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Vicky Foxcroft (Lewisham, Deptford) (Lab)
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Mike Amesbury (Weaver Vale) (Lab)
The Secretary of State for Foreign and Commonwealth Affairs (Mr Jeremy Hunt)
I have recently discussed post-Brexit diplomatic co-operation with my French, German, Belgian and Norwegian counterparts, and I am confident that it will continue post Brexit.
Vicky Foxcroft
When the Cabinet met to discuss the Prime Minister’s deal, the Foreign Secretary said that it risked leaving the UK in what he called the “Turkey trap”, and that the backstop could in fact become an indefinite “frontstop”. Given those entirely valid concerns, will he explain why he is backing this terrible deal?
Mr Hunt
I do not comment on confidential Cabinet discussions, except to say that I started my comments at that meeting by saying that this is a time when all of us owe our loyalty to the Prime Minister, who has an extremely challenging job. And like many Members of this House, I am looking forward to a delicious roast turkey for Christmas.
Stephen Doughty
It is not a coincidence that Russia has chosen this opportunity to take further military action against Ukraine and to continue to stir up trouble. Why does the Foreign Secretary think that so many former diplomats and others are totally opposed to the deal that the Government are putting forward on Brexit? Is it because it will undermine our diplomatic capacity in the world and our ability to stand up to those who would seek to divide and undermine Europe and this country’s national interests?
Mr Hunt
On the contrary, I think this deal allows us to project ourselves with confidence and strength across the world. I have had conversations with the Ukrainian Foreign Minister, who is grateful for the staunch support that the UK has given his country in this challenging situation. It is fair to say that the UK has been one of the leading voices, if not the leading voice, among EU countries on foreign policy issues such as this, and I am confident that we will continue to do that.
Mike Amesbury
When he spoke to Andrew Marr last weekend, the Foreign Secretary said that the Prime Minister’s proposed deal
“mitigates most of the negative impacts”
of leaving the EU. Can he tell us which of the negative impacts of leaving the EU the deal does not mitigate?
Mr Philip Hollobone (Kettering) (Con)
Both the United Kingdom and France have permanent seats on the United Nations Security Council. We get to keep our seat after Brexit, but there is growing pressure by the European Union to take over France’s seat. What is the Foreign Secretary’s view on that?
Mr Hunt
With the greatest respect to my hon. Friend, I think that is a matter for France. In my short time in this job, I have noticed that it is very difficult to get a consensus across the European Union to take common positions. We sometimes succeed and we sometimes do not. It is much easier to get the French to take a strong position, even though sometimes we do not agree with that, either.
Tom Tugendhat (Tonbridge and Malling) (Con)
As we are talking about British-European co-operation on diplomatic matters, I wonder whether my right hon. Friend could talk about the events that we are seeing in Ukraine and the importance of working together to reinforce a country that is under severe threat and suffering severe abuse by a neighbour. It really does need the help of our institutions, both UK and European, to ensure that it is able to stand up to such aggression.
Mr Hunt
I am pleased that my hon. Friend has raised this issue. He is absolutely right to say that, on an issue such as Ukraine, we have to stand four-square with our European friends, and we have indeed been doing so. We have extensive discussions about taking a common position with them, and I am pleased to say that there is unity not only among the European nations but with the United States that what Russia did is totally and utterly unacceptable. It is against international law and we do not condone it—we condemn it.
Kevin Foster (Torbay) (Con)
Will the Foreign Secretary confirm that he made it clear in his discussions that, while we are leaving the European Union, we are not leaving Europe, and that we will continue to work through NATO and the many other international forums to ensure the peace and security of the whole continent?
Mr Hunt
My hon. Friend is absolutely right. It is important not to underestimate the influence that we have. We are a member of the G7, the G20, the OECD and the Organisation for Security and Co-operation in Europe. We are a member of 60 international organisations. With the EU, we have built up a huge amount of trust and common ground over recent years, which is why I am confident that it is in both sides’ interests that that continues.
Stephen Gethins (North East Fife) (SNP)
Climate change is the biggest challenge that we face, and one that we should perhaps spend more time discussing in this Chamber. Being able to take a common position with our EU partners on this has been an incredibly powerful diplomatic tool for pushing that message forward. I am sure that the Foreign Secretary will join me in welcoming the fact that the First Minister is in Poland—where Scotland’s actions have been hailed internationally—to push that message as well. How will we continue to work with our EU partners to push that important diplomatic message?
Mr Hunt
My right hon. Friend the Minister for Asia and the Pacific will be in Poland on Friday and Saturday for further discussions on such issues. This issue does not respect any national boundaries and can be solved only by countries across the world working together. We have a strong common position with other European countries and that will continue.
Stephen Gethins
I thank the Foreign Secretary for his response. There is a concern that the UK is being left isolated in terms of Brexit and the broken relationship. In maintaining that common position as we go forward, will he commit to working as closely as we have done with our European partners? Additionally, in terms of our international ambitions, can Scotland help to act as a bridge between the UK and the rest of the EU?
Mr Hunt
The best bridge Scotland could be is by not creating a wall between Scotland and England and not trying to become independent. If we act as one voice, as a United Kingdom, we will be a more powerful voice abroad. We have had an independent foreign policy during our whole time as a member of the EU. That is not going to change, but we have found that it is incredibly effective to work closely with our European neighbours and friends on a whole range of issues, and that is also not going to change.
Michael Fabricant (Lichfield) (Con)
Mr Hunt
I thank my hon. Friend for that excellent question. In fact, I raised that issue when I was in Tehran on 19 November. It is essential that we give full support to media freedom in all parts of the world. We have a lot of common ground on that with other European countries that share concerns about the recent deterioration in the situation.
Emily Thornberry (Islington South and Finsbury) (Lab)
Only a month ago, the Foreign Secretary was one of eight Cabinet Ministers who said that they could not decide whether to back any Brexit deal unless they had seen the full, unedited legal advice given to the Prime Minister, saying that they could not repeat the failures of the Iraq war and rely only on an edited summary. The Foreign Secretary was right to take that entirely sensible and rational position just four weeks ago, so why should the same principle not apply to the whole of Parliament?
Mr Hunt
For the same reason that the previous Labour Government did not publish all the legal advice that they received: it would make the practice of Government totally and utterly impossible. I am delighted that the right hon. Lady has come in on this question, because she said on TV on Friday:
“I like the idea of us remaining in the EU.”
On this side of the House, however, we rather like the idea of implementing the will of the British people in a referendum.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Mr Hunt
I am unsure why the hon. Gentleman thinks that any of that is going to change, because the political declaration could not have been stronger in the commitments made to continue diplomatic co-operation between the UK and the EU. That is one of the first issues that European Foreign Ministers have raised in every single discussion that I have had with them, and there is total and complete unanimity.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Mr Hunt
No, it is not. We strongly support the JCPOA, but we strongly condemn missile activity by Iran in the region, because it is extremely destabilising. Military activities in Yemen, Lebanon, Syria and Iraq are causing enormous problems for many people in the region, and we will not settle the issues in the middle east unless Iran starts to change its approach and act peacefully towards its neighbours.
Tom Brake (Carshalton and Wallington) (LD)
Brendan O’Hara (Argyll and Bute) (SNP)
The Secretary of State for Foreign and Commonwealth Affairs (Mr Jeremy Hunt)
Our policy on the death penalty has not changed, and we continue to raise human rights issues with the Kingdom of Saudi Arabia and other countries.
Tom Brake
I am sure that the Foreign Secretary is aware that my right hon. Friend the Member for Twickenham (Sir Vince Cable) yesterday asked the Prime Minister whether she would make an appeal for clemency on behalf of the 12 men who currently face imminent execution. Is the Foreign Secretary or the Prime Minister willing to do that?
Mr Hunt
We continue to make representations on all cases of the death penalty in Saudi Arabia, and I will look carefully into the case the right hon. Gentleman raises. I have to be direct with him and say that, because it is connected to sharia law, we think it unlikely that Saudi Arabia will change its policy on the death penalty, so most of the interventions we make tend to be in cases where a juvenile has committed the offence, or where we do not think the offence is egregious and where we think we will have the best chance of success.
Brendan O’Hara
The Government would have us believe that our close ties with Saudi Arabia have led to the regime behaving more humanely. Given that almost 100 Yemeni children were recently killed by Saudi airstrikes, and given the brutal murder of Jamal Khashoggi, there is very little evidence to back up that claim, so can the Foreign Secretary point to the evidence that the UK is making the Saudi regime more humane and more responsible?
Fabian Hamilton (Leeds North East) (Lab)
Last month, the United States imposed Magnitsky sanctions on 17 individuals accused of involvement in the murder of Jamal Khashoggi. Many of them now face the death penalty in Saudi Arabia. Of course I would not ask the Foreign Secretary to comment on any individual cases, but can he simply tell us how many of those 17 individuals accompanied Crown Prince Salman on his visit to the UK in April?
Mr Hunt
The Home Office is doing a lot of work on what happened with all those 17 individuals, and there have been media reports that some of them did accompany the Crown Prince when he came to the UK. We want justice in the case of Khashoggi. It is an appalling case, and the Prime Minister made that clear to the Crown Prince when she met him in Buenos Aires. We have made it clear in my private meetings, too.
Steve Double (St Austell and Newquay) (Con)
The Minister for Asia and the Pacific (Mark Field)
The rule of law and the independence of the judiciary are the foundations of Hong Kong’s continued success and prosperity. The UK remains absolutely committed to the joint declaration and to upholding “one country, two systems.” I raised the concerns about the erosion of the rule of law when I visited Hong Kong only last month, and we will continue to monitor that situation closely, as detailed in the Foreign Secretary’s six-monthly reports to Parliament.
Steve Double
I thank the Minister for that answer. Recent events in Hong Kong have seen the movement restricted of those critical of the Hong Kong Government, including political opponents and journalists. What steps are the UK Government taking to protect British interests in Hong Kong and the rights of British national (overseas) passport holders?
Mark Field
I reassure my hon. Friend that we take very seriously our long-standing and ongoing duty to uphold the joint declaration. We have raised publicly our concerns about the decision, for example, not to renew the visa of Victor Mallet, of the Financial Times, and the subsequent denial of his re-entry into Hong Kong, as well as other developments. These call into question Hong Kong’s high degree of autonomy. We have also made it clear in private to the Chinese and Hong Kong Governments that it is vital that Hong Kong’s rights, freedoms and high degree of autonomy, which are set out in the joint declaration, are fully respected.
Catherine West (Hornsey and Wood Green) (Lab)
What will the Foreign Office do if the Government in China continue not to allow the likes of Victor Mallet, Benedict Rogers and others to have access to Hong Kong, as is correct and proper in a country with which the UK has such a long-standing relationship?
Mark Field
I agree with the hon. Lady that it is right and proper that such individuals are entitled to be there. We are concerned by the specific decision not to renew the visa of the Financial Times journalist Victor Mallet. As I said in Hong Kong the day I was there, that incident on 9 November undermines Hong Kong’s freedom of speech and, indeed, freedom of the press, which are guaranteed under the Basic Law. This, in turn, risks undermining Hong Kong’s economic success in the longer term. We will continue to raise those concerns.
Fiona Bruce (Congleton) (Con)
Does the Minister share concerns about the trial that began on 19 November of nine leaders of the pro-democracy Hong Kong umbrella movement on such vague charges as “incitement to incite” public nuisance, and about the implications of such charges for freedom of speech and the rule of law in Hong Kong? Will Ministers raise such concerns with the Government there at the earliest opportunity?
Mark Field
I thank my hon. Friend for her tenacious work in this regard. The trials are a matter for the Hong Kong courts. I met Roberto Ribeiro, the deputy chief justice, and the head of the Hong Kong Bar Association when I was there in November. I have every confidence in the continued independence of the Hong Kong judiciary, which remains in high international esteem. But I hope that the incidents to which she refers will not discourage either lawful protests or the young from engaging in politics in Hong Kong.
Helen Goodman (Bishop Auckland) (Lab)
The banning of a pro-independence party in September marks a disturbing new phase in the erosion of democratic rights and freedoms by China. It is a clear breach of the spirit of the 1984 declaration, yet the Government are so desperate for a post-Brexit trade deal that they have done nothing. Is Chris Patten right to describe the Government’s policy as “craven”?
Mark Field
May I reassure the hon. Lady that we have done rather a lot? We do not support Hong Kong independence as we feel that would be a clear breach of “one country, two systems”. Nevertheless, as she rightly says, the right to stand for election, and the rights to free speech and to freedom of association are absolutely enshrined in the Basic Law. We are also concerned that, if not the letter, then certainly the spirit of “one country, two systems” is being breached by this matter. We have issued a statement and we will continue to apply pressure through diplomatic means; we will do so on an ongoing basis. I share many of her concerns, but she should not believe that there is not a lot of work going on, both from our consulate general there and from London on this matter.
Lucy Powell (Manchester Central) (Lab/Co-op)
The Minister for Europe and the Americas (Sir Alan Duncan)
The Prime Minister has written to President-elect Bolsonaro. Our ambassador in Brazil has seen him, many of the future Ministers and the transition team, and we look forward to working very closely with Brazil in the time ahead.
Lucy Powell
The great Sir David Attenborough said yesterday that climate change is humanity’s “greatest threat”. We all know that the Amazon rainforest is known as the planet’s lungs, yet we are seeing an alarming and irreversible rate of deforestation in the Amazon and worrying noises are coming out of the new Administration about their approach. So will our Government play a strong global leadership role in ensuring that the new Brazilian Administration understand their responsibility to protect the rainforest and the consequences if they do not do so?
Sir Alan Duncan
The answer to the hon. Lady’s question is a very clear yes—the UK, of course, is fully committed. The Brazilian Government come into office on 1 January. The President-elect has already said that Brazil will remain a party to the Paris agreement. Our ambassador has already discussed this with the incoming Government and we will continue to put pressure on and lobby in the same way as we always do in favour of climate change legislation and adherence to the Paris agreement.
Mr Gregory Campbell (East Londonderry) (DUP)
In any discussions the Minister may have with the new President, will he ensure that the understanding comes across that the populism that is sweeping across much of the democratic world is because of mainstream Administrations internationally leaving many of the populations behind? That is giving rise to the populism we see today.
Sir Alan Duncan
I understand exactly what the hon. Gentleman is saying. I think that all Governments need to serve the needs of all their people. We have seen the rise of the right in quarters closer to home across Europe, including in regional elections in Spain last week. I agree that populism has its serious dangers. We want to see all Administrations serve the needs of their country, as we would all wish to see.
Graham Stringer (Blackley and Broughton) (Lab)
The Minister for Asia and the Pacific (Mark Field)
We have consistently urged the Afghan Government to protect the rights of all ethnic and religious groups, including the Hazaras, in line with the Afghan constitution. The Foreign and Commonwealth Office is deeply concerned by recent reports of security incidents affecting the Hazara community, particularly in Ghazni and Uruzgan. We will continue to call on all parties to the conflict to protect the civilian population.
Graham Stringer
Recently, Hazaras lobbied me and other hon. Members, saying that they are now in deep fear of an ISIS attack. This comes after they have suffered massacres at the hands of the Taliban, and they have a history of being the subject of genocidal attacks by other ethnic groups in Afghanistan. Given the amount of money we have put into Afghanistan, can the Minister not do more?
Mark Field
We fully understand the deep concerns about civilian casualties and displacement and, as the hon. Gentleman rightly says, the threat from not only the Taliban but potentially ISIS, too. Only last week, staff from the British embassy in Kabul met Hazara representatives for Ghazni from the Afghan Government, to hear those concerns at first hand. The Afghan national defence and security forces are working to stabilise the security situation, and of course they do that in tandem with UK forces.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
In the light of the recent Taliban offensive and the atrocities that occurred as a result, and bearing in mind the deep insecurity currently felt by the Hazara community, what additional support is NATO’s Resolute Support Mission contributing to the Hazaras’ safety?
Mark Field
We are obviously working together with many of our allies, particularly at NATO level. NATO’s Resolute Support Mission is helping Afghans to build their own self-standing capability and capacity. We very much hope to see the fruits of that in the years to come with the Afghan national defence and security forces. That work is happening in several parts of Afghanistan. The hon. Gentleman will appreciate that we are obviously concerned about the humanitarian side, particularly when we see civilian populations under threat. This is going to be a long haul. The hon. Gentleman will recognise that, working together with allies and the US in particular, we are no longer governed by an electoral timetable. We want to leave the country in a better place, which means working to build up that capacity.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Minister for Africa (Harriett Baldwin)
The UK has been working with the United Nations to agree a global compact on refugees, which is set for adoption by the end of the year. It provides a comprehensive global framework that goes beyond life-saving humanitarian support, enabling a longer-term response, offering refugees a viable future.
Debbie Abrahams
The UN’s global compact on refugees is indeed welcome—it recognises our common humanity and interconnectedness—but I am concerned that it is non-binding. How will the Government work to strengthen it? Will the Foreign Secretary and Home Secretary work together to review our restrictive rules, which prevent refugee families from being together?
Harriett Baldwin
I am glad that the hon. Lady welcomes the UK’s role, and I assure her that the UK has been fully engaged throughout the whole process since the United Nations agreed to move forward on this issue. We have been working on the wording and the direction of travel, to make sure that it is an agreement that can work for the whole world.
Sir Desmond Swayne (New Forest West) (Con)
Exactly what are we signing up to at Marrakesh?
Harriett Baldwin
We are signing up to the global compact on refugees. I should clarify for the House that it is a different document from the one that has perhaps generated more controversy: the global compact on migration.[Official Report, 5 December 2018, Vol. 650, c. 9MC.]
Christine Jardine (Edinburgh West) (LD)
Following numerous political attacks, search-and-rescue vessels have found it difficult to operate in the Mediterranean. Given the death toll, which Médecins Sans Frontières reckons is approaching 1,300 people this year, what are the Government doing to support the non-governmental organisations that wish to provide search-and-rescue facilities in the Mediterranean sea?
Harriett Baldwin
The hon. Lady is right to raise this important issue. She will be aware that two Border Force cutters are in the area right at this moment. I know she will welcome the fact that over the course of the operation, UK naval assets have rescued more than 30,000 souls in the Mediterranean. Of course, we are doing further work in respect of the UK allocation, which so far has totalled some £175 million.
Rebecca Pow (Taunton Deane) (Con)
I recently attended a humbling and moving event in Taunton Deane to celebrate all the Syrian families—almost 20 of them—who have come to Somerset. Will the Minister join me in praising and thanking Taunton Welcomes Refugees, which is a model organisation? So many church people, individuals and council workers are involved in the organisation. It is just wonderful, and the families were so delighted. Will the Minister also please confirm our commitment to helping the most needy of Syrian refugees?
Harriett Baldwin
Mr Speaker, have you ever come across in this House a representative more passionate about her constituency than my hon. Friend? I am happy to endorse what she says and to endorse the work done in my county of Worcestershire. I inform the House that, nationally, the UK is well on track to achieving our commitment of 20,000 vulnerable people resettled in the UK by 2020. In fact, as of September, I understand that that total is now more than 15,000.
Mr Speaker
The Minister is absolutely right. I have learned more about Taunton Deane in the past three years than I knew for the previous 52—that is correct.
Rachel Reeves (Leeds West) (Lab)
Many refugees are fleeing religious persecution. The Archbishop of Canterbury has said that Christians in the middle east are on the brink of extinction, facing the worst crisis since the 13th century in the birthplace of Christianity. What are the Government doing to support Christians in the middle east and to grant asylum to those who are fleeing that persecution?
Harriett Baldwin
Well, indeed, it is a very sobering Christmas thought from the Archbishop of Canterbury. In fact, there are 25.4 million refugees worldwide, and the UK, of course, stands as one of the most significant supporters of refugees whatever their religious persuasion. There is a service in Westminster Abbey later today to which all colleagues are invited. I know that this is an important piece of work that the UK will remain steadfast in supporting.
Robert Courts (Witney) (Con)
Will my hon. Friend outline what new mental health support is being given to the children in Lebanon and Jordan who are affected so badly by the fighting that is ongoing in Syria?
Harriett Baldwin
Yes, if Mr Speaker will allow me to put on my other hat from the Department for International Development just very briefly, I will say to my hon. Friend that he will be aware that the Secretary of State for International Development recently announced a range of new programmes to provide support in what has been a neglected area in terms of the psycho-social support and mental health support that particularly children in refugee situations need.
Leo Docherty (Aldershot) (Con)
Hannah Bardell (Livingston) (SNP)
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Ross Thomson (Aberdeen South) (Con)
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Secretary of State for Foreign and Commonwealth Affairs (Mr Jeremy Hunt)
Peace talks to resolve the terrible conflict in Yemen are due to start in Stockholm tomorrow and attendance is looking positive.
Leo Docherty
I am grateful to the Foreign Secretary for his response and for the support that he has given to these critically important peace talks. What reasons does he have for thinking that the Houthis and their Iranian backers will negotiate in good faith?
Mr Hunt
It is difficult to know the answer to that question, because what has bedevilled these talks to date is that both sides have thought that a military victory is possible. This is the first time for two years that the parties have come round a table together. I do think that the mood has changed, so we want to do everything we can to support it.
Hannah Bardell
The UN says that more than 60% of civilian deaths have been the result of Saudi-led airstrikes. Will the UK Government therefore confirm that they will undertake any and all measures to ensure that Saudi Arabia is no longer armed and trained by the UK and that every impression is made on it to reach an agreement that means that no more Yemeni civilians die at its hands?
Mr Hunt
With respect to the hon. Lady, whose views I listen to carefully, it is important to remember that the cause of this conflict was the illegal taking over of power in Yemen by the Houthis, and the Saudi military offensive was authorised by resolution 2216. We have a relationship with Saudi Arabia, which we are using to encourage it to do everything possible to come round the table to talk about peace.
Sir Geoffrey Clifton-Brown
Some humanitarian agencies are warning that, next year, Yemen could have the worst famine in a century. Is it not incumbent on the civilised world, therefore, to lift every sinew to broker a peace settlement under the auspices of Martin Griffiths, our UN special negotiator?
Mr Hunt
My hon. Friend speaks extremely wisely. There are 8.5 million people on the brink of starvation; 14,000 people are getting cholera every week; and 85,000 children have already died of starvation. That is why we have to do everything possible. Martin Griffiths is doing a fantastic and very difficult job.
Ross Thomson
Houthi rebels pushed the legitimate Government in Yemen from power, and they have fired Iranian-backed missiles across the border into neighbouring countries and commercial shipping lanes. Does my right hon. Friend agree that any vote in the US Senate to withdraw American support from the coalition would undermine efforts to reach a ceasefire?
Mr Hunt
My hon. Friend is absolutely right to point out that there can be no lasting settlement to the terrible conflict in Yemen unless Iranian missiles are prevented from being fired from Yemen into Saudi Arabia and even as far as Riyadh. That is why we must have a balanced way forward that recognises both the humanitarian needs and Saudi Arabian security.
Gavin Newlands
The Prime Minister said yesterday that the situation in Yemen could only be resolved with a “long-term political solution.” To make that possible, should we not be strongly urging restraint on the part of the Saudis, given that when total war has been waged on civilians—often using weapons supplied by this country—it is hard for calls for a political solution to carry any meaningful weight or credibility?
Mrs Pauline Latham (Mid Derbyshire) (Con)
Some 85,000 children under the age of five have starved to death in Yemen over the past three years. Does my right hon. Friend agree that a political solution is the way to a lasting peace and that, more urgently, we need to ensure that imports of food can make it through the port of Hodeidah in the light of the Save the Children Fund report?
Mr Hunt
My hon. Friend is absolutely right. Hodeidah opening is crucial; it is also important to get access to the Red sea mills, which have enough wheat to feed 3.6 million people. The fighting has lessened, but it has still not stopped, which is why we need these peace talks to succeed.
Matt Warman (Boston and Skegness) (Con)
Fifty wounded Houthi rebels are to be flown from Yemen to Oman. Does my right hon. Friend agree that that flight on a UN plane for treatment is at least a good sign of good will in advance of the peace talks and that we should pay tribute to all those involved and be hopeful for the future?
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
It is hugely welcome and encouraging that the peace talks in Stockholm are finally starting tomorrow. Will the Foreign Secretary update us, in parallel, on what is happening regarding getting a new UN Security Council resolution?
Mr Hunt
I am happy to do that. We have circulated a text, and the truth is that we will finalise that text after the talks have concluded. If we could choose what the text would say, we would love it to announce a ceasefire, but there is no point doing that unless it is agreed by all the parties. That is why we want the peace talks to succeed.
Keith Vaz (Leicester East) (Lab)
May I thank the Foreign Secretary for the amount of time that he has spent on the Yemen issue since assuming office? This is a very special moment. The guaranteed treatment of the Houthis in Oman is critical, but may I ask the Foreign Secretary to go to Stockholm on one of the days and show the support of the highest level of this Government for the peace process?
Mr Hunt
In principle, I have no problem with doing anything that will help this process along. As my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) said, this is by far the worst humanitarian crisis in the world today and possibly the worst that we have had for 100 years. However, I will always be guided by Martin Griffiths on whether my presence would be helpful.
Sir Vince Cable (Twickenham) (LD)
As long as the bombing continues, can the Foreign Secretary describe the surveillance that British embassy officials have over the activities of the Saudi air force, as required by export licence conditions?
Mr Hunt
The right hon. Gentleman is absolutely right to point that out. Indeed, he oversaw those export conditions when he was working in government. It is because of the contracts that we have with the Saudis that we are very closely involved in looking at things like their targeting to make sure that they are indeed compliant with international humanitarian law.
Emily Thornberry (Islington South and Finsbury) (Lab)
I thank the Foreign Secretary for his update on the Yemen peace talks. I would like to ask him some more questions about the UK’s draft UN resolution. May I ask him a question that I have asked three times now—at the Dispatch Box, by letter and in a written parliamentary question—without ever getting an answer, yet it is such a simple question? Did the version of the draft UN resolution shown to Crown Prince Salman by the Foreign Secretary on 12 November include a call for independent investigations of war crimes—yes or no?
Mr Hunt
First, I did not show a text of the draft resolution to King Salman or the Crown Prince when I went to Saudi Arabia, but I can confirm that both the original text and the current text refer to international humanitarian law. But in the process of getting that text agreed, did we make compromises to please the Saudis? Yes. Did we make compromises to please the Houthis? Yes, we did. As a result of that diplomacy, the talks are happening this week. Rather than criticising that, the right hon. Lady should be celebrating the brilliant work done by British diplomats.
Emily Thornberry
It would be very helpful, in those circumstances, if the Foreign Secretary put a version of that draft resolution in the Library so that we can all see it for ourselves. In the meantime, the House will be aware that this week the US Senate is due to vote on whether America should continue supporting the Saudi assault on Yemen, even as millions of children face starvation. If the Foreign Secretary genuinely believes in the sovereignty of this Parliament, when will he show it? When will he ask Members of this House to vote on whether the UK support for this war can any longer be justified?
Mr Hunt
I simply say to the right hon. Lady that when it comes to the question of arms exports to Saudi Arabia, she seems to feel rather more strongly about it today than she did in 2007, when Labour Foreign Office Minister Kim Howells talked about shared values with Saudi Arabia following a big arms deal. The truth is that we follow the guidelines put in place by a Labour Government. That is what we do. They are the strictest in the world, and if she wants to change them, she should say so.
Rosie Cooper (West Lancashire) (Lab)
The Minister for Asia and the Pacific (Mark Field)
The FCO’s 2017 human rights and democracy report demonstrates the breadth of the issues we work on and how we mobilise our diplomatic network to champion universal rights. This of course includes freedom of religion or belief. As a testament to that commitment, on 4 July the Prime Minister appointed my FCO colleague, Lord Ahmed, to the role of special envoy on FORB—an end to which I can assure this House he works tirelessly.
Rosie Cooper
The biggest recipient of UK aid, Pakistan, has received £2.8 billion over the past 20 years—that is nearly £400,000 a day. Should we not suspend aid until Pakistan promotes freedom of religion and belief for its minorities and allows an innocent woman, Asia Bibi, falsely imprisoned for nine years, to leave Pakistan, and should we not be offering her asylum in the United Kingdom?
Mark Field
I know that a number of Members have concerns about this question. As the Prime Minister has stated, our primary concern is the safety and security of Asia Bibi and her family. We want to see a swift and positive resolution to the legal aspect of this case in Pakistan. I should perhaps say that one allied nation has, for some years, been in detailed discussions about providing a safe destination for Asia Bibi and her family once the current legal process is complete. The House will appreciate that going into detail on these discussions would compromise that safety.
Dame Caroline Spelman (Meriden) (Con)
Having recently returned from the Holy Land with a cross-party delegation of women MPs—and, indeed, your Chaplain, Mr Speaker—I am very concerned about the human rights abuses that I saw. Does the Minister agree that there is a renewed urgency to find a solution to the conflict in this area?
Mark Field
I thank my right hon. Friend for her question. I could not agree more. We will continue to work as closely as we can with all parties. As I have pointed out, we do a lot of work underneath the radar. The Foreign Secretary and my right hon. Friend the Minister for the Middle East work very closely in relation to these issues and will continue to do so, looking after the rights of religious minorities across the world.
Tonia Antoniazzi (Gower) (Lab)
Mark Field
I know that my hon. Friend the Minister for Africa has recently been in Cameroon and speaks regularly with counterparts. We are extremely concerned about the issues in the Anglophone area. As the hon. Lady will be aware, a considerable amount of work goes on with Boko Haram on the porous border between Cameroon and Nigeria. We will continue to do all we can to protect the interests, particularly in the Anglophone area
Liz McInnes (Heywood and Middleton) (Lab)
Cambridge PhD student Peter Biar Ajak was detained without charge by the authorities in South Sudan in July for doing nothing more than speaking out on the human rights of his fellow citizens. The Government said at the time that that was of great concern. Can the Minister tell us what action has been taken since then to secure Peter’s release?
Mark Field
I thank the hon. Lady for her question. We remain appalled by the conflict and deteriorating humanitarian situation in South Sudan. We welcome the regionally led peace agreement signed on 12 September. We believe that that is the only real chance and opportunity for the people of South Sudan, who have suffered for so long. There are positive steps, but I accept, as the hon. Lady points out, that progress is very slow and inconsistent. We welcome reductions in violence, and we work with our mission there to try to move towards ceasefire violations coming to an end.
Peter Heaton-Jones (North Devon) (Con)
The Secretary of State for Foreign and Commonwealth Affairs (Mr Jeremy Hunt)
We are very concerned at the increasing number of attacks on journalists throughout the world, which is why next summer we plan to host a major conference in London on protecting media freedom.
Peter Heaton-Jones
I am grateful for that answer. This issue is close to my heart. Will the Foreign Secretary confirm that the UK Government will continue to press other countries to protect the freedoms, rights and securities of journalists, wherever they might be working and however inconvenient their reporting might be in those jurisdictions?
Mr Hunt
I am happy to confirm that. When I was in Burma, I talked to Aung San Suu Kyi about the two Reuters journalists, Wa Lone and Kyaw Soe Oo, because we have serious concerns about how due process was applied in their cases. We should remember in this House that 65 journalists were killed last year, and nine out of 10 times, no perpetrators were brought to justice.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Foreign Secretary knows that, out of Europe, we are more and more not only under the radar but on the periphery of the periphery. The plight of journalists and aid workers is very similar, in terms of the dangers they have to face doing good work. Will he speak to the president of the International Rescue Committee, David Miliband, about that?
Mr Hunt
I met David Miliband when I went to New York in September, and I think it would be a good idea to have those discussions. We have great concerns about the safety of aid workers, but our concern with respect to journalists is that this trend seems to be increasing, and it seems to be the new border between free and unfree countries.
James Duddridge (Rochford and Southend East) (Con)
The BBC is still banned from Rwanda. Is the Secretary of State hopeful that that ban will be overturned by the Commonwealth Heads of Government meeting in 2020?
Mr Speaker
Ah yes, the Political Studies Association’s Back Bencher of the year, Diana Johnson.
Diana Johnson (Kingston upon Hull North) (Lab)
Thank you, Mr Speaker. I listened carefully to what the Foreign Secretary said about Iran and journalists. With the UN special rapporteur on freedom of expression, David Kaye, describing the recent attacks in the state media and online in Iran on the BBC Persian service as “deplorable”, what more can we do to support those journalists who so bravely work in the BBC Persian service?
Mr Hunt
I, too, congratulate the Back Bencher of the year.
I raised this issue when I was in Tehran on 19 November. I pointed out to the Iranian Government that if they are unhappy with the coverage of the BBC Persian service, there is a very simple thing that they can do: allow their representatives to be interviewed on it and allow them to put across their point of view, at which they smiled and changed the subject. We will, however, continue to press on that point.
Damien Moore (Southport) (Con)
The Minister for Africa (Harriett Baldwin)
We will continue to work with international partners to drive progress in tackling this terrible crime and deliver on the commitments made at October’s London conference. Some 57 countries have adopted the conference’s declaration so far.
Damien Moore
Will my hon. Friend update the House on the progress that is being made towards the Government’s target of halving the number of elephants killed for ivory by 2024?
Harriett Baldwin
We are leading from the front. As my hon. Friend knows, we are bringing in an ivory ban in the UK. We have formed a high-level political coalition, the Ivory Alliance 2024, and we are urging everyone to tackle something that is extremely urgent, because the number of African elephants has declined by 30% over the past seven years.
Vernon Coaker (Gedling) (Lab)
May I ask the Minister, who will share all our concerns about this illegal wildlife trade, to redouble her efforts to get other countries involved as well as her own and to get international organisations involved? What has happened is deplorable, and the wildlife across this planet is disappearing before our eyes.
Harriett Baldwin
I thank the hon. Gentleman for his endorsement of the work, and we truly are working very energetically and vigorously, following the incredibly important and wide-ranging conference. As I say, 1,000 people attended it, and 57 countries have signed up to the declaration. We are encouraging everyone and leading by example with our ivory ban.
Several hon. Members rose—
Mr Speaker
Order. We are out of time, but I do not want Lewes or Stockton North to lose out. Extreme brevity is required.
Maria Caulfield (Lewes) (Con)
Alex Cunningham (Stockton North) (Lab)
The Minister for the Middle East (Alistair Burt)
The recent upsurge of violence in Gaza reminds all of us of the need to ensure that the middle east peace process gets moving, because that is the only thing that will make a difference. Both the Foreign Secretary and I have recently seen US envoy Jason Greenblatt, and we will continue all our efforts.
Maria Caulfield
The UN General Assembly is scheduled to vote on Thursday on the US-sponsored resolution condemning Hamas for the increasing violence and attacks on civilians and for the worsening situation in Gaza. Will the UK Government be supporting that resolution?
Alistair Burt
We do not disclose the intention to vote in advance. What I would say is that it is very clear that we condemn Hamas’s action and conduct; we call for a permanent end to its terror and rocket attacks in relation to Israel; and we continue to proscribe the military wing of Hamas, to impose sanctions against individuals and to have no contact with Hamas.
Andy Slaughter (Hammersmith) (Lab)
Given the Government’s view, which I know the Minister shares, that Israeli settlements are illegal under international law, why do the Government allow the import of goods from those settlements and investment by British companies?
Alistair Burt
We allow the import of goods, but the labelling makes that clear, so customers can make their own choice about whether to buy goods from those areas.
Bob Blackman (Harrow East) (Con)
What assessment has my right hon. Friend made of the Hezbollah terror tunnels from Lebanon into Israel that have been discovered?
Alistair Burt
The tunnels demonstrate the continual threat to the state of Israel from those who would mean it harm. Again, however, that emphasises the need—I am sure the whole House shares this view—to ensure that there is a resolution of the issues between Israel and its neighbours, so that there can be permanent peace and security for all in the region.
Alex Cunningham
Ministers keep telling us that they want to wait and see President Trump’s long-awaited middle east peace plan. In the meantime, we have seen an escalation of violence, death on the Gaza border, a worsening humanitarian crisis, continued demolition of Palestinian homes and the ending of US support for the United Nations Relief and Works Agency. Is it not time that the UK said very clearly, “You cannot have a two-state solution if you only recognise one state”?
Alistair Burt
We have said very clearly that we recognise a two-state solution. We are keen to ensure that when the envoy’s proposals come forward, they get a strong reception, and people can work on them to try to bring a resolution to this long-standing crisis. It is the only thing that will deal with the concerns that the hon. Gentleman raises.
Jeremy Lefroy (Stafford) (Con)
The Minister for Africa (Harriett Baldwin)
Mr Speaker, congratulations on getting through the whole Order Paper.
We are opening posts in Chad, Niger, Eswatini, Lesotho and Djibouti and increasing the number of staff working on Africa by up to one third.
Jeremy Lefroy
With the African Union developing a continental free trade area, what additional resources are the Government putting into Addis Ababa to deal with the increasing opportunities for working with the African Union?
Harriett Baldwin
My hon. Friend is right to highlight the importance of the African Union and its work in Addis Ababa. In the years to come, we will increase the number of posts working with the African Union by, I think, 12.
Rebecca Pow (Taunton Deane) (Con)
The Secretary of State for Foreign and Commonwealth Affairs (Mr Jeremy Hunt)
Given the stresses and strains in British politics at the moment, I thought I might share with the House some good news: we will open a new British embassy in the Maldives. That small country has made important strides towards democracy with the recent elections and we wish to extend it every support possible, doubtless supported by several colleagues making fact-finding visits.
Mr Speaker
I wonder whether the Foreign Secretary is opening the said embassy, or whether he is generous enough to devolve that to his deputy.
Rebecca Pow
I will be first up for coming on the opening visit.
Does my right hon. Friend agree that through programmes including the prosperity fund, but particularly through working with MPs in Parliaments in developing countries, the UK could establish itself as a leader in accelerating renewable energy, electric cars and other business opportunities to promote sustainable development and climate action in developing countries?
Mr Hunt
Mr Speaker, given that we wish to encourage parliamentary democracy in the Maldives, you might be the right person to go there on that important occasion and I am happy to expedite the process if it would help.
I completely agree with my hon. Friend about the importance of zero emissions, and Britain can certainly play a leading role.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The Minister for Asia and the Pacific (Mark Field)
A nice easy one. Perhaps I should say that I am the last British Minister to visit Malé, the capital of the Maldives, and I would not recommend it for more than a weekend, though the islands around might be more fun. I think that that is why my right hon. Friend the Foreign Secretary suggests that you should go there, Mr Speaker.
I will keep my answer to the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) simple: yes, of course, I am happy to meet him at any point.
Stephen Kerr (Stirling) (Con)
The Minister for Africa (Harriett Baldwin)
I know that my hon. Friend contributed to the Westminster Hall debate that took place last week, thanks to the hon. Member for Strangford (Jim Shannon) and the Backbench Business Committee. In that, I outlined the way in which our high commission is working with not only the national Government, but the state Government and community and religious leaders, and offering its help to support reconciliation and mediation in this growing crisis.
Alex Cunningham (Stockton North) (Lab)
The Minister for the Middle East (Alistair Burt)
We are still pressing the Israeli authorities in relation to exactly what we said previously. That is the best way to try to find an answer to the tragedy that happened in Gaza.
Alan Mak (Havant) (Con)
Mark Field
My hon. Friend is absolutely right about the soft power access of the Chevening scholarship programme, which creates lasting, positive relationships with future leaders, influencers and decision makers from 145 countries around the world. We now have some 50,000 Chevening alumni since the project was set up in 1983. Last year, with 75 scholars, China was the single largest part of our Chevening ambition.
Mr Stephen Hepburn (Jarrow) (Lab)
The Minister for Europe and the Americas (Sir Alan Duncan)
As with all countries, I urge anyone thinking of travelling to look at the travel advice, which we offer in a very disciplined way on the Foreign Office website. Should the hon. Gentleman wish to discuss an individual case, then of course I would be very happy to see him as he asks.
Martin Vickers (Cleethorpes) (Con)
Sir Alan Duncan
Yes. The Foreign Secretary does indeed wish to widen the pool of talent from which we select ambassadors. Irrespective of that initiative, we are very keen to develop economic and commercial ties with Albania. We will do that in conjunction with the Department for International Trade. One thing that would help those commercial opportunities would be if Albania itself reforms its justice sector.
Tom Brake (Carshalton and Wallington) (LD)
Mark Field
We are very concerned about the current chaotic political situation in Sri Lanka to which the right hon. Gentleman refers. It is causing great damage to that country both politically and economically. I made statements on 26 October, 29 October, 9 November and, as he knows, earlier this week at the meeting of the all-party group for Tamils. We will continue actively to co-ordinate our response with the international community in Colombo and in the UN.
Sir Hugo Swire (East Devon) (Con)
Mark Field
First and foremost, we want this to be resolved by Sri Lanka in line with its own constitution and laws. We welcome the statement made on 5 November by the Commonwealth secretary-general, who I understand will be meeting the Foreign Secretary to discuss a range of matters. Obviously, Sri Lanka will very much be at the forefront of that conversation. We want to encourage ongoing dialogue and to offer the support of the Commonwealth, if required, to the Government and the people of Sri Lanka. We are in an ongoing dialogue with the Commonwealth and other partners to ensure a co-ordinated international response.
Ian Austin (Dudley North) (Lab)
I am sure I speak for all members of the Foreign Affairs Committee when I say how much we are looking forward to scrutinising the work of our new embassy in the Maldives.
What assessment have the Government made of the human rights of Palestinians living under the brutal dictatorship of Hamas, which routinely imprisons people without trial, tortures them, executes people and is reported today to have sentenced six people to death? Does that not show, along with the indiscriminate attacks on Israel, why Hamas is the main barrier to the peace process that we all want to see?
Alistair Burt
Yes; there is all too little emphasis on looking at the rule of Hamas in Gaza and the human rights abuses that are conducted, not least the pushing of people towards the fence during the course of the summer, which led to some of the deaths and woundings that have taken place. That is why we have a long-standing policy of no contact with Hamas.
Greg Hands (Chelsea and Fulham) (Con)
Will my right hon. Friends update the House on the work they are doing with the Department for International Trade on securing UK accession to the World Trade Organisation’s Government procurement agreement?
Carol Monaghan (Glasgow North West) (SNP)
The 3.9 million Christians in Pakistan are among the most persecuted in the world. Will Ministers assure the House that they are working with colleagues in the Department for International Trade to make sure that any future trade deals are not made at the expense of those people?
Mark Field
I assure the hon. Lady—I know the Foreign Secretary feels the same way—that clearly this is a major concern. As she rightly points out, we want trade deals with that country and we want to normalise relations, but we are particularly concerned about the freedom of religious belief, which applies not just to Christians but to many other religious minorities in that country.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
On a recent visit to Sweden, I was rather disturbed to see a leaflet being delivered to every household entitled, “Om krisen eller kriget kommer”, which translates as “If crisis or war comes”. Will my right hon. Friend confirm that we are doing all that we can to stand by and support our closest allies not just in Sweden, but across Scandinavia and the Baltic, who see themselves on the frontline of this new cold war?
Sir Alan Duncan
Apart from my hon. Friend’s primary duty of defending his Swedish wife, I can confirm to him that we are, of course, not in any way resiling from our commitment to defend our friends and to understand growing threats in eastern Europe and to the north.
Mr Jim Cunningham (Coventry South) (Lab)
The Foreign Secretary said earlier that they had achieved a great deal from the EU as part of the Government’s proposals. What parts has the Foreign Secretary not achieved?
Jeremy Lefroy (Stafford) (Con)
What assessment has the Minister for Africa made of the preparations for the forthcoming elections in the Democratic Republic of the Congo, which are so vital?
Harriett Baldwin
I can share with the House that our assessment is that they are on track to take place, in accordance with the accord of Saint-Sylvestre, on 23 December. My hon. Friend will know that the UK has been very involved in funding 20,000 of the 60,000 election observers who will be there to observe the process.
Anna McMorrin (Cardiff North) (Lab)
My constituent Mr Nkemgo is from Cameroon. Many close members of his family have been shot and killed, and their villages have been burnt. What urgent action has the Secretary of State taken or will he take, and what does he say to my constituent?
Harriett Baldwin
I can say to the hon. Lady’s constituent that she is absolutely right to raise this very serious situation, that the UK Government are doing everything that they can to encourage the Government in Cameroon to engage in a dialogue with what has become an increasingly armed separatist movement. We are working with the United Nations on what further assistance can be given to the populations who are being displaced in this crisis.
Several hon. Members rose—
Mr Speaker
Order.
Bill Presented
Nappies (Environmental Standards)
Presentation and First Reading (Standing Order No. 57)
David Linden, supported by Patricia Gibson and John Mc Nally, presented a Bill to establish environmental standards for nappies; to make provision about the advertising and promotion of nappies with regard to those standards; 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 299.)
Planning (Appeals)
Tuesday 4th December 2018
(5 years, 4 months ago)
Commons ChamberRead Full debate Planning (Appeals) Bill 2017-19 View all Planning (Appeals) 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
John Howell (Henley) (Con)
I beg to move,
That leave be given to bring in a Bill to limit the grounds of appeal against decisions on planning applications consistent with a neighbourhood development plan or local plan; and for connected purposes.
I am introducing this Bill to try to provide reassurance to communities who spend considerable amounts of time and money producing a neighbourhood plan that their work is valued, that it plays an important part in the planning system and the determination of planning applications, and that, together with the local plan produced by the district or borough council, it is a fundamental document—[Interruption.]
Mr Speaker
Order. This is something of a discourtesy to the hon. Gentleman who is moving his ten-minute rule motion. It might not be front and centre stage in the minds of all right hon. and hon. Members, but it is extremely important to the hon. Gentleman and to a lot of people. Whether people are interested in listening or not, they should do him the courtesy of affording him a respectful silence.
John Howell
Thank you, Mr Speaker.
I want to reassure those communities that neighbourhood plans are fundamental documents and that the effort made in producing them is worthwhile. In my own constituency, two more plans recently passed referendums by 94% and 98%, which shows how much they are valued by communities. The Bill would provide that, where a district or parish has taken control of the planning requirements in their area, that view is an important and determining one for taking applications forward.
I introduce the Bill having held the position of Government champion for neighbourhood planning. In that role, I have been around the country talking to groups of parish councils and their Members of Parliament about why they should produce a neighbourhood plan. I am grateful to the many colleagues—far more than the 11 supporter slots available—who have supported the Bill.
In my constituency, in a village called Sonning Common, the local community and district council are reported to have spent £90,000 defending the village’s new neighbourhood plan against an appeal. The subject of the appeal was an application for 95 dwellings on a site located in the neighbourhood plan for just 26. Why the application was able to be taken to appeal is part of the reason for the Bill. The application was inconsistent with the Sonning Common neighbourhood plan and there were no mitigating circumstances. Local residents had worked very hard on the neighbourhood plan, and continue to do so. The question we have to ask is: why was the existence of the neighbourhood plan not sufficient?
In order to set the scene for the Bill, I will go back to what prompted me and the then Planning Minister, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), to introduce neighbourhood plans in 2011-12. The starting point was the recognition that the previous system of taking parish views on applications into account by ticking one of three boxes was inadequate. The boxes were: “yes”, “no” and “no firm opinion”. As we live in a plan-led system, it was crucial that anything that replaced it was part of the plan-led system—hence a new plan, the neighbourhood plan. This has proved to be a much better way of crystallising local views of development.
The neighbourhood plan becomes part of the local development plan when it is approved at a referendum and thereby carries the full legal weight that the local plan does. It is not a nimby’s charter. The plan needs to conform with the strategic objectives of the local plan, particularly the housing numbers, which should be seen as a minimum figure, and they have in practice allocated some 10% more sites than originally detailed by the district or borough council. About 2,500 communities around the country are producing a neighbourhood plan, and many have already passed a referendum with North Korean-style majorities. Nevertheless, despite the work of the local plan expert group, on which I served, to simplify the production of neighbourhood plans, the process is becoming more complex and time-consuming for ordinary people to carry out, and I pay tribute to the volunteers who spend so much of their time putting these plans together.
There is a bigger problem that the Bill seeks to address. Imagine a parish that has committed considerable money and time to producing a neighbourhood plan. It has been through the exercise of allocating sites. It may even have allocated more than it was told was appropriate by the district council. A developer wants to make a planning application that falls outside the neighbourhood plan. He makes the application. It is rightly refused as being not in accordance with the neighbourhood plan, yet he can still appeal to the Planning Inspectorate. That appeal will need to be defended. It will require vast amounts of time from the local people who put the plan together. It may require the services of a QC or other specialists, depending on the nature of the defence. As at Sonning Common, they and the district council may end up having to spend around £100,000 on defending it. Moreover, the chances of the neighbourhood plan being upheld are open to doubt. In other words, all that effort and all that money could be wasted. The question I am always asked is why, when we have a neighbourhood plan, should the developer be allowed to appeal?
How would the Bill work? Let me give three examples. First, we have the situation where there is a robust five-year housing land supply in place—or indeed, where appropriate, a three-year housing land supply—as well as a fully approved neighbourhood plan and local plan. In this case, a developer makes an application for development that is contrary to the neighbourhood plan and is earmarked for refusal on the basis of neighbourhood plan policy. The local planning authority first decides that the application is outside the plan, or contravenes a policy in it, and refuses it. It also makes a formal decision, which is published as a formal notice in the minutes of the planning committee, that the application is contrary to the neighbourhood plan: in other words, that the neighbourhood plan holds sway. In this instance the developer would have no right of appeal, because it would be withdrawn.
In the second case, there is still a five or a three-year housing land supply, but in reaching its decision the local planning authority does not follow due process. It makes a decision in which there are processual errors. It is not possible to evaluate the significance or impact of those errors, and whether that would ensure that the decision could be overturned or whether it would make no difference at all. In this case, too, the finding of fact is that the application is contrary to a neighbourhood plan. The developer would have to make an initial referral to the court by way of judicial review of the processual issues, meaning that the bar for decision was a high one, and he would seek leave to appeal to the planning inspectorate. It would be for the court to review the processual errors rather than the issue of fact.
In the third example, there is no five or three year-housing land supply, but the local planning authority still refuses the application. In this case, the rights of the developer to appeal against the application to the planning inspectorate would continue as now. That would have a number of effects. First, it would send a strong message to developers that neighbourhood plans are to be taken seriously. I am fully aware of one developer who has devoted considerable resources to undermining neighbourhood plans and regularly submits objections to local planning authorities. The issuing of a notice by the local planning authority makes it clear that there is a finding of fact that the application is contrary to a neighbourhood plan.
Secondly, only through such action will we return real democracy to the towns and villages of this country, as we originally envisaged in the Localism Act 2011. It will have no bad effect on housing numbers: as I have said, neighbourhood plans provide for some 10% more housing than originally envisaged. It could even make the allocation of land for more houses more attractive to towns and villages, because they will be protected from rapacious interests. Thirdly, it will give those towns and villages confidence that producing a neighbourhood plan is worthwhile, and will be seen as producing a determinant for the planning system.
Fourthly, this can be seen as another step in the reform of the neighbourhood planning system, which has adapted to changing circumstances throughout. First, there was the Barwell ministerial statement, which in certain circumstances reduced the housing land supply to three years. More recently, changes have been included to simplify the process for updating a neighbourhood plan.
Lastly, the Bill will encourage communities to prepare plans, including local district and borough councils, and to support neighbourhood plans. Our Local Plans Expert Group report quoted the then national planning policy framework, which states that plans should be
“the key to delivering sustainable development that reflects the vision and aspirations of local communities.”
However, we also commented that less than a third of the country was suitably covered. There are many examples of good practice in plan making; the Bill will add to that stock of good practice.
Question put and agreed to.
Ordered,
That John Howell, Sir Oliver Letwin, Sir Nicholas Soames, Sir David Evennett, Nick Herbert, Sir Geoffrey Clifton-Brown, David Hanson, Kevin Hollinrake, Gillian Keegan, Victoria Prentis, Damien Moore and Stephen Lloyd present the Bill.
John Howell accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 25 January 2019 and to be printed (Bill 300).
Privilege (Withdrawal Agreement: Legal Advice)
(5 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:23 - The House divided: - Ayes: 307 / Noes: 311 - Question accordingly negatived.
16:41 - The House divided: - Ayes: 311 / Noes: 293 - Question accordingly agreed to.
Mr Speaker
The right hon. and learned Member for Holborn and St Pancras (Keir Starmer) has tabled a motion for debate on a matter of privilege, which I have agreed should take precedence today. I must inform the House that I have selected the amendment in the name of the Leader of the House.
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move,
That this House finds Ministers in contempt for their failure to comply with the requirements of the motion for return passed on 13 November 2018, to publish the final and full legal advice provided by the Attorney General to the Cabinet concerning the EU Withdrawal Agreement and the framework for the future relationship, and orders its immediate publication.
I move this motion in my name and in the names of the relevant spokespeople for the Scottish National party, the Liberal Democrats, the Democratic Unionist party, Plaid Cymru and the Green party.
The issue before the House on this motion is very simple: have the Government complied with the order made by this House on 13 November this year to publish the final and full legal advice by the Attorney General to the Cabinet concerning the EU withdrawal agreement and the framework for the future relationship, yes or no? That order was binding. Mr Speaker, on 13 November I sought your advice on that issue and you ruled in the following terms:
“The ruling I give is simply that the motion is effective—I have been advised thus. It is not just an expression of the opinion of the House; it is an expression of the will of the House that certain documents should be provided to it.”—[Official Report, 13 November 2018; Vol. 649, c. 236.]
Yesterday, the Government published a reasoned position paper. That was not legal advice. It simply described the deal: it was a synopsis; it was in the nature of an explainer—an explainer having already been published when the deal was published. It was a long way from legal advice. The Attorney General made a statement to the House and then answered questions, but the Government did not publish the full and final advice by the Attorney General to the Cabinet. That is the long and short of it. The Government are wilfully refusing to comply with a binding order of this House, and that is contempt.
Yesterday, the Attorney General as good as admitted it when he said:
“I wish that I could comply with the request of this House but if I did, I sincerely believe that it would not be in all of our interests.”
And slightly later he said:
“although the House says that I should disclose, I believe that the public interest compels me not to. I am sorry.”—[Official Report, 3 December 2018; Vol. 650, c. 534 and 564.]
That is a plea of mitigation; it is not a defence.
I make three points about the Government’s position. First, as the hon. Member for North East Somerset (Mr Rees-Mogg) made clear yesterday, for the Attorney General to say that in his view it is not in the national interest is not good enough. The hon. Member for North East Somerset went on to say:
“When the Government lose a vote, they must follow the will of this House under an Humble Address, according to all precedent. It is no longer a matter for the Government to judge; it has been decided by this House, which is a higher authority.”—[Official Report, 3 December 2018; Vol. 650, c. 563.]
My second point is this: if the Attorney General feels so strongly about this matter that he is prepared now to put the Government in contempt of Parliament for refusing to comply with a binding order, why on earth did he not vote against the order in the first place, or anybody else on the Government Benches? That was not an oversight: the Government knew very well what was being asked for. The Attorney General must have known what was being debated and voted on. Yet it appears from answers given by the Attorney General yesterday that he was not asked before that vote for his view on the wisdom of not voting against the order, nor did he offer any advice, directly or indirectly.
Again I quote the Attorney General:
“I had no discussions with the Chief Whip on this subject. None was sought.”—[Official Report, 3 December 2018; Vol. 650, c. 569.]
I do not doubt the Attorney General’s word for a minute, but really—before that vote nobody asked the Attorney General’s views on the consequence of not opposing the order?
The truth is that the decision not to oppose the order was a political decision, taken by the Government because they feared they would lose the vote. They did not want the short-term humiliation of losing a vote, and the price of that was higher than voting against the order—and none of them did that. That is not the first time that has happened.
Chris Philp (Croydon South) (Con)
Will the right hon. and learned Gentleman give way?
Keir Starmer
I will in a moment.
For months the Government have ignored Opposition day motions, and now their tactic has got them into very deep water indeed. The Government cannot now come to this House and say, “We took a political decision not to oppose the making of the order to publish the full and final legal advice by the Attorney General and then we took a decision not to comply with that order, but somehow we are not in contempt of Parliament.”
My third point is about the Government’s amendment in the name of the Leader of the House asking this House to refer the matter of whether the Government’s response fulfils the motion to the Privileges Committee. The short point is this: there is nothing to refer. A binding order was made and the Government are refusing to comply with it. The reality is that, yet again, by their amendment the Government are simply playing for time in the hope that this ends up in the long grass until the crucial vote is long gone.
So this motion is extremely important. It has huge constitutional and political significance. Bringing the motion is not something I have done lightly. [Interruption.] On the contrary—[Interruption.] On the contrary—[Interruption.] On the contrary—[Interruption.] On the contrary—[Interruption.]
Mr Speaker
Order. [Interruption.] Order. I do not need somebody yelling rather stupidly from a sedentary position “Give way.” The right hon. and learned Gentleman will give way if and when he wants to do so, and that is the end of the matter. And the same will apply when the Leader of the House is on her feet. Let me just make it clear: these are extremely serious matters and the public is entitled to expect that this debate will be conducted with courtesy. However long it takes—[Interruption.] However long it takes, that is what will happen.
Keir Starmer
I have not taken the decision lightly because I understand the constitutional and political significance of this motion. On the contrary, we have raised points of order on a number of occasions about this order, and we have asked urgent questions, and I have repeatedly urged the Government to reconsider their position both publicly and privately, making clear the consequence of not doing so. But the Government have chosen not to do so. I urge the Government now, even at this eleventh hour, to think again: to pull back from the brink of being found in contempt of Parliament.
Several hon. Members rose—
Keir Starmer
This motion is a last resort. The issue before us is simple: this House passed a binding order; the Government are wilfully refusing to comply with that order; that is contempt of Parliament.
Several hon. Members rose—
Mr Speaker
Order. The right hon. and learned Gentleman has very clearly completed his speech. To move the amendment, I call the Leader of the House.
The Leader of the House of Commons (Andrea Leadsom)
I beg to move amendment (a), leave out from “House” to the end and insert:
“refers to the Committee of Privileges the question of whether the Government’s response fulfils the motion passed on 13 November 2018 and requests the Committee to consider the constitutional and historic context and the proper use, ambit and scope of the motion for return procedure.”
I want to start by thanking my right hon. and learned Friend the Attorney General for putting himself at the disposal of the House yesterday for over two hours, to provide information about the legal impact of the withdrawal agreement. He did so with his characteristic candour and integrity. The use of this motion has happened very rarely in the history of Parliament, and I do not think that any Member can be in any doubt that the information that the Attorney General provided yesterday was a very frank assessment of the legal position. The questions posed by Members on both sides of the House addressed the key issues we must all consider on the legal effects of the withdrawal agreement. My right hon. and learned Friend responded to all those questions in comprehensive fashion.
Alongside yesterday’s session of nearly two and a half hours, the Government have also provided a 48-page legal commentary that sets out the legal effect of each part of the withdrawal agreement. The information provided to the House is the detailed legal position on the withdrawal agreement and, as the Attorney General said to the House yesterday, he continues to be at the disposal of parliamentarians to answer further questions.
I would, therefore, in responding to the contempt motion before us today, urge the House to exercise caution in this matter. The issue at hand is not one of substantive content. As yesterday’s questioning illustrated, there is no real dispute as to the meaning and legal effect of the withdrawal agreement. The Attorney General could not have been clearer about the legal position yesterday. No hon. Member could say in all honesty that the Attorney General has done anything other than treat this House with the greatest respect. There can be no question that he, or the Government, has acted in a manner that is contemptuous of this House.
Toby Perkins (Chesterfield) (Lab)
The Leader of the House says that the Attorney General answered with candour. Indeed, he did, when he said that
“although the House says that I should disclose, I believe that the public interest compels me not to.”—[Official Report, 3 December 2018; Vol. 650, c. 564.]
He made it clear that he was deliberately in contempt of Parliament.
Andrea Leadsom
The hon. Gentleman is not correct. As I have just set out, the Attorney General answered questions from all Members with the most possible frankness on the clear legal position.
Simon Hoare (North Dorset) (Con)
Does my right hon. Friend share my disquiet about some of the sincerity expressed by the right hon. and learned Member for Holborn and St Pancras (Keir Starmer)? The letter that he produced in support of the motion was signed and sealed on Thursday. They clearly had no interest in what the Attorney General had to say on Monday.
Andrea Leadsom
I agree with my hon. Friend that the House needs to exercise some caution, and I wish to explain precisely why.
The issue we are debating today is the Government’s duty to protect Law Officers’ advice in the national interest. The House has previously recognised the importance of the principle that information cannot always be disclosed. This is always guided by the need to protect the broader public interest. This is directly reflected in the Freedom of Information Act 2000, brought in under a Labour Government, which sets out a careful scheme for balancing the twin imperatives of transparency on the one hand, and of safeguarding the public interest on the other. The consequences of not following those principles are obvious. The House might request, by way of a Humble Address, information that could compromise national security or which might put the lives of our troops in danger.
Mr Kenneth Clarke (Rushcliffe) (Con)
Obviously, parliamentary sovereignty and the duty of Government to obey motions is extremely important to the House, but my right hon. Friend is rightly describing the other problem of the confidentiality of legal advice, which Labour and Conservative Governments need as well. Is there not a sensible solution to this, as opposed to this current party political exchange? The Opposition could agree to receive a confidential briefing on Privy Council terms, look at the documents and have the Attorney General point out those parts that, in everybody’s view, might damage the national interest or damage the negotiating position of any Government of any party, and in effect agree to redact the documents. The politically embarrassing bits, which are what the Opposition are after, and all the rest of it can come out.
Both the conventions—that the House must be obeyed and that the Attorney General’s legal advice should be confidential—should be protected, and that is a possible way of reconciling them.
Andrea Leadsom
I am grateful for the advice of the Father of the House, but he will appreciate that the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) wants all legal advice to be put into the public domain without any attempt to protect the national interest.
Several hon. Members rose—
Andrea Leadsom
I will not give way for a while.
The consequences of not following the principles of transparency on the one hand and safeguarding public interest on the other are obvious. The House could request, by way of a Humble Address, information that could compromise national security. It would mean releasing information with no method for the House itself to review or assess the information in question, before its full release into the public domain. It would not be possible under the Humble Address procedure to weigh up any potential consequences of such a disclosure. It is simply an irresponsible thing to do.
I turn to the present case concerning Law Officers’ advice. As the House is aware, this is the subject of very long standing conventions which are enshrined in the ministerial code, and recognised in “Erskine May”. First, without the authorisation of the Law Officers, the fact that—or indeed whether—their advice has been provided to Government should not be disclosed. Secondly, such advice must not be provided to those outside of Government without the Law Officers’ express authorisation.
The purpose of the conventions is to provide the best possible guarantee that Government business is conducted in the light of full and frank legal advice. This is a fundamental principle of the rule of law. If Government knew that they might be forced to disclose the advice that they had received, it could seriously compromise the sorts of request for advice that would be made, and totally impede the ability of the Law Officers and Government lawyers to provide it. In turn, that would seriously compromise good government.
The motion we are debating today would undermine these vital conventions, and it would do so through the blunt instrument of the Humble Address, an arcane parliamentary procedure which, until very recently, was last used in this way in the 19th century. Moreover, there is real doubt about the ambit of the procedure: as I said earlier, it contains no mechanism by which information can be reviewed to ensure that its disclosure would not seriously harm the public interest. In considering today’s motion, hon. Members must reflect carefully on this—and on the potential consequences not just for this Government, but for all future Governments.
As this House knows, the Government have worked extremely hard to comply with Humble Addresses that have been passed previously. We have also sought to do so in response to the case we are debating today, while at the same time, taking steps to protect the national interest. The conventions that I have spoken about stand and endure because they respect the proper balance between the Government and Parliament—and the principle that Ministers should be as open with Parliament as it is possible to be, provided that disclosure of information does not compromise the wider public interest. We chip away at them at our peril; today’s motion is not in the interests of Members and it is definitely not in the national interest. What we break now may be very difficult to fix later.
Chris Philp
The Leader of the House has been commenting on the use of the Humble Address mechanism to compel the disclosure of information. We were told by the Attorney General yesterday that this information would be prejudicial to the national interest. Is it not impossible to debate openly in this House whether that information should be disclosed without knowing what the information is? Would it not be more appropriate to make the decision in a confidential tribunal about what may and may not be disclosed, analogous to a judge making such a decision when a matter of disclosure arises in a court of law?
Andrea Leadsom
Again, my hon. Friend points out the problem, which is that the right hon. and learned Member for Holborn and St Pancras’s motion seeks that all the information be placed in the public domain without anyone on either side of the House having the ability to consider whether it is in the national interest to do so.
I want to turn now to the contempt motion itself. We recognise that concerns have been raised as to whether the Government’s response meets the terms and spirit of the motion agreed on 13 November. We consider that the spirit and intent of that motion have been fully complied with. As I said earlier, the Government have now provided a 48-page paper setting out the legal effect of the withdrawal agreement, and the Attorney General came to the House yesterday. Anyone present in the Chamber for his statement and his subsequent responses to questions can be in absolutely no doubt that the Attorney General gave a full—[Interruption.]
Mr Speaker
Order. The Leader of the House must resume her seat momentarily. Mr Russell-Moyle, you are a very excitable denizen of the House. If you were on your feet, you would be entitled to express your views. When you are in your seat, you are not. I hope that that basic rubric is now clear to you and will require no further explanation.
Andrea Leadsom
Thank you, Mr Speaker. Anyone present in the Chamber for the Attorney General’s statement and his subsequent responses to questions yesterday can be in absolutely no doubt that he gave a full and frank exposition of the legal position of the withdrawal agreement. I simply reject any suggestion that the Attorney General has done anything other than treat this House with the greatest respect.
Turning to process, the motion before the House today seeks to find the Government in contempt of Parliament, without having taken the important prior step of referring the matter to the Committee of Privileges, as is normally the case. This is a matter of due process. First, those facing this extremely serious charge of contempt should each be given the opportunity to make their case and to follow the due process of this House. They should be given the opportunity to explain how they have come to their decision about how best to balance the Government’s responsibilities to Parliament with their ministerial duties, including the need to consider the national interest. That opportunity is a vital element of any such procedure, and in this mother of all Parliaments, we are surely nothing if we do not uphold our own constitutional practices in the appropriate way.
The Privileges Committee will also want to consider the question of compliance with the motion in its full constitutional and historical context. The Government would strongly welcome the Committee having the opportunity to consider the more general scope of the motion for the Humble Address procedure, in particular as regards confidential information and the national interest. The Committee could consider these complex matters in a full and impartial way, away from the heat of the present debate and in fulfilment of its parliamentary duty as established by this House. I am grateful to the Chair of the Committee, the hon. Member for Stretford and Urmston (Kate Green), for the conversation that she and I had today in which she agreed that her Committee would be happy to consider that.
The members of the Committee are accustomed to the consideration of complex and contested issues. That is the very essence of their role. Although it would be for the House itself to reach a final determination on whether a contempt had been committed, it should do so on the basis of the full and impartial consideration of the facts by the Committee of Privileges. I therefore appeal to all hon. Members right across the House that if they seek to pass this motion, they should refer it to the Committee in line with our parliamentary procedures. I urge all hon. Members to support the Government’s amendment.
Sir William Cash (Stone) (Con)
I must say that I found the answers given by the Attorney General yesterday extremely difficult to understand in the terms in which they were expressed—that is, of relating to the national interest, because that is a question that is contained in the results of the referendum and the European Union (Withdrawal) Act 2018. Following reports that I have heard, I also find it most unsatisfactory that this issue is regarded as a parlour game, and that we have been told to stop messing around with the process and to grow up. I think that that somewhat underestimates the significance of what we are dealing with here, but I will leave it at that, because people in these circumstances sometimes use language that underestimates the importance of the matters that are being dealt with.
I would like to say to the Leader of the House and to the Law Officers that the question of conventions turns on the reason for the rule. In this context, the reason for the application of this particular convention, which includes the question of the ministerial code, clearly demonstrates that, unless we know what the Attorney General has actually given by way of a full disclosure, it is extremely difficult to know whether or not the public policy that has been pursued is consistent with the legal advice that he gave.
Ivor Jennings was one of the greatest constitutional authorities on these matters. He said that
“conventions are observed because of the political difficulties which arise if they are not.”
I suggest that nothing could better illustrate the current situation, and in particular the issues relating to the ministerial code. The ministerial code states:
“The Law Officers must be consulted in good time before the Government is committed to critical decisions involving legal considerations.”
The Chequers proposals lie at the heart of the beginnings of the issues with which we are considering the withdrawal agreement, and I have been informed that the Law Officers were not consulted before the Chequers proposals. This has had dire consequences. Indeed, I said to the Prime Minister on 9 July that I did not think she would be able to reconcile the Chequers proposals with the express repeal of the European Communities Act 1972 in the European Union (Withdrawal) Act 2018, which was passed on 26 June, 16 days before Royal Assent was given. We were then presented with the Chequers proposals. Everyone knew, when Royal Assent was given, that the express repeal of the 1972 Act had been enacted, yet it was clear, because it happened only a few days later, that an 80-page White Paper was being produced, the effect of which was to demonstrate that the 1972 Act was going to be considerably altered. I regarded that as a massive breach of trust, but it could have been resolved if we had had the full advice of the Attorney General at that time.
Under that same convention, and with respect to the present withdrawal agreement, it is essential for us to know now whether the present Attorney General gave advice on the issue of incompatibility between the express repeal of the 1972 Act in the European Union (Withdrawal) Act and the withdrawal agreement. There is no indication in the Attorney General’s introduction to his legal statement yesterday that he addressed that question as a matter of fundamental constitutional importance. Indeed, he states that the agreement needs a new Act of Parliament in domestic law, but as I pointed out in The Sunday Telegraph that is no more than a wing and a prayer.
I asked the Prime Minister about such matters during her statement last Monday and in the Liaison Committee, but I received no satisfactory answer. I also asked the Attorney General a similar question yesterday, requesting that he draw his attention to a Queen’s bench division that was cited as a precedent for the disclosure of the Attorney General’s advice. There are four other precedents, but Factortame is particularly significant due to the incompatibility between the 1972 Act and the withdrawal agreement.
If we do not have the full disclosure of the Attorney General’s opinion, that is relevant to the question of whether the actual withdrawal agreement itself is invalid under the Vienna convention, because a fundamental failure to comply with internal domestic constitutional law amounts to grounds for the invalidity of such a withdrawal agreement.
Sir William Cash
Just one moment. If there is a danger that the withdrawal agreement could be invalid, that is a matter of fundamental importance on which I would have expected the Attorney General to include his opinion, but there is no evidence whatsoever that he referred to that in his opinion, and that is why we need full disclosure. I also understand that there are sheaves of papers within governmental circles unpacking the repeal of the 1972 Act with respect to the prospective withdrawal and implementation Bill, which is again a matter of extreme public importance. By any standards, all these matters fall not only within the ministerial code, but within what I would have hoped and expected the Attorney General to deal with in his opinion and the statement he gave yesterday, but there was nothing there to give me any comfort whatsoever.
To say that we should move on and get real and that what the Attorney General thinks is in the national interest actually is in the national interest does also bear on the question of whether the European Union (Withdrawal) Act is a matter of extreme public interest and fundamental importance. The failure to address that question in the introduction and in the legal statement seems to be a mistake of the first order and, furthermore, to be inconsistent with what I would have expected from the legal opinion of the Attorney General.
As to the role of the Attorney General, I simply refer to the authoritative work “The Attorney General, Politics and the Public Interest”, published in 1984 and written by Professor John Edwards. In his chapter dealing with ministerial consultations with the Law Officers, it is made clear that all legal advisers from all Departments will ultimately turn on the view of the Attorney General. Edwards states that there will be times when the Attorney General, perceiving the legal implications of a Department’s proposed course of action—in this case, No. 10 and the Department for Exiting the European Union—will find it necessary to oppose a Minister’s preferred policy. Such opposition must also derive from the legal implications of the proposed policy.
As Edwards says on page 190 of his authoritative work, for the Government to reject such advice would be quite exceptional and would reasonably lead to serious questioning by the Attorney General himself of his continuing to serve as the Government’s chief legal adviser. Without full public disclosure of his opinion, it will be impossible to get to the bottom of all the considerations that are at the heart of the issue of public trust to which the former Secretary of State for Exiting the European Union referred regarding the manifesto and the reasons for his resignation and the conduct of the Government, to which I have referred myself in terms of broken promises made in the House recently.
The reason why my European Scrutiny Committee is making a full inquiry into this situation is, in a nutshell, because we want to get to the bottom of the conduct and the processes and the outcome of these negotiations, and we will do so by taking evidence. I trust that the Government will take note of the seriousness of the suggestions and the arguments that I am putting forward, because they go to the heart of public trust, the referendum vote itself, the repeal of the 1972 Act, whether the Attorney General has fully addressed the consequences for the withdrawal agreement of the opinion that he has given, which we have a right to see, and whether it is really in the public interest for it not to be disclosed.
Peter Grant (Glenrothes) (SNP)
I commend those hon. and right hon. Members who secured this debate and thank you, Mr Speaker, for allowing it. I also pay tribute to the stamina of my hon. Friend the Member for North East Fife (Stephen Gethins) and of other colleagues who ensured that you had ample time last night to consider the response to the original application.
Later today, we begin five days of debate on possibly the most important peacetime decision that this Parliament will ever take. Also today, Ofsted has described the Government’s treatment of thousands of vulnerable schoolchildren in England as a “national scandal”, we have a major investigation into alleged profiteering by funeral companies, and we have had reports from the UN special rapporteur and the Joseph Rowntree Foundation highlighting the appalling poverty that exists here in one of the wealthiest economies on the planet. What does all that have to do with the motion before us now? The only reason why we are allowed to know and discuss those things openly and without fear is because the power of the state to prevent us from knowing about them is tempered by the rights of this democratically elected Parliament—not tempered nearly enough in my humble opinion. Elections to this Parliament are not democratic enough, but we do have an elected Parliament to hold back the excesses of the Government, and that is what today’s motion is all about.
We have a Parliament of 650 people, and each of us is entrusted to exercise sovereignty on behalf of those who have sent us here. A contempt of this Parliament is a contempt for the fundamental principle of the sovereignty of the people. A Government who seek to place themselves above the express will of Parliament are a Government in contempt of the people. They are a Government who have already taken a dangerous step down the road from democracy to dictatorship.
Today’s debate is not about the rights and wrongs of the original motion presented to the House on 13 November. Astonishingly enough, the time for debate on those questions was on 13 November. Let us not spend time today on questions of convention and precedence, of the confidentiality of legal advice or of when that confidentiality should be waived. The time for opposition to the terms of that motion was when that Question was put to the House, but the Government instructed their MPs to do nothing. They instructed their Members not to oppose the motion. I welcome the degree of humility that they have shown in admitting that they got that wrong, but that admission is not an excuse for the Government unilaterally to seek to change the wording of or meaning behind a binding decision of this Parliament. They have the audacity to come here yesterday and today and say that they, not Parliament, know what Parliament decided. They are placing themselves above Parliament. That is a contempt of Parliament.
As for the “legal position” document published yesterday that was going to fix it all, it could hardly have been more patronising if they had included pictures to colour in and wee join-the-dots puzzles every so often just to keep us interested. It was not a legal position by any accepted definition. It was possibly an attempted sop to some Conservative MPs, who are in a very difficult position—struggling between their understandable loyalty to their Government, to their party and to individual Ministers and their overriding loyalty to the people and to this Parliament.
As the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) said, the Government have made a habit of not turning up if they think they are going to lose. Maybe the problem is that they are so used to being allowed to ignore the views and opinions of Parliament that they forgot that sometimes Parliament takes decisions they are not allowed to ignore. Maybe that is why they are so upset now. Maybe it is because, alongside the issues of what should and should not be made available to Members of Parliament and to the public, this decision has laid bare the incompetence at the heart of a Government who do not even know the basics of parliamentary procedure.
David T. C. Davies (Monmouth) (Con)
Does the hon. Gentleman’s commitment to openness now mean that he will be asking the Scottish Law Officer to publish all her advice to the Scottish Parliament in future?
Peter Grant
I have absolutely no doubt that, if the Parliament that represents the sovereign people of Scotland gave a binding direction to the elected Government of Scotland, the elected Government of Scotland would comply with that binding direction. No such binding direction has been given, so let us not try to deflect attention from the clear and blatant contempt that has been committed against this House with completely false accusations of contempt elsewhere.
We have a Government who are behaving like a football team who do not turn up for friendlies if they think they will be beaten and then discover that they have missed a cup final and have forfeited the tie with a notional 3-0 score. Not only are they asking to be allowed to replay the final, but they are complaining that the score is void because the three notional goals would all have been offside if they had been there to defend them.
We are not talking about a game of football with a trophy at stake, and we are not talking about the sanctity or non-sanctity of the confidentiality of legal advice; we are talking about the most fundamental principle that governs our nations, the principle that Parliament can tell the Government what to do, not the other way around. This is not just some temporary individual aberration; it is part of a pattern of Government attempts to keep Parliament out of this altogether. They want to restore sovereignty to Parliament by keeping Parliament out of its own sovereignty.
The Government went to the Supreme Court to stop us having any say on the triggering of article 50, and they lost. They did their damnedest to stop Parliament having any say on the withdrawal agreement, and they lost. They spent thousands of pounds of our money trying to prevent a group of Scottish parliamentarians from finding out whether article 50 can be unilaterally revoked, and they lost. The Court of Justice of the European Union will now almost certainly find that article 50 can be revoked.
I pay tribute to the parliamentarians from five political parties and three national Parliaments who took that case to the Court. What they have won will prove to be a pivotal victory, but it raises a question that is too important to be treated as rhetorical, and a question that is highly pertinent to the substance of today’s debate. What kind of Government go to court to prevent their own citizens from knowing that the Government have legal powers but have chosen not to use them? What legitimate reason can there be for a Government to want their people to believe something is legally impossible when the Government already have legal advice telling them it is perfectly possible?
This morning’s preliminary opinion from the CJEU is simply another example of this Government’s attitude that the path they have chosen unilaterally is the only one worthy of consideration and that nobody is even allowed to know that other paths might be possible. They have their priorities completely wrong. They repeatedly tell us, and the Leader of the House said it often enough in moving the amendment, that their ultimate duty is to act in the public interest, but in fact they are demanding that Parliament and the public act at all times in the Government’s interest—that is not the same thing at all. The Government, and not the Parliament that holds sovereignty on behalf of the public, have taken upon themselves the right to decide what is in the public interest. The Government declare they know better than Parliament what is in the public interest. The Government place themselves above the decisions of Parliament, and they place themselves in contempt of Parliament.
Early next year we will see the 370th anniversary of the day when a crowned king of Scots was executed, just a few hundred yards up the road from here, for defying the will not of this Parliament—this Parliament did not exist then—but of one of its predecessors. I do not think anyone is suggesting a similar fate for those who are found in contempt of this Parliament, but we should be under no illusions about the gravity of what we are discussing, and we should be under no illusions as to how the mockery from the Conservative Benches is being perceived by those who believe this Parliament should be allowed to tell the Government what to do.
The elected Parliaments of our four nations, for all their faults, flaws, imperfections and ridiculously outdated, arcane procedures that the Leader of the House sometimes does not like, represent the rights of our citizens. No one, but no one, has the right to wield power over the people without the consent of the people. In a parliamentary democracy, that consent is expressed through Parliament, not through the office of the Prime Minister or any other office of state.
When Parliament speaks, it speaks on behalf of the people and the Government must listen. When Parliament instructs, it instructs on behalf of the people and the Government must comply. Parliament has spoken, and the Government must listen. Parliament has instructed. It has not asked, opined or suggested; it has instructed. The Government can disagree, moan or complain as much as they like, but they must comply with the instruction of Parliament.
Instead, the Government seek to defy the instruction of Parliament. They seek to defy the sovereignty of the people, as expressed through their elected representatives. It is now for Parliament to take the only course of action open to us to compel the Government to back down.
Ms Nadine Dorries (Mid Bedfordshire) (Con)
I apologise at the start, because I will have to absent the Chamber quickly to chair the Finance (No. 3) Bill Committee.
I begin my short remarks by referring to the comments made on the radio this morning by the right hon. Member for Carshalton and Wallington (Tom Brake). He conflated the Iraq war debate and the legal advice that was then issued with what is happening now, but the advice that was then issued, wrongly, by the previous Administration and that resulted in Members of this House going into the Lobbies misinformed and without the required information was about the legalities of the Iraq war, whereas this, as the Attorney General made clear yesterday, is a political decision, not a legal decision.
Tom Brake (Carshalton and Wallington) (LD)
The comparison was about the risk of cherry-picking, and I do not think anyone would argue. On the Iraq war, the position set out by Lord Goldsmith cherry-picked the advice to maximise the Government’s position and to press their case.
Ms Dorries
I do believe that the two issues were conflated and that that was used to argue for revealing the legal information on the wrong predication.
I have been in a quandary about the vote today. I would like to see the full legal evidence, as I am sure everybody in the House would, but there are conventions and other people to consider, and civil servants fall into that category. They serve us all with true and absolute independence. I do not know how any Government would ever be in this place if we could not depend absolutely on the impartial legal advice we receive from civil servants. If this motion was passed today, what civil servant or legal adviser would ever want to advise any future Government without first putting in place a filter of self-preservation, by considering the advice they give? Who would want to do that as a civil servant? Although I would love to see this legal advice, we have a duty to consider others: the people who serve both the public and us. I have 100% respect for civil servants. They work amazingly hard; they are truly independent; and they serve us without any political bias, and that should absolutely be considered.
On the public interest and the points the Attorney General made yesterday, none of us, apart from him and a select few, knows whether there are any issues in that legal advice that pertain to intelligence, national security or any other of those issues. I have to assume only that when he spoke yesterday about public interest, he was talking in the much broader context. This is an important issue. As he said yesterday,
“There is no procedure by which this House can have redactions or entertain circumstances in which it could weigh the competing public interest against the interest in disclosure, as a judge would do.”—[Official Report, 3 December 2018; Vol. 650, c. 557.]
Given what happened with the publication of the summary of the legal advice during the Iraq war, this inevitability that is happening today should have been foreseen then. We live in a changing world, one where people demand transparency and have a right to know all the full information. I believe that a resolution should have been passed in this House to give powers to this House—after all, Parliament is a court—and a process in this House whereby this House, probably through the authority of your office, Mr Speaker, via the Clerks and independent judicial advice, should be able to take a decision and redact matters of national intelligence and security from legal advice, so that people in this House can see legal advice. I hope that as a result of what has happened today, and given that demands to see legal advice will be made again in the future, the House will take cognisance of that and decide to pass a resolution that will ensure that we do not find ourselves in this position again.
As far as I am concerned, we have been told the worst; the Attorney General pulled no punches. He said:
“There is nothing to see here.”—[Official Report, 3 December 2018; Vol. 650, c. 557.]
But he told us what needed to be seen, so let me again quote his words. He said:
“There is therefore no unilateral right for either party to terminate this arrangement. This means that if no superseding agreement can be reached within the implementation period, the protocol would be activated and in international law would subsist even if negotiations had broken down.”—[Official Report, 3 December 2018; Vol. 650, c. 547.]
He told us the worst: we will be in the backstop in perpetuity. That was as bad as it gets. If we cannot withdraw from the backstop following the decision of this House, we are trapped, as somebody said from a sedentary position yesterday. I believe that no MP with any conscience, given what the Attorney General told us yesterday, could vote for the withdrawal agreement, because he pulled no punches—he told us the worst it can be. I commend him for that.
I want to finish, because I have to, with a comment about us. I listened to the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) when he said what he said at the Dispatch Box. One day, and I hope he is white in hair and long in tooth before he gets there, he may be the Attorney General, and his words may come back to haunt him at some time in the future. I have watched him many times and I could see that thought going through his mind. As a former legal adviser to one of most eminent law firms in the country, he knows full well, when he stands at that Dispatch Box, what he is saying and what he is doing. I hope you never find yourself in the position that you have put our Attorney General in. I would like to finish—
Mr Speaker
Order. I cannot quite understand why the hon. Lady thinks that someone of my limited capabilities aspires to the high office of Attorney General.
Ms Dorries
I should know better, Mr Speaker, and I apologise. I would like to finish by saying that before we are Attorney Generals, Mr Speakers and Front-Bench spokesmen, we are all MPs—we are all elected Members. I believe that the Attorney General came to this Dispatch Box yesterday with honour and in good faith, and he was honest. If this motion is passed, the integrity, reputation and honour of a good man will be traduced. It would be a disgrace for this House to do that, because any one of us may one day be in that position. I hope that this motion does not pass today for that reason.
Nigel Dodds (Belfast North) (DUP)
It is a pleasure to follow the hon. Member for Mid Bedfordshire (Ms Dorries). I do not agree with the main thrust of what she said, but she did make some useful and pertinent comments about what the Attorney General said yesterday in terms of the analysis of where we find ourselves. I agree with her and with other right hon. and hon. Members who have praised the Attorney General, his candour, his honour and what he brought to the House yesterday in terms of more truthfulness about what this deal actually means. By contrast to others who have been prepared to say things to the press and media, he came here, as a member of the Cabinet, and told us some of the unvarnished truth about this agreement. So I praise him for that and join the hon. Lady in what she has said, as I went through the adjectives that he used in his devastating commentary yesterday. He said that this deal was “a calculated risk”; that it was “unattractive”, “unsatisfactory” and “undesirable”; that it provided “no unilateral” exit clause for the UK; and that it was indefinite, with
“no unilateral right…to terminate”. —[Official Report, 3 December 2018; Vol. 650, c. 557.]
Yet he asked us to take it on trust that it would all never happen because, believe it or not, having spent 18 months negotiating all this, the EU and the Irish Government do not actually want to implement any of it.
The fact is that despite all the candour and all that was said yesterday, coming to this House to make an oral statement lasting two and a half hours and taking all the questions and providing the reasoned position paper does not actually fulfil the order given by the motion that was passed by this House, which was for the final and full advice provided by the Attorney General to the Cabinet to be published. The Government may not like the fact that that was passed by this House, but they cannot simply wish it otherwise.
During the debate on 13 November, they argued that they would do precisely what they have now done, and that was rejected by the House—the House passed a different motion. We do not particularly single out the Attorney General here, because, as he said in his statement yesterday, he wished that he was not in the position he was in. The Government as a whole are collectively responsible for deciding that they would simply ignore this binding, effective motion and revert to doing what they said they would do during the debate. Frankly, that cannot be allowed to stand. We have heard a lot of talk about precedent and about conventions of this House and respect for all that—surely, this is one area where the Government must respect the will of Parliament. They simply cannot set it aside.
The right hon. and learned Member for Rushcliffe (Mr Clarke), the Father of the House, in his intervention earlier, made an interesting and positive contribution about a way around this. Interestingly, the Government did not take that up. They did not take it up during this debate and they have not taken it up previously, so clearly it appears they are not interested—they certainly have not said anything publicly up to now—in taking that suggestion forward. What they have done is say, “No, no, it doesn’t matter what is said by this House. It doesn’t matter what other suggestions are out there. We are going to stick to the plan.” Obviously, the Government have a grid somewhere, where it is on the plan that they will publish this reasoned summary position paper and have a statement, and that is it. This House will have the final say, and I hope that it will reiterate what on 13 November it ordered to be done.
We are told that this situation is unprecedented. It was said in the other place yesterday that such advice can be published in exceptional circumstances. I have also heard the argument used that the advice is privileged, but of course in the lawyer-client relationship privilege belongs to the client, not to the lawyer—not to the person giving the advice. The lawyer has a duty to protect the client’s privilege, but the reality is that if the client waives that right, the lawyer—the provider of the advice—is quite at liberty to disclose it. So the argument about privilege is bogus.
The Attorney General said yesterday that he wished he could comply with the order of the House, but that it is not in the national interest or the public interest. I am afraid it is not the duty or job of any Minister to decide that. The House has decided what it wishes to do and it is not for a Minister unilaterally to override that with no good reason.
James Heappey (Wells) (Con)
The right hon. Gentleman is a patriot, and he therefore understands national security and the national interest. Does he agree that it is quite probable that in the legal advice that the Attorney General gave to the Government would have been an analysis of the strengths and weaknesses of the Irish Government’s position and that to publish that in full would hand to the Irish Government an advantage in any subsequent negotiation?
Nigel Dodds
I think the massive advantage to the Irish Government, other Governments and the European Commission in respect of future leverage over the negotiations is handed over in the withdrawal agreement. I do not accept what the hon. Gentleman says, because the Attorney General went on the record yesterday to say:
“There is nothing to see here.”—[Official Report, 3 December 2018; Vol. 650, c. 557.]
So there is obviously nothing of concern about national security in his advice. That is what he said himself.
The reality is that we had this debate on 13 November. The Government had the choice to vote against the motion and decided not to because they feared they would lose the vote. Their abstaining from a vote on an Humble Address cannot invalidate the motion, because that would set a very serious precedent.
Some of the legal advice that the Attorney General has given to the Cabinet—the advice it is crucial that we must have—has already been leaked by members of the Cabinet to the press and media. I think the Attorney General accepts that. The reality is that members of the Cabinet have already released to members of the press and media some of the advice given by the Attorney General in terms to the Cabinet. The Attorney General is somewhat estopped, if I may use a legal term, from saying that the rest of us are not entitled to have that advice. If some members of the media and press are entitled to have it, Members of this House are entitled to have it.
Sammy Wilson (East Antrim) (DUP)
Does my right hon. Friend agree that as the Government and the Prime Minister are going around the country trying to convince the populace that it is a good deal, this secretive approach only confirms in people’s minds that there is something to hide? If anything, the Government are scoring an own goal by refusing to publish the advice.
Nigel Dodds
I thank my right hon. Friend for that intervention. Indeed, that very point about the Government actually scoring a massive own goal, in their own terms, has been made not from these Benches but by a former Cabinet Minister on their own side and by many Government Members. My right hon. Friend sums it up very well. What is there to hide? Given that the Attorney has said that there is nothing to see and given the fact that the clear motion was passed by this House, it is now vital that that decision is enforced and the bogus arguments against it rejected.
Mr Dominic Grieve (Beaconsfield) (Con)
I am not sure that members of the public who come to watch our debates necessarily appreciate our role as the High Court of Parliament, but that is what we are. By virtue of history, we have been given a whole range of powers normally enjoyed only by others of Her Majesty’s courts, by which we regulate our affairs and maintain our own privilege—which also means, by virtue of the Bill of Rights of 1689, that we cannot be impugned in any other court—and by which we have coercive powers for dealing with those who transgress in front of us, and that can include Government Ministers. The difficulty we have—I say this having served on the Standards and Privileges Committee and having also been a Law Officer—is that our powers are entirely archaic, almost completely unusable, and in many cases so old-fashioned and antiquated that any attempt to use them would probably run foul of most modern principles of justice. I am afraid that this situation has been allowed to prevail for decade after decade by a mixture of a failure of the House to grip the problems it faces and, of course, the happy complacence of Government, who have known that in reality the teeth are not really present for this House to be able to assert its authority.
Nowhere do we see all that come to a head more than with this issue. It is all very well criticising the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) for using a blunt instrument, but there are only blunt instruments to be used. He was fully entitled to table the motion and to seek from the Government the documents that he wanted. The Government chose—slightly to my surprise, I have to say—not even to oppose the motion, even though there were compelling arguments that could be presented. Indeed, I continue to be of the view that the Law Officers’ advice should not be published because it undermines the ability to provide proper confidential advice to Government.
That said, the method that was adopted—this may simply have been because of the speed with which the drafting took place—was undoubtedly very blunt. Given its ordinary meaning, as I interpret it the Humble Address extends not just to the Attorney General’s advice but to every bit of advice about the development and impact of the withdrawal agreement that was provided through the civil service to Government at any time during the two and a half years of tortuous negotiations with the EU. I have no doubt that most of that advice is unlikely to be of great relevance to what the House wanted to see. Moreover, some of it may undoubtedly contain confidential material that, if put in the public domain, could well jeopardise the national interest. To take an example, I do not suppose that the House would seriously contemplate requiring the Government to disclose the name of agents who work for MI5 or MI6. But we have to face that fact that this House does have the coercive power to make such a request. That highlights not only the untrammelled nature of the House’s sovereignty but the extent to which it can be open to abuse.
During the course of the debate on the Humble Address, I think the right hon. and learned Member for Holborn and St Pancras became aware that the terms of the motion were rather widely cast, because at that point he restricted them to seeking
“the final and full advice provided by the Attorney General to the Cabinet concerning the terms of any withdrawal agreement.”—[Official Report, 13 November 2018; Vol. 649, c. 235.]
Having been a Law Officer and supplied advice to Government, I simply make the point that although it may surprise the House a little, I have simply no idea whether there ever was a final and full advice of the kind that was identified. In my experience, the advice provided by Law Officers comes in a continuous stream of dribs and drabs which, by letter to the relevant Department, to the Prime Minister and, if necessary, to the Cabinet, touches on a multiplicity of things without necessarily being drawn into a whole. I must say, therefore, that what is being sought is about as easy to measure as the length of a piece of string. It is not at all clear what the motion was seeking to grab on to, although I accept that in so far as it was seeking to acquire the original documents of some of the advice that was provided, it is manifestly clear that it has not been complied with; that is apparent.
Faced with that problem, where should the House go? Within this House there will, of course, be differences of view: the Government wish to protect their position; and the right hon. and learned Member for Holborn and St Pancras and all those on the Opposition Benches, and indeed some on my own Benches, who wish either to embarrass the Government or just to see this information, are going to be profoundly dissatisfied. The question of the culpability of Ministers is in any case not uniform. In defence of my right hon. and learned Friend the Attorney General, he is not a member of the Cabinet, although he attends Cabinet, and, as the point has been made, he is covered by legal and professional privilege when it comes to disclosing the advice that he provides to his client. The one person who cannot be blamed for this mess is him. He came along to provide the best explanation he could yesterday, but the fact is he is not responsible for making the decision as to whether the documents that the House wants are disclosed. I assume that that may have been a collective decision of the Cabinet, although knowing the way that the Cabinet works, I am not even sure that that is necessarily the case. It may be an individual Minister, or it may indeed be my right hon. Friend the Prime Minister. Whichever it is, this also emphasises the blunt nature of the instrument, which is then reflected in the motion that has been brought before the House today.
Referring the matter to the Committee of Privileges may be seen to be getting the Government a little off the hook, but it is not a stupid course of action. I can, I am afraid, anticipate a little how it is likely to progress because, in its session, the Committee of Privileges will immediately come to the awareness of just how complex and bedevilling this entire area is because of the lack of clarity of both our Standing Orders and the processes of this House. However, simply to go ahead without doing that and to move to a statement of contempt—I am not quite sure and it has not really been explained where, if that is passed, we would proceed next—does not seem to me, on balance, to be the better course of action. I say on balance because I have sympathy with the position of the right hon. and learned Member for Holborn and St Pancras. However, I acknowledge that, on the face of it, we have processes in this House and if this House is to work properly, they should be capable of being met.
What this highlights over and over again for me, and has done for many years since I came here and particularly after I became a Law Officer, is that our processes and powers bear no relation to the real world in which we have to operate and that, as a consequence, they can cause serious injustice. That is something that all of us should be very careful to prevent.
Tom Brake (Carshalton and Wallington) (LD)
May I start by praising the Attorney General for spending more than two hours answering questions, but may I also gently chide him for the manner in which, occasionally, his style of delivery descended rather into Vaudeville? Finger-pointing, faux bonhomie and expansive arm gestures may work in court, but perhaps he might like to leave those at the Bar of the House.
The Leader of the House referred to an arcane procedure and Government Members have talked about Opposition Members playing parlour games. The arcane procedures and the parlour games to which the Government Members refer are about holding the Government to account on a matter of contempt. Arcane they might be, but, clearly they are essential as well. Members will know that Parliament’s bible, “Erskine May”, makes it very, very clear that the Government’s actions are in contempt. The Government’s refusal to release the advice is an act that impedes the House in the performance of its functions, and what could be a more important function for this House than to be able to take the decisions in the next week or so in full knowledge of the impact of Brexit having seen the full legal advice on Brexit? That is why we are here today. That is why, Mr Speaker, I wrote to you on 28 November and subsequently signed the joint letter raising this issue of contempt.
The Government came forward with a reasoned position paper. The right hon. and learned Member for Beaconsfield (Mr Grieve) did a good job of explaining quite how complex and extensive the legal advice is that the Attorney General will have received, but that rather reinforces the point that the Attorney General’s producing a synopsis of said extensive legal advice spread over much correspondence runs the risk of presenting that synopsis in a way that is most advantageous to the Government. In relation to my intervention on the hon. Member for Mid Bedfordshire (Ms Dorries), who is no longer in her place, the only point that I was making again—I am very happy to get it on the record again—in relation to the advice about the Iraq war is that, clearly, that advice was cherry-picked, massaged and presented in a way that reinforced the Government’s case. That is the only comparison that I am making, with the possible risk of the Government, unintentionally perhaps, doing exactly the same thing in relation to the full legal advice that Ministers have seen—and indeed that Ministers have leaked. While a reference was made to that leaking, the Attorney General simply shrugged his shoulders as if the leaking of that advice selectively to the media by the Government is perfectly normal and acceptable in the daily course of Government business.
We know what happened in relation to that advice about the Iraq war, and, as for the Government’s amendment, we know clearly what the purpose of that is. Even with undue alacrity, the prospect of the Committee of Privileges addressing this before 11 December is precisely nil, so we will clearly not get that clarity, guidance and direction to the Government before 11 December. I must say that I suspect that that is what motivates the Government in pushing that amendment. This is, of course, a pattern of Government unwillingness to allow Members of Parliament access to the legal advice that we need in order to take the decisions that we need to take. The article 50 case is a very good example of that, as the Government have repeatedly refused to say whether article 50 is revocable, hiding behind the fact that they will not seek to revoke it, so Parliament does not need to know. I am very pleased that, today, the Advocate General has given a recommendation—it is only a recommendation, but one that is very likely to be adopted by the Court—that makes it very clear that article 50 is revocable. For Members of Parliament voting next week, it is critical to know whether, if a people’s vote is secured and if, at the end of that campaign, people vote to stay in the European Union, we have a means of revoking article 50 to bring that into effect.
Geraint Davies (Swansea West) (Lab/Co-op)
On that point, does the right hon. Gentleman believe that the Attorney General gave advice to the Government on the revocability of article 50 and has hidden that advice from this House, and that is why we have not had that disclosure?
Tom Brake
All we know for a fact is that a number of Members of Parliament, including, I suspect, the hon. Gentleman, have repeatedly asked the Government to confirm their position on that and they have not been willing to do so, which is why, on these Opposition Benches, we very much welcome the fact that the European Court will resolve this matter in the next couple of weeks.
Just on that issue of article 50, I wanted to thank the hon. and learned Member for Edinburgh South West (Joanna Cherry) for leading that charge, along with Members of the Scottish Parliament, and indeed also the hon. Member for Nottingham East (Mr Leslie), who is not in his place today but who has joined me in a supporting role to the hon. and learned Lady.
Mike Gapes (Ilford South) (Lab/Co-op)
I am really pleased that the right hon. Gentleman, my hon. Friend the Member for Nottingham East (Mr Leslie) and the hon. and learned Member for Edinburgh South West (Joanna Cherry) took the risk of taking this case to the Court to establish an important principle. If the decision now is in line with the advice that is being given, then that is in the interests of the democracy of this country. We should all register our thanks to him and the other Members.
Tom Brake
I thank the hon. Gentleman for registering those thanks.
The critical point for Members of Parliament to know is that, if we go beyond 21 January without a deal and start going down the track of no deal, it is open to this House and this Government to revoke article 50 to avoid a catastrophic exit from the European Union. I would argue, and many Opposition Members have argued, that we are entitled to know that information, and it is remiss of the Government to have kept it from us.
To conclude—[Interruption.] I knew that would cause celebration on the Government Benches, so I will speak for a little longer than I had intended. I accept that it is not a simple choice that Members have to make today. Publishing the full legal advice has serious implications—of course I accept that, and I think everyone on these Benches accepts that—but the ramifications of the Government ignoring the express demand of Parliament are of even greater import. That is why I urge Members to vote for the motion today.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
I think we need to start with why parliamentary privilege is so important, particularly those of us on the Government side, because there will come a time when we are not on the Government side, at which point the protections provided for us by parliamentary privilege are all the more important. Governments who run roughshod over parliamentary privilege when they are in government find that, when they are in opposition, their position is much harder to defend and uphold. When the Conservatives were in opposition, we disliked the streamlining of parliamentary procedures that made it easier for the then Government to get legislation through, because we found it harder to have the full debates and discussion that we wanted—the ability to discuss and sometimes even to delay things to which we were deeply opposed. That was a loss to us in opposition, even though it was a benefit once we were back in government.
My right hon. Friend the Lord President of the Council mocked the Humble Address procedure on the basis that it was ancient, but every morning when we come into this House and pass through security, we are exercising a right that dates back to 1340. Whether we have our pass on or not, we are entitled to come into this House and nobody is entitled to obstruct us. This is an important right because in times less benign than ours, people have wanted to obstruct Members coming into Parliament. We sit in a House where there is a very slim margin and it may be that, rushing back for a Division—perhaps a Division of confidence in the Government—somebody obstructs Members coming in. That would be a breach of our privilege and, though it is one of our most ancient privileges, it is actually a great safeguard of the proper democratic operation of this House.
We heard from the Treasury Bench and from other right hon. Members a very good argument for why the Humble Address should not have been passed in the first place, but today is the wrong day for that debate. That debate should have been held on 13 November and voted on, or not, according to whether or not it were the will of this House that the Humble Address go through. The tradition of Humble Addresses is very clear—that the Humble Address is followed. Now, that does not mean that this House is irresponsible in passing Humble Addresses. We have heard suggestions that we might seek information from the security services. This House has never passed a Humble Address of such an unwise kind.
Although I am not, dare I say, the greatest admirer of the socialists on the Opposition Benches, I accept that they are responsible enough not to wish to endanger the security of our nation, but that Parliament has the power does not mean that Parliament will exercise the power. Indeed, and importantly, this House constrains its right of free speech in relation to the sub judice issue. We have passed Standing Orders, and we give power to Mr Speaker, to stop hon. and right hon. Members breaching the sub judice rule in order to ensure that the system of justice in this country proceeds properly. Likewise, we are entitled to limit the means of Humble Addresses and the information that can be received from a Humble Address, but we did not do so before 13 November. Therefore, what happened on 13 November ought to be complied with, because if we simply say that motions of this House according to great antiquity and precedent can be ignored because the Government feel like it, what is this House here for? How are we protecting the rights of the people we represent? How are we able to seek redress of grievances?
The Humble Address may have been unwise. Indeed, had there been a Division on 13 November, I would have voted against revealing the Attorney General’s information and advice to the Government. I did not think that the Humble Address was well advised, but the Government decided to accept the motion. Having done so, it was not then up to the Government to say that it was not in the national interest to do so. I am afraid that is a classic confusion; the Government interest and the national interest are different things. The Government interest is a political interest, and the national interest is a higher interest. In my view, the national interest is better served by respecting the privileges of Parliament than the convenience of the Law Officers. Therefore, in the national interest—not the government interest—this legal advice ought to be produced because Parliament has said so.
This is clearly a right that this House has. Every Select Committee has the delegated right to send for persons and papers, and this is simply an exercise by the whole House of requiring that papers be produced. But the Government, with their majority—perhaps a majority they cannot always achieve, but at least with a technical majority thanks to our friends in the Democratic Unionist party—ought to be able to stop any papers being produced that they believe are too confidential. Indeed, it is still open to the Government to bring forward a motion suggesting that the previous motion be overturned; there is precedent for overturning a Humble Address and seeking to do the opposite. There is a proper process for the Government to follow if they do not want to release these papers, rather than sticking their feet in the mud and saying no.
Then we come to the motions before us today, and here I agree with my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve). I do not think that the motion before us actually works because it is too indistinct about who it is criticising—that is, it is criticising Ministers broadly, rather than the ones specifically concerned. The motion needed to be more specific about who it was objecting to and who it was holding in contempt, and indeed it ought to have used the rights of Parliament to inflict some punishment on the person who is deemed to be in contempt.
Helen Goodman (Bishop Auckland) (Lab)
If the hon. Gentleman feels as he has described, why did he not table an amendment to the motion in the name of my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), setting out what he thinks ought to have been done?
Mr Rees-Mogg
Because the Government have tabled an amendment that I feel I can support—[Interruption.] We are not in pantomime season quite yet. [Hon. Members: “Oh yes we are!”] All right, I give in on that one. I am defeated on that particular point, but not on the substantive one.
I am happy to support the Government’s amendment, because I think it is right that a Committee of this House look at the issue in broad terms. It may be right that the House wishes to take a self-denying ordinance on the extent of Humble Addresses. It may be that we would like to say specifically that they would be deemed disorderly, and therefore not tabled, if they related to matters concerning the security services or other types of information where there would be a broad consensus that those matters should not be brought forward. The ability to demand papers could require—dare I say it?—that the tax returns of Opposition Members be brought to the House—[Interruption.] Mine would be of so little interest that I cannot imagine it happening. That would be a clear abuse of the precedents that we have. So it may well be right that the Privileges Committee should consider broadly how Humble Addresses should be used to ensure that they are effective, because currently they ought to be effective and the Government ought to abide by them.
Dr Andrew Murrison (South West Wiltshire) (Con)
I am following my hon. Friend’s remarks with a great deal of interest. He will know, since he is an expert on “Erskine May”, that it says very clearly on page 168, from memory, that the Humble Address should not normally be used on matters that touch directly on Bills before Parliament, as this clearly does. So was the Humble Address being used correctly, in his view, or incorrectly?
Mr Rees-Mogg
I am sorry to say that my hon. Friend is not quite right. There is not a Bill before Parliament on this issue—there is a motion before Parliament on this issue. Those two things are clearly separate matters that are not to be confused. I have no doubt, Mr Speaker, that had a Humble Address been brought forward on a Bill before Parliament, it would have been ruled disorderly and therefore would not have been a subject for debate. For the benefit of the Hansard reporters, Mr Speaker is nodding, and I therefore hope that this can go into the record as an authoritative reply.
I have one concern about the reference to the Privileges Committee, and that is of course that the Attorney General is himself a member of that Committee, though a non-voting member who does not affect the quorum.
Andrea Leadsom
The Law Officers would recuse themselves from any such meeting.
Mr Rees-Mogg
I am extremely grateful for that. It gives me complete confidence in supporting the Government’s amendment. But I absolutely reiterate that, however the vote goes today, the Humble Address must be obeyed unless overturned. For the Government to fail to do so would not be treating Parliament properly. We on the Government Benches must remember the great need for us, when we are in power, to defend the rights of Parliament for those occasions when we will not be.
Geraint Davies (Swansea West) (Lab/Co-op)
The question before us is whether there is additional information that was in the legal advice that is relevant and pertinent to the crucial question that we must ask ourselves in voting on the withdrawal agreement. Against that, the Government have suggested that there are security and national interest matters to defend. The motion says that Ministers should provide
“the final and full legal advice provided by the Attorney General to the Cabinet concerning the EU Withdrawal Agreement and the framework”.
That does not imply that every email and every jot and tittle is required. In terms of national security and the national interest, that means that there is not a great risk.
The question is whether there is a reason to believe that critical legal advice has been withheld. I suggest that there is such a reason. Yesterday, I put it to the Attorney General, following advice from counsel in two chambers, that the European Union (Withdrawal) Act 2018 gives the Prime Minister the right to submit article 50 based on an advisory referendum, but if that referendum has been found to be conducted illegally and subject to cheating and lying, then the advice is flawed and so the notice should be withdrawn—and we have heard from the advocate general that in all probability it can be withdrawn. Was this advice tendered to the Government or discussed with them by the Attorney General? He did not mention it at all, and yet it is advice that is available. That suggests to me that the advice that has been given to this House is incomplete for us to draw our conclusions.
I turn to the argument that the Government should now revoke article 50 on the basis that the advisory referendum was flawed. First, we already know that the leave campaign misled the country during the referendum, deliberately or not. Secondly, multiple investigations by the Electoral Commission have found that the leave campaign broke campaign finance law. Thirdly, had those offences committed by the leave campaign been committed in a general or a local election, the result would have been legally void. Fourthly, the Government have a legal duty to take all relevant considerations into account when making a decision. Therefore, the fact that in any other election the referendum result would have been void due to one side’s illegal conduct is a relevant consideration when deciding whether to give effect to the result—that is, in ratifying the withdrawal agreement that would give Brexit effect.
In essence, then, the advice on the withdrawal agreement that the Attorney General should have considered would be whether the Government were failing in their duty by promoting an agreement when the animating factor of the agreement—the referendum—was so fundamentally compromised. Therefore, the Government are acting illegally by moving forward with Brexit without giving proper consideration to these facts. This whole debate and discussion was not included. Whether or not one agrees with it, this discussion would presumably have occurred within the ambit of the Attorney General, but we do not know that. That is a key reason to believe that the advice being given has been doctored for party political reasons. We need the full and latest advice.
As we have heard, the advocate general is saying that article 50 may be revocable. What was the view of the Attorney General given in the legal advice to the Government? We have not been told. The Attorney General must be aware of these points of law but has not listed them, and so we must conclude that he is withholding from the House relevant issues not for the national and public interest but for party political reasons, and is therefore in contempt of this House.
Antoinette Sandbach (Eddisbury) (Con)
The hon. Gentleman has just made very serious allegations. Does he not recognise the importance of the legal professional privilege that attaches between a lawyer, as an adviser, and their client?
Geraint Davies
Of course I do. The whole point is that this House is entitled to the full legal advice. The Government are hiding behind this cloak of saying, “Oh, the national interest; oh, negotiations; oh, security.” That has nothing to do with it.
What I am illustrating with these legal arguments is that there are alternative views that need to be fully discussed so that we can take the right decision on the withdrawal agreement in full knowledge of the facts. We have had a doctored version that is politically spun in the interests of the Government getting their objectives through. They are protecting themselves by saying, “Oh, there might be issues of national security, MI5, the public interest, etc.” I have great support, I must say, for the Father of the House’s suggestion that if there were such problems with national security and so on, those parts could be redacted and we could see the full legal advice.
This motion focuses clearly on the legal advice provided by the Attorney General on the EU withdrawal agreement. Implicit in that, in my interpretation, is that we obviously do not need lots of details about MI5, national security, the negotiating position and so on. What we want to know is the legal position in respect of article 50 and of the illegalities during the advisory referendum that made it flawed, thereby undermining the power that the Prime Minister has under the EU (Withdrawal) Act based on the advisory referendum that we now find is flawed. None of this was brought before the House. Why? Either because the Attorney General and his colleagues are incompetent or because they are withholding that information.
Hannah Bardell (Livingston) (SNP)
As the hon. Gentleman says, the Government are hiding behind the national and public interest and claiming to be the final arbiter of public interest. Does he agree that they are not the final arbiter of public interest, despite what some on the Government Benches may think, and that it is not in the public interest for the UK Government to be governing in secret, with Members of this House not having all the information to make a proper, educated decision?
Geraint Davies
Yes, that is precisely right. What the House wants is the complete legal arguments on either side of the debate on the EU withdrawal agreement. These are difficult issues; we all accept that, and we are all grown up. They might say, “Well, there are all these things about national interest, negotiation and security,” but people are not interested in that. We want the full facts. I have made some simple legal points that show the full debate has not occurred.
Dr Murrison
Is the hon. Gentleman interested, like I am, in legal advice given to the European Commission and its negotiators by its lawyers, which presumably the European Commission would like to be privileged in the same way as advice to the Cabinet is? Has he interested himself at all in that side of this negotiating process?
Geraint Davies
Yes, I am sure we would all be interested in that if it were available, but the issue on the table is whether the Government are in contempt, and there is reason to believe they are in contempt, because a lot of the legal arguments are simply being taken out.
Hilary Benn (Leeds Central) (Lab)
My hon. Friend referred to the suggestion of the Father of the House. Does he recall that the last time a Humble Address was passed by the House, which instructed the Government to hand to the Select Committee on Exiting the European Union the exit analyses, I made it clear to the Government on behalf of the Committee that the Committee would take the decision about what was released? In the end, having read all the pages, we released 36 or 37 of them and held three back, because we accepted the argument made by the Government at the time, that those might not be in the national interest, given that negotiations were taking place. That is an example of the way in which a Committee of the House has been able to exercise that judgment on behalf of all Members.
Geraint Davies
That is a very helpful intervention, and it builds on the proposal of the Father of the House.
There is a time constraint here. Obviously, the idea behind the amendment is to kick this into the long grass so that we do not have full legal clarity to make an informed decision when we vote next Tuesday. It is critical that all the legal advice is available to Members before then. If there were a facility to enable the redaction of irrelevant and possibly dangerous facts, figures and information in relation to our national interest, national security, negotiating position and so on, obviously that would be much better. The main question is, are we going to have the full legal advice, or are we going to say, “What can you do? They’ve played the national interest card”? As my right hon. Friend the Member for Leeds Central (Hilary Benn) said, there should be—I hope there will be—a way through this maze, so that we have the full advice before the crucial vote.
Mr Kenneth Clarke (Rushcliffe) (Con)
I follow up entirely on what has just been said by the hon. Member for Swansea West (Geraint Davies). He and the right hon. Member for Leeds Central (Hilary Benn) obviously have some sympathy with what I said.
It seems to me that the House is facing an extremely difficult dilemma, which was exactly the one faced by the Attorney General yesterday. There are two very important constitutional principles involved here that are important to people on both sides of the House, and unfortunately the present situation puts them in direct conflict with each other. The first is the sovereignty of Parliament and its ability to instruct the Government to do things that the Government do not want to do.
I will not repeat what my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) said, because I entirely agree with everything he said, but the Humble Address is an extremely important weapon of this House. It is the duty of Parliament sometimes to instruct the Government to do things. We know that whenever the Government lose a vote, they think Parliament is wrong—they disagree—but they should comply. Parliament in recent years has greatly weakened its powers vis-à-vis the Executive. We should all think ahead to future Parliaments and simply not weaken it any further.
The Government did not vote against the motion when it was before the House because they knew they were going to be defeated. We all know why they asked Conservative Members not to vote at all. I disapprove of that. A Humble Address is an instruction. I disapprove of refusing to vote on Opposition motions and other motions. It may well be that constitutionally they are not legally binding, but we have never previously had a Government that just said, “Well, the House of Commons can express opinions if it wants, but as they’re not legally binding, we won’t bother to attend, and not many of us will listen to it.” That is a very unpleasant step.
Ahead of us are votes, including the meaningful vote on the withdrawal agreement and votes on the Bill that is necessary to implement that. Particularly on the meaningful vote, I hope that the Government abandon the idea that the only vote of any legally binding significance is the one on the Government’s proposal—yes or no—and that if the House wants to pass amendments or motions or express a different opinion, that is very interesting and a matter of opinion, but the Government will ignore any amendments. That was virtually what was being urged on the Procedure Committee a few weeks ago.
I hope that when we get on to sorting out the procedure for next week’s vote on amendments and the motion and for the Bill that ultimately follows, we go back to the standard procedure, whereby amendments can be tabled to Government motions before the motion is put, and when amendments are carried, the only vote remaining of the House is whether it approves of the motion as amended. With great respect, I do not think we should take any notice of all this stuff about the Government’s duty being to listen to what the House says and then decide, in their opinion, whether the public interest justifies complying with it. I am entirely on the side of the critics.
On the other hand, as my hon. Friend the Member for North East Somerset said, the Conservative party will deeply regret when one day it is in opposition that it has challenged the authority of Parliament, and the Labour party might well come to regret when it gets into government its attempts to override the convention that Governments are entitled to confidentiality when they get legal advice from the Attorney General. It is quite ridiculous to throw out either of those principles, because there are occasions when they are both extremely important.
I am not a lawyer in the same rank as my right hon. and learned Friend the Attorney General, though I have practised for many years. I once declined an offer of an appointment as a Law Officer, because I preferred to stay in the departmental job I was then in. I am now totally out of date—I accept that—but I am very familiar with the circumstances when a lawyer gives advice to his clients and gives honest opinions of the legal advice. Of course a lawyer is talking about the circumstances of the case, but Law Officers’ advice in particular, which I have seen many times when I have been given it as a Minister, is all muddled up with questions of policy, the law, arguments about tactics and comments on what the other side might do. Advice is given to a client in a way that 100% should be an accurate expression of the lawyer’s opinion of the law, but it will be coupled with lots of other things, because the lawyer does not just sit there ignoring the merits or what the client wants to achieve.
Justine Greening (Putney) (Con)
My right hon. and learned Friend is making a powerful argument. He is saying that the House should not have to choose between those principles, and what we should have expected was more leadership from those on both Front Benches in order to reach a proper, thoughtful solution on how to strike the right balance—just as we have on security matters, for example. This is a unique position we find ourselves in, but it was not beyond the wit of the political leaders in our country to reach a solution and avoid this point.
Mr Clarke
My right hon. Friend summarises my argument in a very neat way. That is exactly the case. I will not do the Father of the House “What it used to be like” and all that sort of thing, but I would have expected—it would easily have happened in my time—the usual channels to sort this situation out.
Mr Clarke
Well, perhaps the usual channels were more reliable in the past. We would get together and agree that the House has passed a resolution, but there are these problems, and we satisfy the Opposition that their political desires can be satisfied and they can get all the documents with the embarrassing political opinions of the Attorney General—though I do not think they will find much, because the Attorney General is pretty candid. He is a very sound Brexiteer. He and I do not agree on Europe in the slightest.
They can excise things such as security, which we have talked about. I do not know what is being excluded or held back, but it is likely to be comments on the negotiating position of the Commission, the strengths and weaknesses of the Government’s case and where there are risks. A great deal of a lawyer’s advice is, “This is my opinion, but the risks involved are this”. Some of these comments about other Governments, the Commission and so on it may well not be in the public interest to disclose. There are reasonable people on both sides of the House and on the Procedure Committee, and I would have thought that we should certainly consider where we are going.
Sir Oliver Heald (North East Hertfordshire) (Con)
Will my right hon. and learned Friend give way?
Mr Clarke
I will not give way, because I am concluding. It will not take too long, because it is just my one suggestion that I am pursuing. I have made it twice now, so I will not labour it too long.
It seems to me likely that the motion we are debating is going to be carried. There must be a very considerable risk of that. I do not know whether the Chief Whip thinks he has a majority for resisting this motion. Even then, I would hope that we will consider how to do this in a responsible way that does not prejudice the national interest or the interests of British Governments. I would also hope—I am not sure that the Committee of Privileges is the best place to do this, but it was done in the case of the Exiting the European Union Committee, as we have been reminded—that somebody nominated as responsible by the Opposition could have a look at the documents and give the Attorney General the opportunity of explaining why, yesterday, he was so obviously wrestling with a dilemma or problem of conscience about its simply not being in the national interest to put all this in the newspapers. The previous problem was solved by redactions, and I still urge that there should be redactions.
Nobody in the Opposition is going to allow the Government just to hold back things that are politically embarrassing, somewhat at odds with what the Government are now saying or advocating a tactic that the Government in the end chose not to use, and all that. Because we lost the motion for a Humble Address, I fear that Conservative Members have to be braced for that if these documents do come out. However, there is a public interest in not undermining the confidentiality of the legal advice.
I repeat my suggestion. No one knows where we are going in politics, who will be in government and who will be in opposition for very long, but what matters is that this Parliament is not weakened any further and that the ability of Governments of whatever party to rule in the national interest is not undermined. I repeat my suggestion, and I think that if the Opposition are victorious, they should in the public interest consider how far they wish to press it. I am sure that the House as a whole would accept it if they held back in some ways and the Law Officers’ confidentiality was left intact.
Several hon. Members rose—
Mr Speaker
Order. Before I call the next Member wishing to speak, may I very gently point out to the House that, although many Members still wish to speak, afterwards we have the business of the House motion to consider and the debate itself with a protected period of eight hours? I make this point simply so that Members can factor that into the equation and no doubt take account of the mood of the House. That is the only consideration I am inviting colleagues to contemplate. From my point of view, there are, outside family, few joys greater in life than listening to right hon. and hon. Members on both sides of House and from all points of view. [Interruption.] I should get out more, somebody says from a sedentary position. I am the servant of the House, so I am not complaining—it is a joy—but people might want to bear in mind that their own enthusiasm to speak is not always matched by a comparable enthusiasm of everyone else to hear them. I call Mr Chris Bryant—and that is not personally directed at him. It was not personal.
Chris Bryant (Rhondda) (Lab)
Your wisdom, Mr Speaker, in always making that point just before you call me is shared by the whole House, I am absolutely sure. So we are all united now and everybody can just agree with what I am about to say.
Although I sympathise with the arguments made by the Father of the House and for that matter with the points made by the hon. Member for North East Somerset (Mr Rees-Mogg), I disagree with the conclusion to which they have come. I am delighted that the motion does not mention the Attorney General by name because I do not think this is a matter of the Attorney General being a dishonourable man at all. I am very fond of the Attorney General. I think he is a wonderful man. I think he is entirely honourable and, yesterday, he did his level best in the Chamber to provide what he thought he could, within the terms and the strictures given to him by the Government. However, I would say that we are today facing an extraordinary moment. I cannot in the history of Parliament find a moment when the Government have referred themselves to the Committee of Privileges. The best argument they have today, in response to the motion moved by my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), is—“Instead of deciding already on the House’s behalf that the Government are in contempt, we will refer it to the Committee of Privileges.” Always in the past, that has been to decide, prima facie, that there is a case to answer. So the Government themselves accept at the very least that there is a case to answer about their being in contempt. I cannot think of another moment in our history when that was true.
In fact, as several Members have already said, the Attorney General himself in a sense confessed his own guilt to the charge of contempt yesterday. He said on the motion for the debate we had previously:
“We should have voted against it.”—[Official Report, 3 December 2018; Vol. 650, c. 579.]
Of course we should have done. It would have been good if the Government had made in the debate back then all the arguments they are making today and made yesterday afternoon. Some of us might have listened to the argument about national security then. It might have been an appropriate argument then, but it was not an appropriate argument yesterday and, for that matter, it is not an appropriate argument today.
The Attorney General repeated time and again yesterday that he knew he was not fulfilling the will of the House. That is what we are asked to decide today—whether the Government are fulfilling the will of the House. He himself said yesterday that he was not fulfilling the will of the House. In an extraordinary moment, he said:
“The House has at its disposal the means by which to enforce its will.”—[Official Report, 3 December 2018; Vol. 650, c. 574.]
That is what we are doing now. To all intents and purposes, the Attorney General yesterday asked us to do what we are doing this afternoon and I think he fully accepts that the House has to be able to have its way in the end.
I say to the right hon. and learned Member for Beaconsfield (Mr Grieve) and the hon. Member for North East Somerset, the other thing that is extraordinary about the motion before us—the Opposition motion, supported by the other Opposition parties—is that there is no sanction involved in it. In fact, the only thing it requires to happen is that the will of the House is abided by. That is the only thing. It may be that we have to return to this if the Government choose to ignore it, but my suspicion and hope is that, if the Opposition motion is carried today, the Government will say, “Alright. Fair do’s. That’s twice we’ve been told now. We do actually have to abide by the decision of the House.”
Mr Rees-Mogg
Could the hon. Gentleman help the House by explaining what the next step would be if the Government did not then publish the information and what procedural effect could be had or what motion could be brought forward to follow up on the motion before the House today?
Chris Bryant
I do not want to go back to 1340, as the hon. Gentleman did, and I am not going to. I prefer to cross my bridges one at a time. I am hopeful for all the good reasons that he himself adduced that, if the House for a second time decides to insist on its will, the Government will then comply. To be honest, if that were not to be the case, I hope other hon. Members who today are dubious about this procedure would want to stand in favour of more robust measures. The anxiety is of course that there is a time factor. We cannot let this roll on until after next Tuesday because then the Government would have completely defied the will of the House beyond the time necessary.
Chris Philp
A few moments ago, the hon. Gentleman referred to having to implement the will of the House. Does he believe that there should be any limitation on the House’s ability to impose its will, for example, if it came into conflict with an individual’s personal or civil liberties?
Chris Bryant
In the debate that would transpire, I do not think that hon. Members would vote for such a motion. The hon. Gentleman asks me a hypothetical question, and we have been dealing with lots of hypotheticals. I have tried to search through history for a moment when the Government refused to abide by the will of the House when there was a Humble Address and I simply cannot find one. We should therefore deal with the actuality rather than the hypothetical. I say to Conservative Members that it is all very well when sitting on the Government Benches to say that the Government should have their way, but that does not normally serve the long-term interests of the nation, and in our current system, the Government have phenomenal power.
Sir Oliver Heald
The hon. Gentleman knows that our Committees often ask for papers and sometimes the response to such requests is to say that the documents are legally professionally privileged. In those circumstances, the House tends to use a bit of discretion and common sense and often an agreement is reached about exactly what is to be disclosed. Is not that what is needed here?
Chris Bryant
It would have been interesting if the Government had made that argument, but they did not. They made no argument—they allowed the motion to go through. If they had said in the meantime, for example, yesterday afternoon, “We will provide the document that you want. We’ll give it to the Chair of the Exiting the European Union Committee, which has a majority of Conservative Members, and it can decide what should be in the public domain”, I think the House would have been content. That would have been a perfectly logical process to adopt, but the Government have not done that. Perhaps they will do it later today if they lose the motion—I do not know.
Let me consider the important substantive point. Can the House require the Law Officers to provide their legal advice to Parliament? It is important that Select Committees can require documents of all sorts of people outside Parliament, and it is difficult to enforce that if we cannot even require documents of Ministers. Yesterday, the Attorney General referred several times to “previous editions of ‘Erskine May’” to show that “the motion to return” is traditionally always
“confined to documents of public and official character.”—[Official Report, 3 December 2018; Vol. 650, c. 563.]
That was his argument for saying that “Erskine May” did not really allow for Law Officers to provide anything that was sought by the House, even though the current 24th edition does exactly that. He suggested that the 22nd or the 23rd edition had changed the rule and that we should return to a previous version.
Perhaps the Attorney General was referring to the 10th edition of “Erskine May”, which, as I am sure the hon. Member for North East Somerset knows, came out in 1893. In that, the traditional version of this doctrine, which I think the Attorney General meant, is laid out:
“The opinions of the law officers of the Crown, given for the guidance of ministers, in any question of diplomacy or state policy, being included in the class of confidential documents, have generally been withheld from Parliament.”
I think that the Attorney General believes that that should still be the case, although that has been superseded. Unfortunately for the Attorney General, “Erskine May” goes on to say:
“In 1858, however, this rule was, under peculiar and exceptional circumstances, departed from, and the opinions of the law officers of the Crown upon the case of the Cagliari, were laid before Parliament.”
I will not go into the instance—I know that hon. Members are saddened by that.
The point is that, when the House has required that the Law Officers provide the information, they have always done so. The Attorney General’s argument therefore does not stand.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
That also appears in the 17th edition of “Erskine May” from 1964, to which I will refer if Mr Speaker calls me. In the case to which the hon. Gentleman refers, in the middle of 19th century, the Minister voluntarily gave that advice, which was not demanded by the House.
Chris Bryant
It was required by the House. Indeed, it was required by the House of Lords and the House of Commons. The point about the 1893 version, which survived for a while, was that the information was provided
“under peculiar and exceptional circumstances”,
but they were peculiar and exceptional in a remarkably similar way to the current case, because the information dealt with international treaties and the relationship between other countries in Europe.
The House must surely be able to require documents. Just as the Speaker is the servant of the House, so in the end, the Government have to bow the knee to Parliament. It is not good enough for the Government to say, “You’re all wrong; you’re benighted; you don’t understand the full implications. We, the Government, are the only people who have seen the whole truth and understand the security implications.” If they want to find some other arbitration method through the processes of the House, such as a Select Committee, that is fine, but that is not what they have done.
In the end, we reach the simple point, which I do not think a single one of my constituents would understand: the Government look as if they are trying to keep something secret; the Law Officers want to say one thing in private, in Cabinet, and another in Parliament. That is not to accuse anybody of hypocrisy. It is simply to say that my constituents would not understand why the Government would want to keep the information secret. I say to Government Members: one day, you will sit on the Opposition Benches and if you vote against this being contempt and therefore against requiring the Government to produce the documents, that power will be gone forever.
Several hon. Members rose—
Mr Speaker
Order. In inviting an illustrious lawyer next to address the House, it is perhaps more in hope than in expectation that I reiterate the plea for brevity. I call Bob Neill.
Robert Neill (Bromley and Chislehurst) (Con)
I am grateful, Mr Speaker, and in an endeavour to fulfil that injunction, I say, as lawyers would, that I adopt most of the arguments that my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) made, particularly his masterly analysis of some of the matters, and I do not intend to repeat them.
However, it is important to recognise that there is a potential conflict between two important concepts: the revived use of the Humble Address, which may be of value to the House, and the imperative of protecting the concept of lawyer-client privilege generally, and particularly as it relates to advice given to Government. Having been a much less distinguished member of the Government than my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), I confirm what he said about the way in which legal advice is received by Ministers. The impression has been given that it is as if, a little like in private practice, we are asked to produce one big rolled-up opinion as a nice document for which one charges appropriately. That is not what happens in practice here. We need to draw that distinction.
Another point concerns the particular nature of the Law Officers’ convention, which goes beyond the normal lawyer-client privilege. The hon. Member for Rhondda (Chris Bryant) rightly conceded that it was wrong to attack the Attorney General because he is not the client but the Government’s lawyer. Having known my right hon. and learned Friend the Attorney General professionally and personally for the better part of 30 years, I have absolute faith in his integrity. I believe that he did everything he could to fulfil the injunctions placed upon him. I have absolute confidence that he spoke frankly and that he would not, as the right hon. Member for Carshalton and Wallington (Tom Brake), who is not in his place, unworthily suggested, cherry- pick. My right hon. and learned Friend has never approached his responsibilities as a lawyer or a politician in that way. In a sense, the wrong person has been put in the dock.
I will support the Government amendment because the conflict between the use of the Humble Address and protecting parliamentary privilege requires something more than the summary disposal that will come at the end of the debate. The way in which we deal with the interaction between those two matters warrants serious consideration. If the Humble Address process is to be updated, perhaps it is a matter for not just the Committee on Privileges, but the Procedure Committee to look at. I offer that as a constructive suggestion.
For a proportionate way forward, the Committee on Privileges is best placed to consider the matter in a dispassionate and evidence-based way and I therefore support that. Perhaps the Committee might look at the option that the Father of the House floated. However, for today, I urge hon. Members to accept the Government amendment and not to imperil a fundamental legal and constitutional privilege.
Mr Peter Bone (Wellingborough) (Con)
Much of the debate today has been about what the debate should have been back in November. I am going to dismiss those arguments. Had a vote taken place in that debate, I would have voted with the Government. However, they did not put it to the vote and they accepted the motion. That is a matter of fact. It is therefore clear that not providing the information is a contempt.
The Father of the House, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), and my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) argued the problem that it breached the other important aspect—confidential legal advice for the Government—which I also accept. It seems to me, however, that the only way we will get something like what the Father of the House suggested is if we vote for the contempt motion, so that the Government can then come back, overnight if necessary, to suggest that option. I do not see how we get to that if we vote for the amendment because it will go off to the Privileges Committee.
I was undecided before I came into the Chamber, but because of the arguments from my hon. Friend the Member for North East Somerset, the Father of the House and, for that matter, the hon. Member for Rhondda (Chris Bryant), it seems to me that the motion before the House, signed by spokesmen for six different parties in this House, is not actually critical of any particular Minister. All it says is what the original motion said—it is perhaps even more precise than the original motion—about publishing the legal advice. Unless something changes very dramatically between now and the end of the debate—I have to leave the Chamber, Mr Speaker, as the Chief Whip would like to have a word with me—I think that, if the House votes for the contempt, a compromise will happen and we will get hopefully properly redacted information before we vote next Tuesday.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I am most grateful to you, Mr Speaker, for letting me speak now. I have been able to listen to the debate before deciding whether to speak. That may be unusual.
I rise to speak because the Public Administration and Constitutional Affairs Committee is in the process of concluding our inquiry into the status of resolutions of this House. We have been looking at the question of what we call “motions of return”: how they should be dealt with and what their legal status is. At the moment, how a Government responds to a Humble Address is merely a matter of precedent and convention. It is not a matter of law. It is not a matter of statute law or of common law. Therefore, this is not a device that should be overused or used irresponsibly. I am not casting aspersions on anybody’s motives. I just make that observation.
This House operates on the basis that it is not the Government. The Government exist as a separate legal entity and function when this House is not sitting, when Parliament is prorogued and even when Parliament is dissolved. Parliament holds Ministers to account and we scrutinise the work of the Government. We make the laws that bind the Government, and this House controls the supply of money to the Government and the Crown. But we do not run the Government. We have parliamentary Government, but not Government by Parliament. The point about labouring this little constitutional essay is that if we forget that, there is then confusion and we risk creating more confusion about how the distinct roles and responsibilities of Parliament and Government have to be divided if we use our powers and procedures irresponsibly, unpredictably, in the wrong circumstances, or—dare I say?—as a bit of oppositionism.
Where does that leave this Humble Address, a device that until very recently was not used since the 1850s? We find ourselves in a very abnormal political atmosphere. I will come back to that point in a moment. This device is known as a motion of return. If it was to be used indiscriminately and frequently, if the Opposition were to use the vulnerability of the Government to demand the advice to Ministers as well as legal advice, the minutes of internal meetings, previous drafts of policy or speeches, or matters of national security, it would be impossible to conduct the Government business. That does not happen, because we rely on the self-restraint of Parliament.
The credibility of the unwritten powers of this House depends on their responsible exercise. As they cease to have credibility, they will not be respected. Incidentally, the Select Committee has just returned from a visit to the US Congress. The US, of course, has a written constitution. One might think that that would provide all kinds of solutions, but it does not. They are suffering from exactly the same problems and exactly the same kind of breakdown in the understanding of the norms and conventions that surround their written constitution. Even in the US, it is not unknown for the Executive to ignore new laws passed by Congress.
I referred earlier to the normal atmosphere that we usually enjoy in politics and how, until very recently, motions of return had fallen into what our learned Clerks call “desuetude”—that is, they had ceased to be recognised as functioning bits of the constitution. So why are they being revived now? First, we have a minority Parliament. In particular, we have a minority Parliament where the confidence and supply agreement with the Democratic Unionist party appears to have broken down. Secondly, as in the US, politics has become extremely polarised, particularly between the two factions of remain and leave. The referendum demonstrated that the balance of opinion is different in the country from what it might be in this House. That presents particular challenges. Thirdly, just as in the US, there is a breakdown of trust: trust in politicians generally, and trust, restraint and respect between the political parties and between factions. We have noticed—have we not?—how deeply embittered some of the political arguments are particularly around the referendum and the European Union question. As in the US, norms of procedure and convention become overshadowed by partisan dispute and political opportunism. I invite the House to look at the US and the endless confected rows about matters of supposedly fundamental constitutional importance, which we can see from this distance are really just partisan politics.
There is a strong case for reviewing and codifying in some way many of the ancient devices, procedures and powers of this House, but that would not resolve what we should do today. The right hon. and learned Member for Holborn and St Pancras (Keir Starmer) underlined the real weakness of the justice in his case. Its weakness is a matter of procedure that is in the public interest. He warned the Government that they faced being found in contempt of the House. That supposes we are a high court of Parliament, which we are not, and that we are operating as some kind of judicial authority on this matter. But of course this Chamber is not behaving like anything we would recognise as a court. I am afraid that this vote is likely to divide on party lines. There is very little that is objective about this finding of contempt, which he invites the House to do in this debate.
The Government have made a sensible compromise. The hon. Member for Rhondda (Chris Bryant) said that the Government seemed to admit that they were in contempt. The amendment is an admission that there may be a contempt, by referring the matter to the Privileges Committee where there might be a slightly less partisan and heated atmosphere and where there might be a more objective atmosphere in which some of the ideas and procedures for sorting this out as quickly as possible could be reached.
I invite the Leader of the House to consider whether she would accept a little addition to her amendment—that the Committee should be required to report by 10 pm on Monday, so that there is no suggestion that the Committee is being used as a device to knock this into the long grass. I am going to give her my unqualified support for her amendment anyway, but I suggest that she could accept that proposal, or at least invite the Committee to report early next week in time for the debate—not that I think many people will change their minds as a result of what the Government may or may not publish. I think this issue has got caught up in this great dispute about our future relationship with Europe. It is the elephant in the room in the debate, and this is not necessarily the best circumstance under which the absolutist device of a Humble Address should have been exercised in the first place.
Mr John Baron (Basildon and Billericay) (Con)
I am neither a lawyer nor a constitutional historian, but I concur with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), the Father of the House, and indeed, my hon. Friend the Member for North East Somerset (Mr Rees-Mogg), in suggesting that it is regrettable that we have got to this position. One would not—Government Members, certainly—start from this position if we had to choose, but as hon. Members, we have to make a decision about the facts before us. The point I put to the Opposition is that they have failed to answer a very obvious question. Their motion is a take-it-or-leave-it, all-or-nothing approach, which does not recognise the sensitivities of the situation at hand, which has been built up by convention over decades, if not centuries, in trying to balance the will of Parliament with the national interest.
Many of us in this place have no problem with the concept that the will of the House of Commons should be recognised by the Government, but there is a delicate balance on issues of national interest. I do not think that anybody in this place would question the national interest when it comes to, for example, the role of our special services or our intelligence services, or indeed, Cabinet minutes freshly laid. That is generally accepted, but there is a grey area that we have to approach very carefully, and the Opposition’s all-or-nothing approach risks establishing a principle that they may come to regret one day. It is very important that there is honesty and honour in this place, but we also have to recognise that there needs to be a filter for claims about the national interest by Governments, and the Opposition motion lacks that filter. What the Opposition would be doing is putting everything out on the table, but there may be issues in that disclosure that are sensitive when it comes to the national interest. It is a reckless idea that risks riding roughshod over decades of convention when it comes to trying to establish that balance.
I make no bones about it: I do not like where we are as a Government on this issue, but we have to judge the situation as it is now, and the filter that could achieve the delicate balance that is needed in this situation is with regard to the Committee of Privileges. Although it is not a perfect answer to this situation, it would serve as a means of filtering information that is perhaps against the national interest.
I will support the amendment this afternoon—one hopes—but I urge the Opposition to think this through very carefully. On the balance of opinion, I think that the Government may lose this, but I suggest that the Opposition act with restraint in the follow-up, because there is a real danger that they could one day regret what they have done, and they should be careful what they wish for.
David Linden (Glasgow East) (SNP)
I am very grateful for the opportunity to contribute to the debate, Mr Speaker. So far I think I am the newest Member to do so, so this is clearly the first time that I have witnessed a privilege motion coming before the House.
I want to reflect on how we have come to this position. I had to nip out for five or six minutes to attend a Delegated Legislation Committee upstairs this afternoon. Before that Committee began, Government Members were talking about the importance of the Humble Address and how the House must adhere to it. I had been reflecting on the fact that before that, I had been down here, and we find ourselves in the very sorry circumstances of our debating a privilege motion before the House. This is somewhat unprecedented for the vast majority of Members.
Since I entered the House in 2017, time after time, we have seen the Government ride roughshod over this Parliament. This is a Parliament that is meant to be taking back control, but it has been denied money resolutions, it is not adhering to Opposition day votes and it is not adhering to a binding motion of the House calling for the release of this legal advice. It might be uncomfortable for the Government to release that legal advice, but the reality is that the House has voted for that. Members claim regularly that Brexit is an opportunity for us to take back control. Well, I am afraid that Government Members cannot have their cake and eat it. If they are serious about the House taking back control and about adhering to the will of the House that was outlined in November when the original motion was passed, they should vote for the motion in the name of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer).
Dr Andrew Murrison (South West Wiltshire) (Con)
A number of interesting things have come out during this debate about our general procedures and our way of handling matters of the sort we have been discussing—in relation to procedures and privileges, and the nature of the Humble Address and whether it is an appropriate vehicle for advancing Labour’s essentially political aims. I think there is one thing on which we can agree: we need to find a sensible way forward, and it seems to me that the Government’s amendment, although not perfect, is a sensible way through this particular conundrum. The Government are clearly not in principle averse to being as transparent as possible, but they have to safeguard the national interest. My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) made a sensible suggestion, as one would expect, on the use of Privy Councillors to examine this matter. Of course, we have the Privileges Committee, which is up and running already. As a number of right hon. and hon. Members have said, although it is imperfect for the purposes of examining this issue, it is at least there and we could at least support that in determining whether the very serious charges of contempt are reasonable or not.
We have to understand that some serious allegations have been made. Lawyers and legislators understand full well what contempt is. The general public probably think that it means something rather different, and they can be forgiven for that. Contempt is a very harsh term. If it is associated with individuals—I am not suggesting that the Attorney General has necessarily been associated with this, but Ministers have been—and it sticks, that is very serious, even if we have not decided yet what the penalty might be. Of course, when this language was being got up hundreds of years ago, the penalties may have been very severe indeed. Mercifully today, that is not the case, but we have yet to determine what happens if individuals are found to be in contempt. That is left uncertain, but one thing that we can agree on is that this is a very serious allegation to make and the consequences are potentially significant, so we have to get this right. Simply to use an arcane measure such as the Humble Address to make this determination, untrammelled, seems unfair to me.
If we accept that this is a rather archaic vehicle, which is more traditionally used not for legislation or things that might lead to legislation, but for providing gifts to Commonwealth countries, as suggested in “Erskine May”—which I cited in my intervention on my hon. Friend the Member for North East Somerset (Mr Rees-Mogg)— we must also accept the possibility of using a measure that is not ideal for determining this issue, and that, in my view, means the Privileges Committee.
Mr Jim Cunningham (Coventry South) (Lab)
Does the hon. Gentleman agree that what has upset Members on both sides is the fact that the Government several times now have ignored the will of the House? That has antagonised a lot of Members.
Dr Murrison
The hon. Gentleman is right. The difficulty is that a court of law has available to it a judge who can determine what may be disclosed. The Freedom of Information Act, passed fairly recently, put significant constraints on what may be disclosed and gave powers to the Information Commissioner to use their discretion to permit, or otherwise, information to enter the public domain. We do not have that here.
The Government are mindful not only of potentially setting a precedent, but of the very real possibility that in the advice given—in this case, by the Attorney General—there might be something that is embarrassing to this country internationally or which has security implications. It is irresponsible of the House not to recognise that dilemma, which the Government now face. They are trying to reconcile their duty to be as candid as possible with their duty to safeguard the public interest, and specifically the interests of individuals who might be adversely and directly affected by such a disclosure.
On contempt, it is appropriate to dwell for one moment on the nature of the advice the Attorney General gave to the House yesterday. Nobody in this place could fail to have been impressed by his candour, and it seems wholly inappropriate to associate the word “contempt” with anything he said.
I have grave reservations, as a former Minister in the Ministry of Defence and the Northern Ireland Office, about the impact that this could have on the disclosure of sensitive information. I am worried about that, knowing what I do about the nature of some of the material that the Government would like to keep unto themselves. It has nothing to do with the precedent in 2005 cited today in relation to the Iraq war, where it came two years after the event and dealt with whether the Government had behaved lawfully. That is not a question facing the House today—clearly the Government are behaving lawfully—so the two cannot be compared or contrasted in any way. The Government amendment is a sensible and pragmatic way forward that reconciles the House’s desire for openness and transparency with their legitimate desire to ensure that they put nothing in the public domain that might harm individuals or set a dangerous precedent.
Robert Courts (Witney) (Con)
It is an honour to speak in this important debate and to follow my hon. Friend the Member for South West Wiltshire (Dr Murrison), who made some excellent points, all of which I agree with.
It is worth restating the fundamental issue that we are dealing with, which is the clash between Parliament, as a sovereign institution and the highest court in the land, and the right of the Government—any Government—to have access to independent, unvarnished, honest legal advice. I suggest that this is a moment when all Members, on both sides of the House, ought to engage in a period of cool, calm reflection. I would further suggest that the Government’s amendment is the correct way to do that.
Kevin Foster (Torbay) (Con)
Does my hon. Friend agree that traditionally the Law Officers’ advice can only be released with their consent? The information has now been revealed via a statement—that is self-evident—but there is that convention to bear in mind.
Robert Courts
I am grateful to my hon. Friend, who, as always, makes an excellent contribution. It is normally the case that the client has the ability to waive legal advice if they wish, but, in the case of Government Law Officers, there clearly is another layer to that, and their position is of enormous importance.
The Government’s amendment is the correct, cool, calm way to look at this matter. We are in uncharted territory. The very fact that we are all discussing constitutional and historical precedents today means that we all ought to avail ourselves of more time in which to study those in detail so that the Privileges Committee can consider the real constitutional and historical ramifications of any decision we take.
To be honest, there are a number of questions to which I do not know the answer. Does a Humble Address trump privilege? It would be helpful if somebody were to look into that and consider it. I do not think there is a straightforward answer because I do not think it has ever been tested—I may be wrong. My point is that a period of cool, calm reflection on such points would be of benefit to everybody in the House. Further, where does the line fall in terms of disclosure? Is there a question of redacting elements of advice? If so, where does the line fall?
Many Members will be clear that the line falls when we are talking about national security—that is relatively straightforward perhaps—but what about the national interest? It is not so easy to define, but it is something that we ought to consider carefully before rushing into what are extremely serious matters, not just of party politics—although of course there is a big element of that in this—but of constitutional and legal theory and practice that could have profound consequences for any Government. The Opposition ought to be aware that at some stage—I hope not for a long time—they might be sitting on these Government Benches and should consider the position they would wish to take.
Dr Murrison
Is my hon. Friend interested, as I am, in the position of the European Commission? A number of right hon. and hon. Members would be interested in the advice given to the European Commission by its legal service. I suspect that it would take a very dim view of any request that might prejudice the position taken by the Commission’s negotiators.
Robert Courts
My hon. Friend makes an excellent point. In the middle of a negotiation, in any discussion that by necessity is high profile and tense, any disclosure of advice that might undermine a negotiator is clearly to be regretted. The Commission will have its legal advice, and we might like to see it, but there is a good reason why we cannot see it and why the Commission should not be able to see ours.
The Government are approaching this matter in a better way than the Opposition’s motion because, as hon. Members have mentioned, they have used an archaic procedure. It was not designed to deal with this situation. [Interruption.] I hear an hon. Member say the whole House is archaic. The whole House is old and historic and flexible, but this procedure has not been used for many years and is not designed for a matter of such sensitivity. It is designed for the production of documents, not legal advice
Michael Fabricant (Lichfield) (Con)
What does my hon. Friend think the Director of Public Prosecutions, say, might think if he were asked to give private legal advice that would then be made public?
Keir Starmer
If and when I was ordered, as Director of Public Prosecutions, to do something by order, I complied.
Robert Courts
I am grateful to the right hon. and learned Gentleman for making that point. Of course, he has considerable experience in those matters, but we are dealing here with a wholly different consideration. He deals with circumstances in which he has been subject to a court order, which brings me precisely to my point. No doubt he will say to me that Parliament is a court—it is the high court of Parliament, the highest court in the land—and I accept the force of that point, but the court before which he has been used to appearing, and the court before which I have been used to appearing at the Bar, has a procedure for dealing with such matters that we do not have here.
A number of Members have already referred to the Freedom of Information Act, which contains exemptions for certain purposes. The right hon. and learned Gentleman will also be aware of public interest immunity applications, which are made when cases are being prosecuted, and a judge can look confidentially at documents and there can be redactions and so forth. None of that applies here, because this procedure is not designed for the purpose for which it is being employed by the Opposition. There simply is no mechanism for this procedure to deal with issues of the gravity of those with which we are dealing now. To its great credit, the Government’s proposal offers a way of looking at that.
Chris Bryant
When I sued Rupert Murdoch for hacking my phone, the court required him, under the Norwich Pharmacal procedures, to provide all the documents. His team legally had to do so, because if they did not, they would be in contempt. That is an exact parallel of what is happening here.
Robert Courts
The hon. Gentleman is right—he makes a good point— but he is referring to something wholly different. He is referring to disclosure, not the waiving of privilege. Any Member—[Interruption.] I am sorry, but they are wholly different concepts. I did not wish to sound patronising to the hon. Gentleman, but, as any lawyer—including those on the Front Benches—will realise, legal privilege is protected. That is totally different from the disclosure of relevant documents, when someone is expected by a court to disclose documents that can assist the other side. For example, the prosecution may be expected to disclose documents that undermine its case or could be reasonably expected to assist the other side’s. There are procedures laid down in law, through practice and regulation, which deal with those circumstances. They do not apply here, because they do not exist, and they do not apply with regard to legal privilege. That is the crucial difference. There is no mechanism to weigh, under the Humble Address procedure, all the subtle points that we have been discussing today.
I will end my brief remarks by making the point that the Attorney General has come down to the House and spent two and a half hours answering questions—
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
And he is here today.
Robert Courts
And he is here today. He answered those questions with absolute honesty and candour, strikingly so, and he made a number of points on which Members will be reflecting. I apologise for summarising those points, but essentially, with regard to the backstop—he will correct me if I am wrong—there is a risk that it may be indefinite. When I asked him about it, he kindly agreed that that was a sound analysis. What he said can be summarised as “That is as far as the legal advice can go.” The disclosure of legal advice will not provide answers; it will only take the House’s consideration so far. After that, it is a political judgment. The political judgment that we must make over the next week is one for us: it is one for us on a political basis. It will not involve an answer being given on the basis of legal advice, whatever standpoint is taken on Brexit or on the Prime Minister’s Brexit deal.
Given that the legal advice will not provide an answer, Members ought not to continue to pursue its disclosure as if it will be a panacea that will provide something that we do not already know. We already have those points. We already understand the impact on what has been negotiated, because we can read it for ourselves in the withdrawal agreement. We understand what the Attorney General thinks, because he has told us. That is as far as legal advice can take us, because over the next week we will not be debating whether what the Government propose to do is legal; we will be debating whether or not it is something that we think the Government should do, as a matter of politics and policy, and that is wholly different.
As the Government have suggested, the Committee of Privileges is the right body to consider this matter. I ask the whole House to support the Government and not the Opposition.
David T. C. Davies (Monmouth) (Con)
Publishing the legal advice on the Brexit Bill would be a “dangerous precedent”. Those are not my words, but the words of Mike Russell, MSP, who back in March was the Scottish National party’s Brexit Minister. He was talking about the UK Withdrawal from the European Union (Legal Continuity) (Scotland) Bill. He refused to publish the legal advice because, he said, it would set a “dangerous precedent”.
David Linden
Can the hon. Gentleman tell me whether there was a motion in the Scottish Parliament advising Mike Russell that he had to do that?
David Linden
The hon. Gentleman was clearly too busy trying to plan how long he will speak this afternoon. Can he tell me, for the record, whether a motion was passed in the Scottish Parliament asking Mike Russell to do that?
David T. C. Davies
I am not an expert on the Scottish Parliament—[Laughter]—but I do know that the Scottish National party Minister was refusing to publish that advice. The hon. Gentleman laughs, but it was on the front page of The Scotsman back in March. Mike Russell refused to publish it because he said it was a dangerous precedent.
The fact of the matter is that Governments across the United Kingdom—Governments of all political parties, the SNP included—know that they must have the right to be able to obtain legal advice without that advice being published. Not just Governments but local authorities—even, dare I say, the House of Commons authorities—can get hold of legal advice, and it is very important that that advice remains confidential. If it does not, the danger is that at best it will become a political football, kicked around by members of all parties using the information to try to buttress the arguments that they wish to present, and at worst it will become a stick which can be used to beat our own Government by the Governments of other nations who may, during complex negotiations, have aims that differ very much from our own.
What the Government have been doing is not defending the information about Brexit, because we already know what the problem is. I am an ardent Brexiteer. I already knew that the problem would be over the backstop. None of the information that has come out since then—none of the information that was leaked, rather unhelpfully, over the weekend—has changed anything. We already knew that the problem was the backstop, and we will no doubt spend more than a few minutes debating that over the next couple of days. If anything, however, I have been reassured by what I have seen—reassured that the Government have at least been behaving honourably, because we have not learned a single thing from the leaks that came out over the weekend that we did not already know about. There has been no smoking gun, and no hidden information.
The principle is what the Government have been defending: the important principle that the information that they access remains confidential. It is not only SNP Members who are being inconsistent; so are Labour Members. They already have a Labour Government in Wales, and that Labour Government are not known for their approach to openness. I can certainly tell Opposition Members that I have submitted numerous freedom of information requests to the Welsh Labour Government that have not been properly dealt with, and I am pretty certain that they are not going to start publishing the information that they receive from their legal officers. Let me also say to my Liberal Democrat friends that there is not just a Labour Government in Cardiff; there is a Liberal Democrat Education Minister. Wonderful though she is, will she start publishing the information that she gets from her law officers when she decides to close down school sixth forms, as has happened in my own constituency? I would like to think that she might, but I doubt it very much, and I doubt whether the right hon. Member for Carshalton and Wallington (Tom Brake) will be asking her to do so.
What I detect here is a whiff of inconsistency from Members opposite—a whiff of inconsistency from those who for years have accepted that Governments and public authorities have the right to independent, impartial, confidential legal advice, and who know perfectly well that if that advice is going to be offered up in public it will no longer be sought.
This is a not an attempt to get openness; this is yet another attempt to subvert the will of the people, who in a referendum in 2016 clearly voted to leave the EU, and that is why I will be supporting the Government amendment tonight.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I must be one of the few non-lawyers to contribute to this debate. However, I am a passionate believer that the conventions of how we as a Government conduct the business of government should be respected, and that these conventions we abide by are there for a reason. We must protect the integrity of the Law Officers in advising the Government. The ramifications of not doing so—the ramifications of publishing legal advice given to a Government—could be hugely damaging. I wonder whether when the other side are in government—as they surely will be one day—they will be as keen as they ask us to be to publish confidential legal advice.
Members are unlucky today, because I was considering withdrawing from this debate, but I did not feel that I could let the comments of the hon. Member for Glenrothes (Peter Grant) pass without remarking on the near-parody of the position SNP Members find themselves in in attaching their names to this motion. Let me take the House back to October 2012 when the then First Minister Alex Salmond was asked by Members of the Scottish Parliament to confirm whether he had sought legal advice over whether Scotland would continue to be a member of the European Union if it was to gain independence in 2014. Notwithstanding the fact that it transpired that thousands of pounds of taxpayers’ money was spent to cover up the fact that no legal advice was actually sought, in answer to a question on this very topic to the BBC’s Andrew Neil, the former First Minister said:
“You know I can't give you the legal advice, or reveal the legal advice of law officers.”
David Linden
I hold the hon. Gentleman in very high regard, but he is missing the point here. There is a difference between being questioned by the BBC about legal advice and Parliament having a binding vote, which is why a contempt motion has been brought before the House today.
Andrew Bowie
I fully respect the hon. Gentleman as well, as he knows, but I put it back to him that the Scottish Government have through their actions shown themselves to be disrespectful of the Scottish Parliament on binding motions, for example on primary 1 testing or the named persons legislation or fracking, when the Scottish Government abstained, or possibly the offensive behaviour at football Act, all of which they decided were advisory motions that the Government did not have to abide by.
Peter Grant
I am interested that the hon. Gentleman says that the Scottish Government decided these were advisory motions. Is it not the fact that they were advisory motions under the Standing Orders of the Scottish Parliament, exactly like the advisory motions from the Opposition that this Government have ignored for the last three or four years? Can he give a single instance when a binding motion of the Scottish Parliament has not been complied with by the Scottish Government or indeed Scottish Executive prior to 2007? A single example would do.
Andrew Bowie
I am not here to debate these issues; I am here to point out the rank hypocrisy of SNP Members in putting their names to a motion demanding that this Government publish legal advice when they themselves have not done so on countless occasions, including, as my hon. Friend the Member for Monmouth (David T. C. Davies) pointed out, recently when the Scottish Government’s Brexit Minister refused to publish their own legal advice for their continuity Bill. So I ask SNP Members what has changed: have they changed their minds on this, and do they believe now that it is in the interests of the country and of all Governments at every level—from here at Westminster to Holyrood to Cardiff to Belfast—to publish legal advice in full? If so, that is quite a change from where they were six years ago, and quite a change from where they were even six weeks ago, and it would lead to some interesting questions on the Floor of the Scottish Parliament.
Michael Fabricant
It seems to me that both the SNP and the former Director of Public Prosecutions are arguing that if Parliament passes a motion, even if it might not be in the public interest, the Government have to comply with that motion. Does it follow that if Parliament were to pass a motion that MI5 or MI6 were to open their files and make them public, the Government should naturally do that?
Andrew Bowie
I wholeheartedly agree with the first part of my hon. Friend’s question. I have enough respect for the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) to hope that the second part of the question would never come to pass. I do not think that even the Labour party today or the SNP would think it in the national interest to ask the Government to open MI5 files—I sincerely hope not anyway.
I must take issue with one comment made by the hon. Member for Glenrothes, when he described this Government as dictatorial, and on this I will finish. This is from a member of the SNP, whose Government have the worst record in publishing FOI requests of any Administration in the UK. He should look closer to home when he starts throwing such stones.
I will conclude now as I know that other Members wish to speak and I am conscious of Mr Speaker’s advice that not all Members are as keen to hear my voice as I am—[Interruption.]—although the hon. Member for Glasgow South (Stewart Malcolm McDonald) seems to be delighted to hear me speaking this afternoon. I put on record my support for the amendment tabled by my right hon. Friend the Leader of the House. Members of this House have a duty to consider the ramifications of their actions and the consequences of what they do today for short-term political gain. Members must consider the full constitutional and historic context of what they ask today.
By standing in the House yesterday and answering questions from all sides, and by making himself available to any colleague with further questions, the Attorney General has proven more than respectful of the House and certainly not in contempt.
Alex Chalk (Cheltenham) (Con)
It has been said more than once in this debate that this is the high court of Parliament. My constituents, and anyone else watching the debate, might assume that that is some historical nicety or arcane expression, but it is far more important than that. In the context of these proceedings, this court has the ability to achieve the conviction, punishment and disgrace of one of our number. Therefore, it is critical that when it does so, it complies with what we might think are natural rules of fairness and, in the present context, other important statutory limits—most obviously, of course, the European convention on human rights.
Why does that matter? Any court, be it the magistrates court, the Crown Court, the High Court or the Court of Appeal, must ensure that its proceedings are fair. Never is that more important than here in the high court of Parliament. It is no defence to say, “Well, we are seeking to condemn the Government as a whole.” In the court of public opinion, assumptions and judgments will be made about precisely who is being identified. If anyone has any doubt about that, it is made clear in the press that is already circulating on social media who it is who stands to be condemned.
In those circumstances, we need to be careful to ensure that what is taking place is truly fair. If these were criminal proceedings in a normal court—the magistrates court or the Crown Court—the first question would be what precisely is being charged. What is the matter that is being breached? I suggest that there is serious confusion about what was ordered on the last occasion—the proceedings on 13 November. The written motion before the House on that day stated:
“That an humble Address be presented to Her Majesty, that she will be graciously pleased to give directions that the following papers be laid before Parliament: any legal advice in full”.
In the course of those proceedings, an attempt was made—perfectly properly, no doubt—to seek to amend that motion.
The document submitted to the House yesterday states that
“During the debate on that motion Labour’s frontbench made it clear that: ‘the motion requires the publication of the final and full advice’”.
Leaving to one side for a moment precisely what is meant by “final and full”, and leaving aside whether those two adjectives are capable of pulling in different directions, I suggest that some confusion must remain about what exactly happened. There were two hon. Members who sought to clarify what it was that we were being asked to vote on—my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and my hon. Friend the Member for Banbury (Victoria Prentis), who is in her place. It was you, Mr Speaker, who said:
“Order. I am extremely grateful to the hon. Lady. It might profit her and all Members of the House if they listen to the development of the argument in which the shadow Secretary of State is engaged. Frankly, it is not really very confusing at all. There is a motion, and Members can read the motion and form their own view of it.”
In that remark, it seemed to me that you were saying, “Look at the text: it is tolerably plain.” But then my hon. Friend the Member for Chelmsford (Vicky Ford) said:
“I am deeply unclear—are you asking for publication of the final advice”—
which is what was being proposed orally—
“or of any legal advice”.—[Official Report, 13 November 2018; Vol. 649, c. 193-96.]
Although it is not necessarily for me to give evidence, there was a state of some confusion at the end of the proceedings on 13 November about precisely what had been ordered. That matters because the wording that appears in this motion is the latter, not the former. In other words, it is what is amended. That is significant because, if we are applying the European convention, proceedings must be fair under article 6, and article 7 says that there must be no punishment without law. In other words, it must be crystal clear precisely what law is alleged to have been contravened. I want to make the basic point that there was considerable confusion in the House about precisely what had been ordered.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I remember being here when that debate happened, and there was initially some confusion, but if such confusion reigned, why did the Government not oppose the motion at that time? It is all well and good to say now that it was unclear, but that was not the argument that was progressed at the time.
Alex Chalk
Respectfully, that is not right. My hon. Friend the Member for Chelmsford said at the time:
“I am deeply unclear—are you asking for publication of the final advice or of any legal advice in full that has happened during the entire negotiation? [Interruption.] With due respect, I am being asked for my vote regarding the motion on the Order Paper. Are you asking for what is on the Order Paper, which is,
“any legal advice in full”—
that is, during the whole negotiation?”—[Official Report, 13 November 2018; Vol. 649, c. 196.]
At that point, Mr Speaker rightly intervened to ask who my hon. Friend was referring to, and so it went on. The matter was not clear. Given the importance of these proceedings, and the potential impact on one or more individuals, is it not right that the House should be crystal clear about what is on the indictment, so to speak?
Mr Kevan Jones (North Durham) (Lab)
I am following the hon. Gentleman’s argument, but will he answer the question that my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) asked? If the motion was so unclear, why did he not vote against it and why did the Government not oppose it?
Alex Chalk
It is no answer at all; absolutely not. To take an analogy, if the prosecution were to bring proceedings against the hon. Gentleman for an alleged crime and if the court were satisfied that the proceedings were bad through duplicity or lack of clarity, the court would stay those proceedings because they would be improper proceedings. That is what has happened here. There are real concerns about these matters. In these circumstances, if the high court of Parliament wishes to act in a way that is proportionate and fair, the proper outcome is to refer the matter in accordance with the terms set out in the amendment. Those are my representations, Mr Speaker.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
It is a great pleasure to follow my hon. Friend the Member for Cheltenham (Alex Chalk) and to contribute to this debate. I am especially pleased to see the Attorney General in his seat, because I am going to refer to one or two of his remarks. I was concerned by what I heard from him yesterday. I was concerned that he was less than optimistic. He had a somewhat gloomy outlook on what might happen if the vote does not pass, a week today. I thought he could have been more full-throated and full of voice in defence of the prospects for our country. Further, concern was expressed from where I was sitting in the Chamber as to the length of his replies during the course of the debate yesterday. We have become used to short questions and short answers, but the reason for the length of his replies was that he was being asked for his legal opinion on several questions and he was giving a full and frank response to each and every one.
I have one further concern, which other Members on both sides have also expressed. It is that the motion that we debated on 13 November was not opposed. It seems to me that that was a mistake. It should have been opposed, and arguably, an amendment could or should have been tabled. Had that happened, and had the amendment been voted on, that might have solved the issue. In the event, however, there was no vote and there was no amendment—at least, there was none that was selected. However, the Attorney General is absolutely right not to disclose the legal advice. Where would it leave us if he did? Should he disclose Cabinet minutes? Should he disclose official secrets? Should he disclose any other legally privileged documents just because a Humble Address says that he should do so? My instinct would be to say no. Thankfully, we do not have to rely simply on my instincts.
The hon. Member for Rhondda (Chris Bryant) referenced “Erskine May”. He referred to the 10th edition from the late 19th century, but the relevant passage is still present in the 17th edition from 1964. As no one has quoted from it yet, and as it is absolutely pertinent, it is important that I do so now. It states:
“Returns may be moved for, either by order or address, relating to any public matter”,
and it goes on to qualify what is meant by a “public matter”, stating that the
“papers and correspondence sought from Government Departments should be of a public and official character and not private or confidential”,
and it quotes from an example of confidential papers that should not be disclosed. It further proceeds to say:
“The opinions of the Law Officers of the Crown given for the guidance of Ministers in any question of diplomacy or State policy being included in the class of confidential documents, have generally”—
I will come back to that word—
“been withheld from Parliament.”
We then come to the 1858 Cagliari case referred to by the hon. Member for Rhondda. I wish he were in his place—he really would enjoy this—because he is wrong. He said that that involved an order of Parliament, but it did not. Information was voluntarily disclosed, and I can quote from the Hansard—if anyone cares to reference it later, the passage is from column 178, which is towards the bottom on the right-hand side—for 15 March 1858:
“We have given directions that all the papers connected with the management of the Cagliari case by our predecessors should be prepared and laid with all reasonable despatch before Parliament. They are more voluminous than the House perhaps imagines; but no unnecessary delay will take place in their production. It is also my duty to state that, after great deliberation, while perfectly aware of the inconvenience which under ordinary circumstances would accrue by submitting to Parliament the opinions of the law officers of the Crown”—
I am delighted to see the hon. Gentleman return to the Chamber; he may enjoy this exchange—
“we have arrived at the conclusion that in the peculiar and exceptional circumstances of the present case we ought to lay the opinions of the law officers of the Crown before the House.”—[Official Report, 15 March 1858; Vol. 149, c. 178.]
The information was voluntarily disclosed, and that is the key and distinguishing feature of the 1858 Cagliari case.
However—the Attorney General referred to this section in his response to my hon. Friend the Member for North East Somerset (Mr Rees-Mogg)—the 17th edition of “Erskine May” states:
“However ample the power of each House to enforce the production of powers may be, a sufficient cause must be shown for the exercise of that power; and if considerations of public policy can be urged against a motion for the papers, it is either withdrawn, or otherwise dealt with according to the judgment of the House.”
Therefore, despite having been concerned in three respects by what the Attorney General said yesterday, I can say that he was precisely right to have stated that a public policy test could and should be applied in this case. The passage from “Erskine May” is crystal clear. If the hon. Member for Rhondda were in his place, he would say, “That is the 17th edition, not the 24th. Why has it fallen out of use?” Well, Humble Addresses had fallen out of use by the time of the most recent edition of “Erskine May” but that has changed.
I have no doubt that there will be fuller section in the next edition, but that does not mean that it is irrelevant or that the law has been superseded; it means that the Humble Address had fallen out of practice up to and until these extraordinary times following the general election of 2017. With you in the Chair, Mr Speaker, I am sure that there will be a footnote or extended passage on the increase in the usage of the Humble Address. That is not to say that the advice and guidance of “Erskine May,” whether from the 19th century or from the 17th edition of 1964, is otiose, useless, worthless or has been superseded; it has not. It is still relevant, and it is relevant to the debate today.
In any event, the Attorney General gave ample legal advice yesterday. He was crystal clear and he was frank on his concerns about the backstop, and he was absolutely right to say it is now no longer a question of legal precedent. It is now no longer a legal question; it is a political question for each Member of the House to debate and to vote on a week today.
Chris Philp (Croydon South) (Con)
At the heart of our debate today is a question of Parliament’s powers and prerogatives. The right hon. and learned Member for Holborn and St Pancras (Keir Starmer) laid out a simple and clear case at the beginning of the debate. He said that the House passed a motion on 13 November compelling the Government to do something and that the Government have not done it. He said that it proceeds simply from those two facts that Ministers are therefore in contempt. I say that that analysis is too simplistic and is lacking in nuance, and that it presupposes that Parliament’s power, generally, is unqualified and unconstrained.
Indeed, two Members have made that point explicitly in this debate. My right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) described Parliament’s power as untrammelled, and the hon. Member for Rhondda (Chris Bryant), who is at the Bar of the House, also suggested that Parliament’s power is entirely without limitation. Without wishing to open up an enormous debate on those two points, I would suggest that those two assertions cannot be taken at face value as self-evidently the case.
For example, the Human Rights Act 1998 and the European convention on human rights impose limitations on Acts of Parliament. Any Act of Parliament we pass must conform with human rights legislation and with the European convention on human rights, so there are limitations on what Parliament may do.
When I asked the hon. Member for Rhondda whether Parliament really has the right, for example, to trample on somebody’s personal liberty, he replied that Members of Parliament could be relied upon not to trample on people’s liberty in that way. Yet when one reads the great tracts on personal liberty, and particularly John Stuart Mill’s essay “On Liberty,” one sees that Mill urges that we should seek to protect individuals from what he describes as the “tyranny of the majority.” We need more than simply a reliance on good will to protect, for example, individual liberty.
My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin), who is not in his place, also referred to the limitations on parliamentary authority by highlighting the distinction in the powers exercised by the Executive versus those exercised by Parliament as a legislature. There are all kinds of areas where the Government act with prerogative power and Parliament does not seek to usurp that power by essentially becoming the Government or becoming the Executive.
There are all kinds of areas where the limitations of parliamentary authority can, at the very least, properly be debated. The assertion that parliamentary authority is unlimited is not something one can take immediately at face value, attractive though it is to us as parliamentarians.
Of course, in no way do I wish to fetter Parliament’s ability to make its will felt. For example, our Select Committee colleagues were entirely within their rights to summon Mark Zuckerberg, and it is deplorable that the chief executive of such an influential company contemptuously refused to appear before a parliamentary Select Committee. I urge the Chairman of that Select Committee to use his good offices to compel Mark Zuckerberg to appear.
A question has repeatedly been posed by Opposition Members: “Why didn’t the Government oppose this motion when it was first put on 13 November?” I would suggest that the reason is that, in order to properly debate what parts of the legal advice might or might not be disclosed, the Government would have had to disclose the legal advice. We would have had to examine what the legal advice says before deciding what could or could not be disclosed. The very act of debating it would cause its disclosure, which is why when matters of disclosure arise in a court of law, they are decided by a judge in chambers, not in open court. The judge then decides what can be disclosed and what cannot be disclosed. No equivalent provision existed when the House debated this matter on 13 November; it would have been a case of disclosing everything and debating it openly, or disclosing nothing.
There is clearly a tension between Parliament’s desire to get disclosure and the desire of the Executive to protect the public interest. The question is: how do we balance those two competing considerations? A number of right hon. and hon. Members today have suggested that there are various appropriate forums in which that might occur, one of which, evidently, is the Privileges Committee or indeed some other Committee of the House. Such a Committee might, behind closed doors, look at the legal advice—
Mr Kevan Jones
The hon. Gentleman is talking complete nonsense with the idea that in order to vote against the motion on 13 November the Government would have had to disclose the evidence in that debate. Is it not a fact that the reason why they did not oppose that vote is that they would have lost it?
Chris Philp
The hon. Gentleman is engaging in speculation. The fact is that when matters of public disclosure are considered in other environments, for example, a court of law, an independent person, in this case a judge, in chambers, in private, decides what might publicly—
Chris Philp
I must conclude, because Mr Speaker wishes to move on with the business. That independent person decides what gets publicly disclosed. No such device or mechanism was available to this House on 13 November and it strikes me that the Privileges Committee is a suitable forum in which the balance between the desire for disclosure and the public interest can be struck, and it is appropriate that that balance is struck in private. I will therefore be supporting the amendment. I know that you wish to move on, Mr Speaker, so I will conclude my remarks there.
Kevin Foster (Torbay) (Con)
It is pleasure to be called in this debate, following so many learned, right hon. and hon. Members. I enjoyed some of the contributions from the Scottish National party Members on the idea of Parliament being supreme, given that they will remember the famous case of MacCormick v. Lord Advocate, where it was said that complete parliamentary supremacy is an English concept and not necessarily one of Scots law. So it is great to see their conversion now that they have come here.
I shall turn now to the matter of substance. I sat through a lot of that debate on 13 November and I noted the numerous points that were picked up about how the motion passed then had various queries raised about it.
Ian Blackford
I wish to assist the hon. Gentleman by giving him the exact quote, which is that parliamentary sovereignty is a purely English concept that
“has no counterpart in Scottish constitutional”
history. Of course this House endorsed a motion, pushed by the SNP some months ago, that sovereignty does rest with the people of Scotland, through the Claim of Right. I trust that if this Government seek to try to take us out of the European Union and the only way we can protect our interest is by becoming an independent nation, they will endorse our right to call a referendum.
Kevin Foster
I very much thank the right hon. Gentleman for that intervention and for, yet again, reminding people in Scotland that the SNP’s focus is indyref2 and separation of this Union. It is always ironic to hear SNP Members calling for an end to borders in Europe, given that they want borders on this island. I am genuinely grateful for that intervention and I know that my Scottish colleagues will be even more grateful for it, as they will be able to put it in their next leaflet.
I turn back to what we are discussing today, which is the motion on contempt. Like previous speakers, I find it interesting that, even before the Attorney General had managed to sit down, some people had concluded that he was already in contempt. The Opposition do not strike me as short of the ability to find senior and experienced lawyers to analyse the withdrawal agreement, its implications and what it might mean for the future. To see that, we have only to look at their Front Bench, where we see a very eminent Queen’s counsel. So it is bizarre that they are, in effect, arguing that they are not able to make a reasoned judgment on this without the legal advice. We are not talking about the legal position of the Government, as it is right that this House should always be able to demand that the Government set out the legal basis of their actions in this Parliament. We are a country defined by the rule of law, which is why it is right that legal positions can be requested and demanded. The Opposition, however, are saying that we need the Government’s lawyer to tell us what the legal implications are and what the legal advice is on this area. For me, this is not an area in which they are going to be short.
My hon. Friends the Members for Cheltenham (Alex Chalk) and for Mid Dorset and North Poole (Michael Tomlinson) made excellent speeches and made clear the key points on what the motion is about. I particularly enjoyed the speech from my hon. Friend the Member for Witney (Robert Courts), who made the distinction between disclosure, which is a strong point of criminal law—indeed, it is important in civil cases, too, to make sure that evidence is not concealed—and privilege around legal advice.
When I used to give legal advice in the run-up to cases in places such as Solihull magistrates court, there was no forum in which to ask what my advice was. Clearly, I could not conceal evidence, and I could not run a line of argument in court that I knew to be untrue. Many Members, including the Attorney General, will have heard the adage about what happens if a client tells a lawyer they are guilty. That means that the lawyer cannot run a defence. They can test the prosecution’s case, but they cannot run a defence in court or mislead the court. A lawyer cannot be required, though, to overturn their legal privilege and put their legal advice out there. To be blunt, it is quite a worrying trend that Government Members want to attack the right to legal privilege.
Lady Hermon (North Down) (Ind)
Will the hon. Gentleman deal with the assertion, accusation, suggestion or allegation made by the Democratic Unionist party that if the Government are not prepared to publish the full legal advice given by the Attorney General, that means that somehow they have something to hide? That has to be addressed before we vote.
Kevin Foster
To be blunt, anyone who listened to the Attorney General’s statement yesterday would have been hard pressed to think that he had something to hide. He was very open about some of the challenges with the withdrawal agreement, particularly in respect of issues related to the Northern Ireland backstop and what it means, which will be of immense concern to the hon. Lady. There was not one word on which he was holding back on what he thought about the legal position on the backstop. I do not believe for one minute that he, as a very senior barrister, would have come to the Chamber and given a legal position that in any way conflicted with the legal advice that he had given to the Cabinet and the Government. We need to be very clear about that, because I do not believe there is anything to hide. The statement was not on why legally it might be a good idea to sign this treaty; it was on the legal position.
No one in the House is arguing that Parliament does not have the legal power to sign and ratify the treaty that the Government have negotiated, if it wishes to do so. The debate is fundamentally about whether or not we think it is a good idea to do so. There are obviously sharply differing views about whether it is a good idea, not only on either side of the Chamber but, to be blunt, among Members on the Government Benches, but nobody is arguing that there is not the legal power to do that, based on our constitution.
To turn to the intervention from the hon. Member for North Down (Lady Hermon). I do not think that anything was hidden. The Attorney General was clear about the legal position and the backstop and he was clear in response to colleagues’ queries. I do not believe for one minute that any word of what he said would have conflicted with the legal advice that he had given privately. That is the difference: position is different from advice. Evidence is different from a lawyer commenting on the evidence to their client and giving them advice about what it might mean. If we reach the point at which we accept the idea that the Attorney’s advice will end up out in public, we will see a trend towards things not being written down but expressed verbally instead, and of there not being proper records that can be accessed at a later date when the advice might become relevant. We would be moving away from the idea that some of the key principles of law, including legal privilege, operate in the same way in Government as they operate outside.
Let me turn to the motion. I find it interesting that there has been a push to debate this today. I accept that—it is all part of the procedures of the House, all perfectly properly followed—but it would make much more sense for the Privileges Committee to carry out a proper investigation, rather than the House deciding whether someone is guilty of contempt in effect via a jury made up of their political opponents, and following a party political knockabout in the Chamber.
That is why, for me, the amendment has strength. This is not about saying, “Let us vote no, and forget about it”. This is about asking for the proper process of the House to be gone through. For those following our proceedings, the Privileges Committee is chaired by an Opposition Member. It is not a Committee that will purely follow the will of the Government, and that, for me, is where the strength of the amendment lies. This is about having a proper debate about this clash of principles, this clash of legal privilege, the position of the law officers and the position of this House to pass returns and to make a request for documents through the means of a Humble Address. I accept that nobody in this House would think that it was a sensible idea to have a Humble Address for MI5 documentation or for sensitive diplomatic papers, and I would not seek to advance that. However, in this instance, those things are coming together at a time when, actually, if anyone wants a legal opinion on the withdrawal agreement, they will not be short of suggestions coming into their email inbox from various eminent lawyers across the country.
Kevin Foster
I am about to conclude because I am conscious that there are one or two others who are waiting to speak. [Interruption.] I hear a request for more from SNP Members, but sadly, I will have to disappoint them.
For me, the amendment is the right path to go down as it allows proper consideration by a Committee and a decision on whether the matter has been properly and fully dealt with, not a short-term debate 24 hours after a statement on the Floor of the House. It was particularly interesting to hear the Father of the House, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), giving us some ideas about how matters such as this could be handled in future. With that, I will conclude my remarks, and say that the amendment is the right way to go. There have been some quite interesting arguments this afternoon, but I hope that Members will reflect on what precedent they might set for a future Government of their own colour.
Simon Hoare (North Dorset) (Con)
Let us be clear that contempt is not disobeying an order. In fact, a tweet put out on the UK House of Commons Twitter account defines contempt as:
“Any act or omission which obstructs the House of Commons in carrying out its duties”.
That can be seen as a contempt of Parliament. That is an incredibly high bar and I do not believe that the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) has made his case before the House this afternoon.
Mr Speaker, you and I love this place, but there is nothing more humorous than the synthetic confection of outrage, umbrage and humbug—that sounds like a rather dodgy firm of solicitors—that comes from this place when it thinks that its honour has been offended. It draws up its skirts like a slightly shocked maiden aunt at a risqué joke. The Opposition have, I am afraid, turned this into a parlour game—a parlour game called parliamentary politicking or parliamentary process. Let me pray in aid one or two thoughts that substantiate that viewpoint. So great is the umbrage of the Opposition that they ran out of speakers about 50 minutes ago. It strikes me that they are not exactly as hot under the collar as the right hon. and learned Member for Holborn and St Pancras tried to portray them as being.
Yesterday, when the Attorney General invited any question from any Member on any topic, about 75% of the stuff was to do with process and nothing to do with questions. If the right hon. and learned Gentleman was serious in his, I have to say, entirely synthetic sincerity about being more in sorrow than in anger, why was he trailing his letter around last Thursday and having it signed and sealed by close of play last Thursday? I thought that a former Director of Public Prosecutions would believe in honesty in the courts and in listening to somebody give their case before deciding what the next step would be, but he went around this place like a political costermonger selling his wares.
Keir Starmer
The hon. Gentleman is talking nonsense; that letter was not signed on Thursday.
Simon Hoare
Well, the right hon. and learned Gentleman was tarting his letter around this place on Thursday, trying to get signatures in order to instigate contempt proceedings. He may not have put it in the envelope and got the stamp out, but he had the letter drafted. The Attorney-General had only been on his feet for about 20 minutes when the letter was handed in to say, “Let us have a contempt motion.” I have heard of a judge trying to come to the final judgment, but not when the prosecution or the defence are still trying to make their case. It begs the question what sort of a lawyer the right hon. and learned Member for Holborn and St Pancras made.
I have also heard the right hon. and learned Gentleman and the hon. and learned Member for Edinburgh South West (Joanna Cherry) make an incredibly powerful case in support of privilege. They did so during the course of the Investigatory Powers Bill, when the right hon. and learned Gentleman and I both sat on the Bill Committee, and he was absolutely right to talk about the sanctity of privilege. In that case, it was with respect to the lawyer-client relationship and the relationship between a journalist and their source. But it now seems that he wants to cherry-pick which bits of privilege are important.
Simon Hoare
I will not because I am very conscious of time.
This is a parlour game. We are not going to play it. We are going to support the Government’s amendment and we are then going to move on to do what this country is expecting us to do—that is, to debate the exit of this country from the European Union with the sobriety and seriousness that the issue demands.
Keir Starmer
I have listened carefully to the debate, in which some very good points and some very bad points have been made. The Labour party is well aware of the two principles laid out by the Father of the House. The first is that only in exceptional circumstances will privilege be overridden, and the second is that orders of this House should be complied with; 13 November was about the first principle and the Government did not oppose the order, and today is about the second.
In drafting this motion, we have been careful to refer to Ministers rather than individuals to reflect some of the points that have been made in this debate. We have also been careful to ask for the remedy, which is that the order is complied with before we think of anything else, in fairness to the Government. The Father of the House said that there surely must be some way that this can be agreed and the order can be complied with, and lots of Members indicated that as well. In the three weeks since the debate about the first principle to today, the Government have put no suggestion to me of any sort of mechanism to enable them to comply with this order, and the House will make of that what it will. For that reason, I must push the motion to a vote.
Question put, That the amendment be made.
Keir Starmer
On a point of order, Mr Speaker. The House has now spoken, and this is of huge constitutional and political significance. It is, I think, unprecedented for the House to find Ministers in contempt. The motion makes it clear that the Government must now publish the Attorney General’s final legal advice in full. I hope that they will now confirm and comply with that order, but if they fail to respond, what steps can I and others take to ensure that they do comply with the motion and before the votes that we shall have next Tuesday?
Mr Speaker
Before responding to the right hon. and learned Gentleman’s point of order, I will of course hear a point of order from the Leader of the House.
Andrea Leadsom
Further to that point of order, Mr Speaker. We have tested the opinion of the House twice on this very serious subject. We have listened carefully, and in the light of the expressed will of the House, we will publish the final and full advice provided by the Attorney General to the Cabinet; but, recognising the serious constitutional issues that this raises, I have referred the matter to the Committee of Privileges so that it can consider the implications of the Humble Address.
Mr Speaker
I am grateful to the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) for his point of order, and to the Leader of the House for her response. [Interruption.] Some Members are saying, from a sedentary position, “When?” I had intended to say that I expected Ministers to comply with the verdict of the House. If the Leader of the House wants to offer a further and better particular on that point now, or immediately after the point of order from the right hon. and learned Gentleman, she can do so, but if not, I would certainly expect to have fuller information on that matter provided to the House very soon.
Keir Starmer
Further to that point of order, Mr Speaker. Will you please advise me what steps we can take to ensure that the process that has just been outlined is completed by next Tuesday, when we vote?
Mr Speaker
It would seem to me to be unimaginable that it would not be, but of course I will hear from the Leader of the House.
Andrea Leadsom
Further to that point of order, Mr Speaker. The Government will respond tomorrow.
Mr Speaker
I am extremely grateful to the Leader of the House for the clarity of that confirmation. I think that it has satisfied the curiosity of Members, and that we can leave it there.
Business of the House (European Union (Withdrawal) Act)
(5 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:28 - The House divided: - Ayes: 321 / Noes: 299 - Question accordingly agreed to.
Mr Speaker
I inform the House that I have selected amendments (e), (a), (b) and (c), in the name of the hon. Member for Eltham (Clive Efford), and amendment (d), in the name of the right hon. and learned Member for Beaconsfield (Mr Grieve).
The Leader of the House of Commons (Andrea Leadsom)
I beg to move,
That the following provisions shall have effect.
Sitting arrangements
(1) In this Order—
‘European Union withdrawal motion’ means a motion in the name of a Minister of the Crown under section 13(1)(b) of the European Union (Withdrawal) Act 2018; and
‘allotted day’ means a day on which the first Government business is the European Union withdrawal motion.
(2) The allotted days shall be Tuesday 4 December, Wednesday 5 December, Thursday 6 December, Monday 10 December and Tuesday 11 December.
(3) On this day, proceedings on the European Union withdrawal motion may be proceeded with for up to eight hours from the commencement of proceedings on the Business of the House (Section 13(1)(b) of the European Union (Withdrawal) Act 2018) motion.
(4) On the second, third and fourth allotted days, proceedings on the European Union withdrawal motion may be proceeded with for up to eight hours from the commencement of proceedings on the European Union withdrawal motion.
Decisions on any amendments
(5) No amendment to the European Union withdrawal motion may be selected before the final allotted day.
(6) In respect of the European Union withdrawal motion, the Speaker may select up to six amendments of which notice has been given.
(7) If, on the final allotted day, an amendment to the European Union withdrawal motion has been disposed of at or after the moment of interruption, any further amendments selected by the Speaker in accordance with the provisions of paragraph 6 of this Order may be moved, and the questions thereon shall be put forthwith.
(8) Questions under this Order may be put after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.
General
(9) No motion to vary or supplement the provisions of this Order shall be made except by a Minister of the Crown; and the question on any such motion shall be put forthwith.
(10) On an allotted day—
(a) no Emergency Debate shall be taken in accordance with Standing Order No. 24; (b) no dilatory motion shall be made in relation to the proceedings on the European Union withdrawal motion except by a Minister of the Crown; and the question on any such motion shall be put forthwith;
(b) no dilatory motion shall be made in relation to the proceedings on the European Union withdrawal motion except by a Minister of the Crown; and the question on any such motion shall be put forthwith;
(c) no motion shall be proposed under Standing Order No. 36 (Closure of debate) except by a Minister of the Crown; and
(d) no motion shall be proposed that the question be not now put.
I intend to speak only briefly so as not to detain the House before the historic debate that is ahead of us. [Interruption.]
Mr Speaker
Order. I apologise for interrupting the Leader of the House, who is absolutely ready to proceed, and I know that she has indicated that she wants to speak only briefly in the interests of facilitating the House, but I think it would be a courtesy to her if Members who are leaving the Chamber were to do so quickly and quietly. I espy a couple of Members engaged in animated conversation, which I am sure is of enormous and consuming interest to the hon. Member for Liverpool, West Derby (Stephen Twigg) and the right hon. Member for Enfield North (Joan Ryan), but that conversation could usefully be conducted elsewhere. I am playing for time here and trying to hush the House up so that Leader of the House is accorded the respectful hearing that she should have.
Andrea Leadsom
Thank you, Mr Speaker.
I believe that the Prime Minister’s negotiation delivers on the Brexit priorities for which this country voted. The debate and the vote ahead of us are the next crucial steps that we must take to ensure that we deliver on the whole referendum and in the best interests of the United Kingdom. The Prime Minister’s proposal delivers on everything that those who voted to leave the European Union were looking for: we are taking back control of our borders, our laws and our money; we are leaving the common agricultural policy and the common fisheries policy; and, importantly, the United Kingdom will be able to undertake free trade agreements with the rest of the world, which in many places is growing far faster than economies in the EU. At the same time, the Prime Minister’s proposal seeks to ensure that we continue with a deep and special relationship with our EU friends and neighbours not only for economic trade but also in security and other areas that are of great value to all our nations.
This has been a challenging journey and compromises have had to be made on all sides. However, two things are certain: first, that the Prime Minister’s deal is the only deal on the table; and, secondly, that it means we will leave the EU on 29 March 2019.
Mr Speaker
I hope it is a point of order, rather than a point of frustration.
Kevin Brennan
What do these comments have to do with the business of the House?
Mr Speaker
I think that the Leader of the House is providing the context for what she intends to say. [Interruption.] The hon. Member for Great Grimsby (Melanie Onn) is in an animated state and is expressing through wild gesticulation her dissatisfaction with that state of affairs, but I think a modest forbearance would be seemly.
Andrea Leadsom
I am grateful to you, Mr Speaker, for allowing me to set the context; we should, perhaps, think of this as an introduction.
I believe that the withdrawal agreement and political declaration offer the route to a good future relationship with our European friends and neighbours, and therefore I believe we must support the deal and continue our efforts to deliver on the will of the people of the United Kingdom.
Before my right hon. Friend the Prime Minister opens the meaningful vote debate itself, this motion seeks first to set the framework within which that debate will take place. The Government have listened carefully to views right across the House on how best to govern the arrangements for the debate on the withdrawal agreement and the future framework, and I am grateful to colleagues on all sides for the collaborative discussions that have taken place in advance of tabling the motion on the Order Paper today.
I am also very grateful for the contributions of the Select Committees, whose views and recommendations have been insightful. I pay particular tribute to the Exiting the European Union Committee chaired by the right hon. Member for Leeds Central (Hilary Benn) and the Procedure Committee chaired by my hon. Friend the Member for Broxbourne (Mr Walker) on the procedure in the House that ought to apply to this unique debate.
The Government have carefully considered the Procedure Committee’s recommendations in bringing forward today’s business of the House motion. I hope that the House agrees that the motion on the Order Paper today is reflective of the vast majority of recommendations in that report. The parameters for the debate will enable what the Committee itself called a momentous decision for Parliament and the country. It is vital that we make sure the substantive issues are properly debated so that Members of the House can take an informed decision in the national interest.
On the amendments of the hon. Member for Eltham (Clive Efford), I gently say that the motion in the Prime Minister’s name as tabled provides for a full five days of debate, as recommended by the Exiting the European Union Committee and the Procedure Committee, following their consultations and evidence taken across the House on what provision should best govern proceedings.
The timeframe being provided strikes the optimal balance between ensuring full and proper scrutiny and debate on such an important decision and vote and allowing the time for the legislation that will give effect to that decision to pass through Parliament by 29 March 2019. The Government have been determined to make sure the House is able to carry out full scrutiny and play its essential role as we move towards leaving the EU, and the motion tabled reflects that.
Should the House agree to the business of the House motion today, the five days of debate ahead of us will build on the many important opportunities the House has had to consider EU exit so far. We have had 37 days of debate as Parliament agreed the European Union (Withdrawal) Act 2018. There have been regular statements and opportunities to question Ministers, including more than 10 hours at the Dispatch Box by my right hon. Friend the Prime Minister in the last 12 sitting days alone. Committees of the House are carrying out invaluable scrutiny, and the Government have scheduled a number of valuable general debates, including the debate on legislating for the withdrawal agreement that took place on 10 September.
The amendment tabled by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) and others would have the effect of making any future motions tabled under section 13 of the EU Withdrawal Act amendable under House procedures. I recognise the desire of hon. Members to ensure that their views are fully expressed if the vote on the deal does not pass. However, I encourage Members at this stage to focus on the matter at hand. I gentlysuggest that now is not the time to pre-empt whether or not further motions under section 13 may be required. As such, I encourage Members not to press that amendment to a vote.
I hope that all hon. Members will agree the motion before us. If we can do so quickly, we can move on to the vital debate that precedes the meaningful vote itself, which will take place next week on 11 December. I commend the motion to the House.
Valerie Vaz (Walsall South) (Lab)
I thank the Leader of the House and acknowledge that she has been in the Chamber since lunchtime. I hope that she gets the chance to have a break.
I do not intend to detain the House long on this matter. The Opposition support the business of the House motion. We are glad that the Government have seen sense, and that the motion accepts that the House will deal with amendments in the usual way, before the main motion. We welcome the fact that the Government have accepted the recommendations of the Procedure Committee, and I would like to put on record our thanks for its report.
The Labour party will support the amendment in the name of the right hon. and learned Member for Beaconsfield (Mr Grieve) and others. There is an important principle here. The Government are accountable to Parliament. At every stage in this process, the Government have sought to prevent Parliament from having a meaningful say on how this country approaches the withdrawal from the EU. The Prime Minister has sought to sideline Parliament. The amendment would simply ensure that Parliament would be given another meaningful say if the Government lose on Tuesday—no true democrat and parliamentarian could vote other than in favour. We support the motion.
Mr Dominic Grieve (Beaconsfield) (Con)
I, too, wish to thank the Government for listening to the Procedure Committee and the engagement they had with the Committee over how the debate should be conducted. On that, I have nothing further to add.
Members will recall that in June issues arose about how the House should proceed in the event of the Government motion being rejected. At that time, my right hon. Friend the Prime Minister represented to me that if the motions to be considered thereafter were to be made amendable, it would in some way interfere with her ability to negotiate, which was why—having reflected on her view—I took the decision to vote against my own amendment when it came before the House. I listened to what she had to say to me. But the reality remains that we have an unsatisfactory procedure to resolve differences of opinion in the House if—and it is obviously an “if”—we come to a point at which the Government do not succeed in their motion.
The opportunity exists this afternoon to cure that anomaly. As was so rightly said by the hon. Member for Walsall South (Valerie Vaz), it is contrary to all sensible practice and—I have to say—slightly disrespectful of the role of this House, that we should end up with a situation in which we have unamendable motions for consideration at a time when Parliament should be fully focused on trying to find the means to resolve outstanding issues. It is for that reason that I tabled this amendment, which would in simple terms cure that problem and provide reassurance, even before we start on these really important debates, that whatever the outcome next week, we would have a means of continuing the debate thereafter, if we needed to, in a way that must be in conformity with what any right-thinking Member of this House would think to be the proper procedure and process to adopt. For that reason, I am grateful to my many right hon. and hon. Friends who have indicated their support for the amendment, and to the many right hon. and hon. Members on the Opposition Benches who have done likewise.
Helen Goodman (Bishop Auckland) (Lab)
When the right hon. and learned Gentleman came to the Procedure Committee, he proposed free-standing resolutions alongside the Government’s motion. Would he like to clarify now that his amendment is not proposing that process, and that it is proposing something that would be an expression of will rather than an expression of the opinion of the House?
Mr Grieve
I am very happy to do so. The hon. Lady might remember that when I came before the Procedure Committee on the main business in this motion, I tried to be as conciliatory as possible in finding a way through. I am delighted that the Government have accepted the first principle of having amendable motions. The purpose of this amendment is to ensure that if we do not resolve this issue next week, there will be further amendable motions to be considered under the programme laid out in section 13 of the European Union (Withdrawal) Act.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Is my right hon. and learned Friend not attempting, in his amendment to the business of the House motion, effectively to amend primary legislation?
Mr Grieve
Most certainly not. We have just had in the past few hours an example of the assertion of parliamentary sovereignty, which I understand to be dear to many Members on this side of the House and elsewhere. I say to my hon. Friend that no statute may fetter in any way the procedure and processes that this House chooses to adopt. There is therefore no incompatibility whatsoever between this motion and any statute. Mr Speaker, I beg to move the amendment.
Mr Speaker
We will come to the proposition of that matter being put to the test of the House in due course, but there is a choreography to these things, so it will not happen just yet. If Mr Efford wishes to orate, he has his opportunity to do so now.
Clive Efford (Eltham) (Lab)
The amendments that my hon. Friends and I have tabled speak for themselves. They would introduce more flexibility into the timing of our debates so that Back-Bench MPs could get their thoughts and views on record. Too often, Members who are called to speak at the tail-end of debates in this House have their speaking time cut to just three or four minutes. That is barely as long as a press release, and they are often discouraged from taking interventions, which really turns this Chamber into a recording studio for a series of statements. It would be unfortunate if that were to happen in a debate of this importance. I ask the Government to bear that in mind as the debate goes on, and not to deny Back Benchers the chance to put their views on record. I will not divide the House on my amendments, because I think that the point has been made.
Mr Speaker
I am grateful to the hon. Gentleman, who has made his intentions clear.
Sir Oliver Letwin (West Dorset) (Con)
My right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) and I have not always agreed as we have gone through the lengthy discussions of the Brexit process, but we did both appear before the Procedure Committee to discuss the proceedings that we are now about to undertake. When he and I, and others, came to discuss the effects of section 13, in which many of us were involved in trying to find compromises that would make it all workable, it became clear that there was a significant issue involved. I want to explain to those of my hon. Friends, and those on other Benches, who might think that this is an abstruse amendment, just why it may become utterly critical to the future of our country.
Section 13(8) of the European Union (Withdrawal) Act 2018 specifies that, by 21 January, whoever is then the Prime Minister and whoever are then the Government—I hope that it will be the current Prime Minister and the current Government—may be compelled to come to the House of Commons to explain that they believe that it is impossible to reach an agreement with the EU. Section 13(8)(b)(i) states that a motion “in neutral terms” should then be put to the House. That is a strange and arcane parliamentary term, but it has a meaning, which is specified in Standing Order No. 24B.
Ludicrously, given our unwritten constitution, the Standing Orders of the House of Commons were correctly described by Bagehot as the nearest thing that we have to a constitution, and Standing Order No. 24B states:
“Where, in the opinion of the Speaker or the Chair, a motion, That this House, or, as the case may be, the committee has considered the matter, is expressed in neutral terms, no amendments to it may be tabled.”
Amendment (d), tabled by my right hon. and learned Friend the Member for Beaconsfield, would cancel Standing Order No. 24B as it would then apply, so that the House would have a chance to amend the motion from a Government who had concluded that they could not reach a deal with the EU.
Of course, that may not be in any way relevant to our proceedings. I shall be voting for the Government’s deal on Tuesday, and many of us hope that the Government will reach a deal. Many of us hope that even if we do not reach a deal on Tuesday, we will reach it subsequently under the Government’s guidance in some way or another. Under those circumstances, I believe that a sort of Norwegian arrangement is probably the next best step. However, whatever we may or may not do, we could arrive on 21 January with a statement that no deal can be reached, and it could be that at that time there is somewhere across this House a majority in favour of some solution that would avoid us leaving without a deal. For those of us who believe that leaving without a deal would be a catastrophe for our country, it seems right that we should at least have the chance to crystallise and express that majority, should it arise. The only way of doing that is to provide for the motion to be amendable, and that is the reason for amendment (d).
Joanna Cherry (Edinburgh South West) (SNP)
The Leader of the House, who is unfailingly courteous, for which I pay tribute to her, made some preliminary comments, and I felt that I must reply to them on the behalf of the Scottish National party. This deal is not in the interests of the Scots or, indeed, of anyone in the United Kingdom. The past two years have shown that the promises made by the leave campaign are undeliverable. All significant analysis shows that this deal will mean a massive hit on the British economy and on the jobs and living standards of all our constituents across these islands, and the loss of freedom of movement will have a particularly heavy impact on the Scottish economy. I say to the Leader of the House that this is not about deal or no deal, because there is a third option: no Brexit.
As has been widely reported today, the advocate general of the European Court of Justice has given his opinion in the case of Wightman and others, including myself, v. the Secretary of State for Exiting the European Union. The preliminary opinion states that article 50 can indeed be unilaterally revoked, and I suggest that that may have some impact on today’s proceedings. I will explain why in a moment—[Interruption.] Hopefully, I will get the courtesy of a hearing, as others did. For the moment, I should make it clear that the Scottish National party will support the amendment in the name of the right hon. and learned Member for Beaconsfield (Mr Grieve), and we applaud his efforts and those of others to ensure that democracy is not steamrollered by this Government and that Parliament has a meaningful say in what might happen in the future.
Otherwise, we are generally happy with the time allocated for the debate, and we are pleased that the UK Government have paid attention to the letter from the leaders of the Opposition parties calling for amendments to be decided on before a final substantive vote—that being the usual practice in this House.
However, the UK Government should consider pushing back the meaningful vote until they have the final judgment of the Grand Chamber of the Court of Justice of the European Union in the case I mentioned. It is no surprise to the UK Government that this decision is pending, because they have been fighting it tooth and nail for the last eight months, but I am very proud to say that I and other Scottish SNP parliamentarians, two Scottish Greens and two Scottish Labour Members of the European Parliament have triumphed in getting this case to the Court of Justice of the European Union for the preliminary ruling that the Grand Chamber is likely to follow.
The reason we did that was to make sure that parliamentarians in this House would know when they came to the meaningful vote that it is not, as the Government would have us believe, deal or no deal and that there is the third option of staying in the European Union on the current terms and conditions—on the rather good deal that we currently enjoy. That is what the advocate general has said today, and the Court follows him in 80% of cases. The Court has said that it will rule quickly, and the word on the street is that that will be before Christmas. Will the Government consider postponing the meaningful vote until we know the decision of the Court of Justice of the European Union? As I say, it comes as no surprise to the Government that this decision is pending.
At every turn since the Brexit vote, the UK Government have sought to marginalise Scotland, the Scottish Government and the Scottish Parliament. The Scottish Government proposed a series of compromises that have been ignored by this Government, and I am proud to say it will be a rich irony that it is Scottish parliamentarians and the Scottish courts who are throwing this Parliament a last-minute lifeline to reverse the madness of this decision. It will ultimately be up to the public in a second vote as to whether they reverse that madness, but I very much hope that, when Scotland becomes an independent nation state again and when Scotland looks to take her rightful place at Europe’s top table alongside Ireland and the others, it will be remembered that it was the Scots who threw this Parliament and the whole United Kingdom a lifeline. I urge the Government to postpone the meaningful vote until MPs have the vital final decision from the Court of Justice of the European Union.
Hilary Benn (Leeds Central) (Lab)
I will be very brief. First, I acknowledge that, in this business motion, the Government have listened to representations made by both the Exiting the European Union Committee and the Procedure Committee, although I gently say to the Leader of the House and other Ministers present that this whole process, unfortunately, has shown the Government’s marked reluctance to listen to the House, to trust the House and to share information with the House. I suspect that what the Government have sown, they will reap in the vote next Tuesday.
Secondly, I rise to support the amendment tabled by the right hon. and learned Member for Beaconsfield (Mr Grieve). As it bears more than a passing resemblance to amendment (c) that I have tabled to the motion on the withdrawal agreement and the political declaration, he is probably not surprised to hear me say that. The hon. and learned Member for Edinburgh South West (Joanna Cherry) talked of a lifeline, and it is essential that the House of Commons has the opportunity, if the deal is voted down next Tuesday, to give itself a voice and to express a view about what happens next. Amendment (d) to the Business of the House motion would, as we have just heard, remove the obstacle to that, and I hope the whole House will vote for it.
Amendment proposed: (d), at end add
“(11) The provisions of Standing Order No. 24B (Amendments to motions to consider specified matters) shall not apply in respect of any motion tabled by a Minister of the Crown pursuant to any provision of section 13 of the European Union (Withdrawal) Act 2018.”—(Mr Grieve.)
Question put, That the amendment be made.
European Union (Withdrawal) Act
(5 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mrs Theresa May)
I beg to move,
That this House approves for the purposes of section 13(1)(b) of the European Union (Withdrawal) Act 2018, the negotiated withdrawal agreement laid before the House on Monday 26 November 2018 with the title ‘Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community’ and the framework for the future relationship laid before the House on Monday 26 November 2018 with the title ‘Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom’.
At the start of five days of debate that will set the course our country takes for decades to come, it is worth taking a moment to reflect on how we got here. When the treaty of Rome was signed in 1957, the United Kingdom stood apart. It was 15 years later, at the third attempt, that we joined what was then the European Economic Community. Ever since, our membership has been a contested matter.
In the first referendum in 1975, the British people voted to stay in, but almost a third of those who voted wanted to leave. Indeed, there are those in this Chamber who campaigned to leave at that time. As the EEC evolved into a European Union of increasing political depth, the British people’s doubts about our membership grew. Ultimately, membership of any union that involves the pooling of sovereignty can only be sustained with the consent of the people. In the referendum of 2016—the biggest democratic exercise in our history—the British public withdrew that consent.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The right hon. Lady has lost in the Supreme Court and in the European Court, and today she has lost in this House. I hope that she will not compound that by opposing a section 30 order for Scotland when the Scottish Government want it. Her history of opposition is not a good one and she should respect the democracy that she is talking about; it applies to Scotland too, Prime Minister.
The Prime Minister
As I have just said, membership of any union that involves the pooling of sovereignty can only be sustained with the consent of the people. In 2016, that consent was withdrawn by the British public in relation to our membership of the European Union. In 2014, when the people of Scotland were asked whether to remain in the United Kingdom, they voted to stay in the United Kingdom.
As I just repeated, in the referendum in 2016, the British people withdrew that consent, and they confirmed that choice a year later by voting overwhelmingly for parties that committed to delivering Brexit. The referendum was a vote to bring our EU membership to an end and to create a new role for our country in the world. To deliver on that vote, we need to deliver a Brexit that respects the decision of the British people: a Brexit that takes back control of our borders, laws and money and a Brexit that sets us on course for a better future outside the EU as a globally trading nation in charge of our own destiny and seizing the opportunities of trade with some of the fastest growing and most dynamic economies across the world.
Anne Marie Morris (Newton Abbot) (Con)
Having read this agreement, it seems to me that we will not be able to enter into trade agreements because we are going to be stuck with the same rule base that we had in the EU. Does my right hon. Friend agree?
The Prime Minister
I do not think my hon. Friend will be surprised if I say that I do not agree with the analysis that she has just given in relation to the agreement. It is clear that we will have an independent trade policy and that we will be able to negotiate trade deals around the rest of the world. This is a specific issue that we looked at when we were putting forward our own proposals in the summer in relation to our future economic partnership with the European Union. I heard somebody on the Labour Benches asking from a sedentary position when we will be able to negotiate our trade deals. During the implementation period, we will be able to negotiate, sign and ratify trade deals around the world.
This will only be a moment of opportunity if we in this House can find a way to deliver a Brexit that begins to bring our country back together. That means protecting the easy trading relationship that supports just-in-time supply chains and the jobs that depend on them, the security co-operation that keeps us safe, the progress we have made in Northern Ireland, and the rights of citizens here in the UK and across the European Union.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Prime Minister spoke of security co-operation, yet when I asked the Home Secretary the other day whether we would be left more safe or less safe as a result of this deal, he could not answer the question, because he could not guarantee that we would have access to the crucial SIS II database that ensures that we have information on terrorists, paedophiles and other criminals trying to cross our border. That is the reality of the deal that she has put before us.
The Prime Minister
As the hon. Gentleman knows full well, I think, the political declaration and the security section of that political declaration go well beyond any security arrangement that the European Union has with any other country—[Interruption.] And it makes it clear that in the next stage of negotiations, we will be negotiating how we can have access to the very elements that are covered by both SIS II and ECRIS. [Interruption.] No—perhaps the hon. Gentleman would like to look at the political declaration. The reference to those elements is indeed in the political declaration. [Interruption.] He says that they are not. I am sorry, but I have to say to him that he may not understand the elements that lie behind SIS II and ECRIS.
The Prime Minister
I am going to make some progress for a minute.
Achieving all the things that I have just set out in terms of protecting our trading relationship, the security co-operation, the progress in Northern Ireland and the rights of citizens requires some compromise. I know there are some in this House, and in the country, who would prefer a closer relationship with the European Union than the one I am proposing—indeed, who would prefer the relationship that we currently have and want another referendum which they hope would overturn the decision we took in 2016. Although I profoundly disagree, they are arguing for what they believe is right for our country, and I respect that. But the hard truth is that we will not settle this issue and bring our country together that way. I ask them to think what it would say to the 52% who came out to vote leave, in many cases for the first time in decades, if their decision were ignored. What would it do to our politics?
Several hon. Members rose—
The Prime Minister
I will take a significant number of interventions, but I will make some progress at this stage.
These are important points. There are those who want a closer relationship with the EU, but they need to recognise the message that was given by the 52% who voted to leave the European Union.
There are others in this House who would prefer a more distant relationship than the one I am proposing. Although I do not agree, I know that they are also arguing for what they think is best for our future, and I respect that too. But the hard truth is also that we will not settle this issue and bring our country together if, in delivering Brexit, we do not protect the trade and security co-operation on which so many jobs and lives depend, completely ignoring the views of the 48%. We can shut our eyes to these hard truths and carry on debating between these extremes for months to come, or we can accept that the only solution that will endure is one that addresses the concerns of those who voted leave, while reassuring those who voted remain. This argument has gone on long enough. It is corrosive to our politics, and life depends on compromise.
Wes Streeting
My constituency was split pretty much down the middle during the referendum. May I explain the crux of the problem that the Prime Minister has next week? She set as the benchmark for security co-operation things being better than the relationship the EU has with other countries. My constituents who voted leave voted for a better future for our country, and my constituents who voted remain wanted to protect all the good that we have with the European Union. With the deal she has negotiated, she has brought those two groups together, but against her deal.
The Prime Minister
The deal that I have negotiated provides that good security co-operation while protecting the jobs that depend on the trade relationship with the European Union. That is why, as I say, it is not a deal that appeals to those who want—there are many who want a relationship that is closer and there are those who want a relationship that is further apart. I believe it is important that we respect the views of those who voted leave and deliver Brexit, but we also recognise that we need to protect the trading relationship with the European Union and the jobs that rely on it for the future.
Kevin Hollinrake (Thirsk and Malton) (Con)
If Parliament does not support the Prime Minister’s deal, what is the most likely outcome—no deal or no Brexit?
The Prime Minister
I will reference the problems if Parliament does not support this deal a little later in my speech, if my hon. Friend will wait for that.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I absolutely agree with the Prime Minister that we need to start coming together as a country once this process is over, but does she agree that if she is so convinced that her deal and political agreement are what the British people voted for, she should have the confidence to go back and ask them to verify whether it is something they support?
The Prime Minister
As I have said in this Chamber before, it is very important that all of us in this House recognise what this Parliament did. This Parliament overwhelmingly voted to give the choice of membership of the European Union to the British people. The people voted. They voted to leave. I believe it is incumbent on us to deliver that Brexit, and I believe it is a matter of trust in politicians and in this House that we do indeed deliver on that Brexit.
Sir Patrick McLoughlin (Derbyshire Dales) (Con)
Will the deal that my right hon. Friend has agreed ensure that inward investment in this country, which has led to many hundreds of thousands of jobs—particularly in the automotive industry—will have the same access to markets that it presently has?
The Prime Minister
That is absolutely what underpinned the proposal that we put forward in the summer, and it is what underpins the ambitious trade relationship identified in the political declaration, ensuring that people can invest in this country with confidence. Reference was made earlier to people voting for a brighter future for this country. We can deliver that brighter future for this country with a deal that delivers a good relationship with Europe but also enables us to have those other trade deals around the rest of the world.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
My right hon. Friend has courageously and consistently said that there will be no second referendum. Does she agree that a second referendum would reopen all the wounds within families and, above all, that it would put the Union itself in jeopardy?
The Prime Minister
I do, indeed, agree with my hon. Friend. I think a second referendum would exacerbate division in our country and would not bring our country back together again.
Several hon. Members rose—
The Prime Minister
I will give way to the hon. Member for North Ayrshire and Arran (Patricia Gibson), and then I will make some progress.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Prime Minister has repeatedly referenced the 52% who voted to leave, but I am still confused about why she is not willing to take any cognizance of the fact that electoral law has been broken, and therefore the result of the referendum cannot be trusted. Otherwise, we may as well abolish electoral law altogether. Will the Prime Minister not at least respond to the findings of the Electoral Commission?
The Prime Minister
The Electoral Commission stills says it believes that it was a fair poll, and I believe that we should abide by the result of that poll and deliver for the people of this country.
We can choose to settle this issue now—
The Prime Minister
I have said I will make some progress, and then I will be generous in my acceptance of interventions.
We can choose to settle this issue now by backing the deal in this motion—a deal that delivers Brexit and a new partnership with the European Union, a deal that delivers for the whole United Kingdom, a deal that begins to bring our country back together again.
Simon Hoare (North Dorset) (Con)
The deal that my right hon. Friend has brought back has my full and unequivocal support, but may I ask her to confirm that, as we leave, our country will still be a rules-based, international, outward-looking, caring and compassionate country that stands as a beacon for good in the world?
The Prime Minister
I am very happy to give my hon. Friend that absolute reassurance, but more than that, we will be a country that promotes those values and that promotes that rules-based international order around the world. That is what we have always done as the UK, and it is what we will continue to do.
Several hon. Members rose—
Stephen Timms (East Ham) (Lab)
On 30 March, under the agreement, the UK will lose its place on the European Data Protection Board, even though Ministers have said they wanted to hang on to that place. It is a place where the UK has wielded considerable influence on the development of European policy. Is not the reality of the agreement that we will continue to have to obey these rules, but we will have lost the ability to influence what those rules are?
The Prime Minister
The position in terms of voting rights and various elements once we have left the European Union is of course going to change, but what has been clear from the agreements that we have negotiated is the capacity for the United Kingdom to continue to give technical support where that is appropriate in a whole range of matters. On a number of the issues that are dealt with by the European Union, in terms of the rules that it operates, of course these are not just European Union rules, but international standards on which the United Kingdom will continue, during the implementation period and beyond, to have its role. I said I would take a second intervention.
Mr Bob Seely (Isle of Wight) (Con)
It is unfortunate for the Government to be in contempt of Parliament. Does the Prime Minister agree that it is worse for Parliament to be in contempt of the British people, which is what will happen if we do not deliver on Brexit?
The Prime Minister
I absolutely agree that it is the duty, I believe, of this Parliament and it is the duty of us as politicians to deliver on the result of the vote that the British people gave in 2016 in the referendum. We gave them the choice, they voted to leave the EU and it is up to us to deliver that leaving of the European Union in the interests of our country.
Several hon. Members rose—
The Prime Minister
I will make some progress.
The decision we have before us has two elements to it: the withdrawal agreement that sets out the terms of our departure from the European Union and the political declaration that sets the terms of our future relationship with the EU.
Alberto Costa (South Leicestershire) (Con)
Will the Prime Minister give way?
The Prime Minister
If I may, I will just make a little progress.
The withdrawal agreement ensures that we leave the European Union on 29 March next year in a smooth and orderly way. It protects the rights of EU citizens living in the UK, and of UK citizens living in the EU, so that they can carry on living their lives as before. It delivers a time-limited implementation period to give business time to prepare for the new arrangements. During that period, trade will continue on current terms so that businesses have to face only one set of changes. It ensures a fair settlement of our financial obligations, less than half of what some originally expected and demanded.
Alberto Costa
I thank the Prime Minister for giving way and apologise for intervening. Two years ago, I said to my right hon. Friend that I could never imagine her requesting me to vote to take away the rights of my Italian parents, who are resident in Scotland. Will she confirm that her deal guarantees the rights of EU nationals in the UK—3.6 million of them—as well as those of 1 million UK citizens in the EU27, in a way that no deal would not?
The Prime Minister
The withdrawal agreement does indeed guarantee those citizens’ rights—the rights of UK citizens in the EU and of EU citizens here, in the UK. The withdrawal agreement delivers that guarantee.
Conor Burns (Bournemouth West) (Con)
No one can doubt the Prime Minister’s commitment to the deal and the passion with which she is selling it. In the early part of her statement, she twice referred to the status of Northern Ireland, saying that the deal is a good one for Northern Ireland. I come from Northern Ireland—I am a Catholic and a Unionist; I understand it pretty well. Can she explain why that passion for the deal as good for Northern Ireland is not shared by those who should understand Northern Ireland best?
The Prime Minister
My hon. Friend raises a point. I recognise that there are representatives of Northern Ireland in the Westminster Parliament who are concerned about aspects of the deal. It is this Parliament’s and this Government’s responsibility to provide some reassurance about those elements that have caused concern. I wish to continue to discuss the matter with representatives from Northern Ireland.
Lady Hermon (North Down) (Ind)
Although the Democratic Unionist party has 10 MPs in the House, it campaigned for leave and the majority of people in Northern Ireland, like me, campaigned for remain. The DUP does not speak for the majority of people in Northern Ireland. I can reassure the Prime Minister that her withdrawal agreement has considerable support in Northern Ireland, particularly among farmers, businesses and fishermen. [Interruption.] I am sorry that people feel that that is funny. It is not. It is really serious for the people of Northern Ireland.
Reassurance is needed from the Prime Minister on the constitutional guarantee of the Good Friday agreement, which the Labour party should be proud of. It is guaranteed in the withdrawal agreement and the political declaration, so why the Labour party chooses to vote against the withdrawal agreement beats me. Will the Prime Minister please give an assurance to the people of Northern Ireland that nothing in the deal threatens the consent principle or the constitutional status guaranteed in the Belfast agreement?
The Prime Minister
I am happy to give the hon. Lady that absolute assurance. The issue was referenced in the December joint report, it is in the withdrawal agreement and it is clear in the political declaration. Nothing in the relationship and the deal with the EU will affect that position. We will continue to uphold the Belfast agreement.
Several hon. Members rose—
Nigel Dodds (Belfast North) (DUP)
I am very grateful to the Prime Minister. Of course, the referendum was for the whole United Kingdom, and as a Unionist, I respect the result across the UK—Manchester, London, Scotland—[Hon. Members: “They voted remain.”] Whatever way they voted, the UK voted, and we should respect the result. In terms of the views in Northern Ireland, I am quite happy to put them to a test any time. We will happily go to the electorate and put our views to the people if needs be. I am quite certain that we would be returned in greater numbers than we are today, so I am quite happy to take on the challenge that has been put down.
In terms of guaranteeing Northern Ireland’s position, the Prime Minister will remember that in paragraph 50 of the joint report, which we spent four days negotiating, guarantees were given to Northern Ireland. Never mind the words that have been said in this House today, they were in the actual text. Why have they been deleted? Why has she not kept them in the withdrawal agreement? Why have they not been translated? That is what we have a problem with. Words are good. It is the legal text, what is in the agreement, that matters.
The Prime Minister
The right hon. Gentleman is absolutely right: there was that reference to the consent of the Northern Ireland institutions in relation to any potential new regulatory differences between Great Britain and Northern Ireland. That is a matter we will be looking at and can look at in this House with regards to the parliamentary arrangements between the institutions within the United Kingdom for the future. It is exactly on these issues, the question of potential new regulatory divergence, that I believe it will be possible to give reassurance to not just representatives in this Chamber, but the people of Northern Ireland for their future.
Several hon. Members rose—
The Prime Minister
I will continue to take interventions, but I am going to make some more progress now.
The withdrawal agreement ensures a fair settlement of our financial obligations. I want to turn to the most contentious element of the withdrawal agreement. Perhaps this is a neat segue, as my last intervention was from the right hon. Member for Belfast North (Nigel Dodds), because I want to turn to the Northern Ireland protocol. It is important to remember what is at the heart of the protocol. It is our commitment to the people of Northern Ireland. It is about saying that whatever happens as we leave the European Union we will, as I have just said to the hon. Member for North Down (Lady Hermon), honour the Belfast agreement. The hard-won peace that has inspired the world and the detailed arrangements that have delivered and sustained it will not be lost. The people of Northern Ireland and Ireland will be able to carry on living their lives as before. To deliver that, we need a solution in the future partnership that ensures there is no hard border between Northern Ireland and Ireland.
Both the UK and the EU are fully committed to having our future relationship in place by 1 January 2021, but there is still the possibility that it is not ready before the end of the implementation period. The only way to absolutely guarantee no hard border on the island of Ireland at the end of the implementation period is to have a backstop in the withdrawal agreement as a last resort insurance policy. Let us be clear: this is true not just for the deal we have negotiated. Whether you want a model like Canada’s or whether you want to see the UK as a member of the European Economic Area, any future relationship will need to be negotiated and will need an insurance policy if that negotiation cannot be completed in time. Put simply, there is no possible withdrawal agreement without a legally operative backstop. No backstop means no deal.
Mr John Baron (Basildon and Billericay) (Con)
The Prime Minister is well aware that many of us have wished her well in these negotiations, but does she understand and recognise that many of us also have concerns about the backstop and equate it to entering a contract of employment that gives the sole right of termination to the other party?
The Prime Minister
I recognise the concerns there are in the House and, if my hon. Friend will permit me, I want to go on to reference them a little later.
Mr Speaker
May I just very gently exhort the Prime Minister to face the House? In answering her hon. Friend, her hon. Friend can hear very well but Opposition Members cannot.
The Prime Minister
I understand that some colleagues are worried, as I have just said, that we could end up stuck in the backstop indefinitely. In the negotiations, we secured seven separate commitments in the withdrawal agreement and political declaration to ensure that that is not the case. First, there is an explicit legal duty to use best endeavours to reach an agreement by the end of December 2020 that avoids the backstop coming into force in the first place.
That is not just a political commitment. As the Attorney General has set out, this is a recognised approach in international law, and we have the right to seek independent arbitration if this duty is not upheld. Secondly, if despite this, the future relationship is not ready in time, the backstop can be replaced by alternative arrangements. The political declaration makes it clear that we will seek to draw upon all available facilitations and technologies that could be used to avoid a hard border, and preparatory work will be done before we leave so that we can make rapid progress after our withdrawal. Thirdly, if neither the future relationship nor the alternative arrangements were ready by the end of 2020, we would not have to go into the backstop at this point. Instead, we have negotiated that there would be a clear choice between the backstop or a short extension to the implementation period.
Fourthly, if we do go into the backstop, the legal text is explicit that it should be temporary and that the article 50 legal base cannot provide for a permanent relationship. Fifthly, if the backstop is no longer necessary to avoid a hard border, we have the right to trigger a review through the Joint Committee. Sixthly, as a result of the changes that we have negotiated, there is an explicit termination clause that allows the backstop to be turned off. Finally, the legal text is now clear that once the backstop has been superseded, it will cease to apply, so if a future Parliament decided to move from an initially deep trade relationship to a looser one, the backstop could not return.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
I am grateful to the Prime Minister for giving way—indeed, she is being very generous in giving way to a lot of people. We are told that the EU does not wish to exercise the backstop, Ireland does not wish to exercise it and certainly, the UK does not wish to exercise it. Is it not the case, therefore, that this is a matter not of renegotiating the withdrawal agreement, but of the European Union showing good will and good faith towards the United Kingdom by allowing us one additional line in the withdrawal agreement? This could be words to the effect that in the event of the backstop being triggered, the United Kingdom can, say, at three months’ notice, leave the customs union. To allow that one line would show enormous good faith and good will on the part of the EU, and nothing else.
The Prime Minister
I recognise the degree of concern that there is about this issue, and I will go on to speak about it further in my speech. The withdrawal agreement has been negotiated. It is clear from the European Union that this is the deal, and I just ask those colleagues who wish to reopen the withdrawal agreement to recognise that were it to be reopened, it would not simply be a question of what the United Kingdom then wanted to change; it would also be a question of enabling others to change elements of that withdrawal agreement. Given the rigorous fight that we had in the negotiations to ensure that there were certain elements that were in the interests of the United Kingdom, notably around fisheries and other issues, I caution hon. Members that not only has the EU made it clear that the withdrawal agreement cannot be reopened—we have agreed the deal and the deal is there—but it is not the one-way street that hon. Members would perhaps wish it to be.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Will my right hon. Friend give way?
The Prime Minister
If I could finish this point, it might respond to some of the comments. Rather than focusing on the legal mechanisms that we now have to avoid the backstop and ensure that if it is used, it is only temporary, the real question that the House needs to ask itself is whether it is in the EU’s interest for the backstop to be used, and if it is used, for it to endure. The EU’s original proposal for the backstop would have split the UK into two customs territories and given only Northern Ireland tariff-free access to its market. It barely changed the EU’s orthodoxy. It was wholly unacceptable to us, but the backstop that we have succeeded in negotiating no longer splits the UK into two customs territories. It gives the whole UK tariff-free access to the EU’s market without free movement of people, without any financial contribution, without having to follow most of the level playing field rules, and without allowing the EU any access to our waters. The backstop is not a trick to trap us in the EU; it actually gives us some important benefits of access to the EU’s market without many of the obligations. That is something the EU will not want to let happen, let alone persist for a long time. I recognise that, as is clear from the contributions from my hon. Friends, some Members remain concerned. I have listened to those concerns, I want us to consider how we could go further, and I will continue to meet colleagues to find an acceptable solution.
The Prime Minister
I give way to my hon. Friend the Member for Mid Norfolk (George Freeman).
George Freeman
As the Prime Minister confronts the inevitable contradictions at the heart of this process on behalf of the nation, is it not worth remembering that the vast majority of Members, including on the Opposition Benches, voted to trigger article 50 and voted for the referendum in the first place? Could I also remind her that out in the country her commitment to pursuing this is hugely admired? Given that this issue divides all parties in this House—indeed, on the Government Benches it even divides the factions—would it not be sensible next week, as Parliament begins to take back control, to consider a free vote?
The Prime Minister
It is important that all hon. Members remember not only that the House voted overwhelmingly to give the decision on whether to leave the EU to the people in the referendum, but that the House voted by a significant majority to trigger article 50 and so to continue that process of leaving the EU and that, as I said earlier, at last year’s general election about 80% of the vote went to parties that had in their manifesto a solid commitment to deliver on the Brexit vote. We should all remember that when it comes to voting on the motion next week.
The Prime Minister
I will give way to my hon. Friend, who has been trying valiantly for some time to intervene, and then I will make some progress.
Daniel Kawczynski
Yesterday, we tried to ask the Attorney General for his legal advice as to how much of the £39 billion we were legally and contractually obliged to hand over. He refused to give us a specific figure. Will the Prime Minister now give that specific figure, given that we are to hand over this £39 billion to the EU when we are facing shortages in our own constituencies?
The Prime Minister
There are different elements to the £39 billion in terms of the liabilities to which they refer. Of course, roughly £20 billion of that sum relates to the payments that will be made during the implementation period, which is about ensuring the smooth and orderly exit that is good for businesses. Obviously, there are other liabilities within that where it is determined that we have legal obligations, but, as I say—it is £34 billion to £39 billion; everybody quotes the higher figure, but it is £34 billion to £39 billion—it is from within that range that the final figure will come.
We have five days of debate, but I recognise that hon. Members will want to contribute in today’s debate, so I will make some progress. The second part of this deal is the political declaration. This is a detailed set of instructions to negotiators that will be used to deliver a legal agreement on an ambitious future relationship after we have left. I know that some Members worry that the political declaration is not already legally binding. It cannot be a legal agreement at this stage because the EU cannot legally agree a future relationship with us until we are a non-member state. Through the negotiations, however, we have ensured that we have the framework for an ambitious new economic and security partnership that is absolutely in our national interest.
At the outset, the EU said we would have a binary choice—Norway or Canada. The political declaration concedes that there is a spectrum, and we will have an unprecedented economic relationship that no other major economy has. The EU also said we could not share security capabilities as a non-member state outside of free movement and the Schengen area, but we have secured the broadest security partnership in the EU’s history. If this deal is passed, the task ahead of us will be to turn this ambitious political declaration into our new legal agreement with the EU.
Alison McGovern (Wirral South) (Lab)
I must intervene at this point. The Prime Minister claims that this political declaration is detailed and specific. If that is the case, why was the Treasury Select Committee told today that it was not even possible to produce an economic analysis of the document because it was not specific enough?
The Prime Minister
The economic analysis that was produced by the Government last week made it very clear that within the political declaration is a spectrum on which the balance of obligations in relation to the rights of access—the balance of obligations on checks at the border in relation to market access—must be addressed. It is clear that that will be ambitious, and we will continue to work for frictionless trade, which is indeed what was put forward in the White Paper in the summer. However, it was only right and proper that in our economic analysis we indicated a midpoint on that spectrum, which gave an indication to people of the impact of trade barriers should they be put up.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I thank the Prime Minister for giving way—she is being very generous—but does she not understand that by over-claiming what is in the political declaration, she is undermining trust? She is asking for our trust in her, and in the UK, to determine what will happen in future, because so little is resolved. Not only on the spectrum on the economics, but also on the security issues, she is over-claiming. She suggested to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) that she had effectively secured agreement to SIS II, but she knows that she has not, because she tried to do so. Paragraph 87 of the political declaration does not refer to SIS II; it simply says that “the Parties” will “consider” the arrangements, and if we are lucky we will get something that will “approximate”. That is not the same as SIS II, and the Prime Minister knows it. Will she be straight with the country and with Parliament about the political declaration?
The Prime Minister
I have said this to Members before, and I will say it again. There is a difference between ensuring that we have the security capabilities that we need in the future, and simply saying that we will be doing that in a particular way. What paragraph 87 makes clear is the intent to have
“exchange of information on wanted or missing persons and objects and of criminal records, with the view to delivering capabilities that, in so far as is technically and legally possible, and considered necessary and in both Parties’ interests, approximate those enabled by relevant Union mechanisms.”
The Prime Minister
No; I am sorry.
This is a fundamental issue which has underpinned the approach to these negotiations. We could have approached the negotiations by saying, “We are going to take the models that already exist, and in all cases we are going to say that we have to be in those models in exactly the same way as we are today.” What we have said is that we look to ensure that we can have the capabilities that we have where we need those capabilities, and that is exactly what we are delivering—
The Prime Minister
No. I am sorry.
That is exactly what we have in the political declaration.
Several hon. Members rose—
The Prime Minister
I will give way to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) on that point, but then I will make further progress.
Yvette Cooper
I am hugely grateful to the Prime Minister for giving way, but she tried to get exactly the same thing: she tried to get SIS II. She should be honest with the House, and say that she tried to get SIS II and failed. She got other things, but I ask her to tell us whether she tried to get SIS II.
Mr Speaker
I am sure the right hon. Lady will want to make it clear that she is not suggesting that the Prime Minister has been other than honest. She is presumably encouraging forthrightness, is she?
Yvette Cooper
I certainly am encouraging forthrightness. I would not challenge the Prime Minister’s integrity, because I know that she has worked immensely hard on this, but I am asking her to give accurate information to the House. Will she tell us whether she tried to get SIS II, rather than pretending that she was trying to get parallel capabilities?
The Prime Minister
We are clear about the capabilities that are currently available to us as a member of SIS II and within ECRIS. It is still open to us to seek to have the same relationship in relation to SIS II and ECRIS as we currently have, but we want to ensure that we have the capabilities that underpin SIS II and ECRIS.
I am tempted to say that the right hon. Lady might like to cast her mind back to the time when I was Home Secretary and she was shadow Home Secretary, and I stood at this Dispatch Box moving the motion that ensured that we could rejoin 35 measures on justice and home affairs matters, including SIS II and ECRIS, while she, I seem to recall, was working with my right hon. Friend the Member for North Somerset (Dr Fox) to prevent the Government from rejoining those measures.
If this deal is passed, the task ahead of us will be to turn this ambitious political declaration into our new legal agreement with the EU. [Interruption.] No, I am going to make more progress, and the next section of my speech might be of interest to Members of this House. In doing so, I want to build the broadest possible consensus both within this House and across the country. So for the next stage of negotiations we will ensure a greater and more formal role for Parliament. This will begin immediately as we develop our negotiating mandate, building on the political declaration ahead of 29 March 2019. The Government will consult more widely and engage more intensively with Parliament as we finalise the mandate for the next phase of the negotiations. Ministers will appear before Select Committees between now and March in each relevant area of the political declaration from fisheries to space to foreign policy. So Members across the House will be able to contribute their expertise to the detailed positions we take forward with the EU, and the whole House will be consulted on the final version of that full mandate. We will also provide the devolved Administrations with a similar degree of detailed engagement. We will undertake targeted engagement with business and civil society to help inform our detailed negotiating positions.
Hilary Benn (Leeds Central) (Lab)
Will the Prime Minister give way on that point?
The Prime Minister
I give way to the Chairman of the Exiting the European Union Committee.
Hilary Benn
The Prime Minister is being extremely generous in giving way. She said a moment ago that the House of Commons would be consulted on the mandate; can she give a very simple assurance that the House of Commons will get to vote on whether to approve that mandate, or not?
The Prime Minister
The outline of that mandate will be set in the political declaration; that is the deal that has been agreed with the European Union. What we are looking for is to have the expertise of the House and the views of the House when we go into that negotiating position. I also say to the right hon. Gentleman the Chairman of the Select Committee that I stated that Ministers will appear before the Select Committee, but of course Ministers will have to be invited by the Select Committee to appear before it. I hope, however, that Select Committees will indeed accept that it is important for Ministers to appear before them on these matters. Taken together, these arrangements will support a national mission to forge the strongest possible future relationship with our European partners, commensurate with our wider global goals and in the interests of the whole country.
Let me turn to the amendment proposed by the Leader of the Opposition. First, it argues for a permanent customs union. The benefit of a customs union is that it means no tariffs, fees, charges, quantitative restrictions or rules of origin checks. All of these are explicit in our deal, but, importantly, it goes further, because it also gives us the crucial ability to have an independent trade policy beyond our partnership with the EU, which membership of the customs union would not. So the Leader of the Opposition needs to explain why he does not share our ambition for a global Britain.
Secondly, the amendment argues for a strong single market deal. If that means being close to the single market but not part of it, then it is our deal which delivers the closest possible partnership. If it actually means being in the single market, the Leader of the Opposition is opposing taking back control of our borders and ending free movement. That not only contravenes the democratic instruction of the British people, but it contravenes his own manifesto.
Thirdly, the amendment claims our deal would
“lead to increased barriers to trade in goods and services”.
Unless the Leader of the Opposition’s policy is to stay in the single market as well as the customs union, some increase in barriers is inevitable. But our deal is the best deal outside the single market and it gives us the opportunities that come from an independent trade policy and increased regulatory freedom.
Joseph Johnson (Orpington) (Con)
As the UK will have lost the ability to influence EU rule-making on financial services directly, it is vital that we can play a full part in defending our interests in international bodies that set standards globally such as the Basel Committee on Banking Supervision and the International Organization of Securities Commissions. Does the Prime Minister therefore share my concern that article 129 of the draft treaty, which clearly states that the UK may not take a contrary position to the EU in such bodies, will prevent us from doing so?
The Prime Minister
Article 129 is about the joint committee responsible for the management, administration and supervision of dispute resolution in the future. [Interruption.] I say to my hon. Friend that we have been very clear in the area of financial services that it is important, because of the significance of financial services to the United Kingdom, that we are able to ensure that we have the ability to set the regulations that we need to set as a global financial centre, working with the other regulatory bodies and doing that in the interests not just of the United Kingdom, but of financial stability across the world.
We are now at the stage in this process where we must all engage with the hard choices we face. Simply pretending that everything can stay the same as we leave the EU, as Labour’s amendment does, does not face up to those hard choices and amounts to not being straight with the people of this country.
Fourthly, the amendment claims that our deal would not protect workers’ rights and environmental standards. This is simply wrong. Our deal does protect them. As part of the single customs territory in the Northern Ireland protocol, we have committed to ensuring that there will be no reduction in standards in this area, including on labour and social protection, fundamental rights at work, occupational health and safety and fair working conditions. We have said that we will improve on this in developing our future relationship with the EU.
Indeed, we already go further than EU minimum standards, including on annual leave, paid maternity leave, flexible leave, paternity leave and pay, and parental leave, because we know that the first responsibility for protecting those rights sits with this Parliament. As we take back control of our laws, we will not only honour that responsibility, but go further still, including, for example, by implementing the recommendations of the Taylor review. So we will not just protect workers’ rights: we will enhance them.
Fifthly, the amendment claims that our deal allows the diminution of our security. The Leader of the Opposition knows full well that, if we fulfil the democratic decision of the British people to leave the European Union, we cannot have exactly the same rights as a third country that we currently have as a member. The question is: which deal represents the broadest security partnership in the EU’s history? It is our deal. What is he doing? He is opposing it.
Sixthly, the Leader of the Opposition’s amendment appears to reject the backstop— even though businesses, farmers and people from across the community in Northern Ireland support this insurance policy. There is real anger in Northern Ireland at the approach Labour is taking.
Finally, the amendment opposes leaving without a deal. But the EU has been crystal clear that no backstop means no deal. So the amendment is simultaneously opposing no deal and proposing a policy that would lead to exactly that. At this critical moment in our history, the Leader of the Opposition is not making a serious proposition for the future of this country. He is simply trying to force a general election. The right hon. Member for Hayes and Harlington (John McDonnell) admitted it when he said:
“Our view is we should have a general election.”
At a time when we should be delivering on the vote of the British people, the Leader of the Opposition wants to ignore that and have another vote. At a time when the Government are working in the national interest, the Leader of the Opposition is playing party politics. At a time when we should all be focused, at this historic moment, on what is best for our country, the Leader of the Opposition is thinking about what gives him the best chance of forcing a general election.
Let me turn to the amendment from the right hon. Member for Leeds Central (Hilary Benn). This also seeks to reject our deal, as well as to reject no deal. But the House cannot unilaterally rule out no deal. The only way to avoid no deal is to agree a deal—and that requires the agreement of the House and the European Union.
Several hon. Members rose—
The Prime Minister
I have been very generous with interventions, and I will take further interventions in a few minutes after I have made this point. If you reject what the other side have described as the only deal on offer, then, whatever you say to the contrary, you put this country on course for no deal. This is doubly so when the amendment is silent on what alternative deal we should strike.
The EU27 member states have made it clear that this is the best deal available, and that there is neither the time nor the inclination to reopen negotiations and ensure that we leave in good order on 29 March next year. The choice before Parliament is clear: this deal, no deal, or the risk of no Brexit. Investing parliamentary time in seeking to create an alternative to these choices will only endanger our ability to deliver Brexit at all.
Vicky Ford (Chelmsford) (Con)
I congratulate the Prime Minister on two years of the trickiest negotiations in our lifetime. Some of my colleagues in this House seem to think that, if they reject this deal on Tuesday, the other EU27 leaders will come back and give us something better, but why should they?
The Prime Minister
My hon. Friend raises a very important point. Exactly. They certainly do not intend to do that. They have made it very clear that this is the deal on the table.
Dr Sarah Wollaston (Totnes) (Con)
I welcome the Prime Minister’s commitment to engage further with the Select Committees. When she came to the Liaison Committee last week, she will have heard one Committee Chair after another pointing out to her the catastrophic consequences of no deal and asking whether she would rule that out, if and when the House rejects this deal, because we cannot inflict that kind of catastrophe on our people.
The Prime Minister
If my hon. Friend is concerned about no deal, the way to ensure that there is a deal is to support the deal that is on the table.
Stewart Malcolm McDonald (Glasgow South) (SNP)
This feels like the fall of the ancien régime this afternoon—[Interruption.] No, I think the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin) was there. May I take the Prime Minister back to the bit that I think was supposed to be the Scotland part of this speech, on devolved Administrations? The Scottish Parliament will not be interested in Ministers making day trips to Scotland for a number of hours in order to come over with meaningless waffle. If we are to be convinced that our views will genuinely be taken into account, what will change? That has not happened up to this point.
The Prime Minister
The hon. Gentleman knows full well that we have had a high degree of engagement with the Scottish Government, and indeed with the Welsh Government, on all these matters as we have been going through. We will continue to have that high level of engagement. There are areas where there is a disagreement. The Scottish Government want, ideally, to remain in the European Union, but that would deny the vote of the British people—[Interruption.] That would deny the vote of the British people, so we do have a difference of opinion on that.
Let me now deal with another question that has been raised, which is the question of another referendum. I understand the argument that, if this House is deadlocked, we could give the decision back to the British people, but I ask the House to consider what that would say to those in our constituencies who put aside decades of doubt in the political process because they believed that their voice would finally be heard; what it would say about the state of our democracy if the biggest vote in our history were to be rerun because a majority in this House did not like the outcome; what it would do to that democracy; and what forces it would unleash.
This House voted to give the decision to the British people and this House promised that we would honour their decision. If we betray that promise, how can we expect them to trust us again? Even if we held a referendum, what would it achieve? It would not bring the country together; it would divide us all over again. It would not end the debate, because if it were close like last time, whichever side lost out would soon start to call for a third referendum. It would not take us forwards; rather, it would take us back to square one. This country cannot afford to spend the next decade going round in circles on the question of our relationship with the European Union. We have already spent too many years with divisions on Europe simmering in the body politic. We must deliver on the referendum that we have already had, focus on the day-to-day concerns of the people and take this country forward.
Rebecca Pow (Taunton Deane) (Con)
I thank the Prime Minister for her generosity in giving way. My youngest child has just gone to university. Can she give an assurance that, when he leaves, he will be able to walk out and make his way in this world and in this country? Will she give an assurance that this Government will have the ship back on track, will have respected the democratic view of this country, will have trusted the people, as we expect them to trust us, and will respect the European Union and have a close relationship with that great trading bloc? Will she also assure us that we will be able to hold our head up on the global stage and that we will not be diminished, but even greater?
The Prime Minister
I thank my hon. Friend, who may have anticipated what I am about to say. I can absolutely give her that assurance, because I want to be clear about what this deal delivers for the country. There will be an end to free movement once and for all, an end to the jurisdiction of the European Court of Justice in the UK, an end to those vast sums we send to Brussels every year, a fair settlement of our financial obligations—less than half what some predicted—
Several hon. Members rose—
The Prime Minister
I am conscious that I have now been speaking and taking interventions for an hour. Many Members want to contribute to the debate, and I will make some progress.
We will have a new free trade area with no tariffs, fees, quantitative restrictions or rules of origin checks—an unprecedented economic relationship that no other major economy has. At the same time, we will be free to have an independent trade policy and to strike new trade deals all around the world. This deal means being out of EU programmes that do not work for us. We will be out of the common agricultural policy and out of the common fisheries policy as an independent coastal state once again, with full control over our waters. It means jobs protected, citizens’ rights protected, the integrity of our United Kingdom protected, the sovereignty of Gibraltar protected, and our security protected, with the broadest security partnership in the EU’s history, working together with our friends and neighbours to keep all our people safe. The British people want us to get on with a deal that honours the referendum and allows us to come together again as a country, whichever way we voted. This is the deal that delivers for the British people.
Several hon. Members rose—
The Prime Minister
No, I am not going to take any more interventions.
Mr Speaker, I have spent nearly two years negotiating this deal. I have lost valued colleagues along the way. I have faced—
Several hon. Members rose—
The Prime Minister
No, I am concluding. I have faced fierce criticism from all sides. If I had banged the table, walked out of the room and delivered the same deal that is before us today at the end of the process, some might say I had done a better job, but I did not play to the gallery. I focused on getting a deal that honours the referendum and sets us on course for a bright future, and I did so through painstaking hard work. I have never thought that politics was simply about broadcasting your own opinions on the matter at hand—[Interruption.]
Mr Speaker
Order. Mr MacNeil, I am concerned—[Interruption.] No, you were chuntering noisily from a sedentary position. I saw you, and I heard you. Your apprenticeship to become a statesman has still a substantial distance to travel.
The Prime Minister
Politics is as much about listening to people from all sides of the debate and then doing what you believe is in our national interest. That is what I have done, and sticking to the task has delivered results for the British people. When the EU gave us a choice between off-the-shelf models, I won us a bespoke deal. When in Salzburg the EU tried to insist on a backstop that carved out Northern Ireland from the rest of the UK, I faced them down and they backed down. Right at the end, when Spain tried to make a move on Gibraltar, I stood firm and protected Gibraltar’s sovereignty. That is why the Chief Minister of Gibraltar has said that no friend of Gibraltar should vote this deal down.
Do not let anyone here think there is a better deal to be won by shouting louder. Do not imagine that, if we vote this down, a different deal is going to miraculously appear. The alternative is uncertainty and risk—the risk that Brexit could be stopped; the risk we could crash out with no deal. And the only certainty would be uncertainty—bad for our economy and bad for our standing in the world. That is not in the national interest.
The alternative is for this House to lead our country forward into a brighter future. I do not say this deal is perfect. It was never going to be, and that is the nature of a negotiation. Yes, it is a compromise. It speaks to the hopes and desires of our fellow citizens who voted to leave and of those who voted to stay in. We will not bring our country together if we seek a relationship that gives everything to one side of the argument and nothing to the other.
We should not let the search for the perfect Brexit prevent a good Brexit that delivers for the British people. And we should not contemplate a course that fails to respect the result of the referendum, because that would decimate the trust of millions of people in our politics for a generation.
Several hon. Members rose—
The Prime Minister
I am concluding.
To all sides of the debate, to every Member in every party, I say that this deal deserves your support for what it achieves for all of our people and our whole United Kingdom—one Union of four nations, now and in the future. And this is a debate about our future. It is not about whether we could have taken a different road in the past, but about which road we should take from here.
If we put aside our differences and remember what unites us, if we broker an honourable compromise in the interests not of ourselves but of those we were sent here to serve and if we come together to do our duty to our constituents, we will pass the test that history has set for us today. It is not easy when the passions run so deep, but looking around this Chamber, I know we can meet this moment. So I promise you today that this is the very best deal for the British people. I ask you to back it in the best interests of our constituents and our country and, with my whole heart, I commend this motion to the House.
Jeremy Corbyn (Islington North) (Lab)
This is a seminal debate in the history of this House and for the future of our country. I have been in the House since 1983, and this debate and the decision we will take next week is one of the most important we will ever take as Members of this House.
The deal before us would make our country worse off. Taken together with the withdrawal agreement and the future partnership, it represents a huge and damaging failure for Britain. The Prime Minister says this is a good deal, and is so confident of that that she attempted to refuse to publish the Government’s legal advice—she was forced to publish it by votes in this House today.
However, the economic assessments and other assessments that we will see indicate that this is actually a bad deal. These documents are the product of two years of botched negotiations, in which the Government spent more time arguing with itself than it did in negotiating with the European Union. It is not only on Brexit where they have failed. The economy is weak, investment is poor, wage growth is weak, our public services are in crisis and local councils are collapsing because of this Government’s refusal to fund them properly. More people in this country are living in poverty, including half a million more children, since 2010. The Government should be ashamed of themselves for that. Poverty is rising, homelessness is rising and household debt is rising, too.
It is against that backdrop that the Government have produced this botched deal, which even breaches the Prime Minister’s own red lines. Across the House the deal has achieved something—it has united Conservative remainers, Conservative leavers and Members of every Opposition party in an extraordinary coalition against the deal.
Jeremy Corbyn
Mr Speaker—[Hon. Members: “Give way.”] Mr Speaker, it could have all been so different. Following the 2017 election, the Prime Minister—[Interruption.]
Mr Speaker
Order. Calm yourselves. Some of these antics are rather undesirable and to be deprecated. They may have a role on the playing fields at some public school—I do not know—but they have no role in this Chamber. [Interruption.] No, they are just unseemly and inappropriate.
Jeremy Corbyn
It could have all been so different. Following the 2017 general election—[Interruption.]
Mr Speaker
Order. I am going to say it once, but I will say it as many times as necessary, and colleagues who want to speak will be prevented from doing so by that sort of pathetic self-indulgence. The right hon. Gentleman will give way when he wants to give way. If you don’t like it, frankly, you can lump it.
Jeremy Corbyn
Thank you, Mr Speaker. It could have all been so different. Following the 2017 general election, the Prime Minister could have attempted to build a consensus, recognising the new arithmetic of Parliament, and sought a deal that brought people together. Instead, just like her predecessor, who called a referendum without preparing for the eventuality of a leave vote, the Prime Minister has seen these negotiations only as an exercise in the internal management of the Conservative party, and that did not work out very well at all. When the two previous Brexit Secretaries, who, theoretically at least, led the negotiations—well, they did theoretically—say that they cannot support the deal, how can she expect anyone else in this House or in this country to have faith in a deal that has been rejected by two of the people who were involved in the negotiation of it?
Jeremy Corbyn
Mr Speaker, no deal is not a real option, and the Government know that, because they are not seriously prepared for it. Eleven out of the 12 critical infrastructure projects that would need to be in place by the end of March 2019 to manage a no-deal Brexit are at risk of not being completed on time, according to the National Audit Office.
Mr Dunne
I am grateful to the right hon. Gentleman for having the courage to give way to someone on this side of the House, when he refused to give way to the former shadow Chancellor three times running. Will he explain to the House why he has not got the courage to debate with my right hon. Friend the Prime Minister on Sunday?
Jeremy Corbyn
I am quite happy to debate with the Prime Minister. I notice she was not very keen to debate with anybody during the general election, but we understand that.
The Government have been forced to publish their full legal advice, as voted for by this House. I hope and assume that that advice will be published tomorrow, because Members ought to be in possession of all the facts. In 2007, the Prime Minister then argued, and I absolutely agreed with her, that the full legal advice should have been made available before the Iraq war. Why did she push it right to wire here and lose two votes in the House in order to try and prevent the publication of the legal advice, which is so necessary to inform us in our debates?
This withdrawal agreement is a leap in the dark. It takes us no closer to understanding what the future of our country post Brexit would look like, and neither does the future partnership, which I will come on to. The Prime Minister states that the transition period ends in December 2020. Article 132 actually says it can be extended for up to two years, to 31 December 2022.
Dr Huq
I am grateful to my right hon. Friend for giving way. He makes a very good point: Brexit is painted as dividing our nation, but it has actually united our party in opposition to the Prime Minister’s proposals. It has also united many Conservative Members against her proposals, including two former Brexit Secretaries, the former Foreign Secretary and two former science and higher education Ministers. I wanted to ask the Prime Minister who the new science and higher education Minister is, but she did not take my intervention. Perhaps batting for that sector is incompatible with her Brexit, and indeed any form of Brexit.
Mr Speaker
Before we proceed, may I say very gently to the House that interventions should be brief, not mini speeches?
Jeremy Corbyn
I thank my hon. Friend for her intervention. The Labour party discussed this issue at great length at party conference and agreed that we would oppose this deal. We said that if the Government cannot govern and cannot command a majority of the House, then the great British tradition is that those Governments resign and we have a general election.
Mike Amesbury
I thank my right hon. Friend for giving way. Does he agree that this Santa Claus letter of a deal offers no protection for workers’ rights, jobs, the environment or frictionless trade? Vote it down.
Jeremy Corbyn
My hon. Friend is right, because the deal does not ensure that if there are changes across the EU that improve workers’ rights and conditions, they are necessarily mirrored in this country. When the Prime Minister talks so grandly about workers’ rights in this country, what comes to my mind is a million people on zero-hours contracts; what comes to my mind is people trying to make ends meet by doing two or three jobs just to feed their children.
As I said, the Prime Minister states that the transition period ends in 2020. Article 132 actually says that it can be extended for up to two years, to December 2022. The Business Secretary is already clear that it is likely to be extended to that period, and under this bad deal we would have to pay whatever the EU demands to extend it for those two years.
Jeremy Corbyn
Under this deal, in December 2020 we will be faced with a choice: either pay more and extend the transition period, or fall into the backstop. At that point, Britain would be over a barrel. We would have left the EU, have no UK rebate and be forced to pay whatever was demanded. Alternatively, article 185, on the Northern Ireland protocol—the backstop—would apply. Not only would that mean that Northern Ireland would be subject to significantly different regulations from the rest of the UK, but the EU would have a right of veto—a right of veto—over the UK’s exit from the backstop arrangement. Far from taking back control, that is actually handing control to somebody else. That is what the Prime Minister is asking us to support. Whether in a backstop or an extended transition, the UK would have no say over the rules. By that time, we could have already given up our seat on the Council of Ministers, our commissioner and our MEPs, without having negotiated any alternative say in our future. This Government are not taking back control; they are losing control.
Vicky Ford
The one item that is in the control of all of us is which way we vote on Tuesday. The right hon. Leader of the Opposition has said that he does not want no deal. The EU leaders have made it clear that it is this deal or no deal. Does he realise that it will be his vote that pushes us into no deal? That is what he is asking us to vote for.
Angus Brendan MacNeil
On a point of order, Mr Speaker. I distinctly heard Donald Tusk say at the weekend that the options are no Brexit, no deal or this deal, so to say that it is a binary choice is not right.
Mr Speaker
We are extraordinarily grateful to the hon. Gentleman for his elucidation, but that intervention suffers from one notable disadvantage: it was not even tangential to a point of order. His intervention and points of order are not even nodding acquaintances, in my experience.
Jeremy Corbyn
It really is not credible for the Government to come to this House with this deal, that does damage a great deal of our economic interests, that does reduce our powers to decide our relationships in the future, and that does damage our trade, and then say there is no alternative. This House will make its decision next Tuesday. I hope and expect this House will reject that deal. At that point, the Government have lost the confidence of the House. They should reflect on that. They have either got to get a better deal from the EU or give way to those who will. No wonder the former Minister of State for Universities, Science, Research and Innovation, the hon. Member for East Surrey (Mr Gyimah), resigned, saying that this deal will cost us
“our voice, our vote and our veto.”
Mr Kenneth Clarke (Rushcliffe) (Con)
If the right hon. Gentleman is so emphatic that we will not have a no-deal exit if we reject the Prime Minister’s deal, what deal does he suggest that we will put in place between now and March next year that will avoid it?
Jeremy Corbyn
Well, if the House rejects this deal, as I hope it will, it is then up to the Government to go back and negotiate something, like a new comprehensive customs union, which would be backed by both the TUC and the CBI, and which is necessary to defend jobs and also have access to a strong single market. We cannot be told that this is the only thing we can do. The process of negotiation is to be accountable. The Government will be held to account. I hope this deal is rejected, in which case we will force the Government to go back and negotiate.
Mr Speaker
Order. I want to hear the intervention. There is a lot of noise.
Jeremy Corbyn
The referendum took place. We fought the election respecting the result of the referendum. We are opposed to this deal. We think there is the possibility of getting an agreement that would be better for this country and give us the control that this Government’s proposals do not give us.
The past two years gives us no confidence that the Government can do a deal in under two years, taking us up to the transition period. So, at some point before December 2020, the focus would then inevitably shift from negotiations on the future relationship to negotiations on an extension of the transition period, including negotiating what further payments we would have to make to the EU. So, we are over a barrel—either paying whatever is demanded, or negotiating away fishing rights and who-knows-what else. This is a terrible failure of negotiation by this Government.
Janet Daby (Lewisham East) (Lab)
Does my right hon. Friend agree that the Prime Minister will not take her political declaration for this deal to the people because she is afraid that her Brexit ship would sink?
Jeremy Corbyn
We will know the outcome of that next Tuesday, when the vote takes place in this House, but any analysis of this deal would show that it is unacceptable and should be defeated in this House.
Should the backstop come into force, there is no time limit or end point. It locks Britain into a deal from which it cannot leave. Remember that: it cannot leave without the agreement of the EU.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
Will the right hon. Gentleman clarify his answer to the hon. Member for Nottingham East (Mr Leslie)? He says that the Labour party stood on a manifesto that accepted the result of the referendum; he was clear on that. Yet since then, the right hon. Member for Hayes and Harlington (John McDonnell) has suggested that the Labour party’s position would now be to support a second referendum. Will the Leader of the Opposition now clarify, for the sake of the House: is the Labour party’s position to support a second referendum, or is it that it accepts the result of the first referendum and will not support a second referendum?
Jeremy Corbyn
I am sure that the right hon. Gentleman read the Labour manifesto with great caution and detail. [Interruption.] Oh, he did. We were quite clear that we respected the result of the referendum. In our conference motion we discussed the whole issue at great length, and at the largest Labour party conference in our history, our party agreed unanimously to back the composite motion that we put forward. That motion opposed the process that the Government are bringing forward, and suggests that if the Government cannot govern—and it looks increasingly like they cannot—they should make way and have an election. That is our priority.
Should the backstop come into force, there is no time limit or end point. It locks Britain into a deal from which it cannot leave. As was said during proceedings on the Attorney General’s statement yesterday, this is the first time ever in the history of this country that we have signed up to a treaty that we could not leave of our own volition. That is quite a serious indictment of this Government. In the backstop, restrictions on state aid are hard-wired with an arbitration mechanism, but no such guarantee exists for workers’ rights, and new state aid rules could be brought in, whether they were in Britain’s interests or not. The Attorney General made that very clear yesterday.
Mr Speaker
Order. Members of the same party do not need to bicker as to whom the Leader of the Opposition is giving way to. I think it is the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) who has been invited to intervene. Just before he does, I remind colleagues that it is legitimate to use mobile devices without impairing decorum, but it has just been brought to my attention that there is a very widespread use of them, and I gently remind colleagues that they most certainly should not be taking photographs in the Chamber. [Interruption.] Yes, I know exactly what I am doing and saying, and upon what advice. It requires no comment or contradiction, simply a recognition of the validity of the point.
Angus Brendan MacNeil
The Leader of the Opposition talks about respecting the referendum. Fair enough—that is his point of view. I have a different perspective in Scotland. Will he respect the mandate of the Scottish Government and the Scottish Parliament’s will to have a second independence referendum? How far does his respect go?
Jeremy Corbyn
That is not actually relevant to today’s debate. We are talking about the deal that the Government have brought back, and that is what the debate is about. In the backstop, regulatory frameworks dealt with by non-regression clauses are non-enforceable by EU institutions or by arbitration arrangements, and would give the Government the power to tear up workers’ rights and damage environmental protections and consumer safeguards.
Chris Bryant (Rhondda) (Lab)
Is not one of the most extraordinary things about the debate so far that we have not had a single mention of the word immigration, and yet it was meant to be one of the most important aspects of the referendum? The Government have not even published an immigration Bill. We do not know what our immigration policy will be next year. Do we not really want to stand up for the rights of young British people to be able to study, work and live elsewhere in the European Union? It is British people who have used that right more than any other country in Europe.
Jeremy Corbyn
I was coming to that in my speech, but my hon. Friend is absolutely right: young people need that right to travel and study. The Erasmus scheme has worked very well, giving a lot of people opportunities to study. I will come back to that issue. I just think we should reflect on the massive work done by European Union nationals who have come to make their homes in this country and helped us to develop our health service and many other services.
The backstop would apply separate regulatory rules to Northern Ireland, despite the fact that the Prime Minister said that this is something that
“no UK Prime Minister could ever agree to”.—[Official Report, 28 February 2018; Vol. 636, c. 823.]
That is another of her red lines breached. In fact, the list of the EU measures that continue to apply to Northern Ireland runs to 75 pages of the agreement.
Wayne David (Caerphilly) (Lab)
Does my right hon. Friend agree that this is bad deal, and that one of the reasons for that is that the Prime Minister has spent much of the past two and a half years discussing the deal with her colleagues in the Conservative party rather than negotiating with the European Union?
Jeremy Corbyn
My hon. Friend is so right. This has been a negotiation with the Cabinet, with Conservative MPs and within the Conservative party. That is where all the concentration has been. Indeed, one of the Brexit Secretaries hardly ever went to Brussels anyway, presumably being more interested in arguments within the Conservative party.
It is also clear that the Prime Minister’s red line regarding the jurisdiction of the European Court of Justice has been torn up. Under the Prime Minister’s plan, by 2022 we will either be in a backstop or still in transition, where we will continue to contribute to the European Union budget and follow the rules overseen by the European Court of Justice. Indeed, the Foreign Secretary said on 25 November that the deal only “largely” ends the jurisdiction of the ECJ. It is crystal clear that the Prime Minister’s claim that this plan means that we take control over our laws, money and borders is utterly far-fetched.
On the future partnership, let us be clear: there is not a deal; there is a framework for a future partnership. Our trading relationship with Europe is still to be negotiated, and it will take years to do that. We still do not know what our long-term relationship with Europe would look like. That is why so many MPs across Parliament are not willing to vote for this blindfold Brexit and take a leap in the dark about Britain’s future. There is no mention of the Prime Minister’s favoured term, “implementation period”, anywhere in the 600 pages of the withdrawal agreement—and no wonder, as there is precious little new to implement spelled out either in the agreement or in the future partnership. The agreement does call for a transition period, but there is nothing to transition to. It is a bridge to nowhere. As the 26-page document says, it
“can lead to a spectrum of different outcomes…as well as checks and controls”—
and we are expected to endorse that as a basis of our future relationship with the European Union. After two years of negotiations, all the Government have really agreed to is a very vague wish list. Only three of its 26 pages deal with trade. It is not a trade deal; it is not even close to a trade deal. The trade deal recently signed between the EU and Canada took seven years to negotiate and ran to 1,600 pages. In two and a half years, this Government have agreed to three pages of text on trade. It is hardly an encouraging start to our future trade relationships.
The former Brexit Secretary committed to a “detailed”, “precise” and “substantive” document. We had the right to expect one. What we got contains no mention of frictionless trade, promised at Chequers, or even trade “as frictionless as possible”, promised before that. There is no ambition to negotiate a new comprehensive customs union with a British say that would protect jobs, trade and industry—and so uncertainty continues for business.
Bambos Charalambous (Enfield, Southgate) (Lab)
Does my right hon. Friend agree that this deal does not deliver frictionless trade and that this will have a negative impact on the economy and risk jobs as well?
Jeremy Corbyn
It certainly does not deliver frictionless trade, and those working in industry are extremely worried about what will happen, because they do not see this deal as protecting their jobs or their futures.
The demand for a new comprehensive customs union has united both the Confederation of British Industry and the TUC, because it protects manufacturing supply chains. The decision to rule out a customs union and the lack of clarity in the deal risks deferring business investment on an even greater scale than at the moment, costing jobs and living standards. Many companies may decide that the lack of certainty means they will explore their contingency plans to relocate elsewhere.
The First Ministers of both Wales and Scotland have made clear to the Prime Minister that they would support participation in a customs union to protect the economy and jobs. A commitment to a new and comprehensive customs union could, I believe, have found support in this House, but the Government did not seek it.
Alberto Costa
The Leader of the Opposition talks about uncertainty, but I put to him just one example of why I encourage him to support the Prime Minister’s deal. If the deal does not go through, we could face a situation at 11.1 pm on 29 March where 1 million UK citizens living in the EU27 will no longer have their rights guaranteed. What would he do in that position?
Jeremy Corbyn
I imagine that the hon. Gentleman supports the Prime Minister’s deal because he is incredibly loyal to his party, with a blindness about the dangers of this deal for the rest of the country and the jobs that go with it.
The lack of clarity around these proposals also means that there is no guarantee of a strong deal with the single market, to ensure continued access to European markets in services. There is merely a vague commitment to go beyond the baseline of the World Trade Organisation.
As both the Attorney General and the Environment Secretary made clear in recent days, the commitments to workers’ rights, environmental protections and consumer safeguards are very far from secure. The social Europe that many people supported and continue to support was not part of why people voted to leave. All of that is at risk from this deal. This deal fails to give so many economic sectors and public services clarity about our future relationship with several European Union agencies and programmes.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the right hon. Gentleman agree that the Prime Minister’s deal seriously undermines environmental protection in this country, because it does not replace the European Court of Justice with anything like the strength of an enforcement body? Instead of the promised watchdog, we have little more than just a lapdog.
Jeremy Corbyn
The hon. Lady is absolutely correct. The environmental protections that we have are essential. We cannot protect the environment inside national borders; it has to be done across national borders. We have to have the toughest possible environmental protection regulations, and the suspicion many of us have is that there is an appetite on the Government Benches to remove many of those protections as time goes on.
Mike Hill (Hartlepool) (Lab)
Does my right hon. Friend agree that the Government’s obsession with clamping down on state aid is the wrong focus, and they should be focusing on all the important protections that we are discussing?
Jeremy Corbyn
The state aid rules of the European Union are something that this Government have been very happy to sign up to and, indeed, use as a means of not defending the steelworks at Redcar, when they could have done something about it and defended those jobs. This Government should be condemned for their failure to do anything to protect those steelworks and those jobs. I thank my hon. Friend for his intervention and the work he did to try to protect those jobs.
Let us take, for example, the Galileo programme, to which the UK has so far contributed £1.2 billion, but from which we now seem set to walk away. Then there is the lack of clarity about whether we will continue to participate in the European arrest warrant, Europol or Eurojust. The Chequers proposal argued for the UK maintaining membership of the European Aviation Safety Agency and the European Medicines Agency, but the future partnership merely allows for co-operation.
Afzal Khan (Manchester, Gorton) (Lab)
Does my right hon. Friend agree that, while the Prime Minister seems proud to claim that freedom of movement has ended, she cannot tell us what it will be replaced with? Is it not right that we see the Government’s immigration White Paper before the meaningful vote?
Jeremy Corbyn
I am coming on to that in just one second.
We lack similar clarity about many other areas, including Horizon 2020 and Erasmus—it was mentioned by my hon. Friend the Member for Rhondda (Chris Bryant)—which have been so brilliant in providing students with opportunities to study in other countries. That is why so many young people are so concerned at this present time about what is happening.
There is no clarity about any future immigration system between the UK and the European Union, and it now seems that the immigration White Paper we were promised in December 2017 will not even appear in December 2018. Following the disgraceful Windrush scandal, many prospective migrants will have no confidence in the ability of this Government to deliver a fair and efficient system.
Janet Daby
I thank my right hon. Friend for mentioning immigration. Immigration is a serious concern for our young people, especially to do with Brexit. As he has mentioned the Windrush scandal, does he agree that learning the lessons is not good enough? We need a public inquiry if we are really to understand the Windrush scandal and the “hostile environment”. When we get that, we will understand more about how far the Government are committed to immigration and getting things right, especially at times like this.
Jeremy Corbyn
I thank my hon. Friend for her intervention, and as the daughter of a Windrush generation migrant to this country, she fully understands how horrible it felt in her community when this Prime Minister, as Home Secretary, deliberately created the “hostile environment”, which was so damaging to community relations all across our country.
Many EU nationals already here have no faith in this Government to manage the process of settled status fairly or efficiently. These are people who have contributed to our country, our economy, our public services and especially our NHS. We all meet them in hospitals and doctors’ surgeries. It is these people who are now so anxious about their future.
To our negotiating partners in the European Union, I say: “We understand why, after two years of negotiations, you want this resolved, but this Parliament represents the people of this country and the deal negotiated by this Government is not good enough for the people of this country, so if Parliament votes down the deal, then reopening the negotiations cannot and should not be ruled out.” There is a deal that I believe can win the support of this House and bring the country together, based on a new comprehensive and permanent customs union with a UK say and real protection of workers’ rights and environmental and consumer safeguards.
Several hon. Members rose—
Jeremy Corbyn
I have been very generous in giving way, particularly to Conservative Members.
As I conclude, I want to pay tribute to my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), the shadow Brexit Secretary, and his team of shadow Ministers. He is now facing his third Brexit Secretary, but he has stayed the course in holding this Government to account. I thank him and his wonderful team, and their supporters, for what they have done, and for the success today in forcing the Government to release the legal advice they were trying to withhold from us.
This is not the deal the country was promised and Parliament cannot—and, I believe, will not—accept it. The false choice between this bad deal and no deal will also be rejected. [Interruption.]
Mr Speaker
Order. The Leader of the Opposition is not currently giving way; he is developing his point. [Interruption.] No, he is developing his point. Hon. Members do not need to set themselves up as though they are conducting an orchestra. It is not necessary. Mr Hoare, for example, you are an incorrigible individual. Your assistance in this matter is not required. I am afraid that you are a veteran of Oxford Union badinage and you have never really overcome it.
Jeremy Corbyn
As I said, this is not the deal the country promised and Parliament cannot, and I believe will not, accept it, and the false choice between a bad deal and no deal will also be rejected.
People around the country are very anxious. Businesses and workers are anxious about the industries they work in, the jobs they hold and this country’s stability.
Several hon. Members rose—
Jeremy Corbyn
I have given way a great many times, and I will draw my remarks to a close soon.
The responsibility for the state of anxiety lies solely with the Government. Two years of botched negotiations have led us here. Members of this House have a very important decision to make one week today. To vote for the deal would be to damage our economy, to make our constituents poorer and to take a leap in the dark with the future of this country. Do not take my word for it—the Government published their own economic assessment, which found that the Chequers proposals would make our economy nearly 4% smaller than it would otherwise be, thus knocking £100 billion out of our economy within 15 years. For those who like to break down those sorts of figures into weekly amounts, that is nearly £2 billion a week less. That definitely was not seen on the side of a bus.
Labour will vote against this deal. It is a bad deal for Britain, a bad deal for our economy and a bad deal for our democracy. Our country deserves better.
Boris Johnson (Uxbridge and South Ruislip) (Con)
It is perfectly clear from listening to the leader of the Labour party that he is joining the shadow Chancellor and the shadow Brexit Secretary and is now determined to frustrate Brexit and the result of the referendum in 2016. That is absolutely clear from what he just said.
I must regretfully say to my right hon. Friend the Prime Minister that I cannot believe that a single Member sincerely believes that the deal before us is good for the UK.
Boris Johnson
In which case, I am happy to acknowledge my right hon. Friend’s sincerity. However, I have to say that the Government’s heart does not appear to be in this deal. From listening to those who are sent out to defend and explain it, they know that it is a democratic disaster.
As has been said, after two years of negotiation, the deal has achieved an extraordinary thing: it has finally brought us together. Remainers and leavers, myself and Tony Blair, we are united—indeed, the whole Johnson family is united—in the belief that the deal is a national humiliation that makes a mockery of Brexit. I am sorry to say this—these are hard truths—but there will be no proper free trade deals and we will not take back control of our laws. For the Government to continue to suggest otherwise is to do violence to the natural meaning of words. We will give up £39 billion for nothing. We will not be taking back control of our borders. Not only have we yet to settle the terms on which EU migrants will in future come to this country, but we will be levying EU tariffs at UK ports and sending 80% of the cash to Brussels. In short, we are going to be rule-takers. We are going to be a de facto colony. Out of sheer funk—I am sorry to have to say this to the House—we are ensuring that we will never, ever be able to take advantage of the freedoms we should have won by Brexit.
Under the terms of the backstop, we have to stay in the customs union, while Northern Ireland, and therefore the rest of the UK if we want to keep the Union together, will stay in regulatory alignment unless and until the EU decides to let us go. And why should they let us go? By handing over £39 billion, we lose all our leverage in the talks. With the £95 billion surplus they have with us in goods alone, the EU has absolutely no interest or incentive to allow us—
Vicky Ford
The Prime Minister gave us seven reasons why the EU will not be using the backstop. Yesterday, the Attorney General made it completely clear that the backstop, if it ever came into place, would be challengeable under EU law itself. I say to my greatly respected colleague that I think he is promoting “Project Fear”. What is his option—
Mr Speaker
Order. Resume your seat. I am sorry to have to bark at the hon. Lady, but the intervention is just too long—end of. Enough.
Boris Johnson
A very good point none the less, Mr Speaker. It is exactly on the point. As I have been saying, the EU has no incentive whatever to let us out of this backstop precisely because they have a massive trade surplus with us. Furthermore, when they look at UK manufacturing and UK business, they realise that they will have, in that backstop and through the whole of the implementation period and beyond, unchecked and unmediated power effectively to legislate for the UK with no UK representation.
Stephen Gethins (North East Fife) (SNP)
Will the right hon. Gentleman give way?
Boris Johnson
If the hon. Gentleman thinks that that is an ideal situation for this country to end up in, then let him speak now.
Stephen Gethins
The right hon. Member talks about an ideal situation. He was a senior member of Vote Leave. He was Foreign Secretary for two years. We are in this mess because of him. Does he take no responsibility?
Boris Johnson
I am grateful to the hon. Member, but the fact is that I was not able to continue to support this process for precisely that reason.
Several hon. Members rose—
Boris Johnson
If the House will allow me, I will make some progress.
The EU knows that having that regulatory control over us, they would have no incentive, as it were, to take the foot off our neck. They will have us in permanent captivity as a memento mori, as a reminder to the world of what happens to all those who try to leave the EU. This is a recipe for blackmail and it is open to any member of the EU to name its price for Britain’s right to leave the backstop. The Spanish will make a play for Gibraltar. They French will go for our fish and our bankers. The Germans may well want some concessions on the free movement of EU nationals—and so it goes on.
Boris Johnson
I will give way in just a second.
The worst of it is that we have not even tried properly to leave or show any real interest in having a different future.
Alberto Costa
The Prime Minister, at the Dispatch Box today, was generous. She made very clear that for us to unify the country we have to bring the 48% who voted to stay, as well as the 52%. Can I ask my right hon. Friend, someone who was regarded in London as a unifying political figure, what he would do to bring the 48% and the 52% together?
Boris Johnson
As I say, remain and leave have been, to a very large extent, united in their dismay at what I think is a wholly undemocratic deal. The thing that really pains me—the hon. Member for North East Fife (Stephen Gethins) asked about the role of Ministers in this—is that we on the UK side of the negotiation have been responsible for forging our own manacles, in the sense that it is almost as though we decided that we needed to stay in the customs union and in the single market in defiance of the wishes of the people.
Sir Roger Gale (North Thanet) (Con)
Will my right hon. Friend allow me to intervene?
Boris Johnson
I will give way in a minute to my hon. Friend, who has been chuntering away from a sedentary position behind me. We should be careful about claiming any kind of subterfuge—we have lost two Brexit Secretaries in the course of these negotiations, and it is very hard to understand how the former Secretary of State for Exiting the European Union could have been kept in the dark about the crucial addition to paragraph 23 of the political declaration. This country agreed in paragraph 23, apparently without the knowledge of the elected politician concerned, that our future relationship would be based on the backstop. No one campaigned for that outcome. No one voted for this type of Brexit. This is not Brexit, but a feeble simulacrum of national independence.
Several hon. Members rose—
Boris Johnson
I will give way in a second to my hon. Friend the Member for North Thanet (Sir Roger Gale). It is a paint and plaster pseudo-Brexit, and beneath the camouflage, we find the same old EU institutions—the customs union and the single market—all of it adjudicated, by the way, by the European Court of Justice. If we vote for this deal, we will not be taking back control, but losing it.
Sir Roger Gale
I am very grateful to my right hon. Friend for giving way. He appears to be one of those who prefers the grievance to the solution. My right hon. Friend the Prime Minister has come up with a solution. What is his big idea? [Interruption.]
Mr Speaker
Order. Members must not shout across the Chamber at the right hon. Gentleman. It is extremely unseemly—[Interruption.] Order. I have no doubt that he is well able to look after himself. I am not really concerned about him; I am concerned about the reputation of the House.
Boris Johnson
I have been told, by your leave, Mr Speaker, that I have an unlimited time to speak, so I will come to the solution that my hon. Friend the Member for North Thanet craves in just a minute.
Several hon. Members rose—
Boris Johnson
I must make some progress. If we vote for this deal, we are not taking back control. Indeed, I say to colleagues and friends across the House of Commons that we are part of a representative democracy, and voting for this deal would be not just like, as it were, turkeys voting for Christmas; it is actually worse than that. There is a sense in which we would be voting for Turkey, or Turkish—[Interruption.] That is exactly true. We would be voting for Turkish-style membership of the customs union, obliged to watch as access to the UK market is traded by Brussels, but with no say in the negotiations. Of course, the kicker is that with its veto, the EU ensures that the backstop that they impose on us is more subservient even than the arrangements that the Turks have—[Interruption.] That is absolutely true. It is a wonder, frankly, that any democratic politician could conceivably vote for this deal, and yet I know that many good colleagues are indeed determined to do so in the belief that we have no alternative or that we have run out of road, and as we heard earlier, that Brussels will offer us nothing else.
Boris Johnson
And I want respectfully to deal with those anxieties, which I am sure my hon. Friend shares.
Simon Hoare
Given that my right hon. Friend appears to be unwilling to enter into an understanding of what a negotiation is, can we take it that he has only ever meant that no deal is a good deal because he does not believe in having a deal with an institution—this windmill at which he tilts at every turn—to which he is philosophically opposed?
Boris Johnson
I have great respect and admiration for my hon. Friend, but I do not philosophically oppose the EU; I simply think that membership is no longer right for the UK. That was what I campaigned on, and I think the British people were completely right. I do not believe that no deal is the option we should be going for automatically, but I will come to that in just a minute. I want to deal with the anxieties that I know that he shares, because I think that he is profoundly mistaken, as indeed are other colleagues, in thinking that we have absolutely no option but to go ahead on this basis. We have plenty of other options. In order to see the way ahead, we need to understand what happens if next Tuesday this great House of Commons votes down this deal, as I very much hope it does. I will tell hon. Members what will happen, but they have to put themselves in the mind of our counterparts across the table in Brussels. In Brussels, they think they’ve got us beat— they do.
Boris Johnson
They think our nerve will eventually fail, that the Prime Minister will come to the summit next week and, in the event of the deal having been voted down, ask for some cosmetic changes, and I expect they will think about granting some cosmetic language that is intended to be helpful but which does not change the legal position.
In Brussels, they are confident that some time before next March, the Government will come back to the House and that the deal will go through somehow or other—by hook or by crook—because, as everybody keeps saying, there is allegedly no alternative. The Norway option will be seen for what it is—an even worse solution than what is currently proposed—and the notion of extending article 50, thereby delaying the date of Brexit, will be greeted, I think, with fury by the electorate, as would any attempt to amend the terms of exit so as to plunge us back into the customs union. That would be rumbled by the electorate as well.
Colin Clark (Gordon) (Con)
Is my right hon. Friend not concerned that, in trying to win 7-0, he might lose 4-3?
Boris Johnson
No, although I understand exactly my hon. Friend’s analogy. I have heard it said by defenders of the Government that we may be 1-0 down at the end of the first half of the negotiations, but that we will win 2-0—I mean 2-1—by the end.
Boris Johnson
I do not see it that way. If we go on like this, with the backstop as it is, we will be thrashed out of sight. [Hon. Members: “Let Carol in!”] I will come to Carol in a minute. Having studied the UK’s negotiating style in detail, I do not think that it believes—[Interruption.]
Mr Speaker
Order. There is excessive noise in the Chamber. My understanding, in so far as I can hear—[Interruption.] Order. Calm yourselves. My understanding is that Mr Johnson is not currently giving way.
Boris Johnson
I think the House will agree that I have given way quite a lot so far, and I am very happy to do so again in the future, but I want to come to the point that has been raised by my hon. Friends.
Several hon. Members rose—
Boris Johnson
Just one second. In Brussels, they think we have nothing left in our tank and that we want to do a deal at any price. As we all think about this vote and what we are individually going to do, and thinking about the attitude in Brussels towards us, now is the time for us to show them that they grossly underestimate this country and this House of Commons and our attachment to our liberties. There is an alternative. There is another way. We should not pretend, after two years of wasted negotiations, that it is going to be easy, but it is the only option that delivers on the will of the people and also, I believe, maintains our democratic self-respect as a country. That option is obvious from this debate, and from every poll that I have seen. We should go back to Brussels and say, “Yes, we want a deal if we can get one, and yes, there is much in the withdrawal agreement that we can keep, notably the good work that has been done on citizens.”
Tom Tugendhat (Tonbridge and Malling) (Con)
When you went to Russia, did Lavrov give Ukraine back?
Boris Johnson
My hon. Friend, from a sedentary position, compares the European Union to Lavrov and Russia. I think that that is an entirely inapposite comparison. These are our friends. These are our partners. To compare them to Russia today is quite extraordinary.
We should say that we appreciate the good work that is being done to protect the rights of citizens on either side of the channel, but we must be clear that we will not accept the backstop. It is nonsensical to claim that it is somehow essential to further progress in the negotiations. The question of the Irish border is for the future partnership, not the withdrawal agreement. It was always absurd that it should be imported into this section of the negotiations. We should use the implementation period to negotiate that future partnership, which is what I believe the Government themselves envisage—and, by the way, we should withhold at least half that £39 billion until the negotiation on the new partnership is concluded.
Ian Murray (Edinburgh South) (Lab)
May I ask the right hon. Gentleman a simple question? Is the deal that is currently on the table better or worse than staying in the European Union?
Boris Johnson
I am afraid that that is a finely balanced question. [Interruption.] Much will depend on what happens after the vote on Tuesday. I believe that if we say what I propose, the EU will understand that the Government have found their resolve and are willing to be tough at last, and I believe that the EU will do a deal on those terms.
Boris Johnson
I am going to anticipate the intervention of my right hon. and learned Friend. I bet I know what he is going to say. In case the EU does not agree, we must be absolutely emphatic now that we are preparing urgently for the possibility that we will indeed have to leave before we reach a final agreement.
Mr Clarke
What we are voting on is the withdrawal agreement, and three points that must be settled before the big, wide, grown-up negotiations start on the future relationship. There will be a very wide agenda over the next few years. My right hon. Friend is suggesting that we reject the withdrawal agreement now, in December, before we leave in March, and that we go back and say, “We are not going to pay our contribution to any legal liabilities and any continued access, and we are not at this stage going to guarantee an open border in Ireland.” Does he think there is the faintest chance of that being listened to seriously by any other member Government? If he gets his way, will he not doom us to rushing into a no-deal arrangement?
Boris Johnson
I do not agree with that at all. Obviously we should state what is agreed among all—that there will be no hard border in Northern Ireland. All sides agree on that. As for the legal liabilities to pay the £39 billion, they are, to say the least, contested. I believe it is additionally vital to do what we have failed to do so far, which is to show that we have the conviction and the willingness to leave without an agreement. Yes, I agree that that will mean a great national effort if it comes to that point, and yes it will mean that we have to make sure we get all the goods to our ports in addition to Dover, and ensure that the planes can fly and we address all the other questions.
Carol Monaghan
I thank the right hon. Gentleman for finally giving way. He is presenting an illusion of the EU not being good for the UK. Does he also think Euratom is not good for the UK, and if so can he explain to those currently waiting for cancer diagnosis and treatment where they are going to get their radioactive sources from?
Boris Johnson
I am glad to have given way because that is the kind of scaremongering about the consequences of leaving the EU that does no favours to the debate. In the event of our coming out without an agreement, the Treasury will have an opportunity to use the £39 billion to ensure that we can support the economy rather than talking it down, and I believe it will be far better to make that effort now and at least be responsible for our destiny than to agree to give up our right to self-government forever—because that is effectively what we will be doing—just because of our lack of short-term competence or confidence. Frankly, the EU will not treat us as a sovereign equal in these negotiations unless and until we are willing to stand up for our own interests now and in the future.
I think our country is ready for us to take this stand. [Interruption.] I think it is, because I think it has had enough of being told that we cannot do it—that the fifth or sixth biggest economy in the world is not strong enough to run itself. If we fail now, it will not be good enough—
Several hon. Members rose—
Boris Johnson
I have given way a great deal.
It will not be good enough to say to our fishermen that we cannot actually take back control of our fish because in the end it all proved to be too difficult and it will not be good enough to say to the people of Northern Ireland that after all those promises we accept that they must be treated differently from the rest of the UK.
Kevin Hollinrake
My right hon. Friend talks about avoiding a hard border in Northern Ireland. Speaking to the DUP conference at the weekend before last, he said that if Great Britain chose to vary regulations, there would be a need for regulatory checks and a customs border between Great Britain and Northern Ireland. Does he accept then that in some future world where the UK can vary its regulations as a whole, that would inevitably lead to regulatory checks between Northern Ireland and the rest of Ireland?
Boris Johnson
I am glad my hon. Friend has raised that point, because it is very important. Michel Barnier himself has said that technical solutions to implement such regulatory checks—not necessarily customs checks but regulatory checks—away from the frontier can be found, and that is what we should be doing. Frankly, that is what we should have been doing for the last two years; that is where our effort and our energy should have gone. And on that point about regulation, it will not be good enough to tell the people of Northern Ireland they are now going to be treated differently and it will not be good enough to tell the businesspeople of the UK that now and in the future they will be burdened with regulation emanating from Brussels over which we will have absolutely no control, and we could not stop it because we could not see an alternative. I must say to colleagues that if they think it is too disruptive to go now for the super-Canada option—to go now for freedom—just wait until we feel the popular reaction that will follow when people realise the referendum has been betrayed.
Anna Soubry (Broxtowe) (Con)
Can my right hon. Friend tell us how his cunning plan, which will end up with no deal, will secure the 485,000 jobs that rely on the automotive sector and the just-in-time supply chains that he first heard about some six months ago from the Secretary of State for Business, Energy and Industrial Strategy?
Boris Johnson
I will not comment on when I heard about just-in-time supply chains, but it was many years ago. The objective, as my right hon. Friend knows, is to create a zero-tariff, zero-quota deal with the EU, which is readily deliverable when we consider that we already have zero tariffs and zero quotas. As for her anxiety about job losses, we have already heard a lot of prophecies about job losses. I think it was said that we would lose 500,000 jobs in this country if the British people had the temerity to vote leave. Actually, we gained 800,000 jobs, so I take such prophecies with a pinch of salt.
The sad thing is that too many people—indeed, some of the people who have been negotiating this deal—seem to regard Brexit as a disaster to be managed, rather than an opportunity. They see bad news as a vindication of that judgment and talk up bad news as a result. In taking that attitude, they badly misunderstand the instincts of the people of this country, who did not vote for Brexit out of hate, as the Prime Minister’s chief of staff tweeted after the referendum. They voted to take back control of our laws because they believe—I think, rightly—that if we govern ourselves and legislate in the interests of the UK economy, they have a better chance of good jobs, higher wages, cheaper food and clothes, and a brighter future, all of which are possible under a proper Brexit, and none of which can be delivered by this deal.
Above all, if we vote through this apology for Brexit, we will be showing that we have treated the 17.4 million people—the highest number of people ever to vote for a single proposition—with contempt. We will be turning our backs on those people. We must understand that when people voted to leave in 2016, they voted for change. They did not vote for an endless transition or a thinly disguised version of the status quo: they voted for freedom, independence and a better Britain—and for a country where politicians actually listen to what the people say. If we try to cheat them now—as I fear that we are trying to cheat them—they will spot it, and they will never forgive us.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
It is difficult to be here today. It is in many respects a debate that many of us wish was not happening. It is with real sorrow that I rise to respond to the Government’s motion. The reality of Brexit is now laid before us—broken promises of taking back control from a Government that are so out of control; 21 ministerial resignations; countries, communities and households divided; our politics stale; and a Prime Minister fighting for her political life.
The past number of months have been filled with political drama—theatre, squabbles and chaos—and from crisis to crisis, the Government hang on by a thread. Beneath all that is the reality, the hard, cold truth, that this is a moment of self-harm in our history. History has a way of teaching us lessons. If only we would listen.
In moments such as these, I reflect on someone we regard as an icon: Winnie Ewing—Madame Écosse—who came into this House 51 years ago to represent the seat of Hamilton. She represented the Highlands and Islands in the European Parliament and fought hard to ensure that Scotland benefited from its membership of that Parliament. I can see those benefits throughout my constituency in all the projects that were funded by European money. We had a welcoming ear in the European Parliament, and Winnie played an important part in the development of that institution.
We have heard today about the importance of Erasmus, and it holds a special place in the Scottish National party’s heart because it was Winnie Ewing who chaired the European Parliament’s education and culture committee when Erasmus was established in the 1980s. It is the legacy of someone who fought hard to ensure that all of us benefited from that European membership. In contrasting the approach that we have had from Europe with that of this place, I want to quote the great lady herself. She said:
“Time after time, on matters great and small, we are still standing on the sidelines, mutely accepting what is decided elsewhere instead of raising our voices and making our own choices. Scotland’s much vaunted partnership of Jonah and the whale.”
Respect for human dignity, human rights, freedom, democracy, equality and the rule of law are the core values of the European Union. Those values have united, not divided, us as citizens of Europe for many years. They are now ingrained in our society, and they are to be cherished and protected, not discarded or eroded. I am proud and privileged to be a citizen of the European Union. The European Union has been the greatest peace project in our lifetime. It was born out of the horrors of two world wars that ripped Europe apart, and it is a project that has gone on to change the course of our communities and improve citizens’ rights and opportunities across the continent. It is a project that I still believe is worth defending, and those of us on the SNP Benches will defend it. It is a project that has enabled our generations to travel, to work, to live and to thrive across all the countries of the European Union.
I come here today with a heavy heart and with the deepest regret that the opportunities I had to work in Amsterdam, to travel throughout Europe in my working career and to learn from the best and the brightest across Europe will be taken from our children. That is what we are doing. Embracing the diversity of European culture has enriched so many of us. We have had exciting opportunities to live and work in Amsterdam, Barcelona, Brussels, Berlin, Copenhagen, Vienna and so many other places. Our generation has had so many choices and opportunities to work and develop friendships across Europe, to learn from the rich diversity that Europe has to offer, to benefit from the experiences of different cultures and to form friendships with those like us who celebrate being European citizens with shared rights. The right to live and work across the EU is to be ended as a right for the next generation.
I have in the Gallery today an ex-colleague from Amsterdam, where I worked for a bakery ingredients company. My friendship with him was formed out of the opportunity I had to work in Amsterdam, and it is a celebration of the success of the opportunities that EU membership gave to all of us. That right to live and work together across the EU is to be ended as a right for the next generation. That automatic right to benefit from those career opportunities is to be removed. The opportunities to benefit from an inclusive Europe are to be swapped for the constraints of an inward-looking United Kingdom.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Most people in this Chamber know that my husband is German, but not all of them know that his mother was Polish and that his parents were not allowed to marry. The child they had together was taken from them. His mother was a forced labourer and his father was lifted by the Gestapo. Long before we ended up in this mess, he used to celebrate the fact that after one generation, he could live and work where he wanted and marry who he loved. In one more generation, we are taking all that away. It is shameful.
Ian Blackford
I thank my hon. Friend for that explanation of what we are doing. Colleagues, we must reflect on where we are. I appeal to everyone throughout this House to stop and think about that erudite explanation of what has happened in Europe over the past 70 or 80 years. We should enshrine the benefits of free movement of people that have enriched so many of us. It is not too late to turn back.
Daniel Kawczynski
I am proud to be the first ever Polish-born British Member of Parliament and to celebrate the contribution that 1 million Poles have made to our country. However, by offering or proposing another referendum, does the right hon. Gentleman not share my concern that we could be giving wind to UKIP’s sails? The party is currently withering on the vine and falling apart, but there will be a renaissance for UKIP if we have another referendum that overturns the previous result.
Ian Blackford
I respectfully say to the hon. Gentleman that we have to take that argument on. Migration has enriched us. Scotland’s population has barely grown over the past 100 years. We have gone from 4.8 million to just over 5 million people. If we do not have access to the free movement of people, we will be unable to deliver sustainable economic growth. I again say respectfully to the hon. Gentleman that thousands of Poles have come to work in Scotland over the past few years, and I say to each and every one of them who may be watching tonight, “You are welcome.” They are welcome because of the contribution that they make to our lives, our culture and our economy. The thought that we would take up the drawbridge and prevent people from coming to participate in the growth of the future of our country is, quite frankly, repugnant. I will fight along with my colleagues to ensure that we remain an open society and that we can continue to be enriched by those who want to come, live and contribute to our economy. They are welcome and will remain welcome.
In April 1988, when the single market campaign began, one prominent speaker stated:
“A single market without barriers—visible or invisible—giving you direct and unhindered access to the purchasing power of over 300 million of the world's wealthiest and most prosperous people... We are putting the European Community to work for ordinary people: for cheaper air fares, for more and better services, for consumer choice and product safety.”
That was Margaret Thatcher. Even Margaret Thatcher recognised that shared markets, collaboration and partnership in Europe was in all our interests.
Many people may be puzzled as to why I begin by expressing the sentiment and not the content of the Government’s motion, but I do so because it is right. It is right to remember the real loss that we all will feel. That loss is down not simply to this deal or any other, but to the fact that any deal will mean a loss to our economy, our society and our children. The SNP has long argued and continues to believe that staying in the European Union is the best option for Scotland and, indeed, for all parts of the United Kingdom. When I hear the Prime Minister say that if we vote down this deal or no deal, that means staying in the European Union, I say, “Yes, please.”
There is no option that will be better for our economy, for jobs and for our communities than staying in the EU. It is the height of irresponsibility for any Government to bring forward a proposition that will make their people poorer and mean that people will lose their jobs. We heard earlier from the previous Foreign Secretary, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), that the warning on jobs was part of “Project Fear”, but let us look at the reality and at what we already know: 1,000 jobs lost from the European Banking Authority and 1,000 jobs lost from the European Medicines Agency. That is not “Project Fear”. That is the reality, and it has already happened.
Stewart Malcolm McDonald
I commend the open nature of my right hon. Friend’s speech, in stark contrast to the capricious and solipsistic nonsense from the former Foreign Secretary, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson).
Will my right hon. Friend join me in calling on the Government, even at this late stage, to drop the charge they intend to impose on EU nationals to keep rights they already enjoy in this country right now? The cost of a passport might not be much to them, but it should be dropped as an act of good will.
Ian Blackford
My hon. Friend is correct. We simply should not be charging people to exercise the right they should have to be here. I go further, because of course we are discussing rejecting this deal, but we are also ruling out no deal. The Government should make it crystal clear that, in any scenario, the rights of all our EU citizens here will be protected.
There is another factor when we discuss the rights of EU citizens here, because there are also UK citizens in Europe. UK citizens who are currently in Europe will only have the right to stay, live and work in that one territory. The rights they have had up until now, of living, travelling and working throughout the European Union, are to be ended. What a disgrace. I know of people who live in Belgium but work throughout the European continent, and they are going to have those rights countermanded. That is a disgrace.
Ian Blackford
Let me make some progress.
Although we respect that England and Wales voted to leave the European Union, we ask that the Government respect that Scotland did not. However, it is clear that the UK Government have no intention of respecting the will of the Scottish people, as the deal we are asked to support will do nothing but bring harm and hardship—socially, economically and politically—to Scotland.
We must remember that this fight, this huge struggle and this burden on our society we now face from Brexit come from the Tory party, and from the Tory party alone. The European debate was an internal battle for the Tories, and they drove it into the public discourse, on to a bigger battlefield, not because of the interests of the citizens of this country but because of the deep divisions and narrow interests within the Tory party itself, not outside it. We know today that it does not have to be so. We know that the Prime Minister’s deal will be voted down—we know it and she knows it—and this House should also vote to remove no deal from the table. There is no scenario where we will be wealthier with Brexit. No Government should expose their citizens to economic risk, which is what will happen with Brexit. The Government’s own analysis shows that to be the case.
We must stop this madness. We can go back to the people of these islands and be honest with them on the consequences of Brexit. Today the advocate general, Manuel Campos Sánchez-Bordona, has advised that EU law would allow the UK unilaterally to revoke article 50. We can hit the reset button. That, Prime Minister, is called leadership.
Tom Brake
The right hon. Gentleman touched on this earlier, but does he agree that perhaps the people who are most affected by this are UK citizens who live in the EU? It will require 27 countries in 27 different ways to address their concerns and their issues, so they are perhaps most vulnerable in what the Government are seeking to impose on us.
Ian Blackford
I fully agree, and I touched on that earlier. It just shows how this Brexit deal is a complete shambles and how we need to think again.
“A future in which Scotland, Wales, Northern Ireland and England continue to flourish side-by-side as equal partners.”
Those words are not mine; they are the words of the Prime Minister. A Prime Minister who promised we would be equal partners, but her rhetoric is in ruins, as her Government’s record has shown time and again that the Tories believe Scotland to be not an equal partner but a second-class nation worth only second-class treatment. Throughout the entire negotiating period, the UK Government have treated Scotland with contempt. As I look around the Chamber, I can see the shaking of heads, but where are the 13 Scottish Tory MPs who were to stand up for Scotland? In this debate, which is so crucial to Scotland’s future, the Tories are not just found wanting—they are simply not here; they have disappeared.
Hannah Bardell (Livingston) (SNP)
My right hon. Friend is making an incredibly powerful speech. On contempt for the Scottish people and for our Parliament, does he agree that, if this Government and their MPs continue to treat Scotland with the kind of disrespect we have seen throughout this Brexit process, it will only make independence for Scotland more likely and come sooner?
Ian Blackford
I thank my hon. Friend for that. I will make a prediction to this Parliament that Scotland will become an independent country. I say simply to the UK Parliament: keep going. Since we have come here, we have had English votes for English laws and the power grab that is taking place. The people of Scotland will one day make their judgment on what is happening.
Several hon. Members rose—
Ian Blackford
I want to make some progress, as I am aware that many others wish to speak.
Throughout the entire negotiating period, the UK Government have treated Scotland with contempt. Scotland voted overwhelmingly to remain, yet the will of the Scottish people means nothing—absolutely nothing—to this Prime Minister. Instead of engaging meaningfully with Scotland during this critical time, she chose last-minute photocalls and stage-managed events in Scotland—all smoke and mirrors to dress up the fact that her Government could not care less about Scotland, and we can see it tonight. The Tories think they can do whatever they want to Scotland and get away with it. They think they can railroad through this deal against our will and against our interests. The Tories’ mask has well and truly slipped. Scotland is not a second-class nation and our people do not deserve a second-class deal. This proposed deal is a non-starter and a no-deal Brexit is unthinkable. That means the priority now must be to stop Brexit and the SNP has made it clear that we will support any steps that would secure Scotland’s place in the European Union, in line with the votes of the people of Scotland. But we have also said that, if the UK is to leave the EU, by far and away the least damaging option is to stay in the single market, which is eight times bigger than the UK alone, and the customs union.
Sir Roger Gale
The right hon. Gentleman has nailed his saltire to the mast. He has been very clear and we know what he is saying: he wants to stay in the EU. How is he going to get out of the common fisheries policy? What is he going to do for Scottish fishermen?
Ian Blackford
Well, well, well, Scottish fishing. Scottish fishing was sold down the river in the 1970s because Ted Heath made sure that our fishing interests were sold out. I have to say to the hon. Gentleman that the deal the Government have brought forward is the worst of all deals because in the transition period the UK would remain in the CFP but would have no effect on the rules. Let us look at what the EU has made clear because you are going to enter into a transition but you are not holding any cards in terms of the future relationship, and the EU27 have said that the starting position for the negotiations on fishing will be the existing quotas. The Scottish fishermen have been sold out by the Tories, who have duped them into thinking that they are going to be taking back control of their waters—nothing could be further from the truth.
Several hon. Members rose—
Ian Blackford
I am going to make some progress.
Not content with ignoring the Scottish Government’s compromise option for two years, the Prime Minister now wants to shut Scotland’s voice out entirely. She cannot go on ignoring Scotland. Tomorrow, the Scottish Parliament will debate a cross-party motion that rejects this deal and a no-deal Brexit. Perhaps there are lessons for this place because at Holyrood parties have come together against a damaging Brexit, with a consensus and a desire to work collectively to defend Scotland’s interests. How many of the 13 Tory MPs from Scotland will stand up with us to defend Scotland’s interests? Where are they? I think we know the answer from the failure of the Scottish Tory MPs to stand up against a power grab when Westminster voted to take back control from the Scottish Parliament. We saw, when our powers over fishing, farming and the environment were to be trampled all over by Westminster, that the Scottish Tories turned a blind eye—Scottish Tories standing silent as the Scottish Parliament, our Parliament, which the people of Scotland voted for in such huge numbers in 1997, had its powers constrained.
The Prime Minister boasts that her deal has support, but her deal does not have the support of the people of Scotland. A poll published earlier this year found that almost two thirds of Scottish voters believe that the Westminster Government are ignoring their concerns during the Brexit negotiations. There is now more support in Scotland for remaining in the EU than there was at the time of the 2016 referendum. According to research carried out for the people’s vote campaign, 66% of Scottish voters support staying in the EU. The Prime Minister, like her predecessors, is out of step with the feelings of the Scottish people.
It is not just Scottish people: countless experts and professionals throughout the UK have said that it is a bad deal. Why is the Prime Minister not listening? Her proposed deal is unacceptable and must be defeated in this House. Some 80,000 jobs in Scotland will be put directly at risk as a result of Brexit. [Interruption.] I can see Ministers shaking their heads, but that is the analysis of the Fraser of Allander Institute. Indeed, the UK Government’s own economic analysis points to the fact that a no-deal Brexit would damage the Scottish economy and wipe out more than 8.5% of our GDP. How any Government can impose these risks on Scotland is simply breathtaking.
The UK Government’s intention to end the free movement of people will be hugely damaging to our economy. Inward migration has made an overwhelmingly positive contribution to Scotland’s economy, meeting our needs for workers in sectors such as health and social care, as well as in the tourism industry in the highlands and islands. Any reduction in EU migration could have a serious effect on Scotland’s population growth and its demographic composition. All the projected increase in Scotland’s population over the next 25 years is due to migration. According to the Scottish Fiscal Commission, with 50% less EU migration, the working-age population would decline by almost 1% and the proportion of children would decline by 4.3%. The Prime Minister’s deal totally fails to meet Scotland’s needs.
Angus Brendan MacNeil
An example of exactly what my right hon. Friend is talking about came to my ears today. A pilot who works for a Scottish airline has a choice between having a strong EU Dutch passport or a UK passport. Having a UK passport would mean that he would have to pay around £10,000 for himself, his wife and his children to stay in the UK, and he would be left with a weaker passport. Or he can go with a Dutch passport and work internationally in the airline industry. That is the very damage that my right hon. Friend is talking about. The Government do not care about what they will do to the transport infrastructure of the highlands. They will carry on blindly, as they have been doing.
Ian Blackford
My hon. Friend is absolutely right. We must make the point right across Scotland that there is an existential threat to our living standards and our workers. We must make sure that we stop Brexit. If we cannot stop Brexit for the United Kingdom, we have to take seriously our own responsibility to protect Scotland.
Brexit uncertainty is already damaging our economy to the tune of £600 per household per year, as the value of the pound falls and inflation rises. That is not “Project Fear”; that has happened. That is what has happened since the sheer irresponsibility of the Vote Leave campaign, with ridiculous statements on the side of a bus, promoted by the ex-Foreign Secretary, the right hon. Member for Uxbridge and South Ruislip, who should be hanging his head in shame.
There is no certainty in the Prime Minister’s deal on future trading arrangements for goods and services, no certainty on future mobility, no clarity on law, and no guarantee on continued participation in the EU funding programmes that support our universities, communities, non-governmental organisations and businesses. Uncertainty leads to risks for investment and further risks for our economy. Under a free trade agreement, GDP would be £9 billion lower by 2030 than if we stayed in the European Union. That is equivalent to £1,600 per person in Scotland. That is what Brexit risks per year, making the people of Scotland poorer. That is why the Scottish National party, in all good faith, has offered a compromise. If we are to be dragged out of the European Union against our will, then, at the very least, we must remain in the single market and the customs union to protect our economy. Without single market and customs union membership, the future relationship can only be a free trade agreement, introducing barriers to Scottish companies’ abilities to trade. That will damage jobs, investment, productivity and earnings.
The Government’s own analysis proves that Brexit is bad for Scotland: trade volumes, GDP and wages would all fall, while Government borrowing and trade costs would increase. All the analysis shows that a no-deal scenario would be catastrophic and it is likely that the corporate sector in general is not well equipped to deal with a no-deal Brexit. It is more important than ever that we are not faced with a false choice between a bad deal and a no deal. We need to have more time. We must extend article 50 and take an alternative route to protect our economy. This deal and no deal are not options. Only those reckless enough to risk economic hardship will back this deal.
Despite what the Prime Minister said here today, her own Chancellor agrees with the SNP. He admitted on Radio 4 that, in economic terms, we will be worse off after Brexit and after leaving the single market. Even more telling is the admission from the Prime Minister herself in the House last week. In response to the right hon. Member for Belfast North (Nigel Dodds), she said:
“What we want to be able to do in the future is to have our independent trade policy. One of the issues in relation to the backstop is whether or not we would be able to do that—that is one of the issues that we would not want to see us continuing to be in the backstop for.”—[Official Report, 26 November 2018; Vol. 650, c. 32.]
So the Prime Minister is clear. There is a concern from this Government over their ability to be able to strike and implement free trade deals if the backstop comes into force. Why then is she arguing here that this deal delivers? Again, I ask the House: how can we support a deal and back the Government on delivering an outcome that would make our economy smaller and our communities poorer?
Ministers have tried to spin support in favour of this deal, citing the support from sectors across the United Kingdom. However, let me say this to those who believe that this deal is the only option: it is not and we deserve better. We know that frictionless trade at the border is crucial for Scotland’s food and drink exports, but there is no guarantee of that as, under the deal, border checks and controls will depend on the extent of the UK’s alignment with EU customs and regulatory regimes. Yet the declaration contains no commitment to a common rulebook on regulation. The SNP believes that our food and drink sector deserves assurance. It deserves cast-iron protections for the industry, not a false binary choice between a no Brexit and a blindfold Brexit.
Yet again, another UK Tory Government in Westminster have bargained off our fishing sector. The utterances from No. 10 are false assurances. The UK is reneging on its promises to support Scottish fishing by accepting a link between UK waters and access to EU markets. Its commitment to a separate fisheries agreement as part of the economic partnership could mean the UK ceding access for EU vessels to UK waters, or accepting tariffs and customs barriers on trade and fish, seafood and farmed salmon with the EU. That is not acceptable. That will mean that, again, Scottish interests are being traded off against each other. That is absolutely unacceptable and those Scottish Tories who profess to want to protect Scottish fishermen should hang their heads in shame. If the Tories go through the Lobby to protect this Government, they will once again have sold Scotland out for party political gain and they will not be forgiven for it.
The UK Government must respect the will of the Scottish people, who voted overwhelmingly to remain in the EU. It is a democratic outrage that Scotland has been dragged out of the EU against its will. The withdrawal agreement sidelines Scotland and sells out our vital national industries. How could any representative in good conscience support such a move? Let me be clear: next week, the SNP will reject the withdrawal agreement because it will leave Scotland poorer and rip opportunities away from future generations. Does the Prime Minister show any respect at all for our mandate? No. Do this Government have respect for the fact that every Scottish local authority voted remain and that the nation voted 62% in favour of staying in the EU? No. Well, in Scotland we will make our voices heard once again.
Northern Ireland has been given a differential deal that will put Scotland at a competitive disadvantage. There is no reason why a similar arrangement cannot be afforded to Scotland. The SNP will table an amendment to ensure that the voice of Scotland is well and truly heard in this place. Those who claim to be democrats—those who claim to have respect for the people of Scotland and for the mandate of the Scottish people and Parliament—cannot vote with the UK Government on this deal. It is clearer now than ever before that the only way to protect Scotland’s interest is to be an independent nation.
The First Minister has been very clear that she will set out the next steps on Scotland’s future once the terms of the Brexit deal are clear. The process of Brexit has demonstrated weaknesses in the UK’s constitutional arrangements. Scotland has been ignored, sidelined and undermined through the entire Brexit process. The costs to the people in Scotland of not being independent have been laid bare.
Today is a moment of huge historical significance. For decades to come, people will remember what this place decided to do—whether we, as public representatives with the responsibility to protect our communities and constituents, voted for a deal that would harm and hinder their opportunities, or whether we stood up for them. This is no ordinary time in our history and it is no ordinary time for our politics. Brexit has cast the politics of Westminster into a landscape of crumbling certainties.
We are at a defining moment. We must stand up for our constituents. We cannot ignore the economic analysis. We cannot drive blindfolded off the cliff edge. We must take back control in this place. We must have the courage of our convictions and wield the power gifted us to do the right thing. We must stop this deal and this Government railroading recklessly over our rights, our freedoms and the opportunities of our people. There is another way, there is time and we must take it.
Alex Chalk (Cheltenham) (Con)
On a point of order, Mr Speaker. I am sorry to trouble you with this, but in the course of proceedings yesterday, you gently rebuked me for intervening from a sedentary position on the hon. Member for Brighton, Pavilion (Caroline Lucas). You went on to suggest that there had been general shouting and braying, and the Gloucestershire Echo is now reporting that I was admonished by you for participating in such behaviour. Would you be kind enough to confirm that there was no suggestion of braying or other disrespectful behaviour from me? It is not my style and I would be grateful if the position could be clarified so that the record and the Echo can be set straight.
Mr Speaker
I am very happy to set the record straight for the benefit of the hon. Gentleman. In all my experience of him, which is now quite considerable, I think I can say authoritatively that the hon. Gentleman and braying are complete strangers; they have never met. Indeed, other than by virtue of the fact that he is a well-educated fellow, I would question whether he would even know the meaning of “to bray.” The hon. Gentleman is in every other respect a good citizen. He did heckle, but he was not braying, and his behaviour is ordinarily not in any way unseemly, so he can tell his local newspaper to put that in their pipe—if they still have one—and smoke it.
Sir Graham Brady (Altrincham and Sale West) (Con)
Mr Speaker, there may not be room in the Gloucestershire Echo for the whole of your ruling in response to my hon. Friend the Member for Cheltenham (Alex Chalk). I am grateful to allowed to speak so early in the debate, and I will be brief out of consideration for the many Members on both sides of the House who wish to participate.
Following the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), I have to wonder how he has apparently not realised that the British economy has been growing steadily since the vote to leave in the referendum in 2016. If the Scottish economy is failing in the way that he suggests, perhaps it has something to do with the Scottish Government and their failure to provide the services that are needed north of the border, rather than having anything to do with the Brexit vote.
The right hon. Gentleman spoke at length about the tradition of democracy and respect for the rule of law. He called them European traditions without noting that they are actually strongest in this country—in Britain—and have been for a very long time. I wonder whether he might reflect for a moment, as he thinks about that respect for democracy and the rule of law, what damage could be done to that respect and to those values that are so precious in our country if he and his hon. Friends were successful in ignoring the biggest democratic mandate in British history.
Sir Graham Brady
Blimey—what a choice. I give way to the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil).
Angus Brendan MacNeil
I hope that the hon. Gentleman will reflect for just a tiny moment on the fact that Ireland, which became independent of the UK 96 years ago, will this year be growing five times faster than the UK. For further understanding of that, it will take the UK five years to do what Ireland does in one year.
Sir Graham Brady
The hon. Gentleman will know, I am sure, what is the fastest growing major European economy at the moment. He also knows the difficulties that Ireland had some years ago as a result of its membership of the euro—something that would be inflicted on Scotland by the nationalists if they had their way.
I think the Prime Minister has enormous good will on both sides of the House. I think that Members on both sides of the House know that she has worked phenomenally hard to try to secure the best agreement. I also think she is correct when she makes the point that the country feels ready to move on. There is palpable tiredness with this subject. People the length and breadth of the United Kingdom want to know that we are going to move forward and put into effect the referendum that took place two and half years ago.
I listened earlier to the Leader of the Opposition as he talked about fear and concern in business and said that uncertainty was affecting investment in our country. It is important that Members on both sides of the House understand that if there is fear and uncertainty in boardrooms in this country, it is because of the concern about what would happen if the right hon. Gentleman were ever to form a Government in this country, and if there is capital flight going on at the moment from our country, it is because of that concern, not because of concern about Brexit. Certainly, we on this side of the House are in no doubt that it is better to have a Conservative Government led by my right hon. Friend the Prime Minister than the alternative.
Sir Graham Brady
I think we have probably heard enough from the Scottish nationalists for all five days of the debate.
But more remarkable, perhaps, is the number of Labour Members who feel that it would be much safer for the country to continue to have a Conservative Government led by the Prime Minister than one—
Stewart Malcolm McDonald
The hon. Gentleman says that he hopes that his right hon. Friend the Prime Minister will continue to see the deal through, but of course only he knows whether that is going to be the case—so can he enlighten us?
Sir Graham Brady
The hon. Gentleman knows perfectly well that I am not going to enlighten him on that, although I could enlighten him on so many other things.
There is so much that is good and sensible in the proposed withdrawal agreement. Crucially, the implementation period gives business a degree of certainty and the time to accommodate to changes. That is critically important. Also, I think that Members on both sides of the House absolutely welcome the mutual protection of citizens that is embodied in the agreement. That has been very important to Members on both sides of the House ever since the referendum over two years ago.
The Prime Minister was clear in her assessment when she said that there are those Members who would like to see much closer integration than is proposed in the withdrawal agreement. There are also those who would like to see a much looser relationship than is proposed. I am firmly in the latter camp. I find much in the agreement disagreeable. I think that it does propose to tie us in too closely to the European Union in the future. But like many others in this House, I recognise that there is a need to compromise. I recognise that at a time when we are negotiating with 27 other countries, and at a time when there is no overall majority in the House of Commons, some compromise is necessary.
But—this is my central point for my right hon. Friends the Prime Minister and the Secretary of State for Exiting the European Union—while recognising that compromise is necessary, there is one compromise beyond all others that makes this withdrawal agreement very difficult for many of us to support. It is the possibility, however remote, that we might be leaving a treaty that allows us to give notice to quit to join one that can only be left with the consent of the other party. To do that in the name of taking back control is very difficult for many of us to accept.
Over the next seven days, I urge the Secretary of State and the Prime Minister in the strongest possible terms to redouble their efforts to find a way to give real reassurance that we, the United Kingdom, could leave the backstop in the event that we have to enter it and to recognise that if negotiations on a future trading arrangement were to break down, there has to be a way to leave that backstop agreement. We have seven days of debate and discussion ahead of us. Many of us are hoping to hear that reassurance and are willing the Secretary of State and the Prime Minister well in that process.
Margaret Beckett (Derby South) (Lab)
Over 20 years ago, as the new President of the Board of Trade, my first overseas visit to a major trade partner—Japan—was dominated by the most overwhelming concern. Business and politicians alike wanted reassurance that the then new Labour Government would not be leaving the European Union. They were polite, but they were blunt. They had invested in the UK because the UK was in the European Union, and if we left, so would they. Just today, their ambassador re-emphasised their nervousness.
So in 2016, I could foresee serious economic harm to Britain’s interests, but I accepted that we had to abide by the referendum result and concentrate our energies on damage limitation. Despite the mixed messages from the Government, I voted to trigger article 50 and the process of withdrawal, but frankly, since then, it has been downhill all the way. First, it became clear that those who had clamoured for us to leave the European Union had not the faintest idea what to do next. There was no concrete plan for the nation’s future—just a series of sweeping assertions about how easy, swift and painless leaving would be and the golden future that awaited us.
Then we saw that the Prime Minister’s decisions were being taken not in the best interests of the country, but to satisfy her Brexit extremists. The withdrawal Bill then proposed that the control we were taking should be returned not to Parliament but to Ministers, with little, if any, real parliamentary scrutiny. Asserting Parliament’s legitimate role has been an uphill struggle, as we saw in the most recent Division today.
Article 50 allows only a two-year window for negotiations, so I expected the Government to seek the fastest possible progress. I agreed with them that withdrawal and future partnership were best considered side by side, but when that was rejected, concluding negotiations on part one—the withdrawal agreement—became all the more urgent. Leaving is one thing; what matters more is where we are going and on what terms, and that dialogue has yet to begin in earnest.
If anyone had said that we would reach the end of our two-year window struggling to reach any deal at all, I would never have believed it. But it is hard to negotiate successfully if we cannot agree on what we want, wilfully throw away our negotiating flexibility and sack people who tell us what we do not want to hear.
Over these two years, while the Government have wrangled endlessly about how to proceed, one disastrously unforeseen consequence of leaving the EU after another has been revealed. Government Members keep insisting that everyone who voted knew exactly what they were doing and what the possible consequences would be. It may be so. All I can say is, I did not.
When I heard the Prime Minister pontificating about escaping the jurisdiction of the European Court of Justice, it never crossed my mind that that meant leaving Euratom—the watchdog not just for cancer treatment, but for the safety of nuclear power stations. I know from ministerial experience that we have, and have had for years, a shortage of people across the world with those skills and capacities, and we are about to leave behind some of those on whom we presently rely. However, whatever I did not know, I did know how much we rely on Dover for our import and export trade. I had not focused either on the losses to our scientific and medical research, or things such as the Galileo project.
As each of these problems emerges, I keep hearing that it is all right because the Government will continue all this investment—for example, to support our farmers—all on our own, so clearly the Prime Minister has found another of those magic money trees. Much of our consumption—for example, our food consumption—relies on the frictionless trade that we now enjoy; so, too, does modern manufacturing. Key goods and components are perpetually whizzing around the European Union and back to the UK, and thousands of jobs across Britain depend on this just-in-time delivery. That is why I was appalled to hear the Prime Minister announce, casually, that Britain would leave both the single market and the customs union—and, what is more, that these were red lines.
The economist Professor Patrick Minford declared the other day that just as the Thatcher years saw the demise of major industries such as coal and steel, so, too, leaving the EU, which he nevertheless supports, will probably—and, in my view, disastrously—see the end of what is left of UK manufacturing. I know that, nevertheless, most of the business community urges us to vote for this deal to provide the certainty that business always, understandably, seeks. I understand that totally; I have dealt with it for years. But no one should be under any illusions. Bluntly, these are not commitments to invest or stay in Brexit Britain. These are perfectly justifiable attempts to keep business going for the next two to three years to give them a breathing space, without disruption, to make their long-term decisions, which may not be in our favour.
I recognise, too, the concern that staying in a customs union may restrict our ability to negotiate other trade deals, say, with the United States. Personally, I am not starry-eyed about such deals. For a start, it is frankly inconceivable that any American President, let alone this American President, would do a trade deal with the UK without making it a key condition that giant US health corporations be allowed unfettered access to our national health service. I can well imagine that that might suit some right wingers who hanker after a privatised NHS and would let those companies use a free trade deal to accomplish exactly that, along with in other public services, while leaving the hands of Tory politicians clean. Equally, we would face demands to admit chlorine-washed chicken and hormone-fed beef, and no doubt other delights on which we have not yet focused.
Other trade deals would not be consequence-free either. India and China, to name but two, would, again understandably, want additional visas for their citizens—I have no quarrel with that—but the Prime Minister’s emphasis on the end of free movement may give some people the misleading impression that she is offering an end to immigration. She is not. According to the most recent figures, it is non-EU immigration that is increasing.
Not satisfied with the grave red lines misjudgement, tying her own hands and restricting her room for manoeuvre, the Prime Minister added to that the crass folly of selecting a date—not just a date, but a time—for our leaving and, to please and reassure her Brexiteers, she put it into the Bill. As that self-inflicted deadline approached, some began to say that it would be best to leave the EU at the end of March, giving up our prime negotiating cards and our strength, and work out afterwards what would be in our interests in future. I do not think that I have ever heard anything so criminally irresponsible from any Government or the supporters of any Government.
The Prime Minister says that people just want it to be over. Of course they do. Heaven knows, I think we all probably share that sentiment. But it is a con, perhaps the biggest con of all. If we pass the deal, it will not be over. The really serious stuff has not even started and it will go on for years.
Of course, to guide us, we have the political declaration. We have already heard from the Governments of France and Spain how binding they believe its warm words to be. The point is that it settles nothing. All is to be “explored”, “continued”, “considered” or “discussed”. Nothing is settled.
From the outset, the Prime Minister resisted the idea that this sovereign Parliament should have the chance to vote and express its opinion on any deal she might secure. She forcefully resisted the notion of a meaningful vote, and now that we have one, she is doing her utmost to make it meaningless by insisting that there is only one way for MPs to vote: for her deal.
The outcome of the series of votes is unpredictable and could well be indecisive. I have seen such a thing happen in this House before. Should there now be a further people’s vote? I hear “no” from most Conservative Members. But I am in no doubt that I know infinitely more now about the potential consequences of leaving the EU than I did in 2016, and I think, having been in the Cabinet for some 11 years, I probably knew a little bit about it before. I know, too, that what leave campaigners promised is not on offer, mostly because it was undeliverable.
The hon. Members for Totnes (Dr Wollaston) and for Bracknell (Dr Lee) have reminded us that a major medical intervention must be preceded by an assurance that informed consent has been given. Consumer protection law gives a 14-day cooling-off period for people to make sure they know what they are doing. This time, the very future of our country is at stake.
There has been a determined effort to keep people in the dark. Economic assessments of Brexit’s impact prepared for Ministers were withheld, like the Government’s legal advice. The real-life consequences of leaving with no deal, which clearly still attracts some Conservative Members, are not being fully spelled out. The Chancellor, like the Governor of the Bank of England, publicly accepts that we would be economically better off staying in the EU, but he points out—and this is fair—that many who voted leave thought that a price worth paying to recover our sovereignty. But the deal on offer, which the Prime Minister says is the only deal on offer, does not recover our sovereignty. It leaves us rule takers from the European Union without any voice in shaping those rules. It represents what may well be the biggest transfer of sovereignty ever proposed by any British Government, because this time sovereignty is not being shared—it is being surrendered.
None of us can know today just what decisions or options, if any, will emerge from next Tuesday’s votes. The Prime Minister demands—she repeated it today—of all MPs that, when we vote, we do so not in any party or personal interest, but for what we honestly believe to be the interests of our country. I shall, Mr Speaker, and it will not be for this deal.
Several hon. Members rose—
Mr Speaker
Order. With immediate effect, an eight-minute limit will now apply.
Anna Soubry (Broxtowe) (Con)
It may be that I can shorten my comments, because I want wholeheartedly and thoroughly to adopt the outstanding and excellent analysis and conclusions of the right hon. Member for Derby South (Margaret Beckett). She does indeed speak with great authority. She of course knows, as a proud representative of the city of Derby, the Rolls-Royce plant in her own constituency. She also knows the Toyota plant near Derby. When she speaks about the just-in-time supply chains and our manufacturing, I suggest that there are few who could speak with so much genuine authority and knowledge. In her analysis and conclusions, she is absolutely right. I am delighted that she and I also agree that we should now have a people’s vote on this, the most important decision that our country faces and will take for decades.
Mr Speaker, I also want to say this. You, I think, understand perhaps more than many how that consensus, that agreement, was here in this House shortly after the referendum result. The great failing—it gives me no pleasure to say this of my own Government—was from the outset, when instead of reaching out across this House and across our country to heal the divisions, to bring together the 48% and the 52%, I am afraid and sorry to say the exact opposite was done. The 48% were tossed aside. We were abused. We were sidelined. If we had even the temerity to question almost anything we were called remoaners. It is supremely ironic that it is because of brave colleagues who normally sit here in what is called the naughty Chamber, who about a year ago stood up to the abuse from those calling us traitors and mutineers—and yes, the death threats—and voted, with some courage, that hon. Members will be able to debate in the way that we will and then to vote. The irony is not lost on me that some of those who were most ardent in their opposition to what we did 12 months ago are now the most keen to take advantage of it.
I will not vote for this deal on any other basis than it goes to the people for their approval. This is not a good deal. In fact, as many have already observed, it is not a deal. It is certainly not what we were promised, not even by our Prime Minister. Shortly after the triggering of article 50, she was interviewed by Andrew Marr. The tape exists. He questioned whether it would be possible in the next two years to begin to get anywhere near securing all the various deals that had to be secured or even get to the beginning stage. She was confident that it could all be done within two years. Well, here we are today and what do we know? We have a political declaration that can be ripped up by any Prime Minister or any Government who come in once we have left the European Union. The withdrawal agreement is the only legally binding part of the so-called deal. As we know, there is nothing to implement, and certainly nothing that we were promised. The so-called transition period is to an unknown destination, because after two and a half years, we still do not know what our eventual relationship with the European Union will be. That is simply not good enough.
The withdrawal agreement is indeed a blindfolded Brexit that fails to deliver on the promises made not just by the leave campaign but, I am sorry to say, by my own Government. As the right hon. Member for Derby South said so beautifully and eloquently, the right hon. and hon. Government Members who think that we should just get on with it, do it, and that we can all go home for Christmas and it will all be over, are—with great respect—completely and utterly fooling themselves. We have already heard speeches from those who prefer a no-deal, hard Brexit, and people can be assured that if we leave next March with nothing more than this withdrawal agreement and a political declaration that can be torn up, they will carry on and on and on for years in their quest to sever all ties with the European Union. As I say, they will do that because of the non-binding nature of the political declaration.
How poor is that political declaration? As others have observed, it is so vague that the Government could not even apply their assessments to it to try to inform us of its financial consequences.
Dr Wollaston
Does my right hon. Friend agree that this is exemplified in article 107 of the future framework document? It just says:
“The Parties should consider appropriate arrangements for cooperation on space”—
and that is it.
Anna Soubry
Indeed, it is nothing more than warm words of good intentions. There is no mention of the frictionless trade that we were all promised. Services, which make up 80% of our economy barely get a mention, and of course, the political declaration is the high point as we now go to the negotiations in March.
The worst part of the withdrawal agreement and the political declaration is that it will make our constituents and our country poorer, and I did not come to this place and will not vote to do anything that makes my constituents poorer, especially when a far better alternative exists. On their own admission, the Government are urging people to vote for this so-called deal in the clear knowledge that it will reduce the future economic prospects of the people of this country. And that is on their best assessments—or rather, guesses—because we know of the inherent problems and inaccuracies, in effect, of the impact assessments and the forecasts that have been made. Those just give us the best assessments when, in fact, many believe that it will be far worse than even those estimates.
No one should be under any illusions about how bad a place the backstop will be. I will not rehearse some of the arguments that have been put forward very well by others. This is not just vassalage; it will convey only a bare bones customs union, with none of the regulatory alignment that is so critical for business. Northern Ireland will have limited benefits, but those benefits will be better than the rest of the United Kingdom, which is clearly a threat to the Union of our country. I say to Members on the Government Benches: as members of the Conservative and Unionist party, on what possible basis can you vote for that? As others have observed, we will not be able to deliver any of the unicorn trade deals that have so far eluded us, but which will apparently magically appear in the next two years; nor, it seems, will we be able to benefit from the dozens of great trade deals that we already have because we are a member of the European Union. That is the reality.
This is not what leave voters in Broxtowe voted for. They have seen through the lies on buses and they now know of the broken promises. They see that whichever way we cut it, Brexit will make them poorer and reduce the life chances of their children and grandchildren. Now that they see the reality of Brexit, they are entitled to change their minds and have a final say by way of a people’s vote.
It is said that this Brexit is a price worth paying, but I reject that. I understand the political consequences—many hon. Members have mentioned the need to deliver this—but we must all put our country and our constituents first. If we do that, we will understand that the best deal with the EU is our current deal with the EU. It is not just good for trade; it is also about the country we are—open-minded, open-hearted. I fear for our country if we set course now, agree to this deal and make the grave mistake of leaving the EU, which has conveyed so much prosperity and delivered peace and a better country.
Hilary Benn (Leeds Central) (Lab)
Next Tuesday will be the House’s opportunity to have its say, and I rise to move amendment (c), which stands in my name and that of my right hon. and hon. Friends and colleagues.
I want to begin by acknowledging the effort that Ministers, including the Prime Minister, and civil servants have put into trying to negotiate a deal. The fact that so many of us object to what has been brought back reflects not on that effort, but on the decisions that the Government have made. First, as we have heard, the Government embarked on the negotiations with the cries of those who argued for Brexit ringing in their ears. We need to remember the point made by my right hon. Friend the Member for Derby South (Margaret Beckett). We were told that
“we will hold all the cards”;
that this
“will be one of the easiest trade deals in history”;
that
“getting out the EU can be quick and easy”;
that
“within two years...we can negotiate a free trade area massively larger than the EU”.
How slowly the truth has been revealed, and how painful a process it has been.
Secondly, while the referendum result made it clear that we would leave the institutions, it did not determine the future of our economic relationship. Thirdly, I believe that history will record the Prime Minister’s red lines to have been an absolutely catastrophic mistake, because they created the problem of the border in Northern Ireland and removed the Government’s room for manoeuvre. They boxed the Prime Minister in. These illusions and decisions resulted in the plague of disagreement that affected the Cabinet and led to so many ministerial resignations, including the loss of not one but two Brexit Secretaries. Goodness me! They exited the Department before we even exited the EU.
The Government spent two years trying to agree what to ask for, and the result was the contortion that was the Chequers proposal—an attempt to keep the border open and save friction-free trade. The problem was it was rejected by the EU. The Prime Minister spoke about home truths. Now is the time for some honesty. If we wish to maintain an open border in Northern Ireland, we will have to stay in a customs union and observe most, if not all, of the rules of the single market, but not a single Minister is prepared to acknowledge that truth.
As was demonstrated by the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) in his contribution, those who argued for Brexit have been exposed as having absolutely no plan for it at all. A Canada deal would fail to solve the Northern Ireland problem and would not give us friction-free trade, and as to the suggestion that we should leave the EU on WTO terms—no deal—I will turn to that in a moment.
The problem with the deal is the political declaration. We were assured that it would be substantive and detailed. It is not. It is merely words and aspirations that have no legal force. We have no idea where we are going, no idea where we will end up, no clarity and no certainty, and for business and future investment, which hate uncertainty, what kind of a deal is that?
The Prime Minister was questioned by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), who chairs the Home Affairs Select Committee, about security. She was asked why there was no reference to ECRIS or SIS II in the deal. In 2016, the police in Britain made 100,000 requests to ECRIS. In 2017, we made 500,000 queries to SIS II. That tells us how important those two sources of information are to the protection of our security, but neither is mentioned in the political declaration.
What about services, foreign policy co-ordination, policing and information sharing, taking part in EU agencies, fisheries, data, recognition of professional qualifications, broadcasting rights, intellectual property, public procurement, consumer safety, aviation, freight, energy, medicines, scientific co-operation, and lots of other things? What is the answer on all those? “We do not know.” “We cannot be sure.” “It is yet to be sorted out.” The truth is that that will not do.
The Treasury figures published last week, showing the reduction in GDP that would result from a no deal compared with what would otherwise happen, are sobering and speak for themselves. Those who try to wave all that away by saying, “It would not be the end of the world”, or “There would be some disruption initially”, simply fail to do justice to the economic consequences of taking such a highly damaging step. They pay no heed to the fears and concerns of businesses that know it would be a disaster, and they do not respect the importance of the Good Friday agreement and the open border in Northern Ireland.
Anna Soubry
Does the right hon. Gentleman agree that the use of the slogan “No deal is better than a bad deal” was most unfortunate, given that no deal is in fact the very worst thing that could happen to our country? Was that not verging on the irresponsible?
Hilary Benn
I completely agree with the right hon. Lady. That is a nonsensical argument that the Government have advanced for the last two years. Ministers know that we cannot leave with no deal: they know that we are not ready. I do not think that any responsible Government would allow this country to leave the EU with no deal, but they are unwilling to say that, because no deal must be kept alive as the bogeyman to frighten the House of Commons into voting for the Prime Minister’s deal.
Jeremy Lefroy (Stafford) (Con)
Does the right hon. Gentleman also agree that no deal—cutting ourselves off in that way—would have serious repercussions not only for our politics, but for our relations with our European neighbours?
Hilary Benn
Absolutely. I do not believe that there is a majority in the House for leaving with no deal, and we will have an opportunity to demonstrate our view in our vote next week.
This decision will define the present generation of Members of Parliament and shape the future for our children and our grandchildren. From the very beginning, our nation has been divided on the subject of Europe. From Hugh Gaitskell’s speech about the end of 1,000 years of British history, to Edward Heath’s argument that joining the Common Market was a
“great step forward towards the removal of divisions in western Europe”,
from Harold Wilson’s renegotiation and referendum to David Cameron’s, the British people have shown support for and reticence about Europe in almost equal measure.
I argued for remaining in the European Union, but not because it is perfect. It is far from perfect, and it needs reform. The result of the referendum told us and the rise of populism across Europe is telling Governments that too many people feel that the balance between sovereignty, self-determination, control—call it what you will—and co-operation with other countries is not quite right. That thirst for control is a reflection of the lack of control that many of our constituents feel they have over their lives, given what has happened to their jobs and the changes that they have seen. But at this moment in our history, in this century, working with our neighbours and our friends is an absolute necessity if we are to address the great challenges that we all face on this small and fragile planet: the challenges of trade, dealing with threats to peace and security, preventing the climate of our earth from running out of control with devastating consequences for all the people whom we represent, and dealing with the tide of humanity that is travelling across the globe in search of a better life.
I will not dissemble, and I will not pretend. I think that leaving the European Union is a terrible mistake. It will damage our economy and discourage investment; it will hurt our constituents; it will make it much more difficult to do something about the many reasons why people voted to leave; it will reduce our influence in the world; and it will disregard the extraordinary achievement of the European ideal in bringing peace to a continent on which centuries of war had seen blood shed for no purpose, and generation after generation laid beneath the earth. In this year of the centenary of the end of the first world war, we should remember that, as well as remembering them.
We have to deal with the situation we find ourselves in, and my final plea to the House is as follows. Now is the moment to tell each other the truth. We owe that to a nation that has shown itself to be divided almost exactly down the middle. We have to bear in mind our responsibility to the 48% as well as the 52%, and no one is going to get out of this mess everything they wanted. No one is going to get everything they thought they would get. No one is going to receive all the things they were told they would receive. All of us are going to have to compromise, and we are going to have to find a way forward that a majority can agree upon.
The reason I would ask the House next week to vote for my amendment if it is selected is that the sooner we are able to say to the Government that we are not prepared to support the motion before us and we are not prepared to leave with no deal, the sooner we can move forward and find a solution to this problem in the time that remains. Thanks to the amendment successfully moved by the right hon. and learned Member for Beaconsfield (Mr Grieve) earlier today, the House can at least end this debate secure in the knowledge that, as and when that time comes, we will have an opportunity to have our say, and so it should be.
Several hon. Members rose—
Mr Speaker
Order. I am extremely grateful to the right hon. Member for Leeds Central (Hilary Benn). He began his speech by saying he was moving his amendment and I know what he meant was that he was speaking to it. Simply for the avoidance of doubt, I should emphasise to the House that under the motion agreed earlier today—that is to say the business of the House motion, in respect of which the right hon. and learned Member for Beaconsfield (Mr Grieve) did indeed move an amendment—no amendment will be selected by me until next Tuesday, and it will be on that day of course that the votes take place. I say that simply for purposes of clarification.
Still with the eight-minute limit, I call Sir Roger Gale.
Sir Roger Gale (North Thanet) (Con)
It is always a pleasure to follow the right hon. Member for Leeds Central (Hilary Benn). I do not agree with everything he said, but let me start with a point of definite agreement: the European Union needs reform. I personally believe that the EU is corrupt, bureaucratic, meddlesome and wasteful, but for all of that I voted remain. I did so because I believe my children and grandchildren and my constituents’ children and grandchildren would be better off within than outwith the European Union in terms of the economy and security.
That is how I voted, but unfortunately 52% of the British public did not. I have accepted that result, although I understand that others take a different view and would like to rerun the referendum or have a people’s vote or try to overturn the decision. But I believe we do have a duty now to honour the expressed wish of the British people, and for that reason I shall be supporting the withdrawal agreement. It is not perfect—no compromise ever is—but I listened very carefully to what the Attorney General said yesterday and his words were, to paraphrase slightly, that it is a risk, but a risk we have to take when we consider all the alternatives.
If we look at all the alternatives—I tried to goad my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) into offering one this evening and got nothing—such as the hard Brexit, and if we have to rule out, as I do, a return to no Brexit, we are left with the withdrawal agreement. I believe my right hon. Friend the Prime Minister was absolutely correct in saying it is not possible to go back to the Commission cap in hand. We might get a tweak here and a tweak there, but the idea that anybody is going to offer a radical reassessment of what is on offer today is baying at the moon. I spend a certain amount of time leading the Parliamentary Assembly of the Council of Europe delegation, and I meet European parliamentarians, as I have in the past few weeks. They are astonished, looking through the other end of the telescope, at how much has been given to the United Kingdom, and my right hon. Friend the Prime Minister is absolutely right to say that if she goes back and tries to reopen the deal, 27 other countries will all say “Me, too,” and then we shall have a raft of changes that will not be to our advantage. So for all that the withdrawal agreement is not perfect, I shall support it.
I want to touch briefly on the hard Brexit, because this is part of my equation, and now I need to be parochial. I am proud to be a Member of Parliament representing the garden of England—Kent. Other people do not seem to have grasped this fact, but quite a lot of trade comes through Dover and into the rest of the country and goes out through Dover. The fact of the matter is that probably 20 years ago 85% of the lorries going out were British, whereas now 85% of the lorries coming in and going out are continental.
A hard Brexit means a hard border. We have heard a lot about hard borders in Northern Ireland, but we have not heard about hard borders in England—a hard border between Dover and Calais. That shutter will come down. There will be controls, if we go for a hard Brexit. Kent Members visited the Dover Harbour Board last week and we spoke with the Freight Transport Association and Kent police, and I spoke personally with a freight forwarder. If those shutters come down, the traffic backs up at about a mile an hour. That is out of the port of Dover, up the M20, up the M26 and on to the M25, and then we are stuffed.
If the M25 comes to a grinding halt, south London comes to a grinding halt and soon Birmingham will come to a grinding halt. No car parts for the just-in-time car industry, no life-saving pharmaceuticals, no construction materials—rockwool, which is used extensively in construction, comes through Dover—and no food. The good people of North East Somerset and of Uxbridge may not care whether Kent is turned into a lorry park, but I do. What I also know is that the people of Somerset and Uxbridge will scream blue murder when they find that they cannot buy their new Chelsea tractor, their life-saving drugs or the foodstuffs that they enjoy that come in from mainland Europe. We will hear those screams from the west country and west London in Westminster.
We have three options. I rule out no Brexit, because I believe that it is not what people voted for. I have had to rule out, for the reasons I have just given, hard Brexit. I believe that it would be immensely damaging. Even my miserable maths says that two out of three leaves one, and that one is the withdrawal agreement that will be before us on Tuesday night. I believe that I owe it to my constituents’ children and grandchildren to vote for it, get behind it and then let this great country move forward. That is what I shall do on Tuesday.
Sir Vince Cable (Twickenham) (LD)
I wish to say a few words on behalf of the Liberal Democrats’ position that we should have a people’s vote with the option to remain in the European Union. We shall campaign to remain in the European Union, as we believe unambiguously that that is in the national interest and the right thing to do.
I think that I am one of the relatively few people left in the House who actually campaigned to join the European Union and in support of membership during the Wilson referendum. It was my privilege at the time to campaign alongside some very fine British and Scottish statesman, such as Jo Grimond, John Mackintosh and, perhaps above all, John Smith, who strongly believed that Britain’s future lay in the European Union. John Smith in particular would be pleased with the amendment that my Liberal Democrat colleagues have tabled, which fully endorses the Labour party’s amendment, but would add a small section that the leader of the Labour party either forgot or was embarrassed to refer to. It would add
“including a public vote as endorsed by the Labour Party Conference”.
He did not mention that this evening.
My other relevant experience, which I share with the right hon. Member for Derby South (Margaret Beckett), is of having worked as President of the Board of Trade, for five years in the coalition Government. There were several important lessons from that experience. The first was the importance to Britain—and this was recognised by both parties in the coalition and the Labour party—of its membership of the single market. It stemmed originally from an insight in the 1980s under Mrs Thatcher and was taken up by the Blair Government, that the future of the British economy lay with services, not just financial services but more generally. It was an area in which Britain had a considerable competitive advantage, and was in the national interest to promote. We did so, and we lectured countries such as Germany that were dragging their feet on issues such as mutual recognition of professional qualifications. At the end of the campaign for the single market, in 2015, we reached a provisional understanding on a digital single market, which was very much in the interests of Britain’s emerging digital economy and creative industries. The Prime Minister herself said recently that this was something that Britain should be part of, until it was pointed out that we cannot be part of it if we leave the single market.
The other major lesson of that period comes from having negotiated with General Motors over Ellesmere Port and Luton, with Ford over its plants in the UK, with Toyota, with Jaguar Land Rover over its expansion, with Airbus over its big investments here, and with Siemens over its investment in wind turbines. In each case, the company made it absolutely clear that it was making its investments in the UK manufacturing sector in order to be part of the wider European market. Many of those investors, who invested here in good faith, now feel somewhat betrayed. The Japanese have said that very clearly, having been told by successive Governments that our membership of the European Union single market, on which the future of their investment here depended, would be maintained.
Looking forward, there are overwhelming arguments for remaining a member of the European Union. Some of them have already been expressed, including the arguments about peace, put forward by the right hon. Member for Leeds Central (Hilary Benn), and about high environmental standards. The fundamental point, however, is the impact on our living standards. It has been acknowledged—even by the Government in the past two weeks, as a result of their assessments—that however Brexit is constructed, we will be worse off if we leave the European Union. We can have different scenarios and assumptions, but there is none that shows that we would actually benefit from leaving the EU. We can see the signs of this already in what has happened since 2016. We have seen the biggest devaluation since the second world war, the cut in real incomes, the stifling of business investment and the decline in productivity. These things will continue on a bigger scale.
We are offered the fantasy of a clutch of trade deals, but we need to look at what that actually means. There will be some trade deals that can be negotiated. Small countries in the Caribbean will certainly sign up for trade deals to get better access for their bananas and sugar. Some countries will find it relatively easy to come to an agreement. They include Japan, Korea and Canada, but they already have trade agreements with the European Union, so we would gain nothing from that.
Norman Lamb (North Norfolk) (LD)
Does my right hon. Friend share my concern about our participation in the world-leading Horizon 2020 programme and the Horizon Europe programme that will follow it? When I questioned the Prime Minister last week at the Liaison Committee, there was no clarity as to whether we would be part of that successor programme, which will be vital for our science base in this country.
Sir Vince Cable
My right hon. Friend is absolutely right, and he speaks with the authority of his Select Committee. Many universities will be among the biggest casualties of Brexit precisely for this reason. The loss of the Horizon and Erasmus programmes, and in some sectors the loss of Galileo, will be a major blow to the UK economy.
On the specific issue of trade deals, the countries that really matter are the United States, India, China and possibly Russia. We know about the United States, which has made it absolutely clear that an “America first” trade agreement will mean fewer British exports to the United States and more imports to Britain from the United States. It is quite unambiguous about how it defines a successful trade deal. When the right hon. and learned Member for Rushcliffe (Mr Clarke) and I negotiated with the United States on the Transatlantic Trade and Investment Partnership agreement, even the milder Obama Administration made it clear that they wanted British food standards to be shredded and that they could offer very little in return because public procurement, which is a key issue in the United States, is a state function.
Agreement with India is also difficult to achieve, as we have already heard. It is a very protectionist economy, and it would offer limited access for whisky and financial services in return for a substantial increase in visas for relatively low-paid Indian professional workers, which the Prime Minister has already specifically ruled out. The Chinese might reach an agreement, but only if we turned a blind eye to Chinese practices on intellectual property and the rest, and we are trying to impose more sanctions on Russia, so what kind of a trade deal could we possibly get there? This really is a fantasy. However, we need to be careful—this is where the amendment of the right hon. Member for Leeds Central (Hilary Benn) is so important—that we do not allow the development of the argument that we must have the possibility of no deal. There was an argument for saying that the no-deal option must be kept on the table when we were negotiating with the European Union, but an agreement has been reached and no better terms are going to be obtained. The Prime Minister is now negotiating with the House, and that is why no deal is there. It is not to threaten Europe, but to threaten us, and we must stand up to that and reject it absolutely.
Finally, a people’s vote is essential because we must give people the choice now that we know what Brexit means. We need informed consent, not just an opinion expressed on promises made at the time. The perfectly reasonable argument has been advanced that we want to bring the country together, and the Prime Minister spoke eloquently about that. We do not want to perpetuate division, but the brutal truth is that the country is bitterly divided, and it will be bitterly divided if we leave under the terms that the Government have negotiated. We will be entering into a set of conditions in which the economy will deteriorate relative to how it would have performed in the European Union. The younger generation coming through will bear the brunt of the costs. Most of them voted to remain in the EU—an estimated 80% of 18 year olds wish to remain—and there will be great bitterness and resentment about what the older generation has imposed upon them. The issue will not go away, and there will be continued demand for a further vote on the question.
Layla Moran (Oxford West and Abingdon) (LD)
Does my right hon. Friend share my concern that the Prime Minister’s gambit that this will somehow be the end of the matter is not true? The 26-page political declaration is just the start of further negotiations, and people deserve the right to say whether they want to continue talking about Brexit and to suck the air out of this Parliament’s ability to tackle the big issues in this country.
Sir Vince Cable
That is absolutely right, and none of us should be under any illusion that this issue is going to die in March next year. As my hon. Friend points out, we will have five or 10 years of continued negotiation about what type of trade relationship we have, and there will be bitter divisions around that. We will have a great deal of disillusionment with the costs that Brexit will inevitably entail and continued demands to return to the issue. Let us agree to have another vote on Brexit now that we know what it is. That is the least damaging and least hurtful way that we can proceed as a country.
Mr Dominic Grieve (Beaconsfield) (Con)
I am conscious that one should pay tribute to my right hon. Friend the Prime Minister for the selfless devotion that she has shown over the past two and a half years in trying to carry out Brexit. I say that particularly because of the view that I have taken that I cannot support the deal that she is bringing before this House, but it would be wrong not to acknowledge the appalling hand that she was dealt at the start of the negotiation or, indeed, her good intentions in trying to carry it out.
I want to explain briefly to the House why I cannot lend the Government my support on this matter. The reality is not so much the Prime Minister’s red lines, but the rather harsher truth that the decision that underpinned Brexit was built upon a fantasy. It was a fantasy about the nature of the United Kingdom, about its apparent lack of interdependence with other states, and about our ability to get a deal from the EU, which seemed to presuppose that we were separating ourselves from a sovereign entity not, as we are in reality, trying to detach ourselves from an international treaty organisation organised by a complicated rulebook and with limited scope for movement.
A consequence of that can be seen in the way in which, over a period of time, the ambitions that my right hon. Friend set out had progressively to be narrowed, particularly when she was also being attacked from her own side by some of my colleagues, who wanted to restrict her and imposed on her the red lines that underpinned much of her negotiation. The consequence of that is where we are now. Quite frankly, we might have been led by archangels to get a better outcome, because all negotiations move towards the mean centre, and it is where the power lies that you end up getting the agreement.
The consequence is that, far from detaching ourselves from a complicated international treaty, we only have to look at the 585-plus pages of the document that has been brought back, plus the 26 pages of the political declaration, to see that we are in the process of enmeshing ourselves in another very complex international treaty, but one that is much more disadvantageous to this country than the one we are leaving.
One only has to look at this, perhaps with a lawyer’s eye, to see the arbitration mechanisms, the continuing role of the jurisprudence of the European Court of Justice and the complex issues underpinning Northern Ireland, where what we are effectively doing is substituting a bilateral treaty with the Irish Government, which was underpinned for its legitimacy by a referendum north and south of the border, and replacing it with an international treaty that makes the EU the guarantor of certain aspects of it. Where is the recovery of sovereignty in that?
Far from it giving us greater freedom of action, the entirety of this document restricts it. Of course I understand that my right hon. Friend the Prime Minister hopes that, in the political negotiations to follow, some of those problems may be overcome. I cannot make a prediction, but it is possible that they may be overcome, because I acknowledge that the EU may wish it, too. But the reality is that there is enough of a challenge that it ought to give this House real pause for thought.
Of course if there were total consensus, I might be reassured that, despite the fact I see this as a second-rate outcome, it may be worthy of support, but I only have to listen to so many of my hon. and right hon. Friends to realise, and I agree with what has been said, that in reality, far from bringing this debate to an end, we are only just embarking on it. And it will destroy this country over years of sterile debate about a future relationship, with the very real possibility that, at the end of it, we are still left in a relationship of dependency, because that comes from our geography, without any of the advantages of full participation. I do not consider that I can look my sons in the eye and say that I am simply prepared to sign this off.
The point has been made that we are living at a time when the will of the people should be respected and that we cannot ignore the result of the 2016 referendum, and I certainly acknowledge that it cannot be ignored. Many people voted for a multiplicity of reasons and the majority of them voted to leave, but when one ends up with a deal that is so markedly different from the things that were discussed in the referendum, it does not seem undemocratic to say that if the Prime Minister wishes to have this deal, the proper course of action is to go back to the people of this country and ask them whether it is what they really want.
There is an alternative, which is remaining in the EU, and I acknowledge there might even be one or two other alternatives beyond that, although renegotiating this package looks to be a pretty fantastic idea. As for no deal, a moment’s look at the economic projections shows that it would plunge this country into chaos for the sake of satisfying the ideological fixations of a tiny minority of this House, and that I will not let happen.
I do not know what will happen if the Government lose the motion. I have no desire to hurt the Government, and I want my right hon. Friend the Prime Minister to continue leading this country, but at least it would provide an opportunity for this House to rise to the occasion, to put party political considerations to one side and to start to work together to see if we can achieve a better outcome. The opportunity is there. I am pleased that hon. Members supported my amendment this afternoon and I am grateful to them, as it provides a foundation, at least by means of process, for taking that forward. I will vote for the amendment in the name of the right hon. Member for Leeds Central (Hilary Benn) in due course, because it also takes matters a further step forward. I am certainly prepared to engage with any right hon. and hon. Member in this House as to what other options than my own ideas might be available, although I come back to a basic point: we cannot be seen to be cheating the electorate of the 2016 outcome, and we have to recognise and acknowledge the consequences of that in the way in which we consult them. Subject to that, with reluctance, because it is certainly not an easy matter for me to find myself diverging from my own party, I have to say that this is a matter on which the national interest must come first. I am absolutely firm in my conviction that this deal is not good for the future of our country.
Nigel Dodds (Belfast North) (DUP)
This House has, fundamentally, a duty to respect the clear will of the people of the United Kingdom as delivered in the referendum and to deliver our exit from the EU as one United Kingdom. I regret to say that the withdrawal agreement put forward by the Prime Minister and a majority but not all of the Cabinet falls short of that objective. To enter into this arrangement, first through the transition period, as proposed, and then the backstop provisions, means we enter a twilight world where the EU is given unprecedented powers over the UK, certainly in the transition period, and massive leverage in the negotiations on the future trade relationship. And we would have to rely on the good will of others to let us ever leave these arrangements. Under these terms, the UK’s future as a strong and independent global trading nation, standing together, is in real and imminent jeopardy; this is an outcome that does not honour the result of the referendum or take back control of our laws, money and borders.
David Simpson (Upper Bann) (DUP)
I am sure my right hon. Friend will agree that it is ironic that while the Prime Minister is out on her roadshow trying to sell this deal to the great and the good, the place where it actually matters is this House and she has managed to unite it against this deal.
Nigel Dodds
I thank my hon. Friend for that intervention. There is a point here, in that this deal does not satisfy anybody. Leave voters are outraged at what they see as the betrayal of Brexit and remain voters are asking, “What on earth is the point of losing all our say but still taking all the EU rules?” The political declaration, despite previous promises, does not set out a clear, precise future relationship and raises significant issues in its own right. As for the legally binding withdrawal agreement, we are somehow now told to take on faith that it might never be used, even though 18 months has been spent negotiating it, as nobody actually wants it. But as the Attorney General made clear yesterday, in a forthright and candid session before the House, there is “no unilateral” exit clause and
“no unilateral right…to terminate”.—[Official Report, 3 December 2018; Vol. 650, c. 557.]
He said it is indefinite and that the whole thing was “undesirable”, “unsatisfactory”, “unattractive” and “a calculated risk”. That is hardly the most ringing endorsement for reasons why this House should vote for it.
Paul Girvan (South Antrim) (DUP)
Commitments were given in paragraph 50 of the joint report to both our party and to the House, but there does not seem to be any reference to them in the document that has been produced.
Nigel Dodds
Again, I am grateful to my hon. Friend, because I have said this on a number of occasions. I have asked the Prime Minister about that point but have yet to receive a reason for it. Hundreds of detailed legal clauses in hundreds of pages are devoted to the Northern Ireland situation and the backstop, but there is not a single line and not a single word in relation to paragraph 50, which followed paragraph 49, of the joint report in December. That provision was inserted specifically to allow that the final say in and decision on any regulatory differences between Great Britain and Northern Ireland should rest with the Northern Ireland Assembly and Executive, yet none of that appears anywhere in the withdrawal agreement. We have received no satisfactory explanation as to why that has been deleted. Indeed, the assurance was given at the time that the backstop would be UK-wide—that there would not be this sort of special carve-out or provision for Northern Ireland—so the whole concept of the backstop is nonsense. Deciding a fall-back position, an insurance policy, before even starting the talks or reaching any decisions on the final arrangements was always nonsense. The whole process has been bedevilled by the fact that so much time has been spent on negotiating something that we are now told that nobody wants and that nobody will ever want to see introduced, and we are now told that other arrangements will be put in place.
Quite frankly, this is an issue of trust, because some of the words that have been spoken and some of the things that were told to this House and to us directly as a party during the negotiations have not come to pass. I remind the House of what the Prime Minister said to the House on 28 February 2018. She said that we cannot
“undermine the UK common market and threaten the constitutional integrity of the UK by creating a customs and regulatory border down the Irish sea, and no UK Prime Minister could ever agree to it.”—[Official Report, 28 February 2018; Vol. 636, c. 823.]
A customs and regulatory border—that is precisely what the Government now propose. The Prime Minister said in terms on 28 February that no UK Prime Minister could ever accept that.
We are now being asked to take on trust the word of the Government. Who knows who the Government will be in two, three or four years’ time, whenever these negotiations come to an end? Who knows what the European Commission and European Parliament will look like at that time? We do know, though, that the final text of the withdrawal agreement will remain. It will be the thing that will stand and endure. It will be the only reference point that will be used, and it commits that after we come to the point at which we decide to go into this transition period of two years—and even if we do not get a deal after that, and there is absolutely no guarantee that we would have any such deal after that period of time—we will automatically go into the backstop arrangements. That will include large swaths of rules and laws in relation to the single market for goods and agri-food. It will not just build on the regulatory differences that are there now, because the existing regulatory differences between Northern Ireland and the rest of the United Kingdom were decided by this Parliament and by the Assembly and the previous legislatures, and they are there for health reasons, not because we are in a different regime. The reason we would have checks and differences would be that Northern Ireland would be in a different regime—the single market regime, subject to enforcement by the European Commission and to oversight by the European Court of Justice.
On the customs arrangements, it is simply untrue to say that somehow we are all in one big customs union together. Northern Ireland is in the EU customs union, but a special customs arrangement is created with the UK and the EU, and Northern Ireland is therefore part of that. Quite frankly, that is unacceptable to me as a Unionist. We were told by the Prime Minister in her six declarations to the people of Northern Ireland in December that she would ensure that Northern Ireland left the European Union with the rest of the United Kingdom, that no part of the United Kingdom would be left in the single market or the customs union, and that no part of the UK would be left subject to the jurisdiction of the European Court of Justice. Whether or not we agree that that is a good thing, the fact is that these commitments and pledges were made and are now being broken.
Let me go back to what the Attorney General said yesterday, because it is important. We look forward to the legal advice that will be published tomorrow as a result of the Government’s finally acceding to the will of the House on this issue. The fact of the matter is that there is no get-out clause from the withdrawal agreement. It is in the gift of the European Union as to how we get out, when we get out and on what terms we get out. Many of us are concerned that whatever the short-term consequences of entering the backstop may be, the real danger lies in the future. When it comes to the point at which a final arrangement—a final trade deal—is agreed, whatever that may look like, it is clear that there will be those in other jurisdictions and Governments who will say, “Well, UK, you can have whatever arrangements you like, but one thing is certain: as far as Northern Ireland is concerned we still do not accept that there can be no hard border through the use of technology, so Northern Ireland is going to have to stay in the customs union and single market.” Leverage will be exercised by other Governments on other issues, but I have no doubt that that will be the argument that will be used. It will not be our decision, even if we disagree with that, even if we put forward counter arguments and even if we put forward other proposals. No one in Northern Ireland and no one in this House will have the final say over what happens; it will be the decision of the European Union as to whether or not it allows us to leave on whatever terms it may be.
Lots of contradictory arguments are being put forward by the Government in Northern Ireland. We are told here all the time that nobody wants this—the Irish Republic does not want it, the European Union does not want it, and the UK does not want it—and yet, in Northern Ireland, the Secretary of State is going around telling everybody that it is the best possible solution and the best possible outcome. If it is the best possible outcome, why is everybody else saying that it should never be used, that it is temporary? We are told that it is temporary, but we now know that, legally speaking, although there may be a desire for it to be temporary, it is indefinite.
There are many things that I could say, but I do not have any time to develop them. Quite frankly, many people in Northern Ireland feel that the pledges that have been made by the Government and the Prime Minister have not been honoured. We are sad about that and we deeply regret it. I admire the Prime Minister’s stamina, her resilience and the work that she is doing, but on this she has misjudged the mood of the country and the mood of the House.
Mr Owen Paterson (North Shropshire) (Con)
It is a pleasure to follow the right hon. Member for Belfast North (Nigel Dodds), and I agreed with every word that he said.
Let us go back. David Cameron promised that if people voted Conservative in the 2015 election, there would be an in-or-out referendum; the people would decide—no ifs, no buts, no second choice, they would decide. To his horror, he won and had to deliver the referendum after a botched negotiation. What happened? We had a referendum—absolutely clear. All the processes in the House said, “You, the people, will be sovereign. We the MPs will give you the decision. You will decide.” We then had project fear mark 1. The people were bombarded with propaganda. Leaflets worth some £9 million were sent—crazy stuff from George Osborne’s Treasury—and the people voted to leave. A total of 17.4 million people voted to leave, the largest vote in British history on any single subject. We then had from those who lost: what does leave mean?
Mr Paterson
Like me, my right hon. Friend was elected on a particular platform at the general election, because the Prime Minister very helpfully said, “Leave means leave the single market, leave the customs union and leave the remit of the European Court of Justice. Every single Conservative member was elected on that platform and, helpfully, it was endorsed by the Labour party, so 85% of the votes in the general election endorsed the fact that leaving meant leaving those three things.
We then had the Lancaster House speech, which said that there would be no halfway house. What we have in this latest document does not deliver that. If this is passed, there will be the most appalling disillusion with our institutions. The people will have been thwarted and deprived by the establishment. We have seen it this evening: the political establishment hates Brexit; the commercial establishment—the CBI—hates Brexit; and the media establishment hates Brexit. None the less, the damage to our institutions will be grievous.
What we have in this document is worse than where we are at the moment. I was the Secretary of State for the Department for Environment, Food and Rural Affairs and represented the country in the common agricultural policy negotiations. We worked with our allies in Germany, Hungary and wherever. We stopped some of the more stupid proposals going through in the CAP reform, but we had to swallow an awful lot because we always got outvoted eventually in the qualified majority voting. We will not be there from now on. We will have law imposed on us. We will not be able to amend it or to repeal it in this House. The idea that we can sign trade deals is, sadly, nonsense. I was in Washington two weeks ago. Democrats, Republicans and senior members of the United States Trade Representative made it absolutely clear that countries cannot do trade deals with other countries that do not set their tariffs or their regulatory regimes. We will not set our tariffs and we will not set our regulatory regime.
Then there is the horror of the backstop, so eloquently described by the right hon. Member for Belfast North. This really is disgraceful, especially given the difficulties in getting the Belfast agreement signed. The absolute pillar of the agreement was the principle of consent that the status of Northern Ireland would never change without the majority of the people in Northern Ireland voting for that change. And what do we have? Something ghastly called UK(NI) has been created. Northern Ireland will be under a different regime. That is a breach of the Acts of Union 1800. It is extraordinary that this has been allowed through.
There are only two solutions to the Northern Ireland border. The first is that we stay in the customs union as a full member, as the right hon. Member for Derby South (Margaret Beckett) said. The second is that we address the reality that customs has moved on. I have spent a lot of time on this issue. I wrote a paper with the European Research Group that we published in mid-September. I discussed that paper with the Government and sent a copy to Monsieur Barnier, resulting in a very fruitful meeting. The fact is that there is currently a border—a VAT border, an excise duty border and a currency border—and that it is all done with technology.
Mr Steve Baker (Wycombe) (Con)
There is also an Intrastat border, so companies already have to declare their exports under Intrastat. While I have the floor, does my right hon. Friend agree that it is extremely concerning that the political declaration includes reference to a single customs territory, and that this is just another name for a customs union, in clear breach of our manifesto promises?
Mr Paterson
My hon. Friend, having been a Minister in the Department for Exiting the European Union, knows this subject in great detail and he is spot on. We cannot be in any customs territory like that because it is a breach of the promise to the people, and we will never do trade deals around the world. Sadly, the right hon. Member for Twickenham (Sir Vince Cable) is not in his place; it is pathetic to say that we cannot do trade deals with India, America and China, when we are the great international country and these people want to buy from us. We will not be able to do this if we are in some sort of customs territory.
Jim Shannon (Strangford) (DUP)
I congratulate the right hon. Gentleman on his remarks so far. Has he heard, as I have, various Government Ministers assuring Unionist MPs from Northern Ireland that we have nothing to worry about, even though they do not like the agreement themselves? In the Lobby this afternoon, the Secretary of State for Northern Ireland told us that she did not like what was put forward. When we put it to her that this could only be annulled by the Republic of Ireland, the EU and the UK together, she had no answer. The fact of the matter is that this is what it means; the backstop will be there forever.
Mr Paterson
The hon. Gentleman is absolutely right. There is no way out of the backstop. As we heard from the Attorney General yesterday, whether we support this is ultimately a political decision because we do not get out unless the European Union agrees, and it is not going to let us go while we are stumping up the cash, nor while it has us trapped in an arrangement whereby it can impose law on us that is perfidious and can damage our economy but benefits the EU, which has a £100 billion surplus with us.
Before we get off the question of the economy, let me say that so many Members who have spoken this evening think that the EU is the most wondrous organisation and that the economy is booming in Europe. There is one continent in the world with a slower rate of growth: Antarctica. The European Commission says that 90% of world growth is going to be outside the EU, and that is where we want to be. But we have got hung up on the Northern Ireland border, where there is already a border that is handled with modern technology. The turnover—incredibly important locally—is tiny, at 4.9% of Northern Ireland’s sales. That is 0.2% of UK GDP and 1.6% of the Republic of Ireland’s exports north. This can all be done with modern techniques.
I have engaged with real-world experts at an organisation called CLECAT, which represents—[Interruption.] Opposition Members are laughing. I think that an organisation with a membership of 19,000 customs brokers and freight forwarders that handles 80% of customs transaction in Europe knows a lot more than the Labour Front Bench. CLECAT recommends very clearly that we should move on. We should recognise that borders are no longer inspection points, but tax points. Inspection happens before goods are shipped. Earlier, we heard about just-in-time delivery. One thousand trucks will turn up at the border tomorrow with car parts, and they have all been pre-cleared. Pre-clearance will carry on. The border inspection point in Rotterdam is 40 km from where the containers land. If that were the distance from Newry, we would be looking at somewhere well north of Lisburn, into the suburbs of Belfast. Looking at the most contentious products—food and agri-tech—landing in Rotterdam, there are 30,000 containers a year, and they are all inspected. They go to the border inspection post, some for less than a minute, and 97% or 98% of them whizz through. Of the remaining 2% or 3%, only 10% are physically opened up. People have this ludicrous idea of borders—that we have a man in a tricorn hat stopping the stagecoach with a ladle and testing the brandy. That does not happen. Goods are tested in advance. They are pre-cleared. We have modern systems like REX—the registered exporter system—on rules of origin. We have Transit, and records that are so accurate that I saw when I went to Larne that only two goats went through there in 2016. That is the sort of modern system that could work not just on the Northern Ireland border but at Dover-Calais.
We must vote against these ghastly proposals. This is absolutely appalling, and I am delighted that so many Members from across the House are going to vote against it. So what is the alternative? The answer is to go back to what President Tusk offered us on 7 March—a wide-ranging free trade deal that foundered on the issue of the Northern Ireland border. Using existing techniques and technologies within the existing customs code, we can resolve the problem of the border and go back and take up that offer. It was very clear at the meeting with Monsieur Barnier and his senior colleagues that that offer is still on the table.
The European Union will have to face the fact that if this proposal goes down, as I hope it will this time next week, we should go straight back and take up that offer. I am glad to see that the Secretary of State is here. He should go straight back and do that. We can solve the problem of our borders. We can immediately start negotiating for this wide-ranging free trade deal. Just to show that we are serious, he should also make it very clear that we are going to make preparations for what “Project Fear” calls no deal, which means World Trade Organisation terms. Those are the terms on which 164 countries conduct 98% of world trade. It is absolutely childish to describe this as “leaping off a cliff” and a “catastrophe”.
We should show that we are deadly serious because obviously we are not going to get the free trade deal done by March. If we have a short temporary period in which we have set up a genuine agreement with the European Union, then we can invoke article 24—which I am not sure many people have heard of—of the general agreement on tariffs and trade, which enables us to go on at the current rate of zero tariffs for a reasonable length of time, potentially up to 10 years, so we can carry on exactly as we are. Goods will carry on moving. We will prosper and grow at a tremendous rate, as has been proposed by various forecasters. That is the alternative and that is the way ahead.
Mr Roger Godsiff (Birmingham, Hall Green) (Lab)
Thank you, Mr Speaker, for the opportunity to speak in this momentous debate, which will determine the direction of our country for decades to come.
I strongly support our system of representative democracy, whereby electors send their representatives to Parliament to exercise their judgment and then to vote as they think fit, whereas referendums are, as far as I am concerned, direct democracy, where power moves from Parliament to the people. I have to say that I am not a fan of direct democracy or referendums. I much prefer representative democracy, but there are occasions, as occurred on the EU, where it is right that the decision is put straight to the people. There was a precedent for that because, under the Labour Government in 1975, a referendum was called on whether we remained in the Common Market.
Like everybody else in the country, I had to make my mind up as to how I was going to vote in the referendum. On balance, I took the view that it was better for the long-term future of the UK if we left the European Union. My main reasoning for that was that I did not believe that attempts to create a European superstate modelled on America were going to be in the long-term best interests of the people of Europe. I was particularly concerned by the fact that the people of Europe, in all the countries, had never been asked whether they wanted the EU to evolve into a “United States of Europe”. I also did not believe that the EU was capable of reform from within, and that has been shown by the failure of Governments of both parties to reform what even The Guardian calls the “ridiculous” common agricultural policy.
However, if the EU had become a confederation of independent states working together on common issues and sharing best practice, with a small secretariat in Brussels or somewhere else, I would have been more than happy to support it. But that was not going to happen, because the project people were never going to allow it to happen, nor were they going to tell the people of Europe exactly what the ultimate objective of the EU was. It had to be integration by stealth, which I believe has contributed to the rise of populist parties on both the left and right throughout Europe over the last 10 years.
After the result was announced, I made it clear that, now that representative democracy had reasserted itself, I would respect the views of the 66% to 34% majority opinion in my constituency in favour of remain and I would not vote to trigger article 50; that I would press for a meaningful vote on the final deal to be put to Parliament; and that I was not opposed to having another referendum on the finally agreed package, so that the people could make the final decision. Therefore, I did not vote to trigger article 50; I pressed the Government, along with others, to have a meaningful vote on the finally agreed package, which was accepted by the Government; and I added my name to the amendment to the Lords amendment, which was tabled by the right hon. Member for Carshalton and Wallington (Tom Brake) and called for the finally agreed package to be put to another referendum.
All four wards in my constituency of Birmingham Hall Green voted to remain, so I believe that it was incumbent on me as their representative—whatever my personal views—to vote the way that I have, but I respectfully point out to my colleagues on the Labour Benches that 70% of them represent constituencies that voted leave. Six out of 10 Birmingham constituencies voted leave. All the other cities and large towns of the west midlands—Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton—voted leave. I am not convinced that there has been a seismic shift of opinion and that those people would now vote differently.
The finally agreed deal has now been put before the House. From the discussions I have had with my constituents and the representations I have received, I do not believe that it is acceptable to the majority of my constituents, and I will therefore not be voting for it.
Extricating ourselves from the political straitjacket of an embryonic European superstate was never going to be easy, and the Prime Minister and our civil servants deserve credit for their efforts in putting this deal together, but I do not believe that it will command a majority in the House. Unless another option wins majority support, I can see no other way forward but to put the decision back to the people in another referendum. We must be under no illusions—if we do that, it will have profound constitutional repercussions for this country. However, the electorate made the original decision through the direct democracy of the referendum and, if Parliament cannot come to a decision, it is up to the British people to make their choice as to whether they wish us to remain, to leave or to accept the terms put before the House by the Prime Minister.
Mrs Maria Miller (Basingstoke) (Con)
If the contents of this withdrawal agreement had been secured by the then Prime Minister, David Cameron, in 2016, it would have been heralded on both sides of the House as a great success. I think that it is a huge pity that people in Brussels did not take that opportunity more seriously.
As in any negotiation, Members of Parliament have to weigh up the merits of and concerns about every option before us. I voted remain and I fear the impact of leaving the EU not only for business reasons, but for issues of peace and security. However, we have to look for compromises and a way forward. What I have found most disturbing about the debate tonight is the lack of that compromise coming through in Members’ contributions.
Where should that compromise lie? It has to lie where we feel that people wanted us to act as a result of the referendum. What did people want us to do as a result of that vote to leave? Many people voted to remain, but most voted to leave. They voted for a return of control of our borders and an end to the freedom of movement. They voted to stop vast sums of money being sent to the EU. They voted for an end to the European Court of Justice’s jurisdiction in the UK. What nobody voted for is uncertainty in our businesses and threats to our jobs. The sort of threats the hon. Member for Birmingham, Hall Green (Mr Godsiff) has outlined could well be realistic for people working in the manufacturing sector in his constituency.
Mr Jonathan Lord (Woking) (Con)
I think this is still there on the official Vote Leave website, but it mentioned being out of the customs union, out of the single market, a comprehensive free trade deal with the EU and free trade deals around the world. So it was there. That was the mandate and that is what the people want us to see through.
Mrs Miller
My hon. Friend has every right to say that. I am saying to him: should we not be looking for a way forward in reality, rather than in the theory of the words set out in a manifesto? We have to look at the reality of what we are dealing with in terms of negotiation. A negotiation cannot happen by one side alone; it has to happen with the second partner as well. I would agree with anybody who has spoken today to say that leaving the EU is inherently risky, but the option before us at least has the detail behind it for us to be able to consider more closely.
How do we move forward? We could take the view of my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), who sounded rather like Micawber in saying that something will turn up. I certainly will not be holding my breath. The people we represent would not expect us to enter into something as risky as hoping that the EU changes its mind.
We could embrace uncertainty; I am referring to some of the comments made by SNP and Liberal Democrat Members. They talked about no Brexit—remaining in the EU—and perhaps having a second referendum. I believe that that would do very little to enhance democracy in our country and I certainly would not support that. I was pleased to, I think, hear from Labour that it will not be supporting that either.
We could embrace the uncertainty of no deal. I think the catastrophic impact of that is recognised by many people in the House today. I do not believe that there would be a majority in this place for a situation where we have no transitional period in which to forge the trade deals with the EU or beyond, and indeed no protection for EU citizens or for UK citizens living in the EU as a result of having absolutely no deal in place in March.
What is the least risky option and the thing that we should be responsibly advocating? Surely it is what the Prime Minister called “an unprecedented economic relationship” with the EU—the withdrawal agreement that is before us. It is the option that we know most about. It is the option where we actually have details to debate today in the Chamber. As the Prime Minister has set out, it delivers far more than the Canada deal could do and far more than a Norway deal could do. It would mean an end to freedom of movement, an end to the EU Court’s jurisdiction in the UK, a single market and a framework for our future relationship.
I am not going to stand here and say that this is without risk. Of course, there is risk—that is the territory within which we are operating—but a trade deal with the EU has to be something that is of value to our EU neighbours as well as to ourselves. I simply do not buy the argument that we would fall into a backstop as a result of lack of negotiation or lack of technology. Many of our near European neighbours, such as Switzerland, already operate in a similar way to the way we will operate in Northern Ireland. The technology exists. It is therefore a faux argument, and we will not be prevented from being able to operate in future.
There is much talk of proposed amendments to the agreement. I want the Secretary of State for Exiting the European Union to address that at the end of our immense debates. The Attorney General was extremely clear and helpful yesterday and I applaud him for the time he spent explaining things to Members. He referred to
“anything that is incompatible with our obligations under the withdrawal agreement.”
He went on:
“Any amendment to the meaningful vote that would introduce a qualification to our obligations under the agreement would be likely to be viewed by the European Union as a failure to ratify it”.—[Official Report, 3 December 2018; Vol. 650, c. 561.]
Does that mean that inserting an end date to the backstop could risk destabilising the only negotiated option on the table for us to view today, or indeed, throughout the five days of this debate? I will not support any amendment unless the Secretary of State can confirm that it would not destabilise the withdrawal agreement.
Leaving the EU is a huge risk for our nation. Everybody knew that when they voted in the referendum. To say that they did not belittles the thought that our constituents put into their vote. I speak as a Member of Parliament whose constituency reflected the national result: 52% voted to leave and 48% voted to remain. It is a democratic decision, but it is still a huge risk. That is why we have a duty to look at the facts. Our constituents expect us to weigh up the risks and act accordingly.
Above all, we have to deal with the situation as it is. Unlike other Members, Ministers are dealing with the hard reality of negotiating with Brussels and of the legal confines within which they have to operate.
Trade-offs are needed, but in going forward we must have a clear plan. That is far less risky than no plan, less risky than rerunning a referendum and far less risky than hoping against hope that the EU has a change of heart. In my four years as a Minister, I never encountered the EU having a change of heart, so I hope that the Secretary of State is not banking on that.
I will support the Government’s withdrawal agreement because I believe that it is in the best interests of not only my constituents in Basingstoke—a major trading part of the south-east of England—but the whole of our country. I hope that more Members, particularly those who were more on the Brexit side of the debate than me, realise that this is probably as good as it gets for them. I am surprised that they have not already woken up to that.
Clive Efford (Eltham) (Lab)
I voted remain in 2016 and I did not hide my disappointment at the outcome of the referendum. However, since then, I have honoured the result. I have watched as the negotiations progressed. Like my right hon. Friend the Member for Derby South (Margaret Beckett), I have learnt and I was willing to go along with the Government’s negotiations and plans to leave the European Union. I was always clear that the 52% of people in my constituency who voted to leave did not vote to make themselves or their families worse off, or to diminish our country’s status in the world.
The people who campaigned for Brexit never said at any stage that things would be worse. They accused opponents of being doom mongers and pedlars of “Project Fear”. On 14 June, during the campaign, the Ministers of the Vote Leave campaign wrote in a joint letter:
“There is more than enough money to ensure that those who now get funding from the EU—including universities, scientists, family farmers, regional funds, cultural organisations and others—will continue to do so.”
What else did they promise? Here is a list of things that was on their website and they put out in adverts on YouTube and so on: hundreds of new schools, more primary places in our current schools, more spending on scientific research, more health spending, raised pay for junior doctors, the abolition of prescription charges, the building of new hospitals, maintaining all current EU spending, more public support for agriculture, new roads, improving railways, expanding regional airports, reversing changes to tax credits, paying state aid to the steel industry, new submarines, protecting research grants and—the old chestnut—pothole repairs. It goes on: lower taxes, lower business taxes, a cut in VAT on fuel, a reduction in council tax—all of this promised on the back of money that we would save from the European Union. Of course, there is the other one that everyone refers to: the £350 million per week for the NHS on the side of the bus.
In June, the Institute for Fiscal Studies said that estimates on EU contributions and the savings that could be made were over-exaggerated. The £350 million is a bogus figure. The institute estimates it to be nearer £170 million. Last month, the Government’s own forecast said that, in 15 years, GDP would be 10.7% lower than if the UK stayed in the EU. The Bank of England said that GDP would be at least 1% higher in five years if the UK had voted to remain. Mark Carney went on to warn about the worst-case scenario, a disorderly no-deal Brexit, where the economy would contract by 8%, house prices would tumble by 30% and interest rates would have to rise to combat inflation.
After the referendum, it did not stop. The chatter continued. In July 2016, soon after he was appointed, the former Brexit Secretary, the right hon. Member for Haltemprice and Howden (Mr Davis), wrote that
“within two years, before the negotiation with the EU is likely to be complete, and therefore before anything material has changed, we can negotiate a free trade area massively larger than the EU. Trade deals with the US and China alone will give us a trade area almost twice the size of the EU”.
And then there is the Secretary of State for International Trade and President of the Board of Trade, who famously went on the “Today” programme in July last year and said:
“The free trade agreement that we will have to do with the European Union should be one of the easiest in human history.”
Later that year, in October, he said he would have dozens of international free trade deals within the next 18 months. He went on to say that Britain would simply copy and paste existing EU deals with third countries. That was quite an admission. My constituents who were part of the 52% will ask, “What did we vote for when we voted for Brexit if deals are simply going to be cut and pasted from the European Union to trade deals once we have left the EU?”
We will also need to have trading schedules. If once we leave the European Union we want to trade under World Trade Organisation rules, we will have to have schedules in place. Those schedules will have to be cut and pasted from the EU if we want to start dealing with countries outside the EU immediately after we leave.
The WTO has rules. It recognises us under EU trade deals. If we want to begin trading without any problems, we will have to stick with them. All those who make the argument that leaving is simple have failed to explain the complexities of WTO rules. They ignore, for instance, the most-favoured nation rule, which means that, if we cut our trade tariffs with another country without having a trade deal in place, we have to offer that opportunity to every other single member of the WTO. That would effectively make us a tariff-free nation. We would then be open to cheap imports, undermining jobs and local businesses. The notion that we will be completely free agents if we walk out of the European Union is, and always has been, a complete fabrication. If we do not leave with an EU deal in place, we will not be able to start negotiations to do deals with economies as large as the US, China or India.
I have listened to the arguments, and I have learnt, and it is clear that the Prime Minister’s proposal is the worst of all worlds. She is caught up in her own rhetoric—“Brexit means Brexit”, “no deal is better than a bad deal”—but now we know that no deal is the bad deal. My constituents who voted to leave wanted sovereignty to come back to this Parliament. They wanted to take control of their borders and to stop payments to the European Union, but they did not vote to make themselves worse off. This proposal will be lost in the vote next week. No doubt there will be a vote of confidence, and I and my Opposition colleagues will vote against the Government, but assuming that the Tory allies re-rat, the Prime Minister will then be charged with bringing to the House her plan B within 21 days.
I have added my name to amendments that mean we will get meaningful votes here in this House and that Parliament is taking back control. There is no majority in this House for no deal. The amendment tabled by the right hon. and learned Member for Beaconsfield (Mr Grieve) means that we will get a vote to deliver on that and to stop no deal. So the Prime Minister should stop threatening Members of the House, saying that, if we vote down her deal, it means that we will have to vote for no deal. It is time that we started talking to people about how we take this issue forward. I believe that, eventually, we will have to suspend article 50 and continue negotiations with the European Union.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Mercifully, there are no more UK Independence party Members of Parliament in this Chamber, but we have to remember that in the last European Union elections, they won the largest number of seats, and certainly, in our county of Shropshire, they won the most votes when those elections took place. In the debate today, we have not properly referenced the huge numbers of British people who voted for UKIP in the EU elections because of their frustration with the European Union. I consider UKIP to be a very malign, rabidly right-wing organisation and party. Some of their language on migration and immigrants was a real concern to me, particularly being the first ever Polish-born British Member of Parliament and very proud of the extraordinary contribution that 1 million Poles have made to this country.
I am pleased that UKIP is withering on the vine. Today, even Nigel Farage quit UKIP, but I am really concerned about the references that have been made during this debate, in many speeches, to the wish for a second referendum. I am absolutely convinced that if we have another referendum and try to overturn the decision that was taken, this will give wind to UKIP sails and it will be resurrected as a genuine political force.
Many Members of Parliament have spoken about how we will have to spend many years adapting ourselves to our new relationship with the European Union. They are clearly oblivious to the amount of constant work that we have had to do in this Chamber to adapt ourselves to its move towards a supra-national state. There are two issues that I want to address briefly: one is the single currency and the other is the EU army.
There are 19 eurozone countries, but the eight that do not have the euro are contractually obliged so to do. They have no alternative but to join the eurozone, yet the people in these countries do not wish to abandon their currencies. In the Czech Republic, 71% of the electorate do not want the euro. In Sweden, 72% do not, and in Poland, the country of my birth, 62% of the electorate do not want to give up the złoty, yet they are moving towards a single currency for the whole European Union. We have an opt-out—one of only two countries to have one—but it is not inconceivable that at some stage in the future, if we remained in the EU, say in 10 or 30 years, the EU might come back and say, “You know you thought you had an opt-out? Well, think again. We cannot have a system with 27 countries using the same currency and you being an exception.”
Secondly, there is the European army. I take my daughter, Alexis, to the Polish-Russian border every year for our summer holidays, and I say to her, “Darling, this is the most highly militarised part of Europe, and if the tit-for-tat missile deployments continue at the pace they have been over the last few years, it will be the equivalent of the North and South Korean border.” Despite that, the EU wants to create a single European army that, at best, will duplicate the services of NATO, an organisation that has kept the peace on our continent for 70 years, and, at worst, will usurp NATO as the supreme defence posture for the continent of Europe.
Let us not forget that, once we pull out of the EU, there will be six countries committed to the common defence of our continent that are not members of the EU and never will be: America and Britain, two permanent members of the UN Security Council; Canada and Iceland, protecting the Atlantic; Norway, in the extreme north; and Turkey, protecting our southern flank from ISIS and its extremely dangerous moves.
Mr Paterson
Will my hon. Friend confirm, as he knows public opinion in Poland well, that, although we have this idea that it is the EU that has kept the peace, people in Poland know, having escaped from the Soviet empire, that actually it is NATO that has kept the peace in Europe and brought freedom to those eastern countries?
Daniel Kawczynski
Absolutely. I could not agree more with my Shropshire neighbour. Of course, we are relatively safe here on our island. It is those frontline states such as Poland that will really face instability if anything is done to usurp the supremacy of NATO. The Russians understand that NATO is united and strong and that any deviation from that could put countries such as Poland and others at risk.
I have two issues with the withdrawal deal. The first—I look at our DUP colleagues as I say this—is the Northern Ireland backstop. The Attorney General yesterday did not give me sufficient guarantees that Northern Ireland would be protected in the event that the backstop has to be utilised. We owe a debt of honour to the people of Northern Ireland. The hon. Member for North Down (Lady Hermon) said that DUP Members did not represent the whole of Northern Ireland. Well, they are here and they are our interlocutors, and if they are telling us, as the representatives of the people of Northern Ireland, that they have genuine concerns about the backstop, it would be highly irresponsible of us as Unionists to ignore those concerns. The determination of the people of Northern Ireland to remain British in such extraordinary adversity is remarkable. I am very proud of their determination to remain within the United Kingdom. The Attorney General looked at the DUP last night and said, “You have to vote in the interests of the whole United Kingdom.” I have a message for the Attorney General: there is no United Kingdom without Northern Ireland.
I come to my second concern. I asked the Attorney General in a one-hour telephone conversation last week, “What is your legal advice? How much of the £39 billion do we really owe?” and he told me a figure in private over the telephone, but when he was asked that same question yesterday by my hon. Friend the Member for Shipley (Philip Davies), he said the figure was too difficult to calculate. Again, I asked the Prime Minister this afternoon for assurances, but she did not give me a clear answer. What really concerns me is that, while we in Shropshire are facing shortages for our local schools and hospital, we are, under this agreement, likely to hand over another £39 billion of British taxpayers’ money to the EU in return for the possibility of a treaty further down the line. That is simply unacceptable.
This week Mr Macron has threatened to block a trade deal with Mercosur that has been discussed over the last eight years because the new Brazilian President, Mr Bolsonaro, has pledged to pull out of the Paris climate agreement. Members should think about what would happen to the Conservative party if we handed over £39 billion, and two, three or four years on, there was still no trade agreement. That would be devastating for our party, and devastating for our country. As things stand, I will find it extremely difficult, if not impossible, to support the withdrawal agreement.
Douglas Chapman (Dunfermline and West Fife) (SNP)
Many people throughout the United Kingdom are very excited about Brexit. They know about the blue passports that they will be able to hold and about the new Brexit 50p coin, and the prospect of Empire 2.0 is coming to the fore. However, the more people learn about the Brexit process, the more they are realising that we will lose more than we could possibly ever gain. In my constituency, 60% of people voted to remain in the EU, and recent polls have shown that the proportion of remain supporters has increased to 68% or 69%. I think that as people in Scotland become aware of the real impact on their lives and jobs, there will be a hardening of the pro-EU vote.
I want to focus, however, on the impact of the UK’s leaving the EU on the important areas of defence and security. In my view, the Government have drastically underestimated the negative consequences of Brexit for our ability to maintain safety and security in the UK without the full co-operation of our European counterparts and the ability of our defence industries to trade and operate freely across the single market. We have a strong, competitive defence industry here in the UK. Firms such as Babcock, BAE Systems and Rolls-Royce have successfully fulfilled Ministry of Defence orders for years, and even more newer companies are coming into the work stream. Those firms, like many others, have built up a valuable breadth of expertise and capability, and we should be doing all that we can to preserve their skills.
While the withdrawal agreement offers short-term stability to the defence industry, it provides no assurances in the long term to ensure that just-in-time supply chains and trading arrangements across the EU will be maintained. We must also consider the support that is currently given to the industry, particularly to small and medium-sized enterprises, in the form of European structural and investment funds and the European Investment Bank. The Government must commit themselves to continuing or replacing that support. Without it, we face further job losses in dockyards like Rosyth in my constituency and the gradual depletion of those skills from our industrial landscape. That would be an economic travesty, which I am sure neither Members nor our constituents wish to see.
In a report published in March entitled “Ministry of Defence: Acquisition and support of defence equipment”, the Public Accounts Committee said:
“The Department needs…to safeguard the interests of British industry after we have left the European Union.”
The Government have been warned time and again that they must protect our defence sector from the economic calamity of leaving the EU, and I urge the Prime Minister and the Ministers who are on the Front Bench tonight to take heed before it is too late.
Yesterday, as a member of the Public Accounts Committee, I co-led an evidence session with witnesses from the Ministry of Defence on the defence equipment plan for the next 10 years. The National Audit Office reports that the plan remains unaffordable, and the MOD itself admits that there is a black hole of between £7 billion and £14.8 billion black in its budget. Why is that affected by Brexit? We have established that, even under the Prime Minister’s deal, the UK will be worse off than it is with the current arrangements, and the Government themselves accept that. Almost every economic commentator who has produced anything of note also recognises that the public finances of UK plc will be in a much worse state beyond Brexit than they are at present. So given that the MOD is already struggling to realise its ambitions with the current budget, how will it cope with another blow to the economy when we leave the EU, especially under a no-deal scenario, and that is even before we start going anywhere near possible negative currency implications? With question marks already hanging over where the axe will fall in the equipment plan to bring it into balance, the Brexit situation puts at risk our defence capability.
Much has been said about our fishing industry, but what has been missing most in those discussions is a focus on securing our waters post Brexit. In particular, the north Atlantic is of key strategic importance, not only to safeguard fisheries and our oil and gas reserves and renewables, but to protect us from external threats. The MOD currently has a total of 19 Royal Navy escort ships, which is an historical low, while there are three Type 26 frigates on order at BAE Systems in the Clyde. That gives us nowhere near enough vessels to adequately protect our waters.
Another area of huge importance in defence is research and development. As a member of the EU, we currently benefit from numerous opportunities for collaborative research with our European partners through bodies such as the European Defence Agency. I recognise that it is possible for non-EU countries to participate in EDA projects, and I urge the UK Government to ensure provision is made to retain as much access as possible to these and to other defence funds as they become available.
One such project is Operation Atalanta, the highly successful EU-led anti-piracy operation off the horn of Africa in which the UK has played a leading role. At the height of Somali piracy in 2011, 736 hostages and 32 ships were being held by pirates. By April 2017, that number had fallen to zero. This demonstrates the value of joint EU efforts to tackle global security threats, and we must continue to be a part of those efforts.
The Galileo satellite system is another collaborative project that the UK is at risk of being excluded from as a result of Brexit. While the Government have put forward proposals for continued participation in Galileo as part of the wider security relationship, there is no guarantee they will be accepted.
With the Prime Minister putting forward the prospect of either this deal or no deal, Brexit will leave the UK exposed to a multitude of threats to our defence and security industry. In a recent article, Malcolm Chalmers, deputy director-general of the Royal United Services Institute, suggested:
“In security terms, the full benefits of membership—combining both shared decision-making and operational effectiveness—cannot be replicated under the proposed deal.”
He goes on to say:
“If the UK were to leave the EU without a deal, it would have severe and immediate consequences for the UK’s ability to combat crime and terrorism.”
On a recent visit to Culross, Torryburn and St Margaret’s primary schools, I discussed Brexit at length with the 12 and 13-year-olds there. It is perhaps a cruel irony that the EU came about through the end of two world wars that took many lives, yet that is the kind of legacy we are about to leave our children, and probably the saddest part of Brexit is the fact that we are ignoring the peace dividend we have had for the last several decades.
Mr Edward Vaizey (Wantage) (Con)
I am grateful for the chance to take part in this important debate. It is a common theme at the moment to praise the Prime Minister’s resilience, but may I take a moment to praise your resilience, Mr Speaker? When this debate concludes you will have been in the Chair for about 13 and a half hours listening to a combination of highfalutin rhetoric and complete drivel; I will leave the House to conclude what Members are going to hear for the next eight minutes. In the time that you have been in the Chair, Mr Speaker, you could have travelled to Paris and back on multiple occasions and probably could have flown to Gibraltar and back on multiple occasions, which emphasises how close Europe remains, despite the fact that we are leaving the EU.
I said in an earlier intervention that I have come to my own conclusion that it is right to back the withdrawal agreement. I came to that conclusion all by myself. No one gave me a knighthood; no one offered me a job. I looked at what the best solution was for the United Kingdom and Brexit, and I think supporting the withdrawal agreement is the right solution.
Let me just deal with one piece of homework. I praise the Department for Business, Energy and Industrial Strategy, because I see our continued relationship with Euratom as a very important issue. We are leaving Euratom, and in Culham—just outside my constituency —we lead the world in nuclear fusion research. I am delighted to say that almost all the relationships we had under Euratom will be replicated through a series of bilateral agreements and legislation.
I also praise something else that perhaps does not get enough praise, the inanimate object of the civil service, made up of many animate objects. The civil service has worked tirelessly for the past two and half years to put in place the measures we will need for a successful Brexit, and too often the thanks it gets from certain parts of the Chamber is to be traduced, slagged off, insulted and dragged into some absurd conspiracy theory. In my time as a Minister I never met any civil servants except ones who worked hard, were strictly neutral and did the bidding of their Ministers.
Let me also speak briefly about the importance of the creative industries. Although I will back the withdrawal agreement, I remain concerned that too many issues that affect those industries—the most successful part of our economy—have not been covered. Notably, they are the future of free movement, which is very important, as there are many freelance workers in the creative industries; the future of copyright; our ability to have international broadcasters based in the UK who can broadcast throughout Europe; and digital transfer.
Daniel Kawczynski
Can my right hon. Friend tell me, in hindsight, what were the biggest mistakes made by his close friend and neighbour, David Cameron, in the run-up to the referendum, during it and after?
Mr Vaizey
I have only got six minutes, but his biggest mistake was not to win the referendum, which I wished we had done on behalf of my constituents, who voted to remain. In the last few hours, I have had more than 200 emails calling for a second referendum from my constituents, and I shall disappoint them in not endorsing that call. Although I was trolled heavily by ultra-remainers a few weeks ago, all of whom seemed to be quoting Burke, I remain a representative and not a delegate. I know my own mind and what the way forward is for Brexit—the withdrawal agreement. Too many people do not seem to realise that this is a two-stage process. We have to leave the European Union before we negotiate our close trading relationship with it, of which the political declaration is a part.
My right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) said that too many people think that Brexit is a disaster to be managed, but we are separating from a 45-year relationship. Of course it has to be managed: we cannot simply walk away. Sadly, it has fallen to the remainers to manage it. We had a Brexit Foreign Secretary who walked away, we had a Brexit Brexit Secretary who walked away, and we had another Brexit Brexit Secretary who walked away. The thing that annoys me most about those people who fled the scene is their continued claim that somehow they represent the purity of Brexit. Well, we have a Brexit Environment Secretary who is happy with the withdrawal agreement. We have a Brexit Leader of the House who is happy with the withdrawal agreement, and a Brexit International Trade Secretary, with whom I work as a trade envoy and who is doing a great job, who is happy with the withdrawal agreement.
The trouble for the pure Brexiteers—the wreckers, the people who ironically will bring down Brexit with their pathetic behaviour on the withdrawal agreement—is of course that no one had a specific view of Brexit and it has been left to the House to work it out and vote for what it thinks is right. I will support a withdrawal agreement that secures citizens’ rights, that does not leave us as a vassal state, that has a backstop that keeps Northern Ireland part of the United Kingdom, and that—unfortunately for me—restricts freedom of movement. I am a huge fan of freedom of movement, but if people think that that is what people voted for with Brexit, so be it.
Mr Lord
Will my right hon. Friend reflect on the fact that had the Prime Minister put a Brexiteer—as he calls them—fully in charge of Brexit, whatever deal came back would perhaps have more support in the country among the 17.4 million who voted leave and the leavers and Brexiteers in the Chamber as well? Brexiteers should have been made to own Brexit, because we think that we might have done a slightly better job of it.
Mr Vaizey
I do not think the Brexiteers would have done that. Too many Brexiteers fantasised about what Brexit would look like without confronting the cold reality. I slightly wish that the Prime Minister had done that, however. As it is, she has given the Brexiteers a get-out clause. They will all complain about the withdrawal agreement not being good enough, and if we crash out with no deal, they will all say that nobody prepared for that. Nothing is ever the Brexiteers’ fault and no solution is ever put forward by them. The Department for International Trade, the Foreign Office and the Brexit Department are three pretty big Departments, and I would have thought that they, along with the Prime Minister—whom the Brexiteers elected, by the way—would allow the Brexiteers to deliver the Brexit that they pretended they wanted.
Another thing that has annoyed me about this whole process is the sudden rising up of free trade deals that can be done overnight without any concern about how the public might react when we do deals with huge economies such as China, the US and India.
There is also the ridiculous confrontational language. I know I have been guilty of it in this speech, but I am worked up at the moment. The ex-Foreign Secretary was talking about the EU deciding to let us go, but the EU is now desperate for us to go. What people do not understand about the backstop is that we will now have to have our cake and eat it, to coin a phrase. We will have access to the European Union single market without paying in and we will have a restriction on freedom of movement. This is not part of a plot to turn us into a vassal state. The EU did not want us to leave, but now that we are doing so, it wants us to leave in as orderly a manner as possible. We should embrace that. It is appalling that we use such confrontational language.
Unfortunately, however, this does not mean that I support a people’s vote, which I think is a complete red herring. If we were to agree to one, people would be entitled to say, “If you’re asking us to vote again, can we have your salaries? We delivered our verdict in the referendum, and we asked Parliament to reach a conclusion and vote on it.” That is what this withdrawal agreement is about, and it would be a humiliation for this Parliament if we were to go back to the people. I also believe that those who think that a people’s vote will deliver a verdict that we should stay in the European Union would be sorely disappointed by the outcome of any such vote.
I said at the beginning of my remarks that I supported this withdrawal agreement because I had come to the conclusion that that was the right thing to do. I am not supporting it because I am a huge fan of the Prime Minister or of the way in which she has conducted herself over the past two years. I really have been angered and appalled by the “citizen of nowhere” and “jump the queue” language. Too often, the Prime Minister has spoken only for the 52%, although I was delighted when she said a bit about the 48% earlier today. There has been no attempt to heal the divisions after the referendum, which leaves me hugely disappointed, but I will still back her withdrawal agreement because I believe that that is the right way forward.
Do you know what disappoints me most, Mr Speaker? If we were to analyse my genetic make-up, I am sure that we would find a bit of Viking and a bit of Huguenot, but I am sure that we would also find a bit of Brexiteer. My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) knows this only too well from when he tried and failed to select me for Bristol North West. I absolutely accept what was said earlier by the hon. Member for Birmingham, Hall Green (Mr Godsiff). He said that there was a European project, a ratchet and a will to create a European superstate. Part of me thinks that we could potentially thrive after Brexit if we do it properly. We could actually remake the European Union and the European continent. We could have what moderate Eurosceptics always wanted, until this debate turned toxic, which was an inner core, with a single currency, pressing forward towards an ever closer union, and an outer core, outside the single currency, with a looser relationship with Europe. That outer core could still have all the benefits of that relationship without the fear of being subsumed into a superstate. This withdrawal agreement is potentially a step forward, but after months of hard technical work and with the prize within our sights, what happens? Of course the hard Brexiteers come out and try to tear the whole thing down. Well, try—and see if you get your Brexit.
Lilian Greenwood (Nottingham South) (Lab)
Twenty-two months ago, I sat in this Chamber listening to arguments from both sides of the House about the triggering of article 50. It was a difficult decision, but I voted against that motion at the conclusion of the debate, because I was not convinced that the Government had a proper plan for Brexit. I take no satisfaction in being proved right. The Prime Minister’s failure to unite the country, focusing instead on trying to satisfy the warring factions in her own party, is a terrible failure of leadership just when our disunited kingdom really needed that leadership.
At the 2017 general election, I reassured my constituents that, while I respected the referendum result, I would not give any Prime Minister a blank cheque. I promised to stand up for my constituents and fight for the best deal for Nottingham South—one that would not leave them worse off, less secure at work and with fewer opportunities in the future. This deal does not deliver on those promises. Conservative Members remain bitterly divided about what kind of Brexit they want. They have failed to build a consensus within their party, within Parliament and within the country. They have not listened, and the people whom I represent, particularly those on low incomes, are likely to suffer most if we leave the EU on the Prime Minister’s terms.
As UN special rapporteur Philip Alston warned two weeks ago in his report on extreme poverty and human rights, the lowest paid will bear the brunt of the economic fallout from Brexit. My constituents were promised “the sunlit uplands”, hundreds of millions of pounds every week for our NHS, the easiest trade deal ever, taking back control of our borders and a return to sovereignty. We now know what the reality looks like. As the Chancellor admitted, our country will be worse off under all Brexit scenarios. Far from delivering more money for schools, to tackle poverty and for our NHS, we will all be poorer, with fewer opportunities, and our public services will suffer. They did not put that on the side of a bus.
The deal that the Prime Minister has reached satisfies no one and seems increasingly unlikely to command a majority in this House, and yet she is in complete denial. She has repeatedly refused to explain what she will do when her deal is defeated. That is utterly reckless, putting the future of my constituents and our country at risk.
I intend to vote against this deal because it fails to protect the interests of the people, the businesses and the city that I represent. Nottingham South is home to two world-class universities. They are vital to our city’s success and matter deeply to the thousands of students and staff I represent. The University of Nottingham told me that the
“impact of the decision to leave the EU has already had negative implications for the University. We have noticed a decline in student numbers at postgraduate level. EU staff report feelings of demotivation and alienation in a country they have chosen to call home and have made a massive contribution towards. We have noticed a number of examples where industry collaborators have put investment into joint R&D programmes on hold or have cancelled them. If the UK’s participation and status in the Horizon Europe scientific research programme isn’t confirmed in time, then there is a significant risk that we and the major businesses and SMEs that work with us will be locked out of the major part of this programme going forwards.”
It is not only our universities that are threatened. The Nottingham University Hospitals NHS Trust recently published reports on the impact that Brexit will have both on its staff and on the supply of medicines. Thanks to this Government’s cuts to nurse training bursaries and the failure to value NHS staff, we have a recruitment crisis. Non-British EU staff make up 4.4% of the hospitals workforce—690 staff, including 214 nurses and midwives. These are people we desperately want and need working in our NHS but, as reported in the Nottingham Post yesterday, despite immediate reassurances issued by the trust following the referendum, these EU citizens
“feel that they have been forgotten and are unsettled and anxious because of the uncertainty of their employment due to Brexit.”
It is no wonder when they are characterised as “queue jumpers”. The trust also reports that a no-deal Brexit may affect the timely supply of goods, services and medicines, which could disrupt health and social care services.
Businesses across Nottingham, in both manufacturing and services, are equally worried about recruiting skilled staff, about their supply chains and about access to markets. This is not what my leave-voting constituents were promised. Here is what one of my constituents from the Clifton estate says:
“We are headed for a Brexit that nobody voted for...a million miles away from what was promised in 2016. It threatens jobs, businesses and hospitals here in our constituency; it will mean no end to austerity for years to come...it will do nothing to deal with…the real challenges facing our local area. In fact, it will make dealing with those problems harder.”
The answer to those challenges is a Labour Government who are determined to tackle the poverty, insecurity and fear that drove so many of my constituents to vote leave. A general election would give people a real opportunity to have their say, not only on this bad deal but on this bad Government, but if we cannot have an election, maybe it is time to ask the people what they think. Parliament does not support this deal, and Parliament will not support a catastrophic no deal. If the Prime Minister will not listen to Parliament, maybe it is time to listen to the people.
Derek Thomas (St Ives) (Con)
I appreciate the opportunity to speak at the beginning of this important five-day debate.
My right hon. Friend the Member for Wantage (Mr Vaizey) said that Brexit is often what has been promised, if only we were doing it properly. I agree with that. Looking back, there are many regrets that we should all share. One is that we in this House have not worked together. We might have differences behind closed doors, but we have not worked together to show leadership to the nation and to do the best we can to deliver the result of the 2016 referendum for the British public and for those in Northern Ireland.
We have done untold damage to the sense of security of people whose natural home is not the UK and who no longer feel welcome. I have met several such people in my constituency, and I regret that they were ever allowed to feel unwelcome. I also regret that, even now, we have not truly clarified for our farmers, for our health and social workers, for those in hospitality and for the many in permanent, so-called unskilled jobs whether they can still come and work freely in the UK. It is important we correct that concern.
When it comes to doing Brexit properly, I believe that the Prime Minister’s Lancaster House speech of 17 January 2017 was doing Brexit properly. It reassured me that we were heading in the right direction and with the right priorities. It accepted that we could not get all we wanted but that we could get some common agreement across both sides of the argument and with Brussels.
The problem is that the proposed agreement we heard about in the statement two weeks ago is quite removed from the Lancaster House speech and other speeches. The Attorney General says that there is no unilateral right for either party to terminate the backstop arrangement, or the protocol as it is described in the legal advice. That is a great concern because it says that it is not in the United Kingdom’s hands to determine when it actually leaves the EU, which is exactly what people thought they were voting for in 2016.
I listened to the Prime Minister’s statement two weeks ago, and I was left with four concerns, which I have raised with the Attorney General—I am also meeting him tomorrow—and they rest with me. I am pleased for fishermen in my constituency that we are leaving the common fisheries policy, but it is not clear that this will lead to UK control of access to UK waters. No fisherman believes that we will not allow foreign fishermen to come into UK waters, but our fishermen believe that we should be the ones who decide when they do, where they do, what they catch and where they land it. I can see nothing in the withdrawal agreement that confirms that that will be the case. If we can address that issue, my local fishermen will be satisfied.
There is also a real risk to the integrity of the Union. I am clear that no part of this agreement should treat any part of the UK differently, and I will be looking for assurance from the Attorney General tomorrow that that is the case. Unfortunately, as my right hon. Friend the Member for North Shropshire (Mr Paterson) made clear, the belief is that parts of the UK will be treated differently—obviously, I am referring to Northern Ireland —and this really matters. People in Cornwall, who are proudly nationalist and believe in the integrity of Cornwall, also believe in the integrity of the UK, and they are as concerned as we are to see that Northern Ireland should not be treated differently.
We were also promised control of our own laws. What we would like to know is: when? When will the UK become a sovereign independent state, where we will be making our own rules and not be a rule taker? Is that at the end of the transition period or at the end of the backstop protocol time? It is important that we know the answer, because we do not know when that protocol will come to an end. I have been attending monthly international trade briefings and listening to people talking about what work has been done to begin conversations on trade deals. I have listened to the Prime Minister and others saying that we can strike new trade deals, but the reality is that although we can strike them and agree them, they cannot be implemented until we leave the EU properly. Is that at the end of the implementation period or at the end of the backstop?
I have no desire whatsoever to see further uncertainty. There are businesses in my constituency and right across the UK that really need to know what the future holds for them, and they want to know soon. I have no desire to prolong the agony and anxiety that many, many face, but we have a narrow opportunity, a narrow window, in which to get this right. I believe that we can get it right first time and that the vast majority in this House would support the deal if we could address the backstop, even if it meant having to consider a longer implementation period.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
This is often described as the most important decision this House has taken since the second world war, so it is an even greater privilege then usual to speak in tonight’s debate. In making my remarks, I will try to be less divisive than the times in which we find ourselves, because these are very divisive times. Newcastle reflects that: we voted 49.3% to leave and 50.7% to remain. We reflect the diversity, division and commonality of the UK. When taking the metro from Newcastle airport to Byker, people travel through a reduction of 11 years in the average lifespan of those living nearby. The north-east is the only region to export more than it imports, and 52% of that goes to the EU as part of highly integrated, just-in-time supply chains. So we have stark inequalities and a regional economy integrated into Europe, but still we have strong remainers and committed Brexiteers. How am I to represent that?
We have to start with the most important thing about Brexit: what it tells us about our nation. The fact is that the Brexit voters won more than the Brexit vote: they won the right to be heard. Before Brexit, few were paying much attention to the views of people in council estates such as the one where I grew up; they had not gone to the right schools, and did not have the right jobs or the right vowels. The Brexit vote caught people’s attention, and let me give one example of that. As shadow Minister for industrial strategy, I meet industry groups and lobbyists all the time. Before Brexit, they told me how much they contributed to the country, but they meant London. Now they tell me how much they contribute to the regions. They have started measuring it. That is the Brexit effect.
The right to be heard is a key battleground in the history of our country, and it is at the heart of the age-old division between those who labour in silence and those who speak from a gilded platform. We must recognise that, despite its many well-intentioned people, the European Union did not appear as a champion of the voiceless. I am vice-president of the Party of European Socialists, and I acknowledge that although European socialists have been responsible for hugely important achievements, from the social chapter to protecting the environment to ending mobile data roaming charges, Brussels never felt like a stronghold of socialists standing up for the voiceless—and that was before the financial crisis and the gospel of austerity championed in Brussels, even if its most enthusiastic choir was in David Cameron’s Government.
Immigration is often cited as the key issue of the Brexit vote, and it is certainly one that was talked about very much on the doorstep. Labour has recognised that leaving the European Union means that free movement as it stands will come to an end, but I do not believe that that will make anyone here more prosperous or their jobs more secure. As an engineer, I worked all over the world, not taking other people’s jobs but meeting skills needs and contributing to other cultures. I believe that, like sustainable trade, the right kind of skills exchange makes everyone richer. As shadow Minister for industrial strategy, I know that it was not immigration that betrayed the working people of Britain, but the laissez-faire economics that privileged the rich and the well connected. I will not support the further betrayal of my constituents by a Brexit deal that sacrifices their future prosperity for outdated and outmoded ideology, which is what the Prime Minister’s deal would do.
British industry is integrated with Europe: we are part of supply chains that go back and forth across the North sea and the channel multiple times. These European supply chains cannot be replaced by American or African or Australian ones—the logistics and the costs are just too high. As an engineer, I know the challenges involved in creating proper, effective supply chains, and they cannot go backwards and forward across the Atlantic in the same way they do across the channel. The promises of the posh and privileged, who promised the world while hedging their own not inconsiderable assets, have misled people.
This deal dumps our industry out of the customs union within 24 months. It introduces barriers to our trade in services and creates legal uncertainty and regulatory mismatches with Europe. It undermines our science and innovation base and cuts off access to key talent. It therefore endangers our core industrial competitiveness and threatens the future of British industry and, as a consequence, the economic, physical and mental wellbeing of communities throughout the country, and especially my constituents.
I do not accept that the nation should be voiceless when it comes to what the deal is, so I will not accept that it is a choice between this deal and no deal. Only a general election can address the issues that drove the Brexit vote, and this Government, which is in office but not in power, should go to the country to set out their stall. If they are too scared, we should go back to the country in a public vote—one that I hope would include the voices of 16-year-olds.
The next few weeks—indeed, the next few days—are going to be very difficult for this country. No matter what the result of the vote next Tuesday, we will enter a period of uncertainty about both our short-term and long-term future and relationship with the European Union. Whatever that uncertainty brings and whatever debates follow on from that, I will insist that the interests of the people who sent me to Parliament, our values, our solidarity, our commitment to social justice and a more prosperous future, define not only the United Kingdom’s future, but the future of our relationship with Europe.
Ben Bradley (Mansfield) (Con)
It is unfortunate that I rise to speak against the approval of this withdrawal agreement, which does not represent the best deal for the United Kingdom or fulfil the spirit of the referendum result. It ties us to EU rules and regulations for the long term while removing our ability to influence those rules. It ties us to a backstop arrangement that would create different circumstances for Northern Ireland compared with the rest of the UK and that we cannot leave of our own volition. It ties our hands to prevent us taking advantage of the full extent of independence over our international trade policy. For that reason, I feel that it is worst of all worlds; it is a state of purgatory, which, as the Attorney General made clear yesterday, has no fixed end point.
In her Lancaster House speech, the Prime Minister was clear: she said simply that we would seek to negotiate a bold and ambitious free trade deal with Europe that would also give us the ability to strike out around the world. She was honest with us, and did not pretend that this would have all the same benefits of full membership. We were leaving so things would have to be different, but we could still have a positive relationship built around free trade. She aimed to take back control of our money, our borders and our laws. She was quite right that those were at the heart of why people voted to leave. She said that no deal was better than a bad deal, and that if the EU would not give us something that worked for the whole United Kingdom, we could walk away and succeed on our own merits.
Looking back, it is hard to understand how we have ended up here, particularly when our manifesto in 2017 committed us to so much more. My Labour predecessor in Mansfield held the seat for 30 years, longer than I have been alive, but, more recently, the constituency has shown its appetite for change. Local people voted Conservative for the first time in 2017, sick of decades of representatives moaning about the past, but having no plan for the future. They also voted overwhelmingly to leave the EU in 2016, fed up with being forgotten by the establishment and eager to take back control of their destiny.
I am under no illusion that each of my constituents—in fact, most people in the country—have dissected the details and come to a conclusion on their preferred customs arrangements; some have, but the vast majority have not. That does not mean that they did not know what they wanted when they were voting. I have had this conversation on literally thousands of occasions now with local people who felt—to coin a phrase—that leave meant leave. It meant not being part of the institutions, not being tied to their rules, and not paying into their budgets. We were leaving, in the English dictionary sense, which is “to depart from permanently, to cease to be a part of” the European Union. I think that it is a fundamental misunderstanding by many, not just in this place, but out there, that it might be possible to make it look like leaving while actually seeking continuity. At Lancaster House, the Prime Minister did not phrase things in that way. She accepted that our relationship would change, that it would be a different and a looser one, and that it would give us the freedoms that we wanted. At that time, I am fairly certain—and the votes back it up—that she had the support of the majority in this House for that kind of deal.
I draw the comparison, an overly simplistic one perhaps, between the referendum and a game of cards—a choice between stick or twist. Voters knew, and they were told each and every day throughout that campaign, of the risks of voting to leave. They were told all the horror stories. Things were overblown and exaggerated, just as they are now, but they voted to leave anyway, because the status quo does not work for them. In the choice of stick or twist, they opted for twist, recognising the consequences and the uncertainty, but wanting to take that risk in order to seek new and different opportunities. Having ticked a few boxes that looked a bit like leaving, they did not want to try to replicate the status quo; they wanted change, because they felt that the status quo did not work for them. We cannot deliver an outcome that meets the “spirit” of the referendum result if we remain tied, possibly indefinitely, to the institution that we promised to leave and if we compromise on all the things that mattered in that decision. It cannot be boiled down to a spreadsheet with data on economic forecasts; the decision was so much bigger than that. It was about the heart as well as the head; the outcome was for change.
Lilian Greenwood
I am listening with interest to one of my Nottinghamshire neighbours. When the hon. Gentleman’s constituents voted to leave, does he think that they voted to be poorer, because we have heard that every Brexit scenario will leave people in Nottinghamshire poorer?
Ben Bradley
I thank the hon. Lady for her intervention. People did not see it in those terms. Part of the fundamental misunderstanding of the Government and of this House is that people saw it solely as an economic transaction. As I have just said, it was about more than that. Despite the forecasts and the doom and gloom that is discussed in this place and in the media, the vast majority of people who come to me—75% in local polling—say “Reject this deal and seek a looser relationship.”
Mr Paterson
Thinking about the previous intervention, does my hon. Friend agree that his constituents and mine were very sensible and completely ignored these ludicrous forecasts, which are all part of “Project Fear”? Our constituents have been bombarded with further utter nonsense forecasts this week, but they do not believe them; they see real opportunities for this country when we get our freedom back.
Ben Bradley
I totally agree. The more obscene these forecasts become, the less they are believed. My favourite was that we are all going to get super-gonorrhoea if we leave the European Union. This week, the story is that babies will die through milk shortage because of leaving the European Union. These are the stories that exist in the media, and people out there give them no credence or credibility. It was interesting to hear my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) making many similar arguments earlier today. However, I would argue that the right conclusion is not a second referendum; it is to deliver on what we promised.
It is right that people are sick of this debate and want to get it done, but this proposal does not allow us to do that. Instead, the debate rolls on for another year or 18 months as we try to agree a future relationship. It offers little certainty to business and almost guarantees that we will be back here again in 2020, having an equally divisive and difficult debate. As it stands, the withdrawal agreement does not end the problem—far from it. The only way to truly get it done, put it in the rear-view mirror and get on with talking about a positive domestic agenda, which Opposition Members have mentioned, is to accept that we cannot agree on a specific deal. Then we can go back and talk to the European Union about how to agree on all the things that we can actually agree on, including issues such as citizens’ rights, security, travel and all the rest, and carefully manage a transition to World Trade Organisation terms.
The only way to have certainty at this point is to have a clean break. I would prefer us to seek a more positive free trade arrangement first and to be strong in that approach, because that is what we promised in our manifesto and at Lancaster House, but we should not fear leaving on the same terms that govern 98% of global trade. It may be true that better relationships can be agreed further down the line, with or without this withdrawal agreement, but our hand is most certainly strengthened by being true to the mantra laid out in the Lancaster House speech—no deal is better than a bad deal—rather than being held over a barrel throughout the coming year and being threatened with this backstop arrangement, as President Macron has already told us he will do.
After months of saying that it could not be done and it was impossible, the withdrawal agreement accepts in black and white that the Irish border situation can be resolved through technological solutions. It is a political problem, not a practical one, and again, we are better prepared for that debate if we leave and come at it from a position of strength.
The World Trade Organisation has been clear that its rules would not require a hard border, and HMRC on both sides has said the same. If the barrier to achieving this is a political one and the Prime Minister is right that there is no deal without the backstop, we have to take charge of that debate in the interests of the whole UK, put ourselves in the driving seat and say, “This is not acceptable, so how do we handle that no deal scenario, because we are not going to agree to something that is detrimental to the United Kingdom?” That is the only way to force the issue that currently dictates this entire arrangement, which has always been built around the problem, rather than around the positive outcomes that we all want to see. As my right hon. Friend the Member for North Shropshire (Mr Paterson), who has great experience of this issue, said earlier, customs has moved on. We have to embrace that, as does the EU.
This is a divisive issue and reaction is of course mixed. I have had constituents ask me to support the deal and to support remaining, but as I said to the hon. Member for Nottingham South (Lilian Greenwood), the overwhelming majority of my constituents—collaring me in the street, answering me on social media or writing to me—want us to be stronger and to agree a looser arrangement with the European Union that gives us the freedom that they sought.
We have to start from the premise that we are a free and independent nation seeking a trade deal with Europe as we laid out at Lancaster House, not from the position of seeking continuity with our existing arrangements as this agreement does. If we do that, and if we truly take back control and deliver on the referendum result, we would restore the brittle faith in democracy that led to that outcome in the first place. It would prove to people in constituencies like mine that the Government do listen and act on their decisions, and that they do have a voice. Brexit presents a huge opportunity to give people who have felt forgotten for a long time a chance to believe in government and to believe in a country that is proud, independent and embracing new opportunities across the whole world, but I regret that this withdrawal agreement cannot deliver that outcome.
Caroline Lucas (Brighton, Pavilion) (Green)
This debate goes to the very essence of what we want to be as a country—confident, compassionate and outward-facing, or fearful, inward-looking and isolated. All the major challenges that we face today—the climate crisis, terrorism, the refugee crisis, cyber-crime—are trans-boundary, and so all of them would be far harder to address if we leave the EU. I therefore stand by my decision to campaign to remain in 2016, and still believe that the future will be brighter, fairer and greener inside the European Union.
I also stand by my vote against the Prime Minister’s foolish decision to trigger article 50 before she and her Cabinet had even worked out what “Brexit means Brexit” actually does mean. At a stroke, that recklessness surrendered all leverage to the EU27, and it has resulted in the miserable, blindfold package that we have before us today, with its 26-page, 8,000-word wish list guaranteeing absolutely nothing about our future relationship with the EU. The Prime Minister urges us to “get on with it”, as if accepting her plan would be the end of it, but let us be very clear: in reality, it is the starting gun for years of more negotiations and more political infighting, with uncertainty hard-wired into it.
Over the past two years, I have not seen any evidence that the Government understand or appreciate the importance of many of the amendments that many of us tried to make to the EU (Withdrawal) Bill, whether to do with upholding basic legal rights, trying to safeguard jobs, protecting freedom of movement and the Good Friday agreement, or enhancing the protection of our precious environment. Indeed, all the evidence I have seen, including the Government’s own impact assessments, has simply confirmed to me that Brexit would make my poorest constituents, and the nation’s poorest communities, poorer still. It would lead to a smaller Britain with less influence: borders closed, horizons narrowed. It would betray the hopes and dreams of young people, who overwhelmingly voted to remain. It is an unforgivable act of inter-generational betrayal. It puts our contribution to vital cross-border work on climate change and nature in jeopardy. It sees us abandoning what is frankly little short of a miracle that few would have dreamed possible when the bombs were raining down on British towns and cities in the middle of the last century. It helped us to emerge from the rubble and the destruction of the second world war into a nation that has been at peace with its neighbours ever since. With a supreme irony, the Prime Minister’s package would also result in people having considerably less control over the decisions that affect their lives, not more.
In recent days, the Prime Minister has been admonishing MPs to think of our constituents when we vote on this deal. Well, I can assure her that I have been doing— and we have been doing—exactly that. I think of my Brighton constituents when I consider that every single economic impact analysis shows them being worse off as a result of any kind of Brexit. I think of them when I learn of a study by the local UK Trade Policy Observatory that concludes that her deal would cost at least 960 of them their jobs. I think of them when the leisure sector in the city reports how seriously it would be affected by the end of free movement. I think of them when the universities tell me how worried they are about the future of European research, their research grants, and the Horizon Europe programme. How does the Prime Minister have the gall to suggest that MPs are not thinking of our constituents in this debate? How dare she call on our constituents to unite behind her deal when she knows how much damage that deal will do to them and to their families?
For more than two years now, I have consistently said that the 2016 referendum was, and could only be, the start, not the end, of the democratic process. In 2016, voters could not, and did not, express any opinion on the terms on which the UK should leave the EU, because at that time the terms were completely unknown. That is why I believe the outcome of the negotiations must now be put before the public in a people’s vote. That people’s vote must give the option of remaining inside the EU, which every recent poll shows to be what a clear majority of voters now want. This is not about subverting democracy or seeking to overturn the referendum result; it is simply giving voters a proper say on important issues that were not put before them in 2016.
If it is still the will of the people to leave the EU in the light of what they know now, then that is what they will vote for in the people’s vote. But if they decide that it would be better to stay in the EU, and reject the Prime Minister’s deal, then the UK could continue as a member of the EU on the same terms as now, as the opinion from the Scottish courts has underlined today. I would put it to the Prime Minister that the will of the people is not fixed in stone. As she learnt to her cost last June, it can change and it does change. There were 25 months between the general elections of 2015 and 2017. Those 25 months were enough time for the Prime Minister to lose her majority, her mandate and her credibility. A longer time has elapsed—29 months—between the referendum of June 2016 and today. Every recent opinion poll shows that the will of the people has changed since then as well.
Brexit and the lies, false promises and cheating of the leave campaign in 2016 have unleashed forces that should worry us all, so I take seriously the charge that a people’s vote could risk yet more division. But I have thought about this clearly, and I believe that nothing would be more divisive than the people of this country discovering the hard way that the Prime Minister’s blindfold Brexit does not deliver the sunlit uplands that they were promised.
I want to say clearly that a people’s vote is not about putting the clock back to 22 June 2016 or pretending that the last two years somehow never happened. Those Brexit voters who voted to leave because they believed the status quo is intolerable were right—it is. We are a country of grotesque inequalities. Far too many people are living in communities with proud histories that have been hollowed out by years of deindustrialisation and decades of neglect, compounded since 2010 by an ideologically driven assault on national and local public services under the name of austerity. Economic vitality has been drained from their neighbourhoods, and many feel hopeless and trapped
Last year’s Social Mobility Commission report identified the 30 worst coldspots for social mobility, and it is no coincidence that every single one of those 30 places voted to leave. The lie at the heart of the leave campaign was that this downward spiral can be reversed by leaving the EU. The truth is that Brexit would make things much harder to fix, and we know that the real answer lies in far-reaching reform at home. We need a new social contract—better jobs, high-quality public services and investment in the green economy, with people of all backgrounds and communities treated with respect and given the opportunity and power to thrive. We need to ensure that the net economic benefit that people from the EU bring to this country is spent in those areas that experience the largest changes, on projects collectively decided by local people.
Those of us campaigning for a people’s vote need to make clear our commitment to addressing the grievances aired during and since the 2016 referendum, to campaigning for far greater public investment in those regions that need it most and to working towards a Britain where people have a real say in the decisions that affect them.
In my last few words, I simply want to say that I reject the false choice presented by the Prime Minister between a catastrophic no deal and her miserable blindfold deal. That is no choice at all, and that is why we need a people’s vote.
Rachel Maclean (Redditch) (Con)
It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas). I do not agree with her views, and I hope I will be able to explain why.
We have to start with the political reality of the House of Commons today. It is abundantly clear that there is no majority in this House for a no-deal Brexit. As someone who supports Brexit and wants to see it happen, I believe the Prime Minister was right to start by negotiating a deal. Those calling for her to walk away without negotiating a deal forget that it was always going to be extremely difficult, because of the diametrically opposing views on this issue that represent different value systems. These arguments cut across political parties, as we have seen in all the debates in this place.
It is clear from what I have seen in the House, as a Member of 18 months’ standing, that the Opposition want to frustrate Brexit. They have made it clear that they would vote down any deal that the Prime Minister brings back, thereby ignoring the democratically expressed view of their constituents and mine. It is also clear that the majority of MPs do not support Brexit. I support Brexit, and I therefore believe that the calls for a second referendum are completely misguided. The divisions that exist on the Government and Opposition Benches are being exploited to stop Brexit, and I fear that that is where we are heading if we do not support this deal.
This deal has been criticised by Members on both sides of the House. It has been criticised by those who want us to remain and those who want us to leave without a deal. As I said, I support Brexit, but I am pragmatic, in the best traditions of my party. I deal with the world as it is, not as I would like it to be. I have that view because I spent nearly 30 years in business before coming to this place, and I recognise that we sometimes have to make compromises to get most of what we want. If we pursue perfection, we end up without anything.
I believe that there are of course risks of voting for this deal. We all heard the Attorney General yesterday, and he was perfectly honest and transparent about those risks. I am not naive about those risks, but I have to make a political judgment about how, if I vote down this deal, that carries more risks. I never said it would be easy to leave the EU—having spent 30 years in business, as I have said—but this is certainly not a reason to ignore the referendum result.
Those on all sides of this argument who sit outside the negotiation room find it incredibly easy to criticise the Prime Minister. I wonder how many of them would, in reality, do a better job. When I go out on the streets of Redditch, I find that there is a silent majority out in the country who admire the Prime Minister for what she has done, and they implore me to back her to provide certainty for the businesses in my town that employ my constituents and on which they depend for their livelihoods. The BBC World Service was in Redditch today, on the first stop of a nationwide tour, to interview people, and there was widespread support for the Prime Minister’s deal on that programme.
Surely if the Prime Minister was motivated by narrow party political interests, she would have come to this House and said, “Let’s support a no-deal Brexit”. She knows that that would have had overwhelming support from our side of the House, as we have heard from colleagues. She has sought to strike a pragmatic balance and to take on board the views of Members on both sides of the House and the 48%, and I think she is absolutely right to do so.
We have heard a lot of criticism from people, but the people who criticise have not presented any sensible options to solve the intractable constitutional problems that face us due to the Northern Ireland situation, nor have they really paid due regard to the businesses that employ people and that welcome the certainty coming from this plan. A very good point about the WTO rules is that, if we were to leave on those rules and then seek to negotiate something else in the future, there would be two sets of rules that businesses in my constituency had to plan for. Here we have a plan that they can take on board and make plans for. It is a deal that presents us with certainty.
This is a divorce and it is messy. In such a situation, neither side gets what it wants, but given the uncertainty of events in this House of Commons, it strikes me that we are now faced with an incredibly clear choice. If we do not vote for this deal, the parliamentary arithmetic dictates that we cannot now leave without a deal. All scenarios mean chaos, political chaos, turmoil and further division, which would not be good for my constituents in Redditch at all.
This decision is far from simple, and I am aware that by making my decision I am going to disappoint many people. That is life in politics. But I have read all the documents, and I want to reassure my constituents that I have studied them carefully. I have listened to the debates. I have engaged with Ministers, and I have engaged with my constituents, local businesses and people on the street. I am not part of any faction or any group. I have made this decision and, hand on heart, I believe it is in the best interests of my constituents in Redditch and of the country. I offer the Prime Minister my support in voting for this deal, which I believe will deliver the Brexit that people campaigned for and voted for when they cast their vote.
Mr David Lammy (Tottenham) (Lab)
The European Union was once just a remarkable dream—a hope that our countries which fought and murdered each other on an industrial scale twice in one century could come together, a refusal to return to extreme nationalism and a determination to prevent more bloody conflicts in which tens of millions are killed. The audacious idea of European integration was motivated by fear, but it was made possible by shared ideals—democracy, human rights, equality and freedom—and a refusal to submit to the tyranny of fascism ever again.
After the second world war, Winston Churchill said in 1946:
“If Europe were once united in the sharing of its common inheritance there would be no limit to the happiness, prosperity and glory”.
Today, however, some Conservative colleagues talk about total independence from Europe as though it were a virtue. Let me remind them that Churchill understood the European dream is to build a whole that is bigger than the sum of its parts. He understood that it is about pooling sovereignty, working together and sharing control.
Let us now be honest with the country. Total independence is a fantasy. It is the same idea that motivates an angry teenager to run away from their family. Total independence means throwing a tantrum and ending up in the cold. Total independence is selfishness, individualism, arrogance, superiority, a refusal to work together and the breakdown of the common good. Total independence will lead to total isolation. Let us be honest: Britain did not become great in total isolation. Britain thrived by becoming the biggest treaty-signing power in the world, signing more than 14,000 treaties in the modern age. Britain thrived by sharing, not stockpiling our sovereignty. NATO membership compels us to deploy soldiers when our fellow members are attacked. The Paris climate accords demonstrate how we tackle global threats together, not alone. There is also our membership of the WTO, which commits the UK to supra-national regulation and arbitration. Sovereignty is not an asset to be hoarded, but a resource, which has value only when it is spent.
The hard Brexiteers in the House say that they want to take back the control that we lost because of the European Union. In reality, they are still mourning Suez, Britain’s last fling of the colonial dice. Back then, Anthony Eden failed to recognise that Britain was no longer capable of launching a solo imperial adventure. Let us not fall for the same hubris today.
When those on the other side of the debate say that they want empire 2.0, let us ask what it means. What was imperialism? What was colonialism? At its worst, the British empire was exploitation and subjugation—moral superiority that led to putting humans in shackles and the oppression of black and brown people because this country thought it knew best. Those countries once coloured pink on the globe were not won in negotiations, but taken by force. Today, we need to build a new image of Britain, which brings this country together after years of division. We have to use our imagination. Empire 2.0 is not it.
After the global embarrassment of Suez, Britain became the sick man of Europe. The European Economic Community was set up in 1958, but Britain did not join until 1973. In those years, GDP per head rose by 95% in France, Italy and West Germany, while Britain grew by only half that rate. Our industry and economy had fallen behind. Europe gave post-imperial Britain a chance to regain some wealth and dignity. In the 40 years since, our economy grew faster than those of France, Germany and Italy.
We restored our position on the global stage, but it was not only our prosperity that increased. Our allies in the US respected us for our seat at the top table in Europe, and the rest of the world saw us become a confident nation again: a grown-up country, prepared to give and take for the greater good.
The Brexiteer promise to take back control in 2016 was nothing more than a deluded fantasy. It was a lie that divided friends and families, pandered to racism and xenophobia and caused an extra 638 hate crimes per month. What does it say about the United Kingdom when the UN sends rapporteurs to warn us of increased racism in our country? What does it say about Britain when our politicians play on the fear of migrants, races and religions to win votes? What did it say when Nigel Farage stood in front of a Nazi-inspired poster of refugees with the caption, “Breaking point”?
The founder of the Labour party, Keir Hardie, spoke of socialism’s “promise of freedom”, its “larger hope for humanity” and of
“binding the races of the earth into one all-embracing brotherhood”.
I honestly ask my good friends in the party who are still wavering: can you really vote for this politics of division and hate? Can you really vote to slash workers’ rights and protections? Can you vote to give tax avoiders a sanctuary? Can you vote to hand over more power to the clumsy hand of the market?
What I am about to say is not fashionable, but our country’s story of renewal through Europe is one of immigration. We grew as a nation because of free movement. European migrants are not “citizens of nowhere” or “queue jumpers” as the Prime Minister would have us believe. Young, energetic, diverse and willing to pay taxes, EU citizens have given so much. They have done the jobs that our own would not do. Around 3.8 million now live in Britain. Over their lifetimes, they will pay in £78,000 more than they take out.
The contribution of European migrants has not been just financial. Our culture, our art, our music and our food has been permanently improved. The Prime Minister’s deal has emerged as a Frankenstein’s monster—an ugly beast that no one voted for or wanted. To appease hardliners, the transition period can be extended to 2022 at most. That has eradicated our leverage—it is simply not enough time to negotiate a free trade deal. We are now on course for another cliff edge. The deal does not take back control; it gives it away. It surrenders our voting rights on the European Council, the European Commission and the European Parliament for nothing in return. I cannot vote for any form of Brexit because every form of Brexit is worse for my constituents.
Brexit is a historic mistake. It forgets the lessons of Britain’s past. It forgets the value of immigrants. It forgets that we cannot build a new empire by force. It forgets that in the modern world our nation will flourish not through isolation, but through connection, co-operation and a new vision for the common good. Brexit forgets why this continent came together after two bloody wars.
This country is crying out for a second chance. Seven hundred thousand people marched on the streets of London. Millions more campaigned online and wrote to their MPs. They are asking for one thing: an opportunity to right the wrong of 2016 and another shot at the imperfect but audacious European dream. As John of Gaunt says in Shakespeare’s “Richard II”:
“That England, that was wont to conquer others,
Hath made a shameful conquest of itself.”
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I congratulate the right hon. Member for Tottenham (Mr Lammy) on his speech.
When it comes to Brexit, since 2016, everyone in this place has probably had their tuppence-worth to say on the Floor of this House. In that time, the most extraordinary statements have been made. Some, at the beginning of the debate, were on the side of a bus—or, as some of us where I come from would notice it, a coach. It seems that some folk in this debate do not know the difference between a bus and a coach. They have never been on a public bus in their life.
We had a former Brexit Secretary say on the Floor of the House that the industrial working class voted for Brexit. Well, Mr Speaker, my constituents rejected the proposition on the side of the bus/coach. As I said to the then Brexit Secretary on that very day, as I remember it, the industrial working class of West Dunbartonshire voted overwhelmingly to remain within the European Union. Not only did they reject Brexit, but they voted, surprisingly, to his knowledge, for Scotland to again become an independent sovereign nation. I mention that because there was a referendum process in 2014 where we discussed, for over two years, our place in the world. We were told that the only way to remain in the European Union was to remain within the United Kingdom. Well, there you go—that is another lie for everyone to see.
It would also seem that on Brexit this is a Government who have, as we would say in some parts of these islands, dingied Scotland. It is a Government full of dunderheids and indeed clypes. I would advise Hansard to get themselves a guid Scots dictionary. They have had since 2015 to get used to the idea.
Ministers of this Government who bring the issue to the Dispatch Box seem merely to haver about Brexit, unable to articulate a principled position on the greatest constitutional crisis faced in these islands since 1921. Again, I go back to that. If you do not know what I am talking about, pick up the modern history of Ireland found in the House of Commons Library. I seem to be the only person who has ever read it since it was brought into the Library in the 1960s.
I could not blame my constituents for coming to the necessary conclusion that the British Government were incapable of running a ménage, never mind the complexity of Brexit. It is a time in which the British Conservative and Unionist party has paraded its finest like some alternate Easter parade. There are not a lot of them here today, especially Scottish Conservative Members. We have seen Conservative Members who found the Brexit referendum so difficult they did not even participate in it. A former Minister found it unbelievable that there had at one point been a hard border—a British border—on the isle of Ireland. The lack of historical perspective is staggering. The lack of political acumen is profound.
The Prime Minister and I will not agree—we can both be assured of that—on next week’s vote, but at least the Prime Minister, like those of us on the SNP Benches, has been consistent in her opposing positions. That cannot be said of those who brought us to this point. I would describe them, in that guid old Scots term, as sleekit, for off they went, and at the top of that list would be the former right hon. Members for Witney and for Tatton. This is a Parliament that they thought would take back control and they have handed it—as they scurried off to build their huts in the backs of their gardens—lock, stock and barrel to a bunch of free marketeer Brexiteers on the Government Benches and, would you believe it, to the other end of the corridor, to the unelected, unaccountable, as I have often said, bunch of warmers in the House of Lords? We could say that there is a flippancy to that comment, but how does it come about that the archbishops and bishops of the established Church of England should have more of a say on Brexit than the elected Parliaments of Scotland and of Wales and, if it should sit, the Assembly of Northern Ireland? It is a profound reversal of the devolution story in this Parliament, which many Members of this House participated in.
To be brutally honest, we on the SNP Benches are in no way surprised by this turn of events. The constitutional points include, for example, the backstop, which many Members from Northern Ireland have talked about. That is a privileged position, which the SNP would be delighted with—I know that some Members from Northern Ireland are not, but I congratulate them on it. However, it highlights the inability of the elected and sitting Parliament of Scotland—not just its Government, but its Parliament—to have a voice in these deliberations, for they continue to be ignored. This constitutional conundrum is further muddied by the private expression of the Electoral Commission on the dubious donation of over £435,000 to the Democratic Unionist party, which may have come about from a shadowy group known as the Constitutional Research Council, headed by the former chair of the Scottish Conservative and Unionist party—the very foundation of Brexit.
When I entered this House, Mr Speaker, I made it clear to you, for you were in the Chair when I gave my maiden speech—my first speech, should I say—that I was neither a Unionist nor a Home Ruler, and I am not. I believe in the independence of the nation of Scotland yet, even as a democrat in this House, I believe that the decision that we take next week will be based on a false premise, funded by dark money, challenging the very idea of fair elections and any future referendums. I am no conspiracy theorist. I was there when my constituents voted for independence, and I was there when they voted to remain within the European Union. I saw the ballots being counted, yet because of the issue of dark money, there are many Members, including me, who believe that the inability to investigate the involvement of dark money is not only an existential threat to democracy, but a real threat that weakens the democratic consensus that has been built since 1945.
Let me conclude by saying this to my constituents—they voted remain and many of them have asked me to be committed to a people’s referendum. I will vote against the Government’s motion next week, if a referendum motion is brought to this House, I will fully support it and I will campaign in my constituency for my country, Scotland, to remain within the European Union.
Paul Girvan (South Antrim) (DUP)
It is a privilege to take part in this debate. I must say that it might not have happened had the previous Prime Minister been able to come back with a deal from Europe. Unfortunately, Europe, being its usual intransigent self, would not give a deal on that occasion, so a referendum was called.
My constituency voted to leave. It did not vote for this withdrawal agreement. It voted to leave the customs union, the single market and the ECJ, but this withdrawal agreement does not address those matters, and it leaves Northern Ireland in a place it does not wish to be. Many people say they have heard business welcome the agreement. In Northern Ireland, many families gave sons to fight to remain part of this United Kingdom. What was not achieved by the IRA and republicanism and its adherents has been achieved by bureaucrats in Europe with a pen, and it will potentially leave Northern Ireland en route to a united Ireland. We will have no control over other Governments, and we will be rule takers, not rule makers.
Great emphasis was placed on protecting the Good Friday agreement. I never voted for the Good Friday agreement, but those who did did so on the basis of certain protections that were promised. The border between Northern Ireland and the Republic exists—it is there and present today—and those who say they did not see it obviously did not look. People there measure in kilometres; they use the euro; they tax at different rates; and they use state aid in a very imaginative way in the Republic of Ireland—and they tend to challenge us whenever we attempt to do likewise. That so-called border, which we put forward in our argument, could be dealt with using technology. That technology could be put in between Larne and Stranraer, between Belfast and Ardrossan, and at any other port—Liverpool, for instance; they could have all the associated issues and access all our ports using technology. I can only say that that technology could work between Newry and Dundalk without any difficulty.
But we are where we are, and the backstop proposed in this withdrawal agreement will do nothing but leave Northern Ireland out on the periphery. We will not be able to enjoy any of the advantages. We have heard the message that the Ulster Farmers Union has accepted this deal, but there are many areas in this. Should intervention be given to farmers from the United Kingdom and it is not in line with what Europe has agreed, or it is more than they would have received under the CAP—or the single farm payment, as it currently is—those farmers in Northern Ireland would not be able to access it, because it would be breach EU rules.
I agree that we have had many advantages from being members of the EU in relation to trade. The EEC, as it was when we joined in the 1970s, was never envisaged as the federal states of Europe that we see today trying to dictate to sovereign Governments around Europe. It has overstepped the mark in many areas, and that is one reason this nation voted to leave. When we voted in June 2016, a clear message came from Europe that it would not make leaving easy, and the same is evident today. It will not make this easy, and we are not at the end of the road yet; there is a long way to go.
I have listened to hon. Members around the Chamber say this evening that there is no stomach for a no-deal Brexit. That is correct—nobody appears to be happy with a no-deal Brexit—but something else is very clear: there are very few voices speaking in favour of this agreement. It has united those who want to leave, those who never wanted to leave and those who actually believe in a no-deal Brexit. It has united them all in opposition.
I can tell the House that that is how we will vote next Tuesday. My party and I will oppose this agreement because we believe that it has left Northern Ireland in a constitutionally vulnerable position, irrespective of the assurances that we have been given. It has been said that the backstop will only be an insurance policy, but we will not accept an insurance policy that has no route out once we are in. Once we are there, we shall never be able to get out again, so we will oppose the withdrawal agreement on Tuesday.
Several hon. Members rose—
Mr Speaker
Order. It would be desirable now for contributions to be reduced to seven minutes.
Mary Creagh (Wakefield) (Lab)
As we pass the witching hour, we are all still present and correct. I have never spoken in the Chamber after midnight. I feel that a pumpkin may appear, and some small mice may come out. Perhaps they come out later; I do not know how the pest control is doing. [Laughter.] That woke everyone up.
Let me begin with a French phrase. Qui sème le vent récolte la tempête: who sows the wind reaps the whirlwind. We are in this debate, in this position, in this Parliament, with no good options before us. We have only bad options and less bad options, after two years of negotiating what I believe has always been a fantasy Brexit. I think that David Cameron has a huge amount to answer for. He opened the Pandora’s box of English nationalism with his promise of a referendum, and the genie cannot easily be put back in the bottle. The Europe issue has defeated every Tory Prime Minister since Edward Heath. Thatcher, Major and Cameron all left because of Europe, and I fear that this Prime Minister may well be undone by it as well.
Let me be clear: I will not be voting for the Government’s draft agreement. I did not vote for a referendum; I voted to remain; and I was one of only three Labour MPs with leave seats who voted against triggering article 50. I feared that the Government had no idea what they were doing. I feared that they would call a general election and waste valuable negotiating time, and so it came to pass.
Let us not forget that that election was intended to crush the saboteurs. Members were called Luddites and people who wanted to disrupt democracy. However, the election did not crush the saboteurs. The election was tough, but it was not tough on those who, like me, opposed the Government’s approach to Brexit. It was tough on the causes of Brexit: the years of austerity, the grinding poverty, the creaking public services, the endless belt-tightening for families, the explosion of food banks, the public squalor that we see with homeless people sleeping on our streets and the shrinking of the state. The electorate were tough on the Conservative party. The Prime Minister, as I had feared, wasted six months and lost her majority. Then she came back to this place and, in the Lancaster House speech, showed that she had learnt nothing, setting out red lines on leaving the customs union and the single market.
And so, one by one, like layers of onion peel, the promises of the leave campaign have fallen away, leaving the people with tears, broken promises, and less trust in politicians than ever before. We have a political declaration with 585 pages, which is full of hope, exploration and best endeavours—full of warm words—but which signifies very little and which places the UK firmly as the weaker negotiating partner after we leave. We will be removed from all EU databases, and we face the prospect of a backstop border in the Irish sea.
Minutes were issued after the European Council’s approval of the withdrawal agreement—the so-called interpretative declaration. Rather like the Prime Minister, who has to come and translate everything for the House of Commons, the European Council has had to translate what that really means for Spain and Cyprus. According to the declaration, article 184 of the withdrawal agreement states only that we should use our best endeavours to cover the territories named in article 3. What are those territories? They are Gibraltar, the Cyprus sovereign bases and Britain’s overseas territories. We will use our best endeavours, but there are absolutely no guarantees in law that those territories will be covered in the withdrawal agreement, and, effectively, Spain has a veto over Gibraltar.
I am concerned that our environmental obligations are at risk of being breached, and the Government now have an unprecedented constitutional and administrative task before them. They have passed just five of the 13 Acts of Parliament they need to enact before Brexit. They have 700 statutory instruments, just 45 of which have gone through Parliament, and goodness knows what faces us when we come back in the new year.
This morning at 10 o’clock, I chaired the Environmental Audit Committee and we heard from the chemicals industry about the fact that it has spent half a billion pounds registering some 6,000 chemicals with the EU’s chemical database, and the Government are now expecting it to spend a similar amount re-registering the same registrations all over again with the Health and Safety Executive, which has no experience with public health or the environment. I am delighted to see the environment Minister in her place.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
The HSE is already very experienced. It is the competent authority on behalf of the European Chemicals Agency, or ECHA, in this country, but would the hon. Lady prefer that the future UK chemical regulation system did not have the information on which the ECHA is currently reliant?
Mary Creagh
Perhaps the Minister should take the time to meet the chemicals industry and listen to its concerns. It described Ministers’ approach to this problem not so much as strategic, but as being a view from the moon as it is so far away from the reality it is facing. I exhort the Minister to read the Hansard transcript. The intellectual property of the ECHA database is the subject of a great deal of argument and legal concern. I exhort her to read the details of what we heard this morning.
We have been calling for a new environmental Bill. We do not want to go back to being the dirty man of Europe, and we know that 80% of the UK’s environmental laws originate from the EU. They mean we bathe on cleaner beaches, drive more fuel-efficient cars and can hold the Government to account on things like air pollution. We are still waiting for the draft environment Bill; it is a bit like waiting for Godot—we never know quite when it is going to turn up, a bit like with the waste and resources strategy, which we are also waiting for.
These EU environmental laws such as the chemicals database cannot simply be cut and pasted into UK law. The Minister’s Department is setting up this new chemicals database. This is the foundation industry on which British manufacturing, aerospace motoring and electronics are based and it is at risk because of what is happening.
Mary Creagh
The Minister shakes her head: she is wrong; read the Hansard. These regulations are brought to life when they are held by regulators, the Commission and the ECJ and backed up by sanctions, and the Minister’s proposals do not allow stakeholders and the public to have a say in which chemicals are approved and which are not.
The cakeism, the cherry-picking and fudge before the summer will not work as we head into winter. We are promised this brave new world of free trade areas, but what the Prime Minister does not tell people is that it means less free trade with our nearest neighbour, it means shrinking our economy, and it means a backstop down the Irish sea.
For the past 40 years, we have worked together with our partners and allies to develop great social and environmental standards, and the EU has been the longest and most successful peace process the world has ever seen. There is no deal the Prime Minister can do that is as good as what we have now, and we are living in strange days when we have three votes—[Interruption.] I have listened to the Under-Secretary of State for Exiting the European Union, the hon. Member for Daventry (Chris Heaton-Harris) and others on the Government Front Bench—[Interruption.] Calm down. We have had three defeats for the Government today, and we are going through the motions. We know this deal is going down. My constituents in Wakefield were promised something totally different. The Government are unable to deliver on their promise. That is why we need to put this decision back to the people before they pay the price.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The importance of this debate and the votes that might follow cannot be overestimated. They are significant not just to those avidly following every twist and turn of this debate—and good morning to those who might be still watching—but to those who are fed up of discussing Brexit, and even more so to our children, young people and future generations. So it is no wonder that I have been inundated with emails and correspondence from constituents, some asking me to vote against the agreement because it does not deliver the Brexit they feel they were promised and who believe a no-deal outcome would be preferable. I do not share that analysis. Due to the projected dire impact of a no-deal Brexit on almost every aspect of our everyday lives, I am not clear how any Member of Parliament could even consider that to be an option. I also refuse to hold such low ambitions for our country and future generations of being able just to survive the next few years, if not decades—or however long it is that the hard Brexiteers now state it will take us to start feeling the benefits of leaving the EU.
I know the economy was not the only driving factor behind the vote in June 2016, but all the parliamentary sovereignty in the world will not make up for rising unemployment, reduced living standards, falling productivity and lost opportunities, not least in regions such as the north-east, which has been thrown on the economic scrapheap too many times before.
A small number of constituents have asked me to vote in favour of the withdrawal agreement, as they believe it is the best offer available to us after the Prime Minister’s efforts, and they are understandably concerned about the prospect of crashing out of the EU given the Government’s insistence that those are the only two options before us. I recognise that the Prime Minister has had an impossible task in trying to deliver on the totally unachievable set of pledges made by others, but that is no reason for her to continue ploughing on regardless, given what is at stake for our country.
I simply do not accept that we face a binary choice between this deal and no deal at all, because it is increasingly clear that driving off the cliff is not an inevitability. Parliament can stop the bus before we drive over the edge. Parliament is sovereign. That view is shared by the overwhelming majority of the large number of constituents who have asked me to vote against the withdrawal agreement next week, and to continue to work to ensure that the final decision on how we proceed as a country is put back to the British public via a people’s vote. That is the approach I intend to take.
I cannot support this agreement because it is a fudge, and serves only to emphasise that negotiating an arrangement better than or equivalent to the one we already have, as members of the EU, just cannot be done —despite the bombastic pledges of the former Brexit Secretary that he would deliver “the exact same benefits” of our current membership.
We are giving up those benefits for an agreement that the Government admit will leave every nation and region of the UK poorer. We must have the only Prime Minister and Chancellor in living memory who actively pursue a policy they know will damage the economy of their own country. There will of course be no Brexit dividend, and therefore no additional funding for our public services. Meanwhile, we will be subject to EU rules with no say over how they are made in future—so much for “taking back control”.
The withdrawal agreement also fails to deal with several pivotal issues, such as the Northern Ireland border. Crucially for thousands of businesses in the north east, and the hundreds of thousands of good, skilled jobs they provide, it offers absolutely no certainty about our future relationship with the EU, nor the frictionless trade and easy access to European markets that our manufacturing and services firms require.
Members are being asked by the Prime Minister to vote for a blindfold Brexit, with no idea of what happens beyond the transition, while also being subjected to the most ridiculous peddling of misinformation by the Government, desperately trying to persuade us all that this fudge is what the country really wants. As I said to the Prime Minister earlier in the debate, if the Government are so convinced that the withdrawal agreement is what the country wants, why not go back to the British public and ask them if they support it, instead of resorting to propaganda campaigns? This is not about trying to rerun the 2016 referendum; it is about asking people to confirm, now that a Brexit deal is on the table, whether it is what they want for their country, their economy and their families. Or would they prefer to remain in the EU on the terms that we already have?
It is evident that there is no majority in the House for the Prime Minister’s deal, or for a no-deal outcome. After much deliberation, I have come to the conclusion that the most constructive, democratic and realistic way out of this deadlock is to put the issue back to those who started the process in 2016 to make the decision on how we proceed. We should give the decision back to the people in a people’s vote.
Tommy Sheppard (Edinburgh East) (SNP)
The people of Scotland did not vote for Brexit. In 2016, 62% of them rejected the proposal, and that figure would be higher today. Their judgment then was that Brexit was bad for them, and that is their judgment now. If anyone doubts the veracity of that conclusion, they need only to look for evidence in the pages of the withdrawal agreement we are discussing today. This is a bad deal, and I will vote against it for four reasons.
First, this deal will make the people that I represent poorer. Not overnight, not all at once, and not dramatically, but slowly, steadily and surely, it will make them less well off as it drives down living standards and drives down the money available for public services; and as is so often the case, the people at the bottom of the economic ladder will be disproportionately hit as that happens.
Secondly, I will not vote for the withdrawal agreement because it will prevent people from elsewhere in Europe from coming to live and work in my country and it will threaten its economic prosperity. Thirdly, I will not vote for it because of the backstop for Northern Ireland, which places Scotland at a clear material disadvantage, both for our existing businesses seeking access to the European market and for future investment. Fourthly, I will not vote for it because it represents our political and cultural diminishment, as a result not only of withdrawing our European identity but of making a country that aspires to be outward looking and that celebrates its diversity and inclusivity subject to the new model empire mark 2.
Those are things that I reject, but the good news is that even the dogs in the street know that this deal will not pass, next Tuesday. So the real question is this: how can it be that, after 30 months, this Government have come to this Parliament with a package of proposals that only the people on their own payroll, and those who aspire to be on it, will support? The answer to that question lies in the process that has been adopted. As others have remarked, it lies at the heart of a Government who have decided to look internally to the divisions in their own party rather than looking outwards across the party to try to build consensus in the country. That is why we are in this situation.
This is a masterclass in how not to do politics, and at its heart is a fundamental disrespect for those who hold an alternative opinion. Almost as soon as the results came in, the narrowest of results—52 to 48—was seized upon by the victors as though it had been a landslide. Their triumphalism was embarrassing. There was no magnanimity in victory, no olive branch, no bridge building. Instead, the views of almost half the population were excised from the story, but when it comes to how this Government have dealt with the Government of Scotland, disrespect has plumbed new depths.
In December 2016, the Scottish Government put forward a clear and workable compromise proposal that many across this House now regard as the thing that they should be going for. It said that we should stay in the customs union and the single market while leaving the European Union, but it was not even taken seriously. It was treated with contempt. Then, when we said, “Okay, if we cannot persuade the UK Government of the benefits of this economic integration, at least give Scotland the powers to have a differentiated relationship with the European Union that recognises a different economic imperative and a different will of the people who live there.” That also was rejected. Worse, in fact: it was treated with contempt.
Those of us who put forward that view were derided and castigated. Our motives were questioned. We were accused of malintent. In fact, we were told that this was a Trojan horse for independence, and that that was the only reason we were suggesting such a thing. The opposite is actually true. It is the rulers of this United Kingdom who refuse to recognise its diversity, who will do more to hasten its demise than I ever could. We now have a situation in which, for the first time since the post was recreated in 1885, the Secretary of State for Scotland is arguing for the material disadvantage of the territory that he represents in Cabinet.
What is to be done about this sorry state of affairs? Well, the old adage is that when you find yourself in a hole, stop digging. The most important thing that we can do is to reject the proposals in front of us and then clear the decks, as the change to the Standing Orders now allows, to consider better alternatives. It is crystal clear that the alternative is not to leave without a deal, but not to leave at all, because that is the best way of aiding the prosperity of the people we represent, both now and in the future. If that takes a people’s vote, a new referendum or a general election to get the mandate to organise a new referendum, so be it. Those who suggest that to say that is somehow to betray the people and to try to put this Parliament above the electorate do a great disservice to democracy, because no one is talking about this Parliament overriding the result of the referendum. We are talking about the people overriding the result of a referendum from three years previous, and people in a democracy have the right to change to change their mind.
Finally, many people in Scotland have learned from this experience. A great many more than before have come to the view that Scotland’s views will never get the respect that they deserve while we remain in this Union of the United Kingdom. Many more people are now open to the prospect of Scotland becoming an independent country. I do not say that they would vote yes tomorrow, but I know from campaigning last weekend that there are many for whom it is now an open prospect. Many people believe that if they want to live in a progressive society at home, one which looks outwards and plays its role in the world, they should take back control themselves.
Fiona Onasanya (Peterborough) (Lab)
At this time of year, we all recall the age-old saying that it is better to give than to receive. However, that should not have been the Prime Minister’s approach when negotiating the deal. In my humble opinion, we have given so much, yet received so little. The shambolic Brexit negotiations have gone on for too long. From an indefinite backstop and extended transition period to the lack of mention of state aid, workers’ rights or environmental protections, I am worried that the lack of attention given to such matters means that the Government’s idea of post-Brexit Britain is quite simply a race to the bottom.
While figuring out how to leave the EU is unquestionably complex, the Prime Minister appears to have failed on her own terms. When in these negotiations was the Prime Minister being “a bloody difficult woman”? It is evident that the priority has always been surviving instead of striving, which ignores many of the reasons why people voted to leave. The Prime Minister and the Government have had more than enough time to negotiate, but they have brought my constituents chaos, a raft of Cabinet resignations and a botched deal that many people who voted to leave do not feel takes back control. In fact, according to YouGov only 20% of the British public actually support this half-baked deal, and it would not surprise me if only 20% of the Prime Minister’s Cabinet do as well.
We need the best possible deal, but the Prime Minister is insisting that it is her deal or no deal, neither of which we accept. We cannot have a choice between a hurriedly cobbled together calamity or nothing. That is not how this should work. This Government needed to put forward a decent, appropriate plan so that Members could unify. Instead, they made the empty threat of no deal. Supporting a bad deal would involve conceding to a political hoax designed to pressurise rather than persuade. This Government have not even prepared for the possibility of no deal. As just one example, 11 of the 12 critical IT projects needed at the border in the event of no deal will not be completed in time for March 2019.
A no-deal Brexit would be catastrophic, and the Government do not have the right to plunge our country into chaos because of their own failures. It would be politically unsustainable for this Government to deliver a no-deal Brexit without the consent of Parliament. Our constituents were essentially asked a simple question: “Would you like a divorce, yes or no?” They answered the question, but they did not have the details. They did not know in the terms of the divorce who would have the children, who would get the house and how the assets would be split. That is the detail we have been discussing in this place.
It is becoming increasingly clear that this deal is a damning indictment of the Government’s failure to negotiate a deal that will help us prosper post-Brexit. My constituents voted to leave the EU so, if we are going to launch into this vast, open space, we must have a parachute. We must ensure we are prepared for a safe landing.
As we leave the EU, we must tackle the burning injustice of poverty and make Britain a country that works for everyone. I am struggling to see how what appears to be a chaotic attempt at scrambling support for agreement to a deal can be a catalyst for genuine progressive change for this country and for my constituents.
Dr Philippa Whitford (Central Ayrshire) (SNP)
What we are really discussing here is a blind Brexit, because what we have is a withdrawal agreement and six and a half pages on a future deal that have now been padded out to 26 pages. I find it strange that the economic analysis did not include this deal. It included the Chequers have-your-cake-and-eat-it deal, which is not what we are voting on.
My constituency has an airport and an aerospace campus at one end that will be hit by the loss of the single aviation market, by the loss of just-in-time supply chains and by coming out of the European Aviation Safety Agency, which allows local maintenance, repair and operations firms to sign off planes to fly in Europe and licenses aviation engineers.
At the other end we have pharmaceuticals, which again will suffer from losing just-in-time supply chains, but they will also suffer from leaving the European Medicines Agency and the European Chemicals Agency, and from losing jobs that come from lot release quality control that must be carried out inside the European Union.
Dr Whitford
Sorry, I thought the right hon. Gentleman was trying to intervene. He is confusing me. It is a bit late at night.
One of the other industries in my constituency is fishing, which is always held up as the great beneficiary of Brexit, but in my constituency the catch is dominated by langoustine and lobster, 85% of which goes to the EU, and every few hours of delay decreases its value. The problem for the industry is that fishermen from Northern Ireland, much as they do not want the benefit, will be able to fish in the same waters and have direct and swift access to the single market through the south of Ireland. They also will not face tariffs on processed fish. That will hit smoked salmon, which is not just Scotland’s biggest food export but the UK’s biggest food export. We are talking about tariffs ranging from 5% to 16%. We will lose our advantage over Norwegian salmon.
Yet the real problem of the fishing industry, which is that the vast majority of quota is held tightly by very few companies, will not be fixed by this. In Scotland 80% of boats share 1% of quota, and in England 77% of boats share 3% of quota, while a handful of firms own the majority. An additional issue in England is that huge amounts of quota have been sold to Dutch and Spanish companies. It is not Europe doing that, and it is not the common fisheries policy; it is because this place has never cared about fishing. Up until now, fishing has always been expendable, but it has always been a very useful ploy around Brexit.
One other thing that has been missing for us, coming up to making this decision, is that the Government analysis claims that the economic impact will be minimal if there is no change to immigration. That is funny, because the Prime Minister has put all her effort into creating a hostile environment, just to drive European immigration down. The Government’s own economic assessment shows that European immigration contributes at least 2% to GDP and the migration report showed that these people contribute more than £2,300 a head more to public finances. They help our economy, as well as our public services and our communities. In Scotland, we need people, for our demographics and our economic growth, and we welcome them. That is why we need control of immigration, because if the Government’s plans to set a threshold of £30,000 go ahead, three quarters of the European citizens here now would not qualify, and the impact across public services would be immense. The failure in 2016 was to fail to talk about the benefits of Europe and what these people contribute to our workforce in public services, particularly health. Health is not delivered by machines in hospitals; it is delivered by people—healthcare workers and social care workers. They do not earn more than £30,000. Junior nurses, careworkers and even junior doctors do not earn more than £30,000. Some 150,000 of them look after us when we are sick.
We have also had the opportunity to carry a European health insurance card that has allowed even people on dialysis to travel to Europe. You tell me: what is the price of health insurance that will cover that? The card has allowed our pensioners to retire to the sun, where they have paid no tax but they have been able to transfer their rights. The European Medicines Agency has not increased bureaucracy; it decreased it, by creating a single licensing system. The Government talk about replacing research money, but research is not just about funding; it is about collaboration. You cannot sit in a muddy field on your own and call it collaboration. We are only going to lose. We lose the public health drive and pressure that we have had from Europe. We lose that collaboration, and we lose both the academic and medical research. Earlier, one MP, perhaps it was the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), was dismissing concerns about radioisotopes. It is funny that the president of the Royal College of Radiologists is concerned about access to radioisotopes. The UK does not manufacture them. Molybdenum has a half-life of 66 hours and we have to import it from elsewhere. Until now, since the loss and crisis in 2009, the Euratom Supply Agency has managed that supply. It will be diminishing as these old reactors go offline and we will be outside begging to have the chance, “Can we please have enough technetium for our patients?” These are the things that we are going to lose.
Patrick Grady (Glasgow North) (SNP)
Of course we are already starting to lose these things. Are the academic institutions and the health institutions my hon. Friend talks about not already having to make plans? People are not coming to this country, goods are not coming to this country and academic research is not coming to this country, and that is before Brexit even hits.
Dr Whitford
We already know that there has been a 90% drop in the number of European nurses coming here, and 14% of European doctors in Scotland and 19% of them in England are already in the process of leaving, with many more considering it. So people right across the spectrum are already considering leaving or are already leaving. The problem is that we are the losers, given what they have contributed.
My constituents and I voted clearly to remain, as did voters across Scotland, and we still wish to remain and we will still fight to remain. The Prime Minister kept saying, “It is my deal or no deal”, but now she has changed her tune. She now says, “It is my deal, no deal or no Brexit.” We will take no Brexit thank you very much. But as my hon. Friend the Member for Edinburgh East (Tommy Sheppard) pointed out, what we have seen in the past two and a half years, when the Prime Minister refers to the precious Union, is actually the utter contempt she holds for Scotland. I can tell the House that that has been seen from Scotland. What has been shown is the democratic deficit and the fact that the only way to control your own future is to be in control of your own future. Scotland will be making that decision, as well as supporting staying in the EU.
Paul Blomfield (Sheffield Central) (Lab)
May I begin, Mr Speaker, by congratulating you on your stamina staying in the Chair for more than 12 hours now? I welcome the right hon. Member for North East Cambridgeshire (Stephen Barclay) in what I think is his first outing in his new role as Secretary of State for Exiting the European Union. I notice that there is a rapidly diminishing tenure for those in the post—the first Brexit Secretary lasted 24 months and the second five months—so I hope that the new occupant of the post can at least make it through to oral questions on Thursday.
It is a privilege to give the winding-up speech for the first of five days of debate on the Government’s withdrawal agreement, and to do so on a day on which Parliament has asserted its sovereignty so dramatically. Today’s debate has confirmed that the Government have forged a remarkable consensus on one thing at least: opposition to their deal, which fails not only Parliament but the British people.
Labour campaigned to remain in the European Union because we believed it to be in the economic and political interests of our country and of the continent that we share and will continue to share, and for all the reasons that were set out so powerfully by my right hon. Friend the Member for Leeds Central (Hilary Benn). But we accepted that we lost the referendum, which is why we voted to trigger article 50, setting the clock ticking. The past two years, though, have been squandered, as negotiations with the EU27 have taken second place to those between the warring factions in the Conservative party—and the country is paying the price.
It did not have to be like this. The hon. Member for Altrincham and Sale West (Sir Graham Brady) made the point that the Prime Minister has worked hard over the past two years and won respect from many in the country. That is a fair point, but working hard is not enough. The problems that she faces now are the result of the decisions that she has taken. At the outset of this process, we urged the Prime Minister to reach out to the majority in Parliament who would have supported a sensible Brexit, by acknowledging and saying that the people had voted to leave the European Union, but by the closest of margins. I was bewildered to hear her question the legitimacy of the 1975 referendum because one third of people voted against remaining in the EEC, while she is seeking to deliver this damaging Brexit on a result that split the country down the middle.
The 2016 referendum gave a mandate to end our membership of the European Union, but not to rupture the relationship with our closest neighbours, our main trading partner and our key allies. If the Prime Minister had said two years ago that she would seek a deal that reflected that position, and that was right for people’s jobs and their livelihoods—in a customs union, close to the single market, and in the agencies and partnerships that we have built together over 45 years—she could have secured a majority in Parliament, and she could have united the country that was so deeply divided by the referendum. And the Northern Ireland border would not have been an issue.
Our amendment sets out the position that the Prime Minister should have taken. Instead, she let the demands of the management of the Conservative party shape her agenda. She set her red lines and she boxed herself in, and the result is this doomed deal that pleases nobody, as the right hon. Member for North Shropshire (Mr Paterson) demonstrated so powerfully. The deal fails the six tests that Labour set for it at the outset. I remind Government Members that those tests were based on the Government’s own goals. They were tests that the Prime Minister looked at and said were reasonable, and that she was “determined to meet.”
One thing has changed since the deal was struck, and that is the Government’s narrative. A little honesty is finally breaking out. Those who spent the past two years endlessly repeating the mantra that no deal is better than a bad deal are now arguing that this bad deal should be accepted, because the alternative is no deal, which they rightly say would be a catastrophe. We, as an Opposition, will work with the overwhelming sensible majority in this House to prevent that from happening. We welcome the amendment passed by this House and moved by the right hon. and learned Member for Beaconsfield (Mr Grieve), which provides a framework for ensuring that.
Even more significantly, the Government’s narrative has changed because claims that the country will be more prosperous as a result of Brexit have been abandoned, and rightly so, not least because this deal fails to provide the frictionless trade that we were promised. The Government have confirmed that we will be economically worse off to varying degrees under every Brexit option, and it was a point made by my right hon. Friend the Member for Derby South (Margaret Beckett) in another very powerful contribution. Instead, the Government argue that this deal should be accepted on the basis that failing to deliver on the 2016 referendum would have serious social and political consequences, and it is a serious point that should not be lightly dismissed, but they should recognise that there will more serious consequences if Parliament votes for a damaging Brexit on a false prospectus. The public will not forgive politicians who do that. This deal fails not just the 48%, but the 52%, too.
As they have discarded the idea of a brighter economic future, the Government say that the deal deserves support because it delivers on the other pledges, particularly to take back control of our borders. Indeed, that is top of the Government’s “40 reasons to back the Brexit deal” on their website. But the expectations unleashed by the rhetoric of “taking back control” are a long way from the reality. The Government have had complete control of non-EU migration for the past eight years and, in every one of those years, net migration from outside the EU was higher than from within it. As last week’s figures from the Office for National Statistics show, falling immigration from the EU, because people no longer wish to come, has simply been replaced by non-EU immigration hitting a 14-year high. On the central issue, the Home Secretary said this week that we are unlikely to see the Government’s plans before next Tuesday’s vote. The long-promised White Paper has been delayed beyond then and it is a disgrace.
On other issues, the Brexit blindfold is tightening, too. Let us take fishing, where the rhetoric of being an independent coastal state is not matched by the reality of the new deals that will need to be struck to ensure that we continue to have access to the European markets that buy 80% of the UK’s catch—another issue kicked down the road. However, the political declaration kicks so much down the road. It offers no certainty and it opens the door to a hard and damaging Brexit. A document that we were promised would be “detailed, precise and substantive” setting out clearly our future relationship with the EU is nothing of the sort. After two wasted years, we have no clear picture of our future relationship, as the right hon. Member for Broxtowe (Anna Soubry) pointed out. This is a blindfold Brexit. The Government are asking Parliament to take the country over a cliff with no clarity on the safety net, and we will not do it.
The Secretary of State for Exiting the European Union (Stephen Barclay)
I thank the hon. Member for Sheffield Central (Paul Blomfield) for his kind welcome and join him in congratulating you, Mr Speaker.
In my first speech as Secretary of State, I am grateful to be able to close the first day of this historic debate, although at this time of the morning it feels like I may be close to opening the second. Let me begin by paying tribute to the work of my predecessors, my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for Esher and Walton (Dominic Raab). Both are hugely respected figures in this House who worked tirelessly in the role of Secretary of State, and I thank them for the significant contributions they made over the past two years. In perhaps a rare moment of agreement with the Leader of the Opposition, may I also recognise the longevity and endurance of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) over the past two years? In closing today’s debate, I will of course address as many points made by colleagues across the House as possible but, before doing so, I want to take a moment to underline just how far we have come.
At the start of this negotiation, the Prime Minister was told that we faced a binary choice between Norway and Canada, that the whole withdrawal agreement would be overseen by the ECJ, that we could not share security capabilities as a third country, that we would be required to give the EU unfair access to our waters and, moreover, that she would not get a deal at all because of the needs of the 27 different member states. And yet we have a deal. The Prime Minister has achieved concessions on all these things, and as my right hon. Friend said earlier, these are not just negotiating wins; these are real changes that will improve the livelihoods of people up and down the country. They reflect the bespoke deal secured, not the off-the-shelf options that were initially offered.
It is not the British way to put ideological purity above the practicalities of good government. During the negotiations, Her Majesty’s Government did make compromises in order to secure the bigger prize of a deal that delivers on the referendum result while protecting our economic ties with our main market of Europe. I want to confront head-on the notion that there are other options available. What is agreed, as my right hon. Friend the Member for Basingstoke (Mrs Miller) acknowledged, is the only deal on the table. It is not perfect, but it is a good deal.
The deal recognises our shared history and values, and provides the framework for our future economic and security relationship. It will ensure that the 3.5 million EU citizens living in the UK and the nearly 1 million Britons living in the EU have their rights assured and can carry on living as they do now, and it will also benefit businesses and public services such as our NHS. It stays true to the wishes of all Members to co-operate closely with the EU on security, and the desire to restore our status as an independent trading nation, as recognised on the first page of the political declaration.
I recognise that there are parts of the deal that displease colleagues across the House, but this deal is a choice between the certainty of continued co-operation, the potentially damaging fracture of no deal and, indeed, the instability of a second referendum vote. To those colleagues who say, “Go back again. Another deal will be offered”, I say that this ignores the objections already voiced within the EU at the concession secured by the Prime Minister, and the likely demand for more from the UK that would be heard in European capitals. Rejecting this deal would create even more uncertainty at a time when we owe it to our constituents to show clarity and conviction.
Let me come to some of the so-called alternatives that some colleagues have raised in the debate. Membership of the European economic area would require the free movement of people, the application of EU rules across the vast majority of the UK economy, and potentially significant financial contributions—conditions that simply would not deliver on the result of the referendum. The Canada option would mean a significant reduction in our access to each other’s markets compared with that which we currently enjoy, and reduced co-operation on security. And the WTO option, under a no-deal scenario, would mean that we lose the crucial implementation period, which allows businesses and citizens time to adapt, we lose the guarantees for UK citizens in the EU, we lose our reputation as a nation that honours its commitments and we lose our guarantee of negotiations on an ambitious future relationship with the EU.
The only way to guarantee our commitments to prevent a hard border in Ireland at the end of the implementation period is to have a backstop in the withdrawal agreement as an insurance policy. The same will be true for a Norway deal or—as the Chair of the Exiting the EU Committee, who is in his place, pointed out—for a Canada deal. There is no possible deal without a legally operative backstop. We must never forget the importance of ensuring that the people of Northern Ireland are able to continue to live their lives as they do now, without a border.
Let me turn to a number of the contributions made by colleagues across the House. My right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) started his remarks by pointing out—[Hon. Members: “Where is he?”] I appreciate that he is not in his place, but he started his remarks by stating that he was “standing with Tony Blair”. I gently suggest to my colleague that, if he is standing with Mr Blair, he is standing in the wrong place.
My hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) spoke of the importance of the certainty and time to prepare that the implementation period offers to businesses, and the importance of the country now moving forward. I very much agree with him.
The right hon. Member for Derby South (Margaret Beckett), who voted to trigger article 50, noted the importance of respecting the referendum result. When she commented on the fact that the business community wants us to support the deal, I think that she spoke for many businesses up and down the country. The right hon. Member for Leeds Central (Hilary Benn) pointed out the limitations of a Canada arrangement and his concerns at the approach put forward by some colleagues in terms of the WTO rules.
My hon. Friend the Member for North Thanet (Sir Roger Gale), in a powerful speech, brought to bear his experience as the leader of the UK delegation to the Parliamentary Assembly of the Council of Europe in saying that the idea that a radical reassessment of this deal could be achieved by reopening it was not realistic. He also spoke of his experience as a Kent MP in terms of the potential disruption that a no-deal scenario would bring.
The right hon. Member for Twickenham (Sir Vince Cable), who is not in his place, spoke of his experience on Europe, so he will no doubt recall the Lib Dem leaflets that were the first to propose the in/out referendum before the idea caught on. He is now saying that we should ignore the result of the referendum while also calling for another referendum. It is a bit like saying that large multinational tech companies are inflaming public opinion before taking a job with one of them.
My right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) said that in all negotiations you move to the mean centre. I agree with him. But I would suggest that calling for another referendum in his desire to remain in the European Union is not the mean centre either of our party or of the country.
The right hon. Member for Belfast North (Nigel Dodds) spoke of his concerns on the issue of trust. I hope that in my new role there will be an opportunity to build that trust in our relationship moving forward. I very much recognise the experience that he brings to these issues and, in particular, his point referring back to the December discussion on paragraph 50. Let me pick up one specific issue that he raised about the Attorney General’s remarks yesterday. He suggested that the Attorney General had said that the backstop was indefinite. I draw his attention to the fact that when my right hon. Friend the Member for New Forest East (Dr Lewis) asked the Attorney General:
“Is it possible that the UK could find itself locked in backstop forever, against our will?”,
his answer was the single word:
“No.”—[Official Report, 3 December 2018; Vol. 650, c. 561.]
However, I am very happy to discuss these issues with the right hon. Gentleman in the days ahead.
My right hon. Friend the Member for North Shropshire (Mr Paterson) spoke of the forces that hate Brexit and are intent on stopping it. I hope he will recognise that, as someone who has always supported Brexit and shares his desire to see it concluded, perhaps, unlike him, I fear that the uncertainty involved in not supporting this deal risks others in the House frustrating the Brexit that he and I both support.
My right hon. Friend the Member for Basingstoke asked whether amendments to the approval motion that seek to insert an end date to the backstop could risk destabilising the only negotiated option on the table. The simple answer to that is yes. An amendment that is incompatible with any of the terms of the deal as drafted would amount to a rejection of the deal as a whole and prevent the Government from ratifying the withdrawal agreement.
My right hon. Friend the Member for Wantage (Mr Vaizey) correctly identified the importance of Euratom. I pay tribute to him. He speaks with great authority on that issue. I know he has done a huge amount of work on that, and I hope that where we have landed in the deal reflects many of the contributions he has made.
The hon. Member for Nottingham South (Lilian Greenwood) raised the importance of EU citizens to our NHS. As a former Health Minister, I very much agree with that point. I gently point out that there are more non-UK EU nationals working in the NHS today than there were at the time of the referendum. [Interruption.] She says from a sedentary position that that is not the case. That is the record. As the Minister who covered the workforce, I can say that there are more non-UK EU staff working in our NHS than at the time of the referendum.
My hon. Friend the Member for St Ives (Derek Thomas) spoke of the importance of regaining powers for his local fishing fleet. He is absolutely right to highlight that. That is a key aspect of the deal, and I look forward to discussing it with him in the days ahead, so that we ensure that it reflects his concerns.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) spoke of the divisions on Brexit in her constituency and more widely. I very much recognise that. This deal is seeking, as the Prime Minister acts in the national interest, to bring the country back together.
In conclusion, it is important that we do not lose sight of what this deal will enable us to deliver—a fair skills-based immigration system; control over our fisheries and our agricultural policies; our own trade policy for the first time for more than four decades; and an end to sending vast sums of money to the EU. In 2016 we had the biggest vote in our democratic history. This deal allows us to deliver on it, rather than the alternatives of division and uncertainty. I urge the House to back this deal.
Martin Docherty-Hughes
On a point of order, Mr Speaker. You often remind me that this is a place of convention and that the convention is that at the end of a debate, most Members should be in the Chamber. I notice that some who went on for quite a while on the Back Benches are not in their place as convention would dictate. Could you advise me what action you will take in relation to that matter and advise the House if you do take any at all?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. I am inclined to err on the side of thinking that there may have been some unawareness on the part of some Members of the requirement to be present for wind-ups tonight. I say that because a number of Members came to the Chair expressing the expectation that there would be no wind-ups, and I corrected those Members, so they came to be aware that they should indeed be present. I am merely being perhaps slightly charitable. There may have been Members who were not aware that, although it is one theme over the five days, there are wind-up speakers each night and, unless there is good cause, preferably notified to the Chair and those on the Front Benches, there is an expectation that Members who speak in the debate, on whichever of the five days, will be present for the wind-up speeches. I hope from now on that that will be clear.
Dr Whitford
On a point of order, Mr Speaker. I am sorry; I do not often raise points of order, but the Secretary of State has claimed, as was claimed in Health questions last week, that there are more EU staff working in the NHS now than in 2016. If he bothers to check with the Library and others who collect the statistics, they will point out that 90,000 members of staff in NHS England had no nationality. That has been reduced by collecting the data, and the Library clearly points out that it is wrong to assume that there are more people here. It is actually just more people whose origin in the EU is registered. The British Medical Association and General Medical Council surveys suggest that 19% have left England’s NHS, so the statistic he gives is incorrect.
Mr Speaker
The hon. Lady has put the point very forcefully on the record. If the Secretary of State feels, at any stage, that there is a requirement on him to correct the record, it is open to him to do so. At this point, however, I have to regard it as the end of the exchange.
I thank all colleagues who have taken part in this debate for their stoicism and forbearance in waiting—in some cases, for very long periods—before having the chance to do so. From my point of view, it was a great privilege to hear colleagues.
Business without Debate
(5 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Health Technology Assessment Charges
(5 years, 4 months ago)
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Anne Marie Morris (Newton Abbot) (Con)
I rise to speak about health technology assessment charges in England. I am sad to see that there is not more interest in this debate, even at this very interesting early hour of the morning.
The Government are proposing to charge for technology appraisals undertaken by the National Institute for Health and Care Excellence. The House should understand that for a drug to be fully marketed, it has to go through three stages: it is required to be licensed, to go through NICE and then to go through the formulary. Licensing enables the drug to be certified as doing, in effect, what it says on the tin. The NICE process ensures that it offers good value for money and is something the NHS is prepared to make generally available. The formulary is all about endeavouring to ensure that the drug is available locally.
It is not common in other markets for technology appraisals to be charged for. It is not unheard of, as I am sure the Minister will tell me, but in the grand scheme of things, these pharmaceutical companies or life sciences businesses have already put billions of pounds into these particular drugs. As hon. Members will appreciate, there is quite a high failure rate at the first stage for licensing, but by and large, those that get to NICE are fit for purpose and are good value for money, and most of them are eventually passed.
Given the billions that the drug companies have already spent, to ask them to pay for this approval process, which is for the benefit of the NHS, seems a little churlish. Hon. Members may ask, given that the amount to be raised will be £10 million—with the cost for a single technology appraisal at £126,000 and a highly specialised appraisal of the same amount—whether this really matters. The answer is yes, it does. This is not a comment on NICE. NICE is incredibly well respected. It is a global leader in what it does. It makes very high-quality decisions, and it is absolutely clear that if we want to ensure something is fit for purpose and safe, NICE is where we want to go. Indeed, we need more NICE, not less NICE: we need more drugs to be available to patients.
The trouble with what is being proposed is that, while there is undoubtedly a need to look at the cost issues, it sends the wrong message, and that wrong measure will be far more damaging and costly to UK plc and to patients than the £10 million. The balance of risk between the taxpayer and the life sciences or pharmaceutical companies will change, albeit ever so slightly, but that message says that this is not something that we, UK plc, should be incentivising. That is wrong: it goes against the life sciences industrial strategy and against any recognition of the competition out there.
There is huge competition. The United Kingdom has some of the best brains in the world, but increasingly, because of the challenge of getting the drugs to market, competitors are looking at incubating in the UK, where we have the expertise, but when marketing and taking a drug to a competitive position, going to the USA or Japan, and failing that, Germany or France. What might seem a small figure is sending out the message, “Don’t invest here”.
Following Brexit, that is absolutely the wrong message. The sector could—and should—be a real source of this country’s growth post Brexit. It needs to grow: it can and must grow. We must send a strong message that we want people and businesses to invest in the UK to develop the medicines that we need and, most importantly, to ensure that the UK citizen has the best access to the best drugs in the world.
We then have to examine the NHS’s duties when it considers approvals for drugs. It has at least four duties. The first is to provide equal access to NHS facilities, irrespective of cost. The second is to promote research. The third is to take account of research and development costs when making decisions. The final duty is the family test to ensure that its actions respect the impact on the whole family of approving or not approving a drug.
The challenge with equal access is that the unmet need is for often expensive therapies and pharmaceuticals for very small patient groups. Increasingly, those new therapies are being developed by start-ups—new companies that focus on one particular disease area. Doubtless the Minister will say, “What if those small companies were offered a reduced rate, cut by 25%?” Frankly, that is the proverbial drop in the ocean. The negative message is still there. I am sure that the Minister will remind me that those small companies can phase payment. The problem is that that is front-loaded. The Minister will then no doubt say that there is the potential—as, when and if NICE decides not to proceed—of reimbursement. However, by that stage, most of the money—the equivalent of the £126,000—will have already been spent. It is a nice idea, but it does not work in practice.
The NHS has committed to promoting research, but as I have already mentioned, there is huge competition from America, Japan, Germany, France and many others. Not only will those who incubate here go to those countries to commercialise, develop and market that product, but in those countries, it is quicker, cheaper and easier to get to market. We are talking about businesses—those are business decisions—so why would they not do that? Sadly, we are no longer the first choice of place to commercialise, then sell and market drugs. We are often the second, third and even fourth choice. We cannot afford to lose pharmaceutical companies and investment. Compared with that, the £10 million the Government are looking to gain is a drop in the ocean. Post Brexit, we must do everything we can, in the interests of patients and our life sciences industry, to support our companies and ensure that they can continue to grow.
We must look at taking into account R&D costs. They are going up, not down. It is not clear from the regulations how many times the fee has to be paid, because there are several parts to those processes and there are also appeals processes. The other peculiar part of the way in which this has been shaped is that the charge applies only to medicines. It does not apply to medical devices and diagnostics, so it does not apply across all the possible cures that go through NICE. Are the pharmaceutical companies supposed to pick up the costs for medical devices and diagnostics, too? That does not seem right or fair.
Finally, there is the family test. The family will obviously be impacted by what happens to a member of it. If one member is suffering from something very acute, very rare and very debilitating, that will have a huge impact on the family members and the carers of that individual. The win in sorting this out is much greater than just that individual.
I propose to the Minister that none of the tests, to which the NHS has committed, has been met. Clearly, I would be with the Minister and the Government in saying that costs are an issue, but that is not the answer. Clearly we must look at ways of finding the money to produce more for less, but there are many other ways of doing that. Let us look instead at removing bureaucracy, improving efficiency and avoiding the duplication we see because of the three-part process of getting drugs licensed so they do what they say on the tin, going through the NICE process to see whether the Government and the NHS are prepared to ensure that they are readily available and, finally, going through the formulary process.
I submit that what we need to do is look at licensing, the NICE process, baseline commissioning and formulary decisions in the round. Let us look across those processes and cut out the duplication which other countries have achieved so successfully. I submit that we should not, in the best interests of patients and the country particularly post Brexit, introduce the regulations in April next year. We should look again at the broader issue and at all the processes in the round, and instead make this part of the NICE methodology review, which is due next year. Let us consult on efficiency and effectiveness, not just cost reduction.
We want more drugs assessed, not fewer. We want it done faster. We want it to be more efficient. We want it to be more effective and we want to make sure that UK patients get the benefit of lifesaving medicines more quickly than others. We need to strengthen the life sciences sector. We need to encourage investment in the UK. I say to the Minister, “Do not introduce the regulations. Think again.”
The Parliamentary Under-Secretary of State for Health and Social Care (Steve Brine)
Mr Speaker, you are remarkable for sitting here for all this time. I share the admiration for you, if not your football team after Sunday afternoon. Less said about that the better. I cannot even believe I have raised it. I know that you will have been there and will have enjoyed it. I just have to take my hat off to the 4-2 score. The return leg will come.
I am disappointed that only you, Mr Speaker, my Parliamentary Private Secretary, the Whip and my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who introduced the debate, and I are here. An Adjournment debate without the hon. Member for Strangford (Jim Shannon) is a rare thing. I can only feel that he will come running in at any time.
I have been asked to reply to the debate on behalf of the Under-Secretary of State for Health, Lord O’Shaughnessy, who sits in the other place and has responsibility for this policy area. I take a keen interest in it, as he knows. My hon. Friend the Member for Newton Abbot has a keen interest in this matter, both on behalf of her constituents and in her capacity as chair of the all-party group on access to medicines and medical devices, which I know she chairs with aplomb.
The main thrust of my hon. Friend’s remarks was about the charging process the NICE has proposed, but let me reiterate to the House that the Government are committed to ensuring that patients can benefit from rapid, consistent access to effective new treatments. It is always important to say that in these debates. NICE plays a key role in this aim, through its technology appraisal and highly specialised technologies programmes. Through both programmes, NICE produces authoritative evidence-based guidance on whether drugs and other treatments should be funded by our NHS. Where NICE recommends a treatment as value for money, the NHS is required to make funding available, so that the treatment can be provided when it is clinically appropriate for a patient. That is reflected in the NHS constitution as a right to NICE-approved treatments, as it should be. Since it was established, NICE has recommended around 80% of the drugs that it has assessed. Many thousands of our constituents have benefited from access to effective new treatments as a direct result of its guidance.
Over almost 20 years, NICE has gained a firm reputation as a world leader in its field, and I was pleased to hear my hon. Friend talk about us wanting more NICE. When I travel around—at the G20 last month, for instance—and talk to fellow Ministers, they are always respectful about and look with some envy at what NICE achieves as an organisation. If we did not have it, we would have to invent it, so it is crucial that the methods and processes for making recommendations continue to evolve and develop to meet new challenges. I totally take my hon. Friend’s point about the NICE methodology review next year. These issues will be talked about within that process, of course.
My hon. Friend talked at length about charging. We think it extremely important that we have a system such as NICE in place to ensure that the NHS spends its money—public money, our constituents’ money—in the most effective way possible. It is critical that NICE’s work operates on a sustainable footing in a way that enables it to continue to be responsive to developments in the all-important—I completely agree with what my hon. Friend said—life sciences sector.
To date, NICE’s technology appraisal and highly specialised technology programmes have been funded through the resources that it receives from Government. However, in common with all Government bodies, it is right that NICE considers how to operate with maximum efficiency, as well as who stands to benefit from the services that it provides. My hon. Friend is absolutely right to talk about the robustness of how it spends money and looking at efficiencies across the board. As she rightly points out, that is why it will be doing its methodology review and why it does that regularly. It is also essential for us that NICE continues to be able to respond to continuous change in the global life sciences market—it is a global market, of course—whether with the ever-growing movement towards personalised medicine or an increasing number of medical devices and digital products.
For that reason, the Government and NICE believe that the most appropriate and sustainable method for NICE’s appraisal programmes in future is for NICE to charge the companies that benefit directly from its recommendations. This is not without comment and controversy, as we have heard this evening, but it also has support. To this end, the Government carried out a public consultation between 10 August and 14 September on proposed changes to regulations that would enable NICE to charge companies for the cost of making technology appraisal and HST recommendations. The consultation followed extensive engagement by NICE with the life sciences industry on a possible charging model. During that engagement, NICE heard clearly from companies that it would be important to ensure that there was some mechanism for minimising the impact of charges on small companies—my hon. Friend rightly referred to that—wanting the NHS to invest in their innovative and effective new products.
The Government are committed to ensuring that there is appropriate support for small businesses—I do not know whether my hon. Friend saw my speech before the debate, but she seemed to know a lot of what was in it—and she is right that this was reflected in the Government’s recent consultation that proposed a small discount for small companies and provision for small companies to pay by instalments. That was in there, too. We are especially keen in the response to pitch this right as we move from the consultation to the Government response. That is probably as much as I can say about that, but I repeat: we are keen to pitch that right for small companies and have listened to responses, including from my hon. Friend, to that consultation. It also gave a clear commitment to reviewing the charging mechanisms over time to ensure that they are fit for purpose and respond to developments in the life sciences sector.
We received 78 responses to the consultation from a range of audiences, including the life sciences sector, the NHS, patient groups and professional groups, as well as my hon. Friend through the all-party group. A range of issues were raised in response to the consultation, such as NICE’s impartiality and the impact on drugs for rare diseases, as well as potential impacts on small companies. I was over the road at the Britain Against Cancer conference today talking, for instance, to Cancer52, which represents people with rarer cancers, so that is very important to me as the cancer Minister.
It would not be appropriate for me to pre-empt the Government’s response to the consultation, and I do not intend to do that this morning, but I can assure the House that the Government have been carefully considering all the issues raised and agree that any charging mechanism must include appropriate support for the small companies, while protecting the impartiality and benefit of NICE’s work to patients and, as my hon. Friend rightly says, the global nature of this business and the great opportunities in this sector from Brexit.
We will publish our response to the consultation very shortly. The Under-Secretary of State for Health, Lord O’Shaughnessy, has invited my hon. Friend to meet to go through these proposals in detail and discuss her response to the consultation. As chance would have it, I understand that the appointment went in the diary today—just before today’s debate. Who would have thought it? That is happening this Thursday.
Anne Marie Morris
Would it be right to say that the consultation assumed there would be a charging mechanism and that it was not about whether but about how?
Steve Brine
Yes, the consultation was about how, but we are listening very carefully to the “how”.
As my hon. Friend said, Members have expressed concern that the introduction of the charging mechanism will make us a less attractive country in which to invest. We are committed to ensuring that the UK is an attractive environment for the life sciences sector. Sir John Bell’s life sciences industrial strategy published last year set out the sector’s vision for how we will do that, and we fully support the strategy’s vision. We have committed £500 million of Government money, and that has been backed by significant investment from 25 different organisations across the sector. Strong progress has been made on that sector deal, therefore, and one year on we are working with partners to agree the second sector deal with the new measures to secure our lead in the areas of global opportunity.
Anne Marie Morris
I thank the Minister for answering my last intervention so honestly. Given that the last consultation was not about the “whether” but about the “how”, may I ask if there was ever a consultation on whether this was the most appropriate way to ensure better value and more money for NICE to develop more medicines more efficiently?
Steve Brine
Not to the best of my knowledge, but this will of course continue through the NICE review process next year, and I have no doubt that my hon. Friend will be able to discuss this at great length with Lord O’Shaughnessy on Thursday.
I stress that the Government share the views that we have heard today about the vital importance of NICE’s work and about protecting the UK’s place in this important sector, which a lot of people work in and which—more importantly—a lot of patients rely on. That is why we want to ensure that NICE can continue to develop its recommendations with the same authority, transparency and impartiality that have been the backbone of what is a world-leading organisation with a world-class reputation.
Question put and agreed to.
Draft Package Travel And Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018
(5 years, 4 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
I beg to move,
That the Committee has considered the draft Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Hosie. The draft regulations, which were laid before the House on 29 October, will be made under the powers conferred by the European Union (Withdrawal) Act 2018. They form part of the wider programme of work to adjust our legislative framework in readiness for leaving the European Union.
If a withdrawal agreement is reached between the UK and the EU, the implementation date of this draft statutory instrument could be changed by any Bill that the Government introduce to implement the withdrawal agreement in UK law. However, it is sensible to prepare for all scenarios, and that is what we are doing by bringing this instrument before the Committee today.
The Package Travel and Linked Travel Arrangements Regulations 2018 came into force in the UK on 1 July this year. They implemented the European Union’s 2015 package travel directive, and expanded the definition of “package” to ensure that it encompasses modern methods of purchasing package holidays, online in particular. They also created the new concept of linked travel arrangements, which are looser combinations of travel services, and introduced limited protection for consumers who purchase them.
The 2018 regulations require the provision of information to travellers, so that they have clear information about their package holiday or linked travel arrangements and their statutory rights. They also require that organisers put in place adequate insolvency protection to cover the refund of payments made by passengers and, if necessary, their repatriation.
If approved, the draft instrument will make amendments to deal with deficiencies that arise from a possible UK withdrawal from the EU on a no-deal basis. The 2018 regulations implemented the mutual recognition requirement of the EU directive. That requires member states to recognise the insolvency protection put in place by traders under the law of the member state in which they are established. In consequence, the 2018 regulations exempt traders established in other member states from having to comply with UK insolvency protection rules. Upon EU exit, the UK will become a third country, and so will no longer benefit from the mutual recognition provisions of the directive. In consequence, member states will no longer recognise the UK’s insolvency protection under the 2018 regulations.
The draft instrument will remove the exemption that allows European economic area traders to sell in the UK as long as they meet the insolvency protection of the member state in which they are established. If they sell or offer for sale package holidays or linked travel arrangements in the UK, they will be required to comply with UK insolvency protection rules on the same basis as UK traders—and, indeed, traders established anywhere else in the world. That change is necessary, first, to ensure that UK travellers are fully protected by the 2018 regulations if they purchase a package from EU traders that choose to trade within the UK market; and, secondly, to ensure fairness for UK-based traders. EU-based competitors should not have the advantage of an exemption that is no longer reciprocal.
The 2018 regulations also required member states to establish central contact points, the main purpose of which is to facilitate information sharing between member states in relation to insolvency protection. The Civil Aviation Authority is the lead central contact point in the UK. Should the UK leave the EU without a deal, the role of the central contact point would become redundant. The draft instrument will revoke the function of the central contact point to reflect that. It does not affect the Civil Aviation Authority’s other enforcement functions in relation to the 2018 regulations.
The draft instrument will also change the obligations on UK retailers that sell packages put together by a non-UK organiser. Regulation 27 of the 2018 regulations requires UK-established traders selling a package put together by an organiser outside the European economic area to be responsible for the performance of the package. They must meet the insolvency protection obligations of the 2018 regulations, unless they can provide evidence that the organiser complies with those requirements. The draft instrument changes regulation 27, so that this responsibility is placed on UK-established retailers when selling a package put together by any organiser established outside the UK, including organisers established in the EEA. This change is important to ensure that UK travellers purchasing packages combined by EEA established organisers can continue to be confident that they would be protected by adequate insolvency cover in the event of the organiser’s insolvency.
Sir John Hayes (South Holland and The Deepings) (Con)
The Minister may be familiar with the role that I played when I was Transport Minister in doing exactly the sort of work and supporting the kinds of businesses that she is talking about. As she will know from the explanatory notes, one of the principal objectives will be to get those kinds of businesses, voluntary bodies and charities, to understand the changes. She is a competent and extremely diligent Minister, so I know that she will want to find means by which the Government can support that growing understanding. Will she agree to make provisions to get the word out among those kinds of businesses about what the changes mean?
Kelly Tolhurst
I thank my right hon. Friend for that point. If the draft statutory instrument is agreed to, and we move into a no-deal situation in which this piece of legislation is required, the Government are committed, as we have always made clear, to ensuring that consumers’ rights are protected. We are and will continue working with the industry, and with consumer representative bodies, to make sure that consumers are aware of what they need to be looking at, and that businesses operating in this area make sure that people are fully aware of the consequences of the draft instrument.
Finally, the draft instrument makes other technical changes to deal with references to EU legislation, for instance replacing references to EU directives with references to the relevant saved domestic legislation. Importantly, the instrument does not otherwise change the 2018 regulations, so that after EU exit, travellers will continue to benefit from all the protections in those regulations. Officials from the Department have undertaken the appropriate assessment of the impacts of the draft instrument. That has shown that there is likely to be a small impact on business in cases where UK businesses have to provide the relevant insolvency insurance.
The draft instrument is a sensible and necessary use of the powers of the European Union (Withdrawal) Act 2018 that will ensure that our consumer law continues to function effectively on exit day. I commend the regulations to the Committee.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship for the first time, Mr Hosie. As the Minister indicated, with the rise of the internet and the boom in low-cost airlines, the way we book our holidays has changed significantly. Last year, 38% of all holidays abroad by UK residents—17.5 million holidays—were package holidays. Holidays to the European Union made up 79% of all holidays, and 74% of package holidays, by UK residents. Consumers often buy packaged holidays a long time in advance. They often spend a considerable amount of money—a very significant proportion of their income—on a holiday, including on flights, hotels and car rental.
As the popularity of package holidays rises, so do the risks, including the risk of trader insolvency leaving consumers stranded, the risk of accommodation providers going bust, and the risk of difficulties with access to information, help or redress, to name just a few. That is why the EU directive was an important step forward in protecting consumers in both the UK and the EU.
As the Minister outlined, this statutory instrument amends EU-derived regulations that protect consumers buying package holidays or linked travel arrangements to ensure that these protections continue to operate effectively after the UK’s departure from the European Union. It proposes a new obligation on UK businesses that sell package holidays put together by a European Union business. Those UK businesses will be required to comply with UK insolvency protection requirements, unless they can demonstrate that the EU business has taken out appropriate insolvency protection.
Clearly it is vital that insolvency protection schemes work. To give just one example, in 2016, Lowcostholidays failed, which left 140,000 UK consumers at risk of losing the money they had paid for their holiday, and some stranded overseas. At the time of the failure, the company, which sold primarily to the UK market, was based in the Spanish Balearic islands, following a controversial move in 2013, and its insolvency arrangements were held there. The UK regulator, the CAA, was powerless to prevent the company selling to UK consumers, or to obtain information on its insolvency arrangements. Fortunately, in that case, the majority of UK consumers ended up receiving refunds through the Consumer Credit Act 1974, which covers refunds of credit card payments. However, it has since emerged that the company’s insolvency protection came nowhere near to covering the sales it had made. That illustrates the potential risks of insolvency protection schemes not working in a joined up manner. It is not enough to have a scheme; it needs to work in a joined up way.
The intention behind the mutual recognition rules is to prevent this type of scenario occurring, but without those rules, the only way to do that is to require UK sales to be protected here. As a result of the regulations, the mutual recognition of insolvency protection with EU member states will end. As part of the withdrawal negotiations, have the Government attempted to negotiate continued mutual recognition of this? If not, do they intend to?
As UK individuals and businesses will no longer benefit from mutual recognition of insolvency protection, they could see a reduction in their consumer rights. Is that compatible with the Prime Minister’s statement in October 2017 that she wanted a partnership with the European Union based on strong consumer rights?
Furthermore, the Minister will know when this SI came to the Committee in May, an impact assessment was undertaken, as it was recognised that businesses offering packages that would be newly within the scope of the package travel directive of 2015 would face costs of £21 million in ensuring proper performance of the package. Does she not agree that an impact assessment should have been prepared prior to this debate? The right hon. Member for South Holland and The Deepings asked how businesses could be made more aware of these changes; should that not have been costed as part of an impact assessment? Will she estimate what exactly the cost will be to businesses?
The Minister did talk about an impact assessment. What assessment has she and her Department made of the number of travel companies that may move away from the UK market as a result of the new changes in insolvency protection? Finally, what discussions has she had with British trading standards on the impact these amendments will have on its workload? We know British trading standards has, unfortunately, been underfunded. Will this add to its workload without adding resources? My final question: given the 56% reduction in staffing for trading standards due to Government cuts, has the Minister any assurance to make?
Sir Hugo Swire (East Devon) (Con)
How much more money would the hon. Lady’s party give to the trading standards body?
Chi Onwurah
I thank the right hon. Gentleman for his intervention, even though it is a little mischievous in nature. As he knows, we would have undertaken these negotiations in an entirely different and more effective way. To ask questions on the detail of what we would do—
Chi Onwurah
I will finish answering the right hon. Gentleman’s first point before I give way a second time. Asking how we would mitigate the negative consequences of agreements that are part of the Government’s deal—we will see whether it will be approved by the House in a week’s time—is taking hypothetical questions to the extreme.
Sir Hugo Swire
For the sake of the Hansard reporters, let me state that I would never want to be accused of saying that the Opposition were strong on detail, but the hon. Lady has just accused the Government of cuts, and of reducing the amount payable to a body, which suggests that her party would commit more funds. It is not hypothetical; we need to know what she means by this.
Chi Onwurah
It is entirely wrong to say that I am making an accusation against the Government by simply stating that there was a 56% reduction in staff numbers. How is that an accusation? That is a statement of fact, a statement of the consequence of this Government’s and the preceding Government’s austerity agenda, which has led to our consumer protection services being decimated. The right hon. Gentleman was looking for more detail on this point, and I am happy to give it to him. Our services have been decimated as a consequence of the Government’s austerity agenda. His Prime Minister has said that austerity has ended, but his Chancellor has in no way committed the funds to make that real.
Chi Onwurah
Again, I would like to answer the right hon. Gentleman’s first point before giving way another time. A Labour Government will ensure that our public services are properly funded. We need to see exactly what mess this Government leaves for us before we can say exactly how much that will cost.
Sir Hugo Swire
Hopefully it will not be as great a mess as the one we inherited from her Government in 2010. People are beginning to rumble the Opposition for being opportunistic. The hon. Lady has talked about cuts and decimation; she has accused the Government of decimating this particular body. It is entirely right that, as parliamentarians, we should know what her counter-proposals are. It is no good trying to lose the room in blandishments and vague promises. We need to know, if she has looked at this, how she would better resource it.
Chi Onwurah
Our commitments are to comprehensive investment in our public services and our infrastructure, and to strengthening consumer rights and protections. I will not go through every line of funding in our first Budget as a Labour Government, because I am not in a position to do that. However, I am in a position to say categorically that we would not have indulged in the failed economic policy of austerity, which has cut our public services while also giving us the lowest economic growth within the Organisation for Economic Co-operation and Development, and the second lowest within the European Union. If that is successful economic investment, then I think the right hon. Gentleman has a lot to learn about a successful economic policy.
Sir John Hayes
Might I be helpful? I realise that I cannot match the assertiveness of my right hon. Friend the Member for East Devon, but this seems to be less about trading standards than about the way in which people book holidays. When I looked at these matters as a Minister, as I mentioned earlier, it became clear that the regime that has prevailed for some time was based on the fact that most people booked their holiday through a supplier, as a package. Increasingly, people construct their holiday by a variety of means, including through the internet. There is a reasonable point to be made about this being a dynamic sector that requires a moving regulatory environment.
When I challenged the Minister on this, she very helpfully committed—I thought she would—to providing information to all those bodies associated with that highly dynamic part of the market, as the explanatory note implied that we should. I am not putting words into the mouth of the hon. Member for Newcastle upon Tyne Central, but a more telling critique would be about that, rather than taking this more conventional approach around trading standards.
Chi Onwurah
I hesitate to disagree with the right hon. Gentleman, who is so well informed in many areas, but as I said in my opening remarks, while it is absolutely true that consumer behaviour has changed in terms of how holidays are booked, that does not mean that the need for protection and for trading standards has reduced. For example, if we look at how crime has moved from the high street to the virtual high street, then some might argue that there was a greater need for trading standards and for protection of consumers. While I take the point that any consumer protection regime needs to reflect consumer behaviours, I do not think that that in any way reduces the need for trading standards bodies to have the proper resources.
The Chair
Order. Before the hon. Gentleman makes another intervention, the statutory instrument is very narrow; it is about package travel and linked travel arrangements, not about trading standards. If you stuck to the statutory instrument, I would be very grateful indeed.
Sir John Hayes
I am always guided by your wisdom, Mr Hosie. The point is that this is a complex area. The hon. Member for Newcastle upon Tyne Central is right that trading standards matter, but that is not all that matters. The Minister has made it clear that she is determined to make sure that information is provided to the businesses, voluntary organisations and charities that are likely to be affected, in exactly the way that I requested.
Chi Onwurah
Thank you for your advice, Mr Hosie. Let me reflect the right hon. Gentleman’s point and ask the Minister specifically what assurance she will make to resource British trading standards adequately to reflect additional workload. Assurances are very well, but it takes resource and funding to make them into reality. What resources will she put behind the information and communication campaign that she has apparently committed to in this debate?
Patricia Gibson (North Ayrshire and Arran) (SNP)
Thank you, Mr Hosie; it is a pleasure to see you in your place. My remarks will be brief.
The statutory instrument brings welcome consumer protections, but the Minister will be aware that it does nothing to reverse the loss of income that Brexit has meant and will continue to mean for holidaymakers, should it go ahead, which is becoming less clear with every day that passes. I say that at the risk of raising the ire of Government Members. It seems to me that the only thing that is clear is that Brexit is unclear.
Mark Carney, the Governor of the Bank of England, told the Treasury Committee that
“real household incomes are about £900…lower than…forecast in…2016.”
The question is why, and what drove that difference. Some of it, according to Mark Carney, is ascribed to Brexit. I crave your indulgence for just a brief second, Mr Hosie. Alongside what Mark Carney notes, there has been a decline in real wage growth since the Brexit referendum, largely fuelled by persistent inflation, which has been above the 2% target each month since February 2017, one of the key drivers being the weak pound as a result of the market’s dim view of the UK Government’s Brexit plans. That is the context in which we are thinking about consumers booking future holidays.
It is extremely important that the UK Government give assurances that they will seek to ensure a future partnership framework, and will retain the consumer benefits of the 2018 regulations. I agree that it is important that protection be expanded for consumers buying package holidays, to reflect modern travel booking methods, such as online booking, and that we broaden the definition of “package” to encompass new ways of purchasing package holidays.
This statutory instrument shows the importance of EU member states working together, but I fear—perhaps the Minister will seek to reassure me—that over time, Brexit will inevitably dilute and damage the consumer rights that are currently protected by EU member states working together. This will be at the expense of general consumer protection measures. As the right hon. Member for South Holland and The Deepings said, the package holiday sector is a moving and dynamic environment, so any UK Government have to be on their game to ensure that there is no unnecessary and damaging divergence in the kind of protection that we seek in this dynamic and innovative environment, to use the right hon. Gentleman’s words.
The new directive introduced a requirement for insolvency protection arrangements that were mutually recognised by EU member states and the UK, backed up by a central contact point that should, I hope, reassure consumers of package travel. As we have heard, this insolvency protection must work for all consumers who need it. I am sure that the Minister will agree that travel businesses need to be made fully aware of consumer rights and protections, as others have indicated.
I welcome the protections offered in this statutory instrument, but I have to say again that it will not put back into holidaymakers’ and householders’ pockets the income that has been lost since this Brexit episode started. People’s income is an estimated £900 less than the Bank of England forecast it would be in 2016. That comes alongside a decline in real wage growth since the Brexit referendum. I fear that consumers will be taking fewer holidays and therefore, sadly, will need fewer protections, but those who do take holidays rely very heavily on the kind of protections set out today.
Kelly Tolhurst
First, I reassure the hon. Lady that the 2018 regulations were implemented in July; we are making an amendment today based on a no-deal scenario. I thank her for her comments about the SI and the protections that we are trying to establish.
I will try to answer the questions raised by the hon. Member for Newcastle upon Tyne Central about the SI. As she will know, if a deal is agreed by this House, the Government will enter into a future economic partnership with the EU. This Government have been clear in their technical notices that consumer protection is at the forefront of what we are doing. Particularly in my role in the Department for Business, Energy and Industrial Strategy, consumer protection and what we are doing to support consumers is always at the forefront of our mind. I said it twice in two debates last week, and I say it again today: we are committed to continuing to deliver the highest consumer protections possible for the people of the United Kingdom.
The hon. Lady talked about consumer rights and different mechanisms as we move this statutory instrument forward. I alert her to the fact that in future weeks we will lay before the House an SI about mechanisms that we are working on for cross-border co-operation and redress in the event of no deal.
The hon. Lady talked about the impact assessment and mentioned a figure of £21 million. I am afraid I do not recognise that figure. Our assessment is that the potential cost to business is between £1.4 million and £1.8 million. As that falls below £5 million, a full impact assessment was not undertaken. I may need to make the Committee aware that the impact had already been established prior to 1 July, when the 2018 regulations came in, because UK businesses already had to provide protection for other holiday packages sold in the UK. We are pretty sure that our estimate of the burden on business will be at that level. In actual fact, we estimate that even if 70% of retailers currently supplying package holidays or linked travels arrangements in the United Kingdom were affected, it would still fall below the £5 million mark. More than 70% of retailers would need to be affected for that amount to be larger, and we think that the burden and the number of businesses affected will be reduced.
The hon. Lady also spoke about trading standards and enforcement. I take issue with her saying that trading standards have been decimated, and that the Government have not wanted to fund and have not taken seriously the enforcement of consumer rights. That is quite simply untrue. The priority given to trading standards locally is decided on at local level. Trading standards already enforce current regulations. We are committed to enforcement. We have National Trading Standards, and this year we put in the Office for Product Safety and Standards, which works very closely with National Trading Standards, and which obviously shows our commitment to delivering on product safety. We will continue, as ever, to maintain our trading standards capability.
As the hon. Lady knows, there was a Green Paper on consumer protections and enforcement. The Government are looking at that, and at how we can better our consumer protection and enforcement. I assure her that, as the Minister with responsibility for this area, I am committed to that. I reiterate that commitment, as I have in previous such Committees when consumer protections and enforcement have been raised.
I also highlight to the hon. Lady that, under the draft regulation, the CAA is still responsible for enforcement when flights are included. The Department for Transport is confident that even with the increased workload, it will be able to discharge its responsibilities under the draft regulation sufficiently well.
The hon. Lady also asked about the campaign that I agreed to. I did not agree to a marketing campaign; I do not think I spoke about a marketing campaign. I said that we will continue to work with consumer protection groups such as Which? and stakeholders. We have roundtables. We will also make sure that if there is a change and we are in a no-deal situation, the Government will work with our stakeholders, industry representatives, Citizens Advice, trading standards and all our usual stakeholders to make sure that the information is out there as prominently as possible. My right hon. Friend the Member for South Holland and The Deepings made the point that we have already had significant discussions with the industry and with stakeholders prior to laying this SI before Parliament.
We remain confident that we will reach a deal with the EU. However, it is of course important that we prepare the legislative framework to protect consumers and businesses in case we leave the EU with no deal. That is what this draft instrument will do. It does not make any substantial change to the regime for the protection of consumers purchasing package holidays or linked travel arrangements, or to the standards that travel operators are already expected to meet.
The draft regulations are essential to ensuring that the retained EU legislation that sets out those requirements continues to work effectively in the UK immediately after exit day. That is what they are designed to do. We need to make sure that we have the right regulatory and legislative framework to provide travellers with adequate protections, irrespective of the outcome of the negotiations. I therefore hope that the Committee approves the draft regulations.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018.
Draft Central Securities Depositories (Amendment) (EU Exit) Regulations 2018
Draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018
(5 years, 4 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Central Securities Depositories (Amendment) (EU Exit) Regulations 2018.
The Chair
With this it will be convenient to consider the draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018.
John Glen
It is a pleasure to serve under your chairmanship, Mr Evans. The two statutory instruments before the Committee, which were debated in the House of Lords on Wednesday 28 November, form part of our contingency planning for a potential no-deal EU withdrawal scenario. They are two of approximately 60 SIs that we are laying under the European Union (Withdrawal) Act 2018 to ensure that the UK retains a fully functioning legislative and regulatory regime for the financial services sector after our withdrawal from the EU in March 2019.
Last December, the Treasury pledged to transfer functions and powers in relation to trade repositories and central securities depositories to the Financial Conduct Authority and the Bank of England respectively, thus enabling the regulators to manage any cliff-edge risks arising from a no-deal scenario and to ensure an orderly exit from the EU. The statutory instruments deliver on those commitments.
Trade repositories and central securities depositories provide essential services to UK customers under EU regulation. Should the UK leave the EU without a deal or an implementation period, they would be unable to provide services to UK firms until they had the appropriate permissions under the UK’s domestic regimes, given that the UK would be outside the single market for financial services. The SIs therefore seek to ensure that there will continue to be a functioning regulatory regime to mitigate any risk of disruption to the provision of services in the event of a no-deal scenario.
Let me first discuss the draft Central Securities Depositories (Amendment) (EU Exit) Regulations. A central securities depository is an element of financial market infrastructure that keeps a record of who owns individual securities such as bonds or shares. Central securities depositories carry out three core functions: the registration of share ownership, trade settlement, and the maintenance of obligations arising from owning a security. Central securities depositories are governed by the central securities depositories regulation, which created a common authorisation, supervision and regulatory framework for central securities depositories across the EU.
The failure to maintain access to the UK for non-UK central securities depositories would introduce unnecessary risk to any UK firm using those services and would potentially cut off access to central financial markets. The draft regulations will therefore introduce a UK transitional regime that will allow both UK and non-UK central securities depositories to continue to provide services in the UK after exit next March.
To make use of the UK transitional regime, the draft regulations will also introduce a requirement for non-UK central securities depositories to notify the Bank of England, before exit day, of their intention to provide services in the UK after exit from the EU. The Bank of England has sent letters to non-UK central securities depositories—10 of them, I think—to set out the notification process. The draft regulations will introduce measures to mitigate those risks and ensure a smooth continuation of the provision of services by central securities depositories to the UK.
The draft regulations will transfer the various functions and powers currently held by EU bodies to the appropriate UK authorities. After exit, the powers that are currently held by the European Securities and Markets Authority in the EU to recognise non-UK central securities depositories will be transferred to the Bank of England. The European Commission’s powers to make equivalence decisions are being transferred to the Treasury. This is a process of reviewing another country’s regulatory framework to determine whether it is equivalent in outcome to one’s own. Once the Treasury has deemed a country equivalent, the Bank of England can recognise central securities depositories within that country. This will allow such central securities depositories to provide services to UK firms in compliance with the UK regime.
I now turn to the draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations. Trade repositories centrally collect and maintain data on derivative transactions. Derivatives are financial instruments that can be used to hedge against risks such as interest rate fluctuations or asset price volatility. The European market infrastructure regulation requires all data and information on European derivative transactions to be reported to trade repositories that are registered with or recognised by ESMA; this is known as the EMIR reporting obligation. If trade repositories are unable to provide services to UK firms post exit, those UK firms will be unable to fulfil their reporting obligation under the UK’s regime, resulting in the UK regulators losing access to the data necessary for monitoring financial stability risks to the UK market.
The draft regulations will introduce measures to mitigate that risk, ensuring a smooth continuation of services from trade repositories to UK firms. First, they will establish a framework in the UK for the registration of UK trade repositories, while maintaining the same regulatory criteria for new UK trade repository applicants. To achieve that, ESMA functions relating to the registration of trade repositories will be transferred to the Financial Conduct Authority, including the mandate to make technical standards specifying the information to be provided by trade repository applicants. The FCA currently supervises UK firms subject to existing EU reporting obligations and is therefore familiar with the reporting requirements under EMIR, so it is the most appropriate UK authority to take on that role.
Secondly, the draft regulations will provide powers to the FCA to consider applications ahead of exit day so that a trade repository can provide services in the UK as soon as possible after exit. Thirdly, they will establish a temporary registration regime for eligible trade repositories that will allow them to continue to provide services to the UK by setting up new UK entities. This provides temporary registration for a period of three years to UK trade repositories that are part of a group that contains an ESMA-registered trade repository. The purpose is to allow additional time for those trade repositories’ applications for permanent registration to be considered by the FCA and ensure continuity of services to UK firms. To enter the temporary regime, an eligible trade repository must, ahead of exit day, submit an application to the FCA for registration and set up a new legal entity in the UK.
Finally, the draft regulations will create a conversion regime whereby UK trade repositories that currently have ESMA authorisation are deemed to be registered by the FCA from exit day. To enter the regime ahead of exit day, a UK trade repository must notify the FCA of its intention to be registered. The conversion regime will ensure the smooth continuity of services from UK trade repositories to UK firms.
The Treasury has worked very closely with UK financial regulators and industry bodies to draft the statutory instruments. To ensure full transparency with Parliament, industry and the public ahead of laying the instruments, the Treasury published the trade repositories regulations in draft on 5 October 2018 and the central securities depositories regulations in draft on 22 October 2018, with an accompanying explanatory policy note for each. The regulators and the industry have generally been supportive of the policy decisions in the SIs, both of which are essential to ensuring that the UK retains a fully functioning legal regime both for trade repositories and for central securities depositories in the event of a no-deal scenario. The relevant UK regulators are also equipped to manage any cliff-edge risks. No matter what the outcome of the exit negotiations, UK businesses and customers who use trade repositories and central securities depositories can therefore be confident that they will continue to operate and provide services in the UK.
I hope colleagues from all parties will join me in supporting the draft regulations. I commend them to the Committee.
The Chair
Before I call the shadow Minister, let me inform the Committee that if there is a Division in the House, I will suspend our sitting for 15 minutes so that hon. Members can vote.
Lyn Brown (West Ham) (Lab)
It is an absolute pleasure to serve under your chairmanship, Mr Evans.
As we know, the regulations before us are two of a large number of statutory instruments relating to preparations for a potential no-deal Brexit. We expect around 70 to have been tabled by February. With this process, we have effectively begun to construct the bare bones of a functioning regime for financial regulation post Brexit.
Labour has consistently advocated for consolidated legislation on financial regulations. Since 2010, we have been faced with confusing, piecemeal legislation. There were financial regulation Acts in 2012, 2013, 2014 and 2015, and there have been more since—reams of reams of detailed amendments to legislation that was already complicated. On top of those Acts, Delegated Legislation Committees like this have attempted to scrutinise the many pieces of secondary legislation that have been needed to correct technical errors.
Put simply, we are concerned that the process for these Brexit regulations is not accessible or transparent. Not only does that make our role more difficult; it raises questions as to how stable the regulations will be if they do need to be used in respect of the industry itself or the wider public. My colleagues who are normally in this place, because I am not one of the economists in my team, have been reassured by the Government that these measures will not come into force should a deal be agreed before 29 March, but many of these powers could be applied whatever happened with Brexit. Which provisions will be revoked or substantially modified if, for example, we go into an implementation phase and no deal has, rightly, been ruled out as a possibility?
Before I ask my other questions, I want to make it clear why I think the regulations are important. The global financial crisis a decade ago taught us that the trading of derivatives and other securities needed to be better regulated within a transparent framework, and with robust infrastructure to monitor and enforce compliance. During the crisis, there was behind-the-scenes, over-the-counter buying and selling of complicated financial contracts, introducing risks that regulators and financial firms themselves could not properly assess or manage. There was no requirement to keep proper accessible records in the midst of that terrible crisis, and regulators could not always know who had bought which derivative and from whom. That meant that they could not know which banks or other financial institutions were exposed to bad loans or wrongly priced assets, gumming up the works of the financial system, and which were close to going under.
That is why, in the immediate aftermath of the crisis, it became a priority of the G20 in 2009 to move the regulation of over-the-counter derivatives to a regulated clearing framework. That change was put in place across the EU by the European market infrastructure regulation, which is implemented by the European Securities and Markets Authority. Having a robust, transparent infrastructure for derivatives trading imposes compliance requirements on firms across the EU, but it does help to protect us from a repetition of the events of 2008—we hope.
Colleagues will be aware that the draft Central Securities Depositories (Amendment) (EU exit) Regulations 2018 will make technical changes to ensure that the UK still has functioning regulations for central securities depositories, or CSDs, in the event of no deal. The regulations will transfer the power to make equivalence decisions from the European Commission to the Treasury. They will transfer powers from ESMA to the Bank of England, enabling the central Bank to recognise third-country CSDs after Brexit. They also make amendments to the transitional regime so that third-country CSDs can continue to provide services relating to the UK after exit.
The draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018 are intended to ensure that the UK’s legal framework for the reporting of derivatives trades to trade repositories continues to operate effectively after Brexit. Of course, we support the general aim of improving the transparency and predictability of the settlement of securities transactions. However, I do have some specific questions.
The explanatory memorandum for the draft central securities depositories regulations says that they aim only to ensure that the UK’s framework will continue “to operate effectively”. Will the Minister clarify whether any departure at all from EU rules is envisaged, however small? The Treasury website’s guidance on those regulations states that an application before exit
“will be subject to existing UK law…while that application is being considered.”
Will the Minister elaborate on whether there is any difference between the UK law that applies to applications before exit and the onshored regulation, once firms switch to it?
Similarly, the transfer of regulatory powers does not tell us anything about how UK-based companies will be affected in their future relationships with other countries’ financial sectors. How will any decisions about third-country equivalence be taken in situations where in the past there was a joint decision by European and other authorities? In previous SIs, equivalence decisions have been transferred to the Treasury, not to the Bank of England. Will the Minister elaborate on why in this case it has been decided to transfer them to the Bank of England instead? How and why was the decision reached? Was it consulted on?
Our strongest commitment, as with all no-deal SIs, is to ensuring that such amendments to our regulations need never be used. We hope that they never will be, because a no-deal scenario is something that no responsible Government would allow to happen.
On the broader question of financial regulation, Labour will take measures to ensure that there is public faith in the financial and investment system. We will not repeat the light-touch regulation mistakes of the past. We have commissioned independent experts to report on how the regulatory system should be reformed to ensure that the kind of behaviour that caused such terrible damage during and before the financial crisis can never happen again. We know that people and society want and need banks in which they can safely deposit their money, that lend responsibly and that provide credit to finance investment across the whole country. All I can say is that I wish we were discussing how to do that, rather than these no-deal Brexit preparations.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Mr Evans, and to join the Committee for another session as we hurtle towards EU exit. As I have said in other such debates, it is not something that the Scottish National party wanted to see or that voters supported in Scotland, where 62% voted to remain. However, I will play my part in these things and call for the Government to answer some questions.
As always, I have concerns about a potential reduction in regulatory standards. I seek assurances from the Minister that that will not occur and that at the very minimum we will keep to the standards outlined in current EU legislation. We know the long-term impact that the financial crash has had on our economy; I do not think that anyone would argue that lack of regulation was not a major driver of it. We cannot veer back towards that situation; that would be terrible for all our constituents throughout the UK.
Let me address the central securities depositories regulations first. I note from the impact assessment that the familiarisation cost is £400 per firm—£4,400 to all firms affected. That is a further burden to business from making these changes for Brexit. I am sure that nobody told businesses at the time of the referendum that they would incur such costs as a result of Brexit; it is one of those things that is hidden in the detail.
The Minister mentioned Sir Jon Cunliffe’s letter of 25 October to CSDs. Can he tell us what reply he has received from them? I appreciate that the number of CSDs is rather small, but it is not unreasonable to expect some response. It would be good to have a little more detail about what they are saying about the draft regulations.
I note that there is nothing in the impact assessment about monetised non-familiarisation costs of the central securities depositories regulations, whereas that information is provided about the trade repositories regulations. Is that because the costs are not known, or because there are no costs, as the central securities depositories regulations do not have an impact in the same way?
On trade repositories, will the Minister give us more information about the UK’S future relationship with ESMA? Clearly, ESMA will continue to function, make regulations and do things. How much notification will there be of obligations to apply the rules set up so that we continue to have a relationship? Is there any indication of what formal agreements or other types of arrangements might be put in place?
I note that there is a draft registration form on the FCA website, as well as a consultation on fees, which runs until January for the trade repositories. Will the Minister give more detail about that process? Does a draft registration form become a formal registration form at the point that the UK wishes to leave the EU, or before then? What is the process? Is there much point in those trade repositories that wish to fill out that form doing so in draft if they can do so in a permanent form? Will they have to do the paperwork twice? Will the Minister indicate what level of fees the Government feel are reasonable for the process? If people are asked how much they would like to pay, I am sure that most people will say that they would like to pay no fee, but the Government might have a different idea.
The impact assessment quotes familiarisation costs of the trade repositories regulations as £150 per firm, which is £1,200 for all impacted firms, as there are only eight. However, the wider impact of the monetised non-familiarisation costs to business, as outlined on page 47 of the impact assessment, is quite different, as they could run to £10,000 to £15,000 per trade repository—a total of £80,000 to £120,000. There would also be a cost of £5,000 per firm accessing trade repositories, with an unknown total cost, because it is about changing IT systems and internal processes. If we read the start rather than the end of the document, we get quite a different picture of the impact of the regulations.
The impact assessment states, at the bottom of page 47, that trade repositories are
“currently regulated by ESMA, so the UK regulators do not have direct access to information relating to clients of trade repositories.”
We therefore do not know how many will be affected. Will the Minister tell us a wee bit more about what conversations he has had with ESMA? Is ESMA unable or unwilling to give him that information? Has information been requested? It is difficult to get an idea of the total impact if we do not know how many are currently regulated, so we should be able to access that information.
The Minister will expect me to raise my usual concerns that both sets of regulations put more burden on the FCA, the Bank of England and other regulators, and that we do not have the specialists to deal with it. Registering is a new thing, so will the relevant functions and IT be in place in good time to allow all that to happen?
John Glen
I thank the hon. Members for West Ham and for Glasgow Central for their points, and I will endeavour to answer all of them. I recognise that some of the scenarios are obviously not desirable, and I echo their comments about that. We are seeking a deal, and the framework of the deal for financial services would give us provision for early equivalence decisions before the end of the implementation period, and we hope that will happen. We believe that the regulations are necessary to ensure that the UK retains a fully functioning legal regime for the trade repositories and central securities depositories in the event of a no-deal scenario. I also want to make the point, which applies in response to both hon. Ladies’ comments, that the Government do not, in any eventuality, see the UK financial services sector trading on some deregulatory arbitrage basis, where we somehow remove ourselves from the context in which we have been so intimately involved within the EU with respect to regulations. The hon. Member for West Ham made reference to the Pittsburgh agreement in 2009 to improve transparency, and we stand by that. A holistic review was undertaken following the crisis and the ESMA rules came into effect to try to address that.
On the point about how stable the regulations on central securities depositories will be when needed, we have engaged extensively with the regulators and with industry, and we are confident that we will ensure a stable and functioning regime at the point of exit. With respect to what happens if there is a deal, the withdrawal agreement Bill will include provision to delay, amend or revoke statutory instruments made under the European Union (Withdrawal) Act 2018, so we would make a decision based on what was appropriate at that time.
The hon. Lady asked about the differences between the transition regime for CSDs and full authorisation or recognition under CSDR. While a CSD is within the transitional regime, it will be subject to the recognised clearing house regime in part 18 of the Financial Services and Markets Act 2000. Other legislation, such as the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001, is also relevant. Recognised clearing houses must be recognised as part of the Bank of England, which gives an exemption from the general prohibition under FSMA IV regulated activity. A recognised clearing house may provide clearing services in the UK.
Once a UK CSD has been authorised, or a non-UK CSD has been recognised, the onshore CSDR regime will apply to it. That consists of the EU CSDR and the UK’s 2014 and 2017 regulations that implement it, and CSDs are given a separate exemption in section 285 of FSMA. As the hon. Lady pointed out at the start, the regulation is complicated by the way that those markets function. That regime is more extensive than the recognised clearing house regime and contains more detailed requirements about the operation and supervision of CSDs.
The hon. Lady also asked whether there would be any departures from EU law. The legislation is drafted using powers under the European Union (Withdrawal) Act 2018, so there is no policy innovation or deviation. That Act does not allow such policy changes, except where necessary to address deficiencies in language or such like. No changes are made to the regulatory requirements on CSDs.
The hon. Lady asked about the appropriateness of the Bank of England recognising non-UK CSDs. The Bank of England is obviously the UK regulator responsible for the authorisation and supervision of UK CSDs. It has a process in place for the recognition of UK CSDs and therefore has the most relevant experience for recognising non-UK CSDs. That sort of pattern has been followed throughout the construction, engagement and laying of these statutory instruments, so where the Commission is appropriate for making equivalence decisions, that comes to the Treasury, because we are equivalent, and the same with ESMA and the Bank of England.
John Glen
The regime that we would be onshoring for the future recognition of third countries would be a matter for us to consider, on the same basis that we would be onshoring EU entities that would have a new legal entity in the UK. It will be the same process, but one that we would essentially have to do domestically, rather than relying on the ESMA framework.
I now turn to the points of the hon. Member for Glasgow Central. I acknowledge the recurrent but appropriately made comments about her party’s position. All I can say is that I have tried to conduct this in as professional a manner as possible. The regulators have the resources available. They have a supervisory framework and, through the levy, they have the ability to make the appropriate resources available.
The hon. Lady asked about the temporary registration regime, which is intended to allow existing EU trade repositories to continue to provide services to the UK. It allows the new UK legal entities, which are part of an ESMA-authorised group, to submit an application. In terms of the process for that application, she mentioned the drafts on the site. I cannot give her the responses to the letter of 25 October, but I undertake to write to her on that. I need to speak to the regulators to understand where they are with that.
The hon. Lady also made a point about the degree of engagement that we have had with the EU. We have had a wide range of discussions with our EU counterparts—I have not personally, but my officials have—on matters relating to our withdrawal from the EU and this matter.
The UK Government and regulatory authorities will continue to do everything we can to ensure a smooth adjustment for firms and customers on both sides. Unfortunately, as with many of these matters, we cannot determine the EU’s response. That has been a challenge over this period. It is inevitable that, in a no-deal scenario, hostility will break out. It is in the interests of all market participants, regulator-to-regulator, Government-to-Government, to continue to work closely together, because that is in the interest of stability.
I believe that has addressed most, if not all, of the points raised.
Alison Thewliss
On the point about not knowing the exact number of firms affected, I draw the Minister’s attention to paragraph 124 on page 32 of the impact assessment, which says:
“As the volume of firms affected is so large, and both financial counterparties and non-financial counterparties are affected by the reporting obligation, it is difficult to provide an estimate of the number of firms affected.”
Will he tell me more about what can be done to raise awareness among the firms that may be caught up in this? If they do not know about it, they will not know about their obligations to comply.
John Glen
The existing reporting obligations for both statutory instruments are enduring and have been established for a long time. The issue of reporting into a different legal entity would come to pass following the enablement and the enacting of this regime.
The hon. Lady referred to the different parts of the impact assessment and the wider cost of familiarisation. She is absolutely right to draw attention to the undesirability of this additional cost and expense. That is why we do not advocate a no-deal scenario. I am not in a position to give her any more information, because I do not possess it. It will be incumbent on the regulator to send out timely information updates on what will be required. There is no meaningful change in what a market participant will need to do, in terms of the information they will need to share.
I hope the Committee has found this afternoon’s sitting informative and that it will support these regulations.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Central Securities Depositories (Amendment) (EU Exit) Regulations 2018.
Draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018.
Resolved,
That the Committee has considered the draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018. —(John Glen.)
Independent Parliamentary Standards Authority
(5 years, 4 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Lord Commissioner of Her Majesty's Treasury (Paul Maynard)
I beg to move,
That the Committee has considered the motion, That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Richard Lloyd to the office of ordinary member of the Independent Parliamentary Standards Authority for period of 5 years with effect from 1 December 2018.
It is a great pleasure to serve under your chairmanship, Mr Robertson, and to make a guest appearance to move the motion in the name of my right hon. Friend the Leader of the House.
The proposed appointment is due to the resignation of Jackie Smith from the IPSA board. The Speaker’s Committee for the Independent Parliamentary Standards Authority has produced a report—its first of 2018—that relates to the motion, but it may help if I set out the key points for the record.
IPSA board members are appointed under the Parliamentary Standards Act 2009. Under the Act, the Speaker is responsible for overseeing the selection of candidates for appointment to IPSA. The names of any candidates to be members of IPSA must be approved by the Speaker’s Committee for IPSA. On this occasion, the vacancy was for an ordinary board member. Such members are not subject to any of the specific statutory requirements listed under the Act.
The Speaker is not regulated by the Office of the Commissioner for Public Appointments, but in making this appointment Mr Speaker has chosen to follow recommended best practice in his supervision of appointments. As is normal for such appointments, Mr Speaker appointed a panel to conduct the shortlisting and interviewing of candidates. The panel was chaired by Mr Mark Addison, a former civil service commissioner. The other panel members were Ruth Evans, chair of IPSA; Shrinivas Honap, lay member of the Speakers Committee on the IPSA; and Meg Munn, former MP for Sheffield, Heeley.
The candidate recommended by the appointment board is Mr Richard Lloyd, the current UK chairman of Resolver, who has substantial experience both of organisational strategy and of operational delivery in public, private and third sector services. He exhibited a strong understanding of the role of IPSA and the critical challenges that it faces. He also has experience working with regulators, including the Food Standards Agency, the Gambling Commission and the Financial Conduct Authority. His full CV is included in the Speaker’s Committee report.
As required under the Act, the appointment was approved by the Speaker’s Committee at its meeting on 20 November. If the appointment is made, Mr Lloyd will serve on IPSA for five years. Should this Committee, and ultimately the House, support his appointment, I wish him well as he takes up his new post, and I thank the panel for its endeavours.
Karin Smyth (Bristol South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I, too, thank the interview panel for its work, which often goes on unseen behind the scenes. The panel—the independent chair Mark Addison, Ruth Evans, Shrinivas Honap and Meg Munn—has been independent, transparent and diligent in that work, reviewing more than 179 applications. Its unanimous view is to support the appointment to the IPSA board of Richard Lloyd, whose previous experience the hon. Member for Blackpool North and Cleveleys outlined.
The Speaker’s Committee report notes:
“Mr Lloyd exhibited a strong understanding of the role of IPSA and the critical challenges it faces”—
something that I think we all agree on. The Opposition agree with Mr Lloyd’s appointment, as recommended in the report, and wish him well in his new role.
David Linden (Glasgow East) (SNP)
As ever, Mr Robertson, it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Blackpool North and Cleveleys on opening the debate on behalf of the Government; I suspect that he did not expect to be here, but given that his boss is downstairs in the Chamber trying to hold the Government together, it is no surprise that he is. I do find one thing rather amusing: like many hon. Members present, I have just come from the Chamber, where we were discussing an Humble Address not being followed, so it is with a sense of irony that I see another Humble Address before this Committee.
I have one question for the hon. Gentleman standing in for the Leader of the House. As I understand it, the gentleman who is proposed for the IPSA post took up office on 1 December, yet Parliament is being asked to approve his appointment today, on 4 December. Over the EU referendum campaign, we were told that Parliament was taking back control, yet essentially we are being asked to rubber-stamp something that has already happened. I suspect that that is an indication of how the Government see the role of parliamentarians. We can draw our own conclusions about that, but I want to put it on the record that I ask the hon. Gentleman why Parliament is being asked to approve an appointment that has already started.
Paul Maynard
I am happy to try to respond. I was not sure whether we were getting a question or a running commentary there, but I think I detected a question at the end. The hon. Member for Glasgow East may have been paying attention to what I said; I do say things for a reason. The Speaker’s Committee reached its decision on 20 November. I am sure that the hon. Gentleman, as someone with great knowledge of the workings of the House, realises the time it takes to process delegated legislation. We brought the motion before the Committee as soon as we could; I hope he can support it, because I am sure that Mr Lloyd will do a good and diligent job.
Question put and agreed to.
Fisheries Bill (First sitting)
Tuesday 4th December 2018
(5 years, 4 months ago)
Public Bill CommitteesRead Full debate Fisheries Bill 2017-19 View all Fisheries Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 4 December 2018 - (4 Dec 2018)
The Chair
As you all know, we are here to consider the informative bit of the Fisheries Bill. We will first consider the programme motion, which is on the amendment paper. After that we will consider a motion to enable the reporting of written evidence for publication and then a motion allowing us to deliberate in private. I call the Minister to move the programme motion. Date Time Witness Tuesday 4 December Until no later than 10.25 am Scottish Fishermen’s Federation; National Fishermen’s Federation Organisation Tuesday 4 December Until no later than 10.55 am UK Seafood Industry Alliance Tuesday 4 December Until no later than 11.25 am UK Association of Fisheries Producer Organisations; Angling Trust Tuesday 4 December Until no later than 2.30 pm New Under Ten Fishermen’s Association Tuesday 4 December Until no later than 3.00 pm Marine Management Organisation Tuesday 4 December Until no later than 3.30 pm Blue Marine Foundation Tuesday 4 December Until no later than 4.00 pm Fishing for Leave Thursday 6 December Until no later than 12.15 pm Greenpeace; Pew; Greener UK; Marine Conservation Society Thursday 6 December Until no later than 1.00 pm Macduff Shellfish; Interfish/ Northbay Pelagic; Whitby Seafoods Ltd; Scottish White Fish Producers Association Ltd Thursday 6 December Until no later than 2.30 pm New Economics Foundation Thursday 6 December Until no later than 3.00 pm Carl O’Brien (Chief Fisheries Science Advisor, Department for Environment, Food and Rural Affairs) Thursday 6 December Until no later than 3.30 pm Coastal Communities Alliance; Communities Inshore Fisheries Alliance
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 4 December) meet—
(a) at 2.00 pm on Tuesday 4 December;
(b) at 11.30 am and 2.00 pm on Thursday 6 December;
(c) at 9.25 am, 2.00 pm and 5.00 pm on Tuesday 11 December;
(d) at 11.30 am and 2.00 pm on Thursday 13 December;
(e) at 4.30 pm, 7.00 pm and 9.00 pm on Monday 17 December;
(f) at 9.25 am and 2.00 pm on Wednesday 19 December;
(2) the Committee shall hear oral evidence on Tuesday 4 December in accordance with the following Table:
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 4; Schedule 1; Clauses 5 to 13; Schedule 2; Clauses 14 to 17; Schedule 3; Clauses 18 to 28; Schedule 4; Clause 29; Schedule 5; Clauses 30 to 37; Schedule 6; Clause 38; Schedule 7; Clauses 39 to 43; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Wednesday 19 December.—(George Eustice.)
The Chair
Under the programme order, the deadline for amendments to be considered at the first line-by-line sitting of the Committee will be the rise of the House on Thursday, so if Members wish to table amendments to be considered next week in Committee, they must table them by the rise of the House on Thursday.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(George Eustice.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(George Eustice.)
The Chair
Why on earth we have agreed to potentially meet in private now, I have no clue. However, the learned Clerks know better than I. We will now move on to the interesting part of the session.
Examination of Witnesses
Bertie Armstrong and Barrie Deas gave evidence.
The Chair
I am delighted to welcome the Scottish Fishermen’s Federation and the National Fisherman’s Federation Organisation to give evidence. For the sake of Hansard, will you kindly introduce yourselves before we start questions?
Bertie Armstrong: Certainly, in alphabetical order, I am Bertie Armstrong, chief executive of the Scottish Fishermen’s Federation, which is the trade association that looks after the catching sector in Scotland. It has nine constituent associations and a geographical spread. It covers some 450 fishing boat businesses from smallest to largest.
Barrie Deas: I am Barrie Deas, chief executive of the National Federation of Fishermen’s Organisations, which is the representative body for fishermen in England, Wales and Northern Ireland.
The Minister for Agriculture, Fisheries and Food (George Eustice)
Q
Bertie Armstrong: The central ill of the common fisheries policy is the matter of the distribution of catching opportunity—the so-called relative stability—which places us, from our waters, in the position of 60% of the seafood assets removed from our waters being in the hands of non-UK EU fishing nations. The relative figures for other coastal states, one of which we will become on Brexit day, are Norway 85% or thereabouts and Iceland 90%. So the primary ill is common access to our waters and statutorily giving away that amount of our natural capital.
The second ill of the CFP is that it is distant and remote, and the process is effectively moribund. It is dysfunctionally distant. It is centralised by treaty and cannot be uncentralised or regionalised to any proper extent. The Bill must seek not to replace one unworkable system with another.
Thirdly, and finally, some political elements of the CFP in terms of practical fisheries management are counterproductive and unworkable. For instance, no one wishes to discard our perfectly edible fish, but the way it is linked to the CFP will simply not work.
Barrie Deas: I very much share Bertie’s views. The essential problems with the common fisheries policy for the United Kingdom lie in its inception, which was based on the principle of equal access, and ten years later, the principle of relative stability that allocated shares that do not reflect the resources that are in our waters. The comparison is with what we would have been had we been an independent coastal state for the last 45 years, like Norway. It is a huge disparity.
We are tied into an asymmetric and exploitative arrangement. The departure of the UK from the EU and therefore from the common fisheries policy provides us with the first opportunity to break free of that. The content of the Fisheries Bill is extremely important in terms of taking the powers to control who fishes in our waters—the access arrangements—and to renegotiate the quota shares.
I very much share Bertie’s view that the common fisheries policy has been cumbersome to deal with and very remote from where the impact of the decisions are felt, which has led to a huge gulf between fairly grandiose legislation and failure at implementation level. The gulf between primary legislation and its implementation has been recognised by the Commission and in the common fisheries policy. In recent years there has been an attempt to address it by introducing an element of regionalisation. Unfortunately, the treaty of Lisbon and the introduction of co-decision making into fisheries involving the European Parliament has moved active decision making even further away from where it counts and where its effects are felt. In that sense, we have moved in the opposite direction.
George Eustice
Q
Barrie Deas: Yes. I think there always has been the right of UK fishing vessels from any part of the country to fish anywhere in the waters. We think that is an important principle that should be retained. The NFFO has some problems with the impact of the devolution settlement on fisheries, which makes it much more complex, but the fundamental principle of equal access for UK vessels is one that we support.
Bertie Armstrong: Likewise, the Scots fleet would like to continue to be able to catch its prawns off South Shields as well as in the Fladen Ground, but we are too small. I think the central and relevant point is that there has been no arm-wrestling and no desire for regionalisation of the catching area. The heft of the UK exclusive economic zone is great because of the area and its seafood contents; it is not great in terms of home nation fleets. I do not think there is any sense in splitting it up, or any requirement to do so.
George Eustice
Q
Bertie Armstrong: From my point of view, in the strongest possible terms, there has to be some sort of principle for division. Given the fact that there will be access as we have access, for instance, to Norway, there will be access by European boats to UK waters. We need to be very careful not to put anything on the face of the Bill that is obstructive.
Barrie Deas: The most extreme example of the distortion in quota shares is English channel cod: the UK share is 9% and the French share is 84%. Other examples include Celtic sea haddock: our share is about 10% and the French share is 66%. Those kinds of distortion have been part and parcel of relative stability and equal access, and they need to be addressed as a matter of urgency.
The principle of zonal attachment is used in the division of quota shares between the EU and Norway, so it is already accepted by the EU in that context. Obviously, it does not work to their advantage in relation to the UK, which is why it is not unexpected that they are very unhappy about the change. The broad picture is that the principle of zonal attachment, reflecting the resources that are in the UK water, should be the basis for allocating quotas in the future, in our view.
Bertie Armstrong: May I add a practical example of the ills of not doing that? To make a discard reduction or ban, or a landing obligation, work, the fishing opportunity in the area has to resemble what is in the ocean. The great distortions of the CFP mean that you simply cannot make that work, because you get choked immediately on having caught all of one species and still having quota for another. There needs to be an underlying principle, and zonal attachment is the one that, by common sense and instinct—apart from the fact that Norway has accepted it—makes the most sense. If we approach the whole of our new role as a coastal state with the idea that common sense and sustainability are central, we will do well.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Q
Bertie Armstrong: The Bill in its present form enables the UK to work as a coastal state in the way that other coastal states do, so the answer to that is yes. We would be greatly comforted by the insertion into the Bill of a date of assumption of sovereignty. The self-suggesting date is the end of the transition period—the implementation period, in our parlance. In other words, the end of December 2020.
The Chair
I am very sorry, but I am finding it hard to hear you, perhaps because I am a bit deaf. Would you mind speaking up a bit?
Bertie Armstrong: I will, forgive me. The date of the end of December 2020 should therefore be inserted into the Bill so there is a commitment to becoming, in practical terms, a coastal state.
Luke Pollard
Q
Bertie Armstrong: There is a whole fisheries agreement laid down in the withdrawal agreement, which is yet to happen. That is the point. Your question does not indicate from whom I would seek that answer. There is a whole fisheries agreement to be negotiated. Well, we say negotiated, but you need to ask, “Who owns this place?” After Brexit, we own this place. This is the UK’s natural capital. That places a pretty strong trump in your hand of cards for the negotiation.
At one end of the spectrum of the fisheries agreement is, “None of you get in at all and fish anything,” which is absurd. At the other end of the spectrum is, “We’re going to give up and shut the fleet down. You can have at it and have the lot.” The negotiating ground is in between. We would like to see, in the fullness of time, the UK’s fishing opportunity representing zonal attachment or something close to it. That is what should be the result.
Barrie Deas: The UK will be an independent coastal state under international law. The United Nations convention on the law of the sea carries certain rights and responsibilities, including the responsibility to co-operate on the shared management of shared stocks. That is a starting point. There is a very important link between access rights and the renegotiation of quota shares. You can use the EU-Norway example as the most relevant model for future management. The UK is engaged in bilateral negotiations with the EU. That will be about setting quotas and total allowable catches at safe levels. It will also be about access arrangements for the coming year, and it will be about quota shares. That link between access and quota shares is the key to delivering a change and rebalancing of quotas to the UK, where needed. There will be a certain degree of access for European fleets—how much is to be negotiated—and there is the rebalancing of the quota shares. Those two things should be inextricably linked, and that is where our leverage lies in addressing the quota distortions that are there at the moment.
Luke Pollard
Q
Witnesses indicated assent.
Luke Pollard
Q
Bertie Armstrong: It is a complicated question. We should look to other coastal states. There is great assistance in looking at other models. Iceland and Norway—to cite the pair of them again—place much stronger economic links on ownership of vessels and ownership of the stewardship of the fishing opportunity, which is less strong in the UK because of EU regulation. Everyone will know that in the late 1970s the UK attempted to apply a 75% ownership limit to foreign investment in fishing vessels and lost in the European courts because that was illegal under European law. It had to be 75% European ownership. There is an opportunity downstream to have another look at ownership.
Luke Pollard
Q
Bertie Armstrong: The first thing that happens if you make rules about landing is that you have a boat full of mackerel and you cannot land it until Friday, which is very prejudicial. If we are to make rules about landings which make instinctive perfect sense, to capture the economic activity into the land, we must have a sensible vision of how much volume we will need to cope with and how that will be done seasonally. Making simple rules is likely to produce more problems than it will solve. It would be more helpful to have a vision for the UK fishing industry. In the withdrawal from the EU lies the opportunity effectively to double the economic activity associated with UK fishing, including the whole of the supply chain. As long as we are ready for that, the landings will take place into the UK. We look forward to the day when all UK fishermen will want to land their fish into the UK, because we are a world seafood leader and that is where they will get their best price.
Barrie Deas: The principle is that UK quotas should bring proportionate benefits to the UK. That is the starting point. The question is how you do that. The obligation to land a certain proportion of the fish is there in the current arrangements—the current economic link—but there are other options to meet that question of equivalence. Requiring all fish to be landed in the UK would mean an intervention in the market, because if there are economic benefits to landing particular species abroad where there is higher value, there is obviously an economic purpose to doing it that way, so we have to be careful about that. It is right that the economic link requirements are reviewed in the new circumstances, but I quite like the idea of having the flexibility, as long as there is an equivalence, and it is all linked back to the fundamental principle that UK quotas should bring proportionate benefit to the UK.
Peter Aldous (Waveney) (Con)
Q
Barrie Deas: On increased fishing opportunities and how they could be allocated, for a number of reasons, including case law in the English courts, but also the stewardship that comes along with rights of tenure, which have been an important factor in stabilising our fisheries over the last 20 years, our federation takes the view that for existing quota it should remain the same, but for additional quota we think there is a conversation to be had on the most appropriate use of that. There is a range of options.
Perhaps we are being a bit narrow here. You alluded to the division line at under-10, which has, I think, caused distortions in the fleet and unintended consequences —you have a cohort of high-catching under-10s, sometimes called rule beaters or super-under-10s, that have kind of distorted fishing patterns. There is recognition that we need to move beyond that now. In that context, there is an issue about how you define genuine small boats—genuine low-impact vessels—and I accept that. My organisation would be very interested in taking them out of the quota system altogether. That does not mean not taking into account their contribution to mortality. In a sense, it is a reversion to what we had in the early days of under-10 metre management, where sufficient quota was allocated and we did not have to have monthly quotas for that class of vessels. There is a very interesting conversation to be had about the future and new entrants and how the genuine low-impact fleets fit into that.
Equal access has been an important principle and there are dissatisfactions wherever you have a nomadic fleet arriving on the doorstep of a local fishery. That would be true of our boats fishing in bits of Scotland, I suppose, and certainly you hear these kinds of things about Scottish boats fishing off the Northumbrian coast or down in the south-west. Fishermen are competitive. They are competing with each other as well as with foreign fisherman. That is the context in which you have to situate that particular issue.
Bertie Armstrong: Mr Aldous, your question was about new entrants in under-10s. The enabler for a better deal for new entrants in under-10s will be the uplift in opportunity for fishing that comes with Brexit; otherwise, we presumably have fixed the problems already with the fishing opportunity available. The situation is different as you go around the coast. The small-vessel fleet in Scotland has a different character and tends to use creels, or pots, to catch shellfish—that is a great generalisation; there are others—so there is a different set of problems. It is generally inshore and small scale and is therefore best sorted out locally, but I think there will be a better deal for all with the uplift in opportunity.
There is another abiding principle here. If you are going to make alterations to arrangements for fishing, the fish need to be there to be caught. It is one thing to give someone tons of fish; it is quite another if the fish are not there in prime condition with a business plan for getting them landed and into a logistics chain. Much is made of the big mackerel catchers in the pelagic fleet, and much is made of rather lurid statistics about what percentage is held by what number. You cannot catch 250,000 tonnes of mackerel in winter, 100 miles to the west of the British Isles, with hand line under-10s—you simply cannot. But a few hundred tonnes to the hand line under-10s, provided the local arrangements pay attention to making sure there is a whole logistics chain and they are going to get that fish to a place where somebody wants it, is where the opportunity lies.
My final input, on behalf of slightly larger-scale fishing, is: be careful what you mean by low impact. The carbon footprint per kilogram of fish of a pelagic trawler catching mackerel is very much smaller than any other form of fishing, because you catch volume efficiently and quickly. There are many aspects to this.
In answer to the question, yes, there is extra opportunity, but there has to be extra opportunity to distribute. The problems are largely regional and should be sorted out regionally. We need to be careful not to place excessive detail on the face of the Bill. I suggest that a lot of this is best done by secondary legislation.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Q
Bertie Armstrong: I would wish to dispense with the flexibility to extend for fishing the implementation period by placing a date on the face of the Bill. There will undoubtedly be some resistance, but that would not be up to me. That is why we would like to see that in there. We are on record as being less than completely happy that the implementation period applies to fishing at all, because legal sovereignty over the waters and the resource therein comes on Brexit day. However, we are where we are, and we recognise that the withdrawal agreement has compromises all over the place. We therefore, with reluctance, accepted the implementation period compromise, but we would not wish to see it extended at all.
The backstop has been much described, particularly over the last few days. Clarity is helpful on what happens. There are two preconditions: if the backstop clicks in and is applied and there is no fisheries agreement in place by that stage, and there is no prescription of what is in the fisheries agreement, tariffs will apply. Fishing will be cherry-picked out of the trade arrangements. Tariffs will apply to fish—which, by the way, the Scottish Government study indicates would not necessarily be a terminal problem—and access to our waters for other UK fleets would cease. So it would be a mess of large proportions and we are rather hoping that it would not apply.
I see some puzzlement about the lack of access for anybody else. If there is no fisheries agreement—and there is precedent on this, with EU-Norway arrangements, for instance—there is no access to each other’s waters.
The Chair
May I lay down a red line, particularly for our detailed consideration of the Bill, starting next week? The backstop and all that is not in the Bill. Those are, of course, important matters and they do have some relevance to and bearing on it, but our purpose today—and, indeed, during the process of consideration in detail, as of next week—is to consider in detail the words that are on the face of the Bill. Therefore, next week I will take a tough line on the broader political considerations and say that they are, I am afraid, simply out of order. They are important, but let us focus on the Bill.
Alan Brown
Q
Bertie Armstrong: To be honest, that is not where our focus lies at this point in time; it is on making sure that the Bill as an enabler of—I will use the phrase “the sea of opportunity”—makes it on to the statute book, rather than on the details of what does and does not happen to Northern Ireland in the event of a backstop.
David Duguid (Banff and Buchan) (Con)
Going back to Mr Pollard’s question about UK vessels landing elsewhere, for example Norway, can you say a little about what motivates fishermen to land elsewhere? What changes are required in our ports or onshore infrastructure to make landing in the UK more attractive, and is that covered by the Bill?
Barrie Deas: Money. That’s it, really. [Laughter] I had better say a bit more. Over the last 20 years, markets for fish have developed and diversified. Peterhead has become the pre-eminent white fish port in Europe. Flat fish tends to go to Urk in the Netherlands. South-west ports are sending prime, high-value fish to the continent, and then there is the shellfish market. From time to time there will be price differentials. Also, it can reflect where the vessel is fishing: for example, it might make sense to go to Denmark and land for one trip and then land back into Peterhead for the next, or to land into France. Fishermen are commercial animals. They are very much driven by catching fish but also by marketing fish, and price is key.
Bertie Armstrong: I would reinforce that. At the slight risk of crossing the red line again, and as I keep saying, the elevation of the UK to the world stage would mean that, in the simple arithmetic of volume and value, we would overtake Iceland. It would allow us the sort of conditions that our own processing industry would want to entice not only all our own landings but perhaps some from others as well. However, it is a matter of commerce and business, generally.
David Duguid
Q
Barrie Deas: Over time, and with rebalanced quotas, there would be opportunities, because of the greater throughput, to look again at all these issues. I am not sure what you could put in the Bill particularly that would be helpful, given that this is a dynamic commercial issue that you are addressing. I certainly think that it is an important issue, but I would have to be persuaded that the Bill is the right place to address it.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Q
Bertie Armstrong: The provisions, as we understand it, are that we will act as a coastal state-designate during that period, participating fully in the coastal state arrangements that will set the catching opportunity for 2021.
Mr Carmichael
Q
Bertie Armstrong: It would mean that, between now and then, there would need to be the construction of coastal state arrangements that include the United Kingdom as a stand-alone coastal state, and for the United Kingdom to participate in that. This is probably in 2020, but not before.
Mr Carmichael
Q
Bertie Armstrong: It is also as laid down in the withdrawal agreement. Happen as may, it turned up in a paragraph of the legal advice yesterday, which was not actually advice on what we ought to do on fisheries but was a repeat of what was in the withdrawal agreement.
Barrie Deas: The December Council later this month will be the last time that the UK participates as a member state. The whole apparatus of European decision making will then not apply to us; we will not have MEPs and we will not be involved in any of the decision-making forums. The transitional period is a little bit anomalous and strange, because the UK will be part of the EU delegation to EU-Norway next year but will not be in the room for co-ordination. There is some uncertainty about how that will work in practice, and we need clarity on that. I agree with Bertie that an implication of the withdrawal agreement is that in autumn or December 2020, there will be bilateral or trilateral negotiations with Norway that will set the quotas, quota shares and access arrangements for 2021. That is my understanding.
Mr Carmichael
Q
Barrie Deas: No—in 2019 we are in the implementation period. It is slightly anomalous that there is a lack of clarity about how that will work in practice. It is governed by a good faith clause for both parties, but it is still uncertain how that would work in practice.
Mr Carmichael
Q
Bertie Armstrong: I know for a fact that you understand this, Mr Carmichael, but there is a point of principle that is worth mentioning. The December Council is something of a distortion of importance, because effectively it takes the pie piece—the amount of opportunity that was agreed in coastal states arrangements for the EU—and, in terms of relative stability, it fiddles about with the details and ratifies them. That will be of no real interest to us in times to come. This year it will be of extreme importance, but in times to come we will be involved in the rather more important division of the north-east Atlantic fishing opportunity. As an owner of a very significant piece of the north-east Atlantic, we will genuinely be at the top table, to use a hackneyed phrase. The December Council is not any form of top table; it is arm wrestling inside the EU for an already settled fishing opportunity.
Mr Carmichael
Q
Barrie Deas: Those concerns have to be there for the negotiations in 2019 for 2020. Science is going to be the basis of the decisions on total allowable catches. There is the good faith clause, but we do not understand the mechanics of how the UK will be consulted as we have been promised. However, 2020 for 2021 is an entirely different scenario: all other things being equal, the UK will be negotiating as an independent coastal state and will carry a great deal more political weight as a result.
Mr Carmichael
Q
Barrie Deas: I think the answer is that a transition or implementation period was agreed to give business a chance to adjust to leaving the EU—
Mr Carmichael
Q
Barrie Deas: The whole acquis—the whole body of EU law, including fisheries law—applies. As much as we would have liked to sidestep that, the Government made a calculation that that was not available or realistic.
Bertie Armstrong: Clearly the industry was not in the room when that happened. As I understand it, there would have been no agreement and it would have been stuck with four or five nations. Of the 27, half do not have a coastline. These pressures apply to a maximum of 11, but more like four or five, nations—
The Chair
Mr Carmichael, that is your last question. We are all drifting beyond the Bill. We have four questioners and 10 minutes to get them in.
Bertie Armstrong: There is certainly a matter of relevance, although it remains subjective rather than objective. If we become dish of the day, there will be a time when we are a sovereign state with a complete grip on what happens in our waters. It would therefore be unwise for short-term gain to be exacted at that stage, providing that the Government of the day retained their backbone.
Brendan O'Hara (Argyll and Bute) (SNP)
Q
Bertie Armstrong: We represent the 450 businesses that are responsible for most of the quota species. For the non-quota species, a large number of vessels are one handed or two handed. They belong to no associations—that is not being dismissive, but if you are a one-handed fisherman, you do not have much time for politicking. We have the whole of the Shetland Shellfish Management Organisation and the whole of the Orkney Fisheries Association, but not the Western Isles Fisherman’s Association or some of the smaller associations down in the Clyde.
Brendan O'Hara
Q
Bertie Armstrong: I am not seeing much in the Bill that awards that. Be aware of the stats here—I am about to make a statement of fact, not opinion. About 60% to 65% of the UK’s fish landings by volume and value come from the Scottish fleet. That is just an observation of the facts. With access to waters, the position of the ports, where the fish live, and a couple of decades of contracting and rationalising the industry, we have ended up with quite a lot of concentration in the core areas of Scotland.
I am aware—I am very concerned—that there should be a level-playing field and no prejudice against any area, but I am comforted by the fact that business will take care of that, as long as there is nothing obstructive. The whole point of the future is the increased economic activity, which business will take care of.
Brendan O'Hara
Q
Bertie Armstrong: It would be helpful if you framed the question as to which part you think is prejudicial.
Brendan O'Hara
Q
Bertie Armstrong: We are back to the backstop, and that will kick in only if the backstop kicks in. Anybody’s guess around this room is as good as anybody else’s guess.
The Chair
We are drifting a little. I am keen to extract maximum benefit from our witnesses. We have three more questioners, so I will move on, if you do not mind, Brendan.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
Q
Barrie Deas: Yes, I think the broad thrust of the Bill goes in the right direction. We have some concerns about particular aspects of it, but the Bill is necessary in order to give Ministers the power to set quotas, albeit in the context of international negotiations, to negotiate as an independent coastal state, to control access to our waters, and, on that basis, to renegotiate our quota shares. That is the main thrust of the Bill, and that is really important.
We also completely understand, having been within the common fisheries policy for so long and having had direct experience, that top-down, over-centralised management is not effective, sustainable management. We need the flexibility to adapt. Fisheries seem to be particularly prone to unintended consequences; you think you are doing one thing, and it generates perverse outcomes. We need to be able to address those in an agile, very prompt fashion, and the Bill contains those delegated powers. I know that there are political concerns about Henry VIII powers, and so on. I think those are valid concerns. As parliamentarians, you have a role in scrutinising secondary legislation.
We would also like to see an advisory council. They have something similar in Australia. They actually have something similar within the common fisheries policy, not that we would necessarily want to follow that particular model. An advisory council of people with experience of the industry, who understand the complexities of a highly diverse, complex industry, would be a kind of filter for legislation. We would like that counterweight, as well as parliamentary scrutiny, but we absolutely understand the need for delegated powers.
Bertie Armstrong: We met, discussed and agreed that as the common position for the two main federations in the UK. We would be a little more concerned about excessive additions to the Bill, rather than dissatisfied with the Bill as it stands.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
Q
Barrie Deas: That relates to the idea of an advisory council to run new ideas through a panel of experts—people who understand the complexities and nuances. It would be advisory. We understand that the job of Ministers and fisheries managers is to manage, but we think that an advisory council could add something, as it does in other countries—I would certainly recommend looking at the Australian model. It could make recommendations and provide advice on new legislation coming through. That is one of the areas where the Bill could be tweaked in the right direction.
Bertie Armstrong: In that clause, there is the little anomaly of adding the Marine Management Organisation. It is an organisation good and true, no doubt, but if you are talking about, as Barrie has described, a council of administrations, it is rather an ill fit for the MMO. Perhaps it would be a technical adviser.
Barrie Deas: To build on that point, when you see that consent is required from the Secretary of State, Ministers for Scotland, for Northern Ireland and for Wales, and then the MMO, which is the delivery arm of the Department for Environment, Food and Rural Affairs, it does seem, as Bertie says, an anomalous situation.
The Chair
I apologise to the remaining questioners, whom we have not been able to squeeze in. We have run out of time, bar a few seconds, so I shall simply say thank you very much to both witnesses for extremely useful evidence that will greatly add to our consideration of the Bill next week. Thank you very much for taking the time and trouble to come and give evidence to us this morning.
Examination of Witness
Andrew Kuyk gave evidence.
The Chair
Q
Andrew Kuyk: Thank you, Mr Gray. My name is Andrew Kuyk. I am director general of the Provision Trade Federation, which is a food trade association, but as part of that role, I also represent the UK Seafood Industry Alliance, which represents UK fish processors and traders.
George Eustice
Q
Andrew Kuyk: How long have you got?
The Chair
We have until 10.55, so let us try to keep it brief.
Andrew Kuyk: This is going back into history. At the time, I was first secretary, fisheries, in the UK permanent representation in Brussels, so I was the desk officer for these negotiations. I will not go into it in too much detail, but Committee members may recall that we had already joined the EU by that stage. The common fisheries policy had to wait another four or five years; it was a lengthy and difficult negotiation. The background was that, at the time we joined, we did not have an exclusive 200-mile zone, although the concept existed. We joined the EU and became subject to what was known as the common pond. There was equal access within that, save for some coastal rights under the London convention. Also, prior to the CFP, fisheries were managed by things such as the North East Atlantic Fisheries Commission—NEAFC. There was a concept of high seas and so on. Total allowable catches and quotas, as a management instrument, were familiar, but they were not done within the EU, so we had to invent that system.
The reason why there is an apparent imbalance in some of the quota shares is that the negotiation was done with reference to what was called track record, which was the catches historically taken by the various component parts of the EU fleet. Prior to our joining, most of the fish that were relevant to our domestic market were fished off countries such as Iceland and Norway. We had what then was our distant water fleet—large vessels based in Hull and Grimsby that went quite far afield to get the main species on which our market depended. Therefore, our track record was on those vessels, in waters that were not immediately covered by the EU common pond.
Also at the time—this is going back some 30 years—there was not—
The Chair
Mr Kuyk, I am keeping a close eye on the clock and would be most grateful if you would restrict your remarks as much as you can.
Andrew Kuyk: I will get there quickly now. The smaller vessels were not subject to logbooks and recording of catches. Our track record was good in relation to the bigger vessels, and the track record used for the decisions was going back 10 or 20 years prior to 1980. The track record for the smaller vessels was not so good. Therefore, one of the reasons why the quota shares do not necessarily reflect current realities is that they were backward-looking and based on partial data. That is the short answer to your question, Minister.
George Eustice
Q
Andrew Kuyk: Briefly, for the benefit of the Committee, we have what I term the supply paradox. Roughly two thirds of what we eat in this country, we import, and a lot of that is not from the EU. Some 80% of what is caught by UK vessels is exported, mainly to the EU. The reasons for that are largely to do with consumer choice. The main species consumed in the UK are cod, salmon, haddock, tuna, shrimps and prawns. Obviously, the tuna and most of the shrimps and prawns are not available in UK or EU waters. The salmon is largely aquaculture. On species such as cod and haddock, we are very far from self-sufficient. Our total consumption of cod in the UK is about three times the total EU TAC for cod, so we are about 10% self-sufficient in cod.
We import that raw material because that is the market demand. A lot of that does not come from the EU, but a lot of it comes via the EU, which complicates the trade statistics. The Minister has referred to the autonomous tariff quota system—ATQs. This system is a regulation that normally runs for three years. It recognises that the EU, not just the UK, is a deficit market in fish. That relativity—about two thirds imports—applies to the EU market as a whole, so the EU recognises that the fish to meet consumer need are not available under its jurisdiction. Although there is an external tariff, it has these autonomous tariff quotas. Specified quantities are admitted, either tariff-free or at a reduced tariff, and they are negotiated on a three-yearly basis. We are just about to conclude the next agreement, which will run for only two years, rather than three.
Most of those imports come in through some kind of preferential arrangement. We pay some tariffs on some of them. There is the complication of trans-shipment through the EU; some of those are landed in, say, Rotterdam, Bremerhaven or wherever and then come to us as part of free circulation within the single market.
In summary, imports come through a variety of arrangements; some come as a result of the EU-Norway agreement. Various agreements are in place that give us the benefit of significant tariff reductions. Those are necessary, because otherwise we would not be able to supply market demand in the UK.
George Eustice
Q
Andrew Kuyk: I am not sure I would use the term “highly processed”. Quite a lot of it is things such as bread-crumbs; I do not know whether you regard that as a high degree of processing. It is to do with the presentation. These are consumer-ready, convenience products—fillets with some kind of coating. There is a growing line in ready meals—a meal opportunity: a fish product with vegetables and a sauce, and so on. Most of those imports are for domestic consumption, because we are a deficit market. There is some re-export. I do not have an exact figure, but I would imagine it is something like 10% or 15%—not more than that. The vast majority is to supply our domestic market.
Luke Pollard
Q
Andrew Kuyk: It is difficult to say. Again, without going too much into the history, we used to have what I would call an end-to-end processing industry in the UK, where a whole wet fish would go in one end of the factory and a product would come out of the other. Over the years, that has become rationalised and specialised, and a lot of that first-stage processing now happens elsewhere. Some of it happens on board vessels, on factory ships. Some fish—I know this sounds anomalous, but it is sheer market economics—are sent to places such as China, where they are filleted, and come back as frozen blocks. The raw material for quite a lot of our processing industry at the moment is a pre-prepared product—it is not the fish straight from the boat.
That could be a problem on two or three different levels. It is a problem and an opportunity. Clearly, if there was more domestic supply available, the UK processing industry would do its best to cope with that, but that would require investment. I was listening to the earlier session. The front end of the processing factory does exist on a smaller scale in some parts of the country, but for the people who supply the vast volumes—a sort of 80:20 thing—that front end, the lines of people physically filleting the fish and so on, does not exist any more. To reinvent that, you would need the labour, which I know is a tangential issue not to do with the Fisheries Bill, but it is a broader issue for the food industry in relation to Brexit—the supply of labour—and you need the skill. You need both the people and the skill, and you would need some physical investment in capacity, more storage, more chilling and so on.
It is not as if there is under-utilised capacity. It is a function of modern business that capacity matches throughput and the market, so there is not excess processing capacity waiting for new supplies of fish. It would have to be put in place. It would require money, people and skills. To invest the money, you would need a sound business case that could give you a projection of what your price and what your market share would be. The price, critically, would depend on what your broader trading relationship was—tariffs and currency—and what the competition was. It is quite a complex jigsaw, but the short answer is that there is not significant under-utilised capacity that, at the flick of a switch, could suddenly cope with an influx of domestically caught fish.
The Chair
Before we go on, Mr Grant looks as if he has a question on this particular point.
Bill Grant
Q
Andrew Kuyk: I think not, in the sense that those are not areas that are covered in the Bill. It does not cover trading relationships or the kinds of issues that you are raising. From our point of view, is that a significant omission? Not necessarily, because my understanding of the Bill is that it is a piece of framework legislation, which gives the Government the necessary tools to manage fisheries in the UK and the marine environment, in a changed legal situation where we become a sovereign coastal state. It is the tool box for the management of fisheries. It does not address those issues. Do we have concerns about those issues? Yes, we do, but I am not sure that the Bill is the appropriate place for those concerns to be addressed.
Luke Pollard
Q
Andrew Kuyk: It is because they are not the same species.
Luke Pollard
Q
Andrew Kuyk: I am not a parliamentary draughtsman, and I am not sure it is relevant to the subject of the Bill. I suppose it would be possible for the Government to include a trade section in the Bill. One of the things that unites the people I represent and your previous witnesses is that we do not think there should be a link between trade, access to waters and quotas. We think those are separate issues. I know, Mr Gray, that you do not want to go too near Brexit and the backstop, but there is a relevance, given that in the backstop you have a carve-out in article 6 of the Northern Ireland protocol, which exempts fish and fishery products from the single customs territory that would otherwise apply in the backstop, so there is the potential for tariffs to be imposed on UK exports.
To recap, the main things we catch are things like herring, mackerel and shellfish, for which there is not great demand on our domestic market—people prefer cod, tuna and salmon—but there is a good market in the EU. In that succession of hypotheses if there is not an agreement and we come into the backstop, UK exports would potentially face significant tariff barriers. There may be opportunities elsewhere, but that would have a significant impact on the trade. I genuinely do not know how you would guard against that in the Fisheries Bill.
In terms of our access to the raw materials we need, we have the ATQ system and the benefit of some EU trade agreements with third countries. Again, I do not know how you make a reserve carve-out and preserve that position in the Fisheries Bill. That would be our aspiration. As processors, we want free and frictionless trade, like any other part of the food industry. That is our headline message: free and frictionless trade. The deal on the table—the political declaration—holds out the prospect of free trade. That would be very good.
The friction will depend on the degree of regulatory alignment. Fish fall into the category of products of animal origin, to which certain special rules apply in the EU. As a third country, things would have to go through a border inspection post, and so on. Clearly, for a highly perishable fresh product, any increase in the degree of inspection control is potentially detrimental if it leads to delay. Even if the product is not spoiled, its commercial quality and its value will have reduced.
Peter Aldous
Q
Andrew Kuyk: We export 80% of what we catch. The majority of that goes to the EU.
Peter Aldous
Q
Andrew Kuyk: That is not really within my area of responsibility, because we are processors and traders. Quite a lot of that is exported as fish; it is not processed. You could argue from first principles that, as a UK industry, we should be getting more added value from that. Some of that fish is landed directly in EU ports. Although there is a market for that, you could argue that there would be greater economic benefit if we could get some of that value added and export.
There clearly are markets elsewhere in the world. We are a deficit market. Just a bit of propaganda for the fish industry: fish is a healthy, nutritious product, and is a renewable resource if managed properly and sustainability. There are a lot of people in the world for whom fish is their sole source of protein. There is a big demand for fish in the global trade, so there will be opportunities there, but as in any kind of market, it depends on how competitive you are. For the sorts of export that we have at the moment, which are predominantly fresh exports, not processed products, you have obvious barriers of distance. You would have to do something to make it a product that you could sell further afield. There is potential there, but going back to my earlier point it would require investment and to make the investment there has to be a sound business case.
Mr Sweeney
Q
Andrew Kuyk: I think that harks back to an earlier question. There is no surplus processing capacity to do that at the moment. You could legislate for what people have to do, in terms of where they land things, but I do not think you can legislate for how the processing industry or investors would respond to that opportunity. They might or they might not.
Mr Sweeney
Q
Andrew Kuyk: Clearly, that would help solve the investment problem. Again, it would not be for me to pronounce on the use of public funds in that way for a particular sector of a particular industry, but if the Government chose to make grants available to do that, clearly that would help the business case for those kinds of investment.
David Duguid
Q
Andrew Kuyk: Again, that is straying outside my territory as representing processors and traders. Your previous witnesses would be involved in that. Without going into the history too much, the Committee will be generally aware of the ability of people to buy quota and so on; it was freely sold and it was freely acquired. That is the way that the market has operated up until now. Clearly, were more quota available it would be possible for the UK fleet to seek to exploit these value added opportunities and, as you say, to cut out the middleman.
It would not necessarily be my members who would be involved in that at the outset, because that it is not business that we are currently involved in. The people who export those pelagics are not my members; it is the large pelagic companies on the catching side of the industry. It is done with minimal processing and minimal value added. I think that is a missed opportunity for UK plc, but I am not sure how much you can legislate for that. If you provide a framework that is conducive to that, then clearly business will step in with the right incentives and will do its best to take advantage of those possibilities.
David Duguid
Q
Andrew Kuyk: I do not have an exact figure, but I imagine that a clear majority of that would have no or minimal processing.
Jeremy Lefroy (Stafford) (Con)
Q
Andrew Kuyk: Virtually none, in the sense that quite a lot of this stuff is transshipped through other countries, as I have already explained. If it comes in to us through the tunnel there is no friction at all, as it has already entered the single market, so any formalities—border inspection and any controls—have taken place elsewhere. The same is true of some fish that comes from Norway; some of that comes overland into Sweden on lorries. It is not quite just-in-time in the same sense as in the automotive industry, but there is a narrow window—something like 48 hours maximum—for getting those lorries through and into the UK market. At the moment, that is frictionless.
Jeremy Lefroy
Q
Andrew Kuyk: Yes, and we have some stuff that is landed directly in the UK. There are well tried and trusted systems, and any necessary adaptations have already taken place. We have the facilities to cope with fish that are landed directly in the UK—from Norway, Iceland or anywhere else—because that is established trade. It is well run-in, it functions smoothly and it is not a problem. My general answer is that at the moment we do not have friction either through the EU route or directly. There are controls and rules that have to be complied with, but there are tried and trusted systems. The relevant capacities for handling at ports and for storage are all there for existing trade.
Luke Pollard
Q
Andrew Kuyk: We certainly recognise that that is an issue in global supply chains. I think that both our members and our retail customers do their utmost through due diligence and audits to try to ensure that our own supply chains do not suffer from that. This is an issue in the textile industry and others; it is not restricted to the food industry. Part of our industry’s overall corporate responsibility is not just sustainability of the resource, but ethics and employment practices. That is part of the sustainability agenda of all major processors and retailers, and we do everything that we can to ensure that poor practice is eliminated.
Luke Pollard
Q
Andrew Kuyk: No. As you said, there is already modern slavery legislation. Companies over a certain size must have policies in place. We would have no difficulty with that. Obviously there are some practical issues in supply chains in terms of tracing things back and assigning responsibility. On the aquaculture side—without going off at too much of a tangent—the fish feed might come from less well-regulated fisheries, but those are known problems in the industry and people are doing all in their power to tackle them, including using the commercial power not to source from areas where there is dubious practice. There is also the EU regulation on illegal, unreported and unregulated fishing, which I know we will wish to continue. There is no social chapter in IUU, but that is part of the approach to ensure that things are sustainably and ethically sourced.
The Chair
Mr Kuyk, I thank you very much for your most learned, well informed and well expressed evidence, which will be extremely useful to the Committee.
Examination of Witnesses
Paul Trebilcock and Martin Salter gave evidence.
The Chair
It is a great pleasure to welcome back Mr Martin Salter, who was the Member of Parliament for Reading West for a number of years and is a dear old friend of mine, and Paul Trebilcock from the UK Association of Fish Producer Organisations. Mr Salter is from the Angling Trust. Perhaps you could kindly introduce yourselves briefly for the record.
Martin Salter: Thank you, Mr Gray—I miss our late-night train journeys back to Swindon. My name is Martin Salter, formerly of this parish and now head of campaigns for the Angling Trust, the national representative body for all forms of recreational fishing. That includes sea angling, which according to figures from the Department for Environment, Food and Rural Affairs is an industry in its own right worth £2 billion to the UK economy, generating 20,000 jobs and supporting thousands of coastal businesses.
One of the reasons we were very keen to give evidence before you is that, despite the warm words from Ministers and in the White Paper, recreational sea angling is not mentioned in the Bill, and we are hoping that you will put that right.
Paul Trebilcock: I am Paul Trebilcock, chairman of the UK Association of Fish Producer Organisations. All producer organisations in England, Wales and Northern Ireland are in our membership. Our members account for more than 40% by value of fish and shellfish landings in the UK.
George Eustice
Q
Paul Trebilcock: I should probably say at the outset that the fishing industry clearly has an interest and a priority to ensure the long-term sustainability of all our fisheries. Sustainability is at the very core of what we want from the Bill and the UK acting as an independent coastal state. However, in the words of Karl O’Brien at the Centre for Environment, Fisheries and Aquaculture Science, the MSY concept is scientifically illiterate. To have all stocks at MSY at a particular point in time is just not possible. In particular, in ultra-mixed fisheries, as we have in the south-west, there will always be ups and downs and natural variants. We are trying to manage a dynamic natural resource.
The concept of MSY is a good principle. Working towards MSY proxies on the key driver stocks is probably more practical than what we have at the moment, with an arbitrary legally binding commitment in the common fisheries policy that gives us some perverse pieces of advice. Zero TACs on stocks does not mean they will not be caught in mixed fisheries; it just means they are not taken account of in practical fisheries management. A far better way would be to have the MSY framework as an aspiration and to move towards it, and wherever possible have as many stocks as possible in that MSY range.
George Eustice
Q
Paul Trebilcock: As I say, I think there are lessons to be learned from independent coastal member states such as Norway. Its approach to fisheries management takes the whole ecosystem into account and does not try just to manage stock on arbitrary numbers. There are lessons to be learned, such as using proxies or other indicators to ensure that the whole mix of stocks is going in the right direction and perhaps using the MSY as the driver for some of the key economic stocks. It is about trying to take into account that we are trying to manage a dynamic natural resource rather than something that neatly obeys some scientific modelling.
George Eustice
Q
“the promotion or development of recreational fishing.”
That is in the Bill and it is the first time ever that we have created power to give financial assistance to angling. Is that something you welcome?
Martin Salter: What do you think, Minister? With due respect, it is obviously right and proper that the European maritime and fisheries fund makes some of it available to the commercial sector. That is fine, but you had six direct references in the White Paper to recreational fishing. One of the great failures of the common fisheries policy is the failure to recognise recreational angling as a legitimate stakeholder in the European fishery. That is a failure of the CFP that the Bill could put right. You could do that, as we state in our evidence, by putting on the face of the Bill, “The UK Government recognise recreational sea angling as a direct user and a legitimate stakeholder in the fishery.” That would be a win-win situation and it would add to the very welcome news that we are going to have access to EMFF funding.
George Eustice
Q
Martin Salter: We, like you, are looking forward to saying goodbye to the annual horse trading that takes place at the Fisheries Council. It is worth putting on the record that, despite the reform of the CFP, some 44% of total allowable catch limits were set above scientifically recommended limits. That process is far from perfect, and it is to be welcomed that the Bill and particularly the White Paper talk in terms of world-leading fisheries management.
However, the point for politicians is that it is easy to claim that we are going to be an independent coastal state, but that does not deliver sustainable fisheries. Senegal is an independent coastal state, and its fisheries have been wiped out by super-trawlers, which are mainly European and have used their economic power to destroy the livelihoods of artisanal fishermen in independent coastal states. You will deliver sustainable fisheries management by having world-leading sustainable fisheries policy. You will deliver that by looking at the very best in the world. You should look at Norway and in particular at the United States. The Magnuson-Stevens Fishery Conservation and Management Act 1976 puts a statutory duty on the eight regional fishery councils to take action to rebuild fish stocks.
You asked what we are seeking. We would like to see on the face of the Bill a binding duty for Ministers to set total allowable catch limits in line with scientifically recommended evidence, rather than this dreadful horse trading that takes place every year at the European Fisheries Council, which is no model of sustainable fisheries management at all.
George Eustice
Q
“above biomass levels capable of producing maximum sustainable yield.”
There is a legal commitment there.
Martin Salter: There is, but there is a section in the Bill about binding duties. Frankly, Minister, if I were in your shoes, I would want a binding duty. I would want to make it crystal clear that we are going to end the discredited system that has operated under the common fisheries policy and replace it with a legally backed duty to fish at sustainable levels, just as we have legally backed targets for climate change and emissions.
I am afraid I do not agree with Paul and my colleagues in the commercial catching sector about having MSY as an aspiration. Minister, you have piloted bass conservation measures more than anybody else, but usually in the face of opposition from the commercial catching sector. We have seen those conservation measures start to lead to the rebuilding of bass stocks in the UK, which is really to be commended. We need to be bold, we need to be outliers, we need to learn from the best in the world, and we need it clearly and simply on the face of the Bill.
Luke Pollard
Q
Paul Trebilcock: I think we are well down the track on that one. Increasing numbers of UK fisheries have either achieved accreditation and are now Marine Stewardship Council-accredited, or are going through the process. Growing numbers by volume and across Scotland, England and Northern Ireland are achieving that. We are definitely moving in that direction, and the UK fishing industry is currently on a trajectory toward having all its fisheries on a sustainable footing. Contrary to Martin’s view, I think the people who will deliver a sustainable fishery and fishing industry are the fishermen themselves, those who are actively at sea. Currently, there are elements of the common fisheries policy, whether it be relative stability shares, access arrangements or some of the technical measures, that hamper the travel toward that sustainability.
The UK operating as a genuine independent coastal state, with a practical and balanced fisheries policy that takes into account all three pillars of sustainability—not just the environmental but the social and economic pillars—will in a very short space of time take the UK further down that track and ultimately toward our shared aspiration of all UK fisheries operating in a sustainable way that will allow the UK Government and anybody else to buy with a clear conscience.
Luke Pollard
Q
Martin Salter: Yes, thank you for that. We are promoting an amendment that states:
“Promoting the sustainable development of public access to recreational fishing opportunities as both part of the catching sector and the leisure and tourism industries, taking into account socio-economic factors.”
What is interesting, if we look across the pond at America, is that they have fishery management policies on some stocks. It is worth bearing in mind that those fish stocks that are of interest to the recreational sector do not clash desperately with the fish stocks that my colleagues from the catching sector wish to exploit. We are not interested in monkfish. We are not interested in hake. We are not interested in crabs. We are not interested in lobsters. We are actually only interested in something like 20% of fish landed into UK ports, so there is plenty of opportunity to look at sensible resource-sharing.
In America, the striped bass fishery, which was driven to extinction by commercial overfishing, has recovered as a result of tough conservation measures. They now have in place a resource-sharing operation where X percentage of the stock each year is reserved for the recreational sector, which generates huge value for the US economy. I can read the figures into the record if you like. We have the potential to do that over here. We can look at certain fish stocks and say, “Do you know what? We could deliver better for UK plc by managing that stock recreationally, or at least sharing a proportion of that stock.”
Luke Pollard
Q
Martin Salter: To be honest, Mr Pollard, I do not think that is a matter for the Bill. We are looking forward to meeting the Minister on bluefin tuna, although we accept that he is pretty busy at the moment with two Bills going through Parliament. It is interesting that the bluefin tuna is still on the endangered list, but the International Union for Conservation of Nature list goes back to 2011, which predates the International Commission for the Conservation of Atlantic Tunas stock recovery programme. That stock recovery programme has seen the global quota increased to something like 38,000 tonnes. The EU gets 20,000 tonnes of that. Under ICCAT rules, the EU has to allocate a small proportion to a non-commercial interest—in other words, a recreational catch-and-release interest. The recreational sector only ever needs a very small part of that quota because of the mortality rate for bluefin tuna. They are big, tough animals, and the Canadian model shows that their mortality rate is around 3.6%.
You can therefore have a very small quota in the UK and develop a thriving recreational tuna fishery. Given that the stock is slowly recovering, I should imagine that ICCAT would consider it far too early to start thinking about cranking up commercial exploitation in an area of the globe where it has not traditionally happened. A first run at tuna, if you like, really needs to be a tightly licensed, properly controlled recreational fishery that sits alongside the tagging programmes that the World Wildlife Fund is currently doing in Sweden and has also done in the Mediterranean.
We need to know a lot more about these wonderful creatures before we open the door to commercial exploitation, and the first stage would be to set up a recreational bluefin tuna fishery. That would generate an awful lot of money for the south-west and for Ireland, and it would also mean—this is really important—that there would be anglers out there looking after this resource. Frankly, if stakeholders are not engaged in the fishery, bad people will do bad things to fish, as can be seen in the amount of illegal and black fish landings that take place every year in this country.
Peter Aldous
Q
Mr Trebilcock, the Bill suggests an enhanced role for producer organisations. Are you fit for purpose—not your specific PO but generally—to fulfil such a role? At the beginning of last month the European Commission issued a reasoned opinion to the UK Government, which admittedly was about the management of POs but in which there was a strong suggestion that you are not doing what you should be.
Paul Trebilcock: You are absolutely right. The Commission is certainly having a look and gave a reasoned opinion about POs functioning in the UK, although that focused primarily on the compliance checks and the audit process by the Marine Management Organisation rather than the functioning of particular POs.
The short answer to your question is that, yes, I think POs are fit for purpose. They are primarily fishermen’s organisations, entirely funded by fishermen and run by and for fishermen to manage quota, market and represent. They have an extremely valuable role. Is there room to improve as we enter a new regime? Absolutely. Clarification of a standard that all POs across the country must deliver to, clarity of function and a greater understanding from people outside POs of what they actually do would all be really useful.
Peter Aldous
Q
Paul Trebilcock: No, but in response I argue that the Cornish PO, for example, is made up of around 150 different fishermen, from small handliners catching mackerel and bass through to beam trawlers. That is an example of how a producer organisation might work.
In the Lowestoft example, the local boats sold to Dutch interests, and there was an evolutionary process. The Lowestoft PO functions as a producer organisation, securing maximum price for its members and that sort of thing. The local community in Lowestoft chose not to be part of that. It is important that, as we enter the UK operating as an independent coastal state, all parts of the commercial industry are encouraged into producer organisations to ensure that they collectively understand and drive the function and operation of producer organisations wherever they might be.
You really have to be seeing the benefit. Perhaps that is a role where UK Association of Fish Producer Organisations and producer organisations in general have not particularly done well in explaining to and educating people outside the PO movement what they actually do for fishing communities. The reach and effect of producer organisations goes beyond their membership in a lot of areas. I know that the south-west and east of England POs will help those in the local community who are not even in membership. I strongly feel that producer organisations do a tremendous job around the country at the moment, and have the scope to build on that and do better things as we go into the post-Brexit era.
Martin Salter: The highlight of any debate is the contribution from the hon. Member for Broxbournero, as we know.
Do we need recreational fishing on the face of the Bill? It is great when the White Paper says:
“We will consider how we can further integrate recreational angling within the new fisheries framework recognising the societal benefits of this activity and impacts on some stocks.”
However—your constituents who fish recreationally will tell you this—for many years they have been a bit sick and tired of seeing their recreational sea angling experience fall off a cliff edge as stocks are overfished, and in some cases get driven into parlous conditions. They feel that the recreational sector, despite its economic significance—its significance for jobs and for coastal communities—is basically being left to feed on the crumbs that are left over after commercial exploitation has had its whack.
If you look at quality fishery management—at America and Magnuson-Stevens, and the New Zealand fishery conservation legislation—shares are allocated. There is proper resource sharing. There is consideration in a sensible, grown-up, policy development way—recognising the social and economic impacts of the exploitation of different stocks for different purposes. It might not just be for recreational fishing. It might be for diving or other forms of tourism. It might be for conservation. Yes, putting it on the face of the Bill would send a strong signal, and would also mean a sea change from the very discredited policies of the common fisheries policy. What I think the Bill is really about is recognising that this is a new chapter for fisheries management. That is why I would urge you to support our amendment.
Mr Carmichael
Q
Paul Trebilcock: One of POs’ functions is quota management. Part of that involves getting quota to those who need it—fishermen. That can be done through the swaps and transfer mechanism, which has evolved and developed over many years. Those can be swaps involving different quota stocks swapped for those needed. It can be leasing, it can be gifting, it can be borrowing and it can be a form of banking—it is quite a sophisticated and complex, or flexible, way of doing things, which enables it to be moved around to where it is needed, wherever possible.
Mr Carmichael
Q
Paul Trebilcock: At the moment we have the ability to trade across all parts of the devolved Administration quota tonnages on an annual basis, but it is not possible to move the fixed quota allocation units across Administration borders, which hinders business and stops FQAs getting to where they need to be—fixed quota allocation units for stocks off the south-west probably are not needed in Shetland and vice versa. The ability to rebalance that and free that movement would be welcome, but at the moment there is free movement of quota tonnages across the devolved Administrations, which is absolutely essential in getting quotas.
Mr Carmichael
Q
Paul Trebilcock: The Bill as it stands, as I read it, does allow for that. The risk, of course, is that there is the signal towards devolution that means the different devolved Administrations can, I think, as I read it, choose to have their own quota management rules. That is certainly a risk, but it does not appear on my reading to be a high risk. I would hope that all devolved Administrations were trying to work collectively for the benefit of their respective fishing industries and the UK as a whole, so retaining flexibility and restoring the flexibility to move FQAs would be a welcome addition.
Jeremy Lefroy
Mr Salter, you rightly placed great emphasis on sustainability. Given that in the UK we export most of our fish and export most of what we catch, most of what is consumed comes from places in which as an independent coastal state we rightly have no control over whether things are fished sustainably. Do you see a role for consumer-type markings on sustainability? Should that be left up to the industry or should there be some kind of legal basis so that we walk the walk on sustainability as well as talking the talk?
Martin Salter: I think consumers welcome guidance. It is a matter for you whether you think legislation is required, but when you walk into a supermarket you see a very complicated tapestry in front of you.
We have a very real problem with farmed salmon. Our colleagues from Scotland recognise it as an important industry, but if it were a land industry it would be shut down tomorrow given the appalling levels of pollution. The amount of sewage that is discharged as a result of the Scottish salmon farming industry into pristine marine lochs is quite horrendous. The wrasse that are prevalent around Mr Pollard’s constituency in the south-west are slow-growing fish of very little commercial value—often the first fish that youngsters catch when they go sea angling. They are being shipped live to the Scottish salmon farming industry as a cleaner fish to eat the lice because that is cheaper. That is a double bad whammy. The industry really needs to improve its act—I notice that Norway is moving a lot of its agriculture on to land so that it can deal with the effluent.
I still see an awful lot of people eating Scottish farmed salmon. I am sure Scottish MPs welcome the fact that they do so, but in sustainability terms and environmental terms it is a dreadful product—doubly dreadful because of its impact on sea fish down in the south-west. Perhaps statutory guidance would be welcome, or at least a level playing field in which agriculture was forced to clean its act up as farming practices on land have been forced to do over the years.
Alan Brown
Q
Martin Salter: We are not calling for that to be in the Bill; it would tie the Minister’s hands. If we are to adopt world-leading sustainable fishery management practice, it is important that Ministers and decision makers are able to take the best scientific advice without having to come back to Parliament to change quotas and reallocate bass stocks from 30% recreational to 37% recreational, for example. That clearly would not work. They have to have that power, but that is why it is important that we put a duty in the Bill for Ministers to set sustainability targets.
The point about resource sharing is more about achieving an optimal economic and societal return for the stock. I find it very sad that protected species such as the grey mullet that we see swimming around harbours in the UK have very little commercial value, yet at times of spawning aggregations we see entire year classes of those stocks totally netted, flooding the market and getting less than £2 a kilo. This is a slow-growing species: a grey mullet takes anything from 10 to 12 years to achieve a size that makes it a useful recreational angling target. It is a very poor use of that resource. As a good business calculation, which is the better use of that stock? Would reserving more of it for recreation give us more jobs for the UK economy—more bites for our buck, if you like? That is something that good fishery management practice would seek to achieve. It will not be achieved by legislation as such, but it could be assisted by a power and duty for fishery Ministers.
Alan Brown
That is a complication, because trying to get a legislative framework that gives that certainty—
The Chair
Order. We are strictly limited by time and it is now 11.25 am, so I fear I have to call this evidence session to an end. The Committee will meet again at 2 pm. The Committee Room will be locked in the meantime, so hon. Members may leave their papers here if they wish. I thank the witnesses very much indeed for their useful evidence.
Courts and Tribunals (Judiciary and Functions of Staff) Bill [ Lords ] (First sitting)
Tuesday 4th December 2018
(5 years, 4 months ago)
Public Bill CommitteesRead Full debate Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 View all Courts and Tribunals (Judiciary and Functions of Staff) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 4 December 2018 - (4 Dec 2018)
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Chair
Before we begin, I will make a few preliminary points. Please switch all electronic devices to silent. Tea and coffee are not allowed during sittings. Today we will consider the programme motion, which was agreed by the programming sub-committee yesterday. We will then consider the motion to enable the reporting of written evidence for publication. In view of the limited time available, I hope that we can take those matters without too much debate.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 4 December) meet—
(a) at 2.00 pm on Tuesday 4 December;
(b) at 11.30 am and 2.00 pm on Thursday 6 December;
(2) the proceedings shall be taken in the following order: Clauses 1 to 3; the Schedule; Clause 4; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 6 December. —(Lucy Frazer.)
Ordered,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Lucy Frazer.)
The Chair
We will begin line-by-line consideration of the Bill. The selection list, which shows how the selected amendments have been grouped for debate, is available in the room. Amendments grouped together are generally on the same issue, or similar issues. Decisions on amendments will not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection list shows the order of debate; decisions on each amendment are taken when we come to the clause that the amendment affects. I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following the debates on the relevant amendments.
Clause 1
Deployment of judges
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
It is a pleasure to serve under your chairmanship, Sir Henry.
A key element of our reforms in relation to courts is ensuring that we have a justice system that works better for everyone, which includes making the best use of our judges’ experience, expertise and time. I should make it clear that the deployment of judges is a matter for the judiciary, and the Lord Chief Justice and the Senior President of Tribunals already have far-reaching powers to ensure that the right judges are deployed on the right cases, taking account of changes in case loads of different jurisdictions. However, there are five areas in which clause 1 would amend current legislation to increase that flexibility to deploy judges where they are needed.
The first change is about the temporary appointment of deputy judges to the High Court. The Lord Chief Justice already has a statutory power to appoint a person meeting the eligibility criteria as a judge of the High Court if their appointment is urgent, temporary and there are no other reasonable steps that could be taken to fill the gap. Those temporarily appointed judges are ordinarily existing, serving judges who have been appointed to a judicial office via the independent Judicial Appointments Commission process. Current legislation allows those appointments to facilitate business in the High Court or Crown court only. Clause 1(1) would widen that so that the person appointed could sit in any court or tribunal on which an ordinarily appointed deputy judge of the High Court could be deployed, such as the county court, the family court, the first-tier tribunal and the upper tribunal.
The second change in clause 1 relates to the upper tribunal. The Tribunals, Courts and Enforcement Act 2007 sets out which judges are judges of the upper tribunal and may therefore hear cases there. The definition comprises a number of different types of judge, such as circuit or district judges, but does not currently include recorders. As fee-paid judges, recorders have equivalent powers to circuit judges, and may sit in the Crown court or the High Court with appropriate authorisation. Allowing recorders to sit in the upper tribunal would allow the judiciary to make more use of recorders’ experience, expertise and skill, and would provide greater flexibility to meet business need.
The third change in clause 1 relates to chamber presidents in the first-tier tribunal and the upper tribunal. Currently, there is a restriction that prevents someone from presiding over more than one chamber of the first-tier tribunal or of the upper tribunal. Subsection (4) would allow a chamber president to be appointed to more than one chamber in the same tribunal. That would enable the Senior President of Tribunals to use the existing and future complement of chamber presidents to provide continuous leadership across all chambers without having to recruit and appoint a new chamber president immediately if there were a vacancy.
The fourth change in the clause relates to senior judges of employment tribunals. Currently, there are restrictions on where senior judges of employment tribunals may be deployed. The Bill will enable the presidents of employment tribunals for England, Wales and Scotland to sit in the Employment Appeal Tribunal, which will provide additional capacity for experienced judges to hear appeals. The Bill will also enable leadership judges— the presidents and vice-presidents of the employment tribunal Scotland, and regional employment judges of the employment tribunals—to hear cases in the first- tier tribunal and the upper tribunal, making more use of their experience and skill where needed.
The final part of the clause relates to flexible deployment with respect to arbitration. The Arbitration Act 1996 currently provides for certain judges of the High Court to sit as judge-arbitrators. That allows cases falling within the relevant jurisdiction of the High Court to be resolved via arbitration with the Lord Chief Justice’s permission. The clause extends the range of High Court judges who can sit as judge-arbitrators, and would also allow the Lord Chief Justice to delegate his functions in agreeing that judges can be appointed as judge-arbitrators. That will allow, for example, judges in the chancery division of the High Court, which has seen a growth in demand for arbitration in recent years, to resolve cases in that way. Those provisions, taken together, will contribute towards a modern and responsive justice system.
Yasmin Qureshi (Bolton South East) (Lab)
It is a pleasure to serve under your chairmanship, Sir Henry. While we accept the necessity for the clause, we have some concerns, which we hope the Government will take on board.
We accept that there are practical arguments for expanding the flexible deployment of judges, including temporary judges appointed outside the usual Judicial Appointment Commission selection process, to a wider pool of courts and tribunals. The appointment of temporary judges as a principle, however, should be approached with caution. It is important to view flexible deployment generally through the prism of the Government’s wider reforms and cuts, and plans for savings on judicial salaries.
We are concerned about that being used regularly as opposed to on an occasional basis. [Interruption.] Sorry, the Minister was looking very confused. We are concerned about the potential for a trend of too much reliance on temporary judges. The provisions should be used only to deal with urgent matters in the case of a shortage of judges, and the deployment of judges across different sectors should not become the de facto position.
Clearly, one of the things that the Government have not mentioned is what training provisions will be provided for judges moving out of their normal area of activity. If a Crown court judge is transferred to a tribunal, for example, what kind of training would they receive to deal with issues unique to the tribunal system—for example, on issues of disability, reasonable adaption for the purpose of disability legislation, and what could be considered discriminatory under equality legislation. Those are key issues unique to employment tribunals. We want to know and ensure that there are training provisions for that.
As a consequence of the clause, civil judges might come into the criminal courts and Crown courts. What training will be provided for them to deal with specific issues that are unique to the criminal court, such as admissions of previous convictions, which can sometimes be brought in against defendants, and go against the normal rules? What about issues of disclosure? If a failure to disclose material information is ruled inadmissible, it can cause the whole case to collapse. Those are some of the things that are unique to particular courts. I have used the example of the Crown court and the employment tribunals to demonstrate that there are things that are unique to those courts. While we will not oppose the clause, we ask the Government to provide some assurance that the Lord Chief Justice and the Lord Chancellor will make proper financial provision for those judges to update their skills and to receive professional training when they go into a different area of judicial function.
Lucy Frazer
I am grateful to the hon. Lady for making some important points. She can rest assured that the temporary appointments are temporary, and they can be made only if they are urgent and temporary and if no other reasonable steps can be taken to fill the gaps. I can also assure her about training: where judges are asked to sit in a new jurisdiction, further induction will be provided in line with the directions of the senior judiciary. The Judicial College is in charge of training, and it will continue to train our judges. Judges will also attend continuation training for all jurisdictions in which they sit.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Alteration of judicial titles
Question proposed, That the clause stand part of the Bill.
Lucy Frazer
No amendments have been tabled to the clause and no issues at all were raised in the other place, or on Second Reading in this place.
In summary, the clause is part of our reform to modernise our courts to ensure that court users know who is hearing the case, and what sort of case the matter is about. The clause therefore provides for amendment of judicial titles to reflect a change in the name of the court in which those judges sit. It also ensures that the title of that office and similar offices can be changed through secondary legislation in the future.
Subsections (1) and (2) change the title of chief bankruptcy registrar to chief insolvency and companies court judge. That reflects the change in the name of the other judges of this court and of the court itself. In 2017, the name of the court dealing with bankruptcy matters was changed to the insolvency and companies court to better reflect its work. Earlier this year, the titles of the more senior judges in that court were changed to reflect the change in the name of the court. The Bill therefore changes the title of the office of the senior judge to bring it in line with other judges of the court.
Subsection (3) enables the judicial titles of other senior masters and district judges of the senior courts to be changed in future by secondary, not primary, legislation, should it be necessary to do so. Changes of title may be required, for example, because of organisational changes in the courts and tribunals. The clause will correct an anomaly that prevents some judicial titles from being amended by ministerial order. Such judicial measures, while relatively modest, will contribute towards a more modern justice system.
Yasmin Qureshi
The clause seems to be a sensible one, so the Opposition have tabled no amendments to it.
The Chair
I am pleased to hear that.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Authorised court and tribunal staff: legal advice and judicial functions
Yasmin Qureshi
I beg to move amendment 2, in clause 3, page 3, line 24, leave out subsection 3 and insert—
“(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.”
This amendment would require that where statutory instruments delegating judicial functions to authorised persons are brought they would be subject to the affirmative procedure.
Yasmin Qureshi
We tabled the amendment because the existing drafting of the clause appears to allow the delegation of judicial functions to authorised persons without going through an affirmative process—that is, without using secondary legislation. As the Bill stands, that would be done automatically. Bearing in mind that we have expressed concern about the whole system of the authorised person being delegated judicial functions, we believe that that should be done, if it comes to that, by means of a statutory instrument so that Parliament has a chance to discuss it. We would be able to make observations and it would not go through on the nod.
The issue of delegating judicial functions to authorised persons is important to us. At the moment, the Bill does not talk about who such people will be, what their qualifications are, what they will do, or what subjects and issues they can deal with. As the Bill is drafted and from what Ministers have said, the procedure committee is expected to make all those decisions. We do not accept that that should be the case. There are real issues that need to be determined through parliamentary discussion. These measures should be introduced through statutory instruments and not just be decided by the procedure committee as envisaged in the Bill. The procedure committee should listen to our concerns. We want more parliamentary scrutiny of this part of the legislation, through a statutory instrument.
Lucy Frazer
I am grateful to the hon. Member for Bolton South East for raising the issue and giving me the opportunity to respond, so I can satisfy her that her concerns are unfounded, I hope.
The power in clause 3(2) seems to have caused considerable confusion here and in the other place, so it might be helpful for me to explain how it works. That power does not permit the delegation of judicial functions to authorised persons—that is a matter for the procedure rules made by the independent rule committees. The power in clause 3(2) could not make such changes because it is a narrow power that is very clearly restricted to consequential, transitional, transitory or saving provisions—a concept that is well understood with many precedents. Those terms are construed strictly by the courts.
The power in clause 3(2) is needed because the procedure rules cannot be used to make all the necessary amendments to other secondary legislation—we will use regulations made under the clause to do that. The power is needed principally to amend references in secondary legislation from “justices’ clerk”, a post abolished by the Bill, to “authorised officer”. So far, we have identified more than 200 references in more than 60 pieces of secondary legislation that would need amendment, and there may be more.
The Government do not intend to use this power to amend primary legislation. Lord Keen gave an undertaking to that effect on Report in the other place. Therefore, there is no express provision for such amendments in clause 3. To accept this amendment would set an unhelpful precedent and would mean that valuable parliamentary time would have to be set aside to debate minor and consequential changes to secondary legislation. In a busy parliamentary Session, that would delay implementation of the provisions in the Bill. I hope that the hon. Lady is reassured and feels able to withdraw the amendment.
Yasmin Qureshi
Although I hear what the Minister says, we are not reassured and we will push the amendment to a vote.
Question put, That the amendment be made.
Yasmin Qureshi
I beg to move amendment 3, in the schedule, page 6, line 36, at end insert—
“(aa) is a qualified solicitor, barrister or chartered legal executive with more than three years’ experience post-qualification, and”.
This amendment would stipulate that the minimum legal qualifications for authorised persons should be three years’ experience post-qualification.
The Chair
With this it will be convenient to discuss the following:
Amendment 4, in the schedule, page 8, line 31, at end insert—
“() is a qualified solicitor, barrister or chartered legal executive with more than three years’ experience post-qualification, and”.
See explanatory statement to Amendment 3.
Amendment 5, in the schedule, page 11, line 12, at end insert
“and if they are a qualified solicitor, barrister or chartered legal executive with more than three years’ experience post-qualification”.
See explanatory statement to Amendment 3.
Yasmin Qureshi
As I have indicated to the Clerk, we will be dividing the Committee on these amendments.
Clause 3 delegates judicial functions to authorised staff, and we are concerned about that. Although we accept that there are some occasions where people other than judges can make decisions on cases, such as on simple procedural issues, including time extensions or requests for adjournments, if authorised people are to be given more than those powers, they must be of a certain calibre. The Bill gives no information on who these people will be, and that worries us, because it would appear that allowing jobs carried out by judges to be done by others, who are not qualified, is another attempt to cut costs and save money. If the Bill said that the authorised people were to be qualified lawyers, barristers or solicitors, or legal executives with three years’ experience or more, as in the amendments, we would be much more reassured about this part of the Bill.
Ellie Reeves (Lewisham West and Penge) (Lab)
Does my hon. Friend agree that even what might, on the face of it, be a straightforward case management conference could involve complex tactical or substantive issues? Giving such decisions to someone who is not legally qualified could have a massive impact on access to justice.
Yasmin Qureshi
My hon. Friend makes an excellent point. We know that more and more people are now representing themselves in court because of cuts to legal aid. If those making decisions—those may appear to be administrative but may be quite crucial to these people—are not legally qualified and trained, errors are more likely to occur, because we now have so many people representing themselves who are not familiar with court processes or the courts. That is on top of the fact that so many courts are now being closed, and a lot of the work is being done off-site by means of technological improvements. Many cases used to be disposed of in a physical court building, and there would be judges, lawyers and people who could assist and give advice and information. Now, with so much being done outside of court buildings and from call centres, there is even less help available.
I will give an example. When I was prosecuting, defending or in court, someone would sometimes turn up who had no legal representation. They would be really worried about what was going on. I and many of my colleagues would give informal advice; it was not legal advice, but we could point them in the right direction—we could suggest things they could try. There was somebody to give them advice or assistance; the court clerks or staff in the court were also able to direct people informally. However, with fewer and fewer people going to court, more and more things being done online, and more and more stuff being carried out in call centres, where someone does not know who they are speaking to or what qualifications or level of experience they have, it is even more important to ensure we have this safeguard.
It is okay to have laws, but if we have no mechanism to enforce them, or to ensure that they are done properly, justice is not served. Therefore, the complete lack of information in the Bill about who the authorised people will be, and even about what work they will do, is completely wrong. That is why we feel strongly about it, as we mentioned on Second Reading in the House of Commons, and in the other place. To date, the Government have taken no notice of that.
We also have to recognise that some of the authorised people will be employed directly by Her Majesty’s courts and tribunals, which raises questions about accountability and independence. They may be more subject to pressures because of administration. Again, therefore, we need something to show that the people who will do these things are qualified.
Qualified barristers, solicitors and lawyers, even when they work in the courts system, have an appropriate professional body with codes of conduct they have to abide by. If they do not abide by those codes of conduct, they could be struck off from their practice. However, if the people who carry out the work are not legally qualified, such as administrative staff or clerical officers, they will not have to think about their independent professional bodies. In fact, they will probably be more subject to pressures of administration to speed things up. If somebody asks for an adjournment, staff might say no; if somebody wants certain documents to be disclosed, they will say that that cannot be done, because they will be under pressure to speed things up and deal with cases quickly. They will not be as concerned as a barrister, a solicitor or a chartered executive about what their professional bodies will say.
We also do not know what kind of functions these people will be given. As my hon. Friend mentioned, something that seems straightforward could actually be quite complicated. I refer to disclosure issues in civil cases, as well as in the criminal courts. Disclosure is an important part of a case proceeding properly. Someone may well ask for certain information, and the person at the other end will say, “No, you don’t need it,” but we do not know. Because they do not have the legal expertise and knowledge, there is a greater chance of errors occurring and things happening that perhaps would not happen if a legally qualified person were exercising those powers.
The Government’s approach is that all these issues can be dealt with by the procedure rule committees, which are made up of judges and other practitioners. They are also under pressure and financial constraints, however, so they would also have to look at pressures and so on, and they might not be able to do things as independently as we might ask.
Alex Chalk (Cheltenham) (Con)
The hon. Lady is, of course, making important points, but we can have a degree of confidence that the judges who head up the committees, who have shown themselves to be scrupulously and fiercely independent, would continue to behave in exactly that way. Does she not agree?
Yasmin Qureshi
I have, of course, the utmost regard and respect for our judiciary, but I believe that, in the procedure committees, financial constraints and pressures sometime come into play in trying to speed things up through the courts system. The ethos is that a case should be dealt with very quickly—there is nothing wrong with that—and that there should be minimal interactions between lawyers in the court process. When the procedure committees make certain rules, such as defining who the authorised person is, what is wrong with Parliament saying that the starting point should be that those authorised persons must have been legally qualified for at least three years?
It is also important that we have an idea about what kind of things the authorised persons can do. Procedure committees can make rules, but they may be constrained by trying to get things through quickly. There may be things that they think that authorised persons can do, but, in fact, they should not, because they are not judicial. I do not see what is wrong with us, as Parliament, saying, “Look, this is the bare minimum that the procedure committees should be thinking about.” Then they can add to it.
Alex Chalk
I am grateful to the hon. Lady for giving way a second time. May I respectfully press her a little on this? On the one hand, she says that she has enormous respect for the procedure rule committees, the judges and the highly qualified people who occupy these positions, and that they would always act in a way that is consistent with justice. On the other hand, she says that, actually, they will not, because they will ensure that a desire to avoid delays trumps justice. She cannot have it both ways. If she trusts the judges, she needs to come out and say that she trusts them to act in the way that they have, in time-honoured tradition, which is by putting justice first.
Yasmin Qureshi
My observations relate to when judges are dealing with an individual case. Of course, we know that they are independent, but when someone becomes part of an administrative body, a procedure committee or an arm of the state—I mean that in a loose way, not in terms of a formal relationship—sometimes the criteria that they look at are different from when they are dealing with an individual case presented before them.
I will give an example, albeit not one that relates to judges. The Crown Prosecution Service, an organisation for which I worked for a number of years—I still have friends who work in it, even though I left years ago—has had different people serve as Director of Public Prosecutions. However, prosecutors who have been there for a long time say that, bar perhaps two DPPs who were really concerned about ensuring that the department was fully financially resourced, and who actually fought hard for it to get resources, the other DPPs did not make that sort of effort. People do act for administrative purposes.
The reality is that senior people at the top of organisations, when they are doing administration and are running institutions, look at things such as money and financial administration, try to save as much money as possible, and try to push things along as quickly as possible, because that looks good in their statistics. Because of that, we would say that what we are asking for is not too weighty. We have tabled very reasonable amendments. The people who will make some of these enormous decisions should be legally qualified and—we will come on to this later—we should consider what kind of things they can actually do. I do not think there is anything wrong with giving a steer to procedure committees. They can deal with some of the other rules, but we should have some basic minimum standards.
Lucy Frazer
I, too, propose to deal with amendments 3, 4 and 5 together, as they all relate to minimum qualifications for authorised staff. Amendments 3 and 4 require that any staff member who gives legal advice to lay justices or judges of the family court be legally qualified and have more than three years’ experience post qualification. Amendment 5 makes the same requirement of any staff carrying out judicial functions.
The staff who currently give legal advice in the magistrates court and the family courts are justices’ clerks and assistant clerks. Assistant clerks, who are also known as legal advisers, currently provide the overwhelming majority of legal advice on a day-to-day basis. To be an assistant clerk at the moment one must be a barrister in England and Wales or a solicitor of the senior courts of England and Wales, have passed the necessary exams for either of those professions, or have qualified as a legal adviser under historical rules that were in place prior to 1999.
Jess Phillips (Birmingham, Yardley) (Lab)
The Minister is explaining who will get to decide whether we are flexible on this in the future, bit what I do not hear—what I do not hear in any of this Bill—is how we make sure that these changes mean improvements for the people who use these courts. While the judiciary and the people carrying out these functions certainly seem to have a voice in the changes being proposed, in terms of the changes I would like to see in the family courts, the voices of those people using the courts are nowhere in this Bill.
Lucy Frazer
That is a very important point. We serve the people through justice and the court system. The people who come to the courts to get justice are the people my Department is serving. In all our reform programme, we have a user-centred focus and consistently engage with users to improve our services. All the forms we have recently produced were produced with insight from users, which is why we have an extremely high satisfaction rate for the reforms we are making.
The hon. Member for Birmingham, Yardley makes an important and valid point, and I can tell her how users will benefit from this. She will have been in the House when questions were put to me about delays in the court system and about the time it is taking for certain hearings to come before the courts. We want to ensure that there are as few delays as possible and that justice is not only fair but speedily dispensed. These changes will allow functions to be operated by the appropriate people, and will enable us to get more swift, easy and quick justice for those who use our courts.
Andy Slaughter (Hammersmith) (Lab)
I am sure the Minister is sincere in her intention. My experience is that there is increasing delay. Part of that is caused by inexperience, perhaps because of the use of lay magistrates as opposed to district judges, who do not take command of the issue and do not timetable matters correctly. I am concerned about any decline in the level of experience. This is perhaps a question not of legal qualification but of experience in being able to manage and seize control of cases. I would rather see the greater control and scrutiny that the amendments would introduce.
Lucy Frazer
I am sorry if the hon. Gentleman has not experienced the appropriate level of judicial engagement or appropriate judgments in courts. I recently went to the family court in London, and I have been to courts across the country, and I have spoken to magistrates who operate in the family courts. The expertise and dedication I see is commendable. We can stand still, do nothing and just let our courts operate in the way they are operating, or we can sit back and reflect on how we can improve our court system. We are trying to do the latter through the Bill. We are trying to improve people’s experience of the courts, recognising that funds and resources are not unlimited and that we need to use them as well as we can. On listing, my Department is looking at a listing programme to ensure that lists operate as effectively as possible.
It is simply not necessary for all authorised staff exercising judicial functions to possess legal qualifications. The qualifications and experience staff need will depend on the nature of the work they carry out. Legal qualifications of the level that would be required by amendment 5 not only are far too high for the routine and straightforward case preparation tasks that we anticipate many authorised staff may carry out, but may not be the most relevant qualifications for staff in different jurisdictions. For example, it is more helpful for a registrar in the tax tribunal to be a tax professional by background than to be a legal professional. Where powers currently exist, rule committees already determine the qualifications staff need to exercise particular functions, and that works well. Such committees can focus qualification and experience requirements on what is most relevant to the work that those staff carry out.
Amendments 3, 4 and 5 would all set the bar for qualification prohibitively high and rule out a large proportion of Her Majesty’s Courts and Tribunals Service staff from giving legal advice or exercising judicial functions, even though they may have been doing either or both for a number of years.
Alex Chalk
Will the Minister be kind enough to address the issue of the approach we can expect judges to take in rule committees? It is my experience that they show themselves in court to be scrupulously fair and focused on justice. Does she agree that there is no reason to think they would abandon those principles when they sit out of court on a rule committee to make these important judgments?
Lucy Frazer
My hon. Friend makes an extremely valuable point. Rule committees are made up of members of the judiciary and legal professionals, who take their roles incredibly seriously. Lord Thomas said on Second Reading in the other place that
“it is important to stress the degree of control inherent in the Bill by the use of the rule committee. I was a member of and chaired…the Criminal Procedure Rule Committee, which I can assure you is a highly representative body with many representatives of the legal profession.”—[Official Report, House of Lords, 20 June 2018; Vol. 791, c. 2039.]
It is important to note his experience of sitting on and chairing a rule committee. I actually sat on an insolvency rule committee when I was at the Bar, and I do not think anyone mentioned costs. We were concerned with ensuring that the procedures we used in court day in, day out worked well, and that they worked well for our clients, too.
A loss of expertise would render the provisions in clause 3 and the schedule unworkable. I should add that a member of staff will not be able to give legal advice or exercise judicial functions until they have been authorised to do so by the Lord Chief Justice or their nominee, or by the Senior President of Tribunals or their delegate. Authorisations are therefore ultimately the responsibility of the judiciary, who will not authorise staff unless satisfied of their competence.
The Government’s position is consistent with the approach taken over many decades and is supported by both current and former members of the senior judiciary. Lord Neuberger, former President of the Supreme Court, said that the amendments place
“a potential straitjacket on the ability to appoint the appropriate people to make appropriate decisions.”
He went further, reflecting that there
“will be many decisions”
for which the level of experience set out in the amendments
“would be appropriate, but there will be others where less experience would be adequate for the decision-making.”—[Official Report, House of Lords, 10 July 2018; Vol. 792, c. 882.]
I want to reassure hon. Members that we have listened to the concerns expressed here and in the other place about linking the qualifications of staff to the judicial functions that authorised staff may carry out. That is why we added further safeguards to the Bill in the other place by restricting the functions that staff will be able to exercise. In the light of that, Lord Marks of Henley-on-Thames said:
“we are not persuaded that it is necessary for the authorised person exercising the remaining powers—some of which are trivial, some minor and some of more substance—to be a qualified lawyer or one of particular experience.”—[Official Report, House of Lords, 16 October 2018; Vol. 793, c. 414.]
Before I close, I would like to respond to a number of the points made by the hon. Member for Bolton South East in putting forward her amendments. She has mentioned for the second time in her submissions cost-cutting. What we are doing in the Bill is trying to achieve a position whereby judges are deployed in the most effective way to bring justice to the people whom they serve. We are trying to ensure that jobs are appropriate for those who carry them out, and that they have the appropriate qualifications. The hon. Lady suggested that only barristers, solicitors and judges—that is, people who are legally qualified—understand justice. That is self-evidently wrong. A large part of our criminal justice system is the justice dispensed by magistrates, who are volunteers and are extremely able. As I have said, many people are already carrying out the functions, and carrying them out well, in courts and tribunals across the country.
The hon. Lady mentioned court closures. Of course, this is not a debate about court closures; it is a debate about who carries out functions in the courts that operate. She also suggested that call centres are having a detrimental impact on justice. Our call centres are actually improving justice, because, as can be seen from the take-up rate, people are speaking to someone who can answer their concerns much more speedily. The satisfaction of people ringing up is improved as the pick-up time is improved, because it is now dedicated people picking up the phone, rather than people in courts, who have a large number of things to do.
I hope that the hon. Lady feels able to withdraw the amendment, based on the explanations that I have put forward.
Yasmin Qureshi
I thank the Minister for her response, but our position remains the same, and we ask for a vote on the amendment.
Question put, That the amendment be made.
Yasmin Qureshi
I beg to move amendment 6, in the schedule, page 11, line 32, leave out subsection 67C and insert—
“67C Right to judicial reconsideration of decision made by an authorised person
A party to any decision made by an authorised person in the execution of the person’s duty as an authorised person exercising a relevant judicial function, by virtue of section 67B(1), may apply in writing, within 14 days of the service of the order, to have the decision reconsidered by a judge of the relevant court within 14 days from the date of application.”
This amendment would grant people subject to a decision made under delegated powers to a statutory right to judicial reconsideration.
The Chair
With this it will be convenient to discuss the following:
Amendment 7, in the schedule, page 19, line 21, at end insert—
“(7A) A party to any decision made by an authorised person in the execution of the person’s duty as an authorised person exercising functions of a tribunal, by virtue of this subsection, may apply in writing, within 14 days of the service of the order, to have the decision reconsidered by a judge of the relevant tribunal within 14 days from the date of the application.”
This amendment would require the Tribunal Procedure Rules to set out a procedure for applying for judicial reconsideration. It is consequential on Amendment 6.
Amendment 8, in the schedule, page 11, line 40, at end insert—
“(2A) In reaching its decision under sub-paragraph 2 above, the authority must consider whether the function is capable of having a material impact on the substantive rights of the parties.”
This amendment would require any Procedure Rules Committee making rules about the functions to which a reconsideration right would apply to consider whether the substantive rights of the parties will be materially affected.
Amendment 9, in the schedule, page 19, line 39, at end insert—
“(2A) In reaching its decision the Committee must consider whether the function is capable of having a material impact on the substantive rights of the parties.”
This amendment would require any Procedure Rules Committee making rules about the functions to which a reconsideration right would apply to consider whether the substantive rights of the parties will be materially affected.
Yasmin Qureshi
Amendments 6 and 7 have been tabled to ensure that there is a safeguard for claimants who do not accept a decision made by authorised persons. There should be a right to a statutory reconsideration, and the claimant should be able to apply in writing, within 14 days of the service of order, to have a particular decision reconsidered by a judge of the relevant court. They are strengthening provisions. As we do not know who authorised persons will be or what delegated functions will be given to them, we believe that if claimants disagree with important decisions, they should have a statutory right to reconsideration. The Bill makes no reference to that.
Amendments 8 and 9 relate to the issue of material impact. When a decision is being made on whether there a should be a reconsideration within 14 days, we ask that there be consideration of whether the function could have a material impact on the substantive rights of the parties. That means that we accept and acknowledge that one should not be able to ask for reconsideration simply because one disagrees with the decision of the authorised person; one must have a cogent reason. There must be proper grounds for requesting a reconsideration. We would define and decide what is an appropriate reason for asking for a reconsideration by assessing the limb of material impact on the substantive rights on the parties, which I think speaks for itself. That relates to decisions made by authorised persons that are material and important to the claimant, who should be able to ask for a reconsideration of that decision.
We suggest that the application in writing should be sent within 14 days of the decision, but it could be 21 days if the Government wished to change that. We think that 14 days is the minimum period that should be allowed for the reconsideration application to be made. The Government’s intention is to leave the procedure committee to decide fully what “material impact” means, whether there should even be reconsideration options for claimants, and by what processes that must be done.
We are effectively asking for safeguards for litigants. I will try not to repeat the same points, but it is important to remind the Committee of a point I made earlier, which was that a number of claimants are not legally represented because of cuts to legal aid, both civil and criminal. Many people now go to court without any legal advice, and are basically litigants in person or may have a McKenzie friend. To ensure that decisions are made properly, if there is a material impact on the substantive rights of parties, claimants should be able to ask for a reconsideration of the decision by a legally qualified judge of the court. People will have more confidence that the decision has been made properly, if it is made by a judge.
It should not be left to the procedure committee to decide, in theory, whether to allow reconsideration or to decide, off its own bat, what kind of decisions should be up for reconsideration. We ask that it determine and put into place rules on how reconsideration applications could be done.
Again, those three things are there to enhance the right of the ordinary person going into the court system and to ensure that our judicial system maintains the highest standards, as accepted throughout the whole world. For Parliament not to have democratic oversight of the matter, and not to indicate what the procedure committee should do, is a derogation of our duty to the people of this country. We are effectively looking after their interests. A judgment or decision by an authorised person should be subject to review by a judge. We accept that should not be done gratuitously, or in cases that do not warrant it, but if the decision has an impact on the rights of the person, that should be allowed. We ask the procedure committee to set out a procedure for applying for judicial reconsideration.
Alex Chalk
The hon. Lady makes a fair point; I will be interested to hear what the Minister says. How does she propose that an assessment be made about whether the decision truly had a material impact? A decision on whether to grant an adjournment or on whether to allow evidence to be admitted could in certain circumstances have a material impact, but in other circumstances might not. How would she ensure that the procedure to determine that was effective and efficient, and did not clog up the courts?
Yasmin Qureshi
We could include the criterion of the impact on someone’s rights. When we look at a case, we can work out whether an adjournment or a particular issue regarding disclosure would have an impact. The legislation should have that as a criterion in determining whether there should be judicial reconsideration. Obviously, we assume that the procedure committee would set out a procedure whereby, when a person writes to the court to ask that something be reconsidered, it goes to a judge, who works out whether this was something that impacted on the person and should therefore be subject to reconsideration. The legislation does not do any of those things.
Although we accept that some administrative functions carried out by judges can be delegated to the “authorised people” defined in the Bill, when a judicial legal function is given to other people, there should be a right to ask for reconsideration of the decision if a litigant is unhappy with it. To avoid anything flimsy, we have helpfully put in the impact aspect, so that reconsiderations are not a matter of course but are limited to appropriate cases. We would leave it to the procedure committee to make rules as to what the procedure would be.
The amendments are perfectly reasonable. The Minister mentioned that some Lords in the other place said that the provisions were okay, but if we look at the Hansard, Lord Marks of Henley-on-Thames, Lord Pannick and others said that they had concerns, not just about the issue of 14 days’ reconsideration, but also in relation to the authorised persons. The Government have put all these things about judicial functions, delegated persons and authorised people into one clause, but concern was expressed in the other place about the need to make the legislation better. Those are my words.
We have gone further than some of the noble Lords in the other place, but we tabled the amendments not for the fun of it, but because we genuinely and sincerely believe that they would ensure that processes were carried out properly, justice was done properly, and properly qualified people would deal with issues. If there are decisions that people are unhappy with, they should have the right to ask for reconsideration within 14 days, if that is appropriate—or 21 days; I would be happy with whatever additional days the Government wished to add.
Lucy Frazer
As the hon. Member for Bolton South East has said, amendments 6, 7, 8 and 9 deal with the right of reconsideration of decisions taken by authorised staff in courts and tribunals, and amendments 6 and 7 would enable a party in a case to request that any decision made by an authorised person exercising the functions of a court or tribunal be reconsidered by a judge. It might be appropriate for there to be reconsideration of decisions, but the Government believe that the independent procedure rule committees, composed of jurisdictional experts and experienced practitioners, are best placed to decide if such a right of reconsideration is needed and if so, the form it should take.
The approach taken in the proposed amendments would impose across all jurisdictions the same blanket right of reconsideration with an arbitrary deadline of 14 days. That would not work in practice, especially for those functions that are entirely straightforward case management and preparation duties. Each jurisdiction has its own ways of working, and it is imperative that any mechanism for reviewing decisions is designed with those jurisdictional intricacies in mind.
The rule committees in the civil and tribunals jurisdictions, for example, already have included in their respective rules a specific right to judicial reconsideration for decisions made by authorised persons. The magistrates courts and the family court, however, have their own existing mechanisms for reviewing various decisions, which the amendments would cut across.
Furthermore, the amendments are unworkable. In the magistrates courts, legal advisers issue some 2.5 million local authority summonses every year. If a right of reconsideration, as laid out in the amendments, were imposed on the court, a defendant could apply to the court against the issue of the summons. That would inevitably delay the first hearing and would mean that the matter would need to be referred to a magistrate who would reconsider the decision to issue the summons alongside a legal adviser, and the outcome of that decision would need to be notified to the parties before the case could start. That would build significant delay and cost into the process.
There are already three ways for a defendant to challenge a case in which a summons has been issued in the magistrates courts. They can make an initial argument to the court hearing the case that the summons should not have been issued, contest the substantive application made by the local authority, or apply for a judicial review of the decision to issue the summons. Creating a mandatory right to judicial reconsideration is therefore unnecessary.
I have some sympathy with the intention behind the hon. Lady’s amendments, which is to ensure that the Bill contains adequate safeguards. For that reason, the Government moved amendments on the right of reconsideration that were accepted on Report in the other place. Those require the committees, when making any rules, to allow authorised staff to exercise judicial functions and consider whether the rules should include a right to judicial reconsideration of decisions made by authorised staff exercising those functions. That means the rule committees will have to consider whether each judicial function should be subject to a right to reconsideration. Additionally, the amended Bill requires that if a rule committee decides against the creation of a right of reconsideration, it must inform the Lord Chancellor of its decision and the reasons for the decision.
The measures in the Bill should also be read alongside the existing statutory provisions, which require the committees to consult such persons as they consider appropriate before they make rules. If a rule committee then chose not to include a right of reconsideration in its rules, it would have to notify the Lord Chancellor. The Lord Chancellor could then ask the committee to reconsider its decision, or, if he agreed with it, he could lay the rules in Parliament. We expect that he would set out the committee’s rationale for not including a right of reconsideration in the explanatory memorandum to accompany the statutory instrument. The Bill as amended in the other place therefore ensures much greater transparency in the decision-making process.
Alex Chalk
Those are reassuring words. Will the rule committee have the right to request when, in certain circumstances, an exercise of discretion that might otherwise be innocuous—say, for the sake of argument, granting an adjournment—could lead to a material impact on the rights of an individual, that there could be a right of review in those circumstances? Does the Minister follow? It is important that that flexibility is in place.
Lucy Frazer
I think that is right. It will be the rule committee that will set out the procedure and requirement for any reconsideration. If it considers what my hon. Friend has mentioned as an appropriate way forward, it could make those determinations.
The noble and learned Lord Thomas, the former Lord Chief Justice said:
“I support what the Government seek to do and urge a substantial degree of caution in respect of the proposal put forward by the noble Baroness”—
that is, Baroness Chakrabarti. He added that the Government’s approach provides the right balance:
“It gives discretion to a body that knows and has a lot of experience, but it contains that degree of explanatory accountability that will make sure that it does not do anything—even if we were to worry that it might—that goes outside a proper and just delegation”.—[Official Report, House of Lords, 16 October 2018; Vol. 793, c. 425-426.]
Amendments 8 and 9 relate to the right of judicial reconsideration and the substantive rights of parties to cases in the courts and tribunals. As I mentioned earlier, the amendments we made to the Bill in the other place now mean that the rule committees will, when making any rules to allow authorised staff to exercise judicial functions, have to consider whether each of those functions should be subject to a right to reconsideration. They would require that, in doing so, the rule committees should also consider whether the function in question would be capable of having a material impact on the substantive rights of the parties.
The amendments appear to have been prompted by concerns about the compatibility of the provisions in clause 3 and the schedule with the rule of law, the independence of the judiciary and article 6 of the European Convention on Human Rights. In the circumstances, the Government believe the amendments are unnecessary. The independent procedure rule committees have for many years been making rules about practice and procedure which impact on court users. In carrying out this public function, they must ensure that the procedure rules are compatible with fundamental rights, including rights under the convention. I note that the overriding objective of the criminal procedure rules, for example, explicitly refers to these rights.
Other safeguards in the Bill will help to ensure compatibility with the right to a fair trial. Most importantly, the Bill provides that all court and tribunal staff who are authorised to exercise judicial functions will now be independent of the Lord Chancellor when doing so, and subject only to the direction of the Lord Chief Justice or their nominee or the Senior President of Tribunals or their delegate.
The Bill also provides, for the first time, protections from legal proceedings and costs in legal proceedings and indemnities for all authorised staff when carrying out judicial functions, which will further safeguard their independence. We have, of course, strengthened these safeguards by limiting the types of functions that authorised staff will be able to exercise, through the Government amendments we made to the Bill on Report in the other place.
I hope I have reassured the Committee and the hon. Member for Bolton South East that there is no issue of compatibility between the measures in the Bill and article 6 rights, the rule of law or the independence of the judiciary. The Bill strikes the right balance between ensuring appropriate safeguards and transparency of decision-making, and leaving the jurisdictional rule committees the discretion to determine the most appropriate mechanism for reviewing decisions by authorised persons. I urge the hon. Member for Bolton South East to withdraw her amendment.
Yasmin Qureshi
I thank the Minister for her response, but our position remains the same and I therefore wish to press the amendment to a vote.
Question put, That the amendment be made.
The Chair
Amendments 8, 7 and 9, which have just been debated, can be moved formally by the hon. Member for Bolton South East, or she can withdraw them in the light of the last vote.
Yasmin Qureshi
I would like to move amendments 8 and 7, but not 9.
Amendment proposed: 8, in the schedule, page 11, line 40, at end insert—
“(2A) In reaching its decision under sub-paragraph 2 above, the authority must consider whether the function is capable of having a material impact on the substantive rights of the parties.”—(Yasmin Qureshi.)
This amendment would require any Procedure Rules Committee making rules about the functions to which a reconsideration right would apply to consider whether the substantive rights of the parties will be materially affected.
Question put, That the amendment be made.
Lucy Frazer
I beg to move amendment 1, in clause 4, page 4, line 6, leave out subsection (8).
This amendment would remove the privilege amendment inserted by the Lords.
This is a technical and procedural amendment to remove the privilege amendment made on Third Reading in the other place. The privilege amendment recognises that provisions in the Bill may infringe the privilege of the House of Commons with regard to the control of public money, and amendment 1 will leave out subsection (8), ensuring that the imposition of any charge resulting from the Bill is properly approved. In practice, the new powers the Bill will confer and the cost arising from them will be met by the Ministry of Justice.
Amendment 1 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Lucy Frazer
Clause 4 is technical in nature but it is important to give proper effect to the measures the Committee has considered. Subsection (1) confirms the short title of the Bill. Subsections (2) and (5) set out the commencement provisions, which will enable speedy and orderly implementation of the measures in it: clause 4 will come into force on the day on which the Bill is passed; clauses 1 and 2 will come into force two months after Royal Assent; and clause 3 and the schedule will come into force on a day to be appointed by the Secretary of State in regulations.
Subsection (4) allows the commencement regulations to make transitional, transitory or savings provision and to appoint different days for different purposes or areas, which will ensure that the rule committees are able to implement the proposals as they best see fit. Subsections (6) and (7) set out the territorial extent. Subject to certain exceptions, the provisions of the Bill extend and apply to England and Wales only. Where the provisions extend beyond England and Wales, this is in relation to tribunals, for which responsibility is currently reserved to Westminster. This is not the moment for debate about devolution matters, but I stress that we have undertaken extensive consultation with the devolved Administrations in preparing the Bill, and they agree with our analysis.
Subsection (8) is the privilege amendment inserted by the House of Lords, with which I have already dealt.
Clause 4, as amended, ordered to stand part of the Bill.
New Clause 1
Review of the delegation of legal advice and judicial functions to authorised staff
“(1) Within the period of three years from the coming into force of this Act, the Lord Chancellor must arrange for a review to be undertaken on the impact of the implementation of the provisions contained within section 3 and the Schedule to this Act.
(2) A report setting out the findings of the review must be laid before both Houses of Parliament.”—(Yasmin Qureshi.)
This amendment would require the impact of the delegation of judicial functions to be reviewed within three years of it coming into force.
Brought up, and read the First time.
Yasmin Qureshi
I beg to move, That the clause be read a Second time.
The new clause asks for a review of the impact of the legislation to be carried out within three years of the start of the Act, and that this be laid before both House of Parliament. The reason for that is, as mentioned earlier and in all debates in respect of the Bill, the Opposition have serious concerns about how the Bill will work out and about its impact on our justice system—in particular on litigants who go into court not legally represented, as often happens.
With the Act, there will be a more rapid use and deployment of judges from one sector to another, and we would like the Government to consider how that is working and its impact on our traditional court system. We believe that the functions the authorised people will be given and the issue of reconsideration will have a clear impact on what happens in both our criminal and civil courts.
Lucy Frazer
As the hon. Lady mentioned, the new clause is about reviewing the impact of the authorised staff provisions within three years of the Bill coming into force.
Reviewing laws is always important. We in the Ministry of Justice do not shy away from that. The question is what the appropriate form of that review is. As the impact assessment for these measures says, we have committed to working with the rules committees and the senior judiciary to monitor the impact of any future assignment of judicial functions and responsibilities to authorised staff. This is particularly important where the Bill enables provisions to be extended to a new jurisdiction; for example, the power of authorised staff to carry out judicial functions will be new to the Crown court. We therefore expect the criminal procedure rule committee to conduct a review of the provisions as it feels appropriate, and to draw on its impartiality and expertise in doing so.
In other jurisdictions, the exercise of judicial functions by staff is already kept under review by the relevant rule committees, by the senior judiciary and by Her Majesty’s Courts and Tribunals Service, where appropriate. For example, the civil procedure rule committee has undertaken a review of a pilot scheme in which a range of functions were delegated to legal advisers in the County Court Money Claims Centre. As a result of that, the committee decided to modify and extend powers. It has also agreed to a further pilot to allow legal advisers in the county court to make unopposed final charging orders. This will run to April 2020 and, again, will be reviewed before a decision is taken to extend it.
Those reviews and this approach to implementation are illustrative of how we expect these measures to be rolled out in the future: incrementally, with the necessary monitoring, and subject to review and evaluation before any further steps are taken. The rule committees are independent of the Government and their membership includes judges, legal professionals and representatives of voluntary organisations. They are best placed not only to make the rules for authorised staff exercising judicial functions, but to conduct the reviews of these measures in the future. I hope that I have provided the hon. Member for Bolton South East with the assurances that she seeks, and that she will withdraw the new clause.
Yasmin Qureshi
I thank the Minister for her response, but the Opposition will not withdraw our new clause. I ask that the Question be put.
Question put, That the clause be read a Second time.
Fisheries Bill (Second sitting)
(5 years, 4 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
In this afternoon’s sitting we will first hear oral evidence from the New Under Ten Fishermen’s Association. Will the witness please introduce himself?
Jerry Percy: Good afternoon. Thank you for inviting me. My name is Jeremy Percy. I am the director of the New Under Ten Fishermen’s Association, the representative body for 80% of the UK fleet, which operates from vessels of less than 10 metres in length.
The Minister for Agriculture, Fisheries and Food (George Eustice)
Q
Jerry Percy: We have long argued that relative stability needed to be reviewed, primarily because of the very bad deal that the under-10-metre sector has always had in the UK, not just because of relative stability but because of the way in which quota was allocated back in the ’90s, when we did not have a seat at the table and therefore, despite being nearly 80% of the fleet, ended up with less than 2% of the overall UK quota. Relative stability really does need to change.
Our priorities are, overall, to ensure that the under-10-metre fleet—unquestionably, it has been massively disenfranchised over the past few decades—comes out of it with a significantly increased allocation. We have argued strongly that the current method for allocating quota is unfair and discriminates against the under-10s, and of course the myriad coastal communities they support. I have been in the fishing industry as a fishermen and in other roles off and on for over 40 years, and I have seen the demise of any number of coastal communities, the fleets that they supported and the people who supported them over that period. Our main aim is to ensure that the under-10s specifically get a fair deal come the new horizon.
George Eustice
Q
Jerry Percy: You will not be surprised to hear that I am very supportive of the idea, having written the initial paper back in 2012. There is absolutely no doubt about that. To put it into perspective, at the moment I gather that the UK has had infraction proceedings served upon it by the European Commission for failure to manage and regulate its producer organisations adequately. I have not seen the detail but I would have thought that the Commission was concerned that, despite the fact that the coastal PO—the producer organisation dedicated to the under-10-metre sector—has had official recognition by the UK Government and by the Commission for over a year, we are still refused the ability to manage the quota of our own members. This is particularly important with the run-up to the landings obligation, where the ability to acquire quota retrospectively will be vital.
With the greatest respect to the Marine Management Organisation, the disparity between the rationale for MMO management of quota and that by the producer organisations, which are very focused on the commercial benefits of their particular members, is huge. This has resulted in this year to date, for example, in only just over 50% of the under-10-metre quota actually being fished, although that is down to a number of issues. One of them is undoubtedly the inflexibility in the Government trying to manage the quota, so I am particularly supportive of the coastal PO.
I fail to understand why the Government have not permitted us to have exactly the same rights—no more; no fewer—as the existing POs. In fact, in your own words, Sir, in a letter earlier this year, you said that as soon as we had the correct infrastructure in place you would like to see us going ahead and doing this sort of management. We have had the infrastructure in place for a considerable amount of time, yet we are still refused the ability to manage for the benefit of our members.
George Eustice
Q
Jerry Percy: I do not think so.
George Eustice
Q
Jerry Percy: No, there is always a choice about whether you join a producer organisation or not. To be honest, there is absolutely no reason why any under-10 metre vessel even slightly reliant on quota should not join the coastal PO. The membership fee is £1. More importantly, however, membership should give those vessels access to far more flexible and user-oriented management of their quota, rather than the current situation.
George Eustice
Q
Jerry Percy: In response to your first question, there is no doubt that the arbitrary under-10/over-10 metre divider has been an unnecessary nuisance, frankly, especially as time has gone on. Yes, 20 or 30 years there was a very significant difference between what was in the ’90s a much more artisanal fleet and today’s under-10 metre boats, which can be 9.99 metres and highly efficient. One of the purposes of developing the coastal PO initiative was that, rather like other examples one might think about in the current climate, you tend not to go to war with people you are trading with, and there has always been a difference of opinion between under-10s and over-10s and their POs.
Losing the 10-metre measure in the fullness of time would be a very positive step forward. Clearly, if you look at the breakdown of the under-10s, which are some thousands of vessels, you see that the vast majority are less than 8 metres in length, and again you can go down. So there is a strong argument for taking any boat up to 6 metres completely out of the quota system, whether or not you replace it with something like effort management. I can speak from experience. While a modern under-10 metre boat has a very significant fishing capacity, far in excess of what it would have been 20 or 30 years ago, it remains the case that boats that are less than 18 feet would really struggle to make any significant impact on stocks.
At the same time, we have said all the way along that although the effort management suggestion is ostensibly a fairer way of allocating access to the resource than quota, with all its issues and problems, we really need to have a proper, full-scale and focused trial before anybody could say unequivocally, “This would be the most effective and efficient way forward.”
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Q
Jerry Percy: There are two main answers to that question. At the moment, despite the claims that we are going to be an independent coastal state and take back control, nearly 50% of the UK’s allocation of quota is held in foreign hands. Now, although a lot of that is the pelagic species, such as mackerel, herring and blue whiting, nevertheless fish quota, whether we like it or not—we do not—has become a commodity and gaining more access and a fairer balance post Brexit, when the Bill comes in, would be a particular opportunity.
There are opportunities. The Government have always been concerned that if you tried to repatriate quota, then you get a whole queue of people lining up for a judicial review, but it was clear from the judicial review in 2012 and from legal advice subsequently that that is entirely practical. In fact, the Faroe Islands has just instigated a similar sort of system. Rather than us arguing that one should rob Peter to pay Paul, it is at heart the allocation system that is at fault. It is based on historical rights.
As I said, I go back far too many years in this business. In the 1990s, the Government said to the over-10-metre vessels, “Go out and fish and record all your catches, and we will take a three-year average and provide you with your fixed quota allocation—your proportion of the overall UK cake.” Not surprisingly—the larger-scale representatives admitted this in the judicial review I mentioned—they did ghost fishing. If you went out and caught 10 tonnes, you might put down 12 or 14 tonnes just to make sure that you had good opportunities. I dare say that if I had been in that position I might have thought the same. The whole thing was predicated on a lie, frankly, and it has gone on ever since. Historical rights are really not an effective method, for any number of reasons.
The answer to your question, which we put forward in our response to the Bill, is that clause 20 effectively takes in article 17 of the common fisheries policy. We suggest that should be amended so that quotas are allocated according to social and environmental criteria and economic benefit for coastal communities. Some 80% of the under-10 metre fleet use passive rather than mobile gear, so their environmental credentials are better, and their economic credentials are certainly more significant. We would take our chances with everybody else, but that would provide a level playing field, irrespective of size of vessel, and your allocation of the resource would be based on environmental, social and economic criteria.
Luke Pollard
Q
Jerry Percy: No, it is almost exclusively landed into UK ports, although of course a very significant element is then exported to markets in France, where our European neighbours tend to pay far more for it. I think it is relevant to mention at this point that, with all due respect, we must not focus just on the quota issue, although that is vital because the quota has been so unfairly dealt out in the past. A very significant proportion of the under-10-metre fleet relies on non-quota species such as cuttlefish, shellfish, lobster and crab, and they in turn rely on direct export. About 90% gets exported, mainly to France and Spain, so the export market is key.
Luke Pollard
Q
Jerry Percy: Fishing, unfortunately, still carries the record as the most dangerous occupation in the world. I sit here having lost any number of friends and colleagues over the years in pursuit of fish. I do not think having to carry more fish should be a significant safety issue. It is going to be more relevant in terms of the forthcoming landings obligation, under which we can no longer discard any fish so we have to keep it all aboard. There are of course safety issues in that respect.
The Sea Fish Industry Authority monitors and measures, and ensures that vessels are safe to go to sea. We are effectively talking about capsize as a result of overloading, which is actually quite rare. It is perhaps more common in the pelagic fisheries, where a great bulk of fish is landed. For most small-scale fish fleets, I think fishermen and the authorities would ensure that there was no safety issue. Even in my wildest dreams, safety has never come to mind as being an issue if we had significantly more quota. I have never thought, “Oh, I’m going to catch too much fish and put myself at risk.” It does happen—even now, with non-quota species, you never throw it back.
Luke Pollard
Q
Jerry Percy: Yes. Under the International Labour Organisation’s convention 188, it is now mandatory for fishermen to wear lifejackets unless the owner and/or skipper of the vessel can prove that he has sufficient guards in place to ensure that fishermen do not go over the side.
I still go to sea quite often. I have a personal locator beacon that I bought myself for about £170. It will tell the rescue people where I am in the water anywhere in the world. It is cheap. As far as I understand it, European funding would probably cover it because it is not a mandatory requirement, but surely, in terms of safety, it is a few pounds and it makes all the difference in the world.
Peter Aldous (Waveney) (Con)
Q
Jerry Percy: Our main concern is that the Bill is predicated on a successful fisheries Brexit, if I may call it that, with a significant windfall of quota. Again, with the greatest respect, that would get the Government out of the hole that successive Governments have painted themselves into—if I may mix my metaphors—in that because there is only so much in the UK pie of quota, they are somewhat hamstrung, in their view, in their ability to reallocate more fairly and effectively. Not surprisingly, we disagree with that version and there is legal argument that they could do so, albeit slowly—that was said by the judge in a judicial review in 2012.
I gave an answer earlier about moving the method of allocation to become genuinely reliant on the social, environmental and economic criteria, but I do say genuinely because the UK Government are also already subject to article 17 of the common fisheries policy, which says something similar about allocating quota on those three criteria. The Government have argued that they meet those criteria. I personally do not think that they even remotely reach them in many respects. If we are going to have a revised method of allocation, we need an undertaking or to ensure that the Bill does what it says on the tin.
Brendan O'Hara (Argyll and Bute) (SNP)
Q
Jerry Percy: I do not think it goes far enough in some respects. Again, going back to the common fisheries point, the European maritime funding document says that member states shall produce an action plan for the development of their small-scale fleets. To date, we have not really seen anything to that extent, and there is nothing specific in the Bill in that respect.
Our main concern is that, from a non-quota, shellfish perspective—this is particularly reflected in our members and colleagues in the Scottish Creel Fishermen’s Federation, who asked me to mention it, which I am more than happy to do—the whole business of hundreds, if not well over 1,000, boats around the west coast especially, and the east coast of Scotland to some extent, as well as Wales and the rest of the UK, is based on seamless transport across the channel to our markets in France and Spain. Their main concern, of course, is that if any issues come up in a post-Brexit scenario where we seek to take back control, not only will we get tariffs, which will make a big difference, but what is more, there will be non-tariff barriers in terms of the requirement for veterinary inspections of live shellfish. At the moment, the only two ports with those facilities are Dunkirk and Rotterdam, neither of which we use and neither of which, effectively, is a Channel port. To date, the French have not exactly been quick off the mark in building new facilities in time for next year.
We are equally concerned about the fact that French fishermen, like French farmers, are renowned for taking very direct action should they feel that something has upset them. You will remember that when the French farmers got upset about some aspect of Welsh lamb exports, they actually burned the lorries as they came off the ferry in France. We are very concerned that if we do have an independent coastal state, and so on and so forth, it would kill that transport overnight. We only need a few hours’ delay for it to make all the difference in the world.
Brendan O'Hara
Q
Jerry Percy: There has to be a balance in the negotiations, permitting some level of access to our waters—although much less than currently—to ensure that we do not have those non-tariff barriers, and that the facilities, including on the French side, permit us to have that seamless transport and that there are no road blocks in the meantime.
David Duguid (Banff and Buchan) (Con)
Q
Jerry Percy: Absolutely. We should start with a clean sheet: “We are an independent coastal state. That’s that.” We have a clean sheet and nobody has the right of access. Then there will inevitably be negotiations and bargaining, and that balance is going to be extremely difficult, because Mr Macron, the Commission and others have already made clear that they want the status quo to be the basis of any further negotiation. The Government will have their work cut out to try to sort that out.
David Duguid
Q
Jerry Percy: Our concern about the Bill is that there are a lot of phrases in it like “intend to”, “will consider”, “could include”, “aim to”, or “DEFRA intends to be”. There is not a great deal of certainty about some elements on which we would have liked to have seen more certainty and absolutely unequivocal statements: “We will do this.” The Government have made it clear to date that they want an unequivocally clean sheet start. Whether we actually achieve that, of course, is open to significant debate.
David Duguid
Q
Jerry Percy: There are a number of global examples where you can retain quota as a national resource without allowing its sale. There obviously needs to be flexibility in-year to move quota about, to ensure that those people benefit from it. It is not an easy situation to resolve, but there are global examples of what can be done to ensure that almost half of our national resource is not in foreign hands, as has happened here.
Mike Hill (Hartlepool) (Lab)
Q
Jerry Percy: It is not just ports; there are harbours, coves, small areas and small coastal communities. It would be dozens, if not hundreds. Going back 40-odd years, I can remember fishing out of Lowestoft as a boy fisherman. There were myriad groups of small boats all the way up and down the coast, all providing a significant benefit to those local communities. They may not show up on an economist’s spreadsheet, but those people are nevertheless paying their mortgage, taking their kids to school and keeping the local infrastructure going. I am not exaggerating; it could certainly be in the hundreds that we could revive and have some level of renaissance. There is no doubt whatever.
Mike Hill
Q
Jerry Percy: Well, why should they get more? To an extent, it is based on greed. They already have approximately 98% of access to the quota, 50% of which is in foreign hands, and a very significant proportion is in the hands of the five richest families in this country. It has become a fundamental nonsense and is grossly unfair socially, environmentally and economically that nearly 80% of the fleet in the UK has access to only 2% of the quota. The idea or argument that any additional quota should be allocated according to the existing fixed quota allocations frankly is just grossly unfair. There is no sensible economic or social reason why that should be the case.
Jeremy Lefroy (Stafford) (Con)
Q
Jerry Percy: You could say that across Europe the scene is dominated by the larger scale vessels. They have more resources, more PR companies and more paid lobbyists; they were at the table when the rules were set, and we were not. It is only in recent times—NUTFA was created in 2006—that we have had actually had a voice, and it takes time to build up. Hopefully with the Fisheries Bill we are now on an equal footing with a seat at the table to ensure that the 80% of the fleet gets a fair deal.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Q
Jerry Percy: By negotiation, but our response to the Fisheries Bill was the first step. We are particularly concerned that there is a suggestion within the Bill that an element of the UK’s fishing opportunities should be put up for auction. I struggle to understand the logic in that when the whole thrust is in terms of environmental, social and economic criteria. The Government Minister identified the fact that we need to support and enhance the small-scale fleet for all the very tangible benefits that are there to be taken. I struggle to understand why you would then take a piece and sell it off to what will inevitably be those who already have financial resources. If we are going to have flexibility in the quota, we need to bring in new entrants and we need to make it attractive. The cost of quota is one of those significant areas that keeps out new and young entrants.
Mr Carmichael
Q
Jerry Percy: Anything but, sir.
The Chair
We have 35 seconds if anyone has a one-word question and a one-word answer. Is there anything else you wish to say to the Committee, Mr Percy?
Jerry Percy: Thank you for the inquiry. The Fisheries Bill gives us an opportunity. There are some failings in it, but we seriously look forward to conversations with Government and others in that respect. I am grateful for the opportunity to talk to you.
Examination of Witness
Phil Haslam gave evidence.
The Chair
Good afternoon, Mr Haslam. For the benefit of the Committee, could you introduce yourself and your organisation?
Phil Haslam: Good afternoon. My name is Phil Haslam and I am the operations director of the Marine Management Organisation, which is an arm’s length body of the Department for Environment, Food and Rural Affairs with the competence to deliver marine planning and licensing and, in this context, fisheries management, control and enforcement regulation.
George Eustice
Q
Phil Haslam: The mechanism we use to conduct fisheries control and enforcement is risk-based and intelligence-led. The mechanism by which we do that ashore is to have up to 75 warranted officers who can be deployed—routinely, circa 50 are able to be deployed—and we are situated at 14 offices around the coast of England. The MMO regulates only within English waters. That is one element of our business: shore-based inspections of landing, marketplace inspections and the like. The risk-based, intelligence-led description is basically what it says. We understand where risk may arise and we have a level of intelligence that we apply to that, which can make our operations targeted.
At sea, our surveillance is conducted by vessels from the Royal Navy fishery protection squadron, which we contract on an annual basis for a set number of hours. They conduct patrol and inspection routines on our behalf on the direction of the Newcastle fisheries monitoring centre ops room. The way that works operationally is that we direct them to conduct a patrol in a certain area, we direct the outcomes we wish to see, and then it is down to the commanding officer in the vessel to deliver them. On the number of ships that are available to us, both because of budgetary restraint or constraint within the MMO and the availability of Royal Navy vessels, the Royal Navy is this year providing 2,000 hours of patrol time within English waters.
George Eustice
Q
Phil Haslam: As a result of the referendum and the fact that we will be becoming an independent coastal state and taking back control of our waters in the future, a risk-based analysis has been done of what could happen after that exit moment, and based on that analysis we have identified increased risk across the piece. Our work has driven us to look at our current surveillance levels and to judge what we will need to effectively enforce the integrity of the exclusive economic zone from the fisheries point of view. That has led us to bid for an uplift in surface surveillance and within that to move away from having all our eggs in one basket in relation to the Royal Navy, to come to a mixed economy of providers for both the inshore and the offshore element of the patrol requirement.
We have come up with a greater amount of surface surveillance that we need in the round, and the mechanism to deliver that will of course include the Royal Navy. We have dialogue with Border Force as well, to see what utility there is within its vessel fleet—it is predominantly its cutters. Similarly, the inshore fisheries and conservation authorities, which are the small English-based regional organisations that have a jurisdiction of the nought to 6 miles of inshore fisheries, have a fleet of vessels that we may be able to get some utility out of. Also, we are speaking with colleagues in the devolved Administrations to see what utilities are there. We are trying to get a blended provision of surface surveillance.
Aerial surveillance is a capability that is being reintroduced. The idea is to have routine overflight of our waters so that, should there be vessels that should not be there and are not discernible through remote location devices, we have, basically, a set of eyes in the air that can see them. In terms of monitoring vessels at sea at present, there is a system called the vessels monitoring system, which gives us the position statement of vessels of 12 metres or longer.
George Eustice
Q
Phil Haslam: It will make an enormous difference. As you stated earlier, at the moment the fishery protection squadron is relatively constrained in the number of vessels it can put to sea, and that matches our constraint in being able to contract them. Having more vessels available to us to police a very large EEZ gives us that flexibility to deploy ships to the right place at the right time. By keeping the batch one offshore patrol vessels in service for longer and introducing the batch twos incrementally, as they come off the build, there will be a larger hand of cards to be played with.
George Eustice
Q
Phil Haslam: Fisheries enforcement is devolved, as you state. The way the Scottish do it is to have three vessels that conduct enforcement up to 330 days a year within their waters. They contract two aircraft as well, to provide oversight. At this moment, they have the kind of surveillance capability and control and enforcement capability that we are building up to.
Luke Pollard
Q
Phil Haslam: Yes. Royal Navy vessels used to be contracted on a 24-hour-day basis. That was always non-exclusive, so they were not passed to the MMO, where we would have command and control of them; they would conduct our business but always with the risk of higher priority national tasking taking them away. But we did have more of them in 2010, and over time, with reductions in the MMO budget, we have had to roll back the number of hours, or days, we can contract, moving from 24-hour days to 12-hour days and then to nine-hour days.
When I came into this job we were relatively constrained regarding where we could deploy them for that part of the day. The idea of going to hours was to give us the flexibility to deploy them where the need was, rather than where they were shackled. So there has been a reduction, but on the other side of that, with the vessel monitoring system we have an understanding of what is going on in our waters. We have a picture against which we can patrol. So it was risk-based.
Luke Pollard
Q
Phil Haslam: There is always a risk of tensions unearthing themselves within a fishing thing, but I must say that what we saw with the baie de Seine scallop wars was an expression of discontent based on using fishing vessel rather than on non-compliance with fisheries regulation, which is what the MMO does. There is a risk—that is the risk we have analysed—and against that risk we have built a bid for increased surveillance to meet and mitigate it.
Luke Pollard
Q
Phil Haslam: We have to be careful. The vessels the Royal Navy deploys to meet any MMO contract that is signed in the future is within its gift. It may be Batch 2s or Batch 1s, but that is the call of the commander of the squadron. In terms of manning the ships, it is similar. If the demand is there and it is required, the Royal Navy, being as innovative as it is, will come up with manning solutions to meet what it needs to do.
Luke Pollard
Q
Phil Haslam: The automatic information system, which is fitted to vessels of 300 gross tonnage and above is predominantly an anti-collision device. It is to create situational awareness at sea. It is an open-source mechanism by which you can find out information about any given ship, where it is going and what type it is. In fishing, a fisherman’s mark of where he is fishing and what he is getting from it is commercially sensitive and we would not wish to openly display that. I-VMS—the inshore vessel monitoring system—is a similar system to the one on smaller vessels. It gives us a picture of what is going on within the fishery. To conduct a fishery, you need to know what the input is so that you can control the output. That is not something we have at the moment. Also, it covers off that commercial sensitivity. We are not transmitting where a fisherman is. There is a point-to-point transmission of that data, which we will take into a hub so that we have a picture of what is going on in our waters, but that is not widely accessible.
Jeremy Lefroy
Q
Phil Haslam: The enforcement action we take now is that we enforce the requirements of the common fisheries policy. In a routine inspection, when you board a fishing vessel you check the paperwork. Is the vessel licensed, in the first instance? Does it have quota for its catch? Then you would go into the mechanics of, “What have you caught? How have you caught them? Which area have you caught them in?” Then you do an inspection to see whether what is reflected in the logbook is manifest within the fishing vessel. That is what we do at sea in terms of inspection. It is everything from paperwork, to gear inspection, through to the actual catch. Ashore it is similar: it is about taking data from the logbook and then inspecting to see whether what is being landed matches that, and then goes through to the marketplace as well. All of it is in pursuit of assuring sustainable practice, but also the traceability of fish. That underpins the sustainability.
Jeremy Lefroy
Q
Phil Haslam: I would expect it to be similar in future. We do controlled enforcement now. There may be a requirement to do much more of it in the future, and there may be additional complexity, such as different permissions to be able to access our waters and the like. All of that will just become another thing that we have to understand, inspect and ensure compliance with.
Jeremy Lefroy
Q
Phil Haslam: At sea, it can be as much as one in three where you find some level of non-compliant behaviour. Not all of that ends up in a court room. Some of that can be covered off with a verbal re-brief, because it is a genuine misunderstanding. At the other end of the spectrum is known behaviours. That is where we will have prosecution.
Brendan O'Hara
Q
Phil Haslam: The project that I am driving has basically considered several options, one of which is no deal. Access would no longer be guaranteed; therefore, a risk that comes off that would be illegal incursion to the EEZ. There are others options where access is permitted and there is non-compliance with the conditions of that access, so something has to be done about that. The other thing is that there could be a risk of non-compliance from home fleet, based on difficulties with the outcome of the negotiations or whatever. However, from a purely regulatory enforcement perspective we have weighed those risks, and that is the way we have built the additional capability.
Brendan O'Hara
Q
Phil Haslam: That is where our judgment has been made, and that is where the bid has gone in. We are building that capability in order to be able to deploy it within the timescales, so by March.
David Duguid
Q
Phil Haslam: The intent of redeploying aerial surveillance on a more routine basis is to cover off any risk that we do not continue to receive data that we receive now through the vessel monitoring system and the like. We would need a mechanism to build a picture of what was happening in our waters. If it is not derived remotely from a location device on board a vessel, we will have to actively go out and build that picture.
What the aerial surveillance does in the first instance is build situational awareness of what is going on in the water. If, once you have that, you see in among it non-compliant behaviour, it can operate as a queueing platform. Either it can queue in a surface vessel to come and take subsequent action, or you can warrant the air crew so that they can issue lawful orders, whether it be, “You are required to recover your gear and exit our waters,” or whatever it is. That can be passed from the aircraft.
It is not an entire panacea. It cannot stop non-compliant activity, because it is clearly airborne, but it gives you, first and foremost, that picture. It has a very clear deterrent capability, and it can start a compliance regime by queueing.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
Q
Phil Haslam: Taking the first point, we work, as I said, on a risk-based, intelligence-led basis, so refining where we deploy our assets is based on that outlook. That is how we would deploy it. In terms of the differential between inspection rates of foreign vessels and UK vessels, I think that comes under the same cover. Where we perceive that there is risk and intelligence, we will take action on where it needs to go.
I am sorry, but I missed the second point about including something in the Bill.
Mr Sweeney
Q
Phil Haslam: No, because I think it involves over time the introduction of technology that may come downstream. At the moment, the reason we do what we do in the manner that we do it is to get evidential quality, should we need to take compliance activity. We still need inspectors to step on board fishing vessels.
George Eustice
Q
Phil Haslam: We have spoken about increased surveillance as part of the package to deliver an enhanced control enforcement capability. People are central to that. In the first instance, we are recruiting additional people into the MMO, so I will go from the cadre of warranted officers I have now to an increased number. That is actively under way. Also, to provide contingency planning, we have looked within the Royal Navy at who is currently qualified to conduct warranted fisheries business and who has recently been qualified. There has to be a cut-off, because obviously you will time out. There is a cadre of people still within the Royal Navy who could, should the need arise, be deployable to carry a warrant and conduct the inspection capability.
George Eustice
Q
Phil Haslam: Basically, if you allow access to your waters you have to control who is coming in and who goes out. There is quite a sophisticated way of checking in and checking out: a vessel has to declare its catch on entering and its catch on exit. Indeed, the point of exit and point of entry is conditioned as well, so you can establish gates at sea where people have to actively come through, so you can understand who is in your waters at any given time. I know that within Scottish waters quite a dynamic mechanism has to be in place to manage the inflow and outflow of vessels.
Mr Carmichael
Q
Phil Haslam: It provides an opportunity for non-compliance, provided you are minded to do that. I would not want to perceive something adversarial, with the regulator running around trying to catch fishermen out. The way this works best is that the rules work for the industry. We, as an enabling regulator, support them in the pursuit but within the bounds of the regulation. As I understand it, that is what we are working towards—that is rather more of a strategic partnership.
Mr Carmichael
Q
Phil Haslam: Personally speaking, yes, because anything that increases the dialogue between the cadre of people you have mentioned can only help. This has to be a process of shared understanding and pursuit of common objectives.
Mr Carmichael
Q
Phil Haslam: Yes.
Owen Smith (Pontypridd) (Lab)
Q
Phil Haslam: The budget reduction since inception has been in the order of 60%, but that is counterweighted by the fact that the MMO can accrue income through services delivered. That has provided a relatively stable, if declining, budget. In terms of the bid for additional capability going forward, a bid has been made and we are just in the process of finessing that.
Owen Smith
Q
Phil Haslam: How much more in terms of actual—
Owen Smith
Percentage versus current budgets, or in cash terms.
Phil Haslam: It is basically a doubling of the budget at the moment.
Owen Smith
Q
Phil Haslam: Support in delivering it, yes. I have not seen any resistance in terms of, “We need this capability.” The scale and volume is the bit, because it is based on judgments of risk, but nobody has said they have any doubt about the operational need.
Owen Smith
Q
Phil Haslam: Under austerity, in line with all Government spending, there has been a decline.
The Chair
We have five minutes left for any further questions from the Government side. If not, Luke Pollard.
Luke Pollard
Q
Phil Haslam: We have the latitude to make that a condition of the permit to enter.
Luke Pollard
Q
Phil Haslam: That is what we can do as an independent coastal state. Access to our waters will be granted by a permit, and the conditions we put on that permit are for the country to determine, so yes we can.
Luke Pollard
Q
Phil Haslam: The power in the Bill gives us the ability to regulate who comes into our waters by granting permission. I do not think the conditions of permission need to be explicit in the Bill, but they can be part of that, among other things that we would require any vessel within our waters to comply with.
Mike Hill
Q
Phil Haslam: There will be a cut-off of who actually gets fitted with it, because the point is to try to develop a picture of what is the main input into the fishery in terms of effort on vessels out there. There will be some vessels—there will be a line below which we will not need to go. At the moment we are looking to catch—not catch, that is the wrong word—fit IVMS to the active fishing vessels.
Luke Pollard
Q
The Chair
Can you answer that question quickly, Mr Haslam, because one other Member wishes to ask a question?
Phil Haslam: Okay. In terms of an effort scheme, we would just need a data flow to track how often that vessel is put to sea, and whether it is in the bounds of the effort that is available. We have effort schemes that we run now.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
Q
Phil Haslam: Taking what happens now for a UK vessel or an English vessel, the Maritime and Coastguard Agency issues a certificate of seaworthiness, and that is the first thing we need to see in granting a licence to fish.
Bill Grant
Q
Phil Haslam: We would expect a similar behaviour. If that vessel was applying for a licence to fish in UK waters, one of the checks and balances you would have is asking, “Is it fit to conduct itself at sea? Is it seaworthy?” That would be the first check.
The Chair
On behalf of the Committee, Mr Haslam, I thank you for your attendance and your evidence.
Examination of Witness
Dr Tom Appleby gave evidence.
The Chair
We now move on to our sixth witness, from the Blue Marine Foundation. Would you please introduce yourself and your organisation?
Dr Appleby: I am Dr Tom Appleby. I am a non-practising solicitor but I have been in property law for about 20 years. I am also an associate professor of the University of the West of England, and I have been operating in this sphere—ports, marine conservation and fisheries—for about 15 years.
George Eustice
Q
Dr Appleby: First off, it has been drafted in short order to deal with the situation that we have. By and large, and given the constraints that the drafters had—you can see that it is drafted in different forms and it does not sit together very well; it is not very beautiful—it does what it says on the tin, but it could be improved. I was looking at some other legislation. The Australian Fisheries Management Act 1991 has 168 sections, the MACA—the Marine and Coastal Access Act 2009—has 325, but this has 43. You can see that more could have gone in here, but there were time constraints on the people who drafted it, and I think that they produced what they could in the timescale.
George Eustice
Q
Dr Appleby: It does. Clause 1 leads you into the devolution minefield. One thing it has to try to deal with in drafting is repatriating legislation on the one hand, and then delegating it around the four nations of the UK on the other. It tries to do that. Given the constraints on the drafters, there are fisheries plans to bring these objectives in.
There are potentially some bits missing. We do not have marine planning in there, which we could possibly put in. Quota could possibly go in there. There could be a method of dealing with quota at that stage, on how, if and when quota comes back, what happens with climate change and fishing opportunities. That could be put into the plans as well.
However, I recognise that the drafters sat there not only having to operate from the UK perspective but also having to take the devolved Administrations with them, which inevitably is slow. The clause could be improved if we had a little more time.
George Eustice
Q
The second point I want to raise is on the fixed quota allocation—the FQA units—which has been the basis of quota allocation inside the UK, attached to individual vessels, as you know. We have been explicit in the White Paper, and we take the powers in the Bill to make a break from that, and to say that any additional fishing opportunities that come as we depart from relative stability could be allocated on a different basis. What is your view of the FQA units system?
Dr Appleby: What has happened is that the UK fishery has essentially been, for want of a better word, squatted. We gave it out free to two people, who then sold it and it became propertised. The UK Association of Fish Producer Organisations case held that unused FQA became a property right.
The White Paper talks about quota being a public asset, so we have to make a decision on whether the UK fishery—particularly if we are getting more back; it will be very expensively brought—starts off as a public asset. That means unwinding the FQA system. You can potentially do that under existing powers, or you can do it under some things in the Bill. When you actually look at the auction, I think you have probably constrained yourself a bit too much. If you auction off quota, you are looking at people who have the cash to buy the quota in the first place. A royalty, for instance, is the sort of thing that you would charge—I think we would call it turnover rent in the property sector. That would be a way of charging people and then not having to come up with the cash. Even in the Bill, it only says “may” use an auction. Without constraining yourself, you could expand your powers on what we do with repatriated quota and, indeed, what we do with FQA generally.
We went through some debate when first drafting our amendments. We thought that we needed to put a stop to FQA, but a legal argument will come back the other way that says quota is a property right. We thought, “Well, if you give eight years’ notice, that’s probably sufficient to deal with any compensation that would arise,” but even then, I did not feel comfortable putting that in the Bill, because you reify the situation as soon as you do that. We put it in to start with, then we took it back out again on the basis that there needs to be a proper conversation about what we do with quota. Given the time restraints, we will not be able to do that in the Bill, even with the best will in the world. We can reserve the powers in the Bill to ensure that whatever we decide to do with FQA in the long run is settled, and that we can do some interesting things with it. I think that balance is there if you pull back just slightly on the prescriptive language about what you do with it.
George Eustice
Q
Dr Appleby: We reallocated quota last time—unused quota—without compensation or additional legislation, so I think we could do that. I think you have to be careful when you do that, because a lot of people borrow money by using their quota as collateral. One the one hand, there are some very rich people sitting on quota—the quota barons we read about—but on the other hand, there are people who use quota to support their running a business. You would need to think about what you will do, but I think you can do that under the current legislation.
What has happened here is that it has been beefed up. We have put some more suggestions forward. There are two things that you could do. You could vest the fishery so that it actually becomes public property. We have done a heck a lot of research at UWE on who owns it, and we reckon it was set up by some sort of implied Crown trust that goes back to the middle ages. One of my PhD students is working on this at the moment.
It would be easier just to state in the Bill that it is a public asset and put it in some sort of trust, and then you would get the kind of things that you would normally expect when disposing of a public asset to the commercial sector. That is the way I would approach it. I appreciate that we did not start there; we started with an open-access resource, which we have tried to deal with through legislation. We are in a transition.
Luke Pollard
Q
Dr Appleby: I am not sure. In common with previous speakers, I liked the idea of a scientific adviser, which would be a lovely thing to have. Its constitution is probably the same size as the Act, so you can imagine the bunfight about who sits on the advisory panel, whether it is peer reviewed and whether it is devolved. That is a huge conversation to have, and it needs to be had in public. That is something I would like to see. If we had more time, I would like to see that go in the Bill.
There is a mirror piece of legislation, which is the Environmental Principles and Governance Bill. Does that apply to fishing or not? When we leave the EU, we will lose the right to infraction proceedings against recalcitrant UK—all parts of the UK. Should Scotland do something, it is the UK that gets infracted. We will lose that, and we have not quite been able to replace that kind of thing.
Those are just two examples: a good, robust, scientific, forward-looking body that looks at how to make the most of our resources, and some sort of regulatory regime to punish the hindmost, if you want to be quite so curt.
Luke Pollard
Q
Dr Appleby: I think you can put one in. I would love to, but given the timeframe to which we are working—having this Bill ready for March—it would almost be a wrecking amendment if we tried to put something like that in. You are going into devolution which is an enormously emotive topic, especially at the moment. In terms of the Government’s position of being able to hit the devolved administrations with a stick: it is a devolved matter. I do not think the Government can do that.
When you look at most of the Act, it is consensual and they are consulting one another. That is how it should be, to be honest. The four nations should be able to work together and that is right. At some level we have lost the outside influence that we had. The way everything is drafted is, unfortunately, currently predicated on having a common fisheries policy that kept everything together. I am talking around the subject because were you to put a drafting pen in front of me and say, “Get on and draft that,” it would be incredibly difficult. My sympathies go out to the Government for what they have done.
Luke Pollard
Q
Dr Appleby: What does maximum sustainable yield actually mean? The European Union defines it as something like the highest theoretical equilibrium yield. It says something like that in the basic regulation. You take a basket of theories and you use the highest one. It has been knocked around as a term for a long time. Our rights in our EEZ only go up to maximum sustainable yield and we do not have a right to fish beyond it. We can take the interest off our fish stock outside our territorial waters, but we cannot spend the capital. This is the way to look at it.
To some extent, that is all the rights we have. I have not explicitly looked at that, but my sense on the way this works is that we would be bound by MSY targets anyway. The other thing is that the UK has access to judicial review, whereas trying to review the European Commission is interesting. It is very difficult to get a standing in the European Court of Justice, particularly on maximum sustainable yield. A few years the World Wildlife Fund tried to get access on cod quotas, I think, and they failed. So the European Union is good at giving rules to other people, but not so good at looking after itself. From an environmental charity point of view, we are not so concerned as long as there is something in there that does allow some conversation about moving to the right stocks that produce more fish, more jobs and a better environment. We could get hung up on this if we are not careful.
Peter Aldous
Q
Dr Appleby: An FQA is a possession under the European convention on human rights. There is a distinction. “Quota” is once it is distributed, and FQA units are about your expectation of how much of a share of the UK’s TAC you are going get every year. That was based on the historical landings data, traditionally. He said that unused FQA units could be reallocated without compensation. FQA units are a possession, so the corollary of that is that used FQA units—and most of them are used—would require some sort of compensation payment. I have not been privy to the subsequent legal advice, and I took a sharp intake of breath when he said that at the time. In fact, I went to court to watch some of the court proceedings—it was quite interesting; it was right up my field. It is inherent in the UK that we do not take assets off people without compensation. It is part of our culture—way before the European convention.
There is another point about that redistribution and the immediate way it would have ramifications on how the whole commercial sector is constructed, which you need to be mindful of. Once you put that whole lot into a bag and shake it up, you could design a scheme to reallocate quota, but it would need to be done in a sensible, crafted way.
Owen Smith
Q
Dr Appleby: That is a good question. There are things that you can do. The Australian legislation, for instance, makes it a legal duty to fish sustainably and according to the plans that they come up with. We could put that in. Our fisheries statements are a bit woolly. I notice that there is a bit in here that says that they do not have to adhere if relevant considerations are taken into account. What is a relevant consideration? I could not find a definition of that.
We have not nailed the Secretary of State to the floor in this Bill, and that could be done. Again, it would have to be done in the context of devolution, so we would have to nail everybody’s feet to the floor around the UK, because we cannot have a situation in which one part of the UK can fish non-sustainably and the other parts cannot. There are things that you can do. There are tweaks and modifications that can be made to harden up that duty.
Owen Smith
Q
Dr Appleby: Yes, I think that their fisheries plans are statutory.
Owen Smith
Q
Dr Appleby: They have a management board. We are looking at the scientific advisory panel that has been put forward. Those scientific recommendations are binding in some way.
Owen Smith
Q
Dr Appleby: You are looking at a public resource, so how do we make the best of that public resource? Some of that is going to be to the commercial sector and some of it is undoubtedly going to be to the recreational sector. The whole thing is so political because we are trying to carve up this public resource through regulation. Undoubtedly, the recreational sector is an important part of this conversation, too. Historically, although it has recently been included in the common fisheries policy, it has come to the table late.
George Eustice
Q
One unique thing about fisheries is that, in or out of the EU, they are subject to annual international fisheries negotiations. Norway, for instance, follows MSY but also follows lots of other scientific metrics that it thinks are superior to those that we use. In such a situation, do you think it is important to keep that flexibility, so that you can actually land an agreement with Norway, the Faroes, Iceland and the EU, or is it preferable to make it unlawful for the UK to reach such an agreement and just have everyone go off on their own and unilaterally set a tax?
Dr Appleby: That is an interesting question; theoretically, we cannot fish beyond MSY, because that is all we have. Under the United Nations convention on the law of the sea, our rights extend to MSY and that is it. You cannot have an agreement on what you do not have.
However, the question is: what is MSY? It comes down to the definition. The Norwegians would probably argue that, by taking a basket of different theories, we achieve MSY, because one stock can be plotted on a graph and another cannot. I am not a fisheries scientist—you would have to ask them—but it seems that you are essentially looking at something like a repairing obligation on a lease. How far can you go with this and do it in a sensible way?
The difficulty with going into, say, MSY or BMSY or all those things, which I have never completely got my head around, is that you define a particular scientific methodology in your Bill. I think that could come back to haunt the draftsman if stock does not behave in a certain way or if you want some sort of flexibility. Again, it is interesting that, coming from a conservation point of view with my Blue hat on, I am not uncomfortable with just leaving it at MSY.
The Chair
I have Alistair Carmichael and then Mike Hill, unless anybody else wishes to contribute.
Mr Carmichael
Q
Dr Appleby: You can write that into the legislation. The Americans, in the Magnuson–Stevens Fishery Conservation and Management Act, just write in that it is not a property right. You can make it terminable, so that it kind of becomes a contractual right.
Mr Carmichael
Q
Dr Appleby: One way of dealing with that is to inflate your way out of it, so that you do not punish one individual. You could say that, this year, you are going to topslice 20%.
Mr Carmichael
Q
Dr Appleby: I think you could. We are straying into an area for which you need explicit legal advice, but I see no reason why not. You are not disappointing somebody. The other thing about doing this sort of thing with this sort of asset is that you cannot target one individual and say that you are going to take their quota off them and off they go. That really is compulsory purchase. When you water down the entire pot, it is much harder for somebody to make a claim, particularly if fish stocks start to come back and the inherent value of the asset has not really changed.
The price of quota pings around like anything, depending on how much fish has been landed that month. It is not a very stably priced asset anyway. Again, if in the Act you use robust wording about this, the first thing the courts will look at is the Act and ask what Parliament has said. It comes back to reasonableness, I think.
Mr Carmichael
Q
Dr Appleby: The thing is that it was never privatised properly in the first place. Normal squatter’s rights would be 12 years, but this is based on three years. It is a much shorter timeline that people have a track record for. We did the same thing with the milk quota—that was wound down—and various other farm subsidy payments were wound down, too. This is not a sector where this sort of thing happens.
The duty of the public administrators is to make sure there is no undue shock on the fishing industry by pulling the rug out from everyone, and otherwise to make sure we safeguard what is, at least nominally, a public asset. Elsewhere, in the UK Association of Fish Producer Organisations case, which is a slightly funny case, Justice Cranston says that it is a public resource. There is some force in the intervenor’s point that it is a public resource.
Mr Carmichael
Q
Dr Appleby: That is a very good question. I put my amendments together in two parts. The Secretary of State is doing two roles; I am sitting here with two roles myself, so I appreciate that. One is being the Secretary of State on behalf of the UK—he is a trustee of the UK’s public fishery—and the other one is being English Fisheries Minister. That is why I do not like the way clause 20 is drafted, because I thought you would split the functions. The trouble is that it goes into some very difficult water when we start to look at the different devolution settlements.
Mike Hill
Q
Dr Appleby: I will take the second question first because the second one leads to the first. How can you define “sustainable” if you do not know what the stock levels are? There is a massive absence of science on this. If we get money back in from the fishery, I would like the commissioning of decent science so we can look ahead and plan forward. We seem to be navigating while looking behind us. We need to get better data to manage the stock. We also need to have a conversation about which stock we want to fish. What are the stocks that live best in our waters that we want to feed the country in the 21st century?
Peter Aldous
Q
Dr Appleby: There is an argument. If we were to try to stick an English Fisheries Minister into this Bill, which is kind of where you are going, that is the West Lothian question. I almost feel we should ask the Minister what he feels.
The Chair
The Minister will have several hours over the next few weeks to tell us what he thinks. Time is at a premium. On behalf of the Committee, I thank you Dr Appleby and the organisation for your submission. Watch the Bill with interest as it progresses.
Examination of witness
Aaron Brown gave evidence.
The Chair
We now move to our final session of the day, which I remind colleagues must finish at 4 pm. The final witness is Aaron Brown of Fishing for Leave. Could you please introduce yourself as the witness?
Aaron Brown: I am Aaron Brown of Fishing for Leave; thank you to hon. Members for having me along today.
George Eustice
Q
Aaron Brown: To start with, overall we were very happy with the White Paper. The Bill is somewhat disappointing, because a lot of what was good and gave a lot of hope to people has disappeared, and an effort pilot was one such thing. We have been staunch advocates of that, because over 30 years with increasing regulatory burden we have tried to go up a cul-de-sac and it has not worked. We have had black fish and discards, and now we are on to choke species.
We sat back and said, to use a phrase the Minister likes to coin himself, “What are the first principles of management?”, and that is the ecosystem. You have to work with mother nature. Currently, all the problems, many of which Members have discussed today—whether that is enforcement, science or shares of resources—all stem from the current quota system. What we said is that the only way to manage a dynamic mixed fishery, where you catch a mix of species that fluctuate up and down and it is difficult to determine exact, quantitative, arbitrary figures such as quotas, is to say to vessels, “What is a sustainable level of time that vessels need to catch a sustainable amount of fish from an ecosystem? If in the North sea you can take 200,000 tonnes of biomass, combined, from that ecosystem, how long does it take your fleet collectively to do that?”
That allows vessels to land all catches. It means you see exactly what the fluctuations and dynamism in the marine environment are, which generates accurate science, and you are flowing along with the environment rather than what we are trying to do just now, which is to impose arbitrary theoretical targets and then try to hit them. That has been proved not to work.
Just to finish, before Mr Aldous asks a question, we quickly concluded that effort control alone does not work, and that is what we brought to the Department as a solution that answers most questions. Blunt time at sea, especially in a blunt measurement such as days at sea, does not work. What we have developed is a system where you adopt FQAs, so there is no contention about people losing their investment in that, and turn them into percentages that people should be aiming to catch. It is not an arbitrary weight that you are aiming for; what you are aiming for is a percentage-based mix of what is deemed to be sustainable. If you catch outside that percentage, what happens is that you lose time in compensation.
Therefore, as a vessel is losing time for catching the wrong fish that he is able to land for that time penalty, his effort burden on the environment is coming back. Since the fish that has been landed has almost been time for the crime, scientists know that is a true representation of what is going on. I have worked on this for over two years; we have not asked for it to be dropped out of the sky, as some of the amendments to the Bill seem to be—for an enabling Bill, there are some clauses that seem to be a shopping list for DEFRA. What we are asking for is a trial, because we truly believe that for a unique system anywhere in the world, we have a system here that could get us away from poor science, solve the problem of FQAs and who owns them, and get us towards a far more sustainable fisheries management system.
We implore hon. Members to put in a legislative requirement that a trial across the fleet, not just inshore, is enacted to give us an alternate solution. If it fails, it fails, and if it is proved right, we have lost nothing but gained a lot.
George Eustice
Q
Coming back to the principle, the difficulty with fisheries is that, while you have said effort does not work, nothing quite works on fisheries. That is why it becomes a circular argument. You seem to be arguing for a return to catch composition rules, which themselves became slightly discredited so that people tried to move away from them. The challenge is that an effort regime works best in a mixed fishery where it is harder to segregate out the fish, but a tonnage system works best in, say, the pelagic.
Aaron Brown: Absolutely. We would say for pelagic species, where you are catching an individual bulk species and vessels can reasonably accurately target that, although at times you do get it wrong, a quota system is fine. The problem is that dynamic mixed fishery—the white fish; we include nephrops in that mixed fishery. What we are saying is catch compositions but not arbitrary limits, which, again, is a problem. It has flexibility.
To avoid a race to fish, to avoid giving people a blunt dollop of time and their going off and targeting the highest value species because the economic incentive is there, what you are effectively doing under this system is a buffer scheme, if you like. It is a trading scheme. “Okay, I’ve caught the wrong fish. It’s worth money”. Then, rather than discard it into the sea unrecorded and keep on fishing and killing more of that species while trying to find one you can keep, what you are moving towards is trading overall ceiling of effort for that wrong fish. So it is a compensation scheme, effectively, in which you get the financial benefit of that fish and your men get their pay—we will come on to that with the system that DEFRA proposes for discards—but, overall, your ceiling in the year comes down to meet you.
That would solve the bass problem. You could put in a zero catch composition for bass. Any catches would have a time penalty. Boats could be tied up on the Monday but they would have that bass landed, and the financial benefit of it. It would work for spurdogs. We really believe there is a system here that merits a good look, and proper scrutiny and trial. As we say, we lose nothing if it fails and we gain everything if it succeeds.
Luke Pollard
Q
Aaron Brown: I think that absolutely, yes. I think there has always been that case. I was very pleased to hear Dr Tom Appleby state that, and many of the other non-governmental organisations have said it, about the idea of privatisation. Even with the FQA system, it says in the paperwork that people get through, that it should not be bartered, sold or bought. It just happens to be that the industry has gone and done it.
Fish always has been a public resource. Various judicial hearings have defined that as well. Indeed, it probably stretches all the way back into Magna Carta, right back through our constitution. At the end of the day, we as fishermen, as the members of the public who catch, are only custodians of what is the nation’s; we look after it and husband it well for current generations and future ones. We would very much like to see a clause put in towards that.
Luke Pollard
Q
Aaron Brown: That is one of the main five things that are in the Bill. As I said at the start, one thing that disappointed us more was what was missing from the Bill rather than what was in it. But out of the five things we are deeply concerned about, that auctioning clause is one of them. It runs coach and horses through the principle of it being a public resource. Practically, it will end up in the hands of the highest bidders.
There is no tightening of the economic link in the Fisheries Bill, which is one of the things we really want to see included, so without that, combined with auctioning, you could have massive, multinational, hugely wealthy seafood companies saying, “British fishing is on the up so we’ll come in and wave our cheque book and outbid everyone else.” Even the biggest companies in Britain could not compete with some of those far eastern ones.
If we go down the auctioning route, we have an opportunity to draw a line, as I think the right hon. Member for Orkney and Shetland said, between the current quota resources—how it has been divvied out, not in the way we would have chosen—and this clean slate of what comes back. If we go down the auctioning route, where it is monopolised into the hands of a few big interests, with their financial firepower, it rides coach and horses through the Government’s objective of rebuilding coastal communities and supporting family-based fishing.
Luke Pollard
Q
Aaron Brown: One of the amendments we put in was to amend it to hours at sea. It might seem contrary to Members that fishermen would want to tighten what could be perceived as a noose on themselves. That amendment was to get towards what we really need to get towards, which is some kind of catch-per-unit effort system of fisheries management.
Over the years, one of the clauses in the Bill we would like to see amended is right at the start: clause 1. It says that management will “ensure that…activities are”, which suggests that the Government kind of take a hammer and beats down the industry to meet their requirements. We would like to see that reversed so that policy requires management that delivers. In other words, the onus should be on the Government to say, “Okay, here are the objectives we want to meet. How do we move towards that?” We want it changed to hours of soak time at sea, because that is a far more accurate method of delivering catch-per-unit effort. You would be getting accurate data to deliver management that actually achieves objectives rather than just trying to take a hammer to the industry to make it comply.
Luke Pollard
Q
Aaron Brown: Absolutely. We feel it should be banned outright immediately. You could put a sub-clause in that says it should be banned until it is proved that it is not responsible for the environmental degradation that has been reported by fishermen all around the southern North sea, where the derogation has happened. I certainly do not think anyone could say that the Dutch, who are primarily responsible for this, have not taken the Michael—that’s the polite word. It started as a derogation against the ban on electric fishing that the European Commission itself got—let us remember that it was a derogation against the EU’s own scientific advice—for a trial of the method. That trial has gone on for 10 years and has 100 boats on it. That is a commercial fishery masquerading as a trial. Even the Dutch now hold their hands up to that. We would like to see that banned.
We would also like to see sandeel fishing banned in the central North sea. For years and years, that has taken away a key component of the food chain—the base of the food chain—for sea birds, fish and obviously fishermen. Neither method—pulse fishing or sandeel fishing—is of benefit to any UK vessels, and with sandeel fishing you have the double dunt that the sandeels are taken for pig feed, so the British bacon industry could see a competitor’s food costs go up.
There would be a massive environmental gain if we banned both practices. That would not affect any British industry. I am actually very surprised that a Government who extol their environmental credentials with plastic cups and wars on wet wipes have not taken the easy win of banning pulse fishing.
The Chair
There is considerable interest in asking questions in this session. We have to finish at 4 pm, so can I ask for short questions and shorter answers, please?
Peter Aldous
Q
Aaron Brown: That is one of the areas where, when we devised this system, we realised there had been a massive failing. The days at sea scheme was blunt and there was no effective monitoring. Generally, it was with smaller boats in south-east England. I think even the fishermen themselves would hold their hands up and say they really knocked the backside out of the pilot. There was mis-reporting going on—they just went out and kind of went Tonto on it.
We are advocating an hours-based system. You would obviously have vessel monitoring systems. We want to get towards a fully integrated monitoring/management system. Vessels would have sensors, which are not expensive to put on—vessels use a similar technology for gear telemetry and door sensors—and go on any type of fishing gear, to monitor soak time, so you would know the exact time a vessel’s gear was in the water. There would be a stipulation to monitor where vessels were through your inshore VMS or your full-on VMS, and also to fill out electronic logbooks, which are here now. You would get an up-to-date, haul-by-haul update on how much fishing effort was going in. You would know, “That boat towed six hours in this area and he caught x amount of fish for this size of gear. The chap over to the side towed similar gear and caught half the amount of fish.” You would start to know where the abundancies were.
The one main control to go for with a pilot is making sure it is rigorously enforced and it is an hours-based scheme. The other main thing is the catch composition thing. That really is the main control for regulating the industry. Rather than everybody going Tonto, like they did last time, and targeting Dover sole, cod or bass, you would say, “Yes guys, you can catch them and keep them, but be aware that if you do that, your ceiling of hours is going to come clattering down to meet you.”
Alan Brown (Kilmarnock and Loudoun) (SNP)
Q
Aaron Brown: That is one of the things in the Bill that very much seems to ride coach and horses over the idea that the Bill is just an enabling Bill. Obviously, there is a bit of reticence—okay, you could say, “Understandably so”—to career on towards a different type of management on an effort-based system, yet somehow we have a scheme here that has dropped out of the air, with no prior piloting and no prior consultation, and that has just arrived on the table. We are vehemently against it, because we personally feel—and everybody who has read the Bill, both among our membership and in other organisations, feels—that only an idiot who could not understand the practical implications of such a scheme would propose it.
We feel that the scheme is there to administratively abrogate the failings of the current system. The Government are proposing to take all the repatriated resources and use them as headroom to avoid choke species, whereby, as of 2019, vessels have to cease fishing on the exhaustion of their lowest quota. What will happen is that you will have vessels going to sea. Many hon. Members are from the south-west, as the Minister is, and haddocks are a huge problem there—in the North sea, it is hakes. The Government then say, “We will honour the fish that would choke you or would tie you up. We will give you fish to keep fishing, but so that there is no economic incentive to target that species, you must land it for free.” That scheme effectively creates a giant shuttle service, where boats are going to have to run in and out, in and out of harbour, landing all this fish that they cannot profit from, to allow them to keep fishing.
The first big problem with that scheme is retention of crew. Lads are not going to work to retain—well, just now it is a 40% discard rate, so if they have to retain that 40% for free, you are going to lose your crew very quick. The next problem is that there is no provision in the Bill as to what happens to this fish when it is landed: you cannot turn around and allow processors, hauliers, markets or shore-based people to profit from it, because that would disadvantage the fishermen. Really, the logical question about that clause is, “Are we going into some sort of Soviet system, where the fishing industry is going to work for free for the Government?” It is an ill-thought out thing, and I think it needs taking out of the Bill. It needs to come back once it has been properly tested and run in to see if it actually works, because we see such pitfalls in it, and it does not actually—
The Chair
We have to move on, sorry. We have to finish at 4 pm and we may have a Division in the House before then, so we have to be quick on questions, or all Members will not get in. Any further questions, Mr Brown?
Alan Brown
Q
Aaron Brown: To some extent, that would be difficult now. It would come back to black fish, which were really stamped out through the vessel monitoring system and designated ports legislation, whereby vessels now have to book in three hours in advance and declare their catch. Effectively, the only way to do it would be coming in and mis-declaring that you did not have those fish—because otherwise you would be declaring them, and the Government would know they were there—and taking them up the road. Obviously at the ceiling, you could say, “Well, the tally was wrong.” There is some degree of openness to abuse.
However, the thing that disappoints us most, where our system works but this one allowing fish to come in does not, is that it does not address the fundamental flaw: arbitrary quotas do not work in mixed fisheries. All that happens is that we are now setting an arbitrary target that we try to hit, and all this scheme does is allow you to make it right up to that target. It does not actually tell you, “Is that more abundance of fish?”
In the south-west with haddock, say, or in the North sea with hake, you could lift the quota up—double it—and the fleet would still catch it. Does that tell you there is a greater abundance of species, or does it basically show that you have given more legislative headroom to bring fish ashore? The only way that scheme would work is if you increased the quota disproportionately high, which no one is going to agree to. Since there would be no economic incentive for the boats to go off and handle all these fish that they are not profiting from, you would see where the fleet came up to and what a natural abundance catch was. That might be 60,000 tonnes, but if you had set the quota at 100,000 tonnes, you would know that there was not that abundance. The scheme, effectively, does not work. It needs taking out.
Bill Grant
Q
Aaron Brown: The way we want to see it is with the auction clause taken out and a direct replacement put in on what we call the 1 tonne to one boat principle, whereby the resource is seen as a national resource and legislated as such. What happens is that all the repatriated resource that we gain under zonal attachment—anything about that is missing from the Bill—that national pot of resources, gets allocated to all vessels in a sea area fairly, equally. For the west coast of Scotland, where we are both from, about 60,000 tonnes of mackerel could be repatriated—worth about £60 million—and about 100 vessels are left there with the capability to go to that fishery, so what you would turn around to say, therefore, is that each west coast fishing boat in the ICES sea area for that stock gets 600 tonnes. That applies across any stock.
What we would like to see with that is, instead of it just being administrated on a spreadsheet like the non-sector is, which ends up with DEFRA just saying that we get 12 tonnes for 12 months, spread out equally over the months, is that that fish can be held in a PO—not monetarily traded, rented, bought or sold, but held in a PO—as a kind of holding vessel to use it at the best time of year, when that fishery may be on, rather than trying to spread 600 tonnes over 10 months. Also, if you cannot use that resource, it goes back into the national pot. We believe that has a huge degree of simplicity to it, legislatively and operationally. It would provide the flexibility for vessels to use that fish at the best time of year and, obviously, it would allow it to be reabsorbed into the national pool. That is what we would like to see.
The Chair
I call Alistair Carmichael. We have nine minutes left, and four Members wish to speak.
Mr Carmichael
Q
Aaron Brown: We would agree with that. We have one—it is actually the first one that we have put together ourselves—and we are obviously aiming for 2019. The way that negotiations are going, it will probably end up being 2019—hopefully, if God is merciful. Yes, we would absolutely agree with that. Our big fear is that if there is not a commencement date, the Secretary of State has the powers to kick the can down the road—it depends on what Government is there. We very much agree with a commencement date, preferably 2019, when we actually are a fully independent coastal state.
We have made it clear—I would like to put it on the record—that the transition is an existential threat to the industry: we leave, but we then sign up to re-obey the CFP—we have to obey all EU law—and they can enforce any detrimental legislation that they please, which they have every incentive to do, because under UNCLOS article 62, paragraph 2, if a state cannot catch its own resources, it must give the surplus to its neighbours. The EU has absolutely every incentive—they have even mentioned it in their own studies by the PECH committees, that this could happen—to run a bulldozer over the top of the UK fleet.
We implore Members: fishing cannot be in a transition. Obviously, with the wider deal, the big problem is that the EU says that there must be a future relationship or we are into the backstop, and that future relationship for fisheries will be based on current access and quota. That is not conjecture; the EU has said quite clearly that Gibraltar and fisheries are getting it, in the words of Mr Macron—via my rusty French translation. There is a huge danger of fishing going into that, so as the right hon. Member for Orkney and Shetland said in the Chamber, given the current poor state of the negotiations as they have been conducted, every red line has been breached. If the Government truly had a commitment to fisheries not getting mangled again—bartered a second time—they would not have been in the transition in the first place.
David Duguid
Q
Aaron Brown: I absolutely agree with you. That is why Fishing for Leave has been absolutely explicit right from the start that FQAs as they stand—the current quota and the current FQAs—should not be touched. We agree with you that it opens up a total legal and moral can of worms to turn round and say, “Okay, this shouldn’t have happened, but it has happened, but we’re going to take it off you.” I absolutely agree.
Our solution to preserving the FQAs, while moving to a more equitable system of management for both fisherman and the fish was to convert them into this flexible catch composition entitlement. That is very simple to do. It is legislatively no problem, because all you are doing is saying that your FQA is not an entitlement to a kilogram; it is an entitlement to a percentage. So the resources all come back, and the current resources go into a national pool; that is divided out as time and everybody gets an equal stake of time to reach their potential, but those biggest quota holders, both in the south-west and the north-east, which have heavily invested in FQAs, get the benefit of their investment, because when the fleet’s national average might work out at 5% cod in the North sea, those who have invested heavily in FQAs would get their 30% or 40% or whatever. We think that is a fair way to do it.
Owen Smith
Q
Aaron Brown: You have no idea the level of my disappointment.
Owen Smith
Q
Aaron Brown: Yes, absolutely. That makes it worse. It pours petrol on the bonfire that I have described to you. In the transition, the EU has every incentive to run a bulldozer over the top of us. They can abolish the 12-mile limit; they could fully enforce the discard ban in choke species and, obviously, we would not be able to implement policy to mitigate that, such as suggested in the Bill. They would be able to barter UK resources in international swaps, because we will not be party to international agreements but the EU will be making them on our behalf.
The other thing that is really devastating right round the country is that currently the UK relies on a lot of swaps in the EU, to get in fish that would otherwise probably be ours under a zonal attachment. We will not be able to do that because we will not actually be sitting at the table any more. So we will be trapped in this kind of halfway house, where the EU has every incentive to take a great big stick and beat us with it like a piñata. It is not a position that I think is equitable for the survival of the industry. To be brutally honest, by the time we get round to a new British policy, if we are not shovelled into the backstop, of which there is a high likelihood, there will not be a fleet left to take advantage of anyway.
Mr Sweeney
Q
Aaron Brown: I am fully supportive of that. We have gone further and said 60%, and not just for landings. There is a huge benefit from that. Currently just now, the flagship problem that Britain has, after the Factortame case, is that under freedom of establishment and freedom of movement, any EU national could come in and buy up British entitlement. Obviously, with the British fleet struggling with so much loss of its own resources, and regulatory ineptitude, many family fishermen felt compelled to sell. That is huge problem just now as we see on the west coast, in Lochinver. I think it was £30 million of fish went through Lochinver and there was not a single indigenous fishing boat. That needs to be tightened up on. There is a huge benefit, not just to the fisherman and their communities, but also to processors and market share.
Norway’s crowning glory is not actually its fishing fleet. Norway’s crowning glory is its dominance in processing and marketing globally. That is something that Britain could equally compete in with the resource we have got. We would like to see 60% landings into the UK, sold and processed, because otherwise people will just put them on the back of a lorry and run them down the road. We want to see 60% beneficial ownership of any British vessel—that is no different from the other Nordic countries—to avoid foreign nationals or conglomerates buying out the UK fleet.
We would also like to see 60% British crew, but with a five-year or thereabouts dispensation for foreign crew, until we rebuild the future generation back into the industry to replace the one we have lost. The economic link absolutely needs to be there and we implore you to accept that that is an amendment that needs to go in. The Conservatives tried to do it in 1988 with the Merchant Shipping Act. I argue that if it is good enough for Mrs Thatcher, then it should be good enough for this Government as well.
The Chair
I think that brings us almost to the end of the session. It is good to hear Mrs Thatcher still being quoted 38 years after she gained office. On behalf of the Committee, thank you, Mr Brown, for your contribution.
Ordered, That further consideration be now adjourned.—(George Eustice.)
Finance (No. 3) Bill (Fifth sitting)
(5 years, 4 months ago)
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The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Clause 32 ordered to stand part of the Bill.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I beg to move amendment 73, in clause 32, page 19, line 23, at end insert—
“(6) The Chancellor of the Exchequer must review the likely effect of extending the first-year allowances on energy-saving plant or machinery or environmentally beneficial plant or machinery to 2030 and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the effects of extending first-year allowances to 2030.
The Chair
With this it will be convenient to discuss the following:
Amendment 74, in clause 32, page 19, line 23, at end insert—
“(6) The Chancellor of the Exchequer must review the likely cost of extending the first-year allowances on energy-saving plant or machinery or environmentally beneficial plant or machinery to 2022 and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the cost of extending first-year allowances to 2022.
Amendment 75, in clause 32, page 19, line 23, at end insert—
“(6) The Chancellor of the Exchequer must review the effect of ending the first-year allowances on energy-saving plant or machinery or environmentally beneficial plant or machinery and lay a report of that review before the House of Commons within one year of the passing of this Act.
(7) A review under subsection (b) must consider the effect on—
(a) the energy technology sector, and
(b) the water technology sector.”
This amendment would require the Chancellor of the Exchequer to review the impact on the energy and water technology sectors of ending first-year allowances.
Amendment 76, in clause 32, page 19, line 23, at end insert—
“(6) The Chancellor of the Exchequer must review the effect of ending the first-year allowances on energy-saving plant or machinery or environmentally beneficial plant or machinery, on foreign direct investment in the energy technology and water technology sectors and lay a report of that review before the House of Commons within one year of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the impact of ending the first-year allowance on foreign direct investment in the energy and water technology sectors.
Amendment 77, in clause 32, page 19, line 23, at end insert—
“(6) The Chancellor of the Exchequer must review the effect of the provisions in this section on the United Kingdom’s ability to comply with its third, fourth and fifth carbon budgets and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the impact of Clause 32 on the UK’s ability to meet its carbon budgets.
Amendment 78, in clause 32, page 19, line 23, at end insert—
“(6) The Chancellor of the Exchequer must lay before the House of Commons a report on any consultation undertaken on the provisions in this section within two months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to report on any consultation undertaken on the provisions in this clause.
Clause stand part.
Jonathan Reynolds
It is lovely to see you again in the chair, Ms Dorries, as we reconvene for this Committee’s second week. It is particularly good to see the Minister still here—I am never quite sure at the minute who will turn up on behalf of the Government.
I speak to Opposition amendments 73, 74 and 78 to clause 32, which focuses on first-year allowances and first-year tax credits. This measure would end the first-year allowance for all products on the technology and energy list and on the water technology list. Before I move on to why the Opposition feel strongly that the Government are wrong to end the first-year allowance, it is important to establish the extent of the allowance, its qualifications and the logic behind its introduction.
Enhanced capital allowances legislation was introduced in 2001 to encourage the use of energy-saving plant and machinery, low-emission cars, natural gas and hydrogen refuelling infrastructure, water conservation plant and machinery construction projects and so on. Under the relief, businesses that pay income or corporation tax can claim 100% of the first-year capital allowance on investment in ECA qualifying items. In addition, adoption of ECA qualifying items improve a project’s building research establishment environmental and assessment method—the BREEAM rating—and contribute to an improved energy performance certification rating.
To qualify, the item acquired must qualify as plant and machinery and satisfy the following criteria: it must not be second hand; the expenditure must have occurred after 1 April 2001; and the plant must either be a listed product or meet the energy saving or water conservation criteria specified by the Carbon Trust. Energy-saving technologies are things such as air-to-air energy recovery, automatic monitoring, boilers including biomass, combined heat and power units, compressed air equipment and so on. Water conservation technologies include efficient showers, taps and toilets, energy-efficient washing machines and more.
The Department for Business, Energy and Industrial Strategy describes enhanced capital allowances as different from standard capital allowances. It estimates that enhanced capital allowances are between 5.5 and 12.5 times greater than ordinary capital allowance relief. This accelerated cost saving further shortens the period of time and builds the business case for investment in energy-efficient equipment.
It is clear that this allowance encourages businesses to mitigate their environmental footprint and is designed to help the UK transition to a green and low-carbon economy. It is therefore disappointing that at a time when, as we have already discussed in this Committee, the United Nations Intergovernmental Panel on Climate Change has warned that climate change is at the point of becoming irreversible, the Government would choose to end such an effective relief.
Despite the positive steps that national Governments are taking all over the world to get citizens to recognise and limit their personal carbon footprint, businesses clearly have a role to play, too. We feel that the best way is to incentivise businesses, making it worth their while to use energy-saving and water-conserving technologies through tax relief. Taking away first-year allowances with little notice would only further alienate business at a time when we all need to do what we can to transition our economy to deal with the realities of climate change.
Although in its policy notes the Treasury suggests that small and medium-sized businesses will be shielded and the vast majority will be able to claim relief under the separate annual investment allowance, it concedes that large businesses will face additional costs and some level of disruption. Similarly, the Chancellor has stated that the revenue saved will be used to fund the industrial energy transformation fund. However, details about the fund remain scant, aside from the fact that it will be targeted at smaller businesses and funded through the end of these first-year allowances.
From the Opposition’s perspective, the change appears to be little more than a rebranding exercise designed to take an effective relief—first-year allowances—away and simply redirect that revenue into the Chancellor’s new fund. It is far from the radical industrial strategy that the UK needs to ensure that businesses and citizens are equipped to deal with climate change and the evolving energy market.
In the Budget, the Chancellor announced a consultation on a new business energy efficiency scheme, yet there appears to be little mention of whether businesses were consulted about ending this vital relief. Opposition amendment 78 would therefore require the Chancellor to report on what consultation has taken place.
The Government’s decision to end first-year allowances for energy-saving and water conservation technologies raises a further question about the effectiveness of this relief. Put simply, it is not broken, so the Government need to explain why they are planning to scrap it. That is certainly the sentiment behind Opposition amendments 74 and 73, which would require the Chancellor to undertake a review of the cost of extending the allowance to the end of this Parliament, and to 2030, respectively.
The reality is that the changes made by the Government in clause 32 appear to be revenue-led. They put the short-term priorities of the Treasury ahead of the UK’s long-term obligation to tackle climate change. Rather than empowering businesses to do their part and invest in energy-saving and water conservation technologies, it appears likely to deter them. We cannot see the logic of that. If the Government are sincere in their desire to create a better-targeted and more effective relief, they need to offer the Committee further details about the supposed industrial energy transformation fund to replace first-year allowances. If the Committee is being asked to endorse that change, let us have all the details first.
The Exchequer Secretary to the Treasury (Robert Jenrick)
It is a pleasure to serve under your chairmanship, Ms Dorries. After two days in the reassuring embrace of the Financial Secretary to the Treasury, the Committee has a brief interlude.
Clause 32 will make changes to end, from April 2020, first-year allowances for all products on the energy technology list and the water technology list, including the associated first-year tax credit. The environmental first-year allowances aimed to encourage greater take-up of environmentally friendly technology. Capital expenditure by businesses on plant and machinery normally qualifies for tax relief by way of capital allowances. Environmental first-year allowances allow 100% of the cost of an investment in qualifying plant and machinery to be written off against taxable income in the year of investment, providing a cash-flow benefit. The first-year tax credit provides a tax credit for loss-making businesses that invest in qualifying items.
The first-year allowance was introduced in 2001 for products on the energy technology list, and in 2003 for products on the water technology list. However, the allowances have made the tax system more complex, and there is very limited evidence that they have driven greater uptake of such technologies. A report by the Office of Tax Simplification found significant barriers to accessing the allowances, including the administrative burden of making claims. Government analysis suggests that less than 25% of energy managers would increase investment in energy-saving technology because of the allowances, while fewer than 20% of manufacturers report a positive impact on sales.
Kirsty Blackman (Aberdeen North) (SNP)
The Minister makes an interesting case, but it is what I would have expected as part of the report required by amendment 75. Will the Government accept the amendment and provide us with the information in report form, rather than having the Minister stand up here and tell us?
Robert Jenrick
I will come to the amendment in a moment, but I hope I will be able to reassure the hon. Lady and the hon. Member for Stalybridge and Hyde that we have already given the matter a great deal of thought and spoken to a number of stakeholders in the sector. Our actions are led by precisely the businesses that benefit from the existing reliefs.
For 99% of businesses, all plant and machinery is already eligible for full relief under the annual investment allowance, so the enhanced capital allowances provide no additional incentive. Smaller businesses such as those to which the hon. Gentleman refers have little if any reason to make use of those reliefs. The Government therefore believe that there are better ways to support energy efficiency.
The changes made by clause 32 will end the first-year allowances and the first-year tax credits from April 2020. In answer to the hon. Gentleman’s question about little notice, there is a significant amount of notice, beginning with the Budget this year, and these first-year tax rates not ending until April 2020. That is the point at which the industrial energy transformation fund will be available. Those rates will still be available until then, which will give businesses the time they need to prepare for change. The Government will look to lay secondary legislation in 2019 and update the lists of eligible technology, so that they can still be used and will be updated to include the most efficient technologies in the meantime. There is no sense in which those measures will fall behind with technological change.
To give some extra detail on some of the flaws with the current first-year allowance for energy technology, we found very low levels of awareness, as I have already described. Manufacturers estimate that less than a quarter of their customers are even aware of the scheme, and it provided little additionality. As I have set out, fewer than 25% of energy managers reported that the scheme influenced their investment decisions, and fewer than 20% of manufacturers reported that, if they did use it, it made a positive impact on their sales and businesses.
Many tax advisers reported to us that their clients decided to make claims after they had chosen to invest in efficient technology, so it did not have the impact that we would have hoped. Small companies are much less likely than larger companies to benefit, and 99% of companies would already be able to make such investments under the annual investment allowance. A 2017 survey by the Federation of Small Businesses found that only a quarter of small business owners were even aware of the scheme.
Kirsty Blackman
Is the Minister not making the case for more consultation in advance of any tax changes? Clearly, this tax change did not achieve what the Government thought it would. The consultations and information asked for are even more vital if the Government are making mistakes and not achieving what they had hoped.
Robert Jenrick
It is pretty clear from the evidence I have just laid out that the current tax reliefs do not work. We are making the changes required to ensure that smaller businesses, through the increased annual investment allowance, will have the allowance they need to make these investments. We will now work closely with other businesses, through the design of the industrial energy transformation fund, and a full consultation on that will be launched at the beginning of next year. We encourage the hon. Lady, businesses and other members of the Committee to take part in that consultation, as we design the successor fund to these reliefs.
The Government remain committed to increasing environmental efficiency, and the savings from ending first-year allowances and tax credits will be used to fund the industrial energy transformation fund. That fund will help businesses with high energy use to cut their energy bills and reduce their carbon emissions, by supporting investment in energy efficiency and other innovative decarbonisation technologies that may become available in the years ahead. Those could include, for example, investment in carbon capture and storage, or fuel-switching technologies. However, decisions on the scheme design, including eligibility and the technologies that will be supported, will be subject to the consultation with industry that I have just described. Establishing the scheme will fulfil our manifesto commitment to establish an energy efficiency scheme for industry, and that has been widely welcomed, including by groups such as EEF, the manufacturers’ organisation; UK Steel and the Energy Intensive Users Group. Since the Budget, I have spoken to a number of heavy users of energy, including car manufacturers, who all welcome this measure.
Clive Lewis (Norwich South) (Lab)
Is the Minister aware that some businesses are concerned that the Government are ending one scheme without having another in place? That causes uncertainty for business at a time when they need more certainty than they have had for a long time.
Robert Jenrick
I hear that concern, and that was the reason we chose not to end the scheme immediately. The scheme will end in April 2020. Until then it will continue as it does today, and be regularly updated with new technologies. If a company that makes use of it knows of a new technology that it wants to be part of the scheme, it will be possible for that to be added. The scheme will continue exactly as is until April 2020, by which time the new one will be in place. As a result of this year’s Budget, the annual investment allowance will also go up to £1 million, so additional allowances will be available to those businesses.
Amendments 73 and 74 would require the Government to publish a review of the cost of extending first-year allowances to 2030 and 2022. As set out in the policy costings document that we published alongside the Budget, ending the allowances will save £160 million by 2021-22. As we announced in the Budget, savings from ending the allowances will be invested in an industrial energy transformation fund of up to £315 million. Our primary motivation is finding a better way to help businesses be more energy-efficient—not saving money for the Exchequer, as was suggested—and we believe that our approach makes more efficient use of public funds. We anticipate that the average annual cost of extending first-year allowances would remain at around the same level until 2030. The figures are already known and in the public domain, so I urge the Committee to reject amendments 73 and 74 because the information that they request is already available.
Amendments 75 and 76 would require the Government to publish a review of the impact of clause 32 on the energy and water technology sectors. I hope that I have already provided the Committee with an answer to those points, removing the necessity of such reports. As I have set out, there is little evidence that the first-year allowances lead to a greater uptake of environmental technology, so the Government do not believe that such reports would provide any significant additional information. Furthermore, the Government support business investment in other, more efficient and dynamic ways, through the increase in the annual investment allowance and the creation of the industrial energy transformation fund.
Jonathan Reynolds
I am listening carefully to the Minister, but if the increase in the annual investment allowance replaces the first-year allowances or mitigates their loss, it seems that there is no fiscal incentive to invest in energy-efficient or climate change-relevant technology. The Opposition believe that we should try to operate the policy as a fiscal instrument to direct investment into the technologies that we need, but I do not see that described in the Minister’s answer.
Robert Jenrick
I have described it; that is the rationale for replacing the first-year allowance with the energy transformation fund. Had we chosen simply to remove the allowances and replace them solely with the increase in the annual investment allowance, the hon. Gentleman would be correct: 99% of businesses could proceed broadly as they do today, but they would not have a specific incentive to choose environmental equipment, plant and machinery or energy efficiency measures. However, by coupling the increase in the annual investment allowance with the transformation fund, we hope to shift the dial in favour of technology that helps the environment.
Amendment 77 would require the Government to review the impact of clause 32 on the UK’s ability to meet its carbon budgets. I assure the Committee that there are already robust requirements to report on progress towards the UK’s emissions reduction targets. When the measures in the Budget and the Bill become law, they will become part of that regime.
The Climate Change Act 2008 provides a world-leading governance framework that ensures that progress towards carbon targets is robustly monitored and reported to Parliament. First, the Government are required to prepare and lay before Parliament an annual statement of emissions that sets out the total greenhouse gases emitted to and removed from the atmosphere across the UK, and the steps taken to calculate the net UK carbon account. Secondly, the independent Committee on Climate Change is required to prepare and lay before Parliament an annual report, to which the Government are required to respond, on the Government’s progress towards meeting the UK’s carbon budgets. I would expect the committee to take the changes made by clause 32 into account in their deliberations. Thirdly, the Government are required to prepare and lay before Parliament a statement that sets out performance against each carbon budget period and the 2050 target.
Clive Lewis
I thank the Minister for his patience. As I understand it, having requested an analysis from the Minister responsible for carbon budgets on whether the Government were going to take into account the recent evidence from the Intergovernmental Panel on Climate Change on the 1.5° warming, the fourth and fifth carbon budgets do not currently do that. I have been told that there will be no assessment of the 1.5° warming until after 2030 when the fifth carbon budget concludes. Was the Minister aware of that and will he comment on the fact that that could have a severe impact on our ability to be able to achieve the targets?
Robert Jenrick
The IPCC will report in the usual way. It will not necessarily update its methodology, but it will lay before Parliament its usual statement and the Government will have to respond, as they have in every case. The Committee on Climate Change will hold the Government to account for the changes that we make, such as the ones in the Bill. That does not entirely answer the hon. Gentleman’s question on future targets. The mechanisms in place are strong and will ensure monitoring and reporting to Parliament of greenhouse gas emissions and of the Government’s responses. I therefore urge Members to reject amendment 77.
Amendment 78 would require the Government to report on any consultation undertaken on the provisions in clause 32. The Government consult stakeholders on an ongoing basis to inform all their policies. The provisions in clause 32 are no different. This includes, for example, surveys of relevant manufacturers and a call for evidence on helping businesses to improve the way they use energy, which was conducted by the Department for Business, Energy and Industrial Strategy. It would therefore not make sense to report further on the consultation that the Government have already undertaken on first- year allowances. Her Majesty’s Treasury Ministers meet manufacturers regularly, as I have said. I have met automotive manufacturers since the Budget and they welcome the changes.
The legislation was not released in draft because this is a simple abolition and does not constitute a measure that we would consult on normally. The Government stated in the new budget timetable and the tax-making process, which was published last year, that they will generally not consult on straightforward rates, allowances and threshold changes because they do not benefit from that process. I therefore urge Members to reject amendment 78.
The removal of the first-year allowances and associated first-year tax credits will allow the Government more effectively to support businesses to cut their energy bills and reduce carbon emissions. It will enable us to redirect the funds to the industrial energy transformation fund, which has been widely welcomed. I hope Members who are interested will take part in the consultation next year so that we can ensure it meets the requirements of industry and those who care about the environment. I therefore commend this clause to the Committee.
Question put, That the amendment be made.
Robert Jenrick
After that excellent start, I will continue. Clause 33 extends the life of the first-year allowances for electric vehicle charge points until April 2023. In the UK, the continued use of high-emission vehicles creates pollution and increases health issues. This measure was first introduced on 23 November 2016 to support the transition in the UK to cleaner vehicles with zero or ultra-low emissions. The measure allows businesses that invest in charge points to reduce their taxable profits by 100% of the cost of their investment in the year it is made. That provides accelerated tax relief compared with normal capital allowances, and so encourages greater investment in these assets. The allowance is currently due to expire in April 2019. The clause enables the first-year allowance to continue as part of the Government’s ambition for all new cars and vans to be zero emission by 2040.
Bim Afolami (Hitchin and Harpenden) (Con)
Yesterday evening, for some light relief, I was going through emails from constituents. One constituent runs a business that installs electric charging points. Will the Minister illustrate for the Committee how he thinks that business will flourish as a result of these measures?
Robert Jenrick
The Government have taken two measures, the first of which was in the last Budget. That created an electric charge point investment fund— £200 million of public investment—which is designed to spur an extra £200 million of private investment. A business such as the one my hon. Friend describes could be part of that. The measure could enable the business to partner with the public sector and gain the capital that it needs to develop, and will be able to take advantage of the allowance and invest early. There are now two opportunities for such a business to take advantage of tax reliefs and public investment in order to grow rapidly and enter the market.
Peter Dowd (Bootle) (Lab)
I do not deny the Minister’s point per se. Is there any implication that businesses that have chargers could be subject to a rating revaluation, which would put the cost of their business rate up? Perhaps the Minister could clarify that important point.
Robert Jenrick
The hon. Gentleman makes a valid point and I will reply—the powers that be will return to me in a moment.
The changes made by clause 33 will extend the current 100% first-year allowance for expenditure incurred on electric charge point equipment for a further four-year period until April 2023. That will encourage the increased use of electric vehicles by supporting the vital development and installation of charging infrastructure for such vehicles, to which drivers will look when deciding whether to buy them.
Robert Jenrick
Perhaps I could reply to the hon. Member for Bootle before taking a further intervention.
Robert Jenrick
Or not, as the case may be. We will have to write to the hon. Gentleman, I am afraid. He has outfoxed our officials.
Sir Robert Syms
Is the funding available to businesses also available to local authorities, because many of them put in charging points, or does that not apply to councils?
Robert Jenrick
I understand that this would apply only to private businesses. Other interventions help the public sector, such as the charging infrastructure investment fund, which local authorities can become involved in if they wish to develop infrastructure in their area. There were a number of wider measures in the Government’s Road to Zero strategy, including consulting on changes to the planning system to ensure that new business and residential properties, as well as public sector projects such as new council offices, hospitals and so on, are built with the infrastructure in place to support these vehicles.
The allowance will expire on 31 March 2023 for corporation tax purposes and on 5 April 2023 for income tax purposes. This extension is expected to have a negligible impact on the Exchequer. There are no anticipated costs to Her Majesty’s Revenue and Customs and neither will there be any significant economic impact nor any additional ongoing costs for businesses beyond the investment that will be generated.
In conclusion, this extension will incentivise the use of cleaner vehicles by encouraging companies to invest in electric vehicle charge points, giving confidence to drivers to shift away from current combustion propelled options in the knowledge that the further roll-out of charge points will continue and accelerate in the years ahead, and reduce all the damage to the environment and public health that follows. I commend this clause to the Committee.
Jonathan Reynolds
Having just passed clause 32, which ended first-year allowances on the basis they were little known about and ineffective, I cannot help but comment how clause 33 extends the first-year allowance for another technology for four years on the basis it will provide the incentives and drive Government policy in that direction. Forgive me for pointing out that there are mixed messages from Ministers on these clauses.
It is disheartening that this is one of the relatively few mentions of environmental issues in the Finance Bill. We were all at Mansion House in June when the Chancellor gave a speech about how we would lead the way on green finance, yet there have been no legislative measures to follow up on that promise. We still lag behind our European counterparts on things such as mandatory climate disclosure laws or sovereign green bonds, but we should welcome any measures we like the look of when we see them.
Transport is a major source of emissions and we agree that we rapidly need to shift away from fossil fuels towards electricity and renewable sources and, to a certain extent, hydrogen for heavier vehicles. Thankfully, electric vehicles are coming through the system quickly and are expected to move rapidly through their cost curves, getting cheaper and cheaper. I have been hugely impressed by the electric vehicles I have experienced. Some estimates have cost parity for purchasing an electric vehicle as soon as 2022, after which buying an electric vehicle will become cheaper than buying a fossil fuel powered car.
The transition to a decarbonised, clean and smart economy will offer the UK many advantages, particularly considering how tech-savvy and early adopting much of the UK population is. The Nissan LEAF is the most-sold electric vehicle in the world. I say with some local pride, as someone born in Sunderland, that Sunderland has been the sole producer in Europe of the Nissan LEAF, creating over 50,000 vehicles. Of course, electric vehicle and hybrid production in the UK has provided a £3 billion trade surplus.
With a growing list of countries setting a date to ban combustion vehicles and modelling showing strong uptake curves, the global move to electric vehicles will be rapid. The first mover advantage to capture supply chains and jobs in this coming market will be considerable.
Alex Sobel (Leeds North West) (Lab/Co-op)
Norway is planning to ban combustion vehicles by 2025—the incentives and the infrastructure in Norway are sufficient for that. We are not planning that until 2040. Does my hon. Friend agree that there is a policy failure not just on this measure but more generally in terms of building our electric vehicle infrastructure?
Jonathan Reynolds
I agree with my hon. Friend, who has taken a major interest in these issues both before and during his parliamentary career. The availability of charge points is the greatest concern when it comes to achieving this shift. My hon. Friend the Member for Manchester, Withington and I were just talking about the local charge points in Greater Manchester, which we have both experienced.
A recent World Wildlife Fund report on accelerating the electric vehicle transition made some predictions about how it might evolve. It said:
“Private charging infrastructure will be in most homes and many workplaces. The opportunity to charge at home rather than relying on public charging infrastructure is an attractive feature of electric vehicles, and we assume that owners who are able to charge at home will do so when convenient (for example overnight). Workplace chargers are also likely to be required; evidence suggests that around 20% of electric vehicles currently make use of workplace charging…In the 2040 scenario, 11 million home chargers and around 2.2 million workplace chargers are needed by 2030.”
That last point is key in relation to the clause.
Electric vehicle charging will be facilitated by a combination of home and workplace charging, running to millions of stations. That is why it is essential to grasp every chance to promote the installation of infrastructure in companies. We support this capital allowance to help achieve that. However, although it is a positive move, it is a drop in the ocean of what needs to be done to encourage the use of cleaner vehicles. More than half of new car registrations last year came from businesses, so ensuring that there is an attractive package to encourage companies that are reliant on cars to use electric vehicles is clearly fundamental to tackling emissions.
Will the Minister elaborate further on how this measure will work for smaller companies? Our concern is that smaller companies, which have vast competing spending priorities, may find it difficult to source the cash they need to build charge points. We would also like to know the Government’s long-term plans for the charging infrastructure investment fund, which has recently changed its grant system for the installation of plug points. Will the Minister elaborate on what the take-up of the programme has been among small businesses? How is the scheme being promoted to ensure the maximum possible take-up?
My hon. Friend the Member for Bootle raised a key issue about business rates. We must aim high to ensure workplace charging infrastructure is as widespread as possible. We should compare how this might evolve with the uptake of solar panels. A change in valuation methodology meant that some institutions had a 400% increase in their business rates after they deployed solar technology. That runs counter to everything we all want to incentivise. Why would we penalise those who lead the charge? In such a generous package of capital allowance for businesses, it is difficult to see why any Government would build a tax disadvantage into the system for users of renewable or climate change-solving technologies. That is not simply our view. That point has been heavily put across by trade associations, including the Solar Trade Association, which launched a fairly scathing attack on Budget 2018.
In conclusion, the extension of the first-year allowance on workplace charging infrastructure is a step in the right direction, but these things cannot operate in isolation. The Government must take serious further action urgently to promote the transition to a greener economy. Although this is a start, I hope the Minister can reassure us of the Government’s ambition to go even further.
Robert Jenrick
I hope I can reassure the hon. Gentleman on those points. The first point was about why we would choose to extend this measure at the same time as bringing another to an end. We chose to bring the other one to an end because the evidence was not there to support its continuation. Having given the matter careful analysis, we believed that there was a better way forward.
We are still at a very early stage in the process. It is too early to assess the precise impact of this measure. We know that the total number of electric charge point connections has increased from more than 13,000 in November 2017 to more than 18,000 in October 2018—a 38% increase. Clearly, we would like that to accelerate even further, because that is still a small number across the whole of the country. We believe, anecdotally, that the measure is working and that it has been welcomed by the industry, but it is too early to assess that precisely. We are placing an extension in the Bill to ensure it can continue and to give certainty to the market. We will review this measure in time, as we have done with other measures, to determine its effectiveness. If it is not working correctly, we will take action accordingly.
The hon. Gentleman asked why the Budget did not do more for the environment. Of course, I contest that. The Budget did set out a wide range of measures to help the environment, from the new plastics tax, which will be consulted on and legislated on in the next Finance Bill—we hope it will be one of the world’s first plastic packaging taxes—to the measures already set out in the Finance Bill, such as this one and the vehicle excise duty measure on taxis, which we brought into effect a year early, and which has ensured that cities such as London and Manchester are seeing a great increase in low emission taxis.
We have already spoken about the industrial energy transformation fund, which we hope will put heavy users of energy on a more sustainable path. These things build on recent announcements, whether it is the industrial strategy and its commitment to the environment and to clean growth, or the Road to Zero strategy with respect to electric vehicles. Across Government, we are taking a wide range of measures to support the environment and to help businesses and individuals to cut their energy bills and lower carbon emissions.
The hon. Gentleman asked about the electric vehicle charging infrastructure fund. This was announced at the Budget last year, and we have now progressed the fund. We are in the final stages of selecting a fund manager, and once they are appointed we expect the fund to be formally launched and to start investing in early 2019. I hope to be able to give the hon. Gentleman and others more information on that very shortly so that businesses that wish to participate in it can start to access that £200 million and we can increase public and private investment in charging infrastructure very rapidly.
Small businesses, which the hon. Gentleman raised, will be able to claim under the annual investment allowances, which we have debated on a number of occasions. As I have said before, 99% of businesses will be able to claim under the annual investment allowances, which is a considerable increase as a result of the Budget and will help businesses that want to invest in this area.
On solar, the feed-in tariff scheme has supported over 800,000 small-scale installations, generating enough electricity to power 2 million homes. The scheme has helped to drive down the cost of renewable electricity, including small-scale solar photovoltaic. We therefore think it is right to protect consumers and to review the incentives as costs begin to fall. The Government—and indeed the Government before us—have made significant interventions in this area. With those reassurances, I hope the hon. Gentleman will support the clause.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Qualifying expenditure: buildings, structures and land
Jonathan Reynolds
I beg to move amendment 79, in clause 34, page 19, line 38, at end insert—
“(4) The Chancellor of the Exchequer must lay before the House of Commons a report on any consultation undertaken on the provisions in this section within two months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to report on any consultation undertaken on the provisions in this clause.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
New clause 2—Review of changes to capital allowances—
“(1) The Chancellor of the Exchequer must review the effect of the changes to capital allowances in sections 29 to 34 and Schedule 12 in each part of the United Kingdom and each region of England 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 the effects of the changes on—
(a) business investment,
(b) employment, and
(c) productivity.
(3) The review must also estimate the effects on the changes if—
(a) the UK leaves the European Union without a negotiated withdrawal agreement
(b) the UK leaves the European Union following a negotiated withdrawal agreement, and remains in the single market and customs union, or
(c) the UK leaves the European Union following a negotiated withdrawal agreement, and does not remain in the single market and customs union.
(4) 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.”
New clause 5—Aggregate effect of changes to corporation tax and capital allowances—
“The Chancellor of the Exchequer must, within one year of the passing of this Act, lay before the House of Commons an analysis of the effect of the changes to corporation tax and capital allowances made under sections 25 to 28 and 29 to 34 of this Act.”
This new clause would require the Chancellor of the Exchequer to review the aggregate effect of the changes to corporation tax and capital allowances made under this Act.
Jonathan Reynolds
I regret to inform the Committee that we are reaching the end of the section of the Bill relating to capital allowances.
The capital allowances regime clearly requires a holistic review by the Government. We all agree that we want to make the UK a competitive and attractive place for businesses. As we contemplate our departure from the EU, that requirement has never been more pressing. Yet, these measures all come at a cost. The annual investment allowance increase will cost £1.24 billion in its first three years. By 2023-24, the buildings and construction expenditure allowance will cost over half a billion pounds. They need an assessment in the round so we can aggregate these reliefs against the corporation tax reductions and see what the package really looks like, what the economic justification is for these changes, and whether that money should be reprioritised elsewhere.
With the UK becoming such an outlier among other developed countries in relation to corporation tax, with an eventual rate of corporation tax well below the average of OECD countries, we need to ensure that our overall package of measures is properly targeted. That is why Labour is moving new clause 5, which would oblige the Government to present an analysis in a year’s time of the full effect of these changes and the corporation tax alterations. We need to understand what this package looks like in the round, whether it is providing value for money, and what the real cost is to the taxpayer in aggregate. Only then can we make a judgment on whether this is the right and appropriate way to spend the money, when the UK has so many other priorities after eight difficult years of austerity.
That is why I urge Members to vote for new clause 5, which would obligate the Government to publish a review in a year’s time. By then, we will be in a position to see how these allowances have been taken up, as well as to make some initial judgments on Britain’s business investment landscape post our exit from the European Union.
Clause 34 will amend the Capital Allowances Act 2001 to clarify that land alterations qualify for capital allowances where plant or machinery is installed that qualifies for the same allowances. It helps to clarify the qualifications in place for businesses that seek to carry out such work. The Opposition have no particular objection to ending the mismatch, but this is another tidying-up measure. Will the Minister provide some insight on whether any further such measures are to come? How was the inconsistency brought to the Government’s attention? Is there any estimate of the cost associated with this measure? There should be greater transparency and understanding of exactly where such a measure has come from. If there has been pressure from a particular sector, that needs to be clear. Opposition amendment 79 calls for the Government to present to the House a report on any consultation undertaken on these provisions. I call on Members to vote for this amendment to provide proper transparency on process to the House, so that the cost and benefit can be properly scrutinised and we can assess the motivations for bringing about this change.
Kirsty Blackman
It is a pleasure to speak in this Committee and to serve under your chairpersonship, Ms Dorries. I want to focus my comments on new clause 2, but if the Labour party presses amendment 79 or new clause 5 to a vote, we will support it. What we are trying to do in new clause 2 is not dissimilar from what Labour is trying to do in new clause 5—we are just going about it in slightly different ways. Putting the two new clauses together would make a lot of sense, to encompass what we are both trying to achieve.
New clause 2 looks at clauses 29 to 34 and schedule 12 to the Bill and provides for a review of the changes to capital allowances. It asks for a number of reviews and for us to measure against a number of outcomes that we hope the Government will seek through any changes they make to capital allowances or through having a capital allowances system in the first place.
The first review is of business investment. What changes do the Government expect for business investment as a result of all the changes made to capital allowances? Any tax system tries to do three things: disincentivise undesirable behaviour, incentivise desirable behaviour and get money for the Exchequer. It is important to consider whether the legislation does any of those things in the way we would hope. Business investment is key; surely, the point of capital allowances is to incentivise good business investment. Therefore, it is reasonable that the Government come back and explain to us the potential changes they expect to business investment resulting from their legislative changes.
The second review is of employment. That is important; the Government are never off their high horse about the level of employment they say we have. If they hope the changes will make a difference to employment levels, they should tell us how much change they expect so that we can measure their performance against whether that has been achieved. We just heard that the previous tax allowances put in place for first-year allowances did not have the desired effect, and the Government have to change them. Therefore, it would be useful to know what the Government expect to happen to the number of employed people as a result of their changes. We can measure the Government against that and say whether the measure has failed or has achieved what they intended to achieve.
Vicky Ford (Chelmsford) (Con)
I would like to drill down a little on the point about the customs union. As I read the withdrawal agreement and the future framework, the Government have negotiated single market access that is tariff-free and quota-free and that carries no rules of origin checks. Effectively, the benefits of the customs union are in that package. What more does the hon. Lady want?
Kirsty Blackman
The other day, I was talking about the benefits of being in the customs union to a trade expert, who explained to me in quite simple—but incredibly useful—terms the difference between being in a customs union and not being in one. Within a customs union, the starting point is the assumption that the appropriate tariff has already been paid on every good, whereas outside the customs union the assumption is that that has to be proved. Even without rules of origin checks, we would be starting from a different point of view. However, I am not clear that the withdrawal agreement has agreed that there will not be rules of origin checks. I do not understand how the UK Government can say in their financial analysis paper that they will have a free trade agreement with China but no rules of origin checks for goods travelling between the UK and the EU.
Vicky Ford
The Government negotiating team have offered briefings on this deal to every Member of the House from every party. Establishing the answer to those rules of origin—
Kirsty Blackman
I was just looking to wind up—[Laughter.] That is not entirely what I meant.
We are seeking more information from the Government about what they intend to achieve. It is incredibly important to do this in the context of Brexit, and it is incredibly important that companies know what the Government are trying to achieve, so that they are aware of what they are being incentivised or disincentivised to do and what the Government’s changes to capital allowances are trying to encourage them to do. If more information could be provided to us and the general public, that would be hugely appreciated. I hope that we can vote on this new clause when we come to the votes at the end.
The Financial Secretary to the Treasury (Mel Stride)
It is a pleasure to serve under your chairmanship, Ms Dorries. I thank the hon. Members for Stalybridge and Hyde and for Aberdeen North for their contributions, and I will endeavour to pick up the various points that have been made.
Since 1994, capital allowances have not been available for most buildings and structures, including aqueducts, bridges, canals, roads and tunnels. It has been long understood by HMRC—and by taxpayers—that nobody can claim plant and machinery allowances where the expenditure relates to an excluded structure or building. Specifically, nobody can claim capital allowances for expenditure on altering land for the purpose of installing an asset that is excluded from allowances. Expenditure on buildings and structures is excluded in this way by sections 21 and 22 of the Capital Allowances Act 2001.
To answer one of the specific points raised by the hon. Member for Stalybridge and Hyde, doubt has been cast on that principle by a recent tribunal decision, which HMRC is appealing against. The purpose of the clause is to ensure that the law remains clear and that plant and machinery allowances can be claimed only in relation to alterations of land to install qualifying assets. The clause clarifies the legislation to provide certainty going forward and to protect the Exchequer from potential spurious and windfall claims for historical expenditure.
The clause should be read alongside the introduction of a new structures and buildings allowance, which in time will become a very substantial relief that fills a significant gap in our capital allowances system. Taxpayers who alter land for the purpose of installing a structure or building should claim this new allowance—we covered it when debating clause 29—and should not claim the plant and machinery allowance.
As I have said, the clause clarifies that expenditure on land alterations cannot qualify for capital allowances unless it relates to the installation of qualifying plant and machinery. No expenditure on structures or buildings, as defined in sections 21 and 22 of the Capital Allowances Act 2001, will be counted as plant. This will apply to all capital allowance claims made from 29 October 2018 onwards, but not to claims already in the system—to do otherwise would be unfair. However, as this does nothing more than restore the commonly held interpretation of the law, we do not consider it to disadvantage any company that has already incurred expenditure. If we did not make this amendment, there is a strong probability that some businesses might make spurious or windfall claims, as there is no time limit for making a capital allowances claim.
Amendment 79 seeks a legislative commitment by the Government to report on any consultations that are undertaken on this measure. However, the measure addresses a potential source of ambiguity in the capital allowances legislation and protects revenue that we need for our vital public services. That needs to be done quickly to maintain a level playing field and to provide certainty for businesses incurring expenditure in this area. The Government’s view is that this measure is not best supported by consultation, which would delay this change. In any case, it restores the interpretation of the law that HMRC and taxpayers commonly understood before the recent tribunal case.
New clause 2 aims to commit the Government to report on the impact of the capital allowances changes in the Bill, including under a number of different EU withdrawal scenarios, as well as on the impact on different parts of the United Kingdom. The Office for Budget Responsibility has provided its independent view of the impact of these policies, in particular on business investment, in its “Economic and fiscal outlook” report, in the box titled “The economic effects of policy measures”. When available, HMRC will publish updated statistics on capital allowances claimed, split by asset type and by industry. Data on capital allowances claimed are based on where companies are registered rather than where the activity itself takes place. Requiring businesses to provide the more detailed information that this report would require about the precise location of their expenditure would represent a significant new administrative burden.
On the impact of the policies in different EU exit scenarios, the capital allowances package in the Bill is intended to boost business investment in all scenarios. The Government have already laid before Parliament a written ministerial statement under the title “Exiting the European Union: publications”, representing cross-Whitehall economic analysis on the long-term impacts of an EU exit on the UK economy, its sectors, nations and regions and the public finances. The document is available on gov.uk and from the Printed Paper Office. Committee members will be aware that I also answered an urgent question at length on this very matter.
New clause 5 is intended to commit the Government to assess the aggregate effects of the changes to corporation tax and capital allowances made under the Bill. However, that information is already largely set out in the public domain. The independent Office for Budget Responsibility certifies the Exchequer impact of all the measures in the Bill, set out in table 2.1 and table 2.2 of Budget 2018. When they are announced, the OBR will also provide its independent view of the impact of these policies on business investment in its “Economic and fiscal outlook” report, in the box titled “The economic effects of policy measures”.
Finally, every year HMRC will publish updated statistics breaking down corporation tax paid and capital allowances claimed. For those reasons, I urge the Committee to reject the amendment and new clauses, and I
commend the clause to the Committee.
Jonathan Reynolds
We would like to press amendment 79 to a vote.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss that schedule 13 be the Thirteenth schedule to the Bill.
Mel Stride
Clause 35 and schedule 13 amend various parts of tax legislation to ensure that, despite changes to the treatment of leases in accounting standards, the legislation continues to operate as intended and does not give rise to unfair outcomes.
The long funding lease regime, the corporate interest restriction rules, and certain other tax rules require taxpayers to distinguish between operating and finance leases in order to determine their tax treatment. The tax legislation has relied on accounting standards to make that distinction, but changes to the international accounting standards mean that from 1 January 2019 companies that lease assets will cease to distinguish between operating and finance leases in their accounts.
That change will affect companies that prepare their accounts using international accounting standards and the UK accounting framework financial reporting standard 101, but not the alternative UK accounting framework FRS 102. It is therefore necessary for us to amend the tax legislation to ensure that it continues to operate as intended, and that companies do not face different tax outcomes depending on the accounting standards that they use.
The clause will mean that for tax purposes lessees will be required to continue to distinguish between operating and finance leases, even where that distinction is no longer required for accounting purposes. That will maintain the status quo and avoid unfair outcomes. Additionally, the changes to the treatment of leases in the accounting standards may lead to large tax adjustments on transition. To ensure that those adjustments do not lead to unfair outcomes or an excessive administrative burden, the adjustments will be spread over the weighted average length of all leases held by a company following the adoption of the new accounting standard.
The clause will ensure that, despite changes to the treatment of leases in some accounting standards, tax regimes that rely on those accounting standards continue to operate as intended. I therefore commend the clause and schedule 13 to the Committee.
Question put and agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Schedule 13 agreed to.
Clause 36
Oil activities: transferable tax history
The Chair
With this it will be convenient to discuss the following:
Amendment 84, in schedule 14, page 260, line 15, leave out sub-paragraph (d).
The provision as drafted allows companies to transfer TTH worth double the value of anticipated decommissioning costs. This reduces the incentive for companies towards efficiencies in decommissioning costs and paves the way for decommissioning-related tax repayments far bigger than the companies are currently acknowledging. This amendment removes that provision.
Amendment 81, in schedule 14, page 261, line 29, at end insert—
“(aa) assessing the impact on employment, skills and the Exchequer from the asset’s production life and planned decommissioning phase, and”
Amendment 89, in schedule 14, page 261, line 42, at end insert—
“(d) includes an assessment of the impact on the Exchequer from the amount spent on directly employed and contracted staff by the seller over the production life of the asset to date; and the impact on the Exchequer from the buyer’s plans for employed and contracted staff up to and including the decommissioning stage.”
This amendment requires a decommissioning security agreement to include an assessment of the impact on the Exchequer from the amount spent on staff, in order for that agreement to be qualifying for the purposes of this Schedule.
Amendment 85, in schedule 14, page 268, line 40, at end insert—
“(aa) the amount spent by the purchaser in post-acquisition periods on new capital investment, major maintenance work, retraining of redundant staff, initiatives to reduce methane emissions or initiatives to introduce carbon-capture techniques into the operations in relation to the relevant TTH assets (‘post-acquisition qualifying investment’)”.
This amendment, and amendments 86 and 87 incentivize capital investment by new purchasers in job creation and emissions reductions. Combined, the amendments limit the TTH which may be claimed to an amount equal to such investment.
Amendment 86, in schedule 14, page 269, line 3 at end insert—
“(c) the amount by which total post-acquisition qualifying investment exceeded the higher of excess decommissioning expenditure and the total TTH amount as calculated for the first activation period under paragraph 35.”
See explanatory statement for Amendment 85.
Amendment 87, in schedule 14, page 269, line 40, at end insert—
“(c) provided that the total activated TTH amount may never exceed the purchaser’s post-acquisition qualifying investment for the relevant TTH assets or TTH oil fields.”
See explanatory statement for Amendment 85.
That schedule 14 be the Fourteenth schedule to the Bill.
Clause 37 stand part.
Robert Jenrick
Clause 36 and schedule 14 introduce a transferable tax history—TTH, as it has become known—mechanism, and clause 37 amends the petroleum revenue tax rules for retained decommissioning costs. Both measures will apply to oil and gas companies operating on the UK continental shelf, and to transactions that receive approval from the Oil and Gas Authority or relevant regulator on or after 1 November 2018.
These measures are designed to encourage investment in late-life oil and gas assets that are approaching the point of decommissioning, prolonging the life of the basin and sustaining jobs across the UK, but in particular in north-east Scotland. Decommissioning costs are generally incurred at the end of a field’s productive life, when taxable profits are not being generated. To provide tax relief for those costs, oil and gas companies within the UK’s ring fence tax regime can carry them back against taxable profits generated since 2002. That prevents decommissioning from being performed early for tax purposes, thereby helping to achieve the Government’s goal of maximising economic recovery of oil and gas.
When a new entrant without a history of taxable profits acquires an old field, there is a risk that the decommissioning costs of the field will exceed the taxable profits generated by the new owner, preventing effective tax relief via the traditional carry-back mechanism and leaving the buyer in a worse position than the seller would have been in. That can make old fields unattractive to new entrants and deter much-needed investment in this important industry. That is a growing problem in an ageing basin, but one that we now believe can be resolved by our innovative TTH measure.
The change to the PRT rules addresses the increasingly common scenario of a seller retaining some or all of a decommissioning liability after selling a field. The PRT system currently requires the seller to remain on the relevant production licence to receive tax relief for any retained costs. However, doing so often requires complex tax structuring that serves no particular purpose other than to protect the seller’s tax position.
The changes made by these measures will create the right environment for much-needed new investment in our older fields. They will introduce a TTH mechanism that provides new investors with the certainty that they require about the tax relief they will receive for decommissioning costs. That will allow new deals to proceed, injecting new energy into a basin that still has 10 billion to 20 billion barrels of oil remaining. Initial feedback from the industry has been extremely positive—this change is already well received internationally and is helping new deals to continue.
TTH will allow companies selling oil and gas fields to transfer some of their tax payment history to the buyers of those fields. The buyers will then be able to set the costs of decommissioning the field against the TTH to generate a repayment. It should be noted that that should not be an extra cost to the Exchequer, as the repayment only replaces what would otherwise have been made by the seller. It will level the playing field between sellers and buyers of oil and gas fields, encouraging investment by providing new entrants with certainty on the tax relief available for their decommissioning costs. The new investment into the basin as a result of TTH is expected to increase tax receipts from the sector by £75 million over the scorecard period.
The clause also makes changes to enable petroleum revenue tax relief when a seller retains a decommissioning liability. A tax deduction will now become available to the buyer where the seller subsequently incurs decommissioning expenditure or where the seller contributes to the buyer’s decommissioning costs. That will simplify the way that older oilfields can be sold to new investors and help to prolong their productive lives. Before turning to the amendments, I thank all hon. Members, including the hon. Member for Aberdeen North, who participated in the discussions that led to this important measure, which we believe will help the community around Aberdeen in particular, but also those across the country.
Amendments 81 and 89 seek to amend the definition of a decommissioning security agreement within the TTH legislation in schedule 14. Decommissioning security agreements are specific commercial agreements that provide assurance to partners in a field for which funds will be available for decommissioning. The proposed changes to the definition would make the decommissioning security agreement required for a TTH election incompatible with the industry standard decommissioning security agreement, which, in our opinion, would make TTH elections impracticable and unworkable for the vast majority of our oil and gas fields, which rely on the well-established and respected industry standard agreement. TTH has been carefully designed to leverage estimates of decommissioning costs, which are already used in decommissioning security agreements, taking note of the history of the agreements. The agreements are confidential and, as one might imagine, highly commercially sensitive and are typically shared only between the joint venture partners and HMRC, in accordance with taxpayer confidentiality.
Kirsty Blackman
Will the Minister tell us a little bit about the process that the Government went through in creating the Bill, and the work done between the Government and industry to ensure that the legislation works?
Robert Jenrick
Yes, I will turn to that. As the hon. Lady knows—she participated in and attended at least one meeting I held in Aberdeen with the Oil and Gas Authority and stakeholders—we have carried out a great deal of careful consideration and consultation with the industry, because TTH will succeed only if it works for both the buyers and the sellers. Our sole objective is not to raise revenue for the Exchequer but to extend the life of the basin and to create jobs and investment for an important part of the United Kingdom.
The new investment encouraged by TTH will prolong the life of the basin, which has 10 billion to 20 billion more barrels left, helping to protect the hundreds of thousands of jobs I have already mentioned. We believe that the amendments would introduce counterproductive additional requirements and inhibit the use of TTH. I urge the Committee to reject them. They may be well intentioned, but they would be contrary to the objective of the measure.
Amendment 84 would limit the maximum amount of tax history that a seller can transfer under a TTH election. The TTH legislation currently caps the maximum amount of tax history that can be transferred under a TTH election to double the decommissioning cost estimate agreed for a decommissioning security agreement. Decommissioning costs are inherently uncertain and can increase significantly for reasons outside the control of the operator and for reasons that were unknown at the time of the sale. For that reason, they are typically subject to a very large range of accuracy. For fields still years away from decommissioning, the range often includes a 100% cost increase. TTH has been designed to be compatible with this regularly accepted range of estimates and to ensure that the buyer cannot end up in a worse position than the seller.
Kirsty Blackman
I agree with the Minister’s point about fluctuations. Does he agree that the cost of hiring boats has fluctuated massively over the past five years? If we had looked at this in 2010, we could not have predicted the fluctuations in just that small but nevertheless incredibly expensive area for oil and gas companies.
Robert Jenrick
The hon. Lady speaks from her deep knowledge of this area. It is absolutely right that some costs have fallen, particularly since the fall in the oil price, which has driven significant efficiencies in the sector, but other costs are rising. New technologies are coming on board. Taking on a project that entails such uncertainty while being tied to a single estimate of decommissioning costs, without a wide range as we have allowed in the measure, would be a major disincentive for a buyer coming in to one of these projects.
Let me address the concern inherent in the amendments about disincentivising cost-reduction, or that the measure, in providing such a wide field, would make it unlikely for buyers to try to reduce the cost and therefore would gain higher tax relief as a result. I think the buyer will retain a strong incentive to minimise total costs, as they will be liable for meeting the remainder of the decommissioning costs. The amendment is therefore unnecessarily restrictive and would harm TTH.
Amendments 85, 86 and 87 and schedule 14 would change the TTH activation mechanism to restrict decommissioning tax relief on a field, so that it could not exceed the level of new capital investment made by a purchaser. Decommissioning costs generally occur at the end of a field’s life, when its reserves are exhausted and new capital investment will not result in further economic recovery of oil or gas reserves. For many purchasers it would therefore not be practical to make significant capital investment during the decommissioning process.
Furthermore, requiring the purchaser to match what can be very high decommissioning costs with an equal level of new capital investment could easily bankrupt many of the smaller operators that we want to take part in the industry. The best way to ensure that we get new investment into the industry, to protect jobs and create new ones, and to maximise economic recovery of our natural resources, is to have an effective TTH mechanism. That is exactly what we believe we have achieved, as a result of the deep consultation that we have conducted with industry, which I will explain in a moment. The amendments would make TTH completely unattractive and ineffective. I therefore urge the Committee to reject them.
In answer to the hon. Member for Aberdeen North, I will briefly summarise the steps that we have taken to consult with the industry since TTH was announced at Budget 2017. Even prior to Budget 2017, the topic had been discussed with stakeholders for some time. We have built on numerous discussions held between July and December 2016, by issuing at the time of the Budget a discussion paper on tax issues affecting late-life oil and gas assets. We received 28 detailed responses and then held an expert panel, working with the industry to design the measure. I myself held two meetings in Aberdeen this year with the Oil and Gas Authority and stakeholders. Draft legislation was published over the summer on L-day, for technical consultation with the industry. We received further feedback as a result and much of that has been incorporated into the final legislation. Although there are always ways to take the measure further, we believe we have reached a point where the industry is satisfied and welcomes the steps we have taken.
Peter Dowd
Trade unions have argued that more conditions need to be attached to TTH to bring it in line with OGA and maximising economic recovery objectives, and for broader commercial behaviours, which should include minimum compliance with UK employment law—workers being paid and employers paying tax and national insurance. Did that form any part of the discussions with the industry and stakeholders?
Robert Jenrick
I do not think we spoke specifically with trade unions but we did speak with a wide range of industry stakeholders. To return to TTH, its purpose is not to give an incentive to industry that it would not ordinarily have. The owner or operator of one of those fields would already be able to take advantage of those tax reliefs to set aside decommissioning costs, but they would be difficult to sell on to a new operator. This measure will make it much easier for new entrants to enter the market, for fields to continue or be developed further, and for jobs to be created that would not ordinarily be created. We believe that this is a win-win for all involved: for the Exchequer, which will make modest additional receipts as a result, for industry, and for all those employed in north-east Scotland—I see the hon. Member for Aberdeen North nodding. I believe this measure will be widely welcomed and well received by all stakeholders in the industry.
The best way to get new investment into our industry is, as I described, to protect jobs and maximise the economic recovery, and we believe that we have reached that point with this measure. The Government take their environmental responsibilities seriously, as we described when debating the previous clause. We have legally binding commitments to reduce greenhouse gas emissions under the Climate Change Act 2008 and the system of carbon budgets it sets out, as well as the Paris agreement that we ratified in November 2016. Nothing in this measure takes away from our efforts elsewhere, but we want the UK oil and gas industry to continue to thrive. It has been through a difficult period following a significant reduction in the price of oil, and that price has fallen once more since the Budget. That industry makes an important contribution to the UK economy, supports more than 280,000 jobs, and provides around half our primary energy needs. To date, it has paid around £330 billion in production taxes. By introducing these changes for late-life oil and gas assets, we hope to encourage new investment in the UK continental shelf, and I commend the clause to the House.
Clive Lewis
It is a pleasure to serve under your chairmanship, Ms Dorries. I look forward to speaking on behalf of the Opposition, and I draw attention to my entry in the Register of Members’ Financial Interests. I am particularly pleased to speak to our amendments to the clauses and schedule that relate to transferable tax history, and I hope that the Minister will answer some questions on the proposed measures.
As the Minister outlined, the clause creates a mechanism for companies that are buying equity in UK oil and gas fields to acquire the tax histories of the selling companies and use them to reduce the future decommissioning costs of those fields. The Government’s intent, as we understand it, is to extend production from late-life oil and gas fields in the UK by encouraging their purchase from companies that are no longer willing to extract from them by companies that are. The Government seek to achieve that by overcoming what they believe is a barrier to sales—namely the concern that new companies will not make enough profit from the field to pay for future decommissioning costs. Transferable tax history will allow the buying company to draw on the taxes paid by the previous owners to claim the maximum tax relief possible for decommissioning.
The Opposition believe there are a number of fundamental flaws to the proposals. Transferable tax history is fiscally irresponsible. It expands the very tax breaks that put the Exchequer on the hook for exorbitant future decommissioning liabilities, which the Government have set aside no money to pay for. It creates perverse incentives, providing a windfall for companies exiting the North sea, and it fails to ensure a long-term commitment from incoming buyers on workers’ rights, capital investment and emissions reductions for the benefit of the UK. It also totally disregards the UK’s role in avoiding catastrophic climate change, and does nothing to address the urgent need for a just transition to a low-carbon economy.
With that in mind, amendments 81 to 89 seek to ensure that no transfers are approved that increase taxpayer liability for decommissioning tax-related rebates. They would also limit TTH transfers to current estimates for decommissioning costs, thus ensuring that transferable tax history does not spiral and is no higher than estimated for current reliefs. The Bill currently allows companies to transfer tax history that is worth double the value of anticipated decommissioning costs. The UK taxpayer is already committed to footing the bill for a staggering £24 billion of the estimated £64 billion decommissioning costs in the coming decades, despite the massive profits made by oil and gas companies from the North sea. Do the Government expect the £24 billion decommissioning bill to double to £48 billion over the life cycle of TTH? The UK cannot keep spending revenues that it knows it will have to pay back and that are derived from oil we cannot afford to burn, yet TTH doubles down on those policy failures. If that is not addressed now by ring-fencing a portion of oil revenue to prepare for those costs, our fiscal and environmental future will become hostage to oil revenues.
The most staggering thing about this measure, which perhaps the Minister will confirm, is that the Government have set aside no decommissioning fund to deal with the consequences of these promises. As it stands, our share of decommissioning costs is completely unfunded, and a consequence of short-term priorities and incentivising investment decisions that have been taken regardless of long-term fiscal planning and environmental exigencies. Will the Minister explain the long-term fiscal strategy for dealing with those costs when they inevitably land on the taxpayer in the not-too-distant future?
The Government’s arguments appear to rest on the assumption that additional decommissioning tax rebates will be compensated for by higher revenues from oil and gas fields, generated by increased investment and production by buyers. There is, however, an alarming lack of evidence to support that assumption, and detailed modelling of the long-term impact on decommissioning costs is conspicuously absent. Indeed, it could be argued that TTH reduces the incentives for the buying companies to increase production and generate more revenues, so have the Government considered the potential implications of that? It is perhaps unsurprising that the Government have provided no data on how much additional decommissioning rebate the Treasury might give away due to TTH, and neither have they undertaken any analysis of what would happen in a future scenario in which the oil price changes. Will the Minister commit to conducting such analysis and present the results to the House?
In our view, the measure reduces the incentive for companies to move towards efficiencies and decommissioning costs, and paves the way for decommissioning-related tax repayments that are far bigger than those companies are acknowledging. The clause is representative of the Finance Bill as a whole: it fails to deliver for the people of this country who are so desperately in need of investment in our public services, and instead it favours tax cuts for the wealthiest corporations, with the taxpayer left vulnerable to huge potential payouts. Our amendment would remove that provision and ensure that runaway decommissioning costs will not become a taxpayer risk.
Moving on, amendments 81, 85 and 86 seek to incentivise capital investment by new purchasers in job creation and emissions reductions—two crucial things that the Bill does not address. Exacerbating the problem is the fact that no clear plan has been set out by Government in the Bill to ensure a commitment to continued investment and employment from incoming buyers. Will the Minister tell us what plans he will put in place to ensure job security? Will he consider making TTH transfers conditional on maintaining employment levels? Similarly, will the Government consider limiting TTH claims to incoming companies’ investment in infrastructure, maintenance, retraining and methane reduction?
The irony of TTH becomes clear when looking at that last point. The stated aim of TTH is to prolong the life of North sea assets, yet it has the potential to do the opposite, reducing incentives for incoming companies fully to develop late-life fields. Currently, a new entrant to the North sea would have to ensure several years of production to generate sufficient taxable profits fully to carry back decommissioning losses. TTH removes that incentive. Rather than ensuring sufficient production, should the oil price dip, a company can simply claim against transfer tax history.
Far from ensuring stable future investment, the irony is that TTH has the potential to subsidise the cost of an early exit should the oil market turn against the companies, thereby making UK jobs in that industry more, not less, vulnerable to market conditions. Amendments 81, 85 and 86 limit the TTH history that may be claimed to an amount equal to such investment, ensuring that the measure will not result in increased future liabilities for the Exchequer. They will also act as a starting point for addressing issues of job security and the environment, which I will come on to in more detail.
Amendment 89 builds on ideas that the Committee has already discussed, and extends them to a decommissioning security agreement. It would require such an agreement to include an assessment of the impact on the Exchequer of the amount spent on staff in order for the agreement to qualify under the schedule. The amendment seeks to encourage transparency and accountability between the seller and the buying company, ensuring that the cost of staff, and expectations for staff retention levels, are made clear, and I look forward to hearing the Minister’s response.
There are a number of additional questions about the clause. The first expands on the issue of workers’ rights. Although the Government may argue that transferable tax history is a way of protecting jobs by extending the life of those assets, research by Oil Change International, Platform and Unite, which represent those workers, found that major North sea tax cuts over the last 40 years have not led to higher employment, and neither did tax rises reduce employment. Will the Minister say what the net flow of revenue has been between the Treasury and North sea oil and gas companies over the last three years? It seems clear that those companies have used the raft of recent tax cuts not to create new jobs—160,000 have gone in the last three years—but to enrich their shareholders.
How can the Government ensure that TTH will work in the interests of workers employed on those assets? No clauses in the Bill provide safeguards for workers’ jobs and workplace rights—it seems that the benefits of TTH will go to the private owners of oil and gas companies, and that the clause has been drafted in their interests alone. We argue that it is the Government’s responsibility to promote the stability of jobs in the region, and to ensure they are protected once smaller businesses take over the running of those sites. Will the Minister commit to conduct an analysis of the stability and security of those jobs, including the impact of the provisions, and to share that with the House?
Secondly, there is a huge concern about the environmental consequences of TTH and the encouragement of further exploitation of oil and gas in the North sea. The Government have yet properly to explain how the proposed policy fits with the UK’s commitment to the Paris climate agreement. Despite the continued claim that the UK is a global leader in taking action to meet those targets, the Government’s policies continue to fall far short of their green rhetoric. Climate science states clearly that to avoid global warming of more than 1.5°, at least 80% of known oil and gas reserves must stay in the ground. Every nation bears some degree of responsibility for leaving a portion of its fossil fuel reserves untouched.
Rather than assessing purely commercial viability, we should also assess how much remaining oil and gas in the UK can be exploited within the confines of the Paris climate agreement. It would therefore be helpful to know if and how the Government intend to assess the compatibility of TTH with that agreement. Do the Government have a view on how much of the UK’s remaining 7.5 million barrels of discovered undeveloped oil and gas resources can be equitably developed if we are to play our part in meeting the Paris goals?
Ultimately, this issue ties into the Government’s wider policy of maximum economic recovery, by which they have committed to extracting as much oil and gas as is commercially viable. Recent reforms, such as tax reduction and the decommissioning relief deed, as well as the proposal before us, are designed to make ageing marginal fields attractive to investment, even if that means reducing the per-barrel tax take or subsidising decommissioning costs to improve corporate returns. That approach is wholly inappropriate in a climate-constrained world, and it is entirely inconsistent with the Paris agreement, which requires not only a moratorium on new exploration, but the winding down of a substantial portion of current projects. In short, we need sustainable economic recovery, with Paris-compatible maximum-production targets, and a strategy to determine which combination of oil fields can most safely, efficiently and equitably exhaust the UK’s quota.
Kirsty Blackman
To clarify, is the Labour party position now no longer to maximise economic recovery?
Clive Lewis
I sat on the Bill Committee for the setting up of the OGA three years ago, and we put forward amendments for sustainable economic recovery. I recall that the Scottish National party and the Conservative party favoured maximum economic recovery. That was a difference of opinion between the two sides back then.
Thirdly and finally, there are huge risks for the taxpayer. Those risks are acknowledged by the Office for Budget Responsibility, which concluded:
“The underlying tax base is volatile and the behavioural response to these relatively complex tax changes is uncertain. We have assigned this measure a ‘high’ uncertainty rating.”
Ultimately, the policy is based on a gamble on the future oil price. Independent expert research commissioned by Global Witness states that there could be a loss of over £3 billion in tax revenue for the Exchequer over 10 years, as compared with the tax take if TTH is not introduced.
Transferable tax history has an impact on the results of investment decisions only when oil prices are relatively low. When the prices are above $50 a barrel, the impact of and need for transferable tax history is less, or even nil, since the higher prices tend to mean higher taxable income to the acquirer, who would generate enough new taxable income on their own to cover decommissioning costs.
Transferable tax history effectively provides acquirers with a hedge against lower oil prices. It jeopardizes future tax returns to incentivise investment in fields that are likely to be less efficient and with lower yields, without any consideration of climate limits or guarantees on jobs. Why is the Exchequer willing to push that cost on to the taxpayer, rather than on to the multinational companies that make vast profits from production every year and are seemingly unwilling to share them with their own workers?
Kirsty Blackman
It is not often that I will be found in Committee agreeing with clauses in any Government Bill—least of all in a Finance Bill. However, on clauses 36 and 37, I agree with the provisions on transferable tax history and thank the Government for including them.
I first raised the issue of transferable tax history on the record in March 2016 in Westminster Hall. The debate was led by the hon. Member for Waveney (Peter Aldous), the chair of the all-party parliamentary group on the offshore oil and gas industry. It is an active all-party group and does a huge amount of lobbying of the Government. I am sure the Chancellor is sick of hearing from us about things to make the industry more effective and maximise economic recovery, as we have been discussing. We have regularly proposed transferable tax history since we first discovered that the industry was concerned.
I will give a little background on the importance of transferable tax history and the reasons why we have called for it. There are smaller oil and gas fields around the central ones. The decommissioning of the central oil and gas field results in secondary oil and gas fields, and the smaller pools around the site, no longer being accessible without the building of significant new infrastructure. It is therefore important that, whenever the Oil and Gas Authority takes decisions about which assets can and should be decommissioned at a given time, it does so in the full knowledge of the knock-on impact. We need to ensure that we continue to have access, for example, to the small pools that are not economically viable now but are likely to be once the technology has improved. Decisions about decommissioning must be taken with full knowledge of the knock-on impacts.
The other thing that must be taken into account with decommissioning is the effect that removing assets might have on future carbon capture and storage plans. It is incredibly important that some pipelines are kept in place for the carbon capture and storage systems that are currently in train to be viable. That is another thing the Oil and Gas Authority must consider when it decides whether a field is ready for decommissioning.
One recent issue is that big operators that own a huge number of oil and gas fields, some of which are reaching the end of their economic life, must put in enhanced oil recovery mechanisms to get the rest of the oil out, which means working at higher pressures and temperatures. Big companies that have a huge number of operations in the North sea and around the world will not want to put in the necessary effort to maximise the recovery from the asset. It will think, “Actually, we are not fussed about this asset. Potentially we should just decommission it.”
Clive Lewis
When the deliberations were taking place with the Government, was any consideration given to climate change, the Paris agreement and the sustainable level of oil extraction? Was the fact that we will need to leave a substantial amount of oil in the ground— 80% by some estimates—to ensure we play our part in tackling climate change and remaining within the Intergovernmental Panel on Climate Change targets taken into account?
Kirsty Blackman
The SNP position and the Government position is to maximise economic recovery. Oil extraction does not have a particular impact on carbon levels. It is not about oil extraction; it is about what is done with it afterwards. Carbon capture and storage, for example, has a major impact on reducing the emissions that are produced when oil and gas are used. We have been pushing very hard on carbon capture and storage. If the extracted oil is made into tarmac or plastic products, it would not cause the emissions that would be caused if it is put into a car or turned into heating oil.
The Government have taken steps on electric vehicles and the Scottish Government are doing incredible things to promote them. They are increasing insulation in houses, because domestic heating is a significant contributor to climate change. A lot is being done in this space, and it has been recognised that Scotland has the most ambitious climate change targets in the world.
All of our oil and gas fields will be decommissioned at some point. That is how this works. It was always going to be a time-limited industry, because eventually the oil and gas that can be recovered economically will run out. Once an oil and gas field is decommissioned, there will be no jobs associated with it anymore, and there will be none of the anciliary services, so it reduces the amount of employment. A new player may come into the market and want to take on a field that is not a major asset for a big oil and gas company—it would rather decommission the field because it has had enough of it and cannot be bothered with it anymore. Transferring the asset on to the new company means that, however much technology it uses, jobs will be associated with the asset—there will be no jobs if it is decommissioned. We will still get the decommissioning spend and the jobs associated with decommissioning—we will just get it later. The continuing jobs on the asset will be a good thing.
Vision 2035 is the Oil and Gas Authority’s vision, which has been picked up by the industry. It is still not talked about enough, particularly by parliamentarians. We are doing our best to raise its profile, but more hon. Members could do more. Vision 2035 is about what we want the oil and gas industry to look like in 2035. Hon. Members will understand that it is hugely important for the north-east of Scotland because of the significant percentage of jobs supported by the oil and gas industry, but it is important throughout the UK. A huge number of companies throughout England provide widgets—I tend to call goods widgets—that are used in oil and gas. If we do not have a successful North sea operation, those widgets will not be bought or used in the north.
Vision 2035 is about anchoring the supply chain. It is about a system where, once there is no viable oil and gas left in the North sea, we can continue to have oil and gas jobs anchored in the north-east of Scotland and throughout the UK. The only way we can do that is if we support the industry now and support the jobs that there are now. The Oil and Gas Authority states that the North sea and the UK continental shelf are seen as a gold standard. If a technology is trialled and works in the North sea, other countries will be happy to roll out that technology if it suits their sea conditions, because they know it has been tested in one of the most rigorous regimes and by some of the best people—they will know that the technology works.
For us to continue to have a viable oil and gas industry and a viable anchored supply chain, we need to ensure that we continue to be at the forefront of any technological changes. What we are doing on enhanced oil recovery is genuinely world leading. There are few fields in the world that are at the supermature stage of the North sea, so we are doing some of the most amazing things with technology. We can see by the increase in productivity in the North sea that technological advances have been made. If the companies making the widgets that improve production continue to be anchored here in the UK, we will be able to export those technologies and the services that sit alongside them around the world even when there is no recoverable oil and gas in the North sea.
Many of the companies that I have spoken to in Aberdeen and Aberdeenshire are providing widgets and, yes, they are exporting them, but they are also exporting the people power and the services that go with them through ongoing maintenance contracts, which are a big revenue stream for the region. It is important that we do not talk only about the amount of money oil and gas generates for the Exchequer through petroleum revenue tax and the money that comes in because oil and gas comes out of the ground. We should also talk about the wider impact on the economy, which can be felt particularly in the north-east of Scotland.
When the oil price went down, we had a massive issue with house prices and redundancies in the north-east of Scotland. Very real change took place not just in those jobs directly involved with operating assets in the North sea, but in those jobs working in supermarkets in Aberdeen or in hotels. We saw the knock-on impact on the economy. It is important for the entire economy that we pursue Vision 2035.
As I have said previously, and I think the Minister covered this, this has been a good example of the UK Government and industry working together. I particularly thank Mike Tholen and Romina Mele-Cornish from Oil & Gas UK, who worked incredibly hard on this. Romina had a particularly difficult time trying to explain transferable tax history to a room full of MPs and managed to get there eventually, but that was not an easy task because it is quite complicated. If people do not understand particularly how decommissioning liabilities work, we have to explain that first before explaining why TTH makes a big difference, which I think it really does.
Regarding the amendments tabled by the Labour party, there is a suggestion that companies will try to inflate the cost of decommissioning or will be disincentivised from reducing the cost of decommissioning as a result of TTH. I do not believe for a second that that is the case; the point the Minister made in relation to the increase and potential fluctuation in decommissioning costs is well made, but the other thing is that companies do not want to have to spend that money. They want decommissioning not to cost a huge amount of money. I am clear that when decommissioning is done, it must be done right, and the Oil and Gas Authority must be on top of that. I am not in favour of companies being able to drive down costs to the very furthest reaches. I want them to drive down costs, but I want the decommissioning to be done properly and at the right time.
Clive Lewis
Given the fact that this could see a doubling in the current estimate of reliefs to about £48 billion—I know there is uncertainty about what that could be, but the legislation here is for that potential for TTH to double the current estimate of £24 billion to £48 billion—can I be cheeky and ask the SNP this? If they did achieve independence, would they carry on with this policy as a sovereign Government and bear the costs associated with it?
Kirsty Blackman
In the event of independence, as was laid out in our White Paper, “Scotland’s Future”, the Scottish and UK Governments will have a negotiation about what will happen to decommissioning tax reliefs. We will do what we can to maximise economic harmony in the North sea and create jobs for the long term. It is incredibly important that those jobs are kept in the UK. The jobs could simply relocate if the Government do not take action. They could do more to support the supply chain, which has been squeezed by the cuts that the bigger operators have had to make because of the reduction in the oil price. The Government could do more to ensure that the supply chain companies are provided with the support that they need. The Oil & Gas Technology Centre is doing a very good job in that regard.
Access to finance is incredibly important so that companies can begin to support and monetise the technology that they have created. They have incredible reserves of intellectual property, some of which have not had the chance to be developed. I would rather not see the IP sold on to somebody else. I would rather the Government supported such development.
All the oilfields will need to be decommissioned eventually, but we want the jobs to be kept for the longer term. We are making a case for the maximum economic recovery to be made from the fields. It is important to note that once a field is decommissioned, there are no longer any jobs associated with that field. If we can prolong the life of that asset, we prolong a situation whereby jobs and therefore money for the Exchequer are secured. That is incredibly important for the north-east of Scotland. I will not support the Labour party’s amendments; I will choose to abstain. However, I will support the Government’s clause in relation to TTH. I thank them for taking action, although I would rather they had taken it sooner.
Sir Robert Syms
In my lifetime, the greatest British success story has been the development of North sea oil. As the Minister set out very clearly, billions of pounds of taxation have been generated. Under successive Governments we have had a tax regime that has been balanced against the risk of the investment that companies have had to take. It is therefore perfectly sensible at this stage of the maturity of the oilfields to use tax policy to ensure that the oilfields continue longer and continue to create jobs and to support, as the hon. Member for Aberdeen North said, the worldwide oil services sector based in Aberdeen.
I thank the Minister for what he is doing, which is perfectly sensible. It will generate more tax revenue. I hope we will oppose the amendments because they would make an intended simplification of the tax system more complicated. At the end of the day, we want people to continue to pump oil in the North sea and keep the jobs rolling. The Government’s policy supports that.
Robert Jenrick
In the few minutes that remain, I wish to thank the hon. Member for Aberdeen North for her comments and her helpful exposition of the purposes of this policy, which is to create jobs and wealth for the whole country, and particularly for the area that she represents. We would be concerned, as the hon. Lady said, if we created a two-tier system where new entrants—predominantly smaller and often innovative businesses that want to enter the market—had to live up to higher standards than the predominantly larger and more established businesses that they are trying to take on. As she has done, I thank some of the stakeholders who have helped us to develop this policy, including Oil & Gas UK, which has been excellent throughout the preparation of this measure.
Rather like my hon. Friend the Member for Poole, I am surprised by the Labour party’s position in this area. There has been a broad, cross-party consensus throughout my lifetime that North sea oil and gas are of benefit to the United Kingdom and an important asset to the country. Political risk will deter new investment into that field, if international companies that would like to invest in the North sea oil and gas sector believe that the Opposition in the United Kingdom are likely to increase their taxes, make those taxes more complex and disincentivise future investment.
Clive Lewis
We would like to put on the record that we are not giving up on North sea oil. Rather, we have an appreciation for the climate emergency that is taking place, and we ask for a reassessment of how we can sustainably recover those assets. That is all we are asking for.
Clive Lewis
Our amendments are simply about not exposing the Treasury to the vast costs that these companies could unload on to the Treasury and the taxpayer. The Bill contains no protection for the taxpayer in that regard.
Robert Jenrick
I will briefly answer some of those points. There has been a misunderstanding about the cost of the policy to the Exchequer. We believe, as is set out quite clearly, that over the scorecard period the measure will raise £65 million of revenue for the Exchequer. Because of the nature of the oil and gas industry and oil price fluctuations, that is a difficult assessment to make. However, we see no evidence for the more outlandish estimates in the press of a £3 billion cost to the Exchequer. Neither did the independent OBR, which checked our figures in relation to the measure and agreed that £65 million was an appropriate estimate over the forecast period. We believe that the measure is fiscally responsible because no additional tax relief will be due until the field is decommissioned. That will enable more fields to be developed, and decommissioning costs will be as they always were.
We see no evidence that the measure will disincentivise efficiency savings and productivity increases. As the hon. Member for Aberdeen North said, there is a great incentive on all parties to reduce the cost of decommissioning. The industry has signed up with Government to a target of reducing the costs of decommissioning by 35%. We would like them to go even further in the years ahead, and there is a lot of work going on to achieve that. We believe that the United Kingdom, particularly the area around Aberdeen, could be a world centre for decommissioning, and we are investing in facilities and training in that regard. We would like to work on that with the industry, because we see it as creating knowledge, new technology and jobs, which would then be exported to other fields around the world.
Kirsty Blackman
I am really pleased to hear the Government make that commitment in relation to the world centre for decommissioning. We are talking about one of the first oil and gas fields to decommission on a mass scale. It is important that the lessons that we learn from that are used to improve and export the technology.
Robert Jenrick
I think I have answered those points. There was a misunderstanding about decommissioning security agreements, which I hope I have answered. Decommissioning security agreements are confidential and commercially sensitive documents. Amendment 89 would not achieve the aim that the hon. Member for Norwich South set out, because such agreements will not be in the public domain. The documents will be received by HMRC, and decommissioning costs are regulated by the Offshore Petroleum Regulator for Environment and Decommissioning.
Finance (No. 3) Bill (Sixth sitting)
(5 years, 4 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 84, in schedule 14, page 260, line 15, leave out sub-paragraph (d).
The provision as drafted allows companies to transfer TTH worth double the value of anticipated decommissioning costs. This reduces the incentive for companies towards efficiencies in decommissioning costs and paves the way for decommissioning-related tax repayments far bigger than the companies are currently acknowledging. This amendment removes that provision.
Amendment 81, in schedule 14, page 261, line 29, at end insert—
“(aa) assessing the impact on employment, skills and the Exchequer from the asset’s production life and planned decommissioning phase, and”
Amendment 89, in schedule 14, page 261, line 42, at end insert—
“(d) includes an assessment of the impact on the Exchequer from the amount spent on directly employed and contracted staff by the seller over the production life of the asset to date; and the impact on the Exchequer from the buyer’s plans for employed and contracted staff up to and including the decommissioning stage.”
This amendment requires a decommissioning security agreement to include an assessment of the impact on the Exchequer from the amount spent on staff, in order for that agreement to be qualifying for the purposes of this Schedule.
Amendment 85, in schedule 14, page 268, line 40, at end insert—
“(aa) the amount spent by the purchaser in post-acquisition periods on new capital investment, major maintenance work, retraining of redundant staff, initiatives to reduce methane emissions or initiatives to introduce carbon-capture techniques into the operations in relation to the relevant TTH assets (‘post-acquisition qualifying investment’)”.
This amendment, and amendments 86 and 87 incentivize capital investment by new purchasers in job creation and emissions reductions. Combined, the amendments limit the TTH which may be claimed to an amount equal to such investment.
Amendment 86, in schedule 14, page 269, line 3 at end insert—
“(c) the amount by which total post-acquisition qualifying investment exceeded the higher of excess decommissioning expenditure and the total TTH amount as calculated for the first activation period under paragraph 35.”
See explanatory statement for Amendment 85.
Amendment 87, in schedule 14, page 269, line 40, at end insert—
“(c) provided that the total activated TTH amount may never exceed the purchaser’s post-acquisition qualifying investment for the relevant TTH assets or TTH oil fields.”
See explanatory statement for Amendment 85.
That schedule 14 be the Fourteenth schedule to the Bill.
Clause 37 stand part.
The Exchequer Secretary to the Treasury (Robert Jenrick)
If I may, I will conclude the remarks I was making earlier—[Hon. Members: “Hear, hear!”]—to widespread acclamation. Clause 36 will establish transferable tax history, which is widely supported across the industry and will help to protect and increase the number of jobs in the oil and gas sector in the whole of the United Kingdom and, in particular, in north-east Scotland. We see this as a great step forward for this important national asset. We believe that it is fiscally responsible, as was certified by the Office for Budget Responsibility. It will bring in revenues to the Exchequer of £65 million, and reports to the contrary are misguided.
Clive Lewis (Norwich South) (Lab)
Given that we know that the decommissioning costs could come to around £24 billion and that there is provision in the Bill to double that to £48 billion—I asked this question in my opening remarks, but I will ask it again—what money has the Treasury put aside specifically to cover these costs for future Governments, a little bit further into the future?
Robert Jenrick
Decommissioning costs will be covered by future Governments over the course of decades to come. We estimate that the costs will run into something in the region of £24 billion, as the hon. Gentleman says, although, as I said in my remarks earlier, we are working closely with the industry to bring down those costs. We hope the UK will become a world-leading market for decommissioning and that we will see at least a 35% reduction in those costs over time. The measure before us will help the situation by increasing revenues to the Exchequer, which could be set against future decommissioning costs if required.
Clive Lewis
We have said that the costs could be up to £48 billion—no insignificant sum of money. If we do not ring-fence some of the petroleum revenues to pay for this, it will fall entirely on future Governments further down the line, and nothing is being done now to prepare for that. That is a lot of money that could hit a future Government and a future Exchequer in goodness knows what economic conditions.
Robert Jenrick
The hon. Gentleman is arguing that we should ring-fence revenues from the oil and gas sector, whether through petroleum revenue taxation, the supplementary charge or whatever it might be in the future. That is not what we have done in the past. It is a peculiar argument to make when opposing the transferable tax history measure, which will increase revenue to the Exchequer, extend the life of a number of fields and make decommissioning easier and more affordable in the future. With that, I commend clause 36 to the Committee and ask hon. Members to reject the amendments.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Schedule 14
Oil activities: transferable tax history
Amendment proposed: 84, in schedule 14, page 260, line 15, leave out sub-paragraph (d).—(Clive Lewis.)
The provision as drafted allows companies to transfer TTH worth double the value of anticipated decommissioning costs. This reduces the incentive for companies towards efficiencies in decommissioning costs and paves the way for decommissioning-related tax repayments far bigger than the companies are currently acknowledging. This amendment removes that provision.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
New clause 10—Review of higher rate of tax for additional dwellings—
“(1) The Chancellor of the Exchequer shall commission a review on the revenue effects of the amendments to FA 2003 made in section 43.
(2) A report of the review under subsection (1) must be laid before the House of Commons before 29 October 2019.”
This new clause requires a review of the revenue effects of the provisions in clause 43, and for that review to report within 1 year of that clause becoming effective.
New clause 11—Annual statement on effects of provisions of section 43—
“(1) The Chancellor of the Exchequer must make an annual statement to the House of Commons detailing how the provisions in section 43 have affected instances in which land transaction returns are amended to take account of subsequent disposal of the main residence.
(2) The statement must specify—
(a) the number of such instances, and
(b) such information as the Commissioners hold as to the characteristics (including income) of those concerned.
(3) The first such statement under subsection (1) must be made before 29 October 2019, and each subsequent statement must be within twelve months of the previous statement.”
This new clause requires an annual statement on how the provisions in section 43 have impacted the number of back claims of HRAD.
New clause 12—Review of higher rate of tax for additional dwellings—
“(1) The Chancellor of the Exchequer shall commission a review on how the provisions of section 43 have affected residential property prices.
(2) A report of the review under subsection (1) must be laid before the House of Commons before 29 October 2019.”
This new clause requires a review on how the provisions in clause 43 have affected house prices, and for that review to report within 1 year of that clause becoming effective.
The Financial Secretary to the Treasury (Mel Stride)
Clause 43 makes changes to ensure that the stamp duty land tax higher rates for additional dwellings rules are easier to understand and more transparent. In April 2016, the Government introduced additional rates of SDLT for those purchasing additional residential property such as second homes and buy-to-let properties. The rates are 3 percentage points above the rates of SDLT ordinarily payable and are part of the Government’s commitment to support first-time buyers. The changes reflect feedback from the public and industry specialists about the key areas where the rules on the higher rates have proved challenging or do not work as well as they could.
In general, purchasers buying their first property, replacing a main residence or buying an additional property worth less than £40,000 will not be subject to the higher rates. Someone buying their new home before they sell their old home, however, must pay the higher rates up front but can claim a refund when they sell their old home within three years of buying their new home. When the old home is sold more than 12 months after the purchase of the new property, individuals are required to reclaim the higher rates within three months of the sale of the old property. The first change introduced by the clause will increase that period to 12 months, giving taxpayers a longer period within which to reclaim the higher rates. The change will apply to all disposals of a previous main residence from 29 October 2018.
The second change addresses the term “major interest” in relation to the higher rates of stamp duty land tax, where some stakeholders have suggested that existing legislation is unclear. The higher rates of stamp duty land tax are intended to apply when someone buys or already owns a major interest in a dwelling. “Major interest” is used to ensure that the higher rates for additional dwellings apply only to meaningful purchases of residential property and not to minor interests—for example, a right of way or a right to light. This change confirms, in line with the Government’s existing treatment, that an undivided share in land constitutes a major interest for the purposes of the higher rates. That also takes effect from 29 October 2018.
New clause 10 seeks to commission a review on the revenue effects of the amendments to the Finance Act 2003 made by clause 43. It would require the Chancellor of the Exchequer to make an annual statement to the House on those who have made a reclaim for the higher rates. The new clause is not necessary; as is stated in the tax information and impact note published at the 2018 Budget, these changes are expected to have a negligible impact on the Exchequer, so a review on the revenue effects is not required. Her Majesty’s Revenue and Customs already publishes annual and quarterly statistics setting out transactions subject to the higher rates of SDLT on additional properties and the transactions, volumes and values reclaimed.
New clause 12 seeks to require a review of the effect of clause 43 on residential property prices. Clause 43 simply increases the time from disposal for people to make a claim to 12 months and confirms existing practice on the definition of “major interest”. Neither change is expected to have an impact on house prices and such a report would not be of benefit to Parliament. I therefore urge the Committee to reject the new clauses.
The changes in the clause will help to ensure that the rules on the higher rates of stamp duty land tax are easier to understand and more transparent. I commend the clause to the Committee.
Sir Robert Syms (Poole) (Con)
I am glad I caught my right hon. Friend just as he was coming to his peroration. I have a constituent who had a home in Malaysia, where he was working. He moved back to Poole to retire and bought a flat. He was charged the higher rate of stamp duty because the flat was classified as a second home because he still owned a home in Malaysia. When I wrote to the Treasury, it said that that was because having a second home in Malaysia had an impact on the British housing market, which I did not think was a very convincing answer.
Does this rule apply worldwide if one owns a home outside the UK? In effect, if someone has a holiday home outside the UK, they get charged higher stamp duty when they buy a house in the UK. If they sell their house in Malaysia, Spain or France within three years, do they then get a reduced rate of stamp duty land tax? As an aside, it seems bonkers that we are charging people a higher rate on the basis that they have a home halfway round the world, but that is the world we seem to live in.
Mel Stride
The central point is that if someone is UK tax resident, their income is taxed, albeit that some of it may occur in other jurisdictions and perhaps be subject to double taxation arrangements between that jurisdiction and our jurisdiction. None the less, my hon. Friend’s assumption is correct that if someone has a property overseas, it is effectively counted as if it were a domestic property in the context of this clause. The easements that the clause introduces in terms of greater time to put in an application for a rebate at the higher rate apply equally whether one of the properties is overseas or here in the United Kingdom.
Anneliese Dodds (Oxford East) (Lab/Co-op)
As the Minister explained, the clause would change the parameters for claiming a refund on the additional dwelling SDLT by quadrupling the time that claimants have to reclaim the funds, potentially for up to a whole year after they have sold their old home, if that is later than a year after the filing date for the SDLT date for the new home—so the second parameter stays the same, if that makes sense. It is quite a complex change to understand.
The “major interest” provision is also tightened to make it clearer that a major interest in a dwelling includes an undivided share in a dwelling for the purpose of the higher rates for additional dwellings. I understand that the Government have suggested that the extended time period is necessary to enable those who might find it difficult to claim to do so—for example, those who are elderly or vulnerable due to serious illness.
In principle, the changes do not water down the Government’s initial stated commitment to charge additional SDLT for those owning additional properties, provided they are held on to for more than three years and provided that they fall outside the multiple dwellings category, which I will come back to in a moment. None the less, given that the changes appear to be focused on the context for the provision of additional dwellings, as against continuously occupied single dwellings, we feel it is necessary to subject their effectiveness to review, in order to ensure that they do not water down the initial measure in any way. That is what new clauses 10, 11 and 12 ask for.
Sir Robert Syms
I suspect that there are a lot of people with holiday homes abroad who do not realise that when they buy a property, they have to pay a higher rate of stamp duty land tax.
Anneliese Dodds
I am very grateful for that intervention. Furthermore, presumably it would be relatively difficult for the Exchequer to assure itself that that additional purchase had happened. This seems like quite a bureaucratic system, but I am sure the Minister can explain to us exactly how it works and how it is ensured that it is processed properly.
It would also be helpful to consider the measures in relation to the actions advocated by Labour, including enabling local authorities to treble council tax on empty properties after they have been empty for a year. Although the Government have shifted a little in this area recently, councils unfortunately still have to wait 10 years—an incredibly long time—before they can levy that level of premium.
We also need to consider the impact of these measures on house prices, which, as the Minister intimated, is demanded by new clause 12. There is a desperate need for action to level the playing field for those seeking housing for their families to live in continuously, as against those seeking a holiday home. Here again, the Opposition seek to place a surcharge on second homes that are used as holiday homes, based on council tax banding, which could raise £560 million a year to help tackle homelessness, as well as helping to level the playing field between those who can afford additional homes and those trying to take their first step on to the housing ladder. We surely need to understand the impact of the clause in relation to other potential measures.
Finally, while I have the chance, I inform the Minister that when one uses a particularly well-known search engine to try to find the very exciting HMRC stamp tax manual, it unfortunately finds the versions from 2010 initially, rather than more up-to-date versions. That surely needs to be ironed out.
Mel Stride
I am sure that my hon. Friend will be tempted to speak by the time I have finished my remarks.
The hon. Member for Oxford East raised several points. She sought an assurance that we are not watering down the measure. I can certainly give that assurance. For example, the three-year window will be the same for people to reclaim the higher rate where a property is not sold before a new property is purchased, albeit that we are giving people more time to apply for that rebate. The essence of the measure remains very much the same.
The hon. Lady pointed out that home ownership is falling, particularly among young people. The Government are heavily engaged on that and have brought in various measures, as she will know, not least in the stamp duty area, with the stamp duty relief for first-time buyers. None the less, the statistic that she quoted of there being 1 million fewer homeowners under 45 than in 2010 is certainly something that we seek to address. I reassure her that, since the higher rates have been introduced, more than 650,000 people have bought their first home, and first-time buyers make up an increased share of the mortgaged housing market. That is what the underlying measure that we are debating is really all about: supporting first-time buyers and first-time home ownership.
The hon. Lady also raised multiple dwellings relief and gave a clear exposition of how it works by way of her example of the £1 million and the five properties. The way she described it was entirely accurate. In other words, there is a disaggregation, and then the appropriate level of stamp duty is applied to each one of those properties at, in her example, the £200,000 level. However, it is also the case that each one of those properties in her example would attract the additional stamp duty charge in a situation in which more than one property is, of necessity, owned by the same purchaser.
The hon. Lady’s final point was about the potential impact of these measures on house prices. I go back to my earlier remarks that this a change in the timing by which individuals are required to make reclaims at the higher rate; it is not a change to the window of opportunity for doing so. As I set out, that in itself is not expected to change house prices.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44
Exemption for financial institutions in resolution
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 90, in clause 48, page 32, line 39, at end insert—
“85B Review of possible register
(1) Within three months of the passing of the Finance Act 2019, the Chancellor of the Exchequer shall review the viability of establishing a public register on the use of the exemption from stamp duty established under section 85A.
(2) A report of the review under this section shall be laid before the House of Commons as soon as practicable after its completion.”.
This amendment would require the Chancellor of the Exchequer to review the viability of a public register of financial institutions in resolution benefitting from the exemption from stamp duty for certain financial transactions.
Clause 48 stand part.
Mel Stride
Clauses 44 and 48 will simplify and strengthen the current financial institution resolution regime by introducing an automatic exemption from stamp taxes on shares for public bodies and creditors whose interests are converted into shares, and stamp duty land tax—SDLT—for certain transfers of land arising from the exercise of resolution powers.
Under the Banking Act 2009, the Government have the power to exempt from stamp taxes on shares and SDLT transfers of property, in the form of shares or land that arise from an exercise of resolution powers. However, the current legislation requires the Government to pass secondary legislation exempting a defined set of transfers. This introduces potential timing challenges and creates additional complexity when resolving a failing financial institution.
The changes made by clause 48 avoid that by specifying exempt transfers in primary legislation. The stamp taxes on shares exemption will be limited to transfers of shares to a bridge entity or a public body that holds the shares temporarily while the institution is being resolved, and to the transfer of shares in exchange for temporary certificates issued to creditors that demonstrate their entitlement to the shares. The exemption does not cover the private sale and transfers of shares in a failing institution to a private sector purchaser, where stamp taxes on shares will be charged as usual.
Similarly, the changes made by clause 44 specify SDLT transfers in primary legislation. This exemption will be limited to transfers of land to a bridge entity or public body that holds the land temporarily while the institution is being resolved. The exemption does not cover the private sale and transfer of land of a failing institution to a private sector purchaser, where SDLT will be charged as usual.
The changes will simplify and strengthen the process of resolving a failed institution. In the event that a creditor is found to be worse off as a result of resolution action, when compared with an ordinary insolvency, they are entitled to compensation, which would be paid by the Treasury. The changes will protect taxpayers by reducing the risk of the Government having to compensate creditors in order to prevent the “no creditor worse off” principle being violated. They were announced in the autumn Budget 2017 and the draft legislation was subject to consultation. Officials from the Treasury and HMRC have worked closely with officials from the Bank of England to develop the legislation.
Turning to the amendments that have been tabled, amendment 90 seeks a review, within three months of the enactment of the Bill, of the viability of establishing a public register on the use of the exemption from stamp duty—something that I have already raised—and would require a report of the review to be laid before the House of Commons soon after its completion. The clauses do not create any tax exemptions for failing institutions themselves. The exemption would apply to creditors of failing financial institutions who see their debt holdings bailed in for equity, to ensure that affected creditors are not penalised inadvertently. The exemption also applies to the Bank of England, which may, in certain circumstances, need to take temporary ownership of a failing institution’s assets, in order to protect financial stability.
The clauses will strengthen and add transparency to the resolution process by providing further clarity for affected creditors and the taxpayer. The register would impose an additional and unnecessary burden on the Bank of England and provide no great benefit to the public. By creating an exemption from stamp taxes on shares and SDLT for certain transfers arising from the use of resolution powers, the Government are simplifying and strengthening the UK’s resolution regime, and I therefore commend the clauses to the Committee.
Anneliese Dodds
I am grateful to the Minister for his explanation. As he intimated, clause 44 ensures that SDLT is not charged on transfers of land following the exercise of certain resolution powers under the special resolution regime. It is paralleled by clause 48 for stamp duty. As he has intimated, our amendment 90 would require the Government to produce a review and potentially introduce a register of financial institutions in resolution that might benefit from the exemptions for SDLT and stamp duty for certain financial transactions resulting from the measure.
We are asking for such a review to have a clearer understanding of which firms might be relieved of SDLT and stamp duty in this manner. This is without prejudice to the function of the clauses, which we understand and support. In other words, we support the concept that the Bank of England should be able to use its resolution stabilisation powers to manage failing financial institutions in an orderly manner and should as part of that, where required, be able to transfer property, potentially including land held by that body, to a temporary holding entity appointed by the Bank of England or to a temporary public body. In that context, we agree that it does not make sense for SDLT or stamp duty to be paid. We are willing not to press our amendment, because of the general acknowledgment of the importance of the measure.
Mel Stride
Taking up the points made by the hon. Member for Oxford East, I will begin with her final point about why we have approached this by way of primary legislation rather than relying on existing powers to make regulations. At the heart of that is our ability to act quickly in the circumstances of the resolution powers being brought into effect, to ensure that everything goes smoothly and we do not end up in a situation where compensation might be due, where it could be shown that the measures we had taken had not been as effective as they might otherwise have been under a normal insolvency process. That is why relying on a general position in primary legislation would be preferable to a number of exercises of secondary powers.
The question of why we have made changes to the Finance Act 2003 rather than the Banking Act, and the associated question that the hon. Lady asked about whether the Office of Tax Simplification was content with our approach, are highly technical and certainly not questions to which I have a ready answer, I am afraid. I undertake to the Committee to go away and ensure that I write to the hon. Lady with a full explanation on both those points.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clause 45
Changes to periods for delivering returns and paying tax
Anneliese Dodds
I beg to move amendment 95, in clause 45, page 29, line 19, at end insert—
“(11) The Chancellor of the Exchequer must lay before the House of Commons a report on any consultation undertaken on the provisions in this section.
(12) A report of the review under subsection (9) must be laid before the House of Commons within two months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to report on any consultation undertaken on the provisions in Clause 45.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
New clause 13—Equality impact analysis of provisions of section 45—
‘(1) The Chancellor of the Exchequer must review the equality impact of the provisions in section 45 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 households at different levels of income,
(b) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the impact of those provisions on the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and
(d) the impact of those provisions on equality in different relevant parts of the United Kingdom and different regions of England.
(3) In this section—
“relevant parts of the United Kingdom” means—
(a) England, and
(b) 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 Clause 45 on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a regional basis.
Anneliese Dodds
I am grateful to be serving on this Committee with you in the Chair, Ms Dorries; I do not think I have said that before, and I apologise for that.
This clause reduces the time limit that purchasers have to file an SDLT return and pay the tax due from 30 days after the effective date of the transaction to 14 days. It applies to transactions to purchase land in England and Northern Ireland with an effective date on or after 1 March 2019. Of course, since 2015 there has been a separate land and buildings transaction tax in Scotland, and since earlier this year there has also been a different regime in Wales, where the relevant tax is the land transaction tax.
SDLT was introduced—we were just referring to the relevant Act—in 2003, replacing stamp duty on land transactions. Data from SDLT returns are used by a variety of actors, after being submitted to the Valuation Office Agency, to carry out activities such as valuations for the purposes of council tax and business rates.
This clause obviously has some similarities with clause 14, to the extent that it requires a faster turnaround for the payment of a tax, but clearly in this case it is payment of SDLT rather than capital gains tax. Many of the concerns expressed in relation to that change also apply in this case. They include the question whether taxpayers and, above all, their agents are likely to be sufficiently aware of the new deadline. As a result, with amendment 95, we are asking the Chancellor of the Exchequer to
“lay before the House of Commons a report on any consultation undertaken on the provisions in this section.”
It appears that many taxpayers—some 85% of them, according to HMRC’s figures—already submit their return in line with the proposed new timetable. However, the remaining 15% may have reasons for failing to submit so quickly and those surely should be examined before we embark on this halving of the deadline. Indeed, there appeared to be significant concern among respondents to the consultation about the proposed reduction to the filing and payment window. The consultation response stated:
“Many felt it would be manageable for straightforward transactions—for example most purchases of residential property. Many envisaged difficulties for more complex transactions where the property purchased is subject to leases. Although only a small proportion of reportable transactions are likely to be affected, they amount to approximately 50,000 transactions every year.”
That is clearly a very large number, and those transactions may be particularly concentrated in their effects among certain segments of the population. It is for that reason that new clause 13 would require a full impact assessment of the measure to be undertaken and to consider its impact on people with protected characteristics, people with different incomes and people living in different regions.
I note in the consultation document that, at least at the time of the consultation, there was no HMRC facility for filing and paying SDLT simultaneously. It would be helpful to understand from the Minister whether that facility is coming, as it would surely make the system more efficient.
I was also surprised to see in the consultation document that more than 40% of the returns submitted on paper included errors. That is an incredibly high rate. It would be helpful to know what has been done to deal with that problem, as that system clearly cannot be helping either the taxpayer who has—presumably inadvertently, most of the time—made the error or the HMRC officer who has to try to rectify it. The very high usage of cheques, which need to be accompanied by the correct 11-figure unique taxpayer reference number, also seems almost designed to create an inefficient and error-ridden system.
It was stated in the consultation document that the shorter timescale would be accompanied by a number of other measures to improve the effectiveness of SDLT filing, but it is unclear to me whether and when those new measures are coming into place. One such measure would be requiring all agents to file online, which does seem sensible, but I was intrigued to see in the consultation document the claim that online filing may not be
“reasonably practicable…because of remoteness of location, or on grounds such as religious beliefs.”
It would be helpful if there were more joined-up thinking across Government. For example, it is very difficult for claimants of universal credit to receive it without using the online system. Surely more of them are likely to be affected by living remotely than professional agents involved in property transactions. It would also be useful if the Minister could clarify why religious faith might impact on an individual’s ability to use the internet and why that might be the case for those filing returns for stamp duty and not for those attempting, for example, to claim universal credit.
It was stated in the Government’s response to the consultation that they would look to potentially introduce electronic payment at the same time as the reduction of the reporting period to 14 days, so can the Minister please inform us whether electronic payment will indeed be available when this measure comes into play?
Mel Stride
Clause 45 makes changes to improve the SDLT filing and payment process. In answer to the hon. Lady’s question about whether we will provide facilities on the site to pay simultaneously, we do not have plans to do so. That is because the online service cannot be combined with Bacs and CHAPS services at present.
The hon. Lady made a more general point about the mistakes that are made in filing. As she knows, we consulted on the information being sought as part of the process, and we will be applying various simplifications as a consequence, most notably around complex commercial lease arrangements. The information that we have hitherto sought in that respect will now no longer be sought. That simplification, and others, should be beneficial in cutting down the mistakes that the hon. Lady referred to.
Currently, the purchaser of land, or the purchaser’s agent, must make a stamp duty land tax return and pay tax due within 30 days of the effective date of the transaction—usually the completion date. The changes made by clause 45 will reduce the time allowed to make an SDLT return and pay the tax due from 30 days after the effective date of transaction to 14 days. That is in line with other initiatives in recent years that bring tax reporting and payment closer to the date of the transaction. The hon. Lady referred, I think, to clause 14 on capital gains tax, where a similar approach has been taken. This is in line with these other initiatives.
The measure will not change liabilities for the purchaser, but will lead to tax being paid earlier. The change applies to purchases of land situated in England and Northern Ireland where the effective date of the transaction is on or after 1 March 2019. This change will directly affect approximately 20,000 businesses, mainly agents, such as licensed conveyancers and solicitors. Each year, this will directly affect fewer than 500 individuals who file their own SDLT returns without using an agent. However, the impact on administrative burdens for businesses is expected to be negligible.
The Government announced the change at autumn statement 2015 and consulted on it, as the hon. Lady described, in 2016. The Government confirmed at autumn Budget 2017 that it would come into effect on 1 March. To help purchasers and agents to comply with the new time limit, HMRC has worked with key representative bodies to agree simplifications to the SDLT return, for example, by reducing the amount of information required. These improvements will be in place when the new time limit begins. The measure will result in a yield of £60 million in 2018-19—the year of implementation—and a small ongoing yield in future years.
Amendment 95 would require a report on any consultation undertaken on the provisions in this section.
Bambos Charalambous (Enfield, Southgate) (Lab)
What steps has HMRC put in place to make sure that the 20,000 businesses that are going to be affected are properly informed of the change, and know that it is coming?
Mel Stride
HMRC will, as a matter of course, issue guidance on all major tax changes, and that will be available online. As part of the consultation, as I have outlined, a number of these organisations were consulted in detail, not just about the measures but to make sure that those businesses are ready and appropriately informed.
The amendment is not necessary. I can give the Committee the information it requires now, because it is already in the public domain. The Government published a document on 20 March 2017 in response to the consultation that we published in the autumn of 2016, and we published draft legislation in July 2018 for technical consultation. HMRC also held meetings with stakeholders, which included representative bodies from the property and conveyancing industries. Their views on the information required in the return are reflected in the changes being made to make compliance with the new time limit easier.
New clause 13 would require a review of the equality impact of clause 45. The new clause is not necessary either, because the Government set out in the tax information and impact note published on this change in July 2018. It is not anticipated that there will be any impact on groups with protected characteristics. Clause 45 does not change anyone’s SDLT liability; it just brings a requirement to file a return and pay the tax closer to the date of the transaction. For that reason, direct impacts on different types of households will be negligible, and the type of analysis required by the amendment would not be meaningful.
Regarding other regions of the UK, Land and Property Services in Northern Ireland—an agency of the Department of Finance of the Northern Ireland Executive—was consulted and is content with the measures. The changes will improve the SDLT filing and payment process, and I commend the clause to the Committee.
Anneliese Dodds
I am grateful to the Minister for his comments. However, I am sure the whole Committee is looking to the Government to ensure that the payment and reporting systems can be calibrated as soon as possible. Surely, the very high rate of error is a terrible waste of taxpayers’ and, indeed, HMRC’s time. I hope he prioritises sorting that out and having the relevant discussions with the Bacs and CHAPS systems so it can be dealt with.
Anneliese Dodds
I beg to move amendment 91, in clause 49, page 33, line 2, at end insert—
“(c) after subsection (4) insert—
‘(5) Within three months of the passing of the Finance Act 2019, the Chancellor of the Exchequer shall review the revenue effects if—
(a) the provision of section 49(2) of that Act had not been made, and
(b) the exemption under subsection (3) of this section did not apply to a Schedule 2 SIP that was not approved between the coming into force of the relevant provisions of the Finance Act 2014 and the passing of the Finance Act 2019.
(6) A report of the review under this subsection (5) section shall be laid before the House of Commons as soon as practicable after its completion.’”
This amendment would require the Chancellor of the Exchequer to review the revenue effects if the tax exemption under section 95 of the Finance Act 2001 had not applied to self-certified share incentive plans.
Anneliese Dodds
The clause makes a minor change to ensure that existing stamp duty relief continues to apply to both non-approved and approved share incentive plans. Our amendment 91 calls for a review of the revenue effects of that measure compared with the status quo, under which only approved plans are covered. The amendment is intended to give us a better handle on the overall cost of SIPs and how that relates to their benefits.
As I am sure Committee members know, SIPs have been tax advantaged since 2001, when stamp duty and what was then stamp duty reserve tax—it is now SDLT—were removed from the transfer of shares in a SIP from trustees to an employee. The requirement for approval was removed in 2014, but the appropriate corrections to legislation were not made. I note that the changes in the clause are required purely because of errors of omission back then, which perhaps highlights some of the issues the Committee has discussed.
SIPs avoid many of the problems with other share incentive plans, not least by being provided to all employees rather than only to a subset. We have seen how share plans have been manipulated when they have been provided only to the top management of companies. SIPs avoid that. Although so-called free shares can be linked to the achievement of performance targets, they cannot be allocated individually. They can be provided only to a particular business unit or to the whole company, so they cannot be manipulated by, for example, very top management.
Some categories of shares can be removed from employees who leave the firm through either voluntary resignation or dismissal within three years of their joining the SIP. That and the stake that SIPs create for employees in their company are viewed by some commentators as positive aspects of the plans. In addition, there is a considerable cost saving for firms of up to £138 for every £1,000 invested in SIPs by their employees. We must acknowledge, however, that the people who gain most from such schemes are those who are already in a higher-rate tax band, who by my calculation gain around an additional third of the tax they would otherwise pay, compared with a basic rate taxpayer.
In addition, SIPs have complex interactions with the social security system. I want to ask the Minister for clarification in that respect. Information provided to SIP holders states clearly that a small number of people may be affected by the fact that, because of their salary sacrifice—I suppose in practical terms that is what this is—for their SIP, they will not have paid enough national insurance contributions to qualify for particular benefits. However, it is unclear whether contributions to a SIP are treated differently for tax and social security purposes.
Some claimants of tax credits have received mixed messages about whether contributions to SIPs should be added back on to their gross pay for the purpose of informing the Department for Work and Pensions about their income. Individuals do not have to declare their SIP contributions for the purpose of income tax, or at least those contributions generally are not chargeable to income tax. There is a peculiar and potentially unfair difference there.
That is compounded by the fact that tax becomes payable on some of the different types of shares within a SIP if an individual sells them within five years—for example, if they have to switch jobs. Some individuals have said that that is almost a form of double taxation for people who claim social security. They suggest it is a bit of an anomaly, and I can see why. For people affected in this way, they would be better off buying their firm’s shares at market prices rather than taking part in a SIP in the first place. That is the situation with tax credits, but I cannot find any information anywhere about the treatment of these schemes for those claiming universal credit.
I looked at the IR177 document “share incentive plans and your entitlement to benefits” but that was produced in January 2011, and there seems to have been no amendment of it since then. There does not seem to have been any amendment to the SIP manual relating to universal credit either, or at least not since November 2015. Having gone through all the iterations of the manual, I did not wish to waste any more time searching for a potentially non-existent needle in a haystack.
Will the Minister clarify whether contributions to SIPs are counted as income for the purposes of calculating working tax credit or universal credit? If so, will the Department be looking at this issue? Might it be trying to devise a different approach, given that individuals will be affected by the counting of those shares as income if they leave a SIP scheme early? People on low incomes may well have to switch jobs more regularly than others do, so it would be helpful if he looked into that. Perhaps he knows the answer already. If not, will he write to us? Some people would find that enormously helpful.
Mel Stride
On the hon. Lady’s specific question about the interaction of SIP contributions and the reporting of income, and the further interaction with working tax credits and universal credit, I do not know the answer, and I do not think my officials can immediately answer it. I will have a closer look at that and write to her, as she requests.
Clause 49 makes a minor correcting amendment to section 95 of the Finance Act 2001 concerning stamp duty and stamp duty reserve tax exemptions for SIPs. Stamp duty and stamp duty reserve tax exemptions for SIPs were introduced in the Finance Act 2001. Until 2014, share incentive plans had to be approved by HMRC before an employer could operate them. These were referred to as approved share incentive plans. The Finance Act 2014 removed the requirement for HMRC to approve share incentive plans and replaced it with a self-certification process. All references to approved share incentive plans should have been removed from legislation, but a change to section 95 of the Finance Act 2001 was omitted. The clause changes the wording of section 95 of the Finance Act 2001 to ensure that it is consistent with other provisions of the share incentive plans code. No taxpayers should have incurred stamp duty on self-certified SIPs since the rule changed in 2014, and this provision confirms and clarifies the position. No changes are made to the existing exemptions available for share incentive plans.
Amendment 91 would require a review of the revenue effects if the stamp duty exemptions for SIPs had not applied to self-certified share incentive plans from 2014. This provision is a minor technical change that brings the wording of the legislation back in line with its application. There will be no revenue impact as a result of the correction. SIPs offer a combination of tax incentives to employers, and estimates for the cost of the stamp duty exemptions for SIPs are not available. The clause makes a minor correcting amendment to exemptions for share incentive plans, and I commend it to the Committee.
Anneliese Dodds
I am willing to withdraw amendment 91, given the Minister’s clarification, and I am grateful for his willingness to write to me about the issue that I raised. I make the general point that it is important that we consider these interactions between the social security system and the taxation system. It is particularly important for people on low incomes that we always bear that in mind. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 49 ordered to stand part of the Bill.
Clause 50
Duty of customers to account for tax on supplies
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I beg to move amendment 92, in clause 50, page 33, line 11, at end insert—
“(9B) An order made under subsection (9) for the purposes of subsection (9A) must be accompanied by a statement by the Treasury of the expected impact of that order on—
(a) the number of traders who are expected to benefit from the reduction of a burden, and
(b) the supply chain in respect of the description of goods or services.”.
This amendment would require an order made under the new provision of Clause 50 to be accompanied by an impact statement.
Jonathan Reynolds
We now turn to the part of the Bill that addresses value added tax, which is always a much-anticipated part of a Finance Bill. There is a lot to look forward to. Clause 50 relates to the duty of customers to account for VAT on supplies. It is designed to give the Government the flexibility to mend some items of anti-fraud legislation so that there does not end up being an undue burden on small businesses. It works in conjunction with an order of the Value Added Tax Act 1994, specifically section 55A, which aims to prevent so-called missing trader fraud.
I will provide some context about the ongoing challenges presented by VAT. These appear to fall into two categories, which I believe overlap: fraud, and the complications that administering and reporting VAT poses for businesses. Tackling those challenges is impossible if they are considered to be mutually exclusive. Fraud continues to be a major issue for the Exchequer in collecting the level of VAT that is owed, and VAT fraud costs the UK at least £1 billion a year.
That was discussed at length in last year’s Finance Bill Committee, in October 2017, when the Government introduced a clause to place new obligations on fulfilment houses to help to tackle VAT fraud, which has, understandably, worsened with the rise of online sellers that obtain goods through third-party sellers based abroad. As my hon. Friend the Member for Bootle said at the time:
“Many small businesses find themselves outcompeted and outpriced by overseas traders, which not only have lower operating costs but artificially lower their prices by failing to pay VAT on the goods they sell to UK consumers through fulfilment houses based here.”––[Official Report, Finance Public Bill Committee, 24 October 2017; c. 117.]
That is something that we will all recognise.
My hon. Friend further highlighted that we will all have received casework from small businesses
“that found themselves severely disadvantaged when filling out their VAT returns when they were unable to obtain VAT receipts from either their overseas supplier or the fulfilment business in question. In one case, the reason for the problem was simple: there were no VAT receipts because the seller had not charged VAT, unbeknownst to that particular British business. The online fulfilment house involved simply washed its hands of the matter and blamed a third-party seller that it supposedly has no control or influence over.”––[Official Report, Finance Public Bill Committee, 24 October 2017; c. 117.]
That flags just one of the multiple VAT issues that small businesses face. The Opposition believe that they need more support in getting to grips with the tax if we are ever to close the VAT gap. The situation has been worsened by the Government’s disaster-stricken attempts to transition to “Making tax digital”, which have thankfully been delayed to next year to give businesses some chance to adapt.
HMRC believes that there is a £3.5 billion VAT gap resulting from mistakes made by businesses when they submit VAT returns. Tax professionals, via the Chartered Institute of Taxation, said in written evidence to the Treasury Committee’s VAT inquiry earlier this year that HMRC must improve its VAT guidance and show a greater willingness to provide rulings where businesses want certainty over VAT treatment. It also echoed the Opposition’s repeated warnings over the diminishing resources and capacity of HMRC, which has been subject to a series of cuts resulting in staff reductions and office closures. That was admirably highlighted by my hon. Friend the Member for Oxford East in her summer tour of HMRC office closures, which was well received across the country. I should say that the cuts were not well received, but the attention that she was able to bring to them was.
The Chartered Institute of Taxation makes six recommendations to help address the VAT gap, which it estimates at a shocking £12.6 billion. I will focus on just one today, which is its request that the Government resist the temptation to
“introduce widespread changes that are disruptive to the majority of compliant businesses”.
That is tied to concerns around the clause, despite what appear to be quite laudable intentions behind it. The clause relates to so-called missing trader fraud. It is a huge problem, and not only in the UK; it is perpetrated across the EU in several different ways. Europol estimates that the cost to the EU is about €60 billion. Fraud is carried out in supply chains, sometimes by organised criminal gangs. They take advantage of the VAT exemption across borders, charge VAT in the UK when the product is sold on and subsequently disappear without relaying it to the Exchequer. As referred to earlier, section 55A of the Value Added Tax Act 1994 helps to prevent that by making the customer, rather than the supplier, responsible for declaring the VAT on certain goods and services, thus taking the benefit of VAT away from the seller.
Kirsty Blackman (Aberdeen North) (SNP)
First, the hon. Member for Aberdeen South (Ross Thomson) and I are two very different people. He is a lot taller, has dark hair and is a Conservative Member of Parliament. Lots of people have made this mistake over time. He also has very different views from mine on Brexit.
To follow up on some of the issues raised, I am comfortable supporting the Opposition amendment; it makes sense to ask for this information. A couple of matters were raised during the debate. It is important that reasonable VAT guidance is given to organisations. As we have previously discussed in Committee, people can only pay the correct tax if they understand how the tax system works. If they do not have the appropriate guidance, it is difficult for them to ensure that they pay the right VAT.
It is clear that the Government and HMRC are falling short in the information that they communicate to the companies and organisations that are expected to jump through these hoops. It would be useful if the Government looked at that and ensured that they improve the information they are providing to companies and organisations, so that they can better understand their liabilities and how to comply with them.
Lastly, in relation to discussions around the Taxation (Cross-border Trade) Act 2018, the hon. Member for Stalybridge and Hyde mentioned the changes from making tax digital and the impact of that on companies that are finding it more difficult to navigate the system. Another possible impact, depending on what happens with any withdrawal agreement, is that move from acquisition VAT to import VAT, which would also have a significant impact on companies, because they would have to pay significantly more money to allow them to do things differently.
I was pleased that the Government moved on that point after sustained pressure on them through the passage of the Taxation (Cross-border Trade) Bill. I appreciate that they agreed to put in place a deferment scheme in the event of no deal; that is positive. However, we do not yet know what the deal will look like. Could we have more commitment from the Government about smoothing that path, if there is to be change from acquisition to import VAT?
Obviously I would rather there was no change and we all stayed in a customs and VAT union, with common VAT as the preferred option. If there is to be any change, will the Government reassure us that companies that will be provided with as much support as they can, in order to make that change without the cash-flow impact suggested by organisations such as the British Retail Consortium?
Mel Stride
Before I get into more general points on the clause, I will turn to some specific issues raised by Members, starting with the hon. Member for Aberdeen North. I entirely take her points about the distinction between her and my hon. Friend the Member for Aberdeen South. The differences are quite stark in all respects, though I am not sure to whose benefit that is.
The hon. Lady is entirely right to suggest that we need good guidance on these issues. I should point out that a primary focus of the proposed change is to ensure that we do not, under the existing arrangements, have a number of construction companies falling due to VAT and going over the threshold. That does bring unwanted complexity for those who would not otherwise be in that situation. It is worth bearing in mind that the reason behind the measure is trying to avoid drawing ever more businesses in that sector into the VAT regime.
The hon. Lady also reminded us of the discussions that we had at length on the Taxation (Cross-border Trade) Bill, when most of us were all together.
Mel Stride
Happy days. I thank the hon. Member for Aberdeen North for her positive comments about the position that the Government have taken on acquisition VAT as opposed to import VAT, and extending that—at great cost to the Exchequer, of course—to all external trading arrangements, whether with the EU27, as they will become, or the rest of the world.
It is worth making a general comment on the VAT gap, which featured prominently in the contribution from the hon. Member for Stalybridge and Hyde. That gap has fallen from 12.5% under his party in 2005-06 to 8.9% on the latest figures. That is a pretty significant drop in relative terms across that period. Clause 50 amends the anti-avoidance provisions in section 55A(3) of the Value Added Tax Act 1994, which will enable effective implementation in October 2019 of the VAT reverse charge to combat missing trader fraud in construction sector supply chains. As announced at autumn Budget 2017, the Government are introducing a VAT reverse charge for specified construction services, which is due to come into effect from 1 October 2019.
This measure will help to tackle the problem of organised criminal gangs fraudulently creating or taking over companies in the sector to steal VAT and income tax, known as missing trader fraud. Under reverse charge accounting treatment, the customer, if VAT registered, is responsible for settling VAT with HMRC. As a result, suppliers cannot get the tax due and hence cannot steal it. However, there is currently an anti-avoidance provision in the primary legislation for VAT reverse charges, which requires businesses that purchase supplies subject to a VAT reverse charge to include those purchases as part of their turnover for VAT registration purposes.
Reverse charges apply only to supplies to other VAT-registered businesses. Therefore, this provision was designed to prevent fraudsters from avoiding reverse charges, especially on mobile phones, by instead charging VAT to small unregistered businesses before going missing. The current anti-avoidance provision has the effect of making unregistered businesses purchasing supplies covered by the reverse charge registrable for VAT sooner.
The construction sector has many businesses legitimately trading close to, but below, the VAT threshold. The current anti-avoidance provision could therefore push some legitimate small businesses over the VAT threshold and increase the burdens placed upon them. Clause 50 will amend the VAT Act to allow future VAT reverse charge statutory instruments, including one for the construction sector, to waive this anti-avoidance provision. That means that unregistered businesses will not have to add purchases of construction supplies subject to the reverse charge to their turnover for the purposes of VAT registration, thereby limiting the impact of the reverse charge on small businesses.
Disabling this provision in the construction sector will not have an impact on the effectiveness of the reverse charge, because builders are unlikely to be involved in the sort of supply chains that feature in large-scale missing trader fraud in construction. However, the Government do not wish to remove the provision in its entirety, as it may be beneficial for other sectors subject to missing trader fraud.
Amendment 92 would require that, whenever the Treasury makes use of the Government’s proposed new power to disapply the anti-avoidance provisions in section 55A(3) of the VAT Act, it would also publish a statement setting out the number of traders expected to benefit from being relieved of the burden to register for VAT as a result, and the impact of the VAT reverse charge and the disapplication of the anti-avoidance provisions on the supply chain in the sector that they target. The Government have closely considered the amendment, but ultimately deem it unnecessary. Whenever a Treasury order is made to require the use of a VAT reverse charge in a particular sector, HMRC publishes a tax information and impact note as a matter of course. This note will highlight the scale of the reverse charge’s expected impact in terms of numbers of traders who will be affected and whether the anti-avoidance provisions will apply, and outline how the changes will help to disrupt fraudulent supply chains operating in that sector. This publication is more than sufficient for the purposes sought by amendment 92. I urge the Committee to reject the amendment, and I commend clause 50 to the Committee.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
That schedule 16 be the Sixteenth schedule to the Bill.
New clause 8—Review of Schedule 16 provisions on voucher circulation and distribution—
“(1) The Chancellor of the Exchequer must commission a review of the expected impact of the provisions of Schedule 16 on the circulation and distribution of vouchers in—
(a) the United Kingdom, and
(b) the European Union.
(2) A report of the review under subsection (1) must be laid before the House of Commons within 3 months of the passing of this Act.”
This new clause requires a review of how the provisions in Schedule 16 affect voucher circulation and distribution.
New clause 9—Review of potential divergence of VAT treatment of vouchers—
“(1) The Chancellor of the Exchequer shall commission a review that will consider the potential public revenue, and other impacts, if domestic law regarding the VAT treatment of vouchers were to diverge from European Union law.
(2) A report of the review under subsection (1) must be laid before the House of Commons within 3 months of the passing of this Act.”
The provisions of Schedule 16 transpose Council Directive (EU) 2016/1065. This new clause requires a review of the revenue effects of diverging from EU law on the VAT treatment of vouchers.
Mel Stride
Clause 51 and schedule 16 make changes to ensure that we can properly collect VAT when purchases are made using vouchers. It amends the Value Added Tax Act 1994, introducing new section 51B, 51C and 51D and new schedule 10B. These clarify the VAT rules for postage stamps and set out new rules for the VAT treatment of vouchers issued after 1 January 2019.
Members of the Committee will be familiar with tokens—for example, those used in the purchase of books—but the world of vouchers has expanded significantly in recent years. The UK vouchers market is now estimated to be worth about £6 billion a year. As well as the traditional use of vouchers as Christmas presents, vouchers now play a large part in business promotion programmes and staff incentive schemes, which rely heavily on complex distribution systems using electronic, plastic and internet-based products, as well as the traditional paper voucher. Some businesses issue and redeem their own vouchers, whereas others issue vouchers to be redeemed by others. VAT law has been slow to adapt to these changes. This new law modernises the rules and introduces a simpler system.
Anneliese Dodds
The Minister is extolling the virtues of vouchers and noting how innovative many of the company schemes that use them are, but why are the Government still committed to removing individuals’ capacity to benefit from childcare vouchers?
Mel Stride
I think that issue may be outside the scope of the clause, tempted though I am to be drawn into the issue of childcare and vouchers. The hon. Lady will have noted the delay that we implemented in that respect, to make the transition that little bit easier for some of those who might have been impacted.
The clause transposes new EU law, which we pressed the European Commission to introduce, to help combat tax avoidance. The new law has to be in place by 1 January 2019 and the Provisional Collection of Taxes Act 1968 will give the measure effect until Royal Assent of this Finance Bill.
From a VAT perspective, vouchers are unexpectedly complex. That is because, for one payment, a buyer gets two things: a voucher and an underlying good or service. Without special rules, we risk taxing twice: once for the voucher and a second time for the underlying supply. Gift vouchers could be used to buy products with different VAT rates. It is therefore often difficult to apply VAT at the time the gift voucher is bought. Furthermore, gift vouchers are now often sold at a discount to the face value, via distributors to businesses, which give them away for free in business promotion or staff incentive schemes. It is then not always clear to the shop accepting the voucher exactly what has been paid.
Finally, trading vouchers across borders resulted in problems of double and non-taxation, as different countries have different rules. The changes made by clause 51 and new schedule 16 will standardise these rules. First, the legislation specifies the type of voucher covered. Quite a few things nowadays look similar to vouchers, but are not recognised as vouchers under the VAT system—for example, the type of card many of us store money on to go on holiday or give to our children. We are not talking about vouchers that are totally free from when they are issued to when they are used to buy something, such as discount vouchers found in magazines or toothpaste money-off tokens.
The legislation identifies two distinct types of voucher and sets out specific VAT treatments for each. If we know what the voucher can buy and where, that can be charged at the point of issue and at any subsequent transfer of a voucher through its distribution network. If these details are not known at the time of issue, because it is a general gift voucher, we must wait until it is used to be able to apply the correct VAT. Therefore, the law identifies single-purpose vouchers, such as a traditional CD token that can be used only to buy CDs, which are limited to specific products, and multi-purpose vouchers, such as a WHSmith gift voucher, which can be used to buy many things,.
To avoid charging VAT twice, single-purpose vouchers are subject to VAT throughout distribution, but no VAT is charged on redemption. In contrast, multi-purpose vouchers are VAT-free through distribution, but are subject to VAT at redemption. For the multi-purpose voucher, the redeemer—the shop—must account for VAT. If they know the amount paid for the voucher, they should account for the VAT on that value. If they do not know the amount paid, they should account for VAT on the face value of the voucher.
Because the activities of any distributor of multi-purpose vouchers are disregarded for VAT purposes, there will be certain restrictions on the extent to which they can reclaim VAT incurred on related costs. I hope that the Committee is following this very closely, because it is an extremely important series of elaborations on how these vouchers work. HM Treasury and HMRC have consulted with the relevant businesses represented, and HMRC will be clear in guidance on how the rules will work.
The two new clauses would require two reviews by the Government within three months of the passing of the Act. New clause 8 concerns the impact of the provisions on the circulation and distribution of vouchers in the UK and the EU. New clause 9 concerns potential revenue and other impacts that could arise if UK law were to diverge from EU law.
Collecting VAT when vouchers are used is always complex, and it will inevitably take some time for the new rules to bed in. Throughout the negotiations about the changes in the underlying EU law, the Government were in regular contact with the UK businesses affected by the changes, and it was generally felt that this option was the best of the various options identified. Officials have worked hard with businesses to ensure as smooth a transition as possible, and HMRC has offered to be pragmatic as businesses get to grips with the new system.
I can reassure the Committee that the Government will continue to monitor the effects of the change and other developments in this area, including impacts on revenues. With regard to divergence from EU law, it is far too early to consider such impacts, given that we do not yet know the future agreement with the EU and what it will look like in respect of the VAT system more generally. However, I stress to the Committee that a key advantage of this measure is to ensure a level playing field across the EU, so that UK businesses are not disadvantaged by different rules in other EU member states, which they would need to understand and which could result in double taxation or—in terms of Exchequer impact—no taxation at all. I therefore ask the Committee to reject the new clauses, and I commend the clause and schedule 16.
Jonathan Reynolds
I begin with a word of apology to the hon. Member for Aberdeen North for mixing up my Aberdeen constituencies. I can only say to her that in a former Parliament a former Member for Aberdeen South and I were both shadow Energy Ministers, and that at some level I must be missing him and I cannot bring him back. However, that is no excuse for mixing up the two parts of Aberdeen.
Clause 51 relates to gift vouchers and the transposition of an EU Council directive clarifying the consistency of treatment of vouchers. I thought that this was more interesting than it sounded in the explanatory notes; the Minister has done a very good job on that. As he said, this Christmas, when people are out shopping, not many of our fellow citizens will understand that vouchers pose a challenge to HM Treasury in charging VAT, because when a customer buys a voucher, should we charge the VAT on that, or should we charge it when they spend the voucher?
As the Minister said, the discrepancy is further complicated because there will be some stores that sell gift vouchers that then offer zero-rated VAT items, such as children’s clothes. I understand that there have been mismatches in the way that different member states have approached these questions, and that this situation has potentially led to double taxation or no taxation at all across borders. That is the background to the introduction of the EU vouchers directive agreed in June 2017.
The Minister outlined the new regime of single-purpose vouchers and multi-purpose vouchers; I do not think that anyone wants me to repeat that. However, it makes sense that there is clarity on vouchers, finally, and that the risk of there being either double taxation or intra-EU taxation is avoided.
However, professional bodies have raised a number of issues, which I would appreciate some further detail from the Minister on. It is my understanding that there is still no new guidance available from HMRC on this measure, even though implementation is from 1 January 2019. As I mentioned in relation to the previous clause, VAT is a complex and time-consuming area for businesses, so they need as much advice and notice about it as possible. The timing of this implementation, in January, will also coincide with one of the peak times of the year for voucher redemption—hopefully, all of us will get a voucher for Christmas—and that could create a further burden. Gift vouchers are an important part of revenue for UK businesses.
This is a very challenging time for the high street, so the Opposition are mindful that we do not want to create any additional administrative barriers for smaller shops as they develop their businesses. As the Chartered Institute of Taxation has highlighted, shops will need to be able to identify the date of purchase for vouchers, to assess whether they need to declare VAT, given that the rules will be changing. It is surely important, therefore, that they receive as much support as possible from HMRC through the process and receive as much guidance as they can. Those technical details are a concern, and I would appreciate further context from the Minister on how they might be mitigated.
Clause 51 also raises a wider issue, given that it relates to the transposing of EU laws into the UK and our future compliance with EU VAT regulations. Historically, it has not been possible for the UK to fully diverge from the EU on setting rates for VAT. VAT revenues to the Exchequer are a crucial part of the UK’s tax landscape, and we need to know how crashing out without a deal or abruptly pulling out of the customs union will affect how we set VAT rates in future. That is why Labour has tabled new clauses 8 and 9, in relation to schedule 16, which is associated with this clause. New clause 8 would oblige the Government to
“commission a review of the expected impact of the provisions of Schedule 16 on the circulation and distribution of vouchers in—
(a) the United Kingdom, and
(b) the European Union.”
Vouchers are an important part of business for UK retailers. As we leave the EU, questions should be raised about whether this decision on compliance will still work best for both sides, as it has been drafted on the basis that the UK is a member of the customs union. Given that circumstances will change quite dramatically in future, we must be mindful of how this will impact on ongoing changes.
Subsequently, new clause 9 mandates the Government to produce a review of the potential divergence from EU policy of the VAT treatment of gift vouchers, so that we can properly assess its implications. Supporting our high street in today’s challenging environment is a priority for all of us. I therefore urge Members to vote for our new clauses, to make sure that we create the best possible taxation framework for vouchers and help our retailers to succeed.
Mel Stride
I will be brief, but will hopefully answer the questions that the hon. Member for Stalybridge and Hyde has posed. First, as regards guidance, these measures were consulted on widely with UK businesses and stakeholders, and HMRC has recently shared draft guidance with stakeholders for comment. HMRC’s guidance was published yesterday, so that is now in the public domain. Of course, if the hon. Gentleman has any particular observations on that, I would be happy to take representations from him. The Government have also given businesses advance notice of the changes. A consultation document was published last December, HM Treasury and HMRC have been in constant discussion with businesses, and we published the draft legislation last July on L-day, with an impact assessment last month.
My final point relates to the hon. Gentleman’s comments about future VAT arrangements in the context of our departure from the EU. Of course, at this stage, we do not know exactly what those will look like. However, the Government have made a general statement that we are seeking to have arrangements that are broadly in line, so that we do not have very dramatic changes when we depart from the European Union.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Schedule 16 agreed to.
Clause 52
Groups: eligibility
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 93, in schedule 17, page 305, line 28, at end insert—
“Part 3
Review
“16 (1) The Chancellor of the Exchequer shall commission a review on the impact of the provisions in this Schedule on the number of individuals and businesses entering into VAT groups.
(2) A report of the review under sub-paragraph (1) must be laid before the House of Commons before 1 April 2020.”
This amendment requires a review of the impact of this measure on the number of individuals and businesses entering into VAT groupings for the purpose of tax planning, and for that review to report by the end of the tax year 2019-20.
Amendment 94, in schedule 17, page 305, line 28, at end insert—
“Part 3
Review
“16 (1) The Chancellor of the Exchequer shall commission a review on the potential revenue changes if domestic law were to diverge from European Union law in relation to VAT groups.
(2) A report of the review under sub-paragraph (1) must be laid before the House of Commons within 3 months of the passing of this Act.”
This amendment requires a review on the potential revenue changes if domestic law were to diverge from European Union law in relation to VAT groups.
That schedule 17 be the Seventeenth schedule to the Bill.
Mel Stride
Clause 52 makes changes to the Value Added Tax Act 1994 to allow certain non-corporate entities such as partnerships and individuals to join a VAT group. VAT grouping is an important VAT accounting simplification for UK businesses. It allows companies within the same corporate group to operate under one VAT registration and submit a single VAT return. Members of a VAT group can share goods and services with each other without the need to account for VAT. This helps businesses operate effectively and saves time and resource, for both businesses and HMRC.
Clause 52 will simplify VAT accounting arrangements for many UK businesses and ensure that the UK’s VAT grouping rules operate effectively. It is up to the UK Government to determine how VAT grouping rules operate, to ensure that they work effectively for UK businesses. They must adhere to EU VAT principles when doing so. Following a judgment of the Court of Justice of the European Union in 2016, HMRC held a consultation to determine which entities should be eligible to join VAT groups. HMRC listened carefully to the representations made during this consultation and held detailed discussions with VAT expert stakeholder groups to ensure that the changes to VAT grouping rules work for businesses and HMRC, including publishing draft legislation in July this year.
The changes made by the clause will help reduce VAT accounting burdens for many businesses. Under current rules, only corporate bodies can join a VAT group. We will amend the Value Added Tax Act 1994 to allow non-corporate entities such as partnerships or sole traders to join a VAT group, where those entities control all other members of the VAT group. Although these changes will bring administrative benefits for businesses, it is important that the rules are not misused, so we will update existing anti-avoidance rules via a statutory instrument to ensure that no taxpayers use VAT grouping to avoid VAT. The changes made by the clause are expected to have a negligible impact on the Exchequer.
Amendments 93 and 94 would require the Chancellor to commission a review on the impact of these changes to individuals and businesses and a further review on the UK tax revenue impact of any future divergence from EU VAT grouping rules. The Government do not intend to accept these amendments. The VAT grouping changes have been made following extensive consultations by HMRC. HMRC’s response to the consultation was published in December 2017.
With respect to a review of the UK tax revenue impact of any future divergence from EU VAT grouping rules, it is worth noting that although the UK must follow EU VAT law principles, the UK Government already have the ability to tailor UK VAT grouping rules to our own specifications. If any future changes are made to UK VAT grouping rules, they will of course receive parliamentary scrutiny at that time. I do not consider, therefore, that either of the proposed reviews is required.
Jonathan Reynolds
I will speak briefly to clause 52, schedule 7 and our related amendments. As the explanatory notes say, UK VAT grouping already allows for two or more bodies corporate, such as limited companies or limited liability partnerships, to register collectively as a VAT group if they are both established in the UK and under common control. Their VAT return is considered as one and, therefore, supplies between the individual subsidiaries are disregarded for tax purposes.
However, a judgment from the European Court of Justice in September 2015 on a case relating to a shipping company widened this definition beyond bodies corporate. After consultation, this has been extended to a wider definition, including non-corporate entities such as partnerships and individuals that have a business establishment in the UK and control a body corporate.
We are awaiting further guidance from HMRC in relation to non-corporate entities, which we are told by the Government will be published after Royal Assent. Outstanding issues remain that the guidance will urgently need to address. The Chartered Institute of Taxation, which has been helpful in providing briefings on the VAT-related issues in the Bill today, has outlined a number of these questions already. We need to know whether partnerships could have partners that were both UK and non-UK resident, and whether a partnership that had UK business premises with entirely non-resident partners would be eligible. How would the ongoing challenge of the physical presence test be monitored and policed? That is especially pertinent given HMRC’s constrained resources.
Equally, it is important to understand how ongoing eligibility for partnership will be assessed. Questions that need to be answered include whether there should be an annual declaration or tick box on the VAT return to encourage regular self-assessment. Will VAT groupings be cross-referenced with partnership or sole trader tax returns within that group to ensure accuracy? Another issue raised by the Chartered Institute of Taxation is whether partnership and sole trader tax registration details should be used to tag and monitor which partnerships or sole traders were within a VAT group, both for HMRC administration and for taxpayers’ reference when dealing with such entities and checking VAT registrations.
The Government’s 2017 consultation document stated:
“The government recognises that any widening of grouping will come with a revenue cost unless it excludes businesses that make exempt supplies. This is not something that the government is planning to do, so any potential change must be assessed to fully understand the effect on UK revenue.”
I appreciate that the Minister’s comments appeared to contradict that, but that also appears to be contradicted by the wording in the consultation document last year.
The consultation also says:
“Whilst we agree that there may be implications with joint and several liability for certain entities, the government has no immediate plans to make any changes to joint and several liability rules.”
Can the Minister confirm that both statements still apply 12 months later, and that there is no intention to change joint and several liability rules now or widen grouping in a way that impacts on revenue?
Ensuring compliance and that revenue is fully collected must be our priority. It is noted that, in the 2017 consultation, the majority of respondents agreed with HMRC’s view that an entity could be excluded to prevent evasion, avoidance and abusive practices. However, given the large VAT gap in the UK, the Opposition believe we must be vigilant to any potential opportunities that arise that can be exploited with regard to VAT treatment by incentivising individuals or businesses to enter into groups for tax purposes when they might not otherwise have done so. That is why Labour has tabled amendment 93; I encourage Committee members to vote for it. It mandates the Government to commission a review on the impact of provisions made on the number of individuals entering into VAT groups for the purposes of tax planning by the end of the tax year 2019-20. That will help us to identify quickly whether a distorting effect has been created by the legislation.
The second, wider issue in relation to the clause and schedule is how our own changes in VAT legislation will be impacted by our departure from the EU. Amendment 94 would require a review of the potential revenue changes if domestic law were to diverge from EU law in relation to VAT groups. As we outlined when discussing clause 51, we must take stock of the full impact as the Government propose our departure from the customs union. That will have a huge bearing on how we collect VAT, and potentially VAT revenues, if we choose to deploy flexibility in what we do and do not accept. This measure is no exception and for the purposes of scrutiny it is critical that we have a full understanding of its impact on the UK.
Kirsty Blackman
It is not our position that the UK should leave the common VAT area, but we support both Labour amendments, because it is sensible that we have more information about all these provisions, so that the House can take better-informed decisions.
Jonathan Reynolds
I am extremely grateful for the hon. Lady’s intervention and entirely agree with it.
On the access of financial services to the single market once we leave the EU, under the terms of what the Government have negotiated—that single market access will almost certainly be denied unless the equivalence provisions prove adequate, although most people expect them not to be—the Government’s advice to firms in the UK is to set up subsidiaries in the EU. It was reported to me in meetings yesterday in the City that there is concern that when those subsidiaries are created, the connected UK entities will not be able to enter VAT groups in the UK, which would therefore trigger a substantial tax liability in order for firms to comply with the Government’s own advice on market access to the EU. The Minister may not be able to answer that now, but I want to put it on the record.
I call on all Committee members to support both amendments today so that we can get a clear and full picture of the wider impact of the measures on the future VAT policy approach outside the EU and on closing our own VAT gap here in the UK.
Mel Stride
The hon. Gentleman raised a large number of questions, most of them very specific and quite technical, not least around the treatment of UK resident individuals in the context of VAT grouping, as opposed to non-residents in a similar situation, where perhaps a business has—my terminology—a permanent establishment here, but is run by non-residents. He also made various points about the administration of VAT groups. I will write to him about those issues and the other points he raised in that part of his contribution. He asked a specific question about whether we are updating joint and several liability rules for these changes. The answer is that we are not. HMRC will continue to monitor the rules, of course, to ensure that they work effectively for UK businesses.
The final point that the hon. Gentleman raised related to our future relationship with the European Union. His specific question, as I understand it, was about compliance with the financial services arrangements that might be in place once we have left the European Union: if, as a consequence of that, a UK financial services business had a subsidiary or another operation within the EU27 as opposed to here, would that prohibit that particular operation from participating in a VAT group with the UK domicile concern? I have absolutely no idea what the answer to that is, but I did at least understand his question and I am happy to look into it and get back to him.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Schedule 17
VAT groups: eligibility
Amendment proposed: 93, page 305, line 28, at end insert—
Part 3
Review
16 (1) The Chancellor of the Exchequer shall commission a review on the impact of the provisions in this Schedule on the number of individuals and businesses entering into VAT groups.
(2) A report of the review under sub-paragraph (1) must be laid before the House of Commons before 1 April 2020”. —(Jonathan Reynolds.)
This amendment requires a review of the impact of this measure on the number of individuals and businesses entering into VAT groupings for the purpose of tax planning, and for that review to report by the end of the tax year 2019-20.
Peter Dowd (Bootle) (Lab)
I beg to move amendment 96, in clause 53, page 34, line 14, at end insert—
“(5) The Chancellor of the Exchequer must review the revenue effects of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the revenue impact of the revised rates on cider and wine.
The Chair
With this it will be convenient to discuss the following:
Amendment 103, in clause 53, page 34, line 14, at end insert—
“(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the impact of the revised rates on cider and wine on public health.
Amendment 97, in clause 54, page 36, line 12, at end insert—
“(5) The Chancellor of the Exchequer must review the effect on the cider industry of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the impact of Clause 54 on the cider industry.
Amendment 98, in clause 54, page 36, line 12, at end insert—
“(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the impact of Clause 54 on public health.
Amendment 99, in clause 54, page 36, line 12, at end insert—
“‘(5) The Chancellor of the Exchequer must review the expected effects in each part of the United Kingdom and each region of England of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.
(6) In this section—
“part 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 amendment would require the Chancellor of the Exchequer to review the impact of Clause 54 on different parts of the United Kingdom and regions of England.
Clause stand part.
Peter Dowd
I am delighted to see you in the Chair, Ms Dorries. Clause 53 provides for an increase in line with inflation based on the retail prices index in the rates of excise duty charged on all wine and made-wine with a strength at or below 22% alcohol by volume—ABV—and sparkling cider and perry exceeding 5.5% ABV but less than 8.5% ABV. The changes will come into effect on and after 1 February 2019. As we approach Christmas, we felt it was important to scrutinise this measure closely: poring over the matter, one might say. The Government have ensured that enjoying a nice glass of rouge by the fireside over a game of charades—they know a lot about charades—will cost a little bit more. Never fear though, we have tabled a number of amendments to clause 53, which I will address in turn.
It is important to note the context of the rates. Duties on alcoholic drinks are forecast to raise £11.5 billion this year, split between beer and cider at £3.7 billion; wine duties, £4.3 billion; and spirit duties, £3.5 billion. The House of Commons Library provides us with a potted history of recent developments on the matter of excise duty, an area of strong interest to the great British public.
Bambos Charalambous
My hon. Friend is making an excellent and, shall I say, spirited speech. Does he agree that the Government have totally ignored the health effects of alcohol consumption in the way they have implemented alcohol duties?
Peter Dowd
It leads me to believe that the Government have not paid enough attention. That is why we want to have a look at it in the round and why we want a review. Let us see the evidence. If the evidence indicates my hon. Friend’s contention, as I think it will, we would need to do something.
Unfortunately, despite the move to begin to increase duties on wine and cider as set out in clauses 53 and 54, it seems that the Government’s policy on wider alcohol duties reflects continuation rather than a break with the last eight years. Will the Minister confirm that it remains the Government’s policy to increase only those alcohol duties included in the clause and to freeze all those not included? That being the case, does it not seem that the attempt in clause 54 to increase the price of mid-strength cider is a mere sticking plaster on the Government’s wider policy of ignoring the harm to the public’s health caused by cheap alcohol? In other words, when it comes to applying this approach across all duties, it seems that they bottled it. Could it be that they choose to grab a quick Budget headline once a year instead of taking an evidence-based approach to alcohol harm like that adopted by the last Labour Government?
I question the logic of creating an additional rate of duty to ciders up to only 7.5% alcohol by volume. A cursory look at the white cider market suggests that many of the products that the Government seek to make more expensive are currently listed at exactly 7.5% ABV, which is the upper band of the new duty applied by the clause. Clearly, while those ciders would be covered by the new band of duty, it would take only an additional spoonfull of sugar, as the saying goes, to push them up to 7.6% ABV, which is currently covered by the higher rate of duty that is applied to so-called high-strength ciders. Would it not have been a better approach for the Government simply to reduce the lower band of excise applied to higher-strength ciders to ensure that that duty instead applied from 6.9% ABV all the way up to 8.8% ABV? Will the Minister expand on what logic has been pursued by the Government and whether it might incentivise the industry to take more decisive action to reduce the strength of their white ciders or begin to diversify their products?
Amendment 97 would require the Chancellor of the Exchequer to review the impact of clause 54 on the cider industry. The point is to see how far the Government have tried to work with industry to develop and implement a more public health-oriented approach to their products while minimising the impact such an approach has on the industry.
Anneliese Dodds
Is my hon. Friend aware that there used to be a differential regime for small-scale cider producers, whose product was often of far greater quality than the kinds that are often linked to alcohol overuse? That no longer exists, partly because of changes at EU level. Surely we need to know more from the Government about what they are doing to support that part of the industry as well as clamp down on the production of very high-volume, high-alcohol product.
Peter Dowd
My hon. Friend makes a pertinent point and I am sure the Minister was listening. What have the Government done to work with producers to transition to less harmful products while protecting jobs and livelihoods? That could provide an opportunity for the industry to move into other cider products—perhaps those not so reliant on glucose and corn syrup and using the cheaper pomace, all of which presumably add to the negative health effects. I hope the Minister will speak to the work that the Government are getting on with in that regard.
Peter Dowd
As long as that? Ten minutes? My word.
I should point out that, under a more active Government—one not simply going through the motions—these measures would already have been taken into account, acted upon and been on offer for proper scrutiny during this debate. Nevertheless, I hope the Minister will see the benefits of the review as set out in our amendment and agree that it is worth while—or that Members will choose to support amendment 98 to see that it is implemented. That brings our amendment on this particular matter to a close. Cheers.
Kirsty Blackman
I rise to speak to amendment 103 in my name and that of my hon. Friend the Member for Paisley and Renfrewshire South, but I would also like to speak a little more widely about the clause and the Labour amendments. First, I would like to ask the Minister a question about the post duty point dilution, which was in the Red Book. Hopefully, he can answer or get inspiration during the course of the debate. The changes do not appear to be in the legislation, so it would be useful if the Minister could explain when the legislative changes to post duty point dilution will take effect. I understand that the hope is that it will be put into legislation to be enacted in April 2020, but it would be useful if we could have an idea of the legislative process to ensure that those changes are made. I have been lobbied heavily on this by one of my constituents. I know it is important to a lot of people and that the Government have to their credit committed to making changes in the autumn Budget 2017.
Returning to our earlier discussion, I am not clear what the Government are trying to do with the changes to alcohol taxation. Are they trying to incentivise good behaviour; are they trying to disincentivise bad behaviour; or are they trying to generate revenue for the Exchequer? It is important for the Government to clarify that and accept the Labour amendment on the revenue impact on the Exchequer and on public health. That would make a big difference, because we would be clear about the Government’s intentions and what the Government expect to achieve.
On public health, people who want to get drunk quickly often drink high-strength ciders. It is important the changes focus on people who are not drinking for pleasure in the main, but who are drinking to get as drunk as they possible can. Those are the alcohol deaths we are trying to combat in Scotland with the new minimum unit pricing we introduced, which is a clear and well-intentioned public health change. Minimum unit pricing is all about making sure that high-strength alcohols that can be bought very cheaply are increased in price, so that people cannot get hold of them as easily. We predict that we will see a reduction in alcohol deaths as a result of the changes to legislation in Scotland.
What do the Government expect will be the impact of their legislation, particularly the extreme impact on people who are dying from alcohol misuse? What numbers do they expect to see as a result of the changes? If the Government accept Labour’s amendments, it would be useful if the review included the number of people whom they expect to save so that we can measure them against that.
Lastly, it is important that the Government tax this stuff and increase the tax rates as inflation increases. We want the Government to take a step back and have a holistic look at the entire system and explain why they are taxing things in the way that they are, rather than tweak and bodge and make changes year on year, as often happens in this place, so that we end up with something that is unwieldy and does not fulfil the intentions of the Bill in the first place, let alone the intentions of the world as we see it. Will the Minister provide answers?
Sir Robert Syms
The Government have sensible policies on this. We debated an amendment earlier today about securing jobs in the North sea when there are relatively few jobs on oil rigs. The hospitality industry is one of the biggest employers in the United Kingdom. It is also very important for the tourist industry. The Government have been constantly keeping taxes under review to see what gets a reasonable amount of income and what is fair for consumers.
We also have to understand that we have been through a difficult economic period and incomes have not risen as much as one would like. One of the disadvantages of putting up some of these prices is that it will affect not middle class people, but some of those on the lowest incomes who have every right to enjoy a drink. I therefore think that the Government policy is perfectly sensible.
Kirsty Blackman
I agree that the hospitality industry is incredibly important, particularly to tourism. However, the oil and gas industry supports 135,000 jobs and is also very important to the livelihoods it supports.
Sir Robert Syms
I am sure it is, but I suspect the hospitality industry is 10 times that. The other factor about the drinks industry generally is that it is very regionally diverse, with the scotch industry in Scotland, and wine, cider and beer producers. We all have representations from the owners of breweries, which employ people and are sometimes very important parts of the local economy. We have all had representations from people who run public houses, which are also central to the community. One of the worst things that has happened over the past few decades is the number of public houses that have closed, which has had a material impact on many people and communities. This is a matter of balance, and the Government may be wrong or they may be right, but I think they are more likely to be right because their approach is more likely to secure jobs in the hospitality and brewing industries, and to achieve a proper balance so that people can enjoy a meal or a drink out.
There is a serious alcohol issue, but the producers of wine and beer label things very clearly to show the strength of alcohol. There is a strong “Drinkaware” campaign, so it is not difficult for people to find out the impact of alcohol, but we know there is a hard core of heavy drinkers, many of whom use A&Es and ambulances. It costs about half a million pounds a year to keep an ambulance on the road, and many of them are disproportionately used by people who abuse alcohol. The focus, if there is any focus, ought to be on addiction services and trying to intervene with those who abuse alcohol rather than on the vast majority of people who enjoy a drink.
The hon. Member for Bootle, in his amusing speech—we will miss him on Thursday when he is no doubt raising a cheer to Cicero in whatever he is doing—noted that the industry contributes substantially to the Treasury. Some of those billions of pounds have to go to the NHS because of drinking, but the industry also generates a lot of money for good causes and things that the Government need to provide.
This is a matter of balance, and I think the Government have it right. There may come a time when prices have to go up. If incomes start to rise more substantially—we hope that will be a factor in a few years and that there is evidence that pay is picking up a bit—it may be time to review the taxes, but I think the Government have got this one right.
Robert Jenrick
I gather there may be a vote in a few moments’ time, but I will begin by addressing, in no particular order some of the points that have been raised by the hon. Member for Aberdeen North. We are interested in the Scottish and indeed the Welsh Government’s actions on minimum unit pricing. It is fair to say that the jury is still out on whether that has been effective, but we will be watching with interest, as will the Department of Health and Social Care and Public Health England, and that will inform the decisions we take at future Budgets.
The hon. Lady asked about post duty point dilution. This is an issue that she has rightly highlighted, and a number of the producers who are likely to be affected by this and who are based in the UK will no doubt be asking the question she has asked. We intend to give this further consideration and lay draft legislation on L-day next year, in the early summer of 2019, with a view to legislating on it in the autumn Budget 2019 and its coming into force from April 2020. While I have spoken to some of the small number of British producers who will be affected and I note their concerns, this is a question of fundamental fairness in the duty system.
Kirsty Blackman
Perhaps I did not express myself very well. My constituents are lobbying for the change to be made; they are not lobbying against the change being made. I was asking when this would come in, because they are hoping for it to come in.
Robert Jenrick
It is coming in as swiftly as possible, although because of the impact on the small number of British manufacturers, we have given them some time at least—until April 2020—to make any adjustments they might need to.
My hon. Friend the Member for Poole advanced what has been our approach to this issue—a nuanced one that helps those on low incomes to enjoy a drink, particularly at Christmas time. We are concerned, as he is, about supporting the British pub industry. As he says, the number of pubs has declined significantly. It is still declining, although it has stabilised somewhat in the last year or so. We are taking a number of actions, including freezing duties where appropriate, to help to support them.
My hon. Friend also made the point that the drink industry has a significant regional element to it, whether that is the Scottish whisky industry, which is very important to particular regions of Scotland where large numbers of distilleries are clustered in small areas, such as Moray or the areas around Aberdeen, or the cider industry in Herefordshire—where I grew up—and throughout the west country and Wales, which as we have heard has a particular resonance and supports local jobs. We have taken a nuanced approach, but where there are particular interventions that we feel we need to make, as with white cider, we have made them and will continue to make more in the future if that is required.
I now turn to the questions raised by the hon. Member for Bootle in his entertaining speech. I hope, Ms Dorries, that you did not have to reach for a stiff drink in the middle of it, although you might do by the time I have finished. [Laughter.] Well, we are about to talk about the retail prices index and the consumer prices index.
Peter Dowd
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 103, in clause 53, page 34, line 14, at end insert—
“(5) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this section and lay a report of that review before the House of Commons within one year of the passing of this Act.”—(Kirsty Blackman.)
This amendment would require the Chancellor of the Exchequer to review the impact of the revised rates on cider and wine on public health.
Question put, That the amendment be made.
Question negatived.
Clause 53 ordered to stand part of the Bill.
Clause 54 ordered to stand part of the Bill.
Clause 55
Rates
Peter Dowd
I beg to move amendment 100, in clause 55, page 36, line 30, at end insert—
“(4) The Chancellor of the Exchequer must review the revenue effects of the changes made to the Tobacco Products Duty Act 1979 by this section and lay a report of that review before the House of Commons within six months of the passing of this Act.”
This amendment would require the Chancellor of the Exchequer to review the revenue impact of the changes to the rates of excise duty on tobacco products.
Peter Dowd
If hon. Members consult the Treasury’s Red Book published with the Budget, they will see that tobacco duties account for £9.2 billion of revenue. That relates to amendments 100, 101 and 102. It would therefore be accurate to describe tobacco duties as one of the Treasury’s most important revenue streams, as few taxes have consistently contributed such a level of revenue to the Exchequer, but there will be a fall. The fall in the expected receipts from tobacco duties raises questions about their long-term viability as a stable source of revenue for the Exchequer.
What is often overlooked in this discussion is where the revenue raised from increasing tobacco duty actually comes from, particularly given that smoking is no longer as socially acceptable or widespread as it once was. In 2016, those with an annual income of less than £10,000 were almost twice as likely to smoke as those with an annual income of £40,000 or more.
To return to the Treasury forecasts for tobacco duties, it is clear that tax receipts will inevitably fall victim to the success of smoking cessation programmes and the shifting demographics of those who smoke. Smoking prevalence is highest among younger adults: almost 20% of 16 to 34-year-olds smoke, compared with less than 11% of those aged 60 and over. However, younger adults report lower levels of daily consumption. The House of Commons Library found that the prevalence of cigarette smoking tends to be higher in the north of England. For instance, almost 18% of those in Yorkshire and the Humber were smokers, compared with about 14% in the south-west. That regional variation is quite clear and apparent.
Data on NHS stop smoking services in England shows that between April and December 2016, more than 200,000 people set a date to quit smoking and 50% reported successfully quitting at a formal follow-up. Those statistics clearly show that an increasing number of people are quitting smoking, which will inevitably affect the revenue that the Exchequer receives from tobacco duties. It looks as if the changes in clause 55 will exacerbate that, as cost is one of the greatest influences on people to give up smoking, besides health. The Tobacco Manufacturers Association has long complained that the UK’s rates of tobacco taxation are higher than those of any other European country. It is therefore hard to see how much bandwidth the Government have for raising further taxes.
The Opposition welcome the fact that fewer people smoke today than even 20 years ago, but it is clear that the Treasury and Ministers need to begin to consider the long-term viability of tobacco duties, and an alternative source of revenue to replace the £9 billion a year they represent. We are concerned that without forward planning, the Treasury will not be equipped to handle the fall in tobacco receipts and will instead be forced to borrow money or, more likely, to pursue further austerity and cut public services that we rely on. We hope that the Minister will take our request seriously and support the Opposition’s proposal for a review, as well as considering the long-term stability of tobacco duties.
The Opposition amendments to clause 56 would introduce a new excise on tobacco for heating, more commonly known as tobacco for vaping.
The Chair
Order. That is a separate debate, so the hon. Gentleman needs to move on to the substance of his amendment.
Peter Dowd
Okay, Ms Dorries. In relation to amendment 102, we would require the Government to undertake a review of clause 56 and its impact on public health.
Peter Dowd
I accept the point that you are making, Ms Dorries. I have moved the amendment and laid out our overall position on tobacco revenues, and on that basis I shall not take up the Committee’s time further.
Robert Jenrick
Clause 55 implements changes announced in the Budget concerning tobacco duty rates. My right hon. Friend the Chancellor announced that the Government will increase tobacco duty in line with the escalator. The clause therefore specifies that the duty charged on all tobacco products will rise by 2% above RPI inflation. In addition, duty on hand-rolling tobacco will rise by an additional 1% to bring it to a total of 3% above RPI inflation this year.
The clause specifies with respect to the minimum excise tax—the minimum amount of duty to be paid on a pack of cigarettes—that the specific duty component will rise in line with cigarette duty. It also sets the rate for the new category of tobacco product, tobacco for heating, at the same rate applicable to hand-rolling tobacco. The new tobacco duty rates will be treated as taking effect from 6 pm on the day they were announced, 29 October, with the exception of the rate for tobacco for heating, which will take effect on 1 July 2019.
We recognise the potential interactions between duty rates and the illicit market. The Government have to be careful not to raise rates too far and fast, as that might exacerbate the illicit market. We included an important measure at the time of the Budget: the creation of a UK-wide anti-illicit trade group, bringing in law enforcement and representatives from the devolved Assemblies, and building on the good work done by the Scottish Government. We hope that that will mean we can take forward and intensify our efforts to tackle the illicit trade.
Amendment 100 would place a statutory requirement on the Chancellor to review the revenue effects of changes to tobacco duty, as we have just heard from the hon. Member for Bootle. The Chancellor assesses the impacts of all potential changes in the Budget considerations every year. The tax information and impact note published alongside the Budget announcement sets out the Government’s assessment of the expected impacts. Detail on the revenue impacts is set out in the policy costings document, which is also published alongside the Budget. Both include the expected revenue impact to 2023-24.
In addition, HMRC publishes a quarterly bulletin covering all excise duty receipts. The information that the amendment calls for will already be in the public domain for Members to scrutinise. It is not an area that requires further reviews and information, as there is no shortage of information in the public domain.
I take the hon. Gentleman’s point that, with the use of cigarettes declining, this is an area where we would expect revenues to fall in the years ahead. That is, of course, something that we take into account as we review duty rates for each fiscal event, with our two objectives, which I hope hon. Members will support: the primary objective is to protect public health, but the secondary one is to raise revenue to support vital public services.
I hope that I have reassured the Committee, and I ask that amendment 100 be withdrawn.
Peter Dowd
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 ordered to stand part of the Bill.
Clause 56 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Craig Whittaker.)
Westminster Hall
(5 years, 4 months ago)
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ATM Closures
(5 years, 4 months ago)
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Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)
I beg to move,
That this House has considered the effect of ATM closures on towns, high streets and rural communities.
It is a pleasure to see you in the Chair, Mr Hollobone. I and other hon. Members on both sides of the House have been raising the closure of ATMs and its impact on our towns, high streets and rural communities for some time. The issue is more pressing than ever. In November 2017, LINK, the ATM membership body that sets the funding for free-to-use ATMs, began consulting on proposed cuts to the funding mechanism known as the interchange rate fee—a fee paid to the ATM operator, by the bank or company that issues a consumer’s bank card, when cash is withdrawn. Prior to LINK’s reductions, that fee was 25p. In its consultation, LINK proposed reducing the fee to 20p through four rounds of cuts beginning on 1 July this year and ending in January 2021, although the third cut was cancelled and the fourth has been put under review.
From the beginning, LINK accepted that those changes would lead to ATM closures. In its analysis and consultation documents, it stated that it expected a decline of between 1% and 11% in free-to-use ATMs, but that it was confident that there would be a reduction only in areas with a high concentration of free-to-use ATMs, such as cities. However, the number of closures has been far higher —approximately 250 per month—since LINK announced its consultation. Operators such as NoteMachine and Cardtronics say they expect to lose thousands of machines each, and new installations have been put on hold.
Yvonne Fovargue (Makerfield) (Lab)
Does my hon. Friend agree that one of the major problems is that the machine operators—Cardtronics and so on—do not have to inform the LINK network before closing a machine, and that the cost of replacing a machine is prohibitive?
Ged Killen
My hon. Friend anticipates my next point. If an ATM is removed, it costs between £7,000 and £10,000 to reinstall. That high capital investment means that, once closed, an ATM is difficult to replace, due to concerns that the investment may not pay off.
LINK sought to reassure the Payment Systems Regulator that the spread of free-to-use ATMs would not be damaged, because it would use its financial inclusion programme to protect ATMs in areas where there was not another free-to-use machine within 1 km. However, although it is well-intentioned and well funded, that programme relies on communities or operators reporting vulnerable ATMs to LINK and nominating them for extra funding, which, as my hon. Friend alluded to, they do not have to do.
The problem is that the existence of the financial inclusion programme is not well communicated, and there is concern that take-up has been poor. Anecdotal evidence suggests that the process for accessing the programme is not well known or straightforward, meaning that communities, operators and councils are often delayed in applying for funding.
I spoke recently to Tesco about its network of more than 4,000 ATMs. As I am sure Members know, many of those ATMs are in groups of two or three outside stores. Tesco told me that in some cases, those two ATMs are the last two in the town, but neither falls under LINK’s financial inclusion programme because both are right beside another free-to-use ATM.
As a consequence of the poor deployment of the financial inclusion programme, more than 100 ATMs with “protected” status have closed. We see examples of the programme failing in Scotland. Just outside Edinburgh, in the EH18 postcode, the nearest free-to-use machine is now 1.3 km away. In the PH24 postcode in the Cairngorms, the nearest machine is 6.6 km away. In TD10 in the Scottish Borders, some consumers must travel 10.9 km to withdraw their cash without charge.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I am extremely glad that the hon. Gentleman is making an issue of the distance between ATMs. My constituency is vast and remote, and we have a thin scattering of ATMs. There is a threat of closure. I have a map here. I assure the hon. Gentleman that the distance between some of those ATMs is more than 10 km. If any one of them closed, that would be severely detrimental to my constituency.
Ged Killen
I thank the hon. Gentleman for making that point. He came along to an event I held in conjunction with Which? where that information was available to Members from across the House. Many Members were surprised to learn just how far apart ATMs are in their constituencies, and how vulnerable each of those areas would be if something happened to one of those machines.
The 1 km rule just is not working. Even if it were, things can go wrong quickly when one of the last remaining machines develops a fault or runs out of cash. I stopped off in Ballantrae in South Ayrshire over the summer recess, which seems a long time ago now. When I went to use the ATM, I discovered it was out of service. There is a post office counter in the local shop—we would need an entirely separate debate to talk about the pressure post offices are under to try to meet the gap in services created by the banks—but when I went into the shop to inquire, I discovered that the next-nearest ATM is more than 20 km away, or almost 13 miles in old money.
The other issue is that it is difficult to take account of local circumstances in applying the 1 km rule. In Cambuslang in my constituency, both free-to-use ATMs at either end of the main street are—excluding the other—within 1 km of another ATM, but those alternative ATMs would be not just inconvenient but very difficult to get to for anyone who experiences mobility issues. The closure of either ATM on the main street would have a massive impact on the small businesses in that area, which are already really feeling the pressure.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Gentleman on securing this timely debate. Does he agree that in coastal towns—particularly in my constituency but in others, too—we sometimes see the dilution of ATMs? A filling station might open with an accompanying shop and ATM, but the ATMs in the town centre might close, thereby exacerbating the problems we have with reinvigorating our town centres.
Ged Killen
The hon. Gentleman is absolutely right. He makes an excellent point about the existing pressure on our high streets. Removing ATMs and other services does not help that pressure one bit.
LINK has now been given a specific direction by the PSR to review its financial inclusion programme, due to its failure to protect the spread of free-to-use ATMs. However, I have little confidence in the regulation of the sector. LINK’s changes to ATM funding were the PSR’s first major regulatory hurdle. In my view and that of many stakeholders, it fell at that hurdle. Common themes related to the reporting of issues and access to the financial inclusion programme have been reported by those involved in the industry pretty much since day one. I sat across from the PSR and explained the concerns I had heard about the closure of free-to-use ATMs and about their operators, and from the many people who are against the cut to LINK’s interchange fee, and I was met with silence. On every occasion when concerns were raised, the PSR failed to act. Only latterly has it taken action.
Ruth George (High Peak) (Lab)
I thank my hon. Friend for bringing forward this important debate. My very rural constituency is similarly affected. When I met the PSR, I found its attitude was, “Wait and see whether there are any problems, and then we might think about acting.” Does he agree that that is not the correct attitude for a regulator to take when it has such a weight of evidence before it that there will be problems?
Ged Killen
My hon. Friend is absolutely right. When I met the PSR, it seemed wholly satisfied with listening to what LINK, rather than everyone else involved in the industry, had to say about the issue. That was surprising and disappointing.
The closure of free-to-use ATMs highlights the significant problem we have with the way access to cash is managed in the UK. There seems to be no effective oversight of the issue, and responsibility sits across numerous Departments, regulators and private companies. We need a regulator to have the powers to take a rounded view and implement effective measures that will ensure access to cash is protected. It seems likely that the PSR either does not have the power it needs or has not utilised fully and effectively the abilities it has. I should be grateful if the Minister would comment on that.
We are in a transition towards a cashless society, but we are not there yet. We need to be careful about how the transition is managed. Most importantly, we have to think about the impact on people who still rely on cash. Access to cash remains an important part of many of our constituents’ lives. Research from Which? has highlighted the fact that four in five people said that access to the free-to-use network was important in their daily lives and in paying for goods and services. Removing free access to cash would leave one in 10 people struggling to make payments, and would shut many consumers out of local shops and services.
We also need to think about what happens when the technology fails or in the case of hacking. This year the Visa payment system crashed and there were major online banking issues for TSB customers, many of whom of course did not have a local branch to visit as an alternative. The experience of other countries further along the journey towards a cash-free society, such as Sweden, where there has been a huge rise in the number of places that simply will not accept cash, is that there are now serious concerns about the lack of cash in the economy, so that the Government are looking at ways of addressing that retrospectively.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Does my hon. Friend agree that another challenge is the fact that in many communities there simply is not access to digital platforms—so that 25% of my constituents have not accessed the internet in the past six months? Moving to contactless payments or online banking is not an option available to them.
Ged Killen
My hon. Friend is right. My constituency is neither rural nor a city; there are new-build towns that are in between, with surprisingly poor access to broadband in some places. We are asking people to use those services instead of visiting a local branch. That is not always practical—not least for those who are perhaps not as tech-savvy as others.
It is not just a matter of ATMs. The whole infrastructure that supports access to cash will be at risk if we move towards a cashless society too quickly. Without intervention from the Government it will be the elderly, the least well-off, rural communities, struggling high streets and small businesses that will pay the price. We see that happening in other countries that have made the transition too quickly. That is the driving force behind my private Member’s Bill to ban ATM charges and protect access to cash, the Banking (Cash Machine Charges and Financial Inclusion) Bill. In principle I do not believe people should have to pay for access to their own money. Long gone are the days when people’s employers handed them a pay packet at the end of the week, and the banks would not much like it if we all decided to keep our cash under the mattress. We have little choice but to keep our money in banks, and that money generates profit for banks, so we should not be paying to get access to it.
As LINK chips away at the funding formula for ATMs and more and more people use contactless and digital payment methods, there will be far fewer ATMs and more of the ones that are left will charge us for the privilege of withdrawing our cash. I do not want to stand in the way of progress towards a cash-free society, but I do want to shift the burden of that transition away from consumers and on to banks, who after all are the long-term beneficiaries of a cash-free society. We will never reap the rewards of those savings when they come, so let us have them now by requiring the banks to continue providing free access to cash where there is still a demand for it.
I was glad that the Labour party adopted the aims of my private Member’s Bill. For me, and for the Labour Front Bench, the rejuvenation of the high street is not just about helping small businesses; it is a social issue as well. I have noted that there is a growing cross-party consensus on the issue. The hon. Member for Bexhill and Battle (Huw Merriman)—he is not here for the debate, but I have notified him that I shall be mentioning him—has a private Member’s Bill on ATMs, the Minimum Service Obligation (High Street Cashpoints) Bill. I agree with the hon. Member for Ochil and South Perthshire (Luke Graham), who is here today and who, with his private Member’s Bill, the Banking and Post Office Services (Rural Areas and Small Communities) Bill, has highlighted the responsibilities that banks have to the consumers who bailed them out during the financial crisis. In addition to what is being done by Members of this House, a range of organisations have raised the same concerns. They include Which?, the Federation of Small Businesses and the Association of Convenience Stores.
I recently met the chair of the independent access to cash review, and I know that the review is considering in detail some of the issues I have touched on in the debate, so I look forward to seeing what comes out of that. However, in the context of bank branch closures up and down the country, and with high streets and rural communities facing ever greater challenges, the Government must take a serious look at the issue now. I hope that the Minister will reflect on what I have said.
Mr Philip Hollobone (in the Chair)
The debate can last until 11 o’clock, and five Members want to catch my eye. We have about 40 minutes of Back-Bench time, so if Members speak for more than eight minutes they will deprive someone else; please be courteous to each other.
Kirstene Hair (Angus) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for bringing this important debate to the Chamber. I was delighted to support his recent ten-minute rule Bill on protecting access to cash and reducing charges, the Banking (Cash Machine Charges and Financial Inclusion) Bill.
According to analysis by Payments UK and the Bank of England, those who rely almost entirely on cash are much more likely to be in rural areas such as my constituency. Yet they are experiencing the greatest reduction in the number of machines since the funding reduction by LINK in 2018. The closure of ATMs on the high street is of particular concern to older residents, who are more likely to rely on such services. The ATM network in rural areas is therefore incredibly important in supporting rural economies. My constituency will soon lose the Bank of Scotland branch in Kirriemuir, and earlier this year we lost our Royal Bank of Scotland branch in Montrose. When we lose banks, we also lose the ATMs.
Such closures have a huge impact on rural high streets. High streets in Angus are struggling anyway, and the closures put further pressure on them, continuing to challenge their trading environment. The removal of ATMs only creates a further barrier and a disincentive to shoppers. That is why the UK Government and LINK should work together to make shopping on high streets as simple and straightforward as possible. Everything should be done to prevent rural communities from feeling the brunt of the fee reductions and the potential closures that might ensue.
Like many hon. Members, last week I visited many small businesses in my constituency. Among the matters that came up was the ATM issue, and the negative impact that card transactions can have on small independent businesses. Many ask that people spend a certain amount before they can make a card transaction, but if one in 10 people have to walk more than 30 minutes to find the closest ATM, they may just walk away from the transaction. There are differences between contactless payments and card payments, and those things all put more pressure on small independent retailers. That is why ATMs must be in place to support them.
The financial inclusion programme, which aims to identify vulnerable ATMs and increase the interchange payment by 30p, in order to keep rural ATMs financially viable and protect rural communities, is welcome, but there is a question as to how effective it has been. Despite the programme, research by Which? has shown that closure rates of free-to-use ATMs have still been at their highest in rural constituencies such as mine. The provision that people should not have to travel more than 1 km does not go far enough. In fact, it is not in place in every area in Angus, and today we have heard other Members say the same. Residents in Inverkeilor, a village in my constituency with a population of 1,000, must travel six miles to Friockheim to use a free ATM. That is well outwith the 1 km provision that should be in place.
Jamie Stone
What if someone living in the hon. Lady’s constituency, or in my Caithness, Sutherland and Easter Ross constituency, does not have a car?
Kirstene Hair
The hon. Gentleman is right. With declining public transport provision in rural communities, if someone does not have the provision of a car they are left completely stranded, with no access to cash.
Ruth Smeeth
Does the hon. Lady agree that one of the challenges is that LINK, when it makes these decisions, looks at a map and has no understanding of local territory? It has no idea how steep some of the hills are. Access can be almost impossible for someone trying to walk 1 km, never mind 10 km.
Kirstene Hair
I agree. That is why I want to talk about how important it is to do impact assessments before we lose the ATMs, so that those issues are closely considered.
The Association of Convenience Stores has criticised LINK’S FIP, saying that, “it is not clear whether LINK has the resources to implement these commitments across the network.” For example, LINK previously identified 2,651 deprived areas in the UK that are eligible for free-to-use ATM subsidy, but 10 years after the introduction of the FIP, 824 of those did not have free access to cash within a 1 km radius.
We need to watch what commitments LINK makes to ensure that ATM networks in rural areas are properly protected as rates are reduced further in the years ahead. The question is whether the LINK process of identifying vulnerable ATMs is working or whether we need to have further impact assessments. As the hon. Member for High Peak (Ruth George) said, we need to ensure that this is not a “wait and see” game. We must work ahead of time to ensure that people are not negatively affected when they lose their ATMs. That is a huge issue across my Angus constituency, and for hon. Members across the Chamber.
Luke Graham (Ochil and South Perthshire) (Con)
I know that my hon. Friend is drawing her speech to a close, but she is talking about impact statements, which are especially important. It is something I raised in my ten-minute rule Bill. Does she agree that we need to have different impact analysis for rural and urban areas? Some of the evidence she cited about constituents being disadvantaged is the same for Ochil and South Perthshire. I have a constituent in her 80s, who lives in St Fillans, who was told to “nip to Perth” to do her banking. That is a journey of 50-plus miles that would take more than two hours on the bus, especially in bad weather. Members who know the geography and weather in my part of the world will appreciate that that is no easy feat for a woman in her 80s who walks with two sticks.
Kirstene Hair
I thank my hon. Friend for his intervention. I know his constituency very well, both the geography and the weather, so I know it is important, as I said at the beginning of my speech, that the most vulnerable in our society have that provision and that it is easy to access. I look forward to hearing the Minister’s response.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on bringing forward an issue that is important for every one of us here. It is a particularly important issue for me, as I have fought for ATM retention in many places across my constituency, sometimes successfully and sometimes not, mostly due to bank closures. I will use the time available today to do that.
For those who hail from a rural constituency, the availability of free-to-use ATMs is essential. The hon. Gentleman and the hon. Member for Angus (Kirstene Hair) have both outlined the importance of that. In recent times, bank closures have severely affected rural communities, particularly those in my constituency, where I think we have had seven bank closures. I live on the Ards peninsula, and the effect of the closures on the rural community is intense. When the banks close, often no ATMs are retained because the building is sold and there is nowhere to put it, which is very frustrating. My hon. Friend the Member for East Londonderry (Mr Campbell) made a salient point: whenever the banks move out of the villages and toward the town centres, the business moves with them, meaning that villages and small places come under intense pressure.
Yvonne Fovargue
Does the hon. Gentleman agree that it is not just bank closures but post office closures that have that effect? Although the closure programme for small post offices has been completed, two post offices in my constituency have closed because the sub-postmasters have resigned and they cannot get anyone else to do it. The Payment Systems Regulator, which told me that cash is available at post offices, has not taken that into account.
Jim Shannon
The hon. Lady is absolutely right. We have not had so many post office closures in my constituency—we have been able to defray those by moving post offices into shops and so on—but I know that the effect on rural communities is immense. On the Ards peninsula we recently lost the Ulster Bank branch in Kircubbin, with a mobile bank in place at present.
The British Bankers Association investigated lending data and found that bank closures dampen lending growth to small and medium-sized enterprises by a massive 63%. I am sure that other hon. Members can reflect that. The figure rose to 104% in areas that had lost their last bank. We must consider the impact on SMEs, because it is a significant and damaging drop in funding for areas already under commercial and economic pressure.
David Simpson (Upper Bann) (DUP)
Does my hon. Friend agree that the fact that between 150 and 250 ATMs are closing per month in Northern Ireland, as the Belfast Telegraph recently reported, is causing major difficulties, especially for pensioners and those not able to get out?
Jim Shannon
My hon. Friend makes a salient evidential point, which contributes greatly to the debate. The removal of any ATM services will have a further, extreme impact on rural communities and convenience shops. It must be remembered that currently there remain more cash transactions than any other method. We need to ensure that cash is available to people as they need it and that we do not return to people hiding money in the house because they cannot easily access their cash.
I live in a community where it is not unusual for people to keep their money at home. Those of an elderly disposition more often than not even keep their savings there. A few years ago my wife’s aunt was burgled and lost her life savings as a result of two people taking advantage of a vulnerable lady with poor eyesight. More than one constituent has told me that since the latest banking crash they lift their money after pay day and keep it at home. That is not safe and it is not what we advocate. It must also be remembered that many ATMs provide other services such as pin number changes and balance inquiries. For those who do not have reliable broadband at home, these machines are essential for the correct control of finances. These problems make the ATM debate so important.
Polling research by Which? found that cash remains popular and important. The research showed that almost three quarters of people, or 73%, use cash at least two or three times a week, including 60% of 18 to 24-year-olds, which is quite interesting. Only 5% of people use cash once every three months or less, and the majority of consumers still rely on cash in some circumstances. Which? magazine research further found that 57% of consumers say that they have experienced a situation in the last three months in which they could only pay by cash. Two thirds, or 67%, of people say that cash is important for making small purchases, and six in 10 say that it is important for paying for occasional professional services, such as babysitting and cleaning.
Mr Gregory Campbell
Does my hon. Friend agree that the other statistic we should bear in mind is that the number of contactless payments is going up exponentially every single month? The greater likelihood is that there will be many millions more of that type of payment, leading to greater numbers of breakdowns of contactless payments, which will leave people without cash or the ability to pay otherwise?
Jim Shannon
My hon. Friend illustrates clearly where the focus is moving as more people use contactless payment methods. Cash is still a widely used payment method. It is relied upon not just by consumers, but by those receiving payments, with 52% saying it is an important way of being paid. It is imperative that rural communities have access to these services, which I believe we must secure. That is why I support Which? magazine’s suggestion to deal with the ATM concern, which has been taken up by the magazine and other consumer bodies. It responded to the LINK review by pointing out that ATMs are only one part of the cash nexus that needs to be protected. It believes that without a wider strategy for cash, the closure of bank branches, post offices—the hon. Member for Makerfield (Yvonne Fovargue) referred to that—and ATMs could mean that the UK reaches a point where maintaining the current system of free-to-access cash is no longer viable. We have to look at the end result of what we are heading towards.
There are also potential risks to all UK consumers and businesses if we no longer have a sustainable cash network. Recent IT failures have underlined for many people who do all their transactions by card and are almost in a cash-free environment that, whenever their card or bank fails, they are in big trouble. For example, IT failures at RBS highlighted that the distribution of cash can be critical to national infrastructure and is often the only viable alternative if a consumer or business cannot make an electronic payment.
That is why Which? has called on the Government to take urgent action to protect cash by placing a duty on the Payment Systems Regulator to protect access to cash and to ensure the sustainability of the UK’s cash infrastructure. Will the Minister address that and assure the House, Members here and people watching from elsewhere that that will be the case? It would support consumer choice, prevent financial exclusion, ensure that there remains access to a secure, non-digital form of payment and promote effective competition across all payments.
With all that in mind, I put that suggestion to the Minister for his consideration. I look forward to hearing from him and the Government on how we can ensure that services are available UK-wide, particularly in rural areas. I again thank the hon. Member for Rutherglen and Hamilton West for securing the debate.
Douglas Ross (Moray) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing the debate and on introducing it so well. I was delighted to agree to be a co-sponsor when the hon. Gentleman applied for the debate to the Backbench Business Committee, and I am grateful to that Committee for granting it.
I will divide my comments into two parts. First, it is abhorrent that we should be charged to take our own money out of ATMs. There are still a few in Moray that charge for use. If I come upon one, I will actually go away to another. It might end up costing me more in money, time, fuel and inconvenience, but out of principle I would rather go to another destination than pay a company to access my own money. It is simply unacceptable that, in 2018, we still have to pay some companies to take out our hard-earned money. My constituents in Moray are particularly aggrieved about that.
However, I will focus my remarks on the availability of ATMs in high streets and rural communities, as the motion mentions. ATMs have been critical to many communities in Moray for several years, particularly in Lossiemouth and Keith. A couple of weeks ago, Bank of Scotland announced the closure of eight branches across Scotland. Some are in the constituency of my hon. Friend the Member for Angus (Kirstene Hair), but 25% of those eight are in Moray—one in Keith and one in Lossiemouth. As well as potentially closing the branches next year, the bank will also remove the ATMs.
In the 2011 census, the population of Lossiemouth was just over 6,000. That has now boomed to more than 7,000. The P-8s are coming to RAF Lossiemouth in one of the biggest UK Government investments in our defence estate, which will boost personnel numbers at the base alone by 400, and those personnel will bring their families with them as well.
The town is expanding at an excellent rate, which is encouraged by the local community, yet Bank of Scotland has decided to close its very last branch in the town. With that it will take away the ATM, so a town with a population of more than 7,000 that is expanding will go from three ATMs to two ATMs. One of those is in the local post office at Buckley’s, which is up for sale. If it is sold and that ATM is lost, we could have a population of more than 7,000 and only one cash machine. That is simply unacceptable and cannot be allowed to happen.
Luke Graham
My hon. Friend makes a powerful point. Does he agree that banks are speaking with a little bit of a forked tongue? They are closing branches in the areas that really need them, such as his constituency and mine, but are happy to open them in places such as Canary Wharf and Chelsea, which are very well served by the financial system and by broadband, and where more people bank online than in our constituencies.
Douglas Ross
I absolutely agree. That issue came up at the two public meetings I have held in Lossiemouth and Keith since the potential closures were announced. The questions at Keith centred on the fact that this would not happen in the central belt of Scotland or in the capital down here in London, where there is a large footfall. Closing one branch would have less impact on communities in Glasgow or Edinburgh than closing the last branch in a town such as Lossiemouth.
My hon. Friend the Member for Angus made the excellent point that some people may decide not to shop locally if they cannot access an ATM so that they can pay by cash. We heard at my Lossiemouth public meeting that a lot of takeaway shops only accept cash payments. It is not that people go there and decide not to buy; they have already purchased on the phone. They place an order, the food is then made, and they turn up to find out that payment is by cash only. With the cash machines potentially going in Lossiemouth and Keith, they may have no opportunity to get money out, and therefore the takeaway business loses income, because it has already produced the order.
Another important point is that, yes, this has a huge impact on local residents, and particularly the elderly, but Lossiemouth and Moray are beacons for tourists coming to Scotland. We want to welcome as many tourists as possible. What will they think when they want to buy something from the local shop, when they want a memento of their visit to Lossiemouth and Moray, but there is no cash machine for them to get their money out to purchase the goods in the town? We have to consider that going forward.
The local Conservative councillor for Heldon and Laich, James Allan led a great campaign in Moray. I pass on my best regards for Councillor Allan, who unfortunately ended up at Dr Gray’s hospital yesterday. He is recovering well. James has been a real champion of this issue in his hometown of Lossiemouth. When the Royal Bank of Scotland left the town and took away its ATM, he led the campaign to reintroduce it. The RBS building has been taken over by a commercial businessman who would be absolutely delighted to retain the RBS ATM in the town, because he knows the needs of local people. He would facilitate and work that machine, but RBS has so far refused to allow the machine to reopen. It really has to consider its obligations to the community. It may leave and close branches, but it should not take lock, stock and barrel away with the ATMs as well.
James has done an excellent study of the number of cash machines in the local area. Lossiemouth, with a population of more than 7,000 and expanding, currently has three cash machines, which will potentially be down to one. Forres, with a population of 12,500, has eight cash machines. Fochabers, which I used to represent as the councillor for Fochabers and Lhanbryde, has a population of 1,700 and three cash machines, compared with a community the size of Lossiemouth, which is expanding and will potentially go down to one cash machine.
I have to say that the mobile banking provision, which the banks always say will support the communities, does not serve our communities particularly well. It is potentially available for one hour every week or every fortnight, and many of the functions of an ATM are not available at a mobile banking service. The Moray Rambler introduced by RBS now covers a far wider area than only Moray, because RBS has closed so many other branches in Aberdeenshire and the highlands and so on, and our service in Moray is diminished even further.
I will finish on a recent court judgment about ATMs in England and Wales. I was involved in an issue with Buckley’s newsagents in Lossiemouth, again with Councillor Allan. It has an ATM that faces out on to the high street, to ensure that people can use it 24 hours a day. The owner, Tony Rook, could put it inside, but it would then be available only when the shop is open. As a servant to the community, he decided to have it outward-facing. He is being punished by the Scottish Government, who have implemented far higher business rates for outward-facing ATMs than those inside a shop.
I hope that the Minister will clarify this. The issue was passed on to me by Councillor John Cowe, who attended the public meetings in Lossiemouth and who is encouraged by the judgment that came down, I think, last month. Since 2010, supermarkets and convenience stores have been liable to pay rates on the machines, but the courts have now decided that that is not correct and have ruled in favour of the supermarkets who took this forward, particularly Sainsbury’s and Tesco, meaning that the £300 million already charged will now be refunded. I agree with the Tesco spokesperson who said:
“We welcome today’s result and the confirmation of our belief that ATMs should not be separately rateable.”
I will be interested in the Minister’s response and particularly whether he has had any discussions with his Scottish Government counterpart about how they will look at the issue in Scotland, because the ruling was for England and Wales only. It will be very important and useful for us to learn what the Scottish Government will do as a result of the judgment, because it will make a big difference to people such as Tony Rook at Buckley’s newsagents.
I am grateful for your indulgence, Mr Hollobone. This is an important debate for our communities, and I am grateful to the hon. Member for Rutherglen and Hamilton West for initiating it. Banks and ATM providers have a moral obligation to the communities that we all represent and serve. The message is coming through loud and clear. Do not take away ATMs, which are an integral part of our communities; they are important for everyone who lives in and visits them. We need them, we need them to be free and we need them to be accessible and available. By shutting them down, banks and ATM providers are shutting down many of the communities that rely on them.
Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)
I am grateful to you, Mr Hollobone, for allowing me to speak in this important debate. It was a pleasure to be here this morning to listen to the important speech made by my constituency neighbour and hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen). I support his continuing efforts to stand up for the most vulnerable people in our communities through his campaigning on this important issue.
My hon. Friend has already outlined many of the concerns. I will not repeat all the arguments, but will focus on a few key areas: charges, closures and the reliance of many people on ATMs as essentially “the last bank in town” on main and high streets in towns and villages in all four nations of the United Kingdom.
Since my election to this place in 2017, a number of issues have been raised with me in my role as the local MP. One is the impact of Tory austerity on the people I represent in Coatbridge, Chryston and Bellshill. That impact has been made worse by the fact that many of the ATMs available in our community charge residents to access their own money and by the closure of three RBS branches. Forcing people to pay to withdraw their own money is crazy and, in these tough times, so unfair and unjust. I call on ATM providers to think again about the impact on those who have to survive on low incomes and low wages. Those people have to turn the pennies inside out and the pounds upside down to survive, to keep a roof over their head and to keep their families warm and fed. We all have a duty to speak up for them in the House.
The figures speak for themselves. From January to July 2018, 1,300 free-to-use ATMs disappeared, at the disgraceful rate of about 250 a month. According to analysis by Payments UK and the Bank of England, the number of people who rely almost entirely on cash has risen by more than half a million in the past two years to 3 million. Like me, my hon. Friend the Member for Rutherglen and Hamilton West has raised this issue in Parliament, through his private Member’s Bill introduced under the ten-minute rule, which has my full support. I will continue to work with him and others on the Opposition Benches on these issues.
The issue of ATM closures goes to the heart of the debate this morning. My hon. Friend was very clear in his speech that we cannot sit back and watch the programme of closures. I thank Which? for its research on this issue, which has shown that the number of closures of free-to-use ATMs is highest in rural areas. That stands to reason: ATM providers think that fewer people will complain and make a big deal of it. Well, they cannot get away with that, not on my watch, not on my hon. Friend’s watch and not on the Opposition’s watch. I know that most hon. Members here today will not allow it, either.
All colleagues will know that Coatbridge, Chryston and Bellshill is made up of towns and villages across North Lanarkshire in central Scotland. We have main towns and small villages, and I am proud to represent every one of them and all those who live in them. I am determined to stand up for their right to access their own money, in their own community, free of charge.
This debate speaks to the crisis facing our high streets and main streets. All Members of the House will recognise, as they go about their business in their constituencies, that an increasing number of pubs, businesses, post offices and banks are closing. That is why I am hugely supportive of Labour’s five-point plan to support and save Britain’s high streets, outlined by the shadow Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), at Labour’s recent conference in Liverpool. The five points are, first, to ban ATM charges and stop bank closures and, importantly for me, stop post office closures; secondly, to improve local bus services and provide free bus travel for under-25s; thirdly, to deliver free public wi-fi in town centres; fourthly, to establish a register of landlords of empty shops in each local authority area; and, fifthly, to introduce annual revaluations of business rates, ensure a fair appeals system and review the business rates system to bring it into the 21st century.
For many people in my area, the ATM is indeed the last bank in town. If someone does not have a car to travel to the closest branch of their bank, or if they cannot afford the cost of bus travel, they rely on access to an ATM to be able to pay bills and survive. Members of the House will know that Crown post offices are branches directly managed by Post Office Ltd, which is wholly owned by the Government—or should I say by the people who elected every Member of this House. Let me take this opportunity to pay tribute to the postal workers who campaigned in Scotland, England, Wales and Northern Ireland on Saturday for the national day of action to save our post offices. I was proud to campaign with postal workers in Scotland; I am proud of my brothers and sisters in the Communication Workers Union.
As part of the “modernisation” programme, Post Office Ltd has been involved in the privatisation of Crown post offices. The Post Office closes down the Crown post office and looks for a retailer to take over the counter. We are paying £31 million—it is Government money—to subsidise our post offices. That is not good enough. I am delighted that the next Labour Government will stop the franchising of Crown post offices by introducing a new condition into the Post Office’s funding agreement—that no further Crown post office branches will be closed. That will be an important step forward and is so necessary.
I thank my hon. Friend the Member for Rutherglen and Hamilton West for his leadership on this issue and for introducing the debate today. I will fully support him as he continues his endeavours.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) on securing such an important debate on an issue that is of genuine concern to many of my local residents across Stoke-on-Trent North and Kidsgrove. The issue affects both rural and urban communities. Up and down our country, towns and smaller communities are losing access to community-based financial services on an almost monthly basis. These are not “nice to have” facilities; they are a lifeline for people and communities that still depend heavily on cash. I am of course referring to the community banking services—whether that means the local bank branch or the local ATM machines—on which so many people depend.
Earlier this year, I raised the issue of the impact of the closure of local bank branches, which we are also losing at an unprecedented rate. However, basic access to cash is now disappearing from our high streets. LINK’s own figures show that we are losing free-to-use ATMs at the rate of 250 a month. When we explore the reasons for this extraordinary cut to provision, we find that there are multiple excuses, but as my hon. Friend the Member for Rutherglen and Hamilton West made clear, it is in large part because of LINK’s cut in the interchange fee—a decision that had serious repercussions for our ATM network even before it was fully implemented.
The loss of these services is a serious problem in its own right, but there is a larger concern, too. The closure of well-used local bank branches in my constituency and the associated impact on residents and businesses have unfortunately been all too obvious in the last year. Burslem, Kidsgrove and Tunstall have all lost popular local branches. In the case of Burslem, we have found ourselves without a single bank branch left in the town and with no replacement of the ATMs that the NatWest and Lloyds banks operated until their closure. The sector’s lack of local understanding is evident all too often in its decision making. In Tunstall, the Co-operative bank justified its branch closure by stating that customers would be able to access the NatWest across the road. Unfortunately, that bank had already closed and its ATM machine went with it.
For communities that have already lost all-important branches and access to personal banking, ATMs represent a financial service of last resort—a fall-back for the millions of people who still make cash purchases every single day, and for those who do not make contactless payments and prefer to manage their household budgets by allocating cash towards their bills. To do that requires free access to money. A charge of £3.50 to access cash—as in parts of my constituency—is an extraordinarily large proportion for someone taking out only £10 or £20. As ever, those most struggling financially are being punished by the decisions of a faceless corporation.
In Burslem, the mother-town of the potteries, the closure of our last bank means that the only remaining free-to-use ATMs are inside retail facilities and there is nowhere for residents to withdraw cash in the evening. For a town with a thriving night-time economy, that is not just a hindrance to trade but a threat to public safety. Mr Hollobone, if you should leave the pub in Burslem late at night—I am sure you never would—and need money for a taxi, your only option is a long, dimly-lit walk to an out-of-town petrol station. That trip, understandably, could be threatening for many people, especially women, who would not want to make that journey alone. Alternatively, they would have to take a taxi and ask the driver to take them to an ATM and wait, which is far from ideal and costs more money.
In too many parts of my constituency and our country, free-to-use cash points are getting harder to find and further to reach, especially in areas of financial vulnerability. This is exactly the scenario that LINK’s financial inclusion programme was designed to prevent; it was supposed to identify the needs of rural and deprived areas and provide additional funding to ensure that communities did not have to travel more than 1 km, as we have already said, but it is not working. Huge swathes of my constituency do not have access to their money. Neither Goldenhill nor Chell Heath can access a free-to-use ATM within 1 km. In parts of my constituency, this is leading to a spike in the use of illegal loan sharks. There are human consequences to the decisions that LINK is making.
Often, the machines that LINK considers easily accessible to a community are not. The geography or terrain should also be considered. Given that an ATM costs between £7,000 and £10,000 to reinstall, it is almost impossible to get new ATMs in place where there is no provision. I know how important these services are to my constituents, which is why I secured a debate on community bank closures earlier this year. In every debate we discuss the immediate challenge, but we need a policy solution that tackles these issues in the round, which is why my constituency Labour party submitted a motion to this year’s Labour party conference calling for the protection of community banking services to be made official party policy. I am delighted that that policy has now been adopted.
We cannot allow banks to default on their responsibilities to our community, which is why I welcome this debate and congratulate my hon. Friend the Member for Rutherglen and Hamilton West on securing it. I fully support calls to protect our free-to-use ATM network and ensure every community has access to the services it needs.
Mr Philip Hollobone (in the Chair)
We now come to the Front-Bench speeches, beginning with Patricia Gibson for the Scottish National party. The guideline limits are 10 minutes for the SNP, 10 minutes for Her Majesty’s Opposition and 10 minutes for the Minister. Then we will allow Ged Killen three minutes at the end to sum up the debate.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for bringing this important debate, and for the work he has done on this issue. I am pleased to participate in this debate on the important issue of our constituents’ access to their own cash free of charge and, ultimately, the issue of social and financial inclusion.
We have heard that 2.2 million people across the United Kingdom are entirely reliant on cash, as opposed to credit or debit cards. It must be correct that we should all be able to access our own cash without incurring any charges. The fact is, those who are reliant on cash transactions tend to be less well-off and are the least able to pay any additional cost to access what little cash they have.
As the hon. Gentleman pointed out, earlier this year LINK, the UK’s largest cash-machine network, announced that it would go ahead with plans to cut its interchange fee by 20% over the next five years. As a result, we have seen hundreds of ATMs closing. Scotland has been hit hard, with 221 free cash machines lost between January and July 2018—around one every day. There are now fewer than 6,000 free cash machines left in Scotland. That sits uncomfortably alongside bank branch closures, as the hon. Member for Strangford (Jim Shannon) pointed out, with banks closing at a rate of 60 each month, leaving significant towns in my constituency—such as West Kilbride, Dalry, Brethe, Stevenston, Ardrossan, Kilwinning—with no bank at all thanks to RBS closures. The communities affected will never forgive RBS for this abandonment and betrayal. I believe that RBS will never again be trusted, nor will it have its reputation repaired. It is still disappointing that the UK Government did not intervene and use what influence they had in that matter.
We have also heard that post office closures, stretching back to 2007 and 2008, have compounded the issue, as the hon. Member for Makerfield (Yvonne Fovargue) pointed out. As the hon. Member for Strangford said, we have the additional problem of postmasters not being replaced; so the issue is snowballing.
I fairly enjoyed the hon. Member for Moray (Douglas Ross) doing his impersonation of a trapeze artist when he tried to blame—if I heard him correctly—the shortage of ATMs and the impact on small businesses on the Scottish Government. He will be well aware, I am sure, that thousands of businesses in Scotland have benefited from the small business bonus. I think anybody in Westminster Hall would agree, looking at the evidence, that the major issue facing small businesses is the concern and uncertainty caused by Brexit. We will just leave that there.
Patricia Gibson
I will not give way. I will proceed.
So far, 2018 has seen 670 local bank branches closing across Scotland, following close on the heels of the 879 that closed in 2017. In response to this debate, the banks will no doubt tell us that fewer and fewer of us use cash in our transactions; but research shows that at least three-quarters of us use cash at least two or three times a week and it is still the most popular method of payment. The hon. Member for Stoke-on-Trent North (Ruth Smeeth) pointed out—as did almost every contributor to the debate—that those on lower incomes and older people are likely to be hardest-hit by any reductions in access to cash. The less well-off you are and the older you are, the more likely you are to rely on cash transactions, with just over a quarter of people not using card payments at all.
This perfect storm of a reduction in free ATMs and bank closures means that now there are real concerns about the effect that the closures will have on consumers and small businesses without adequate access to cash. This financial and social exclusion is utterly unacceptable. Consumers are gradually being forced into online banking, and the evidence suggests that now they are being gradually forced into cashless transactions—so much for consumer choice.
We heard from the hon. Member for Rutherglen and Hamilton West that in January 2018, LINK announced a series of four reductions in the interchange fee—the amount paid every time a customer uses a free ATM, and which funds the entire free-to-use network—from around 25p per transaction to 20p. However, concerns have been raised and, as we heard from the hon. Gentleman, the third and fourth reductions have been cancelled and put on hold respectively. Cutting the interchange fee was supposed to reduce machines in areas where there were considered to be too many, but maintain geographical coverage of ATMs across the UK. LINK commissioned a review to consider consumer requirements for cash machines over the next five to 15 years. That review was cognisant of the fact that financial inclusion is extremely important for all consumers and will remain so. Their needs and requirements must be met. Like all hon. Members in Westminster Hall today, I look forward to the findings of that review in March.
Meanwhile, research carried out by Which? is truly shocking. It shows that free-to-use ATMs are closing at a rate of 250 a month, while over 100 ATMs with so-called protected status have stopped transacting in the same period. The hon. Member for Rutherglen and Hamilton West set out the challenges associated with ATMs with protected status. Analysis shows that from November 2017 to April 2018, following LINK’s announcement about cutting the fees paid for each ATM transaction, the rate of cashpoint closures increased from around 50 per month to 300 each month. LINK’s own figures show that between January and June this year, 500 cashpoints closed each month. The implications of all this are extremely significant, with more machines being lost in rural communities despite LINK’s pledge that changes would only target urban machines, not rural ones.
Just under half of us use a cashpoint at least once a week, with 80% of us saying that access to free-to-use cash machines is important in our daily lives for paying for goods and services. Forcing people to pay to access their own cash would leave around 10% of us struggling and would constitute nothing less than financial exclusion. It would hit small and local businesses hard, as was set out in some detail by the hon. Member for Strangford. As the hon. Member for Rutherglen and Hamilton West said, already many people struggle to access free cashpoints, with around 11% of us having to walk for more than 30 minutes to access the nearest cash machine and around 9% saying that the nearest machine is simply too far away to reach on foot. That, coupled with the fact that many people do not have access to a car, makes life extremely difficult, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) reminded us.
One in five of us currently does not have access to free-to-use cash, but it seems this might get worse. That is why the calls from Which? for the Payment Systems Regulator to bring more regulatory scrutiny and intervention to bear on this issue are so important. I agree that it is time for the financial inclusion programme to be amended to ensure that the entire ATM network is fit for purpose. LINK has tried to address concerns that all ATMs 1 km or more from the next free ATM will be exempt from any reductions and cuts to fees for transactions made and is increasing the subsidy for these machines, but there is some concern that these measures, although well-meaning, simply do not go far enough. Exempting individual cashpoints from cuts to fees might not be enough to save them. Cashpoint closures are not decided by LINK. We know that recent closures and the inability of LINK to quickly and effectively replace protected machines shows the shortcomings of the current approach.
We have heard from many Members today that it really is time for the Payment Systems Regulator to show its teeth. It seems eminently sensible for the PSR to conduct its own review of LINK’s financial inclusion programme, including the ATM replacement process, because that must be fit for purpose. The Government must also beef up the powers of the PSR to allow it to protect cash, and impose a duty of care on it to ensure the sustainability of the UK’s cash infrastructure. I believe that would do much to protect consumers, the choices they want to make and their financial inclusion.
If it had the power from Government, the PSR could introduce robust measures to ensure that all our communities have free and easy access to their own cash. I urge the Minister to set out how he can empower, and what he is prepared to do to empower, the PSR, to ensure that there is a robust future for free-to-use cash machines. In correspondence with me on 12 September, the PSR has admitted that it is “concerned about these closures”.
Patricia Gibson
I am hoping the Minister will heed the calls he has heard from all parts of Westminster Hall today to work across party lines to ensure a sustainable, inclusive approach on this issue that works for all consumers.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) on securing this important and timely debate. I know that he is an avid campaigner in this area and that this debate follows the introduction of his Banking (Cash Machine Charges and Financial Inclusion) Bill, which is intended primarily to end cash machine charges.
Small businesses form the backbone of our economy. Over the past weekend parliamentarians and citizens across the UK had an opportunity to support our small businesses during Small Business Saturday. They are vital to our local communities, from large towns to small rural communities, but in order to survive and thrive they need the infrastructure conducive to their running, which includes a vibrant network of free-to-use ATMs.
As has been outlined, ATMs are under threat. Earlier this year LINK decided to begin a phased reduction of the interchange fee by 5% from 1 July 2018. This reduction in the funding formula has led to concerns that ATMs will become financially unviable, resulting in closure or an increase in the number of fee-charging ATMs. Despite all the discussion to the effect that we are all transforming into a cashless society, recent research by Which? highlighted that demand for cash and physical financial infrastructure remains, and that these services are important to everyday life. In a survey of over 1,200 members in Scotland, Which? found that 44% of people use a cashpoint at least once a week, that nine in 10 people said that free-to-use cash machines are important to their everyday lives, and of those, more than half described them as essential for day-to-day living, with this figure remaining similar across every age group. My hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) eloquently reminded us of that.
A reduction would also lead to one in seven people being deterred from using outlets that accept cash only, placing a strain on consumers and retailers alike. Similarly, a poll of Federation of Small Businesses members found that 59% of retail businesses felt that a cash machine was useful to their business. In addition, 50% of businesses said that their nearest free-to-use cashpoint was already over 1 km away. Many hon. Friends have referred to this scandal today. Although LINK has said that it will provide funding to ensure that there is always a free ATM at least 1 km from another one, in practice this has proved difficult to implement and there are concerns that this standard does not provide free-to-use ATMs in the areas where they are needed most.
The ATM Industry Association has calculated that at least 10,000 free-to-use cash machines could be at risk—almost one in five of the 54,000 ATMs at which customers can withdraw cash without incurring fees. The organisation has found that the worst-hit regions for independent, free-to-use cash machines are set to be rural south-west England, Scotland and urban south-east England, outside London. The Which? and FSB research has shown that there remains a demand for free-to-use cash machines, that reductions could damage consumers and businesses, and that the public could be forced to use fee-paying machines if free-to-use options are reduced. Any reduction will be most harshly felt in rural and deprived areas.
There has been no significant review of the ATM market for a number of years. I know that the Bill introduced by my hon. Friend the Member for Rutherglen and Hamilton West would introduce a legal requirement for access to free cash through ATMs or other means, following a market review of the ATM network by the Payment Systems Regulator to establish demand. The legal requirement would create a function for ATMs to be provided where there is demand, based on the PSR’s review. Reviews could be conducted at regular intervals to monitor demand. LINK has said that it will provide funding so that there is always a free-to-use ATM at least 1 km from another one. In practice, this has been difficult to implement and there are concerns that this standard does not provide free-to-use ATMs in the areas where they are needed most, hence the need for a full market review by the PSR. Both Which? and the FSB have called for a full market review. On principle, Labour does not believe that anyone should have to pay to access their own cash.
Fee charging is the option often taken most in deprived or rural communities, meaning that the most vulnerable are often asked to pay more. We should try to prevent a poverty premium and ensure that access to cash is inclusive. By banning fee-charging machines we can focus on a funding formula that ensures that all ATMs are fully funded without there being recourse to charges. My hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) explained clearly what this means for people in many areas of her constituency.
As the shadow Minister for postal affairs, I find it particularly concerning that under this Government vital local community assets, such as ATMs, are being stripped away. The same is true of our post office network, which has seen a managed decline under the Tory Government. We must protect our local communities’ ability to do business and ensure financial inclusion for all. ATM closures have a detrimental impact on our communities and the Government must ensure that any further closures are immediately halted.
The Economic Secretary to the Treasury (John Glen)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for raising the matter and for the thoughtful way he set out several issues that I will respond to. I also thank the other five Back-Bench Members who made contributions.
First, I assure hon. Members present, and across the House, that the Government recognise that widespread free access to cash remains extremely important for the day-to-day lives of many consumers and businesses in the UK, particularly the most vulnerable members of our society. Ultimately, the Government’s approach to payments is one of facilitating maximum choice; consumers should be free to choose the method of payment that best suits them. I acknowledge that several scenarios have been set out, particularly for rural and less affluent areas, and I will come on to address some actions that can be taken at different levels to deal with those challenges.
The fundamental context for the problem is the rise of digital payments and the decline in cash use. The UK has one of the most extensive free ATM networks in the world; some 82% of the ATM network is free. I listened carefully to the remarks of my hon. Friend the Member for Moray (Douglas Ross), who resists the option to pay a fee. I share his antipathy to that situation, but 98% of all ATM transactions are conducted on free ATMs. Moreover, the free ATM network has increased by 40% in the past 10 years and the number of pay-to-use ATMs has fallen by a similar percentage.
However, we must all acknowledge that people are increasingly moving away from cash and towards digital payments. To be specific, in the UK, cash use has fallen from 61% of all payments in 2007 to a remarkable 34% last year. That fall is expected to continue at pace. Correspondingly, the declining number of withdrawals at ATMs is forecast to continue as cash usage by consumers for payments declines. We can all, therefore, recognise the challenge of maintaining efficient, free access to cash.
In response to that challenge, LINK—the UK’s ATM network—announced a series of reforms at the beginning of the year, which have provided the main focus of the debate. Its work to maintain widespread free access to cash involves acknowledging that 80% of free ATMs are within 300 metres of one another. There is evidence that too many ATMs are clustered in busy, urban areas, which unnecessarily duplicates the supply of that service. Therefore, LINK’s measures aim to reduce the amount of ATM duplication in urban areas and avoid unnecessary growth in ATM numbers, despite the observed decline in consumer demand for cash.
Jim Shannon
The Minister says that there has certainly been a downturn in the use of cash, but I remind him that we have to acknowledge that almost three quarters of people use cash two to three times per week. An interesting trend, which we cannot ignore, is that 60% of 18 to 24-year-olds also use cash at that level, so it is still vital.
John Glen
I acknowledge that we are not seeing the end of cash. The challenge is how we adapt to the different mode and frequency of its use. There is no simple single solution. Clearly, creating a complete network in sparsely populated areas will not always be the right answer.
Although the hon. Member for Makerfield (Yvonne Fovargue) is not in her place, for general edification I will respond to her point about the lack of notice when ATM operators move. They have a duty to inform LINK that a protected ATM will close. LINK can offer premiums to all its members to incentivise the replacement of the machine. It has set up a publicly available monitoring tool on its website that shows ATM availability. It has the power to mandate and directly commission an ATM deployer where one is necessary.
LINK’s measures aim to reduce the duplication that I mentioned earlier and to intervene where necessary. It aims to incentivise broad, national coverage of free ATMs and to protect every community across the UK from losing free ATM access. Specifically, LINK has ensured that free ATMs that are 1 km or more from the nearest free ATM are exempt from any reductions in the interchange fees that fund free ATMs. It has put in place specific arrangements to protect free ATMs more than 1 km away from the nearest free ATM, including boosting the interchange fee available in those areas. It has also enhanced its financial inclusion programme by tripling the interchange fee available to the lowest-income areas of the UK, to ensure that they all have at least one free ATM. Some 93%—an all-time high—of the most deprived areas in the UK have a free ATM.
That fact has to be seen in the context of the £2 billion of investment in the Post Office since 2010. The £370 million that is earmarked for 2018-21 is designed to maintain the last post office in the village and ensure that consumers can use the over-the-counter option to secure cash.
Douglas Ross
I am grateful to the Minister for his courtesy in giving way—a courtesy that was sadly lacking in the hon. Member for North Ayrshire and Arran (Patricia Gibson). As he is speaking about post offices, does he think that the hon. Lady did not take my intervention because she is fully aware that business rates are overseen by the SNP Scottish Government in Scotland? The problem for the Lossiemouth post office is that it is being punished by the SNP Scottish Government for having its ATM facing outwards and accessible 24/7 rather than inside the post office, which has therefore reduced the hours when the ATM is accessible.
Carol Monaghan (Glasgow North West) (SNP)
The Minister talks about the importance of keeping an ATM in rural and deprived areas. The difficulty is that when there is only one ATM in such areas, it often experiences high levels of usage and regularly runs out of cash, which is worse than not having it at all in some ways. I encourage him to do what he can to ensure that we keep a network, even in such areas.
Patricia Gibson
The Minister mentioned the Payment Systems Regulator, so before he moves on I want to ask whether he is considering giving it greater powers to protect cash, and imposing a duty of care on it, to ensure that the UK’s cash infrastructure is sustainable. That would address a lot of the concerns that hon. Members have expressed.
John Glen
I will come on to talk about the powers of the Payment Systems Regulator, which I have met. My judgment is that it has considerable power over the LINK network. It can mandate LINK to do certain things and it can impose fines. I would need to look carefully at what that proposal would involve and where it would be different from the powers that LINK has at the moment.
I acknowledge LINK’s independent review, which is chaired by Natalie Ceeney. As was mentioned earlier, the report will be published in March. It is looking at long-term access to cash and exploring further the impact on consumers and small businesses of the shift from cash to digital payments. I have met Natalie Ceeney and encouraged her to look as broadly as possible at this issue. I imagine that the nature of her powers, as well as what she needs to do her job, will be part of her report.
This House should also note that the payment systems regulator, which the Government established in 2015 to ensure that payment systems work well for those who use them and which regulates LINK, has taken a lead in examining this issue. Following the first publication of LINK’s ATM footprint report, the regulator used its powers to place a specific direction on LINK. This is designed to make sure that LINK does all it can to fulfil its public commitment to preserve the broad geographic spread of free ATMs and to report to the regulator on a regular basis.
I think I have addressed a number of the concerns raised in the debate. The Government have invested heavily in maintaining a stable network of post office branches. Anyone can use their LINK-enabled bank card to take money out for free at the counter of every one of the 11,500 post offices in the UK. I acknowledge that a post office needs to be open for that to happen, so I am not presenting it as a perfect solution, but it is a significant alternative source of cash for many people.
Additionally, in the autumn Budget at the end of October the Chancellor announced the Government’s plan to help local high streets to evolve and adapt to changing consumer demands. It included £675 million for the future high streets fund to support local areas’ plans to make their high streets and town centres fit for the future.
The hon. Member for Rutherglen and Hamilton West raised a couple of specific points about digital payments failure. The Treasury and the UK financial authorities take this issue very seriously and are investing in improving the operational resilience of the system, including cyber, across the financial sector. Over the next five years, £1.9 billion will be spent on cyber-security initiatives.
The hon. Gentleman also asked about helping the vulnerable. The Department for Digital, Culture, Media and Sport has a digital skills partnership that is looking at partnerships across the private, public and charity sectors, which also involves training in digital skills for adults.
On the point about the powers of the PSR, it has the power to direct LINK and impose financial penalties; it is committed to using those powers. It also made a direct intervention on the interchange fees to LINK to deal with this issue.
To conclude, I thank the hon. Member for Rutherglen and Hamilton West for raising this issue. It is surely right that we consider the impact of an increasingly digital world and ensure that we protect those who need to be able to pay by cash. In the here and now, cash use remains important; it is still the second most frequently used payment method, just behind debit cards. We also know that around 2.2 million consumers predominantly use cash, many of whom are the more vulnerable members of our society.
I take this matter very seriously. I chair the Government’s financial inclusion forum, and for me there is a combination of interventions. There will be interventions from the regulator to deal with those who are making it very difficult for people to access affordable credit. However, this issue is also about increasing capacity.
I do not rule anything out in terms of efforts to improve the situation. With my officials, I have spoken to the PSR about this issue, and it has engaged with the regulator and LINK on this topic. I assure the Chamber this morning that I will continue to emphasise the importance that this Government place on widespread free access to cash.
Ged Killen
I thank hon. Members for taking part in this debate; I was encouraged to see so many people first thing on what promises to be a very long day indeed.
I also thank the Minister for his response. Unfortunately, for some of it I felt like I was hearing the LINK briefing that I have heard a thousand times being repeated back at me, but there were some interesting things in there that I agreed with. I was encouraged to hear him say that the authorities were investing in cyber security, but I suggest to him that the people who are seeking to undermine our security are also invested in that endeavour.
As we witness the rise of digital technology, which the Minister mentioned, we have to consider the experience of other countries, such as Sweden, that are now retrospectively looking at Government intervention. We have a chance in this country to get ahead of that by considering intervention now.
I agree with the Minister when he says that this issue is about consumer choice; he is right about that. However, having listened to the concerns of Members here today, he will understand that that choice is being taken away from some people, due to the lack of availability of free cash. He can quote some favourable statistics showing that the situation is better than we might have suggested, but on the ground the picture is very different for the communities that we represent.
We all recognised what the hon. Member for Moray (Douglas Ross) said about going to other ATM machines if he finds one that is charging a fee. I am exactly the same. Unfortunately, as he said, not everyone has the ability to go to another ATM.
The hon. Gentleman made an interesting point about business rates, which must be looked at. I have heard these concerns expressed many times by shop owners in particular. They are concerned not just because ATM machines attract business rates; as I understand it, an ATM machine in a store actually increases the rateable value of that store overall, which brings additional costs for that business. We need ATMs to be there if there are no bank branches offering ATM provision.
The hon. Member for Strangford (Jim Shannon) said that cash transactions were still in high use. From memory, when I spoke to Tesco it told me that over 60% of its transactions in store are still cash, and that there is a withdrawal from one of its ATM machines every 10 seconds. So, it is simply not right to say that cash is on the way out yet. As I have said, we are in a transition towards a cashless society, but we are not there yet and we have to get that transition right.
My hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) said that services such as ATM provision were a lifeline for our communities, and spoke about the percentage of someone’s income that they could pay out in charges if they withdrew £10 from an ATM machine and were charged. Of course, if that person has only £10 in the bank, they will be unable to withdraw that from one of these ATM machines that charge.
I conclude by giving my private Member’s Bill one final plug. I am pleased to report that the inventor of the ATM machine and the PIN code, James Goodfellow, is alive and well in Scotland. Mr Goodfellow supports my private Member’s Bill. So, if the Minister is unwilling to take my word for how important this issue is, perhaps he will consider taking the word of the inventor of the ATM machine.
Question put and agreed to.
Resolved,
That this House has considered the effect of ATM closures on towns, high streets and rural communities.
Out-of-area Education: Cared-for Children
(5 years, 4 months ago)
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Gordon Henderson (Sittingbourne and Sheppey) (Con)
I beg to move,
That this House has considered cared-for children educated out of area.
It is a delight to see you in the Chair, Mr Hollobone. I should first explain, for those who may know them by another name, that cared-for children are the same as looked-after children—so if I refer to looked-after children in my speech, people will understand who I am referring to.
The use of children as drug mules by “county lines” gangs seems to make the news almost daily. Some might think that this is a new problem, but it is not. A year ago, almost to the day, there was an article in The Times about thousands of children being groomed as drug mules. A couple of days later there were two letters in the same newspaper from headteachers in east Kent, complaining about the number of looked-after children being placed in children’s homes and foster homes in Kent by local authorities from outside Kent, particularly London boroughs. It is outrageous that the most vulnerable children should be sent to one of the most deprived and challenging parts of the country, and of course those vulnerable children are most at risk of falling prey to criminals. There is an acknowledged link between the growth of drug-related gang crime in Kent and the number of looked-after children being sent to the county from London.
Protocols are in place that are supposed to prevent local authorities sending looked-after children farther than 20 miles from their home, and local authorities are not allowed to place a child in foster care without first securing a school place, but the protocols are repeatedly ignored, which means the problem is getting worse. Increasing numbers of looked-after children are being placed in Kent, not only by London boroughs but by counties as far away as Hampshire and Wiltshire. Indeed, only last week Buckinghamshire sent three children to a school in Thanet. That not only places many of the children in danger, but puts pressure on already hard-pressed schools and on Kent’s social services. The problem is made worse because the children are, in the main, placed in areas where there are already pockets of deep social deprivation, such as my constituency, which currently has the largest number of looked-after children from outside the area in Kent.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing the matter to the House. Sometimes it may not be of the utmost importance to many people, but it is an issue of importance to us across the whole of the United Kingdom of Great Britain and Northern Ireland. I will give an example of how this is happening not just in the hon. Gentleman’s area. The number of children per capita in Northern Ireland is the lowest in the UK, but there is still a lack of available foster carers, which means that children are fostered, and therefore educated, out of their home area. Moving school is incredibly difficult for children. Does he agree that there must be a better way of ensuring that there is as little upheaval as possible, and that kinship fostering should be encouraged?
Gordon Henderson
I fully agree with my hon. Friend—he is my friend—that that is a problem. He is right that there are other solutions, one of which is to increase the funds available to local authorities so that they can pay more to keep children in their own areas.
As I was saying, pressure is put not only on our local schools but on social services, and the problem is exacerbated by children often being put in areas of deep social deprivation. The chairman of the Kent Association of Headteachers, Alan Brookes, who also happens to be the headteacher of one of the best secondary schools in my constituency, told me:
“The fact that there are currently 353 out-of-county looked-after children in Swale and Thanet, but only 42 in Tonbridge and Tunbridge Wells, clearly demonstrates that market forces, rather than morality, are driving this practice.”
Alan gave me that information over a year ago, a month before The Times published its article, and I shared, and still share, his concerns. I wrote to the Minister for Children and Families, who acknowledged our joint concerns regarding
“areas being chosen for out-of-authority placements and the relationships of placing authorities with school.”
I hoped that such an acknowledgment would prompt at least some sort of action. However, we are a year on and nothing has happened, other than that the situation has worsened. There are now 1,329 out-of-county looked-after children in Kent, 467 of whom live in Swale and Thanet—Swale is the local authority covering my constituency. That is 40% of the total in the whole of Kent, and 30% more than 12 months ago. Those 1,329 children have been moved away from their home areas, their friends and the surroundings in which they were born. Being moved so far from home is not good for vulnerable youngsters, for the Kent schools that are expected to educate them, or for Kent social services, which are expected to look after them.
In conclusion, I will read out one of the letters I spoke about at the beginning of my speech, because it expresses in stark terms the frustration felt by many headteachers in Kent. It reads:
“Sir, as a head teacher in Margate the terminology of cuckoo houses and county lines is all too familiar to me. Local authorities have shown irresponsibility and an utter lack of morality by sending their most vulnerable young people to Margate in order to secure cheap foster care. This is a national disgrace of the magnitude we have seen in Rotherham, yet head teachers are threatened with ‘secretary of state direction’ when they make a stand and refuse. It is time the Government prevented this obscene dumping of children.”
I could not have put it better myself.
The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
It is a privilege to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) for securing this important debate. I know that the education of children in care placed in Kent from other authorities is a long-standing concern for him and a number of his colleagues in neighbouring constituencies. In September, I met my hon. Friend the Member for North Thanet (Sir Roger Gale) and representatives of the Coastal Academies Trust, and I and my officials have discussed the issue with the National Association of Virtual School Heads. The issue is clearly engaging many Kent Members of Parliament.
Children in care are some of our most vulnerable children, and we know that their educational and other outcomes are nowhere near as good as they should be, even when their pre-care experience and high levels of special educational needs are taken into account. That is something that I, as the Children’s Minister, am absolutely determined to address. I am committed to doing everything I can to ensure that children in care have the opportunities I want for my own children, which is why I stress that the language I sometimes hear and read, of children in care being “dumped” in other areas, is particularly unhelpful. It is in many ways an oversimplification of a complex issue, which fails to recognise the crucial role that out-of-area placements can play in, for example, disrupting gang violence, trafficking and sexual exploitation. Of equal concern is the stigma and narrative it attaches to this vulnerable group of children and young people in the communities in which they are placed.
That is not to underplay the concerns of my hon. Friend the Member for Sittingbourne and Sheppey, including his desire, which I absolutely share, to ensure children’s safety. Safeguarding children and tackling county lines is a priority for the Government. In August, I announced that we intended to contract a new service to tackle a range of threats involving child exploitation, including county lines, gangs, modern slavery, child sexual exploitation and child trafficking. The service will operate from April 2019, with funding of up to £2 million.
Through the recently published serious violence strategy, we have provided £3.6 million for the establishment of the new national county lines co-ordination centre, to enhance the intelligence picture and support cross- border efforts to tackle county lines. In Kent specifically, £300,000 was awarded for a support services pilot, run by the St Giles Trust, for exploited young victims caught up in county lines drugrunning between London and Kent. The pilot offered one-to-one support to exploited victims caught up in county lines, as well as specialist return-home interviews with those returning from exploitation.
Gordon Henderson
I welcome that initiative—it is very good—but the problem with it is that it only relates to people who are known to be in that category, and ignores the hidden youngsters who never reach that stage.
Nadhim Zahawi
I agree with my hon. Friend: it is not a panacea. It does not solve the whole problem, but I wanted to reassure him that we are taking the issue very seriously. I fully appreciate that placing a child far away from home can break family ties and make it difficult for social workers and other services to provide the support that young person needs. However, some children may need to be placed further from home—so that they can access specialist provision, for example. We are clear that out-of-area placements should be made when it is the right thing to do for that child, not because there is no alternative. I think that is the point that my hon. Friend is making in his very good speech.
Gordon Henderson
If it is the case that there are children who should be placed further from home, why is there a protocol that says local authorities should not be sending them further than 20 miles away?
Nadhim Zahawi
As I say, my hon. Friend raises an important point. I hope that when he has heard the rest of my speech, he will at least recognise that this Minister recognises the issue, and that the Government are beginning to tackle it. However, what I can provide him with is a long-term strategy, rather than short-term fixes.
It is our duty to ensure that looked-after children have the best possible care and education placements, and that the decisions made on those topics are not taken in isolation from each other. As of March this year, 19% of looked-after children were placed more than 20 miles from their home. We recognise that this is often a result of insufficient capacity in the home area—especially in London—rather than underlying care need or poor practice, which is another point that my hon. Friend the Member for Sittingbourne and Sheppey has made. My hon. Friend has also explained some of the issues that local authorities in Hampshire and Buckinghamshire are having, which we know have a direct impact on other areas, including his own constituency and Kent overall.
Some local areas can host significant and disproportionate numbers of children who are looked after by other local authorities. As of 31 March this year, 45% of the children placed within Kent’s boundaries were the responsibility of an external—meaning another—local authority, a figure that is slightly higher than the national average of 40%. However, the overall number of children placed in Kent who are the responsibility of an external local authority has remained stable since 2013, despite the overall increase in the number of children in care over that same period. That supports the sector’s claim that it is doing everything possible to avoid such placements unless there is no alternative.
Gordon Henderson
That does not explain why the number of out-of-area looked-after children in my constituency and neighbouring constituencies increased by 30% over the past year. That simply does not equate with what the Minister is saying.
Nadhim Zahawi
The overall number in Kent has remained relatively flat since 2013. I suspect that particular wards or parts of Kent are taking a greater number of looked-after children, hence the rise in the number of those children in my hon. Friend’s constituency and neighbouring constituencies.
Gordon Henderson
I accept that: that is the point that I am making. Those children are being placed by other authorities way outside their areas, not for the children’s benefit, but to save money by getting the cheapest possible foster care. That is immoral.
Nadhim Zahawi
I take on board my hon. Friend’s forceful remarks about how local authorities are behaving, but I remind the House that out-of-area placements will always be part of the landscape. I think my hon. Friend shares that conviction, but he is challenging us—urging us—to do more to make sure children are placed nearer to their home, which we are doing. We are doing a range of things to address issues of sufficiency, including investing part of our £200 million children’s social care innovation programme in projects in London, where demand for placements far outstrips supply. That investment will increase councils’ capacity, so that fewer children are placed far away from home, including in my hon. Friend’s constituency and in Kent overall. We are setting up the residential care leadership board to drive practice improvement and share learning across the sector. We are providing funding to three local authorities where out-of-area placements are far too common, in order to set up new secure provision. My hon. Friend rightly identified fostering as a concern; earlier this year, I committed to providing seed funding to fostering partnerships, which will increase the sufficiency of foster parents and improve commissioning, so that we do not end up in the sorry situation that he articulated.
I will touch on educational placements and support for schools. Schools play a vital role in supporting looked-after children: children in care often tell us that school is the only stable thing in their life, and the evidence supports that. The greater the stability and permanence that we can deliver for those kids, both in care and in educational placements, the better their educational outcomes will be. That is why our guidance is clear that not only should care placements ideally be in, or near, the home area, but that everything should be done to minimise disruption to education and, where appropriate, maintain the child’s current school placements when considering care options. Far too often we hear of delays in securing school places for children when, for whatever reason, a change is needed. Children being placed out of their own area in-year are most subject to delays, which is unacceptable.
Gordon Henderson
Once again, I agree with the Minister. However, he has re-emphasised the problem: secondary schools in my constituency are already overflowing. There are not enough places for all the home-grown children, so we have a problem when out-of-county looked-after children are moved into our area. There are no places, but because I have some excellent headteachers in my constituency who refuse to turn those children away, they are put at a disadvantage.
Nadhim Zahawi
I commend and thank those excellent headteachers, who go above and beyond. From the evidence I have seen, they do a fantastic job. Sometimes—dare I say it?—they are victims of their own success, because they do such a great job with these most vulnerable children. Schools can draw on the expertise and resources of the local authority virtual school heads, including, of course, the pupil premium plus funding of £2,300 per looked-after child.
However, we need to ensure that schools receive all the information and support they need to both understand and meet the needs of children who are placed with them. We have heard that such information and support can be lacking, or too late in coming, when children are placed out of area. As my hon. Friend the Member for Sittingbourne and Sheppey has articulated, that adds to the pressure felt by teachers and school heads, and risks placing schools in an extremely difficult position. At worst, it sets up the child and their placement to fail, which none of us wants to happen. We recognise the challenges of school admissions for looked-after children. I want to work with the sector to ensure that provision of information and support happens in a timely manner, and that school placement is given proper consideration during the care planning process, rather than being an afterthought once care planning has taken place.
We are carefully considering what we can do to ensure that all children in care can secure high-quality school places without delay. I am clear that the lengthy delays that have been reported to me and in the media in getting schools to admit these vulnerable children are not acceptable. I do not think that a child’s future life should be part of the political machinations of local government and this place. The future of that looked-after child must be paramount. Looked-after children are placed in schools for good reason. It is important to remember that instead of turning away these children, schools can and sometimes will be directed to admit them.
Finally, I again thank my hon. Friend. He is a passionate advocate for the right outcomes for vulnerable children, not only in his constituency but in the whole of our country. I thank him for securing this debate on such an important issue; it holds our feet to the fire and reminds local authorities of their responsibilities. He and others have raised a number of important issues with me. I thank the hon. Member for Strangford (Jim Shannon) for making time to be here for this important debate. I reassure Members that we are doing all the things that I outlined in my comments earlier.
Gordon Henderson
I have been reassured by the Minister’s words, but I hope I do not have to come back next year with exactly the same complaints.
Nadhim Zahawi
I thank my hon. Friend for that further intervention and the challenge he sets us in government. It is incumbent on all of us responsible for the upbringing of these children—through no fault of their own, other than the accident of birth, they have been dealt the worst hand possible, and the baton of parenting is held in our hand, and I include myself and my officials in this, as well as my hon. Friend—to ensure that children in care have the same support and opportunities behind them as our own children. I again thank my hon. Friend, and I thank you, Mr Hollobone.
Question put and agreed to.
Mental Health and Wellbeing in Schools
(5 years, 4 months ago)
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Layla Moran (Oxford West and Abingdon) (LD)
I beg to move,
That this House has considered mental health and wellbeing in schools.
It is a pleasure to serve under your chairmanship, Mr Stringer. I am delighted to have secured today’s debate on mental health and wellbeing in schools. I am sure that many hon. Members will know that I am a former teacher. My interest in this subject comes from the link between mental health and wellbeing and learning. I will come later to all sorts of issues surrounding children’s mental health and the lack of services out there, but I hope that today’s debate will focus on how this issue affects children, and indeed teachers, in schools.
Schools are not just places where we help students and children to learn resilience and the skills that they need to build themselves up so that they become adults who can cope with all sorts of pressures that are thrown at them; schools themselves can influence the mental health of children. Some of the debate so far has focused too much on the outside influences on children coming into school. Today I will focus on aspects of the current schooling system that exacerbate that problem.
Let us look at the scale of the issue. The National Society for the Prevention of Cruelty to Children says that the number of schools seeking help from mental health services is up by more than a third in the last three years. The number of referrals to NHS child and adolescent mental health services by schools seeking professional help for a student was 34,757 in 2017-18. That is the equivalent of 183 every school day. To say that this is anything other than a crisis would be wrong. We are facing a crisis of mental health issues in our schools.
The National Education Union further found that 49% of education staff said that secondary school pupils had been suicidal as a result of the stress that they were under, and more than half of professionals surveyed said that funding for support for pupils’ mental health in schools was inadequate.
Stephanie Peacock (Barnsley East) (Lab)
I congratulate the hon. Lady on securing this important debate. In my constituency of Barnsley East the local clinical commissioning group has been working with schools to try to embed support in a project called “MindSpace”. Does she agree that projects such as MindSpace that get trained counsellors into school, to be there every day, need more funding?
Layla Moran
I thank the hon. Lady for her contribution. Funding is part of it, but a number of interventions are taking place in schools, and they have to be critically evaluated. We have to look at the evidence to see whether they work. To my knowledge, only one—the Bounce Forward intervention programme—has been shown to have had a positive impact. I am not saying that the intervention that she mentioned does not, but we need to be careful that what we are doing in schools works. It is incumbent on the Government to ensure that that critical evaluation happens.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the hon. Lady on securing this timely debate. Just before the 2010 general election, I introduced a Bill, which I discussed with the then education Ministers, that provided for somebody with medical knowledge, for want of a better term, to be available who would be able to spot mental illness, or other illnesses. In a way, that would have helped teachers as much as parents to do what would probably be called early intervention. Unfortunately, a general election came along, and the rest is history. Had that Bill passed, it could have been a great starting point.
Layla Moran
I thank the hon. Gentleman for his intervention. He makes an important point, and I will get to what the Government are suggesting in a moment. I also add a note of caution: I do not think that we should over-medicalise being an adolescent. There is a grave difference between that and ensuring that there are proper services for those on the acute end of the spectrum.
Coming back to funding cuts, one of the best bits of being a teacher in my day was having time to get know the students, and develop a level of trust with them, very often after a class was finished, or during an after-school club. Those are the kinds of things that are going. There is pressure on teachers, with cuts to the number of teaching assistants and a narrowing of the curriculum. Teachers have to teach more lessons and do more prep, meaning that they have less and less time for that critical pastoral support. What are the Government doing to measure how pastoral support in schools—the time that teachers have to spend with students—is changing?
It would be remiss in a debate such as today’s not to talk about teachers. Mental health in schools is not confined to the children; there is a crisis among teachers as well. A report by the charity Education Support Partnership, including a survey of 1,250 education professionals, showed that a huge majority—75%—of the UK’s education professionals had suffered from either mental or physical health issues in the last two years due to work. Some 50% of those who took part in the study said that they had experienced depression, anxiety or panic attacks due to work, and the charity has warned that unless urgent action is taken over rising mental health problems, there will be a severe retention and recruitment crisis. We already know that that is one of the issues that our schools are facing, and it exacerbates all the issues that I was describing regarding pastoral care.
The impact of Ofsted on the mental health of teaching professionals also needs addressing. The way in which Ofsted operates under its current inspection framework drives the wrong kinds of behaviour in schools. I believe, and the Liberal Democrats have now made this party policy, that the brand of Ofsted is so broken in the teaching profession that it needs scrapping and replacing with another inspectorate that does that job. Critically, the job of school improvement must be separated.
I sit on the Public Accounts Committee, and in a recent hearing we heard how school improvement is being lost amid academies’ governance structures and the lack of services provided at local authority level. Representatives from the Department for Education could not definitely say that it was their job, and neither could those from Ofsted. The Liberal Democrats believe that it is time to have an arm’s-length body that focuses on school improvement for all schools, no matter their governance structure, and a separate inspectorate that does that specific job.
Further to that, we need to change the framework for school inspections. It should not just be about numbers. I am the school governor at a primary school. I sit on the performance and standards committee of that school, and it is all about numbers. We are reducing children to single numbers; we look at their progress but do not allow teachers the time to look at broader issues. We believe that we should have an inspectorate that looks closely at wellbeing in schools and measures that part of what a school delivers as critically as attainment and progress. Having said that, I welcome much of what Amanda Spielman is doing in terms of drawing together the issues in education, particularly where she has spoken about the narrowing of the curriculum and off-rolling. That role is vital, so I do not want that to be lost in today’s debate.
Another thing that I want to bring up is league tables. Early in my career, during my first couple of years of teaching, in the early 2000s, I was a fresh-faced, brand-new physics teacher and I absolutely adored my job. I went into a school where I lost my faith in the profession very early on. We were teaching GCSEs and all the science students had been put up on a wall and colour coded. This was when we had A to F grade. The reds were the ones who were never going to get to the C boundary, and the greens were the ones who looked as if they were going to pass. We were told in no uncertain terms that we had to focus on the middle group, who were coloured yellow. That did not make any sense to me. I thought that I should be able to focus on those who needed it the most. When I asked why, I was told, “League tables.”
What can the Government do about league tables? I am not saying that we should get rid of any of the data; we should publish it. However, on the DFE website one of the first things that people can do is click on performance tables data. They are then encouraged to compare schools in their local area. Comparing schools is not a bad thing; parents need to have the right information. However, it should not just be about numbers; there needs to be a full sense of what the school offers, including its extra-curricular stuff and its ability to deal with wellbeing and mental health issues. That is not what people get; they either get performance tables data, or a link to the school’s Ofsted report, which, as I just mentioned, is inadequate in that form. The Liberal Democrats have therefore said that we would stop the Government doing that, even if we cannot stop the press doing it. In Ofsted’s annual report, which was published today, Amanda Spielman noted that, shamefully, thousands of children are being let down by off-rolling. The off-rolling epidemic in schools is a direct result of schools’ desire to push up numbers. It is about numbers, not about the children, and that cannot be right.
The Government are fostering a culture of senseless competition among schools, in which results from a single set of narrowly focused high-stakes exams are the be-all and end-all. That is not good enough. Amanda Spielman wrote to the Public Accounts Committee in October about the narrowing of the curriculum:
“Where we do have clearer evidence of a decline in the quality of education are in the narrowing of the curriculum in schools and an endemic pattern of prioritising data and performance results, ahead of the real substance of education…schools must work to make sure that pupils leave school with the qualifications and examination results that set them up for future success…However, our research has found evidence that an overly data-driven accountability system is narrowing what pupils are able to study and learn.”
My worry is that rather than encouraging children to flourish at every turn in their lives—which can often be one step forward and two steps back; that is how life works—we have a curriculum that encourages multiple levels of failure. It starts with baseline testing as soon as children get into schools, moves on to SATs and continues with exam after exam. Every young person whom I have asked about high-stakes testing tells me that it has got worse and worse.
I was an experienced teacher before I came into Parliament, but I am still one of the youngest MPs. We have to remember that the school system that we MPs went through is not the same as the system that students are going through now. There is much more high-stakes testing in the curriculum now, and we have to stop it, so the Liberal Democrats have committed to getting rid of SATs. We are not saying that data is not important, but we can collect it in other ways. For the record, as a physics teacher I loved exams—they were great—but they do not have to be so high-stakes. They can be part of learning well; they do not have to be the be-all and end-all. I am seriously concerned.
Andrea Jenkyns (Morley and Outwood) (Con)
I thank the hon. Lady for securing this debate. I, too, have worked in education, so I understand the challenges that our young people face. Does she agree that the Government are making a step in the right direction by ensuring that young people will be prioritised with school-based mental health support available in every part of the UK?
Layla Moran
I will come on to the Government’s proposals in a moment, but yes, I do call that a step in the right direction.
To come back to the thrust of the debate, what does my speech so far have to do with mental health? Lisa, a mum of three children in my constituency, writes:
“I had a chat with my 6-year old’s teacher about the amount of homework they get. Her response was that parents needed to see the SATS papers the children would have to sit in May. They would then understand how much work the children needed to do to reach the expected standard. The problem with the ‘expected standard’ is that it only looks at certain aspects of the curriculum and then puts children into boxes”.
If they do not meet that expected standard, they can only interpret that they have failed. Lisa goes on to say that
“putting children in boxes which suit a government body is, in my humble belief, creating mental health issues at a very early age.”
I would like our debate to focus on that toxic culture.
Let me move on to what the Government have announced. We now have a plan, at least, which I would call a step in the right direction, although it is not sufficient. We are looking at having health professionals in schools—a massive workforce of thousands. My question, which was shared with some scepticism during the Public Accounts Committee inquiry, is where those professionals will come from. The professionals whose roles we are looking to create are the same people we cannot get for nursing or midwifery, because it is the same type of person who might want to do the job.
I am seriously concerned that we are creating a parallel system, while the problem could have been solved by having school nurses in the first place. To return to the subject of funding cuts, school nurses were a valuable part of schools’ wider pastoral care. Many schools have lost their school nurses, which is a crying shame.
Andrea Jenkyns
Does the hon. Lady agree that mental health should be treated in schools with the same importance as physical health and that it should be central to the Government’s health agenda? I agree with what she says about nurses; we need to ensure that that is central to future policy.
Layla Moran
I completely agree. In fact, I would argue that if mental health is the Cinderella service in the NHS, children’s mental health is the Cinderella of the Cinderella service. That is brought into stark relief by child and adolescent mental health services across the country, although I will focus on Oxfordshire. My postbag is full of letters from parents who are desperate to get their children to CAMHS for all sorts of reasons. We have to remember that CAMHS is there for the most acute mental health needs; it does not cover the mild to moderate needs that so desperately need solving in school at an early, preventive stage. In Oxfordshire, children can wait for a referral for up to two years; extraordinarily, they are then often pushed back.
The Education Policy Institute reports that the number of referrals to specialist children’s mental health services has increased by 26% over the past five years, although the school population has increased by 3%. Something is clearly going on, whether it is lack of early intervention in schools or increased pressure.
Stephanie Peacock
Does the hon. Lady agree that it is quite concerning that people need to be in absolute crisis even to get a referral? Often young people need to be suicidal before they can get a referral. That is absolutely shocking. Surely earlier intervention would be much better.
Layla Moran
I completely agree. It is especially shocking with respect to issues such as depression and eating disorders. Parents seek referrals, but when—after a waiting time of six months at the very least—they see a professional, they are told, “I’m sorry, but your daughter’s not sick enough.” They despair, because they do not know what to do any more. We need a much more joined-up service. A lot of these things are picked up in schools, so schools have a part to play.
There is a lack of resources for CAMHS across the country, and unfortunately the new commissioning service is not going to solve it. The funding problem for mental health services shows that we do not have parity of esteem between mental health and physical services; I know that the Government want it, but they cannot pretend that it has happened. If they say that children’s mental health is a priority within that, I ask people to look at the evidence given to the Public Accounts Committee’s inquiry into children’s mental health services and see for themselves that that is absolutely not the case. The Government know that there is not enough money for CAMHS.
The EPI study further points out that as many as a quarter of local authorities have phased out vital support services around schools, including school-based mental health services, family counselling and support for those living with domestic abuse. The median waiting time for treatment is 60 days, but I am well aware of many constituents who have had to wait as long as two years. That is extraordinary.
Last but not least, I want to discuss the impact of cuts, particularly on local government and on the support available in the wider community. As we know, schools never exist in a vacuum. As today’s Ofsted annual report points out, schools cannot fix everything, but for a lot of children they are often where the buck stops. Cuts elsewhere in the system, particularly in local government, have a massive impact.
I have secured quite a number of debates in Westminster Hall, but of all of them, this debate attracted the most responses when I tweeted about it. I would like to share one with hon. Members, from Vanessa Whitcombe, headteacher at Castle Manor Academy:
“Just emailing following your Facebook post regarding tomorrow’s debate. We are trying so hard to prioritise mental health and wellbeing in schools, applying for grants, paying for school nurse service as ours has been withdrawn, participating in Anna Freud school mental health award, peer mentoring programmes, reducing workload for teachers and putting in wellbeing support, and we are really proud of the small steps we are taking forward. But they are small, as they are against a backdrop of dwindling external services and decreasing budgets. External service provision and early help is only available at such a high threshold we feel like we are firefighting, and it is the most vulnerable children and families that are not accessing what they need. Amanda Spielman spoke wisely of the need for schools to be able to stick to their core business, and in our school we try to make sure that classroom teachers are able to do that as much as possible, but the surrounding investment that is needed to be put in to safeguarding, emotional support, educating parents, feeding students is not going to go away without more provision outside school.”
We have seen that for ourselves in Oxfordshire. Every single one of the children’s centres in my constituency was closed by the Conservative county council, and the more than 40 across Oxfordshire have fallen to just eight. We were able to help families in children’s centres, at an early stage, before there were problems. I have not even started to go on about youth services and youth provision and the issues there. All the wraparound services for young people have gone from the local community, and that leads to all sorts of issues. It is not just about social media—in fact, there is some evidence to show that a little bit of social media for teenagers is a good thing, although a lot is very definitely a bad thing. The debate often focuses too much on that point and less on the much more intractable issues that surround the child.
In conclusion, I believe that this is an issue of deep concern. Even on a day such as today, when the shenanigans of Parliament might make us forget that there are big issues in the country, this is one of the biggest issues we have, and I am concerned that the Government response is simply a sticking plaster. What they are not doing is looking at the core issues that are driving the problem. Unless they do that, they are always going to be playing catch-up; I am not convinced that the laudable aims in the White Paper are actually deliverable. We need to change the culture in schools. We need to stop the pressures on young people. I am grateful in advance for the contributions from other Members, because I am sure that I have missed many of those issues out of my speech.
It is time for change. I am so proud that my party has managed to take a massive step forward in our conference debates. The issue I had in my early years of teaching was under a Labour Government. That has happened again and has got much worse under a Conservative Government. I am not blaming anyone; we have reinforced bad practice across the political spectrum. It is time that we made it stop. This is our next generation and there is nothing more important than that.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
It is a pleasure to serve under your chairmanship, Mr Stringer. I commend the hon. Member for Oxford West and Abingdon (Layla Moran) for bringing the debate to Westminster Hall today, when there are many other pressing demands on our time, because this is an important matter. She rightly highlighted a number of the challenges facing young people in our schools. I draw attention to my declaration in the Register of Members’ Financial Interests; I am a doctor practising in mental health services and a member of the Royal College of Psychiatrists.
We need to analyse first why the problem is happening. Is it down to the increased challenges facing young people—the stresses and strains of exams and the need to perform in tests at schools, as the hon. Member for Oxford West and Abingdon outlined, and general increasing distress among young people—or is it also due to increasing awareness and recognition of mental ill health among young people, and the fact that more young people are therefore prepared to come forward because there is generally a greater recognition of their needs? Perhaps it is a combination of the two. We do not fully know or understand the reasons for greater pressures presenting in services, but they are happening. It is right that the Government are beginning to turn their mind to the issue and have put forward a number of initiatives.
I entirely agree with the hon. Member for Oxford West and Abingdon that, in addressing young people’s mental health, it is important that we do not over-medicalise issues such as teenage angst or normal patterns of growing up. It is important that we do not follow the American system, where—in my view and, I am sure, that of many psychiatrists in this country—a lot of young people are on medication without there necessarily being a good evidence base for that. We have to be very careful about over-medicalising problems, or medicalising problems too quickly, which is perhaps how we should look at it.
The Government are making strides in this area. They are rolling out training for every school and college to ensure that a designated mental health lead will be in place by 2025 and that there will be greater mental health awareness training for teaching staff. There has also been a lot of talk by some, including the Secretary of State for Health and Social Care, about the dangers of social media and its potential impact on young people’s mental health. However, as the hon. Member for Oxford West and Abingdon outlined, eye-catching announcements will do little to deliver the meaningful expansion and improvements in care that young people need and deserve. Although such announcements may make good media headlines, I am afraid the lack of provision on the ground for young people is the real problem. I know that it will be one that the Minister will want to work with colleagues in the Department of Health and Social Care to address.
I want to look at some areas of challenge. The coalition Government had a commendable focus on improving special educational needs provision. We know that a lot of children with special educational needs may also suffer from poor mental health. There is a correlation between some conditions that are associated with special educational needs and psychosis or other mental illness. However, far too often the joint care plans that should exist between the NHS and schools take a long time to come to fruition. Schools are far too often frustrated by the identification of a problem that they have recognised for which the NHS does not have the resources available to support the school in meeting the needs of the child in the way that was envisaged when those joint care plans were legislated for in this House. That speaks very much to the issue of lack of workforce, which the hon. Member for Oxford West and Abingdon outlined in her remarks.
Dr David Drew (Stroud) (Lab/Co-op)
That is no more evident than with the huge problem of eating disorders, where all the medical evidence shows that what is needed is early intervention. The NHS has got to get much more involved with schools on that. Does the hon. Gentleman agree?
Dr Poulter
Certainly, eating disorders are an area of great challenge. One of the difficulties is that very often young people present in great distress after their illness has taken hold for quite some time, and the prognosis can be less good in those situations. A lot of young people may have to travel many miles or even out of area to get the specialist care they need, and that does need to be addressed as a matter of urgency. I know that my right hon. Friend the Minister will be raising such issues with his counterparts in the Department of Health and Social Care, because a number of the answers to the challenges raised in this debate have greater priority, and there is greater understanding of what the challenges are in that Department rather than in his.
Layla Moran
Does the hon. Gentleman agree that it is not just about talking; it is active co-ordination between the two Departments that will solve this? If they end up working in silos, as we know Government Departments often do, none of this is going to work.
Dr Poulter
I completely agree, but it is also about breaking down the silos on the ground. It is all very well Government Departments coming together to work together and the silos being broken down—that did help between the Department of Health and the Department for Education on special educational needs under the coalition Government, but in reality the levers or mechanisms do not exist on the ground to deliver meaningful change for young people in the timely manner that was envisaged by the legislation passed in this House. We must make sure that whatever legislation is passed and whatever co-operation there is at Whitehall level translates into the right levers on the ground to deliver the co-ordinated and joined-up approach to more integrated care that young people need, across health, education, social services and other statutory services as may be required.
On the broader issue of child and adolescent mental health, a key challenge is the lack of workforce to deliver the care needed for young people. We know that the number of full-time mental health nurses has fallen by more than 6,000 between 2010 and March 2018, with a reduction of 1,832 learning disability nurses alone during that period. The number of CAMHS and learning disability consultant psychiatrists has slightly declined over the past decade. Many parts of the country, particularly outside London, are struggling to fill higher registrar training posts in CAMHS and learning disability psychiatry. That is a real problem, because without the workforce to deliver care we will not have the bodies on the ground to make a difference for young people.
Perhaps more concerning is the fact that the recent rhetoric on child and adolescent mental health still bears little resemblance to the reality facing many children and their families. Given the shrinking CAMHS and learning disability workforce, it is difficult to see how current levels of care can be maintained, let alone how the step change in mental healthcare provision for young people, which the hon. Member for Oxford West and Abingdon and I—and everybody taking part in this debate—would like to see, can take place.
The focus on healthcare apps and the talk of fines for social media companies are no substitute for having enough trained professionals on the ground to deliver frontline care to young people and their families. The NHS is far too often viewed through the prism of A&E. As a result, acute hospitals often receive a disproportionate level of funding compared with primary care and community services. In child and adolescent mental health services, as in other parts of the NHS, community services are often understaffed and poorly resourced. In fact, we are hearing about reductions in staff levels and not about the increase that the Government talk about as being desirable. My message to the Minister today is that we need more staff in child and adolescent mental health services, whether they are working in schools or in the community. Without those staff, all the media announcements and well-wishing announcements to improve in this area will come largely to nothing, and young people will still be struggling.
On the issue of fragmented commissioning, which the hon. Member for Oxford West and Abingdon raised, we see silos not just in Whitehall but on the ground. CAMHS, social services and education providers do not always work in a joined-up way. Although there can be some good initiatives at local level, and there are examples of good, co-operative working, there is nothing to compel the providers of different services to work in a joined-up way for the benefit of young people. Unless we get the commissioning of services right in providing better mental healthcare for young people, and actually compel joint working rather than just encourage it, we will not make a meaningful difference.
I know that the Minister will want to pick up some of these issues with his colleagues in the Department of Health and Social Care. Unless we have a joined-up approach that we can compel at local level, all the announcements on improvements in tackling young people’s mental health will come to very little. We will still be having these debates in this place in 10 years’ time—those young people will have lost 10 years of their life and will still be struggling.
I know that the Minister has a great commitment to all he has done on schools and in education. He has been a very good Minister, and I hope that he will redouble his efforts to get joined-up working and collaboration with the Department of Health and Social Care in addressing some of these problems.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Stringer. I want to focus on my constituency in particular, and I will certainly echo comments made by hon. Members today. I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for securing today’s debate.
We have some real challenges in York. The severity of the challenges facing young people is the one thing that keeps me awake at night. There have certainly been challenges with funding and staffing, which I will refer to. We have a service that is seriously overstretched. We had 1,930 referrals to CAMHS in the past year, and we are seeing some of the challenges increasing in York. Young people in the city are very vulnerable, and research is being undertaken to ascertain what challenges they face—I am sure that the Minister will tell us about the results—but what is the school system doing to our young people?
One issue that has been raised is the narrowing of the curriculum. The perfectionism that is expected of our young people—and the exam methodology itself—is putting incredible strain on them. That has been seen particularly in our schools, but also in York College, where there has been a 23% increase in the number of young people with mental health challenges in the past year. At Askham Bryan College there has been a massive increase in the number of young people experiencing mental health challenges.
This challenge is very real. Much can be put back into the methodology that is used in the education system, which is why it is really important that in today’s debate we look at how that discussion can move forward. Transition points for young people between primary and secondary school, and between school and further or higher education, are places of vulnerability in our system. We need to ensure that we do not make just the educational connections; the health connections for those young people are essential for driving that forward and supporting them. We also need to address bullying in our school environments. Some 30% of children in York have experienced bullying in the past year, which is serious indeed.
I have read through the Vale of York clinical commissioning group’s “Transformation Plan for Children and Young People’s Emotional and Mental Health 2015-2020”, which has been revised due to the scale of the challenge in York to start to address some of the issues. Across the whole of York we have only six wellbeing members of staff in our schools. They might not be professionally trained in mental health, but they have had training in those roles—four are funded by the CCG and two by the schools—to address some of the low-level areas of mental health that children face. They have had more than 300 consultations with children over the past year and have made 36 referrals to CAMHS. As we have heard already, the threshold for accessing CAMHS is extraordinarily high. If a child has an eating disorder—sadly, York is one of the worst areas in the country for eating disorder services—they are often told that their BMI is too high for them to be able to access those services. We need to ensure that we make early interventions so that children do not become so poorly. Sadly, should they be refused at that point, then we have problems.
This service has been evaluated, and it is helping. Staff across our schools have gone through some training, which has helped them to deal with children who face mental health challenges, but there is so much more to do. Essentially, we need to look at health professionals being in place in our schools; we should not be relying more and more on our teaching staff to try to address many of these issues. Something that really disturbs me is the level of high risk that children have—it is generated particularly from trauma in their life—and the lack of wrap-around care and support services.
I was in a school on Friday, where I talked to the chief executive of York’s mental health services. I also had discussions with parents in my surgery about the level of self-harm that children are experiencing—including repeated suicide attempts in some cases—not having support workers, and the interventions around them being processed in a system, as opposed to putting the child at the heart of the equation. We need to change the system so that education and health services wrap around the child, as opposed to the child being in a process of services. That can be demonstrated where children have been discharged from acute care. They might not be poorly enough to be in acute care, but they have got real challenges that they try to deal with and they cannot see a way forward. The system as it works at the moment does not address that.
I want to mention the funding issue. York’s schools, as I have mentioned many times, are the worst funded in the country. That has an impact because schools cannot supply the additional support services required, as demonstrated by a school I visited on Friday. It therefore has an impact on the children’s wellbeing. We have to address the issue of school funding. Likewise, our health authority is one of the worst funded. The money that was given to the CCG to address mental health issues in our city has been used to clear the deficit. As a result, money is being pulled away from the partnerships that are so essential for addressing the wellbeing agenda. Money therefore matters in this equation. The Minister will need to answer my question one of these days about the challenges we face. Clearly the funding formulas are not working. They cut across multi-agencies and the demographics of our city. We are therefore being failed.
I want to mention briefly the national shortage of staffing. Although we can recruit for the medium and longer term, we must look at what we do in the short term. We need to look at overseas recruitment to try to fill some of the skills gaps with immediacy, because it takes time to address such issues. We also need to make sure that we have the right facilities in place. School is one location to have good mental health facilities for young people. Off the school campus is also important. We need to see that moving forward.
Our Labour group will propose a motion to our council next week highlighting the real challenges facing local authorities and the local area around mental health in our schools. Despite the number of debates that they and we have had, it seems that we go round and round in circles. In conclusion, would the Minister be willing to have a meeting with the mental health Minister and the Members who have participated in this debate to discuss the serious issues in our constituencies and to see whether we can find some real solutions between us?
Jim Shannon (Strangford) (DUP)
I am conscious of the time, Mr Stringer, so I will make sure colleagues have the same amount of time to speak as I have. First, I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for securing this debate. I spoke to her earlier today and decided to come and make a contribution from the Northern Ireland perspective.
School can either be the best or the worst days of your life—that’s a fact. I attended a boarding school for five years or so. Although I enjoyed it, I can remember having things thrown at me when, as a Christian, I prayed at the side of my bed. I remember such things very well. I was—and still am, or I probably would not survive in politics—of a disposition where I can let things slide off my skin, just as those items that used to be thrown at me bounced off. However, I am also aware, as both an elected representative and a father, that that is a particular gift, and that even the strongest person can be wounded by the words of a peer. I have three children and two grandchildren, so I am aware of the issues.
More than 1 million of our young people admit to being affected by bullying. We can be sure that for every person who speaks out, another is suffering in silence. I read an article in the Belfast Telegraph that outlined the latest figures from Childline. They revealed that the NSPCC supported service delivered 4,636 counselling sessions for loneliness in 2017-18—a 14% increase on the previous year. Of that total, 105 counselling sessions were carried out with children from Northern Ireland, up from 71 in the previous year. Across the UK, girls received almost 80% of sessions, with some pointing to the harmful effects of social media. Among the reasons they cited for their being made to feel increasingly isolated was watching people that they thought were friends socialise without them. Children are sensitive.
Our children are struggling in a world that is increasingly “nothing hidden and all show”. Although social media can be wonderful to connect people and perhaps spread positivity, I agree with Prince William and the Duchess of Cambridge in their campaign to address cyber-bullying. In June, Prince William launched the online “Stop, Speak, Support” code of conduct in a bid to tackle the problem. He spoke of the social media giants being “on the back foot” when it comes to tackling fake news, privacy and cyber-bullying. He said that technology firms
“still have a great deal to learn”
about their responsibilities, and he challenged them to fight harder against the poison that is spread online. I agree very much with what he said.
Increasingly, teachers report that much of the bullying now takes place outside the playground, in what should be the safety of one’s own home. However, that does not take away from the responsibility to promote good mental health and make help available in schools.
I spoke in the main Chamber last Thursday—the Minister was there to answer the debate—about the financial difficulties that schools are facing and the cuts that have been made, as a result of which all teachers are under more time pressure. It also means less time to build up relationships with students and to supervise their interactions. We are seeing the rise of pastoral teams from churches in some schools, which is a good thing as it emphasises to children that there is someone there for them to talk to. Sometimes they need someone to listen and possibly help.
The End Bullying Now campaign, run by the Northern Ireland Anti-Bullying Forum, has said there is a basic level of good practice that all schools must achieve. There are strategies that empower young people, parents, carers and practitioners to know what bullying is, what to do and how to stop it. There are strategies that demonstrate a reduction in incidents of bullying; strategies that demonstrate good intervention if and when bullying behaviours occur; a whole-school consultation, including school staff, parents, carers and pupils in the development of an anti-bullying practice—everyone has to be involved in it—and strategies that include integrating an anti-bullying ethos into relevant areas of the curriculum.
It is my belief that schools are attempting to play their part, but I must come back to the budget cuts that see a reduction in teaching staff, classroom assistants and all those in the frontline defence who are in the right place to tackle bullying.
Kids are under more pressure than ever to have the right look inside and outside of school: to have the top clothes, the latest tech and the perfectly angled selfie—a perfect face of make-up and a perfectly ripped body. The weight of those expectations is too heavy for any child to bear and we must have support in schools to address that. My belief is that it must come by means of additional funding and assistance for key support staff on site in school.
The stories of children who have taken their own lives before they have begun are heartbreaking. Every one of us, as elected representatives in close contact with their community, will be aware of such cases. I am aware of some cases. I declare an interest as a member of the board of governors at Glastry College, where there were children that I knew personally who took their life. Indeed, because of my age I knew them from the day they were born—that is a fact of life—and in those circumstances the reality hits home.
To a generation increasingly asked, “Are you fit enough—rich enough—pretty enough—bright enough—social enough?”, there must be people to say, “You are loved as you are. You have the opportunity to write a new chapter and change your ending tomorrow.” There is an onus on us, with the Minister here, to put that in place. Will we do it?
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
It is a pleasure to serve under your chairmanship this afternoon, Mr Stringer. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing this vital debate. The speed at which Members are speaking this afternoon and the interest shows that we could have spoken for at least three hours and still had more time and more interest. If it was not for what was going on in the other Chamber, even more colleagues would be here with us this afternoon.
There is much that I could reflect upon, but I particularly want to reflect on the Government’s Green Paper—their strategy, and their actual plan for young people’s mental health between now and 2030. The Green Paper was called “Transforming children and young people’s mental health provision”. That is the key intervention in which the Government set out their plans. It is important that we consider it in the context of this afternoon’s debate.
I agree with the hon. Member for Oxford West and Abingdon when she says that—let us not mince our words—we see a mental health crisis in our young people. I do not use those words lightly. We have only to reflect on the prevalence study that came out the other week, a repetition of the study that tells us how many young people are affected by one or more mental health conditions. We saw in that repeat of the study—last done in 2004—that there has been a 28% increase in the number of children affected. We used to use the statistic one in 10, or three in every classroom. It is now one in eight children, which for me is a very serious consideration. The Government need to urgently reflect upon and revisit their Green Paper, which was predicated on data that is now 14 years old. We now have the results that give us a reason to see the Government come forward with revised plans. Unfortunately, I do not believe that it is good enough.
I am a member of the Health and Social Care Committee; together with the Education Committee we produced a report on the Green Paper. We heard from expert witnesses, students in schools, and teachers. Many points reflected on the Government’s plans and set out what was missing, and what needs to be addressed to make a real difference. There are many points that I could reflect on, but I want to focus my remarks on the most salient points. I urge Members, but particularly the Minister, to reflect on the joint Select Committee report, because it contains many recommendations. It is fair to say that we were disappointed by the Government’s response, which did not adequately respond to serious concerns raised by many people throughout the country.
When I reflect on the experience of young people in my constituency, I am aware that a previously exemplary service in which young people were seen within three weeks—from referral to assessment and then treatment—now has hundreds waiting 24 weeks just for an assessment. That is not good enough. A special educational needs teacher, who wrote to me previously, came to my constituency surgery on Friday and said that the threshold to get access to services is now even further out of reach, even for children under 11. There are children aged four who cannot get access to any services. That is not peculiar to Liverpool; it is replicated across the country. We had a 43% cut to our service, and not in just one year—it was repeated in the second year; that was the main service for young people. Thresholds for access to care are rising, and I reiterate the point that children have had to self-harm or attempt suicide to get in. That is not good enough.
Colleagues have touched on the issue of resources. It is not just about money, but let us be honest: some resources are needed to ensure that children are properly supported. Schools are an important place. I want to reiterate what I said when I asked the Minister a question in the Select Committee. It is an important point, and gets to the crux of the matter. My greatest concern about the Green Paper and the Government’s plans for now until 2030 is that they will only replace what has already been lost, because the Government have no idea—no assessment has been done—how many peer mentors, counsellors, educational psychologists, pastoral care workers and school nurses have been lost from the country’s schools. Those are just some of the roles—vital services—that schools that are passionate about students’ mental health no longer have the funds to invest in. Schools in my constituency had access to a service called Seedlings. It was pulled from all those schools. The only ones that could afford it were those that met a threshold of a certain number of children on free school meals, in relation to pupil premium. Those just below the threshold could no longer afford it.
Those cuts have combined with other cuts, not just in schools but in local authorities. They affect children’s centres, the educational psychologists previously funded by local authorities, Sure Start centres and youth centres—because it is not only what happens in school that is relevant, but what happens afterwards. Many young people would turn to youth workers as a trusted adult if their mental health was suffering. The combination of all those things is the toxic situation we are in. Young people are now seen only when they are in a crisis; the system is geared only to what we do then. We need proper early intervention and prevention, to keep young people well. Schools cannot be expected to do it all.
From the teachers’ representations that we heard in evidence, it was clear that they want to do everything possible to support students in the classroom, but many demands are made on them and the current academic system adds many pressures, not only for students but for teachers. A staggering 81% of teachers say that they have considered leaving teaching in the past year because of the pressures of their workload. The combination of those factors means that there is every reason to think it is not good enough to expect every school to have just one designated mental health lead—one teacher who is trained for two days—when the Government accept, in their own evaluation, that that arrangement has an opportunity cost, in taking those teachers away from other activities that they are expected to do in school.
The social media issue is something that the Government definitely need to address, but even if we removed all the challenges of social media we would not solve the problem because, judging by the evidence that we heard, there are so many other challenges, but particularly issues to do with the social determinants of health and poverty.
I shall draw my remarks to a close because other Members want to speak. We cannot expect our schools to do it all. Young people are really suffering; this is a crisis, with a 28% increase in the figures, even going by those that came out the other week. I urgently request that the Government look again at the Green Paper strategy, because it is simply not good enough.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend the Member for Oxford West and Abingdon (Layla Moran) on securing this vital debate.
Early intervention and preventive work on mental health are massively important and schools play a colossal part in it. Fifty per cent. of mental health problems in adult life take root before the age of 14; 10% of schoolchildren today have a diagnosable mental illness, which means that in an average class of 30 young people three will be living with a mental health condition. That is three children in every class. Stress about exams, fear of failure, concern about body image, bullying, and the crushing weight of the aspirations and expectations of materialism have a huge impact on people’s mental health. Unchecked, those concerns can spiral into acute long-term mental illnesses that will lead to serious problems all the way through adulthood.
The Prime Minister characterised the colossal failure to treat mental health conditions as a “burning injustice”, but that is an injustice that the Government have failed to fight in practice. There are few things more frustrating than a Government who speak the right political language in a debate but fail to deliver. Investment in preventive measures and early intervention has only got worse in recent years. Councils’ public health budgets, which include funding for school nurses and tier 1 mental health services, have been reduced by £600 million between 2015 and the present. In my constituency central Government cuts to the public health budget mean that the NHS in Cumbria currently spends only £75,000 a year on tier 1 mental health preventive care. That is just 75p per child per year. In 2015 the coalition Government agreed to allocate Cumbria £25 million a year in public health money. Now it gets only £18 million a year. That is a £7 million cut—a huge proportion. It is not just unacceptable; it is an insult. As a direct result, we no longer have any school nurses directly attached to schools anywhere in the county.
Alongside the situation I have described, there are additional pressures. Many young people with special and additional needs are at greater risk of acquiring mental health difficulties. We have a special educational needs funding system that punishes schools that take children with additional needs and rewards those that do not fulfil their responsibility; so the system compounds the difficulties. Like the rest of the hon. Members present, I get letters in my postbag about many issues of great emotional significance. They weigh heavily on all MPs as we seek to help people out of difficult situations. However, nothing keeps me awake at night like the plight of young people with mental health conditions. I have noticed in recent years that the volume of my case load taken up by that issue has rocketed. We are clearly a society that breeds poor mental health.
I am proud of the young people in Cumbria with whom I have worked and who are determined to fight for better mental health provision for themselves and their friends. In my constituency, for example, CAMHS was not available at the weekend or after school hours in south Cumbria until our community ran a campaign and forced local health bosses to change that. What an outrage that we had to fight for those changes. Alongside a focus on the provision of timely, top-quality treatment, there needs to be a focus on preventive care. That is why 2,500 mostly young people in my constituency signed the petition that I shall soon present to the House, calling for a mental health worker to be allocated to every school in Cumbria, so that we can manage to prevent problems before they arise and get out of control.
Perhaps the biggest single issue affecting young people’s mental health is eating disorders. In South Lakeland, three quarters of children reporting with an eating disorder are not seen within the target time of a month. Not a single one of those children presenting with an urgent need is seen within the target time of one week. The most appalling aspect of the situation is not just those statistics but the fact that the number of children they represent is 15 in a year. That is utter nonsense. I deal with at least one new eating disorder case among young people every single week in my constituency. Children are clearly slipping through the loopholes and are not being pushed into the system. As the hon. Member for York Central (Rachael Maskell) said, they are told that they have to come back when they are more sick as they have not yet lost sufficient weight to enter the system. That is an outrage. In 2016, the Government promised Cumbria a specialist one-to-one eating disorder service, and it has failed to materialise. Wonderful people work in CAMHS, but they do not have the support that they desperately need. As others have said, young people’s mental health is the crisis of our age. It needs more than platitudes; it needs real action, and it needs it now.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing this very important debate. I will not run through all hon. Members’ contributions because we are running very short of time, but I have a few words to say. The hon. Lady’s knowledge and breadth of experience shone through her contribution, and her clinical dissection of the high stakes in the school system was informative and chilling.
As a member of the Education Committee, I am aware that the UK Government are not responsible for education matters in Scotland, Wales or Northern Ireland, but that does not mean that I or anybody else in the House have no desire to improve the mental health and wellbeing of children right across the UK. Schools are on the frontline of supporting children and young people’s mental wellbeing. We can shift the focus on to preventing mental health problems and building resilience through simple methods. In one of my granddaughter’s schools, children are being taught to think not, “I can’t do this,” but, “I cannot do this yet.” That is a huge step forward. It was never done in schools in my and my children’s time.
Increasing the availability of learning tools and experiences in health and wellbeing ensures that children and young develop knowledge about mental health and understand the skills, capabilities and attributes that they need for mental, emotional, social and physical wellbeing now and in the future. The Scottish Government’s mental health strategy focuses on early intervention and prevention, which feeds into this issue.
Over the course of their education, children spend more than 7,800 hours in school. Emotional wellbeing is a clear indicator of academic achievement, success and satisfaction in later life. Combining mental health awareness and coping mechanisms is critical for prolonged resilience. The Scottish Government have spent quite a bit of money recently. I spoke to Clare Haughey MSP, the Minister for Mental Health, who had recently taken on the recommendations of the “Children and young people’s mental health audit” report, which was produced by the Auditor General and given to the Public Audit Committee on 22 September.
It is important that we do not just throw money at these problems. There has to be a change in attitude. Money helps by making counselling available. In Scotland, our hope is that £20 million will provide 250 additional school nurses, and that £60 million will provide 350 counsellors. There will be other counsellors in further and higher education.
In Scotland, we are also doing mental health first aid programmes for teachers so that the early signs of mental health problems are spotted and children can be moved forward into services. In the package of money given by the Scottish Government, there is also provision for community support. The Scottish Government have set up a Mental Health Youth Commission, which is working with the Scottish Association for Mental Health and Young Scot to put young people’s issues front and centre. The Scottish National party Government are committed to meeting their commitments to ensure all children are given the tools they need to achieve a happy and prosperous life.
The UK has signed up to the UN convention on the rights of the child, but has stopped short of making it part of its legislation. That has been done in Wales, and the First Minister of Scotland is committed to making it part of domestic law in Scotland. Article 19 of the UNCRC says:
“State Parties shall take all appropriate legislative, administrative, social and educational measures to protect the child from all forms of physical or mental violence”.
The First Minister’s commitment will better enable positive mental health and wellbeing practice in Scottish schools.
Will the updated guidance, which is intended to come into force in September 2020, apply in academies and free schools, as well as local authority-maintained schools? It is my understanding that those types of school do not have to follow national school curriculums.
The Minister for School Standards (Nick Gibb)
We have changed the basic curriculum, rather than the national curriculum, to ensure that it applies to academies as well as local authority-maintained schools.
Marion Fellows
I am very grateful to the Minister for that response.
It is necessary that children across the UK are able to access timely and helpful support when they need it.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for securing this important debate on mental health and wellbeing in schools, and other hon. Members who have made valuable contributions.
Despite all the warm rhetoric about this issue, the reality is that, when it comes to real action and real change to children and young people’s mental health, the Government are failing children and setting them up for future struggles. Schools are integral to the mental wellbeing of children and young people. They are where a lot of children spend a large majority of their time. For children for whom home is not a good place to be, or is a cause of distress, it can be the only safe, consistent element of their lives.
Last December’s Green Paper, “Transforming children and young people’s mental health provision”, seemed to signal, at last, a joined-up approach and a commitment between the Department of Health and Social Care and the Department for Education to address the crisis in children and young people’s mental health. As the report of the Education and Health Committees said, the Government’s strategy lacks ambition. The Committees said that it was narrow in scope and would put significant pressure on the teaching workforce. The report was entitled “Failing a generation”.
Sadly, just weeks ago, the NHS “Mental Health of Children and Young People in England” survey, referred to by my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), who has long been a champion of improving mental health provision across the board, confirmed the failing of that generation. It found that one in eight five to 19-year-olds had at least one mental health disorder. That means that, in an average classroom, almost four pupils will be suffering. The Royal College of Psychiatrists estimates that that equates to about 1.23 million children and young people. The survey also found that 400,000 children and young people identified as being in need of support were not getting any whatever.
The proposed mental health support teams for schools have been heavily criticised, including by Barnardo’s, which accused the Government of
“sleep-walking into the deepening crisis in children’s mental health.”
As they stand, the plans are piecemeal and will serve only to deepen the existing postcode lottery. It is anticipated that just 20% to 25% will benefit from the support by 2022-23. I would appreciate it if the Minister explained to us how recruitment for the teams is going, what the arrangements for the designated mental health leads in schools are, where the first set of trailblazers are, and what the rationale was for choosing those trailblazer areas.
Furthermore, the teams will be for mild to moderate mental health issues. What happens to children who desperately need intervention from child and adolescent mental health services and specialist trauma-based support, such as the children my hon. Friend the Member for York Central (Rachael Maskell) referred to who are suffering from eating disorders and suicidal thoughts?
What about children looked after in kinship care, care leavers and child refugees? The Children’s Commissioner noted that only 104,000 of more than 338,000 children referred to CAMHS in 2017 received treatment in that year. That should come as no surprise to the Minister, when we know that the number of doctors working in child and adolescent psychiatry has fallen in every single month this year; that less than 1% of the NHS budget is spent on children’s mental health; and that CAMHS funding was cut in each of the four years following 2010.
Underfunding and the stripping back of provision in the name of austerity have led to a crisis in our schools, where £2.7 billion of budget cuts, an overriding focus on competition instead of collaboration, and fragmentation and marketisation of education, have left gaping holes in accountability, provision and support. In that environment, it is little wonder that children are not getting the support that they need.
The situation is far worse than that because, as we have already heard, on schools, the Government are acting in a manner that exacerbates poor mental health in children and young people. The Minister has said on the record:
“we do not want children to be under pressure with exams”,
and stated that nothing that his Department has done makes things worse. Yet children are being placed under unbearable pressure because of the high-stakes exam culture fostered by the Government, resulting in feelings of chronic low self-esteem and stress.
In a study commissioned by YoungMinds earlier this year, 82% of teachers said that the focus on exams had become disproportionate to the overall wellbeing of their students. Similar concerns have been raised by the Education Committee, while some headteachers said that their students had attempted suicide over exam pressures. Now that we have evidence, what will the Minister do to change that approach?
For children with special educational needs and disabilities, those feelings of low self-esteem are amplified. I know from my own experience of having dyspraxia that I suffered from low self-esteem and confidence and, as a result, I would often isolate myself. I cannot imagine how much more difficult it must be for the thousands of children with special educational needs who are missing out on support.
Today, the chief inspector of schools revealed the national scandal of 4,000 children with official education, health and care plans receiving literally no support at all. She also raised serious concerns about the children missing from the education system altogether. The Government have created an environment in which, to improve exam results and league table ratings, off-rolling and illegal exclusions are used at whim to such a degree that today, the chief inspector’s report identified a possibly 10,000 children who cannot be accounted for. As the Education Committee’s report noted:
“young people excluded from school or in alternative provision are…more likely to have a social, emotional and mental health need”.
Can the Minister explain what provision—beyond the review of alternative provision that is progress—is being made for those missing children, and when that review will be concluded?
Children now grapple with a range of issues that we in this Chamber did not face at their age, in particular the all-pervasive nature of social media, where bullying, abuse and grooming are no longer confined to the physical space. Some young people cannot escape and have no respite from the harm they endure online. I was pleased that, in the passage of the Children and Social Work Act 2017, the Government bowed to pressure, but I would urge them to get moving on Personal, Social, Health and Economic education. A wealth of evidence suggests that it improves children’s resilience, wellbeing and safety, both online and offline.
In my former career, I saw the heartache and pain that delayed support and help could cause children, their families, their carers, and those who work with them, both in and out of the school environment; teenagers who regularly cut themselves or make attempts on their own lives because they were victims of child sexual exploitation; little boys and girls who had been so severely abused and neglected that they gouged out their own skin and spent their lessons rocking back and forth in an attempt to self-soothe; and children who had fled warzones, who were stoic and motionless in the playground and completely unable to interact with their peers.
As we discuss these matters, teachers, wider school staff, social workers, mental health workers, parents and carers will all be trying their absolute best for those children in the face of the worst cocktail of cuts—coupled with regressive policies—from the Government, right across the board. Those people, and the children and young people that they are fighting for, need to know what the Minister will do to halt that crisis now. I hope that he will not disappoint us all in his response.
Graham Stringer (in the Chair)
Although we are a little ahead of schedule, before I call the Minister, I ask him to leave a minute or two at the end for the hon. Member for Oxford West and Abingdon (Layla Moran) to sum up.
The Minister for School Standards (Nick Gibb)
Certainly, and thank you, Mr Stringer; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing the debate and introducing it so well.
Mental health can have a profound impact on the whole of a child’s life; it is not just about the effect that poor mental health can have on their attainment at school. We worry about the whole life ahead of them. Improving mental health starts with promoting good mental wellbeing and ensuring that children and young people have the help and support that they need. Schools can play an important role with the right support from specialist services, which is why the Government have made mental health a priority, with a shared approach between the Department for Education and the Department of Health and Social Care.
The hon. Members for Oxford West and Abingdon and for South Shields (Mrs Lewell-Buck) mentioned exam stress in schools. Tests and exams have always been times of heightened emotions for pupils and teachers, but they are not meant to cause stress and anxiety. As the hon. Member for South Shields acknowledged, I have said on many occasions that schools should encourage all pupils to work hard and achieve well, but that should not come at the expense of their wellbeing. Schools should provide continuous and appropriate support as part of a whole school approach to supporting the wellbeing and resilience of pupils.
The hon. Member for Oxford West and Abingdon also mentioned GCSEs. We have reformed GCSEs to match the expected standards in countries with high-performing education systems, so that young people have the knowledge that they need to prepare them for future success and the skills that Britain needs to be fit for the future. We are determined to ensure that no child has an inadequate education that reduces their life chances; we want to ensure that every child has an education that helps them to fulfil their potential. That is the key driver of all of our education reforms since 2010. Better education means better prospects of quality employment and better health outcomes for those young people in the long run.
As a psychiatrist, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) brings serious expertise to the debate. He said that it was important that Departments did not work in siloes. I can assure him that I worked very closely with the Under-Secretary of State for Health and Social Care, the hon. Member for Thurrock (Jackie Doyle-Price), in whose portfolio mental health resides. We worked particularly closely on producing the Green Paper on children and young people’s mental health.
We know that mental health is also a priority for teachers, because of the challenges that many children face in the modern world; a fact that has been referred to by other hon. Members. To get an up-to-date picture of children’s mental health, this Government commissioned the first national survey of children and young people’s mental health since 2004, which was cited by the hon. Member for Westmorland and Lonsdale (Tim Farron). The results published last month show that in 2017, 11.2% of children and young people aged five to 15 in England had a diagnosable mental health disorder. That figure stood at 10.1% in 2004, so the latest results show that there has been a slight increase since then. They reinforce what we have heard from schools and colleges about how many children face issues and about the need to act. We have listened to what schools have told us and are already taking steps to help schools to support children and young people with mental health problems. The findings of the survey will help us to ensure that the action that we take is informed by the most up-to-date evidence.
I understand the important points made by my hon. Friend the Member for Central Suffolk and North Ipswich about the number of staff in children and young people’s mental health services. The Government are already taking significant steps to improve specialist children and young people’s mental health services with £1.4 billion of funding to ensure that an extra 70,000 children a year receive the support that they need by 2020-21.
We recognise, however, that we need to do more, which is why the NHS will invest at least £2 billion a year more in mental health, including children’s services, under the recently announced Budget proposals, increasing NHS funding by an astonishing £20.5 billion a year in real terms by 2023-24. As I said, from that the NHS will allocate £2 billion a year to mental health services. The Budget also included a commitment to set up specialist NHS crisis teams for children and younger people in every part of the country.
Dr Poulter
The extra money is of course welcome, but the focus on crisis intervention is perhaps wrong. We should try to stop children getting to that point in the first place, and invest more in early intervention and community teams. In order to do that, we need to reverse the decline in the mental health workforce. I wonder whether that is an issue the Minister will raise in particular, challenging his counterpart in the Department of Health and Social Care on how to improve recruitment and retention of CAMHS professionals.
Nick Gibb
My hon. Friend makes a crucial point, which I will come to when I talk about the mental health Green Paper. It is absolutely crucial that we are able to devote resources and expertise to intervening early, before a child’s mental health problem escalates into something requiring medical intervention.
Luciana Berger
What percentage of that £2 billion extra for mental health services will go to young people’s mental health services? To what extent will it replace—I asked this question before—services that have already been lost, not just from the NHS but from right across education in schools throughout the country?
Nick Gibb
I have already mentioned that £1.4 billion will be put into young people’s mental health services. I do not have the precise figure that the hon. Lady asks for, but I am happy to write to her with it. I suspect that it will not have been determined precisely at this point, but our plan is to increase that spending, and we can only get to that through careful marshalling of our economy, because our economy of course produces the wealth that enables us to provide such a level of funding.
In the debate, there was a reference to eating disorders. The Government are on track to meet, or are exceeding, waiting-time standards for eating disorder services and early intervention in psychosis.
Nick Gibb
I will not give way now, because we only have a few minutes left. I have already given way a number of times.
Schools have an important role to play in supporting the mental health and wellbeing of their pupils by putting in place whole-school approaches tailored to the particular needs of those pupils. Our 2017 survey, “Supporting Mental Health in Schools and Colleges”, was commissioned to derive robust national estimates on activities to promote and support mental health and wellbeing. It found that about half of schools and colleges already had a dedicated lead for mental health in place, that 61% of schools offered counselling and that 90% of schools and colleges offered staff training on supporting pupils’ mental health and wellbeing.
The Government are committed to supporting schools and colleges to do more to promote good mental wellbeing in children, to provide a supportive environment for those experiencing problems and to secure access to more specialist help for those who need it. To support schools to build the capability to identify and promote awareness of mental health needs, we have committed to introduce mental health first aid and awareness training for teachers in every primary and secondary school by the end of the Parliament. To date, we have trained more than 1,300 staff in more than 1,000 schools.
Nick Gibb
I will not give way. I am sorry, but I want to leave time for the hon. Member for Oxford West and Abingdon to respond to the debate.
We have recently published updated guidance to help schools to identify pupils whose mental health problems manifest themselves in their behaviour, and to understand when and how to put in place support.
The hon. Member for South Shields raised the issue of PSHE. As part of an integrated, whole-school approach to the teaching and promotion of health and wellbeing, we are making health education compulsory for pupils receiving primary and secondary education, alongside relationship and sex education in all secondary schools—
Nick Gibb
All pupils will be taught about mental health, covering content such as understanding emotions, identifying when someone is experiencing signs of poor mental health, simple self-care, and how and when to seek support.
The hon. Lady asked when health education would be made compulsory. We have already published draft guidance and consulted on it—the consultation closed on 7 November. It was well received, and 11,000 pieces of evidence were supplied to it. We will respond in due course. Our plan is to roll out the subject as compulsory in the academic year beginning in 2020. We hope for and expect early adopters from September 2019, but it will be compulsory a year later. We want to ensure that all schools have a proper lead team so that they can implement the policy as well as they can.
On the mental health Green Paper, while schools have an important role to play, teachers are not mental health professionals and they should not be expected to act as such. When more serious problems occur, schools should expect pupils and their family to be able to access support from specialist children and young people’s mental health services, voluntary organisations and local GPs. The £1.4 billion that we have already made available will play a significant role, but we want to do more and to provide a new service to link schools to mental health services more effectively, with swiftly available and clinically supervised support.
To enable that, our Green Paper set out proposals to support local areas to adopt an ambitious new collaborative approach. The cornerstone will be new mental health support teams to improve collaboration between schools and specialist services. We expect a workforce numbering in the thousands to be recruited over the next five years to form such teams. They will be trained to offer evidence-based interventions for those with mild to moderate mental health needs. The teams will be linked to groups of schools and colleges, and the staff will be supervised by clinicians. They will work closely with other professionals such as educational psychologists, school nurses, counsellors and social workers to assess and refer children for other specialist treatments, if necessary.
Nick Gibb
I will not give way because, literally, there are only three minutes to go.
The roll-out of the teams will start with about 25 trailblazer sites, each with at least two teams, to be operational by the end of 2019. The first trailblazer areas will be announced imminently. They will test and evaluate a range of ways to set up and run the new mental health support teams to see what works. The overall ambition is for national roll-out of the teams, to be informed by evaluation of the trailblazers. The detail will be considered further as the long-term plan for the NHS is developed.
We also want to ensure that we have a designated senior lead for mental health in every school to oversee the delivery of whole-school approaches to promoting better mental health and wellbeing. The Department will provide up to £95 million to cover the cost of significant training for senior mental health leads. It is an ambitious programme, and I am optimistic that it will help to deal with a number of mental health problems that are emerging among young people in today’s society.
Good mental health remains a priority for the Government. It can have a profound impact on the whole of a child’s life, not just on attainment. We want all our children to fulfil their potential, and we want to tackle the injustice of mental health problems so that future generations can develop into confident adults equipped to go as far as their talents will take them.
Layla Moran
I thank the Minister for his response. I am sure that many people out there will be heartened to hear that students should not be feeling the stress of exams, but the fact is that they do. It is also a fact that the stress is definitely worse even than when I started teaching, which is well over 10 years ago. It is a shame that the Government will not take responsibility for the part that they have played in creating that culture.
I thank all Members for their contributions to the debate. I am sorry that there is not time to go through them all individually, but there was a range of expertise and the constituency stories that we heard were not only heartbreaking but heartening, because we know that there are people in this place who care.
I also put on the record my thanks to Oxfordshire Mind, the university’s Oxford Mindfulness Centre, Oxford Mental Health Campaigners for Change and a host of other national bodies that contacted me about the debate. Finally, I thank all members of the public who wrote in in such large numbers. I promise that the Liberal Democrats and I—in my role as the education spokesperson for my party—will continue to bang the drum for putting children’s mental health wellbeing at the heart of everything that we do in this place.
Motion lapsed (Standing Order No. 10(6)).
Animal Rescue Centres
(5 years, 4 months ago)
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Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I beg to move,
That this House has considered animal rescue centres.
It is a pleasure to serve under your chairmanship, Mr Hollobone. Having lost two thirds of my first minute, I am pleased that my speech will go on for only 12 minutes, so I should be able to accommodate one or two colleagues who have indicated that they might wish to intervene. I am grateful for the opportunity to raise this issue. I thank the Royal Society for the Prevention of Cruelty to Animals, Dogs Trust, Battersea Dogs & Cats Home and Blue Cross for their briefings, and Richard Mitchell in my office for pulling them all together. I am pleased to see the Minister in his place.
This is a relatively simple issue: animal cruelty is wrong, we recognise that in our laws, and there are penalties for those who break those laws. But there is an ongoing debate in Government about whether those laws need strengthening. There seems to be a consensus across most animal welfare organisations, which have long campaigned for increased sentences for animal cruelty and are working to change legislation, to increase the maximum sentence from six months to five years’ imprisonment. Some 250,000 pets who have been badly treated, abused or abandoned enter their centres every year, yet the custodial penalty of six months on conviction is the lowest custodial penalty in 100 jurisdictions across four continents.
Sir Greg Knight (East Yorkshire) (Con)
Does the hon. Gentleman accept that the consensus on the need for change reaches this side of the House too? Does he agree that there is a good case for setting up an animal abuse register, so that those who abuse animals can be tracked down and prevented from keeping animals in future?
Jim Fitzpatrick
I very much take the right hon. Gentleman’s point that this is not a party political issue. Indeed, most of my comments do not attack the Government but commend them for the comments and proposals they have made. However, we need to move on. He makes an interesting suggestion, and perhaps the Minister will respond to it.
Animal cruelty offenders are five times more likely to have a violent crime record. Welfare organisations were pleased when the Government issued the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill in December 2018. Those organisations have long argued that several of the activities covered by the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018 were in serious need of review.
Jo Platt (Leigh) (Lab/Co-op)
I am sure that my hon. Friend shares my concern that there is no statutory regulation of animal rescue centres in the UK. Since local authorities do not collect that information, I submitted a freedom of information request to every local authority in England and found that only 18% of rescue homes are regulated, through their membership of the Association of Dogs and Cats Homes. Does he agree that is extremely concerning, and does he welcome the efforts of the RSPCA, Dogs Trust and others to implement statutory regulations?
Jim Fitzpatrick
My hon. Friend has been assiduous on this issue. I will move on to the ADCH later on and will recognise the work of the RSPCA and others.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing forward a good issue for us to debate in Westminster Hall, as he always does. I told him earlier that my wife is a volunteer at Assisi Animal Sanctuary. There are many organisations across the United Kingdom of Great Britain and Northern Ireland that do exceptional work and are regularly monitored. Assisi is one of those, as is the RSPCA, PAWS and Dogs Trust—there are some good examples. Does he think that the Government should perhaps look at the good examples when bringing together the legislation?
Jim Fitzpatrick
I congratulate the hon. Gentleman’s wife on her work. I mentioned four of the main organisations, but there are many across the country working in this field and I pay tribute to them all; they do fantastic work and we appreciate it.
The 2018 regulations refresh the licensing regime for: selling animals as pets; dog breeding; boarding kennels; boarding for cats; home boarding for dogs; day care for dogs—regulated for the first time—hiring horses; and keeping animals for exhibition.
Chris Evans (Islwyn) (Lab/Co-op)
Next week I will visit Battersea Dogs & Cats Home, as I do nearly every Christmas, to look at the fantastic work it does. Does my hon. Friend agree that there should be an onus on breeders? When dogs have breeding problems, often the rescue centres or the adopting families have to sort them out. Once the breeders have sold the dogs, the unscrupulous ones will forget about that dog even if it has a breeding problem. Does my hon. Friend believe that breeders have a responsibility?
Jim Fitzpatrick
My hon. Friend makes a relevant and eloquent point. I can add to his criticism of unscrupulous breeders. That problem needs to be addressed.
The 2018 regulations do not address the regulation of rescue centres. The RSPCA has issued a position statement on licensing animal rescue and rehoming centres. It believes that the Government should introduce licensing of animal rescue and rehoming centres under the 2018 regulations. It feels that would close a legal loophole as well as drive up standards and allow for enforcement. Usefully, there are standards already in existence that would assist with licensing and reduce the burden on local authorities.
It is important to get the definition of an animal sanctuary or rescue or rehoming centre right, to ensure the correct establishments are captured by any new law. Blue Cross comments that there is a growing trend for the establishment of “rescue centres” to import dogs from abroad to sell on to members of the public—not genuine rescue centres as we would understand them.
David Simpson (Upper Bann) (DUP)
The hon. Gentleman is a former colleague from the Environment, Food and Rural Affairs Committee, where we have raised this issue many times. Northern Ireland has different legislation—we toughened our legislation over the past few years. Does he agree that stiffer penalties need to be introduced for those found using dogs for dog fighting and gambling?
Jim Fitzpatrick
The hon. Gentleman raises a serious point. The Select Committee on which we served—he is still a distinguished member—has looked at the issue, which is troubling for welfare organisations and needs Government attention.
The RSPCA believes that all rescue and rehoming centres and sanctuaries should be licensed under the animal regulations, first, to close the loophole in the third-party ban on sales and prevent third-party sellers from setting up as animal rescue centres. Secondly, it would improve the welfare of animals kept in such establishments by creating a legislative structure that drives improvements and standards of keeping and allows the enforcement of such standards. Thirdly, standards already exist that would assist licensing to reduce the burden on local authorities.
The RSPCA also believes there is a risk that third-party sellers could become rescue centres, to evade the ban on third-party sales, so it would welcome the licensing of rescue centres and sanctuaries. Indeed, some pet shops already have a charitable arm, such as Pets at Home, which has the Support Adoption for Pets operation that sells animals that have been abandoned and rescued, such as rabbits, to rescue organisations or gives them back to Pets at Home.
The RSPCA stresses that if a charity’s aims are generic and those aims are—on the face of it—being followed, the Charity Commission could be limited in the actions it could take, even if the organisation is a front that was set up to avoid the third-party ban. It argues that licensing rescue centres would close that loophole. Specialist knowledge is required to operate an animal sanctuary or rescue or rehoming centre, in terms of management and administrative skills as well as expertise in caring for animals. All sanctuaries should be required to obtain a licence to carry on such activities. The RSPCA does not believe that there should be a size or animal number threshold below which establishments should be excluded from licensing. Organisations and individuals operating as rescue centres can, despite their laudable original aims, become overwhelmed and struggle to meet welfare standards.
The RSPCA undertakes around 85% of enforcement action deriving from the Animal Welfare Act 2006. As well as the standards coming into force as part of the 2018 regulations, ADCH, which my hon. Friend the Member for Leigh (Jo Platt) mentioned, has a code of practice, which sets standards of animal care. That may be a good basis for the licensing of rescue and rehoming centres, and may aid local authorities to enforce any licensing regime.
ADCH has 132 members in eight countries. The majority—more than 80—are located in England. ADCH, which is 33 years old, has had enforceable standards since 2015. Those standards, which are both self-audited and externally audited, cover the management and governance of a centre, as well as the health and welfare of the cats and dogs in it and transported to it. However, membership of ADCH is voluntary, so rehoming organisations and animal sanctuaries are not required to adhere to the code of practice unless they choose to become a member and meet those requirements.
Although self-regulation is an important step in the right direction, formal regulation is required to ensure that all establishments, as opposed to just those that want to, meet suitable levels of animal welfare. One possibility is for ADCH members that apply and are audited against the ADCH standards to be defined as low risk in a licensing regime.
The RSPCA understands that discussions are under way in Scotland and Wales about improving standards in sanctuaries and in rescue and rehoming centres, and, in Scotland, about introducing a licensing system. In Wales, a definition of places called “animal welfare establishments” has been proposed for the Government to consider, based on discussions with the Department for Environment, Food and Rural Affairs.
The Dogs Trust has also weighed in. It points out that there is currently no legislation in place, so anyone can set themselves up as a rehoming organisation or sanctuary. Furthermore, there is little proactively to safeguard the animals involved, as local authorities are not required to inspect those premises, so they do not do so. It adds that poor welfare can have a knock-on effect when an animal is rehomed.
Chris Elmore (Ogmore) (Lab)
My hon. Friend is making an impassioned speech about why we need better regulation. The Hope sanctuary in Llanharan is in my constituency, where the local authority simply does not have the money or the capacity to check licences. That is part of a wider cuts agenda in local government. Does he agree that, in some cases, these services are there to try to support local government because it no longer has the capacity to protect animals?
Jim Fitzpatrick
My hon. Friend has much better knowledge of his local centre than I do, and the fact that he is concerned about it concerns me. I am glad that he called my speech impassioned—I am actually hastening to try to get through it, having taken a number of interventions. I hope to get to the end, and I hope the Minister understands that I may run over by a few minutes.
Dogs Trust calls on the Government to address the lack of regulation of the rehoming sector as a means of protecting our nation’s animals and creating transparency in the industry. It wants the Government to regulate all rehoming organisations and animal sanctuaries through a system of registration and licensing. It also recommends that the Government should develop an independent, centrally accessible team of appropriately trained inspectors that can be utilised by all local authorities to inspect animal establishments—not only rehoming centres and sanctuaries, but those involved in activities such as boarding, breeding and selling.
The Pet Advertising Advisory Group, which is chaired by Dogs Trust, also operates a system of self-regulation for online adverts offering pets for sale. Owing to its voluntary nature, PAAG has reached a plateau in the progress it can achieve, as some websites are unwilling to engage and apply the group’s minimum standards for online adverts. With no obligation on those who do not want to engage to improve, self-regulation will always be limited to those who want to do more to protect animal welfare.
In late 2017, the Scottish Government consulted on introducing a registration and licensing system for animal sanctuaries and rehoming activities in Scotland, following the discovery of bad practice at Ayrshire Ark and the subsequent “Sort Our Shelters” campaign by The Scottish Sun. The Scottish Government published a summary of responses and are now drafting regulations. The RSPCA recently conducted multiple operations, which Dogs Trust supported to ensure that there was sufficient capacity to house all the animals seized. In 2013, six members of staff at Crunchy’s animal rescue centre in Oxfordshire were convicted of nearly 100 counts of animal cruelty.
Although the regulations do not cover rescue centres, the Government have committed to banning third-party sales of puppies and kittens under six months of age, with an exemption for rescue centres. It is essential that regulation of rescue centres is delivered hand in hand with that ban to prevent damaging unintended consequences, which may include such places being prevented from rehoming puppies and kittens legally and third-party dealers passing themselves off as rescue centres to circumvent the ban. I welcome the news that the Government are minded to make that change.
Currently, any person, organisation or animal welfare establishment that regularly receives vulnerable animals with a view to rehoming them, rehabilitating them or providing them with long-term care can do so across the UK without licensing or regulation. The only organisation that provides mentorship to smaller rescue centres and actively works to raise standards is ADCH, which is run by Battersea and has already been mentioned.
Another example of worst practice was highlighted at Capricorn Animal Rescue in Mold, north Wales. The Charity Commission had been investigating governance issues, but RSPCA Cymru had to step in following a request for support. In the past couple of years, Capricorn has been subject to protests and petitions by former volunteers concerned about its animal welfare standards. Those issues have been raised locally with my right hon. Friends the Members for Delyn (David Hanson) and for Alyn and Deeside (Mark Tami), and they are on the case.
The most senior animal welfare charities are very concerned about the vacuum in this area of animal protection. The Government have made reassuring noises on the issue—their consultation indicated that they are minded to provide stiffer sentences and to look at the absence of regulation—and Scotland and Wales are moving on it, too. As I said, this is not an attack on the Government. I welcome what they have said, and I would be grateful if the Minister reassured us about what action he plans to take and the expected timeframe for that action.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on bringing forward this debate about animal rescue homes, which do a vital job looking after unwanted animals. He made his case with characteristic clarity and enthusiasm. No doubt he drew on his time as a respected Minister of State at DEFRA between 2009 and 2010. I am grateful for the tone he struck, and for the energy he put into his speech.
I acknowledge the valuable work that animal rescue homes up and down the country do to rescue and rehome thousands of sick, abandoned and stray animals each year. The wife of the hon. Member for Strangford (Jim Shannon) obviously does important work in that regard, as do many volunteers, and we should thank them for that. The work of rescue homes is taken for granted by too many. We should remember that most people working in those homes are volunteers, who are incredibly dedicated to the welfare of the animals in their care.
The RSPCA, Dogs Trust, Battersea Dogs & Cats Home and Blue Cross are well known to us and do fantastic work rescuing, caring for and rehoming animals in their care. We can be confident that animals in those organisations are looked after to the highest welfare standards, but we should not forget the smaller and nationally less well-known rescue homes that also work non-stop to care for unwanted and stray animals in our local communities.
Sir Greg Knight
I do not expect an immediate answer, but will the Minister at least reflect on the potential for introducing an animals abuse register, listing those who have been convicted of animal cruelty and banned from keeping animals?
David Rutley
I thank my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) for raising that issue. I heard what he said in his remarks earlier. The records of people convicted of animal welfare offences are recorded on the police national computer. I will gladly pick that issue up with him separately to explore this further, if he would like to do so.
Improving and ensuring the welfare of animals is at the heart of our recent welfare reforms. We have introduced regulations which came into force in October, including a requirement that licensed breeders should show puppies with their mothers. Local authorities also have more powers to inspect and enforce regulations. The hon. Member for Islwyn (Chris Evans), who is no longer in his seat, talked about the need to keep focused on welfare standards with breeders. Our actions do not stop there. The Government will also increase the maximum penalty for animal cruelty offences. It was announced last year that the custodial maximum penalty for animal cruelty will increase from six months’ imprisonment to five years. That remains the Government’s commitment and we will introduce it as soon as parliamentary time allows.
Jim Shannon
Has the Department had any opportunity to look at the legislation in Northern Ireland? It is very strong and was perfected by the Northern Ireland Assembly. Has that opportunity been afforded to civil service staff?
David Rutley
It is clearly an issue that I need to take more time to look at. As a relatively new animal welfare Minister, I will follow up with officials about this, based on the hon. Gentleman’s comments.
We are absolutely committed to taking this legislation through, when parliamentary time allows. We have also been looking to raise our welfare standards even higher; in February, we published a consultation on a potential ban on third-party sales. Third-party sales of puppies are those that are not sold directly by breeders. Sales are often linked to so-called puppy farms, which many of us have real concerns about. We know that there are concerns that third-party sales of puppies and kittens can lead to poorer standards of welfare than when puppies and cats are purchased directly from a breeder. We have heard other reports about that during the debate. A ban would mean that puppies and kittens, younger than six months old, could only be sold by the breeder directly or adopted through rescue and rehoming centres.
Our recently published regulatory triage assessment—a mini impact assessment—on the impact of a proposed ban on third-party sales estimates that 5% of puppy sales are by third-party sellers, which amounts to 40,000 puppies per annum. The RSPCA estimates that some dealers were individually earning over £2 million annually from the trade, and in many cases those revenues were not declared to HMRC. Our view is that the demand for puppies can and should be met by changes to the practices of existing breeders in order to breed more puppies, and by selling directly to the consumer. That will further improve the welfare of puppies.
Some stakeholders raised concerns that any proposed ban could be circumvented by unscrupulous centres presenting themselves as a legitimate rescue or rehoming centre. That is why we have been looking at licensing rehoming centres, as the hon. Member for Poplar and Limehouse mentioned, as well as the hon. Member for Leigh (Jo Platt), who has worked hard on the freedom of information requests she is taking forward. I will look at that more forensically in slower time, but I thank the hon. Member for raising that.
Sadly, there are some rescue homes that, for whatever reason, fall short of the acceptable standard of welfare. As with any keeper of animals, an animal rescue home must provide for the welfare needs of animals, as required by the Animal Welfare Act 2006, but they are not licensed in the same way as dog breeders or pet shops. In response to a call for evidence on a proposal to ban the commercial third-party sale of puppies and kittens in February, many stakeholders pointed out that we should also consider closer regulation of rescue homes. Their argument was that we need to address concerns about animal welfare standards in some unscrupulous rescue homes.
David Rutley
Thank you, Mr Hollobone. I recognise that votes may have taken hon. Members’ interest away from this debate, but for those of us who are here, and particularly for the hon. Member for Poplar and Limehouse, we will continue to address the important concerns that he has expressed.
I was saying that it is argued that we need to address concerns about animal welfare standards in some unscrupulous rescue homes, and to do so partly to address concerns that third-party sellers would simply set up as rescues to avoid the proposed ban. I can assure the hon. Gentleman that the Government share the concerns completely. Therefore, as part of our consultation on a third-party sale ban, which we launched in August, we asked specifically whether the public thought that animal rescue and rehoming centres should be licensed.
The consultation closed in September and attracted nearly 7,000 responses. We are in the process of analysing the consultation responses and will publish a summary document shortly. I am sure that the hon. Gentleman will be interested to see that. To bring in licensing of animal rescue homes, we would need to be clear about the benefits and the potential impacts. About 150 rescue homes are members of the Association of Dogs and Cats Homes, to which he referred. As he set out in his well-informed speech, the ADCH has set standards for its members to ensure that good welfare standards are met.
One member of the ADCH is the RSPCA. That charity says that in the past eight years it has investigated some 11 individuals and obtained 80 convictions against five people involved in animal rescue; a further two people received a caution. Those cases involved a total of more than 150 animals of different species, including dogs, cats, horses, farm animals and birds. That is despite all the hard work and the ongoing assistance that the RSPCA is willing to give and provides to failing establishments to ensure that they meet the standards and the needs of the animals in their care.
Regulation could benefit the sector and, importantly, the welfare of the animals involved, but we must remember the work and contributions of smaller rescue centres, which we have referred to and which in the vast majority of cases do all they can to promote the welfare of animals in their care. Many are not members of the ADCH, and there may be hundreds out there. DEFRA is working with those organisations and other animal welfare groups to build a better understanding of what the issues are for smaller organisations. We want to work with them to ensure that the appropriate welfare standards are put in place so that those who are operating genuinely, with the best intentions, can do so. The ADCH standards are well regarded and we will further consider them as part of our further work. I am sure that the hon. Gentleman is concerned to hear about that as well.
I think that more needs to be done, following on from the Dogs Trust reception today, to tackle puppy smuggling. That, too, will help well-intentioned rehoming centres. It is becoming increasingly clear to me that much more targeted action is needed to tackle puppy smuggling from end to end—both supply and demand. We have zero tolerance for unscrupulous dealers and breeders abusing the pet travel scheme in order to traffic under-age puppies into the UK. Those puppies have to endure very long journeys and they are not effectively protected against very serious diseases, including rabies and tapeworm. That poses a risk not only to their health, but to the health of other animals and people in this country.
The puppies spend many of their early weeks of life living in completely unacceptable welfare and health conditions. We must stop that in its tracks. We will be working hard to do that. We shall also be taking forward campaigns that will focus on changing the opinion and behaviour of the public, so that they have a better understanding of what is required in order to purchase a puppy responsibly, and that will, at the same time, raise awareness of the scourge of puppy smuggling. Doing that will put greater focus on proper breeders and the valid work of rehoming centres.
The Government have made it clear that we take animal welfare very seriously. We have a clear and positive action plan and have followed that up with a series of announcements, including those about updating and improving the laws on the licensing of certain animal-related activities and about increasing the maximum penalties for animal cruelty. We have consulted on banning third-party sales of puppies and kittens and are looking very actively at licensing rehoming centres to ensure that all rescue homes meet the appropriate standards of animal welfare. Hon. Members can therefore be assured that the Government are not afraid to take action that is needed, and will go on doing so in support of Members across the House who want to see action taken.
I again thank the hon. Member for Poplar and Limehouse for his very thoughtful and considered contribution today.
Question put and agreed to.
Resolved,
That this House has considered animal rescue centres.
Financial Implications for the Next Generation
(5 years, 4 months ago)
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Richard Drax (South Dorset) (Con)
I beg to move,
That this House has considered the financial implications for the next generation.
It is a pleasure to see you in the Chair, Mr Hollobone, and to give this speech. It is also a pleasure to see my friend and colleague the Minister in his place. I have huge respect for him and I know that he has gone to considerable length to help with this debate.
As the Member of Parliament for South Dorset, over the past eight and a half years I have had the great pleasure of getting to know many of my constituents. I have always undertaken to represent them without fear or favour, whatever their political beliefs, which is why I have called this debate to discuss the appraisal of our nation’s finances by Mervyn Stewkesbury. He is a well-respected and successful businessman from Weymouth, in my constituency. Mr Stewkesbury owns and runs his property company Betterment Homes and he is in the Public Gallery to listen to this debate.
From the very outset some years ago, Mr Stewkesbury has had an agenda. His concern, which he has expressed repeatedly to me, Ministers and various party leaders since 2010, is the economy. In particular, he believes that our national debt and deficit are too high. He has been an assiduous correspondent since my election in 2010, and indeed briefly ran against me in his genuine desire to make these facts known. His manifesto, as a matter of interest, was based entirely on his financial predicament. He had no other agenda, so keen was he to make his point. I am delighted to say that I won and he did not, despite a very honourable attempt to do so.
Put simply, Mr Stewkesbury believes that we are going to hell in a handbasket, and that he has the figures to prove it. He does not think that any of the responses he has received since 2010 have been adequate. I have therefore taken the opportunity to bring this matter before the Minister and my fellow MPs, in the hope that Mr Stewkesbury may receive a satisfactory answer. If that is not achieved, I hope that this debate will at least serve our country by airing a subject that should be aired repeatedly.
Of course we should live within our means, and Mr Stewkesbury is not alone in suffering sleepless nights over the size of our national debt. The most recent quarterly report from the Office for National Statistics confirms that our national debt at the end of March 2018 stood at around £1.8 trillion. This is equivalent to nearly 86% of our GDP, reaching the reference value of 60% set out in the Maastricht treaty excessive deficit procedure.
However, let me be clear that there is no solace here for the Opposition. It is worth noting that we first exceeded the 60% limit in March 2010, at the end of Labour’s 13-year rule, when debt was just shy of 70% of GDP. On the plus side, our deficit or net borrowing in the financial year to March 2018 has dropped by £5.9 billion for the second consecutive year, indicating that the tide has—we hope—begun to turn. Also, although the debt has increased by nearly £44 billion, as a percentage of GDP it has fallen by 0.9 percentage points, from 86.5% to 85.6%. This fall in the ratio of debt to GDP implies that GDP is currently growing at a greater rate than Government debt—again, movement in the right direction. However, as I am sure you understand, Mr Hollobone, this remains a mighty tanker to turn.
A most informative letter from the former Economic Secretary to the Treasury, my right hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), in August 2017 confirmed that when we inherited the largest budget deficit since the second world war in 2010, we were borrowing £1 in every £5 that we spent. Now we borrow £1 in every £16 we spend, as a result of reducing the deficit. The Minister also confirmed that over the same period debt rose as a share of GDP, although by less than it would have risen had the deficit not been reduced. In the same letter the Minister accepted that Mr Stewkesbury was correct in pointing out that the overall public sector net debt had risen. That, of course, is Mr Stewkesbury’s main concern, and one that we cannot afford to brush under the carpet.
I personally believe that, in view of the recent Budget spending increases, claims that austerity is over and the promise of billions more pounds for the NHS—which I do not think we have—it is time to bring this private citizen’s concerns into the public domain. I cannot vouch for all of Mr Stewkesbury’s points, nor his figures, but they form part of his profoundly and sincerely held belief that our country is heading to financial ruin. I am told that Mr Stewkesbury’s figures are all taken from Government and Treasury publications, which are publicly available.
I would like to point out that Mr Stewkesbury’s ire is not exclusively reserved for the current Government. His research dates back many years. His graph, interestingly, shows how national debt began to soar just as we joined the EU in 1973. He says that for 25 years before we joined the EU our debt increased on average by 1.4% year on year, but from the moment we joined, and for the next 45 years, it increased on average by 9% every year. He claims that had we not joined and maintained that 25-year borrowing record, our debt would now be £66 billion instead of £1.8 trillion.
As I have said, Labour receives equal scrutiny. Mr Stewkesbury was amazed to hear the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), tell the BBC on 18 March:
“Austerity is a political choice, not an economic necessity.”
Mr Stewkesbury asks:
“How can he possibly say this, when we are overspending and borrowing around £300 million every day?”
He is not enamoured with the economics of the Leader of the Opposition either, adding that his pledge to
“spend our way out of debt”
is nothing short of ridiculous.
As I have mentioned, when David Cameron’s Conservative Government were elected in 2010, the financial black hole in which we found ourselves was bequeathed to us by the departing Labour Government. Who can forget the note left by the departing Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), which read, “I’m afraid there’s no money left”? Perhaps it would have been funny, had it not been true. Certainly, that is Mr Stewkesbury’s view. He says that over the past seven years he has spent more than 5,000 hours studying Government finance and that we are “on course to bankruptcy”. He says that it is an indisputable fact that Government cannot go on overspending and borrowing forever without ending in bankruptcy, but that, according to him, is precisely what we are doing. In a letter to me earlier this year, he explained that it had taken 100 years to rack up a debt of nearly £450 billion by 2005, when the debt was £446 billion, and that is taking into account two world wars. Then, Mr Stewkesbury says, over the following years of Labour, coalition and Conservative rule that figure has more than quadrupled to £1.8 trillion. Sobering figures; sobering stuff.
Mr Stewkesbury adds that many of our assets, not least our gold—thanks to Labour—have been sold and an additional £375 billion has been printed. He claims that one asset sold, for £757 million, was the UK’s stake in the channel tunnel. He believes that allowed us to go for three days, five hours and 36 minutes without having to borrow any money. I would be grateful if the Minister could help on that point.
Mr Stewkesbury’s graphs show that in the seven years from 2010 our debt increased by £719 billion. He then explains the consequences. He says that in 2010 the debt for each living person was £16,231, with interest at £9 per person per week. By April 2017 those figures had risen to £26,526 and £14 respectively. He goes on to say:
“For 40 years our debt on average doubled every five years. Do the same again and by 2026 our debt will be more than £50,000 per person, with interest in the region of £30 per week per person. This is not sustainable.”
Neither is the fact, he says, that the Government, on average, overspent and borrowed £338 million every single day during 2016-17. Last year, he adds, the Government increased the debt by £123 billion. Government spending now equates to £231 per week for every living person, at a time when two in five work in the private sector, which, in the main, pays for our public services, including pensions, through tax.
Mr Stewkesbury believes that our children’s future is at risk, and he claims that party politics—of all parties—has played a significant role. For more than 40 years, he says, parties of all colours have attempted to buy voters with unaffordable promises. Here I will add my own two pennies’ worth. I absolutely agree that too often Governments of all colours have promised things that we simply cannot afford and have attempted to buy the voters. I hope that disingenuous habit will not continue in future. I most humbly suggest that what voters actually need is the truth, and if that is financially unpalatable, they need to hear it.
Last month, in his most recent communication with me, Mr Stewkesbury wrote that our debt interest payment alone is circa £50 billion. People outside this place, whether they are in the private or public sector, ask, “Richard, why aren’t you doing this? Why aren’t you doing that?”—always about money, of course—or say, “Spend this, spend that; do this, do that,” but when I tell them the rather sobering fact that before we do anything we have a massive debt interest to pay, a remarkable quiet comes over them when that sinks in. Before we progress anywhere, we have to pay £50 billion—every year. It is a terrifying sum of money, which we have to reduce. I hear cries of austerity, but I am not sure that austerity is working in that sense, because we still have a vast debt interest.
Mr Stewkesbury thinks it is totally irresponsible to claim that austerity is over when we are still borrowing £155 million every single day. Furthermore, he opines, it is irresponsible of the Government to claim that austerity is over until we are living within our means and repaying our debt. He is concerned that, according to Government figures, they expect to borrow a further £52 billion this year and £44.1 billion in 2019-20, so our debt will exceed £1.8 trillion by 2020. That equates to £28,371 for every living person.
Mr Stewkesbury has consistently sought clarification on one particular piece of historical accounting, but has never had a satisfactory answer. Labour’s actual debt in 2010 was reported as £759 billion. Later that figure was increased to just over £1 trillion. Mr Stewkesbury would be most grateful if the Minister could explain why those figures seem so different.
Finally, on Brexit—I thought I might get through one contribution without mentioning that word, but unfortunately Mr Stewkesbury has not allowed me to do that—he quotes an interview I gave, in which I said:
“We want to be in control of our destiny and I am baffled by anyone who cannot understand why.”
He, too, wants us to be in control of our destiny, but feels that that is impossible if we go on overspending and borrowing about £300 million every day.
Despite the many letters Mr Stewkesbury has received from the Treasury, he believes that the truth—or perhaps the facts—has yet to be explained to him. He dismisses the many letters he has received as pages and pages of waffle. He particularly resents being told that we are in a stronger financial position than in 2010, and believes that the figures prove otherwise. He says that one Minister wrote to say that Government debt is expressed as a share of GDP and that, in reducing the deficit, the Government have made significant progress in improving the health of the public finances. With the current debt at 85.6% of GDP compared with 69.6% in 2010, his concern is understandable. He and I very much look forward to hearing the Minister’s response, when he can hopefully allay Mr Stewkesbury’s concerns.
Mr Philip Hollobone (in the Chair)
We will move straight on to the Front-Bench contributions. The guideline limits are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister, but we can be flexible.
David Linden (Glasgow East) (SNP)
As always, it is a pleasure to see you in the Chair, Mr Hollobone. I am reliably informed by WhatsApp that Divisions are imminent, so although we have a degree of flexibility, I will try to be mindful of that. I warmly congratulate the hon. Member for South Dorset (Richard Drax) on securing the debate.
I sometimes come to these debates feeling a bit like William Hague. The Order Paper says that the debate is about the financial implications for the next generation, but I realise that I am probably the youngest Member in the Chamber at the moment. I do not want to sound like William Hague by saying, “It’s all right for you: you won’t be here in 40 years’ time,” but in reality, hon. Members will not.
It is somewhat remarkable that the hon. Member for South Dorset managed a good 15 minutes or so without touching on Brexit, because the reality is that Brexit is the biggest financial threat to the next generation. As I will touch on, it will cost each person £1,600 by 2030. I will also touch on what we are doing at home in Scotland to support first-time buyers, and on the recent Sustainable Growth Commission report.
Opportunities for young people, such as the freedom of movement and the ability to study abroad, will be severely limited as a result of Brexit. All those things are helpful in terms of social mobility and increasing people’s spending power. The Scottish Government’s analysis found that, by 2030, GDP would be £9 billion lower under a free trade agreement than if we had stayed in the EU. Of course, that decision was expressed by the people of Scotland, 62% of whom voted to remain in the EU. That £9 billion is the equivalent of £1,600 per person in Scotland. That is deeply disappointing, although we see that in the main Chamber the UK Government are still refusing to admit the true cost of Brexit, with the Treasury analysis not covering the Prime Minister’s deal; it covered no deal, the European Free Trade Association, the European economic area, the situation without a customs union, and Chequers. This is all quite important for the country’s direction of travel in terms of our finances and what we will leave to the next generation.
The Bank of England’s analysis suggests that the Prime Minister’s deal, which is clearly about as popular in this House as a cup of cold sick, will take between 1.25% and 3% from GDP by 2023, with a no-deal Brexit cutting between 7.75% and 10.5%. So the idea that we can have a debate about the financial threat to the next generation and ignore these figures really beggars belief.
I also want to touch on what we are doing in my own country to make sure that we have an economy for future generations. Some of it is about what we are doing to invest in housing. I remain incredibly concerned, almost as an observer down here, about the fact that the UK Government do not necessarily see the need to invest in social housing. There are things that they are doing around stamp duty, but stamp duty limits for £500,000? I do not know a huge number of 27-year-olds who are able to go and lump down £50,000 for their first home. There is some good stuff being done in Scotland, which I commend to the Minister, about what we can do to invest in housing while also ensuring that young people can get on the property ladder.
Finally, I will touch on the issue of the growth commission, whose report was published by Andrew Wilson on behalf of the Scottish Government. That report looks at the finances of an independent Scotland, and what it is absolutely clear about is that an independent Scotland can leave behind the broken economic model of the UK and actually benefit future generations with inclusive, sustainable growth. I will finish with this point: if the approach to spending recommended by the commission had been applied by the Westminster Government over the past decade, the £2.6 billion in real-terms cuts to Scotland would have been completely wiped out.
So I commend the hon. Member for South Dorset for initiating this debate. It is very difficult to have a debate such as this one, about the next generation, when we are quite literally pulling the rug from under their feet by the retrograde step of leaving the European Union and denying them the right to love and live elsewhere, and the opportunity to get on in the world.
Lyn Brown (West Ham) (Lab)
It is an absolute pleasure, Mr Hollobone, to serve under your chairmanship.
I am very grateful indeed to the hon. Member for South Dorset (Richard Drax) for giving us the opportunity to discuss the very real financial implications for the next generation of this Government’s continuing austerity policies.
We have had eight years now of claims that we have to tighten our belts for the sake of the future. Where has it got us? We are simply storing up problems for the future by destroying the public services on which so many people depend. Last month, the United Nations sent its special rapporteur on poverty to the UK and one of the evidence sessions was held in my constituency. I was there, and I have to say that it was really hard to sit and listen to that evidence. We heard about mums whose young children were not learning to crawl because they were confined to a bed in a small, rat-infested room; the mums could not let the children on to the floor. We heard from parents who had to move their children many times in a single year, from hostel to hostel, preventing friendships and bonds from being created in any community, and forcing the children either to move schools, which would severely disrupt their education, or to face hours of travel every morning and afternoon to get to school and back.
We also heard from vulnerable mums who had survived violence inflicted by people they were living with; they were forced to stay where they and their children were, although they were at significant physical risk, because they simply had nowhere else to go. The services that they needed had simply been cut.
What kind of physical, emotional and developmental problems are we storing up for these children’s future? For me, it is obvious that this kind of poverty is an absolute calamity for their life chances. And it is not just me who is saying that; it is what the UN rapporteur concluded. He noted that 14 million people in the UK are living in poverty today, and that 1.5 million people in the UK are utterly destitute, unable to afford essentials such as shelter, food, heating or clothing. These essentials keep a body and mind healthy and productive, but 1.5 million people—including 365,000 children—do not have access to them.
As we all know, health is extremely important to life chances. The Food Foundation has shown that the poorest quarter of households in the UK would have to spend more than 25% of their disposable income to follow the Government’s “Eatwell” guidelines. That is a quarter of their disposable income going just on food, and more than half of the households that are deprived of food include children.
Let me tell a story from my constituency. I met a young girl at an event where food was provided. Her plate was piled high, and I looked at her and said, “Whoa! That’s an awful lot of food for a small person!” “Yes,” she beamed. “It’s not my turn to eat tonight.” She was young and she had adapted, so for her such circumstances were normal. How will she and all the others in the same desperate situation feel when they realise that it is not everybody’s “normal”?
Some families are struggling to eat, let alone eat healthily; the increasing reliance of so many families on food banks is clear evidence of this. The Trussell Trust has released figures showing substantial increases of take-up of food banks year on year on year, and it is predicting bumper usage this Christmas.
When families cannot afford to eat, it has an impact on their health. Poor physical health or poor nutrition in childhood impacts upon a child’s physical, mental and educational growth. As a basic, how can a child concentrate in school if they are hungry? How can they make the most of their education? How can they develop the skills that they need for a prosperous adulthood? And how can they provide the skills that we need for a prosperous economy?
A sickly or malnourished child takes health risks and medical risks into their adulthood, costing the NHS much more than if they had been given a decent start in life. Reducing support to children today is a false economy; the state of tomorrow will have added costs because of it. The title of this debate is absolutely right—the next generation faces a financial threat from today’s austerity policies. That is one of the reasons why Labour is committed to universal free school meals, so that no child goes hungry in term-time, and it is also why we are committed to a real living wage and a social security safety net that keeps families out of poverty.
Let us have a quick look at the Government’s investment in the future economy through schools, further education and adult education, to give the next generation the skills and opportunities that they will need for the future. Investment in further and adult education has been cut severely. Spending per student in FE colleges is 21% lower than in 2010; the number of adult learners has fallen by a million; and overall spending on skills for adults has been cut almost in half. Now, 60% of small and medium-sized enterprises say that poor skills are their biggest challenge, and eight in 10 FE college leaders say that funding cuts are preventing them from filling that skills gap.
So there is a skills crisis and it is already affecting productivity and growth, but in the October Budget the word “college” did not appear once. I say again—how can this Government claim to be investing in future generations when they refuse to invest in the skills that businesses are demanding?
Mr Philip Hollobone (in the Chair)
The new finish time for the debate is 6.22 pm.
Lyn Brown
Let us face it: schools are faring badly. The Chancellor’s gift of £400 million in the Budget for some “little extras” was frankly insulting in the context of billions of pounds of cuts. If the Institute for Fiscal Studies is right, capital spending on schools has fallen by £3.5 billion—a 41% real-terms cut. I can see it in my constituency every time I visit a school. They are struggling, and they are also struggling to keep their students safe from grooming and crime at a time when young people’s services are disappearing, again due to cuts. Violent crime is rising and destroying the futures of increasing numbers of young people in my constituency, but the Treasury’s only response is to announce £170 million for our neighbourhood police services. That sum would cover less than 40% of the police pensions black hole, so it is unlikely to stop the fall in the number of officers on our streets. Reports suggest that half of that £170 million will have to come from elsewhere in the massively overstretched Home Office budget, so what will be cut to make up for it? Will it be firefighters? Will it be Border Force?
The next generation will not thank us if we leave them more vulnerable to fire, crime and terrorism. The cuts to councils have ensured that children’s services are under threat. Sure Starts and libraries are closing. We are charging for sporting activities in communities that help keep children healthy. There is not enough money to employ the youth workers that we need to teach my children resilience against the groomers.
Since 2010, the Government have claimed that austerity is working to bring down the debt and make spending sustainable, but that is simply wrong. They have missed every deficit target they have set themselves. They said they would eliminate the deficit by 2015, but now the Office for Budget Responsibility says that even eliminating it by 2025 will be challenging with the current approach. To the extent that the central Government deficit has reduced, much of that has been done by passing debt and problems to the future, where they will require more spending to fix. The Government are passing problems into the lap of our underfunded schools, hospitals, local councils and police forces. That does not make the next generation more secure or our public debt more sustainable.
Future generations are not being protected by austerity; they are being harmed by it. We need public investment to repair the safety net, to improve the public services that underpin the life chances of the many and to drive growth that benefits the whole country. In fact, we need a Labour Government to rebuild Britain.
The Economic Secretary to the Treasury (John Glen)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for South Dorset (Richard Drax) and acknowledge the assiduous way in which he has communicated with the Treasury over recent years, sharing the correspondence of his constituent. I welcome this opportunity to address, in as detailed fashion as possible, the points he has raised in his eloquent speech. I pass on my sincere thanks to his constituent for raising his concerns with the Government. I respect those concerns, and it is rare and gratifying to have a member of the public who takes quite such an assiduous interest in the public finances as to spend 5,000 hours studying them. I also thank the hon. Members for West Ham (Lyn Brown) and for Glasgow East (David Linden) for their contributions to the wide-ranging discussion this afternoon.
The Government share the concerns expressed today about the level of debt and recognise the importance of reducing it so as not to pass on an unfair burden to the next generation. I am anxious to reassure the constituent of my hon. Friend the Member for South Dorset that the Government are taking this matter seriously and are committed to getting debt down.
It may be helpful if I start with a few points of clarification. My hon. Friend observed a number of statistics relating to general Government gross debt. The Government’s chosen metric for debt is public sector net debt, which is a more complete and transparent measure of debt, incorporating a wider range of public institutions than general Government gross debt. Looking at net debt rather than gross debt also provides a more accurate picture of the health of the public finances, as it nets off our liquid assets.
My hon. Friend also stated in his opening remarks that the Government had reduced the deficit so that we now borrow £1 in £16, compared with £1 in £5 in 2009-10. He may be pleased to know that the figure is actually better than that: the Government now borrow only £1 in every £20 we spend.
An important point has been raised about how we measure debt, which I would like to address. The observation is that debt has increased in cash terms since 1973 and that that relates to us joining the European Union. I reiterate that looking at debt as a percentage of our national income—that is, GDP—is a more helpful way of assessing the public finances as it recognises our ability to afford debt as a nation. Looking at debt as a percentage of GDP adjusts for inflation and our ability to service that debt. It also paints a different picture from the nominal figures and shows that our debt level fluctuated between 20% and 50% from 1973, before significantly increasing at the time of the financial crisis. The fall in debt that we are now seeing as a percentage of GDP, rather than in cash terms, is an important distinction as it recognises that GDP is growing faster than debt. As my hon. Friend says, that is a movement in the right direction.
My hon. Friend also observed that, although we have significantly reduced the deficit since 2010, debt rose as a share of GDP over the same period before it peaked in 2016-17. That increase to debt in cash terms and as a percentage of GDP is principally due to the high levels of borrowing that we inherited from the last Administration—a post-war high of 9.9% of GDP, to be exact—which added to our overall debt burden. That could not be fixed overnight. As it was, there was significant resistance to the measures we took to reduce that deficit in the early years in government. We have now reached a crucial turning point, and the deficit has been reduced by four-fifths, from 9.9% when we came in to 1.9% of GDP at the end of the last financial year in April.
Thanks to the work of the British people to reduce the deficit, debt peaked at 85.2% of GDP in 2016-17 and has now begun its first sustained fall in a generation. It will reach—or, it is anticipated to, given the inherent difficulties of forecast—74.1% of GDP in 2023-24. That progress means that we are in a much stronger position with the public finances than we were in 2010.
While it is correct that debt rose after 2010, without the Government successfully reducing the deficit to the extent we have, debt would have been even higher and would still be rising. As my hon. Friend observed, there is a keen contrast between the Government’s balanced approach to paying down the deficit and paying down debt and the Opposition’s proposals to spend £1,000 billion if they assume office.
My hon. Friend also mentioned debt figures in cash terms for 2010, which his constituent Mr Stewkesbury rightly points out have changed. That change is due to a large number of reclassifications, the largest of which was adopting the European system of accounts 2010, which increased debt by around £100 billion due to the inclusion of Network Rail’s debt and the asset purchase facility and the treatment of public sector bank shares as illiquid. Reclassifications are necessary in the course of following international standards, which are themselves in constant evaluation.
The Government’s commitment to responsible management of the public finances was shown this summer, as we published our response to the OBR’s fiscal risks report, providing a detail account of the actions that the Government are taking to address risks to fiscal sustainability. That report provides a mechanism for Parliament and the public to assess the Government’s strategies for managing the risks, and to hold us to account for their implementation.
The report’s publication reaffirms the UK’s place at the international frontier of fiscal transparency and accountability, and supports the Government’s long-term fiscal strategy. The report set out a range of reforms that we are pursuing to reduce risks to the fiscal outlook, including actions to reduce our inflation exposure and tighter controls over the issuance of Government loans and guarantees. Such reforms will enhance the UK’s resilience to future economic shocks and aid in helping to keep debt falling.
It is right that actions taken by the Government today do not unjustly impact the next generation. In 2010, the Government inherited a very difficult position in the public finances, with debt having nearly doubled in two years and the budget deficit at its largest since the second world war. We have made significant progress. The deficit has been reduced by four-fifths and debt has begun its first sustained fall in a generation. However, the Government recognise that the job is not yet done, and share the concerns raised today.
We must continue to reduce debt to reduce the burden placed on the next generation. The OBR’s October forecast confirmed that the Government are on course to do that, and that we have met our near-term fiscal rules three years early. We will continue with our balanced approach, keeping debt falling while supporting public services, investing in the economy and keeping taxes low.
My hon. Friend raised a specific point about the sale of the Channel tunnel. The Government’s approach to such matters is that we sell public assets where there is no public policy reason for retaining them, but all asset sales must meet the value-for-money tests set out in the Green Book at the time.
It has been difficult to respond fully to today’s debate, given the range of speeches. My hon. Friend made essentially a macroeconomic critique of the Government, while the Opposition Front-Bench Members made a different set of observations, which are perhaps best left to another time. I sincerely acknowledge the need for the Government to come to terms with the fact that in 2019-20 we will still spend £43 billion on net debt interest, which is more than the amount spent on our armed forces. We need to be clear about the imperative to bear down on the challenge of getting our public finances into a position where we do not add to that debt burden, so that the next generation is in a better situation than when we came into Government.
Richard Drax
I am most grateful to the Minister, to the hon. Member for West Ham (Lyn Brown) and the hon. Member for Glasgow East (David Linden) for their contributions, and to you, Mr Hollobone, for listening to a debate that was full of figures. Such debates are perhaps not always the most gripping, but they are nevertheless important.
The hon. Member for West Ham made some very relevant points. The only point that I would like to make generally to the Minister is that it seems to me that one can look at it as Baroness Thatcher did—and gosh, how we miss her. She always used to say that it is like running a household: if the household spend more than it earns, it goes bust. If a shop—which is where, of course, she came from—makes more than it spends, that money can be reinvested in the business, and perhaps the staff can be paid a bonus, or whatever it may be. That is how she explained running an economy. I know that is very simple, and it is more complicated than that in real life, but the basics are true. Perhaps I can leave the Minister, and the Opposition, with that thought.
I did not agree with the representative of the Scottish National party, the hon. Member for Glasgow East, who said that by leaving the EU we would go to hell in a handcart economically. I would say that the opposite is true, because it will give our country the chance to generate more income. We need to earn more, so that those who earn more pay more tax and those taxes can pay for all the public services that the hon. Member for West Ham rightly pointed out are in urgent need of more money. I would totally concur with that, but we cannot just produce money from nowhere.
We cannot keep printing money; we have to earn it as a country. I hope and pray that when we leave the EU, and I hope that we do—fully—we will be free to generate such an economy, and to give our entrepreneurs, and the businessmen and women in this country, the chance to get out there and generate wealth for the services that we need to pay for.
I thank everyone who has taken part, and I thank you, Mr Hollobone, for chairing the debate.
Question put and agreed to.
Resolved,
That this House has considered the financial implications for the next generation.
Written Statements
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ECOFIN: 4 December 2018
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The Chancellor of the Exchequer (Mr Philip Hammond)
A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 4 December 2018. The Council will discuss the following:
Early morning session
The Eurogroup President will brief the Council on the outcomes of the 3 December meeting of the Eurogroup, and the European Commission will provide an update on the current economic situation in the EU. Following this, the Commission will present its forthcoming communication on the international role of the euro, and the Council will exchange views on the European Investment Bank as a follow up to September informal ECOFIN in Vienna.
Digital services tax
The Council will be invited to agree a general approach on the digital services tax directive.
Strengthening of the banking union
The Council will be invited to endorse the results of the trilogue with regards to the banking package. The Austrian presidency will then present a progress report on the European deposit insurance scheme.
Current financial services legislative proposals
The Austrian presidency will provide an update on current legislative proposals in the field of financial services.
European semester 2019
The Commission will present the annual growth survey 2019, the alert mechanism report 2019 and their recommendation on the economic policy of the euro area, followed by an exchange of views.
Non-performing loans
The Commission will present the third progress report on implementation of the non-performing loans action plan, followed by an exchange of views.
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Education, Youth, Culture and Sport Council
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The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Mims Davies)
The Education, Youth, Culture and Sport (EYCS) Council took place in Brussels on 26 and 27 November 2018. The UK’s Deputy Permanent Representative to the EU represented the UK for the Youth session on the 26 November and Culture and Audiovisual and Sports sessions on the 27 November.
Youth
This session of the Council began with the partial general approach on the regulation on the European Solidarity Corps 2021-2027, which the UK was content to support. This Council then adopted a resolution on the European Union Youth Strategy 2019-2027, as well as conclusions on youth work in the context of migration and refugee matters.
A policy debate was then held on the European Union Youth Strategy 2019-2027: from vision to implementation.
Culture/Audiovisual
This meeting began with a progress report on the regulation on Creative Europe 2021-2027.
The meeting then adopted conclusions on the Work Plan for Culture 2019-2022. In addition the meeting adopted conclusions on the strengthening of European content in the digital economy.
There was also a policy debate on countering the spread of disinformation online, looking at the challenges for the media ecosystem.
Information was provided from the German delegation on dealing with items from colonial contexts in European collections. In addition, information was also provided from the Danish delegation on problems concerning protection and transnational resale of tickets to cultural and sports events.
Sport
The sport session of EYCS began with a policy debate on major sporting events as drivers of innovation. This was then followed by the adoption of Council conclusions on the economic dimension of sport and its socio-economic benefits.
The EU member states represented in the World Anti-Doping Agency Foundation Board presented information on the Foundation Board meeting on 14-15 November.
Other
The Romanian delegation set out their work programmes as the incoming presidency, for the first half of 2019. They highlighted a number of priorities for the presidency. These priorities included improving the cross-border circulation of European cinema works, continuing efforts on disinformation through media literacy and quality journalism, and improving access to organised sport for people with disabilities.
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Telecommunications Council
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The Minister for Digital and the Creative Industries (Margot James)
The telecommunications formation of the Transport, Telecommunications and Energy Council will take place in Brussels on 4 December 2018. The deputy permanent representative to the EU, Katrina Williams, will represent the UK.
The Council will begin with the Austrian presidency seeking to secure a partial general approach on the digital Europe programme. A progress report and policy debate will then take place on the European cyber-security industrial, technology and research competence centre and the network of national co-ordination centres proposal. Following this, a progress report and exchange of views will take place on the e-privacy regulation
Afterwards, the discussion of AOB items will follow, including the adoption of the European electronic communications code (EECC) and Body of European Regulators of Electronic Communications (BEREC) proposals. Information from the Austrian presidency will be given on the progress of current legislative proposals, namely: the recast public sector information directive; the .eu top level domain regulation; and the Cybersecurity Act. The Austrian presidency will also provide an update on the state of play of the digital single market. The Council will end with a presentation from the incoming Romanian presidency on its work programme for the first half of 2019.
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Government Asset Sale Update
(5 years, 4 months ago)
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The Secretary of State for Education (Damian Hinds)
I am pleased to inform Parliament that the Government have today completed their sale of part of the older, pre-2012, English student loan book achieving a value of £1.9 billion.
The Government have been clear in their commitment that the position of all borrowers, including those whose loans have been sold, will not change as a result of the sale. This sale does not and cannot in any way alter the mechanisms and terms of repayment: sold loans will continue to be serviced by Her Majesty’s Revenue and Customs (HMRC) and the Student Loans Company (SLC) on the same basis as equivalent unsold loans. Purchasers have no right to change any of the current loan arrangements or to contact borrowers directly. The sale does not change the Government’s current approach to higher education or student finance.
The Student Loans Company will be writing to borrowers whose loans have been sold within three months to notify them of the sale. No action will be required from borrowers. Government have no plans to change, or to consider changing, the terms of pre-2012 loans. I also want to be clear that these older loans, whose borrowers benefited from lower tuition fees as well as lower interest rates, are not in scope of the current review of post-18 education and funding.
This sale is good for the taxpayer. It releases money that is tied up and serving no policy purpose, to invest in other policy priorities now, while keeping within the spending limits we need to strengthen public finances. The sold loans have already been in repayment for over nine years, and therefore a portion of the original value has already been paid back to the Government. The Government do not expect all of the remaining loans to be paid off in full and the sale guarantees money upfront today rather than waiting for fluctuating and uncertain payments over a long period of time. This sale also transfers risk to the private sector. Repayment income from student loans fluctuates with economic performance, as do tax receipts and managed expenditure like benefits. Selling the loans reduces the Government’s exposure to this fluctuation. The Government are committed to reducing public sector net debt in order to enhance the UK’s economic resilience, improve fiscal sustainability and lessen the debt interest burden on future generations. This sale makes a significant contribution to that objective.
The Government do not sell at any price. Throughout the process, the Government's decision on whether to proceed remained subject to market conditions and a final value for money assessment. This looked at whether we were selling to an efficient market, that can price the asset efficiently, and at a price that was worth more to the Government than retaining the loans. The Government’s retention value takes into account predicted repayments, the effect of inflation, the riskiness of the asset and the opportunity cost of having money tied up in the asset.
I can confirm that the price offered in aggregate across the book was above the Government’s retention value range. I will shortly be laying before Parliament a report on the sale in accordance with section 4 of the Sale of Student Loans Act 2008. This will provide more detail on the sale arrangements, and the extent to which they give good value as well as covering the sale’s different fiscal impacts.
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Joint Committee on the Draft Health Service Safety Investigations Bill Pre-legislative Scrutiny Report
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The Minister for Care (Caroline Dinenage)
The Government are, today, publishing their response to the report of the Joint Committee on the Draft Health Service Safety Investigations Bill which conducted pre-legislative scrutiny on the Bill. The Committee’s report was published in August 2018.
We published the draft Bill in September 2017 which set out legislative provisions to establish a new independent body to investigate healthcare safety incidents in the NHS in England.
I would like to thank the Chair and the members of the Committee for their report and commitment to improve this legislation. I would also like to thank all the contributors to the scrutiny process and all those who over the past three years have helped to shape and inform the development of the Healthcare Safety Investigation Branch and the Bill. I believe this scrutiny process has made a significant contribution to how we should move forward in improving safety and safety investigations in the NHS and the way we learn from incidents when things go wrong.
A copy of the response to the report will be laid before both Houses.
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Disability Inclusion
(5 years, 4 months ago)
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The Secretary of State for International Development (Penny Mordaunt)
For too long, disability has been a neglected issue in international development. An estimated 1 billion people globally have some form of disability. Disabled people are poorer than their non-disabled peers in terms of access to education, healthcare, employment, social support and civic involvement. They are at higher risk of violence and subject to widespread stigma and discrimination. The world will not achieve the sustainable development goals and its commitment to leave no one behind without a sustained and concerted effort on disability inclusion.
That is why in July this year we hosted a global disability summit with the Government of Kenya and the International Disability Alliance. The summit focused global attention on disability inclusion, and brought together more than 1,000 delegates from Governments, donors, private sector organisations, charities and disabled people’s organisations. The summit mobilised commitments from more than 170 organisations and more than 320 Governments and organisations signed the summit’s “Charter for Change”. To ensure long-lasting impact of these commitments, my Department is working with partners on a robust monitoring process.
To support this ambition to make disability inclusion a reality in developing countries, I will ensure we place disability inclusion at the heart of everything DFID does. Our vision is for a world where all disabled people are engaged, empowered and able to exercise and enjoy rights on an equal basis with others, contributing to poverty reduction.
On international day for persons with disabilities, I launched DFID’s first disability inclusion strategy. We will increase access to inclusive education, improve social protection, empower people to find work and step up in humanitarian contexts. We will support disabled girls and women, tackle stigma and discrimination and harness the power of technology. We will also step up on mental health. The strategy will include stretching targets for all DFID business units to deliver, including a focus on regular and meaningful engagement of disabled people in our work.
DFID’s global leadership on disability inclusion is in the national interest in demonstrating UK values of fairness and inclusion, in supporting the most disadvantaged and in sharing UK expertise and practice. I want the UK to be a trailblazer at home and abroad. To do that we need our political offices to be inclusive and better reflect our society. That is why I am delighted to launch the EnAble Fund for Elected Office—a £250,000 commitment to help cover disability-related expenses people might face when seeking elected office. Further information is available via this link: https://www. disabilityrightsuk.org/enablefund.
A copy of the strategy has been published on gov.uk and will be placed in the Library of the House for the availability of Members (including an “easy read” version designed for people with learning disabilities).
[HCWS1138]
GTR: May Timetable Disruption
(5 years, 4 months ago)
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The Secretary of State for Transport (Chris Grayling)
I wish to inform the House that the Department for Transport has completed its analysis of the events surrounding this year’s May timetable introduction on the GTR network. In line with Professor Stephen Glaister’s interim report, it has concluded that the disruption on this network was caused by a series of mistakes and complex issues across the rail industry.
I can announce today that the Government are holding GTR to account for its role in the unacceptable performance following the introduction of the May timetable. GTR will make no profit from its franchise in this financial year and looking ahead, we have also capped the amount of profit that the operator is able to make for the remainder of its franchise, which is due to expire in September 2021.
Furthermore, GTR will be contributing £15 million towards tangible improvements for passengers. This is in addition to the £15 million the operator has already contributed towards compensation for passengers since the May timetable disruption. GTR has agreed to work with the rail user groups representing passengers of Thameslink, Southern and Great Northern, who will determine what improvements this package will fund.
The Department has concluded that a termination of the franchise would cause further and undue disruption for passengers and is not an appropriate course of action.
Performance after the May timetable change was unacceptable. This action announced today holds GTR to account appropriately and will benefit passengers. The Department will continue to monitor closely the performance of GTR, particularly during the upcoming December timetable change. These measures do not make GTR immune from further sanctions in the event of any subsequent failure to perform.
[HCWS1132]
Employment, Social Policy, Health and Consumer Affairs Council: 6 December 2018
(5 years, 4 months ago)
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The Minister for Employment (Alok Sharma)
The Employment, Social Policy, Health and Consumer Affairs Council will take place on 6 December 2018 in Brussels. I will represent the UK.
The Council will be invited to agree a general approach on a regulation establishing a European labour agency and on a third batch of amendments to the worker protection directive on carcinogens and mutagens (2004/37/EC).
The Council will receive reports on progress in negotiations regarding a regulation on the European Globalisation Adjustment Fund (EGF) and a proposal from 2008 for a directive on equal treatment.
The Council is also expected to reach political agreement on a recommendation on access to social protection for workers and self-employed, and to adopt a set of conclusions on gender equality, youth and digitalisation.
The Council will hold a policy debate on an issue related to the European semester. It will also receive a presentation from the Commission on its 2019 “Autumn Package” of annual growth survey, alert mechanism report, draft joint employment report, and draft recommendation on the economic policy of the euro area. The Council will also approve a contribution on that recommendation made jointly by the Employment Committee (EMCO) and the Social Protection Committee (SPC); endorse their joint messages on aspects of digitalisation and robotisation; and endorse EMCO’s key messages on the latest biennial assessment of member states’ progress tackling long-term unemployment.
Under any other business, the Commission will present information on its activities, as well as the Tripartite Social summit which took place on 16 October 2018. The presidency will provide information on current legislative proposals, the joint declaration on gender equality and presidency events on:
(i) Digitalisation of work;
(ii) Fight against occupational cancer; and
(iii) Gender equality.
The Maltese delegation will present a non-paper on future of the LGBTI list of actions and the Romanian delegation will provide information on their work programme for their upcoming presidency.
[HCWS1134]
Automatic Enrolment Annual Earnings Trigger and Qualifying Earnings Band Review
(5 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Automatic enrolment into a workplace pension has been a great success to date with over 9.9 million people having been automatically enrolled and all employers now having to comply with their automatic enrolment duties following the completion of the staged roll-out of the duties in March this year. More than 1.4 million employers have met their duties and overall annual pension saving for eligible employees has increased by £11.7 billion since 2012. The second phased increase in the minimum contribution rates to 8% will happen in April 2019.
The main focus of this year’s annual review of the automatic enrolment thresholds is to ensure the stability of the policy during the contribution increase next April. We also want to ensure that our approach continues to enable individuals, for whom it makes economic sense, to save towards their pensions whilst also ensuring affordability for employers and Government. The review has concluded that the earnings trigger will remain at £10,000 and both the lower and upper earnings limits will continue to be aligned to the national insurance contribution thresholds.
I intend to lay an order before Parliament in the new year which will include the following, for 2019-20:
£50,000 for the upper limit of the qualifying earnings band.
£6,136 for the lower limit of the qualifying earnings band.
The automatic enrolment earnings trigger will be maintained at £10,000.
I will place a copy of the analysis supporting the proposed revised thresholds in the House Library. These papers will be available later today on the www.gov.uk website.
Attachments can also be viewed online at: http://www. parliament.uk/writtenstatements
[HCWS1135]
House of Lords
Introduction: Baroness Osamor
Rail Franchise Agreements
(5 years, 4 months ago)
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Lord Greaves
To ask Her Majesty’s Government what requirements are included in rail franchise agreements for operators to provide information, assistance and support to passengers when trains do not arrive, or terminate before reaching their final destinations.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)
My Lords, franchise arrangements contain obligations for operators to act in the best interests of passengers if there is disruption in service. This includes working with Network Rail and other train operators and using all reasonable endeavours to provide alternative means for passengers to get to their destination. In addition, during franchise bids we ask bidders to demonstrate how they will deliver high standards of information and customer service during such periods, and bidders are evaluated on the quality of their responses.
Lord Greaves (LD)
My Lords, I refer to trains to Brierfield, Nelson and Colne, which are at the end of the line on an eight-mile single-track siding. If trains are late, they often turn back at Burnley and turf out all the passengers without assistance, support or alternative transport to Brierfield, Nelson or Colne, where they have tickets to. It happens at all times of the day and night, leaving vulnerable people stranded at a dark unmanned station—children, young girls, old and disabled people, and visitors who do not know where they are. When will the Government get to grips with Arriva Northern rail and bring an end to scandals such as this?
Baroness Sugg
My Lords, Northern is working hard to reduce the number of cancellations experienced on the line which the noble Lord mentions; they are currently running at about 4%, which is obviously not good enough. If the last train of the day is cancelled, Northern operates a last train of the day policy, which should ensure that passengers who are travelling to Brierfield, Nelson and Colne are not left stranded. If for any reason that service does not arrive, there is a 24-hour helpline, and service will then be provided. I have been assured that onward transport has been provided in all circumstances, but from what the noble Lord has said, that is not the case and, as I said, that is not good enough. I will be happy to arrange a meeting with the noble Lord and the Northern franchise where we can discuss further how better to make improvements.
Lord Tunnicliffe (Lab)
My Lords, the problems outlined by the noble Lord, Lord Greaves, are symptomatic of the structure of the railway. It is the structure that is wrong, and it is the structure that caused the May timetable chaos. Fortunately for us, the Transport Select Committee in the other place reported on that today. At paragraph 63 it concludes:
“The Secretary of State for transport is responsible for the structure of the system that controls and runs our railways. He is at the apex of this system … It is therefore not reasonable for the Secretary of State to absolve himself of all responsibility”.
Does the Minister agree with the committee, and does she further agree that things will not get better until the Secretary of State accepts his responsibility or stands aside for a more proactive and responsible candidate?
Baroness Sugg
My Lords, I should make clear that the Secretary of State and the department have accepted responsibility for the role we played in the implementation of the timetables in May. It is clear from the difficulties with the introduction of the timetable over the summer, from problems experienced with some major investment projects and from the collapse of the Virgin Trains East Coast franchise that we need to see significant change, but that, as the noble Lord said, is in the structure of our railways not in our Secretary of State.
Lord Naseby (Con)
Is my noble friend aware that, while there have been improvements on Govia Thameslink since the May farce, a new technique is nevertheless being deployed on the Peterborough line? You get half way to Peterborough and the train driver announces that he is not stopping at the next four stations. While I normally like going to Huntingdon, on the whole it is not terribly productive after a late sitting in your Lordships’ House. I therefore ask my noble friend to suggest the simple remedy of having a reserve train at Peterborough with a standby driver so that the timetable can be kept.
Baroness Sugg
I am not sure that I will be able to deliver that, but I will certainly take my noble friend’s suggestion back to the franchise. Again, we have seen unacceptable levels of service from GTR over the summer. We have today announced firm and proportionate action against GTR, which will contribute £15 million towards tangible improvements for passengers and will make no profit from its franchise this financial year. Looking ahead, we have also capped the amount of profit the operator is able to make for the remainder of its franchise. I am well aware that the service is not as it should be, and we are working hard to address that.
Baroness Brinton (LD)
My Lords, I am grateful for my noble friend’s Question. I will expand it slightly to look at the particular problem that disabled passengers face in these circumstances. One deaf passenger recently got on to a train and, following a platform change, an audio announcement was made of the need to move to another platform, but no conductor or other staff member walked down the train and the person sat there for some time before realising there had been a change. Secondly, a disabled passenger was left stuck on a train that was terminated before its expected station, unable to get off with the other passengers who were taken off the train. What are the Government doing to ensure that train operating companies look after disabled passengers of all types, whether their disabilities are visible or not?
Baroness Sugg
My Lords, all train operators have a disabled people’s protection policy in place, and they must comply with that as a condition of their licence. The ORR is currently consulting on how we can strengthen that document to set out what train operators are required to do. It looks at key areas such as reliability of the assistance service, staff training, the notice period recommended before booking assistance and passenger information for seeking redress. The ORR has powers to take enforcement action where there are breaches of licence conditions. It has not yet used these powers, but we would absolutely encourage it to do so where there are breaches.
Lord Laming (CB)
My Lords, is the Minister aware that some rail companies appear to have removed the word “cancellation” from their vocabulary? You arrive at the station for a train, look at the board and discover that the train is no more; it never existed; it is not there. Could she help these companies to recover the full use of their vocabulary?
Baroness Sugg
My Lords, train cancellation has certainly not been removed from my vocabulary. We need to make sure that information is properly provided to customers. We are working closely with GTR and all the train operating companies on this. We need, of course, to ensure that passengers are aware which services they will be able to travel on, and that is something we are working to improve.
Baroness Corston (Lab)
My Lords, I hope the Minister does not think that everything is fine on those train operating companies not mentioned here today. On Great Western Railway, for example, the service from Cheltenham Spa to Paddington is frequently cancelled on a Sunday night. All the trains are suddenly and summarily cancelled, so people who work in London all week and expect to travel back there on a Sunday night find they are unable to do so. GWR does this repeatedly. Will she intervene?
Baroness Sugg
My Lords, obviously we should be looking not to cancel any train services, and those services referred to by the noble Baroness are particularly important for people who need to travel to London for work. I will take this issue back and follow it up with the franchise-holders to see if there is anything we can do.
Tourism: Regulation
(5 years, 4 months ago)
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Baroness Doocey
To ask Her Majesty’s Government whether they have plans to introduce further regulation in the tourism sector.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, we continue to work hard to shape the regulatory framework so that it is underpinned by common sense, as outlined in the Government’s Tourism Action Plan. We are also working closely with the hospitality and tourism sector to identify areas where less, or indeed more, regulation would support additional growth.
Baroness Doocey (LD)
I thank the Minister for his response, but there is concern in the tourism industry that regulation of the accommodation sector has not kept pace with technology and that some platforms are operating on the very margins of regulatory compliance. In the sharing economy, there is no distinct system in place to ensure that adequate fire and safety standards are enforced. There is also no legal requirement to ensure that hosts purchase public liability insurance. What will the Government do to rectify this and would the Minister be willing to meet me and representatives of the industry to discuss it?
Lord Ashton of Hyde
My Lords, I take the noble Baroness’s point seriously. We are of course concerned not to overregulate but to support the industry. However, we understand that the most important thing is the safety of all travellers, whether domestic or from further afield, and we will consider any proposal that results in a safer or enhanced experience for tourists in the UK. The guidelines for smaller businesses are currently being reviewed by the National Fire Chiefs Council, using input from a wide variety of accommodation providers, including Airbnb and the Bed and Breakfast Association. We have not yet come to a conclusion about a registration scheme, but the Minister for Arts, Heritage and Tourism would be delighted to meet the noble Baroness.
Lord Clark of Windermere (Lab)
Does the Minister accept that uncontrolled and unsuitable tourist development can threaten the natural beauty and environment of many areas, especially in national parks? Will he therefore write to the directors of the national parks, including the Lake District National Park, reminding them of such?
Lord Ashton of Hyde
I agree with the noble Lord but it is a question of balance. We want to encourage the tourism industry but a UNESCO world heritage site, for example, attracts an increased number of visitors. We generally promote and accept that but I understand the concerns about overtourism. We are working hard to ensure that we maintain a sustainable balance in all tourist areas.
Baroness Gardner of Parkes (Con)
My Lords, the Minister will be aware that there is now great abuse in the holiday letting sector, using premises that would normally be available for people in London to live in, and the Mayor of London has drawn attention to this. If tourism operators were regulated so that people had to prove that leases permitted them to let on a really short-term basis, would that not be helpful in controlling the completely unauthorised and illegal short lets that are doing such damage?
Lord Ashton of Hyde
I am aware of my noble friend’s interest in this matter—we know that she has referred to the issue of leases before. However, a lease is a contract and the remedies for breach of that contract are the same as for a breach of any other contract. There is a potential £20,000 fine for hosts who exceed the 90-day limit, and we think that is a strong disincentive.
Lord Foster of Bath (LD)
My Lords, further to the question from the noble Baroness, Lady Gardner, I am grateful that the Government have belatedly identified the loophole whereby some second-home owners in tourist destinations avoid paying council tax by declaring that their property is available for letting but then avoid paying business rates by making no effort to let it. Can we be assured that, following the end of the consultation next month, the Government will act rapidly to close this loophole and bring benefit to legitimate holiday letting businesses, to local councils and to local communities, and that they will do so in time for next summer’s season?
Lord Ashton of Hyde
I am informed by my noble friend sitting next to me, whose responsibility this is, that the department is looking at that precise question.
Lord Judd (Lab)
My Lords, I declare an interest as a former president of Friends of the Lake District and currently as a vice-president of the Campaign for National Parks. I assure the Minister that many of us feel that the parks should play a crucial role in tourist development—but tourist development to ensure that people have access to national parks. The Minister says that the Government are trying to maintain a balance between different interests, but will he agree that until recently it was specifically spelled out in legislation that scenic beauty and character were to take precedence in all decisions affecting development in national parks? They are not there as theme parks.
Lord Ashton of Hyde
I cannot completely agree with the noble Lord, although I sympathise with his general approach. For example, if a village or town in a national park needs mobile signal, a mast may be necessary. I am afraid that the natural environment and natural beauty do not always take precedence.
Internet Safety
(5 years, 4 months ago)
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Baroness Benjamin
To ask Her Majesty’s Government what financial and other resources will be available to the UK Council for Internet Safety.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, the UK Council for Internet Safety is a voluntary non-statutory body; it does not receive any government financial support. Members of the council, who are drawn from the public sector, the tech industry and civil society, voluntarily commit their organisations’ resource to deliver collaborative projects in support of internet safety. UKCIS is supported by a small secretariat team in the Department for Digital, Culture, Media and Sport.
Baroness Benjamin (LD)
My Lords, internet safety is needed more than ever and we cannot just rely on part-time volunteers to do the job—this is what they tell me. To ensure that this new council deals with the enormous challenges of hate crime, sex abuse, fraud, and violence against women and children, will the Government properly support its work through substantial resources to initiate and pay for research and events linked to its primary objective of keeping the nation safe online, especially our children?
Lord Ashton of Hyde
I completely agree that it is important that UKCIS helps to contribute to online safety. That is why we expanded its role from concentrating just on child internet safety to include, as the noble Baroness mentioned, hate crime, serious violence and extremism. As far as resources are concerned, the previous body—the United Kingdom Council for Child Internet Safety—has demonstrated that getting together a mix of tech companies, public bodies and government achieves good results. That is not the only thing we are doing. The online harms White Paper, which is coming by the end of the winter, will address some of the other issues, one of which will have to be funding.
Lord Griffiths of Burry Port (Lab)
My Lords, as the Minister said, the body we are speaking about has developed from being concerned specifically with children to having a more generic nature. It has a complex set of relationships with various departments of government, including health, the Home Office and education, especially the part dealing with young people’s mental health. It is a complicated structure. In the consultation, a lack of direction in the previous body was bemoaned. Can the Minister assure us that there is a sense of direction and purpose, appropriately monitored, in this voluntary body? Given that we have extended the remit from just children to a generic range of interests—and given that in the past month or so in this House, children and obesity, knife crime, bullying, gambling, image and performance-enhancing drugs and the internet have all been discussed—can the Minister assure me that the needs of children are not being diminished as a result of being wrapped up into a more generic body?
Lord Ashton of Hyde
On the noble Lord’s first question, there has just been a board meeting and the council has reaffirmed the areas of focus: first, online harms experienced by children; secondly, radicalisation and extremism; thirdly, violence against women and girls; fourthly, serious violence; and fifthly, hate crime and hate speech. So there is a definite desire to address these very important matters. As I said in my previous Answer to the noble Baroness, we will look at other areas in the online harms White Paper.
There is absolutely no doubt that children are still a prime concern, as the composition of the board shows. The director of BBC Children’s, the CEO of Childnet, the Children’s Commissioner, the CEOs of Internet Matters and the Internet Watch Foundation, the lead for the National Police Chiefs’ Council, the head of child safety online for the NSPCC and the deputy director of child protection for the Scottish Government are all members of the board and they will certainly make sure that children’s issues are at the forefront of their work.
Viscount Colville of Culross (CB)
My Lords, the council is developing a programme of online guidance for schools. Does the Minister not think that there should be government funding for a digital literacy campaign supported by the council? That is particularly important when it comes to the ability to read the terms and conditions used on websites and tech company sites.
Lord Ashton of Hyde
Yes, I agree that that is important for all people online, not just children.
The Lord Bishop of Chelmsford
My Lords, may I extend this question a little further? This is such an important issue and our generation will be judged on it as the internet and digital age takes over. Noble Lords will know those clever algorithms that are so good at selling us things—if we buy one thing they will try to sell us something else. Those could be turned towards the interests of internet safety by advancing something called safety by design. What consideration are the Government giving to much more forward-thinking legislation not just to support bodies such as the Council for Internet Safety, but to introduce measures to make our inhabiting of the digital world safer and more creative?
Lord Ashton of Hyde
Yes, the right reverend Prelate makes a good point. That is why the Internet Safety Strategy Green Paper set out the need for the industry to think safety first by designing products and platforms in a way that makes them less likely to cause harm. We need to make that as simple as possible for the industry and we need to be aware of the impact on SMEs and growing companies. The White Paper will address this issue further and will, for example, examine the case for a set of safety-by-design guidelines for the industry. It will also set out the Government’s approach to the use of safety technology.
Lord Leigh of Hurley (Con)
Will my noble friend consider instructing the committee to look at the anonymity of social media and in particular whether or not tweeting should be allowed from anonymous people?
Lord Ashton of Hyde
No, it is not part of the Government’s thought process to instruct the committee to do anything. The Government will consider issues such as those raised by my noble friend in the online harms White Paper.
Housing: Accessibility
(5 years, 4 months ago)
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Lord Beecham
To ask Her Majesty’s Government what assessment they have made of objections raised by the Home Builders Federation to proposals from some local authorities to set targets for accessible or adaptable new-build houses.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, we want to build more accessible homes that meet the needs of older and disabled people. Government policy provides a clear and robust framework to support the delivery of accessible housing. Building regulations already require minimum standards of accessibility for all new dwellings. The Government intend to publish new planning guidance on housing for older and disabled people before Christmas and are scoping a review of the accessibility provisions in the building regulations.
Lord Beecham (Lab)
My Lords, at a time of growing concern about the support required by an increasing number of elderly people as life expectancy grows, the Home Builders Federation is objecting to councils seeking to set new targets to increase the number of homes with room for wheelchair users and that can be adaptable. Given that this is a highly profitable industry where 400,000 permissions to build are as yet unimplemented, what action will the Government take to assist local authorities to ensure, through the planning system, that sufficient housing is provided for people with homes suited to their needs?
Lord Bourne of Aberystwyth
My Lords, first I pay tribute to the people who yesterday supported the International Day of Persons with Disabilities. Many buildings in both the public and the private sectors were lit up in purple for that purpose. I agree with the general thrust of the noble Lord’s question. As I say, the Government are very clear on this. For the first time in the planning guidance within the NPPF, we have made it a responsibility to take care of the interests of older and disabled people. As I say, planning guidance in support of that will be out before Christmas. We are reviewing Part M of the building regulations, which again is a crucial issue in relation to M4(2). That is also to be published in the new year, I think.
Baroness Thomas of Winchester (LD)
My Lords, I thank the Minister for his meeting last week about this issue, which I know he is trying to resolve. I wonder whether his department could point out to the Home Builders Federation that there is a world of difference between homes adapted for disability and the basic minimum access requirements in Part M4(2) of the building regulations. Apparently some builders say that not everyone wants to live in an adapted home. We simply want the basic minimum standards set out in Part M4(2) made mandatory.
Lord Bourne of Aberystwyth
My Lords, it was a pleasure to discuss the issue of M4(2) with the noble Baroness and the noble Baroness, Lady Brinton, last week. The Government strongly support the rights of disabled people. This is important and we are behind local authorities which are keen to take this forward. I agree that it is for building companies to respond to that; they have a responsibility. We have an ageing population as well as people with disabilities. It is the mark of a civilised society as well as a point of self-interest, quite honestly, that we should do these things. On both those bases, the Government are solidly behind what the noble Baroness is saying.
Baroness Greengross (CB)
My Lords, in this country only 0.6% of older people live in a retirement community which provides not just housing but care and support. In many other countries such as New Zealand, Australia and the US, the figure is at least 5%. These facilities provide enhanced health and well-being and better outcomes while emergency visits to A&E, hospital admissions and bed blocking are greatly reduced. Does the Minister agree with the vision of the Associated Retirement Community Operators—I am a patron of that organisation, which will be exhibiting here next week—that by 2030 a quarter of a million people should have that option? It would be of huge benefit to the NHS and would ease the housing shortage in society in general, and particularly that faced by young people.
Lord Bourne of Aberystwyth
My Lords, I pay tribute to all the work done by the noble Baroness in this area. We worked together on the Neighbourhood Planning Bill, which was then enacted, and made some important provisions in it about disabled and elderly people which I referred to earlier. She is emphasising the point I made, which is that not only is this the right moral thing to do in a civilised society but it is also very much the right economic thing to do because it will save money for the health service and so on, as well as helping people to live longer in the sort of circumstances that they would want.
Baroness Brinton (LD)
My Lords, I too thank the Minister for the meeting last week, which was extraordinarily helpful. In addition to stiffening the sinews of the Home Builders Federation, would the Minister write to local councils to point out the data that shows that it costs only just over £1,000 to make a new unit disabled-friendly when building it, whereas later adaptations cost a minimum of £20,000? Councils should therefore insist on access being put in right at the start. That is beneficial to them and to the wider community.
Lord Bourne of Aberystwyth
I thank the noble Baroness for that suggestion. I will certainly take it back to the Minister so that it can be picked up in the next letter we write to local authority leaders. She and the noble Baroness, Lady Thomas, will be aware that we are ensuring that the voice of Habinteg—an active housing association with a vision on this issue for disabled people—is heard. It is a strong voice on Document M for the advisory committee, which is looking at this issue. I think that the House will find that reassuring.
Financial Services (Implementation of Legislation) Bill [HL]
Tuesday 4th December 2018
(5 years, 4 months ago)
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The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, I begin with some context to explain why the Government have brought the Bill forward at this time. The Government have been clear that we do not want or expect a no-deal scenario but it remains the role of a responsible Government to continue to prepare for all possible outcomes. This includes the unlikely event that we will reach 29 March next year without a withdrawal agreement or an implementation period.
I have updated noble Lords a number of times on how the Treasury will ensure that we have an effective financial services regulatory regime in the event of no deal. That stability and continuity is being delivered by the 60 or so statutory instruments that Her Majesty’s Treasury is introducing under the European Union (Withdrawal) Act 2018. These will ensure that all relevant existing legislation continues to operate effectively, minimises disruption for firms and protects financial stability.
We need to do more than just ensure that our regime continues to function. The UK’s position as a global financial centre is critical to our prosperity and benefits businesses and consumers across the UK. We need appropriate regulation in place, with the right balance between protecting stability and fostering competitiveness. We aim to be the safest and most transparent place to do business, leading the race to the top and always championing high regulatory standards in financial services markets.
In the unlikely event of no deal, thanks to the hard work of both Houses, we will have brought on to our statute book a vast and highly technical body of EU financial services legislation. We thank both Houses, but both Houses should thank our remarkable civil servants for their incredible work in preparing this great volume of legislation with such accuracy and detail.
However, the powers under the European Union (Withdrawal) Act relate only to EU legislation operative on exit day. Numerous pieces of legislation—or files, which I will refer to later—will not be covered by the withdrawal act powers. They include those that are either already agreed but not yet operative on exit day, or those still under negotiation but which will be operative soon after our departure. There are also provisions in the Bill that relate to non-operative provisions, which it would not make sense to bring into UK law alone.
In many cases, the UK strongly supported these laws when they were being negotiated and played a leading role in shaping them over a number of years. These laws provide up-to-date tools to deal with financial stability risks, ensure that our firms can operate on a level playing field with firms on the continent, allow the UK to meet its G20 commitments and maintain the highest international standards, and provide all-important business certainty and continuity.
As part of this ambition, the Treasury undertook extensive engagement with our financial services industry while negotiating these laws. The sector has been expecting many of these proposals for several years and has been preparing to implement and gain the benefits of them. For example, the prospectus regulation will reduce the financial and regulatory burden for companies wishing to fulfil their financing needs on public markets, while maintaining high standards of investor protection. The UK has been a strong supporter of the reform of the prospectus directive and engaged closely in the development of this regulation.
Implementation is critical to ensure that the UK retains its reputation as an attractive destination for capital. If we are to retain our position as the world’s leading financial centre in the unlikely event of a no deal, it will be vital that the Government can implement the key policies in these EU files in a timely way. Global markets adapt and evolve at pace. We cannot afford for our high regulatory standards to fall behind those of other major financial services jurisdictions. That is what the Bill seeks to address. It will do so in two main ways. First, it allows the Government to implement in the UK a specified list of the most necessary EU financial services legislative proposals in the pipeline through statutory instruments subject to the affirmative procedure. Noble Lords will find the full list and purpose of these files in the policy note published by the Treasury.
Secondly, and importantly, the Bill is only for a situation in which we leave the EU without a deal. It will allow for the Government to choose to implement only parts of these pieces of legislation and make adjustments and improvements as they are brought into UK law. I acknowledge that this is a broad power, but let me be clear on two fronts. In the event of leaving the EU without a withdrawal agreement and without a future economic partnership, the UK will not countenance accepting EU laws wholesale. It will therefore be vital to ensure that any legislation implemented in the UK can be adjusted to work best for the UK markets outside the EU in a no-deal scenario. The Bill is and can be only a stop-gap measure to minimise disruption in the event of no deal for a time-limited period. The Government fully recognise the need to establish a more sustainable process for updating financial services regulation following our exit from the EU and will come forward with proposals in due course.
In recognition of the breadth of powers sought in the Bill, it is subject to a number of strict safeguards. First, as I have stressed, this is strictly a temporary solution and will be limited by a non-extendable sunset clause at two years after a no-deal exit, ending on 29 March 2021. Secondly, the power will be subject to the affirmative procedure in every instance of its use, providing Parliament a guaranteed opportunity to debate, discuss and scrutinise the Government’s approach to implementing these files. Thirdly, the Treasury will be mandated to produce and publish annual reports on the exercise of the power. Finally, the power will be subject to limitations as in Section 8(5) and (7) of the European Union (Withdrawal) Act 2018. It cannot therefore be used to impose taxation, make retrospective provision, create some criminal offences, establish a public authority or amend the Human Rights Act or the devolution settlements.
It is crucial that we press ahead with preparations to ensure that, in the event of no deal, we can protect and enhance the UK’s position as a global financial centre. The Bill is an essential part of those preparations, providing us with the critical ability to implement legislation important to maintaining the functionality, reputation and international competitiveness of our financial sector.
I hope that noble Lords will recognise the Bill as the Government taking a responsible approach in their contingency planning. I look forward to this Second Reading debate on the Bill’s contents and to responding to noble Lords’ questions and scrutiny at its conclusion. I beg to move.
Lord Sharkey (LD)
My Lords, this very brief Bill has a perfectly reasonable objective, which we support. It makes obvious sense to deal with the in-flight files relating to financial services against the possibility that we crash out of the EU on 29 March. I entirely accept that we need to ensure the functioning of our statute book against the possibility of a chaotic exit from the EU. I entirely accept that we need a certain flexibility in the way we do this. We need to have the ability to incorporate pending EU legislation to which we have contributed significantly and which will bring clear benefits to the UK, but will not be incorporated, as the Minister said, by the EU withdrawal Act.
This need is not confined to the financial sector. I expect that the Government will want to bring forward similar legislation to cover other sectors. In particular, I would welcome equivalent legislation to cover the clinical trials regulation, which has been adopted but not yet applied. I realise that this is outside the Minister’s brief, but might he have a quick word with his colleagues in the Department of Health and Social Care about the Bill’s in-flight mechanism?
The Bill before us may be short but it raises a number of substantive questions. The first concerns policy change. It seems clear that the proposed in-flight mechanism will allow the Government to make policy changes by delegated legislation, as section 2 of the de minimis impact assessment makes explicit. That is specifically prohibited in the EU withdrawal Act because it would significantly reduce parliamentary scrutiny. The same objection applies here. Making or changing policy via SIs will equally diminish parliamentary scrutiny. If doing this was wrong for the EU withdrawal Act, why is it okay for this Bill? Is it right to change policy, perhaps significantly, without substantive parliamentary debate? The affirmative procedure certainly does not count as substantive parliamentary debate. I would be grateful for the Minister’s thoughts on the matter.
The second question relates to the schedule. The provisions in it are not the only in-flight financial services proposed legislation. For example, the UK Sustainable Investment and Finance Association points out two other provisions. The first is the European Commission’s proposal of May 2018 for a regulation establishing a framework to facilitate sustainable investment. The second is a proposal for a regulation on disclosure relating to sustainable investments and sustainability risks. Why were those two in-flight proposals not included in the schedule list? More generally, on what basis were the items in the list chosen and on what basis were they excluded?
I can easily see that some items in the schedule are critical. The Capital Requirements Regulation II and the Capital Requirements Directive V will allow us to update the rules on minimum capital requirements derived from the international Basel standards. The Central Counterparty Recovery and Resolution Regulation will ensure that CCPs and the Bank have mechanisms for acting defensively in a crisis to ensure financial stability and the continued functioning of CCPs. I probably do not need to remind your Lordships that the Bank of England’s chief economist, Andy Haldane, has pointed out that if CCPs were to fail chaotically or be unable to continue to function, it would be 2008 on steroids.
My real difficulty with the Bill lies with Clause 1. “Similar” in subsection (1)(a) seems to give very wide discretion. Who is to decide what is similar, and on what basis? Subsection (1)(b) appears to give the Treasury extreme latitude. What is the force of the word “adjustments”? Does it imply any limitation on the changes that may be made? If it does, what are they and should they not be in the Bill? There is then even wider latitude: these adjustments can be made as the Treasury considers “appropriate”. Would it not be better to limit what currently seems an absolute and unfettered discretion for the Treasury to decide what is appropriate? Should not “appropriate” be qualified? Would it not be better to specify a purpose and to know “appropriate” for what purpose or objective? In any case, we need some indication of what tests will be applied in deciding when an adjustment is appropriate.
The wording of subsection (1) makes it clear, given the wide powers, that policy change can be brought about by SIs, limiting parliamentary scrutiny. This becomes evident when we consider the wording in parentheses, which makes it plain that the Treasury adjustments do not even have to have anything to do with our withdrawal from the EU.
A further question arises from Clause 1(9). It is not clear to me—I know that this may be entirely my fault—what this subsection actually does. In particular, I am unclear about the phrase, “in that following year”. I am not sure what that refers to or what it means and I would be very grateful if the Minister would explain.
The policy note issued by the ministry has been very helpful in working through the Bill, but it raises one additional question. On page 3, paragraph 1.8 talks about the safeguards contained in the Bill. The final bullet point states that the power,
“cannot be used to impose taxation; make retrospective provision; create some criminal offences; establish a public authority; implement a withdrawal agreement; or amend the Human Rights Act 1998 or the devolution settlements”.
It follows from this that the power can create some criminal offences. It would be very helpful if the Minister would spell out for us just what criminal offences may not be created and, by extension, under what circumstances the Treasury would want to create new offences and what these might encompass.
Overall, the Bill effectively allows the introduction of fundamental new law by SI. There is no natural, native parent for these SIs. There will have been no primary legislation to allow thorough parliamentary scrutiny. We will be relying, if that is the right word, for proper scrutiny on the EU institutions, which we will have left and whose interests may not be aligned with ours. Perhaps we need a sunset clause for the effects of these SIs, and not just for the powers within the SIs themselves, so that there will be an opportunity for proper scrutiny as they are incorporated in new primary legislation. I am sure that we will come back to this in Committee.
As I started by saying, we support the objectives of the Bill but have some serious concerns about the unfettered nature of the powers it contains and the implications for parliamentary scrutiny. I hope that the Minister will be able to put our minds at rest, at least somewhat.
Lord Hodgson of Astley Abbotts (Con)
My Lords, it would be hard to argue with the importance of having the necessary financial architecture in place to protect and sustain the UK’s position in the event of a no-deal scenario. The ability of the appropriate authorities to act decisively to maintain financial stability and public confidence is critical in any country, and nowhere more than in the United Kingdom, given the size and importance of our financial services sector. So the Bill certainly has my “in principle” support, and although it seems narrowly drawn, covering only regulations which are in process as the UK leaves the EU, there are a number of particular importance, as the noble Lord, Lord Sharkey, pointed out.
When the tide went out as a result of the 2008 financial crisis, it did, in Warren Buffett’s famous phrase, reveal a number of people who had been swimming naked. As a result of that, the UK Government faced a crisis and had to become a significant shareholder in a number of major UK financial institutions. That must surely be inappropriate unless and until the shareholders, bondholders and creditors have borne their share of the pain. So ensuring that the UK keeps up to date with Bank and central counterparty recovery legislation is very important. We cannot allow gaps to appear in the regulatory framework that may offer opportunities for what is known as regulatory arbitrage. At a more practical level, as my noble friend pointed out in his opening remarks, the move to a more focused regulatory approach to the prospectus requirements, particularly for SMEs and investment managers, must be a welcome development. The UK needs to adopt these regulations if it is to avoid being at a competitive disadvantage.
However, as has also been pointed out by the noble Lord, Lord Sharkey, the Bill, though narrowly focused, nevertheless gives the Government extraordinarily wide powers. I am sure that in Committee we shall need to prove the extent to which they are necessary and the ways in which the Government anticipate using them. At this stage I have a handful of points to raise with my noble friend. At paragraph 1.9 of the policy note that accompanies the Bill, there is an assurance that the Government will:
“undertake engagement and co-operation with key stakeholders throughout the process”.
That is potentially a very important restriction on inappropriate use of the powers in the Bill, but as it stands it is quite a bland statement. It would be helpful if my noble friend could give a little more detail about what the Government envisage in terms of their links with the sector during this very important two-year period.
Another constraint is the reporting requirement in Clause 1(8). The clause requires a report 12 months after a no-deal Brexit. After a no-deal Brexit, 12 months will be a very long time indeed. Have the Government given some thought to bringing forward a shorter regulatory period so that their use of these extraordinarily wide powers becomes more transparent more quickly? Moreover, the requirement, as I read it as presently drafted, requires only a statement of the actions that have been taken. It would surely be more helpful to the outside observer if the Treasury was also required to give a statement about why it had felt it necessary to take individual actions, not just that they had been taken.
My final point concerns the paragraph in the letter kindly sent to us by the Chancellor of the Exchequer. Here I am going to cover ground that my noble friend and the noble Lord, Lord Sharkey, have covered. The important paragraph reads:
“It is of course vital that any financial service legislation best serves the interests of UK businesses and customers once we have left the EU, rather than the UK simply accepting EU laws wholesale. The measures in the Bill will therefore allow for the government to choose to implement only those EU files, or parts of those files, which it deems beneficial for the UK, and to make adjustments and improvements to the legislation as it is brought into UK law to ensure that it works best for UK markets in a ‘no deal’ scenario”.
That is a broad power, as my noble friend said in his opening statement. That whole paragraph contains some pretty challenging implications. For example, who is going to deem what is necessary for the UK, and who is going to ride herd on them to make sure that their judgments are being exercised properly?
These early decisions, taken against the background, as they will be, of a no-deal Brexit scenario, may well have a fundamental impact on the shape and structure of future UK securities legislation and consequently on the competitive position of the City of London. Further enlightenment on the background to this paragraph would be helpful when my noble friend comes to wind up.
I have said that I support this Bill, and I do. When I wrote my notes for it, I said that at least it provides an essential stop-gap—again a phrase that came up in my noble friend’s opening remarks—but stop-gaps cannot be, and cannot substitute for, a carefully crafted strategic plan. In Committee we shall need to explore in more detail the extent of the powers the Bill gives to the Government and the way in which the Government anticipate using them.
Baroness Liddell of Coatdyke (Lab)
My Lords, like other noble Lords, I welcome the introduction of the Bill. It is not the most exciting piece of legislation we will consider in this House, but it is pretty vital in the event of a no-deal exit. Taking up points that have been made by other noble Lords, it also points to the intensity of the negotiations that have been taking place outside the Brexit scenario on future financial services regulation. There is poignancy in it as well because for more than 20 years the British voice in the councils of Europe on financial services legislation has been dominant. We have helped to craft that legislation and regulation over those years, and this legislation points out how critical that is. It also reminds us that we are about to move from being rule makers to rule takers. This is one of the steps along the way. I know that that irritates the Brexiteers, but it is a statement of fact.
I am very conscious that a number of points have been made by other noble Lords. There is one specific question that I would like to ask because some confusion has been caused. I think all of us who are speaking on this Bill have been approached by members of the sustainable investment community. I have a difficulty: the number of pieces of in-flight legislation that they refer to does not match the number of pieces of in-flight legislation that the Minister has referred to in this Bill. Particularly in relation to sustainable investment, there is a reference at point 2.52 in the very helpful policy note that the,
“proposal aims to enhance the transparency and comparability of low carbon benchmarks”.
That comparability is an area where there could be widespread interpretation, and it would be helpful if the Minister could give us some idea of the parameters within which that comparability would take place.
Moving to the last part of the policy document, which refers to the European supervisory authority review and the action that the Government will have to take post exit, I would like to see some indication of the timescale that the UK would be considering in making regulatory changes to allow for the exchange of information and delegation to function smoothly. That is a pretty critical part of the functioning of markets. I would be grateful to have some guidance on this; it would be useful because this is not really covered by the sunset clause in the Bill.
There are a number of points that will no doubt be teased out as we go through Committee, and most of them have been referred to before. I too was a bit confused by the use of the word “similar” in the first clause, conscious as I am that I am sitting beside a former Lord Chancellor. It would be useful to have a much clearer definition of what “similar” actually means.
It is important to get this legislation on the statute book as quickly as possible. I hope it is not needed, but again it causes us to reflect on how significant financial services are. It is regrettable that in the political declaration and indeed in the withdrawal Act we do not have any proper explanation of the nature of the regulatory compromises that will be made, particularly in relation to going from passport into equivalence. A big gap is opening up there. I do not expect the Minister to answer that but it is something that we need to have at the back of our minds as we look at this legislation.
Baroness Bowles of Berkhamsted (LD)
My Lords, the Bill establishes a short-cut alternative to starting over again with primary legislation for provisions that are in the EU pipeline and in which the UK has already been engaged. It looks like a convenient scheme. However, I share the concerns raised by other noble Lords, although I agree that the legislation need to be implemented because the large majority of it—at least, what is in the schedule—completes the post-financial-crisis review of legislation.
I am sorry that we have not been given more guidance to what might be objectionable than the example of location policy. Once the short-cut onshoring of bits of legislation has happened, Parliament will be left with very little scope ever to come to grips with major financial services policy. That means that what we are doing now as a temporary measure will have permanent effects. It will all be delegated and in the hands of SIs and regulators—back to the Treasury and the regulatory officials who make up the rules in international consortiums. That, as I have said, is “delegate and deference”, not parliamentary democracy. It is far worse than the scrutiny available in the EU. If we are taking back control, we ought to make sure that our scrutiny is as good as that of the EU.
The Bill is also difficult for me because there is the possibility of wide powers being used differently from non-legislative promises, and because precedents are being set that may then be used in other circumstances. Here, a precedent is set of bypassing primary legislation and piggybacking on somebody else’s scrutiny—for our largest industry. Of course, that may be the truth of Brexit.
There are some non-legislative assurances listed in paragraph 1.9 of the Treasury policy document, which has already been referenced, but I am not sure I find them reassuring. The first is that any method other than coming to Parliament will be used in preference. I do not see virtue in avoiding the scrutiny of Parliament. There is also a commitment to undertake extensive engagement and co-operation with key stakeholders. I do not decry that but—from experience—that does not seem to include Parliament. In the present circumstances, it is all the more important to consult Parliament when, by the Government’s own admission, this is a process that replaces the more detailed scrutiny of primary legislation.
I too have noted the provisions about preparing reports. I particularly noted, in subsection (8)(b), the report on the,
“proposals for exercise of the powers”,
in the second year. Maybe that gives us something to expand on, because it is very important to have an overarching idea of the policy being pursued and the concerns that I have identified. But, as other noble Lords have perhaps already hinted, it is needed in advance of year one as well.
I accept that a no-deal Brexit is not quite what is planned, but, even so, everything that the Government have ever said about our relationship with the EU post Brexit has aimed at getting equivalence or better. If that breaks down because policy changes a great deal, I will accept it, but we must not find that we abandon equivalence by accident because we have made various incremental changes that, in EU eyes, could collectively destroy equivalence prospects without there having been explicit consent to that being what we wished to do. Moreover, as emphasis has been put on consultation with stakeholders, how can we know, whatever the current intention, that the Bill does not turn out to be a dilutors’ charter, because the specified legislation is now out there as an Aunt Sally at which interested parties may chance their arm? I have seen the gleam in the eyes of some in the City already.
In the all-Peers meeting last week with the Minister, the noble Lord, Lord Bates, and the Economic Secretary to the Treasury, John Glen MP, it was said that the words “corresponding, or similar” from Clause 1(l)(a) would not permit changing or deleting aspects of wider legislation not detailed in the specified items of EU financial services legislation. We inevitably got on to bankers’ bonuses as the example everyone knows, so although the schedule includes CRD5 on prudential regulation of banks, it would not, according to the analysis, open up change to the details in CRD4, which is where most of the bankers’ bonus information resides. It would be good for the Minister to confirm that understanding, as an example.
Developing that point further, and because there are some proportionality measures on remuneration for smaller businesses within the specified legislation, does it mean that proportionality measures could not be stretched by the UK to apply to larger businesses than the EU legislation intended? Given that, in my experience, the UK has not used all proportionality provisions—some of which I worked very hard to get—what is the policy on implementation of proportionality?
I could go through the list of legislation and ask lots more questions, but I will spare noble Lords with just one more example. Are the Government now in favour of extending the suspension of the clearing obligation for pension funds—a measure that I forced into the original legislation without any particular support? We should be told, because it could be that the Government do not want to do that and it could be crossed out with our being able to make a specific objection.
Why cannot the Government make a more fulsome policy report now of their key points and concerns? I accept that some things will change, but that does not detract from being given a grounding in where decisions are coming from.
More generally, the words “corresponding, or similar” are too wide. It may be possible to have a corresponding piece of legislation that is not similar. At the moment, I am veering towards suggesting that the provision should be “corresponding, and similar”.
The next part that concerns me is that EU legislation could be cherry picked. That may not be the intention, but the words,
“or any of the provisions”,
allow that possibility. It is very permissive, covering from everything to nothing of a piece of specified EU legislation. I want to find ways to qualify that to ensure that the overall framework that could sustain the objective of equivalence is being retained, and is not disappeared by stealth or accident via statutory instrument. One way to deal with that might be for “corresponding, and similar” requirements to apply to the whole of a piece of legislation, rather than individual provisions, but I accept that we need some more tightly defined requirements for omissions that might be necessary.
Then I come to,
“any adjustments the Treasury consider appropriate”.
In the meeting, we were told that new things cannot be created, but it is not entirely clear that the “corresponding, or similar” provision governs subsection (1)(b). I come back to my point that in this context there needs to be some kind of track record on the policy against which you can measure what is being done. The word “appropriate”, which is the unfortunate and common construction used for delegated power, is usually employed when there is some policy context in the primary legislation. In the Bill, there is no policy context other than to pick, choose, change and avoid primary legislation.
I do not understand why it is necessary to have such broad powers for the completed specified legislation. It is known what was argued and it is in its final form. We will know what was lost and any changes that might need to be considered. Why can we not know them now?
Legislation that is not complete in the schedule is not new or surprising either: there have been years of consulting. I did some of it. By the time an EU proposal is published, before you go through any amendment provisions, it has been well consulted on. The Commission, other member states and many MEPs know the UK lines. I often used to get it from them before I ever got it from the Treasury. How about telling us what those lines are in respect of that legislation? They must exist. Again, that would give us a background against which we could measure what is intended. Without that, we are approving a procedure blind of policy, facts and principle. It is not sufficient to think that an affirmative procedure is enough to satisfy all those concerns.
Lord Leigh of Hurley (Con)
My Lords, I am pleased to speak today on this short, technical, perhaps not that exciting Bill, and thank my noble friend for his briefing earlier. I recognise that some will say that this is a belt-and-braces Bill to cover the very unwelcome possibility that we leave the EU on 29 March with no deal. I say that it is unwelcome not because I think that the UK cannot or will not flourish as an independent nation state outside the EU but because I really do not think that we will be ready at that time. I note that the Government recognise that, in those circumstances, only appropriate legislation will be brought in and then, importantly, it can be adjusted to suit us.
My position in supporting the Government and speaking for their proposals for the deal later this week is set out in an article I have written for today’s City A.M., so I will not bore the House further with my views on it.
I draw your Lordships’ attention to my interests in the register and to an entry which, for good reason, is not in it yet but which I ought to declare. I am, today, the senior partner of Cavendish Corporate Finance LLP, which will merge with finnCap Group PLC tomorrow. All being well, our first day of dealing on the AIM market starts at 7.30 am. So, as deputy chairman of an AIM-listed company, I have a vested interest in the operation of the market and will address some issues which are covered as specified EU financial legislation, which this Bill seeks to bring in on or after exit day.
The stated purpose of the power is,
“ensuring the Government can implement legislation which reflects the interests of the UK market and its participants”.
The House of Lords Delegated Powers and Regulatory Reform Committee criticised the similar powers contained in the European Union (Withdrawal) Act for giving what it called,
“excessively wide law-making powers to ministers”.
However, given the Bill’s stated purpose of ensuring the Government can implement legislation which reflects the interests of the UK market and its participants, it is both necessary and proportionate to allow Ministers to make,
“any adjustments the Treasury consider appropriate”,
so that the Government can make positive improvements to the proposed legislation for the benefit of the UK market and its participants, rather than just correct deficiencies, as the EU withdrawal Act allows.
Regulators and regulation have tended to focus on the largest and most visible markets but should address the whole of the UK financial markets, not just the FTSE 100, many of whose companies are multinational. The major public markets are just the visible tip of the iceberg, part of a broad financial ecosystem which supports the financing of and investment in UK businesses. Government should consider the impact and potential unintended consequences on the broader system before implementing EU legislation.
An important aspect of this broader system is the financing of small and medium enterprises. I am, of course, delighted to see that the Government support the aims of the SME growth market regulation proposals, to support the ability of SMEs to fulfil their financing needs on UK public markets through the reduction of administrative and financial burdens.
In this context, we need to consider the potential negative impact of the central securities depositories regulation, CSDR, and the related delegated cash penalties regulation, DCPR, on the provision of liquidity, which is so important for markets for small and medium enterprises, such as the London Stock Exchange’s AIM market. AIM is by far the most successful SME growth market in Europe. The EU does not have the same sort of experience or success as we do. Part of this success is due to the quote-driven nature of the market, with market-makers committed to providing liquidity at all times during market hours.
However, the CSDR introduces a new settlement discipline regime, under which trades not settled at an agreed time will face daily fines until they are. These fines will pass along the chain of settlement so that only the initial failing part of the settlement chain will pay. This will always be the liquidity providers, which are the market-makers, as they are the only type of participant permitted to sell shares they do not own—known as naked short sell—under the short selling regulation. Liquidity providers are thus fined for providing liquidity in periods when demand outstrips supply: in other words, for performing the specific purpose for which they exist. Penalising formal liquidity providers for not settling trades on time will lead to those very liquidity providers reducing their activities in smaller company securities in order to avoid these additional costs. This will lead to a further reduction in companies’ liquidity, thereby reducing their access to funding on public markets.
In addition, introducing a regulation to impose a fee appears to contradict the stated limitation of the power. The Government have committed to undertake extensive engagement and co-operation with key stakeholders throughout the process. In order to include views relevant to the broader market, this should include bodies representing smaller companies seeking funding for growth, such as the Quoted Companies Alliance, which has been of assistance to me with my remarks, and the ScaleUp Institute.
I hope that we do not need any of these measures, but I am happy to support the Bill in case we do and hope it provides a focus for the Government in their regulation of the SME market.
Baroness Kramer (LD)
My Lords, it seems rather strange to be the winder in a short debate like this. My noble friends Lord Sharkey and Lady Bowles laid out the position of these Benches with great clarity and raised a series of questions, so it is not my purpose today to repeat them but to say how much I stand behind them and the comments we heard from the noble Baroness, Lady Liddell, and the noble Lord, Lord Hodgson. I thank the noble Lord, Lord Leigh, because in a sense he made the point for us about the underlying concerns that we have with this legislation.
I think that everybody accepts that it is necessary to have some provision for how we deal with, as it were, in-flight directives or regulations from the EU since they were not covered in the EU withdrawal Act. If it was simply a matter of technically keeping abreast, none of us would have a lot of queries about this piece of legislation. However, as other noble Lords have demonstrated, there is plenty of scope within this for fundamental policy change, and policy change through statutory instrument—an issue which this House has tackled again and again, and which it tackled in the EU withdrawal Act. We are concerned about creating that kind of precedent once again here, as well as the actuality of what may happen under this Bill.
I raise it in the following sense. If we crash out and have a no-deal exit from the EU, the following months will be absolutely critical to the future of financial services within the UK. In those months, firms that have not already made the decision about what they relocate to the EU 27 will make further decisions, and the EU will be establishing its response to our departure and setting in place many of the key elements that it needs to be able to withdraw a significant part of that business to within the supervisory and monitoring powers of the European Union itself. An example that is given in the policy paper is that we may well end up with a location policy—in other words, a requirement from the EU that all financial transactions denominated in euros, or a significant portion of them, need to be repatriated to within the eurozone because of the exposure of the European Central Bank, which is acting as a backstop to liquidity crises with those instruments. Therefore, we may have those kinds of situations. Policy then will be absolutely critical.
I think many people take the view of the noble Lord, Lord Leigh, that the people who will be making change in that period will be the UK, and indeed he sought from the Government assurance that there would be policy action to dilute regulation in areas where he thought it was of interest. My noble friend Lady Bowles made the point that that alone begins to undermine the policy of third-country equivalence across financial services, which the Government, and the City, have seen as an underpinning to keeping our current level of dominance and vibrance. But there will also be changes within the EU, and I know that the City is very afraid of that. If those changes take place, again that undermines third-country equivalence if we are not following suit.
The point I am making is not about where you end up, on which side of this issue, but that absolutely critical policy decisions will have to be made, and those seem to be the kind of decisions that ought to be placed before this House. They will impact the functioning of the largest and most significant industry sector that we have within the UK, which feeds our tax base, which in turn supports our public services. To hand the decision-making around the issues to the Treasury, or to the Treasury working with the regulator, seems exceedingly high-risk. The breadth of power that is requested is not just to enable relevant and relatively minor adjustment; it covers a period of time in which fundamental decisions are made. We may make different decisions two or three years later, but it will be too late: the shape of our future financial services industry will basically be decided within that relatively short period. Amendments will need to be brought forward to try to tackle these issues.
I ask that the Government recognise how fundamental and significant the decision-making—and policy decision-making—will be during that period.
Lord Davies of Oldham (Lab)
My Lords, Her Majesty’s Opposition support this Bill in principle. The Government have every right, indeed they have a duty, to prepare against the possibility of a no-deal Brexit. A few months ago, when work on the M20 lorry park was first considered, it occasioned some surprise in the nation which had not realised that the Government might need to take constructive action against a no-deal outcome. After all, the Prime Minister had reassured us that negotiations were making satisfactory progress and few Members of Parliament had canvassed the idea of no deal as a good policy for the Government.
However, things have changed over time. Now, of course, the weakness of the Government’s case for the development of our position as a result of the negotiations means that a considerable element in the governing Conservative Party looks upon no deal as better than some other possibilities. Such an outcome is totally rejected by the Prime Minister, so her Government are setting out to mitigate the calamity of no deal against a background where they continue to expect a better result.
For the nation, however, these preparations take on a different salience: there is no certainty about the future and no deal is a possibility, however disastrous that would be for the economy and the country’s welfare. So we have this modest Bill to ensure that “in-flight” legislation in Brussels can be safely implemented in the crucial sector of the financial services industry; no one is in any doubt of the importance of the industry’s contribution to the welfare of the economy. The Bill updates the regulatory regime and seeks to minimise the problem of the year, or possibly two years, after no deal. It reflects the fact that a considerable amount of UK financial services legislation has been part of European law for a long time. Its applicability to the United Kingdom is therefore entrenched in our laws. This has provided a significant place for UK leadership. My noble friend Lady Liddell identified just how much the UK has contributed to the development of policy in Europe—the result of what is widely recognised as the advanced and sophisticated level of financial services in London and several other major cities of the country. It has been a prime mover of improvement in the development of legislation and regulation.
There will of course be an unquestionable loss when the UK quits the European Union. No one is saying for one moment that the industry will not flourish and play a significant role in our economy but it will be increasingly difficult for us to play the enhanced leadership role in Europe that has been the case in recent years. As we all appreciate, there are competing parties from other countries who are also very interested in securing control and power that they can exert over the industry.
As the noble Lords, Lord Hodgson and Lord Sharkey, pointed out, the problem with this legislation is that the legislative initiatives put forward significantly increase the power of the Government. There is a crucial phrase, which noble Lords have referred to on more than one occasion in this debate: the power for the Treasury to make adjustments where it considers appropriate. Of course, the Treasury will decide where this will be of benefit for the United Kingdom and where it will work best in the context of this country. The Treasury will defend itself with that phrase in the legislation, but it does not alter the fact that what are posited through delegated legislation as relatively minor transfers of powers in fact give the Treasury very considerable latitude.
We recognise that the powers last for only a short period—namely, two years—with a sunset clause attached to the legislation, and of course we approve of the fact that some gesture is made towards parliamentary scrutiny by the indication that the SIs will be subject to the affirmative procedure. However, the scope for government policy to develop in this process is considerable, and that has already been illustrated by the anxieties expressed by the noble Baroness, Lady Bowles, and my noble friend Lady Liddell.
Also drawn to our attention has been the case put forward by the UK Sustainable Investment and Finance Association. It wants to know, as I am sure we all do, where two pieces of in-flight legislation in which it has a significant interest appear in the list. If to govern is to choose, this certainly suggests that the Treasury can already operate with a heavy hand, even at this very early stage. Can the Minister clarify this position today? If not, rest assured that this and the other issues that have cropped up in this very well-informed debate will be the subject of considerable discussion and debate, as well as intensive scrutiny, in Committee.
Lord Bates
My Lords, I agree with the noble Lord, Lord Davies: this has been a well-informed debate, representative of the deep expertise in your Lordships’ House, which has been on full display. The areas of agreement were effectively two: recognition of the necessity of preparing for a no-deal scenario, and a united view that we hope never to be in the position of having to exercise the powers in this Bill.
The noble Lord, Lord Sharkey, began our debate by expressing concern about the range of powers, in particular those to include and exclude files. My noble friend Lord Hodgson questioned whether this was a stopgap measure and said that it could not be a substitute for longer-term legislation and a solution in this important area. The noble Baroness, Lady Liddell, having remarked that this is not the most exciting legislation to come before your Lordships’ House, recognised the importance of the financial services industry, to which it relates. She also recognised the role that the United Kingdom has played over many years in the European Union in shaping financial services regulations.
The noble Baroness, Lady Bowles, teed up what will be, if we are fortunate to secure a Second Reading, a Committee stage debate on words such as “implementation”, “proportionality”, “corresponding”, “similar”, “appropriate” and “adjustments”. It will be important to flesh out exactly what is meant by those terms.
My noble friend Lord Leigh talked about the impact of regulations in financial services on small and medium-sized enterprises. He also became perhaps the first Peer to announce in your Lordships’ House his forthcoming listing on AIM. I do not know whether it is appropriate to comment on that, but I wish him well—he is probably getting worried because I wished him well; it was a personal wish.
The noble Baroness, Lady Kramer, talked about the strong role of the financial services in underpinning the fiscal base of the economy, tax revenues and public services. She said it is vital that we retain that strength and continue to exert scrutiny. The noble Lord, Lord Davies, talked about the oft overlooked fact that, when we talk about the financial services, we are talking not just about the City of London but about a national industry, with hugely important centres in Bristol, Leeds and Edinburgh. He also reminded us of the international competitive nature of financial services, and that the UK’s leadership can never be taken for granted but must be earned and restated.
With that, let me move on to some of the points that were raised in the debate. The noble Lord, Lord Sharkey, asked why, if this is so important, other departments are not doing the same, specifically the Department of Health and Social Care. We have already put in place many of the legislative building blocks to deliver our exit from the EU. Since the European Union (Withdrawal) Act received Royal Assent, the Government have started laying statutory instruments to ensure a functioning statute book in all scenarios. Any requirements for further legislation in other areas will be announced in the usual way. I realise that that is not quite the answer that the noble Lord was looking for—or that I anticipated as I began reading out the note. His was a specific question, asking that I speak with colleagues in the Department of Health and Social Care, and I will certainly do that and find out how the particular legislation he referred to might be handled.
The noble Lord, Lord Sharkey, also mentioned the powers to adjust. As the final outcome on these files is still unclear, we need to make sure that we can bring them into UK law in a way that works best for UK markets. This could, for example, include areas where final parts of legislation could, if unchanged in a no-deal scenario, present inconsistencies with the UK regulatory framework, global standards or the UK’s position as an open, global financial market. It is important that we have the power to correct inconsistencies when bringing these into UK law.
The noble Lord then asked why we had chosen some files rather than others. The Bill provides the UK with an interim means to domesticate key EU financial services files that are in the European legislative pipeline. Those are the files that we believe will be the most important for market functioning and UK competitiveness in a no-deal scenario. Those in-flight files not listed on the face of the Bill include those that apply only to eurozone members, which we would never have implemented as a member state, those that the UK has opted out of, and those where there is not a critical need to implement the legislation in the narrow window of time covered in the Bill.
The noble Lord went on to ask what was meant by the word “appropriate”. Once we leave the European Union, we will lose our ability to influence the outcomes of files at a European level—something to which the noble Lord, Lord Davies, and the noble Baroness, Lady Liddell, also referred. As such, we will require the ability to ensure that the files or parts of the files implemented best suit the needs and the structures of the UK financial services market. The power to make appropriate adjustments to legislation is therefore designed to enable the UK Government to ensure that the implemented legislation is the best fit for the UK.
The noble Baroness, Lady Bowles, similarly asked about the power to adjust. The power will only allow the Government to make adjustments to files and not to make entirely new financial services policy not covered within the files. The power will also have to be exercised with the purpose of making similar or corresponding provision to specific lists of files set out in the Bill, so the subject matter of the regulations will naturally be limited. This is simply about ensuring that we implement legislation that is the best fit for the UK.
The noble Lord, Lord Sharkey, asked what was meant by “some criminal offences”. The limitation in the Bill mirrors that in the European Union (Withdrawal) Act. It prohibits the creation of criminal offences for which an adult can be sentenced to a period of more than two years in prison.
The noble Baroness, Lady Liddell, asked about the comparability of low-carbon benchmarks. This is an important issue and I realise that a number of noble Lords have received representations on it. I undertake to look at it specifically and write ahead of Committee.
My noble friend Lord Hodgson asked about the reporting duty of the Government and whether that would include a statement on why a power is used. The report will provide an overview of how the power has been used in the first year and how the Government propose to use the powers in the second year. In the meantime, the Government will undertake extensive engagement and co-operation with key stakeholders throughout the process, ahead of and during each use of the power, and Parliament will have the opportunity to debate every SI under the affirmative procedure. He also asked whether it would be advisable for the Treasury to consult transparently ahead of each use. We agree, which is why, within the policy note accompanying the Bill, we have committed to undertaking extensive engagement and co-operation with key stakeholders throughout the process, ahead of and during each use of the power. In that term “stakeholders”, we very much include Parliament and your Lordships’ House.
The noble Baroness, Lady Bowles, asked whether it would be helpful to change the wording to “corresponding and similar”. This is classic territory for Committee and a well-worked amendment around that will elicit a more in-depth and appropriate response from the Minister at that point. She asked a specific question, which was also referred to by the noble Baroness, Lady Kramer: namely, whether the power could be used to remove the bankers’ bonus cap. While remuneration policies were introduced as part of the EU’s Capital Requirements Directive IV, they are due to be updated through the Capital Requirements Directive V, which is included in the Bill. The Bill allows us to choose not to implement certain files or to implement parts of them. At this point we are not proposing specific policy changes or decisions. Before bringing forward any secondary legislation using the powers in the Bill, we will engage with a wide range of stakeholders, including the financial services sector.
The noble Baroness, Lady Bowles, asked about legislation regarding pension firms. Again, this is something that might best be covered in a letter ahead of Committee. She also asked why we do not just do this through primary legislation in order to get proper parliamentary scrutiny. Given the number of files in question and the potential requirement to implement them at pace to respond to market developments and meet international obligations, it would not be feasible to rely exclusively on primary legislation in every instance. The Bill requires the use of the affirmative resolution procedure for every statutory instrument made. She went on to ask why the Government will not make a full report about concerns and the approach to policy in this Bill. At this point it is very difficult to say which files or parts of files we would seek to implement and whether and what adjustments would be made. This is because we do not know the exact context in which these decisions will be made and what the final versions of many of the files will look like.
My noble friend Lord Leigh asked about the potential negative impacts on, for example, CSDR. We recognise that there are aspects of these files that are currently under development which different parts of the sector may not fully support. The Bill allows us to choose not to implement files, to implement parts of them and to correct deficiencies in them, as well as to make adjustments to ensure that the legislation works best for the UK, subject to appropriate safeguards.
The noble Baroness, Lady Kramer, asked about the so-called Henry VIII powers being used. Of course we understand the concerns around the breadth of powers, and that is why we have included a number of safeguards within the Bill to address them, including explicitly listing the relevant files on the face of the Bill and sunsetting the powers to two years, consistent with the European Union (Withdrawal) Act.
The noble Lord, Lord Davies, asked about adjustments to powers. It would be possible under the terms of the power only to make adjustments to any EU file we would be implementing and not to completely change its intent. This power would allow us to make provisions which are broadly equivalent to the original file and which therefore seek to achieve a similar outcome in a way that best fits the UK. However, it would not be possible for the Government to use this power to implement something completely different from the original file.
Again, I thank noble Lords for their contributions to the debate.
Baroness Kramer
This may be extremely petty, so I ask for the compassion of the Minister. However, subsection (9) is completely incomprehensible. Three of us read it and we came up with entirely different conclusions as to what it meant in terms of both the preparation and publication of this report. Is he able to provide clarity now or else to do so by the time we get to the Committee stage? It may not be contentious at all—it is just that it is impossible to work out exactly what it means.
Lord Bates
I can understand that. It is a fairly short Bill, but I will undertake to write a more substantial letter between this Second Reading and Committee if it is granted by your Lordships’ House. I will cover and expand further on that point.
We will carefully consider all the points which have been raised in this debate. I thank noble Lords for bringing their expertise and knowledge to bear on this important piece of legislation. I request that the Bill now be given a Second Reading.
Social Security (Amendment) (EU Exit) Regulations 2018
(5 years, 4 months ago)
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Baroness Buscombe
That the draft Regulations laid before the House on 31 October be approved.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, these regulations were laid before both Houses on 17 October 2018. They enable the Government to make minor and technical changes to domestic legislation to reflect the fact that the UK will no longer be an EU member state after exit day.
Let me provide some context and background to the regulations. British domestic legislation contains various references to EU law and to the UK as a member state of the European Union, which will no longer be the case once the UK withdraws from the EU. It also includes a provision that allows the Secretary of State to implement reciprocal agreements. The social security legislation applying in Northern Ireland broadly mirrors that in Great Britain; we are making regulations that make analogous amendments to the corresponding Northern Ireland legislation. The Department for Communities in Northern Ireland has agreed to the text of the regulations. This follows the recommended approach in the EU exit SIs policy handbook: to make separate NI statutory instruments that create a separate “transferable” body of NI legislation made at Westminster in the absence of a functioning Northern Ireland Assembly. This helps to keep a separate body of Northern Ireland law intact for when a functioning Executive and Assembly return.
These regulations are made using powers in the European Union (Withdrawal) Act 2018 to fix legal inoperability and other deficiencies that will arise on exit in retained EU law—so that the converted law continues to operate effectively post exit—and make consequential provision. The approach to these amendments is completely in line with both the policy and legal intent of the withdrawal Act. The use of secondary legislation to amend primary legislation—the so-called Henry VIII powers—was debated at length during the passage of the withdrawal Act.
The list of specific legislation that the regulations amend is lengthy. Broadly speaking, we are using the regulations to make two types of changes, the first being where the UK is referred to as a member state of the EU. In these instances, an amendment will be made to reflect the UK’s new status as a state independent of the EU. Secondly, we are extending the scope of Section 179 of the Social Security Administration Act 1992 to allow us to implement a social security agreement with a supranational organisation such as the EU. Of course, the ability to implement an international agreement with such organisations was not necessary as an EU member state. It is only logical that we make this consequential change to our legislation to reflect the UK’s position as independent of the EU and allow us to fully implement any agreement in domestic law.
The Northern Ireland regulations mirror the same amendments to Northern Ireland legislation. No formal consultation was carried out by the Department for Work and Pensions on the regulations as these changes make only minor and technical changes to existing DWP domestic legislation. Similarly, we expect the regulations to have no impact on business, charities, voluntary bodies or the public sector.
Noble Lords will know that the withdrawal Act is a crucial piece of legislation that will ensure, whatever the outcome of negotiations, that we have a functioning statute book on exit day, providing certainty to people and businesses across the UK. The Act enables this by providing a power for Ministers in the UK Government and devolved Administrations to deal with deficiencies in the law arising as a result of our exit from the EU. We are continuing to work closely with the devolved Administrations to ensure that all parties are involved in the process where their interests are concerned. I beg to move.
Lord Kirkwood of Kirkhope (LD)
My Lords, I thank the Minister for that helpful introduction. I understand that these are minor and technical amendments. I have looked at them very carefully as a member of the statutory instruments scrutiny committee of your Lordships’ House. I am pretty familiar with their scope.
Could the Minister clear up two questions from my mind? First, is there any prejudice, potential or otherwise, to transfer payments and entitlements made from United Kingdom sources and systems to United Kingdom citizens and families living in the European Union? I think the answer is no, but an assurance would help, particularly relating to pension payments.
Secondly, I know that the Minister cannot do anything about this but I am getting more and more nervous about the Northern Ireland arrangements being handled indirectly by the department with no meaningful legislature in Northern Ireland to deal with some of their consequences, particularly since it has a free-standing social security system of its own. Colleagues know that it is a mirrored system, so changes are almost automatic. We have been living with that for some time. But in situations such as this, where changes are being made at one or two stages removed from the good people of Northern Ireland who are entitled to these benefits, there are particular concerns that those entitlements should be especially carefully considered in these amendment regulations. If the Minister can help me with these two items I would be very happy to see the regulations pass.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for introducing these regulations. It is fair to say that this is not the most exacting task she will have to undertake on matters Brexit. As we have heard, there are two sets of regulations, the territorial application of one set relating to Great Britain and of the other to Northern Ireland. The two sets cover parallel issues.
The Explanatory Memorandum reminds us that the Northern Ireland Executive are not in being, although the policy areas that are the subject of these regs are transferred matters and should be the responsibility of the Executive. That point was touched on by the noble Lord, Lord Kirkwood, with some expression of concern that we share. The memorandum states that the Government,
“will take through the necessary secondary legislation … in close consultation with the Northern Ireland departments”.
Perhaps the Minister will say what this involves. I think she might have answered that by saying that the Department for Communities was consulted.
The regs will operate with effect from exit day, but it goes without saying that many of us wish that that day will never arrive. Given that the powers of the European Union (Withdrawal) Act 2018 are engaged by these regulations, it is incumbent on Ministers to make certain statements. These encompass a requirement to state that the regs do no more than is appropriate to deal with deficiencies in retained EU law, but that there are good reasons for the provisions and that they leave intact equalities provisions. The Minister states that, given that the Equality Act does not extend to Northern Ireland, she has given due regard to the need to eliminate discrimination, harassment and victimisation. We do not seek to disagree with those conclusions.
As we have heard, these instruments fall into two groups. They amend various provisions in UK domestic legislation that contain references to the UK as a member state of the EU, or of the EEA. Further, they amend Section 179 of the Social Security Administration Act 1992 and its Northern Ireland equivalent to enable social security-related reciprocal agreements to be entered into with international organisations. The Explanatory Memorandum instances the EU, but can the Minister state what others might be in contemplation? What is the position with any existing agreements that the UK has entered into with the EU? Could the Minister please list these? Do they have to be reinstated on some basis or do they run on?
The insertions made to Section 179(4) list a range of EC or EEC regulations. Can the Minister differentiate between the two? Taking new subsection (4)(am) as an example, I presume that its inclusion is not intended to change the domestic law. Can the Minister outline for us the impact of Regulation (EEC) 1408/71 on the application of social security systems to employed persons, to self-employed persons and to members of their families moving within the Community?
The regulations extend to other amendments to existing secondary legislation to ensure accuracy of references when the UK is no longer part of the EU. These cover persons abroad, invalid care allowance regulations, SSP, SMP, overpayments and recoveries, AA, DLA, housing benefit, PIP and universal credit. Can the Minister confirm that in each case there is just a change of wording to reflect the changed situation of the UK and that it has no wider implications for the position of the continuing EU members?
We hope to see these regulations gather dust in some corner of Westminster and not be called into use. In so far as they are, we agree that they do the job.
Baroness Buscombe
I thank noble Lords who have taken part in this debate. Perhaps we have now gleaned rather more from the Benches opposite as to which way the noble Lord’s party may vote in the coming days; hitherto, we have been entirely unclear, as have all honourable friends in another place.
These are minor and technical amendments. I want to make it clear that there is no impact on policy. There is of course frustration—if I may put it that way—that the people of Northern Ireland are not fully represented. The noble Lord, Lord Kirkwood, is quite right that there is sadly nothing that I can do about that. The UK Government remain committed to restoring devolution in Northern Ireland—that also concerned the noble Lord, Lord McKenzie. This is particularly important in the context of EU exit, where we want devolved Ministers to take the necessary actions to prepare Northern Ireland for exit. That includes making the necessary legislative corrections to ensure that the Northern Ireland statute book is ready for exit day, consistent with the action taken at Westminster and in the other devolved legislatures. However, with exit day only a few months away and in the continued absence of a Northern Ireland Executive, the window to prepare the Northern Ireland statute book for exit is narrowing. UK Ministers therefore decided that it would be in the interest of legal certainty in Northern Ireland for the UK Government to take through the necessary secondary legislation at Westminster. That decision was made in close consultation with the Northern Ireland Civil Service. We are in constant touch with the Department for Communities in Northern Ireland. I can reassure noble Lords that we are doing all we can to make sure that we work well with it. We hope that the current situation will change for the better in the near future.
I make it absolutely clear that the regulations make consequential amendments to domestic legislation; they do not make any changes to entitlement to benefit or payment—it is crucial to say that in response to both noble Lords’ questions and concerns. A multitude of references to the EU are made as we are currently members of it, but for only a few months longer. I do not have a list today of all the legislation that this references, but I am very happy to write to noble Lords to make very clear exactly which pieces of legislation this impacts upon.
The Government are committed to ensuring that the social security system works for everyone post exit day and these regulations will help to do this by fixing minor and technical changes to existing DWP and corresponding Northern Ireland domestic legislation. They are part of a package of legislation. We have already dealt with some legislation in reference to the payment of pensions. On that basis and with the proviso that I will write to the noble Lord, Lord McKenzie, with specific reference to those aspects of the legislation, I hope that noble Lords will support these statutory instruments.
Competition (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 4 months ago)
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Lord Henley
That the draft Regulations laid before the House on 29 October be approved.
Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the UK has a world-renowned competition regime, but currently the domestic system is highly integrated with the EU competition system. The primary aim of this SI, therefore, is to remove provisions in domestic legislation associated with being part of the EU competition system. While the draft withdrawal agreement with the EU sets out separation arrangements on competition, the Government are preparing for all contingencies. Should we leave the EU without an agreement in place, this statutory instrument will minimise the litigation risk for the Competition and Markets Authority and provide legal clarity and certainty for businesses and consumers; that is why the statutory instrument is before the House today.
The Secondary Legislation Scrutiny Committee has drawn this SI to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of special interest. As the Scrutiny Committee correctly noted in its report, this statutory instrument makes amendments to the Competition Act 1998 and the Enterprise Act 2002, and makes provision for incorporating European block exemption regulations. I will set out the main changes made by the SI, including those raised by the Scrutiny Committee.
First, the Competition Act 1998 sets out prohibitions against anticompetitive conduct in the UK and empowers the CMA and sector regulators to investigate and take enforcement action against infringements of those prohibitions. The Competition Act, together with EU regulations, also empowers the CMA to investigate and take enforcement action against infringements of EU competition law and provides for investigation co-operation between the CMA, the European Commission and member states’ national competition authorities. This SI amends the Competition Act to remove the CMA’s power to investigate anticompetitive agreements under EU competition law, as it will investigate solely under UK law after exit.
The Scrutiny Committee noted that the SI makes provision for the continued application of pre-exit EU competition case law of the Court of Justice of the European Union after exit. The committee is referring to changes the Government have made to Section 60 of the Competition Act. Currently, Section 60 of the Competition Act provides that competition regulators and UK courts must interpret UK competition law in a manner consistent with EU competition law. The statutory instrument revokes Section 60, as it is inappropriate and contrary to the withdrawal Act to require UK courts to follow ECJ case law after exit. It introduces a new Section 60A, which provides that UK courts and regulators will continue to ensure consistency with pre-exit EU competition case law when interpreting UK competition law, but they may depart from that case law where appropriate in specified circumstances. This approach aims to provide consistency and clarity in the law for courts, regulators and businesses, which look to legal precedent when interpreting the law, while also allowing the competition regulators and UK courts to depart, where appropriate, from EU case law.
With respect to private damages claims, claimants can currently pursue follow-on claims in UK courts, based on enforcement decisions of the European Commission and the CMA. After exit, claimants will still be able to bring private damages claims in UK courts; however, UK courts will not be bound, as a matter of statute, by European Commission decisions. This approach aligns with the European Union (Withdrawal) Act, which provides that UK courts will not be bound by decisions of EU courts after exit.
Under the current system, the European Commission makes block exemption regulations, which exempt certain categories of agreements from EU competition law, where they are believed to have a neutral or beneficial effect on competition. Agreements which benefit from an EU block exemption are also exempt from UK competition law. At exit, all of the seven current block exemptions will be incorporated into UK law, as retained block exemptions. Agreements that meet the terms of the retained block exemptions will continue to be exempt from domestic competition law. This statutory instrument amends the retained block exemptions so that they operate effectively in domestic law. It also empowers the Secretary of State to vary or revoke the retained exemptions.
I turn to the Enterprise Act 2002, which contains the rules on mergers. Currently the CMA is responsible for investigating mergers to ensure that they do not have anti-competitive effects in the UK market. However, if a merger triggers the turnover thresholds set out in the EU Merger Regulation, it is reviewed by the European Commission, including the UK aspects of the merger. After exit, the EU Merger Regulation will no longer apply in the UK, and the UK dimensions of mergers will be reviewed solely by the CMA. The statutory instrument amends the Enterprise Act to remove references to the EU Merger Regulation and other provisions related to being part of the EU’s one-stop shop for merger clearance in the single market. This statutory instrument also makes transitional arrangements for CMA anti-trust and merger cases that are live at the point of exit, so that those cases can continue to be managed effectively.
Anti-trust law protects consumers from anti-competitive behaviour. Similarly, merger control is an important component of a healthy and growing economy. It is vital that we safeguard the legal framework that protects consumers and our competitive market. This statutory instrument achieves these goals by maintaining the strength of the UK’s current competition system, while making only those changes designed to separate the UK competition system from that of Europe in a no-deal scenario. I commend the regulations to the House.
Baroness Burt of Solihull (LD)
My Lords, unlike my noble friend Lord Kirkwood, I have not sat on the scrutiny committee so some of my questions may appear a trifle naive to more learned Members, for which I apologise in advance. I ask the Minister to bear with me.
The regulations address deficiencies in competition legislation arising from our exit from the EU. As I understand it, we will no longer be part of the EU competition system. Can the Minister say how this is likely to affect our ability to tender for EU contracts? Currently we do very well in tendering for and obtaining EU contracts. Am I correct in supposing that we will lose our ability to tender for EU contracts? If so, what estimate have the Government made of the loss of value that this will have on the UK economy? Perhaps the Minister can help me; there is no impact assessment because, according to the text, the SI is supposed to have no effect on private businesses and charities.
The regulations come into force on exit day. But when, if ever, will exit day be? Unless the very worst happens, presumably it will not be 29 March 2019. We understand that we are not going to crash out—that is not going to be allowed—but, on the legal information to which we have not been privy and on which they are voting right now in the other place, presumably exit day could be years away, if ever. The only way that the British people can know is to have a say on the deal that Mrs May has negotiated and vote to end the madness and remain.
We have the advice of the chief legal adviser to the EU that we could pull out of Brexit with no penalty right now. I appreciate that if Brexit continues to prevail, we have to have a plan. Having retained much existing EU law, we have to pick through the bits of legislation which will not apply or which are unlikely to work once we have left. These regulations relate to inconsistencies in competition law in the event of the worst possible piece of self-harm that the British people have done for generations—a no-deal Brexit.
The regulations relate to infringements of and exemptions from competition and merger law. Part 2 of the regulations is “Amendment of the Competition Act 1998”. Part 3 is “Amendment of the Enterprise Act 2002”. Part 4 is “Amendment of other primary legislation”. Part 5 is “Amendment of subordinate legislation”. Part 6 relates to amending and revoking retained EU law, and part 7 is “Saving and transitional provision”.
I am no legal expert, as I am sure has already become apparent to noble Lords, but the fact that no impact assessment has been produced because no significant impact on the voluntary or private sector is foreseen suggests to me that it is hoped that this is merely a tidying-up exercise. It may be technical, but I still fail to see why there is no impact assessment on what impact this competition crisis will have on our ability to trade and compete with our biggest market, indeed, the biggest single market in the world.
Lord Berkeley (Lab)
My Lords, my understanding is that these draft regulations will apply only if we crash out or similar with no deal at the end of March next year. As the noble Baroness said, there are some interesting questions, to which we need answers.
I should like to get some answers from the Minister about what happens to some of the cases that are being considered at present by either the CMA or the European Commission competition authorities. Such cases run for years. They may have started now, but they certainly will not finish. Presumably anything that starts before 29 March next year will continue to some conclusion by the competition authority in the Commission. Is there a time limit on that? How will the relationships between the UK parties, if you like, and the Commission and the other parties be handled in that transition period, which may go on for a great deal longer than any transition that the Prime Minister may be negotiating? Some of these competition cases go on for years.
One case I have got slightly involved in watching is between two railway manufacturing companies, Siemens and Alstom. Siemens has its head office in Germany and Alstom has its head office in France, I think. They have been proposing a merger of all their businesses for several years now. The European Commission has got to the stage of issuing something that is not technically an opinion, but seems to me to be an opinion, which suggests that a merger would be a bad idea for competition across Europe in the whole railway sector. The companies appear to have been trying to promote the merger as a way of preventing Chinese industries taking over everything in Europe, including the UK. Both companies have subsidiaries in the UK; some make trains, some make signalling and some do other things. If that merger went ahead on the continent—in Europe—could the CMA stop a merger between their subsidiaries in this country, or vice versa? How would it work? If they wanted to merge in this country, would the CMA’s decision apply in Europe?
Presumably, if any of this is to work at all, there has to be some communication between the CMA and the European Commission’s competition department on issues such as this. I would welcome a comment from the Minister as to how that conversation—it may be only a conversation—would happen and the extent to which a decision by one party would be binding on the other. I look forward to his comments.
Lord Stevenson of Balmacara (Lab)
My Lords, I am very grateful to the Minister for letting me have a letter before this debate; it came in good time and was correctly addressed. I am sure he will be delighted to know that our discussion across the Dispatch Box in the Moses Room on our previous SI has borne perfect fruit, and I have enjoyed being able to get myself up to speed before dealing with the matter at hand.
I am looking forward to the Minister’s comments on the points raised by the noble Baroness, Lady Burt, and my noble friend Lord Berkeley. Between them, they have exposed some of the difficulties with this SI. Although there is very little that one would object to in what it tries to set out, it raises a number of doubts and concerns about the process that has been going on which are not entirely related to Brexit. Many of the SIs that we are seeing under the general heading of “EU exit regulations” are effectively cut-and-paste, substituting “UK and its institutions and authorities” for “EU”. But in a case such as this, which, as my noble friend says, could go on for years and may have to be transferred across and dealt with under joint arrangements, there is material that is subject to fine investigation and discussion. It affects thousands of consumers in many countries and many areas, and there are difficulties in trying to calibrate that effectively. It is not quite the same as the general ones. I just wanted to make that point.
There are general questions here as well as specific ones about the documentation, and I will cover both sets of questions as I go through it. My main concern relates to paragraphs 7.3 and 7.4 of the Explanatory Memorandum, which is otherwise very good and very clear. I thank the officials for their work on it. We miss impact statements, which are often a source of much more information about the issues before us, but in their absence the Explanatory Memorandum is very good. The first and main point here is the Government’s decision—there are other ways of dealing with this issue—to repeal Section 60 of the Competition Act, which provides that, as far as possible, the CMA and UK courts must interpret UK competition law in a manner consistent with EU competition law. There is a straightforward issue here about whether that would be appropriate in a no-deal Brexit situation. The Government could have had a number of options here, one of which would have been to be more generous in terms of the wish to see the best jurisprudence brought to bear on any cases that might be in front of the CMA. They could choose not to disallow the interpretive obligation but take it as appropriate, or some other wording. That would have been a way of ensuring that the best decisions were reached even though it might transgress a red line on the role of the courts in the EU post a no-deal Brexit.
If that is the issue, have the Government got it right by repealing Section 60 and bringing forward a modified section, Section 60A, to replace it, which provides in some detail that the competition regulators and the UK courts will continue to be bound by an obligation to ensure that there is no inconsistency with pre-exit EU competition case law but makes it impossible to bring in any jurisprudence that takes place afterwards except in limited circumstances? I am sure that Ministers have thought about this carefully and I would be grateful if the Minister would share with us a little of that thinking. It seems to me that, in an attempt to give expression to the red-line areas, they are causing what might turn out to be a legal—I am trying to think of the appropriate word—
Lord Stevenson of Balmacara
Feast, for those who have interests in these matters. This is a bit of a dripping roast, if you do not mind me mixing my metaphors.
The point is that, in attempting to find a way of arguing that there should be no leakage of EU jurisprudence into decisions post-crash-out Brexit, the wording used—the solution mentioned in new Section 60A(7)—provides that the relevant court or decision-maker may disapply the interpretative obligation if they consider that to be appropriate in the light of various criteria, one of which is a post-Brexit development in EU law. However, it goes on to say that other criteria may include—these are terms used in the regulations but there is no apparent way of checking back to see what they mean in fact—differences between EU and UK markets, development in economic activity, generally accepted principles of competition analysis and the particular circumstances under consideration. Like the noble Baroness, Lady Burt, I am no lawyer, and I am not trying to pretend to be one, but that wording is very open and, presumably, will be subject to a lot of discussion and debate.
Those criteria are wide-ranging and broadly expressed and their interpretation is likely to be the subject of considerable debate in many quarters up and down the land. My point is narrow in the sense that the Explanatory Memorandum is perhaps, as I hope the Minister will agree, somewhat optimistic in stating that the provision,
“will provide UK courts and competition regulators with clarity as to how Chapters I and II are to be interpreted after exit”.
I do not think that it is clear at all. I think it is raising a huge amount of interpretative, probably good and proper, debate but it is not providing the sorts of certainty that businesses want as the transition goes ahead. I will leave that point there.
The other relevant point is that there will be transition from a system which is largely co-operative and run across national boundaries under an EU regulatory regime to one that is UK-only, based on UK legislation and UK activities, in this case by the CMA and by other regulatory bodies that have authority.
I do not want to overegg the case but the worry is whether the CMA will be properly resourced to undertake its anti-trust responsibilities as well as the responsibilities relating to the new state aid rules. The CMA itself has said that it will need to carry out a lot more work on more complex cases. It is apparently working on secondary legislation that will facilitate that, and is also increasing staff numbers. That is probably the right response to the problem—both previous speakers raised these issues—but, if that is the case, we are not seeing the last of the legislation that will relate to this. Presumably, we are being promised further secondary legislation to tie up some of the issues that the CMA may wish to raise on its own. Therefore, we are not doing the cut-and-paste job that I criticised the Government for doing. Will the Minister confirm that that is the case? If so, what is the likely timetable and change that we can expect? In particular, will there be more statutory instruments on this set of laws before we reach exit day? It would be nice to know if that is to happen.
My other points are relatively minor. They also relate to the Explanatory Memorandum, in particular, the question raised in paragraph 7.7. There is a slightly convoluted expression of how timetables work on transitions. It states:
“For the purposes of calculating the limitation period to bring these claims in respect of a case which the European Commission has not concluded before exit day, the period before exit during which the European Commission was investigating will not be counted when calculating whether the time period to bring a standalone claim has expired”.
That may make sense in the real world, but I could not understand it. Can the Minister explain it to me from the Dispatch Box or, if necessary, write to me, so we can be clear?
The point here is that there are implied restricted timetables for people who want to make claims in any case over which the UK authorities have control. How do they fit in to where we will have got to on exit day in relation to claims being held under the European Commission? Is there an issue there which we should be aware of? There may not be, but I should like that confirmed.
The Minister spent a lot of time on the block exemption regulations. I do not have much to say on that. It is a difficult area of law because of its subjective nature, but there is another issue about timescale in paragraph 7.18. I do not want to go into detail about it now, but again, if the Minister could write to me about it, I should be very satisfied.
Finally—this is a particularly narrow point—paragraph 7.21 states that the regulations amend secondary legislation related to the Enterprise Act, as the Minister said. It states:
“These changes include amending the definition of insurance undertaking and financial institution so that the statute book is functional after exit”.
I have no complaint about that. But it continues:
“These amended definitions correct deficiencies but do not contain any substantive changes to the definitions”.
I have read them. I do not see many changes. Perhaps the Minister could respond to that now or write to me about it. I want to be sure that the exact nature of the changes is clear and that they have been exposed in this House.
Lord Henley
My Lords, I thank all three speakers for their comments and questions and shall endeavour to answer as many as possible. First, I emphasise that, as with other statutory instruments that will be coming before the House, these are no-deal regulations. If there is a deal—if everything goes through—they will not be necessary. I do not know where they will sit, but they will gradually perish, die or whatever.
There will be more regulations—I am not absolutely sure whether there will be more regulations on this specific subject—and the noble Lord, Lord Stevenson, and others will be debating them with me in due course, and I am sure we will have a busy time over the coming months. I hope that we will at least get a break for Christmas.
I can assure the noble Baroness, Lady Burt, that the regulations will not affect our ability to tender for contracts. They are merely about mergers and anti-competitive behaviour. Ability to tender for contracts is a matter for debate on another day. She also asked about the impact of the regulations. I can assure her that they will have minimal impact on the taxpayer and businesses, as the changes in the instrument only remove deficiencies and enable the statute book to continue to function after exit. This statutory instrument aims to create clarity in law, which would minimise litigation risks. Most of the costs associated with the changes to the competition regime flow directly from EU exit, not from this statutory instrument. There may be some cost to business associated with familiarisation with the regulations, but that is the case with any legislation.
The noble Lord, Lord Berkeley, asked what happens to live cases at exit. In a no-deal scenario—I re-emphasise that that is what we are talking about—there would be no agreement between the UK and the EU on jurisdiction over UK aspects of live cases. This instrument does all it can unilaterally to clarify jurisdiction and provide clarity and certainty in the event of that no-deal exit. After exit, the CMA may conduct investigations into breaches of UK competition law that occurred before or after exit day, including live European Commission cases. In practice, I believe that the CMA would undertake a review to ascertain, among other things, the litigation risk and impact on UK consumers of opening an investigation. But if the European Commission has reached a decision before exit, the CMA will not have the power to open a new case.
The noble Lord also asked what would happen to live merger cases. It does all it can to clarify the jurisdiction in the event of a no-deal exit. At the point of exit, the EU merger regulation no longer applies. Consequently, if the European Commission has not issued a decision before exit, that regulation will not prevent the CMA taking jurisdiction over the UK aspects of the merger. The Government recognise the importance of continued co-operation between the CMA, the European Commission and national enforcement agencies. In a no-deal scenario, the Government would seek to establish bilateral or multilateral co-operation agreements with key member states and the European Commission as soon as possible.
The noble Lord, Lord Stevenson, also asked about changes to Section 60. There is a deficiency in the wording of the current section, because it requires UK courts and regulators to act consistently with EU law. The Government have therefore removed the section and introduced the new Section 60A. This provides that UK courts will continue to be obliged to ensure consistency with pre-exit EU competition case law when interpreting UK competition law, but allows them to depart from such pre-exit law where it is considered appropriate. That would be a matter for the CMA in the light of specified circumstances. This approach will provide continuity and consistency in the law for businesses and consumers, as pre-exit EU competition law will form the bank of case law from which courts and regulators will draw, while also allowing them to diverge from old case law where appropriate.
The noble Lord, Lord Stevenson, also asked what regard the courts would have for decisions of the European courts after our exit. The withdrawal Act is clear that the UK courts will not be bound by any judgment of the European courts after the UK exits the EU. However, it will be possible for UK courts to have regard to such judgments, so far as they are relevant to the matter before the court. The noble Lord also asked about the clarity of the wording of the new section. We believe that the changes to Sections 60 and 60A are targeted, reasonable and proportionate. They will reduce litigation risk for the CMA and provide courts and businesses with legal clarity.
The noble Lord, Lord Stevenson, also asked about resourcing for the CMA. We are confident that it will be ready for exit day and it continues to plan for such an outcome. My department continues to work with the CMA to ensure that this is the case. It will obviously represent a significant challenge but it will also be an opportunity for it. The National Audit Office reviewed the CMA’s exit planning and readiness and concluded that it has robust plans in place to take on a larger competition case load. As part of the Spring Statement, the Chief Secretary to the Treasury announced that the CMA had been allocated an additional £20.3 million in 2018-19 for competition, in preparation for the EU exit. The Treasury has received the CMA’s bid for additional funding for EU exit preparations in 2019-20. We will be announcing further details in due course.
The noble Lord also asked about the time limits in paragraph 7.7 of the Explanatory Memorandum. If the noble Lord is content, I would prefer to write to him on that matter, and obviously I will write on any other matters that I have failed to address. But I think that I have picked up most of the points.
Lord Framlingham (Con)
Before the Minister sits down, can he confirm that these regulations are simply to ensure a smooth transition if we finish up with no deal, meaning that we would have a smooth transition in that eventuality? Is it appropriate for us to keep on calling it “crashing out”?
Lord Henley
I have never used the expression “crashing out”, but I am grateful to my noble friend for making that point. These regulations, and a whole series of other regulations which I and other colleagues will be bringing before the House, are entitled “EU exit regulations”, and they are for dealing with that eventuality. It is essential that we make the right preparations for a no-deal situation, and this statutory instrument is part of that. It provides clarity for businesses and the clarity that will reduce litigation risk, protect consumers and provide for a smooth transition from the current system in the EU to a stand-alone UK competition regime.
Postal and Parcel Services (Amendment etc.) (EU Exit) Regulations 2018
(5 years, 4 months ago)
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Lord Henley
That the draft Regulations laid before the House on 29 October be approved.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
The Government are confident that an agreement on EU exit will be achieved, but, as I said earlier, we must be prepared for all outcomes. If the UK leaves the EU without an agreement in place, these regulations will provide legal clarity for the regulator and postal operators. These draft regulations are made under the powers conferred by the European Union (Withdrawal) Act 2018, and correct deficiencies in the statute book associated with exiting the EU.
The Secondary Legislation Scrutiny Committee agreed with the Government’s recommendation that these regulations should follow the negative resolution procedure, when the draft was originally presented in July. However, at the time, the European Statutory Instruments Committee in another place felt that further explanation was required regarding the changes that these draft regulations present because of exiting the EU, and recommended that the draft regulations should be upgraded to the affirmative procedure. The Government accepted that recommendation.
If approved, the regulations would not change the operation of postal and parcel services beyond the changes that are necessary to ensure the regime is fully functional on exit day. There are four necessary changes. First, they amend the Postal Services Acts 2000 and 2011, to remove or replace references to EU obligations which will no longer apply once the UK leaves the EU. They also remove provisions which impose duties to notify the European Commission. Secondly, they remove from statute the Postal Services Regulations 1999, which implemented Article 22 of the postal services directive and required member states to designate a national regulatory authority for the postal sector. Thirdly, they revoke the European Commission’s decision of 10 August 2010 that established the European Regulators Group for Postal Services—the ERGP. Finally, they revoke Regulation 2018/644 on cross-border parcel delivery services. I will explain each in turn.
The Postal Services Acts 2000 and 2011 set out the minimum requirements of the UK’s universal postal service. The amendments to primary legislation governing postal services in these regulations will not affect the UK’s universal postal service. These regulations ensure that any remaining obligations under retained EU law are maintained in the Postal Services Act 2011 and remove redundant provisions. The regulations also remove obligations of the EU postal services directive, such as sharing information with the European Commission, because the UK will no longer be subject to the directive’s provisions or to the authority of the European Commission after we leave the EU.
The Postal Services Regulations 1999 designate Ofcom and the Secretary of State as the UK’s national regulatory authorities for postal services, a requirement of the postal services directive. Duties and functions of Ofcom and the Secretary of State relating to postal services are set out in the Postal Services Acts 2000 and 2011, so there is no longer a requirement to “designate” them under separate regulations.
The 1999 regulations will become redundant when the UK leaves the EU and are revoked in full by these regulations. The European Commission decision of 2010 established the European Regulators Group for Postal Services. The group consists of national regulatory authorities of member states. It provides advice to the European Commission and aims to facilitate consultation and co-operation between national regulatory authorities of member states.
Ofcom is a member of the group as the UK’s national regulatory authority. After we leave the EU, the UK will no longer hold membership status, as it will cease to be an EU member state, and therefore Ofcom will not be entitled to participate formally as a member of the group. The regulations therefore revoke this EU decision which contains a list of members, one of them being the UK.
The withdrawal from the ERGP was an issue of interest for the House of Commons sifting committee. The House requested further information on the effect of the UK’s non-participation in the ERGP and any alternative future arrangement. Ofcom intends to seek permanent observer status after the UK has exited the EU, in the way that NRAs of the European Economic Area states, Switzerland and EU candidate countries participate at present. Although observer status would remove Ofcom’s right to vote, the impact would likely be minimal given the co-operative nature of the forum. The group generally makes decisions based on consensus. If required, issues that would be voted on are the final work programme, published reports or opinions and the elected officials of the ERGP; that is, the chair and two vice-chairs. If granted observer status, Ofcom will still be able to engage in strategic discussions, negotiations and the sharing of best practice after we exit the EU.
I turn now to Regulation (EU) 2018/644 on cross-border parcel delivery services. The aim of this EU regulation, which came into force in May this year, is to increase regulatory oversight and price transparency of cross-border parcel delivery services within the EU. These regulations revoke the EU regulation in full. The EU regulation requires regular submission of information on cross-border parcel delivery services to the European Commission with the aim of publishing tariff information on member states’ cross-border parcel operators. This duty should no longer apply after the UK leaves the EU, as the UK will cease to be a member state and will no longer be subject to the authority of the European Commission. In any event, the principal information-gathering powers of Ofcom, the UK’s postal regulator, are provided under the Postal Services Act 2011. Ofcom already draws on this as part of its regulatory monitoring of postal services.
These regulations are a sensible and necessary use of the powers of the withdrawal Act, which will ensure that postal and parcel services continue to operate effectively after the withdrawal of the United Kingdom from the European Union. I commend them to the House.
Baroness Burt of Solihull (LD)
My Lords, I am grateful to the Minister for his explanation. My understanding of this piece of legislation is that it pulls us out of retained EU law that will no longer be applicable on our withdrawal from the EU if we get no deal and crash out; unfortunately the noble Lord, Lord Framlingham, who asked the “crashing out” question, is no longer in his place. Again, there is no impact assessment. I take the point that the Minister made earlier but I ask for his patience and for assurances on a couple of issues. I am sure he will be able to supply them.
My first question relates to the directives that we are rejecting which opened up the sector to competition and defined a universal postal service as a right. What will the situation be post Brexit for remote communities, for which the universal postal service is vital, even though it might not be economically viable to provide? As the Minister said, Regulation (EU) 2018/664 increases price transparency and regulatory oversight of cross-border parcel delivery services. Can the Minister explain for the ignorant what difference this is likely to make to price transparency and the prices of cross-border parcels to and from the UK?
Finally, what do the Government assess will be the effect of removing us from these EU regulations? Will our ability to send and receive parcels cross-border be affected in the future? I am not asking the Minister to look in his crystal ball here, although it would be helpful if he had one to hand, but does he think that it will be harder or easier? The Government have produced no impact assessment, but how can there be no effect of withdrawing from this legislation?
Lord Stevenson of Balmacara (Lab)
My Lords, again, I am very grateful to the Minister for the very full letter about this SI that I received last week. He covered all the points that he has made in his speech—and, in fact, a few more—and it was very useful in getting us ready for this debate.
However, there was one thing that I wanted to pick out relating to the Postal Services Regulations 1999, which were set to become redundant and will be revoked in full. I presume that the rationale for wishing to revoke them is that they are derived from an EU directive, I think, rather than a regulation, and they require member states to designate a national regulatory authority in the UK. In this case, Ofcom is the designated authority. The letter goes on to say that the functions of the Secretary of State and Ofcom in regulating the sector are set out in the Postal Services Acts 2000 and 2011, but I question whether the removal of the 1999 regulations, which designate Ofcom as a specific post of national regulatory authority in the UK, does not in some way discriminate against Ofcom as being the likely regulator for postal services in the UK. It is really a question of whether there will be any diminution in Ofcom’s authority as a result of this. I would be grateful for reassurance that there will be no change in substance, even though there will be a change in the legal basis on which it is appointed.
The noble Lord has spent a lot of time discussing the role of the ERGP and the future of that body with Ofcom as an attendee. It is an obvious point but attending is not the same as being a participant, and even though it is an informal body largely operating by consensus, there will still be a difference, so we will be a rule-taker and not a rule-maker in a very real sense. Again, I would like reassurance that there is no question that we will lose out in terms of how our postal services flow and our parcels are delivered in the future.
I have two further points. Like many noble Lords, I am sure, we have received a number of representations from those involved in cross-channel activities, particularly about getting access to goods and bringing them through the Channel Tunnel to make sure that markets in the UK are satisfied. Therefore, this is about inward goods but it is also about external goods. A lot of material flows out through the tunnel to other places, and a particular issue is time-sensitive goods. Is there anything that the noble Lord feels it appropriate to share with us, particularly in relation to recent comments by his colleagues in the Department for Transport about the difficulties in ensuring that goods move backwards and forwards? Would that impact on anything that these regulations should do? Time-sensitive goods are obviously the most important, such as fresh goods and other materials that need to arrive at a particular time. These will be affected by blockages and changes in the overall system. Where they are postal, additional regulatory authority and other issues may be engaged, and there may be costs involved that we are not yet aware of. I would be grateful for some comments on that.
Finally, paragraph 7.6 of the Explanatory Memorandum deals with Article 7 of the EU parcel delivery regulation. I recently saw documentation from the Institute for Government, which has been looking at the Government’s readiness for Brexit in the case of a no-deal crash out. One issue flagged as red, and therefore not ready, is parcels. Does the Minister have any information on that, given that it falls within his brief? Is there a problem here and, if so, is it something that he wishes to share with us? The Explanatory Memorandum makes the point that the EU parcel delivery regulation is largely covered by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. It goes on to say:
“Therefore, the EU Parcel Delivery Regulation will become substantially redundant following the UK’s exit from the EU”.
But “substantially redundant” is not the same as “completely redundant”. Will the Minister spell out the differences that are envisaged?
Lord Henley
My Lords, I thank noble Lords for their contributions to the debate. I hope I can answer the questions that have been put to me. Again, let me assure noble Lords that these amendments to primary legislation governing the postal services will have no impact whatever on the UK’s universal postal service and will preserve, as far as possible, the rights, responsibilities and protections offered by the existing system. They make only those changes necessary to ensure that the regime continues to be fully functional on exit day. As I said on previous regulations, this will increase legal clarity and be of benefit to national regulatory authorities, businesses and consumers.
The noble Baroness asked about the cost to the taxpayer. This will have minimal impact. The regulations qualified for the de minimis threshold, which means that direct impact on business or civil society organisations is less than £5 million annually, and as such a full regulatory impact assessment was not considered necessary. As I have made clear, we will continue to offer the same postal and parcel services throughout the United Kingdom as we do now, and as we do to remote communities. There will be no change in liabilities or obligations. Royal Mail will continue to deliver that universal service in line with requirements set out in domestic law.
The noble Baroness also asked what will happen as a result of revoking the cross-border parcel services regulation. Revoking that regulation will mean that the UK will not be required to share pricing information for cross-border parcel deliveries with the European Commission. Ofcom can request pricing information under the UK’s domestic provisions, which will mitigate any data gap between the UK and member states. There are also price comparison websites that provide information about prices for parcel deliveries from the UK’s service providers. Therefore, comparing prices for cross-border parcel services between the UK and EU member states will continue to be available to consumers.
The noble Lord, Lord Stevenson, asked why the Postal Services Regulations 1999 are being revoked by these regulations. The 1999 regulations designated Ofcom and the Secretary of State as our national regulatory authorities for postal services, as was a requirement of the postal services directive, and that simply no longer applies after EU exit. In any event, the functions and duties of Ofcom and the Secretary of State relating to postal services are set out in the two Acts I referred to: the Postal Services Act 2000 and the Postal Services Act 2011. There is therefore no longer a requirement to designate them as the national regulatory authority under separate regulations.
Lord Stevenson of Balmacara
I may not have made myself entirely clear. This may be a point that is not worth exploring further, but just to be precise, the existence of the 1999 regulations requires the Government to appoint a single national regulatory authority for post, which is Ofcom. Removing that, as is proposed in these regulations, means that in theory it is possible for the Government to appoint other regulators to take over Ofcom’s rules and functions. I wondered if that was the implication and therefore whether there was any danger to Ofcom’s position.
Lord Henley
There will be no change in the position. There is no hidden agenda that a shadow Ofcom will be set up or some such other body. I can give that assurance to the noble Lord.
The noble Lord was also concerned about Ofcom’s new role on the European Regulators Group on Postal Services, and whether it was now, as he put it, a rule-taker rather than a full participant. I stress that the ERGP is just an advisory body. It does not make any binding rules or take any decisions. Leaving that and merely having an observer status will not have a detrimental impact on Ofcom’s ability to participate in it or its ability to regulate the postal sector and engage with other EU regulators. As I said, Ofcom wishes to have that observer status just to ensure that it can continue to participate to the full extent necessary.
The noble Lord also asked about customs arrangements and whether they might affect the post. We will obviously be engaging with businesses about new customs arrangements if the UK leaves the European Union without an agreement. The Government have published the customs White Paper and sent out technical notices. Royal Mail is working with HMRC to ensure that it is prepared for changes so that we can continue to operate in the same way after exit.
I hope that that deals with all the questions. As I said on the earlier regulations, the regulations do not represent a policy change to the operation of postal services and they preserve, as far as possible, the rights, responsibilities and protections offered by the existing system. I commend these regulations to the House.
Textile Products (Amendment) (EU Exit) Regulations 2018
(5 years, 4 months ago)
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Lord Henley
The draft Regulations laid before the House on 10 and 22 October be approved.
Considered in Grand Committee on 21 November.
Tobacco Products and Nicotine Inhaling Products (Amendment etc.) (EU Exit) Regulations 2018
(5 years, 4 months ago)
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Lord O'Shaughnessy
That the draft Regulations laid before the House on 1 November be approved.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O'Shaughnessy) (Con)
My Lords, in introducing the regulations before the House today, I want to stress how critical they are in maintaining the UK’s commitment to be a world leader in tobacco control as we leave the European Union. The Government strongly believe that tobacco control legislation is crucial for stopping people smoking and reducing the harms associated with smoking. Whatever the outcome of the Brexit negotiations, that belief is unwavering.
As noble Lords know, the Government are focused on the successful passage through Parliament of the deal which has now been reached with the EU. Nevertheless, we continue to plan for all scenarios. The regulations before us have been laid for a no-deal scenario. If the UK reaches a deal with the EU, the department will revoke or amend this instrument to reflect that deal.
This instrument will ensure that the UK domestic legislation that implements the two main pieces of EU tobacco legislation—the tobacco products directive 2014/40/EU and the tobacco advertising directive 2003/33/EC—functions effectively after exit day. The instrument, made under the EU (Withdrawal) Act 2018, makes appropriate amendments and revocations to correct deficiencies in UK legislation and retained EU legislation.
Regardless of one’s views on Brexit, I see no reason why the amendments we are proposing through these regulations should not be supported. The proposed amendments are critical to ensuring that there is minimum disruption to tobacco control in the event that we exit the EU without a deal in March 2019. I would like to draw the attention of noble Lords to three main changes that this instrument would introduce.
First, in the event of a no deal, the UK will need to develop its own domestic notification systems for companies that wish to sell tobacco products and e-cigarettes to the UK market. The notification process is essential for ensuring that companies are complying with legislation on product standards. Both Public Health England and the Medicines and Healthcare products Regulatory Agency have commenced work to ensure that domestic notification systems are in place and functional by exit day.
Secondly, in the event of no deal, the UK will not hold copyright to the EU library of picture warnings for tobacco products. Requiring the industry to continue to use these pictures would breach copyright law. Picture warnings are a key part of tobacco control, and it is therefore extremely important that we continue to require the inclusion of graphic picture warnings on tobacco products. The UK has therefore recently signed an agreement with the Australian Government to obtain picture warnings free of cost, and I want to take this opportunity to express this Government’s gratitude to the Australian Government for their assistance in this matter. I would also note that this approach has received endorsement from Action on Smoking and Health, which has said about our proposals on notification systems and picture warnings that they are, “pragmatic and practical, minimising the amount of additional work involved if there were to be a no deal Brexit. We support the Government proposals for dealing with this short-term issue”.
Thirdly, this instrument proposes a transfer of powers from the Commission to the Secretary of State, permitting the Government to respond to emerging threats, changing safety and quality standards and technological advances.
In introducing this instrument, I must be clear that it will have some impact on the tobacco and e-cigarette industry. The department ran a short technical consultation in October to seek feedback on the practical issues that will affect the industry in a no-deal situation. We received 32 responses. Tobacco control stakeholders showed support for the continued use of picture warnings and amendments to the notification system as an effective way of stopping people smoking and as a means of harm reduction. The tobacco industry did raise concerns about the timing of implementation and cost, primarily in relation to the changes to picture warnings. However, I would stress that we did not receive detailed evidence or a breakdown of costs.
As noble Lords know, we have no control over timing issues—or at least this government department does not—as the implementation timetable is dictated by the timing of EU exit. The Department of Health and Social Care has therefore consulted with external experts, who have confirmed that the change in timescale is likely to be difficult but manageable. To mitigate these issues raised in the consultation by the industry, we intend to publish detailed guidance on picture warnings and the notification process in January 2019.
Before closing, I would also like to stress that the devolved Administrations have provided consent for the elements of this instrument which are considered devolved.
I hope that noble Lords can see that this instrument constitutes a necessary and important measure to ensure that our tobacco control regulations continue to work effectively after exit day in the event of no deal. I must emphasise that, due to the instrument being made under the withdrawal Act, the scope of the amendments in it is limited to achieving this objective. At an appropriate point in the future, the department will review whether the UK’s exit from the EU offers us opportunities to reappraise current regulation to ensure that we continue to protect the nation’s health and so that the UK remains a global leader in smoking cessation and tobacco control for many years to come. I beg to move.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lord for this opportunity to discuss e-cigarettes. It is also a great opportunity to press the Minister on the Government’s Brexit situation. I do not think that we have heard him on this matter before. It is interesting to reflect on the confidence set out in the Explanatory Memorandum that,
“as a responsible government, we will continue to proportionately prepare for all scenarios”.
That is just as well because I do not share the Minister’s confidence that the future is at all clear or, indeed, that all scenarios have been planned.
I am sure the regulations are sensible but the Explanatory Memorandum takes us back to our debate when they originally came through your Lordships’ House, during which a number of us expressed concerns that the directive on which they were based takes too draconian a view on e-cigarettes. I happen to think that e-cigarettes are one of the most successful public health measures to help reduce smoking that we have ever seen. It is a great pity that some elements of the public health community that I know well and love have such a downer on e-cigarettes that they have encouraged a disproportionate approach to their regulation. In Grand Committee, the argument was put that e-cigarettes should be regulated in a completely different way from tobacco-based products. I remain convinced of that.
Of course, we must be very careful about the potential impact on young people. I know there are those who think that attractive advertisements and the way e-cigarettes are marketed can sometimes lead young people to take up smoking. The evidence for that is very dubious. We know that e-cigarettes are attractive to people over whose heads most public health campaigns completely fly. Although I fervently hope that we do not exit the EU next March, if we do and if the Government bring forward at some point new regulations on tobacco products in general, I hope they will take note of our debates and look at e-cigarettes in a completely different way.
Lord Rennard (LD)
My Lords, there are those—I am certainly not among them—who welcomed the idea of Brexit because they did not like the restrictions on the promotion of tobacco that we agreed across the EU. Contrary to the biased and selfish claims made on behalf of the tobacco industry, these regulations have been successful in reducing significantly the prevalence of tobacco smoking and its related diseases. We should never forget that tobacco products shorten the lives of half the people who smoke.
The tobacco lobbyists will be disappointed with the regulations because they show that they have lost the argument and there is now cross-party consensus on tackling tobacco-related problems. As the Minister said, even if we have the disastrous no-deal Brexit that some of those people want, the regulations will allow for a set of pictures, as currently used in Australia, to continue to appear on cigarette packs in the UK to warn smokers of the terrible damage done to their health by smoking.
As the Minister said, the regulations have the support of the excellent Action on Smoking and Health, of which I am a former director. Of course, they have my support too, but I would like to remind the Minister that the Tobacco and Related Products Regulations 2016 require the Secretary of State to review those regulations and publish a report before 20 May 2021. Some of the important points made by the noble Lord, Lord Hunt of Kings Heath, should be examined when that report is made. Some of us also feel passionately that e-cigarettes can and must be promoted effectively as an alternative to smoking tobacco, but in such a way as not to encourage people who have never smoked tobacco to take up an addiction to nicotine. I would like the Minister to confirm as well as he can that there will be no going back on our successful tobacco regulation policies, which are doing so much to improve the health and life expectancy of so many people. We should do nothing that reverses the excellent progress being made on this issue.
Baroness Thornton (Lab)
My Lords, I apologise to the House for being a minute or so late. I am afraid that business moved too quickly and the lift too slowly.
As the Minister said, the current regulations for tobacco and related products are designed to promote and protect the public’s health. Speaking as a veteran of tobacco regulation from the previous Labour Government and the Minister responsible for the point of sale retail advertising regulations that put tobacco products out of sight in our shops and supermarkets, all those actions were rigorously and energetically opposed by the noble Lord’s party and the Minister’s predecessor but one. I welcome the Government having definitely seen the light on this; it is wonderful. I am pleased to learn that the Government’s priority is to maintain the same high standards after the UK leaves the European Union, if that is indeed what happens.
The noble Lord and I are discussing regulations that will be necessary if there is no deal. I suspect they are the first of many. We have a whole load of embryonic and blood things to discuss next week. I wonder whether that is really a productive use of his time or mine.
On what these regulations do, in the event of no deal we will be obliged to introduce legislation to ensure that the policies and systems in place to regulate tobacco products and e-cigarettes will continue to function effectively and maintain continuity with current arrangements. The website and the Explanatory Notes use the words “where possible”, so I suppose my first question to the Minister is to explain the words “where possible” and where the current arrangements might not be possible.
If the UK leaves the European Union in March 2019 with no agreement in place, that will mean, as the noble Lord said, that the tobacco products directive and the tobacco advertising directive will no longer directly apply to the UK—which is ironic, as we were the pioneers in these matters all those years ago. UK domestic law that implements these directives, such as the Tobacco and Related Products Regulations 2016, would remain in force.
My understanding is that these regulations’ purposes are threefold: to introduce a new domestic system to allow producers to notify e-cigarettes in accordance with existing rules; to introduce a new domestic system to allow producers to notify tobacco products in accordance with existing rules; and to introduce new picture warnings for tobacco products, already mentioned by noble Lords, based on the picture library owned by the Australian Government. The noble Lord and I have both learned that the pictures in use at the moment come from a library based in Brussels. We will no longer have access to it.
I thank ASH for its views and vigilance on these important matters, and for its participation in the consultation process. I agree with it that the system set out for notification of e-cigarettes and novel tobacco products in the consultation document is pragmatic and practical, and would minimise the additional work involved in the notification process if there were to be a no-deal Brexit. Products notified to the UK prior to the UK leaving the European Union would not require re-notification and data will be accepted in the same format as currently submitted. Those arrangements seem satisfactory.
For the purpose of providing an alternative to the current picture warnings in the event that the UK leaves the EU with no deal, since we would no longer have access to the rather revolting and graphic pictures in the SI—I have not seen any other legislation with pictures in it, but this instrument has them; I suggest that if noble Lords have not read the statutory instrument they should at least open it and look at the pictures it contains—the Minister has said we will switch to the ones used in Australia, which I gather are even more horrible. However, I remind the Government that, in the longer term, the Tobacco and Related Product Regulations 2016 require the Secretary of State to review the regulations and publish a report before 20 May 2021. This review needs to examine the objectives intended to be achieved by the regulatory provision made by these regulations, and to assess how far they have been met and whether they remain appropriate. That will allow a review of quite a fast-moving area in terms of product development to take place. Does the Minister agree that is the case?
For the purpose of providing an alternative to the current picture warnings in the event that the UK leaves the EU with no deal, switching to the pictures from Australia is a short-term quick fix for this emergency. However, current best practice in Australia and the UK is to rotate, regularly review and update those health warnings. Therefore, it is essential that in the longer term the Government review the warnings—they are currently being evaluated by the Australian Government—and find ways to increase the number to allow for rotation, as is currently the case. When can we expect that review to take place?
I do not need to add to my noble friend Lord Hunt’s remarks about the importance of vaping and its role in reducing smoking. These statutory instruments serve their purpose.
Lord O’Shaughnessy
I am grateful to all noble Lords who have spoken on this statutory instrument. It is hard to believe that it has taken us this long to have our first Brexit outing on health issues. It could be the first outing of many and we may not always be in such agreement, but I am happy that we seem to be on this occasion.
On the point made initially by the noble Lord, Lord Hunt, and later reinforced by the noble Lord, Lord Rennard, and the noble Baroness, Lady Thornton, about e-cigarettes, we have been working in a framework decided at a European level and have made the most of it. It inevitably involves some restrictions, whose boundaries we have tried to push in order to have what I think is the most rational and effective approach in Europe. It has worked. As we all know, it has contributed to improved smoking cessation and low use by young people—take-up among young people being one of the fears, which we are unfortunately seeing in the States. Some research is still required to understand better both the behavioural and the health impacts of vaping products, but the Government have no doubt about their central role in dealing with what is still one of the biggest public health issues that we face. I can give an assurance that we keep an open mind about the right way to regulate these products, bearing in mind their almost entirely positive benefits.
It is worth emphasising, as noble Lords have done, that the purpose of the instrument is not to change policy; it is to provide continuity and make sure that there are fixes. However, as the noble Lord, Lord Rennard, and the noble Baroness, Lady Thornton, pointed out, the review of directives that the Secretary of State has a duty to fulfil gives us an opportunity to think about how they are operating in this and other domains. Certainly, we will fulfil that by 2021, but the Secretary of State may decide to do something sooner —of course, that is not something I can commit him to at this point. The policy is working and we want to make the most of it. For example, some of the restrictions on advertising may be stopping realisation of the full benefits of the use of e-cigarettes in smoking cessation; those are the kind of things we would want to think about.
The noble Lord, Lord Rennard, and the noble Baroness, Lady Thornton, talked about the Australian pictures. They are indeed more gruesome—it clearly shows that Australians have a higher threshold for what appals them. We are grateful to the Australian Government for helping us get through the transition by giving us those gruesome photos. It is also worth noting that Australia has a very successful smoking cessation regime—we are not taking these images from just anybody; we are taking them from a country that is doing really well, so there is good reason to think that they will be effective.
The noble Baroness, Lady Thornton, asked about rotation. Clearly, we are going to need to work with the Australian Government as well as design our own pictures. In a no-deal scenario we would need to do that so that we can have rotation and make sure that people do not grow desensitised to these pictures, which is of course one of the problems with them. Of course, in a no-deal scenario we may be able to work with a number of different jurisdictions. It may be possible to assemble a library that goes beyond one or two countries, but that is not something we have a timetable for yet.
In answer to the question from the noble Lord, Lord Rennard, I say again that there is absolutely no going back on the progress we have made on smoking cessation. The Government are a vigorous promoter of tobacco control. We know the health benefits: pretty much the best thing you can do for your health if you smoke is to stop, so I can reassure noble Lords that there is no going back.
On the final question regarding the language—“fixing where possible”—the point is that we are acting under the aegis of the European Union (Withdrawal) Act 2018, which gives us the power to deal with certain things. Let me give an example of what it does not allow us to do, because of the framework of primary legislation. In its 20th report of the 2016-17 Session, the Joint Committee on Statutory Instruments found some defective drafting, but we do not have the power under the withdrawal Act to fix that through this process; we would need some other process. So we have used all the powers we have under the withdrawal Act to make fixes and provide continuity in key areas, but it does not necessarily follow that we have fixed everything through this process; that will have to be done through other processes. That is just the limit of what we can do through primary legislation.
I hope I have been able to answer noble Lords’ questions and provide reassurance about our commitment to smoking cessation and, indeed, about our open-mindedness to future policy changes that may be required for us to go further and take advantage of some of the technologies available to us. On that basis, I beg to move.