate. It is also vital that those homes are council-owned—I have always believed in that, and the privatisation of housing since 1980 has contributed to the issues that I will be addressing.
In Coventry, we have had several problems with housing organisations’ unhelpfulness when responding to their residents’ concerns. A quick search of our casework database has shown that dozens of constituents have contacted me this year about their housing situation. Housing organisations seem to be particularly unhelpful when responding to complaints, and the same names of problematic housing organisations keep coming up.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I thank my hon. Friend for bringing this important debate before the House. Many of the concerns that he has cited, and those I am sure he will be citing later, have been represented to me by my constituents who face similar issues, especially Robert Taylor from the Camden Federation of Private Tenants. Does my hon. Friend agree that it is high time that a Select Committee inquiry takes place, examining the accountability of housing associations and their lack of oversight by both tenants and Members?
Mr Cunningham
I could not agree more. Such a review is long overdue, as even the data protection people do not give us clear answers about what information we are entitled to. They seem to forget that at the end of the day, we are the last line of defence for tenants—and anybody else who has problems, for that matter.
Jon Cruddas (Dagenham and Rainham) (Lab)
Does my hon. Friend agree that one of the major problems is the transparency of housing associations? We had a notorious case in Orchard Village in South Hornchurch, which was raised in a debate in this place. One of the big problems was that housing associations were departing from their historical, ethical role of filling gaps in the market and becoming housing developers themselves, lacking oversight and transparency, and therefore no comeback was possible on behalf of our constituents.
Mr Cunningham
My hon. Friend has highlighted another major problem: at times, housing organisations hide behind the Data Protection Act 1998 to obscure the fact that they are bad managers of housing estates. That suggests that there is a wider issue with competition in the market, allowing poorer customer service to go unchallenged. Like most parts of the country, Coventry has recently seen some new, small-scale housing developments, and issues have arisen in a significant number of those developments as a result of the quality of the build. One recent example in Coventry has been the Philmont Court development in Tile Hill. That development of 48 flats is actually in my neighbouring constituency, that of my hon. Friend the Member for Coventry North West (Mr Robinson), who cannot be here today because he has other business.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
My hon. Friend is making some powerful comments, and I thank him for securing the debate. Over the past few years, I have had considerable issues in my constituency, particularly with A2Dominion and FirstPort. Does he agree that the quality of build requires stronger regulation? I have had issues with letterboxes where mail can be taken from outside, and with residents saying that poor-quality materials are being used, particularly in areas where there is shared ownership rather than private ownership. All of that reduces confidence, particularly among first-time buyers, and those who are struggling and making ends meet in order to get on to the housing ladder and feel proud of the home they live in.
Mr Cunningham
That is why I mentioned the Philmont estate in the constituency of my hon. Friend the Member for Coventry North West. There, there has been bad workmanship—to say the least—and a bad build. Residents have been moved out of their houses for a period of about 40 weeks and cannot get any compensation. They have to rent privately to get accommodation; who is going to compensate them? My hon. Friend the Member for Feltham and Heston (Seema Malhotra) has highlighted similar problems to those we have in Coventry. The builders, Persimmon, have particularly let down residents by refusing to take any responsibility or pay compensation.
Of course, there are sometimes unforeseen issues with the quality of the design and building of a house. However, there seem to be widespread problems with new builds due to rushed building and substandard resources. I also hear from an increasing number of constituents about delays in moving into their new-build houses. I have one constituent who has had a seven-month delay in the building of her new home this year, which has made her and her children homeless: they are having to get by in a friend’s spare room. I am certain that that is the case across the country, as my hon. Friend touched on. I am also sure that there are many more people out there who are affected by delays, but who never contact us because they do not think they will get anywhere.
I would like the Government to review the checks that are currently in place regarding the design and build of houses. They should also look at the support offered to customers by housing organisations when issues arise. We must make sure that mistakes and errors are found early in the process, and that delays are lessened as much as possible.
Mary Glindon (North Tyneside) (Lab)
Can we please note that the things that are wrong with these houses are not simply minor issues? I spoke to a woman on Saturday whose staircase had twice collapsed. Another constituent had the roof of their new home collapse. These problems are really serious; they are not just little things that need to be put right after someone has moved in.
Mr Cunningham
I fully agree with my hon. Friend. Given local government cuts, trading standards officers cannot police this sector any more—it is as simple as that. That is one reason why these housing organisations are getting away with it, but the law should be tightened up as well.
Seema Malhotra
Does my hon. Friend agree that poor-quality materials can have other impacts, not just on the benefit of the asset if it is in shared ownership, but by creating situations where the quality of the ceilings or the walls results in greater noise going through from one property to another—people being able to hear each other’s toilets flush, for example? That impacts on neighbourly relations and puts residents in a difficult position. Finally, regarding the architecture of how blocks are built, there have been cases where bin storage areas have been built on the ground floor of flats. That has resulted in rats running riot through those properties, causing tremendous damage and requiring expense on the part of residents to put it right.
Mr Cunningham
I agree with my hon. Friend. We are building up health problems among future generations, particularly the young children who are growing up in these properties. We had thought we had moved away from the type of housing that people used to experience in the 1930s.
I now want to discuss the accountability that Members offer when we work on behalf of constituents through our casework.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
I congratulate the hon. Gentleman on securing the debate. He is making some very good points, but on the wider issue of accountability, rather than accountability just to Members, we are talking about a comprehensive public service that is offered to residents, including those with disabilities, older residents and people recovering from illness. Do we not need more oversight and more joined-up thinking between housing providers and other parts of the public sector? The current lack of oversight and lack of integration with the housing associations makes things very difficult. We end up further marginalising some very vulnerable people as a result.
Mr Cunningham
I agree with the hon. Gentleman, but I would add that we need the resources, too. We cannot have joined-up thinking without providing them. We have to provide the resources for resolution of the problems, even if we have joined-up thinking. I do not necessarily disagree with him, but it is a question of resources.
I recently had a piece of casework where a constituent had an issue with his housing association, Orbit Housing, in Coventry. Without going into too much detail, the constituent had a concern that Orbit Housing was not adequately dealing with. I wrote to Orbit Housing, and we had the usual initial exchange of correspondence before it investigated the matter further. However, the correspondence I was receiving soon stopped, and I had to chase it for what was an undetailed response. We have all had experiences of delayed and undetailed responses to casework correspondence—I would like to see an improvement in the speed and helpfulness of responses—but that is not the main issue arising from this case. When I eventually received a final letter from Orbit Housing, it was highly unsatisfactory after such a delay.
Orbit Housing said that it could not tell me what steps it was taking because of data regulations. I make it clear that I do not want to know what people have in their bank account or when they got married. We do not want that information; we want to know that the issues we are raising are being pursued, and we want to know the details of how they are being pursued.
Grahame Morris (Easington) (Lab)
I congratulate my hon. Friend on securing the debate. He is making an important point about how public bodies are using the General Data Protection Regulation to obstruct Members of Parliament seeking to represent their constituents. On a housing-related issue involving someone with disabilities, I had to table some written parliamentary questions, and I asked the Ministry of Justice to establish an MP hotline for the tribunals service due to the difficulties I have been experiencing in getting satisfactory answers. I have had to get in the habit of copying tribunal inquiries directly to the Minister in order to obtain a response. Does my hon. Friend believe that the Government should issue guidance to public bodies, explaining what implicit consent means and stopping them obstructing Members of Parliament in carrying out their duties on behalf of constituents?
Mr Cunningham
I could not agree more with my hon. Friend. In fact, on occasions when we have been dealing with constituency correspondence with outside organisations, we have also asked the constituent to sign a form giving us permission. We should not have to go to those lengths. When we talk about trust in politicians, that is a good example of where we are not being trusted. Our constituents trust us because we are the last line of defence. Where do they go after us, whatever the problem might be?
I have had the problem of organisations refusing to give me information on a constituent’s case many times. It used to happen a lot after the passing of the Data Protection Act 1998, before being somewhat dealt with by the Data Protection (Processing of Sensitive Personal Data) (Elected Representatives) Order 2002. However, it seems that more and more organisations are using the new data regulations to avoid responding to casework. I am clear that I do not consider the case closed with Orbit Housing, and today is a good chance for us all to recognise that we need to be bloody difficult people on behalf of our constituents to get results.
As I have already said, the problem I had with Orbit Housing is not unique. I have asked other Members whether they have had similar problems in conducting their constituency casework. Members have made clear through their interventions today that they have, as have many Members who cannot be here today. The vast majority of Members who replied to me said that they had faced some form of obstruction. That ranged from delays to a complete refusal to share information with Members due to the data regulations—at least, that was the excuse. After receiving the response from Orbit Housing, I started looking at how data regulations apply to Members. I also wrote to the Information Commissioner and the Leader of the House to request clarification.
The EU’s General Data Protection Regulation and the UK’s Data Protection Act 2018 are our core data regulations. According to the legislation, we are data processers when we are handling a constituent’s casework. Data processors have to make sure they have a specific reason to process someone’s information. We are covered in our casework by two of the reasons outlined in the legislation: consent and public task. When a constituent writes asking for us to take action on an issue, it constitutes them giving us consent to discuss their personal data with a third party. Some organisations, however, do not always accept a letter from a constituent. That is the whole point.
However, consent is not necessarily always required, as we have a good second legitimate reason. Public task is when data processing is necessary to perform a task in the public interest or for official functions. The 2018 Act outlines that that covers elected representatives fulfilling their parliamentary functions. Conducting casework is one of our core functions and therefore falls under public task. We are therefore usually covered by two clear reasons when discussing a constituent’s information with a third party. That is the case regardless of whether we are discussing someone’s name or email, or a special category of protected data such as health or sexual orientation data.
Ultimately, the legislation is clear that we can discuss a constituent’s details with third parties. However, the issue I encountered comes from how the legislation applies to the third party in the casework. When we write to an organisation, we expect them to respond saying how they will fix the issue, but the data regulations add a layer of complication. As the organisation is itself a data controller, it needs to judge whether it can give a constituent’s information to us. Despite the fact that Members of Parliament are completely entitled to act on their constituent’s behalf, the organisation in question can still decide that it cannot give us the information we need. The constituent’s case is then forced shut, with no room to challenge the decision. That is exactly what happened to me with Orbit Housing, and it has happened to many other Members.
In this instance, data legislation is actually weakening our constituents’ rights and empowering the organisations that hold their data. Members cannot solve every issue, but we should be able to advance a case more than a constituent could alone. If third-party organisations can refuse to share information on a constituent’s case with us, our constituents suffer and we are left failing them due to legislation.
In summary, I would like to see several things from the Government as a result of this debate. First, they should assess the effectiveness of the current methods used to judge whether a building has been designed and built adequately. The Government started to look at that in the aftermath of the tragedy of Grenfell. I implore them to renew their efforts, considering their stated aim of radically increasing the number of homes being built each year. It is important that their rush to build does not lead to substandard homes being built, as Members have mentioned and as has happened too many times recently.
Secondly, the Government should conduct a review of the accountability of organisations, especially large house builders and housing associations, as my hon. Friend the Member for Dagenham and Rainham (Jon Cruddas) mentioned. The Government’s stated aim to soon increase the number of homes being built will mean hugely increased business for the larger housing companies in the UK. It is right that they are held to account if they build inferior housing or ignore customers. Just last month, the chief executive of Persimmon Homes ignored questions about his record bonus of £75 million—quite a salary. It is wrong that in an industry where so much money is made by those at the top there is little accountability when customers or residents are let down.
Lastly, I ask that the Government consult Members to evaluate whether we are stifled by data regulations in our ability to conduct casework effectively. It is my opinion that the regulations give organisations a loophole to ignore accountability. Some organisations might do it innocently, but there are definitely organisations out there using that loophole inappropriately. That represents a serious threat to our ability to progress casework and to hold organisations to account. The law must be tightened up to empower us and, in turn, to empower our constituents.
The Minister for Housing (Kit Malthouse)
It is a pleasure to appear once again before your wise and well-tempered supervision, Mr Hollobone. I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this important debate on a number of housing issues, which I will seek to address.
First, I thank the hon. Gentleman and other Members for assisting their constituents with numerous housing issues. I know from my own experience that housing can form a large part of an MP’s postbag, and I am grateful for the liaison with landlords and the resolution that is brought about by the actions of Members when something has gone wrong and when a service has not been as expected.
Let me start with complaints. A good complaints process must start with landlords. The regulator of social housing expects all registered providers of social housing to have in place a complaints process that is clear, simple and accessible. Landlords are also expected to publish their performance against those standards through an annual report. The regulator does not proactively enforce standards on complaint handling. The onus is on individual landlords, working with residents, to set their approach and timescales for handling residents’ complaints. However, the regulator considers every referral made to it, signposting those not within its remit to other organisations, including the housing ombudsman service.
I stress that if any hon. Member acting on a constituent’s behalf is unhappy with the response provided by a registered provider of social housing, once the landlord’s complaints process has been exhausted, that hon. Member may take the matter further. Social housing residents can approach the housing ombudsman service at any time to seek advice. However, currently they must pass the democratic filter, either referring a complaint to a designated person—a local councillor, Member of Parliament or tenant panel—or waiting eight weeks after their landlord’s investigation has concluded before a complaint can be formally investigated by the housing ombudsman.
The Government’s social housing Green Paper consultation, “A new deal for social housing”, which closed on 6 November, sought views on how to improve the system for seeking redress for social housing residents. We engaged extensively with residents to inform and shape the Green Paper. We heard that residents want redress quickly when things go wrong, and want processes to be clearer and simpler. We want to ensure that residents receive the help that they need to put things right when they have a housing problem. The Green Paper asked a range of questions on how we could deliver that, including questions about the future of the democratic filter, which can delay the complaints process.
Alongside those questions, the Green Paper set out proposals better to hold landlords to account. We consider that stronger action is required against landlords who consistently fail their residents. Part of the solution is to enable residents to understand and compare the performance of landlords. We have proposed a limited number of key performance indicators to achieve that, including a potential indicator on the effective handling of complaints.
Following publication of the Green Paper, we continued our face-to-face engagement with landlords and residents across the country. We wanted to give them an opportunity to input into and influence the consultation outcome. I assure hon. Members that they had some strong views about the handling of complaints, both positive and negative, which I heard myself, having visited six such events across the country. We are currently analysing the findings of those events alongside the other consultation responses, and we aim to publish our response in the spring.
As Members will know, the General Data Protection Regulation, also known as GDPR, imposes new rules on controlling and processing personally identifiable information. In addition, the regulator of social housing is clear that registered providers of social housing should accept complaints made by advocates, including Members of Parliament authorised to act on behalf of a social housing resident. I am not aware of the specific circumstances that the hon. Member for Coventry South mentioned, but I reassure him and other Members that nothing in GDPR or in the Data Protection Act 2018 prevents us from acting on behalf of our constituents in discussions with a registered provider of social housing.
Mr Jim Cunningham
It would be helpful if the Minister circulated that advice on data protection to all concerned, so that the situation is perfectly clear. We often get conflicting views about it.
Kit Malthouse
That is a good suggestion. I have to stress that the hon. Gentleman, and other hon. Members who wish to act on their constituents’ behalf, must be instructed by the constituent before they can do so. That is no different from the arrangements that existed before the GDPR was introduced. In requesting assistance from their Member of Parliament, any resident is effectively giving consent for that MP to process their personal data. A housing association should normally accept a Member of Parliament’s word. However, I appreciate that a housing association or local authority landlord might, if the case is particularly sensitive or other individuals are involved, double-check with the tenant. I stress that that should not be used as a delaying or obstructive mechanism; it is merely an extra protection for the tenant in specific circumstances.
Of course, if the constituent or their MP considers that the processing of the concerned resident’s data goes beyond what the resident might have expected, they should be consulted first. Let me make it crystal clear to all landlords that they should co-operate and engage constructively with Members of Parliament when they act as advocates, within the constraints of data protection. I am pleased that the Information Commissioner has issued the following guidance:
“Consent can be implied from a relevant action, in this case the raising of the matter by a constituent with the Member in the expectation that his or her personal data will be further processed by the Member and relevant third party organisations.”
I can circulate the commissioner’s guidance after the debate.
Finally, I will talk about checks on the quality of building and design—an important issue, given the scale of house building that we are experiencing, and hopefully will in increased numbers in the years to come. As a Department, we are focusing on the quality of build and design as a critical issue for the future expansion of house building. I hope that the hon. Member for Coventry South accepts, though, that when it comes to a new building, the person carrying out the building work is responsible for complying with the requirements of the building regulations. That person remains legally liable for non-compliance.
All new buildings are subject to building control supervision, either by the local authority or an approved inspector. Both are required by law to take all reasonable steps to check on the compliance of building work. Where work is found not to comply, the building control body will require it to be put right before giving a compliance certificate. We are sending a clear message that if something goes wrong with a newly built home, house builders and warranty providers, including the National House Building Council, should fulfil their obligations to put things right.
In addition, on 1 October, the Government announced a new homes ombudsman to champion the rights of homebuyers and to hold developers to account. Once a building is occupied, social housing landlords are required to comply with the regulator’s home standard, which sets two clear outcomes. First, homes must be of good quality through meeting the decent homes standard. Secondly, landlords must provide a cost-effective service to homes and communal areas that responds to the needs of, and offers choice to tenants, and aims to complete repairs and improvements first time.
Once again, I thank the hon. Gentleman for securing this valuable debate. I hope that he and other Members will continue to support all residents, including those living in social housing, in dealing with housing complaints. We are committed to ensuring that social housing residents can seek timely and effective solutions when they have a housing problem. I also hope that in future all landlords ensure that issues such as those raised today do not hinder or delay their residents’ seeking effective and efficient redress.
Question put and agreed to.
UK Sovereign Capability
(6 years ago)
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Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
I beg to move,
That this House has considered UK sovereign capability.
This is a subject that I have spoken about frequently since my election and is close to my heart. I grew up in a shipbuilding family, so from a very early age I became acquainted with the concept of feast and famine orders in shipbuilding in this country. I also developed an awareness of what we need to do to maintain a sovereign capability, not just in shipbuilding but across the full spectrum of defence.
I will be 30 years old in January. Britain’s defence industry landscape has diminished considerably since I was born. Look at shipbuilding. I attended my first ship launch—of HMS Lancaster—when I was one year old. There were a number of shipyards around the UK that built surface vessels, including Swan Hunter in Tyneside and Cammell Laird—
Mr Sweeney
In Birkenhead, as my right hon. Friend says. We also had Vosper Thornycroft in Southampton, and Harland and Wolff in Belfast, to name just a few, but today the landscape is much diminished. The Clyde is the only UK location capable of building complex warships, and even its capabilities have been significantly downsized. In 2013, when I was working in that very shipyard, more than 1,500 jobs in the shipbuilding industry were lost, and the BAE Systems shipyard in Portsmouth—formerly Vosper Thornycroft—closed.
Some 75% of shipbuilding jobs in the UK have been lost since the 1980s. That downsizing was predicated on a realisation that Britain did not have a naval fleet big enough to sustain the industrial base that existed at the time. Rather than drip-feeding orders to yards that would never be at full enough capacity to invest in world-class infrastructure, the idea was to cut our cloth accordingly, so in 2009 the then Labour Government signed a terms of business agreement with BAE Systems. The concept was to introduce a proper and rigorous strategy for shipbuilding in the UK. In return for rationalisation and transformation, the industry would be guaranteed a certain drumbeat of industrial capacity that would give it the confidence to invest in reaching the upper quartile of the world.
When I started working in the shipyards as a young graduate, one of my jobs was to study every other shipyard in the world that was building complex warships, benchmark us against them, determine what they were doing right and develop a prescription that would allow us to design a world-class shipyard in the UK. That seemed a laudable aspiration, because if we could build an infrastructure in the certainty of a pipeline of orders, we could build ships that achieved world-class performance, saving the taxpayer money. It was such a great idea that other countries followed the same model—most notably Canada, which developed its own national shipbuilding strategy and, indeed, employed the very same person from the Royal Navy who developed our strategy under the terms of business agreement.
Sadly, when I corresponded with the Minister for defence people and veterans last November, he informed me that the terms of business agreement had been extinguished in return for the signature of the Type 26 manufacture phase 1 contract. It was then superseded by the national shipbuilding strategy, which in the meantime was used as cover to significantly reduce the scope of ships that the UK had been qualified to build, and that had given certainty to UK industry. The very first page of the strategy document states:
“It is only by building ships that we will once again become good at building ships”.
Well, quite. That seems like a laudable aspiration and exactly what we all want to achieve, but unfortunately the strategy itself undermines that effort, restricting the scope of orders that can go through UK shipyards by limiting the exclusivity of UK build to frigates, destroyers and aircraft carriers.
The 2009 terms of business agreement made very clear the range of ships that were to be built exclusively in the UK without competition, including aircraft carriers; amphibious vessels; all forms of frigates and destroyers; mine countermeasure vessels, including all design and major subcontracted work; all minor naval vessels, including patrol ships; and complex auxiliary ships, which at the time meant the vessels for joint sea-based logistics and joint casualty treatment. That certainty would have enabled British industry to invest in world-class facilities that delivered world-class performance for UK shipyards, achieving the competitive advantage that we had so long striven for. Given that other countries are successfully employing the very same model—Canada now plans to build 15 Type 26 frigates, as opposed to Britain’s much diminished effort of just eight, if we even get them—it is self-evident that we are doing something very wrong by undermining that effort.
It seems to me that the national shipbuilding strategy, particularly the Type 31e frigate project, is a classic example of the Government misidentifying the root cause of the problem that they are trying to solve. The UK prosperity agenda and the effort to make our industry better would be much better served by providing certainty for industry to invest in being world class. That would achieve the opening gambit set out in the strategy document.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Does the hon. Gentleman agree that one of the challenges for the prosperity agenda, and for the Royal Navy’s aspiration to be part of making us a global maritime nation again post Brexit, is that the Treasury does not have a model that helps the Ministry of Defence to plan for that or values the impact that building in the UK rather than abroad would have on the coffers of UK plc?
Mr Sweeney
I thank the hon. Lady for that pertinent intervention, which drives home the point that I am trying to make. I am highlighting the landscape as I see it now, which is not what we want to achieve and is not optimal. That is not necessarily the fault of the Ministry of Defence, but of what Sir John Parker’s report refers to as the “total enterprise” of shipbuilding, which very much includes the Treasury as financial controller.
Mr Kevan Jones (North Durham) (Lab)
Further to the point raised by the hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), the MOD is at fault. It takes no account whatever, either in shipbuilding or in other procurement contracts, of the value added to the UK economy, not just in skills but in the money that the Treasury gets back through tax and national insurance.
Mr Sweeney
The Minister might have been hopeful that I was absolving him of all blame in the matter, but I did not quite mean that; I meant that it was not entirely the fault of the Ministry of Defence, because there is a combined silo mentality across Government. My right hon. Friend makes the important point that in shipbuilding and in major defence procurement programmes, there has been a failure to understand the total prosperity effort across the UK. Royal Caribbean would never approach financing the building of a cruise ship in the way that the Ministry of Defence finances its frigates. The MOD does not achieve anywhere near the sort of efficiencies that commercial operators such as Cunard or Royal Caribbean achieve.
The MOD and the UK Government’s considerations ought to be about what maximises industrial and economic benefit to the UK as a whole, but they have failed to incorporate that into their processes for making these critical decisions. To give a classic example, modelling done by the Confederation of Shipbuilding and Engineering Unions makes it clear that if major shipbuilding programmes were procured in the UK, the return of wage and supplier payments to the Exchequer would effectively achieve a 20% net material discount. The prosperity of those programmes would flow back into the UK economy instead of being bled out into another country.
Frank Field
The hon. Gentleman described the order for eight frigates earlier. Before the first world war, there was the great cry for dreadnoughts—“we want eight and we can’t wait.” Whatever the size of the Government’s programme, is not one of the problems the reliability of the dates for when they start commissioning the programme, which is very important for the longer-term future of shipbuilding? Is it not also about, with this phase, the confirmation that they will give a role in bidding—and therefore a chance of winning—to yards such as Cammell Laird’s, which has done so well recently in helping to build defence orders, but also in winning a major merchant contract, which I think is the first for a British yard in 20 or 30 years?
Mr Sweeney
The right hon. Gentleman makes a very important point. Britain became a pre-eminent naval power because its industry was pre-eminent and because it was an innovator. That is what we need to get back to. The national shipbuilding strategy is trying to achieve that, but it falls short on how it will deliver it, because it militates against the very objectives it is trying to achieve. Industry needs certainty of capacity, so that it can invest with a degree of vigour in shipbuilding.
I talked about HMS Lancaster and the launch of the Type 23 frigate, which was my first ship launch, as a babe in arms, at Yarrow’s in Scotstoun. Sir Bob Easton was chairman of Yarrow’s at that time and made it quite clear that the Type 23 frigate was being bid in batches of three. It was Swan Hunter versus Yarrow. In 1990, Bob Easton said, “I am currently employing 2,500 people in my shipyard. I can employ them until the end of 1991. If I don’t get an order next year, I am making 1,000 of those people redundant, and that is the stark reality of what I am facing. It is not just about the jobs. I would like to invest in a new covered shipbuilding facility. I would like to invest in modernised plant machinery, but the business case does not stack up, unless I know for sure that I am going to be building all of those Type 23 frigates.”
The same issue is playing out today. The national shipbuilding strategy harks back to the same mentality, driving the same behaviours. Whether it is Cammell Laird or BAE Systems, they will not be able to say that they have a prescription for a world-class frigate factory, as it was dubbed, or a modern dock hall covered facility. They will not be able to make that business case stack up. They will not be able to put their shareholders’ money into that and to finance it, unless there is the certainty on the horizon that they will be building the entire programme, and unless there is legal certainty that that will happen. Without that certainty, companies cannnot make the investment and we therefore cannot get the operational efficiencies that deliver the savings and the cost reductions that would enable the Royal Navy, ultimately, to build a larger fleet. That is the virtuous cycle that we ought to be striving towards. Unfortunately, the strategy document undermines it.
When it comes to Type 31, the same point is still an excellent one. By bidding it in blocks and spreading it around the country, we lose the critical mass and do not get the certainty that would allow a shipyard such as Cammell Laird’s to invest in building a production line of Type 31 frigates, in parallel with a production line of Type 26 frigates. Ultimately, we want to get to exactly what the Americans do. They have been building Arleigh Burke cruisers since the 1980s; they have built the exact same ship in a consistent way for the last 30 years or more.
Carol Monaghan (Glasgow North West) (SNP)
The hon. Gentleman is making a very good point. Does he agree that we were promised 13 frigates in 2014, not eight plus five general purpose ships? The shipyard workers in both Scotstoun and Govan have been hugely let down by those broken promises.
Mr Sweeney
Glasgow North West. It was much better when we had the proper place names for constituencies.
Mr Sweeney
Yes, Anniesland. I was one of those shipyard workers at the time. I agree that certain understandings were given about investment. Indeed, the bulk of Scotstoun shipyard was demolished on the premise that it was going to be rebuilt as a new modern dock hall. I was personally involved in the project to design it; my personal investment in that project is second to none. However, it has to be recognised that the Clyde has certainty to the 2030s, although we need to go further in making the most of the opportunity we have.
I understand from the MOD that its ultimate aspiration would be to build Type 26 frigates in perpetuity if it could—if it had that certainty of financing and planning. Then we could be certain that the Clyde would always be the centre of production for those larger frigates. That would mean that other yards around the UK, such as Birkenhead, could focus on smaller projects, such as the Type 31, which could form a critical mass of a learning curve and a productivity enhancement, and secure the investment that would make it excellent at building those ships and more likely to win overseas orders as a result.
Frank Field
A strategy like that, with unit costs coming down, would allow us to compete seriously in the export market.
Mr Sweeney
Unit costs ought to come down but the problem is that the way that the shipbuilding strategy is defined makes it more likely that the cost reductions will not be maximised. That is a great shame, because it undermines the aspirations of the strategy.
I am a vice-chair of the all-party parliamentary group on shipbuilding and ship repair, and we hope to bring forward a report on the strategy very soon. It will highlight some of the opportunities to improve it, because we all share the same aspiration. We want to see a world-class industry in the UK that has the certainty to invest. We want a world-class product that is cost-effective enough to grow the size of the Royal Navy.
John Spellar (Warley) (Lab)
My hon. Friend rightly focuses on warships, but it is also about the civilian ships for the Ministry of Defence. Unlike every one of our European competitors, the Ministry of Defence stubbornly insists on advertising abroad. There is a point about maintaining a competent workforce and the drumbeat of production, as well as the supply chain and the supply ecosystem, which is so important for sustaining all the yards. Can my hon. Friend find a logical, rational explanation for why the Ministry of Defence refuses to behave like every other European naval country?
Mr Sweeney
My right hon. Friend’s point goes back to that made earlier about the Treasury’s behaviour. I feel that this is almost about an economic orthodoxy that drives behaviour and says that we must maximise competitive tendering for the sake of it, because there is some sort of axiom that it works because it does. That approach does not bear scrutiny. Shipbuilding has the highest barriers to entry of any major industry in the world. It is a hugely capital-intensive industry and the only way to make it work, and the only way to get to a world-class, market-dominant position—much like with aerospace, where, as we know, the Americans and Europeans built their own champions in the form of Airbus and Boeing—is by having that synergy between Government, industry and the research and development base that makes it work. That is what we ought to have with shipbuilding in the UK. Fragmenting it in the way proposed in the national shipbuilding strategy serves only to undermine the UK’s long-term sovereign capability in shipbuilding. It is the primary sovereign interest of the UK to have that capability. We are an island nation, a nation of islanders and shipbuilders, and we ought to maintain that capability.
There are critical issues at stake here. We have already heard that Appledore, owned by Babcock, is due to close in March, which will be a devastating blow to the local community and to the UK’s wider defence manufacturing base. It is yet another shipyard to fall. Once it falls, it will not recover and be reopened—that is a simple fact. Once it is gone, it is gone. Despite the recent contract announcement at Cammell Laird, it is also completing an HR1 notification form and making significant redundancies. That is very unfortunate, and speaks to the point about feast and famine. We cannot have these cycles in capacity any more; we need to smooth the cycle as much as possible.
In the context of major shipyard closures and significant downsizing, whether that is at Rosyth or Appledore, it is bizarre that the Government are quite happy to tender contracts overseas in international open competition. Under article 346 of the treaty on the functioning of the European Union, the Government could quite easily designate the industry as UK-protected. It is entirely at their discretion. Any notion that their hands are tied is bogus. They could do that, smooth the production cycles and build a firm and stable footprint for UK shipyards, which would enable them to get match fit and then go out into the world and compete effectively for other orders. That is exactly what they do in Italy with Fincantieri, and what they do in France with DCNS. It is exactly what happens in Germany.
I do not understand why other European Union member states can achieve the same objectives much more effectively than us, but we are so holier than thou that it hurts when it comes to the zealous application of these EU rules and we seem to undermine our own industrial base and our prosperity as a result, meaning that communities are broken and skills lost. Ultimately, we undermine our objective of building a more resilient and effective industrial base to serve our defence industry and, potentially, commercial spin-offs.
Barrow-in-Furness is another example. The gap between the end of the Vanguard programme in the 1990s and the beginning of the Astute programme meant that the shipyard was essentially unable to build a submarine and they had to go to General Dynamics in the United States to be retaught how to build them. That is what we risk losing again if we are not careful.
John Spellar
It was surely not just the design capability and the managerial capability, but the actual day-to-day work experience and the work teams that have been created and then broken up. It took 12 to 24 months to rebuild that capability and was hugely expensive. The Ministry of Defence and the Treasury have still not learnt that lesson.
Mr Sweeney
My right hon. Friend makes a very prescient point. There is no calculation of the opportunity cost when those skills are lost or of how much it costs to build them back up. The feast and famine cycle is hugely costly and inefficient, and the national shipbuilding strategy risks going back to that pattern. I think that is a critical point that the Minister really ought to address in his remarks about the national shipbuilding strategy.
Let me make it clear that we are all here to try to deliver the best outcome for defence infrastructure in the UK—we are trying to get to the same end goal. We are trying to offer the best of our understanding and experience of these issues to inform this document and improve it as much as we can, and it is fair to say that we want to achieve the same objectives.
We have also seen the development of a combat air strategy—the Tempest programme—which is laudable and looks promising, but there is a lack of an overarching objective on defence. We have already lost the capacity to build large fixed-wing aircraft through the cancellation of the Nimrod programme, which was done hastily by the disastrous 2010 strategic defence and security review and means that we have permanently lost that capability in the UK. Similarly, we have lost the capacity to build main battle tanks.
What else is at risk, and where is the risk profile of the sovereign capabilities that will be lost? What is expendable and what is indispensable? That is not defined in the national shipbuilding strategy, where there is talk of potentially putting the Type 31e combat management system out to international tender. Why do we not define what the key sovereign capability is—not just in the shipbuilding programme, but in aspects of its critical supply chain, including gearboxes, gas turbines, combat management systems, weapons systems and so on? We need to have that granularity of detail in the national shipbuilding strategy, but it is not there. That leaves it open to interpretation and extreme gerrymandering by the Ministry of Defence.
Those are the key issues that we have to highlight, whether they are across land, maritime—I am biased towards maritime, which I have focused on heavily—or aerospace. I am sure that other Members are willing to contribute and add their own thoughts to this debate, but essentially that is an overview of my main concerns about our UK sovereign capability and the risks to sustaining it.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
The debate can last until 5.30 pm, and I am obliged to call the first of the Front-Bench spokespeople at 5.7 pm. The guidelines limits are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister. We will then have time at the end for Mr Sweeney to sum up the debate. Two Members are seeking to catch my eye, and there has to be a time limit of six minutes and 30 seconds each. I first call Kevan Jones.
Mr Kevan Jones (North Durham) (Lab)
I congratulate my hon. Friend the Member for Glasgow North East (Mr Sweeney) on securing this debate. He emphasised the lack of strategy on maritime sovereign capability, but we need to ask the broader question of why we are in this mess today.
Since 2010, this Government have had no industrial strategy on defence. Some of the short-term decisions that were taken in 2010, when the Government slashed the defence budget by 16%, have resulted in capability gaps. A revolving door has been put on the office of the Minister for Defence Procurement, which means that they have a life expectancy a bit longer than a mayfly. That is not helpful when we need a champion in that role who can argue against the Treasury.
Why is sovereign capability important? If we want to have certain capabilities for the defence of our nation, we need to invest in them. The right hon. Member for Birkenhead (Frank Field) has raised the issue of defence exports. He is right to say that if we are to nourish that industry, there is a defence export role to it. The Ministry of Defence and the Treasury have adopted Donald Trump’s mantra of “Make America great again”, because the procurements that have taken place are suggestive of an “America first” strategy. In the past few years, they have procured more than $8 billion-worth of contracts from the United States.
As my hon. Friend the Member for Glasgow North East and my right hon. Friend the Member for Warley (John Spellar) both said, those procurements were not put out to contract; they were simply awarded. There were no competitions. We have the Apache contract and the P-8 contract—direct foreign military sales—and we have the scandalous situation of the airborne warning and control system, or AWACS, and I understand the Department is now going down the Wedgetail route. From talking to colleagues in NATO, I know that the Ministry of Defence has had no role, and nor is it interested, in partnering the programme that is replacing the 15 AWACS NATO aircraft. It is going down the Boeing route again. I am not sure whether soon we will have a sign at the Ministry of Defence’s Main Building saying, “Sponsored by Boeing”, but that seems to be the way it is going.
We also have the joint light tactical vehicle contract that was awarded to Oshkosh, with £1 billion of sales to replace armoured vehicles. There was no competition at all. At the same time, the Ministry of Defence and the Treasury are saying that the contract has to go out to competition. This is dangerous for our capability. It is not just about jobs, which are important, but about our supply chain and investment in research and development in our technology. My hon. Friend the Member for Glasgow North East will not remember the Falklands war, where we faced the issue of kit procurement from abroad. It reached a situation where we wanted to use the kit independently but were told that we could not.
I have serious concerns about this off-the-shelf approach to defence strategy, because there is no commitment at all. It would not happen in any other country—it would certainly not happen in the United States. If we were to sell equipment to the United States, there would have to be some offset in terms of jobs or investment there. This Government have not even tried. They trumpet the £100 million going into Lossiemouth, but that would have had to go anywhere. Boeing is going round on a public relations exercise, with glossy adverts that say it is now a British company, but it is not. There is very little evidence of real investment going into jobs and technology. That is not just today; our technology in this important sector is in long-term decline.
The hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), who is no longer in her place, said that there is no indication that the Treasury or the Ministry of Defence recognises that if a contract is awarded in this country, the money will come back straightaway. That is a serious problem for them. Short-term decisions taken now will have long-term implications for our effectiveness not just at maintaining our sovereign capability in a whole host of areas including shipbuilding, which has been outlined by my hon. Friend the Member for Glasgow North East, but at maintaining our capability to use that kit in certain situations. For example, will we be able to get the upgrades on Apaches if a future US Government determine that we should not? That is why we need sovereign capability.
I hate to use the phrase “go back to basics”, but that is what the Treasury and the Ministry of Defence need to do. They need to make it clear that we need to procure and manufacture in the UK under sovereign capability, which should be the starting point for the defence industrial strategy. We have been promised it by the revolving door of Ministers for Defence Procurement, but it has never been put in place. It has to be a joined-up approach across Government that includes the prosperity agenda, which does not seem to matter when it comes to those huge contracts that have been awarded without competition. When there is a situation such as the fleet solid support ship contract, where we could have investment in UK jobs and prosperity, we put it out to foreign competition. My right hon. Friend the Member for Warley is right: no other nation in Europe would do such a thing.
Mr Kevan Jones
I am sorry; I am running out of time.
This scandal needs to be highlighted. I hope the Minister, in the time he has got in his new role, stands up to the knee-jerk “America first” reaction.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Glasgow North East (Mr Sweeney) on his superb oratory.
We are back here again: the same people are largely in the same chairs making the same arguments, although we have a different person in the Chair—you are very welcome, Mr Hollobone—and a different Defence Procurement Minister. I think he is the third since I was elected. We made effectively the same speeches to the previous Ministers, but he should not worry: these are good speeches with good arguments, and I am sure he will enjoy hearing them.
I think that we have a good Minister now. His freshness to defence means that he will bring a new approach to procurement decisions, and I hope that that will yield different results. We need different results, because our sovereign defence capability is at risk. I do not say that lightly, because I know that people who wish our country ill listen to these debates. We must present a strong and forthright position, and we must ensure that our military has the best equipment, the best training and, importantly, a supply chain and support structure that enables it to continue to operate at a high level. Russia is on the rise—it is increasing its threat to our country and making incursions into our airspace and waters—and China is growing its ambitions in the far east. The risk of state and non-state actors threatening the UK’s interests and those of our allies is high.
I will focus my remarks on the Royal Navy, about which much has been said. As the MP for Devonport, I would perhaps be expected to do that. The Royal Navy has suffered the greatest ill done to our sovereign defence capability. It could be said that that is also true of fixed and rotary-wing aircraft, and to Army equipment, but the Royal Navy has suffered the biggest impact. The shipyards that support our Royal Navy are not just about concrete, steel, bricks and mortar; they are about the people and skills, which must be invested in and grown over time. We have had holes in our procurement exercises in the past because there has not been a constant stream of investment in our shipyards. Although we do not build ships in Devonport, we refit them, and we need a constant stream of ships to be refitted to ensure we keep up our skills. That is why it is so important to get the Type 26 and Type 31 right.
I congratulate the Government on what they have done in supporting the industry to sell the Type 26 overseas. I hope the Americans adopt the Type 26 as a platform for their future frigate procurement, which they are struggling with at the moment. The Type 31 is an example of what we need to get better at. There was great potential for it in the national shipbuilding strategy. We need more hulls that can do defence engagement work, station keeping, and the forward deployment roles that are so important in our Royal Navy, while maintaining the high-end capability of the Type 26.
As hon. Members know, I have a problem with calling a Type 31 a frigate. I would much prefer it to be a world-class corvette, rather than a rather poor frigate. I normally use more colourful language, but I will mind my p’s and q’s in this Chamber. We need to sell the Type 31 as the best in class. That would make our international allies want to buy it, rather than one of the plentiful array of small frigates and corvettes that are on the market. The Type 26 shows that people want to buy high-end British technology. The procurement delays and the disruption in the procurement process over the summer do not give us much confidence in the procurement of the Type 31s.
We also need to look ahead. Over the past year, since I and many others in this House were elected, we have been fighting to save HMS Albion and HMS Bulwark. Other Members who would have been here if they had turned up might have claimed the success of the campaign to save those vital capabilities from being cut. Now that we have done that, we must ensure that we plan for suitable replacements for them. If Albion and Bulwark will go out of service in 2033 and 2034 respectively, we need a plan to build their replacements in UK shipyards. That is important, because it builds on the battle to ensure our Royal Fleet Auxiliary ships are built in UK shipyards, too.
We must maintain our sovereign defence capability to build such complex warships. I regard an RFA fleet solid support ship as a complex warship—the Government may stick it in a different column of their spreadsheet, but given that it has the roles and the capability of the RFA, I think it is a complex warship, and it should be built exclusively in UK shipyards.
Mr Philip Hollobone (in the Chair)
Order. I cannot stop the hon. Gentleman intervening, but, including his summary at the end, he will have had 26 minutes of a 60-minute debate. I have to call the Front Benchers at 5.7 pm.
Luke Pollard
My hon. Friend the Member for Glasgow North East is very enthusiastic, Mr Hollobone, and I know that he will make a speedy reply in his two minutes at the end.
We must support the trade unions. I am a proud GMB member, and it is important that its “Making It” campaign is heard loud and clear, not only by Labour Members but by Conservatives. Building the RFAs in UK shipyards is good for British business. It is good for those regions’ economies, the cities in which the shipyards are based, the supply chain and, perhaps most importantly of all, the Exchequer. Why are we exporting that money? If we do not invest in our shipyards, what happened to Appledore will happen again. Appledore is not in my constituency, but workers that came from it are working in Devonport now because Appledore ran out of orders. Without orders, shipyards cannot stay open, which means they cannot hire new apprentices and support the local supply chain. Ultimately, we lose that capability.
We need to talk louder about sovereign defence capability, because we need to preserve it. We need a discrete strategy to preserve our sovereign defence capability. I encourage the new Minister, for whom I have high hopes, to ensure sovereign defence capability runs like a golden thread through all the procurement decisions he and his Department take. It needs to be there if we are to secure jobs and our future capabilities.
Carol Monaghan (Glasgow North West) (SNP)
I congratulate the hon. Member for Glasgow North East (Mr Sweeney) on securing this debate. If the UK aspires to be strong, global and influential, as the 2015 national security strategy announced, it needs access to a capable and resilient supply chain for its armed forces. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) talked about the provocations of certain nations, and we must be alert to the threats they pose.
Defence spending should not exist in a silo. Defence contracts have a series of economic consequences, the most obvious of which is the tax revenues that are generated. It is disappointing that, until now, the Government seem reluctant to take account of that. They receive an estimated 37% of the money spent on contracts in tax revenues, and that is not taking into account the multiplier effect of employees’ spending. That raises a question about their definition of value for money. When bids are considered in the future, we must take into account their impact on tax revenue and employment.
The ability to develop and maintain equipment depends on a rich research landscape and a skilled workforce, so it is critical that there is a commitment to increase science and technology funding, especially in the pure research phases of the development cycle. Most hardware requires after-sales service. We saw that in the equipment plan, which shows that in 2018-19 the MOD spent about £7.8 billion on new equipment and nearly £8.1 billion on support.
Once the capability to develop and produce complex systems has been given up, rebuilding it is difficult, time-consuming and risky. The hon. Member for Glasgow North East raised the issues with the Astute submarine programme. The excessive running-down of the Barrow workforce after the completion of the Trident programme is a classic illustration of that. As the hon. Member for Plymouth, Sutton and Devonport said, those workers are highly skilled and sought-after. There are plenty of industries ready to snap them up if our defence industry does not have opportunities for them.
We must be able to operate independently, so our capability should not be linked to the foreign policy of a supplier, as the right hon. Member for North Durham (Mr Jones) said. There are no guarantees that the UK will only ever conduct military operations that the US recognises and supports. We may have to—or wish to—operate independently.
The contracts for the fleet solid support ships have been problematic for a long time. The idea of putting them out to international competition is short-sighted and reflects our siloed thinking. We know that other Governments subsidise their shipbuilding industries, thus allowing bids to appear competitive, and effectively buying industrial contracts. I wrote to the Minister’s predecessor earlier this year about that. He responded:
“We are confident in the measures we have in place to ensure the integrity of the FSS procurement process, including measures to ensure it is conducted strictly in accordance with the EU rules on state aid. Although these rules do not apply to non-EU companies, the MOD will make no such distinction in their application and all bids will be judged against the same standards.”
I would like some assurance from the Minister that those measures are still in place.
Many nations have shipbuilding capability, including many small nations. Denmark has been able to build all nine of its frigates, three arctic patrol vessels and seven large patrol craft, all in Danish shipyards. The Norwegian navy’s fleet is built in Norwegian yards. We must have the ambition—beyond 2030—to build not just our frigates and warships but our fleet support ships in yards here in the UK.
Wayne David (Caerphilly) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I offer my warmest congratulations to my hon. Friend the Member for Glasgow North East (Mr Sweeney) on securing such an important debate.
The defence industry is vital to the British economy, with a planned spend of £180 billion in the almost 10 years leading to 2026-27. That is a huge opportunity for the country’s economy, but one that has been lost because the Government have clearly rejected—despite their recent rhetoric—the idea of developing a sovereign capability for this country. Sadly, as we have heard this afternoon, the Government are increasingly buying kit off the shelf, principally from the United States of America. That is one reason why the Ministry of Defence has a deficit of £14.8 billion, according to the National Audit Office. Many MOD contracts are given without competition or openness, according to the single-source process, as my right hon. Friend the Member for North Durham (Mr Jones) made clear. The mechanised infantry vehicle contract was recently given to the Boxer without any competition or openness, and it seems that the AWACS replacement will go the same way.
Where there is competition, we see international tenders, as my right hon. Friend the Member for Warley (John Spellar) highlighted with the example of fleet solid support ships. We will be up against tenders from state-subsidised shipyards throughout the world, particularly in Korea, so it is not a level playing field. We could be ensuring that British industry and shipyards benefit from the investment coming from those contracts, but what do we see? Recently there was the announcement that Babcock was going to close Appledore shipyard in Devon, at a loss of nearly 200 skilled jobs. That shipyard has been open since 1885 and has the proud record of producing 350 vessels, but this Government are allowing it to be shut through inactivity. As the right hon. Member for Birkenhead (Frank Field) knows full well, nearly 300 workers at Cammell Laird are going to lose their jobs on the Mersey. There has also been a process of casualisation of the workforce, which will drive costs down but erode both employment and the skills of the workforce.
As the debate has demonstrated, we clearly need a sovereign industrial strategy for the defence industry. We need an industry that ensures a drumbeat of orders and provides jobs in all sectors of the defence economy, and as has been mentioned, we need to make particularly sure that our shipyards are fully provided with work and sufficient investment. We also need to think ahead and invest in technology as well as the skills of workers, and to be mindful of this country’s capacity to export, which sadly the Government are not.
I firmly believe that the shipyards and their workers should be at the very heart of this country’s industrial strategy. I believe that opportunities would present themselves if the Government decided, through the exercise of their political will, to bring forward a Type 31e frigate programme. If they decided, even at this late stage, to withdraw the international tender in order to ensure that the fleet solid support ships were built in British shipyards, there would be marvellous opportunities. That requires not just political will but an overarching perspective that looks beyond the short-term costs of the Ministry of Defence and instead at a holistic industrial strategy for the country, of which our industrial defence capability should be a central part.
In short, we need a Government who put the national interest first and do not look at pounds, shillings and pence in the short term, but have a long-term perspective that places British workers at the heart of an industrial strategy.
Mr Philip Hollobone (in the Chair)
Order. If the Minister could conclude his remarks no later than 5.27 pm, that would allow Mr Sweeney time to sum up. I call the Minister.
The Parliamentary Under-Secretary of State for Defence (Stuart Andrew)
Thank you very much, Mr Hollobone; it is a pleasure to serve under your chairmanship. I too offer my congratulations to the hon. Member for Glasgow North East (Mr Sweeney) for securing this important debate. I know that this is a matter close to his heart and an issue of great importance to him. I was somewhat depressed, however, by the fact that he said he will be 30 in January, given that I will be 47 next weekend, but there you go.
The right hon. Member for North Durham (Mr Jones) wondered how long I would be in post, and I am afraid that is one question on which I am not prepared even to speculate. I hope that I have proved, in the few months I have been in the role, that I am prepared to listen to all arguments—I will agree with some and disagree with others—and will take the time to absorb all the information. That is why I have spent a lot of time going around the country to listen to industry, the people working within it, and of course, the armed forces, to whom we are trying to supply important equipment. As the Minister, I am clearly responsible for procuring that equipment to ensure that we get the best value for our armed forces. It is also important to maintain the relationship with the UK industry and to promote exports and prosperity. Those issues are close to my heart. The debate has been informed by a clear recognition of the importance of the UK industry to our national security.
The debate has also given us an opportunity to remind ourselves of the extensive work that has already taken place to foster innovations and a competitive defence sector. The UK defence industry, working alongside our armed forces, plays a crucial role in delivering UK national security objectives. It is crucial to protect our people, project our influence around the world and promote national prosperity.
Every day since I took office, it has been a privilege to see the difference that the UK defence industry makes, whether that be the people, the equipment being provided, the training, the support, the infrastructure or the technology. Those elements are all there to help our nation’s defence. I think we are all proud to have a world-leading defence sector. The figures speak for themselves: in 2017 alone its turnover was £22 billion, with £9 billion of exports, and it supports over 140,000 jobs.
The report by my hon. Friend the Member for Ludlow (Mr Dunne) showed that defence plays an important part in our economy. It is crucial to strong manufacturing technology and has a broad footprint in every corner of the United Kingdom. As a customer, we are always aware of the need to get the right capability for our armed forces, while ensuring value for money for the taxpayer. The key to that is a thriving and globally competitive defence sector that is an important part of a wider industrial base.
Helping that industry to grow and compete in a global market is a key objective of the defence industrial policy refresh that was published last year. The three strands to our approach are, first, to improve the way defence delivers wider economic and international value and national security objectives; secondly, to help industry be internationally competitive, innovative and secure; and thirdly, to ensure that it is easier to do business with the Ministry of Defence, which is an issue I have heard about particularly from small and medium-sized businesses.
We are committed to maximising value for the UK by taking into account potential economic impacts, strategic international interests and national security objectives. In the defence industrial policy refresh, we committed to a more systematic approach to considering prosperity and international and industrial security and ensuring that we are early in developing high-value business cases. Earlier, more holistic decisions will improve how we inform choices for military requirements and ensure that the acquisition strategy and commercial engagement support a full range of desired outcomes.
Hon. Members made a number of points; I will try to go through them all, but I suspect I will run out of time. If I do, I commit to write to each Member with an answer. First, I note the comment of the right hon. Member for Birkenhead (Frank Field) about the merchant contract that was secured. If we can make our shipyards as competitive as possible across the globe, they will be more likely to secure more of those contracts. That is precisely why we have the national shipbuilding strategy. The hon. Member for Glasgow North West (Carol Monaghan) mentioned in an intervention that we had let down some shipyards. I want to emphasise that we have committed to 20 years’-worth of work for those shipyards. We are in the first batch of the three frigates, costing around £3.7 billion. The commitment to the remaining ones is there; we want to follow a process so that we learn from the first three and get the advantage of a better ship and better value for the taxpayer.
The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), whose constituency I was pleased to visit, talked about the Type 26s. Hopefully America is listening. I had the privilege of being in America recently, where we tried to push the point he made. We need to push wherever we have the opportunities. We should recognise the successes we have had with Australia and Canada. There is still a bit of time to go, but we are working hard on that. I hope industry will be given the confidence to look for contracts all over the globe, so that we can provide security.
The hon. Member for Glasgow North West asked for reassurance about state aid. The response that my predecessor gave her stands for the future contracts—I hope that reassures her. My hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), who has left her place, mentioned tax and prosperity. We have to take into account the recently refreshed Treasury Green Book guidelines as part of our procurement process. The forward plan is exactly what the national shipbuilding strategy is about; it sets out the 30-year forecast of what the Royal Navy’s requirements will be, so we can give the industry the greater clarity it needs.
Appledore shipyard was an issue that arrived on my desk fairly early on. We engaged with Babcock and looked at all sorts of possibilities and options, but the timescales for the Type 31e and the FSS build would not have sustained the jobs at Appledore—or Cammell Laird, in fact.
Wayne David
The Minister mentioned the Type 31e. Let us not forget that the Government deliberately delayed the programme and put it out to tender again, having withdrawn the initial programme.
Stuart Andrew
There were issues with the start of the procurement process. We have reset that, and I reassure the hon. Gentleman that we are sticking to delivery of the first one by the end of 2023. We have made that commitment; this is an ambitious project, and we are determined and working incredibly hard to ensure that we catch up any time that may have been lost. Each time I have updates, I get more optimistic about how we are progressing.
Many Members have talked about the FSS. It is not quite true to say that the Norwegians are building theirs—they are not, actually. They are being put out to international competition and are being built in South Korea. Australia and New Zealand have taken the same approach as us. We have been clear that a warship is as characterised in the national shipbuilding strategy.
Stuart Andrew
It is not a warship by definition, for the simple reason that the definition is based on the UK’s requirement to retain the ability to design, build and integrate frigates, destroyers and aircraft carriers for reasons of national security, ensuring that the complex nature of the construct is an important part of it from the very beginning. We will continue to have this argument—unions are coming to meet me very soon to discuss it.
I congratulate the hon. Member for Glasgow North East again on securing the debate. I will constantly review this matter and take it on board, but the Ministry of Defence has made a decision. I assure him that we are doing everything we can to ensure that our industry, whether in maritime, on land or in the air, is there to compete on the global stage, to secure the jobs we need and the expertise we have in the UK.
Mr Sweeney
I thank the Minister for his reply and thank right hon. and hon. Members who have contributed so effectively to the debate. In reply to the Minister’s last remark about the need to maintain the UK’s sovereign capability to build complex warships being arbitrarily restricted to frigates, destroyers and aircraft carriers, the only reason we can build those ships in the UK today is that the last Labour Government placed an order for an auxiliary ship, the RFA Wave Ruler, at Govan shipyard in 1999, which enabled that yard to continue in operation. Also, there are five River class batch 2 patrol vessels being built at Govan to sustain production there until the Type 26 kicks in. By utilising those less complex, but none the less complex, warships to smooth the build cycle, we can retain the skills, infrastructure and critical mass we need to build complex warships including frigates, destroyers and aircraft carriers. We must look beyond that arbitrary restriction and maximise the purchasing power of the Ministry of Defence to deliver UK sovereign capability in the long term. We should broaden our horizons.
Question put and agreed to.
Resolved,
That this House has considered UK sovereign capability.
Written Statements
Universal Children’s Day
(6 years ago)
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The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
Today is Universal Children’s Day, a day that marks the anniversary of the date that the UN General Assembly adopted both the declaration and the convention on the rights of the child.
The UK is a proud and long-standing signatory of the United Nations convention on the rights of the child (UNCRC) and this Government remain fully committed to the promotion and safeguarding of children’s rights.
The UNCRC sets out an enduring vision for all children to grow up in a loving, safe and happy environment where they can develop their full potential, regardless of their background. This Government share that vision and are dedicated to providing the best possible opportunities for all children but especially those who have the hardest start in life.
It has now been over two years since the UN scrutinised the UK’s progress in implementing the UNCRC and published their concluding observations. Since the last report, the UK Government have continued to raise their ambitions for all children and have made concrete progress in making sure that all children have the opportunity to thrive and develop.
For example, my Department has:
strengthened the quality and range of support for society’s most vulnerable children through the Children and Social Work Act 2017;
revised the “Working Together to Safeguard Children” guidance to better safeguard and promote the welfare of children;
improved support for children’s mental health in schools; and,
we are making relationships and sex education compulsory for all secondary school pupils so that young people learn what healthy, safe and respectful relationships look like.
We, as parliamentarians, all play a role in building a fairer society where children can lead happy lives and fulfil their potential. I urge all Government Departments to consider what more they can do to make sure their policies promote the best interests of the child. To help Government Departments to do this, we are proud to be launching a comprehensive children’s rights training package across Government today, which has been developed with the support of children’s rights experts. I strongly encourage my ministerial colleagues to encourage the civil servants in their Departments to take up this training so that children’s rights are further embedded in policy and law making.
In 2010, the UK Government made a commitment to give due consideration to the UNCRC when making policy and legislation. As we approach the 30th anniversary of the convention on the rights of the child, I would like to reaffirm the value that this Government place on the UNCRC and our ongoing commitment to give due consideration to the UNCRC when making policy and legislation.
[HCWS1093]
Post-Council: EU Foreign Affairs Council (Trade)
(6 years ago)
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The Minister for Trade Policy (George Hollingbery)
The EU Foreign Affairs Council (Trade) took place in Brussels on 9 November 2018. I represented the UK at the meeting. A summary of the discussions follows.
WTO modernisation
Member states unanimously supported the Commission’s approach to modernising the World Trade Organisation (WTO).
The discussion focused on the blocking of new appointments to the WTO appellate body and what this meant for its ability to function as the most urgent and serious issue. The functioning of the WTO more generally was also discussed. I highlighted the significance of these issues, and the need for political engagement to support the international rules-based system. I also highlighted the importance of engaging developing countries in the process of reforming the WTO.
Legislative files
The presidency provided updates on foreign direct investment screening and the bilateral safeguard regulation. The Commissioner is seeking political agreement on both files by the end of November. The Commissioner also called on Council to agree a mandate for the recast of the existing EU dual-use regulation by the end of 2018.
Ongoing trade negotiations
The Commissioner updated the Council on the state of play of ongoing EU trade negotiations. On EU-Vietnam, the Commission had adopted and published the English language text for Council decisions on the signature and conclusion of the free trade agreement (FTA) and the investment protection agreement (IPA). The Commissioner also informed Ministers that the European Parliament was due to vote on the EU-Japan economic partnership agreement (EPA) in December and on the EU-Singapore FTA and IPA in early 2019.
The Commission hoped to conclude negotiations with Mercosur and to present the Mexico agreement at the earliest opportunity ahead of the European Parliament elections in spring 2019.
Negotiations were also progressing with Chile, Indonesia, Australia, New Zealand and Tunisia, and on a multilateral investment court (MIC).
Implementation of EU FTAs
The Commissioner presented the EU’s second annual implementation report. She highlighted how FTAs remove trade barriers and open markets, while allowing protection of sensitive products. She also noted that insufficient preference utilisation rates can leave some of the potential from FTAs untapped.
Member states welcomed the report. I highlighted the UK’s ratification of CETA on 8 November and suggested that more could be done to demonstrate the development impact of economic partnership agreements.
[HCWS1092]
House of Lords
Stalking
(6 years ago)
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Baroness Gale
To ask Her Majesty’s Government what plans they have to introduce a national register of convicted stalkers.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the Government do not have plans to introduce a national register of convicted stalkers. Dr Sarah Wollaston MP’s Stalking Protection Bill would introduce stalking protection orders, which would require those subject to an order to give their name and address to the police.
Baroness Gale (Lab)
My Lords, I thank the Minister very much for her Answer. I am disappointed that the Government are not taking this on board, although she mentioned the Private Member’s Bill. Is she aware that the Home Affairs Select Committee report of 22 October recommended that a national register of serial stalkers and domestic violence perpetrators be introduced as a matter of urgency—as recommended by Paladin National Stalking Advocacy Service— and that individuals placed on the register should be managed through the Multi Agency Public Protection Arrangements, like registered sex offenders? The committee believes that more integrated strategies on violence against women and girls and on domestic abuse would support a better statutory response to stalking and a more joined-up approach to supporting victims and manging perpetrators’ behaviour. Can the Minister rethink this, as we are now on the eve of White Ribbon Day? It would be a great thing for the Government to do; indeed, they would receive lots of praise for it, and I know such praise would please them this week in particular. I look forward to hearing what she has to say.
Baroness Williams of Trafford
I thank the noble Baroness for her question. We are all trying to achieve the same thing: ensuring that stalkers and perpetrators of other types of domestic abuse are brought to book, brought before the courts and made to pay for their crimes. As for a VAWG Bill, as I said to the noble Baroness yesterday, the domestic abuse Bill will be a specific Bill for a specific purpose. We should not try to widen it, which is not to say that we are not absolutely committed to the agenda on violence against women and girls. In terms of a national register, I spoke with the noble Baroness, Lady Royall, and John Clough, whose daughter was murdered; we tried to work through exactly how various databases capture stalkers. Of course, under the new stalking protection orders, names would also be captured on the national police database or the national police computer.
Lord Hogan-Howe (CB)
My Lords, although I support the spirit of the proposal, I would challenge it. I wonder whether the Minister agrees with me about how practical it is to keep creating more registers. At the last count, the sex offender register had around 59,000 people on it. They are going on it quicker than they are dying off it. The realistic approach to controlling or monitoring them in society is very limited, partly due to resourcing and partly due to practicality. If there is to be a future in this, the solution will probably be a technological one. I am honestly not sure whether a register will help.
Baroness Williams of Trafford
I share the noble Lord’s point. The more registers there are, the more propensity there is for people to fall through the gaps. The crucial thing is that the registers and databases that we have work effectively.
Baroness Barran (Con)
My Lords, does my noble friend agree that it is crucial not just to manage the behaviour of serial stalkers and perpetrators, the majority of serial stalkers being domestic abuse perpetrators, but to engage with them to help them to change their behaviour? If she does, perhaps she could share what plans the Government have to build on some of the emerging practice in this area. In my experience from running the charity SafeLives, fewer than 1% of perpetrators got any intervention to change their behaviour. Without that we will never reduce the scale of the problem.
Baroness Williams of Trafford
I commend my noble friend on the work she did with SafeLives. I have seen some of its work at first hand and the emphasis it puts on addressing the problems of perpetrators. The proposed domestic abuse protection order would enable courts to impose positive requirements on abusers to challenge them to change their behaviour, such as requirements to attend a perpetrator programme or an alcohol or drug treatment programme. Through the police transformation fund and the VAWG service transformation fund, we have invested in a number of new approaches to manage perpetrators of domestic abuse. I thank her for all the work she has done to this end.
Baroness Corston (Lab)
My Lords, the noble Baroness outlined the process of tracking or monitoring serious stalkers. The onus is then on the victims to report crime, leave their homes, change their behaviour, sometimes change their jobs and disappear themselves. Surely that is an unacceptable state of affairs.
Baroness Williams of Trafford
My Lords, a victim would certainly report crime to the police, but it is envisaged that the police would then take up the stalking protection order, because it is unrealistic and unfair that a victim would have to come forward with processing the stalking protection order. The point I have been making is that stalkers are listed on various databases, such as the police national computer, the PND and ViSOR. In addition, there is the domestic violence disclosure scheme, or Clare’s law, which the noble Baroness will know about, as well as MAPPA.
Baroness Burt of Solihull (LD)
My Lords, Dr Wollaston’s Bill is very welcome indeed, but on the ground the police are dealing with unrelenting demand on stalking and domestic violence, despite the fact that only an estimated one in five victims will ever contact them. Whether we cover stalking in the forthcoming domestic violence Bill or in Dr Wollaston’s Bill, can the Minister assure the House that the agencies tasked with dealing with stalking and domestic violence have the resources, otherwise any register or Bill will not be worth the paper it is written on?
Baroness Williams of Trafford
The noble Baroness is absolutely right to point out that it is not just a question of resources; it is a question of training as well. Everyone is aware of stories from past days when police might not have recognised what a victim of stalking or domestic violence looked like. Dedicated resources have gone in to the training of special operatives within the police, and I understand that the College of Policing will soon publish refreshed guidance for the police on investigating stalking and harassment.
Brexit: Food Security
(6 years ago)
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Baroness Smith of Basildon
To ask Her Majesty’s Government what planning they have undertaken to ensure food security post-Brexit in the event of there not being any deal reached between the United Kingdom and the European Union.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, the UK has a high degree of food security built on access to diverse sources of supply as well as domestic production. Defra is preparing for exit alongside all relevant government departments, including through the cross-Whitehall Border Delivery Group, which is co-ordinating dialogue with ports, airports and their users. Defra has engaged closely with businesses and trade associations across the food and drinks sector at official and ministerial level and will continue to do so.
Baroness Smith of Basildon (Lab)
My Lords, does the Minister understand that lack of confidence in the Government to deliver even a workable Brexit deal means that major supermarkets and food suppliers are already stockpiling and even now are running out of warehouse space? The Public Accounts Committee in the other place has warned the Government that their contingency plans that the Minister outlined could well lead to increased risk to food safety and of smuggling. Can the Government give any guarantees to food producers who operate a just-in-time business model—not unlike the Government, it has to be said—that they will be able to continue to produce and deliver high-quality, safe food?
Lord Gardiner of Kimble
My Lords, it is absolutely clear that we have been working on this matter of preparedness at the border for nearly two years. We have issued 106 specific technical notices to help businesses, citizens and consumers prepare. They are all available on GOV.UK. It is really important that there is confidence in our food supply—and there is. There always has been, because we have the supply chains. We are working with businesses and it is up to them: it is a matter of commercial decision as to what they do by way of their materials. But we are working extremely strongly with businesses so that there is a strong food supply.
Earl Cathcart (Con)
My Lords, as a farmer I find the idea of food shortages if there is no deal both scaremongering and proven nonsense. Does my noble friend agree that domestic production plays a crucial role in our food security and that the high standards and quality of our produce is recognised both abroad and at home? Surely we should encourage people to buy British.
Lord Gardiner of Kimble
My Lords, I declare my interests as a farmer and my short reply to my noble friend is—yes to all three. It is very important to recognise that the UK’s current production-to-supply ratio is 60% for all food and 75% for indigenous-type foods. This is why we have a very strong domestic supply and other sources. We have excellent food in this country, which we are exporting to the degree of £22 billion last year—and, yes, we should buy British.
Lord Cameron of Dillington (CB)
Are all sections of government and all departments in Whitehall signed up to the principle that we will never import food into the UK that is produced by methods that are illegal for UK farmers?
Lord Gardiner of Kimble
My Lords, I have confirmed that a number of times at the Dispatch Box and I will do so again. On the specific issue of hormone-treated beef, the UK has transposed EU Council directive 96/22/EC. On chlorine-washed chicken, we already have provisions through the European Union (Withdrawal) Act 2018. We have a very strong record, in this country and abroad, for environmental protection of our food and high standards of animal welfare. That is how we are going to trade around the world and we are certainly not going to compromise that.
Lord Grocott (Lab)
Perhaps the Minister can provide some reassurance on behalf of many of us in this House who remember life before we joined the European Community—the Common Market, as it then was. In those years there was no need for people to stockpile food. Supplies of medicines reached our hospitals and our pharmacists during that period. People could freely travel to the countries of the Common Market without great difficulty. It was even possible for planes to take off from British airports and land without hindrance at European airports. If we reminded ourselves of these facts about the past, it might enable us to make more rational decisions about the future.
Lord Gardiner of Kimble
My Lords, this great country is going to have a very strong future. It will be outside the European Union, but we will want to have very strong co-operation with our friends in the EU 27. The noble Lord is absolutely right. In a global economy we are trading around the world—as, indeed, is the EU. The EU is trading with countries that are not members of the EU. We all want to do trade together. That is why I very much hope that a successful deal will be concluded—because it is in everyone’s interests. But the noble Lord is absolutely right: this country will prosper whatever the scenario.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, there is great concern that a careless Brexit will pose a threat to the UK’s short-term food security, when it is vital that a genuinely sustainable food strategy for the whole UK should be developed. It is important for high food standards to remain at the heart of any trade deals. Is the Minister able to assure the House that the Government will provide clarity on their proposed migration policy and consider the contribution that non-UK citizens of the EU make to the quantity and quality of the UK’s food supply and services?
Lord Gardiner of Kimble
My Lords, clearly, Defra and the Home Office will need to consider these matters because we need people to help us in the agricultural and horticultural sector. But I repeat to the noble Baroness that we have very strong domestic production. We also source food from around the world. As I have said from the Dispatch Box before, on the issue of disease or pests or whatever, we have a very sophisticated industry that has other sources of supply—but I am not anticipating that, because EU food producers want to bring their food here and we want to export our wonderful food to them.
Smart Meters
(6 years ago)
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Lord Lennie
To ask Her Majesty’s Government what progress they have made on the roll-out of SMET2 smart meters.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, more than 12 million smart meters are operating across Great Britain, with more than 400,000 meters installed every month. As of Sunday 18 November—two days ago—industry information showed that more than 138,000 SMETS 2 meters were connected to the national smart metering network.
Lord Lennie (Lab)
I thank the Minister for that response. Yesterday, Which?, the consumers’ champion, published a report that stated that the Government’s £11 billion rollout of smart meters to hard-pressed customers is seriously behind schedule. To meet their target of a smart meter in every household and small business would now require 30 smart meters to be installed every minute of every day between now and the end of 2020. Currently less than one-third of that figure is actually taking place. In addition, the Government’s projected financial benefits to customers have been slashed from £47 a year to less than £1 a month. Can the Minister say what specific actions the Government are taking to both turn around the lamentable rollout performance and restore the projected financial benefits to customers?
Lord Henley
My Lords, I am aware of that report but, as I made clear in my original Answer, we are installing more than 400,000 meters every month and that figure is increasing. We are still confident that we will be able to ensure that by the end of 2020 every household in the country will have been offered a meter. That is the aim that we have set out. We are also still confident that we expect to see a net benefit of around £5.7 billion for the entire rollout—benefits for individual consumers as they get greater choice and the advantage of being able to monitor their electricity and therefore keep their bills down, and advantages to the companies themselves.
Lord Teverson (LD)
My Lords, perhaps it is worth reminding the House that this programme of smart meter implementation will cost the country £11 billion. Sure, we need the customer benefits in savings from that but we also need to use them to create a properly distributed energy system in this country. Can the Minister explain to me how SMETS meters will achieve that?
Lord Henley
SMETS meters will allow the consumers greater benefits in that it will be easier for them to switch supplier and to monitor their use. Therefore it will be easier for them to cut their consumption of electricity and we will see a reduction in energy use, with benefits to the consumer in the cost, and benefits to the country in lower carbon use. As I said, there will be a net benefit overall after that cost of some £5.7 billion.
Lord Dubs (Lab)
My Lords, will the Minister confirm that many if not all of the smart meters currently offered are such that they cannot work if the consumer switches from one supplier to another? That is a pretty good reason for not having a smart meter. I wonder whether the people organising Brexit are also organising the smart meters.
Lord Henley
My Lords, the companies have been installing the SMETS 1 meters and we are now moving on to SMETS 2. Changes happen when one moves from a SMETS 1 to a SMETS 2 but the same benefits will still be available when consumers switch supplier in due course, and they will be able to benefit from those. There will be a slight delay in that but by 2020, all those who switch will find that they have the same benefits on SMETS 1 as they have on SMETS 2.
Lord Watts (Lab)
My Lords, when it is 2020 and everyone has the smart meters, it will be possible for those smart meters to choose the lowest cost provider. If they do that, consumers will all swap to one provider and that will put the rest of the companies into bankruptcy, meaning there will be no competition at all.
Lord Henley
My Lords, I know that noble Lords opposite do not like competition but the advantage of this system is that it offers choice to the consumer and, as the noble Lord quite rightly says, will offer the ability for people to move on to an app that will allow them to choose the cheapest supplier. Once there is competition, I think the noble Lord will find that the 60 or 70 supplier companies involved will compete among themselves to offer the best possible deals.
Baroness McIntosh of Pickering (Con)
My Lords, will my noble friend confirm that, as in the question from the noble Lord, Lord Dubs, this is putting a lot of people off taking smart meters? At what stage should I take a smart meter when I know that if I switch when my present contract runs out, I will not have to have a new smart meter fitted?
Lord Henley
I do not know whether the companies have approached my noble friend but I hope that she will take the opportunity to have one installed when her supplier offers her a company. She will find that when she has the SMETS 2, she will have the benefit of being able to switch without any difficulty. That will be available for SMETS 1 meters in due course.
Lord Rooker (Lab)
Can the Minister give a guarantee that the cybersecurity of the meters is absolutely 100%, and that they cannot be interfered with by any external force? Do the consumers get the knowledge that the pattern of their household living, on a minute-by-minute basis, is recorded by external powers which will later monetise that figure? I have refused twice and will continue to do so.
Lord Henley
It is entirely open to the noble Lord to refuse to have a meter, if he so wishes. All we are trying to ensure is that everyone is offered a smart meter if they should so wish, because we feel that to go on using metering technology that is somewhat over 100 years old is not the right approach and that new meters would be better. I can give him an assurance that GCHQ and other people have looked at the security of the smart meters and are satisfied that they are suitably secure.
Baroness Walmsley (LD)
My Lords, is the Minister aware that if you have solar panels on your roof, you cannot have a smart meter? I know that because I have tried several times and have been told that I cannot have a smart meter if I have solar panels, which we are all encouraged to have. Does he agree that unless a smart meter is developed that can work with solar panels, we are never going to have smart meters in every household in the country?
Lord Henley
I am afraid that what the noble Baroness says is a myth, but I will look at her case. There is no reason why one cannot have solar panels feeding into a smart meter and being taken into account. If the noble Baroness is having problems, she can come to me and I will look at them.
Asia Bibi
(6 years ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government what response they have made to requests to assist in the (1) safe passage and resettlement of, and (2) granting of asylum to Asia Bibi and her family.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the release of Asia Bibi will be very welcome news to her family and to all those who have campaigned for her freedom. We welcome the ongoing assurances that the Government of Pakistan have given on keeping her and her family safe. As a matter of policy, and in accordance with our duty of confidentiality, the Government do not comment on individual cases. Departing from this policy may put individuals and their family members in danger.
Lord Alton of Liverpool (CB)
My Lords, I am grateful to the Minister for that reply. Is it not passing strange that while other Governments, 200 parliamentarians and the leader writers of national newspapers have all spoken powerfully and clearly calling for asylum to be granted to Asia Bibi, we take Trappist vows of silence? Recalling that Shahbaz Bhatti, who was the Minister for Minorities, and Salmaan Taseer, who was the Muslim governor of Punjab, were murdered for insisting on the innocence of Asia Bibi, does the Minister share my huge admiration for Pakistan’s Chief Justice Mian Saqib Nisar and Justice Asif Saeed Khan Khosa, both of whom I met recently in Islamabad, who courageously and with great integrity acquitted and exonerated Asia Bibi, who was wrongfully sentenced to death and incarcerated for nine years? Does not their refusal to be dictated to by lynch mobs while we fail to offer asylum because of what Tom Tugendhat, the chairman of the House of Commons Foreign Affairs Committee, says is a fear of reprisals, undermine our belief in justice, human rights, the rule of law and religious freedom, and endanger us falling foul of, and succumbing, to blackmail?
Baroness Williams of Trafford
I know the noble Lord will understand that I cannot comment on most of the points that he has made.
Baroness Williams of Trafford
I cannot, my Lords. Our primary concern is the safety and security of Asia Bibi and her family, and we want to see a swift resolution of the situation. A number of countries are in discussion about providing a safe destination once the legal process is complete. Therefore, it would not be right to comment further at this stage. The noble Lord also talked about religious freedom. I welcome the opportunity to say that we continue to urge all countries to guarantee the rights of all citizens, particularly the most vulnerable, in accordance with international standards.
Lord Anderson of Swansea (Lab)
Does not the hesitation of the Government in this sense, either because of a fear of community backlash or because of perceived dangers to our high commission staff, speak volumes about their human rights commitment? Surely as far as Pakistan is concerned, the deal reached with the extremists by the Prime Minister of Pakistan, Imran Khan, tells us something about his human rights credentials and those of the Government of Pakistan.
Baroness Williams of Trafford
Noble Lords can draw their own conclusions in this situation, but our prime concern is the safety and security of Asia Bibi and her family and we want a swift resolution of the situation. As I said earlier, I do not want to comment further because I do not want any individual or their family members to be put in danger.
The Lord Bishop of St Albans
My Lords, the Minister is in a very difficult position because the Government feel unable to speak. However, it is not just Christians who are suffering from these blasphemy laws but other groups of Muslims and other religious minorities. What efforts are Her Majesty’s Government making to put pressure on the Pakistani Government to ensure that these blasphemy laws do not continue unjustly to affect these communities?
Baroness Williams of Trafford
My Lords, as I said to the noble Lord, Lord Anderson, we continue to urge all countries to guarantee the rights of all citizens in accordance with international standards. Our current position on minorities in Pakistan is set out in the Home Office country policy and the information note that we published, Pakistan: Christians and Christian Converts, which provides background, but it is important that each case involving asylum is considered on its individual facts and merits.
Lord Beith (LD)
My Lords, while there may be things that the Government can do or say behind the scenes, and we hope they are doing so, surely the Minister is not trying to cast doubt on the fact that if someone arrived directly from Pakistan into this country who had been through the experiences that Asia Bibi has been through and faced the threat that she now faces, they would have an irrefutable claim for asylum under international law.
Baroness Williams of Trafford
I am not trying to cast doubt on anything. Obviously I will not talk about individual cases. Anyone who arrives in this country and seeks asylum is dealt with on a case-by-case basis. I make the general point that this country has been generous over decades and indeed centuries to people coming here to seek our asylum and take refuge. I do not think the attitude of this country towards people who need our refuge should be in any doubt.
Lord Taylor of Holbeach (Con)
My Lords, the Conservatives have not had a chance to ask a question on this subject so I think it is their turn.
Baroness Warsi
My Lords, I fully endorse the comments of the right reverend Prelate. I believe that it is not just time for those blasphemy laws not to be operated in a harsh way, it is time for those laws to be brought to an end. There have been press reports that Asia Bibi, if granted asylum in the United Kingdom, would potentially not be safe from some communities here. I wish to give my noble friend and this House full confidence. As someone who is deeply connected to British Muslim communities, I assure her that they are fully supportive of any asylum claim that Asia Bibi may have and that our country may afford her, and that she would be supported as she would be by all other communities in this country.
Baroness Williams of Trafford
I thank my noble friend for her point on the various differing media reports on what this country might or might not do. Clearly every asylum claim is treated on its own merits. As I say, and I am sure my noble friend will attest to this, we have a long and proud tradition of granting asylum in this country to those who need it.
Business of the House
(6 years ago)
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Baroness Evans of Bowes Park
That the debate on the motion in the name of Lord Callanan set down for today shall be limited to 5 hours.
Lord Taylor of Holbeach (Con)
My Lords, on behalf of my noble friend the Leader of the House I beg to move the Motion standing in her name on the Order Paper.
In moving this Motion, I should remind the House about the reasons for the offer of time today, which I am delighted to see has been readily taken up by noble Lords. The provision of time this afternoon was a recognition by all parts of the usual channels that an additional 20 minutes for Back-Bench questions and answers last Thursday would not have been an adequate amount of time for noble Lords to discuss an issue of such importance as the draft withdrawal agreement. Last night we amended the Motion before the House to provide for five hours rather than the initial four that were proposed, which should ensure that noble Lords have four minutes each if all noble Lords observe it. I am grateful to the noble Lord, Lord Stevenson, and others for their understanding as we rearranged some of the business due to be taken today to make room for the debate.
I am probably stating the obvious to say that this afternoon’s debate serves as additional time in lieu of extending the time for the Statement last week. This House will have a substantive debate on the deal itself when it is finalised, likely stretching over several days. I beg to move.
Civil Liability Bill [HL]
Tuesday 20th November 2018
(6 years ago)
Lords ChamberRead Full debate Civil Liability Act 2018 View all Civil Liability Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 23 October 2018 - (23 Oct 2018)
Lord Keen of Elie
That this House do agree with the Commons in their Amendments 1 to 6.
“( ) The Lord Chancellor must consult the Lord Chief Justice before making regulations under this section.”
“Report on effect of Parts 1 and 2
(1) Regulations made by the Treasury may require an insurer to provide information to the FCA about the effect of Parts 1 and 2 of this Act on individuals who hold policies of insurance with the insurer.
(2) The regulations may provide that an insurer is required to provide information only if it has issued third party personal injury policies of insurance on or after 1 April 2020 to individuals domiciled in England and Wales.
(3) The regulations may—
(a) specify the information or descriptions of information to be provided;
(b) specify how information is to be provided;
(c) specify when information is to be provided;
(d) require that information or specified descriptions of information be audited by a qualified auditor before being provided;
(e) make provision about the audit;
(f) require that details of the auditor be provided to the FCA.
(4) Regulations under subsection (3)(a) may in particular require an insurer to provide information, by reference to each of the report years, about—
(a) the amount paid by the insurer during the report period under its relevant third party personal injury policies of insurance in respect of personal injuries sustained by third parties, where the amount of damages for the injury is governed by the law of England and Wales;
(b) the amount that the insurer might reasonably have been expected to pay in respect of those injuries if this Act had not been passed;
(c) the mean of the amounts paid during the report period under those policies in respect of those injuries;
(d) what might reasonably have been expected to be the mean of the amounts paid in respect of those injuries if this Act had not been passed;
(e) the amounts described in paragraphs (a) to (d), determined by reference only to cases where—
(i) the amount paid by an insurer under a policy, or
(ii) the amount that an insurer might reasonably have been expected to pay under a policy, falls within one of the bands specified in the regulations;
(f) the amount charged by the insurer by way of premiums for relevant third party personal injury policies of insurance where the cover starts in the report period;
(g) the amount that the insurer might reasonably have been expected to charge by way of premiums for those policies if this Act had not been passed;
(h) the mean of the premiums charged for those policies;
(i) what might reasonably have been expected to be the mean of the premiums charged for those policies if this Act had not been passed;
(j) the amounts described in paragraphs (f) to (i), determined as if the references to a premium charged for a relevant third party personal injury policy of insurance were references to so much of the premium as is charged in order to cover the risk of causing a third party to sustain personal injury;
(k) if any reduction in the amounts referred to in paragraph (a) has been used to confer benefits other than reduced premiums on individuals, those benefits.
(5) The regulations may make provision about the methods to be used in determining the amounts described in subsection (4)(b), (d), (g) and (i), including provision about factors to be taken into account.
(6) The regulations may provide for exceptions, including but not limited to—
(a) exceptions relating to policies of insurance obtained wholly or partly for purposes relating to a business, trade or profession;
(b) exceptions relating to policies of insurance of a specified description,
(c) exceptions for cases where the value or number of policies of insurance issued by an insurer is below a level specified by or determined in accordance with the regulations, and
(d) exceptions relating to insurers who, during the report period, issue policies of insurance only within a period that does not exceed a specified duration.
(7) Before the end of a period of one year beginning with 1 April 2024, the Treasury must prepare and lay before Parliament a report that—
(a) summarises the information provided about the effect of Parts 1 and 2 of this Act, and
(b) gives a view on whether and how individuals who are policy holders have benefited from any reductions in costs for insurers.
(8) If insurers provide additional information to the FCA about the effect of Parts 1 and 2 of this Act, the report may relate also to that information.
(9) The FCA must assist the Treasury in the preparation of the report.
(10) In the Financial Services and Markets Act 2000—
(a) in section 1A (functions of the Financial Conduct Authority), in subsection (6), after paragraph (cza) insert—
“(czb) the Civil Liability Act 2018,”;
(b) in section 204A (meaning of “relevant requirement” and “appropriate regulator”)—
(i) in subsection (2), after paragraph (a) insert—
“(aa) by regulations under section (Report on effect of Parts 1 and 2) of the Civil Liability Act 2018,”;
(ii) in subsection (6), after paragraph (a) insert—
“(aa) by regulations under section (Report on effect of Parts 1 and 2) of the Civil Liability Act 2018;”.
(11) A statutory instrument containing regulations under this section is subject to affirmative resolution procedure.
(12) In this section—
“the FCA” means the Financial Conduct Authority;
“insurer” means an institution which is authorised under the Financial Services and Markets Act 2000 to carry on the regulated activity of—
(a) effecting or carrying out contracts of insurance as principal, or
(b) managing the underwriting capacity of a Lloyd’s syndicate as a managing agent at Lloyd’s;
“qualified auditor” means a person who is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006;
“relevant third party personal injury policy of insurance” means a third party personal injury policy of insurance issued by an insurer to an individual domiciled in England and Wales;
“report period” means the period of three years beginning with 1 April 2020;
“report year” means a year beginning with 1 April 2020, 2021 or 2022; “third party personal injury policy of insurance” means a policy of insurance issued by an insurer which provides cover against the risk, or risks that include the risk, of causing a third party to sustain personal injury.”
“( ) This Act extends to England and Wales only, subject to the following subsections.”
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, with the leave of the House—or as the House leaves—I beg to move that the House do agree with the Commons in their Amendments 1 to 6.
The Civil Liability Bill will provide effective measures to tackle the continuing high number and cost of whiplash claims, which will lead to lower insurance premiums for ordinary motorists. It will also create a better system for setting the personal injury discount rate.
I should like to take this opportunity to thank noble Lords for their contributions and insightful scrutiny, which have already shown during previous debates how the Bill can be strengthened and improved.
The Commons amendments we are considering today were all brought forward by the Government in the other place. Amendment 1 introduces a requirement for the Lord Chancellor to consult the Lord Chief Justice before setting the tariff. This amendment was introduced to meet a commitment made to this House and, in particular, to the noble and learned Lords, Lord Judge and Lord Hope, at Report.
It remains the Government’s firm view that it is the Lord Chancellor who should set an appropriate and proportionate tariff through regulations. This enables the Government to ensure that damages remain proportionate and continue to disincentivise unmeritorious claims, but following reflection on the helpful points made by this House during debates in Committee and at Report, the Government agreed that there is merit in the Lord Chancellor seeking the input of the Lord Chief Justice before setting or amending the tariff. This will provide the judiciary with a formal route by which to comment on the level of damages for whiplash injuries. Consulting the Lord Chief Justice allows the views of the judiciary to be reflected in the setting of the tariff, as well as by way of the uplift in exceptional circumstances.
Amendment 2 corrects a drafting omission. The amendment clarifies, but does not change, our intent in regard to Clause 5. Clause 5 enables the Lord Chancellor to provide in regulations that the court may increase the amount awarded under the tariff in circumstances which it considers to be exceptional. The amendment adds the words “or injuries” to Clause 5(7)(a), and merely reflects that the amount of compensation specified in the tariff can relate to either a single injury or two or more injuries. This is consistent with the language used elsewhere in the Bill. This amendment makes no material change to the provisions of the Bill, but provides necessary clarification and consistency.
Amendments 3, 4 and 5 have arisen from previous debates, when noble Lords raised concerns about whether insurers would stand by their commitment to pass on the benefits arising from the Bill. Recognising the concerns raised by noble Lords and those in the other place, the Government amended the Bill in Committee in the other place to provide for an effective means for insurers to demonstrate that savings arising from the Bill have been passed on to consumers. This is the new Clause 11, as introduced by Amendment 3.
I am confident that Clause 11 allows the Government to hold insurers to account against their public commitment to pass on savings from the Bill in a rigorous but proportionate way, without risking anti-competitive or overly interventionist practices. The clause was developed after intensive and careful consultation with insurers, accountants, auditors and regulators.
Lord Sharkey (LD)
My Lords, I thank the Minister and his officials for their continued engagement on the Bill, which has been very helpful.
The Bill transfers over £1 billion from whiplash claimants to motor insurers. This transfer is only justifiable if the insurers do not retain this gigantic windfall—and, of course, they have promised that they will not. They have promised in writing to pass on to motorists, in the form of reduced premiums, cost savings made by the provisions in the Bill. A huge amount of money is involved, and a significant promise. Without that promise, I doubt the Bill would have been brought to the House—and without it, it would certainly not pass the House.
On Report, we set out the case for checking that insurers keep their promise. The Government accepted the need for checking the insurers’ compliance and committed to bringing forward in the Commons a mechanism for doing that. New Clause 11—Commons Amendment 3—is the proposed mechanism. I was pleased to see a mechanism in the Bill, but was surprised by its length and complexity. The new clause is very long and very complicated. The whole Bill, before this new clause, ran to only 16 pages, and the new clause by itself adds a further three pages.
When on Report we debated the issue of checking on pass-through, and when this was discussed in the Commons, there was an argument in favour of a much simpler approach. We saw the way forward as simply giving the FCA the power to demand whatever data it considered necessary for the purpose, and then to make an assessment of whether and to what extent insurance companies had in fact passed on the £1 billion to motorists via reduced premiums. I would be grateful if the Minister could explain why the complex approach taken in new Clause 11 is better than the simple approach I have just described. In particular, I would be interested in what influence any specific competition concerns may have had in producing the baroque structure of the new clause.
There are a couple more points where additional information would be helpful. The first is to do with anonymity. The Minister’s officials have confirmed that the report on compliance mentioned in new Clause 11 would reference only aggregated data. It will not name companies that have broken their promise to pass through the savings made for them by this Bill. In a written note, the Minister’s office said:
“It would be an extreme step for the Government to identify firms individually and this type of action against a particular firm—as opposed to holding the industry to account as a whole—could leave the Government open to challenge, both on the argument that the Government has facilitated anti-competitive behaviour and further on human rights grounds”.
Lord Hodgson of Astley Abbotts (Con)
I raise a narrower point than that of the noble Lord, Lord Sharkey. I refer to the Government’s Amendment 1 where, notwithstanding the heavyweight legal artillery from the noble and learned Lords, Lord Judge and Lord Hope of Craighead, I would like to probe the thinking a little further. What is proposed seems undesirable in a number of aspects, not least of which is that it may put the Lord Chief Justice into a conflicted and undesirable position.
Clause 3, to which the amendment applies, is entitled “Damages for whiplash injuries”. The House will be aware that because of the difficulty of diagnosis—as we have heard from my noble and learned friend—whiplash has provided easy pickings for the fraudulent over several years; in the vernacular of our early debates, the phrase was “cash for trash”. Millions of motorists’ insurance premiums have been unnecessarily increased. The Government—sensibly, in my view—introduced the blanket figure to cover all injuries with a duration of less than two years. That was discussed extensively and amended during the passage of the Bill here and in the other place. It was not, and is not, an uncontroversial policy decision. It remains an issue about which different parts of the House and different political parties have strong views.
Clause 3 is about money and the compensation payable under the whiplash tariff in different circumstances. I invite my noble and learned friend and the House to look at subsections (1) to (5). In each of those, the key word is “amount”—the amount of damages due and payable in different circumstances. The clause provides that these amounts are determined and laid out in regulations by the Lord Chancellor. Under this amendment, as my noble and learned friend pointed out, there would be another hoop to go through, in that the Lord Chancellor would have to consult the Lord Chief Justice before making regulations under the clause. The discussion in the House of Commons was pretty threadbare. I am concerned that the Lord Chief Justice may find himself dragged into policy areas which are not to his advantage. The clause is about money, not process. I ask my noble and learned friend to consider the options available to the Lord Chief Justice when the Lord Chancellor turns up at his office and presents the new tariff. As far as I can see, he has only two. Either he can accept without demur, or he can say that he thinks the proposed new tariff is too high or too low. If he does the latter, on what grounds would he make that judgment? What expertise does a judicial figure, the Lord Chief Justice, bring to the determination of these monetary figures? What expertise is available to him that was not available to the Lord Chancellor in making his original determination?
I make it clear that this is not an attack on the Lord Chief Justice. Indeed, it is intended to draw attention to the difficult position that future Lord Chief Justices may find themselves in as a result of this amendment. They would either have to act as a cipher and simply tick a box, or require amendments to figures that will remain politically highly charged. That runs the risk of the role becoming politically tainted, and further involving the Lord Chief Justice in the determination of matters on which the courts and justice system would later, no doubt, have to adjudicate.
It is not desirable for the Lord Chief Justice of the United Kingdom to be seen either as a cipher or as a participant in political processes. I look forward to hearing from my noble and learned friend why I have so gravely misjudged the situation.
Lord Monks (Lab)
My Lords, I declare an interest as a non-executive director of Thompsons, a leading personal injury firm. I have two or three questions for the Minister, particularly on Amendment 1. I thank him for the reply we received to the letter he referred to.
The House of Lords Regulatory Reform Committee advised that the key measures in this Bill, including the levels of compensation for claimants under the tariff scheme, should feature in primary legislation, not secondary. The Constitution Committee said that Ministers should follow this advice unless there were clear and compelling reasons not to. There seems to be a trend for the Government to seek wide delegated powers that permit the determination and implementation of policy. The Constitution Committee warned that the restraint shown by noble Lords towards secondary legislation might not be sustained—a serious warning to the Government that, if this trend continues, secondary legislation might be much more difficult to accomplish. I will be interested to hear the Minister’s comments on that.
Secondly, given that the employer liability clauses will not be dealt with through the new online portal, which is being reserved for whiplash claims, can the Minister confirm that the courts will be able to cope with what will undoubtedly be an increased number of claims without the presence of expert legal representation? It is estimated that they could increase from 5% to 30% of the total number of cases. Can the courts manage that extra responsibility?
Finally, what is meant by “in the long term”? This relates to paragraph 5.66 of the whiplash impact assessment accompanying the Bill, where the Government state that, taking into account adjustments to pre-action protocols, they consider that
“in the long term the courts would operate at cost recovery”.
I would be grateful for an explanation of what cost recovery means in this context.
The Earl of Kinnoull (CB)
My Lords, I shall speak to Commons Amendment 3 and shall make a general point about all the amendments in the round. I declare my interests as set out in the register—in particular, those in respect of the insurance industry. I would very much like to add my thanks to the Minister, the noble Baroness, Lady Vere, and the Bill team, who have been very courteous and warm as they have engaged with me, particularly on Amendment 3.
We spent a lot of time discussing the area covered by Amendment 3 in Committee and on Report, and even slightly at Third Reading. The amendments suggested in this House—there were quite a few of them—had a common theme: they were short and clear, and they instructed the FCA to act, as it were, as the scorer and to work out how it would ascertain whether insurers had in fact handed the money back to customers.
The section of the policy note, which the Minister referred to, entitled “Context and overall approach to amendment” refers to an intent to:
“Hold insurers to account in a way that is sufficiently rigorous”,
and to:
“Avoid intervening in an already competitive market or placing disproportionate burdens on insurers or regulators”.
I am very grateful to the Minister for confirming that those should be the guiding principles for the FCA as it begins to consider the best way to discharge this duty. I find the three pages of new Clause 11 pretty difficult and they are potentially extremely onerous for insurers. I note that, depending on how you construe new subsection (2), insurers might also have to report on every single comprehensive household policy they have, because injury cover is possibly included in that. I could make other points on that too.
We now know that this amendment was drafted by a committee full of highly intelligent people, including insurers, obviously very intelligent lawyers, accountants and officials. Of course, we all know that when you put a committee together, you get a camel, and I am afraid that it is a bit of a camel. However, I say again that I am very grateful to the Minister for confirming that the policy note will trump what is in the legislation, as that is important.
That leads on to my general point about the Bill. In Committee I referred to the 2016-17 annual report of NHS Resolution. It stated that moving the discount rate from +2.5% to -0.75% meant that the cost of medical negligence in the UK every year would rise by an extra £1.2 billion. That means that every day £3.3 million is not being spent on the NHS front line. If the personal injury discount rate, which is in Part 2 of the Bill, went up—perhaps not all the way up to 2.5% but maybe to 1%, which is currently the case in France—that would release around £1.75 million a day to the front line of the NHS. In a nutshell, the quicker this Bill passes, the better. My one question for the Minister is whether he agrees with that point.
Lord Hunt of Wirral (Con)
My Lords, I declare my interests, having now been chair of the British Insurance Brokers’ Association for the past five years and for the last 50 years having been a partner in the global legal firm DAC Beachcroft.
We need to remind ourselves that it is almost three years to the day that the then Chancellor of the Exchequer announced the coalition Government’s plans to reform whiplash claims. What a long journey it has been. In welcoming the amendments made in the other place, I join the noble Earl in impressing on all noble Lords the need to avoid any additional delay. The figures on the costs to the National Health Service just given by the noble Earl are stark and revealing, and we need to speed up.
I congratulate the noble Lord, Lord Sharkey, on the way in which he proposed that we should speed up the review process of looking at the discount rate, which is a vitally important part of the Bill. We also removed the prospect of any delay between Royal Assent and the start of the review timetable. I trust that my noble friend the Minister will understand when I stress again how imperative it is that we proceed to Royal Assent without any further delay. There is now no need to return this Bill to the Commons and no need to let any more time pass before Royal Assent. Further, there is no need to further delay the start of the review and the return to a more realistic, viable and normal discount rate.
I welcome the new clause on reporting, although I can understand how, as a non-lawyer, the noble Lord might think it complicated. But it covers the full picture exceedingly well. I congratulate all those both in Government and in the insurance industry who worked so hard on the wording over the summer. I know that it is not perfect, but it strikes an appropriate and judicious balance. It introduces the necessary rigour into reporting, but at the same time it is workable for those who have to provide the data.
One vital element to the industry—passing on cost savings to consumers—has been slightly forgotten in the heat of the debate at earlier stages. For insurers to be able to pass on the savings, there must first be savings. That is the primary purpose of this Bill. Only if the Bill is implemented, as it is now with a tariff of low damages for whiplash claims up to two years in duration and the other measures planned alongside this, including raising the small claims limit to £5,000, will there be any prospect at all of savings being realised and passed on to consumers. That will be in the best interests of all consumers and all citizens.
I add my praise to the Minister and the noble Baroness for their diligence and patience and for making themselves so readily available and accessible to all and any Members of this House to discuss various matters of concern. The Minister has made this a better Bill. Now let us speed it on its way.
Lord Judge (CB)
My Lords, in view of everything that has been said about the Minister, perhaps he does not need any help from me in addressing the concerns expressed by the noble Lord, Lord Hodgson, but I will offer him some comfort. Many people will want to make a contribution to the discussion with which the noble Lord, Lord Hodgson, has been concerned. They may not all have the same interest as the judiciary has in seeing that there is a fair balance between the way in which the whiplash injuries damages are to be assessed and the way that all other injuries are assessed—the process of assessing damages as it develops over the years.
I specifically asked that we should not have the concurrence of the Lord Chief Justice. We simply asked that he should be consulted. When he is consulted, like everyone else who has been consulted, he will be someone making a contribution to the final decision of the Lord Chancellor. As he will be merely consulted and not asked to concur, there is no danger that my successor many years down the line will find himself at the wrong end of a claim.
Lord Beecham (Lab)
My Lords, I refer to my interest as an unpaid consultant with my old firm. I begin somewhat unusually by congratulating the Minister on having improved a pretty flawed Bill since it left us. I assume that he has played a significant part in that. In particular, I strongly endorse the provisions of Amendment 1, which are an improvement on the original wording. However, we would still have preferred the retention of the existing system which allows judicial discretion on the level of compensation to be awarded based on judicial guidelines. To answer the noble Lord, Lord Hodgson, that is how the system operates and there seems to be no good reason why the assessment of damages for this kind of injury should be different in those terms from any other form of injury.
Of course, we also continue to be opposed to the increase in the small claims limit by an amount higher than inflation, in accordance with the review carried out by Lord Justice Jackson several years ago of civil litigation costs. In fact, the increase is something like 100%, although I take the noble and learned Lord’s point that that is not strictly within the scope of this Bill.
The Justice Select Committee warned that,
“increasing the small claims limit for PI creates significant access to justice concerns”.
The Government’s plans to increase the small claims limit will mean that more cases are allocated to the small claims track. That will leave tens of thousands of working people priced out of getting proper legal representation. These measures are a further gift to insurance companies which are already experiencing increased profits at the expense of people injured through no fault of their own.
What assessment have the Government made of the impact of the changes to the operation of the courts, given that increasingly claimants will be unrepresented? Within the last fortnight, the Permanent Secretary at the Ministry of Justice has told the Justice Select Committee that two of the main spending assumptions were fundamentally “unrealistic” and that even the Treasury recognised that the department was under “considerable strain”. In these circumstances, how confident is the Minister about the ability of the courts to deal with an increase in unrepresented claimants from 5% to 30%, as predicted in the whiplash impact assessment? That of course relates only to that particular area; there will be another shortfall in relation to other claims. How long do they anticipate will be the “long term” envisaged before the courts operate at cost recovery level, as suggested in the whiplash impact assessment? To be clear, whiplash impact for this purpose is on the system, not on the unfortunate claimant.
It is estimated that insurers will gain £1.3 billion a year. I hope that the noble and learned Lord’s confidence that the industry will ensure that those savings are passed on to policyholders will be proved correct. Why will it be six years before the Treasury reports to Parliament on the savings accrued to policyholders, as apparently will be the case? It seems an inordinately long time to assess the impact of this provision. Further, is it not ironic that the Government, who make so much of the need to protect policyholders from the impact of exaggerated or fraudulent claims, have themselves increased insurance premium tax four times in eight years, thereby currently collecting £2.6 billion a year more from the people they purport to be helping through this Bill?
While the commitment given at Third Reading in the Commons that vulnerable road users will be exempt from the changes is welcome, why are children and people injured at work not included in the exemption? Extending the change to those two groups would seem to be a reasonable move.
By sheer coincidence, today sees the publication of the report of the Constitution Committee. It is highly critical of the Government’s increasing reliance on secondary legislation. The committee supported the views of the Delegated Powers and Regulatory Reform Committee earlier this year that key measures should be included in the Bill and not left to secondary legislation. Also, most tellingly, it said that judges, not the Lord Chancellor, should set the new tariff and that the Lord Chancellor should not be granting powers to make provision for damages relating to minor psychological injury. This accords with amendments debated during the passage of the Bill through this House but not enacted.
I hope that a review of this measure will provide an opportunity to return to this issue and adopt that approach in due course. I repeat that the Bill comes back to us in better condition than it was, but I remain convinced that it is not in as good condition as it should be.
Lord Keen of Elie
I am obliged to the noble Lord, Lord Beecham, for acknowledging that we have at least achieved a curate’s egg, if nothing more.
The Bill makes important changes to our personal injury compensation system; it makes that system fairer, more certain and more sustainable in future for claimants, defendants, motorists and the taxpayer. That builds on our wider reforms to cut the cost of civil justice claims and strengthen the regulation of claims management companies, which play such a big part in this. The first part of the Bill will deliver a key manifesto pledge. It will support the consumer by bringing down the cost of living through a crackdown on exaggerated and fraudulent whiplash claims that lead to higher insurance costs. The second part of the Bill will provide a fairer method for setting the personal injury discount rate and reviewing it so that it does not remain at one level, as it did for 16 years.
I am grateful for noble Lords’ observations and careful scrutiny of the Bill. I want to touch on one or two of their points. The noble Lord, Lord Sharkey, commented on the complexity of the approach taken on Clause 11. That approach was carefully crafted after consultation with interested parties, including the FCA, to ensure that it is as effective as possible. At the end of the day, the Government’s approach has been determined by the need for a rigorous and proportionate regime for insurers as far as savings are concerned. We have to remember that the FCA is an independent body. Clearly, we cannot confirm exact FCA action in respect of these matters but we assure the House that it will take very seriously any case where an insurer does not treat customers fairly. That could include a public commitment not being met if that formed part of a policyholder’s or consumer’s expectations.
The Government have taken a careful and considered approach to what is sometimes termed “naming and shaming”, particularly with regard to the provisions in Article 6 of the European Convention on Human Rights. There are circumstances in which the FCA may decide publicly to censure a firm, but that would typically follow a detailed investigation. The idea of somehow naming and shaming a firm before such an investigation could raise questions about convention rights under Article 6. I suggest that we have taken a considered approach to this but, ultimately, those outliers—if I can call them that—who might seek to abuse the system will be open to censure, potentially publicly, by the FCA in due course.
In the context of the point made by the noble Lord, Lord Hodgson, I readily adopt the observations of the noble and learned Lord, Lord Judge. At the end of the day, consultation with the Lord Chief Justice will allow the judiciary some input into, or comment on, the setting of the tariff of damages against the background of its knowledge of the general level of damages awarded for personal injury in diverse cases. One would hope that this would ensure no material divergence in levels of damages as far as that is concerned.
The noble Lord, Lord Monks, raised a number of questions. Regarding Amendment 1, the primary legislation approach to setting the tariff is not considered appropriate because it should be amenable to review and flexibility. Setting it in stone would not allow for that. Regarding the question of employers’ liability and employers’ liability clauses, we consider that the courts are equipped to cope with such claims. On cost recovery, referred to in the impact assessment at paragraph 5.66, I note that the aim is ultimately to try to achieve cost neutrality so far as the court process is concerned, but I acknowledge that that is a long-term aim.
Crime (Overseas Production Orders) Bill [HL]
Tuesday 20th November 2018
(6 years ago)
Lords ChamberRead Full debate Crime (Overseas Production Orders) Act 2019 View all Crime (Overseas Production Orders) Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 134(a) Amendment for Third Reading (PDF) - (15 Nov 2018)
Baroness Hamwee
Baroness Hamwee (LD)
My Lords, I want to raise two areas of questioning of which, I hope, the Minister has had notice. We have had correspondence and I am grateful to her and her officials, but I am keen to get the explanation in Hansard. Clause 1 provides for the making of overseas production orders, and Clause 1(8) provides for a treaty to be laid before Parliament under the Constitutional Reform and Governance Act 2010. I tabled an amendment covering this question on Report and I regret that I am still not entirely clear about the answer. Can we not provide for a reference to ratification on the face of the Bill? It would deal with Parliament’s involvement in the process and I think it is important that legislation is as clear as possible to the reader.
The Act provides for a two-stage process. One is the laying of a treaty; the other is Parliament’s role in ratifying it—or perhaps not ratifying it. I have asked the Home Office what the problem would be. I understand from the Minister that there may be operational timing reasons why one would want to designate an agreement after it had been laid before Parliament but before it has been ratified, and the Minister has also told me in correspondence that an agreement that came into force on ratification would impose that obligation immediately, which would be a problem. I am a little puzzled as to why one cannot provide, in the parliamentary process, either that a designated agreement comes into force at a future date linked to the designation, or that the designation is linked to ratification. I would be grateful if she could help me and the House as to the need not to include a reference to the second stage of the process.
The importance of this is that Clause 1 deals with designation of an agreement under Section 52 of the Investigatory Powers Act. That section relates to the interception of a communication in the course of transmission, as I understand it, not to other data. My noble friend Lord Paddick raised this in the debate and we would be grateful if the Minister would explain how all data is covered, not just data intercepted in the course of transmission. That phrase implies data intercepted before or at the same time as it reaches the recipient, so would it not include itemised phone bills, geolocation data and internet connection records?
Communication, the word used in the relevant section, is defined in the Investigatory Powers Act and the term “communications data” is also defined: they are different. The great importance of this is that at the previous stage your Lordships inserted a requirement for death penalty assurances—or to put it the other way around and more accurately, that an agreement should not be designated without death penalty assurances in the case of an agreement where it is possible that a person may receive a death penalty as a result of, or in connection with, the provision of data under that agreement. I hope that those two separate but closely linked areas of questioning are clear and I beg to move.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, I thank the noble Baroness for her explanation of her amendment. The powers in the Crime (Overseas Production Orders) Bill will work only if a relevant international agreement is in place. The effect of the amendment would be that an international treaty could not be designated under the Bill until it had been fully ratified. Ratification is the process by which relevant parties signal their consent to be bound by a treaty, contract or agreement. I hope I will be able to reassure the noble Baroness as to why it is not needed, and that she might be persuaded to withdraw it.
There may be operational reasons why a Government would want to designate an agreement under the Bill before the process to ratify a relevant treaty is finalised. If we had to wait until the agreement had been ratified before making the regulations that designate the agreement under the Bill, and the agreement came into force on ratification, there would be a delay, as the noble Baroness said, in respect of our use of the agreement. We may want the regulations to be in place when the agreement comes into force so that officers in the UK can immediately start applying for overseas production orders. I am concerned that we should not unnecessarily delay their access to vital evidence. I make it clear that designating the agreement under the Bill prior to ratification will not permit applications to be made until such time as the agreement has been ratified and is in force.
I will give a practical example of this. An example of an operational reason to designate an agreement under the Investigatory Powers Act prior to ratification arises in the context of the development of an agreement with the US. One of the core obligations of the agreement with the US will be the removal of any legal barriers that would prevent a UK company complying with a request from the US. The IP Act itself contains one of those barriers, in that it criminalises the interception of communications, save for where a person has lawful authority.
However, Section 52 of that Act provides lawful authority to carry out interception where it is at the request of,
“the competent authorities of a country or territory outside the United Kingdom”,
and the request has been made pursuant to an agreement which has been designated by regulations under that section. In effect, the designation of the agreement under Section 52 will be the removal of the legal barrier, thereby fulfilling our obligation. As the US agreement will come into force immediately upon ratification, regulations under Section 52 must have been made and laid before that point so that we can fulfil our obligations from the moment the agreement enters into force.
I stress that making regulations designating an agreement prior to it being ratified would not permit UK communications service providers to intercept communications in response to requests by foreign law enforcement authorities. Such activity would be permitted only once those regulations and the agreement came into force, which would happen on or immediately after ratification. This in no way changes or undermines the process of ratification or the scrutiny that Parliament is afforded of a treaty. Indeed, if Parliament resolved that the treaty should not be ratified, what is provided for in any agreement and the powers in the Bill could not be used. I hope that the noble Baroness is reassured on that point.
The noble Baroness’s second point was about how Section 52 of the IP Act covers all data, not just data intercepted in the course of transmission. As I said on Report, Section 52 can authorise obtaining stored as well as intercepted communications. Section 52 should be read alongside Section 4 of the IP Act, which outlines the definition of “interception” and related terms. According to that section, “interception” refers to the interception of a communication,
“in the course of its transmission by means of a public telecommunication system or a public postal service”.
A person intercepts a communication in the course of its transmission if the effect is to access any content of the communication “at a relevant time”. It is the meaning of “relevant time” that is significant. It can mean a time when the communication is transmitted but it can also mean, as Section 4(4) of the IP Act says,
“any time when the communication is stored in or by the system (whether before or after its transmission)”.
Baroness Hamwee
My Lords, obviously I am not going to challenge the Minister on that but I will comment, if I may, on her latter point. The distinction between the definitions of communication, which is the subject of Section 52, and communications with data, which is defined as data held or obtained, including what relates to the provision of the service or is,
“logically associated with a communication”,
as it relates to the use of a telecommunication service, still defeats me, I am afraid. Why is it worded in that way? I see in the definitions the distinctions between communication and communications data, and the Minister referred to “the relevant time”. On the parliamentary process, there are two parts to it: laying regulations, which is the Executive’s job, and ratification, which is Parliament’s task. I was seeking to be quite clear that those are both covered.
It also baffles me that there cannot be conditional arrangements, with the laying of regulations which are conditional on designation or designation which is conditional upon the whole process under the Constitutional Reform and Governance Act. It may be that American practice would not allow it, although I am sure that I have dealt with American arrangements which are conditional. But because of the importance of the death penalty issue, I felt it was important to air these to the best of my ability, which may not be as extensive as it might have been. At least it will all be there in Hansard for others who may be exercised to satisfy themselves. I beg leave to withdraw the amendment.
Baroness Williams of Trafford
My Lords, in moving this Motion I thank all noble Lords who have participated in debate on the Bill, in particular the noble Lords, Lord Rosser and Lord Kennedy, the noble Baroness, Lady Hamwee, and the noble Lord, Lord Paddick. Of course we can never do anything without our fabulous Bill team, who have been on hand to explain some quite complex and technical matters. I always think that your Lordships’ House improves a Bill as it passes to the other place, and I hope that it will agree when it has time to consider it. Thank you.
Lord Rosser (Lab)
I too take this opportunity to add to what the Minister has said. Despite the reality that the Bill has not exactly held this House in rapt attention, judging by the number of people who decided to participate in our debates, I thank the Minister, the noble Baroness, Lady Manzoor, and the Bill team for their help and their willingness to meet to discuss the important issues that have been raised during the passage of the Bill. I also thank the members of our team who have provided such invaluable and vital support to me and to my noble friend Lord Kennedy of Southwark.
Lord Paddick (LD)
My Lords, I too thank the Minister. I do not know whether I am speaking out of turn in saying that I think at times she has shared some of our concerns over the implications of the Bill, if not over the Bill itself. I thank the Bill team for engaging with us so that we got a better understanding of the formulation of the treaty, the process of negotiating the treaty and what the possible implications of that might be. Clearly we are now alerted to the fact that both Houses need to be very concerned in scrutinising any treaty that is developed that this Bill relies on. I also thank my noble friend Lady Hamwee, without whom I would be lost.
Tenant Fees Bill
Tuesday 20th November 2018
(6 years ago)
Lords ChamberRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 129-II Second marshalled list for Committee (PDF) - (16 Nov 2018)
Baroness Grender
Baroness Grender (LD)
My Lords, I shall speak also to Amendments 29 and 30 and in support of Amendment 28, tabled by the noble Lord, Lord Kennedy. I thank the Minister for all the meetings with him and his officials and for the meeting today on guidance. I look forward to continuing to meet to make sure that we do what the noble Baroness, Lady Williams, described and make sure that the Bill is beautifully polished before it receives Royal Assent.
Amendment 27 would cap the change of sharer charge to £50 and Amendment 29 would avoid exorbitant charges to end a tenancy. Amendment 30 would avoid what I hope is an unintended consequence, which is that paragraph 6 of Schedule 1 allows landlords to insist on all the rent for the remainder of the fixed term. It aims to make the provision a little more tenant friendly by limiting the tenant’s liability for the rent to the point at which the property is relet.
Regarding a change of tenant, if a sharer moves out, it is normally their and the remaining housemates’ responsibility to find a replacement. The alternatives are for the remaining housemates to pay rent on an empty bedroom or for them all to move out, with the associated costs. Currently the fees associated with changing a tenant are comparable to those of starting a new tenancy. Indeed, Generation Rent recorded an average of £248 in its research. This reflects the limited options available to tenants rather than the actual costs involved. As the tenants tend to do all the marketing though sites such as Gumtree and SpareRoom, the landlord’s costs are limited to the referencing process. Even then, the existing tenants have an incentive to find a new housemate who will pass the referencing process and whom they can rely on to pay a regular rent.
If there is to be a fee, it should reflect the landlord’s or the agent’s reduced cost in that circumstance. The Bill as drafted says that the charge is capped at £50, but it still allows landlords to charge more than that—so it is not really a cap but more of a floor. The possibility remains that landlords would charge as much as they could. A true cap would not permit fees above a specified sum.
I turn to Amendments 29 and 30. People will always need to move unexpectedly in circumstances where their personal or professional life changes. The Government have recognised this through their proposed longer-tenancies model, which we welcome, giving tenants the flexibility to exit the tenancy without penalty before the fixed period ends. However, paragraph 6 of Schedule 1 allows landlords to insist on all the rent for the rest of the fixed term, which is unnecessary if they are able to relet the property, has the potential to create financial hardship for tenants and could even see some people trapped in difficult relationships. The amendments would limit the tenant’s liability for the rent until the point when the property was relet, which should take place within a reasonable timeframe. I very much appreciate that there is a little more clarity in terms of the draft guidance at the moment, but that is of course draft guidance and I am seeking to probe what can be in the Bill regarding this issue.
Regarding costs at the end of a tenancy, no one makes the decision to move lightly. To end your tenancy early would mean that you face significant changes in your personal or professional life. The Bill should therefore limit the cost of this where possible. As it currently stands, my understanding is that it would appear to make a tenant leaving a tenancy liable for the rent for the remainder of the fixed term, plus the costs of remarketing the property. A tenant moving out could pay all of this and the landlord could still get a new tenant within a month of the tenancy. The landlord therefore could possibly receive several months of double rent through sheer luck. To make it more of a level playing field and limit the departing tenant’s liability, the Bill should apply a reasonableness test. As soon as the property has a new tenant, the former tenant’s liability should end, and the landlord should have an obligation to deal reasonably with any request to leave. I beg to move.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, as this is my first contribution to the proceedings, I draw the attention of the House to my relevant interest as a vice-president of the Local Government Association.
This group of amendments covers Schedule 1 to the Bill, specifically around issues of changing or terminating the tenancy agreement. Amendment 28 is in my name and I have also put my name to Amendments 29 and 30, while I support the intention behind Amendment 27 in the names of the noble Baronesses, Lady Grender and Lady Thornhill. Amendment 27 would cap the amount that could be charged for a change in tenancy to £50, and that seems very reasonable. As the noble Baroness, Lady Grender, said, otherwise the £50 becomes a floor rather than a ceiling. The problem with the clause as worded is that it leaves the way open for a large amount to be charged. I think that that is unfair and not reasonable.
My Amendment 28 seeks to ensure that in a situation where the only change is that of a tenant, a charge cannot be made. I hope that the Government will agree that there is no loss of rental income if you are just replacing one name with another, and to allow a charge to be made in that situation seems very unfair.
Amendment 29 would require the landlord to react reasonably to any request for an early exit, including when taking steps to relet the property. If they do not do so, this payment would be a prohibited payment, for all the reasons that we have heard in this short debate. Amendment 30 seeks to provide better clarification than is provided by the schedule as presently worded.
The Earl of Lytton (CB)
My Lords, I rise to speak to Amendment 29. I entirely understand the points made by the noble Baroness, Lady Grender. A number of individuals collectively forming “tenant” particularly occurs in London and other metropolitan areas. Those of us who inhabit the countryside tend to have single tenants in a building, rather than a system of sharing.
I have absolutely no problem with the idea of ensuring that landlords are not overcharging beyond reasonable cost. My concern is that this is beginning to look like micromanagement of the letting process. The question is, “reasonable” by whose standards? For instance, a group of tenants—perhaps four of them—decides to take on a property on a two-year term. Let us suppose they collectively decide that they want to finish the tenancy after one year and want to move out in the run-up to Christmas, which is known to be a difficult time for the letting market because things tend not to get going again until into the new year. By whose standards would “reasonableness” be measured? Would it be by reference to the tenants, who, after all, have agreed to take on the property on a two-year basis and wish to terminate after one year; or by reference to the reasonable costs the landlord would run up in that process? All sorts of things hang on that—for example, rent voids and running costs such as heating and security while the place is unoccupied, were that to happen.
I appreciate that things get more difficult when you have a number of tenants and one wants to go, because that creates a dynamic which, as the noble Baroness rightly said—and has said previously—affects the other occupants. It would be really undesirable if landlords responded by simply deciding not to agree to early termination. That would be the worst of all possible worlds. As a private sector landlord, I have never used that other than when someone wants to terminate at short notice and before the property can reasonably be re-let. That tends not to happen in the high-pressure circumstances of inner-London shared residential, but with a freestanding property in the countryside, where things are quite different. The Bill will apply across the nation.
I counsel a little caution here, and perhaps the Minister would care to comment. If the culture creeps in whereby no early termination of a lease is possible or will be agreed, we will be back here later with another measure to say that landlords must provide that facility. I do not see this as necessarily being the endpoint, and I should like to tease out that issue to give some closure on what we are doing with residential landlord and tenant. Hopefully, the situation can stabilise so that everyone will know where they are for, at any rate, the reasonably foreseeable future.
Lord Best (CB)
My Lords, it is worth underlining that this part of the Bill is an important measure to prevent what is a pretty common abuse, which is, when there is a change of tenancy, at little or no cost to the landlord, the agents involved making serious amounts of money, which the Bill would prevent them doing in future.
At Second Reading, I cited an illustration from my last intern, whose sister was taking her place in a flat share of three. Each of them, on entering the flat, needed to pay the agent a fee of £275 for the privilege of signing up. When one of the occupiers left and was replaced by her sister, the outgoing one was charged £250 for termination of the tenancy agreement and her sister, who was moving in on the same day with her packed suitcase, was charged £275 as a new tenant. The agents got £525 for this transfer from one sister to another. The landlord received exactly the same amount of rent, because there was no discontinuity in the rent paid.
In such circumstances, paying £50 as a takeover fee for the privilege of signing a photocopied document when one person moves in in place of another sounds quite enough. The guidance may be the best place to put this, but the test must be whether the landlord has suffered a loss of rent. If there is no such loss, surely the £50 should kick in as the maximum which the agents can take. One can understand the need to compensate if there has been a loss of rent because of a gap when one tenant has moved out and no new one has arrived. Otherwise, £50 sounds like a maximum not a floor.
Lord Young of Cookham (Con)
My Lords, I am grateful to all noble Lords who have taken part in this short debate relating to the charges that can be imposed for variation, assignment, novation or termination of a tenancy where these are requested by the tenant. We have previously set out that it is not fair to ask landlords and agents to pay reasonable fees where these arise from the action or request of a tenant. Following pre-legislative scrutiny, we clarified that both early termination and change of sharer costs were permitted, so long as these were fair. As a result, the Bill provides that a landlord or agent can charge a tenant in these circumstances, but such fees are capped at £50—one-tenth of the fee charged in the case cited by the noble Lord, Lord Best—or reasonably incurred costs if higher.
Amendments 27 and 28 seek to impose a hard cap on the amount that can be charged and to prohibit this charge in relation to a change of sharer. When considering how to manage these amendments, we share the caution mentioned by the noble Earl, Lord Lytton. We want to ensure that landlords and tenants can agree reasonable requests to vary a tenancy. Although we do not expect this charge to exceed £50, it is only fair that, where it does so, landlords and agents are able to recover their reasonably incurred costs. For example, if a landlord is required to undertake a search, conduct reference checks and amend tenancy deposit protection arrangements for a new tenant with no help whatever from the outgoing tenant, those costs may be higher than normal. Landlords and agents will need to be able to demonstrate, if challenged, that their costs are reasonable. They will have to justify them and, if they cannot do so, trading standards officers may have a case to investigate.
Crucially—this point was mentioned by the noble Earl, Lord Lytton—we do not want to create a situation where landlords are reluctant to agree to a change of sharer because they do not believe they can recover their reasonable, justifiable costs. This would not help tenants, who would be required to break their contract if they wanted to leave, nor would it help those hoping to move in to replace the sharer moving out. This matter was discussed during pre-legislative scrutiny and tenant representative bodies recognised the need for the ability to charge in such circumstances, provided that the risk of abuse was mitigated, which we have done by imposing a cap of £50 and requiring any additional costs to be reasonable. In its report, the Housing, Communities and Local Government Committee said that:
“We welcome the Government’s intention to clarify the legislation and to permit charges related to a change of sharer where these are requested by the tenant”.
Amendments 29 and 30 would place an obligation on the landlord to take reasonable steps to re-let the property where they have agreed to terminate a tenancy early. These amendments would also limit the loss a landlord can recover to the period reasonably required to find a new tenant, even if he was unable to find one.
An assured shorthold tenancy is a contract where a tenant commits to pay the landlord rent for a given period of time, the fixed term. The landlord is entitled to the rent for the entirety of that term. If the tenant seeks to leave the tenancy before the end of it, then they would need to seek agreement of the landlord to do so. Where possible, landlords should agree to this, and can ask the existing tenant to find a suitable replacement. We encourage them to do so through our guidance.
Turning to the amendment introduced by the noble Baroness, Lady Grender, paragraph 6(2) of Schedule 1 says:
“But if the amount of the payment exceeds the loss suffered by the landlord as a result of the termination of the tenancy, the amount of the excess is a prohibited payment”.
In other words, the landlord can only recover any loss they incur in permitting a tenant to leave early. They cannot double-charge for the same period of time. They are entitled to recover only the sum of any rental payments which would not be met by the start of a new tenancy. If a replacement tenant is found and there are no void periods, we would expect no early termination charge to be levied to the outgoing tenant. This has been reiterated in the consumer guidance for tenants and landlords, and we welcome the constructive comments made by the noble Baroness on our draft guidance.
However, looking at the amendment, we cannot necessarily expect landlords to know how long would reasonably be required to find a replacement tenant. This depends on several factors, including the rental market in the local area. Therefore, we expect landlords and tenants to consider on a case-by-case basis the likely void period and any reasonable charge for early termination. Again, we do not want to harm tenants by disincentivising landlords agreeing to a reasonable request to end a tenancy early or to a variation of a tenancy. That is not what this Bill is seeking to achieve, but there is a real risk of this if the amendments are agreed to. On that basis, I hope that the noble Baroness will withdraw her amendment.
Baroness Grender
My Lords, I thank noble Lords who have spoken about these amendments. When the noble Earl, Lord Lytton, talks about how one defines “reasonable”, a good look through the guidance will drive him in the direction of asking that question quite a lot, because quite a lot hinges on “reasonable” on both sides of the argument. The idea that we do not expect landlords to charge more than £50, rather than that they should not charge more than £50, is the issue here. I am trying to ensure a proper balance between tenant and landlord when a tenancy ends. I will seek to discover if there is a better way of drafting my amendment for Report or if there is a better way of clarifying this in guidance, and with that in mind I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“( ) In the case of a payment to a landlord, such a payment is a permitted payment only if the landlord is required by the tenancy agreement to review the contract or contracts annually and make arrangements to switch tariffs or suppliers if this would be beneficial to the tenant.”
Lord Kennedy of Southwark
My Lords, Amendments 31 and 32 in my name seek to add two new sub-paragraphs to paragraph 8 of Schedule 1. The schedule is concerned with permitted payments and paragraph 8 is concerned with payments in respect of utilities. Amendment 31 seeks to place a requirement on the landlord to review the various utility contracts and switch tariffs or suppliers to one that would be the most beneficial to the tenant.
We are all aware that the utility market is competitive and that there is a whole range of offers and deals. If the landlord or letting agent is able to make a charge for utilities, it is not unreasonable to require them to do something about getting the best deal and the best value for the benefit of their tenant. Looking at the market to see what is available is not too onerous a task and a reasonable obligation.
Amendment 32 proposes that the amount charged to the tenant must be the reasonable costs incurred, and any excess would be a prohibited payment. This amendment seeks to close a potential loophole by restricting what can be charged to reasonable costs incurred. I beg to move.
Lord Shipley (LD)
My Lords, I support the noble Lord, Lord Kennedy, in these two amendments, which would help to tighten up the Bill. As he said, paragraph 8 of Schedule 1 is very open-ended, and he referred to a loophole potentially lying within it as it is worded. I think his amendment will tighten it and will do so partly because it is in the interests of the tenant, who may secure a cash saving in the amount they pay for a utility even though they may have to pay a fee to achieve it. I therefore hope the Minister might be willing to look at that carefully. As paragraph 8 of Schedule 1 is currently drafted, it simply refers to the fact that the tenancy agreement may require the payment to be made, but it does not define why it would have to be made. That is why the amendment in the name of the noble Lord, Lord Kennedy, is so helpful.
The Earl of Lytton
My Lords, I have great sympathy with this amendment but I would have more were it possible to ensure that utility providers themselves acted reasonably. While I will not name any names, one particular well-known supplier of electricity, with what is generally regarded as an extremely cheap and competitive tariff, has gained for itself an extremely poor reputation because of what happens when one wants to change to another supplier. Indeed, so tortuous are its processes—of which I have had direct experience—that many landlords specify in their agreements that the tenant may not change to that supplier, and with good reason.
I had a situation myself concerning the commercial supply of electricity to an agricultural building. My wife and I were faced with a demand from this company for over £30,000 for a period of some 15 months, when the only thing that happens in this shed is that for a period of about three weeks a series of low-wattage lights are used to assist with lambing, and for a period of about 10 days in another part of the year they are used for a sheep-shearing operation. By no stretch of the imagination could the fee have totalled that amount. When, finally, the company rang up my wife and said, “We’re going to take you to court”, her answer was, “Make my day”. It was not until the matter was referred to its lawyers that it became apparent that there had been a complete muck-up. It had simply not got an initial reading and was trying to steamroller that payment through in the hope that we would crack and pay it. I know that other landlords in the private rented sector are sometimes faced with the same situation.
These people run up the most appalling costs. While I have great sympathy that this should not be laid solely at the door of tenants, it is none the less an occupational hazard that afflicts both parties to this arrangement. That is the only reason why I have a reservation about the amendment in the name of the noble Lord, Lord Kennedy—because there is another dimension to this, where certain suppliers are acting utterly unreasonably and unconscionably.
Lord Young of Cookham
My Lords, the Countess of Lytton is clearly even more formidable than the noble Earl.
I too have a lot of sympathy with these amendments, but I believe there are already sufficient existing protections—not in this Bill but in other legislation—which address the concerns raised by noble Lords. Landlords who resell energy to their tenants for domestic use are governed by maximum resale price provisions set by Ofgem under Section 44 of the Electricity Act 1989 and Section 37 of the Gas Act 1986. This prevents landlords from overcharging tenants; they cannot charge the tenant more than the landlord has paid. If the landlord does overcharge, the tenant is entitled to have the charge lowered and overpayments refunded. The tenant can also bring a claim against their landlord to the small claims court for the amount that has been overcharged plus interest. In addition, on other utilities, landlords are prohibited from overcharging tenants for the resale of water under the maximum resale price provisions set out in the Water Resale Order 2006. If the landlord does overcharge, the tenant can take legal action through the small claims court to recover any overpayment and the tenant is eligible to recover interest at a rate of twice the average base interest rate of the Bank of England for the period they have been overcharged.
Amendment 31 would specifically require landlords to review any contract held for the provision of utilities and to consider switching provider if this would be beneficial to the tenant. In the majority of cases, tenants will be responsible for paying their own energy bills; they will pay them direct to the supplier and not to the landlord. So in most cases, tenants will already have the right to choose their own supplier. The tenancy agreement will set out who is responsible for paying these charges. Where the landlord is responsible for paying the bills, they may seek to recover these costs through the rent or directly from the tenant but, as I have already explained, they are already prevented from overcharging for this for energy and water.
Through, for example, the How to Rent guide, we encourage tenants to speak to their landlord or agent if they think their utilities payments are too high or if they want to request a change of supplier. In many cases, it may be in the interest of the landlord to move to a more competitive supplier as that may help to market their property in the future.
In addition, the Government’s Domestic Gas and Electricity (Tariff Cap) Bill received Royal Assent on 19 July. This requires Ofgem to implement a price cap on standard variable and default tariffs, which will guarantee protection for the 11 million households currently on the highest energy tariffs.
Against that background, I hope the noble Lord will feel able to withdraw his amendments.
Lord Kennedy of Southwark
I thank all noble Lords who have spoken in this short debate, and particularly the noble Lord, Lord Young of Cookham, for his very helpful response. I will withdraw my amendment shortly, but I would like to check something. He helpfully set out the legislation which will prevent people from being overcharged by landlords, but I cannot recall off the top of my head whether this will be clearly laid out in the guidance so that people will be very much aware of their rights and obligations. That would go some way to allaying the fears that are behind these amendments.
Lord Young of Cookham
Before the noble Lord sits down I would like to say that that is a very helpful suggestion. We will indeed look at the guidance to see whether that suggestion can be incorporated.
Lord Kennedy of Southwark
In that case, I am happy to withdraw the amendment.
“Payment in respect of identity and immigration status checks
11 (1) A payment for or in connection with the costs associated with carrying out identity and immigration status checks on the tenant is a permitted payment.(2) But, in the case of a payment to a landlord, if the amount of the payment exceeds the reasonable costs incurred by the landlord for or in connection with the provision of the identity and immigration status checks, the amount of excess is a prohibited payment.(3) In sub-paragraph (1), a check on the immigration status of the tenant means the conduct of checks by the landlord pursuant to ensuring compliance with section 22 of the Immigration Act 2014.”
Baroness Gardner of Parkes (Con)
My Lords, I have moved this amendment simply because it is essential for people to know what they can be charged and what they cannot. The noble Lord, Lord Kennedy, commented at the end of his speech on just that fact: that people need to know. If something was in the guidance that would indeed be very valuable, but at the present time people have no idea what they will be charged.
A lot of people have no idea that they have to prove they have a right to be in this country. I am sure most of us remember the embarrassing start of this whole problem, when a very impressive member of the Government at the time found that she had not checked on someone she employed. That is where all this started. As I understand the situation, there is now a fixed amount that people would be asked to pay for such an official designation of their nationality and the rights they have here. People are often totally unaware of this.
I understand that overcharging should not take place—I am not for a minute suggesting that—but people will need to know that, to rent a property, they have to prove that they are an ordinary person entitled to live here and not limited in what tenancy they can undertake. That is the purpose of this amendment. I claim no expertise in the wording of it, as the Public Bill Office very kindly helped me. I would be interested if people have comments on that. The principle behind it is to enable people to know what is and is not legitimate. Whether it is the agent, the prospective tenant or anyone else who provides that necessary information, it costs. You do not get it for nothing; that is the problem. I feel that the Bill is rather restrictive at the moment. I beg to move.
The Earl of Lytton
My Lords, the noble Baroness has made a valid point. I recall some years ago having to check the identity of an applicant for a business tenancy, who produced a passport from a Commonwealth country which was in date but did not contain the crucial words in the out-of-date one, also presented, which described the bearer as having the right to remain in the United Kingdom. I have always felt very nervous about trying to sift through this, because of the penalties that can be visited on one professionally—in this case, it would have been on a client landlord—in connection with letting. Getting these things right and carrying out identity and immigration status checks cannot be left to the tea boy. They need to be done by somebody who knows what they are doing and can take responsibility.
This takes us back to the question of where the two-way street between landlord and prospective tenant should lie and whether it is right that the landlord provides a property that he has warranted as clean and tidy, fit for purpose, not unsafe and so on, and the tenant is responsible for the cost of verifying their bona fides, as the noble Baroness says in her amendment. It seems that that is fairly unarguable, particularly in London where there are people of so many different nationalities. A further issue that needs to be addressed, assuming that eventually this country will leave the European Union, is European citizens’ right to remain here. The noble Baroness raises a valuable point, and I look forward to hearing what the Minister says.
Lord Best
My Lords, I take an opposing view. I am sad to do so on the noble Baroness’s amendment, since she does so much good work in this sector. I declare my interest as a co-chair of the Home Office’s right to rent consultative panel, which looks at the right to rent that people require before taking up a letting.
For sure, somebody has to pay for the identity and immigration status check which now has to happen. The question is whether tenants should pay the agent for this—they would do so whether British citizens or not—or whether the landlord should ultimately expect to pay, getting their agent to do it on their behalf. It is one of the functions of an agent to check whether the tenant is an illegal immigrant or has the right to be in this country. That task is for an agent to perform, just as they need to make sure that the landlord’s property has a gas safety certificate or an energy performance certificate. This is part of the process that an agent is paid for. There is a fundamental principle that the landlord is ultimately responsible for the letting, along with the agent who acts for that landlord, and they and not the tenant should be the ones who pay. In the same way, the tenant does not have to pay for their own reference—that is something that the agent takes up. This is part of the process taken on by an agent and it justifies the fees that agents charge their landlords. What else do we want agents to do but look after the landlord’s interests in cases of this kind?
Therefore, I think that the Government have this right. This is not an area where the tenant should be asked to make a supplementary payment to the agent, and the agent may well charge the landlord a good deal already. As the Bill spells out, it is a matter on which no fee should be payable by the tenant.
Lord Shipley
My Lords, I agree with the noble Lord, Lord Best. It is important that we are able to discuss this matter through the amendment moved by the noble Baroness, Lady Gardner of Parkes, but there is an issue of principle here, which is that it should be a charge not on the tenant but on the landlord and the letting agent, who is not mentioned in the amendment.
The principle is that, if a service is contracted for formally between a tenant and a landlord, a payment can be required. However, that should not be required for either reference checks or identity checks, where the responsibility lies with the landlord or the letting agent. The basic problem here is that the Bill attempts to eliminate up-front tenants’ fees but the amendment might reinstate some tenants’ fees that would not be justified as a charge on the tenant.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
I thank noble Lords very much and particularly my noble friend Lady Gardner for bringing forward this amendment. She does much work in this area.
I cannot accept the amendment because, as the noble Lord, Lord Shipley, has just indicated, it would fundamentally undermine the policy intention of the Bill, which is to ban letting fees paid by tenants and to ensure that the party that contracts a service pays for that service.
This issue was dealt with under Section 22 of the Immigration Act 2014. It was very clear then that this was to be a liability for the landlord, not the tenant, to discharge. Therefore, the amendment would effectively drive a coach and horses through the intention of that legislation. I am not sure what the collective term for a coach and horses would be. It would probably be a stampede or possibly a cavalcade of coaches and horses, but it is clearly not the intention.
Despite the very good arguments put forward by my noble friend and the noble Earl, Lord Lytton, on this point, I very much agree with the noble Lords, Lord Best and Lord Shipley. A landlord should be responsible for the costs associated with these checks. As I have indicated, they are required under the Immigration Act to undertake these checks to verify that a tenant has the legal right to reside in the United Kingdom before progressing with any tenancy agreement.
The Home Office produces detailed guidance for landlords and agents carrying out these checks, and I will certainly ensure that it is circulated to my noble friend and the noble Earl, and indeed to everybody who has participated in the debate.
Although the onus is on the landlord to verify a tenant’s right to rent, we have made provision in the Bill that, where a holding deposit is sought and a tenant fails a right-to-rent check, landlords and agents will not be unfairly penalised if the tenant is at fault. I hope that that gives some comfort to my noble friend and the noble Earl. With those assurances, I respectfully ask my noble friend to withdraw her amendment.
Baroness Gardner of Parkes
My Lords, I was very interested in the comments that were made and I will certainly take them on board. I heard people talking about how easy it is to get the right of abode and that is exactly what I have had here for 40 years. Every time my passport comes up for renewal, I have to send in the original documents, which after 40 years are beginning to disintegrate. Why can the Home Office not keep a record of these things? I have only one marriage certificate; it is turning into a bit of old rubbish now because it is getting so worn out although I have always valued it.
I am sure noble Lords know about the Member of your Lordships’ House who made the mistake of employing someone who had no right to be in this country. It is not a light remark to say, “They will just produce that”. You have to reproduce things every time you get a new passport and, as I said, the original documents are insisted on. It is a pretty major thing and I will face it again next year.
The position in this House is that you can be here provided that you are deemed domiciled; you have to prove that you are paying full taxes, which is one of the big factors. But a lot of people may not be aware that you have to have any proof of who you are at all in anything. If the time comes when people want to rent a place and are asked, “How can you prove that you are entitled to be here?”, they will not have the documentation, whereas they would if that requirement were set out in the guidance.
The Minister said that this issue is included in immigration law, but it needs to be mentioned in some way in this legislation, which affects people’s lives on an everyday basis. When they want somewhere to live and find a place they like, they do not suddenly want to lose it because it takes so long to get the correct papers. That should be in a guidance document prior to wishing to rent something. It should not be part of the rental process.
Doing this yourself, as has been suggested, presumably means meeting the costs yourself as well. This whole thing seems to be a little muddled. I do not accept the view of the noble Lord, Lord Best, that we should not burden ordinary people with these things—perhaps I am wrong in asserting that—when they are burdened by them every day in their own living standards. But I appreciate the Minister has given a good answer and I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
Lord Kennedy of Southwark
My Lords, all the amendments in this group are in my name except Amendment 37, although I support that amendment as well. They seek to amend Schedule 2, which concerns holding deposits. Amendment 33 would remove from the Bill the ability for a holding deposit to be withheld if the prospective tenant is prohibited from being granted a tenancy due to the restrictions of the Immigration Act and has failed the right to rent check. It is of course a probing amendment and I look forward to the Government setting out their case to justify this part of the Bill.
Amendment 34 would strengthen paragraph 8 of Schedule 2 by adding the word “knowingly”. That is a reasonable bar to have to reach for a deposit to be lost. Otherwise, it is unfair on the prospective tenant. If you knowingly provide false and misleading information, fine, but if it is unintentional, it seems harsh that the deposit can be withheld.
Amendment 35 would allow a tenant to decide not to proceed with a tenancy by notifying the landlord or letting agent before the deadline. It gives the tenant a reasonable period in which they can change their mind and not lose the deposit. I hope the Government can respond positively to that amendment.
Amendment 36 seeks to put into the Bill a requirement, where a holding deposit is withheld, that the landlord or agent say why they are doing so; that they set out the information they believe is false or misleading and which has been relied upon to withhold the deposit; and that they explain how the tenant can challenge the decision, including how to get advice on doing so, to ensure that the decision is sound. Again, I hope that the Government can respond to this amendment because people should be able to understand why a decision has been made and be clear on whether there is anything they can do. If your deposit is withheld, it must be right that you be told why and that the reasons be set out. If you do not like the decision, you should be told where you can go to get further advice and challenge it.
The final amendment in the group, Amendment 37, has been tabled by the noble Baronesses, Lady Grender and Lady Thornhill. It looks sensible and I look forward to hearing the explanation behind it. I beg to move.
Baroness Thornhill (LD)
My Lords, I rise to speak briefly to the final amendment in this group, Amendment 37. I thank the noble Lord, Lord Kennedy, for his remarks and I should say that we support his amendments.
If the Bill is rightly concerned with redressing the balance of power a little more towards tenants, this modest amendment would surely do that. Its purpose is to ensure that on payment of a holding deposit, which can sometimes be a significant amount of money, the tenant actually gets to see the tenancy agreement and therefore knows the terms of the contract that they will be asked to sign and abide by. The real question is whether there is a good reason for tenants not automatically and always being given this right. I am at a loss to understand this. In life, if we buy a product or a service, we see all the terms and conditions. We tick the “I agree” box online, while on paper we sign on the dotted line—although, like me, I suspect that we do not actually read all of the small print. The situation we are discussing would not arise in any other consumer transaction, so the amendment seeks to ensure that the same applies when people rent their home.
It is impossible for tenants to spot and negotiate out of the tenancy agreement any unfair terms if they have not received it before signing or moving into the property, the more so as they might ultimately incur default fees. Even if they receive the agreement in good time, they do not have much power to negotiate the terms because they stand to lose their holding deposit if they walk away. The ability of tenants to negotiate unfair terms out of a contract would be made just a little easier through the provision in this amendment.
It is equally important that the Bill makes it clear that the draft tenancy agreement must meet a certain universal standard. Thus the amendment refers to the Consumer Rights Act 2015, the legislation that would form the basis for the standard. The rationale is that if the tenancy agreement contained unfair terms, the tenant could ask for those to be removed. If the landlord refused to remove them, the tenant could pull out of the tenancy and claim the holding deposit back on the basis that the draft agreement did not comply with the Consumer Rights Act.
Existing government guidelines for the Act on what are and are not “unfair terms” are quite clear. They talk about transferring risks to consumers—in this case the tenant—that cannot be controlled. The tenancy agreement might be the first time the tenant gets to see what default fees the landlord is setting, and sometimes, even more significantly—and perhaps horrifically—it does not specify the level of default fees they might subsequently wish to apply. Efforts elsewhere in the Bill to define default fees more tightly might help to address these concerns, but surely it is both fair and reasonable for tenants to have some ability to negotiate the terms of their contract before signing it.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for their contributions and the noble Lord, Lord Kennedy, for moving his amendment.
This set of amendments deals with the treatment of holding deposits under Schedule 2 to the Bill. As I have set out on previous occasions, the purpose of a holding deposit is to enable both the landlord and the tenant to demonstrate their commitment to entering into a tenancy agreement while reference checks are undertaken. It is important that there is earnest from both parties to the agreement. As I have said on a previous occasion, it must be wrong for a landlord to have more than one agreement with a tenant; there can be only one on both sides. So that we have a case of what is sauce for the goose is sauce for the gander, we have to be careful in looking at the amendments.
Amendments 33 to 35, in the name of the noble Lord, Lord Kennedy, seek to make changes to the circumstances in which landlords and agents can retain a holding deposit. From the outset of this policy, landlords and letting agents have expressed concern that tenants speculating on multiple properties might be a side-effect of the ban. That is why we are allowing a landlord to ask for a holding deposit so that tenants can demonstrate that they are sincere in their application—as I am sure they are, in the vast majority of cases. It is a pledge from the tenant to a given property. This mitigates the risk of landlords and agents being out of pocket if a tenant registers an interest, only to withdraw if something better comes along. I therefore cannot agree to Amendment 35.
We also want to ensure that landlords do not take an overly cautious approach and preselect tenants that they perceive as the most likely to pass a reference check. Permitting landlords to retain holding deposits in circumstances where a tenant fails a right-to-rent check—which I referred to in discussion on the previous amendment, moved by my noble friend Lady Gardner of Parkes—is a key mitigation against such behaviour. I therefore cannot accept Amendment 33.
Amendment 34 suggests that a landlord or agent should refund the holding deposit only if the tenant “knowingly” provides false or misleading information. Again, I am afraid I cannot accept such an amendment, although I appreciate the spirit in which it was moved. Requiring the landlord to refund the holding deposit in these situations would be near-impossible because the landlord is unlikely to have the necessary evidence to prove whether a tenant has done something knowingly. It would simply be one party’s word against the other. Given that the landlord is liable for a significant financial fine, we believe that the inclusion of a “knowingly” test is more likely to lead to them taking a risk-averse approach, which would not help tenants. I firmly believe that the approach set out in the Bill with respect to holding deposits is the fairest to both landlords and tenants.
As I have said, I recognise the desire expressed by noble Lords for greater transparency regarding the treatment of holding deposits; I have previously indicated that I will look at that. I understand the rationale behind Amendments 36 and 37. Without a commitment on where we will end up, I am happy to look at this issue ahead of Report. I appreciate the valuable points made during the debate on these amendments and the importance for tenants of understanding how their holding deposit is handled and why it may not be returned. That seems entirely fair. I have listened to noble Lords’ concerns on these issues and will be happy to return to them on Report. I listened to the point made by the noble Lord, Lord Kennedy, and the points made by the noble Baroness, Lady Thornhill, on Amendment 37 in relation to sight of the agreement ahead of entering into it. Again, that seems to have some strength in it and I am happy to look at it.
I should say that we are making great progress; I believe that noble Lords who have looked at the guidance notes will acknowledge that. The notes, which will set out the procedures for, and the rights and obligations of, landlords and agents will provide great assistance in this area. That will support tenants in understanding how to seek appropriate redress if they are dissatisfied, including through provision of draft letters to help tenants raise concerns with their landlords and agents around the treatment of their holding deposit. As I have indicated, I am very happy that noble Lords from around the Committee should engage in this process with officials to help us to clarify points made in the guidance notes to improve them in the interests of landlords and tenants. I acknowledge that we have made some important strides in the process of making sure it is much more lucid and transparent, and less riddled with jargon.
Landlords and agents should give tenants sufficient time to understand the terms of any agreement before signing. I am clear on that. That is why the period before the deadline for agreement is there; it is intended to allow that. I will also ensure that a link to the consumer guidance on the Bill is included in the How to Rent guide. That will also help. Landlords are of course required by law to give their tenants these guides to help raise awareness. I hope those assurances enable the noble Lord and the noble Baroness not to press their amendments.
Lord Kennedy of Southwark
My Lords, I thank the noble Lord, Lord Bourne, for that thoughtful and helpful response to this short debate. I will happily withdraw my amendment shortly. Of my four amendments the most important was Amendment 36, which the noble Lord responded to in detail. I was pleased that he did so, because it is only right and fair that if your deposit is withheld you should understand why and how you can challenge that. I will certainly look at that and I hope to bring something back on Report. I thank him very much for that.
I also listened very carefully to the noble Baroness, Lady Thornhill. I thought she made a very strong case for her amendment. Again, I am very pleased that the noble Lord will look at that. I hope we will have something on Report that we can all agree on. At this stage, I am very happy to withdraw my amendment.
Brexit: Negotiations
(6 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That this House takes note of the statement by the Prime Minister repeated by the Lord Privy Seal on 15 November relating to the European Union exit negotiations.
Baroness Goldie (Con)
My Lords, this will be an extremely interesting and important debate. It is a long one and time constraints are very restrictive. I ask your Lordships please to observe the speaking limit for Back-Benchers of four minutes. If the Clock shows four and the noble Lord or noble Baroness shows no sign of sitting down, I may have to attend to that physical exercise for him or her.
The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)
I am sure that nobody wishes to incur the wrath of my noble friend Lady Goldie.
My Lords, as the Prime Minister set out in her Statement last week, we have now agreed the provisional terms of our exit from the European Union, set out in the draft withdrawal agreement. We have also agreed the broad terms of our future relationship, as set out in the outline political declaration, also published last week. Both the UK and the EU are now preparing in earnest for a special European Council taking place this Sunday 25 November, where we hope to be able to agree the full political declaration on our future relationship.
Before I speak further about the draft withdrawal agreement, I am sure that noble Lords will have noted the appointments last Friday of my honourable friend the Member for North East Cambridgeshire as Secretary of State for Exiting the European Union and of my honourable friend the Member for Spelthorne as Parliamentary Under-Secretary of State in the Department for Exiting the European Union. I look forward to working with both colleagues as the whole Government deliver on a Brexit deal that honours the result of the referendum and takes the country from strength to strength, but I must add that both the UK and the EU have reiterated, time and again, that nothing is agreed until everything is agreed. To that end, we will not sign a withdrawal agreement without a full political declaration and we will ensure that Parliament can make an informed decision and that business and citizens have a clear understanding of our future relationship.
What we agreed last week is a draft treaty that means that we will leave the EU in a smooth and orderly way on 29 March 2019 and sets the framework for a future relationship that delivers in our national interest. It takes back control of our borders, our laws and our money; it protects jobs, security and the integrity of the United Kingdom; and it delivers in ways that many said could simply not be done. The outline political declaration sets out an arrangement that is superior for our country than options such as Canada-plus, Norway-minus or even Norway-plus—a more ambitious free trade agreement than the EU has agreed with any other country. On security co-operation, the outline political declaration sets out a breadth and depth of co-operation also beyond anything the EU has agreed with any other country.
I shall now set out the details of the agreement. First, the full legal text of the withdrawal agreement has now been agreed in principle. It sets out the terms on which the UK will leave the EU on 29 March 2019. We have secured the rights of the more than 3 million EU citizens living in the UK and around 1 million UK nationals living in other countries in the EU. We have agreed a time-limited implementation period that ensures that businesses have to plan for only one set of changes. We have agreed protocols to ensure that Gibraltar and the sovereign base areas in Cyprus are covered by the withdrawal agreement and we have agreed a fair financial settlement, estimated to be far lower than the figures many mentioned at the start of these negotiations.
As the Prime Minister has made clear since the start, we have been committed to ensuring that our exit from the EU addresses the issue of the border between Northern Ireland and Ireland. We believe that this issue can best be solved through our future relationship with the EU, but the withdrawal agreement provides an insurance policy, meaning that should the new relationship not be ready in time for the end of the implementation period, there will still be no hard border between Ireland and Northern Ireland. As noble Lords will know, the original suggestion from the EU was not acceptable, as it would have resulted in a customs border in the Irish Sea and cast doubt upon the integrity of our United Kingdom, so last month the Prime Minister set out for the House the four steps we needed to take. This is what we have now done, and the EU has made a number of concessions towards our position.
First, the EU proposal for a Northern Ireland-only customs solution has been dropped and replaced with a new UK-wide temporary customs arrangement that protects the integrity of our precious union. Secondly, we have created an option for a single, time-limited extension of the implementation period as an alternative to bringing in the backstop. As we have said many times, we do not want to extend the implementation period and we do not believe that we will need to do so. This is an insurance policy, but if it happens that at the end of 2020 our future relationship is not quite ready, then the UK will be able to make a choice between the UK-wide temporary customs arrangement and a short extension of the implementation period.
Thirdly, the withdrawal agreement commits both parties to use their best endeavours to ensure that this insurance policy is never used. In the unlikely event that it is needed, if we choose the backstop the withdrawal agreement is explicit that the backstop is temporary and that the Article 50 legal base cannot provide for a permanent relationship. There is also a mechanism by which the backstop can be terminated. Finally, we have ensured full continued access for Northern Ireland’s businesses to the whole of the UK internal market.
Lord Howard of Lympne (Con)
I am very grateful to my noble friend for giving way. Under Article 50, the United Kingdom has a unilateral, untrammelled right to leave the European Union. Under the backstop provisions of the withdrawal agreement, the United Kingdom can leave only with the consent of the European Union. How can that be described as taking back control?
Lord Callanan
There are mechanisms to bring the backstop to an end but my noble friend is right that they would need to be mutually agreed. A joint committee has been set up and independent arbitration is foreseen within that, to which we can apply the solutions. They are set out in the agreement. I would be happy to write to my noble friend with further details but I understand the point he is making.
The Brexit discussions have been about acting in the national interest and that has necessarily involved making what we believe to be the right choices, not the easy ones. By resolving this issue, we are now able to move on to finalising the details of an ambitious future partnership. The outline political declaration we have agreed sets out the basis for these negotiations, and we will negotiate intensively ahead of the European Council this weekend to turn this into a full future framework.
Under the future relationship we will see an end to free movement. As the Prime Minister stated yesterday at the CBI conference, we will have our own new skills-based immigration system, based not on the country people come from but on what they can contribute to our United Kingdom. We have worked hard to deliver for the economy—to deliver a deal that puts jobs, livelihoods, prosperity and opportunity first. This is what Brexit should be about: getting a good deal that unlocks the opportunity of a brighter future for this country and all our people.
Lord Forsyth of Drumlean (Con)
I am most grateful to my noble friend. Just going back to the point about the position of Northern Ireland, given that the backstop in the agreement provides for a different regulatory regime in Northern Ireland, why is this not creating a border down the Irish Sea?
Lord Callanan
This is only within the backstop itself. As I said, we hope that the backstop will not be required and that we will be able to put in place future arrangements that will render the backstop unnecessary. There are some regulatory differences now between Great Britain and Northern Ireland. But it is true that under the backstop, if it comes into operation, Northern Ireland will align with many parts of the single market acquis that are necessary for the creation of a borderless Ireland.
The declaration reached common ground on services and investment, including financial services. It also ensures that we will be leaving the common agricultural policy and the common fisheries policy. The UK will become an independent coastal state once again.
We have been able to agree on key elements which will help keep our people safe. These include effective extradition arrangements, as well as mechanisms for data exchange on passenger name records, DNA, fingerprints and vehicle registration data. We have also agreed a close and flexible partnership on foreign, security and defence policy.
Lord Davies of Stamford (Lab)
I am very grateful to the Minister for giving way. What precisely are the arrangements on financial services that have been agreed? I have failed to find any concrete measures in the large amount of paper in front of us.
Lord Callanan
I have a copy of the document here. There are three paragraphs on financial services in the outline declaration. The noble Lord will find them on page 2. I could happily read them out but time is short. Obviously, we will be fleshing out the future partnership document this week and we hope to publish more details on that shortly.
Lord Davies of Stamford
That document does not contain any specific measures at all.
Lord Callanan
It contains measures for protecting financial stability and market integrity, and for the commencement of an equivalence assessment, which is extremely important to many in financial services. But, as I said, this is one of the things that we are fleshing out. This is an outline declaration and the final details are being negotiated as we speak.
Lord Callanan
I am happy to give way but this is all subtracting from the time that is available for the rest of the debate.
Lord Liddle
The Minister suggested to his noble friends that the Northern Ireland arrangement was temporary. Why then is it said in the political declaration that what is set out in the backstop is the basis for the future economic relationship between Britain and the EU? Can the Minister explain that inconsistency?
Lord Callanan
It is actually stated in the withdrawal agreement that the backstop is intended to be temporary and is not intended to be a basis for the future relationship. But it says in the future partnership document that the future relationship will build on the customs arrangements that are outlined within the backstop facility. I will let the noble Lord make his own interpretation of those words.
We have worked hard to deliver the result of the referendum and to ensure that the UK leaves the EU on 29 March 2019. We have made a decisive breakthrough. Once a final deal is agreed, we will bring it to the Commons for what is being called a meaningful vote, and of course there will be an opportunity in this House for extensive further debate. The Government understand that the British people want us to get this done and to get on with addressing the other issues they care about: creating more good jobs in every part of the UK; helping our NHS provide first-class care; and focusing our efforts on building a brighter future for our country.
The choice is clear: we can choose to leave with no deal or we can choose to unite and support the best deal that can be negotiated—this deal. It is a deal that ends free movement; that takes back control of our borders, laws and money; that delivers a free trade area for goods with zero tariffs, to benefit our manufacturers; that retains the security co-operation to keep our people safe; and that protects jobs in the United Kingdom. This deal honours the integrity of our United Kingdom. It delivers on the referendum result. It delivers the Brexit that the British people voted for. I beg to move.
Baroness Hayter of Kentish Town (Lab)
“Oh, what a tangled web we weave
When first we practise to deceive!”
I am not talking about the figure on the bus but the Brexiteers’—and the Government’s—mantra that withdrawing from nearly half a century of an alliance would be “smooth and orderly”; this has even been repeated today. Indeed, so often did Ministers—the noble Lord, Lord Bridges, at the time—repeat “smooth and orderly” that my then researcher Chelsey Mordue got to writing “S.A.O.” every time she heard it. Smooth and orderly it has not been.
The other deception was that a deal could be negotiated by the Government alone, without business, the Opposition, trade unions—or Parliament itself. I do not usually quote my own speeches but, on 10 October two years ago, I warned Ministers that negotiating without an agreed mandate would lead to trouble. I asked for Parliament to be able to,
“vote on their negotiating objectives”,
since the referendum did not,
“give the Government a blank cheque”,
and said that,
“the national interest—not just the Conservatives’ interests—must come first”.—[Official Report, 10/10/16; col. 1704.]
If only the Government had agreed to work with Parliament on the objectives for the future framework. Instead, they did everything wrong. The Prime Minister laid down red lines in January 2017, before she even understood the task, and without the involvement of Parliament. She refused to agree a mandate—as requested by this House in the Monks/Lea amendment—which would have won her the necessary buy-in at the start of the talks. She appointed Brexiteers to this challenging task—men who refused to heed any evidence which countered their blinkered view, and who then walked away when neither was able to negotiate a deal that either of them could live with.
Sir Simon Fraser, who saw it at close quarters, wrote:
“David Davis was a terrible Brexit Secretary. He could hardly be bothered to go to Brussels and rapidly lost respect there”.
We now learn that he still does not understand the basics, writing just yesterday:
“If we need to leave with no deal and negotiate a free trade agreement during the transition period, so be it”.
No, Mr Davis: without a deal, there is no transition period. We will have crashed out by the early hours of 30 March. No wonder Elmar Brok, a leading MEP, characterised the Government’s negotiating approach as “disarray and disaster” if our lead Minister does not understand the basics.
The clock is ticking. The European Parliament will disappear in April, yet it has to endorse any deal. Business is desperate to know where we are heading and certainly wants to know that we are not facing no deal. As the City of London, which serves not just our economy but those of our trading partners, says, no deal “would be in nobody’s interests”. Terry Sargeant, the head of thyssenkrupp UK, said that the Conservatives were putting their survival ahead of industry, describing negotiations as,
“a complete shambles … The Tory party aren’t making decisions for business, they are making decisions to prevent an implosion in their own party”.
Business, the Opposition and even the Prime Minister’s former aide, Nick Timothy, judge the results a disaster—the latter accusing Ministers of dishonesty and saying it is now clear that no one,
“believes the proposal can win a majority in the … Commons”.
Given this, Parliament must have a bigger role over our future with the EU. First, we must state—in this House as well as in the Commons—that no deal is unacceptable. We must have the transition allowed for in the heavyweight document that we have. Not only is no deal unacceptable for the country but the Government’s technical notices indicate that 15 quangos would either have to be created or have their remits expanded; 51 bits of legislation are needed by the end of March; and 40 new international agreements and 55 new systems have to be set up. Even that is not as bad as the gridlock at Dover, Folkestone and Holyhead, the uncertainty for UK citizens abroad or EU citizens here, supermarkets lacking fresh produce and hospitals lacking vital equipment and medicines, along with vehicle manufacturing at a near stoppage, the end of data sharing and European judicial co-operation. We even read that there are “army plans for troops” on the streets.
The Government have shown a dereliction of duty in getting us to November with no acceptable deal. They must now face up to their responsibility and avoid a no-deal crash. One way is to rethink their blind Brexit—a veritable “dance with chance”. It is simply no good throwing all the possibilities up in the air to watch which way they fall or we risk another “Groundhog Month” in December 2020, when we again will not know the future. More seriously, the Government’s six and a half pages provide none of the requirements for a future close economic and security relationship with our allies and near neighbours. Indeed, it contains a mere three pages on our economic relationship with the EU—our major trading partner, market and supplier. As it stands with that future outline, we would be completely out of any customs union in 25 months’ time. England, Wales and Scotland would be out of the single market and with no alternative; it contains no aspiration for frictionless trade, no assurance on common security or the European arrest warrant and no undertakings on agencies. Worryingly, it allows for the hardest of hard Brexits.
That is a future which the Opposition will not countenance. We have always prioritised a close economic relationship with the EU and thus cannot accept a political declaration with no aspiration, let alone guarantees, about this—especially as there is an alternative on offer. Sabine Weyand says that the agreement, as we have just heard,
“requires the customs union as the basis of the future relationship”.
That is a welcome starting point but more is needed. The future framework must plan for a comprehensive and permanent customs union, a strong single market relationship giving frictionless access to European markets for goods and services, continued close involvement with agencies, clarity on immigration, full future safeguards for Gibraltar and, vitally, a robust security arrangement. Instead, we are faced only by an outline of the political declaration while:
“Negotiations on the full Political Declaration continue”.
These are promised,
“by the end of November”,
and with an undertaking that next year they will “negotiate expeditiously the agreements” concerning the future relationship. We are meant to trust to that.
The Government must sit down now with business, unions and consumer reps, who have been excluded so far, to find a way forward. They must also heed the objectives outlined by the Opposition. This House will not need reminding that 28 years ago today, Mrs Thatcher lacked sufficient votes to defeat her challenger. Of course, that was in the days when assassins knew how to be assassins; judging from last night, perhaps the DUP MPs still do. We look forward particularly to the maiden speech of the noble Lord, Lord McCrea, later this evening. Today Parliament, and the Opposition, warn this Prime Minister: take us with you over these negotiations and build a proper consensus, for the sake of the whole country, at this highly momentous time.
Baroness Ludford (LD)
My Lords, the package the Prime Minister has come back with is a bad deal: it would make Britain poorer, weaker and less secure. That does not mean that no deal is better—far from it. Only remaining in the EU is a good deal and that is what the people must now have the opportunity to choose. It was inevitable that leaving the EU would put the UK at a disadvantage compared with staying in. As for saying in a cavalier fashion, as so many Brexiters do, that leaving to trade on WTO terms would be a superior arrangement, that is like saying that Interpol is better than Europol. However, the extent of the damage has been made worse, without any shadow of a doubt, by the conduct of this Government. The following are my seven deadly Brexit sins, though speakers in this debate will no doubt add more.
First, incompetence has permeated the handling of Brexit. The most egregious example was the early imposition of red lines about no membership of the single market or customs union and the demonisation of the Court of Justice. These placed extreme and unnecessary constraints on negotiations. Then there was the triggering of Article 50 without a strategy, which meant that everything since has been done backwards, with successive retreats from the bombast of the Prime Minister’s October 2016 Tory conference speech and the hubris of her Lancaster House speech. This has led to contradictory assertions too numerous to mention. Out of many examples, I would just mention the almost total neglect of services—cited by Jo Johnson as a major reason for his resignation—which account for 80% of our economy.
Secondly, the Brexit proposition has been riddled with deceit. This started with the lies and alleged fraud by the leave campaigns, in which a variety of Cabinet Ministers are implicated. But it has fully permeated the subsequent conduct of the Brexit path as the Prime Minister grappled with turning fantasy into some semblance of reality, while trying to pretend to her party that she was not doing so. This habit of deception and dishonesty has endured through to the package deal. The Government’s note on the state of play of negotiations says that the:
“Outline of the Political Declaration … records the progress … in reaching an overall understanding on the framework for the future relationship”.
It does nothing of the kind. It is barely more than a shopping list of matters to be covered.
As for the mantra—repeated ad nauseam—of taking back control, the Prime Minister proposes in fact that we hand it over completely, as we will have to follow all EU rules and regulations for at least four years and effectively on a permanent basis, if we are to get anything like decent access to the EU single market, safeguard the interests of our manufacturers and of course keep the Irish border open. In the language of the European Commission, during the transition period,
“the EU will treat the UK as if it were a Member State, with the exception of participation in the EU institutions and governance structures”.
That is rather a large exception. This is the very opposite of taking back control. The British people were lied to big time about this. I see Nadine Dorries MP recently bemoaned the fact that the UK would have no commissioner or MEPs during the transition period—you could not make this up.
That reminds me of another piece of dishonesty. As the noble Lord, Lord Bridges, has often reminded us, the withdrawal agreement is a bridge to nowhere. Not only is there is no implementation period, as there is nothing yet to implement, but that is also true of transition since we still have no idea what type of long-term relationship we might be transitioning to.
I see that Boris Johnson accused others of peddling lies, attempting deception and having tragic illusions in his latest Telegraph column. That is as gross an example of pot and kettle as one could imagine. As his brother Jo indeed wrote on Saturday:
“For May to maintain that we’re delivering Brexit when we're actually giving away control will gravely erode trust in politics and imperil the future of the Conservative Party”.'
Just rewards, some of us would feel.
Thirdly, ignorance has been on permanent display. Of course, Mr Raab’s recent statement that he had no idea that the port of Dover was so important to Britain’s trade took the biscuit, but there have been many other examples of Brexiters showing that they have no idea how our economy works or of the importance of rules of origin and smooth customs procedures to our businesses. Many Ministers embarked on the negotiations betraying absolutely no visible knowledge of the EU’s legal and constitutional structure, competences or policies. They seem to think it is just a diplomatic club where everything is up for bargaining and cherry-picking. The “they need us more than we need them” boast is born of such ignorance. Ignorance is of course a fertile ground for its siblings, delusion, fantasy and petulance. Boris Johnson maintains that all that is needed is,
“confidence and enthusiasm and belief in this great project”.
Fourthly, complacency—a close cousin of ignorance—has been hard to overlook. The House will, of course, recall Liam Fox saying that the free trade agreement that we will have to do with the European Union will be one of the “easiest in human history”, and David Davis, on the prospect of new trade deals with non-EU countries ready to sign on Brexit day, saying:
“We can’t actually sign until the day we leave. But I've got a very strong suspicion there will be a lot of things to sign that very next day.’
I expect the Minister can confirm that that is not the case.
Fifthly, hypocrisy has been much in evidence. Brexiters hate EU freedom of movement, except when they want residence in another EU country and find they can get—or buy—a passport from another member state in order to retain free movement rights for themselves, at the same time as working hard to deny those very same rights to millions of their fellow countrymen or the businesses that want and need to recruit EU workers. We have the spectacle of Jacob Rees-Mogg securing a licence in Dublin for his investment fund to trade across the EU, while snatching the advantages of passporting from other financial firms wanting to trade from their base in London. We have seen Brexit donor hedge fund bosses boast about the fortunes they made speculating against the pound as it had a rough time on the foreign exchanges, caused by the Brexit they back. Meanwhile, ordinary citizens taking a well-earned break abroad have taken a hit they can ill afford on the value of their holiday money. We also saw the rallying cry of Westminster parliamentary sovereignty exposed as the Government fought tooth and nail for six months through the courts to stop Parliament having any say in decisions about Brexit.
Sixthly, xenophobia has been woven though the Brexit motivation. Brexiters are fond of protesting “we might hate the EU but we love Europe”, but what we have heard from Prime Minister May in recent times is a veritable torrent of hostile environment xenophobia. In her Tory conference speech two years ago, there was the notorious condemnation of her countrymen who believe in liberalism, openness and internationalism as “citizens of nowhere”. Then there was the otherwise inexplicable failure to give a unilateral guarantee to EU citizens here—with a reciprocal assurance from the EU 27 to Brits in their countries practically guaranteed—of their future rights as acquired to date. Yesterday, she accused EU free movers of being “queue jumpers”. Is she seriously saying that they prevented her opening the doors to Indian IT workers or Bangladeshi curry chefs? In fact, it was her intransigence on work visas for Indians that scuppered the EU-India trade agreement.
Lastly, Brexit has been a project not of construction but of destruction. One sometimes hears the term “destructive technology” used of new business ideas. Personally, I have never understood how the bright young things who use this term expect to get support from the wider community for projects which are intended to destroy their livelihoods, but the Brexit project does not even have the figleaf of “creative” to justify its destructiveness. Its negativity is just a game to many of its sponsors. It will kill off jobs. It threatens peace in Northern Ireland. It rips us away from our best friends and allies. It imperils the stability and coherence of Europe. It puts Gibraltar at risk of encroachment by Spain, and the Falklands at renewed risk of Argentinian scheming as we seek that country’s agreement to a rewriting of the WTO schedules. Many EU trade partners are getting the chance of more bites at the cherry as we ask them to roll over those agreements. And despite the Prime Minister’s declaration of devotion to “our precious Union”, Brexit imperils the unity of the United Kingdom. The disdain and contempt shown by some Brexiters for the Good Friday agreement will not be easily forgotten in Ireland, south or north.
Nothing can make up for the way these sins have infected the past two and a half years, but the Government and the Prime Minister have a last chance to redeem themselves in a display of unaccustomed honesty, courage and decency by putting the country first instead of Tory party unity, which did not work out very well. The Prime Minister had a flash of such honesty when she said last week that there are three possibilities: her deal, no deal or no Brexit. So she should tell the public that they cannot have the “exact same benefits” of the EU while being outside it, and that the only fair and honourable course of action is to give them the final say, so they can choose to remain in the EU. The Government should immediately and transparently begin contingency planning for a people’s vote in parallel to contingency planning for a no-deal Brexit. Let us have an end to deceit and hypocrisy and give the voters the final say.
Lord Dykes (CB)
My Lords, I thank the noble Baroness, Lady Ludford, for her excellent remarks. It is very heart-warming to see that the Liberal Democrat group is unequivocally in favour of the option of remaining in the EU. We are glad that there is at least one group. In comparison, for the first time in post-war Britain the Conservative Party has become anti-business and adopted a far-right ideology in pursuit of a crazy scheme, and the Prime Minister has made so many huge and needless mistakes in these faulty negotiations that all options have to be on the table now.
I agree that there has never been any explanation by British politicians of how the European Union actually works. It is a collection of sovereign countries. None of the other countries is worried about losing its sovereignty. Why is Britain worried about losing sovereignty by being a member of the EU? Individual sovereignty is strengthened and reinforced every time collective sovereignty is agreed in treaties or by whatever mechanism. The whole union gets stronger, as does each member state. Even small counties recognise and understand that more than this country, with our proud history.
We took 12 years, with two French vetoes, to get in, and then suddenly we started grumbling about things. That was the whole pattern, including from many Conservative politicians of a particular ilk over the years. That is very important, too.
I shall make just a couple of very quick but, I hope, profound remarks—they will have to be quick because of the time. The priority surely must be to think about the younger generation in this country—the people who are now beginning to think about voting in these matters if they get the opportunity and, whether or not there is going to be a general election, are considering that. That is a major matter for them. There are new, younger voters coming on the roll for the first time. Sadly, older members of our national electorate have died since the previous referendum. So the picture is changing. The diehards might want to stay with the so-called instruction of yesteryear, but that instruction is increasingly out of date and in reality they cannot.
By the way, there is one crucial element of our membership of the European Union that is applicable in particular to the younger generation: EU citizenship and the protection of the European Court of Justice. Our comics—called “newspapers”—in Britain have never mentioned that at all. Not even the BBC mentions it, but people are beginning to realise as time goes on that if we were to leave the European Union, we, particularly the younger members of our society, would lose the essential protection of European citizenship, which was granted by a sagacious Government, working with others, in the Maastricht treaty. We thank John Major again for doing that. He dealt with his recalcitrant colleagues—the word begins with “b” but I will not say the rest of it—better than Theresa May has done in the sad, dreadful episode of the gradual perdition of this country as this daft scheme goes on and on.
That means too that the media have to report these things properly. There is a huge amount of dismay about the BBC and how it is reporting this. It is the national broadcaster of this country, much loved by us all, quite understandably, and we hope it has a prosperous future, not least because there are some menacing Tory Peers who would like to do away with the BBC in its present form and with its present financing system. However, the BBC, newspapers and others must mention all the options. There is no question of the remain option being less important than the others. If three options are the present deal, trying to make the present deal better and no deal, the fourth is remain. Going by the latest figures that we have, the polls are showing that more and more people want to remain in the European Union. That is the nature of the body politic that we are now confronted with, and this House and—even more so because it has the greater power—the House of Commons have to realise that and decide what is right for the country in recommending that the people now have another say.
The Lord Bishop of Leeds
My Lords, only four months remain before we walk arm-in-arm to the sunlit uplands where the easiest deal in history will have been made and everybody will be happy—except we know that this is not the case.
Other noble Lords will concentrate on the details of the deal—a word I loathe because it reduces an existential question simply to a matter of trade and transaction—and the position in which it leaves us. I want to pick up on one line of the Prime Minister’s Statement to the House last week, which I questioned in the short debate on Thursday:
“If we get behind a deal, we can bring our country back together and seize the opportunities that lie ahead”.—[Official Report, Commons, 15/11/18; col. 1982.]
I asked if the promise to bring our country back together was credible and achievable and, if so, how it was to be done. The answer was simply a repeat of mantras about the deal.
I thought I was being helpful to the Government by inviting a response such as, “The country is split down the middle and the language and behaviour around Brexit have become toxic even in this Parliament, so it is not going to be easy to reconcile people and parties in the wake of such a divisive issue—but, in acknowledging the size of the task, we intend to pay attention in due course to the language, symbolism and mechanisms of reconciliation”. Because this is the challenge here. The Government, by virtue of being the Government, have a primary duty to pay attention to such reconciliation: to the healing of relationships that have been fractured by this process and the restoration of trust as a public value.
I am not making a case for leaving, remaining, wishful thinking or dreaming. The referendum happened and the rest is history, or at least history in the making. However, the factual phenomenon of Brexit—its language and behaviours, its polarising aggression and its destructive reductionism—will not be addressed by statements about getting behind a deal and people romantically falling back into line. That line has been crossed in our public discourse and I think two things have exacerbated it: first, the repeated implication that the “will of the people” is immutable and clear; and, secondly, the fact that the nature of the split down the centre of the United Kingdom is being ignored.
This raises a question of honesty—honesty with the people of this nation. To ask for honesty is not to accuse anyone of dishonesty, but we hear little or no acknowledgment of the fracture that polarises our people: a fracture that will be neither addressed nor healed by the repetition of mantras about a glorious future. This is not about Brexit as a choice; rather, it is about Brexit as a cultural phenomenon and what has happened as a consequence of the referendum. Social media is not the most edifying place to seek enlightenment and calm reflection—you have to wade through acres of muck to find any gems. But where the gems are to be found is precisely where adults behave like adults: they face reality, whether or not reality reflects their own preferences; they moderate their language in order to prioritise relationships and values over conflict; and they show a willingness to listen before speaking and an ability to look through the eyes of their interlocutor.
I admire the committed resilience of the Prime Minister and the remarkable expertise of our civil servants, but I appeal again for those engaged in this debate to take seriously the language of the discourse, not least in how we speak of those in the EU with whom we deal. I appeal again to the Government not to dismiss with easy words the crying need for an honesty in discourse that sets people free to grow up and own the truth about the deep challenges that we face, and to offer the people to whom we are accountable, and whom we are called to serve, a model for reconciliation and hope.
Whatever happens, the Church is committed to stand with and serve those who suffer, especially the poor, marginalised and disenfranchised people in our communities, but we need an articulation of political vision that goes beyond economics and trade. So what will those in power do to offer language and symbols of reconciliation and hope in practical ways that recognise the divisions and take seriously the need to bring our country and our union back together?
Lord Morrow (DUP)
My Lords, my party, the DUP, wants to see an orderly withdrawal from the European Union. The United Kingdom, which of course includes Northern Ireland, joined as a single entity and on the same terms and conditions. It is therefore important that we leave in the same manner. However, it is quite clear that this is not the way that it is planned. It is patently clear that Northern Ireland is to be treated differently from the rest of the UK.
Furthermore, the draft deal fails to deliver the referendum result in every part of the UK. It leaves Northern Ireland subject to the rulings of the European Court of Justice. It creates a democratic deficit whereby Northern Ireland would become subservient to EU legislation with no representation at all. The draft agreement would establish significant differences between Northern Ireland and the rest of the UK, as set out in annexe 5 to the protocol. It means Northern Ireland remaining in the EU single market rules for goods, including food standards, while Great Britain does not.
In terms of the settled constitution of the precious union, I shall make it very plain: the draft agreement, if implemented as printed, will ultimately threaten the future of the union, something that the Prime Minister continually repeated would not happen. Furthermore, any risk of differentiation or division between the component nations should be avoided, irrespective of how low the chance is of the backstop taking effect.
The very fact that Northern Ireland is singled out for special treatment should ring alarm bells even at this stage. If the concept of regulatory divergence and continued membership of the single market exists in the embryo of the withdrawal agreement then it is quite possible that the architects of the EU project, driven by the historic pro-republican agenda of the EU bureaucrats, will ensure that this embryonic prototype of an all-Ireland converged economic entity will be nurtured to the point of birth, and then rescuing the political union with GB will be well-nigh impossible.
The wording of the draft withdrawal agreement also ensures that Dublin and Brussels hold an active veto on whether the backstop ceases in Northern Ireland in future. Both options—the review mechanism or an extension to the transition period—fail to allow the UK to unilaterally move away from the arrangements should it wish to do so. This could leave us in an indefinite limbo and make it harder to leave the backstop than to leave the EU itself. The ability to supersede the backstop in whole or in part also expresses a danger that Great Britain may be able to leave the backstop but Northern Ireland has to remain. We would be handcuffed to the EU with Brussels holding the keys. That is not taking back control, in my opinion.
We are not alone in our resolve to oppose the risk that this deal presents to the union. Departing Cabinet members hold to our view that this agreement would break up the United Kingdom. Labour has described it as a de facto border in the Irish Sea. The parliamentary debate in the coming days should not be framed as a binary choice between a bad deal or no deal. We believe that there is widespread Cross-Bench support for a deal with the EU, but not this one. We will not, as some have suggested, step back from our commitments to defend the security of the union and protect the long-term economic interests of Northern Ireland. Ultimately, that cannot be guaranteed by this deal, and for that reason, my party cannot in good conscience support it.
Convergence of the political structures and economic alignment has been a cornerstone of Sinn Féin/IRA for decades. Strip out all symbols of British and unionist culture and replace it with “shared space” and “shared future”, which of course is just political speak for cultural and economic assimilation of the pro-union people. This strikes me as a modern day Trojan horse.
Lord King of Bridgwater (Con)
My Lords, I entirely understand the strength of feeling of the noble Lord, Lord Morrow, having devoted a few years of my life to ensuring the right of Northern Ireland to be part of the United Kingdom by virtue of the democratic wish of the people of Northern Ireland. Clearly, the issues we are discussing now are of great concern to them.
I start as a remainer. With many others, I felt the shock of that referendum result: unplanned, unexpected and coming with various promises and assurances which had no justification, as has now been proved to be the case. Having recognised that, we in this House now have a responsibility to decide the right way forward. There is a great nation out there which is bemused, confused and does not understand most of the issues involved but is deeply unhappy about the way in which personal hostility and argument is springing up within families in all different parts of our kingdom.
I agree with the Prime Minister that there are three options. One is to remain, one is to have no deal and the third is somehow to find our way through to a deal that can be acceptable to the greatest number of our people.
Although I am a remainer, I simply do not think that it is realistic to have a second referendum. The referendum stands. I look at our history in the European Union, when our position was as leader of the “larger but looser” brigade, the people who were not looking for ever-closer union within Europe. That position would now be completely undermined if we were to reappear, when it was always felt to be part of our strength that we warned them that if we did not get a sensible outcome, we would probably leave. If we came back begging to be part of the Union again, it would be very difficult. Our arguments have taken place against the background of some evidence in the European Union, not least from President Macron, of a determination to establish a much closer union in the field of defence as well. That is not an easy or acceptable option.
The second option is no deal. Of course, there have been masses of scare stories: the risk that Dover will be locked solid, that planes will not fly, that there will be food and medicine shortages and that the Army will be guarding petrol stations. They may be scare stories, but if you read the explainer document, it brings home very clearly the enormous number of issues that must be covered which, if we had no deal, could give rise to various serious difficulties. That is before one even discusses the impact of no deal on the City of London; on industry, especially the just-in-time industry; and on postponing decisions, either cancelling new investment or otherwise delaying it. I know about that personally. How can a sensible board of directors, with all the uncertainty, embark on major investment at this time?
The third option is to continue to work on the deal. As the Prime Minister found to her cost, everyone can find something wrong with the deal. She learned that over three hours of parliamentary exposure of the different items therein. Against that, some of us had the opportunity to read the explainer document, if not the major, massive tome. I was impressed by some of the things in it. I thought that the paragraphs on the common foreign and security policy, on security-related sensitive information and on participation in the transition period showed evidence of sensible negotiation between two sides trying to find a way forward. It is against that background that I do not suffer from the same neuralgic reaction that every mention of the ECJ must be very bad news. We have lived with it for 40 years, and a year or two more I do not find totally unacceptable if it leads to a successful outcome and final independence.
The noble Lord, Lord Morrow, talked about the problem of the backstop, and the only other issue that I raise is exactly that raised by my noble friend Lord Howard: the lock-in and not having the option. That is obviously the issue that must be tackled—I hope that the Minister will tackle it in winding up—because, in the end, we are an independent nation. In the end, we could take the law into our own hands, but that is the last thing one would want. One would want sensible arrangements in which our position could be recognised.
Lord Reid of Cardowan (Lab)
My Lords, I will say this for the Minister: he has an enduring self-confidence at the Dispatch Box, even if it is totally unrelated to reality. Every time he speaks, I am reminded of the 19th-century general who telegraphed his headquarters saying, “Our left flank is completely lost, the right flank is being overrun and collapsing. Situation satisfactory. I shall attack”.
Despite the confidence, the reality is that after two and a half years of division, discussion and debate—sometimes acrimonious—we now have arrived at an impasse. We have an impasse in Brussels: despite everything that is being complained about, there is nothing more to be gained there. There is an impasse in the House of Commons, which we can ignore if we like, but there is gridlock there and no majority for anything, in my view. There is an impasse inside the Government and the Conservative Party, with a staunch minority wanting to get rid of the Prime Minister but not staunch enough to get 48 people to write a letter.
How did we get here? I think we got here for one simple reason. Among the many—I will not call them lies—fake news items during the referendum, there was one central self-delusion. That was that we could have all the benefits of the membership of the European Union without paying the price in obligations. Everybody in every land knows that that is a nonsense. That is why there is the expression, “You cannot have your cake and eat it”, but we were told we could. In France, I think it is having, “le beurre et le prix de beurre”. No doubt there are similar expressions in German and other languages.
It is the common sense of Europe that you cannot have all of those rights without the obligations, yet that was the delusion that was perpetrated for two and a half years. That is why we ran through this gamut of Brexits: the hard Brexit, the soft Brexit and the blindfold Brexit, and ended up with a sort of hokey-cokey Brexit, with one leg in and one leg out, shaking it furiously about to the bemusement of Brussels and the humiliation of the country throughout the rest of the world. It is not going to be changed.
How do we get out of this impasse—this gridlock? I disagree with the noble Lord, Lord King, who spoke passionately on this. There is only one way and that is to put it back to the people. If Parliament is incapable of reaching a decision, as I predict will happen over the coming months, then the people who made the decision must be allowed to revisit it. Why is this? It is not because I am a remainer who automatically assumes that they will change the decision. They may or may not, I do not know, but I know one thing: democratic decision-making—meaningful votes as they call it in the House of Commons—depends on meaningful information. We now know legal, political, social and economic and fiscal information that was not known at the time the decision was taken. In almost every other contract in Britain, from buying a washing machine to going through a divorce, a preliminary period for reflection is allowed if further information comes to light. Let us do the right thing: admit that this has been a mess and will continue to be so as long as we deprive the people of their democratic right, in the light of all the information known now, to make that decision. It should be a people’s vote and a people’s decision.
Lord Steel of Aikwood (LD)
My Lords, only a week ago one of the Prime Minister’s close aides told a journalist that he should just wait a minute until we got a deal, then everything would be all right: the pound would rise, and the momentum behind it would persuade wavering Tory MPs to support it with their votes. It has not worked out that way. The pound has fallen and more Ministers have resigned, some campaigning openly to replace the Prime Minister. I was first elected to serve in this Parliament way back in 1965. In all those years I cannot recall a time of greater chaos in Government than we see today. I do not blame the Prime Minister; I actually feel rather sorry for her, although I find her reiteration of the phrase “national interest” rather grating, as she appears to conflate it with her own.
Most sane people regard the prospect of crashing out of the European Union without a deal as devastatingly damaging, which leaves us with this defective deal where we remain substantially under European Union rules at great expense but without any say over the policies, as we shall have left. That does not seem to me an attractive proposition. Until recently, I considered a second referendum to be a forlorn hope, but it now seems to have gathered support, not just because of the march in London, nor the growing number of voices for it, but for another reason not so far mentioned. This month we have seen a remarkable number of ceremonies commemorating the centenary of the end of the First World War. People have seen the German President lay a wreath at our Cenotaph. They have watched the handshake of Macron and Merkel leading France and Germany, and they have therefore been reminded why the nations of Europe decided to form a cohesive alliance. This was never referred to during our referendum when all that seemed to matter was the duplicitous slogan on the side of a bus.
Last month, the Royal and Ancient Burgh of Selkirk —the small town where I live—celebrated 20 years of its twinning with the small German town of Plattling close to the Austrian border. I went for the first time, with about 50 others, and at the official dinner sat with the Bavarian Minister who was representing their Government. Both towns lost men fighting in both wars, but Plattling suffered something we in Selkirk did not—the loss of over 400 civilian lives in one night in an allied bombing raid on its railway station. The Minister pleaded with me that we should not pursue Brexit. Yes, the European Union is not perfect; yes, it needs to be less bureaucratic and more accountable; yes, we made a poor deal on fisheries when we joined. But these are all matters we should stay to sort out and which we cannot alter if we just walk away.
That is why I now believe that the noble Lord, Lord Reid, is right: to escape from the current shambles it is vital that we go for a people’s vote.
Lord Hennessy of Nympsfield (CB)
My Lords, the European question has long vexed us, as a people and a country. When the wind from Europe blows through the corridors and Chambers of the Palace of Westminster, it scars our politics and sears our national conversation to a degree unmatched by any other issue. It can chill premierships—occasionally fatally. It is the great disrupter of post-war British politics; a story of showdowns punctuated by sometimes fierce parliamentary set-pieces.
The Prime Minister’s Statement on the draft withdrawal agreement last Thursday was just such an occasion. As I watched the debate from the Gallery, two thoughts crossed my mind. One was very fanciful: I could almost sense the hovering wraiths of Prime Ministers past who had faced their own version of Euro torment at that very same Dispatch Box. Secondly, I felt a pang of sympathy for Mrs May. Why was this? It was because, listening to the Prime Minister, I was struck by how heavily freighted her Statement was by multiple capital Q questions, all of which swirl and entwine one with another in the circumstances we face. There are more than any previous Prime Minister encountered and they all require considerable feats of statecraft. By my calculation, there are now seven in play.
The European question itself has reopened the “Britain’s place in the world” question with which we have grappled since the Suez crisis of 1956. The Irish question is revived in a new form. The union of the UK question is also in play, because a brutal Brexit would surely inflame the likelihood of a second independence referendum in Scotland in the 2020s. The condition of Britain question has also been re-posed by the inequalities of life and life chances across the kingdom, thrown into sharp relief by the 2016 referendum. The standard model of our left/right politics is also under serious pressure. It has never been able to handle the European question, which fissures parties from within, rather than between.
Since we debated the Government’s post-Chequers White Paper in July, I would add a seventh question: Parliament. Parliament itself is being seriously stress-tested in its primary function of being “the grand inquest of the nation”, to use the venerable term. In passing, I commend the report of the House of Commons Procedure Committee, published last Friday. It suggests ways in which this might be done in next month’s debate in the Commons, so that every part of the spectrum of opinion on Brexit can feel it had its moment on the Floor of the House of Commons. This is important because, as all noble Lords know, Europe is a great arouser of grievance politics.
I hope that the draft withdrawal agreement makes it to treaty form. A harsh exit would generate the rawest of capital Q questions in the short term, stretching the public’s faith in government as a protector and provider. Somehow, we must rediscover that political genius in which we once took such pride and draw deep—very deep—on our wells of civility and tolerance. The first people we need to get on with when we are through all this are ourselves.
Lord Pearson of Rannoch (UKIP)
My Lords, I know this will not be popular, but I find myself having to say to the Government, “I told you so”. I told them so in my speeches at Second Reading of the EU withdrawal Bill on 30 January this year, and at Third Reading on 16 May. I refer anyone who is interested in this sorry history to those speeches. The Government did not listen and now they, their civil servants and our political media—none of whom have ever done a deal in their lives—have come to resemble a huge flock of headless chickens. Except that headless chickens do not squawk and there is an awful lot of squawking about Brexit these days. Perhaps the analogy should be the Gadarene swine; presumably they squealed and snorted quite a bit on their way to destruction. The only trouble with that analogy is that, this time, the swine are taking the country down with them.
I suppose I should briefly repeat the obvious way forward, which every businessman who knows how to do a deal and who understands the EU can see. We should stop negotiating with the European Commission, whose only interest is to keep its project of European union afloat. We should make an offer directly to the people of Europe, through the Council of Ministers. That offer should include continued mutual residence for a period of time, and continuing free trade on our present terms but under the World Trade Organization instead of the Luxembourg court. That gets rid of the so-called Irish border problem. We should continue to offer them security through the Five Eyes and Cheltenham, and only when all that has been accepted should we agree on how much money we will give them, if any. All of those offers are much more in the interest of the people of Europe than they are of ours, so why should they not be accepted?
In conclusion, I ask the Minister not to repeat the misleading answer he has given me before when I have suggested this way forward: that we cannot resile from paragraphs 2 to 5 of Article 50, which are what force us to deal with the Commission, because we are a law-abiding country. In other words, we would be breaking the law if we did so. However, there have been some 225 unilateral withdrawals from international treaties since 1945, including by the UK, so we can do it if we have the political will and the common sense. I fear that the Minister will not agree with me, so the best that I can hope for is that we might return to this concept if the Commons votes down the present proposal and we all go back to square one. That might be the best that we can hope for now.
Lord Browne of Belmont (DUP)
My Lords, this is a most significant moment for our nation. It is vital that everyone’s right to debate and examine the draft deal is respected. My position on the proposed deal and that of my party—the Democratic Unionist Party—is in line with what we have previously said in your Lordships’ House, in the other place and in private conversation with Her Majesty’s Government.
In its current guise, the text of the draft withdrawal agreement would establish fundamental differences between Northern Ireland and the rest of the United Kingdom. Indeed, as my noble friend Lord Morrow has already pointed out, Annexe 5 in particular would mean that Northern Ireland remains in the European Union single-market rules for goods, including food standards, while Great Britain would not. In practical terms, this would mean increased checks on food and agricultural products entering Northern Ireland from Great Britain, which would create new barriers for businesses, including supermarkets. In our eyes, such a solution is unthinkable and cannot be described as anything other than a border in the Irish Sea.
The deal that has been negotiated by the Prime Minister and the Government is much different to that described in speeches and announcements during the course of the past two years. Indeed, if we take Lancaster House as one example, one would have expected that any draft before us would have freed the UK from the customs union, the single market and the diktats of the European Court of Justice. This is not the case and in our opinion the draft agreement fails to deliver the referendum result across the United Kingdom. It leaves Northern Ireland subject to the rulings of the European Court of Justice. It creates a democratic deficit whereby Northern Ireland would become subservient to EU legislation with zero representation. In real terms, Dublin legislators would have vast influence over swathes of rules governing us, while elected representatives in Belfast or London would have none. This violates the principle of consent. It also extends the role of devolved institutions and grants a joint committee a significant input into local affairs. This collectively amounts to a breach of the Belfast agreement.
The precise wording of the draft agreement also ensures that Dublin and Brussels hold an active veto on whether the backstop ceases to apply in Northern Ireland in the future. Both options—the review mechanism or the extension to the transition period—fail to allow the United Kingdom to unilaterally move away from these arrangements should it ever wish to do so. This could leave us in a state of permanent limbo and make it difficult to leave the backstop. The ability to supersede the backstop,
“in whole or in part”,
also expresses a danger that Great Britain may be able to leave the backstop but Northern Ireland has to remain. That is not taking back control.
Under the plans before us, Northern Ireland would be locked into an arrangement whereby a substantial number of our laws will be made elsewhere. Regardless of how damaging they are to our economy, we will have no choice as to whether they should be implemented, nor will we be in a position to amend them. The extent of the barriers between Northern Ireland and our main market in Great Britain will be dependent on what the EU deems necessary. We are not alone in our resolve to oppose the risks that this deal presents to our precious union. Departing Cabinet members hold the view that this agreement presents a real threat to the United Kingdom. The Labour Party Front Bench has described it as,
“a de facto border in Irish Sea”.
My party—the Democratic Unionist Party—will not step back from its commitments to defend the security of the union and protect the long-term economic interests of Northern Ireland people alongside those in Great Britain. Ultimately, neither of these things can be guaranteed by this withdrawal agreement, and for this reason I cannot support it in its present form.
Lord Bridges of Headley (Con)
My Lords, I share many of the concerns that have been expressed about the backstop, but I will focus my remarks on the political declaration. As the noble Baroness, Lady Hayter, and others have remarked, I argued back in January that the political declaration that sets out the future framework of our relationship with the EU had to be a clear heads of terms, so that the transition that we will enter into is a bridge to a fixed destination, not a gangplank into thin air. My fear is that, at the moment, the document that we have before us is very long on aspiration but rather short on hard, copper-bottomed commitments.
I realise that the Prime Minister is negotiating this document further this week, but if it remains in its current situation, this matters greatly, because once we sign this agreement, we will lose much of our negotiating leverage; we will have signed the cheque. The backstop will then become legally binding as a treaty and it will also become the EU’s baseline in its negotiating position. So it is absolutely mission critical that the Prime Minister sticks to the pledge given by Downing Street a few weeks ago that,
“there can be no withdrawal agreement without a precise future framework”.
If it is precise, the chances that we will fall into the backstop obviously begin to recede. We can, however, as has been said, be pretty sure about what the final destination is. The political declaration states that our long-term relationship should,
“build on the single customs territory”.
What does that mean? We have been told what it means by the EU’s deputy chief negotiator. It means:
“This requires the customs union as the basis of the future relationship”.
The UK,
“must align their rules but the EU must retain all controls”.
I hope that the Government will have the honesty to say clearly in the days and weeks ahead whether this is or is not the case.
The fact that the UK might be trapped in a single customs territory by the backstop or might enter into the customs union under the political declaration is why some in this House and many in the other place argue that the agreement should be opposed. My hunch is that Parliament will not allow us to leave without an agreement. So, although entering into a transition period would avoid the possible chaos of a no-deal Brexit, I fear that without clarity—real clarity—in the political declaration, we will not have solved the underlying, fundamental problem that we have faced for months.
The problem is this: ever since the general election, the Prime Minister has effectively been in office but not in power. She has been unable to negotiate with the confidence that her strategic aim in the negotiations has the support of the majority not just in Parliament but also, crucially, in Cabinet. That weakness has largely led us to where we are now. So if we are to sign an agreement, unless there is this clarity in the political declaration, that uncertainty will continue. We will continue to twist in the wind as the interminable debate about our future relationship continues. Worse, the EU will be able to dictate the terms in the next phase of the negotiations.
If we want to avoid this, we will have to do what we have failed to do so far. That is to be honest about the situation that we are in and find the courage to compromise among ourselves here at Westminster. The challenge is not to come up with new policy approaches: we know all the options. The challenge is to settle on an option and an approach that commands a clear parliamentary majority and to present it honestly to the British people.
Let us wait to see whether the political declaration contains the precise, clear position around which we as a Parliament might coalesce. I somehow doubt it. If it does not, while I believe that we must honour the referendum result and leave the EU, the Government must confront the reality of the parliamentary arithmetic and compromise to find a position that commands a guaranteed parliamentary majority. Only then can the Government try to retrieve the situation and negotiate in the next phase of negotiations with real force and conviction.
Baroness Smith of Newnham (LD)
My Lords, the noble Lord, Lord Bridges, has just given the Prime Minister an even greater challenge than she already had. For months she has been listening to the European Research Group, which has set out what effectively became her red lines. However, to find an agreement that the whole of Parliament will agree with will be somewhat difficult.
I had planned to start my speech along the lines of my noble friend Lady Ludford, and I quote Nadine Dorries:
“This is a very sad place to be. But unfortunately, the future of the country and of our relationship with Europe is at stake. This deal gives us no voice, no votes, no MEPs, no commissioner”.
In the words of the noble Lord, Lord Pearson of Rannoch, “I told you so”. Or rather, some of us suggested that leaving the European Union and ending up with an arrangement that left us somewhere with a Norwegian perspective would leave us with paying, obeying, and no saying. Therefore, rather than expanding the discussion about chickens, swine and groundhogs that we have heard over the past two and a half years, I will focus a little on some of the other questions that have been raised in the withdrawal agreement.
If the Government are really proposing that this should be voted on by the other place, does the Minister—I believe that the noble and learned Lord, Lord Keen, will reply —agree with the noble Lord, Lord Callanan, who suggested that this agreement will secure the rights of 3 million EU citizens and 1 million UK nationals? Yesterday, I was talking to a group of young people who said that they are still concerned about their rights; they included British students who are currently studying at other European universities. At the moment, the United Kingdom has guaranteed the rights of European students studying in the UK, so that if they are already here, their rights will be guaranteed until the end of their courses. Will that be true for British students studying elsewhere? As far as I can see, the 585 pages are unclear.
Will people currently living in the United Kingdom, exercising their rights as EU citizens, be able to continue to reside here without any retrospective requirements for comprehensive sickness insurance? This is one of the issues that many people residing in the UK were not aware of, yet they discovered that they could not get residency because they had not had CSI. There is a range of questions which this very comprehensive document does not include. If the Government propose that the comprehensive and thorough agreement is to be accepted, does it guarantee the rights of citizens, as we were told?
Looking forward, this agreement would give us no say. Almost every page says that there are ways in which the UK will be beholden to the European Union and subject to its laws. Very occasionally, we might be allowed to send an expert or a representative to sit at the table—they might even be allowed to speak, but certainly not vote—and on many of these issues we will be required to pay.
Have the Government worked out how much this transitional withdrawal agreement would cost the United Kingdom? Looking forward, if this is the model and the starting point for a future relationship, what is the cost likely to be? Will it in any way enable us to take back control? If not, and no deal is not an option, is it not time for us to think again, or perhaps to ask the people of the United Kingdom to think again?
Lord Kerr of Kinlochard (CB)
My Lords, it did not have to be like this, and the drafters of Article 50 did not think it would be. The article makes no mention whatever of a political declaration. It mentions a framework. It says that the divorce treaty negotiators must take account of the framework for the future relationship. Where is that framework? You cannot take account of something that does not exist. The sequence has been reversed, and all we have is this seven-page checklist of issues and aspirations for future negotiation, no doubt now being fleshed out with added adjectives. Where are the agreed architectural blueprints, the agreed struts and girders of the future relationship? Where are the concrete mutual commitments? They do not exist, as the noble Lord, Lord Bridges, elegantly pointed out.
In order to avoid further government defections, the language now being written will no doubt remain sufficiently loose to cover options we well know the 27 will not look at. Maybe we will see the Chequers common rulebook come back again, or the magical thinking about technological frontiers. The 27 know that, once we have left, each of them has a veto. The divorce terms need only a qualified majority in Council, but the forward-looking treaty, when it is written, will require unanimous approval and 27 EU countries national ratification. So their hand is much stronger, and our negotiating capital drains away the moment we leave.
How we got into this mess is a subject for another day. Suffice to say that this is what happens if you continually kick the can down the road, avoiding honest debate on the real trade-off between sovereign autarky and economic well-being. This is what happens if you table no framework proposals and start the Article 50 clock disunited as to destination and strategy. Decisive only in indecision, this is where you end up, offering the country only a blind Brexit and the certainty only of many more years of uncertainty, damaging investment, growth, jobs and incomes.
The incentive for the 27 ever to end that uncertainty is not obvious. At least until late 2020, perhaps 2022, we would apply all EU rules and ECJ rulings, although we would have no say in their making. If the backstop then kicks in, it gets much worse. Still unable to conclude third-country deals for trade in goods, but now with regulatory and fiscal checks on our trade with the 27, we get the friction without the freedom. Why would the 27 rush to end an arrangement so unbalanced in their favour?
We need to stop and think. Crashing out would be crazy, but the Prime Minister has acknowledged that this humiliating treaty is not the only alternative. Continental Europe would willingly stop the clock if Parliament were to decide to put the question back to the country now that it is clear what leaving would mean. The polls show that the people want to be asked, and that two out of three believe that the deal on offer would be bad for them.
If the Government believe in their divorce treaty and that sufficient certainty about the future can be found, without any agreed load-bearing framework whatever, but simply in a vague declaration cobbled together in a week, let them put that case to the country. If the country agrees and accepts the risks and the likelihood of a protracted period of economic pain, we leave. The greatest risk of social division and constitutional disruption would lie in denying the country the final say it now wants while our destiny is still in our hands, and before we hand back control.
Lord McCrea of Magherafelt and Cookstown (DUP) (Maiden Speech)
My Lords, I am pleased and honoured to make my maiden speech today. I thank your Lordships for the kindness and support that I have received since entering this House. I particularly wish to thank my noble friends Lord Morrow of Clogher Valley and Lord Browne of Belmont for introducing me to the House. I am deeply grateful for the guidance and advice offered by all the officers and staff whom I have met, and I appreciate their helping me to learn the workings of this House in such a professional and gracious manner. I acknowledge the encouraging and welcoming words of noble Lords from across this House, many of whom I recall from my years in another place.
As a young man I had the privilege of entering local government in Northern Ireland, and served there for 37 and a half years. For 25 years, I enjoyed the thrust of public debates in the other place and several years in the Northern Ireland Assembly. However, I confess to finding this a daunting experience, having listened carefully to the richness of the contributions of noble Lords in this House today and in previous debates. Each brings a wealth of knowledge and experience, from so many walks of life.
I believe it is also important that I nail my colours to the masthead. For 50 years I served as a Christian minister in Magherafelt and only recently stepped down from my responsibilities there. With deep humility, I thank God for all the years He has given me as a preacher of the Gospel of the Lord Jesus and, by His Grace, I will seek to take my stand for Him in this House.
I am humbled to be given this honour of speaking in such an important debate today, sitting among your Lordships and contributing to the deliberations. This take-note debate on the Statement by the Prime Minister has great relevance and importance to the people of Northern Ireland; it has major implications for the future, regarding not only our exit from, and relationship with, the European Union, but the future of our precious union of Great Britain and Northern Ireland. I come from a Province that has endured years of IRA terror; many of our fairest and bravest men and women were murdered defending the union. For over 30 years, bombs and bullets bombarded us, seeking to break the spirit of our people and our determination to remain part of the United Kingdom. It is true that on many occasions these terrorists broke our hearts, but they never broke our resolve.
We are proud to be a part of the United Kingdom but I believe the deal presented by the Prime Minister threatens the integrity of that union. If these proposals were implemented, we in Northern Ireland would have to take rules from a body without any representation, governed by laws which, even if they damaged our economy, could not be changed and on which we would have no say. These proposals drive a coach and horses through the devolution settlement and our constitutional practices to suit the European Union. The nominal excuse for this is to avoid a hard land border. They have not resolved it; they have moved it and plan to implement a sea border inside our own country instead.
The Government’s claim of a United Kingdom customs solution is simply untrue. Northern Ireland will be in the EU customs territory while Great Britain will not. If Great Britain were to leave then the EU would have the right to impose a customs border. Northern Ireland is the hostage to prevent GB leaving or the sacrifice if it does. In the past week, a European customs expert has made it clear that the hard land border is a “fictitious problem” but, based on this fiction, Northern Ireland is to be pushed further away from Great Britain. Even the Prime Minister of the Irish Republic says there will be no hard border. For a backstop that is never to be used, it takes up a substantial chunk of the withdrawal agreement. The backstop is never to be used, they say, but if it were, it would be only temporary. Then we are told it is a wonderful thing—that long-term investments could ultimately be made upon it.
The people of Northern Ireland have a respect for straight talking. They do not stand anyone seeking to pull the wool over their eyes. There are those who have called for another referendum. The people have spoken. Had the people voted the other way, I wonder how many would be calling for a second referendum. The United Kingdom of Great Britain and Northern Ireland must leave the European Union on equal terms. The present proposals are not a good deal for the United Kingdom and should be rejected. My party, the Democratic Unionist Party, will do the honourable thing and vote against them.
Lord Cormack (Con)
My Lords, it is always a great pleasure to be able to welcome a new colleague to your Lordships’ House, and I am delighted to follow the noble Lord, Lord McCrea, in a very rumbustious maiden speech. He made some very gracious comments about his reception here, and then he gently forgot that maiden speeches are normally non-controversial. I do not look down upon him in any way for that but I am disappointed in him, because he is famous in Northern Ireland for his wonderful singing voice. How much better it would have been if he had sung to us. He is as well known in the recording studios of Nashville, Tennessee, where he has cut many disks of country and western music, as he is in the pulpits of Northern Ireland. Although I cannot tonight sing from the same hymn sheet, I do hope that he will enjoy many happy years in your Lordships’ House.
I would just say, on Northern Ireland, that those who come from the Province—which I know well and love dearly, having done a stint as chairman of the Northern Ireland Affairs Committee—must remember in all humility that the people of Northern Ireland voted in the referendum by a significant majority to remain in the European Union. Therefore, those who purport to represent them should always remember that.
I want to make three very simple but important points. First, whenever one leaves an institution, club or association—any gathering of people or nations—one cannot retain the advantages that membership brought. When Members retire from your Lordships’ House, they will be able to sit on the steps of the Throne and they will have dining rights and some rights in the Library, but, for the rest, they will not. I am sorry that we are leaving the European Union. I accept the result of the referendum. I am sorry we are leaving because I think whatever deal we have cannot be as good as what we are letting go of.
I appeal to everyone in this House, as in the other place, to consider very carefully what the Prime Minister has negotiated. She has shown enormous resilience and great stamina and, although there is room for tweaking and improvement, she has probably got as good a deal as she could. Before we dismiss it, we ought to think carefully about the abyss into which we would be plunging with no deal. Although I greatly respect those who call for a second referendum, I ask them just to think for a minute about the divisiveness and bitterness that has been brought to this nation by the first one and to be careful what you wish for.
If the Prime Minister is to have a proper opportunity of presenting her position to the other place, I would appeal to her to adopt the precedent of Edward Heath when we went into the European Community as it then was. I think she should grant a free vote. There is a lot to be said for a free vote, where Members are voting according to their consciences and beliefs but having to take into account the risks and advantages to all their constituents. I think she should also do one more thing: she should speak to the nation on the television, in the course of the next two or three weeks, and explain, face to face, as previous Prime Ministers have done, just what the issues are and how we can best face them together.
The one thing that must happen is that, when all this is over, we must be together as a nation. We have a great past; we can have a great future. We have made a terrible mistake, but we can get over that as well. I hope and pray that we will.
Lord Hain (Lab)
My Lords, especially as a former Secretary of State for Northern Ireland, I warmly welcome the noble Lord, Lord McCrea, to this Chamber.
The Prime Minister’s deal is a bad one for Britain, primarily because the Tory Brexiteers imprisoned her in a negotiating straitjacket which meant it could not be otherwise. They never did have a plan of their own but merely a set of slogans. On the Irish border—always the Achilles heel of their dogmatism—they promised to keep the border open with nothing other than yet-to-be-tested, fanciful, back-of-an-envelope notions, as Iain Duncan Smith and Owen Paterson breezily wrote about in the Sunday Times on 11 November. They suggested that existing national systems of reporting trade, such as for VAT or the Intrastat data collection system, could be expanded. But you cannot simply add on to those a whole new function, such as the intricate and huge task of customs declarations. Moreover, three-quarters of businesses that trade across the Irish border are small and operate below the Intrastat reporting thresholds of £250,000 for export and £1.5 million for import. So that plan simply will not work.
There is no point in having a national system that might manage exports without ensuring that the country on the other side can facilitate the entry of those same goods as imports. The systems on either side must seamlessly connect on a legally certain foundation—either as EU member states, members of the single market, members of a customs union, members of a free trade agreement, or on WTO terms. Each step down that ladder brings more friction in trade.
The rules that currently keep the Irish border open are the rules of the European Union’s customs code and the single market acquis, which Brexiteers dogmatically reject. How can they, on the one hand, point to the logic of continuing participation in existing systems, such as the EU’s VAT information exchange system, yet, on the other, insist that the UK leaves them?
Duncan Smith and Paterson claim that, even for third countries, only a small proportion of agri-food products need to be physically inspected. But this is a result of rigorous means of ensuring compliance by food producers with the very strict EU rules that Brexiteers reject. They suggested that, because all products of animal origin must enter via specified border inspection posts, these could be located some 25 miles from the border-line itself. But that would mean a serious diversion, plus an addition of time, cost, and risk—for example, to food expiry dates. How would this work on the island of Ireland, where fully two-thirds of cross-border supply chains are in agri-food products, such as in the meat and milk-processing industries? The latter alone requires 30,000 crossings annually, over 80 daily. There are currently no checks for agri-food products on the island of Ireland, because it is a single sanitary and phytosanitary zone. Imports from Britain are subject to checks at sea and air entry ports—checks that the DUP has long accepted pose no threat to the territorial integrity of the United Kingdom.
The problem for the hard-line Brexiteers is that their frictionless trade requires adherence to EU rules and systems underpinned by a legal foundation that they wish to tear up. They want to maintain all the benefits of the EU that keep the Irish border open, with none of the obligations of the EU. Perhaps that is because breaking completely free from the EU is more important to them than protecting the very hard-won peace and prosperity in Northern Ireland. This is yet another reason to support the noble Lords, Lord Reid, Lord Steel, Lord Kerr and others, in their call for a people’s vote on whether this mess or remain should be our future.
Lord Carlile of Berriew (CB)
My Lords, some two and a half years have passed since the 2016 referendum. My concern in this debate is the role of Parliament now, after not just that referendum but the reaching of the draft agreement we have in front of us. I agree with what I regard as the very cogent arguments made by the noble Lord, Lord King of Bridgwater, and my noble friend Lord Hennessy.
I suggest that our task as parliamentarians, particularly in the other place now, must surely be to cut through the recriminations and posturing which have been so clear in the last few years and clear the path to a solution, without running back to the people on the basis that we are not fit to do our duty as parliamentarians.
Parliament was advised strongly, but not enslaved, by the 2016 referendum. The Government have done their duty, in the sense that they have negotiated and presented us with a settlement of a kind, whether we like it or not. I note that the negotiations for that settlement were conducted by two strongly Brexiteer Secretaries of State, neither of whom advocates no deal as being a felicitous result. As many in this debate have said, it would be a disastrous result for the United Kingdom. I suggest that surely it is now time for Parliament to exercise its judgment. It was neither a constitutional nor empirical requirement that we should leave the European Union come what may if the result of the negotiations was contrary to the national interest.
There has always been a clear inference—and, I suggest, a constitutional requirement on us as parliamentarians—that the deal obtained should be considered on its merits by both Houses of Parliament and accepted or rejected accordingly. I fear that the current political drama—many in the Conservative Party will recognise this—has been forced on us by internal disputes within that party. I observe and venture—kindly, I hope—that now may be the time for Conservatives, particularly in the other place, to recognise that they cannot all have their own way or, to coin a phrase, “scweam and scweam”. The interests of our country should be placed above their own perceptions.
My conclusion is that there are only two realistic options, given that no deal is so plainly contrary to the national interest. Either we accept, subject to what appear to be available nuance changes, the still-available deal negotiated and agreed in Cabinet by Mr Raab before his somewhat unusual resignation the day after a passionate declaration of Cabinet responsibility; or we reject that deal and abandon the whole Brexit project as having produced a result contrary to the national interest. Those are the alternatives that should be placed before Parliament and on which Parliament, especially the other place, should exercise its responsibility with as little delay as possible.
Baroness Goldie
My Lords, time is now very tight. I ask your Lordships to watch the clock like a hawk and, when it reaches four minutes, please resume your seats.
Lord Wigley (PC)
My Lords, having congratulated the noble Lord, Lord McCrea, I say with all my heart that I wish we were now remaining in the European Union, but we are where we are. Opinion is still divided down the middle. The Welsh and Scottish Governments have significant misgivings about the effect of Brexit on our manufacturing and agricultural economy. There are also concerns about the effect of this draft agreement on devolved powers, such as those arising in Articles 75 to 78 on public procurement and in Article 93 on state aid. It is highly regrettable that the First Ministers of neither Wales nor Scotland were allowed to see the draft withdrawal agreement before it was published. It takes us out of the EU without specifying where we are going. The outline political declaration is a flimsy wish list of ill-defined aspirations.
Early on, Plaid Cymru realised the need to compromise. We contributed positively to the Welsh White Paper published in January 2017, which contained in its subtitle the words,
“a new relationship with Europe”.
We indicated that we could accept a withdrawal agreement if the Government, while leaving the EU, negotiated single market and customs union membership. But we cannot possibly support what is now proposed. Northern Ireland is given special status in its relationship to the single market and customs union, so why is that not available to Wales and Scotland—or to the whole of the UK? If this is meant to be a bridge over troubled waters, it is only half a bridge. It takes us to mid-air. We have no idea what follows after 2020. It is a blind Brexit. It pushes uncertainty two years down the road, with potentially devastating costs thereafter for manufacturing and agriculture. Ongoing uncertainty will undermine attempts to secure new investment.
The penny has now dropped with Welsh voters. They realise that this offer bears no semblance to the Brexit promises of 2016. That is why it is legitimate to ask for a people’s vote—to ask whether they really want to follow this Brexit trail, now that they know its horrendous destination. If they say yes, so be it—they will have voted with their eyes open—but if they say no, that decision should stand. It should be a straight vote between this draft agreement and the status quo of staying in the European Union. No one in their right mind wants a no-deal Brexit. That was not offered in the 2016 referendum and it should not be on the ballot paper now.
An early Commons vote should facilitate such a path. The Government should then apply to put back the Article 50 departure date—as late as the EU can accommodate, given the forthcoming European elections—or withdraw it unilaterally if the CJEU confirms that power. A people’s vote Bill should be tabled before Christmas with voting in mid-April. If the present Government are unwilling to allow a people’s vote, let them be replaced, without delay, with a cross-party Government specifically to get this done. Having had a people’s vote, then—at that point and not before—let us have a general election to elect a Government willing to turn the people’s settled wish, as expressed by a people’s vote, into a stable, lasting and outward-looking political reality.
Lord Stern of Brentford (CB)
My Lords, the Prime Minister has told us that we have three options: no deal, this deal or no Brexit. I want to speak on the economics of these options. I am a professor of economics at the London School of Economics but of course I do not speak on behalf of that institution.
Let us examine the medium-term effects rather than the very short run, which many have spoken about this evening. These medium-term effects operate through trade and investment. Trade creates opportunities and increases incomes; barriers to trade reduce incomes, and similarly with investment. Thus, economic analysis of the medium term compares the losses from increased barriers with the EU arising from Brexit with any potential gains from possibly reduced barriers elsewhere. In thinking about no deal, the comparisons are clear. In the medium term, it involves major net losses, which, drawing on work by the OECD, the National Institute of Economic and Social Research, the Centre for Economic Performance at the LSE and others, are estimated to be between 5% and 8% of GDP per annum. That means a loss of £100 billion to £150 billion per annum, which is very large compared with the net payments to the EU of around £10 billion per annum.
Although the basic intuition behind these numbers is clear and commonsensical, models make assumptions, so what do the markets say? Sterling has been 10% to 15% below the pre-referendum levels. What does business say? The CBI has described no deal as a wrecking ball. Common sense, the models, the markets and business all point the same way: no deal is a terrible option. Let us take it off the table.
So what about the deal on the table? It is too early for detailed analysis, external to government, of the kind I have described but, unsurprisingly, previous analyses of halfway houses give net losses relative to staying in the EU of roughly half those of a no-deal Brexit. The economic ranking is clear: no deal is by far the worst; this deal is less bad; but both are much worse than no Brexit.
There are two crucial examples that go beyond economics. First, I have witnessed at first hand in climate negotiations, including in Paris in 2015, how effective the UK’s leadership can be when working with and within the EU. Secondly, I work in a truly international university, where the best from Europe and the world come to us and we are the best because they do, and our students and young people across the country are in deep anguish about what we are doing to them. Let us take great care. I am deeply worried that we will do major collateral damage in areas that are at the heart of our well-being and our leadership in the world.
In conclusion, we now have a much clearer understanding of the options that we face than we did in June 2016. Surely it is right to lay the options and the evidence before the people of the UK and ask them to make a choice they have not made before: to choose between this deal and no Brexit. No deal cannot be regarded as a serious option.
Lord Lamont of Lerwick (Con)
My Lords, it is extremely difficult, as the noble Lord, Lord Steel, said, not to sympathise with the Prime Minister in this incredibly difficult situation in an incredibly difficult negotiation. She is entitled to a fair hearing and the deal to dispassionate consideration. None the less, it would be fair to say that the reception the deal has received has been less than rapturous, with criticism not just from the Opposition but from within the Conservative Party from leavers on the one hand and remainers on the other. There have been Cabinet resignations as well, and it seems obvious that some in the Cabinet, although staying, are considering their position.
It was in 1997 that William Hague campaigned in the election on the slogan “In Europe but not run by Europe”. Jo Johnson, in his resignation statement, said that we now seem to be in the position where we will be out of Europe but run by Europe—and, as the noble Lord, Lord Steel, added, at considerable cost as well. Jo Johnson referred to the inability to have free trade agreements or to make competitive adjustments through regulation. If Brexit is to be like that, it will indeed be pointless.
I appreciate that many of the restrictions or provisions to which people such as Jo Johnson and his brother object are temporary. Personally, I would support the deal if it could be demonstrated that these restrictions were indeed temporary, but we seem to be in danger of drifting into the limbo of a never-ending transitional period. For that reason, one of the biggest concerns is the key point mentioned by my noble friends Lord Howard and Lord King, and the noble Lord, Lord Morrow: the exit mechanism from the two backstops. Indeed, the Irish backstop is extremely significant, with 68 pages in Annexe 5 listing different regulations that will apply in Northern Ireland.
The Government originally asked for, but failed to get, the right to leave the backstop after a period of time. Now, the documents refer to assurances that it will be temporary. To some people, it seems as though the EU has a veto on when this period will end. If the two sides cannot agree that it is no longer necessary to meet the objectives of the protocol, the arbitration panel will come into place. However, in matters of interpretation of EU law, it has to refer to the European Court of Justice. Martin Howe QC has said that this will mean that the arbitration panel is merely a postbox for the ECJ. I know that the Minister will say that it does not matter, that it will not come into effect if a long-term trade agreement is reached before December 2020— but it will not be. It is highly unlikely that it will, as the former President of the Council of Ministers, Monsieur Van Rompuy, said on the “Today” programme just two days ago.
Does that really matter? I think it matters profoundly. The protocol means that the EU has no incentive to offer a trade agreement better than that in the protocol. The protocol is based on the association agreements between the EU and Ukraine, Georgia and Moldova, but even Moldova has a break clause in its agreement, unlike us. Is this a matter of concern to only a few swivel-eyed Eurosceptics or is it a matter of real concern and a real point of debate? This is what Carl Baudenbacher, a very distinguished judge at the EFTA Court and for a considerable time the president of the EFTA Court, said:
“It is absolutely unbelievable that a country like the UK, which was the first country to accept independent courts, would subject itself to this”.
It seems to me that we need to alter the arbitration procedures for there to be any chance of this deal passing the House of Commons.
Baroness Quin (Lab)
My Lords, my voice is not in great shape at the moment, so I am quite relieved that I have only four minutes in which to speak. I would also like to welcome the noble Lord, Lord McCrea, to the House. I am not surprised that his speech contained some controversy, as I defy anyone to make an uncontroversial speech about Brexit in the current circumstances.
A number of questions are raised in the course of considering the situation that we face. Is the deal that we have in front of us better than no deal? The answer must be yes. Does it deliver exactly the same benefits as we currently have? The answer to that is clearly no, even though we were promised such a deal by the former Brexit Secretary, David Davis. Does the deal meet the six tests of the Labour Opposition? Clearly, it does not. Is it as good a situation as we have now as members of the EU? Clearly, it is not.
Like others, I have sympathy for the Prime Minister in her current predicament. She has worked hard in the negotiations to try to get a deal that honours the outcome of the referendum and at the same time does not let the country down too badly economically, environmentally and on co-operation with justice and home affairs and all the other areas of co-operation within the EU which are of such huge benefit to our country. None the less, she has ended up pleasing almost no one.
We have heard today from representatives of the DUP in Northern Ireland about their concerns. I know that they are very concerned not to endanger in any way the union with the UK. Yet as the noble Lord, Lord Cormack, pointed out, the people of Northern Ireland voted to remain and, in many ways, membership of the EU is a good way forward for Northern Ireland. It does not break bonds between Northern Ireland and the UK, yet at the same time it allows a frictionless relationship, both in trade and other ways, between Northern Ireland and the Republic. Therefore, in many ways, it is the ideal situation.
The Prime Minister is under considerable criticism from within her own ranks, but some of that criticism seems absurd. There are complaints that the EU and the Commission are bullying. In fact—and this answers a point raised by the noble Lord, Lord Pearson, who was somehow hoping that we could appeal over the Commission to the member Governments of the EU —the Commission is carrying out a mandate from the 27 countries. We should not forget that.
We also hear complaints that we will be rule-takers and not rule-makers. We can hardly say that we do not want to belong to this organisation and at the same time complain that we do not have a seat at the table when it comes to making rules.
We are in a difficult situation and, sadly, Parliament and the Government seem disunited. Therefore, finding a situation through Parliament, although that would be a good way forward, looks very unlikely. For that reason, I join with those people who feel that, given that this process was begun by a referendum, the people need the opportunity to decide whether this deal is the way forward or whether they would prefer, after all, to remain as part of the European Union.
Lord Lee of Trafford (LD)
My Lords, its increasingly anti-European stance was the prime reason for me leaving the Conservative Party 20 years ago. Thus, not surprisingly, I was bitterly disappointed by the referendum result. But I accepted it as a democrat and did not go along with those calling for some form of second vote, recognising the potential divisiveness of that. I assumed that an agreement with the EU would be reached and ultimately approved by Parliament, but that now looks very unlikely.
The Brexiteers are rubbishing the agreement, not accepting any responsibility themselves for this ghastly mess, this national embarrassment, this actual and potential disruption to so many lives and jobs, blaming everyone else—the Prime Minister, European negotiators or poor old Olly Robbins, not themselves. We have a wholly unedifying spectacle of Cabinet Ministers resigning, others supporting the Prime Minister inside No. 10 and then bad-mouthing her outside, others plotting over pizzas, and some putting their prime ministerial ambitions well above the national interest.
If the agreement is not approved, there are three alternatives: crashing out, which everyone agrees would be a disaster; renegotiation, and it is pretty clear that the 27 are unlikely to make any further concessions; or another vote, which is now favoured by a clear majority of our population, by three former Prime Ministers, with Labour moving in that direction as well as my own party, which was the first, of course, to advocate a vote on the final terms.
We have a changing electorate. By March 2019, there will be nearly 2 million new voters. By seven to one, they want the UK to stay in the EU. Some 80% of the under-25s support remain, and it is their future we are talking about, as the noble Lord, Lord Dykes, said earlier. Next time, they would know what they were voting for—not the bogus prospectus of 2016, with its extra £350 million a week for the health service, one of the easiest negotiations ever and 40 new trade deals just waiting to be signed.
After the 2016 referendum, remainers like me were urged to respect and honour that vote. I now say to the Brexiteers: if Parliament fails to ratify the agreement, you now show the same integrity and honour that you urged on remainers like me. In these changed circumstances, support a new vote. As Rachel Sylvester states in the headline to an article in today’s Times, “Each chaotic day brings a People’s Vote closer”.
Lord Bowness (Con)
My Lords, the chaos of our proposed exit from the European Union continues to swirl around us as the latest chapter in a sorry tale. From Mr Cameron’s appeasement of Brexiteers, who were and still are the minority in the Conservative Party, to the current Prime Minister’s disastrous decision to invoke Article 50 without any agreement in the country or even in her own party as to what kind of Brexit we wanted, and the equally disastrous commitment to red lines that obviously would make it impossible to achieve the desired close and frictionless arrangements with our European partners—none of which does the Government, who I have supported, any credit.
At this late stage, there is an acknowledgement that the agreement is a compromise and that the scenario of enjoying all the benefits of membership while being free of the rules and obligations of membership was, and always has been, a fantasy. It is obvious that any arrangement that keeps us close to the European Union cannot be as good as that which we have as members. Before we espouse the doubtful procedure of a referendum, is this not the time for honesty and leadership from the Government and for the people to be told, “We have tried to do your will, but this is the best we can do”? With the knowledge that we now have, do we really want to leave? I put it to my noble friends on the Front Bench that the agreement does not meet the wishes of either leavers or remainers. How can they come to the House and tell us that they are, nevertheless, pressing on with the plan with so many opponents and which is unlikely to pass in the other place? How can they maintain the fiction that we will be better off outside the European Union?
We cannot blame the European Union. The 27 want to preserve the integrity of the Union, its institutions, the single market and the customs union. They knew what they wanted from the start and gave a clear mandate to Monsieur Barnier, while we were unable to agree among ourselves about what we wanted.
Unfortunately, this is not the end of this sorry story. We still do not have the fully agreed version of the political declaration which, unlike the withdrawal agreement, will not be legally binding. What we have is full of generalities and mere aspirations, to which we have become too accustomed over the past two years. Realistically, how long will it be before they put flesh on those bones? How long will it take?
Some who are calling for rejection of the agreement seem to contemplate a catastrophic no deal with equanimity, despite the consequences. If the agreement does not pass in the other place, what is the Government’s plan B? I hope that we will not be told, “We cannot disclose our negotiating position”. We have spent some two years trying to agree what we wanted, but now we have only a few months to plan against a no deal. Stockpiling medicines, chartering ferries and turning motorways into lorry parks may meet the short-term emergency but are not the answer for the long term. I therefore ask again: what are the Government going to do to ensure that there is no deal?
Lord Higgins (Con)
My Lords, all of those who took part in the debates which set up the 2016 referendum were absolutely clear that what we were legislating for was an advisory referendum, not a mandatory one. But the morning after the result was announced, the Government immediately took the view that we should treat it as if it were a mandatory referendum. That was despite the fact that the campaign itself was riddled with lies, fake information and deception. It is also the case that perhaps the worst lie of all was that leaving the European Union was going to be simple. No one in the Chamber this evening would take that view.
But it has presented the Prime Minister with an immensely difficult task, and we must give credit to the stamina and determination which she has shown in pursuing that objective. However, the last thing we need at this moment, I believe, is a change of Prime Minister. I have been appalled by the way in which various members of my own party have sought to undermine her position at such a difficult time.
We have been very clear that the alternatives are: this deal, no deal or no Brexit. The Prime Minister herself has put it in those terms. I am quite clear myself that, of those three alternatives, as far as the future of this country is concerned, the best thing we can do is have no Brexit. That is what we ought to aim to do, but we are stuck with the result of the referendum and therefore there is now enormous pressure for a second referendum.
On 25 October, and indeed on 19 January, I spoke at great length saying why we should not have another referendum or, indeed, any referendum. Every time we have one, we undermine the whole basis of our representative parliamentary democracy, because the referendum takes away our position as representatives and brings us here as delegates. I therefore do not believe it would be right to hold another referendum. Incidentally, what I am clear about, having spoken to many of those who joined that enormous march in favour of a people’s vote, is that 99.9% or probably even more of them were in favour of a referendum because they want us to remain. The demands for a referendum should be viewed in that light.
The question now is: if we are not to do it by referendum, what should happen? This is the time when Parliament has to look at the three alternatives and should say that, in the interests of our country, we must not go ahead with the proposal to withdraw. Here I agree with the noble Baroness who spoke from the Liberal Benches, and indeed I detect a growing feeling in the House that we ought to stand up and take that position so that we do what is right for the economy and the people of this country. It is a great regret that we did not have a vote on whether we accepted the referendum result. I think that it is high time we did.
Baroness Watkins of Tavistock (CB)
My Lords, I declare my interests as outlined in the register, particularly that I am a nurse. It is clear to me that the Prime Minister and her team have reached an agreement in principle with the EU that may well be the best deal that could be achieved under the circumstances. On Friday 16 November, the New York Times summed up the situation as follows:
“Remainers say that it will damage Britain’s economy compared with staying in the European Union. Brexiteers say it doesn’t fulfill their promise to ‘take back control’ of immigration, regulation and trade”.
Faced with this situation, no one is able to predict whether a majority in the House of Commons will support the proposal. Crashing out or leaving the EU without a deal is now recognised to be at the very least an extremely undesirable option. The people voted to exit the EU formulated on a view of UK independence based not necessarily on lies from Brexiteer politicians but on the notion of “sunny uplands”, which now seems to be at least in part a deluded vision of the future. As any elementary student of psychology would inform us, a delusion is a firm, fixed, false belief.
It is widely reported that many people voted to leave because of the expected NHS budget dividend from savings on the UK EU contribution and an expectation that free trade agreements would increase the UK’s wealth and create new jobs. As a result of underinvestment and uncertainty, the fact is that many EU citizens no longer feel it is a good time to come and work in the UK. A recent Health Foundation, King’s Fund and Nuffield Trust report predicts a staffing shortfall of almost 250,000 in the NHS by 2030. They argue that,
“Critical and lasting shortages in the … workforce mean that the forthcoming NHS long-term plan risks becoming an unachievable ‘wish list’ of initiatives to improve the health service”,
rather than reflecting reality.
In May 2018, the Royal College of Nursing, with a membership of more than 400,000, debated the implications of Brexit, resulting in a vote to campaign for a referendum on the final Brexit deal. The debate made clear the numerous implications of Brexit for the health and social care system. These are risks which, if they are not properly addressed,
“may damage population health, as well as severely impact on our members’ ability to provide safe and effective care for their patients in both the short and the long term”.
To the EU’s credit, in many quarters it has made it clear that it would still welcome the UK remaining within the EU. Recent opinion polls suggest that many people in the UK would welcome the opportunity to stay in the EU. I therefore ask the Minister, if the House of Commons fails to support the EU withdrawal agreement as outlined in the Prime Minister’s Statement, to please assure the House that the Government will not lead the country out of the EU with no deal. Instead, will the Government return to the people in a democratic fashion and give them the right through a referendum or peoples’ vote to decide whether they wish to accept the current deal as offered or, as I believe they would, decide to remain within the EU?
The Duke of Wellington (Con)
My Lords, I declare my European interests as detailed in the register. This debate is on the Prime Minister’s Statement last Thursday, which I was able to witness from the Gallery in the other place. My first and overwhelming reaction was that, in the national interest, we must support the Prime Minister. I have been dismayed over the past five days to see attacks on the draft withdrawal agreement from all parties and persuasions. This is probably the most difficult negotiation which the country has faced since the Second World War. We are leaving the European Union next year and the unenviable task for the Prime Minister over the past two years has been to negotiate terms to enable us to leave without too much damage to the economy.
It is clear to most people who do not allow ideology to overcome common sense that leaving without a deal would be catastrophic. It is also not understood by many commentators and politicians that our negotiating position with the other 27 member states is not as strong as they like to imagine. We are indeed the fifth or sixth economic power in the world but, as a bloc, the EU 27 is a much greater market and has much more economic power than us, as well as more important concerns than the effect of us leaving. So whoever became Prime Minister after the referendum faced a herculean task.
It has been a torturous process and has gone on longer than anyone would have wished, creating damaging uncertainty that has certainly affected the economy. But we have now reached a point where the Prime Minister has negotiated a text with the European Union of more than 500 pages. It would be astonishing if many people did not have objections to or disagreements with one or more aspects of the deal, but, whatever our party, and whether we voted to remain or leave, we must consider the national interest.
The alternatives are to leave without a deal, which would create untold damage, or to hold a second referendum, which I do not support. I hope that a calmer debate can take place over the next few weeks. The proposed deal is a compromise, as it was always going to be, and covers only our withdrawal and the implementation period. It will take many years to negotiate new trade agreements with third countries. We will need a lot of time to negotiate our new relationship with the EU. In fact, I am starting to doubt whether a transition or implementation period of 21 months will be long enough.
But the supreme point is that we will leave the EU next year; we must leave on the best possible terms; and then we must negotiate a close and enduring relationship with the rest of the European Union. Even to contemplate at this moment a change of Government or Prime Minister, or another referendum, cannot possibly be in the national interest. I urge Members of this House and the other place to support our nation’s Prime Minister and the interim deal she has so painfully negotiated.
Lord Davies of Stamford (Lab)
My Lords, the Brexit negotiating process has been an unmitigated and historic shambles. I am quite sure that, for decades to come, in business schools and schools of international relations around the world it will be taken as a test case of how not to conduct a negotiation.
I fear that the Government have still not learned even at this stage what the problems are that they ought to face up to. During his speech, I asked the Minister about the new financial services regime, which was held out as a result of the agreement. Of course, I knew that no such agreement had been reached, and he just gave me some PR verbiage taken from the document. We, and business, need to know whether we will be able to do corporate lending from London. Will we be able to manage in London the funds of institutions resident in and regulated on the European continent? Will we be allowed to sell retail financial products without an establishment in the country concerned? These are urgent questions of enormous economic importance. A lot of people are now sitting on contingency plans, wondering whether they should implement them. Only when they know the answer to questions such as those will they be able to take a decision.
This is not just about financial services. It is about the whole services sector, which noble Lords will know makes up 80% of the economy. It is simply waiting for answers. Nothing—nothing—is said on the subject in these jejune and hopeless documents. Let us take broadcasting, for example. We are very good at it—probably the best in the European Union. Will the broadcasting directive effectively continue to operate, under which, if any programme is broadcast anywhere in the EU, it can be automatically broadcast anywhere? Will that happen or not? We need to know the answers to these concrete, precise questions.
The Prime Minister has made a lot of mistakes. One fundamental mistake was to argue and campaign for a project that involved impoverishing the country—although not as much as leaving without an agreement would, as was pointed out by the noble Lord, Lord Stern. Nevertheless, whether we lose £50 billion or £200 billion, we will still lose money. The Government are supposed to focus on improving the economy, employment, living standards and so forth. We are headed in a completely perverse direction. After the referendum, the Prime Minister’s mistake was not going for full and permanent membership of the single market and customs union, both of which were entirely negotiable.
At the time, the Prime Minister said that she could not do that because she needed to come up with something that was endorsed by, or had the blessing of, the referendum. She then made a complete nonsense of her argument by coming up in August with this extraordinary Heath Robinson contraption called the Chequers agreement. Of course, that has evolved and been tinkered with since—but by no conceivable stretch of the imagination could it be regarded as something endorsed by or consistent with the referendum. It is something that no one at the time of the referendum could conceivably have thought of. So I am afraid that her credibility, not surprisingly, is almost at the bottom of the thermometer.
I fear that the Prime Minister is now about to make an even worse mistake. There are rumours that she intends to manipulate House of Commons procedure such that the Commons will get a vote, with no amendments or alternatives, on only two possibilities: either her deal or coming out of the Union without any agreement at all. It is what you might call the “dog in a manger” approach, or the “spoiled child” approach: unless she gets what she wants, she will ruin the party for everybody. That is not the sort of thing I would have expected from the Theresa May I knew all those years ago when I sat with her on the Tory Benches in the House of Commons, and indeed in the shadow Cabinet for two or three years. I hope that her better instincts will prevail because, if she went down that road, she would both incur the economic costs of going through with Brexit and cause something even worse: a profound political and constitutional crisis in this country.
Viscount Waverley (CB)
My Lords, I would like to have had more time to explore the point made by the noble Lord, Lord Cormack, that the people of Northern Ireland voted so overwhelmingly to remain—as did the Gibraltarians, interestingly.
The overall benefits of EU membership have never been fully understood. Regrettably, our island mentality has never sat well with the European vision; indeed, that is the case from many in this building. Globally, the timing could also not be less opportune. We face testing times, with many suggesting that our influence is on the wane, but I have no doubt that how we are recognised globally for our heritage—combined with the British virtues of inclusiveness, tolerance, sense of fair play and hard work, and the quality of our goods and services—will guide us through.
The Brexit risk calculus must be carefully assessed by Parliament but a Brexit without some adverse consequences is an illusion. Domestic party politics must and should step aside for pragmatism. The national interest demands it. No deal is tantamount to a cataclysm. Those who advocate walking away at this late stage from a potentially implementable plan jeopardise the process, pitching us towards the cul-de-sac of either crashing out or remaining. This cliff edge could be averted, provided a withdrawal agreement is reached this week.
Thus far, the negotiations have had an eye to the future, with both sides agreeing an implementable, sustainable plan, drawn up in the spirit of partnership and recognising the inevitable. I fear that prevarication could lead to a whole raft of dissatisfaction on some of the detail from member states and the European Parliament, thus jeopardising the referendum result, with its inevitable disruptive consequences. Once agreement is achieved, we can get on with the urgent task of addressing long-outstanding domestic policies in addition to the full and complete consideration of our long-term collective and individual relationships with the EU and its 27 member states. Those on the political extremes of the debate who advocate walking away are wrong. But, as a degree of comfort to them, it should not be forgotten that it is in the gift of the Government of the day, year on year, to introduce and implement policies that will stand our country in best stead and deliver the will of people.
The point of no return will, in essence, have been reached by the end of this week. Two years have brought us to the point where we should move forward with good grace, leaving the duration of the transition as a matter of common sense and arbitration. The country wants us to get on with it—and demands that we do so—so, with a degree of trepidation, nothing I have heard this evening has convinced me that we have any practical way forward other than accepting this withdrawal agreement as the starting point.
Lord Forsyth of Drumlean
My Lords, this withdrawal agreement or proposal does not deliver what 17.4 million people voted for. It is a Trojan horse, as the noble Lord, Lord Morrow, said, at the centre of our constitution and threatens our very existence as a self-governing and independent United Kingdom. We are told by the Prime Minister and, indeed, the noble Duke, the Duke of Wellington, that we should support it in the national interest.
Lord Forsyth of Drumlean
The noble Lord, Lord Cormack, assents. Is it in the national interest to abandon any say in making our laws in vital areas during the transition period and to pay a staggering £39 billion as the price of our emasculation? That is more than £2,200 for every person who voted leave in the referendum. Every penny of it will have to be borrowed and paid back by the young people who have featured in so many of the speeches this evening. Just think how a fraction of this sum could be used for huge benefit in our schools, or to repair the damage caused by the cuts to welfare and universal credit.
Is it in the national interest to enter into a legally binding agreement from which we will have no unilateral right to withdraw, to bind the hands of future Parliaments and to make us reliant on the permission of a foreign power or court to fulfil our manifesto promises? Is it in the national interest to risk fracturing our United Kingdom by making Northern Ireland a rule-taker in further areas, including goods, agricultural products and VAT? The backstop provides for an all-UK customs union and regulatory alignment in Northern Ireland—a gift to the Scottish separatists and, along with the backsliding on fishing rights, a slap in the face for the 13 Scottish Tory MPs elected to preserve our union and save us from a Corbyn coalition Government. It is not just for the Scottish separatists. As we heard, the noble Lord, Lord Wigley, is already on to the opportunities to argue the case for Welsh nationalists on the back of these proposals. It is a total betrayal of the Democratic Unionist Party, which was assured that no unionist—indeed, no Prime Minister—could ever countenance a border in the Irish Sea, so eloquently explained by the noble Lords, Lord Browne of Belmont and Lord McCrea, in an outstanding maiden speech.
This is a hokey-cokey agreement, leaving our country half in and half out of a failing organisation in defiance of a promise given by a Conservative Government—indeed, by all political parties—that they would implement whatever the people decided in the referendum. We spent nearly £10 million of taxpayers’ money putting leaflets through every door giving that promise. Now people are prepared to cast it aside. We were told that no deal is better than a bad deal. Now, apparently, the national interest requires us to accept that a bad deal is better than no deal. We were told that nothing is agreed until everything is agreed. Now it seems that everything is agreed for nothing. It seems we have stumbled into an episode of “Yes Minister”, where it is being argued that it is necessary for us to leave in order to remain. There is still time for the Prime Minister and the Cabinet to change course and keep faith with those 17.4 million people who were promised that, if they followed us, we would give them their country back.
Baroness Bull (CB)
My Lords, as we heard, the withdrawal agreement is intended to provide for a smooth and orderly transition to the future relationship for people, businesses and organisations across the country, so I will focus my attention outside this House and the other place to consider the impact of the agreement on two business sectors crucial to the UK’s future success: higher education and the creative industries. In doing so, I declare my interest in the former as an employee of King’s College London.
For all its bulk, the agreement offers these sectors, and, no doubt, others, little more certainty than exists at present. For this, we have to look to the much slimmer declaration on the future relationship. It is encouraging to see in it mention of terms for participation in Union programmes in science, education and culture, but it has little of real substance and none of the detail that would allow these sectors to begin planning ahead—nor, as we know, is it legally binding. It is worryingly light on trade in services and there is no suggestion that the EU and the UK will seek a solution on the country of origin principle which has helped to make the UK a global hub for international media companies. Can the Minister give any clarity on the Government’s intentions with regard to this principle, which is of key concern for the sector?
The agreement provides more clarity on citizens’ rights, but the future declaration does not go nearly far enough on mobility—just two brief bullet points that have to be seen in the context of the Prime Minister’s comments last week that positioned the end to freedom of movement as something to be celebrated. In higher education and the creative industries, the freedom to move people, services and ideas within the UK and the EU is fundamental to continued success. The most economically productive parts of our creative industries hire up to 30% of their staff from the EU. The university sector employs just under 50,000 EU nationals. EU-domiciled students—135,000 last year—are crucial not just to the higher education business model but to continuing quality. Their economic impact on the UK each year totals £3.2 billion.
Can the Minister give any indication of when we might get more clarity on future immigration policy for staff and students so that universities can plan for the admissions cycle that begins in autumn next year? When will we have more detail on UK participation in Horizon Europe, Erasmus+ or Creative Europe? Can he give an assurance that any terms agreed would support the movement not just of highly paid established talent, but of those people who would not meet salary thresholds but will be the talent of the future? Without more clarity, the promised benefits of a transition period are denied to businesses in the creative and higher education sectors, and, I have no doubt, in other sectors too. How are they supposed to use this period to plan effectively when there is still no detail on what they are planning for?
The Prime Minister said, as we have heard repeatedly tonight, that there are three choices left to the UK: no deal, this deal or no Brexit at all. No deal would have devastating effects on the creative industries and higher education—sectors that earn the UK billions of pounds each year and make us the envy of the world. No deal would damage these sectors when we will need them more than ever before. So we are faced with this deal, which aims simultaneously to break from the EU, honour the Northern Ireland peace process, protect the integrity of the UK and continue to interpret the 2016 vote, rightly or wrongly, as a popular desire to end free movement. No wonder it is a deal that suits no one. So that brings us to the last option. Two and a half years on from the referendum, with the clock ticking and the stark reality of a post-Brexit Britain hoving into view, the Prime Minister’s third option is now, to many people across this country, the most attractive option of them all.
Lord Hay of Ballyore (DUP)
My Lords, I add my congratulations to my noble friend Lord McCrea on a very moving maiden speech to the House. As a party, we have continually said that we want to see a sensible and balanced agreement on leaving the European Union. Leaving the European Union without a deal has never been our preferred option.
We are not a party of no deal. We believe that the proposed Brexit plans will damage the economy and the constitutional integrity of this United Kingdom. Our position on the proposed agreement is aligned with what we have been saying both privately and publicly for some months: we could not support any deal that treats Northern Ireland differently from the rest of the UK. We believed that that was also the position of the Prime Minister. This proposed Brexit plan will establish significant difference between Northern Ireland and the rest of the United Kingdom. It would certainly see Northern Ireland staying aligned with the rules of the EU single market if another solution cannot be found by the end of the transition period in December 2020. That means that goods coming into Northern Ireland would need to be checked to see whether they meet EU standards.
The other issue, which is more serious, is that we would also have to follow EU VAT rules on goods coming into the country. I have to say that the deal fails to protect jobs and the economy in Northern Ireland and it creates a border down the Irish Sea, subjecting us to EU rules without any power to influence or change them. In the other place recently the Prime Minister argued that the customs arrangement, or backstop, as described in the agreement, is only temporary and we will negotiate a future trading arrangement with the EU. The EU has already made it very clear that any free trade agreement will not be an alternative to this legally binding customs union scheme that will be built on in the future. It is hard to believe that any scenario exists whereby the EU would release the UK from an arrangement that gives it such an advantage.
From the very moment she entered No. 10, Theresa May said that the word unionism was important to her. She talked of protecting the precious bond between the UK’s four nations. I have to say that I believe this deal does the opposite. I could stand here and list the broken promises, as has already been said, that the Prime Minister gave to us, both privately and publicly. I do not think it is the time or place for that tonight, but it is a sad situation that we are in. I know that the Prime Minister has said that it is this deal or no deal. At one time she was saying that a bad deal is worse than no deal, so it is a tragedy that we find ourselves in tonight. Our battle is not with the Conservative Party but with the Prime Minister and her Cabinet and their broken promises. We will not get into the question of who should lead the Conservative Party, now or in the future: that is a matter for the Conservative Party alone. This is about not any deal, but the right deal.
Lord Warner (CB)
My Lords, I have from time to time this evening sensed that people are starting to feel sorry for the Prime Minister, but let us not get all sentimental: she played a large part in creating the biggest political shambles since Suez. The 2016 referendum result never gave the Government the mandate she claimed: only 38% of the electorate actually voted to leave the EU. She rushed into the withdrawal process without a clear negotiating strategy and with a shedload of misguided red lines. A year after the referendum she thought she could get a better mandate by calling an election, only for the British people to let her down substantially by reducing her parliamentary majority. She has totally changed her tune from saying,
“no deal is better than a bad deal”,
to saying that her current, unsatisfactory deal is better than no deal.
Throughout the negotiations the Brexiteers have been allowed to argue that the UK has a very strong hand; that the EU needs us more than we need them; and that the EU would split and do side deals. The reality has been that the EU stuck together, protected its own rules and stood by Ireland on its border concerns. It is the UK Government who have failed to grasp that you cannot have frictionless trade if you leave a single market and a customs union. So here we are today with a deal that satisfies very few people in the Prime Minister’s own party, is opposed by all the other parliamentary parties, threatens the integrity of the United Kingdom and looks unlikely to survive a meaningful vote in the House of Commons.
Although the Prime Minister says she finds it difficult to contemplate, she did last week reluctantly recognise for the first time that there is another option to her unsatisfactory deal or leaving with no deal. That is to stay in the EU, which in practice we will be doing for the length of the transition period, which could now stretch to 2022. Staying in the EU could probably be done only by another referendum that passed judgment on what the Government had achieved.
Until now a second referendum, which is now being called a people’s vote, was seen as a pipe dream of crazed remainers—no longer. Even recent Conservative Ministers use the term supportively and pollsters are starting to test the water. In a YouGov poll last Wednesday, after the Prime Minister launched her deal, six out of 10 voters said they wanted a second vote. Moreover, growing numbers of elected politicians now seem unable either to accept a bad deal or to reject it without some political cover from the electorate who have elected them. I think it is time for this House to help them out. We should provide some ideas to the House of Commons on how a second referendum might be carried out and how the EU might be encouraged to extend the Article 50 timetable to enable such a referendum to take place. I am sure that my noble friend Lord Kerr, somewhere in his cupboards, has some ideas. We are always being told our role is to ask the Commons to think again. A second referendum seems to me a good issue on which to exercise this role.
Baroness Altmann (Con)
My Lords, I begin with the words of Albert Einstein:
“Politics is a pendulum whose swings between anarchy and tyranny are fuelled by perpetually rejuvenated illusions”.
The word “illusions” in many ways sums up how we have arrived at the current position, and delusions or fantasies still abound in many debates on Brexit. Apparently several members of the Cabinet, several noble Lords today and the leader of Her Majesty’s Opposition in the other place seem to believe that they can go back to the negotiating table and achieve a better outcome. This is fantasy.
I have to express my utmost admiration and sympathy for the Prime Minister: I have nothing but respect for her tenacity and resilience. The way she has been treated by some in our party has been shameful. She has done the best she could. She originally stated that we would leave the single market and customs union—the extreme Brexiteers insisted on this. She also said that we must have frictionless trade, leave the ECJ and protect the Northern Ireland border. These objectives are mutually exclusive. Her task was impossible. As her Statement rightly claims, delivering Brexit involves difficult decisions and choices for all of us. There will always be trade-offs. However, she must be honest with the country—her agreement is not a deal.
It is true that the agreement allows us to leave the EU in a smooth and orderly way next March. It agrees a time-limited transition period, which literally buys time to agree a future relationship, but that is as far as it goes. It is a legally binding commitment by the EU to enable us to remain in its free-trading orbit, from which we have benefited significantly, for a temporary period, while giving up our political membership, not even retaining the already-elected MEPs. But this is not a deal for our future relationship. It does not provide the certainty that business needs. It is merely a stay of execution. It also fails to protect our service industries—some 80% of the economy. The political declaration is all but worthless: warm words which any future EU or UK Government can tear up. It does not bring back control.
The Prime Minister outlined three options: no deal, this agreement or no Brexit. No deal cannot be an option. It has always been unconscionable but my noble friends on the Front Bench have consistently insisted that we have to keep no deal as an option; otherwise, we would undermine the Government’s negotiating position. The negotiations are now at an end so that argument no longer applies. We must exclude no deal. No responsible Parliament could possibly contemplate the chaos it would unleash. That leaves two options: the agreement outlined by the Prime Minister, which she insists delivers on the result of the referendum, or no Brexit. On this, the Prime Minister is right. I earnestly wish I could simply support what she has managed to negotiate but the terms that she has brought back are so significantly different from the campaign promises and post-referendum assurances given to the British people, how can Parliament truly believe it is safe to proceed? If Parliament is not sure that this is what the majority of British people want for our future, democracy demands that it must find out before making an irreversible decision.
I finish with more wise words from Albert Einstein:
“All of us who are concerned for peace and triumph of reason and justice must be keenly aware how small an influence reason and honest good will exert upon events in the political field”.
We must ensure that “reason and honest good will” will indeed finally influence the political future of our relationship with the EU.
Baroness Crawley (Lab)
My Lords, this is probably the best deal the Prime Minister could have brought back from Brussels, given where she started from, with those misjudged and totally unnecessary red lines in her Lancaster House speech. She has been hamstrung from the start by the fact that this whole misguided Brexit enterprise has been a massive military endeavour, started by David Cameron to keep his party together. The people of this country have for the most part been mere hapless civilians, trying to find their way through the fog of war.
Watching the PM in the three-hour Commons debate last Thursday, she did seem to be one of the few grown-ups in the Chamber and I could not help but admire her resolve. However, as a former Government Whip, I cannot see how this unloved deal will get a majority in the other place. That is if she survives any 1922 Committee leadership challenge. Did Jacob Rees-Mogg write his letter to Graham Brady with a quill on vellum? Does anyone remember that American show about a dysfunctional family called “The Brady Bunch”? But however dignified, the Prime Minister cannot be absolved of responsibility for the very serious crisis we now face as a country.
As I see it, this is the withdrawal deal that the EU has sweated over with our various negotiators for the last two years and it is not of a mind to conjure up a new one. Mr Barnier’s clock has stopped ticking. From next Sunday, Mr Barnier will metaphorically go off and have a nice, well-earned gin and tonic, as he sees it. It is now over to us.
There is little point saying that Parliament will not allow a no deal, because without a plan B we automatically fall into no-deal territory. That is the real Project Fear, where the raw truth of this whole sorry enterprise could face every family in this country in the next few months. There is the prospect of the stockpiling of food and medicines and of just-in-time lorries being refused entry at ports while goods, livestock and jobs perish.
Such prospects are bad enough but, looking through the draft withdrawal agreement over the weekend, especially the free movement part of it, as the noble Baroness, Lady Bull, said, it was striking to see how much our interests as a country will be undermined immediately under no deal. What happens to the rights of UK nationals currently living in the EU? What about our professional qualifications being recognised in Europe? What about police and judicial responsibilities and co-operation across borders? What about the orderly transfer of responsibilities through Euratom on nuclear materials and radioactive waste destinations? What about British people’s court cases before EU courts? Does it all stop dead in its tracks?
No agreement on the Irish border is another horror story under no deal. Presumably an EU border comes into immediate force. What happens to the all-Ireland energy market? Do all the lights really go out in Belfast? If we think this draft withdrawal agreement and the future relationship paper are unacceptable, wait till we see a no deal.
Mrs May does not have the numbers in the House of Commons—however, never say never—and although a general election may be triggered, I have my doubts; the last general election in January was in 1910. I have to conclude that it is now over to the British people in a people’s vote to take back control.
Lord Butler of Brockwell (CB)
My Lords, I hope that it will not be regarded as a kiss of death if I say a few words in defence of this agreement. I do not retreat from my belief that a better alternative is to stay within the EU and to give the decision to the British people—but, like the noble Baroness, Lady Quin, I regard many of the criticisms of the deal as greatly overstated.
I take as my text the five objections advanced by the European Research Group, which we heard itemised by the noble Lord, Lord Forsyth. The first is that we,
“would hand over £39 billion of taxpayers’ money with nothing guaranteed in return”.
This ignores the fact that the £39 billion represents the UK’s outstanding liabilities when we leave the EU. It has been accepted as money duly owed, whatever terms we leave on, and is a debt of honour.
The second criticism is that we would remain a rule-taker over large swathes of UK law in such areas as social, environmental and employment policy. I agree that it would be better if we remained a member of the EU and had a hand in making these rules. But our acceptance of these rules, with which we largely agree, seems an acceptable price if it leads to negotiating frictionless trade with the EU.
Thirdly, the European Research Group claims that there would be no unilateral right of exit from a backstop to the customs union. We heard this from the noble Lords, Lord Howard, Lord King and Lord Lamont. But we have entered an international agreement designed to protect the absence of physical borders between Northern Ireland and the Republic. I would not expect us to have a unilateral right to abrogate the backstop. The departure agreement provides for an independent arbitration panel in the case of disagreement, and that seems reasonable.
The fourth attack is that the agreement creates internal borders between Northern Ireland and the rest of the United Kingdom. This is the ground for the DUP’s opposition to the deal. The special provisions for Northern Ireland in the draft agreement are necessary to maintain frictionless movement of goods across the border, and there are already different regulations between Northern Ireland and the rest of the UK as a consequence of devolution. If the DUP voted against the agreement on these grounds and the result was no deal, I have to say that it would be cutting off its nose to spite its face.
Finally, it is alleged that the European Court of Justice will continue to remain in control of EU laws that are directly effective in the UK. But the ECJ’s role will be time-limited, and for it to be the interpreter of EU law as it affects the UK, and for the UK courts to have to take account of its judgments, seems reasonable.
To represent the provisions of the agreement as making the UK a vassal state seems absurd. If what the critics are saying is that the agreement does not give all the advantages of alleged independence promised in the 2016 referendum, I say: join the club. There are many of us on the other side of the argument who knew from the beginning that it neither would nor could.
Lord Lang of Monkton (Con)
My Lords, like other noble Lords I would like to address the three options. I would describe them as: first, to support the present deal, with all its imperfections and uncertainties; secondly, to go for no deal, face economic disruption and do what we can to overcome the unforgivable failure adequately to have prepared for it; and, thirdly, to have the mixed-bag option of rejecting the people’s vote and calling for another one, or for a general election, or for a postponement of the Article 50 trigger—in sum and in essence, to stay in the European Union.
I suppose that it is quite an achievement to have reached any kind of deal in the circumstances here and in Brussels, and I pay tribute to my right honourable friend the Prime Minister for the deal that she has achieved. But one has to ask questions. Does this deal treat the UK as a single entity? Does it give us freedom to set our own tax rates? Does it give us freedom to strike our own trade deals and to leave the customs union when we decide? Notwithstanding what I heard from the noble Lord, Lord Butler—whose speech I shall read tomorrow with great care—my answer to these questions is no.
The vital snag that leads to that answer is of course the Irish backstop. Without the unqualified right to terminate that, we will find the relentless grip of the EU stretching into an uncertain future. We will be like a ship ready to sail that finds its anchor snagged on the rocks beneath. One wonders how the Government thought that they could get away with a concession on the backstop, which they had repeatedly promised never to agree to, and which the DUP had repeatedly said that it could never accept. We conceded so much in order to honour our word to Northern Ireland, and then we failed to do so. Pettifogging over that border should never have been allowed to happen from the very outset. The EU frontier is already perforated by countless special deals. I gather that France even has one to cover French Guiana—a country in another continent across a wide ocean. Given reasonable good will and common sense, a pragmatic solution could easily have been found and still could be.
That is the burden of uncertainty that we take on if we decide to accept this deal, as we may have to. Many people assume that no deal would be calamitous. They could be right; it would certainly create disruption and problems, some of them very severe, in the short term. But in the longer term it could be a different story, unfashionable though it seems to say so in today’s debate. We already trade with four-fifths of the world on WTO terms. Our exports there now stand at 60%, with only 40% going to the EU; a decade ago, it was the other way round. The EU’s share of world trade has halved in the past 30 years. The single market should be a springboard: instead it is a protectionist fortress. The EU’s growth rate is flat, close to recession. While the no-deal route is not an easy one to choose, nor is the present deal, so neither should be ruled out.
There is no denying that we face at present the threat of an economic and political crisis: it is a very bad time to have to take a vital decision of this kind. But the proposals from those who are at heart remainers would make matters worse just when what we and, especially, business need is certainty.
There is another reason why it would be wrong to prevaricate. We gave our word to the electorate in the people’s vote of 2016 that we would deliver what they decided upon. Every political party pledged to do that, both before and after the result, without qualification. What the referendum decided was not subject to conditions, and not to honour it now would be the most damning and damaging outcome of all. With or without a deal, we must leave the European Union.
Lord Desai (Lab)
My Lords, I am a realistic pessimist about this. I think life is such that you do not always get the best option, no matter how hard you try. You have to choose between the second and the third best, or even the fourth best. So I am going to make a small forecast, because everything else has been said.
I reckon that, just as the challenge to the Prime Minister in the 1922 Committee has not happened—and I think will not happen—this deal will be approved by the House of Commons; it will not be rejected. I think the fear of no deal, as well as a dislike of no Brexit, are strong enough in the House of Commons for there to be a temporary coalition of enough Conservative Members plus enough Labour Members who will probably follow not their leader’s orders but their leader’s practice and defy the Whip, and I think there will be a small majority.
I think this deal, bad as it is, is the best that can be got. I think people are not foolish. They may not look very intelligent from a distance, but there have been detailed negotiations by talented civil servants. One also has to pay tribute to the Prime Minister. She has managed all this time by feigning to be a weak, indecisive person, and she has lasted longer than any of her colleagues. She did Chequers and got rid of David Davis and Boris Johnson, and ever since then she has been shedding Cabinet Ministers like nobody’s business. It is only when you find out that they have resigned that you realise that they were in the Cabinet in the first place, so it is making them famous by default. I think she has been clever. She has leveraged what men in the other place think are women’s weaknesses, and she has lasted eight years in the Cabinet—two as Prime Minister and six as Home Secretary. She has realised that this is the best she could get.
The fact that we may have a transitional period until not 2020 but 2022 is, in the long run of things, a very trivial matter. It will not look very nice now, but it will be forgotten very soon, so I say cheer up. This is what will be. There will be no no deal, there will be no no Brexit, this is the best you can do.
Lord Balfe (Con)
My Lords, I draw attention to my entries in the register and my, I think, fairly well known position as a very strong remainer. The key thing about this deal has been mentioned on many occasions, including by me. It is that you are never better off outside a club than you are inside a club. I happen to think that our civil servants who have been negotiating in Brussels have probably done as good a job as they could do. In the end you might have got a slightly different this and a slightly different that, but it has not been an easy negotiation.
The first thing I would say is that we are facing a second Suez. We have totally misjudged our place in the world. We have totally misjudged our importance to the European Union, and we are going to regret leaving the European Union every year we are out. I have no doubt about that at all. The fact of the matter is—and this document proves it—that we have got to live with Europe. You can change politics, but you cannot change geography, and Europe and Britain are inextricably linked. This document confirms us as the rule takers, not the rule makers. We will no longer be at that table, although we will be consulted. As one of my colleagues in Brussels said, “You will be consulted but you are no longer part of qualified majority voting and you will no longer be part of the strategy that shapes the decision”.
What do we get back from this? I heard that we get back control of immigration. That is useful, isn’t it? But we have always had control over half the immigration into this country, and government cuts to the coastguard service have meant that there is a fair bit of immigration going on at the moment in boats being brought across the channel, so I am not sure about that. And most of the immigration from the EU has helped to make Britain a fairly prosperous place economically. I find it difficult to believe that taking back control of immigration has been a great achievement.
Technically we leave the jurisdiction of the European Court of Justice—but only technically, because if we are going to export into and deal with Europe then we are going to have to obey its rules, and its rules are set down by the Court of Justice of the European Union. So we do not really have that. I am told we can negotiate trade agreements. The EU is busy negotiating a trade agreement with Vietnam, and when I happened to be in Vietnam recently I said to one of its Ministers, “Would you negotiate a trade agreement with Britain?” He said, “Of course we would”, but he went on, “Of course it would have to fit in with our obligations to Europe. We could not negotiate something with you that Europe objected to”—for instance, exporting a product such as rice to Britain and us then sending it across the channel under our agreements. So even the trade agreements do not work that much.
I saw our friends the Spaniards coming in at the last minute today, as they always do. Josep Borrell, former President of the European Parliament and Foreign Minister of Spain, has said the agreement has to be amended to take account of Spain and Gibraltar. You will find that the bill will go up. I have never known a Spanish Government who have not been susceptible to financial inducements, and they will certainly be presenting the bill here.
I say this to colleagues: this is probably the best deal we can get, but it is a sad day that we are even seeking it.
Lord Birt (CB)
My Lords, as a country we are split right down the middle. There is an unbridgeable divide between, on the one hand, passionate nationalists craving freedom and independence and, on the other, those who for reasons of culture, security and prosperity want the UK to remain at the heart of Europe. Those divisions have thus far haunted the whole process of negotiating an agreement with the EU, a process that began with the shooting of the most capable messenger around, Sir Ivan Rogers. The European negotiating terrain was always going to be challenging as we came face to face with fervent belief in Brussels in the European ideal and with the understandable self-confidence of the world’s most powerful economic bloc outside the United States.
Whatever you think of the withdrawal agreement, its application is temporary. The more critical document, the accompanying political declaration covering future relations for the next period of our history, is skimpy and, oddly, full of sentences without verbs. It falls far short of being a framework. Even if the declaration is only in essence an agreed agenda, though, the sense of it is at least positive. Its import is of a Britain that has only ever been half in the EU moving to a point where it will only be half out. The line in the declaration that there will be no tariffs, fees or quotas for goods offers a ray of hope, even if none of it is agreed and working through that monumental agenda within two years is a very tall order indeed.
Any deal of complexity in any walk of life involving multiple parties requires compromise and will leave everyone involved—including me, in this instance—uncomfortable with many aspects of what has been agreed. Taken in the round, this agreement is preferable to a car-crash Brexit in a few months’ time, with the shock to our economy and social harmony that that would trigger. If, however, as seems likely, the House of Commons fails to endorse this deal—if, indeed, it is unable to muster a majority for any option—the only way forward at that point would be to put back to the people the triple choice of leaving on WTO rules, accepting the deal or remaining in the EU. After years of bad-tempered debate and disunity, we should then accept the better informed choice of the British people and make the very best of whichever option they finally decide to take.
Lord Shinkwin (Con)
My Lords, as we have already heard, we are not actually leaving the EU. We are remaining on worse terms. This deal is so far removed from the people’s vote of 2016 and the result of that referendum that it is no longer just about Brexit. This is now about trust: a breach of trust.
I cast no aspersions if any noble Lord genuinely believes that this deal honours the referendum majority decision to leave. But in a spirit of mutual respect, I thank those such as Dominic Raab, Esther McVey, Steve Baker and Suella Braverman in the other place, whose integrity, sincerity and courage compelled them to resign. For me, their names comprise a roll of honour, because for them, keeping our promises is a matter of honour. They made the difficult decision with courage, because it takes courage to resign on a matter of principle; it takes courage to acknowledge that postponing the pain merely prolongs the agony; and it takes courage to point out awkward facts that those in power would rather we ignored.
Facts like handing over £39 billion of taxpayers’ money in misplaced good faith, on top of additional payments during the transition period—however long that may be—and without guarantees of future favourable trading arrangements from an EU which is determined to do this country down and, understandably, deny us any competitive advantage. Facts like the UK remaining a rule-taker, as we have already heard, over large areas of EU law. Facts like not being able to leave a so-called backstop customs union without the permission of the EU. And facts like reneging on the promise that Northern Ireland would not be treated differently from the rest of the UK.
Those in my party who accept this deal also need to accept that if it goes through, every Conservative candidate at the next election will face this question: “Which manifesto promise are you going to break first?” It would put them in a completely invidious position. In contrast, leaving on WTO terms, on which the vast majority of the world already trades, as my noble friend Lord Lang mentioned, would enable us to honour the result of the people’s vote in 2016 in full.
Some may see Brexit as only a question of technicalities, but trust is not a technicality. Trust determines who occupies No. 10 and which party forms a Government.
Lord Judd (Lab)
My Lords, the noble Lord, Lord Bridges, made the point that the political declaration is absolutely vital and central to our future. He is right; there is no question about that. We need to have a clear view of what the destination is in all our negotiations. What are the challenges facing us as we debate the issues? They are: the inescapability of global interdependence; how we handle economic and resource issues in the world community; security; migration—we talk about immigration, but that is the consequence of the huge migration issues covering the world as a whole—and climate change. In our own, more immediate society, there are the issues of poverty and social justice. As we heard powerfully from the noble Baroness, Lady Bull, culture, the arts and creativity—which make our country worth living in—are intimately related to the free movement of people.
As a nation, under any Government, we never really got the reality of the European project. It started with the coal and steel community, which was real: it was about how they were going to manage that community in their mutual interest. But anybody who thinks that the coal and steel community was an end in itself is self-deluding. It was always a political project; it was really about how you built peace and stability within Europe. There are now wider global issues as well. Whatever our party, whoever our leaders, wherever we are going, the words of the noble Lord, Lord Bridges, should be right in front of us: it is the political declaration. If we are in the community, or closely related to it, we have to have a strategy. If we are out of it, our own society has got to have a political statement of some convincing nature. In the end, the issues that face us are political ones of direction and strategy. Vision is what this country needs; vision and purpose. When I came out of government back in 1979, my family asked me what I had learned in my years in Parliament. I had one answer: within the political system as it was then—God knows how much more it is like that now—tactics were the total enemy of strategy. What is lacking is strategy.
Lord Anderson of Ipswich (CB)
My Lords, Denmark and Ireland joined the Common Market with us in 1973 and some predicted that they would follow us out. However, the latest Eurobarometer poll, taken this spring, showed that 75% of Danes and 91% of Irish thought that their countries had benefited from being members of the EU. Across the continent as a whole, we are seeing the highest levels of satisfaction with the EU in 35 years. Brexit has achieved this at least: by deciding to leave we have fortified the others in their desire to stay in the world’s largest and most frictionless trading bloc, its strongest promoter of civilised values and its only regulatory superpower.
We have all been formed by our own experience of Europe. In my case, it was as a junior in the office of Lord Cockfield, the architect of the single market; as an advocate for 30 years in the courts where its principles were worked out; and, after 1989, as a visiting teacher in places where—as Mrs Thatcher had prophesied in her Bruges speech—people were once again starting to enjoy a full share of European culture, freedom and identity. Despite that perhaps unusual enthusiasm for the European project, I believe that we could do worse than this agreement. I see the backstop as an opportunity for Northern Ireland rather than a threat. The procedure for ending it is both fair and inevitable. By providing so carefully for an orderly withdrawal, it demonstrates how disorderly a no-deal Brexit would be. If we need to come out, this agreement enables us to do so in a grown-up way.
However, it also demonstrates the greater folly of our present course. It binds us to EU rules while removing all representation and influence. Our historic leadership role in areas from sanctions and security to financial services and the internal market will abruptly end. As to the future relationship, we might have a long wait for the struts and girders to which my noble friend Lord Kerr referred. The intention apparent from the seven pages is already plain: to pay a heavy price for the primary goal of ending free moment in terms of our exclusion from other economically vital elements of the single market. The next four years at least will be consumed by negotiations that will make these ones look simple, and not only with the EU. Other pressing priorities will be relegated, as they have been since 2016. We cannot hope to end up with the same benefits as we have now. That is not the basis on which Brexit was sold.
If I had a meaningful vote today—for all the great respect that I have for the Prime Minister and for those on the ground who negotiated and drafted this workmanlike agreement—I would use it to seek an extension to the Article 50 deadline so that the public could vote for the first time on whether to accept this predictably inadequate Brexit deal or to cancel the whole unhappy project.
Lord True (Con)
My Lords, blinkered, ignorant, petulant, complacent, hypocritical, destructive—those were some of the adjectives thrown at those who share my position by the noble Baroness, Lady Ludford. You would wonder who was seeking to uphold the verdict of the British people and who to overturn it.
I cannot support this plan. It flows from a lack of confidence and competence in negotiation, as many have said, and a sense that the British people’s vote to escape the authority of Brussels was a cause for damage limitation and not an opportunity for the future. Yesterday, my right honourable friend Greg Clark said he saw advantage in remaining tied as an EU rule-taker until 2022, six and a half years after the vote to leave— longer than it took to win the Second World War. One does sense that the confidence in our country and the clarity of purpose of some of my right honourable friends is a little less than Churchillian. Once again we hear project panic, catastrophe and chaos let loose. It started with the noble Baroness, Lady Hayter, and has run through this debate.
This Prime Minister—honourably—never joined in Project Fear. How sad it would be if she let her office reach for the manual of Mr Osborne. Like many others, I ask how long this agony must go on, but that does not lead me to arrive at the choice now being designed for the British people in high places. It is the same choice that has been advocated by so many in this debate: a binary choice in the Commons—and if it comes to it, the country—between this sad deal and staying in the European Union. It is a choice between accepting European rules without a voice or with one. That false choice is a snare and a delusion: a choice between spam and würstel, set before a British people who voted for beef and liberty.
There is another way forward: Peel’s vision of Britain as a champion of free trade, a policy built on the terms that most of the rest of the world uses, working to a mutually respectful free-trade offer such as that lately agreed between the EU and Canada. Instead, we have a clunking document in which there is much that is shared and valuable, but within it a catalogue of crucial concessions. It offers many billions for a product: the future relationship that is still, fatally, not fully defined. It perpetuates—crucially, potentially indefinitely —a customs union we promised to leave; my noble friend is right about trust. It delays trade deals, ties us to non-regression, a promise not to be competitive with the most uncompetitive part of the globe, and it volunteers Britain into the humiliating position that it may only ever leave if Luxembourg allows it. In addition, with an odour of dishonour, for which I would apologise to my unionist friends if they were in their places, it breaks a promise that there could never be any distinction in the way parts of our kingdom are treated. Like other promises, that has been forgotten in the small print with which Downing Street and the Cabinet Office have smothered the clarity of the vote to leave.
My right honourable friend the Prime Minister is a great public servant, and her belief that she is doing the right thing is beyond question. But I regret to say, like many in this House today, I am dismayed at the point to which this country has been led, and I have little faith that the necessary change of direction will be forthcoming from this quarter. I will not lend my support—in any way—to imposing these articles of dependency on a people who voted to leave.
Lord Greaves (LD)
My Lords, in his opening speech the Minister said that we have agreed the rights of the 3 million EU citizens living in this country and of the 1 million UK citizens living in the EU. At the beginning of this whole process and during the referendum, EU citizens in this country were told pretty unequivocally that their rights would not be reduced, and there are increasing worries that this is happening. I should say that my eldest daughter is married to an EU citizen and lives in this country.
For example, there is the slightly perplexing question of people who have been here for three months and have not exercised their EEA treaty rights, which is possibly being taken to include people with no comprehensive health insurance, who may have problems getting settled status. A clear statement from the Minister that that is not the case would be helpful. In September 2017, the Home Office confirmed that it would not collect fingerprints from EU citizens. Yet the settled status app will read a passport’s biometric chip, which includes fingerprint information. Again, will that kind of information be included on the national database of fingerprints? The organisation that calls itself the3million, which campaigns on behalf of EU citizens here, asked the Government 162 questions on settled status much earlier this year, and says that only 19% of them have been answered. Can the Minister tell us whether that is an accurate figure, and can he please say when the rest of the questions will be answered?
I spent much of this debate listening to noble Lords speaking in it via the television in my office and otherwise perusing the internet and looking at social media to see what EU citizens here are saying. There is no doubt that there has been a huge backlash this week after Mrs May made her statement about jumping the queue:
“It will no longer be the case that EU nationals, regardless of the skills or experience they have to offer, can jump the queue ahead of engineers from Sydney or software developers from Delhi”.
Frankly, this has given rise to a wave of dismay and anger on the part of a huge number of people. I refer noble Lords to two interesting bits of the social media environment in particular. One is a Twitter thread based on the #alreadynotfine hashtag, which I urge noble Lords to look at. For example:
“I’ve spent 13 yrs in the UK and my wife is English. I am ineligible for permanent residence/citizenship because I spent several years propping up the British university system by doing under-paid teaching work where I was technically classed as self-employed”.
There is a whole series of people who are putting forward their own cases, and it is quite clear that they feel that they are in limbo. There is an area of the internet called #InLimbo, which is worth looking at.
In addition, the3million group itself has a Facebook page, from which here is a comment, I think from yesterday:
“‘Jumping the queue’ implies that we have engaged in something dishonest or took advantage of a subterfuge. It is offensive”.
The person goes on to comment about Mrs May. Then somebody else comments—it is not a comment I would agree with, but it is there—saying, “She is a racist witch”. As someone from Pendle, I have to be careful about witches. Somebody else simply says that it is,
“racist and very hurtful … well and truly unacceptable”.
There is huge dismay in this community, among these people. The Government need to be very careful what they say and what they do.
Lord Inglewood (Non-Afl)
My Lords, almost 30 years ago, in 1989, I was first elected as a Conservative Member of the European Parliament and was a spear-carrier in putting together the single market. The problem at that time was that the European economies, including our own, were being held back by what was known as “Eurosclerosis”. This is because free trade does not actually mean that you can trade freely, which seems to be a bit of a paradox. Non-tariff barriers ensure this; they are ingeniously constructed and expensive to get through or around.
Free trade is a necessary but insufficient aspect of a frictionless international trading system, which is what our Government are looking for. Free trade is, after all, a late 18th-century and 19th-century phenomenon. Now, in the 21st century, we live in a world of regulated markets because of social attitudes, the size of populations, the nature of business and technologies and probably, to some extent, to avert revolutions.
It was 30 years ago that the Conservatives under the leadership of Margaret Thatcher, helped by Leon Brittan and Arthur Cockfield, drove forward the single market. They recognised that sovereignty can be exercised in differing and more or less sophisticated ways. Being clever about this led to the creation of transnational rules and enforcement procedures, which involved our participation. This has enriched our country, generating revenues for private and public sectors and paying, I suspect, for our net contributions to the European Union budget.
The road to Brexit is through a gate called the withdrawal agreement, and Brexit entails our leaving the single market. We have been told that trade with other countries will make up the difference. All I can say is that it did not do so in the 1980s. Other EU countries trade very successfully from the EU into the wider world. For example, I understand that both France and Germany are more effective at doing business with China than we are. I suspect that third countries are keen to flood this country with cheap goods but will be much less inclined or able to buy things from us.
It is therefore my view that we should pause and take stock. I do not see how a non-binding, somewhat tarnished referendum more than two years ago can mandate a sovereign Parliament to run pell-mell into something that its advocates sold on a flawed prospectus. It seems far from clear what the people of this country want now. Where do they want this country to go? The case for Brexit is invariably that it is what the people want, not that it is in the nation’s best interests.
As currently presented, it seems to me that Brexit looks like a curious cross between the revocation of the Edict of Nantes and a political form of the South Sea bubble. As such, it is something that we as parliamentarians, who must act in our fiduciary capacity for the country—past, present and future—should do our utmost to avert.
Lord Dobbs (Con)
My Lords, it is always a pleasure to follow the noble Lord, Lord Inglewood, even though I cannot always follow the thrust of his arguments.
How I wish this deal might have settled things, even with a heavy dose of compromise. Would that not have been nice? But where it should clarify, it confuses, and where it should deliver, it delays. Far from shining an illuminating light on the subject, it simply lights a bonfire of the Government’s frequent explicit promises about the role of the ECJ, about leaving the customs union and about treating all of the United Kingdom as one.
Historians of the near future will ask why the EU, with all its genuine ideals, went so badly wrong. They will identify one cause above all else: its driving ideology, that of political union. It is not an evil ideology, but it is unremitting and so inflexible that those who threaten it, as we do, are punished as a deliberate act of policy—like Greece has been punished. The birthplace of democracy had the temerity to vote for change and instead has been ruined. If you think that is rubbish, please visit the poor, benighted citizens of Greece and see how they are suffering.
Why should elections or referendums make any difference to a European Union whose deafness of ear, blindness to opportunity and wilful rejection of demands to fill the democratic deficit have turned it in on itself? Its response to every question and every rebuff is always more of the same: more Europe—an insistence that there is no other way but theirs.
The establishment loves this deal, of course, because it changes almost nothing. Elites do not want change; they want protection and the status quo. So the CBI, big business, even big charities—those who think only within the big bubble—applaud.
But just imagine if Brexit were put on hold, as I think this deal tries to do—or even reversed, as some want. That would not finish the argument. Political union, the fundamental ideology of the EU, will not change, so the fundamental arguments against it will not change either. The demand for separation from the EU would return with even greater force and, I fear, perhaps in sharper, uglier form. It would be a gift for the bigots and xenophobes who would treat our neighbours in Europe as the enemy, not the allies and friends they are.
There are those who embrace the EU and all its ideals, including many in this House. But sometimes we destroy the things we love the most. Look around Europe and tell me that that is not happening there.
I want a bigger, more open Britain, which takes the many talents and cultures we have and forges them into an exciting new player on the stage, not looking back but looking forward to the challenges and opportunities of a new world that has already left the European Union behind. It is not about having our cake and eating it but finding a better future for our children and grandchildren, one they can create for themselves.
Today we are engaged in a great experiment to test the proposition that it is possible, democratically and peacefully, to leave the European Union and become a sovereign, independent nation once again. If we fail that test, I fear that the price we will be forced to pay—the damage to our sense of self, our standing in the world and, perhaps most of all, our respect for our parliamentary institutions—will be beyond measure.
Lord Liddle
My Lords, I feel a genuine sympathy for the Prime Minister in her plight and I rather admire her dogged determination, but this deal will not wash. Jo Johnson described it as being offered a choice between vassalage and chaos. I am not against vassalage if it means that sticking to EU rules brings big economic advantages. We could have said that we wanted to remain in the single market and customs union. I believe that that is the position we should have taken after the referendum and it is the position the Labour Party should then have supported, but we did not. Now, we are facing a situation where Michael Gove talks about “Norway for now”. If I were Norway, I would say, “Never put up with that kind of playing around with our future”.
However, accepting the EU rulebook is not worth it for the deal that we have on offer. The declaration says that the temporary customs territory is the model for the future. It is what the EU describes as a swimming pool, with a shallow end and a deep end. Economically, Northern Ireland does very well out of this, and it is a shame that the DUP, which of course does not speak for the majority of the people in Northern Ireland, does not recognise that fact. However, my worry is about the shallow end of this offer, which is Great Britain. It is not a full customs union; it is a bare-bones deal that will result not in frictionless trade but in industries with complex supply chains withdrawing from Britain in the future. It is a real economic threat to our future.
In the negotiations, the Prime Minister might think that she can revert to the Chequers idea of a common rulebook but, because of the arguments in the Conservative Party, in Brussels there is very little trust in Britain’s willingness to stick to a common rulebook. Brussels recognises that the only viable national strategy for Brexit is for Britain to become a regulatory competition state. In order to avoid that, it will try to attach details such as level-playing guarantees, enforcement mechanisms, supervision by the Commission and the jurisdiction of the European court. Frankly, the Prime Minister will never be able to get that through her party.
Therefore, this will end up being a bad deal without frictionless trade. If the last two years have shown anything, it is that we would be much better off if we stayed in the EU. To be fair to Mrs May, she does not pretend that this deal will make us better off than being in the EU. If I may just say a word to my own Front Bench, I do not understand why Labour does not speak out now and say that this deal is much worse than our current EU membership.
The fact is that in the last two years Brexit has been shown to be a disaster. It is leading to the biggest political crisis we have faced since the Second World War. I believe that it can be stopped now, but we on this side of the House have to rise to the level of events. Let us hope that in December, we will.
It is time to end all the verbal conundrums about how we can get a better deal. The only choice now is to give the people the opportunity to vote on this deal in a referendum and to see whether they decide to remain, which I sincerely hope they will.
Lord Hannay of Chiswick (CB)
My Lords, the three principal documents that we are looking at today are very different in nature. A sketchy seven-page document on the all-important new relationship between the UK and the EU is so skimpy as to be almost laughable, and there I agree very much with the noble Lord, Lord Bridges. It is more a flyer than a serious blueprint for the future. The document called the Explainer for the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union, which I take to be the Government’s sales pitch for the deal they have concluded, is odd too. Paragraph 58 states flatly that all four of the conditions that the Prime Minister laid down in October for the Irish backstop have been met. But at the time she laid down those conditions, the Government were trying to get a fixed duration and a unilateral right to leave the backstop. Neither of those is in the agreement.
Then there are the provisions on dispute settlement in paragraphs 148 and 149. The dispute panel, which is frequently referred to as arbitration, is not an arbiter because paragraph 149 states quite categorically that when a dispute involves the question of the interpretation of EU law, the panel will not decide the matter but request that the European Court of Justice give a ruling. You cannot be much clearer than that, and that is not being free of the European Court of Justice.
The fact is that all these examples demonstrate that beneath the surface there are fatal flaws in the Government’s approach to these negotiations. Divided counsels at home; intemperate drawing of red lines that have subsequently had to be smudged and smudged again; the use of doublespeak all the time. What of the implementation period? Oh dear. In fact, it is a standstill. Everyone knows that a standstill is being proposed.
It is said that we will get back control of our laws, money and borders, but during the transition period—and possibly for quite a lot longer—we get none of that. As a document on the future relationship, it is as yet little more than warm words and worthless waffle. It will not be easy to change this week, and I rather doubt whether very much substantive change can be made. The trade arrangements in the document, for example, are all things to all men. They could come out in a multitude of different ways. That is no doubt necessary since there are a multitude of different views in the Cabinet as to how they should come out. It is not so much a plan as a sales catalogue.
Then there is the triumphant claim that we can negotiate and ratify trade agreements with third countries during the transition period. Which third countries are going to negotiate with us when they do not know what our relationship is with the European Union and how long they will be held up waiting to find out? The best that can be said for this deal is that it is less bad than no deal, and I hope that both Houses will rule out that option.
The key test, surely, is to compare what we have on the table now with what we have around us as a member of the European Union. On that test, despite all the valiant efforts of our negotiators and of the Prime Minister, it fails on every respect. As the Irishman told the traveller who was asking the way, “I wouldn’t start from here”.
Lord Hunt of Wirral (Con)
My Lords, I draw attention to my interests as set out in the register. I personally regret Brexit, but we cannot ignore the message of June 2016 that our membership of the European Union has been rejected by the electorate and a new relationship with Europe must now be crafted.
I spend a great deal of time with the business community, above all with leaders of our financial services industry, which leads Europe and the world. The clear message from that vitally important industry is the pressing need for there to be no hiatus or vacuum, pause or cliff edge on 29 March next year. Business generally, and the insurance sector in particular, craves certainty, in order that it might plan effectively for the future, and continue to invest in the UK.
I join noble Lords who have said that the best that can be achieved by Parliament is for the House of Commons, and for us taking note, to agree to the terms of the withdrawal agreement, enabling us all to move rapidly on to discussing the vitally important terms of our future political and commercial relationship. That relationship must recognise the UK’s unique strength and experience in insurance which delivers not only much-needed revenue for the UK, but also enables many businesses across the EU 27 to obtain insurance cover that is just not available in their local markets. There has been talk of “equivalence” or “enhanced equivalence” in financial services and how vital it is for these important matters to be taken out of the political arena with a clearly defined procedure. However, for insurance companies, equivalence is extremely limited in scope, while for insurance brokers the concept does not exist at all.
In her Lancaster House speech, the Prime Minister called for:
“A bold and ambitious Free Trade Agreement with the European Union. This agreement should allow for the freest possible trade in goods and services”.
As part of the new economic and regulatory partnership the Government are proposing, the UK and the EU would improve their domestic market access frameworks, including extending them to cover activities that generate the greatest benefits in economies of scale and scope. I would urge the Government to continue to seek as a minimum something akin to the provisions in MiFID II, or to go even further to achieve the broadest possible access.
In conclusion, I will just say this. Our reaction to this proposed agreement with the European Union will define us as a nation and as a generation. The Prime Minister’s determination to rebuild a middle ground in this divisive argument is beyond commendable; I believe it to be heroic. Indeed, it is the very outrage of the fundamentalists on both sides that persuades me fully to support, without hesitation or equivocation, the Prime Minister and her noble attempts to build one nation in place of strife. I hope that we can now unite in supporting the Prime Minister as she seeks to build upon the foundations of Brexit a close, sustainable and mutually beneficial new working arrangement between our nation and the EU 27.
Lord Green of Deddington (CB)
My Lords, the advantage of being tail-end Charlie is that most of the key points have already been made, which also means that one can attempt to weigh them up. I am with those who are seriously disappointed about the outcome of these negotiations. I believe that the Government have been naive and that the Commission has been deeply cynical. We now risk being not just out of Europe but run by Europe; indeed, we risk being trapped in Europe, as my noble friend Lord Kerr of Kinlochard so vividly explained. Yet, as the noble Lord, Lord Lamont, mentioned, even Moldova has a break clause.
We do not yet have a final deal, and the noble Lord, Lord Bridges, explained the importance of the outline political declaration which is still being negotiated. But at present, as the noble Lord, Lord Forsyth, described, this deal does not deliver on the referendum. It leaves us half in, half out, and possibly trapped. So if this is effectively the final deal and if it fails to get through Parliament—the House of Commons—I find myself persuaded, rather to my surprise, that we should look again at a second referendum. I do not mean a people’s vote, but a second referendum. Indeed, that has been the sense of the House because a remarkable number of noble Lords have been moving towards that conclusion.
It is not that I believe entirely the cries of woe about no deal. There is perhaps an element of Project Fear mark 2 in that, but there are clearly risks and this deal, frankly, is nothing like what people were offered during the Brexit campaign. I simply do not see how that course could be pursued without a renewed mandate from a referendum. The answer may well be the same but we need it as soon as possible.
I conclude with a matter which is of considerable importance but has hardly been mentioned; indeed, it was barely mentioned in either the withdrawal agreement or the draft political declaration. Of course, I am referring to immigration. I am very suspicious; I foresee the risk of the skills-based system that the Prime Minister mentioned being widened under pressure from the European Union when we get down to a negotiation on trade, where our hand is very weak. That pressure could well be reinforced by the many employer groups whose members have been making substantial profits from low-cost labour from Europe and, dare I say it, substantial savings on the training of British workers. I will not go any further into that issue but I will just say this: if Ministers are not careful, the outcome of this enormous process could well be very little reduction in net EU migration. If that is the result, the Government will pay a very high price with public opinion—and rightly so, in my view.
Lord Bilimoria (CB)
My Lords, the Prime Minister has said these things for two and a half years: Brexit means Brexit; no deal is better than a bad deal; we will leave the EU on 29 March 2019; there are red lines in leaving the customs union and single market; we will take back control of our borders and laws; we will have no more to do with the ECJ; the result was 52:48; the previous EU referendum was won with 67% of the vote, and was convincing and decisive.
Now we are told that we must implement the will and instructions of the British people. Time and again, we have been told that 17.4 million people voted to leave. What about the rest of the 50 million people in Britain, including the 16.1 million people who voted to remain? What about Scotland, London, Northern Ireland and young people, all of whom voted to remain? Two and a half years after the referendum, the country is being held to ransom by a narrow decision made by just over 25% of our population.
Throughout the negotiations, we talked about equivalence and asked whether we would get something as good as what we have now as part of the European Union. This deal is not about protecting jobs, security and the integrity of the UK, as the Prime Minister said. Northern Ireland, the Achilles heel of Brexit, remains a circle that cannot be squared without jeopardising the Good Friday agreement and the almost-century-old common travel area. What a mess we are in. This is now a hokey-cokey Brexit; it is a case of in and out and shake it all about, as said by the noble Lord, Lord Reid.
The EU is not perfect but it is not the bogeyman. It has not bullied us; Michel Barnier has followed the instructions of 27 other countries. The EU has said, “You, the UK, want to leave and have boxed yourself in with red lines. You opted into Europe 45 years ago but you have had your cake and eaten it because you have had all the opt-outs too. We are talking about the biggest and best free trade agreement in the world, yet you are not in the eurozone, you are not part of the Schengen agreement and you are not for further unification. Now you want to opt out but have all the opt-ins”.
We are losing our sovereignty. Day by day, we are losing our standing in the world. No one in the world, including the EU, wants us to leave. London has already lost to New York its number one spot as a leading financial centre. In future, we will not be at the top table. As said by the noble Baroness, Lady Smith, we will pay but have no say. Two-thirds of MPs and 75% of this House wanted to remain in the EU at the time of the referendum. What has happened to our precious representative democracy, spoken about by the noble Lord, Lord Higgins? Do we have the guts to do the right thing for our country?
No deal is not an option. That is pretty unanimous. So the choice is between this deal and a transition period until 2020 or possibly 2022—the can has been kicked down the road—with a backstop that we may be held to inordinately. Two-thirds of our global trade is already with and through the EU. We have a six-and-a-half-page political declaration being finalised in six and a half days. What a fudge this is; it is a blind Brexit. Spain is already talking about having a veto over Gibraltar. The French are already talking about their fishing rights. The British public have been sold a pup. This is not in the best interests of our economy, businesses or citizens.
What about the 800,000 children born every year in this country? Since 2016, that makes almost 2 million more 16 and 17 year-olds who would be allowed to vote today. If the transition period goes on until 2022, almost 5 million young people will not have a say when their future is at risk. We have to break the spell. It would be democratic, after two and a half years—a normal democratic cycle—to go back to the people and say, “If you have changed your minds or do not like what you see, you can vote differently”. The polls already show that 100 leave constituencies now want to remain. Last week, straight after the Prime Minister’s Statement, 54% would have voted to remain, as opposed to 48% in 2016, and 55% wanted a second referendum.
If we really want to respect the will of the people this should not be Hobson’s choice of a deal or no deal, and a bad deal at that. The British people can get their future back by choosing the Prime Minister’s newly declared option: no Brexit. We need a people’s vote. That would stop this train crash, save our union, respect the will of our people and do the right thing for the British people.
Lord Wallace of Saltaire (LD)
My Lords, we have heard a lot that still suggests, as we come into the endgame with four months left, that there are still a number of illusions about where we are. I hear people saying that the European Union, the world’s largest regulated open market, is a protectionist fortress, but what is China? What is the United States now? I hear people saying that we are better off with global organisations such as the WTO rather than the European Union. I remind the noble Lord, Lord Shinkwin, that the WTO is close to breakdown since President Trump refuses to appoint new members to the arbitration panel. I remember many people saying that we did not need Europol and European security co-operation because we had Interpol. Looking at what is happening at Interpol, that might not be a good idea.
We are now in the endgame. I will talk briefly about the future relationship paper, foreign policy and what we mean by the national interest. I remember asking the noble Lord, Lord Callanan, some weeks ago whether we would have a five-page paper on the future relationship or a substantial document. He assured me that it would be a substantial document. I thank him for the seven-page paper that we have got so far and the promise that we will, by the end of November—in five working days, more or less—have the 200-page substantial, detailed, precise document that we are now promised. Without a precise document we are drifting into a blind Brexit. We need to pause before we jump into a chasm without knowing where the bottom might be.
The foreign-policy dimension of this is particularly important. The Conservative Party used to be the party of strong foreign policy and defence. The state of play document the Government distributed says that we are pursuing,
“a broad and deep partnership on foreign policy, security and defence”.
The seven-page outline of the political declaration is far more hesitant. The Commission’s explainer fact sheet talks about the “possibility” that Britain might be invited to join informal conversations and to contribute to missions. That is a pretty shrunken foreign policy. Any foreign policy for Britain requires, as it always has, that we have close relations and we manage our relations with France, Germany, Italy, Spain, the Netherlands, Poland, Serbia and Greece. Without a European policy we do not have a foreign policy. Instead, for the past two years we have had Foreign Secretaries who talk about either Germany, together with Hitler and Nazis, or the Soviet Union as being like the EU.
The Prime Minister has insisted that she is defending the national interest. It is a good concept but we need to discuss what it is. Some, like the noble Lord, Lord Forsyth, suggest that defence of our absolute imperial sovereignty must prevail over everything else. I much prefer the statement of the last really good Conservative Foreign Secretary, Geoffrey Howe, when he talked about shared sovereignty. He understood that unilateral sovereignty is not the badge of sovereignty. You have to negotiate with your neighbours if you want to maintain good relations.
Jacob Rees-Mogg has warned the Prime Minister that she is risking an 1846 moment, when Robert Peel split his party on the abolition of the Corn Laws. For the first time I agree with Jacob Rees-Mogg about something. It is a good analogy. Robert Peel decided that the national interest was more important than the unity of his party. When faced with the potato blight and the development of famine in Ireland and the Scottish Highlands, he challenged the ideological commitment to agricultural protection that thinly covered the vested interests of landowners at the back of the Conservative Party. It might now be in the national interest for the Conservative Party to split again, with their offshore and financial interests on the ideological right and their English nationalists going in one direction and the pragmatic, one-nation Conservatives going another. I offer that to the Prime Minister and others as a definition of what the national interest might now require.
Lord Goldsmith (Lab)
My Lords, tonight is not, of course, a night for any decision, but we have heard in this debate some interesting observations on where we now stand and some very important contributions—including that of the noble Lord, Lord Steel of Aikwood —reminding us of one of the political reasons behind the European Union, in the shadow of the reminiscences that we have had of the First World War. I must very briefly welcome the noble Lord, Lord McCrea. We have heard the robust straight talking already; we look forward to hearing the singing on another occasion. Given the time available, I will not say more about other contributions other than in the course of the few remarks I want to make.
What we have heard is, first, voice after voice saying that a no-deal solution is not one we can accept or that should be accepted. We have heard formidable descriptions of what this would be: a car-crash Brexit; devastatingly damaging; catastrophic—all these remarks have been made during this debate. The noble Baroness, Lady Altmann, may have explained well why it is in fact no longer an option, but in this House at least it seems there is a strong view that a no-deal exit is not acceptable. So what do we have? Do we have a deal? That has been the subject of much discussion tonight.
Plainly, some issues are dealt with in the 585 pages, some of them important ones. But what really matters for the future are the seven pages—it is quite generous to call it seven; it is six and one-third actually—of the political declaration. That is where we find all the areas that will really govern our future relationship with Europe and the rest of the world. What does it consist of? It consists, as some noble Lords have said, of sentences without verbs. The reason why is that it is a list. On the whole it is an index, a list of things that are desirable—many extremely desirable—but they are not yet spelled out and of course they are not yet a binding commitment. So I want to ask the Minister, the noble and learned Lord, Lord Keen of Elie, a couple of questions about that.
When we look at the political declaration, noble Lords can see all the important things it needs to deal with. Energetic though she and her advisers may be, there is no way that the Prime Minister is going to solve all those issues by the end of the weekend. Some important changes may be made and we look forward to seeing what those are—they may cover some of the areas referred to by noble Lords—but there is a huge amount to deal with, including services and investment. To take one small example, the headline promises:
“Appropriate arrangements on professional qualifications”.
That is very important to many people. Appropriate they must be, but what are they going to be? That covers, as some noble Lords have said, many possibilities. On financial services, I read of:
“Commitments to preserving financial stability, market integrity, investor protection and fair competition”.
Those are really important, but how you achieve them—the detail—is what will ultimately matter, and we do not know that at this stage. The critical thing, therefore, is what the deal is going to be.
When the Minister winds up, I want him to consider the extent of the commitment to two things described during this debate as possible mitigators of the lack, as yet, of a concluded, complete and full binding agreement. One is the fact that Article 184 of the withdrawal agreement provides for good faith negotiations to reach a conclusion. However, does he agree that the obligation that,
“The Union and the United Kingdom shall use their best endeavours, in good faith”—
I will qualify that in a moment—
“to negotiate expeditiously the agreements”,
does not amount to anything other than a best-efforts obligation? It is not an obligation to reach an agreement or to guarantee that result. That is well understood in United Kingdom law and European Union law. That is an extraordinarily important difference.
The noble Lord, Lord Kerr—who ought to know—said that what Article 50 required was not a list of things which should be agreed but things which were there as the framework. That has not happened. That is critical. The sequence of this has been completely wrong. The other thing that has not been contradicted in this debate is what my noble friend Lady Hayter said in opening: that this has been, regrettably, a complete mess and that is why we are in the position we are in today. The sequencing that has taken place on the negotiation is one element of it.
The point about the good-faith negotiation is important but it cannot actually result in an agreement if it is not within the wishes of the EU to achieve it. Of course, as noble Lords have said, the extent to which it will have the incentive to do that is reduced in the circumstances in which we are now.
The second potential qualifier is the arbitration provisions. I really would welcome the Minister’s views on this. It might at least save there being a Motion in the other place to get all the legal advice. The arbitration provisions appear to me to be provisions to determine the true meaning or the true effect of those things which have been agreed—and not to fill in gaps where the parties have not been able to agree them. If the Minister can help us with that, it will make a big difference, because it means that if we do not reach agreement on certain things, the arbitration provisions will not provide it. I would welcome his help on those two points.
Where does that all lead us? The thing that struck me most in the resignation article by Jo Johnson was his statement:
“Suspension of disbelief is a necessary ingredient in all storytelling”.
He was saying that about the narrative that the Government had been putting forward. Having got to this stage in this critical and sensitive area, with these things still not having been finally agreed, will the Government please commit to no more storytelling and no more narratives and to giving an honest statement of what the possibilities are and what the result of those possibilities will be, so that whoever has to make the ultimate decision—whether it is Parliament or the people—can do so in the knowledge of all the true facts?
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, this has been an extensive and interesting debate. I remind noble Lords that it is a debate on the Statement made by the Prime Minister relating to European Union exit, although it has ranged much more widely than that, as we have noticed. In the time available, I will endeavour to address the points raised by noble Lords, but I hope they will forgive me if I do not manage to address each and every point raised by the, I think, 56 speakers we have had so far.
It is clear that we have made a decisive step forward. We have agreed in principle the terms of the United Kingdom’s exit from the European Union, as set out in the withdrawal agreement—or, in the words of the noble Baroness, Lady Hayter, a smooth and orderly exit. We have also agreed the broad terms of our future relationship, as set out in the outline political declaration. It is just that. It is no more than a political declaration at this stage, but that process is not complete and the Prime Minister will be meeting Mr Juncker in the next few days to take that further forward.
Lord Keen of Elie
No, I am not taking interventions because of the time available. I am sorry.
All this puts us close to a Brexit deal—a deal that takes back control of our borders, our laws and our money, while at the same time seeking to protect jobs, security and, indeed, the integrity of the United Kingdom. It is a deal that brings the country together—a deal that realises the benefits of Brexit and then lets us focus on other issues.
Let me touch upon several points that have been raised during the debate. There was the question of citizens’ rights. What we intend to do there is to protect the rights of the more than 3 million EU citizens living in the United Kingdom and about 1 million UK nationals living in the EU. In respect of that we intend to bring forward an immigration Bill, which will be the subject of consideration.
The question of students was raised by the noble Baroness, Lady Smith of Newnham. We have clearly taken a position with regard to EU students in this country, and it is our belief that in due course, in the course of negotiation, we will achieve a reciprocal undertaking from the EU 27 but that has not yet been achieved.
There is the implementation period, which provides a bridge to the future relationship and will allow businesses to continue trading as now until the end of 2020. There is also the financial settlement—a fair financial settlement for UK taxpayers, which is estimated at between £35 billion and £39 billion. Let me be clear in response to my noble friends Lord Forsyth and Lord True: that is not a price. As was pointed out by the noble Lord, Lord Butler, it is an estimate of a determination of our outstanding obligations on a net basis. There are sums that will fall due during the implementation period; there are sums that we have committed to meet in respect of obligations of the EU; indeed, there will be sums coming back from the EU over time, including from the European Investment Bank and the European Central Bank.
Lord Forsyth of Drumlean
You have 25 minutes. The point I made in my speech about the price was that we would be in a transition period or implementation period, although there seems little to implement, and in that period we would have no say in our affairs yet were still expected to pay the £10 billion per year. If we did not have that period, then we would not pay the £20 billion.
Lord Keen of Elie
Let us be clear: if during this implementation period—this transition or time-limited period—we are to have the continuing benefits of membership of the single market and the customs union, and of the other institutions during that two-year period, then there is a price to be paid. In addition, EU obligations have been incurred—for example, those in respect of Turkey. Having undertaken those obligations we will, as a matter of international law, meet them. I reiterate: it is not a price but a matter of discharging our obligations.
With regard to Northern Ireland, as part of our solution to ensure that no hard border between Northern Ireland and Ireland emerges, in the unlikely event that more time is needed to finalise the future relationship, there are two options: the implementation period could be extended for a limited time, or we could bring in the backstop. The backstop as now agreed replaces the EU’s proposal for a Northern Ireland-only customs “backstop to the backstop” with a UK-wide solution, respecting the constitutional and economic integrity of the United Kingdom.
The withdrawal agreement legally commits both sides to use best endeavours to ensure that the backstop is never used. If either side fails to do so, this could be referred to an independent arbitration panel. I stress that it is an independent arbitration panel; it will comprise five members, two selected by the United Kingdom, two selected by the EU and a fifth, wholly independent arbitrator, selected by those parties, to resolve any dispute in that regard.
I would also observe, and I will come back to this in the light of a question from the noble and learned Lord, Lord Goldsmith, that as he observed, the use of the term “best endeavours” gives rise to an obligation. It may be regarded as a good faith obligation, but it is an enforceable obligation. It may be breached, and it may be determined by an arbitration panel. That mechanism is, as I believe the noble Lord, Lord Anderson of Ipswich, observed, a fair means of seeking to resolve disputes with regard to the backstop.
I turn to some of the observations that have been made during the course of the debate and the questions raised. The noble Baroness, Lady Hayter of Kentish Town, said that no one believes that the agreement will get a majority in the Commons. With great respect, the noble Lord, Lord Desai, either as a realistic optimist or a realistic pessimist, observed that he anticipated that it will pass. Of course, much of that lies in the hands of the Labour Party in the House of Commons. If the Labour Party wishes to avoid a no-deal Brexit, it has the means to do that by being prepared to see this final agreement on withdrawal pass through the Commons, so the answer lies in the hands of Labour as much as it does in the hands of any other party in the House of Commons.
As regards the suggestion of further negotiation that the noble Baroness referred to, that, as my noble friend Lady Altmann observed, is fantasy. It is not going to occur and indeed, I believe my noble friend Lord Cormack made the same observation.
With regard to the future relationship, it cannot at this stage be taken beyond a political commitment. The EU 27 are not, prior to our leaving the institution of the European Union on 29 March 2019, in a position to conclude an agreement with regard to the future relationship, so what we have is a statement of political intent, a political statement or undertaking. The noble Baroness said that this is a political statement without guarantees. Of course, that is a truism because political statements do not come with guarantees. That is why they are called political statements. That is where we are at present as we take that matter forward.
I think it is fair to say that the noble Baroness, Lady Ludford, did not have a good word to say about anyone on this side of the House, but it seemed to me that she fundamentally confused the objective of the withdrawal agreement with the issue of our future relationship. At present, we are concerned with the withdrawal agreement, not with the final determination of the future relationship.
The noble Lord, Lord Dykes, began by saying very candidly that we should not leave and then he suggested that we should have what a number of noble Lords referred to as a people’s vote, which is another term for a second referendum. He said that the remain option should be an option in that second referendum. I remind the noble Lord that the remain option was an option in the last referendum.
The noble Lord, Lord Morrow, addressed issues with regard to Northern Ireland. Clearly there are sensitive issues here. He suggested that we should leave the EU in the same way that we joined. There has been a span of 45 years since we joined the EU, and a great deal has happened in both the politics and the economics of the island of Ireland in that 45-year period. I do not accept the suggestion that Northern Ireland is somehow going to be subservient. It will be subject to those elements required to maintain the open border in Ireland. I do not believe that anyone would wish to see that open border threatened. In my submission, it does not indicate, as he suggested, that Dublin or Brussels holds a veto on the backstop. The backstop is one of two alternatives, and the backstop itself is subject to the dispute resolution process in the withdrawal agreement, subject to the obligation of best endeavours. I again emphasise the use of term obligation in respect of best endeavours. My noble friend Lord King of Bridgwater pointed out, and I entirely concur, that a second referendum is not a realistic prospect. It simply does not engage with our democratic process.
Lord Keen of Elie
I must say I am a Burkean as far as representative democracy is concerned. That is how our constitution operates. There are exceptions so far as referenda are concerned.
Lord Keen of Elie
It is suggested that my party had the first one. I believe Harold Wilson had a referendum over the EU rather before my party, but I may be mistaken about that. I am obliged to the noble Baroness.
It is said by the noble Lord, Lord Reid of Cardowan, that we have arrived at an impasse. We have not. We have arrived at an agreement, and it is one that will go before the House of Commons in the near future.
The noble Lord, Lord Steel of Aikwood, talked about crashing out without a deal, and we have had references to car crashes and catastrophes. Such arguments are not improved by overstatement. That, with respect, is what has been happening, perhaps at both ends of the spectrum, with regard to the debate on this matter and it takes away from the factual issue. It plays into what the noble and learned Lord, Lord Goldsmith, referred to as the “storytelling” that can sometimes fog proper decision-making in this context.
The noble Lord, Lord Steel, also referred to “a defective deal, at great expense”. Again I remind him that the sum of £35 billion to £38 billion is not a great expense; it is a negotiated means of meeting our outstanding obligations under international law, and that is what we intend to do.
The noble Lord, Lord Browne of Belmont, also raised the question of Northern Ireland. Again I emphasise that the issue of the backstop, even if it comes into play, will be subject to the obligations of “best endeavours” and to the independent arbitration process provided for in the withdrawal agreement. I also note that there is no limitation at all upon the movement of goods from Northern Ireland to the remainder of Great Britain. That movement remains wholly unimpeded by these terms.
My noble friend Lord Bridges of Headley referred to the political declaration. Of course, as he later observed, it is not yet complete, which is why we must wait to see the outcome of further discussions regarding the political declaration in order to see where we are going to be. It is certainly not the time to anticipate what that outcome might be.
Lord Bridges of Headley
My Lords, I understand that it is premature, but could my noble friend therefore refute the proposition put forward by the EU’s deputy negotiator that the political declaration means that the customs union will be the basis of the relationship?
Lord Keen of Elie
The withdrawal agreement has expressed the terms for the implementation period and the present political declaration has indicated where negotiations will begin, but where they will end is a wholly different matter. It is a case of saying that it is a work in progress and we will have to await the outcome of that further negotiation.
Lord Wallace of Saltaire
My Lords, the document that we had from the Government to say where we are now said the negotiations on the political statement would be finished by the end of November, which is the end of next week. Can he confirm whether that is expected to be the case and when it may come to Parliament for us to debate, or is he saying that it will be much longer delayed?
Lord Keen of Elie
My understanding, as I said before, is that the Prime Minister is going to be meeting with Mr Juncker in the very foreseeable future and that the discussions are going to be taken forward. As to when the final political statement will be concluded, I cannot give a specific date but the intention is, as previously stated, that it should be available by the end of November. I cannot say when it will come before Parliament; at this stage I cannot give a definitive date from the Dispatch Box, but I am quite willing to write to the noble Lord if I have any further information on that point.
The noble Lord, Lord Kerr of Kinlochard, mentioned Article 50 and has previously observed that he had a hand in its drafting. As a general rule of law, one does not submit subjective evidence over the construction of a contractual provision, and there are very good and compelling reasons for that. However, I note what he has to say about the idea of the EU 27 being prepared to stop the clock. With great respect, it appears to me that the indication is: “Let us get on with it. Let us go forward. We have an agreement for withdrawal. Let us implement that. Let us then address how you are going to leave”—because we are going to leave the European Union on 29 March 2019.
The noble Lord, Lord McCrea of Magherafelt and Cookstown, made his maiden speech today. I thank him for that and compliment him on his contribution to the debate. It was suggested that he should not have used a maiden speech to be controversial, but I would not take issue on that. It is a matter of deep concern to the noble Lord and his fellow Peers from Northern Ireland that we should address the matter of the border and the integrity of the union in this context, and I fully understand his concerns, but I cannot accept that Northern Ireland is either a hostage or a sacrifice in the circumstances. Far from it: our concerns lie in maintaining the union. In so far as he suggested that a hard border was a fictitious idea and could be managed, I do not disagree with him. That is one reason why we anticipate that the backstop will not be required. But, as it is, the people of the United Kingdom of Great Britain and Northern Ireland have spoken as a United Kingdom, and their decision is that we should leave the European Union.
The noble Lord, Lord Carlile of Berriew, pointed out that the role of Parliament must be remembered. Like him, perhaps, I am a Burkean on the issue of representative democracy. He said, and I agree, that there should be no running back to the people. It is for Parliament to consider the present withdrawal agreement. It is for Parliament to accept or reject that withdrawal agreement. It is for Parliament to address the consequences of its actions, and it answers to the people in a representative democracy. I agree with much of what he said about the process that we should be going through in this context.
Lord Carlile of Berriew
I am very grateful to the noble and learned Lord for giving way, but on that point, dredging up his experience of representative democracy, does he agree that when a Government put forward a proposition in the House of Commons and it is defeated, the normal course is to revert to the status quo ante?
Lord Keen of Elie
That might be the normal course, but it is not the invariable course. We have to look forward to how the Government will proceed in the context of the present process, where they present their agreement to the House of Commons, where it will be subject to consideration. I shall not anticipate that outcome, although, like the noble Lord, Lord Desai, I take the view that there is every prospect that the House of Commons, having examined this agreement —I am amazed at how many people commented on it before they could conceivably have read its 580 pages—will find that it takes us forward towards the goal that we were set as a result of the referendum.
Lord Hannay of Chiswick
As the noble and learned Lord seems to be drawing to the end of his remarks and has not yet answered my question, I wondered whether he would have a shot at it now. I asked how he would construe the provision that the arbitration panel may not rule on a matter which involves the interpretation of EU law, but must pass it to the European Court of Justice.
The whole of the withdrawal treaty will become European Union law on the day it is ratified. It is no good the noble and learned Lord shaking his head. In its view, it will become European Union law. There will be binding obligations under European Union law. Irrespective of that, how does he construe that provision?
Lord Keen of Elie
I am obliged to the noble Lord for reminding me of his question. Under the provisions of the withdrawal agreement, if there is a question as to the interpretation of a point of EU law, the interpretation must be given by the arbitration panel to the Court of Justice of the European Union, which will determine that point. The application of that interpretation of European law will be a matter for the arbitration panel, not the court. That is why we have an independent arbitration panel and it is why I took issue with the way in which the noble Lord sought to characterise the matter. At the end of the day, the issues that the arbitration panel will be addressing will, no doubt, involve mixed questions of fact and law. The panel will be masters of the fact, apply the law and make a determination on that mixed basis.
I am told that I have three minutes left. That being so—I know that noble Lords would want me to have another 30 minutes—I will quickly go through some of the issues which were touched upon but which I have not yet addressed. Many noble Lords talked about a people’s referendum. I hope that I have made the point that that simply does not accord with our democratic principles, nor does it reflect the will of the people when they voted in the referendum. I was quite taken by the observation of the noble Lord, Lord Warner. He said that only 38% of the electorate voted to leave. That is 17.4 million people and, under our democratic traditions, is what we call a majority.
Lord Warner
Does the Minister accept that the proportion of the electorate that voted to leave, 38%, is less than the requirement for 40% of an electorate to call a strike in many public services?
Lord Keen of Elie
My Lords, we are not talking about a strike in public services. Whether the figure is 38% or not, it represents a majority and that is where we are.
The noble Baroness, Lady Bull, raised a series of questions about citizens’ rights. I quite understand her concern, particularly in the context of educational institutions. We are bringing forward an immigration Bill. Once that has been brought forward and laid, we will be in a position to address comment and criticism with regard to its terms.
Lord Keen of Elie
Every year is a new year.
The noble Lord, Lord Judd, made the prescient point that the political declaration is vital and that until we have that declaration we will not have a clear picture of where we are going to be with our future relationship. This is a staged process. We have the withdrawal agreement in draft; we are capable of taking that forward. We are capable of having a Brexit that works for both the EU 27 and ourselves. We will have an implementation period and we will then have the opportunity to lay out the precise terms of our future relationship with the EU 27.
The noble Lord, Lord Anderson of Ipswich, talked about an extension of the Article 50 process. It is not the policy of this Government that the Article 50 process should be interrupted. Notice has been given; the date of exit is determined; we will follow that through to a conclusion. The noble Lord, Lord Inglewood, raised a number of issues relating to Written Questions. I do not have the answer, but I will arrange for a letter to be written and will put a copy in the Library. I do not know what the present status of various Questions to that department is.
Finally, the noble Lord, Lord Dobbs, referred to a deliberate act of punishment on the part of the EU. I cannot accept that. The EU 27 are negotiating in the best interests of the EU 27. We are negotiating in the interests of the entire United Kingdom. It is going to be a demanding negotiation but, at the end of the day, we will have an ongoing, civilised and mutually beneficial relationship with the EU 27 after we have left.
I am obliged to noble Lords for their attention.