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Oral Answers to Questions
(5 years, 9 months ago)
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Ruth Cadbury (Brentford and Isleworth) (Lab)
The Minister for Apprenticeships and Skills (Anne Milton)
The Department works closely with Her Majesty’s Treasury on the challenges that the further education sector faces. We are currently considering the efficiency and resilience of the sector and assessing how far current funding and regulatory structures enable high-quality provision.
Ruth Cadbury
We know that the Government want to bring in T-levels, but the funding for that is almost immediately offset by the ongoing £3.3 billion real-terms cuts for our colleges and further education. Will the Minister’s review include addressing the 38% cut in construction skills training and the 68% cut in engineering courses that have been experienced recently?
Anne Milton
The hon. Lady is right that T-levels will bring in an extra £500 million a year when fully rolled out. I know the Construction Industry Training Board is putting a substantial amount of money into improving skills in that industry.
Philip Davies (Shipley) (Con)
We certainly need more money for schools in my constituency, but does the Minister accept that funding for further education colleges has been the worst hit of all the parts of the education system? Will she give my constituents some assurances that there will be more money for Shipley College and Bradford College in the very near future?
Anne Milton
I thank my hon. Friend for that question. I know the sector faces significant challenges—indeed, we had a Westminster Hall debate on the issue and I think 53 colleagues from across the House contributed to that. We are putting in £500 million of disadvantage funding and £127 million of discretionary bursary funding. Money has been going in, but I am aware of the fact that although the base rate for 16 to 19-year-olds has been protected, that still leaves the FE sector with challenges.
Ellie Reeves (Lewisham West and Penge) (Lab)
Staff at Lewisham College had not received a single pay increase for 10 years, despite rising living costs in London. While they were able to secure a pay deal in November, college teaching staff across the country have seen their pay fall 25% in real terms since 2009. When will austerity end for our FE teachers and students?
Anne Milton
I am aware of the issues that the hon. Lady raises. I have to say, I am always disappointed when staff take strike action—however good the cause—because it is young people who suffer. I understand that Capital City College Group has offered a 5% pay rise. Some colleges are able to do that. I am very aware of the challenges that colleges face, but as I say, I think resorting to strike action is disappointing.
Mrs Anne Main (St Albans) (Con)
I hope to approach the Backbench Business Committee tomorrow to get a debate on funding for education, because so many colleagues across the House have the same narrative. It is vital that we look at that, especially for pupils with special educational needs. Post-16 and special educational needs are absolutely suffering and we have to look at this in the spending review.
Anne Milton
My hon. Friend was one of those who intervened in the Westminster Hall debate. I am very aware of this issue. I visited a college a couple of weeks ago where 400 students have special educational needs. Colleges do a fantastic job. There has been a focus over the last 15 to 20 years on higher education, and it is great to see Members across the House all campaigning for their local colleges.
Nic Dakin (Scunthorpe) (Lab)
As 16 and 17-year-olds attract 23% less funding than pre-16 students and young people, is it not just time to raise the rate and tackle this problem?
Anne Milton
The Raise the Rate and Love Our Colleges campaigns have been very successful and, to a large extent, led to the number of hon. Members who attended that debate to raise the issue. I will continue to raise this with the Treasury. It has to be said—I have to continue to point this out to hon. Members—that there is over £2 billion available in apprenticeship funding from 2020. It is there now. Currently, colleges are not doing that much of that apprenticeship training. I look forward to seeing them getting more involved in those opportunities.[Official Report, 12 February 2019, Vol. 654, c. 6MC.]
Andrew Bridgen (North West Leicestershire) (Con)
Will the Minister outline to the House what support is available, and will be made available, for students from disadvantaged backgrounds to remove the barriers to their participation in further education?
Anne Milton
We have a pilot project running in five areas across the country specifically to target young people in disadvantaged areas who might be less willing to take up an apprenticeship, particularly in sectors they would not traditionally look at. We have £500 million of disadvantaged funding in the sector and £127 million of discretionary bursary funding, and there are other projects focusing particularly on apprenticeships to encourage young people who might not have thought of them as an option.
Gordon Marsden (Blackpool South) (Lab)
It is clear that the Chancellor has dashed FE’s hopes massively in his Budget, but the Prime Minister, when told in Prime Minister’s questions by my hon. Friend the Member for Chesterfield (Toby Perkins) last week that FE funding was in crisis, replied complacently that he
“could not be more wrong”—[Official Report, 30 January 2019; Vol. 653, c. 811.]
MPs debating FE here recently all said otherwise. One Member said
“it is clear that funding for…16 to 19…has fallen”—[Official Report, 21 January 2019; Vol. 653, c. 20.]
Another said:
“The bottom line is that the…sector needs more money”—[Official Report, 21 January 2019; Vol. 653, c. 23.]
Those are the words of Conservative Members in that debate. Will the Minister get the Education Secretary to pledge to tell the Chancellor that increased FE funding in the spending review is his top priority, to keep at it and to not take no for an answer?
Anne Milton
I notice the hon. Gentleman pointing his finger across the Dispatch Box. The Secretary of State is very aware—because I have not ceased to point it out to him—of the challenges that FE colleges face, and I did hear the hon. Member for Chesterfield (Toby Perkins) raise this in Prime Minister’s questions last week. It is good to hear people across the House talking about further education, because sadly the House collectively, including under the last Labour Government, did not talk about it very much.
Mr Jim Cunningham (Coventry South) (Lab)
The Secretary of State for Education (Damian Hinds)
We are making very good progress. We are working closely with providers to deliver the first three T-levels from 2020 and have launched a £38 million capital fund to support that initial roll-out.
Mr Cunningham
I thank the Minister for that answer. I recently tabled a question and got an answer back saying there had been a 30% cut in adult education, particularly in relation to T-levels, as part of a wider effort to increase the numbers in adult education. What will the Secretary of State do about that, bearing in mind that Hereward College in Coventry, which teaches people with disabilities, and Coventry College badly need funding? Can he give us a positive answer on that?
Damian Hinds
The hon. Gentleman is a great advocate for further education in general, and for his colleges in Coventry in particular, and for the important role that adult education plays in social mobility and improving life chances. On T-levels, we are initially focused on getting the roll-out done, but we will look at adult provision in the future, and of course there was also a big boost in the Budget for the national retraining scheme.
Robert Halfon (Harlow) (Con)
Damian Hinds
I will and I have. I was grateful for the opportunity to discuss some of these matters the other day with my right hon. Friend’s Select Committee. My right hon. Friend the Minister for Apprenticeships and Skills has written to large multi-academy trusts and will be writing to local authorities to remind them of the importance of the so-called Baker clause in making sure that children and young people have information about all the options available to them. I also agree about the importance of embedding careers information deep in the curriculum.
James Frith (Bury North) (Lab)
Only about 10% of 16 to 18-year-olds on a full-time level 3 course are currently studying a technical qualification. The proposed investment in T-levels will not benefit the vast majority of sixth-form students in schools or colleges. FE and sixth-form funding has fallen by one fifth since 2010. Do not all young people deserve to have FE properly funded, irrespective of the qualifications they choose to study?
Damian Hinds
Yes, clearly further education—and indeed all 16-to-19 provision—has to be properly funded, but I do anticipate that more young people will do T-level qualifications in the future, because they will be very high-quality qualifications, with those extra hours, the maths, the English, the digital content, and that high-quality industry placement.
Alex Burghart (Brentwood and Ongar) (Con)
Damian Hinds
I will. In fact, about 200 employers have already been involved, in one way or another, in their development. Business is at the heart of this major upgrade to our technical and vocational education, including T-levels.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Obviously T-levels are still a couple of years away, and colleges are expecting funding now. What can the Secretary of State do to assure me that when T-levels do arrive, colleges such as Stoke-on-Trent sixth-form college, which will be delivering them, will not have to use some of that additional money to cross-subsidise underfunded courses in other parts of the colleges? Is not the best way to stop that money being misused simply to raise the rate for everyone else?
Damian Hinds
The money that the Treasury has committed to T-levels is new money to finance more hours for young people studying these subjects. I think that that is incredibly important, but, as the hon. Gentleman says, there are other people studying for other qualifications, in Stoke and elsewhere, and they too must be properly resourced.
Several hon. Members rose—
Sir David Evennett (Bexleyheath and Crayford) (Con)
I warmly welcome the introduction of T-levels, but what action has been taken to upskill the teachers and lecturers who will be delivering them? That process is vital to the success of the project.
Damian Hinds
My right hon. Friend is absolutely correct. We must engage in a number of preparations, such as setting up relationships with businesses for the industrial placements and also, as my right hon. Friend says, relationships with people working in our sector. We created the T-level professional development offer for precisely that purpose.
Toby Perkins (Chesterfield) (Lab)
The Minister for Apprenticeships and Skills (Anne Milton)
My officials and I have regular and frequent discussions with representatives of colleges and college sector bodies, among others, about the sustainability of the sector. I get out and about as often as I can to find out precisely what funding problems some colleges are facing.
Toby Perkins
I thank the Minister for that answer. I am sure that the Minister does get out there, and I think we all have a strong sense of the sympathy with which she is attempting to make the case for colleges, but she has a Chancellor and a Prime Minister who seem to be entirely deaf to that case rather than responding to it. What more can Members on both sides of the House who recognise the scale of the financial crisis facing colleges do to ensure that the Prime Minister and the Chancellor start taking the action that is so desperately required?
Anne Milton
I do not think that the Prime Minister and the Chancellor are deaf to the case, and, in fact, in the first 15 minutes of this Question Time we have focused largely on the further education sector. I think that Members on both sides of the House are doing well in making the case to ensure that we have a sustainable and resilient FE sector in the future.
Mr Philip Hollobone (Kettering) (Con)
How will the Department assist the businesses that will offer the placements which will be such an essential part of the T-level qualifications?
Anne Milton
We are doing a lot of work in that regard. For instance, we organised a pilot project, run by The Challenge, which highlighted some of the needs of employers. We are working closely with the sector, because it is crucial to the success of T-levels for us to get the industry placements right, and that means building relationships between colleges and those delivering T-levels and local employers.
Clive Lewis (Norwich South) (Lab)
A while ago, like many Members, I was lobbied by staff and students in further education who told me that they and their institutions were at breaking point. At 16, the average further education student receives £1,500 less than the average student aged under 16. When will the Government understand that this investment in our communities needs to happen, and it needs to happen now?
Anne Milton
This member of the Government does precisely understand some of the challenges facing the sector. Some of the money that goes into further education does so through a variety of funding streams. For instance, I have not yet mentioned the £330 million that went into the restructuring of colleges, which has brought about substantial financial savings in some colleges undertaking mergers. However, I am very aware—and the Chancellor is very aware, and the Prime Minister is very aware—of the circumstances of FE colleges.
Rachel Maclean (Redditch) (Con)
I welcome the doubling of funding for apprenticeships, but what conversations has the Minister had with colleges such as Heart of Worcestershire in Redditch about how they can gain a greater share of such funding?
Anne Milton
I could probably bore for England on the issue of apprenticeships. I talk to every college, and ask every college what it is doing. The National Apprenticeship Service will work with any college that wants to set up new apprenticeship training. It is not always easy for colleges to do that, but plenty of support is available if they want to do it, and plenty of money is available.
Paula Sherriff (Dewsbury) (Lab)
At our last Question Time I raised the case of Greenhead College in Kirklees, which has warned that continued cuts in post-16 education are threatening standards. The Minister said that the Department was
“looking at the resilience of the sector.”—[Official Report, 12 November 2018; Vol. 649, c. 14.]
Since then, however, it has been revealed that colleges will be landed with a pensions bill of £142 million by the Treasury. When will the Department stop looking at the resilience of the sector and actually provide further funds?
Anne Milton
We are proposing to fund the teacher pension contribution increase for those FE providers obliged to offer the scheme. I am very aware of that, and I have recently been to Kirklees and have seen the fantastic work that goes on up there. We will continue to raise the issue both with the Treasury and within the Department. The resilience review of FE funding will come forward fairly shortly.
Several hon. Members rose—
Mr Speaker
I think, if memory serves me correctly, and after due consultation, that post 16 the right hon. Member for Mid Sussex (Sir Nicholas Soames) was at cadet school. I feel sure that I speak for the House in saying that we are all convinced he was a very athletic fellow. I call Sir Nicholas Soames.
Sir Nicholas Soames (Mid Sussex) (Con)
Different days, Mr Speaker, I am afraid. May I thank my right hon. Friend for the incredible work and leadership that she has offered, together with officials in her Department, in the reopening of the sixth-form college in Haywards Heath in my constituency? Will she pay tribute to the work of Mid Sussex District Council, whose leadership in this matter has been absolutely exemplary?
Anne Milton
I thank my right hon. Friend for his question, and I am very happy to join him in his tribute. Mid Sussex District Council has shown remarkable leadership, and it just goes to show how much can be achieved when the local authority, colleges and schools in the area—all those with a vested interest, including the county council—get together to find a solution for a problem. I wish them every success.
Mrs Emma Lewell-Buck (South Shields) (Lab)
The shambolic roll-out of special educational needs and disability reforms has meant that nearly 9,000 learners who previously would have been eligible for education and healthcare plans have been denied that support. As a result, college principals have warned the Government that support for learners over 19 is now being met from their college budgets. Surely the Minister knows that, after years of budget cuts, that could push many colleges to the brink of collapse. More than funding, learners with SEND need a Government who are genuinely on their side. When will that happen?
Anne Milton
I reject the suggestion that we are not on the side of young people with SEND. It is disappointing that the hon. Lady put it in those terms. I am very aware of the fantastic work that colleges do with young people with SEND. I have said that I visited a college recently where 400 students had SEND, and the results that they achieve are remarkable.
Luke Graham (Ochil and South Perthshire) (Con)
Mary Robinson (Cheadle) (Con)
The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
The Government are committed to encouraging more young people into STEM education training. We fund a number of programmes to improve teaching standards and participation in those subjects, including the new advanced maths premium and an £84 million programme to improve the teaching of computing.
Luke Graham
Since the SNP would remove Scotland from international maths and science tables such as TIMSS—trends in international mathematics and science study—may I ask my hon. Friend how my constituents can assess STEM education in Scotland to make sure that we are performing in line with the UK and internationally?
Chris Skidmore
As education policy is devolved, issues relating to SAMs in Scotland are a matter for the Scottish Government. However, according to the latest OECD programme for international student assessment from 2015, while performance has remained stable in England and Northern Ireland since 2006, there has been a sustained decline in science in schools in Wales, and in maths in schools in Scotland. Since 2012, Scotland has also experienced a significant decline in its science score.
Mary Robinson
Two software engineering apprentices from Cheadle-based Thales, Nadia Johnson and Jessica Wong, created an outreach campaign designed to provide free engineering resources for young people, teachers and parents. It is hugely important to support young people in these areas. Does my hon. Friend agree that that is a fantastic example of how degree apprenticeships can not only help apprentices to earn and learn but enable them to develop STEM qualifications for the benefit of the wider community?
Chris Skidmore
I congratulate Thales on the work that it does on outreach campaigns for local schools. I was at Thales in Northern Ireland on Friday, and saw for myself the work that it does to raise ambitions for STEM participation in schools. The engineering community does a fantastic job of passing on its passion for the profession, and I welcome the opportunity to hear a further example of that enthusiasm.
Several hon. Members rose—
Mr Speaker
Order. In calling the hon. Member for Nottingham North (Alex Norris), I wish him a very happy birthday—a mere stripling of 35, I believe. I cannot say that I remember such a time in my life.
Alex Norris (Nottingham North) (Lab/Co-op)
Thank you, Mr Speaker. As you can tell, I had a tough paper round. I am very keen for youngsters in my community to take up STEM subjects, but Park Vale Academy is struggling because Carillion went bust a year ago and its school work stopped. A year later, it remains unfinished. This is having a significant impact on the quality of provision for those young people. Different Departments are discussing who should resolve this issue but not agreeing. Could a Minister please step in and get this resolved?
Chris Skidmore
I should also like to congratulate the hon. Gentleman on his birthday. I was there not too long ago. Life comes at us fast, but we have to start somewhere. I would be happy to meet him to discuss the problem he has raised. The Government are committed to supporting STEM teaching in schools, and we have seen £7.2 million-worth of funding annually going into our network of 35 maths hubs. We are also determined to improve science teaching with a national network of 46 science learning partnerships, but let us sit down, perhaps with a celebratory cup of tea, and discuss the issue that he has raised.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Having started surgery when there were hardly any women surgeons and having been told that it was not possible for me to be a surgeon, I have been delighted to speak at Ayrshire College at the #ThisAyrshireGirlCan and Girls with Grit events. Has the Minister read the report by the Royal Society of Edinburgh, “Tapping all our Talents”, which is about getting more women into STEM, and if so, has he considered any of its recommendations?
Chris Skidmore
The hon. Lady is absolutely right to raise the importance of increasing female participation in STEM. Since 2010, we have seen about 26% more women entering STEM A-levels in England, and our efforts to increase skills participation include the Stimulating Physics Network, which delivers on a series of innovative gender-balanced interventions. I would be happy to read the report that she mentions and to discuss it with her. We are determined to ensure that we work together with the science community to raise participation in these crucial subjects.
John Howell (Henley) (Con)
Will my hon. Friend tell us how maths hubs have helped to increase the teaching of mathematics and to enable its better appreciation by students?
Chris Skidmore
The key thing to note about the maths hubs is that we want to spread good practice across the country and increase participation and attainment in post-16 mathematics. In addition to the £7.2 million funding for the 35 maths hubs, we have introduced a £16 million advanced maths support programme and an £83 million advanced maths premium for 16-to-19 providers of up to £600 per additional student. This Government are absolutely determined to increase maths uptake at GCSE and A-level as well as in higher education. It is important for our industrial strategy that we increase maths participation.
Diana Johnson (Kingston upon Hull North) (Lab)
The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
Take-up is a key measure of success for universal infant free school meals, and it has been strong since the introduction of the policy. According to the latest figures, 1.5 million infant pupils—excluding those eligible for benefit-based free school meals—took a lunch on census day. That represents a take-up rate of 86.2%.
Diana Johnson
Some 15 years ago, Hull led the way by pioneering the policy of free healthy school meals to fight poverty and childhood obesity and to improve attainment in the classroom. When the Liberal Democrats came to power in Hull, they scrapped that scheme in 2007, but this was followed by the Labour Government’s pilots and the announcement from the coalition on free school meals for the earliest years. However, given the continuing link between poor nutrition and childhood obesity, is it not disappointing that just-managing families in Hull are seeing a doubling of prices for school meals, all because the austerity funding squeeze on school budgets and councils has not ended in deprived areas?
Nadhim Zahawi
I am grateful for that question. Giving free school meals to infants encourages children to start on the right path to nutritious meals. Those who are eligible will go on to claim free school meals, and it is worth noting that the new eligibility criteria and the protections introduced last April mean that we expect more pupils to be entitled to free school meals by 2022, by contrast to the scaremongering that took place in this place and outside when the policy was introduced.
Mike Kane (Wythenshawe and Sale East) (Lab)
Does the Minister now accept that it was a mistake for his party’s last election manifesto to propose abolishing free school meals? Will he promise that there will be no such proposal ahead of the snap election that looks like it is about to happen and to which his Back Benchers are looking forward so much? Indeed, will he commit to matching Labour’s manifesto commitment to extend universal free school meals to all primary school pupils?
Nadhim Zahawi
I am grateful for that question. It is good to see the shadow Front-Bench team intact after the weekend speculation that they were about to split with the leadership. It is worth reminding the House that we have extended eligibility for free school meals three times while in government, and we continue to be committed to that policy.
Douglas Chapman (Dunfermline and West Fife) (SNP)
The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
Leaving the EU with a deal remains the Government’s top priority and that has not changed, but as a responsible Government we are preparing for every eventuality. We are considering all aspects of how exiting the EU might affect tertiary education. That includes consideration of participation in EU-funded programmes, future arrangements for migration, and access to student finance support.
Douglas Chapman
The Minister will be aware that, per head of population, Scotland’s universities have won more Horizon 2020 funding than any other part of the UK as a whole. It has also outperformed Germany, which has won the biggest overall share of the programme investment. Will the Minister give those successful Scottish institutions a commitment and guarantee that funding for academic research will, at the very least, continue to be maintained at current levels?
Chris Skidmore
On the Government’s commitments on Horizon 2020 funding, I point to my recent appearance at the Select Committee on Science and Technology. We have not only issued a Government guarantee but a guarantee extension to ensure that we protect all current programmes throughout their duration and, in fact, beyond 2020. We are working very closely with other programmes, such as the European Research Council and Marie Skłodowska-Curie actions, which still need to be netted into the guarantee. I absolutely empathise with the hon. Gentleman’s point that we must ensure that the science community is protected under all eventualities.
Charlie Elphicke (Dover) (Con)
Does my hon. Friend agree that, deal or no deal, we must ensure that we get the right balance of funding for tertiary education, universities and further education? Universities have done very well, but further education has experienced an 8% cut in per learner funding since 2010. That has had an adverse effect on East Kent College Group, which teaches 13,000 learners.
Chris Skidmore
In 2017, the Prime Minister instigated a review of post-18 education, which is being led by Philip Augar. That report will be published shortly, in due course. As my hon. Friend says, it is important that we look at the entirety of the post-18 education world, and above all at the opportunities that need to be available for the student. This is not about pitching HE versus FE, but about ensuring that we create learning pathways so that when students wish to achieve a degree or level 4 or 5, the funding and opportunities are in place for them to succeed.
Carol Monaghan (Glasgow North West) (SNP)
This year my son, like very many others, has had the privilege of studying in Europe as part of the Erasmus programme. Last Wednesday, the European Commission gave a guarantee that in the event of a no-deal Brexit, current Erasmus students would be able to complete their studies,
“provided that the United Kingdom continues to honour its financial obligations under the EU budget.”
Will the Minister confirm that in the event of no deal, his Government will honour their obligation and that our young people currently abroad will be able to complete their studies?
Chris Skidmore
We are in close contact and working with the UK National Agency and the European Commission to ensure that in the event that the UK leaves the EU with no agreement in place, the Government’s guarantee on Erasmus will cover the payment of awards to UK applicants for all successful Erasmus+ bids submitted before the end of 2020. Successful bids are those approved directly by the European Commission or by the UK National Agency and ratified by the European Commission. On 29 January, we published on the gov.uk website an updated technical notice stating the current position.
Carol Monaghan
I thank the Minister for that answer. However, Universities UK has expressed serious concerns that, in the case of a no-deal Brexit, the Government will not commit to funding students who plan to study in Europe for the 2019-20 academic year. Unlike the Government, these young people are trying to plan what they are doing next year. Will the Minister confirm, first, whether Universities UK is right to be concerned? Secondly, how can he justify denying our young people such valuable opportunities?
Chris Skidmore
I work closely with Universities UK and with Universities UK International and its director, Vivienne Stern, to allay their concerns. When it comes to the Government’s guarantee, all successful bids that have been approved by the European Commission will be guaranteed funding.
When the House comes to vote again on a deal that will protect Erasmus students not only under the withdrawal agreement but under the political declaration, perhaps the hon. Lady could say to Universities UK that she will now vote for a deal that will protect all Erasmus students.
Angela Rayner (Ashton-under-Lyne) (Lab)
I, too, welcome the fact that half the questions and half the time today have been spent on further education, and I also welcome the new higher education Minister to his place. I believe he is a scholar of Tudor England, which I suspect will serve him well considering how long higher education Ministers last in this Government—it is about the same as Henry VIII’s wives.
Will the Minister confirm that figures show there are 36,000 academics from other EU countries working in UK higher education, nearly one in five of the total academic workforce? Given the damage that a disastrous no-deal Brexit would clearly do to the sector, will he promise the House today that he will never be part of a Government who allow that to happen?
Chris Skidmore
I refer to myself as a scholar with a small s, but when it comes to Henry VIII’s wives, I hope to see myself as more like Catherine of Aragon, who managed to last, I think, 27 years, rather than one of the later wives.
When it comes to ensuring protection for EU students, we have announced guarantees on student finance for EU nationals irrespective of the EU outcome. We have also provided a reassurance that everyone on a course will continue to be eligible for home fees status and student finance support from Student Finance England for the duration of their course. I believe that, even with a no-deal outcome, the Government have done the responsible and right thing, and I hope the hon. Lady will now do the responsible and right thing and walk through the Lobby with me on 14 February in support of the Prime Minister’s deal.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Secretary of State for Education (Damian Hinds)
The Department, of course, measures the progress that pupils make between the end of primary education and their GCSEs, and those data can help schools to identify where and when to put additional support in place.
Mr Sheerman
This is nothing short of a national scandal and a national disgrace, because we all know where we lose these talented children. We lose them in this transition period, and who do we lose? Poorer children from deprived backgrounds. When will we have a big beast on the Government Benches who will see this as a national disgrace and do something about it?
Damian Hinds
I assume the hon. Gentleman means the transition between years 6 and 7, to which I acknowledge we have not paid enough attention—both before and after 2010. That is one of the reasons why we are looking at this in the Opportunity North East programme, and in other piloting opportunities, but it is not the only thing to look at. I am pleased to be able to say that the attainment gap between disadvantaged children and their peers has shrunk both at key stage 2 and key stage 4, but there is much still to do.
Lucy Powell (Manchester Central) (Lab/Co-op)
Commiserations for yesterday’s football, Mr Speaker; I am sorry.
The recent University of Bristol report shows that 40% of so-called underperforming secondary schools would actually be out of category if the progress 8 measure were more rounded. That is in addition to the Education Policy Institute study that found a very strong correlation between the number of deprived children and a school’s Ofsted rating. Given the high-stakes accountability regime in schools, is it not about time we had a much more profound and deeper understanding of what makes a good school, instead of just hammering, time and again, the most challenging schools that are doing a very good job in difficult circumstances?
Damian Hinds
Not at all. The progress 8 measure is materially better than the main measure in place during the last Labour Government, the “five-plus C-plus” measure at GCSE. Progress 8 measures the progress of all children, and it is right that we have high expectations for all children. Progress 8 is a much better measure.
James Cartlidge (South Suffolk) (Con)
The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
The Office for Students holds providers to account for delivering well-designed courses that offer successful outcomes for all students. The teaching excellence and student outcomes framework —TEF—is supporting student choice, and we are developing new digital tools to help prospective students make choices based on graduate outcomes data.
James Cartlidge
Does my hon. Friend agree that parents probably now take for granted the fact that we have Ofsted, which makes public and readily available the performance of schools, enabling parents to make choices for their children’s futures? Does he agree that we want the OfS to have a similar role, so that we embed the idea of potential students making choices on the basis of clear data and so drive up standards at the higher education level?
Chris Skidmore
Absolutely. I look forward to working with the OfS in future, above all to help deliver the best possible outcomes for students, based on the publication of transparent data. The OfS requires providers to meet high-quality standards, which are assessed by the Quality Assurance Agency for Higher Education. As I say, we have introduced the TEF to identify and reward institutions that deliver high-quality teaching and positive student outcomes.
Louise Haigh (Sheffield, Heeley) (Lab)
How many universities are currently considered at risk of insolvency? Does the Minister agree that allowing universities to fail would improve neither quality, nor choice? If he does agree with that, will he give us a categorical assurance that that will not happen on his watch?
Chris Skidmore
All universities are autonomous institutions that have the independence to be able to govern their own finances. The OfS is currently going through a process of re-registration of certain institutions, and I hope that all institutions have put in place sound financial measures to continue for the future. If that is not the case, the Government are working with the OfS towards establishing student protection plans, to ensure that all students’ education will not be harmed.
Mr Philip Dunne (Ludlow) (Con)
The Minister for School Standards (Nick Gibb)
Through a pilot project in 72 schools and trusts, our new team of school resource management advisers have so far identified more than £35 million of potential savings and revenue generation opportunities. We are continuing to work with these schools to help them realise these savings.
Mr Dunne
I am grateful to my right hon. Friend for that answer. Do any of these pilot areas include rural parts of the country, such as south Shropshire, where my constituency is? We are suffering from declining school rolls as a result of the birth rate, and the school efficiency advisers could be very helpful in aiding schools to cope with that problem.
Nick Gibb
Of course we recognise the importance of rural schools, the role they play in their communities and the challenges they face. That is why the national funding formula includes £25 million specifically to provide support to small schools in sparse areas. Early evidence from the pilot projects shows that school resource management advisers can help schools to review their longer-term budget and curriculum planning approach to help them adjust their costs over the long term if income falls due to declining pupil numbers.
Thangam Debbonaire (Bristol West) (Lab)
Schools in my constituency say there are simply no more efficiencies to be made—there are no more savings to be made, and there are no more teachers they can sack or make redundant without affecting children’s education and care. So what does the Minister have to say to schools in my constituency about the efficiencies they are supposed to make to keep functioning?
Nick Gibb
Since 2017, we have given every local authority more money for every pupil in every school. We are spending record amounts of money on our school system—the figure will be £43.5 billion next year, which is a record for those schools—but we do understand the cost pressures that schools are under, which is why we have this cadre of school resource management advisers, who can help those schools. We also have a series of national buying schemes, whereby we can buy things such as insurance, energy and computers far more efficiently to make savings in the non-staff expenditure that schools have to incur.
Priti Patel (Witham) (Con)
The Minister for School Standards (Nick Gibb)
By 2019-20, schools in Essex will receive 3.3% more funding per pupil compared with the level in 2017-18—this is an additional £141 per pupil or £48.7 million in total. In 2019-20, therefore, Essex will receive £855.8 million in school funding—a record amount.
Priti Patel
Notwithstanding the Minister’s response on the funding that Essex will receive, the county council is seeking to transfer funds from the schools block to the high-needs block, as there is not enough money for children with special educational needs. My right hon. Friend the Minister knows that any transfer of funds will have a knock-on impact on educational funding throughout Essex, so will he work with me and the county council to address this issue?
Nick Gibb
I am very happy to do so. I know that my right hon. Friend takes a particular interest in special-needs education in her constituency. High-needs funds for Essex were increased to £139.1 million this year, and will rise to £141 million next year, but she is right to point to the increase in pressures on the high-needs budget, which is why my right hon. Friend the Secretary of State announced in December an extra £250 million over two years. We will work closely with the Treasury as we prepare for the next spending review to ensure that we secure the best funding settlement possible to address this and other school funding issues.
Mr Speaker
I am very glad to hear it. I should add, in parenthesis, that the county is of course also home to the life-transforming University of Essex, of which I am very fortunate to be chancellor.
Vicky Ford (Chelmsford) (Con)
And it is also home to the Anglia Ruskin University in Chelmsford.
Schools in my constituency in Essex were delighted to see in the NHS long-term plan that the NHS intends to help schools with funding for mental health support. How do my local schools access these funds?
Nick Gibb
My hon. Friend raises an important point. We take young people’s mental health very seriously, which is why we recently published the Green Paper on mental health for children and young people. We will fund and place in every school a designated mental health lead, supported by mental health support units, which we are rolling out to trailblazer areas as we speak. That is how my hon. Friend’s local schools will be able to access those funds.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
We plan to spend £3.5 billion this year to deliver our funded early-years entitlements. We recognise the need to keep our evidence base on costs up to date, and continue to monitor the provider market closely through a range of regular and one-off research projects.
Dr Huq
According to the Sutton Trust, 1,000 children’s centres have closed over the past decade. Now, West Twyford children’s centre, which is a small centre in an isolated area, cannot continue under the current funding arrangements. That will leave the 295 families it helped last year, 123 of which are among the 30% most deprived families in the country, in the lurch. Will the Minister come with me, along with headteacher Rachel Martin, to see the great work that the centre does—it is not very far from here—and can we thrash out a way forward from this unsatisfactory situation? The area has had local government cuts of 64%. We need to spare these vital centres the axe.
Nadhim Zahawi
I will happily meet the hon. Lady, and even join her, if my diary permits, to have a look at that work. I have seen many local authorities throughout the country deliver outreach programmes to the most disadvantaged families, who actually do not necessarily tend to come into bricks-and-mortar buildings. There are models that deliver a better outcome for those families than just investing in bricks and mortar.
Huw Merriman (Bexhill and Battle) (Con)
Two of my childcare providers have closed, citing the requirement to pay business rates as the final nail for them. In Scotland and Wales, private childcare providers are not charged business rates. Will the Minister look to see what can be done, because it surely cannot be right that we tax space which is beautiful for young people to grow and be nurtured in?
Nadhim Zahawi
To my knowledge, two local authorities have done the same thing in England, and I urge other local authorities to look into what they can do to help childcare providers to cope with business rates.[Official Report, 21 March 2019, Vol. 656, c. 9MC.]
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Since 2010, the number of state nurseries in deficit has soared. One in five is now in the red and dozens have had to close. Transitional funding will soon run out and they face serious uncertainty about their future. Last week, I visited Harewood nursery, a much-loved maintained nursery in Pontefract. I was deeply troubled when the headteacher told me that without a cash injection the nursery faces imminent closure. Parents are running a GoFundMe page to keep the doors open. Will the Minister give us an assurance today that maintained nurseries will get funding, at least to tide them over until the spending review, before the end of the current financial year?
Nadhim Zahawi
The hon. Lady will know that we had a very good debate on that matter last Thursday, when 13 hon. and right hon. Members spoke from the Back Benches about the provision of maintained nurseries. We are considering how best to handle the transitional arrangements for a number of areas, including for maintained nurseries. My message again is that it would be premature of local authorities to make decisions on maintained nurseries before the spending review, but we are considering transitional arrangements.
Mr Speaker
I was hoping that the hon. Gentleman would shoehorn his inquiry into question 15, because he cannot leapfrog question 16, which would displace it. I thought that if he applied his little grey cells he would realise that the subject matter of his own inquiry was pertinent to that of question 15. I should have thought that a scholar of his repute was capable of making that mental calculation, but if he wants to wait, he will have to take his chances. [Interruption.] Oh, very well.
Mr Speaker
I do not know whether it is his birthday, but he has made a bit of a mess of the matter. Never mind, we will seek to accommodate him at a later stage in our proceedings.
Daniel Zeichner (Cambridge) (Lab)
The Minister for School Standards (Nick Gibb)
Our expectations of effective governance in multi-academy trusts are set out in the governance handbook, and they include the skills, knowledge and behaviour that boards need to demonstrate to be effective. We are supporting trustee effectiveness by allocating a higher level of funding to train multi-academy trust boards and by having regular governance conversations with multi-academy trusts.
Daniel Zeichner
In Cambridgeshire, as elsewhere, the world of multi-academy trusts is opaque and wholly unaccountable with schools looking over their shoulder to see whether they are the next to be picked off. These trusts receive large sums of public money, but are effectively self-perpetuating oligarchies. When will the Secretary of State do the right thing and pass back control to the people who pay for them—the local citizens?
Nick Gibb
These multi-academy trusts are driving up academic standards. In primary schools, disadvantaged pupils in MATs make significantly more progress in writing and maths than the average for disadvantaged students, and the gap in progress between disadvantaged and non-disadvantaged primary school pupils is smaller in MATs than the national average. I could go on with more examples of how MATs are raising standards in our country. I refer the hon. Gentleman to the MAT performance table and he will see which MATs are the highest performers.
George Freeman (Mid Norfolk) (Con)
The Secretary of State for Education (Damian Hinds)
I am pleased to say that the attainment gap is down by 13% and 9% respectively at ages 11 and 16. This year, almost £30 million in pupil premium is allocated to schools in Norfolk, and schools, of course, have the work of the Education Endowment Foundation on which to draw.
George Freeman
I am grateful to the Secretary of State for that answer. Chapel Green School in Norfolk is one of the country’s finest institutions for the teaching of those with the most severe educational needs. I am grateful that I can put on record the thanks of the school and all its governors for the major funding from the Government to move from its cramped facilities to its state-of-the-art facilities. The school has reported that one problem is that, because of a lack of skilled staff in the mainstream sector, it is massively oversubscribed. I invite the Secretary of State and our former Minister, Mr Timpson, who I know are working on this, to come to Norfolk, meet the team and discuss that wider problem.
Damian Hinds
My hon. Friend has touched on a really important and wide-ranging issue. First, I am grateful to him for mentioning Chapel Green School and the excellent work that it does, and also our investment in its new facilities, but he is also right that, in thinking about high needs and special needs, we also need to think about how teachers and others in mainstream schools are equipped. That is one reason we are looking at what happens in initial teacher training and with the specialist qualification, and also the key role of educational psychologists in that regard.
John Woodcock (Barrow and Furness) (Ind)
Figures released last week show that only 15% of school leavers in the Furness area go on to higher education. That is the lowest in the country. Will the Secretary of State or the Universities Minister meet me to see how we can address that gap? We are really proud of our apprenticeship scheme, but a generation of talent is being lost to the country because of this.
Damian Hinds
I am grateful to the hon. Gentleman for his question and he is absolutely right that we all need a blend in our local areas—apprenticeships, further education and higher education. My hon. Friend the Member for Kingswood (Chris Skidmore) or I would be delighted to meet him. I will just mention, though, that universities these days have very large sums of money available for access and participation plans, and they should be reaching out into all communities, including in Furness, to make sure that all children have the opportunity to make the most of those if they can.
Mr Speaker
We will accommodate the hon. Lady in topical questions if we can.
Sir Nicholas Soames (Mid Sussex) (Con)
The Secretary of State for Education (Damian Hinds)
Last week, we launched the Department for Education’s integrated recruitment and retention strategy for teachers to attract and keep even more inspirational people in this most vital of careers. We continue to make progress on the major upgrade of technical and vocational education, including through higher-quality apprenticeships and T-levels. This week is Children’s Mental Health Week, and I am pleased to be able to announce the start of a major trial to look at ways to improve support for young people’s mental wellbeing. The trial—part of our integrated and wide-ranging approach on mental health—will take place in up to 370 schools across England and will be one of the largest such trials in the world.
Sir Nicholas Soames
I thank my right hon. Friend for that comprehensive answer. I have already spoken to the Under-Secretary of State for Education, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), about the excellent St Wilfrid’s Catholic Primary School in Burgess Hill in my constituency, which I visited recently. The school has an outstanding reputation for supporting pupils with special educational needs. It takes in more children with SEN than it is properly funded for and thus finds itself with a budget shortfall through no fault of its own, other than the desire to do good. What further help can my right hon. Friend give to that school, given its outstanding work in this vital field?
Damian Hinds
I pay tribute to the school for its work and I would be happy to meet my right hon. Friend to discuss the matter further. There was some extra funding for high needs in the package of measures that we put forward in December; I also committed to looking at some of the wider issues, including the way funding works structurally, to ensure that the resourcing for those needs is fairly spread among schools. I will also address some of the training and development issues that I mentioned in response to my hon. Friend the Member for Mid Norfolk (George Freeman).
Angela Rayner (Ashton-under-Lyne) (Lab)
Does the Secretary of State agree with today’s call from the Children’s Commissioner for new powers to deal with the alarming number of pupils falling off schools rolls? May I politely suggest to him that he implement Labour’s proposal to ensure that schools are accountable for the results of pupils who leave their rolls until they find a new permanent place?
Damian Hinds
There are a number of interrelated issues in the subject that the hon. Lady has rightly raised and that the Children’s Commissioner was talking about today. I am, of course, concerned whenever there is off-rolling, which is not legal. These things must be done properly. I am also concerned about the extent to which we may not know how some children are being educated, and so on. That being said, there are children who are being home educated brilliantly by amazingly dedicated parents, and we have to acknowledge and respect that. As the hon. Lady will know, a review of exclusions is under way. We will report back on that in due course, as well as on some of the wider issues.
Mr Marcus Jones (Nuneaton) (Con)
The Minister for School Standards (Nick Gibb)
I am delighted to warmly congratulate the teachers in my hon. Friend’s constituency of Nuneaton on the significant improvement in key stage 2 results. Of course, we need to do more to raise standards further, which is why we are investing £76 million to raise the standard of maths education through the 35 maths hubs referred to earlier by my hon. Friend the Minister for Universities, Science, Research and Innovation. We are also spending £26 million on developing 32 schools across England into English hubs, which will take a leading role in supporting schools to improve their teaching of early language and reading.
Jo Platt (Leigh) (Lab/Co-op)
Damian Hinds
The hon. Lady is absolutely right about the central importance of the early years when it comes to social mobility. We know that the gaps between the rich and the poor develop very early on, which is one reason this Government are spending more than any previous Government on early-years education and childcare. There are 154,000 two-year-olds benefiting from early-years education in a programme that was never available to any child before 2010. But we can do more. I want to ensure that we integrate our approach with helping to support parents in what happens at home because, particularly in the very early years, what happens at home is crucial to what happens later at school.
Andrew Rosindell (Romford) (Con)
Damian Hinds
First, I thank the staff at Squirrels Heath for what they do. I totally acknowledge the pressures there are on school budgets and I know that it is difficult managing these budgets. It is also true that, compared with other countries in the world, we spend relatively high amounts on state education at both primary and secondary levels. However, I will of course be very happy to meet my hon. Friend.
Gareth Thomas (Harrow West) (Lab/Co-op)
The Minister for Apprenticeships and Skills (Anne Milton)
I visited St Dominic’s only last week, as the hon. Gentleman will be aware, and was astounded at the brilliant work it is doing. I am very aware of the problem facing Catholic sixth-form colleges, as is the Secretary of State, and we are considering it.
Charlie Elphicke (Dover) (Con)
Nick Gibb
I would of course be delighted to join my hon. Friend in congratulating the teachers and pupils at Eythorne Elvington Community Primary School on their exceptional performance in last summer’s standard assessment tests. Ensuring that 100% of its pupils are reaching expected standards in reading, writing and maths will help those pupils to be ready for the demands of secondary school. In addition, 56% of pupils at Eythorne Elvington qualified for free school meals at some point in the past six years, showing that high expectations and great teaching can deliver high standards for all pupils, regardless of background.
John Mc Nally (Falkirk) (SNP)
Anne Milton
It is absolutely critical that we get the construction workforce we need. We are very aware of that. The Construction Industry Training Board, now with a new chief executive and chairman, is doing great work in this sector. It is absolutely critical that we use apprenticeships to encourage young people to go into construction—not just at levels 2 and 3, but also progressing upwards.
Antoinette Sandbach (Eddisbury) (Con)
Schools in Cheshire are still underfunded compared with more urban counterparts, especially in London. Will the Secretary of State agree to meet me and a number of Conservative councillors from Cheshire East Council, and Cheshire West and Chester Council, to discuss how we can fix this historical inequality?
Damian Hinds
There are differences between Cheshire and London, including in the composition of the population. For example, the proportion of children on free school meals is materially higher in London than in Cheshire, and there are some cost considerations, but I will of course, as ever, be more than happy to meet my hon. Friend.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
Off-rolling of pupils is illegal. Edward Timpson’s review is in progress and will report very soon. Exclusion from school must not mean exclusion from education. Our priority in the Department is to make sure that AP—alternative provision—works for those children who cannot go to mainstream school.
James Morris (Halesowen and Rowley Regis) (Con)
Halesowen College in my constituency recently held an apprenticeship awards evening to celebrate apprenticeships in the Black Country. With projects such as High Speed 2 and the extension of the metro coming down the line in the west midlands, does the Minister agree that we need to redouble our efforts to get young people into apprenticeships, to take advantage of those opportunities?
Anne Milton
May I take this opportunity to wish my hon. Friend a very happy birthday? New industry-designed standards, increasing off-the-job training, rigorous end-point assessments and strengthening the register of apprenticeship training providers all mean that doing an apprenticeship these days gives young people the opportunity to get high-quality qualifications, with a great life and a fabulous career ahead of them.
Mr Speaker
On the matter of birthdays, it is also the birthday of the hon. Member for Coventry South (Mr Cunningham), and I see that he is seated next to another birthday boy, the hon. Member for Nottingham North (Alex Norris), which is very encouraging—birthday boys sitting together.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Nadhim Zahawi
My right hon. Friend has read the report, and there is cross-Government work through the serious violence taskforce. As I said, exclusion from school must not mean exclusion from education. It is vital that pupils who enter alternative provision following an exclusion have a high-quality education, which is why we are reforming AP.
Luke Hall (Thornbury and Yate) (Con)
Will the Secretary of State join me in congratulating Yate Academy on its outstanding progress on its Progress 8 scores, which are now at 0.69—its best ever result? Will he meet me and a delegation of headteachers from south Gloucestershire to talk about how we can continue to drive up educational standards across our area?
Nick Gibb
I certainly want to congratulate Yate Academy on the improvements it has made in the progress of pupils at both primary and secondary phases, and particularly its significant improvement in the proportion of pupils taking the EBacc combination of core academic subjects. We are committed to ensuring that support is available for schools that require it, and teaching schools are strong schools that work with others to provide high-quality training and development for teachers.
Jim Shannon (Strangford) (DUP)
Taking into account the immense pressure that staff are under, torn between a desire to enhance their children’s education through after-school clubs and their obligation to the unions, will the Minister outline what steps the Department is taking to strengthen the teaching profession?
Nick Gibb
On 28 January, we launched the teacher recruitment and retention strategy, which was designed collaboratively with the education sector. Its centrepiece is the early career framework, which will underpin a fully funded two-year package of structured support for all teachers in the first two years of their career. We are also building a career structure for teachers who have more experience. It is a very good package, designed to increase retention and help with recruitment.
Ms Esther McVey (Tatton) (Con)
Will the Secretary of State look again at school funding in rural areas, particularly Cheshire, and push for further funding at the spending review? Will he commit to come to Tatton, to meet some of my headteachers?
Damian Hinds
I am conscious of the issues around rural and smaller schools. We have made adjustments for that in the national funding formula, but I am happy to visit Tatton and meet some headteachers.
Rachael Maskell (York Central) (Lab/Co-op)
Over 50% of York children from disadvantaged backgrounds are not school-ready by the age of five, and only 46% of those qualifying for free school meals are ready by the end of year 1. York has the highest attainment gap in the country. We also receive the worst funding for our schools. What correlation does the Secretary of State draw between the two, and will he meet me to discuss how we can improve the chances of children in York?
Damian Hinds
I am taking a lot of meetings today, but I will take one more, because if the hon. Lady has some good ideas, I am happy to hear them. She is right to identify the issues around school readiness, and this is at a time when there is more early-years nursery provision than ever before. We need to work harder on this, and I would be delighted to hear from her.
Ben Bradley (Mansfield) (Con)
I know the Minister for Apprenticeships and Skills is aware of concerns in Mansfield about the future of West Nottinghamshire College. Despite its strong record historically, it now finds it has overreached financially and made capital investments that were not sustainable. Will she assure my constituents that we have seen good changes in the management and new governance there, that the core purpose of the college in delivering local provision is secure and that we will see accountability for the problems that have happened?
Anne Milton
I know that my hon. Friend has campaigned very hard for West Notts College, and the Skills Funding Agency and the Further Education Commissioner’s office are working very closely with it. What matters now is that West Notts College has the opportunity to do well what it should do, which is offer excellent further education to local people.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
The excellent school food plan recommended in 2013 that Ofsted inspectors should consider the way a school promotes healthy lifestyles. We have had two childhood obesity reports that talk about Ofsted evaluating how schools support children to keep themselves healthy, yet there is no mention of that in the Ofsted inspection framework. Will the Minister commit today to implementing an Ofsted-led healthy rating scheme as soon as possible?
Nadhim Zahawi
We are working with Public Health England to update school food standards. This will focus on reducing sugar consumption and include guidance to caterers and schools. We are testing delivery models as we continue to explore the most effective way to deliver the healthy schools rating scheme, building on the successful resources that are already available.
Petition
Patrick Grady (Glasgow North) (SNP)
There are bank branch closures happening up and down the country from a large number of different outlets. Today’s petition concerns the Bank of Scotland in St George’s Cross in my constituency. Bank of Scotland is one of the banks that is still part-owned by the taxpayer, which is why it is even more disappointing that these closures continue to happen and continue to have such a negative impact on local communities and economies.
The petition states:
The Petition of Residents of Glasgow North,
Declares that proposed closure of St George’s Cross branch of the Bank of Scotland in Glasgow will have a detrimental effect on local communities and the local economy. The petitioners therefore request that the House of Commons urges her Majesty’s Treasury, the Department for Business, Energy and Industrial Strategy and the Bank of Scotland to take in account the concerns of petitioners and take whatever steps they can to halt the planned closure of this branch.
And the petitioners remain, etc.
[P002323]
Knife Crime Prevention Orders
(5 years, 9 months ago)
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Vernon Coaker (Gedling) (Lab)
(Urgent Question): To ask the Home Secretary if he will make a statement on knife crime prevention orders.
Mr Speaker
Before we proceed further on this matter, let me say this. I warmly welcome the Parliamentary Under-Secretary of State for the Home Office, and I am sure I speak for colleagues in saying that we look forward to her characteristic competence and commitment at the Dispatch Box. That said, let it be crystal clear that the Secretary of State for the Home Department should be in this Chamber answering this urgent question.
I know the right hon. Member for Bromsgrove (Sajid Javid), and I have known him since he entered this House in 2010. For what it is worth, I am sure he is a very clever fellow, and on a one-to-one basis I have always found him unfailingly courteous. However, for him to fail to be in the Chamber on Thursday to make a statement about his new anti-knife crime initiative was at best ill judged and at worst rank discourteous to the House of Commons. If the right hon. Gentleman was able to find time to brief or to ensure that others briefed the newspapers on his behalf, and he managed to scuttle off to do a radio interview and then to pop up on “The Andrew Marr Show” yesterday to give viewers and the nation the benefit of his views, the right hon. Gentleman should have been here.
If the Secretary of State for the Home Department aspires to something a little more elevated than to be a jobbing functionary of the Executive branch and wants to be a serious and respected parliamentarian, he has to develop antennae and respect for the rights of the House of Commons. In the circumstances—and he has had notice that he should be here—it is both ill judged and rude of the Secretary of State for the Home Department to send his, admittedly brilliant, junior Minister into the Chamber when he should be here. I am sorry; I take no view on the policy because that is not for the Speaker to do, but in procedural terms it really is time that he upped his game.
The Parliamentary Under-Secretary of State for the Home Department (Victoria Atkins)
Mr Speaker, if I may, I will address that point before we move on to the very important issue at hand. I know that the Home Secretary means absolutely no discourtesy—he is a regular and assiduous Minister. I hope that I will be able to answer questions today in a way that meets with the House’s approval. Please do not think that this in any way undermines our commitment to this important topic. I am sure that my right hon. Friend will hear what you have said, Mr Speaker.
Knife crime is devastating for victims, families and our communities. The Government are determined to do all they can to tackle it, along with our partners across civil society, including local government and those in education, health, policing and the charitable sector. We have a comprehensive programme of action set out in the serious violence strategy to tackle knife crime and prevent young people from being drawn into crime and violence. This public health approach includes support for prevention projects through the early intervention youth fund and the anti-knife crime community fund, support for police weeks of action under Operation Sceptre, and our ongoing media campaign #knifefree to encourage young people to understand that there are alternatives to carrying knives.
We will also be building on longer-term intervention work, with the new £200 million youth endowment fund, and consulting on a new legal duty to underpin multi-agency work to tackle serious violence. However, it is also vital that the police have the powers they need. That is why we listened when the police—those on the frontline in confronting knife-carrying young people—told us that they required additional powers of intervention to deal more effectively with people being drawn into knife crime, and we have acted.
The police asked us to introduce knife crime prevention orders to reach young people before they are convicted of an offence. These orders are aimed at young people who are at risk of engaging in knife crime, at people the police call “habitual knife carriers” of any age, and at those who have been convicted of a violent offence involving knives. The orders will enable the courts to place restrictions on people, such as curfews and geographical restrictions, as well as requirements such as engaging in positive interventions. The intention is that the new orders will be preventive and will support those subject to them in staying away from crime.
We have therefore tabled amendments to the Offensive Weapons Bill, which is currently before the other place. The amendments were tabled last Tuesday, and in line with parliamentary convention, a letter was sent to all noble peers who spoke at Second Reading, as well as to the Chairs of the Home Affairs Committee, the Joint Committee on Human Rights and the Delegated Powers Committee, and to shadow Ministers from Her Majesty’s Opposition and the Scottish National party. A copy of the letter was placed in the Lords Library, and a copy is being placed in the Commons Library.
The amendments to the Offensive Weapons Bill, which introduce these orders, are due to be considered in the other place in detail this Wednesday. The Bill will, of course, return to this House after it has completed its passage through the Lords, and I hope all Members on both sides of the House will lend their full support to this important new preventive measure when the Bill returns to this place.
Vernon Coaker
I appreciate the Minister being here, but this is a matter of national significance, which has been raised in this House by Members on both sides. The Home Secretary has one of the most important positions in Government; he is looked to by the public of this country to be a lead in tackling these issues—not just in London, but right across the country. Time and time again in this Chamber, I and others have asked where the Home Secretary is. I tell the Minister this: the British public will look at this, and they will find it incredible—absolutely incredible—that the Home Secretary can appear on the television and go to various places to address meetings, but that he cannot turn up in this Chamber to explain an initiative that he has put forward. The public of this country will be asking the simple question: where is he? I said on Thursday that he was invisible; he is not just invisible—he has vanished from this Chamber. It is not good enough, and something needs to be done.
According to the police, 10,000 children are involved in county lines. Knife crime offences across the country are at record levels. Homicides are at record levels. Children are being slaughtered on the streets and these orders are what the Government come forward with. It is simply not good enough.
Why is it necessary to have knife crime prevention orders when it is already a criminal offence to have a knife in public without good reason? The Minister talked about “habitually” carrying a knife. For goodness’ sake, it is not habitual. Something needs to be done! Instead of introducing new laws, why does not the Minister, with others, support the police to enforce existing laws? Why have we seen a reduction in police numbers, when her own evidence tells her that they make a difference in tackling this issue? Is it not the case that knife crime prevention orders merely paper over the cracks? Of course we want to prevent young people from becoming involved, but where are the youth services? Where are the street workers? Where are the people out there working with young people who have been excluded from school to prevent them from getting into trouble in the first place?
How will knife crime prevention orders tackle the huge crisis facing our country? Instead of introducing the orders, the Home Secretary should be chairing Cobra. This is a national emergency. This is a national crisis. Up and down the country people will wonder why the Government are not using the full force of the state to tackle it. They need to help the young people who are having problems with knife crime and tackle the criminal gangs who ruthlessly exploit them.
MI5, GCHQ, MI6 and the National Crime Agency, led by the Home Secretary, should be reporting regularly to Parliament. Anybody would of course welcome serious crime prevention orders if they helped, but the British public and Members will all want to know, from the Minister and from the Government, why the state will not respond with ruthlessness and determination to take on the criminal activity that is putting so many of our young people in danger and ruining the lives of countless people in communities across the country. If there was a terrorist act, the state, quite rightly, would respond. I tell the Minister this: this is a national emergency. The lives of countless families and young people are being ruined. We need to step up to the mark. The British public demand no less of all of us.
Victoria Atkins
I thank the hon. Gentleman for his impassioned question. He will know, from the discussions we have constantly on this topic, that the Home Office is a team. Colleagues will have noticed the Policing Minister sitting next to me. This is a team effort, not just in the Home Office but across Government and across civil society.
We are introducing the orders because at the very end of August last year the police asked us for a preventive order to get to a very small cohort of children, who have not yet been convicted of criminal offences but on whom the police have received intelligence, in an effort to intervene before they get a first conviction, with all the terrible repercussions that can have both for the victims of any crimes they commit but also for their own life chances. These orders are about prevention. We want to give the police the power, through the Bill, to seek an order from a court, on a civil standard of proof, so that the state can wrap its arms around children if schools and local police officers think they are at risk of carrying knives frequently. The orders mirror similar prevention orders we have, such as sexual harm prevention orders, by placing negative and positive requirements on children who do not necessarily have a criminal conviction, to try to drag them away from the gangs that the hon. Gentleman rightly identifies as being central to this criminality.
Last week, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) invited me to his constituency. I heard from a group of people who are on the frontline tackling these crimes how young vulnerable children are being targeted by criminal gangs. This is why we have the serious violence strategy. This is why we have the cross-party serious violence taskforce. This is why we have the serious organised crime strategy. We want to tackle not just the exploitation of children, but the criminals behind it. We can agree on one thing, which is that we all want this to stop. We will achieve that by working together and by intervening early.
Boris Johnson (Uxbridge and South Ruislip) (Con)
I congratulate my hon. Friend and the Home Secretary on what they are doing to tackle this very difficult problem. There are no easy answers, but I remind her that 11 years ago, the Met instituted Operation Blunt 2, which, in the course of about 18 months, took 11,000 knives off the streets of London and was one of the factors that led to serious and sustained falls in knife crime and indeed, in the murder rate. Does my hon. Friend agree that the biggest supporters of stop and search are the families who might otherwise face a lifetime of pain, and does she not agree that the present Mayor of London is therefore grotesquely pessimistic in saying that this will take 10 years to resolve?
Mr Speaker
I think the right hon. Gentleman is telling us that he was doing jolly well.
Victoria Atkins
I am bound to say that I agree with my right hon. Friend, if he is congratulating himself. I thank him for his contribution and of course recognise the work that he did as Mayor of London. I sit here alongside the Policing Minister, who is also the Minister for London, and the joined-up work between the Government and the Mayor of London’s office is critical in tackling this. Stop and search is a vital tool in the police’s armoury, but it is not the only answer. That is why our approach on early intervention—including the Home Secretary securing £200 million from the Chancellor recently to set up the long-term youth endowment fund—will, I hope, absolutely give the results that the House expects. However, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) is absolutely right: there is no room for complacency, which is why, in addition to these very long-term projects, we also have much shorter-term, immediate projects such as knife crime prevention orders, which will have a very real effect very quickly on the streets of our cities and rural areas.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Does the Minister accept that with knife crime at record levels, the public at home will be very disappointed that the Home Secretary could not find the time to be in the Chamber today for this urgent question? Opposition Members appreciate that knife crime prevention orders are an attempt to intervene without criminalising, but does the Minister accept that the problems of knife crime and other types of violent crime are as much about capacity as the law? When we say “capacity”, it is a question of not only the number of police officers, which has dropped under this Government, but the capacity in the youth service. I was in Wolverhampton last week, where the youth service has been decimated. People said to me over and over again that they report those they believe to be drug dealers and what they believe to be young people carrying knives, and they get no response because of a lack of police capacity.
Does the Minister accept that although the announcement of knife crime prevention orders was preceded by the Home Secretary’s declaration in October last year that the Government are adopting a public health approach to violent crime, it is simply not clear how knife crime prevention orders fit into that? How is this a public health approach that is supposed to address the underlying causes as well as tackling criminals? We are told that suspects as young as 12 will be on curfew and deprived of their liberty and access to social media. These are only suspects. Are any of these measures based on evidence? If so, what is that evidence? Will the new orders be subject to appeal or review? In addition, what measures are in place to ensure that those deprived of internet access do not simply open up another account using different personal details?
The head of the violent crime taskforce said
“we cannot enforce our way out of this—prevention and intervention is the key”.
We do not reject out of hand these knife crime orders. The House will study them when they come to Committee, but we want to see more from Government than token changes in the law. We want to see real intent and real resources behind prevention and intervention, because the lives of young people in our cities depend on that.
Victoria Atkins
I am pleased the right hon. Lady appears to support these orders. The Mayor of London also supports them. This is what I mean when I talk about a cross-party consensus. People out there, including the bereaved families I meet, such as the Goupall family, whom I met last week, are not interested in the back and forth over the Dispatch Box; they want us to work together to stop this happening, and so I welcome her support for the orders.
As I am sure the right hon. Lady knows, having read our serious violence strategy, we have set out the factors that we believe underpin the rise in serious violence. We note, for example, that other countries across the world have seen similar rises. Last year, we held an international conference to discuss with other law enforcement agencies and healthcare providers across the world what they were doing to tackle serious violence, because of course we want to learn from other people’s experiences.
On intervention, we are as one; we want to intervene earlier. Families worried about their children and young people walking around, whether in London or further afield, want us to deliver results. That is the absolute reason for the strategy and the serious violence taskforce, which, as I said, is a cross-party initiative—I am extremely grateful to Members across the House for helping us with it.
I should have said to the hon. Member for Gedling (Vernon Coaker) that I very much take on board his point about the House being updated more regularly on what we are doing. I am conscious that we are busy working quietly in the background with our partners, and I agree that we should inform the House more, so I undertake to do so.
Dominic Raab (Esher and Walton) (Con)
I welcome my hon. Friend’s answer to the urgent question. We need to be unflinchingly robust on enforcement, but we also need to draw youngsters away from the risks of knife crime in the first place. Having served as a volunteer and later a trustee at Fight For Peace, a groundbreaking charity in Newham with a stellar record of getting at-risk NEETs into training and work, can I ask the Minister what work is being done across Whitehall to invest in the preventive expertise and experience of groups such as Fight For Peace in order to cut the risk of knife crime in the first place?
Victoria Atkins
I thank my right hon. Friend for his question, partly because, in highlighting the work of his charity, he gives me an opportunity to correct a misreport in The Sunday Times this weekend about the early intervention youth fund. It erroneously stated that we had cut the amount available to that fund. We have not. We have spent the first tranche—£17.7 million—on 29 projects across the country, and the rest of the money is to be invested in due course later this year.
I am grateful to my right hon. Friend for highlighting the work of his local charity. Many charities large and small do invaluable work, and we very much hope that their knowledge and intelligence will feed into applications for knife crime prevention orders, where those are in the best interests of the child and the local community, so that we can draw them away from criminality before it is too late.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
We all agree that the surge in knife crime in England and Wales is harrowing, and our hearts go out to everyone affected by this epidemic, but these disproportionate measures cannot be the right approach to tackling this issue. Why is the Home Secretary introducing these orders to the Offensive Weapons Bill at such a late stage, when the opportunity to debate them will be limited?
In Scotland, we have taken a different approach. Under a public health approach, which views violence as a disease, the goal is to diagnose the problem and treat the causes. Officers in Scotland’s groundbreaking violence reduction unit work with teachers and social and health workers to prevent young people from being drawn into a criminal lifestyle in the first place. Only by tackling the causes of violence, and not just its symptoms, and by taking a whole-systems approach, can we break the cycle of violence. As a result of this approach, recorded violent crime in Scotland has fallen by 49% since 2006-07 to one of its lowest levels since 1974.
Does the Minister agree there is much to learn from Scotland’s approach to violent crime, and can she confirm whether the Home Secretary is actively considering the public health approach, which has been so effective in Scotland, but with which these measures do not fit?
Victoria Atkins
I am afraid that I must disagree with the hon. Gentleman’s use of the word “disproportionate”. I recognise that he may not have had time to read the detail of the orders, but they are civil orders imposed by a court on a case-by-case basis following a careful presentation of facts by the police. It will be for the court to determine whether an order is appropriate in all the circumstances of individual children. Those under 18 will be reviewed periodically, which will involve the placing of orders, positive and negative. An order may impose a geographical curfew or prevent children from having access to social media, and it may require them to seek help from youth workers.
As for the timing, the police approached us with this idea on 28 August, and we have worked hard to reach a stage at which we can insert an amendment in the Bill during its passage. I appreciate that we were not able to do so while it was being considered in this place, but if the hon. Gentleman does not have knowledge of the workings of the other place, I can promise him that its Members are very good at scrutinising measures.
Dr Julian Lewis (New Forest East) (Con)
May I draw the Minister’s attention to a disturbing report in yesterday’s edition of The Mail on Sunday about the ability of a 16-year-old “test” youngster used by the newspaper to buy an oversized Rambo-style knife online in about two minutes flat? How will the legislation stop knives being delivered at home?
Victoria Atkins
That is exactly the point of the Bill. We are very conscious that, while most retailers do what they should by obeying the law that has been in place for more than 30 years to stop the sale of sharp knives to under-18s, online retailers are not doing so well in that regard, so the Bill is intended to ensure that online as well as shop retailers meet their obligations. That is just one of the ways in which we are trying to prevent young people from getting their hands on these very dangerous weapons in the first place.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Does the Minister not realise that the Home Office appears just to be tinkering while children and young people are dying on our streets, families are being devastated, and parents are worrying about whether their teenagers are safe on their way home? She has talked about an endowment fund, but it is spread over 10 years. She has also talked about an early intervention fund, but it amounts to only £22 million, and there are reports that it is being cut.
This proposal stands against cuts of hundreds of millions of pounds in our youth services. Does the Minister not recognise that any chance of preventing young people from being caught up in dangerous gangs, drug networks, exploitation or county lines requires investment in people who can work with those young people? Will she now commit herself to meeting the scale of the huge and serious problem that we are facing, and to presenting a much bigger, much more ambitious plan that can actually save lives?
Victoria Atkins
Let me, if I may, correct the right hon. Lady on a couple of points. The endowment fund is spread over 10 years deliberately to ensure long-term investment in prevention and intervention, and it will be leveraged as well. It is in the process of being launched. As I said earlier, reports of cuts in the early intervention youth fund are mistaken: it remains at £22 million. As for scaling up our response, the serious violence strategy encompasses all of Whitehall, it encompasses local government, and it encompasses the various agencies and arms of the state that it would be expected to encompass.
Our plan to consult on a legal duty to take a “public health” approach to this issue goes further, dare I say, than what is being done in Scotland. If the consultation reveals that there is an appetite for it, all the arms of the state will have a legal duty to prevent this violence. So I do believe that we are scaling up our approach. I do not for a moment underestimate the scale of the task that we face, but we must ensure that all the various levers are pulled in a way that is consistent and will deliver results.
Sir Desmond Swayne (New Forest West) (Con)
Young people need to fear the probability and severity of being caught in possession. How close is the Minister to delivering that?
Victoria Atkins
My right hon. Friend brings a frankness to the debate which, if I may say so, does not recognise shades of grey. For example, a young man who my right hon. Friend the Minister for Policing and the Fire Service recently met described his fear of walking outside his front door without a knife, and how that fear was greater than the fear of meeting a police officer. We need to be sensitive to children who behave like that, because they are very, very afraid. That is why early intervention work, knife crime prevention orders and other tools available through the strategy and the Bill will, I hope, give confidence to those young people that knives are not the answer—that there are alternatives. We cannot just give a harsh response; we also need to take a public health approach.
Sir Edward Davey (Kingston and Surbiton) (LD)
One of the Home Secretary’s closest colleagues said of antisocial behaviour orders that
“they were too time consuming and expensive, and they too often criminalised young people unnecessarily, acting as a conveyor belt to serious crime and prison”
Given that it is the Prime Minister who said that, what is different about the proposed new ASBO, and will it genuinely help to tackle this appalling rise in knife crime?
Victoria Atkins
These orders are preventive orders. They can be applied for before a child is convicted of carrying a knife. They can also be used after conviction. For example, the young man whose sentence was raised last week at the invitation of the Solicitor General in Croydon would have been eligible for a knife crime prevention order on serving his prison sentence. The orders are targeted at an admittedly small cohort of people but, none the less, we are worried about them, as they could cause great harm if they continue to carry knives and use them. It is about targeting prevention directly on them in a way that is not available at the moment in the eyes of the police. We are trying to prevent crime at a stage before harm is done.
Crispin Blunt (Reigate) (Con)
When knives have been used to wound or kill, what is the association with the supply of illegal narcotic drugs?
Victoria Atkins
My hon. Friend knows that the illegal drugs market is considered to be the major driver of serious violence. These gangs deal in drugs for nothing more than money—money is their sole motivation—and they exploit children to carry those drugs around the country. The way in which they exploit those children is terrible, which is why we are tackling the organised crime gangs behind the drugs market, and sending out a message to anyone who may have a wrap of cocaine at the weekend or dally in drugs almost as a hobby that they are part of the picture of violence and exploitation. They need to be aware of where their drugs may very well have come from.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
I have a few questions for the Minister that I hope she can answer, especially given that the Home Secretary is not here. How much does she expect the roll-out of knife crime prevention orders to cost? Will there be extra community police officers? How does this fit with the Government’s public health approach? Will there be extra resources available for programmes such as Divert, which I visited at Millwall in my constituency last week and which has proved successful in reducing reoffending by over 20%? Reoffending costs the UK up to £10 billion a year, so should our focus not be on early intervention programmes such as that, rather than gimmicks that risk criminalising our young kids?
Victoria Atkins
I am grateful to the hon. Lady for all the work she does on this issue. She knows how important intervention is in the Government’s approach to tackling this serious violence. In terms of reoffending and preventing offending from happening in the first place, that is precisely what these orders are about; they are called prevention orders. We want to prevent children and young people from carrying knives in the first place, and that is consistent with our approach on, for example, the #knifefree campaign on social media. In terms of the costs, I do not have that figure to hand but I am sure that it will make its way across to me at some point.
The orders have been put in place at the request of the Metropolitan police. We have listened carefully to its analysis that there is a small cohort of young people that these orders may help, and we have drawn inspiration from similar prevention orders that are used in other regards. It will be for the police to decide how they use this tool as part of their operational toolkit. I would argue that this is consistent with the public health approach, because the positive and negative requirements within the order will enable the young person to receive help from other state organisations that will be able to draw them out of the criminal gangs that they might well be frequenting.
Richard Drax (South Dorset) (Con)
Following the excellent comments by the hon. Member for Gedling (Vernon Coaker), I should like to point out that the one group of people he did not blame were the parents. Parents have to take more responsibility because, ultimately, anyone who has a child has a responsibility to take care of that child. I say to those on my Front Bench that I have campaigned for a long time for more police officers on the beat. As more officers are taken to fight online crime, which we all understand, we are losing officers on the beat. As an ex-soldier, I know that that is where intelligence and prevention are used to great effect. Can my hon. Friend reassure me that more police officers will be put on the beat?
Victoria Atkins
Whether there will be more police officers on the beat in my hon. Friend’s constabulary is a matter for his police and crime commissioner. We have quite rightly devolved decisions about local policing to commissioners who are elected locally, because they best understand the needs of their local community. Tomorrow, we are debating the new police settlement grant, in which the Government are proposing to deliver a further £970 million to the police, with the help of police and crime commissioners, and I am sure that my hon. Friend and colleagues across the House will support that extra money.
Joan Ryan (Enfield North) (Lab)
In 2015, amendments were introduced to the Criminal Justice and Courts Bill by my constituency predecessor with, I think, the best of intentions. They stated that anyone caught carrying a knife twice would face a mandatory sentence. Since that time, knife crime in London has reached an all-time high, with a total of 14,987 such offences. In the past year alone, Enfield has seen a 20% increase in knife crime and we now top a league table that we never wanted to top because of our level of serious youth violence. I am not opposed to these powers, but I do not think that they are the solution. As many have said, the massive reduction in our neighbourhood policing teams and the huge cuts to local authority budgets, which have decimated our community safety units and youth services, are where the biggest part of the problem lies. The police need those partners to be properly funded. If they are not, we are not going to solve this problem.
Victoria Atkins
I am grateful to the right hon. Lady, who has questioned me assiduously through parliamentary questions on the prevalence of county lines. In relation to the mandatory minimum sentence, 65% of offenders sentenced under the new second strike legislation receive an immediate custodial sentence. Before the legislation, the figure was 48%. It is important that, even with the mandatory minimum sentence, the courts should have the ultimate discretion, and they are obviously using it in particular cases. On her wider point about funding, Opposition Members will know that I do not like to labour this point, but we had to make some very difficult decisions in 2010 because of the economic situation that we inherited from the last Labour Government—[Interruption.] I say that as a fact, because those spending decisions are made over a long term and we had to make some very tough decisions. However, I hope that she will gain confidence and that she will help to inject a further £970 million into the police accounts when we vote on our police settlement tomorrow. We hope that, with the help of police and crime commissioners, that funding will make a real difference to policing locally.
James Duddridge (Rochford and Southend East) (Con)
I congratulate the Minister on bringing forward the order. What else could she have done if the police were asking for it? It is clearly not the solution to the whole problem, but it is part of the solution. Is she concerned, as I am, that some children feel that they should carry knives for their own protection rather than using them against people? What can she and the Home Office do to promote campaigns such as #knifefree, to demonstrate that children should not carry knives for defensive reasons?
Victoria Atkins
I thank my hon. Friend, who absolutely sums up the situation. This is but one part of the Offensive Weapons Bill, which is but one part of our overall strategy. We have never pretended that this deeply complex and worrying crime can be solved with one tool or one approach, which is why this is just one small part of the overall picture. He is particularly right to identify those children who carry knives not because they are members of gangs but because they feel they need them for their own protection. That is why the orders are important—because gang injunctions, which are available at the moment, apply only to children whom the police can prove to be members of gangs. The orders will also help those children who are not members of gangs but who, as he says, carry knives out of a misplaced sense of security. The fact remains, however, as a visit to the Ben Kinsella Trust or any of the charities we work with will show, that if someone carries a knife, the risks of being hurt with their own knife are considerably higher.
Liz Kendall (Leicester West) (Lab)
Knife offences in Leicestershire have risen by 63% since 2010, yet Leicestershire received no funding from the early intervention youth fund, and neither did the two other largest forces in the east midlands—namely, Nottinghamshire and Derbyshire. Some £5 million from that fund has still not been allocated, so if the Minister really believes that early intervention is the key to tackling knife crime, may I urge her to put her money where her mouth is and give the east midlands the resources we need to tackle this appalling problem?
Victoria Atkins
I note in passing that the reserves of Leicestershire police have risen by £3.8 million since 2011, so just a fraction of the £27.6 million currently in reserves may go a very long way. I hope the hon. Lady will vote with the Government tomorrow to give Leicestershire police and other police forces up to a further £970 million on top of last year’s increases, with the help of police and crime commissioners.
Will Quince (Colchester) (Con)
I welcome this initiative, which I think will make a difference, but we must go further. The Minister knows that since entering this House I have campaigned for both first aid education and weapons awareness education to be on the national curriculum. We are halfway there, with first aid entering the curriculum. What steps can she take to ensure that weapons awareness appears on our national curriculum?
Victoria Atkins
I am grateful to my hon. Friend, who has indeed campaigned so much, not just on serious violence in general, but on county lines in particular, representing as he does an important town in Essex. The Government’s work through the serious violence taskforce has included sending out lesson plans before last year’s summer holidays, because we listened to youth workers who said to us, “Before children go off on their summer holidays, please can we help teachers teach them about the risks of carrying a knife?” We also support the work of charities such as the St Giles Trust, which goes a very long way to helping children. The Department for Education plan to introduce relationship education in schools will, of course, help, because it is about ensuring that children are not exploited and know what behaviour they should expect from their friends and older mentors. That is all part of a joined-up package.
Several hon. Members rose—
Mr Speaker
The hon. Member for Walthamstow (Stella Creasy) is almost uncontrollably excited. I think we must hear from her.
Stella Creasy (Walthamstow) (Lab/Co-op)
Thank you, Mr Speaker. I have to run to a Delegated Legislation Committee, but I am keen to take part in this debate.
The Minister is right when she says that people living with this in communities like Walthamstow do not want a back and forth across the Dispatch Box. They are not interested in who got sent letters or in the parliamentary process. They do not really care about hashtags.
A few short weeks ago, Jaden Moodie was murdered by knife crime in my constituency. On Saturday, another young man almost lost his life after being stabbed while in my constituency. What people in my constituency see is an absent Home Secretary. What they see is Labour Members dragging Ministers to the Dispatch Box and holding Westminster Hall debates about the issues of knife crime and youth violence. What they see is an absence of police on our streets, having lost 200 in the last couple of years alone in our borough. They see an absence of youth workers in a struggling community, and they are asking me who cares about this. They are asking whether this place cares about the lives of those young people. When they see corporation tax being cut and no funding for youth services, I fear they see the answer.
Victoria Atkins
I thank the hon. Lady for introducing me to Jaden’s mother after last week’s Westminster Hall debate. Jaden’s mother showed extraordinary strength in staying in what must have been a very difficult debate for her to listen to.
In terms of resources, we would argue that it is not just about police funding, although that is important. We have rehearsed the impact of the illegal drugs market, and from the work we have discussed, the hon. Lady knows the vulnerabilities of young people, such as how the prevalence of domestic abuse can make young people vulnerable to exploitation outside the home. There is a great deal of work going on in government on the effect of adverse childhood experiences. If she feels so strongly about police funding, I hope that she will support the Government tomorrow on the police grant settlement, under which the Met receive a further £172 million on top of the £100 million-odd it received last year.
Robert Halfon (Harlow) (Con)
I strongly welcome the statement and my hon. Friend’s work on this issue. To use a well-known phrase, “Tough on crime, tough on the causes of crime.” We know that 40 children are excluded from our schools every day, and we know that excluded children are twice as likely to carry knives and that 60% of prisoners had been excluded from school. Will she work very closely with the Department for Education on measures to stop these exclusions, which are almost becoming an epidemic in our country’s schools?
Victoria Atkins
I am grateful to my right hon. Friend who, with his expertise from the Select Committee on Education, hits the nail on the head when it comes to the role that exclusions and alternative provision seem to play in the lives of so many young people who are either the victims or perpetrators of serious violence. I am already working very closely with the Under-Secretary of State for Education, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), particularly through the serious violence taskforce. I look forward to Edward Timpson’s review of good examples of alternative provision, because we need to ensure that children who struggle in mainstream education do not become targets for these criminal gangs that seek to exploit them as they attend alternative provision. We are very much working on that, and I would be delighted to meet my right hon. Friend to discuss our work further.
Mr Jim Cunningham (Coventry South) (Lab)
Thank you, Mr Speaker, for the birthday present of calling me to speak this afternoon. I very much appreciate it.
A famous boxer once said, “You can run, but you can’t hide.” The fact of the matter is that there is a shortage of policemen, and the level in the west midlands is only 75% of what it should be. I have met different groups in Coventry, some from affluent areas and some from not very well-off areas, and the common denominator is the lack of police and the increases in burglaries, knife crime and drugs. Over the weekend, the police used a dispersal order in the centre of Coventry after a young man was badly stabbed. There have been a number of stabbings in Coventry. Let us have the police; let us do something about it; and let us stop shadow boxing.
Victoria Atkins
I understand and hear the hon. Gentleman’s concerns about police funding. I hope that he will encourage his police and crime commissioner to spend some of the £85 million he has accrued in reserves as of March 2018 and that he will support the Government’s funding settlement tomorrow. West Midlands police stand to receive an extra £34 million through the settlement with the help of the police and crime commissioner, and presumably the commissioner will be able to use that money to good effect.
Mr Philip Hollobone (Kettering) (Con)
I thank the hon. Member for Gedling (Vernon Coaker) for tabling this urgent question and you, Mr Speaker, for granting it. As with antisocial behaviour orders, what is to stop these new knife crime prevention orders from becoming a badge of honour in the gangland culture, which makes those upon whom they are served even harder in the eyes of fellow gang members?
Victoria Atkins
Across the course of human behaviour, no one can guarantee that gang members will not come to view orders in that way. However, I must point out that one of the strongest parts of the prevention orders is that the court will be able to prohibit a young person from using social media and from meeting families who have lost loved ones, including the family of Jermaine Goupall, who have done so much work to highlight the impact that social media had in the murder of their beloved son and brother. The social media measure will help to stop the ways in which these gangs can communicate and spread their evil.
Jack Dromey (Birmingham, Erdington) (Lab)
Knife crime has risen by 19% in the west midlands in the past year alone. Young men are dying on the streets, some weeping as their life ebbs away. Let me ask the Minister a specific question: are the Government seriously suggesting that there is no link between the cutting of 2,000 police officers in the west midlands—21,000 nationwide—and rising knife crime?
Victoria Atkins
I assume the hon. Gentleman has read the serious violence strategy. He will see in that the ways in which Home Office officials have analysed the data and set out the chief drivers of serious violence. There are correlations with other countries that have seen rises in serious violence, which is why we have looked to see what they are doing differently and whether there are any commonalities between their experiences and ours, but we have to look at this in the round. The public health approach, which has support across the House, is very much focused on prevention and early intervention, and that is what the strategy and the taskforce seek to achieve.
Alex Chalk (Cheltenham) (Con)
I warmly welcome these knife crime prevention orders, but does the Minister agree that we need to tackle head on the cultural sickness that glamorises knife violence in the first place? That must include taking a robust approach to those social media platforms that host material that is distasteful and downright irresponsible.
Victoria Atkins
My hon. Friend is absolutely right, and I note that he represents Cheltenham, which plays such an important part in our national security. We have invested £1.4 million in a social media hub with the Metropolitan police precisely to help the police identify those images and bring them down as quickly as possible. Frankly, the tech companies were not doing what they should be doing. They are getting better, although I do not think that they are there yet by any means. It is through the campaigning of not just the Government, but people such as the Jermaine Goupall family, who have suffered so terribly at the hands of gangs, who spread their evilness via social media, and through tech companies waking up to the harms that their sites can do to ordinary families across the country that I hope we will get some real action on this and get these sickening materials taken down.
Paula Sherriff (Dewsbury) (Lab)
Police numbers slashed and youth services and other services that support troubled families and vulnerable individuals cut to the bone will be a familiar tale to many in this House. The Government were warned that cuts have consequences. Did the Minister think the consequences of these cuts would be an increase or a decrease in knife crime and other serious violence?
Victoria Atkins
I am sure the hon. Lady knows that I was not in this place in 2010, when those very difficult decisions had to be made in the light of Labour’s leaving us with “no money”—I think that was what it said on the note. I remind the hon. Lady that I am sure that families watching this do not understand this back and forth across the Dispatch Box; they want to see measures that help to protect their children and deal with the causes of serious violence. That is why these knife crime prevention orders are just one tool to help the police to intervene on children whom we think are at risk of carrying knives.
If the hon. Lady is so concerned about funding, I am sure she will support the police funding settlement tomorrow. It will see up to £970 million more fed into policing this year, on top of the nearly £500 million last year and on top of the protected spending since 2015.
Dr Matthew Offord (Hendon) (Con)
A significant number of weapons seized in London are supplied by a wholesale manufacturer named Anglo Arms. It supplies blades described as “First Blood”, “Fantasy Hunting Knife” and “Predator”. I recently purchased a maritime instrument that contained a blade. When it came to me, the person who delivered it did not ask for my identification or how old I was. The Minister says that she wants the responsibility to be put on the suppliers, but once someone ticks a box to say that they, as the purchaser, are 18, the responsibility leaves the supplier and the onus falls on the deliverer. I am sure she would not expect anyone who delivers these goods to take responsibility for enforcing the law.
Victoria Atkins
My hon. Friend makes the point that it is the responsibility of retailers to check the age of the people to whom they sell these knives. That is precisely why we structured the Offensive Weapons Bill as we did, making it absolutely clear to retailers that the onus is on them to conduct these checks—it cannot just be a tick-box exercise—so that they are sure that the person to whom they deliver the item is over 18. That is also why we are requiring people to go to the local post office or to the delivery depot and show ID before they can pick up the item. Again, that means there is an extra check in the system. My hon. Friend is absolutely right that ticking a box simply is not good enough.
Mike Amesbury (Weaver Vale) (Lab)
As we speak, Live Your Life Drop The Knife is doing some excellent work in schools in the Runcorn part of my constituency. The community could do an even better job if the Government reversed the £56 million of cuts imposed on Cheshire police. When are they going to do that?
Victoria Atkins
We have the vote tomorrow, and I assume the hon. Gentleman will vote in support of the police settlement grant, which will give £970 million to policing. I hope he will put his money where his mouth is and support the Government.
Rebecca Pow (Taunton Deane) (Con)
May I commend to the Minister a charity in my constituency called Stand Against Violence? It does some excellent work through anti-violence workshops in schools. I would really welcome a meeting with the Minister to talk about that work, because I think we could roll it out nationally. Prevention is the key, which is why I support the new orders. Parents want to know how children are getting hold of all these knives in the first place. Will the Minister assure the House that we will clamp down on retailers that sell them to children, who are under-age?
Victoria Atkins
I am always happy to meet my hon. Friend, and that sounds like a great charity. Through our various funds we are supporting large and small charities. The knife-crime community fund is aimed specifically at the smallest charities working on the frontline with young people in their local area. I hope that the charity my hon. Friend mentioned has applied to that fund. We also have the early intervention youth fund for larger charities and police and crime commissioners, and of course the youth endowment fund, which is £200 million that will be leveraged up over 10 years to support innovative projects.
In respect of where children are getting their knives, buying them over the counter is but one way in which they get them. We of course acknowledge that some children have simply taken knives from their kitchens. That is why we all—mums, dads, schools—have to work together to send the message out to children that it is not normal to carry a knife and that they face much greater risk and harm simply by carrying one.
Janet Daby (Lewisham East) (Lab)
We need to think about the worth of a person’s life when it comes to funding. We need to think about putting in the resources and the money to save people’s lives, because those lives are what really matter. I attended a school council meeting this morning and was told by the children how some of them were being chased after they left school. They said that they were being manipulated, targeted and bullied by older children. This must stop. To deal with it, the schools need resources, the parents need support and the community needs resources, as well as local police on the ground doing their job. We need to consider whether a life matters enough to put in those necessary resources.
Victoria Atkins
It was a pleasure to address the hon. Lady at the all-party group on knife crime last week, when we were providing a little more detail on what we are doing to tackle serious violence. No price can be put on the loss of a son or daughter, so I am always hesitant to agree that one can put a price on life; it is almost impossible to put a value on the emotional cost of the loss of such lives.
Of course, we must look at the effectiveness of the programmes that we are investing in to help prevent such crimes. The youth endowment fund is important, because, over a 10-year period, it will gather evidence on what has the best effect in preventing young people from being ensnared in serious violence. I end by saying that I am very grateful to the all-party group for all the work that it does in this regard, and I hope that it agrees with the orders, because they are about preventing young people from being ensnared in carrying knives, and all the consequences that that can have, before they receive a criminal conviction.
Bob Stewart (Beckenham) (Con)
What percentage of people who carry out a crime and carry a knife go to prison?
Victoria Atkins
A total of 65% of those who are caught under the minimum mandatory sentence legislation receive terms of immediate imprisonment, but that is always at the discretion of the court. We are mindful, especially when it comes to the first offence of a young person, of not fettering the hands of the judge who is considering that case if he or she believes that forms of intensive community work may help that child out of the cycle of violence and into a much happier, safer adulthood.
Alex Norris (Nottingham North) (Lab/Co-op)
Before joining the Home Department, the Home Secretary was responsible for local government, where he authored significant cuts that have translated into a decimation of youth services in this country. We are losing the battle for the hearts and minds of our young people because we have no one out there trying to engage with them. These cuts will continue tomorrow in this place. If the Home Secretary and the Home Office are really serious about tackling youth crime and violent crime, why are they not banging down the door of the Treasury with their colleagues from local government and saying that youth service cuts not only need to be stopped, but must be reversed through the service being properly and fully funded?
Victoria Atkins
I know that the hon. Gentleman will have welcomed the news announced by my right hon. Friend the Secretary of State for Housing, Communities and Local Government that there would be a specific concentration in the troubled families programme on tackling knife crime. That is precisely because those two Secretaries of State wanted to have a united approach to tackling knife crime. I gently point out that although youth services are really important—of course they are—we have a wealth of amazing charities across the country, which provide services. For example, the charity Redthread sits in accident and emergency departments to try to reach children and young people at the teachable moment. A mixture of youth services and charitable work is one of many ways in which we can help to tackle this matter together
Tom Pursglove (Corby) (Con)
I strongly support the package of measures announced by the Minister. How receptive have the social media companies been to the Government’s plans, given that their co-operation will clearly be vital if we are to block social media accounts? What particular benefit will this measure bring?
Victoria Atkins
Some gangs use drill music and certain forms of social media to incite violence. Just this week, I have heard examples whereby orders to assassinate were put out on social media. I know that everyone across the House abhors that sort of behaviour. The tech companies are under a lot of scrutiny at the moment—not just regarding serious violence, but in relation to tackling the awful scourge of child sexual exploitation and terrorism material on their channels. They have not been great in the past, but they are getting better. The Home Secretary is absolutely clear that there is much more to be done, which is why he is focusing so much attention on the tech companies when it comes to addressing serious violence and stopping child sexual exploitation.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her answer to the urgent question. She will be aware that zombie knives, Rambo blades, lethal knives, and even samurai swords and knuckledusters can be bought online and delivered to home addresses. Who will have the responsibility to enforce knife sales provisions online? Who will check the retailers—the police, local councils or the Department?
Victoria Atkins
In relation to online sales, it will be a combination of the police and trading standards. Retailers are not supposed to be selling knives to under-18s; that is the law at the moment. We therefore see the measures in this announcement as merely solidifying that commitment in a way that will bring about results.
John Woodcock (Barrow and Furness) (Ind)
There will be £20 million a year for the very welcome youth endowment fund, but the Minister knows that far more than that has been cut from local authority budgets, while four billion quid is being made available in three months to slosh up the wall for a no-deal Brexit that the Government have the power unilaterally to stop. I welcome the Minister’s focus on prevention, but do she and the Government not accept that we are a world away from the kind of investment that would be needed to take away the market for drugs and that, unless we can take away that market for drugs in Barrow and other areas, our young people are going to continue to carry knives, be stabbed and be enslaved by these evil drug gangs?
Victoria Atkins
Let me say what a pleasure it was to visit Cumbria on Thursday. I made only a fleeting visit through the hon. Gentleman’s constituency on my way to Copeland, where I discovered the great work that the Copeland hub is doing to bring together all the agencies involved in helping young people, and tackling antisocial behaviour and other types of crime.
I hear what the hon. Gentleman says about money for Brexit; that is a debate for other times. I very much hope that we can count on his support tomorrow for the police settlement, which will see up to £970 million more being invested in policing nationally—something that his local crime commissioner welcomes.
Intermediate-Range Nuclear Forces Treaty
(5 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Fabian Hamilton (Leeds North East) (Lab) (Urgent Question)
To ask the Secretary of State for Foreign and Commonwealth Affairs to make a statement on the intermediate-range nuclear forces treaty.
The Minister for Asia and the Pacific (Mark Field)
As if to prove that lightning does sometimes strike twice, even in this unnatural world of politics, I am here to address this issue again, as I was on 25 October, deputising for my right hon. Friend the Minister for Europe and the Americas, who is once more gallivanting globally. This time he is in Ottawa, where, I am delighted to inform the House, he is in the grip of an even colder spell than we are here—it is minus 7° centigrade, for the record, or so he assured me earlier today.
When I last had the opportunity to respond on this issue in the House last October, President Trump had just announced that it was the intention of the United States to end the intermediate-range nuclear forces treaty unless Russia returned to full compliance. Let me once again set out the context. The INF treaty was a 1987 agreement between the United States and the Soviet Union that eliminated nuclear and conventional ground-launched ballistic and cruise missiles with a range of between 500 km and 5,500 km. For over three decades now, the INF treaty has played an important role in supporting Euro-Atlantic security, initially removing an entire class of US and Russian weapons, thus making a significant contribution to strategic stability.
While the UK is not a party to this bilateral treaty, we have always made it clear over the years that we ideally wish to see the treaty continue. However, for that to happen, the parties need to comply with its obligations. Sadly, this has not been the case. Despite numerous objections raised by a range of NATO allies going back over five years, Russia has developed new missiles, in direct contravention of the treaty. This includes the covert missile testing, producing and fielding of the 9M729 ground-launch cruise missile system. As NATO Secretary General Jens Stoltenberg has said:
“These…missiles are hard to detect. They are mobile. They are nuclear capable. They can reach European cities”.
The US, under both the Obama and Trump Administrations, has made extensive efforts to encourage Russia to return to full and verifiable compliance. It was indeed the Obama Administration who, in 2014, first strongly called out Russia’s non-compliance with this treaty. It is important to acknowledge that, while doing so, the US has continued to meet its obligations under the treaty. However, the US, with the full support of its NATO allies, has been very clear that a situation where the US fully abided by the treaty and Russia did not was not sustainable. On 4 December last year, US Secretary of State Mike Pompeo announced that the US would suspend its participation in the INF treaty within 60 days—that is, by 2 February 2019— unless Russia returned to compliance.
This constituted an opportunity for Russia to address our shared concerns and to take steps to preserve the treaty. Allies took the opportunity to reiterate this point last month to the Russian Deputy Foreign Minister, Sergei Ryabkov, during the NATO-Russia Council meeting. I have to inform the House that Russia has not taken that opportunity. It has offered no credible response, only obfuscation and contradictions designed to mislead. This of course fits a wider pattern of behaviour from Russia aimed at undermining our collective security. We and all NATO allies therefore support the US decision to suspend its participation in the treaty and to trigger the formal withdrawal process. NATO is unified on this process.
It is Russia’s fault alone that we have arrived at this point. President Putin’s statements in the last few days announcing that Russia, too, will suspend its obligations was unsurprising given the fact that it has violated the treaty over the years. Nevertheless, even at this late stage, we urge Russia to change course. The treaty’s six-month withdrawal process offers Russia a final opportunity to return to compliance through the full and verifiable destruction of all its 9M729 systems. That is the best—indeed, the only—way to preserve the treaty.
We remain committed, as do the US and other NATO allies, to preserving effective arms control agreements, but we are also clear that for arms control to be effective, all signatories must respect their obligations. In the meantime, we are working closely with all our NATO allies on the implications for European security. We remain committed to ensuring that NATO has a robust defence posture to deter all threats. As NATO allies said on 2 February:
“NATO continues to closely review the security implications of Russian intermediate-range missiles and will continue to take steps necessary to ensure the credibility and effectiveness of the Alliance’s overall deterrence and defence posture. We will continue to consult each other regularly with a view to ensuring our collective security.”
If this treaty falls, we and other NATO allies will hold Russia alone responsible. We urge Russia now to take a different course and to return to full and verifiable compliance.
Fabian Hamilton
Thank you for granting this urgent question, Mr Speaker, and I thank the Minister for his statement.
During the weekend, one of the main pillars of nuclear weapons treaties was suspended when first the United States and then Russia withdrew from the intermediate-range nuclear forces treaty. As the Minister said, it was only in October last year that I stood here asking an urgent question on this matter. Back then, the United States was only expressing its initial intentions to withdraw from the INF treaty, citing Russian non-compliance. Regrettably, it has now fulfilled that action. Since then, the Bulletin of the Atomic Scientists has decided to maintain its so-called doomsday clock at two minutes to midnight. In a statement after the US Administration’s decision, the Bulletin noted that we are living in
“a state as worrisome as the most dangerous times of the Cold War”—
a sentiment with which I sadly agree.
What we see in these actions by the United States and Russia is the erosion of the system of multilateralism and the rules-based international order which underpins global peace and security. Leaving the INF treaty is a dangerous unravelling of part of the architecture of trust and understanding that has prevented nuclear conflict—an architecture that was begun 50 years ago with the signing of the non-proliferation treaty, which I strongly support. Indeed, this comes only weeks before the 2019 NPT preparatory committee meeting in New York at the end of April.
Along with climate change, nuclear conflict and the devastating environmental impact that it could unleash are two of the most pressing threats to our lives and the future of every living creature on this planet. The suspension of the INF treaty is a sure sign of a dangerous breakdown of trust between the two nations with the vast majority of the world’s nuclear warheads. This has serious implications for future negotiations, including those on extending the new strategic arms reduction treaty, or New START, which is due to expire in 2021. What we see may be the beginning of a new arms race, even more dangerous and unpredictable than the one we saw during the cold war. We now live in a multipolar world in which the US and Russia no longer have a monopoly on the weapons proscribed in the INF treaty, even if they have the majority of warheads.
What assurances has the Minister received from our American allies that suspension of the INF treaty will not begin a new arms race between the United States and Russia involving weapons once again being based on European soil? What contact has he made with other countries that have developed INF-proscribed weapons, including China, so that a future multilateral framework may be developed that could supersede and replace the INF treaty?
Mark Field
I thank the hon. Gentleman for his comments. I will touch on two aspects of what he said. The first is what losing the INF treaty means for extending New START, which is a bilateral treaty between the US and Russia that expires in 2021. We were pleased to see both sides meet the New START limits by the deadlines, by the end of last year. We believe that that treaty contributes to international stability. All allies support continued implementation and early and active dialogue on ways to improve strategic stability. It is, of course, for the US and Russia to take forward discussions about extending that treaty.
The hon. Gentleman also raised perfectly legitimate concerns, which I think we all share, about the broader range of challenges for the multilateral system. We will continue to work closely with the US across a wide range of multilateral organisations and issues. He touched on climate change, for which I have Foreign Office responsibility and on which we work closely—if not necessarily as closely as we would like with the federal Administration—with a number of important state governors and others.
May I just say that we, like the US, believe that a number of multinational institutions are in need of reform? On the matter at hand, a situation in which the US is respecting the INF treaty and Russia persistently and consistently is not is simply not sustainable. The UK and all other NATO allies have made clear our support for the US position.
Dr Julian Lewis (New Forest East) (Con)
In his memoirs, Mr Gorbachev makes it absolutely clear that the reason he signed the treaty was that NATO deployed cruise and, especially, Pershing II missiles, which he greatly feared. Given that this was the most successful example in history of multinational disarmament, as opposed to one-sided gestures, it would be a shame to lose the treaty if there were any chance of saving it. Will the Minister use his best endeavours to persuade the Americans to take to an international forum, such as the United Nations, the evidence they have for Russian non-compliance so that the world as a whole can be convinced, if the treaty is being broken, that the Russians are responsible for doing it?
Mark Field
I thank my right hon. Friend, who has great knowledge of and great interest in these matters. He is absolutely right that there needs to be an evidence-based approach. I have to say that we are confident, and I think all NATO allies have been confident in the discussions that have taken place with our American allies, on this matter. I should also point out, as I did in my initial comments, that the announcement on Saturday 2 February actually triggers a six-month withdrawal process, so there is a chance for Russia to come back to the table and, indeed, as he points out, for all of us to work internationally to try to salvage aspects of this treaty.
Ultimately, to return to the point I made earlier, I would say to my right hon. Friend—as I say, he has a great passion for denuclearisation and for such treaties—that these treaties can only work if they are complied with on all sides. There has been a persistent and consistent sense from Russia, going back many years, that it has not been willing to do so, and that makes such a treaty unsustainable.
Stephen Gethins (North East Fife) (SNP)
Nuclear weapons are a dangerous and expensive folly. As well as taking away valuable resources from public services, they are not fit for purpose in meeting the security challenges of the 21st century. That is something SNP Members believe, and I know that there are even some Labour party Members who still believe that.
There is a need for full compliance, but there could also be dangerous repercussions for a security treaty that has guaranteed European security, so does the Minister agree that any US withdrawal could do more harm than good? How can we work towards getting rid of these weapons for good and—the Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), made a very good point here—will the Minister inform the House what work he is doing with international agencies? We want to see the back of nuclear weapons forever.
Mark Field
I think there is little doubt that all of us feel it would have been better had nuclear weapons never been invented, but the fact that the capability is there does make it difficult in such a world simply to disinvent them.
Let me just say that we, along with allies, have monitored Russia’s programmes very carefully. The hon. Gentleman will understand that I cannot go into great detail about matters of intelligence, but we do agree with the US that Russia has been in violation for some considerable time. That is a judgment on which other allies have come to a similar conclusion, and it is therefore our collective position on this issue.
The hon. Gentleman touched on the broader implications for UK-European security of not having such a treaty. I take the view that a situation in which Russia is illegally developing new missiles that could target Europe simply is not acceptable. I think that is part of Russia’s broader pattern of behaviour, which is intended to weaken the overall Euro-Atlantic security architecture. It does undermine Russia’s claim that it is a responsible international partner upholding the rules-based system.
We will obviously have to take whatever action is necessary, but one thing about which I would reassure the House and the hon. Gentleman is that there is absolute unanimity among NATO members on the steps that have been taken. As I said earlier, it is not simply an issue of the Trump Administration; this was brought to the fore back in 2014 under former President Obama.
Tom Tugendhat (Tonbridge and Malling) (Con)
On the subject of disarmament, I am reminded of Belloc, who wrote:
“Pale Ebenezer thought it wrong to fight,
But Roaring Bill, who killed him, thought it right.”
I just wonder whether, when we look at the treaty, which was signed in 1987, we remember that President Reagan managed to convince Gorbachev to sign it by matching him with a worthy strategic deterrent and capability. What would the Minister offer today in terms of persuasion to stop Mr Putin from similarly breaching the agreement and using these nuclear weapons at least to threaten, as he is doing today?
Mark Field
I think I speak for everyone in the House when I say that no one wants to see a return to an arms race. It is also worth pointing out that broader Russian interests extend well beyond the nuclear; they go into cyber-attacks, disinformation and influence peddling more generally. I think that is the bigger concern that many have in mind—I am slightly quoting the formidable Edward Lucas, who had an interesting article this morning in The Times on that issue and who knows Russian affairs to a great extent.
In terms of the bigger concern, yes, it is not in anyone’s interest to see an escalation of an arms race on European or other soil. Equally, it is very undesirable to see the moves that have been made by Russia consistently, as I say, over half a decade or more. The allies had very little choice other than to trigger this withdrawal, as we have done today. As I say, there is still time for Russia to come back to the table, and I very much hope it will do so.
Caroline Lucas (Brighton, Pavilion) (Green)
Russia is in violation of the INF treaty, it seems, but when someone breaks the law, the answer is not to repeal the law and, in the case of the UK Government, to support another country in walking away from that process, but to look at the well-established methods for bringing an offending nation back into compliance—in this case, through the Special Verification Commission mechanisms. Will the UK Government be doing that, and will they make it clear to the US that if it is now suspending its obligations under the INF treaty, it should not assume that it is going to start putting cruise missiles back in the UK?
Mark Field
It does not “seem” that Russia has breached its commitments; there is absolutely no doubt, and there is absolute evidence, of that—evidence that is understood and supported by each and every NATO member. We will continue to work with partners across the international community to try to prevent the proliferation that, understandably, the hon. Lady is very concerned about and to continue to make significant progress, as we have, in the UN and elsewhere on multilateral nuclear disarmament. However, that can happen only when we are in a position to build confidence and trust between nuclear and non-nuclear weapons states and to take tangible steps towards a safer and more stable world. That trust, I am afraid, is at a very low ebb with the Russians, not just for this reason, but, as she will be aware, in other areas. However, we are determined to try to discuss these matters, and we will continue to do so in whatever forum we can.
Sir Nicholas Soames (Mid Sussex) (Con)
I served in the British Army during the cold war, and I was present in this House at the time of the deployment of the INF weapons and the subsequent treaties, so I know the value of them. I entirely support our American allies on this issue, as well as the statement of the Secretary-General of NATO. If we are to move into an era of a lack of arms control agreements, thus leading to a continuing and most dangerous erosion of trust, would the Minister consider encouraging NATO to really press on with its fundamental review of nuclear deterrence—as I suggested, incidentally, to the Secretary of State for Defence only a week ago—to diminish the risk of misunderstanding and misinterpretation and to avoid returning to the worst days of the cold war?
Mark Field
I thank my right hon. Friend for his wise words. I do not think there is much that I can add to what he said, other than to say that I wholeheartedly agree with it and that it is something we should take up, as he rightly says, with the Secretary of State for Defence, the Foreign Office and others.
Mr Kevan Jones (North Durham) (Lab)
As the Minister said, the Russians are in clear breach of the INF treaty. The development of the 9M729 missile is a clear breach, and there is evidence for it. In addition, the Russians are developing things such as the Kalibr sea-based cruise missile and other technologies. Russia is clearly taking an aggressive stance. Taking up the point that the right hon. Member for New Forest East (Dr Lewis) made, would sharing this information and intelligence in an international setting—I accept that some of it is highly classified—help to persuade those who somehow want to give the Russians the benefit of the doubt?
Mark Field
I thank the right hon. Gentleman for his thoughts on this matter. He will be aware that we have to deal with security and intelligence-rated issues carefully, but I am confident that discussions have been taking place within NATO for many months, if not years. We will do all we can. I do not think anyone wishes to see the treaty ripped up. We would like Russia to come back to the negotiating table. We clearly need the sort of international-level discussions he refers to and to which my right hon. Friend the Member for New Forest East referred earlier. That is certainly the message we will put to our representative at the UK mission in New York.
Richard Benyon (Newbury) (Con)
I represent Greenham Common. I saw in the 1980s how Russia responds to strength and how it will not respond to weakness. Even in the darkest hour of the cold war, the finest minds across the alliance and particularly among our American allies, were devoted to strategic arms limitation efforts. Will my right hon. Friend confirm that that is still the case now? We really need to understand that we can be strong with Russia, but we also need to reassure and negotiate with it to try to get a safer world and a safer future.
Mark Field
My right hon. Friend puts it very well. I should perhaps say that decisions on US nuclear weapons policy are obviously fundamentally a matter for the US Government. However, the US “Nuclear Posture Review” published last year represents a continuation of previous years’ nuclear policy and indicates a measured and proportionate approach to nuclear deterrence, which I think the whole House would welcome.
Jo Swinson (East Dunbartonshire) (LD)
It is alarming to see how, piece by piece, the security architecture that was assembled to keep us all safe after the cold war is being dismantled. Looking ahead to the NPT—the treaty on the non-proliferation of nuclear weapons—review conference next year, how can the UK help to foster a shared understanding among all major powers in the new world order that rules and restrictions on nuclear weapons are of mutual benefit?
Mark Field
I think we all recognise that these are dangerous times. The questioning of the rules-based international system from all sorts of quarters should give rise to very grave concerns. Specifically on nuclear proliferation, I have spoken at the UN Security Council on a couple of occasions. Not least with what is happening in North Korea, this issue is of great importance. I think we all recognise that any further proliferation in nuclear weapons is incredibly undesirable, particularly in this relatively uncertain world. We will continue to make strong representations, working within the international community. I would try to reassure the hon. Lady that many members of the UN Security Council, both permanent and non-permanent, feel very similarly. I suspect that this issue will be quite high profile in the months to come.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
My father was a leading expert in nuclear non-proliferation in the 1960s. It is depressing to see a lot of his work, which led to Gorbachev’s decision to work with Thatcher and Reagan, being reversed by Putin. We are one of the closest partners of the US and the leading military European country in NATO. Can the Minister reassure the House that the Government will do everything they can to ensure that the USA is not dragged into a dangerous arms race again?
Mark Field
I think it is hereditary, Mr Speaker. Others can perhaps judge that. I thank my hon. Friend for her comments. I hope she does not feel that her father’s work was in vain. My late father was also in the armed services. In many ways these problems and issues do not entirely go away, but the patient use of diplomacy, even within the military, can make a real difference over a period of time.
My hon. Friend asked about the issue of an arms race and the concern about whether the United States would be held back by allies and, in particular, the UK. It is worth stating again that any situation where the US is respecting its treaty obligations and Russia is not is simply not sustainable. NATO has been, and will continue to be, consistent in calling out Russia and making clear the importance of this issue for broader European security. In many ways, other nations closer to the Russian border feel that more acutely than we do, but the US has made clear its continued commitment to effective and enforceable arms control.
Mike Gapes (Ilford South) (Lab/Co-op)
The essence of successful arms control is trust and verification. Will the Minister confirm that there has been no trust of the Russians because, as the Obama Administration were saying for several years, there was no effective way of verifying that, and Putin has lied and cheated on the obligations that the Soviet Union and then Russia signed up to under the intermediate-range nuclear forces treaty?
Mark Field
I thank the hon. Gentleman for his question—I know he takes these matters very seriously. Yes, trust has clearly broken down. It is difficult to try to restore trust. It is worth remembering, as he mentions, that the Obama Administration had a clear goal from the moment they came into office at the beginning of 2009 to re-cast their relationship with Russia. Even within that context, they concluded, during the course of their time, that Russia could not be trusted on these matters because simply, as the hon. Gentleman rightly said, there was no evidence of verification. I am afraid that that situation has not improved over the past two and a half years.
Mr Bob Seely (Isle of Wight) (Con)
Tension over nuclear forces is clearly highly dangerous. NATO experts argue that the Russian Federation seeks overmatch in four areas: political warfare, conventional forces over its neighbours, European theatre conventional missiles and European theatre intermediate nuclear missiles. What is being done to reassess the balance of power in eastern Europe and the level of forces needed to deter Russia? Will the Minister endeavour to keep the House informed? I get the sensation that not enough is being done or talked about on this extremely dangerous issue.
Mark Field
I reassure my hon. Friend that Ministers will keep the House up to date, not just on this issue—and obviously, it affects other Departments, including particularly the Ministry of Defence. My last overseas visit, only 10 days ago, was to Warsaw. I spent two days in Poland and we discussed some of these issues, which are clearly far closer to the hearts of our Polish counterparts, as well as those within Baltic and Nordic states, who are very concerned about the proliferation and potential threat of Russia in this regard. My hon. Friend also rightly made the point that in many ways, as I mentioned earlier, Russia’s nefarious work extends well beyond the nuclear sphere. The campaigns of disinformation and the use of cyber-attacks in a very aggressive way are all very modern ways—well beyond the nuclear—in which there are major threats. Obviously, those are issues that the whole of Government have responsibility for, and we shall do our best to keep the House informed about them.
John Woodcock (Barrow and Furness) (Ind)
If we are on the subject of our parents’ contributions to nuclear non-proliferation, I should put on record that my mother was a Campaign for Nuclear Disarmament campaigner who took me, at the age of four, to RAF Molesworth—
John Woodcock
We have both changed our views since then.
Is there not a responsibility on everyone in the House not to hand Putin another PR coup by suggesting that the breakdown of this treaty is in some way the fault of America and the west, or even that there is some sort of false sense of equivalence between the two parties? Must we not put the blame firmly on Russia and do whatever is necessary to re-strengthen NATO to ensure that we can get to non-proliferation, and ultimately disarmament, through the strength of our allies, not their weakness, which Putin will exploit?
Mark Field
I thank the hon. Gentleman for his brave words, and I agree entirely, but that makes it all the more important that we continue to work with the international community. The UN is the obvious vehicle for doing that, but we recognise that the Russians would veto a Security Council resolution, so we are working to build a coalition of interests among many UN members, both those directly impacted and others who, if we do not deal with this now, could be impacted in the decades to come.
Bob Stewart (Beckenham) (Con)
Everyone agrees that we should get Russia back within the provisions of the INF treaty. Intermediate range means up to 5,500 metres. Will the Minister confirm that the INF treaty does not include sea or air-launched missiles, which would be sad if it did?
Mark Field
I believe that is correct. If I am incorrect, I will correct it in writing to my hon. Friend, but I believe he is correct.
Catherine West (Hornsey and Wood Green) (Lab)
What assessment have the Government made of the impact of this breakdown on other nuclear powers, such as Pakistan, India, China and North Korea, and what can the Government do to get international diplomacy back on track in relation to the importance of the framework of inspections, which, without a treaty, could get lost?
Mark Field
The hon. Lady will be aware that this is a specific treaty within Europe between the US and Russia signed some 32 years ago, but she makes a valid point that these issues are not entirely isolated, and obviously therefore rogue states—for want of a better phrase—such as North Korea and states such as Pakistan that have nuclear capability will be watching from afar and making their own decisions. That is one reason I support the idea, before we rush headlong into lifting sanctions on North Korea, that we see verifiable evidence of denuclearisation, which, I am afraid, we have not had to date. That said, we are working closely with our partners in the region, and clearly the US is doing its best to make progress in that regard.
Sir Desmond Swayne (New Forest West) (Con)
Appeasing non-compliance would increase the probability of our being vaporised in a nanosecond, would it not?
Mark Field
By my right hon. Friend’s standards, that was rather a long question, but let me keep the answer short. He is correct.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Minister is right that the world would be better without nuclear weapons—they kill innocent people indiscriminately; they are weapons of mass destruction. If he is sincere about not wanting to return to an arms race, is it not time that the UK stopped building new ones, cancelled the Trident programme, saved a couple of hundred billion pounds the UK cannot afford and set the lead internationally?
Mark Field
The issue is about deterrence. As I said, if these weapons had never been invented, or if they could be mysteriously or mystically dis-invented, we would all be grateful, but that is not the case. In the practical reality of the world in which we live, we need that deterrence, so I absolutely support the Government’s policy, which has been the policy of all British Governments since 1945.
Mr Jonathan Djanogly (Huntingdon) (Con)
The Russian economy is doing very poorly, partly as a result of falling oil prices and partly as a result of crushing economic sanctions, and one wonders why they want to engage in another arms race in such a state. Could it not be a sign of weakness on the part of Russia—the dying gasp of a bankrupt regime?
Mark Field
I thank my hon. Friend for his arguably slightly optimistic view on these matters. I will not speculate about the state of the Russian regime, but I am not convinced that this will necessarily lead to an arms race. For the reasons I have pointed out, my concern is with what one might call the 21st-century aspects—the disinformation war, cyber-attacks and the like—on which the Russians’ main efforts will be focused in the future. As he rightly points out, however, the state of Russia’s economy is grisly—to put it mildly—and it might well be, as he says, that it is behaving in this way out of weakness rather than strength.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I must say that I was somewhat surprised by the Minister’s statement that the United Kingdom seems to be unequivocally supporting the United States rather than trying to pursue more legal and trade measures first. Russia’s actions are of course very worrying, and they must be to blame in large part—[Hon. Members: “But.”] Wait a second. But Russia has pledged that it will not place INF material in Europe unless the United States does so first. Will the Minister reassure me that we will not permit the US to place such armaments in the UK and will discourage it from placing them in Asia, which could spark, inadvertently, an arms race with China?
Mark Field
I am not going to become involved in speculation about arms races in other parts of the world, and, as the hon. Gentleman will appreciate, issues concerning the location of weapons are a matter for the Ministry of Defence. However, an escalation of these matters would be in none of our interests. I think that, in one sense, the treaty has worked well for 30 years—at least it has led to some peace on European soil—but trust and verification are required, and I am afraid that those have been lacking for some years. In many ways it is the Trump Administration who have grasped the nettle, with the support of all NATO allies.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I clearly remember the treaty being signed when I was 11 years old. That pretty much inspired me to take this career course, and it is with great honour and pride that I am now a member of the NATO parliamentary assembly and international vice-chairman of the Conservative party.
International relationships are very important, and today it is with a real sense of tragedy that we see where the treaty has ended up. Does my right hon. Friend agree that this shows the absolute importance of counterbalances? May I remind people who say that Russia promised that it would not put anything into Europe that it is a country which, less than 12 months ago, launched a chemical weapon attack on this country, and showed what its means were and what it was willing to do? Tragic as today is, does my right hon. Friend agree that we must continue our full support for NATO, our full support for our allies, and our engagement on the international stage with all countries to ensure our safer future?
Mark Field
I thank my hon. Friend for his youthful engagement in these matters. I am not sure that even at 23—which was my age in 1987—I realised quite what was going on when the INF treaty was signed. Levity aside, however, my hon. Friend is absolutely right to say that we need to work on this continuously. We should remind ourselves, as he has reminded the House, of events in Salisbury during the past year following the use of chemical weapons by a Russian state source on UK citizens, with fatal results.
I think that all Members who have expressed concern will agree that we need to keep lines of engagement open as far as possible. While trust has broken down and while we want to see verification, we need to talk. One of the criticisms made of international diplomacy is that it is notionally a talking shop. [Interruption.] As several of my right hon. Friends are saying from a sedentary position, we need to talk from strength, but, equally, we need to keep those lines of engagement as open as possible when it comes to these very important matters.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
If, ultimately, there is a request from the United States Administration to relocate US nuclear weapons on UK soil, what will be the response of the British Government?
Mark Field
As the hon. Gentleman will recognise, I am not going to speculate on too many hypotheticals for the future. This issue will obviously be discussed at very senior levels, and I think that it would be wrong for me to say any more at this stage.
Mr Philip Hollobone (Kettering) (Con)
The Minister’s response to the urgent question today has been clearer and more assertive than his response to the same urgent question in October, and I welcome that. There is no point in being a signatory to an international arms treaty if the other side is not going to stick to the rules. The problem seems to be what I think the Minister described as the 9M729 missiles that the Russians have been developing. Can he tell the House how long they have been developing that capability, how many weapons we think they have, and what their capability is?
Mark Field
I fear that I will disappoint my hon. Friend by not going into great detail on these matters, as they are issues of secure intelligence. I confess that when I was at the Dispatch Box 102 days ago I was pretty robust. Perhaps he is getting harder in his old age, or perhaps it is the other way round. These are important issues, and we are full square behind our US allies on this matter. I am glad to say that, overwhelmingly, as far as I can see, although the House thinks it is regrettable that the treaty has been suspended, it recognises where blame rightly lies.
Mr Speaker
Perhaps parliamentary pressure has produced a force field. I call Dr David Drew.
Dr David Drew (Stroud) (Lab/Co-op)
John Bolton has referred to the INF treaty as a cold war relic, and in its place he says that he intends to negotiate directly on behalf of the US with the Russians and Chinese. If that is the case, what is the role of the UK?
Mark Field
We are, and remain, a very active member of the United Nations in the Security Council. We are a committed member of NATO, and will continue to be such a member. Our role is important, but this is a bilateral agreement between Russia and the US that was signed three decades and more ago. Obviously, we have interests as a fully engaged NATO member, and will continue to do so.
The idea that we have no say on this matter could not be further from the truth. This issue has been festering, as I pointed out, for five or six years, right from the early stages of the Obama Administration, and it has finally come to a head. As I say, there is one message that will trickle out loud and clear to the Russian authorities. They have a chance to come back to the negotiating table. The US Administration have triggered a withdrawal, but that takes effect over a six-month period. I hope that before 2 August Russia will come back and recognise the importance of the treaty, but it can do so only if it shows the international community that it can be trusted and is willing on the verification of the outcomes.
Nissan in Sunderland
(5 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
With permission, Mr Speaker, I would like to make a statement about Nissan. The House should know the background to the decision that the company announced yesterday. In July 2016, the allocation decision for the next model of the Nissan Qashqai was about to be made, and it was set to be awarded to a European plant other than Sunderland.
Nissan had located in Sunderland in 1986, having been persuaded by Mrs Thatcher that the combination of British engineering excellence and tariff-free access to the European Union made Britain an ideal location. So it proved, and the Sunderland plant grew to be the largest car plant in the history of Britain. The firm invested nearly £3.7 billion in it, and it currently employs about 7,000 people, with approximately another 35,000 in the supply chain.
The prospect of losing easy access to the EU market was the principal concern of the company at the time. It was clear that if Sunderland lost the Qashqai, which accounted for over half its production, mostly for export, the medium and long-term prospects for a plant losing scale would be bleak. Determined not to see the 30-year success of the plant come to an end, we set out over the coming months a strong case for backing Sunderland that centred on four areas, all of which were about highlighting the success of, and our strategy for, the British motor industry.
First, we would continue our successful and long-standing support for the competitiveness of the automotive sector, which has been available to all firms for skills and training the local workforce and for innovation. The regional growth fund has supported over 30,000 companies—large, medium and small—since 2010, with £2.6 billion of public support. Some £335 million of that has been invested in the automotive sector via the regional growth fund since 2010. All proposals are assessed independently by the Industrial Development Advisory Board and are subject to UK and EU rules. In 2016, Nissan initially considered applying for a total of up to £80 million in support over nine years for skills training, research and development, and environmental improvements, and it was eventually awarded £61 million—around £7 million a year over nine years.
The second commitment was that we would work with the automotive sector to ensure that more of the supply chain could locate in the UK, in close proximity to manufacturing sites. Since 2016, as many hon. Members know, our automotive sector deal has established with the industry an ambitious programme to do just that.
The third was that we would make a strong commitment to research and development, particularly to the development of new battery technology and its deployment in connected and autonomous vehicles. Our joint industry-Government £1 billion advanced propulsion centre R&D programme, along with our £250 million Faraday challenge, is putting Britain at the leading edge of battery technology and manufacturing. We have introduced testbeds for autonomous vehicles across the country. Indeed, the longest autonomous car journey in the UK will take place in November this year from the Nissan site at Cranfield to its site in Sunderland, covering more than 200 miles on public roads.
Our fourth commitment was that, in our negotiations to leave the EU, we would always emphasise the strong common ground that exists between the UK and other EU member states and pursue a deal that could ensure free trade unencumbered by tariffs or other impediments.
These commitments proved persuasive, as they have subsequently for investments by Toyota at Burnaston, BMW Mini at Oxford and PSA at Luton. Indeed, every competitive allocation decision taken since 2016 in this industry has gone to Britain. Although the discussions had been around the Qashqai, Nissan proposed towards the end of the discussions to add a further model, currently produced only in Japan—the X-Trail—to Sunderland. On 27 October 2016, Nissan announced that both the Qashqai and the X-Trail would be built in Sunderland, securing the plant’s future and adding 741 new jobs.
Last Friday, I was informed by Nissan that following a global review of its capital investment, future capital was needed to accelerate the shift in Europe from conventional to lower-emission vehicles. The Qashqai and the Juke will in future have petrol and plug-in hybrid variants made in Sunderland, and as a result, more capital will be invested in Sunderland than was originally planned in 2016. However, this was accompanied by a decision to maintain Japan as the sole production location for the X-Trail model, rather than to establish a new production line in Europe. The consequence of this is that the existing jobs in Sunderland will be maintained by the increased investment, but that the 741 additional jobs that would have been created in Sunderland will not now be available. Nissan confirmed that production of the new Qashqai, Juke and Leaf will continue at Sunderland, and that the decision has no implications for the existing jobs at the plant.
Nissan also pointed out, as it as done consistently since 2016, that the risk of a no-deal Brexit was a source of damaging uncertainty. While I am pleased that the decision taken in 2016 to build the Qashqai and secure the Sunderland plant is unchanged, it is deeply disappointing to me and to the workforce that the extra jobs that would have come from the X-Trail will no longer be created. I told the House that I would publish the correspondence with Nissan at the time of its original decision, as soon as the company advised that it was no longer commercially sensitive. I have previously shared it with the then Chair of the Business, Energy and Industrial Strategy Committee, but I have now agreed with Nissan that it is reasonable to publish it in full today. Colleagues will see that it sets out exactly what I told the House in October 2016.
Grant support for training and development and for environmental improvements were applied for and approved by the Industrial Development Advisory Board on the basis that both the Qashqai and the X-Trail models would be built in Sunderland. Given yesterday’s announcement, if the company seeks to participate in those industry funding schemes—as I hope and expect it will—it will submit new applications in the standard way and undergo a process of independent assessment.
I am disappointed that the new jobs associated with the X-Trail will not now come to Sunderland, but I am pleased that the plant will benefit from substantial new investment in the existing models and that the decision to continue with the vital investment in the Qashqai, Leaf and Juke, and the jobs associated with them, is unaffected. These decisions were made on broader business grounds, but Nissan has commented on the need for us to come together to resolve the question of our future trading relationship with the EU. I believe that its advice should be listened to and acted upon, so that our automotive industry—which will undergo more change through innovation in the decade ahead than it has for most of the past century, in areas such as battery technology and artificial intelligence—can seize the opportunities for Britain to be a world leader in state-of-the-art car making, providing great jobs and careers for hundreds of thousands of people across our country during the years ahead. I commend this statement to the House.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Yesterday’s announcement by Nissan that it has reversed its decision to build the X-Trail at its Sunderland plant and move it to Japan instead is a bitter blow to the north-east, the automotive sector and Britain’s industrial strategy. Of course, Brexit was not the only reason for that, but it was pretty prominent in Nissan’s decision. To quote its initial statement,
“the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”
The Secretary of State’s opposition to a no-deal Brexit is, of course, well known, but still the Government juggernaut chaos hurtles on. Even he must be suitably frightened today by the uncertainty being created by his Government’s negotiating strategy.
This week, Nissan has reversed commitments to invest in the UK. Last week, we saw that car production is down 9% to its lowest level in five years, and fresh investment in the sector halved in 2018, according to the Society of Motor Manufacturers and Traders.
When Nissan made the commitment to produce the X-Trail and Qashqai models in Sunderland, the Government provided certain assurances, as the Secretary of State has outlined. After the Government’s refusals to publish the letter, even in response to freedom of information requests, today we have finally seen a copy. The letter acknowledged the
“uncertainties as the UK prepares to leave the EU”,
and in particular the
“fear that potential future trade arrangements could affect the business case for…investments”,
and it promised that Nissan would not be “adversely affected”.
Although the letter made no firm commitment to a customs union or single market deal, there was a pretty strong assurance that manufacturers would still be able to trade without barriers. However, Nissan clearly does not have any confidence in those assurances today. Can the Secretary of State confirm why those assurances no longer stand and what has changed in the Government’s approach since those commitments were made? Is it now Government policy to accept that there will be significant trade barriers as we leave the EU and potentially a no-deal situation? If not, can the Secretary of State rule out the possibility of no deal?
The letter went on to offer support of about £80 million towards Nissan’s investments at its Sunderland site, in return for the expansion of SUV production. The Secretary of State noted that £61 million was eventually applied for. Can he confirm whether any of the conditions surrounding that £61 million were written into any formal agreement? Can he also confirm whether Nissan will still receive the £61 million, despite the move? He intimated that it may have to reapply for certain forms of grant funding. What assessment has he made of the impact of yesterday’s decision on the wider supply chain, particularly those companies that might already have decided to start investment?
The Government’s letter to Nissan also said:
“It will be a critical priority of our negotiations to support UK car manufacturers, and ensure their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU.”
Yet it is important to note that Nissan’s announcement came days after a free trade agreement was signed between the EU and Japan whereby tariffs on Japanese car exports to the EU will begin to taper towards zero over the next 10 years. What assurances can the Secretary of State give today to British automotive sector companies that there will be no tariffs on British-made vehicles entering the EU?
Similarly, in relation to cars exported to non-EU countries where the EU currently enjoys preferential trading terms, the International Trade Secretary has suggested that we can simply replicate those terms and Tipp-Ex out “EU” and replace it with “UK” on the front page of nearly 40 free trade agreements. How is he getting on with that? What assurances can the Business Secretary provide that Britain will continue to enjoy those trading terms?
Furthermore, what assessment has the Secretary of State made of the real risks of a temporary, Brexit-induced slowdown in British manufacturing? Has he examined any temporary support measures he could offer, such as examples in the German industrial sectors following the financial crash?
Finally, it is clear that we have reached a tipping point. I know that the Secretary of State agrees with me that a real industrial strategy is designed to give businesses the confidence to invest for the long term, but his Government’s handling of Brexit is undermining our industrial strategy. Businesses are no longer speaking out simply to highlight the future dangers of a badly handled Brexit; they are now losing confidence in the Government and taking real action to protect their businesses. Without real assurances from the Secretary of State and a firm commitment to take no deal off the table, it is hard not to think that managed decline is indeed the Government’s plan.
Greg Clark
If the hon. Lady had spent time talking to employers in the automotive sector, she would have come to a different set of conclusions. First, she should welcome the fact that Nissan has committed to Sunderland. After the referendum, before any negotiations had taken place and even before article 50 was triggered, the plant was in jeopardy, and the workforce, the unions and the Government worked closely and hard together to secure its future. At the time, her former colleague, the then hon. Member for Hartlepool and Chair of the Business, Energy and Industrial Strategy Committee, hailed it as
“a welcome example of targeted Government commitment to a successful company in a strategically vital sector”.—[Official Report, 31 October 2016; Vol. 616, c. 684.]
That commitment continues.
The hon. Lady asks whether the financial support that Nissan applied for continues, and I hope that I was clear in my statement that the support is available to the sector and has been for many years. Nissan will be invited to resubmit an application in the light of its changed investment.
The hon. Lady’s second point is that we need to conclude our Brexit negotiations, but what she spectacularly ignores is that Nissan and the UK automotive industry back the deal that the Prime Minister has negotiated. The deal achieves what they need: no disorderly Brexit on 29 March, a transition period and a commitment to no tariffs, no quotas and no rules of origin checks at the border.
The Japan Automobile Manufacturers Association has welcomed both the withdrawal agreement and the political declaration, and it has called for this House and the European Parliament to ratify the agreement swiftly. If the hon. Lady wants to rule out no deal—if that is her concern and her motivation—she should back the calls from the industry to ratify the agreement.
The continued uncertainty I referred to in my statement, as the hon. Lady will acknowledge, is a reflection, in part at least, on the Opposition’s failure to come to a decision and back the deal. During all Nissan’s 30 years in the UK, it has been able to count on constructive support from all parties, yet Labour Front Benchers have evaded having a policy on this vital issue for our country, hiding behind six tests that are a fake and a sham designed expressly to avoid a deal, and they know it. They claim to represent the workers of this country, but the livelihoods of millions of workers are being jeopardised by the machinations of the people occupying the Labour Front Bench.
In a call from Japan yesterday, a senior Nissan executive told me, “Please pass on the view to your Opposition that they need to meet in a way that forms a deal.” I think all of us in this House should act on that.
Sir Michael Fallon (Sevenoaks) (Con)
Whatever the complex rationale behind this decision and, despite my right hon. Friend’s considerable efforts to work on it, is it not a stark reminder that our exporters still have no idea whether, at the end of the implementation period, they will require new certification, whether they will carry tariffs or whether, indeed, they will be able to trade frictionlessly? Given the fall off in business investment in each of the last three quarters, is it not now time for us all to come together to end the uncertainty and agree on the terms of our future trading relationship with the European continent?
Greg Clark
My right hon. Friend makes an excellent point. He has experience of dealing with businesses that are making investments in this country. It is the view of investors in this country and around the world that they want to see us live up to the traditions of this House in providing a stable environment for investment to take place. That includes having certainty on our future trading relationship. It is incumbent on us all in this House to deliver that for the investors who are placing faith in our economy.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I thank the Secretary of State for advance sight of his statement. I echo the sentiment that our thoughts should be with the workers at Nissan and elsewhere who are unsettled by this news.
The Secretary of State has put a brave face on this bad news. We all know that the issue of diesel and the change to petrol is part of it, as is the global review, but the cancellation of X-Trail has his Government’s handling of Brexit at its heart. Brexit, in itself, is bad enough, but it is being bungled beyond belief by a Government who have failed to listen to business. He talks about business wanting to back a deal, but he omits to say that they all say that any deal is worse than what we already have with the EU. Professor David Bailey, from Aston University, is an expert in the car industry, and he has pointed out:
“The Japanese carmakers came to the UK to access the single market”.
He went on to say that Brexit is
“a big shock for the Japanese producers.”
Nissan’s European chairman has been clear:
“The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future”.
Nissan’s decision shows that international investors have no faith in this Government’s assurances about the economic impact of the Prime Minister’s rotten Brexit deal. If Brexit uncertainty is too great for one of the world’s best resourced manufacturers, what hope is there for small and medium-sized businesses, which are the backbone of the economy? This Government’s continued failure can be demonstrated by the failure to top up the Tay Cities deal to support Michelin workers, so will the Secretary of State urge the Chancellor to make the spring statement a fiscal event that increases funds to support businesses impacted by Brexit? Will the Secretary of State, once and for all, rule out participation in the foolish game of failing to rule out no deal?
Greg Clark
First, let me remind the hon. Gentleman that a greater amount of financial investment is going into Sunderland than was anticipated in 2016; this is a long-term commitment that has been made by the firm. He should welcome that and reflect that the future jobs of those employed in Sunderland have been secured by that investment in the Qashqai. That is a welcome factor.
The hon. Gentleman is right to point out that the company has expressed an urgent concern that we should resolve the question of Brexit, but he is wrong to say that the deal the Prime Minister has negotiated does not command the positive confidence of the industry. I have talked about Nissan, but let me mention the head of Ford in Europe, who said:
“It’s important that we get the agreement ratified that’s on the table at the moment”.
The chief executive of Aston Martin has said that it is “obvious” that the deal that we see
“meets the needs of all the requests we put forward as an industry and as Aston Martin.”
Toyota has said that it welcomes the announced deal, which
“would provide business with the certainty of a transition period and help avoid the significant production disruption a ‘No Deal’ outcome would have for ‘Just in Time’ supply chains in the automotive industry.”
I share the hon. Gentleman’s view that we should bring the uncertainty to an end, but the only way to do that is by backing a deal, and I commend to him the deal that has the support of every one of the employers in the automotive sector that I have quoted to him today.
John Redwood (Wokingham) (Con)
The big increase in vehicle excise duties, the squeeze on new car loans, and the general tax and regulatory attack on new low-emission diesels has had a predictable effect, in greatly reducing the demand for and sales of new diesel cars in the UK. Will the Government reconsider these damaging policies, given the strong bias in our industry to produce those Euro 6 diesels?
Greg Clark
I say to my right hon. Friend that, in fact, the extra investment is going into new Powertrains—cleaner Powertrains. Far from being critics of this, Nissan, as people who know the industry well know, is among the principal advocates for more ambitious environmental standards and has been a pioneer in establishing electric vehicles in this country. It is recognising that that is the way consumer demand is going, but it recognises that this is a positive step.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Nissan in my constituency, together with the supply chain, employs almost 40,000 people, many of whom will be extremely concerned at this decision. This Government’s chaotic approach to the Brexit negotiations, concerns about diesel and a new free trade agreement between Japan and the EU have created a perfect storm. With just 53 days until we are due to leave the EU, no Brexit parliamentary business scheduled for two weeks, the Prime Minister currently engaged in fantasy politics over the backstop and the sweetheart deal on the rocks, what immediate steps is the Secretary of State taking to reassure the whole UK automotive industry?
Greg Clark
One of the pleasures of dealing with the automotive industry in the UK is that it is one of the most advanced and most capable in the world in innovation. We are working with the sector, through our industry strategy, to be the leading place in the world, and our work not just for the discovery of new battery technologies, but for manufacturing, and the testbeds that we have put in place for connected and autonomous vehicles make Britain the place in the world that people come to for innovation. This Government back that, and I know it enjoys support across the House; it is a source of confidence around the world. However, it is true that an international business such as an automotive one wants to know, perfectly reasonably, what its trading relationships will be with the rest of the European Union in the years ahead. That is why these companies have been so clear that this House should come together and back the deal. I hope that the hon. Lady, with the care for her constituents that I know she always has in mind, will see fit to do so too in the days and weeks ahead.
Nicky Morgan (Loughborough) (Con)
In 2016, my predecessor as Chair of the Treasury Committee, who now sits in the other place, wrote to the Chancellor asking what money had been promised to Nissan in order for it to make its commitments. Today we find out that a letter was sent to the former Chair of the Select Committee on Business, Energy and Industrial Strategy, but it has only been released today, after the press had got hold of it. First, does the Secretary of State think it right that the company should decide that something is still commercially sensitive two years after the event? Secondly, how much of the £61 million is not going to be paid over?
Greg Clark
I am grateful to my right hon. Friend for her question. What I said in my statement and what I said at the time was that the programme of support for the automotive sector is very long standing and has been very successful. As it happens, the application that Nissan made was concluded relatively recently; it was putting forward a case, through the independent scrutiny processes, for funding. I shared the letter with the previous Chair of the BEIS Committee, and the Comptroller and Auditor General had also seen it at that time. I said in my statement that because the terms of the application, which is independently assessed and reviewed, have now varied, the company will of course need to resubmit on the grounds of the new information that it has. However, this remains a programme that has been very effective in supporting the skills in the wider workforce, environmental improvements and the research and development for which our automotive industry is now so renowned.
Julie Elliott (Sunderland Central) (Lab)
After the announcement at the weekend by Nissan—for the first time publicly saying that the insecurity around Brexit was impacting business decisions, which in real terms means jobs—what assurances can the Secretary of State give the workers not only at Nissan, but in the supply chain and wider manufacturing, that the Government will come up with an agreement that will secure jobs as we leave the EU? As he knows, the Prime Minister’s deal is not going through this House, and we need real decisions and real movement on the customs union and the things that will protect jobs.
Greg Clark
I say to the hon. Lady, whose constituents depend on successful future investments, as well as the ones that have been secured, which she rightly welcomed when they were first made, that this whole House has a responsibility to come together, put its differences aside and find a deal that can be agreed and ratified, and can be ratified by the European Parliament, so that we can have precisely that certainty that Nissan and other investors have called for.
Sir William Cash (Stone) (Con)
Will my right hon. Friend accept that, rather than being about Brexit, a fundamental reason for the decline in demand for diesel cars—not only in Sunderland, but elsewhere in the UK and throughout the whole of Europe—is the imposition of EU regulations, which will continue in UK law under the European Union (Withdrawal) Act 2018, to reduce emissions and diesel particulates, which are harmful to health? So what on earth are the anti-Brexiteers complaining about?
Greg Clark
First, the company sells most of its output into the rest of the European Union so will need to maintain its ability to meet the requirements to which my hon. Friend refers. Secondly, as I said to my right hon. Friend the Member for Wokingham (John Redwood), Nissan in particular has been among the prime advocates of the drive towards cleaner vehicles. That has often been to this country’s benefit, because the Leaf, which is made in Sunderland, is the best-selling electric vehicle in Europe.
Sir Vince Cable (Twickenham) (LD)
I thank the Secretary of State for his comprehensive statement. May I follow up on the question from the Chair of the Treasury Committee, the right hon. Member for Loughborough (Nicky Morgan), about the £61 million? In view of the statement apparently made by the Department an hour ago, which contradicts what the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington), said this morning, apparently in good faith, will the Secretary of State clarify how much of the £61 million was actually paid to the company and how much is now due to be repaid?
Greg Clark
I made it clear that the £61 million was approved by the independent process, with which the right hon. Gentleman is very familiar. To date, there has been a payment of £2.6 million, about half of which was for training of the workforce and the community, and half of which was for environmental improvements to the plant. So £2.6 million has been paid to date.
Dame Caroline Spelman (Meriden) (Con)
A matter of minutes before I came to hear this statement, I had the wife of a car worker on the telephone and she was very distressed by the threat to her husband’s job. Does the Secretary of State agree that, for the long-term security of the car industry, the political declaration needs to secure a stable customs arrangement with the EU and the House needs to get behind the deal?
Greg Clark
I do agree with my right hon. Friend that the House needs to come together and enter into a deal that can provide that confidence. When it comes to the customs arrangements, as she well knows, the motor industry has been absolutely clear, as I set out in my statement, that it wants to make sure that the agreement involves no tariffs, no rules-of-origin checks and no frictions added to what has been a spectacularly successful trading relationship.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Nissan has been clear that uncertainty around our future trading relationship with the European Union has been a factor in this decision. Is it not the case that even if the Government’s deal is passed, we will still face years of uncertainty and negotiation, which will put jobs and investment at risk at Nissan and throughout the country?
Greg Clark
No. The industry has been clear that the deal that has been negotiated meets its requirements to continue what has been a very successful investment programme. One of the opportunities that we have and one reason I really do think it is in the country’s interest to come together on a deal is that I am familiar with investment plans into what is a very successful environment of innovation and excellence on the part of the workforce, and people are poised to make investments if we can settle the question of the terms of our exit and our future relationship. That is why I hope that in the weeks ahead the House will come together to provide that certainty.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
I agree completely with what the Secretary of State has said about the need to provide certainty as soon as possible, but I take issue with those who want to turn this all into an issue of Brexit. The House should be clear that there has been a 14% reduction in the sale of Nissan products into Europe over the past year, which explains a lot of the context of this decision. Will my right hon. Friend clarify that no jobs are being lost as a result of this decision and, crucially, that production of the Juke, the Leaf and the Qashqai is entirely unaffected?
Greg Clark
My hon. Friend is absolutely right, but it is also right to reflect that for more than two and a half years now the industry, and Nissan in particular, has been worried about the consequences of Brexit. That is why many Members, both Government and Opposition, as well as the trade unions, made such a determined effort to ensure that we got the investment that was so vital. That investment is there, it continues, it has been made, and it has saved the plant in Sunderland and ensured that the more than 40,000 jobs—people’s livelihoods—that depend on it are there and secure. I want to see more investment in future, which is why I want the House to agree a way forward with the rest of the European Union.
Ian Mearns (Gateshead) (Lab)
The Nissan Washington plant is less than 5 miles from the edge of my Gateshead constituency, where we have 3,325 people unemployed—1,000 more than at the same time last year. Nissan has laid off many hundreds of agency workers in the past 12 months, so will the Secretary of State commit to do something tangible for the north-east of England? The north-east of England is in danger of being left behind, but parts of it, like my constituency, are being left behind already. In the light of this very harmful decision, will he do something tangible and work with Members from the region to establish a taskforce to rescue the north-east economy?
Greg Clark
I am a north-easterner myself by birth and upbringing. We should celebrate the resurgence of industry across the north-east in recent years, including the expansion of Nissan. The hon. Gentleman should know—Members from all parties certainly know—that I worked closely with Members on both sides of the House to pursue investment opportunities. Had we not done so, we would not have had the investment that Nissan made two and a half years ago that secured those jobs for the future. I will continue to do that, all the time.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
I have many constituents who work at Nissan in Sunderland. They are highly trained and committed workers who do a long commute every day to work in such an extraordinary and fabulous place. As my hon. Friend the Member for Stone (Sir William Cash) said, the changes to the EU rules—and therefore the UK rules, too—on diesel emissions have put real pressure on Nissan to move away from diesel engines in the longer term. Will the Secretary of State set out clearly what the Government will do to support not only Nissan but the car manufacturing industry as a whole to move fully to electric vehicles over the next 20 years?
Greg Clark
In my statement I mentioned the Faraday challenge, which we established as part of the industrial strategy. Not only is there a quarter of a billion pounds to fund the latest research on the future of batteries, but we have established in the west midlands the national battery manufacturing centre to make sure that we not only invent the technology but deploy it. We have a reputation as one of the places in the world with the greatest prospects for the new types of propulsion that the industry is moving to rapidly. Nissan is of course one of the prime exponents of that and one of the prime beneficiaries.
Mr Kevan Jones (North Durham) (Lab)
Many of my North Durham constituents work at Nissan or in the supply chain and were very disappointed by the announcement at the weekend. Will the Secretary of State refute the allegation in yesterday’s Sunday papers that because of this decision the Government will somehow penalise Nissan in respect of future Government grants? Also, will he be an advocate for the clean diesel engine? That would help not only Nissan, but the entire UK motor industry.
Greg Clark
I am grateful to the right hon. Gentleman for what he said, and I can certainly refute that. He knows that I have given particular attention to the expansion of prospects for the automotive industry, including by establishing the programme for battery technology and connected and autonomous vehicles. I travel the world to make the case for Britain as the home of the vehicles of the future. Of course, Nissan is a hugely valued investor, employer and innovator in this country, and we will work closely with it in future.
On clean diesel, I have said to Members from all parties that the country will undergo a transition to fully electric and zero-emission vehicles, and a new-generation clean diesel is a perfectly reasonable choice for people to make, especially those who, for example, use it regularly for long journeys. People should be clear about that.
Mark Garnier (Wyre Forest) (Con)
My right hon. Friend has very clearly shown his enthusiasm for the future with the Advanced Propulsion Centre and the Faraday challenge. On the issue of diesel, however, changes in diesel legislation have resulted in a significant slowdown in the second-hand car market for diesels. That market is incredibly important to the financial sector that finances the car market in the whole of the UK. Has he done an analysis of what is going on in the second-hand diesel car market and its implications for the whole of the financial market in the UK?
Greg Clark
My hon. Friend is absolutely right; as the House knows, there has been a slowdown in the market for new diesels. People are hanging on to their existing ones and values have fallen in the second-hand market. It is something that is reflected across the whole of Europe, and indeed in many other parts of the world. We need to make sure that we are clear that the next generation of diesel is a perfectly reasonable choice for people, and that we accelerate the deployment and the uptake of electric and zero-emission vehicles. That has been our determination in the past two and a half years, and that is recognised by the industry right across the world.
Anna Turley (Redcar) (Lab/Co-op)
I was at Nissan just recently meeting the fantastic workforce, some of whom are my constituents who had lost their jobs in the steelworks and subsequently been recruited by Nissan. It was made very clear to me when I was there just how important the EU market and the integrated cross-border just-in-time supply chains were. In their letter to Nissan, the Government say that they fully recognise
“the significance of the EU market to your presence in Sunderland.”
Why then are the Government keeping no deal on the table and playing fast and loose with my constituents’ jobs again?
Greg Clark
Everyone in this House has a responsibility: we need to protect the jobs of our constituents and to give them opportunities for the future. One way or another that involves this House agreeing on a plan for our relationship with the rest of the European Union. It might involve Members from all parts of the House leaving their comfort zone and being willing to compromise. Internationally, we have had a reputation for being willing and able to do that—to be a pragmatic and dependable place in which to do business. Now is the time to demonstrate that to the rest of the world.
Anna Soubry (Broxtowe) (Con)
I say to the Secretary of State that many people would compromise. If a customs union were put to the vote, some of us would vote for it, but the Prime Minister has made it very clear that that is not available. I suggest to the Government that they might start the compromising in Cabinet and with the Prime Minister. I had the great honour—and it was an honour—to go to Sunderland and visit the Nissan plant shortly after the EU referendum result. Having spoken to the management and workforce, this decision comes as no surprise, as there were very serious concerns then about Brexit. I gently say to him that, in my opinion, this Government, far from allaying those fears, have exacerbated them, because they refuse to take no deal off the table. Given the catastrophe of a no-deal Brexit, I would have expected the Cabinet to have discussed it, based on a careful assessment of the risks of a no-deal Brexit by officials. If it has not, why not? If those discussions have taken place, when will this House see the documents that have been made available to the Cabinet so that we can all understand the dangers of a no-deal Brexit, and so that the next time it comes to a vote, Conservative Members, who are supposed to represent the party of business, will vote overwhelmingly against no deal instead of, like last time, voting overwhelmingly in favour of a no-deal Brexit?
Greg Clark
I say to my right hon. Friend that no deal is fully acknowledged—certainly by me and the industry—as being ruinous for our prospects, but in order to avoid no deal, we need to come to an agreement in this House in the weeks ahead. She is right that this is something that affects all parts of the House. To put off the decision, or not to come to a conclusion, would be to continue the uncertainty. We need to bring it to an end, because that is what the investors are looking for.
Phil Wilson (Sedgefield) (Lab)
Does the Secretary of State agree that big multinational companies want to enter the transitional period detailed in the withdrawal agreement to work out whether they are going to stay or leave? They can make that choice—the transitional period is their breathing space—but the small and medium-sized companies and our constituents do not have that choice. They have to stay and suffer the consequences of whatever Brexit brings. Is it not about time that the issue was put back to the people so that they can decide whether what is on offer today measures up to the promises that were made back in 2016?
Greg Clark
The views of businesses up and down the country—not of all of them, but of the majority of them—are clear that having a transitional period is something that they regard as important. The small businesses as well as the large businesses have called for that. It is one of the features of the withdrawal agreement that has been negotiated and it is why businesses specifically and through their representative organisations have called on this House to back it.
Vicky Ford (Chelmsford) (Con)
My first experience of Westminster politics was as the parliamentary candidate for Birmingham Northfield when Rover closed the Longbridge works and 6,000 people lost their jobs. It takes years to build a car factory, and one phone call to close it. Our car manufacturers benefit from frictionless trade with Europe and being part of the cumulative rules of origin regime. The withdrawal agreement keeps those. Does the Secretary of State agree with me that those who seek to vote against the withdrawal agreement or to try to rewrite large swathes of it are playing a deeply dangerous game?
Greg Clark
I do agree with my hon. Friend. She knows the industry well and she knows that, time and again, the leaders—the chief executives—of the players, big and small, in the industry have called on us to back the deal for precisely the reasons that she gives.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Many of my constituents work at Nissan, and many more at the Port of Tyne in my constituency, which is a large part of Nissan’s supply chain. The Secretary of State has failed to answer what assessment he has made of the impact of this decision on the wider supply chain, but he keeps saying to us, “Back the deal”. He and the Government are offering zero clarity on the true impact of that very deal, so will he share that with us now?
Greg Clark
I think that I have been clear that the investment that is being made into the Qashqai is an expanded investment, which will have opportunities for the supply chain, but that the supply chain will lose the prospects of supplying the new model that we had hoped would be there—that is clearly understood. Again, I say to the hon. Lady that I want, as much as she does, to resolve the question of our future relationship. The leaders of the automotive sector have said that the deal that has been negotiated would do that and they have urged us in this House to get on and approve it.
Mr David Jones (Clwyd West) (Con)
Nissan itself has noted a significant decline in demand for diesel-powered vehicles due in no small part to changing EU regulations over emissions in the wake of the VW scandal. Is it not the case that it is that decline in demand that was the primary reason why Nissan decided that it was simply uneconomical to expand the production of the X-Trail outside Japan?
Greg Clark
The company gave its reason, and it said that it was owing to business conditions. One was the accelerating take-up of low-emission vehicles for which it has been one of the strongest proponents, and indeed it has an advanced position in that. It has been clear about that, but it did comment, as my right hon. Friend knows, that the context of uncertainty around Brexit was a negative factor. When an employer communicates that information as clearly as it has done, I think that we should act on it.
Helen Goodman (Bishop Auckland) (Lab)
The jobs of many of my constituents will be affected by this decision. We all know that the Secretary of State is a man who does not want to see a no-deal Brexit, so can he explain to the House and the country why it is that in this morning’s Financial Times he said that the crunch point was the end of February when the big votes will be on 14 February?
Greg Clark
I do not quite understand the hon. Lady’s point, but I think that she might be referring to the fact that we should not regard the period until 28 March as the time available to us to negotiate. Manufacturers place orders for components with suppliers and they are doing so now. They have to buy components now and these decisions are being taken at the moment. Manufacturers that are exporting to the far east, for example, have to make decisions about what they are going to ship during the weeks ahead. We therefore do not have the luxury of waiting until 28 March; we need to conclude this matter very quickly.
Grahame Morris (Easington) (Lab)
The Secretary of State has some historical connections with my region, so he will be aware that we have lost the coalmining industry, the steelworks and the shipyards. I hope that he is also acutely aware of how vital the car industry and the supply chain are not just to Sunderland, but to the whole region. Given that many thousands of my constituents work in the supply chain and directly at Easington, has the Minister considered introducing some incentives to drive the take-up of all-electric vehicles also manufactured by Nissan on Wearside, such as a car scrappage scheme? That would help to reduce emissions and promote employment in my constituency and in the region.
Greg Clark
The hon. Gentleman will know that there is no one in this House more familiar with the importance of the car industry across the country and in the north-east. Within 10 days of having been appointed Business Secretary, I flew to Japan to meet the chief executives not just of Nissan, but of the other investors. I have always had a clear understanding of their requirements regarding future prosperity, and I have always applied that. If he looks at the automotive sector deal that I negotiated with the whole industry and at the investment that we have made in the Faraday challenge, he will see that we are working well and closely with the industry to do what it says is necessary to drive the take-up and innovation in the sector that will secure the future of the motor industry in the north-east and right across the country.
Dr Paul Williams (Stockton South) (Lab)
North East England chamber of commerce tells me that, as the Prime Minister’s deal does not nail down our future trading relationship, Brexit uncertainty could continue for years. What certainty can the Secretary of State give now to the 600 workers in the Nissan supply chain at Nifco in my constituency, for whom this decision is a massive missed opportunity to improve their job security?
Greg Clark
The hon. Gentleman should, in fairness, reflect—as I have done—on the renewed commitment that Nissan has made to Sunderland by putting more cash into the plant than was originally intended in 2016. It has made a decision not to expand out of Japan the production of a model that does not have any other production lines around the world, and I regret that, but it has made a big commitment to Sunderland. That is something that we should respect and recognise the importance of.
Mike Hill (Hartlepool) (Lab)
I thank the Secretary of State for referencing my predecessor, the former Member for Hartlepool, who was quite right in his observations at the time. Specialist companies in Hartlepool, such as Helios Precision Engineering, have invested heavily in new technologies as part of the supply chain. What will the Secretary of State do to protect local manufacturing suppliers to Nissan and the wider automotive industry post Brexit?
Greg Clark
The hon. Gentleman will know that the automotive sector deal, in which Nissan was an important partner, has a significant programme of investment in the skills and capabilities of the supply chain. In fact, the increase in opportunities for the supply chain domestically is one of the principal components of the sector deal that was so widely welcomed by the automotive industry.
Alex Cunningham (Stockton North) (Lab)
Unemployment in my constituency is double the national average, and there are hundreds of people in the constituency who are employed at Nissan and at supply chain companies. These supply chain companies also provide goods to other car makers and across the EU. What is the Minister going to do about a customs union that will protect those jobs in the longer term?
Greg Clark
To protect those jobs in the longer term, we need to secure our ability to trade without tariffs and without impediment across the whole of the rest of Europe. As I have stated very clearly to the House, it is my view that the House needs to come to a decision within the next few weeks. We need to make compromises with each other to be able to provide that certainty and security to important employers.
Richard Burden (Birmingham, Northfield) (Lab)
When it could soon cost less, in terms of tariffs, to import a car to the EU from Japan than it will to export a new car from the UK to the EU in the event of a hard Brexit, is it not easy to see just what impact Brexit uncertainties have on decisions like this? Could not the Government minimise those uncertainties—first, by jettisoning the customs union as a red line for the Government and, secondly, by ruling out no deal?
On diesel, is it not the case that the problem is not with the latest emissions standards, but that Government vehicle excise duty rates hit the newest, cleanest diesels hard and leave the oldest, dirtiest diesels untouched? Will the Secretary of State have a word with the Treasury to do something about that in the spring statement?
Greg Clark
The hon. Gentleman makes an important point about the importance of tariff-free trade. The European Union has agreed, and put into operation last week, a free trade agreement with Japan that provides advantages for companies in being able to import and export directly with Japan. In my view, it also increases the urgency that we face to conclude our agreement with the European Union that should allow us to continue to trade with it and with other countries, without interruption.
We have had many conversations about diesel. It is the case that companies, including Nissan, are accelerating their investment; they are investing more than they previously intended to in ultra-low emission vehicles. This is giving the supply chain opportunity. I agree with the hon. Gentleman that we should not send a message that the current generation of diesel engines is a choice that needs to be avoided by consumers thinking about their next car.
Liz Kendall (Leicester West) (Lab)
While the Conservative party tears itself apart over the Irish backstop and border, the fundamental problem that we face is that we still have absolutely no clarity about our long-term relationship with the EU. Is it not the truth that it is this uncertainty that is causing huge problems for companies such as Nissan, that the Prime Minister’s withdrawal agreement does not solve that uncertainty—it just prevents us from immediately falling off a cliff—and that, if we go ahead with the Government’s blindfold Brexit, we will back here with more damaging statements and announcements that hurt people’s jobs and livelihoods for years and years to come?
Greg Clark
The policy that the Prime Minister has proposed has commanded the support and endorsement of the employers that the hon. Lady is concerned about. I am not aware of any policy proposal from the Labour party that commands any degree of consensus across the Opposition Benches. I have said very clearly today and previously that all Members of this House who were elected in 2017 following the referendum the previous year always knew that this was going to be the most important decision that we would take. It is time to find common ground and to settle on an agreement that commands a majority of support in this House that will provide the confidence and stability that the rest of the world looks to.
Albert Owen (Ynys Môn) (Lab)
The Nissan decision is sadly following a developing trend of disinvestment by foreign companies not just in the north-east of England, but north Wales. I appreciate the Secretary of State meeting me later to discuss that. I am a proud member of the all-party parliamentary group on Japan, of which the Minister for Asia and the Pacific, the right hon. Member for Cities of London and Westminster (Mark Field), is also a regular member, and Japanese representatives say clearly to me that there are two strengths to investing in the United Kingdom: the loyal and unionised workforce, and a strong single European market. I ask the Secretary of State to urge his Cabinet colleagues, for a start, to ensure that we have that strong unionised workforce and a strong European single market?
Greg Clark
I gently correct the hon. Gentleman when he talks about disinvestment in Sunderland. It is very important that the House understands that far from being a disinvestment, the commitment that has been given actually involves an increase in the capital investment into the plant. Given that that comes from a company that has other uses for its capital, we should recognise that it is putting more money into Sunderland and into securing its future. With regard to the future, he is right to draw attention to the fact that the reason companies have located very successfully here in this country is partly because of the excellent workforce that we have, partly because of our track record of innovation, and partly because they have had access to a large market that has come from the European Union. It seems to me that we need to continue with all of those.
Frank Field (Birkenhead) (Ind)
Have any of the other large car manufacturers in this country sought and gained similar-sized packages of support—I am thinking about Vauxhall—and if they have been refused, why?
Greg Clark
As I said in my statement, there has been a regular and long-standing programme of support for companies right across the automotive sector. It is conducted independently. Companies make applications either through the Advanced Propulsion Centre or through the scrutiny of the Industrial Development Advisory Board. This has been a success. Nissan has applied for it, and many other companies have done so as well. For example, I commend the investment that Toyota made in its Burnaston facility. I had the pleasure of opening the production line for the new Corolla there a few weeks ago.
Mr Ben Bradshaw (Exeter) (Lab)
I thank the Secretary of State and his like-minded colleagues for what we read they are trying to do to avert a ruinous no-deal Brexit, as he just described it, but I gently suggest to him that when the moment of truth arrives again in 10 days’ time when the votes come back, they will be judged on their deeds and not just their words. I say to my own Front Benchers that if we have a Whip that ignores the unanimously agreed policy of our own party in opposing a no-deal Brexit, they will be judged just as harshly.
Greg Clark
I cannot speak for the right hon. Gentleman’s Front Benchers, but he has heard me say that it is incumbent on the whole House to keep the national interest in mind and to reflect our traditions of doing that. I recently looked at the speech that Margaret Thatcher gave when she opened the Nissan plant in Sunderland. She commented that Nissan had chosen the UK because
“within the whole of Europe, the United Kingdom was the most attractive country—politically and economically—for large scale investment and offered the greatest potential.”
That political stability, confidence and pragmatism, which was so important then, is important now, and we should return to it.
Peter Kyle (Hove) (Lab)
In his speech in the European Union (Withdrawal) Bill debate, the right hon. Member for Sevenoaks (Sir Michael Fallon), who has just left his place, said that the political declaration was “vacuous”, so I gently point out to the Secretary of State that opposition to his Government’s withdrawal arrangements is not confined to the Opposition Benches. When a country like Japan is looking to invest, and when companies such as Nissan export up to 80% of their products into the single market, will he just acknowledge that being within the single market provides an advantage over the countries that are outside it?
Greg Clark
Of course, it depends on the terms of trade that are negotiated. Clearly, being a member of the European Union unquestionably allowed Nissan and others to trade without thinking about tariffs or impediments. We need to secure a deal that allows us to continue to offer Britain as a place of innovation and skills, and a place that can be confident in exporting to the rest of Europe.
Lilian Greenwood (Nottingham South) (Lab)
This weekend’s news clearly demonstrates the damage of continued uncertainty about our future relationship with the EU. The Society of Motor Manufacturers and Traders has been warning for many months about the very grave dangers of a no-deal Brexit, but in recent weeks numerous Nottingham employers, including Paul Smith, East Midlands airport and Siemens, have all contacted me to raise exactly the same concerns. The Secretary of State has just admitted that a no-deal Brexit would be ruinous, so when does he think the Prime Minister is going to recognise the damage that she has done by insisting that no deal remains a real option, and instead act to protect jobs and investment by ruling it out?
Greg Clark
I hope that when the hon. Lady has been having her discussions with those employers, she has listened to what they have said. The SMMT, for example, has been very clear that in order to avoid the consequences that she talks about, it is necessary to accept the deal that has been agreed. The SMMT said that it is “a positive step” that should be backed. The chief executive of Siemens in the UK has also commended the deal. So if she wants to avoid the disruption that I agree would be caused, she needs to listen to the other part of what people say to her and follow their advice in that respect too.
Catherine West (Hornsey and Wood Green) (Lab)
Given the uncertainty that the announcement by Nissan has caused, the job losses announced at Jaguar Land Rover, the worries expressed by Honda, and the Hitachi decision when the Prime Minister of Japan had barely taken off following his visit to our Prime Minister, what worries does the Secretary of State think have arisen in his Department? Does he agree with his junior Minister, the hon. Member for Watford (Richard Harrington), that we are going from
“a crisis into a catastrophe”?
Greg Clark
I visit Japan a lot and speak both to the leaders in the Government and the leaders of important investors there. They regard Britain as a place with which they have enjoyed good relationships and in which they have invested with prosperity. They admire the ingenuity of our scientists and our engineers. They are keen to work even more closely together in future. But is true to say that they look at the uncertainty around Brexit and think that after two and a half years it is time that it is resolved and comes to a conclusion. When they say that, we should listen to them and act on their advice.
Chris Bryant (Rhondda) (Lab)
The Secretary of State is a nice man, but I honestly feel as if we are going to hell in a handcart. The only people who can genuinely stop this conveyor belt towards a no-deal Brexit in a few weeks’ time are people like him sitting in the Cabinet. They have got to go back to the Cabinet and say to the Prime Minister, “We will not put up with this. This will do lasting damage to our country, to our people, to our jobs and to our standing around the world, and we must put a stop to it; otherwise we will resign.” I suggest that he does that before next week’s votes.
Greg Clark
I am grateful for the hon. Gentleman’s advice. I think it is matter of public record that I have constantly and consistently advocated the need for us to be able to secure the trading relationship that we need to make sure that the jobs in his constituency and all around the country continue. It is important that I should do that.
Jack Dromey (Birmingham, Erdington) (Lab)
The automotive industry, employing 850,000 workers, is the jewel in the crown of manufacturing excellence. We have had 4,500 jobs going at Jaguar Land Rover and we now have the news about Nissan. The Society of Motor Manufacturers and Traders is warning that the industry is now “on red alert” as a consequence of Brexit uncertainty. Does the Secretary of State agree, on the one hand, that we should rule out any question of a no-deal Brexit, and crucially, on the other hand, that this House needs to come together at the next stages to negotiate a deal that will provide much greater and longer-term security, at the heart of which must be the customs union?
Greg Clark
The success last week of the amendment that the hon. Gentleman tabled with my right hon. Friend the Member for Meriden (Dame Caroline Spelman) demonstrated that the majority of Members of this House are determined not to see a no-deal Brexit. Indeed, to avoid that, we need to come together in just the way that he says to reach a deal, making compromises with each other that can provide the certainty that investors need to continue the period of great success that we have enjoyed in this magnificent industry.
Ian C. Lucas (Wrexham) (Lab)
In response to the 2008 world economic crisis, the Labour Government tasked the Automotive Council, which they had established, with putting together emergency measures to sustain our important automotive sector. We are in a similar situation, and we need action. The Labour Government introduced the scrappage scheme, which led to me, as the last Labour automotive Minister in 2010, announcing the Nissan Leaf going to Sunderland—that is the type of action we need. Will the Minister task the Automotive Council with putting together emergency measures that it will support to sustain not only Sunderland but all the other plants, including at Bridgend, Dagenham and Ellesmere Port, to ensure that the strong automotive sector we have all built—Labour, Liberal Democrat and Conservative—over the past 15 years is maintained at this dangerous time?
Greg Clark
It is important for the hon. Gentleman to recognise that the investment being made in Sunderland is greater than was planned two and a half years ago. The company is investing more of its capital in Sunderland than it originally intended. That is significant because the pace of change in the sector means that there are great opportunities for investment right across it. We have a reputation because of a long-term commitment to the sector that started before this Government for being at the leading edge of innovation. If we can resolve the question of our future relationship with the European Union, I believe that substantial investments will be made very quickly, to the great benefit of this country and the people who work across it.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
When I started my career in manufacturing, I had the great benefit of being taught by experts in lean manufacturing from Nissan, Toyota Burnaston and Airbus. One thing that was drilled into me from a young age was the concept of the seven wastes: transportation, inventory, motion, waiting, over-production, over-processing and defects. The worst of those wastes was inventory. As a result of the uncertainty facing British industry, inventory levels are increasing, putting British industry at a permanent competitive disadvantage. Does the Minister recognise that the absence of a customs union will put British industry at a permanent strategic competitive disadvantage?
Greg Clark
I am impressed at the hon. Gentleman’s recall of the principles that he was taught. He is right that one of the benefits and sources of efficiency in our production system is that companies do not need warehouses or inventory. It is clearly a matter of huge regret that companies are having to invest in inventory and warehouses and divert capital from more productive uses. I agree that we need a deal and an agreement that allows just-in-time production to continue. I strongly share his analysis of that.
Matt Western (Warwick and Leamington) (Lab)
This is clearly a terrible decision for not only Nissan Sunderland and the whole north-east but the entire automotive industry, given how much of it depends on scale and component suppliers working to scale. The Secretary of State understands this sector particularly well. Does he accept that the industry wants a customs union and a single market? Does he accept that the Government have a responsibility to remove the diesel levy that they introduced two years ago?
Greg Clark
Obviously the hon. Gentleman has great familiarity with the industry, from his constituency perspective. The industry has consistently expressed itself satisfied with the deal that has been proposed. It has said so in terms at the overall level, through the Society of Motor Manufacturers and Traders, and individual companies have said so. The industry is concerned that this House has not come to a resolution to turn that agreement into something that it can depend on. I hope he will join colleagues from across the House in advocating the kind of compromise that will enable the whole House, not just by a slim majority but wholeheartedly, to agree a deal that can send confidence to investors in this industry and others around the world.
Justin Madders (Ellesmere Port and Neston) (Lab)
There is no doubt that this is bad news. At Vauxhall in Ellesmere Port, we have had more than our share of bad news in recent times—we have lost over half the workforce in the last year. Now that we know what the Government are prepared to offer to encourage investment in car manufacturing, can the Secretary of State confirm that the same or very similar terms will be available to any other applicants?
Greg Clark
When I first made the statement to the House on 31 October 2016, I described the programme of support that has been operated for many years, in which investment in training the workforce, environmental improvements and R&D can be applied for, and those applications are subject to independent scrutiny. We have a good record of providing that. It is available to large, medium and small firms and is well known in the sector.
Points of Order
Ann Clwyd (Cynon Valley) (Lab)
On a point of order, Mr Speaker. You will be aware of reports that the Government were offering Labour MPs in economically challenged areas financial support for constituency projects in return for support for the Prime Minister’s Brexit deal. I oppose the Prime Minister’s deal, and there are no circumstances in which I would support it. If reports are correct, my area would therefore not qualify. Can you confirm that targeting individual constituencies in that way raises issues of hybridity, if targeted offers are accompanied by legislation?
“Erskine May” states that the House resolved on 22 June 1958:
“That it is contrary to the usage and derogatory to the dignity of this House that any of its Members should bring forward, promote or advocate in this House any proceeding or measure in which he may have acted or been concerned for or in consideration of any pecuniary fee or reward.”
Will you consider whether a reward includes a benefit to a Member’s constituency? It is arguable that a Member may be under pressure from constituents to accept a reward in the form of targeted support and may thereby be under pressure to vote in a particular way to secure the Government’s offer of reward. Must the offer be made to all economically challenged areas, irrespective of the way a Member chooses to vote on the Prime Minister’s deal?
“Erskine May” states on page 265:
“Conduct not amounting to a direct attempt improperly to influence Members in the discharge of their duties but having a tendency to impair their independence in the future performance of their duty may be treated as a contempt.”
Surely the Government’s offer breaches that principle. Will you consider that matter?
Mr Speaker
I am grateful to the right hon. Lady for her characteristic courtesy in giving me advance notice of her intention to raise this subject, though not of the particular question that she had in mind. About that latter fact I make no complaint whatever; I simply say it for the benefit of people understanding the context. I knew that she wished to raise the subject, but I did not know precisely what she wished to put to me.
What I will say to the right hon. Lady off the top of my head is as follows. I am not altogether clear that the criterion of hybridity is satisfied by the circumstances she referred to, but I am happy further to reflect on the matter. On the matter of contempt, which is an extremely serious charge, if any right hon. or hon. Member seeks to level that charge against any Member, including a Minister, allegations of contempt have customarily to be raised with the Chair in writing. If the right hon. Lady is moved to allege contempt on the basis of her own conviction and from her study of “Erskine May”, she is perfectly welcome to write to me about the matter, and I will consider it.
It is obvious to me that the right hon. Lady regards the circumstances she has alluded to as, at the very least, very smelly, and that point of view will be shared by many people. That is not necessarily the same as a procedural or other impropriety, but it is very clear that she regards it as malodorous behaviour. It is for individual Members to decide how they vote on these important matters. As ever in this House, it is not unusual for others to seek to persuade Members to vote one way or another, or for Members to seek to negotiate political outcomes or ministerial undertakings.
I must say that the notion of a trade is a source of concern. I have not witnessed it in this way previously in my time, and it is a matter of concern. I weigh my words carefully because I do not want to make a hasty judgment. The right hon. Lady has raised an extremely serious matter, and she does so on the basis of very long experience in the House. I am not sure—I say this with caution—that she is alleging any specific financial impropriety, but if she were, that would again be a most serious matter. If she does have such concerns, beyond what I have already said to her, she may wish to seek the advice of the Comptroller and Auditor General. I will leave my response to the right hon. Lady there for now.
Frank Field (Birkenhead) (Ind)
Further to that point of order, Mr Speaker. Some of us freely voted for the withdrawal agreement but also represent seats in the north, and I similarly wish that we are not discriminated against because we freely gave our vote without any money.
Mr Speaker
Well, I note that. Without any pejorative reference to any other right hon. or hon. Member, I put it to the right hon. Gentleman that he is veritably a sea-green incorruptible. The idea that the right hon. Gentleman would vote for any reason other than his personal conviction is, to me, unimaginable, and that is quite a striking statement from the Chair because my imagination is quite vivid. However, it is unimaginable that the right hon. Gentleman would do other than vote in accordance with his conviction. Indeed, I think he would be rather offended by the suggestion that somebody would try to procure his vote by what he might regard as an improper influence. I think we will leave the matter there for now. I saw somebody else brow-furrowed, but not rising.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
On a point of order, Mr Speaker. In business questions on Thursday, I likened my local town to Aleppo. The Official Report unfortunately described it as “a leper”, which, as you can imagine, is somewhat different from the message I was trying to get across. Although it was probably righter than me, may I ask your guidance? I am happy for the record to stand, but it was not in fact what I actually said.
Mr Speaker
It could be quite difficult now for the hon. Gentleman to correct the record, although if he wanted to consult the Table Office about a written question he might put down, he could probably find his own salvation. For the avoidance of doubt, the hon. Gentleman, as I understand it, was referring to a place, the title of which begins with an A and, because it is a place name, with a capital A; he was not referring to someone suffering from a very serious and regrettable disease. I hope that that is helpful to him, in so far as he is communicating with the “Bridgwater Bugle” or some other organ of note in his constituency. I am sure he will want to ensure that the facts are known, and I have the impression from his grinning countenance that he is satisfied with that reply.
Social Security
(5 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
With the leave of the House, I propose that we debate motions 1 and 2 together. There are motions this afternoon, and I do not want Members to be confused. More importantly, I do not want people outside this place or viewing our proceedings to be uninitiated. There are two motions, both on the matter of social security. The first is the draft Guaranteed Minimum Pensions Increase Order 2019—oh dear, oh dear; just as I say this, the Gallery starts to empty—and the second is the draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019, and the pace of departure is hastening as I speak. I suggest, with the leave of the House, that we debate motions 1 and 2 on social security together. To move the first of the two motions, I call the Minister, who has some audience in the Chamber and at least some sort of dedicated and loyal following upstairs.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I beg to move,
That the draft Guaranteed Minimum Pensions Increase Order 2019, which was laid before this House on 16 January, be approved.
Mr Speaker
With this, it will be convenient to discuss the following motion:
That the draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019, which was laid before this House on 16 January, be approved.
Guy Opperman
Thank you, Mr Speaker—what an introduction. I will not take the departure personally. With your permission, I will address both the orders at the same time.
The reality is that automatic enrolment is one of this country’s biggest and quietest success stories. It is a cross-party success story that has reformed private pension saving, with nearly 10 million people now signed up to a private pension. Our thanks are due to the 1.4 million employers up and down the country that have supported automatic enrolment.
Paul Masterton (East Renfrewshire) (Con)
I am very pleased by the development of automatic enrolment in East Renfrewshire, but while the Minister is at the Dispatch Box, will he take the opportunity to update me on the progress in relation to collective defined-contribution schemes?
Guy Opperman
The good news is that approximately 5,000 jobholders in East Renfrewshire are now benefiting from a workplace private pension, and our thanks are due to the 1,270-plus employers in my hon. Friend’s constituency.
On collective defined-contribution schemes—I know the hon. Member for Birmingham, Erdington (Jack Dromey), who speaks for the Opposition, is very passionate about them as well—I can confirm that, following the closure of the Government consultation on CDCs last week, the Government intend to proceed with CDC legislation, subject of course to the formal response to that consultation. It is right that I recognise on the Floor of the House the fantastic work my hon. Friend has done in bringing forward a ten-minute rule motion and then a private Member’s Bill to prompt and trigger the consideration of CDCs. This will play a massive part for the Royal Mail postmen and women who work in all weathers—I know there is interesting weather in East Renfrewshire—to support local businesses and the local economy.
The guaranteed minimum pensions increase order is a technical matter that is debated by this House on an annual basis. It provides for defined-benefit occupational pension schemes that are contracted out to increase members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 2.4%, in line with the increase in the consumer prices index to the previous September.
The automatic enrolment order reflects the conclusions of this year’s annual review of the automatic enrolment earnings thresholds, as required by the Pensions Act 2008. In conducting the review, the Secretary of State has considered both the automatic enrolment earnings trigger, which determines the point when someone becomes eligible to be automatically enrolled into a qualifying workplace pension, and the qualifying earnings band, which determines those earnings on which the enrolled employee and their employer have to pay a proportion into a workplace pension.
Christine Jardine (Edinburgh West) (LD)
The Minister will know that the upper threshold is linked to the higher rate threshold for income tax. Will he explain to the House why the Government are prioritising this £1.3 billion tax cut for higher earners over reversing cuts to universal credit or ending the benefits freeze a year early?
Guy Opperman
The hon. Lady will understand that the trigger and the earnings limit are in line with national insurance figures. The level was £6,032 in 2018-19, which has gone up to £6,136. The upper limit was £46,350, which has gone up to £50,000. There will be more people saving by way of automatic enrolment by reason of these changes, and those enhanced by this will be numbered in the tens of thousands.
With respect, automatic enrolment is supported on a cross-party basis. It is a successful policy, with 10 million people in various constituencies up and down the country now benefiting from it. In February last year, the last group of smallest employers took on their duty to enrol all staff, and we now have 1.4 million employers. In April this year, we go to 8%, and individuals and employers will therefore be saving a substantial amount. The crucial statistic is that only 9% of individuals have opted out of, or ceased to have, an automatically enrolled pension on an ongoing basis.
Nigel Mills (Amber Valley) (Con)
I welcome the order. In considering the earnings trigger staying at £10,000—I note that that brings about another 40,000 people in, with an inflationary reduction—did the Minister think about the auto-enrolment review and the various recommendations that the trigger should be reduced to the lower earnings threshold, or should at least be extended so that someone could add up all their jobs to determine whether they qualified over that trigger? Is he tempted to make a change down to £6,000 or to a cumulative total, or is he thinking that next year, when we do not have to do the escalation, would perhaps be a better time to do that?
Guy Opperman
My hon. Friend asks his customary astute question, with his deep knowledge of this issue. The reality of the Government’s approach is that we wish to address the increase to 8%, get to April 2019, address the degree of opt-outs that follow from the increase to 8% and, at that stage, consider where we are. We have already had the 2017 automatic enrolment review, which agrees that the limit will go down to the first pound, and that we will go down from 22 to 18 in terms of the working population. The key point is that we should get to 8%; we should get this country up to a situation where we have ever larger numbers of people being not only part of automatic enrolment, but in a situation where they are up to 8%. That is possibly not the entirety of where we should be going, but, without a shadow of a doubt, it is a massive step forward.
Frank Field (Birkenhead) (Ind)
If I may follow the hon. Member for Amber Valley (Nigel Mills), who is a member of the Work and Pensions Committee, the Government clearly should be worried about people opting out when there are big changes. However, would the Minister and his Department argue to his colleagues from the Treasury, who are sitting just by him, that we could more profitably use some of the huge subsidies that go to higher rate taxpayers for their pensions to pay the contributions of those who are low paid?
Guy Opperman
I am in absolutely no doubt that my esteemed colleagues from the Treasury will be taking due note of the right hon. Gentleman’s advice and recommendations on pension tax relief, as he is the Chair of the Work and Pensions Committee. [Interruption.] They have encyclopaedic memories; they do not necessarily need to write particular words down, and they also have the benefit of Hansard. However, I am sure that the Chair of the Select Committee would agree that the primary purpose of auto-enrolment is to get to 8% and then to gain a proper understanding of where we are at that stage. There is a perfectly legitimate debate to be had across the House, on what is a cross-party policy formulated over 10 years, about where we then go in terms of employer contribution, employee contributions, the rates that one must go to and the tax relief that applies. That, I would suggest, is for another day. In those circumstances, I commend the orders to the House.
Jack Dromey (Birmingham, Erdington) (Lab)
First, in relation to the Guaranteed Minimum Pensions Increase Order 2019, we note it. Secondly, in relation to the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019, I would like to speak to it briefly.
I am the first to accept that, as the Minister has said, there has been cross-party support over the past 10 years for auto-enrolment, but he will forgive me a commercial for the last Labour Government. It was the last Labour Government who commissioned the 2006 Adair Turner review—I actually chaired some of the policy discussions that led to that decision. The review produced an excellent report, and I was one of those who was pleased indeed that our Government acted on it. However, the success of auto-enrolment subsequently could not have been achieved had it not been for the cross-party approach to which the Minister referred.
There is no question but that auto-enrolment has led to a significantly better workplace pensions landscape, with an additional 10 million workers estimated to be newly saving or saving more as a result of auto-enrolment into master trusts. That has led now to almost £20 billion of pension saving, mostly by low-income workers. The Opposition also welcomed the moves by the Government to reduce the age of eligibility, which was an important step in the right direction.
However, for all the immense benefits attached to auto-enrolment, it is not a perfect system, and there are many issues that need to be acted on at the next stage if we are to make the pensions landscape better. First, the threshold at which workers are automatically enrolled is too high. According to the latest figures from the Department for Work and Pensions, 37% of female workers, 33% of workers with a disability and 28% of black and minority ethnic workers are not eligible for master trust saving through auto-enrolment.
Secondly, auto-enrolment does not cover the self-employed or workers in the gig economy. It is welcome that the Government are now taking steps in relation to pilot projects to seek to identify the problems and overcome them. It is particularly welcome that, as part of that, they are including at least one or maybe two joint initiatives with trade unions representing workers in sectors where there are large numbers of self-employed.
Thirdly, 8% cannot be the summit of our ambitions—of that there is no doubt. Labour commenced down this path when in government, and this Government have done things subsequently, so of course we have moved step by step. The Minister was right to say that, as we reach 8%, we need to take stock of where we go from there. We will need to build on that at the next stages, and, commensurate with getting the balance right, we will need, dare I say it, more of an emphasis on employer contribution, although employee contributions will of course continue to be crucial as well.
I have just one final point. I was grateful that the hon. Member for East Renfrewshire (Paul Masterton) raised the matter of CDC. A wider point in relation to auto-enrolment is that it has been a positive move towards many more workers saving. We have always said that we do not want, in any way, to threaten good DB schemes, and we always defend good DB schemes first and foremost, but I am afraid that the direction of travel on that has been depressing in recent years. If one falls back on a defined contribution arrangement, however, the problem is, all too often, the inadequacy of such arrangements. The hon. Gentleman was therefore right that the agreement reached by Royal Mail and the Communication Workers Union was a significant breakthrough. I pay tribute to them, because it is a groundbreaking agreement, which covers in excess of 140,000 workers.
I also welcome the Government’s preparedness, having consulted, to legislate. The Opposition will certainly work with the Government—on other issues, we may have differences, but on this we will work with them—to give effect to this groundbreaking agreement as soon as possible. That is not least because it will offer significantly better savings and a significantly better standard of living in retirement than would be the case if the workers concerned fell back on simple DC schemes. That, for us, is a particular landmark. I confirm that the Opposition stand ready, whenever the Government are ready, to bring forward the necessary legislation in this House. Some 143,000 workers will benefit, so the sooner we can introduce the legislation, the better.
Neil Gray (Airdrie and Shotts) (SNP)
I am grateful for the opportunity to speak briefly in this debate. I concur with the hon. Members for Birmingham, Erdington (Jack Dromey) and for East Renfrewshire (Paul Masterton), as well as the Minister, in what I am sure will be a largely consensual debate. The SNP will not oppose these statutory instruments this evening, but it is right that I outline some areas where we still have concerns.
First, with regard to the guaranteed minimum pensions increase order, we should acknowledge the context. The UK state pension is one of the most miserly in Europe. We lag far behind other European countries in the cash amount paid and the pension to earnings ratio. When we consider that alongside the proposed cuts to pension credit, the scandal of the state pension age increase for 1950s women, and the public sector workers who have been ripped off to the tune of £4 billion, we can see that the UK Government have been letting our pensioners down.
The GMP was supposed to provide a minimum weekly pension roughly equivalent to the amount of additional state pension that would have accrued if they had not been contracted out. The scheme operated until 1997, and although rights do not continue to accrue, they continue to be protected either by the general level of prices or 3%, whichever is less. However, the changes to the state pension mean that the rights accrued between 1978 and 1988 are not protected or subject to this statutory instrument. That is worth bearing in mind. Many pensioners will be getting much less than was anticipated when the scheme was operational. People who were contracted out were not made aware or did not understand what the implications could be long term, and were given the impression that their retirement income was protected at comparable levels. I would be interested to hear what the Minister is doing to ensure that people are properly advised of potential pension changes and that the pension entitlements accrued by workers are better protected in future, with particular regard to the Women Against State Pension Inequality Campaign—the WASPI women—I am sure.
The SI also highlights why it is so important that the UK Government speed up the pension dashboard process. Having one simple dashboard would make it much easier for people to know exactly what their anticipated retirement income should be. Right now, about 47% of UK adults do not know what is in their pension pot. A dashboard would provide that knowledge. One person in five has said they would be more likely to save if they had more information about their pension savings. When people are better able to plan for retirement, that saves the Exchequer. Once again, I suggest that an independent pensions commission would help to ensure that the complexity and vastness of pensions policy could be effectively studied and improved. I hope the Government will finally consider such a commission.
I turn briefly to auto-enrolment. We welcomed auto-enrolment and the Minister described it as a success story. I will explain briefly how he could make it even more so. What we are talking about this evening is the earnings trigger at which auto-enrolment comes into effect. This band sets a minimum contribution level for money purchasing pension schemes. The minimum of the band is also relevant for defining who can opt in if they earn under the earnings trigger. We had hoped the UK Government might have looked at expanding the workforce who would be eligible under auto-enrolment. Considering historical gender pay gaps in lower-paying industries and the fact that women are more likely to take career breaks to care for children, women have always had lower pension savings even though they need bigger pots due to longer life expectancy.
We also know that a large number of those falling below the income threshold will be women. It is therefore disappointing that the Government have not brought forward their welcome proposal to lower the threshold to £6,136, which under current plans will not come into force for some years. It is also disappointing that inclusion of 18-year-olds under auto-enrolment is also not expected for many years.
Finally, I would appreciate the Minister’s guidance on why these two SIs were not consulted on ahead of being presented this evening.
Alison Thewliss (Glasgow Central) (SNP)
The pensions system is overly complex. People no longer work in one job for life; they have multiple jobs over a career. Keeping on top of lots of different pension schemes over a number of decades makes it incredibly difficult to plan for the future. Some people find it very difficult to make savings due to other financial pressures—indeed, before I came to this place my pension contribution was minimal as a huge chunk of my income went instead on paying nursery fees. I am sure that many younger women will have found the same. We are storing up problems for the future.
As my hon. Friend the Member for Airdrie and Shotts (Neil Gray) said, the Scottish National party has long argued for an independent pension commission, because this issue is too important to be kicked around by Governments of different political persuasions. People need to be able to make plans and future Governments need to be ready for the challenges that an ageing population will bring.
This Government have acknowledged the complexity of the pensions system, but they have not really done enough about it so far. Many of my constituents have contacted me as part of the campaign to show their support for a Government-funded pension dashboard, but the Government are still dragging their heels. The Department for Work and Pensions has indicated that it would prefer for the project to be led by industry, but there are many reasons why that is problematic. It would lead to a patchy system that would not encompass everything. If the Government do not step up and supply data from the Treasury on state pensions and non-contributory public sector pensions, that effectively renders the project useless.
The public’s relationship with the Government relies on a series of contracts. When people trust Government bodies such as Her Majesty’s Revenue and Customs to give them accurate information about the tax that they owe and then in good faith pay that amount, they do not then expect there to be all kinds of hoops to jump through to access their state pension. Stay-at-home mums, for example, need to be aware that they have to be registered for child benefit to clock up credits towards their state pension record. That is not well enough understood. The Government need to take extra steps to ensure people understand what their entitlement rests on.
People expect—this is not unreasonable—that a competent Government will inform them of their obligations and allow them to effectively plan for the future. You only have to ask one of the 3,400 WASPI women in my constituency how devastating it is to find out, and not because the Government have made any special effort to tell them, that retirement will come much later than planned. Rosemary Dickson, a leading light in the WASPI campaign in the west of Scotland, has been out on the streets. That will continue with a demo on 23 February to let people know, because too many women still do not know about it. There have not been 3,400 women at my constituency surgery to complain about it. The UK Government at the time waited 14 years before beginning to tell women that their retirement would be postponed. Women have been let down across the board by successive Governments in this place and that needs to stop now.
The WASPI women cannot retire when planned and they cannot spend time with their grandchildren as they planned. Many now struggle to make ends meet. The impact of this policy is already bearing out in labour market figures. According to the annual survey of hours and earnings, the gender pay gap for over-60s has increased by nearly 3% in just one year. The gender pension gap is nearly 40% in Scotland. The system is clearly failing women. If the Government are not willing to act to close the gap, they should devolve the powers and let the Scottish Government do it for them.
I am sure there will be those on the Government Benches who would say that the gender pension gap does not really matter, because it is the overall household income that counts. However, there are many reasons that a woman may not want to rely wholly on her partner for financial support. Relationships can and do break down, and it is most often women who are left worse off when they do. There is also a failure to recognise that many more women will be in same-sex relationships and may be doubly losing out as a result. They are reliant not on a man’s income, but on two female incomes in the household. That needs to be recognised, too.
Auto-enrolment has increased the number of people saving for retirement, but the policy needs some work to be more inclusive of those who need it most. With the trigger frozen at £10,000, those earning below that threshold—again, mainly women working part time—are missing out on auto-enrolment. The scheme is of even less use to those women working in insecure employment, such as zero-hours contracts, who do not have consistent earnings and perhaps have additional pressures relating to childcare.
Worse still, there is an incentive for employers to suppress wages to avoid contributing to these schemes. The figures show that 43% of self-employed people do not have a pension and that there are 4.8 million self-employed people in the UK. More work needs to be done to reach out to those self-employed people and to make sure that they do not store up problems for the future, too.
According to the UK Women’s Budget Group, auto-enrolment perpetuates the gender gap in pensions. As with all private pensions, it makes no allowances for the disproportionate caring responsibilities that many women still have. Pension inequality is not a new problem, nor is it going away any time soon. I would like to hear more from the Government about how they are going to have a serious, targeted strategy to address that, particularly for women.
Question put and agreed to.
Resolved,
That the draft Guaranteed Minimum Pensions Increase Order 2019, which was laid before this House on 16 January, be approved.
Social Security
Resolved,
That the draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2019, which was laid before this House on 16 January, be approved.—(Guy Opperman.)
Sport in the UK
(5 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Mims Davies)
I beg to move,
That this House has considered sport in the UK.
I am delighted that the House has the opportunity to discuss this important subject today. This debate takes place just over three years on from the publication of our sport strategy, “Sporting Future”. I will shortly be laying a written statement in the House on the progress we have made on implementing that strategy. “Sporting Future” set out a radical new vision for sport and physical activity. It reassesses how we value and measure the nation’s health and wellbeing. It prioritises tackling inactivity as well as engaging people from under-represented groups. It places five outcomes at the heart of everything we do: physical wellbeing, mental wellbeing, individual development, social and community development and economic development.
Chris Elmore (Ogmore) (Lab)
On economic development, although the Minister will appreciate that, in essence, sport is devolved to the National Assembly for Wales and the Welsh Government, does she welcome physical regeneration, as has happened in the Llynfi valley in my constituency in the community of Nantyffyllon? It has redeveloped an entire rugby ground, including new facilities for a sports club. This has brought about community cohesion together with whole area regeneration, so sport can not only play a big physical part in improving people’s fitness, but bring about real change in a wider community.
Mims Davies
I thank the hon. Gentleman for raising that issue. Indeed, I have met my counterparts in Wales and will have further such meetings. I absolutely agree that when communities come together around sport, it is really important that economic regeneration plays its part as well. I think that those in his community are benefiting greatly.
I spent my first three months as Sports Minister meeting people in the sector and seeing at first hand the fantastic work that is going on across the country, as we have heard. This is mainly a devolved policy area, so a lot of what I will talk about this evening relates to grassroots in England-only, but there are some reserved aspects in my policy brief, and we share themes and common goals across the UK. As I have said, I met the home nations Ministers at sports cabinet and I plan to build on relationships during my tenure and have further visits and meetings planned.
Mike Amesbury (Weaver Vale) (Lab)
Frodsham junior football club in my constituency has done a remarkable job in fundraising for a needed 3G facility. My concern is that the premiership is not doing its bit. What is the Minister doing to ensure that those vast funds—those vast profits—are used for grassroots football?
Mims Davies
I thank the hon. Gentleman for raising that issue. It is something we have heard across the House, and in my first three months in this job, it has been raised time and again. I looked into the eyes of the premiership leadership last week and spoke about many issues with them, such as how the Football Foundation is doing and how that £100 million that the league gives actually works. I am hot on their heels on this one and it is absolutely right that we continue to work together for all our grassroots sport.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I know that the Minister shares my concerns about financial transparency in the Premier League so that we can see not only how money is being used to support grassroots, but to enable the continuing economic benefits that the Minister spoke about so eloquently. Newcastle United Foundation in my constituency does fantastic work in using the power of football to inspire young people. Unfortunately, the Premier League clubs’ financial transparency does not enable us to see what is really happening to the money in the club itself.
Mims Davies
I hear the hon. Lady—she always wears the outfit of the day when mentioning her football club. It is absolutely vital that when sports clubs are doing well, the economic benefits are felt in the city. Southampton has had a difficult time recently and I know that the city, which is close to me, has felt those pains. I absolutely hear the hon. Lady about the transparency issue and the Premier League. There is work to do to keep those conversations going, but I hear her loudly, once again.
Ian Paisley (North Antrim) (DUP)
I know that a lot of what the Minister wishes to say will not apply to the devolved region of Northern Ireland, but I recognise that she has indicated how important sport is as an economic driver. Given that no devolved Government are currently operational in Northern Ireland, will the Minister encourage and pick up on those strands and push those issues, so that the North West 200, the biggest motorbike race and festival on the island of Ireland, and the Ulster Grand Prix, the fastest motorcycle road race in the world, are given encouragement and support by central Government?
Mims Davies
I hear the hon. Gentleman. Indeed, my officials and I have had conversations about making sure that we do not forget our links to Northern Ireland. In the sports cabinet, it was said very clearly that we cannot forget to focus on areas where there may not be that push right now. I will take that away as an action, and I am very happy to continue to look at that area.
Alex Chalk (Cheltenham) (Con)
Will the Minister join me in paying tribute to the army of volunteers who support mass participation in sport? In Cheltenham, we have a parkrun every Saturday in Pittville park—it is a 5k run—but it simply would not be possible without the volunteers who make it happen. Will she join me in paying tribute to their valuable contribution?
Mims Davies
I am being given a workout with the interventions this evening and I have absolutely no problem with that. I thank my hon. Friend for raising Parkrun. I will come on to that later in my speech. There are junior parkruns and local parkruns. Frankly, by half past 9, people can get their weekend exercise done because of volunteers, rain or shine—or snow, as we have seen recently. It is absolutely right that we thank our local volunteers for that.
Mims Davies
I am going to set out my thoughts on participation, but I give way first to my hon. Friend.
Maggie Throup
My hon. Friend talked about junior parkruns, which reminds us that habits formed in childhood often last a lifetime. Initiatives such as the Erewash school sport partnership do just that. They start in primary schools and hopefully, some of those children will continue with sport throughout life, which is so important. Does my hon. Friend agree?
Mims Davies
I feel that my hon. Friend has read the next part of my speech. Participation and a culture of participation within families and communities is absolutely vital. I would be delighted to set out some of my thoughts on that, so let us talk about participation. We are making good progress on getting more people active. We want half a million people to be more regularly active across England by 2020, with at least half of those being women. Over 470,000 more people are already active compared with when we launched the strategy in 2015, but delivering long-term change in habits requires persistence. We know that we need to do more to get and keep people active.
Julian Knight (Solihull) (Con)
In the three months that my hon. Friend has been in post she has been an absolute champion for women’s sport and women’s participation in sport, and we welcome that. In that spirit, will she join me in wanting to see women’s T20 cricket at the Birmingham Commonwealth games? It is a fantastic sport and we want to see it there in the west midlands.
Mims Davies
My hon. Friend tempts me on that point—he knows it is very tempting and I have recently been hoping to visit his constituency—but that is not fully down to me. However, I have made it very clear that participation, particularly of women, and broadcasting opportunities are absolutely vital, so this is on my radar.
Gareth Thomas (Harrow West) (Lab/Co-op)
Does the Minister think that in the 21st century it is a scandal that only 10% of television sport coverage is dedicated to women’s sport? If she does share that view, what will she and the Secretary of State do to get Ofcom to take action against the free-to-air broadcasters on this issue?
Mims Davies
I spoke to the Rugby Football Union just this afternoon, praising it for its women’s Six Nations opportunities and for making sure that there is a chance for women to be seen doing that sport. We also talked about the events list. If we want to inspire people, it is absolutely right that we get chance to see them on the telly or indeed that we can see them play and take part in our local communities. The Secretary of State is sitting next to me and we are very keen—he has had meetings with broadcasters and I have some coming up—that the elite are seen on our TVs and ultimately, that people feel that they can aspire to be part of sport.
Rebecca Pow (Taunton Deane) (Con)
My hon. Friend is making a very powerful case and I had to intervene on this point, because statistically, one might say that women in rugby—in terms of the Six Nations—are destined to do better than the men, and the same can be said of the England women’s football team. So, to follow the point made by the hon. Member for Harrow West (Gareth Thomas), why are we not seeing more coverage of women’s sport on our screens?
Mr Deputy Speaker (Sir Lindsay Hoyle)
On a point of clarification, the hon. Lady was talking about rugby union. I say that because there is rugby league as well.
Mims Davies
Thank you, Mr Deputy Speaker.
My hon. Friend the Member makes an important point about how women in sport are inspiring others. I was talking about participation and the people we should be inspiring: everybody. If we are to do that, women and girls need the opportunity to be seen on our televisions, so I will absolutely take that away with me tonight.
Christine Jardine (Edinburgh West) (LD)
The gender reward gap between women’s and men’s sport is often reported on and is a serious problem. The BBC has reported that 83% of sports have better gender parity, but does the Minister agree that seeing more women’s sports, such as rugby union, rugby league and football, on television will help to close that gap?
Mims Davies
Indeed. The hon. Lady points out that 83% is getting there, but it is not good enough. In some of my brief conversations with sports journalists so far, I have been keen to point out that this is “sport”, not “women’s sport”, and once we think of it as sport for all and see everybody participating, on the TV or on the pitch, as equally valuable, we will have made real progress, and part of that is equal pay.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
My hon. Friend rightly associates people being inspired to take part in sport with seeing sport on television, but she must be aware that a lot of sport now has to be paid for before it can be viewed and that subscription to channels such as BT Sport can be in excess of £30 a month. Therefore, will she encourage more free-to-air sport as part of the strategy to encourage more people, be they men or women, to take part in sporting events and to enjoy a more active lifestyle?
Mims Davies
My hon. Friend makes a good point about free-to-air sport—indeed, I made that point to rugby union representatives today—but if we are prepared to pay for Netflix, we should also be prepared to pay for great sport. We should have the broadest opportunity for people to be seen participating and inspiring at the highest level.
On participation, I was talking about everyone, and I am pleased that the Chamber feels the same. We must ensure that everyone can benefit from sport. I also want to ensure that we reach harder-to-reach groups and get them active and staying active.
Alex Sobel (Leeds North West) (Lab/Co-op)
I am sure the Minister knows that basketball is the second most played team sport in the UK and reaches hard-to-reach groups in urban communities. I pay tribute to the Department for Digital, Culture, Media and Sport and her predecessor, the hon. Member for Chatham and Aylesford (Tracey Crouch), for giving £500,000 to GB Basketball. It meant, in particular, that the women could stay on court and qualify for EuroBasket top of their league. It is important to look at UK sport funding to ensure that basketball can make its Olympic dream come true.
Mims Davies
Basketball is a sport that has been helped by the aspiration fund, which makes it possible to turn the dial, become medal winners and so continue to inspire. I am delighted about the fund, and I, too, pay tribute to my predecessor.
I was talking about harder-to-reach groups, and some of those have just been described. We want more women; more black, Asian and minority ethnic women and men; and more disabled people taking part in sport, as well as those who might have a hard time finding the cash for exercise and wellbeing. We want everyone to have the opportunity to take part, including those who struggle to find a family activity that they enjoy—we have heard about that this evening as well. These are often the people facing the biggest hurdles to being active, and they are the people we need to support most. I want to tackle those hurdles and make sport fun.
Kerry McCarthy (Bristol East) (Lab)
Is the Minister aware of the work being done by the World Professional Billiards and Snooker Association not only with seniors—I think I qualify as a senior, but then so does Ronnie O’Sullivan—but with people with disabilities, particularly people with autism? Despite that, Sport England does not give snooker any funding. It gives a lot of money to bowls, archery and angling but none to snooker. Would she be prepared to look at that?
Mims Davies
The hon. Lady makes a great point. We need to work with Sport England to reach everyone who can take part in sport in whatever way possible. I was lucky enough recently to speak at an event marking the 30th anniversary of the Paralympics, and it made me think of my young children, who do not see any barriers to participation because of London 2012, which changed so much. It is absolutely right that where there is an opportunity for people to take part in sport we give them that opportunity. That is the focus of my speech this evening.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Minister is making a strong case for participation in sport, but there is also a clear case in terms of preventive health, given that evidence suggests that being involved in sport reduces by 30% people’s incidence of stroke, cancer and other illnesses. Today being World Cancer Day, does she agree that there is a long-term public purse benefit to getting people fit and healthy through participation in sport?
Mims Davies
Absolutely. I will build on that thought in my speech. It is vital that we work with health bodies and communities and through social prescribing. It can help to keep our communities fitter, healthier and more connected.
Stephen Kerr (Stirling) (Con)
Does the Minister agree that this is about not just physical but mental health, and will she join me in celebrating the work of Elaine Wyllie, the founder of the daily mile? All over the world, more than 7,000 schools and nurseries practise the daily mile, and the evidence of the benefit that comes to the children who participate is immense. Would she encourage all our schools and nurseries to engage with the daily mile?
Mims Davies
The daily mile has been a revelation in getting youngsters involved. I recently visited a school that was getting involved but which did not have much green space, only tarmac. It was difficult for that school, but the inventive ways in which the daily mile is being used across the country is a sight to behold. I congratulate Elaine on her work.
Stephen Kerr
I forgot to mention that it all began in Stirling at St Ninians Primary School—the most important thing of all!
Mr Deputy Speaker
I have no problem with interventions. The problem is that the people wanting to speak later are cutting down their own time. The time limit was 10 minutes, but it is now down to eight.
Mims Davies
I will plough on, but thank goodness for Stirling!
I want us to find different ways of doing things. I want to find the next parkrun or daily mile. I thank the fabulous parkrun family for all they are doing. Building strongly on the success of the This Girl Can campaign, we need to be smarter about how we use data and new technologies to get people moving and—more importantly —staying moving. I want us to make being active easy and fun for everyone and a habit for everyone.
December’s Sport England’s active lives children’s survey will help us to understand how children in particular engage with and think about sport and physical activity. This world-leading study represents a big step forward. We now have robust data that tells us which changes will make the biggest difference to our children’s lives. The first set of results was published late last year, and the evidence it set out was a wake-up call for the sector. Our children are simply not active enough. We all need to address that head on.
I will work with ministerial colleagues in the Department for Education and the Department of Health and Social Care, and I am delighted that we will be publishing a new cross-Government plan to focus on getting kids active in and out of school. I particularly want to focus on after-school periods when children should have the opportunity to be active and safe in enjoyable environments. I want to make sure that all children have access to the right sporting offer and that they enjoy physical activity and therefore can reap the benefits of an active lifestyle. Sport needs to be fun, inclusive and engaging. There is a world of options out there, as we have heard, and I want us to work harder to make sport and physical activity appealing to everyone.
Why does this matter? Being active brings many benefits not just to children but to people of all ages. Working with the Department of Health and Social Care, I want us to embrace the use of sport and physical activity in improving health outcomes. Being active can reduce chronic diseases and health conditions such as diabetes and heart disease, and it can ease pressures on our health and social care systems. Given our aging society, we must do everything we can to help people to enjoy healthy, independent and fulfilling lives for longer.
With my loneliness Minister hat on, I must add that getting people active, where that means people being connected, is also vital, and the enjoyment and sense of belonging that can come from taking part in sport and physical activity can be a huge part of that. Real change is already happening in that regard. As part of the NHS long-term plan, NHS England is hiring 1,000 new advisers to expand social prescribing and help patients to lead fitter, healthier and happier lives. About 50% of GP appointments are not directly related to medical conditions, and pills are prescribed. Evidence shows that referrals to, for instance, exercise classes, sports groups or, indeed, ballroom dancing classes can greatly help people’s health and wellbeing.
However, I want to go further, and work with ministerial colleagues to use the power of sport to make lives better. Physical activity can help us in so many ways. Getting more people walking or cycling reduces congestion, improves air quality and can revitalise our high streets. Sport can bring people together and reduce social isolation, and the discipline and teamwork that it encourages can also be an important tool in cutting reoffending rates in the criminal justice system.
My second priority is protecting the culture and integrity of high-level sport. What matters is not just what we do to win medals and create sporting success, but how we go about it. It cannot be right for athletes such as Kelly Sotherton to receive their medals six years late and behind closed doors because the systems are not right. Since taking up my role, I have had discussions with UK Anti-Doping, UK Sport, the World Anti-Doping Agency and representatives of athletes in order to understand what has gone wrong in some quarters, and to make the UK’s position clear.
How can we inspire more people through sport by preserving and strengthening its integrity? People must have faith in sports that they know and love. Our athletes deserve to know that they are competing on a level playing field. We must continue to operate robust anti-doping and governance regimes, both domestically and internationally. We must continue to lead the way.
Mrs Helen Grant (Maidstone and The Weald) (Con)
My hon. Friend is making a superb speech and an important point. Does she agree that if fans cannot trust what they see, the integrity of sport will be permanently damaged, and that we need a multi-agency approach, information sharing and, very importantly, much more player education, so that those who are tempted to cheat know that they will be caught and punished?
Mims Davies
My hon. Friend has walked in my shoes in this role, and she knows how important that issue is. When I have spoken to athletes, there has been compelling evidence that the integrity of their sport, the hard work that they demonstrate, and everything that they do to lead the way is undermined when people feel that sport does not have the integrity that they hold so dear.
Dr Poulter
I thank my hon. Friend for giving way; she is being very generous with her time. She is making a good point about the integrity of sport, but will she also look into some of the often questionable medical exemptions of recent times? There has been reference to a level playing field. It sometimes seems that it is the athletes who have the best doctors, and can obtain the best medical exemptions and certificates, who can benefit from medications that may enhance performance. In the context of other sports people, that may not be correct when the medical conditions involved do not reach a threshold that I, as a doctor, would consider to be sufficient to require such medications.
Mims Davies
My hon. Friend has made an important point. When sport is being led by the question of who has the best doctor, it is likely that we have a problem.
People need to feel that it is safe to take part in sport, and ensuring that children and those at risk are protected as much as possible is a top priority for me. I have been speaking to my ministerial colleagues in the Ministry of Justice about putting sports coaches in a position of trust to give additional protection to 16 and 17-year-olds, and that work continues. We need to inspire children to take part in sport, to make them feel welcome, and to let them have fun. That golden thread runs through all that we do.
As we have heard, if we do not get this right over time, it will affect our love for our sport. It will affect those who take part in it, and also those who watch it. There are huge benefits to be had from watching live sport. London 2012 showcased to the world the UK’s enthusiasm for that, and we see it week in, week out in our sporting fixtures and at our local sporting clubs. Today our sports grounds attract a wider and more diverse range of spectators than ever before, and it is important for those experiences to be enjoyable and safe for all who attend. I know that many of my colleagues are interested in stadium safety and the long-standing commitment to an all-seater policy. I am expecting a report reviewing existing evidence on that topic very soon, and, along with the Secretary of State, I will consider its findings carefully.
As a new sports Minister considering the experience of attending football matches, I have been immediately struck by the racist and other discriminatory behaviour that has been reported over the last few months. I am sure that all Members have been alarmed by the worrying number of incidents about which we have all been hearing. We can take heart, because people feel more confident about reporting such experiences, but we must not tolerate a return to the worst days of sport. Football is the national game, which people of all ages and from all backgrounds should be able to enjoy and play. It should bring people together, not foster division. Those involved in abuse are not football fans; they are using football as a cloak for discriminatory and often criminal behaviour. They are not welcome in our stadiums. In the coming weeks, I will bring together football authorities and other organisations with an interest in the issue to discuss what action must be taken to stamp out all forms of discrimination at sports events. Together, we must find a way of tackling such unacceptable behaviour.
Jo Stevens (Cardiff Central) (Lab)
As the Minister may know, I introduced a ten-minute rule Bill on homophobic chanting in sports stadiums—sponsored by colleagues on the Digital, Culture, Media and Sport Committee—to bring it within the remit of the Football (Offences) Act 1991. When will we hear from her whether the Government will support the Bill?
Mims Davies
I think I have made it clear tonight that I am determined to deal with this matter, but I will reserve judgment until I have heard from the authorities. I will write to the hon. Lady.
Football reaches every community in the country, and it can play its part in helping to champion the values that we want to see in our society today. However, we need to get tougher on those who refuse to play by the rules. Zero tolerance means just that. We cannot allow the minority to ruin the sport for the majority of us who love it. I look forward to reporting back to the House on the actions taken as a result of my discussions.
Let me now turn to more positive matters, because I am very conscious that I need to move on.
Dr David Drew (Stroud) (Lab/Co-op)
Will the Minister include the fit and proper ownership rules in her discussions with the football authorities? My club, Forest Green Rovers, has had a run-in with Bolton Wanderers because Bolton refused to pay the money that it expected for the transfer of a player. So many of those at the lower levels of football are not, dare I say, fit and proper people to run football clubs. Will the Minister look into that?
Mims Davies
I would be happy for the hon. Gentleman to write to me about it. As I think I have made clear tonight, trust and integrity are paramount in sport.
Our sport, internationally, has a massive part to play in our global reputation. We can travel the world and meet people who do not know much about our home town, but they will know if our local football club is in the Champions’ League or has been in an FA cup final. As we leave the European Union, we will work with the Foreign and Commonwealth Office and the Department for International Trade to ensure that the incredible contribution of sport can be part of our international profile, and part of our vision for global Britain. I recently met the Japanese Sports Minister, who is keen to learn from our experience of hosting major events so that the Tokyo 2020 Paralympics and Olympics can be an inclusive experience for everyone.
We can continue to deliver major world events, and this summer we will host the cricket world cup, with an expected global audience of 1.5 billion people. It will be a wonderful opportunity to showcase our country, bring communities together and get more people to be active. It is not just cricket—I will rattle through the other sports. The world wheelchair curling championships take place in Stirling in March; Liverpool host the netball world cup in July; the world road-cycling championships take place in Yorkshire in 2019; UEFA 2020 Euro fixtures take place at Hampden Park and Wembley; and the UEFA women’s Euros and rugby league take place in 2021, with matches hosted all over England. I am delighted that the benefits will be experienced across the country.
Our investment in major events will deliver opportunities for everyone. Everywhere, people will be able to see at first hand that sport is great. Of course, we look forward to hosting the 2022 Commonwealth games in Birmingham, which will be the biggest sporting and cultural event in the west midlands ever. All those global sports events offer a fantastic opportunity to showcase the UK to the world, and give us an opportunity to showcase our commitment to fair and inclusive sport, which is why we must take steps to protect the culture and integrity of elite sport.
John Howell (Henley) (Con)
In that long list of sports, the Minister failed to mention one particular sport that I am particularly keen on—rowing, which is important not just for the high-class activity that takes place in Henley but because it contributes to the better appreciation of the sport by young people in that area. Will she give credit to those companies for attacking sport, as it were, at both those levels?
Mims Davies
My hon. Friend mentioned high-class behaviour in Henley—I expect nothing less. Absolutely—it is fantastic that rowing is thriving, and I have promised to visit.
The Commonwealth games will take place 10 years after the Olympic and Paralympic games, and I want to build on the success of 2012, and make them an event that is remembered for bringing people together, celebrating diversity, and promoting inclusivity across the Commonwealth and beyond. Its legacy will go further, and embrace trade and investment, culture, sport, employment, housing and tourism. Later this month, I will set out the strategy with UK Sport beyond 2020, the Olympics and the Paralympics, supporting our athletes and all competitors for the next stage. As we heard, UK Sport has recently launched its aspiration fund.
I want to conclude, because I am sure that you want me to do so, Mr Deputy Speaker. [Interruption.] I want the number of people enjoying sport and engaging in physical activity to grow; I want sport to be embedded in Government thinking on health and social care; I want this country’s amazing reputation for hosting the world’s biggest sporting events to continue; I want our sporting bodies to demonstrate strong leadership and a duty of care to all participants; I want Team GB to continue its medal success; and I absolutely want to make sure that everyone can benefit from the power of sport.
Mr Deputy Speaker (Sir Lindsay Hoyle)
To reassure the House, it was not me who wanted the Minister to conclude—it was all the Members wishing to speak, if that helps.
Dr Rosena Allin-Khan (Tooting) (Lab)
I would like to begin by sending all our best wishes to Cardiff City FC and its fans, who sang continuously throughout the match against Bournemouth on Saturday, in memory of Emiliano Sala. There is no doubt that he will for ever remain in their thoughts.
With your permission, Mr Deputy Speaker, I would like to put on record my disgust at the situation of Hakeem al-Araibi, the footballer who fled Bahrain and appeared in court today in Thailand, facing forced extradition. The Opposition strongly urge the Government to lean on Thailand and Bahrain with maximum force to drop those charges. The United Kingdom has a proud history of assisting those fleeing political persecution, and we should not stay silent on this matter.
Supporters should always be at the heart of sport. Sport should be run in the interest of fans, not the privileged few, which is what I want to focus our debate on. In a world of ever-growing commercialisation, fans are rarely part of the decision-making process; instead, money talks. Nowhere is that more apparent than in our national game—football. The premier league has undergone a transformation in the past three decades, and without a doubt is now the best sporting league in the world, admired around the globe. Wherever we travel, whether Hollywood Boulevard or refugee camps in Bangladesh where I have worked, premier league football shirts are commonplace. It is incredibly moving to know that the UK football scene has such an incredible fan base, which we must nurture.
Fans are desperate for small changes: they want a better atmosphere in stadiums; they do not want to be at the mercy of billion-pound TV deals; they want a say in how their club is run; and they do not want their children to be bombarded with betting adverts. Those form our pledges for supporters, because we believe that fans must have a greater say in the sport that they love.
Gareth Thomas
Does my hon. Friend accept that many fans want to see premier league football clubs doing the right thing by all their staff? Does she share my view that it is highly disappointing that only four premier league clubs pay the living wage?
Dr Allin-Khan
I thank my hon. Friend for his excellent intervention, and I share his thoughts, views and feelings that everyone should be paid the wages that they deserve, particularly when they work hard, out of hours, supporting the beautiful game of football.
Returning to football supporters in stadiums, the current system simply is not working and is not safe. Standing happens frequently, sometimes in steep tiers where the seat in front barely goes above the ankles of the person who is standing behind it. When I brought together 50 supporters’ trusts for a parliamentary roundtable, they made clear what they were asking for: small sections of a stadium that can be converted to accommodate those who want to stand, allowing them to stand safely, while giving those who want to sit the enjoyment of watching a game without people standing in their way. I am a football fan, and I attend matches regularly. I know the dangers that can arise for a young family when there are people standing in front of them. Children often have to stand on their seats to watch the game.
Christine Jardine
The hon. Lady makes an excellent point. There was a good reason for redesigning our sports stadiums at one time, but does she agree that the introduction of safe standing areas makes watching live sport in person more affordable for many people?
Dr Allin-Khan
I thank the hon. Lady for her intervention. We have made it clear that we need to take the decision away from Whitehall. What the Labour party is proposing with the safe standing system is a one-for-one seating and standing arrangement. There is no plan to cut the cost of a ticket at this point. It is about enjoyment and safety, which is paramount.
We need to take the decision away from Whitehall and devolve it to clubs, fans and local safety authorities, because they know their stadiums better than any of us. To any supporters watching, let me say that we will continue to push for the introduction of safe standing. The Government cannot kick the can down the road on this one. Our second pledge is on the introduction of a “fans fare” travel scheme. It is not right that fixtures are constantly rescheduled, so fans miss out on the cheapest train tickets. In the opening three weeks of the premier league season this year, five matches were rearranged for TV, which made it impossible for supporters to travel to or from the match in time. Fans deserve better—they must be part of the conversation. The Football League, the Premier League, the Rail Delivery Group and fans’ groups are all in favour of the introduction of a “fans fare” scheme, but the Government are dragging their feet. A Transport Minister agreed to meet me, but then cancelled our meeting.
Labour will not sit still. We will continue to push for this. Supporters should not be at the mercy of billion-pound TV deals. The “fans fare” travel scheme would allow them to change the date on their ticket if a match was rescheduled, so they would not miss out on the cheapest train tickets. Those who have tried to attend a match with their partner and two children will know the cost of buying four new tickets to attend a match and see their much-loved football team.
Our third pledge would give fans a say in how their club was run. Overseas investment has revolutionised the Premier League and brought remarkable success for clubs, both domestically and in Europe, but supporters are desperate for a greater say. At the moment, fans are involved in supporters forums, but with clubs increasingly becoming solely owned by rich investors, those forums are becoming meaningless when it comes to making decisions. We would make it mandatory that, when a club was sold, a proportion of the shares being sold should be offered to fans to buy. We would allow supporters trusts to appoint board members who would hold full voting rights, ensuring that fans had a place at the table.
Our fourth pledge relates to gambling. A staggering 55,000 children are problem gamblers, and this is being fuelled by an increase in sports betting. Football stadiums, football shirts and advertising boards are filled with gambling logos and names. This is fuelling a worrying epidemic in children, and not enough is being done. We are pleased that the industry has listened to our calls for a whistle-to-whistle gambling ban across all sports, but we would go further and ban gambling companies from sponsoring football shirts. People who are susceptible to gambling-related harms should be able to enjoy football without having to battle the demons of addiction. That addiction tears families apart and ruins lives. Today and always, our message to the industry is loud and clear: prove to us that you take this seriously by taking real action now, because in government, the Labour party will come down hard.
I have highlighted some of the issues being faced by fans today, but I also want to spend a few minutes talking about the future of sport. We need sport to be run in the interests of those who participate in it at grassroots level, not just of the privileged few. I ask Members to take a moment to imagine two children who were born in the same hospital on the same day. Let us imagine that they were born equal, with the same abilities and potential as each other. The barriers that they might face in life will start the moment they leave the maternity ward. This will be no truer than when it comes to their making a success of any sporting talent they might possess. One child will go to an underfunded state secondary school where PE hours have been cut and the grass field is waterlogged for four months of the year. The other child will go to a private school where there is provision for a cricket coach to come in once a week and for the children to practise indoors during the winter.
Stephen Kerr
Is not the hon. Lady missing a significant factor in the encouragement of children—namely, their parents? I am not convinced that the circumstances she describes are definitive when it comes to whether a child excels in sport, but the encouragement of parents makes a huge difference.
Dr Allin-Khan
I thank the hon. Gentleman for making that point. Of course parents’ encouragement is a factor, but we cannot run away from the fact that this Government have cut 35,000 hours of PE from secondary schools. Children do not have a level playing field in this country, and the sooner this Government accept that and do something about it, the better off all our children will be.
Going back to the maternity ward, let us imagine that one of those children is a girl. She will be actively discouraged by society from getting involved in sports. Does she possess the qualities to be a professional coach, a commentator, a physiotherapist or an athlete? Will she grow up to be a role model for other girls? Many girls will never know whether they have the ability to make it to the top of their sport because of the barriers placed in front of them. If she makes it to the top in rugby, football or cricket, will she get a proper contract? Will that contract give her the security to feed her family and reach her potential without having to focus on finding additional work? Will she be given a role on a national governing body that enables her to make the changes necessary to break down the barriers that she herself has faced?
Mrs Helen Grant
The hon. Lady is making an important point. Does she agree that there is still a lack of diversity in the broadest sense when it comes to representation on boards and in senior management positions, notwithstanding the fact that we have a really healthy talent pool? Does she also agree that we need to reach a position where people from every background can not only knock on the doors for the very top jobs but actually get them?
Dr Allin-Khan
The hon. Lady makes a most excellent point. If you can see it, you can be it. I firmly believe that, and in my position as shadow Minister for Sport I have always pushed for equality in the boardroom, not only based on gender but across socioeconomic divides and for the black, Asian and minority ethnic community.
While I celebrate our wonderful Olympic success in London and Rio, I question whether we should be pumping millions into niche sports to gain a couple of gold medals when sports such as basketball, which is ever so popular in the UK, are going through a funding crisis. Should our success be measured by the number of gold medals we win?
Alex Sobel
I am grateful to my hon. Friend for mentioning basketball. I am the chair of the all-party parliamentary group on basketball. The UK and Team GB are on track for Olympic qualification, which will happen at the world cup this summer, but we will need the funding from the National Basketball Association and the Women’s National Basketball Association to get our players into that qualification tournament and into the Olympics.
Dr Allin-Khan
I know that my hon. Friend has been tireless in his pursuit of ensuring that basketball gets the funding it deserves. I also know that, like me, he was staggered to discover that shooting is getting £6.9 million while basketball, a popular grassroots sport that can be played by all, has had its funding cut.
Should our success be measured by the number of gold medals we can win, or by the millions of people we can motivate to get fit and active and take the opportunity to play the sport they love? Just £23 million a year is being put into grassroots sports by the Government, and half of that was put in under Labour. Local government cuts have resulted in more than 1,000 grass pitches, swimming pools and sports halls being closed over the past two years. The discussion surrounding the sale of Wembley stadium sparked an interesting debate about the funding of grassroots sport in the UK. We believe that the Football Association answered all our questions and had the best intentions, but did we really need to consider selling our national stadium to build grassroots facilities fit for the 21st century?
Mike Amesbury
Since 2010, more than 110 publicly funded swimming pools have closed, denying working-class children the opportunity to get active and to excel. The Minister has talked about her aspiration to get the nation moving more. She has the right aspiration, but actions—and money—speak louder than fine words.
Dr Allin-Khan
I thank my hon. Friend for making that valuable point. If we do not invest in our young people at grassroots level, we will be fuelling our obesity crisis even further. If the Government are serious about taking a public health approach to active lives, they could support local authorities and national governing bodies in building sporting facilities.
Christine Jardine
The hon. Lady talks about sports funding and the funding of facilities. Is she aware that the Scottish Rugby Union, based at Murrayfield in my constituency, feels that it has not benefited from lottery funding in the way that other sports have done? For example, it has had no lottery funding to help it to improve the stadium. Does she agree that it can have an ongoing impact on grassroots sports such as rugby if those bodies do not get the lottery funding that will enable them to invest?
Dr Allin-Khan
I agree. No sport should be left out and no one should feel that they are not part of the conversation and benefiting from pots of money that may be available.
I am going to make progress and get to the end of my speech, because I am aware that many Members want to speak. How can the Government support local authorities? They could broaden the Treasury’s infrastructure guarantee scheme to include the building of sports facilities. Currently, just £2 billion out of £40 billion has been allocated. If our public health approach truly wants to consider preventive measures, it is essential to underwrite schemes to build pitches, swimming pools and athletics tracks. We have a national obesity crisis. The Government could revolutionise grassroots sports if they looked carefully at that scheme, so I encourage them to do so.
We can boost funding for our most popular sports, help build the necessary facilities and give everyone the opportunity to reach their potential, regardless of where they live or how much money their family earn. We can level the playing field and ensure that sport is run in the interests of all those who love it, not just a privileged few.
Several hon. Members rose—
Mr Deputy Speaker (Sir Lindsay Hoyle)
If Members speak for up to six minutes each, that would really help us. Some Members may pull a face, but that is because of the Front Benchers, not me.
Andrew Griffiths (Burton) (Con)
It is a great pleasure to follow the hon. Member for Tooting (Dr Allin-Khan), who spoke on behalf of the Opposition. She made a powerful speech, but I have to say that it was quite negative. She talked about all the things she does not like—including betting, big football clubs and sitting down at the football—but we should be talking about the positive things that sport can achieve and what it brings to all our communities. Let us not be dour; let us be positive about the power of sport.
The Minister gave a brilliant speech. We were lucky to have the Tour de France visit Yorkshire not so long ago, and she gave us a tour de force today about all the benefits of sport.
As well as being the home of brewing, my constituency of Burton and Uttoxeter is also the home of the English football team. We are delighted to have in Burton—I share it with my hon. Friend the Member for Lichfield (Michael Fabricant)—St George’s Park, the home not just of the English football team but of all 28 England national football teams, including the disability teams, the women’s team and the blind team. It is a truly inspirational facility. I took some credit from the Bring it to Burton campaign, which I ran when I was a candidate. That was obviously instrumental in the £105 million being spent in my constituency to develop that state-of-the-art facility. The 13 pitches have attracted teams such as Barcelona and Monaco, and the Irish rugby union team have trained there. We are a magnet for sporting excellence and it is a great pleasure to have the facility in my constituency.
We also have Uttoxeter racecourse for the sport of kings. I am delighted that we play host every year to the west midlands grand national, which attracts some 16,000 people to my constituency on the day and puts £1 million into local businesses over that weekend. We talk about the power and benefit of sport, but its financial benefit to my constituents and those businesses is really important.
John Lamont
My hon. Friend is making a powerful point about horse-racing, which in terms of attendance and revenue created is the second biggest sport in the United Kingdom; it is a great shame that it has not been mentioned so far in the debate. My constituency has Kelso racecourse, which contributes greatly to the local economy. Does my hon. Friend agree that horse-racing is very much an underrated sport and that it does so much to promote sport and physical activity?
Andrew Griffiths
Absolutely—my hon. Friend is spot on. I am lucky enough to know very well David MacDonald and his team who run Uttoxeter races, and it is thriving. Horse-racing is a great sport that inspires people and gives a great day out. My hon. Friend is absolutely right to say that we should not underestimate the real benefits of horse-racing to the United Kingdom.
Carol Monaghan (Glasgow North West) (SNP)
May I seek clarification on the previous intervention? In what terms is horse-racing the biggest sport? It may be in terms of betting revenues, but it is certainly not in terms of participation.
Andrew Griffiths
I believe my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) may have been referring to attendance, but I understand the hon. Lady’s point.
Football is at the crux of the point I really want to make. We have had a great sporting weekend, with some fantastic sporting triumphs, including England’s success over Ireland in the rugby—[Interruption.] I will not mention the cricket. I was lucky enough to attend another sporting giant of a match on Saturday: the thrilling nil-nil draw between Burton Albion and Oxford United. I was delighted to be there.
Burton Albion is a small club. It was only promoted to the football league in 2009, yet by 2017 it had been promoted to the championship. That is a Roy of the Rovers-type success story for a club that is embedded in the community. Thanks to the hard work and determination of the chairman, Mr Ben Robinson, and Nigel Clough, our inspirational manager, who has a huge sporting history behind him, the club has done incredible things. We talk so often about money in sport, but Burton Albion is a shining example of what heart and passion, rather than just money, can do in terms of delivering.
Mrs Helen Grant
On the commercial benefits of and money in sport, does my hon. Friend agree that women still lag behind men in commercial sponsorship and that sponsors should become more alive to the benefits of association with some of our fantastic female role models?
Andrew Griffiths
My hon. Friend is absolutely right. Women’s sport, such as women’s football, is thrilling to watch, and the advertisers should get on board and realise how powerful it could be for their brands.
Burton Albion Community Trust is a shining example of what many clubs up and down the country are doing. It is not just about elite sport; it runs grassroots projects throughout my community. Every week, it touches some 7,000 people through the programmes it runs, including the Fit Fans sessions for, shall we say, the more mature fan, to get them fit; walking football; disability teams such as Able Too and Powerchair; and, importantly for me, Head for Goal, which is a mental health and wellbeing programme, using the power of sport to improve mental health. Given that this is Children’s Mental Health Week, and with my own appreciation of the issues of mental health, it is really important to acknowledge the power of sport to be able to improve mental health. The community trusts of lots of clubs up and down the country, working with children, old people and the disabled, are making a real contribution.
Finally, I hope that the Minister has heard what I have said about the power of community trusts, and that she will agree to visit the mighty Pirelli stadium, where she will be able to see the work of Burton Albion Community Trust in my community.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
For those of us who stayed up into the wee small hours last night to watch the Superbowl, it has already been a long day. The game itself could have got sport stopped, to be honest, but it would be remiss of me not to thank the Renfrewshire Raptors, the Flag American Football team, for hosting the Superbowl party last night.
I should also say at the outset that Scotland currently head the Six Nations table, a position that I fully expect them to stay in until the end of the competition. I will also use this opportunity to praise my own club, Paisley rugby club, which after a slow start is now unbeaten since October, probably because I retired a number of years ago.
It is good to see the hon. Member for Moray (Douglas Ross) in his place, given that he was running the line at the St Johnstone-Celtic game yesterday. As a St Johnstone fan, I am hugely disappointed that he did not find a way to disallow the two Celtic goals in their 2-0 victory. In recent years, with European qualification and a Scottish cup win, it has been easier to be a Saints fan than a Scotland fan. However, recently we have had cause for optimism, with Shelley Kerr’s women’s team backing up qualification for the Euros by qualifying for this summer’s World cup in France, for the very first time.
In my first shameless plug for the all-party parliamentary group on Scottish sport, which I chair, I draw attention to the fact that on 13 March both Shelley Kerr and Ian Maxwell, the chief executive of the Scottish Football Association, will give a presentation to the APPG on the women’s game and the recent UEFA report on the social benefits of football to Scotland. Everyone is welcome to attend.
Sport offers so much in personal development, self-confidence, discipline and social skills, and it plays a vital role in building strong communities and a healthy society. For many, sport can be all-consuming, whether simply as a fan of a local football team, as someone who enjoys a game of golf at the weekend—when the weather permits in Scotland—as a linesman or as a performance athlete who dedicates their life to be the best at what they do. It would be a grave mistake indeed to understate the importance of sport to people’s lives.
Thanks to the media, when we think of performance athletes, we tend to think of multimillionaire football players, but professional athletes come from a wide range of varying disciplines that are all unique and as important as each other. The vast majority certainly do not provide people with the opportunity to retire to a life of wealth and comfort while still in their 20s.
For many athletes, including those who bring home Olympic medals, transitioning to a life beyond professional sport can be a challenge. That challenge often includes uncertainty in establishing a viable career beyond sport, but it can also include poor mental health and battles with depression and anxiety.
Tonia Antoniazzi (Gower) (Lab)
On mental health, a survey by the Rugby Players Association in England reveals that 62% of players suffer mental health issues after retirement and 52% feel their life is out of control after two years. Does the hon. Gentleman agree that, UK-wide, the Government need to take a better, more holistic approach to helping people not just in rugby but in professional sport to be able to cope when they come out of sport by injury or by the end of their sporting life?
Gavin Newlands
I could not agree more. As the hon. Lady is a former international rugby player herself, her point is even stronger, and I will echo that in my later comments.
I have been seeking an Adjournment debate on this issue without success, so I will outline some of the issues now. The Glaswegian Olympic silver medallist Michael Jamieson spoke about the difficulty towards the end of his fantastic career as he battled depression caused by a gruelling training regime. He made the decision to retire, and it was the right decision for him. After some difficulties, he is now an example of an athlete who has made the transition well, as he has now built a successful career as a leading coach, but his story is by no means the norm. Such difficulties have been relatively common in football, but, since the advent of UK Sport lottery funding, they have become more widespread in other sports, and the current cliff-edge approach to UK Sport funding in no way helps the scenario.
Last year, the BBC reported on examples of athletes finding the transition difficult. Rower Mark Hunter competed at three Olympic games, winning gold in Beijing and silver in London:
“It doesn’t matter how good you are, how much money you earn—you have to learn to cope with that loss of purpose. Athletes think everyone cares about what you are doing but most people don’t care until you are performing at the highest level.
In Athens in 2004 I came last and that was my darkest point. I had no money, I had nothing. I used to drive down back roads thinking, ‘if I crash I wouldn’t care right now.’ I didn’t tell my parents but I was lucky I had so many friends around me to help me escape. I’d gone to the ultimate event and come last. We came last, the funding is cut and it’s like ‘get out’...I had no money, I had nothing.”
Ollie Philips was world rugby sevens player of the year in 2009:
“Because I had to retire through injury, it felt as though I had been robbed of my rights and the dreams that I was hoping to achieve. Once I realised that ‘right I am now not a rugby player any more’, there was a really tough period. It’s such a destructive experience on a personal level—everything is affected by it. That experience of feeling valued and adored. Suddenly you’re not as good; you’re not in the limelight. And as a result you chase highs and ego boosts. They give you a kick in the short term, but the highs are high and the lows are very low and you don’t know how to get out of them.
There were times when I looked at myself and thought, ‘I don’t want to be here.’ I’ve probably accepted not being a sportsman but have I truly accepted that it’s not me anymore? Maybe not entirely.”
Switch the Play, which has presented to the all-party parliamentary group on Scottish sport, is an excellent social enterprise—it is shortly to become a charity—dedicated to improving the support offered to elite and aspiring athletes as they transition to a life outside sport, and it has done excellent work on this issue.
One of those athletes is Beth Tweddle, who most Members will know. She is an Olympic bronze medallist, a triple world champion, a six-time European champion and a Commonwealth champion—the list goes on. Beth made the decision to retire after a glittering career, but she was seriously concerned about what she would do with herself after focusing on gymnastics for 21 years. Switch the Play helped to provide her with training, and she found the confidence to become a company director for Total Gymnastics.
Research by Abertay University’s Professor David Lavallee shows that athletes who engage in planning for their future feel less stressed and are better able to focus on their sporting performance. The study also found that the levels of support provided to athletes in planning their retirement can also influence their performance. Switch the Play and others do excellent work, but we cannot expect such organisations to give that peace of mind and care alone.
Sporting bodies and, of course, the Government therefore have a duty of care to our athletes and must ensure that they have all the support, training and opportunities they require to live life and build a career after retirement, whether that be in their sport or in any other sector. I hope the Minister will meet Switch the Play and me to discuss this issue further.
Most Members, and particularly Mr Speaker, could not have failed to be moved by Andy Murray’s press conference, in which it was clear he is very much struggling to come to terms with his possible upcoming retirement. I am sure the House will join me in welcoming his recent successful hip operation, which at the very least will give Andy a much better quality of life, without pain, to spend with his children. Of course, we all hope the operation will enable Andy to continue playing top-level tennis, but, if it fails, he has an astonishing career to look back on. He is a two-time Wimbledon champion, a US Open champion, a Davis cup winner, twice Olympic champion and, probably most impressive of all, a world No. 1 in the era of Roger Federer, Nadal and Djokovic.
I can only hope that Andy is as proud of himself as Scotland is of him. Without a shadow of doubt, Andy is Scotland’s greatest ever sportsman or sportswoman. What can we say to Scotland’s, and probably the UK’s, greatest ever but thank you? Thank you for the memories, the inspiration and the sheer joy that he has given to the nation.
Stephen Kerr
Sir Andy Murray is the pride and joy of Dunblane and the Stirling district. Does the hon. Gentleman agree that, to commemorate an extraordinary career and an amazing contribution to Scottish sport, some form of statue to Sir Andy Murray should be erected in Dunblane?
Gavin Newlands
There is a danger that we might get a bit ahead of ourselves but, yes, I agree that, in the time to come, there should be a statue to Andy Murray in Dunblane, perhaps to sit alongside his gold post box. I wonder whether the hon. Gentleman will commission the statue himself.
That brings me on to the Murray legacy. The staggering success of the entire Murray family is and will continue to be a positive thing for Scottish tennis, as well as tennis across the UK, yet their rise to become the best tennis players in the world has exposed funding and governance imbalance issues that need to be taken seriously, lest we risk squandering the opportunities that their success could provide us with: opportunities not only to nurture future champions, but, just as importantly, to give more people the opportunity to play tennis. To achieve that, we need to be frank about where we are going wrong.
At the age of 15, Andy was advised by one Rafael Nadal that he would have to move away from the UK if he wanted to become a professional. That was 16 years ago, and not much has changed. Scotland is one of the world’s leading nations for tennis, thanks to the success of not only the Murrays, but Gordon Reid, the former world No. 1 in men’s wheelchair tennis, and others. However, it is an indisputable fact that Tennis Scotland has been drastically underfunded by the Lawn Tennis Association. Despite Scotland’s enviable success, the LTA gave Tennis Scotland just £650,000 in 2017, from a budget of £60 million UK-wide. That means that Scotland, with some 8.5% of the UK’s population—and the UK’s best players, Davis cup coach and so on—received just 1% of the revenue funding available from the LTA. In 2018, that allocation was slashed to just £582,000.
John Lamont
The hon. Gentleman is making an important point about the funding for sports development. Does he therefore agree that it is unfortunate that shortly before receiving the extra revenue from the sugar tax from the UK Government the Scottish Government slashed funding for sportscotland by a fifth?
Gavin Newlands
Far be it for me to disagree with the hon. Gentleman, but last year the Scottish sports budget grew by £2 million—more than 7%—and Derek Mackay offered to underwrite any loss from the lottery sports funding of up to £3.5 million. So I will not hear any Scottish Conservative nonsense about the Scottish Government on this issue. This debate at least should be a consensual one.
The perfect example of this problem can be seen in the availability of the indoor courts that make the game possible, particularly in Scotland, given our weather conditions. At the last count, there were 102 facilities in Scotland, compared with 1,484 in England. Of course, this is not just the fault of the LTA; government at all levels, as well as non-governmental bodies, have also to address issues of access. But what a shame it is that, particularly in Scotland, the biggest issue that young people who wish to get into the game may face is finding somewhere to play. Speaking to the Scottish context, Murray said:
“I know in Scotland that there have not been many indoor courts built in the last 10 years. That seems madness. I don’t understand why that is. You need to get kids playing; you need to have the facilities that allow them to do that.”
The all-party group on Scottish sport has looked at these missed opportunities, taking evidence from the then chief executive of the LTA, Michael Downey, Judy Murray and Blane Dodds, the chief executive officer of Tennis Scotland. Following this investigation, the LTA loosened its purse strings somewhat and, along with sportscotland, delivered a capital investment fund specifically for tennis facilities in Scotland.
Andy Murray has criticised the LTA for not doing enough to build on his and his family’s success, recently saying:
“Maybe it’s something I should have given more thought to while I was playing but I never felt that was my job to do that.”
He is right. It is not his job—it certainly should not be—to be getting involved in the governance of his sport; our athletes, in whichever sport, should be able to put 100% of their concentration into their game. But the Murrays have felt the need to intervene as, staggeringly, tennis participation numbers continue to drop, despite the success of top-level tennis players across the UK. Two things must change: we need a sharp increase in the number of facilities available across Scotland, and the UK as a whole; and we need parity and fair funding between the game’s governing bodies. That means that the LTA needs to provide Tennis Scotland with the funding it needs to do its job properly.
Over the past few years—I say this from speaking to other Scottish sporting bodies—it has become increasingly clear that the issues we see arising within tennis are very common in the governance of other sports. Many of these non-governmental bodies feel strongly that there is a lack of “equal status” and “equal standing” between the Scottish bodies—this applies to other devolved bodies, as this is not simply a Scottish issue—and their English counterparts, with many UK-wide NGBs functioning as extended versions of their respective English bodies.
One chief executive I spoke to said that their respective English body acted like they were the “GB” organisation, rather than one of four separate bodies. That too often leads to the organisations responsible for Scotland, Wales, and Northern Ireland being cut out of processes, with no say in crucial decision making. That leads to the kind of situations we have seen in UK Athletics, where a shambolic leadership team are trying to ride roughshod over the devolved athletics bodies. [Interruption.] The hon. Member for Rhondda (Chris Bryant) seems to have a cough, but I will come back to him shortly.
A recurring concern of all Scottish NGBs is that there is a lack of systematic process, with the English bodies often unilaterally taking action over the others on UK-wide decisions. That is not to say there is not some excellent practice that we can learn from; the governance of swimming has been cited to me as an example of a better system working between the UK’s countries. I look forward to raising this issue with Dame Katherine Grainger, who, in addition to being one of the UK’s most decorated Olympians, is also the chair of UK Sport, as she will be attending a meeting of the all-party group on Scottish sport on Monday 25 February.
On devolved sports, another area that needs to improve is broadcasting, and the all-party group has been looking at this subject. The level of media coverage awarded to Scottish sport is regularly a contentious point among sports fans, with claims regularly being made that individual sports in Scotland do not receive the coverage they feel their sport is entitled to. For example, early last year, Scottish football fans took to Twitter to complain that ITV/STV aired the England v. Malta game but did not air Scotland’s crunch game against Lithuania. STV responded to those complaints stating that it did not have the rights to the match, as they were sold on a UK-wide basis. At the time, STV responded on Twitter by saying:
“Scotland, we hear you.
We’d love to bring you the match, but as football rights are sold UK wide it's sadly out of our reach!”
The current list of events was drawn up in 1998, more than two decades ago. I fully appreciate that, because of England’s size, the rights for England internationals are commercially viable for commercial public service broadcasters, and that is not the case for Scotland. If Scotland games were added to listed events, the Scottish game, which is not exactly flush with money, might be forced to accept a smaller rights fee package. I hope to address several other issues to do with broadcasting in an upcoming roundtable with partners and broadcasters in Scotland.
Finally, next Tuesday Glasgow Life will present on the impact and legacy of the Glasgow 2014 games. With Birmingham 2022 on the horizon, Members from the midlands may find that interesting. I hope the Minister will confirm that the Scottish Government will receive the full Barnett consequentials that should flow from the Birmingham 2022 spending commitments.
In conclusion, the great American football coach Vince Lombardi once said:
“It’s not whether you got knocked down; it’s whether you get up.”
And with that, I’ll get down.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. As colleagues will see, a large number of people want to speak in the debate. The Front-Bench speeches were quite long and I have to impose an immediate five-minute limit. I urge people to be considerate, because that limit may well have to come down.
Dr Phillip Lee (Bracknell) (Con)
In the spirit of the sporting values of keeping to time, being efficient and delivering on goals, I will try to keep to my five minutes. It was originally going to be a 10-minute oration, of which I was terribly proud, as the new chairman of the all-party group on sport, but that has now obviously bitten the dust.
We are a great sporting nation. We all remember the super Saturday of the 2012 Olympics and Archie Gemmill versus Holland in 1978. I was fortunate enough to be at the World cup semi-final last year. It is obvious that we are sports mad. Some 27 million of us do more than two and a half hours of sport a week. For the nation, sport probably ranks as the No. 1 pastime, I suppose, outside of work and bringing up children, and it has always troubled me somewhat that sport has not played a greater part in Government policy.
When I had the pleasure of being a Minister, for those two glorious years at the Ministry of Justice, I embarked straight away on trying to introduce sport into the criminal justice system as much as possible. To say that when I suggested this I encountered some resistance—a degree of inertia at the Ministry of Justice—would be an understatement. It took me six months to convene my first meeting on sport and its value in the criminal justice system. What was fantastic about that meeting, when it actually took place, were the people who attended—people who were already deploying sport effectively in the criminal justice system. They were trying to help often vulnerable adults and young people to turn their lives around.
There were such inspiring characters at that first meeting, including David Dein, who used to be a director at Arsenal and who, along with Jason Swettenham from Her Majesty’s Prison and Probation Service, is embarked on a project twinning professional football clubs up and down the country with prisons. There was also John McAvoy, an infamous armed robber from an armed-robbing family, who discovered while he was a prisoner that he was an outstanding indoor rower, set a load of world records and is now a Nike-sponsored endurance athlete; and Jane Ashworth at StreetGames, which works in the community to try to dissuade people from committing crime in the first place. These people were putting into practice, via their own hard work, charity and so on, something that I think the Government should have been doing for a long time.
Off the back of that first meeting, we had a second, and I managed to eke together the massive sum of £70,000 to commission a report on the value of sport in the criminal justice system. That report, by Rosie Meek from Royal Holloway College, is worth a read. Anybody who is interested in the value of sport and the impact it can have should read it. It is particularly interesting on the impact of contact sports such as rugby, including the work of Saracens at Feltham, and boxing. Unfortunately, the Government, and No. 10 in particular, took a rather odd view of the introduction of controlled boxing into controlled circumstances. That view was not backed by any evidence whatsoever, but was driven by the fear of silly headlines in tabloid newspapers.
Boxing in the community—Fight for Peace is a particular example of a charity—is undeniably doing remarkable work in trying to dissuade young people from participating in a life of crime. Anthony Joshua, a classic example of someone who was on remand, turned his life around through boxing. The list of examples of where sport has changed people’s lives is long and continues to grow. If we can bring about a change in our prisons whereby sport plays a significant part in a typical prisoner’s life, we would be doing something remarkable. If we could take prisoners out of the environment in which they find themselves—often locked up, drugged up and so on—and put them into a sporting environment, I am utterly convinced that we could address the rather woeful reoffending levels that we have in the adult male estate, and particularly in the youth estate.
In summary, I am a passionate sports fan. I was alright at sport as well once upon a time. It has made a huge impact on my life, and I just wish that we could use the sporting values of fair play, participation, resilience, hard work and the pursuit of excellence in every aspect of Government policy—in healthcare and education—but I feel particularly passionate about changing the lives of offenders and giving them a second chance.
Jo Stevens (Cardiff Central) (Lab)
It is a real pleasure to follow the hon. Member for Bracknell (Dr Lee) whose evidence at the Digital, Culture, Media and Sport Committee on the report on sport in prisons I very much valued and enjoyed.
My constituency of Cardiff Central, and our capital city as a whole, had the most amazing sporting year last year: Cardiff City got promoted to the premier league; Cardiff Blues won the Challenge Cup; Cardiff Devils won the Elite Ice Hockey League; and Cardiff’s Geraint Thomas won the Tour de France. At the age of 11, Anna Hursey, my constituent, became the youngest competitor in the Commonwealth games, playing table tennis for Wales.
Cardiff University and Cardiff Metropolitan University in my constituency have, for many years, produced world-class sportsmen and women. In cycling, we have Olympic gold medallist Nicole Cooke. In athletics, we have Lynn the leap, the long jumper; and Aled Davies, the Paralympic gold and bronze medallist in the discus and shot. In cricket, we have captain of the World Cup-winning England team Heather Knight, and in basketball, we have Steph Collins, Great Britain’s captain and the most capped basketball player in British history. Of course, in Rugby, we have: Gareth Edwards, Jamie Roberts, Non Evans, JJ Williams, Ryan Jones, Heather Price and my brilliant hon. Friend, the Member for Gower (Tonia Antoniazzi), who got her first cap for Wales while at Cardiff University and went on to be capped a further eight times. Chwarae Teg—“Fair Play” as we say in Wales—is a woman of many talents and she throws a mean set of darts, too.
Tonia Antoniazzi
I thank my hon. Friend for giving way. I would like her to join me and the House in congratulating an ex-pupil of mine, a lady called Alex Callender from Bryngwyn School in Llanelli, who got her first cap for the Wales women senior team this weekend in France.
Jo Stevens
I am delighted to add my congratulations to Alex, and I hope that she will have a long and illustrious career playing for Wales.
I could probably spend my entire five minutes talking about the incredible success of those two universities producing sportsmen and women, but I want to touch on two other issues in my contribution. First, I wish to mention the many people who help make sport happen in my constituency, and, secondly, the low-paid workers in our clubs and stadiums whose hard graft allows us to enjoy live sport so much.
Every week, my constituents of all ages and all abilities are able to participate in sport because of people working in our leisure centres, clubs, universities and schools and the very many volunteers who dedicate themselves to keeping sports clubs going year after year. There are clubs run by volunteers who provide improved health and well-being for people every single day. I want to take the opportunity today to pay tribute to every single volunteer who gives up their free time to keep sport at the very heart of our city: referees, coaches, first aiders, fixture and membership secretaries, and parents giving lifts, fundraising and making hot drinks and hot dogs. They keep our city happy and healthy, and I thank them very much.
There is another group of people without whom our sporting venues and professional clubs could not operate, including, in my view, the biggest and best sporting venue in the world, the Principality stadium in my constituency. These people are a group of predominantly younger, low-paid workers—the pint pullers, catering staff, programme sellers, cleaners, stewards and security guards. We get fed, watered and looked after safely by them every time we go there to watch rugby, football and cricket, to see bands and to watch other sporting events.
Sporting stadiums and elite sports clubs, particularly premier league football clubs, are deeply rooted in our communities and they have huge commercial success. But despite the money flowing to the owners, players and agents, most stadium workers—including cleaners, catering staff and security guards—are paid less than the real living wage and are struggling to keep their heads above water financially. Today, Citizens UK has published its report on money in sport and the real living wage; it is a happy coincidence with our debate.
Last week, I welcomed living wage campaigners to Parliament to hear more about how sports clubs and stadiums that have become accredited living wage employers can lift people out of in-work poverty, bringing benefits not only for those workers, but for the organisations and local economies. Those who work in sports clubs and stadiums are disproportionately affected by low pay; about 42% of them are paid below the real living wage.
These large clubs and stadiums are anchor institutions like universities, local authorities and hospitals. They are major private sector employers with strong social and historical links to their areas. I cannot imagine my constituency without the Principality stadium, or my city without Cardiff City stadium or Glamorgan County cricket club. The significance of these institutions lies in their ability to play a leadership role when it comes to driving take-up of the real living wage and generating that shared economic growth. That is why I, and nearly 30 Welsh MPs, are writing to the chief executive of the Welsh Rugby Union tomorrow, asking for a meeting to discuss how the Principality stadium could also become an accredited living wage employer.
The Welsh Rugby Union pays each of its players a £5,300 appearance fee, and on Friday night, against the French, I reckon they were worth every single penny. But the Six Nations games at the Principality stadium could not happen without those stadium workers, some of whom are earning as little as £7.50 an hour. A cleaner at the stadium would have to work for four and a half months just to earn the equivalent of that match appearance fee.
It is not radical to say that every job in Wales and across the UK should pay enough to live on. Welsh rugby upholds the highest standards on the pitch and off the pitch, and during the Six Nations the Principality stadium has the chance to make a massive difference to the lives of people who work so hard to make our experience and the Six Nations tournament a success, so I am asking the Welsh Rugby Union to step up and become a living wage employer.
Douglas Ross (Moray) (Con)
It is a great pleasure to follow the hon. Member for Cardiff Central (Jo Stevens), particularly because she mentioned a number of people involved in sport, including volunteers. As a referee, I was very pleased that she mentioned referees, although she then mentioned others involved in sport, including hotdog sellers. Many things are said before and after “referee” when people describe me, but I have never heard “hotdog seller” before, so that is a new one. At this point, I remind the House of my declaration in the Register of Members’ Financial Interests, as a qualified Scottish Football Association referee; I also officiate for UEFA and FIFA.
I want first to focus on a point made by the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) about facilities, because facilities are extremely important to all our communities. In the last week, I have raised a number of points about budget cuts, so today I do not want to get into the politics of the budget cuts, who is to blame, and how we can fund things more or less centrally in Scotland or through Westminster. I want to highlight the major impact that budget cuts are having on facilities in Moray. When our swimming pools in Keith and Lossiemouth are under threat, I stand with the hundreds of campaigners who went to a public meeting in Lossiemouth and are signing petitions to save their swimming pool in Keith.
The Active Schools programme is hugely important in Moray, and a number of parents and others have contacted me since Moray Council has decided to axe the programme. The programme is a partnership between councils and sportscotland, with the aim of promoting more and higher-quality opportunities to take part in sport. In 2017-18, over 90,000 participant sessions in Moray were held through Active Schools, with 35% of all school pupils in Moray participating in the sessions. Some 50% of those in my former council area of the Milne’s associated school group were involved in the Active Schools programme. There are 487 people involved in delivering these sessions, 93% of whom are volunteers.
Luke Graham (Ochil and South Perthshire) (Con)
My hon. Friend is talking about budget cuts. In Clackmannanshire, we are facing cuts to Alloa leisure bowl, which is the only remaining public swimming pool in the county. Does he agree that we should be saving and investing in these facilities to give these opportunities to our young and old people, not taking them away?
Douglas Ross
I fully endorse my hon. Friend’s point.
If the Active Schools programme is taken away, that will devastate our communities and our young people. Sportscotland is giving £272,000 in the next financial year to Moray Council to run this and other sports programmes, and that funding is under threat if we ultimately do away with Active Schools.
In speaking about facilities in Moray that face potential closure, I also want to highlight what will be a great addition to our facilities in Moray—Moray sports centre. It will be built in 364 days, and delivered on time and on budget. It will cost £8.4 million, with £8.15 million of that investment coming from the Moray Sports Trust and £250,000 from sportscotland. It will be a great facility with eight courts allowing for regional-level competition in many sports. That is really needed in Moray, as I am sure it is in other communities. Athletes young and old often have to travel to Inverness and, more often, further afield to Aberdeen, to train several times a week, so having a facility like that is a huge breakthrough for sport in Moray. It is more than 30 years since a major new public sports facility was built in Moray. I really pay tribute to Sandy Adam, Kathryn Evans, Grant Wright and everyone else involved in constructing this outstanding facility, which will be opened later this year and will be a huge benefit to the local area.
There are many things that I would like to have spoken about, but time is clearly constrained, so, as a football referee, I want to focus on football and refereeing. We have already heard about the Scottish women’s team qualifying for this year’s World cup in September. That was a great achievement for Scottish sports stars and for our women’s team. I know that everyone in the country will be getting behind the team later this year at the finals. There will also be a derby match between England and Scotland that will, I am sure, allow for interesting debates across the Chamber as it is being played. It is great to see women’s football doing so well in Scotland and across the UK. If I may, I will make a quick pitch for the reception I am hosting on Wednesday night to promote opportunities for women and girls in the football industry. I hope that the Minister, the shadow Minister and the SNP spokesperson could perhaps come to that event. Many people are going to be speaking there, and we really have to do everything we can to promote having more women in football and in sport generally.
On football refereeing, I could speak not just for five minutes but for five hours and maybe even for five days. We do not mention refereeing enough. Without the referees, and indeed the other officials, there is no football. We are quite often derided for our decisions, but it is quite simply the fact, in any sport, that without officials that sport cannot take place. Without a Deputy Speaker in the Speaker’s Chair, this debate cannot take place. That shows how important it is to have someone neutral keeping an eye on the time and on the behaviour of the participants. When I was a Member of the Scottish Parliament, I led a debate on our Scottish officials who had been selected to represent Scotland at Euro 2016. It is important when our sports stars—the men and women who play the sports—qualify for international tournaments, but when we have officials who are selected to represent their country, whether they be tennis umpires or snooker referees, we should celebrate that as well.
Gareth Thomas (Harrow West) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Moray (Douglas Ross). Many community organisations in England would recognise his concern about funding cuts. I come from the constituency that produced Sir Roger Bannister. Members of organisations such as Harrow Athletic Club, Metros Running Club and Jetstream Tri Club pound the paths in Harrow that Sir Roger once trod. I am only too well aware of the funding constraints facing Harrow Council and, indeed, other local authorities.
I want to concentrate the bulk of my remarks on two issues, and if time allows, I will raise one other issue at the end. The first issue is the one I raised in my intervention on the Minister, which is the coverage afforded on television and in the media more generally to women’s sport. As the father of a four-year-old daughter, I have been struck by how little coverage of women’s sport there is on mainstream television. There has been some improvement of late, and it is certainly true that there is a spike whenever a major women’s championship takes place. However, the highly commendable organisation Women in Sport, which did research into this issue, notes that only 10% of TV sports coverage is dedicated to women’s sport at the moment, compared with 7% across all media. When it looked at a number of countries, it identified that there were more hours of women’s sports coverage in the media in Romania than here in the UK.
It is not as if there is not substantial interest in seeing more coverage of women’s sport. Recently released figures show that there is a growing appetite for watching women’s sport. Indeed, research from specialist data measurement company Nielsen shows that almost 50% of people would watch more women’s sport if it were accessible on free-to-air television, while almost 40% would watch it if it were available online.
If we are to see a significant change, it will come down to Ministers holding the feet of the free-to-air broadcasters to the fire. It would be good to hear more about what the Minister is willing to do in that area. If the free-to-air broadcasters are not willing to move quickly, changes to the licence arrangements may be required to apply the appropriate financial pressure.
I share the view of my hon. Friend the Member for Tooting (Dr Allin-Khan) that reform of the premier league is overdue. There is not enough financial transparency. Our fans do not have enough power to hold owners to account. There certainly is not enough investment from premier league revenues into grassroots sport. If the Football Association has to think about selling our greatest sporting asset—Wembley stadium—to get substantial investment into grassroots sport, that is an indicator that the Premier League is not doing enough. A 10% share of the TV rights that the Premier League secures every year would have raised more than the amount of money that the Football Association hoped to generate for grassroots sport from the sale of Wembley stadium.
My hon. Friend the Member for Cardiff Central (Jo Stevens) is right to say that not only the Welsh rugby union but a whole series of premier league and championship football clubs could do a lot more to tackle the issue of paying the living wage to the poorest paid workers in sport.
Lastly, there are Indian elections coming up shortly. I raise that in a debate about sport because it would be wonderful to see an Indian premier league match hosted here in the UK. Many of my constituents would welcome the opportunity to see that just as much as American football is enjoyed at Wembley stadium.
Derek Thomas (St Ives) (Con)
It is a pleasure to follow the hon. Member for Harrow West (Gareth Thomas). It will come as no surprise to the Minister that I am making the case tonight for a stadium for Cornwall. Dr Caroline Court, director of Public Health Cornwall, said in Cornwall’s physical activity strategy:
“Physical activity is a key component in improving the health of the local population… Working together with sectors such as education, sport and leisure, planning, transport and economic development, we can achieve a step change for the health and prosperity of all of Cornwall’s residents.”
Mike Thomas, the director of Cornwall Sports Partnership, wrote:
“Inactivity is a stubborn long standing problem, which without intervention is not going to go away. We cannot afford to be complacent and the situation could get worse. Opportunities to be active in everyday life are engineered out of our lives and older residents in Cornwall spend longer in ill health than in other parts of the country.”
Mr Thomas—no relation—concluded:
“Never has the need to reduce inactivity levels in Cornwall been more urgent.”
The vision statement for Cornwall Sports Partnership reads:
“The vision is a future where everybody in Cornwall and the Isles of Scilly is active as part of daily life, regardless of age, gender, culture or circumstance.”
Its 2020 target is that 50,000 more people in Cornwall and the Isles of Scilly will be more physically active as part of daily life by 2020. Its strategy has five key themes: physical wellbeing, mental wellbeing, individual development, social and community development, and economic growth. At the time of writing the strategy in 2016, 42% of children aged five to 15 in Cornwall were described as inactive—42%—and 28% of adults were described as inactive.
Hon. Members can see why so many of us in Cornwall are working so hard to deliver the stadium for Cornwall project. What is the stadium for Cornwall? It will be a multi-use sports and education facility, and a centre for the promotion of health and wellbeing across the duchy. It will be the permanent home of Cornish Pirates and Truro City FC, with an accessible location, all-weather pitch, improved facilities, and the sharing of costs will put both clubs on a long-term sustainable footing. There will be 180 days of community-based sport on an all-weather pitch. Meanwhile, a new sports and leisure suite, to be managed by Greenwich Leisure, will meet the strong and growing demand in the surrounding districts.
What have we been doing to deliver the stadium? In 2009, I was involved in and part of a working group on developing the scheme. In 2015, we caught the attention of the Conservative Government, and we were promised Government support to deliver the stadium. Direct central Government funding is needed. This ambitious and much-needed stadium for Cornwall project is requesting just £3 million of Government money to unlock a further £11 million. The Minister has been clear this evening that this Government are committed to the health and wellbeing of everyone and to reducing demand on NHS and care services where possible.
It is important that the Government get behind this stadium because the Cornwall Sports Partnership is nowhere near delivering the extra 50,000 more people in the Cornwall and the Isles of Scilly being more physically active as part of daily life. It is already accepted that the geography of Cornwall presents challenges for access to sport and that Cornwall is not receiving its fair share. Sport England acknowledged just last month that there is a rural location factor and that access to and between facilities is a real issue in Cornwall. It also acknowledged that there has not been the same investment in Cornwall as in other parts of the country.
The stadium for Cornwall project is committed to delivering better health outcomes, improving the lives of vulnerable adults and families, improving the physical and mental health of children and young people and increasing the aspiration of young people, especially those who are disadvantaged. Those of us who have been engaged in the project for some time recognise that there is significant political will for the stadium to be built. We are also confident that this is a sound investment for the Government, because it provides an opportunity to improve the health and wellbeing of tens of thousands of people of all ages across the duchy.
Those who have been involved in the stadium for Cornwall project for a long time believe that the Government would welcome the opportunity to back and fund this initiative, but we are also perplexed. Given the positive case I have set before the House today, I cannot pretend that the stadium for Cornwall partners are not frustrated by the hurdles we are having to jump over and perplexed by the hoops we are having to jump through to secure just 20% of the funding for an initiative that delivers on something at the heart of Government funding.
I remind the House and the Minister that never has the need to reduce inactivity levels in Cornwall been more urgent. Will the Minister please take note of this challenge and do whatever is in her capacity to deliver this sound investment for Cornwall’s health and wellbeing?
John Grogan (Keighley) (Lab)
It is a great pleasure to follow the hon. Member for St Ives (Derek Thomas). I look forward to going to see Yorkshire play Cornwall, one day in the future, at that new stadium in Cornwall. I intend to take as my mantra for my few remarks tonight the words of the hon. Member for Burton (Andrew Griffiths), who is no longer in his place. He charged us all to be cheerful and look on the bright side tonight, so that is what I want to do.
As you may remember, Madam Deputy Speaker, I warned the House during the Christmas Adjournment debate that the future of Keighley Cougars rugby league team was at stake. The team that first brought razzmatazz to rugby league was in danger of going under. However, the first good news that I can bring to the House is that Keighley Cougars are now back in safe hands, having been sold to Mick O’Neill and the consortium that first brought that razzmatazz with it 20 years ago. Keighley are an example of a community club that really helps to define a town. I hope that the years to come are good ones and that we can redevelop the site as a whole sporting site, with the Cougars next to Keighley cricket club.
Various speakers have mentioned the soft power of sport. We have heard about the soft power of the premier league. I speak as chair of the all-party parliamentary group on Mongolia, as you well know, Madam Deputy Speaker—you have entertained Mongolian visitors on my behalf. There are 1,000 members of the Liverpool supporters club in Mongolia who will be gripped tonight watching West Ham and Liverpool—[Interruption.] I have not yet heard the score, although someone mentioned that it was 1-1 slightly earlier on.
Parkrun has also been mentioned, and that is soft power as well. It started in the United Kingdom, and it has now spread to 20 countries. It reached Keighley last year. The average time for the average parkrun has gone up to 29 minutes and 30 seconds, as more people, and different members of the community, have embraced the parkrun. My average time is slightly faster than that, even though we have three hills to climb on our parkrun in Keighley. So that is another reason to be cheerful.
Canoeing has not been mentioned tonight. I can reveal exclusively that, together with my hon. Friend the Member for Harrow West (Gareth Thomas) and colleagues from across the House, I will be tabling an extremely important motion about canoeing tomorrow. In Scotland, people can canoe wherever they like. In England and Wales, there are 42,000 miles of inland waterways, but people have uncontested access to only 1,500 of them. That is unfinished business from the right to roam legislation. In many countries in the world people can canoe, and canoeing is also a great Olympic sport. I would like Ministers to have a look at that issue.
I want to finish on sports broadcasting, which has been mentioned quite a lot tonight. Incidentally, we can look forward to the women’s netball world championships and the women’s football world championships live on free-to-air TV later this year. However, one thing we should be proud of in our country is the listed events regulations. They are an intervention in the market, and I think they are supported by all parties. There are reasons to look again at them to see whether we need to extend them. For example, there is not one women’s team sport on the list. The women’s World cup is on free-to-air TV this year, but as it becomes more popular, it may become tempting to subscription broadcasters.
The Six Nations has been mentioned very much tonight. Last week, it appeared that it was under threat and that it could have gone off to Amazon or Google, in a deal that would have created a new world rugby championships—I thought we had the world cup in rugby and that we did not really need a new one. The good news is that, over this weekend, the chief executive of the Six Nations has confirmed that he wants to keep the tournament on BBC and ITV. He sees value in that in terms of uniting the nations. I commend the Sports Minister on speaking out about this at Department for Digital, Culture, Media and Sport questions last week. I hope those on the Labour Front Bench—there was no mention of listed events from Labour Front Benchers earlier—will mention them in summing up.
Ian C. Lucas (Wrexham) (Lab)
Does my hon. Friend agree that it is a national tragedy that we will have an Ashes series this year—14 years after the magnificent 2005 victory—that will not be on free-to-air television? Is it not about time that cricket realised how much interest it has lost by making that very bad decision?
John Grogan
My hon. Friend makes a great point. To be fair to the England and Wales Cricket Board—the cricketing authorities—I think it is now beginning to realise how much this has cost cricket since that summer in 2005, when the Ashes were, I think, on Channel 4. There was a spike in the number of people participating in cricket. I think the latest figures from Sport England suggest that there are now a third fewer participants in cricket, and that is because it has disappeared. A photo of Joe Root—despite the weekend’s results, perhaps the greatest living Yorkshireman—was shown to a group of schoolchildren not so long ago with that of a World Wide wrestler. Very few of them recognised Joe Root; they all recognised the World Wide wrestler, and that is because of the power of television. One good thing, however, is that some T20 cricket is coming to the BBC next year.
Finally, there is one commitment the Minister could give, either now or in the future, in relation to free-to-air coverage. There has been a lot of talk about bidding for the men’s 2030 World cup. The last time there was a bid for the World cup, the Government headed by Gordon Brown was pressurised by FIFA. It was insistent that for England to have any chance of getting the World cup we would have to scrap our listed events legislation as it applied to the World cup whereby every game would be free to air. But FIFA is now under new management and I hope Ministers will make it clear at the very start of the negotiations that if the World cup is to be in England, Scotland, Wales and Ireland, it will be live and free on free-to-air TV.
Ben Bradley (Mansfield) (Con)
I refer Members to my entry in the Register of Members’ Financial Interests.
I had written a 300-page speech to bang on about sports, so I have had to cut it down significantly. Nobody has mentioned my favourite sport of hockey, so I will take the opportunity to do so. In 20 years as a player—I used to be all right, but my knees cannot take it anymore—as a coach and now as a chairman of a hockey club, I have seen the changes that have taken place in the sport. England Hockey has worked to make the sport more inclusive and accessible, with initiatives such as “Back to Hockey” for older players, Quicksticks and walking hockey. In recent years, there has been a massive growth in participation. Hockey is not unique, but it is a rare example of a sport played equally by both men and women, and with equal coverage.
There has been a huge growth in the number of under-16 players, particularly girls. That is no doubt due to the massive success in the 2016 Rio Olympics, where the GB ladies won the gold medal. Since then, participation has gone through the roof. In my mind, that gold medal and England’s netball success in last year’s Commonwealth games are huge sporting highlights. It was a great privilege to see how that affected people—watching sport live and free to air on TV had an impact across the piece. I talked to people about hockey who would never normally have taken an interest. I have had the great privilege of playing alongside some of the ladies at junior level at Belper hockey club, including Hollie Webb who scored the winning penalty in the final. They are an incredibly inspirational bunch of people.
I would like to raise with the Minister the big challenge of playing surfaces. There has been a massive expansion in the number of 3G pitches—the Football Foundation’s investment in Mansfield is very welcome—but hockey cannot be played on a 3G pitch. A lot of local authorities do not seem to recognise that. My own club is looking at bids and planning permission for three 3G pitches in the community where our hockey pitch is gone—it is dead, it is old. We need a new pitch, but there is no support for that. We will be forced out of the town by the lack of facilities. The sport could end up being increasingly centralised. Big clubs have the money to drag players and resources out of small clubs that cannot afford to maintain facilities. I just wanted to flag that with the Minister.
I want to raise a couple of points in the second half of my remarks. Mansfield is a massive football town. I could not not mention the Stags, Mansfield Town football club. I have my tickets for Notts County away next week. Mansfield Town have never lost when I have been there, so I am very hopeful—I am a lucky charm. Since John and Carolyn Radford took over at Mansfield Town, they have been an amazing influence on both the club and the town with the success they have had on the pitch and the positive atmosphere they have brought to the club. We are second in League Two at the moment. If we manage to get promoted, increased attendances could have a huge economic benefit for the town centre. The Radfords have brought forward hotel plans to try to maximise that benefit. That could be incredibly positive, so I wish Mansfield Town the best of luck in the remaining games.
I want to raise a couple of points about football and the English Football League. The arguments are well-rehearsed so I will not go into great detail, but safe standing has been mentioned. It seems strange to me that we can have existing terraces in football stadiums, but new ones cannot be brought in. Scotland has allowed clubs to introduce safe standing. Celtic trialled it and did so successfully. I would love to be able to see that in EFL clubs across England. It would provide the opportunity to bring in more revenue, which is so important for the clubs. We should definitely look into that, and I welcome the Government’s willingness to review it.
The other thing is alcohol served during games. The opportunity for smaller clubs, and the Chancellor, to bring in that additional revenue could be really positive. In rugby, we see—even when games are in the stadiums that are shared with football teams—that the money spent in the club is more than double the amount spent for football. Some of that is based on being able to purchase alcohol in the stadium. I do not see how it is that much safer to tank up before a game and down a pint at half-time than it is to be able to drink sensibly throughout a game.
I also want to mention Powerchair football, which we have in my constituency at West Notts College. It involves electric wheelchairs controlled, in some cases, only by a thumb. It is an incredible, life-changing thing. Ricky Stevenson, who is now chair of the international Powerchair football federation, is from Warsop in my constituency. I urge the FA and the Government to support that sport—it is a real inspiration—as much as possible. There is an awful lot more that I would like to say, and I have a vast list here—
Madam Deputy Speaker
After the next speaker, I will take the time limit down to four minutes.
Chris Bryant (Rhondda) (Lab)
Since I have hardly got any voice, I might not make the five minutes—and I do have a cough, I might say to the hon. Member for Paisley and Renfrewshire North (Gavin Newlands). I am only going to speak about concussion in sport. My doctor has told me that I should not really be here tonight, but I care about this issue passionately, so I want to speak about it.
On 19 January 2002, Jeff Astle died. He was a very famous player for West Bromwich Albion. When the coroner came to examine his brain, it was decided that he had died from heading the ball. It was termed an industrial injury and yet, still today, we have made remarkably little headway.
Ben Robinson died on 29 January 2011. He was just 14 years old. He had had concussion and then went on to play again, and later that day, or two days later, he was pronounced dead at the local hospital because he had suffered from double impact syndrome, where effectively, the brain sort of explodes inside the head. His family have done an amazing job, as have Jeff Astle’s family, in trying to keep the issue of concussion in sport alive.
There have been many recent issues. Last May, the 17-year-old Adrien Descrulhes died after a head injury in France. Also in May last year, the 18-year-old Canadian, Brodie McCarthy, was killed in a rugby match. In December, Nicolas Chauvin, an 18-year-old student at Paris Descartes University—he was a flanker in the academy at Stade Français—was also killed following a similar accident. That is one of the reasons why the French rugby union is campaigning for changes in the sport, which I think we need to listen to very carefully.
If anybody saw the Chelsea versus Bournemouth match the other day, they would have seen David Luiz, the Brazilian player, receive the ball very hard on the head. Interestingly, some of the spectators sort of revelled in the violence of that moment. One person wrote:
“Poor old David Luiz getting a bullet in the mush seems very popular with a lot of your following”—
meaning the opposite team. He said “Terrible” and then he added:
“Must admit did a thumbs up myself”.
This is one of the problems. In some sport at the moment, there is a kind of glorification of such violent moments, and we need to think very carefully about that.
In the United Arab Emirates match against Australia in the Asian cup quarter final, Fares Juma Al Saadi clashed heads with Mathew Leckie, and then he went back on. He then played a few days later in another match and even the players’ union, FIFPro, questioned whether the protocols had been properly adhered to.
The significance of this, first and foremost, is that there is still remarkably little understanding of chronic traumatic encephalopathy, which is the steady acquisition of more damage to the brain by virtue of lots of small concussions. Individual events may not have done an enormous amount of harm, but they may over time. I have a terrible fear that many of my constituents who have played rugby many, many times and have been concussed many, many times, who are now in their old age or in their middle age and who worry about fatigue, depression, anxiety, memory loss and early onset dementia, may have acquired this because of the successive concussions that they suffered in sport. The thing is that concussion, in many people’s minds, is what happens when someone is knocked unconscious, but that is about 10% of concussions. There are a lot of other different symptoms from concussion, so it is very misunderstood.
In youth sport, concussion rates are 18 times higher in rugby, five times higher in hockey and twice as high in American football—those are USA figures. Unfortunately, when I asked the Government for statistics for this country, I was told there were none, which means we have no idea how many concussions there are in sport at the moment. Some sports are getting better, but the Government do not keep the information. It is important that we change that.
My impression is that football is making progress only because it is terrified of litigation, which is a terrible mistake—it should care about the players for heaven’s sake! Research funding is minimal in this field, and as for the protocols in football, it is preposterous that, although the Football Association and the premiership have made some strides in recent years, FIFA still does not allow subs to come on, as happens in rugby. Subs are necessary because it takes 10 minutes to do a proper assessment at the pitch side. It cannot be done in three minutes, and any ref who thinks it can is living in cloud cuckoo land, and dangerously so. Players and coaches often think they know best, but the only person who knows best is a doctor, who knows what they are talking about. If in doubt, sit them out. We can save lives and people’s brains.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
It is an honour to follow the hon. Member for Rhondda (Chris Bryant).
Sport has many forms. As far back as 1770, a racecourse was established in Ayr, and the sport of horse-racing has remained a local economic driver to this day. The present day Ayr racecourse is a modern venue with approximately 24 race meetings each year, including the prestigious Ayr gold cup and the Scottish grand national. It is Scotland’s premier racecourse. The racecourse and the sport of horse-racing generates income for the town, creates employment in the stables, grounds, catering outlets and so on, and affords invaluable work experience in various disciplines.
Today being World Cancer Day, it is interesting and a pleasure to note that Ayr racecourse has in the past supported race days for the local hospice and, I am sure, will do so in the future. It is also a changing venue. It holds ladies’ nights and special themed days for families, and so on. It has become a very enjoyable day out.
Scottish Racing’s economic impact study in 2016 established that more people went to racing than visited golf tournaments and rugby matches. The total attendance at Scottish racing in 2016 was over 300,000, with almost a third attending Ayr racecourse. Ayr racecourse generates more than £25 million per annum for the local economy—not an insignificant sum—and supports a significant number of local jobs in the community.
My constituency has a proud sporting tradition. Annually, we host the bowls Scotland national championships at Northfield and there is Cambusdoon cricket club, a very healthy cricket club. Former England cricket captain Mike Denness was from Alloway and educated at Ayr Academy. Ayr United football club is currently excelling in the league, although its pursuit of the Scottish cup came to an abrupt halt when a healthy and robust local junior team, Auchinleck Talbot, knocked them out—a wee red face for Ayr United, but well done to Auchinleck Talbot!
We also have golf, not least Turnberry—now known as Trump Turnberry, after its famous owner—which held the 1977 open championship and its famous “duel in the sun” between Tom Watson and Jack Nicklaus. We have a healthy rugby scene in my constituency, at Cumnock and Millbrae and Ayr. I commend Carrick Academy, in Maybole, for its range of healthy young rugby teams, covering all ages and genders. I give full credit to that school for bringing on the young ones in sport, particularly rugby, a sport that, through the British Lions, brings our UK nations together every four years to tour Australia, New Zealand and South Africa.
My constituency also has swimming. Cumnock pool, New Cumnock pool, Britain’s newest, finest and warmest open-air pool, and Girvan and Ayr pools have gained popularity with locals, and it is a lovely area for cycling, too, while Scotland, being quite unique, also has curling, a sport suitable for all ages and genders. As a Scot, it would be remiss of me not also to mention the successes of Andy Murray, an exemplar in the field of tennis. Along with, I am sure, the whole House, I wish him a full and speedy recovery.
Such sports give people an ideal opportunity to engage with each other at a time when Governments and the NHS fear that some sections of the population are becoming insular and isolated to the potential detriment of their health, not least given the challenges of obesity.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Gentleman’s time is up.
Carol Monaghan (Glasgow North West) (SNP)
Let me begin by mentioning a great sports club in my constituency, Glasgow Warriors, which is currently second in the Guinness Pro14 League. No doubt it will take the top spot very soon. It shares its ground at Scotstoun, which is round the corner from my house, with Victoria Park athletics club. Both clubs are involved in great schools outreach activities in an attempt to engage young people who would not normally have experience of their sports.
I am now going to make a rather controversial statement which may cost me some votes: I am not a fan of football. There are many reasons for that, but one thing that bothers me is the reporting of it, which dominates television and the print media. I heard a Member say earlier that 10% of written reports were about female sport. I find that hard to believe, because I regularly look through the sports pages just out of principle to see how many articles there are about women. The reporting is pretty much all about football, and it is almost entirely male.
That has serious implications for the health and wellbeing of girls in particular. We know that teenage girls are far more likely to drop out of sport than boys. They are not seeing role models. They are not seeing girls like them succeed in various sports. It is great to hear about the increased participation of women in, for instance, football, rugby and cricket, but more traditional girls’ sports such as gymnastics, dancing, swimming and athletics do not receive much coverage.
Many people will not know that I was a gymnastics coach for a number of years, and coached at elite level. The hon. Member for Tooting (Dr Allin-Khan) spoke of the difficulties experienced by those who did not have support. That is absolutely true: without parental and financial support, it is almost impossible for young people to participate in elite sport. They need their parents to run them to the venues, and to pay the costs of lessons and competitions.
However, there is also a big role for recreational sports, and sports for people with additional needs. As the Soviets knew when they were great at gymnastics, the more people participate in sport, the more excellence rises to the top of the pyramid, so we need to increase participation. There is a very special club in my constituency, the Glasgow Eagles sports club in Drumchapel. Its specialities are basketball and table tennis, but it is a club for people with additional needs, and it has done a great deal of work with autistic adults. It deals with mass participation, but the mass participation of people with special needs.
I think it is important for us also to recognise the dark side of sport. We know that in the past paedophiles have used sports coaching to groom young children. I urge every Member to support the Close the Loophole campaign by the National Society for the Prevention of Cruelty to Children, which is ensuring that 16 and 17-year-olds are given the same protection as younger children, particularly in areas such as sport, in which relationships can develop over a long period.
Rebecca Pow (Taunton Deane) (Con)
Sport has always been an integral part of my life, and I hope that I have passed that on to my children. I first picked up a tennis racket when I was 11, and I hope that I will play until I am 80. That is one of the great aspects of such sports.
In the few minutes available to me, I want to focus on women in sport. For too long, women have been the underdogs. In schools, boys got all the glory—the blazers, the badges, the awards—but I am pleased to say that that has started to change. Women’s participation in the Olympics increased from 23% in 1984 to 46% in 2016. In Rio, women won more medals in a great many sports than the men, including, rowing, swimming, taekwondo, field hockey and judo. Winning gold in the women’s hockey in the London 2012 Olympics gave a huge boost to women’s hockey. Taunton Vale hockey club is testament to that. It is the eighth largest hockey club in the country, with six women’s teams. The talented women in our UK netball team, by winning gold in the Commonwealth games in 2018, have stimulated women to play netball: 130,000 women have taken up netball since April 2018, which has led BBC and Sky to announce a deal to broadcast every minute of the world cup. Taunton boasts a very good netball club—Taunton netball club—which I cannot let pass without a mention.
I was extremely heartened at a recent meeting of the all-party parliamentary group on cricket, of which I am a proud member, to hear Tom Harrison, chief executive of the England and Wales Cricket Board, say that women’s cricket is the biggest growth area in cricket—howzat, Mr Speaker! I have a daughter who played for Somerset, so I have spent a great amount of time following cricket. Well done to Clare Connor, director of England women’s cricket, who really is proving that we can move on in this area.
I am very proud to say that Somerset county cricket club will host the women’s Ashes this year. All my colleagues are invited, but I would particularly like to extend an invitation to the Minister. The matches will bring untold riches to the economy in Taunton Deane, and introduce many more people to the amazing style and performance of the women’s game.
I must not forget rugby. Taunton Titans have a growing girls’ sector. Women’s rugby has been helped by the announcement by the Rugby Football Union of the first full-time professional contracts for the 15s side. That is a big step forward, and will help to achieve a pipeline of players from now into the future. Staging women’s rugby internationals on the same day as the men’s has increased audiences, but I have been told that to go to the women’s match, spectators have to buy a ticket for the men’s match first. Is that fair, gentlemen colleagues? Perhaps we should do it the other way round. The gentlemen should buy a ticket to the women’s match, then get the men’s match free. That would entice them to watch the women. We have a long way to go, but we are definitely on the way. We need to give people the choice of buying a ticket for a women’s match on its own.
I want to give a big nod to the professional reporting in media coverage of women’s sport, with people such as Gabby Logan and Sue Barker. It is unbelievable that it was not until 2018 that we had the first female commentator for a live TV World cup match broadcast in the UK. The position is improving, but we have much further to go, as with equal pay.
To sum up the value of sport, particularly to women, according to the World Economic Forum, girls who play sport stay in school longer, suffer fewer health problems, enter the labour force at higher rates and are more likely to land better jobs. I call that ace, Mr Speaker.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I am going to do something completely different from all the other speakers and speak about country sports and shooting. That is the subject that I want to put on record in Hansard.
As well as supporting those sports, I am a dedicated conservationist. Back home on the family farm, I am always thinking of new ways to conserve the habitat. I have planted over 3,500 trees, and dug two duck ponds. There is a purpose in that, to be honest, and we also maintain the hedgerows. Not only does that maintain the natural habitat but it encourages new habitats. In the past few years, we have seen the return of the yellowhammer, a bird that is much sought after in the UK, and birds of prey.
Surprisingly, shooting is worth £2 billion to the UK economy and supports the equivalent of 74,000 jobs. In these uncertain times, it is a sector that is proving its popularity and it is important to participants. It is estimated that shooters spend £2.5 billion each year on goods and services, and shoot providers spend around £250 million each year on conservation. People who participate in shooting manage 10 times more land for conservation than the country’s nature reserves. Undoubtedly, for many people, country sports play an integral part in society.
In Northern Ireland, we excel at many sports, but at two in particular: boxing and shooting. I am never sure why that is—perhaps it is because they are contact sports, but perhaps it is for other reasons. I am proud of the shooting sports in the UK and of the benefits that they bring for individual discipline as well as for group participation and team building. Shooting is not only a hobby but a necessity for many jobs. It is also a competitive sport for the shooters from the UK who take part in a variety of domestic and international competitions. At least 600,000 people in the UK shoot live quarry, clay pigeons or targets every year, including some 280,000 people who take part in clay pigeon shooting and 168,000 people who take part in small or full bore rifle shooting. They are a tremendous group of people who enjoy the sport and the community of being involved in the sport together. I often feel that many people do not give the sport the respect that it deserves. My local shooting club, at Carrowdore in my constituency, hosts a charitable event called the Swaziland cup, where amateurs and professionals come together to win the cups and raise hundreds of pounds for the children of Swaziland. The club also hosts the little choir when people come for an afternoon of safe fun and good food. I have never won the Swaziland cup, but maybe next year I will.
There is so much good being done by the shooting community and the sport is a way of keeping body and mind healthy and together. I recently read an article that listed some of the benefits. For example, it builds core strength. The Minister said earlier that sports can make us physically fitter and more mentally alert. Shooting builds core strength and helps us to build our centre. Adjusting our body weight to the balls of our feet and remaining still in our shooting stance is great exercise for our core muscles, which support proper posture. Arm strength, mental processing and efficient problem-solving are major components of shooting. It encompasses all the things the Minister referred to, including adrenaline, mental focus, stamina, running through stages, carrying heavy gear and often navigating over uneven terrain with challenging props. Practical shooting requires fitness and stamina to run between arrays, to focus on our front sight, to think about our trigger press and to control our breathing. Stress relief and a vision training mindset are all things that the Minister referred to in her introduction, and they can all be achieved through participating in shooting sports.
Shooting is certainly a sport at which we can excel. Northern Ireland does well in it, as do Scotland, Wales, England and the Isle of Man, when given the opportunity. I want to use this opportunity to express my disappointment that shooting was not included in Birmingham 2022 as an essential part of the Commonwealth games. Shooting is a great sport, whether out in the countryside or at a range, and we must send the message to the Commonwealth committee that its inclusion is vital to the integrity of the Commonwealth games.
Paul Masterton (East Renfrewshire) (Con)
In 1979, David Jones, the janitor at St Cadoc’s Primary School in Newton Mearns, coached his team of 14 primary 7 schoolboys to the first of three consecutive mini world cups at Overlee playing fields in Clarkston. That was the beginning of a remarkable local legacy, which over the next 20 years saw the team grow to include around 50 pupils from three year groups. By 2004, teams included all seven years of the primary school. A couple of years later, the primary school team had evolved into a local club, with more than 250 registered players from over 10 different schools. Continuing its growth beyond those foundations as a school football team, the club converted to a registered charity, whose aim is
“to encourage public participation in sport”.
As of December 2018, 900 registered girls and boys now play netball or football for the club each weekend. Recognising the value of sporting activities to local kids, fees are kept as low as possible and the club also operates a hardship policy to ensure that every child can participate, no matter what their family circumstances might be.
Backed by an incredible team of volunteers, the club continues to go from strength to strength. St Cadoc’s is an incredible example of a small school team growing into a true community-wide organisation benefiting hundreds of local kids each week, but it also needs a bit of help. It has exhausted local facilities and, with its size and ambition, it has reached the limit of what is possible. This has meant putting on hold its community outreach programme, which it had hoped to launch as soon as possible. The programme will take St Cadoc’s to the next level in its work in the community, providing wheelchair football at the local special needs school, walking football for the elderly, and specialist sessions for children and young adults with Down’s syndrome.
On 28 April 2019, the club will attempt to complete 5,000 miles in 12 hours at Eastwood high school in Newton Mearns to raise the money it needs to deliver its outreach programme for the entire community, and that is where I and—whether by agreement or force—my wonderful constituency office team will be helping out, completing a few miles ourselves to help the club to reach its goal. St Cadoc’s youth club rightly has a place in the heart of the East Renfrewshire community, and in my view it is precisely the sort of grassroots club that underpins the health and wellbeing of our young people, and the success of our great nation in sport.
I would also like to take this opportunity to mention an important professional sporting event taking place this week. For the first time in 26 years, Great Britain will host a home tie in the Federation cup, the women’s equivalent of the Davis cup tennis competition. The team of Jo Konta, Heather Watson, Katie Boulter, Harriet Dart and Katie Swan, captained by former British No. 1, Ann Keothavong, will compete against seven other nations between Wednesday and Saturday this week at the fabulous facilities at Bath University. With a dozen top 100 players competing for their country, this is a fabulous opportunity to witness world-class tennis. I am sure that the whole House will join me in backing the Brits and wishing Team GB every success in their bid for promotion to the world group.
Stephen Kerr (Stirling) (Con)
It is a pleasure to follow my hon. Friend the Member for East Renfrewshire (Paul Masterton), and may I say to my hon. Friend the Member for Moray (Douglas Ross) how much I enjoy watching him perform his duties as an assistant referee? We are very proud of what he has done to carry Scotland’s saltire into international arenas. I think I can say, without fear of contradiction, that that is also true of Opposition Members.
It is an enormous privilege to be the Member of Parliament for Stirling, and that privilege takes on even more gloriousness when we consider the contribution that Stirling makes to the sporting life of the United Kingdom. We have already heard about Sir Andy Murray, but Stirling has also produced other great competitors, such as the legendary Billy Bremner. Who can forget how fierce a competitor he was in football? We also have Gary and Steven Caldwell, the famous brothers—by the way, we bought their parents’ house from them. We also have the renowned jockey, Willie Carson, who is also a star of “A Question of Sport” and “I’m a Celebrity…Get Me Out of Here!”
Anna Sloan is also from Stirling, and she is Scotland’s pride in curling, which I am glad to have heard mentioned so often. The Scottish National Curling Academy is based at the Peak in Stirling and has produced Olympic and Commonwealth gold for Team GB and for Scotland. The Stirling Smith Museum has the oldest curling stone in the world, dating from 1511, and we also have the oldest football in the world, which was found in the rafters of Stirling castle and dates from the time of Mary Queen of Scots.
That is the history, but Stirling also has a proud football tradition. We have Stirling Albion and other great clubs, such as Milton football club, which is based in Bannockburn and plays in the Scottish Amateur Football Association’s Caledonian League and does fantastic work with the community.
When it comes to swimming, Stirling is a superpower. If Stirling had been a country at the Commonwealth games, we would have been in the top five for medals in swimming and 17th in the overall medal table, ahead of 23 other countries.
Basketball has been mentioned a few times. The Stirling Knights have won 19 national titles and produced 30 players for Scotland. They are winners. They have won the Scottish cup, the league cup and a youth tournament in Spain.
Stirling County is an incredible rugby club with an incredible legacy and tradition. It has produced great players for Scotland and has a big Scottish cup game with Hawick, I think, a week on Saturday.
Let me pause on Stirling county cricket club, because I have an affection for that particular institution. My son Jared played cricket for Stirling county. I pay tribute, as did the hon. Member for Cardiff Central (Jo Stevens), to the people who make sport happen in our communities. I want to mention specifically Raymond Bond, who for years and years nurtured the talent of young people in Stirling to play cricket. It is people like Raymond Bond whom I pay tribute to in my speech tonight. They are the people who make this country the superpower that it is when it comes to sport. We should nurture that in our constituencies.
Alison Thewliss (Glasgow Central) (SNP)
The hon. Gentleman makes a very good point about people who volunteer and get things going. Will he also congratulate Ammar Ashraf, the community engagement co-ordinator for Cricket Scotland, who is doing an awful lot to bring people into the sport in communities?
Stephen Kerr
Cricket is a fantastic sport for developing so many of the qualities that one needs to be successful in any avenue in life, so I am only too happy to join in that tribute. We should celebrate those who make sport happen—the volunteers, the coaches, the people who give selflessly of their time and their talents in order to foster the talent and enjoyment of others in sport.
Kevin Foster (Torbay) (Con)
That is noted, Mr Speaker. Thank you for calling me to speak in this debate, and it is a pleasure to have a short time to make some observations about the varied role of sport in Torbay. Sport is the life of the constituency I represent.
It is worth starting with Torquay United who, bluntly, after some rather lean seasons have recently been enjoying more pleasant times for them and their fans. A potential move from Plainmoor—the historical stadium still has a terrace, on which I sometimes stand—to a new stadium is being debated. One thing that disappointed me when we met the club, which will be of no surprise to anyone at the local paper, is the lack of even the most basic details about exactly what it plans to do. It is right that the council has indicated it will engage constructively, but councillors have been right to resist a formal agreement until the plan is much clearer on a range of issues, including whether the indicated site, Nightingale Park, can be built on. Surprisingly, that issue has not yet been rectified.
Speaking of new stadiums, the Minister will know that my background is in Coventry, where the Ricoh arena was built. I have heard the comments this evening about whether people should again be able to sell alcohol in the stands at football matches, or whether we should revert to new forms of standing. I would give the cautionary tale that many Coventry City fans will recall an infamous FA cup fixture at Hillsborough a couple of years before the disaster that followed. Many of those fans feel they had a pre-experience of the disaster, and the lessons were not learned. Any changes to the rules that were brought in after the disaster must be carefully considered and evidence-based—we should not just debate what might sound good on the Floor of the House. I am confident the Minister will follow the approach I suggest.
I have a great deal of time for a raft of voluntary sports clubs in Torbay. Paignton rugby football club, the Cherries, are doing a great job of getting more youth teams playing and getting involved in rugby. Cary Park tennis club is doing a lot of work on the intergenerational experience of sport by having days for grandparents and grandchildren to come and play on its new facilities. The clubhouse has been expanded, and the club is making tennis very accessible. I am sure the club would welcome you, Mr Speaker, if you fancied popping down for a game.
We have Barton cricket club, where Agatha Christie kept score under a tree that we have sadly lost in storms over the years. The club is still there and is still playing a vital part in the local community. The former editor of the Herald Express, Jim Parker, has dedicated decades to supporting the club.
When most people hear about rowing, they will instantly think of a lake, but the guys and girls at Paignton and Torquay rowing clubs go out on the sea, which is a remarkable spectacle.
Finally, I pay tribute to the army of volunteers across Torbay who help to make many of these clubs function by giving up their time to help people develop towards their goals, and only for the satisfaction of knowing they have made a difference to local people. Without them, the sporting life in our bay would be a lot less and our community would be a lot poorer.
Mr Steve Reed (Croydon North) (Lab/Co-op)
I congratulate the many Members on both sides of the House who have contributed to such an important debate. On my own side, my hon. Friends the Members for Tooting (Dr Allin-Khan), for Cardiff Central (Jo Stevens), for Harrow West (Gareth Thomas), for Keighley (John Grogan) and for Rhondda (Chris Bryant) each gave heartfelt speeches focusing in particular on giving a bigger voice to fans and on equalities issues in sport, from pay to participation.
I cannot take part in this debate without mentioning Crystal Palace football club in my constituency. It is known as a club that reaches out and plays a full part in the wider community. This winter, with homelessness soaring to record levels and temperatures plunging below freezing, Crystal Palace have opened the doors of Selhurst Park to provide food and shelter for people sleeping rough, which shows us that our top clubs offer much more than just sport. They are part of the fabric of our society, and they deserve recognition for that fact.
We have heard much this evening, and rightly so, about the importance of grassroots sport and sport for all, yet this is an area where funding cuts have had the greatest impact. ITV News reports that local authority sports funding is down by £400,000 in London alone over just five years. Councils are struggling to cope with Government funding cuts of up to 80% since 2010, at a time when demand for high-cost statutory services like social care is rising, the result of which is severe cuts to non-statutory services, including grassroots sports.
The Government’s latest plans to remove deprivation levels from what they are, I presume, ironically calling the fair funding formula will slash what remains of grassroots sports in our most deprived communities. These are the communities where violent crime is rising fastest. There is ample evidence that diversionary activities for young people prevent those most at risk from getting involved in crime, yet this Government run the risk of further driving up violent youth crime with a perverse approach of targeting their harshest cuts on our very poorest communities.
Towards the end of last year, the Government trumpeted their new loneliness strategy. Sports are some of the most effective ways to tackle loneliness among young people, yet grassroots sport funding is facing yet more cuts. The simple truth is that the Government will not make any impact on issues such as loneliness if they keep cutting the very things that allow communities to tackle loneliness.
Last summer, the Government published their obesity strategy. The King’s Fund points out that about a third of children under 15 in the UK are overweight or obese. It tells us that children are becoming obese at an earlier age and staying obese for longer and that children from lower-income household are more than twice as likely to be obese as those in higher-income households. The Government’s reaction to that so far has been negligent. As my hon. Friend the Member for Tooting has previously pointed out, in the past two years alone, Government cuts have seen 100 swimming pools drained, 12 athletics tracks closed, 350 sports halls shut and 800 grass pitches sold off. How are we, as a country, to tackle this health and inequalities crisis if the Government allow grassroots and community sports to disappear at this rate?
Sport has the power to tackle some of the great challenges of our age, whether loneliness, obesity or mental ill health, yet the Government have chosen to cut sport to the bone. Sport can help to prevent these problems. Spending on grassroots sport is not money down the drain; it is a sensible investment that saves money in the long run by keeping people healthy and bringing our communities back together. The Government need to match their warm words tonight with action. They need to get serious about the power, impact and importance of sport for all of our communities.
Mr Speaker
It was very brief. I call the Minister, who need not feel obliged to speak until 10 o’clock, as I know she made a very full contribution earlier.
Mims Davies
Thank you, Mr Speaker. I thank all right hon. and hon. Members and friends from around the Chamber for their contributions this evening. We heard 36 contributions, excluding those made from the Front Bench. I know some were very full, but I felt, three months into the job, that they were important in putting matters on the record, and I took 21 interventions. I hope therefore that Members will feel that they have had a chance to participate this evening.
The hon. Member for Tooting (Dr Allin-Khan) rightly pointed out the need to focus on school sport, and our new school sport plan will look at the quality and quantity of sport in schools. The Government give £320 million a year to the PE premium to support PE and sport in primary schools. I want to make sure that that is used well. We also heard about the closing of swimming pools and facilities. Facilities are extremely important, and Sport England is investing £40 million in its strategic facilities fund and £15 million in its community asset fund to help local communities and local people find the facilities they need. She mentioned our Foreign and Commonwealth Office colleagues and the concerning issue regarding Hakeem. FIFA, too, has expressed concerns, and I know that we will be working with colleagues to hear these worries about his treatment.
Concerns were raised about gambling advertising, and I want to address this very broadly. Since I have taken on this role, I have had roundtables with both the banks and gambling industry, and I have met the Gambling Commission and Gambling with Lives. We are making sure that a responsible gambling message runs through all our messaging, so we make sure we are protecting our vulnerable people and make sure the industry listens and works with us. We have seen that with the whistle-to-whistle changes. The Gambling Commission has toughened up and will be using sanctions. It does have the teeth and needs to use them. We have had several conversations about that.
The SNP’s retired rugby man, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), talked passionately about not only the power and value of sport but what happens in retirement. That is very important. I had the pleasure of meeting Lizzy Yarnold earlier this year. It is important that such ladies come back in and use their power. Dame Katherine Grainger’s role at UK Sport is also important. The hon. Gentleman also talked about perhaps our greatest ever sportsman, Sir Andy Murray. If retirement is where he is headed, we wish him well, but I am sure that he will not be kept quiet.
My hon. Friend the Member for Burton (Andrew Griffiths) spoke about the power of sport and physical activity and the good that they can do for mental health. Sport England has funded the Get Set to Go programme, in partnership with Mind, and it has received £3 million since 2014. We also launched the mental health and elite sport action plan last year to help to bolster the support for our top-level sports people and allow them to think about their future. I will be part of the Bring it to Burton campaign, because I will be coming to Burton, as requested.
The hon. Member for Strangford (Jim Shannon) talked about the importance of country sports and their practicality and about how we can all excel at sport. That just shows the power of sport: there is something there for everyone, and we should not rule anything in or out. Give it a go, because we do not know what we do not know. It is absolutely right that we talk about the whole breadth of sports in the UK.
My hon. Friend the Member for Stirling (Stephen Kerr) told us about the superpower of swimming and about Stirling Knights basketball club. Again, that shows how, up and down the land, we demonstrate all different powers and abilities through sport.
I could go on, and I will, because I feel it is important. I was pleased to hear the hon. Member for Glasgow North West (Carol Monaghan) talk about the importance of body image and thinking beyond that to the power of sport for women and girls. I have previously spoken about the need to focus on opportunities for those with special needs and autism, and I will be taking action on that in my new role. She also mentioned the concern about predatory behaviour. I opened my remarks on that issue and I salute the NSPCC campaign. It is absolutely right that we keep sport safe and enjoyable.
We heard from my hon. Friend the Member for Taunton Deane (Rebecca Pow) about her love of tennis and what sport can do for women who get involved. I have the Vipers cricket team near to me, and I know that Somerset does its bit. Sport for girls equals success. Those points were incredibly well made.
My hon. Friend the Member for St Ives (Derek Thomas) made some key points about the stadium in his area and the fact that inactivity in rural areas needs to be tackled. I will continue to encourage developers to work with Sport England and my Department on a robust business case for the needs in his area. There has been some positive discussion, and I am delighted that we can build on that.
Members have talked about how important it is that broadcasters and sponsors give women’s sport the profile that it deserves, and I will work on that. Women’s sports’ media profile has grown since London 2012, but we all acknowledge that there is more to do.
The hon. Member for Keighley (John Grogan) was an active participant in the discussion about free-to-air coverage. On the possibility of the 2030 World cup being broadcast free-to-air, the process is in its early stages, but we are an active partner in that bid and any related discussions.
We have heard how sport absolutely has the power to change lives up and down the land. We have heard how important it is in different ways. We have heard about our local heroes—our referees. Without our officials and volunteers, how do we inspire? Volunteers absolutely do that work at the heart of our communities up and down the land. We have also touched on the serious side to sport and talked about some of the issues. We need to make sure that sport is run with safety and fairness at its heart. We have spoken about sport at the top level, and we should be very proud of our sporting successes. In the coming years, we look forward to welcoming sports fans to all the amazing events that we will host here in the UK. Ultimately, as I said, sport needs to be fun. It needs to continue to bring people together, and I look forward to working with all Members to help more people to enjoy the benefits of being active.
Finally, let me touch on loneliness. Some £11.5 million has been given out to all different types of groups across the land to tackle loneliness and keep connectivity. Sport absolutely has the power to reach all communities. I will keep the remarks made by the hon. Member for Croydon North (Mr Reed) under review, and I absolutely concur with him on the need to make sure that we support all sports and ensure that activity is there for everybody, young or old. That is my absolute priority in this role.
Question put and agreed to.
Resolved,
That this House has considered sport in the UK.
Business without Debate
Delegated Legislation
Mr Speaker
With the leave of the House, I propose to take motions 4, 5 and 6 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Exiting the European Union (Family Law)
That the draft Civil Partnership and Marriage (Same Sex Couples) (Jurisdiction andJudgments) (Amendment etc.) (EU Exit) Regulations 2019, which were laid before this House on 12 December 2018, be approved.
That the draft Jurisdiction and Judgments (Family) (Amendment etc.) (EU Exit) Regulations 2019, which were laid before this House on 10 December 2018, be approved.
Exiting the European Union (Financial Services)
That the draft Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019, which were laid before this House on 17 December 2018, be approved.—(Iain Stewart.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118 (6)).
Exiting the European Union (Financial Services)
That the draft Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019, that were laid before this House on 17 December 2018, be approved.—(Iain Stewart.)
The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 6 February (Standing Order No. 41A).
Motion made, and Question put forthwith (Standing Order No. 118 (6)).
Exiting the European Union (Road Traffic)
That the draft Motor Vehicles (International Circulation) (Amendment) (EU Exit) Order 2019, which was laid before this House on 20 December 2018, be approved.—(Iain Stewart .)
Question agreed to.
Closure of St George’s Cross branch of the Bank of Scotland
Patrick Grady (Glasgow North) (SNP)
There are bank branch closures happening up and down the country from a large number of different outlets. Today’s petition concerns the Bank of Scotland in St George’s Cross in my constituency. Bank of Scotland is one of the banks that is still part-owned by the taxpayer, which is why it is even more disappointing that these closures continue to happen and continue to have such a negative impact on local communities and economies.
The petition states:
The Petition of Residents of Glasgow North,
Declares that proposed closure of St George’s Cross branch of the Bank of Scotland in Glasgow will have a detrimental effect on local communities and the local economy. The petitioners therefore request that the House of Commons urges her Majesty’s Treasury, the Department for Business, Energy and Industrial Strategy and the Bank of Scotland to take in account the concerns of petitioners and take whatever steps they can to halt the planned closure of this branch.
And the petitioners remain, etc.
[P002323]
Orkambi
(5 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Bill Wiggin (North Herefordshire) (Con)
Last week, one of my constituents, whose daughter suffers from cystic fibrosis, came to see me. He explained that every year that access to Orkambi or other such similar drugs is delayed takes 10 years off the life of his daughter.
My constituent explained how the long hours in hospital and in treatment mean that cystic fibrosis defines his daughter’s life. However, clinical trials by Vertex seven years ago marked the start of a new hope. Vertex’s amazing progress suggested that he might not outlive his daughter, that she could have the fullest life now possible, and that he would not have to tell her that she was likely to die when barely into adulthood. The whole House will understand that never in his worst nightmares did he consider the fact that these drugs would succeed yet be unavailable to his daughter.
Bambos Charalambous (Enfield, Southgate) (Lab)
Is the hon. Gentleman aware that Orkambi, which is manufactured by Vertex, is licensed and available in Ireland and the Netherlands where there are only 1,000 cystic fibrosis sufferers, but not available in the UK where there are more than 10,000 sufferers? Does he agree that that is a terrible shame?
Bill Wiggin
I suggest that the hon. Gentleman hears the rest of the speech before he expects to draw any conclusions.
Cystic fibrosis is a life-limiting genetic disorder. Patients with cystic fibrosis experience a build-up of thick mucus in their lungs. This can have a wide range of effects on their respiratory, digestive and reproductive systems. The disease is widespread in the UK. One person in 25 carries the faulty cystic fibrosis gene. Statistically, that is 26 Members of this House whose future generations could be affected by this cruel disease.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing this debate to the House; there is such a good crowd in the Chamber tonight due to the importance of the issue. I also thank him for being an advocate of Orkambi not because I have had any dealings with the company, but because I have many constituents who are affected. One grandmother in particular has asked me to make a plea because the life not only of their grandchild, but the lives of the whole family, have been turned around by this drug. I want this drug to be available for families throughout Northern Ireland and the whole United Kingdom. Does he agree that this Crown licence is a way to get around the stalemate that is preventing CF sufferers throughout the United Kingdom of Great Britain and Northern Ireland from accessing this drug, which is proven to deliver tremendous improvement in quality of life?
Bill Wiggin
I am sure that the hon. Gentleman’s constituents will be grateful to him for raising the issue in the House this evening.
Every week, five babies are born with the disease, according to Great Ormond Street Hospital, and every week two young people die as a result of cystic fibrosis. The disease accounts for 9,500 hospital admissions and over 100,000 hospital bed days a year. There are two main ways to treat cystic fibrosis: conventional treatments target the symptoms, and precision medicines such as Orkambi tackle the cause of the condition. For conventional treatment on the NHS, the average waiting time to be admitted to hospital is 45 days.
Orkambi presents a relatively safer, more effective and clinically meaningful alternative. In treating the root causes, it reduces lung damage and cystic fibrosis-related diabetes, and improves pancreatic function. The drug has been approved by the European Medical Association, and the Food and Drug Administration in the United States. It avoids the high risk associated with organ transplants.
Orkambi treats the F508del mutation, which around 50% of people with CF in the UK carry. Essentially, the drug permits more chloride ions to pass into and out of the cells. This helps to keep a balance of salt and water in affected organs. Ivacaftor is one of the active substances in Orkambi. It increases the activity of the defective cystic fibrosis transmembrane conductance regulator protein, thereby making the mucus less thick. Decline in lung function is the most common cause of death for people with cystic fibrosis and, although not a cure, Orkambi has been found to slow the decline in lung function by 42% and reduce hospitalisations by 61%.
Rachael Maskell (York Central) (Lab/Co-op)
Before coming to this place, I was a respiratory physio and worked with many people with cystic fibrosis. The cost of hospitalisation and treatment far outstrips the cost of this drug for many people with cystic fibrosis. Should not the National Institute for Health and Care Excellence change its criteria and look at the value of life, instead of only the day-to-day cost of this drug?
Bill Wiggin
No, I do not agree. The purpose of this debate is to a show an alternative that allows NICE to spend taxpayers’ money on drugs for other conditions while still allowing cystic fibrosis sufferers to have access to this vital drug—and not just to Orkambi, but to the next generation of the same sort of drugs. Bear with me because we have not got to the good bit yet.
In July 2016, NICE recognised Orkambi as an important treatment, yet was unable to recommend the drug for use within the NHS on grounds of cost-effectiveness. The drug is estimated to cost around £104,000 per patient per year and must be taken for life. Orkambi is not provided by the NHS, except in rare cases on compassionate grounds. It remains patent to its manufacturer, Vertex Pharmaceuticals, under UK patent law. In July 2018, NHS England made what it said was its best and final offer to Vertex of £500 million over five years. This was described by the NHS as the “largest ever financial commitment” in its 70-year history. Tragically, Vertex rejected the offer.
We all know that it is essential that a solution is found as soon as possible to make the drug available, as every day counts in slowing the progress of the disease. In an email to me, Vertex states that it
“is committed to finding a sustainable solution for access to our medicines for Cystic Fibrosis patients, including Orkambi”.
That is not quite the impression I have received so far. I sincerely hope that that is indeed its highest priority.
The drugs that constitute Orkambi—Ivacaftor and Lumacaftor—can be synthetically developed at low cost, yet their price remains inaccessibly high.
Kerry McCarthy (Bristol East) (Lab)
As some of my colleagues will know, I have a 14-year-old niece with cystic fibrosis, as well as many constituents who have it. I obviously know people within the community, too. Is the hon. Gentleman aware that in 2017 Vertex earned £2.5 billion from the sale of Orkambi and the chief exec was paid more than $17 million? I think that the Department of Health and Social Care probably has to go some way towards meeting Vertex on this, but it seems to me that there is an awful lot of money sloshing around and both sides are in a position where they could compromise.
Bill Wiggin
First, let me say how sorry I am to hear about the hon. Lady’s niece. We should take this very seriously. The figures that I have are even worse than the ones that she has laid out.
The price remains inaccessibly high, and this is entirely due to the powerful patent laws that allow pharmaceutical companies to monopolise drug production. Vertex expects to retain monopoly intellectual property protection on its cystic fibrosis drugs well into the 2030s. Analysts conservatively estimate that it will generate profits of $13 billion on Orkambi and another related drug, Kalydeco, alone. This could be used to fund further research and development—to reward its shareholders for its brilliant breakthrough and perhaps to encourage it to do more. But no, Vertex has spent $500 million on buying back its own shares. Well, that should certainly boost executive remuneration.
I am aware that provisions exist under the Patents Act 1977 for the Government to take independent action against Vertex. Crown use licensing is a powerful legal tool that can be used to safeguard public health. It can ensure the availability of fairly priced medicines in a competitive pharmaceutical market. Section 55(1) of the Act states that the Government can be granted non-authorised use of patents
“for the services of the Crown”.
That can be granted at all stages of manufacture, use, importation, sale and retention of a product. This is a legal opportunity to break the lethal deadlock that eats away at the youngest sufferers who stand to gain the most from this medicine. Crown use licensing has been used by the UK Government before, to great effect. They can suspend a patent and thereby force down the high price of particular pharmaceutical or medical equipment. For example, in 1991 the Government authorised the supply of machines known as lithotriptors for treating kidney stones. More recently, breast cancer patients have lobbied the Scottish Government to implement a Crown use licence on the drug Pertuzumab. Crown use licensing could similarly be used to overturn the patent monopoly on Orkambi by Vertex.
Mr Stephen Hepburn (Jarrow) (Lab)
I applaud the hon. Gentleman for his initiative and guarantee him my 100% support. Does he not agree that this drug should be supplied on the NHS? We are all born equal in this country, but unfortunately if you are a millionaire you can pay for it but if you are working class like my constituents you cannot get it. I have constituents—Emma and Chris Corr and their young daughter Harriet—who are considering leaving England so as to be able to get the care that they need. Does he agree that this country is unfair?
Bill Wiggin
I tragically allowed the hon. Gentleman’s intervention one sentence too early. I was about to say that Crown use licensing would make the drug available to cystic fibrosis sufferers at a reduced price on the NHS, so I absolutely agree.
Those are just a few examples of how Crown use licensing can set the ball rolling on increasing public access to precision medicine. The UK Government have a powerful policy mechanism already behind them. They are now in a position to make a huge difference to many people’s lives. A bio-generic version of Orkambi manufactured at a lower price would save our NHS time, money and resources. The majority of medicines already in use by the NHS are generic versions of originator products.
I have a daughter whom I love unconditionally. Putting myself in the shoes of my constituent, I can only imagine the anguish that he faces, let alone the suffering of his daughter. We know that young children stand to gain the most from access to Orkambi, and I am sure that the Minister wants to give the taxpayer the opportunity to access this drug under the NHS and NICE.
Anne Marie Morris (Newton Abbot) (Con)
Has my hon. Friend looked at the cost and time delay involved in producing the generic alternative that he describes? Has he factored into his argument the potential cost of litigation, which I assume Vertex would pursue? I wonder whether his proposal might actually be less cost-effective and speed-effective than trying to put a bomb under the two parties to reach agreement.
Bill Wiggin
I have. This drug would cost £104,000 if bought from Vertex and about £5,000 if it were made generically, so there is a huge saving.
Anneliese Dodds (Oxford East) (Lab/Co-op)
I am grateful to the hon. Gentleman for giving way. He is making an excellent case. Those of us who have been active on this issue—it is wonderful to see so many of them in the Chamber—have faced the argument from the company that it wants to have a licence for a whole class of these medicines, so that it can plan that future investment. He seems to suggest that that is not necessarily a valid argument. I wonder if he could respond to that argument, which has been used against those of us who have suggested that there should be a fairer way of proceeding.
Bill Wiggin
I am not quite sure I follow. I would have been much more sympathetic to Vertex if it had not been doing share buybacks. If a company expects to make $13 billion of profit, it will have factored into its calculations a reasonable profit margin. I believe that Vertex has an unreasonable profit margin. I support the private sector, and I like the idea of that R&D going on to benefit the shareholders, but I also recognise that we have a responsibility. As people who want to see patients cured, we want to see this deal done ideally by Vertex and NICE. This is a £500 million gamble for Vertex, because it will not get the money if it does not do the deal.
Liz McInnes (Heywood and Middleton) (Lab)
I am grateful to the hon. Gentleman for giving way. He mentioned the R&D that is going on. That R&D does not exist in a vacuum; it is done on patients, with input from doctors. Does he agree that the company, no matter how much profit it might want to make, has a moral obligation to cystic fibrosis patients?
Bill Wiggin
I absolutely agree, which is why I am suggesting that the Crown use licence ought to be used and taken seriously. I imagine that people working for Vertex are listening closely to this debate. They will have heard the hon. Lady’s point, and I think they need to move on from this attention to profit margin.
As a Conservative, I understand the importance of managing the expectations of private companies. We in Parliament have a responsibility to people with cystic fibrosis to stand up to the greed. That is what we are doing now, and it is lovely to see so many Members here. I urge the Government to consider enacting a Crown use licence, to break the deadlock on this patented drug and reduce the price of Orkambi and the suite of medicines that go with it, which are so desperately needed not only by our constituents, but by their children.
The Parliamentary Under-Secretary of State for Health and Social Care (Steve Brine)
It is a pleasure to see you in the Chair for the Adjournment debate, Mr Speaker. My hon. Friend the Member for North Herefordshire (Bill Wiggin) and all Members who have contributed to the debate, some of whom I recognise from previous debates, have spoken on behalf of constituents from the heart as usual, regardless of political persuasion, with one voice. That is good to hear. I had a school here this morning, and the students asked me what the biggest misconception about this place is. I said that we get on far more than we do not, even at the moment. If they tune in this evening, they might see that happen. Adjournment debates are always a good example of that, in my experience—and as Public Health Minister, I have significant experience of the Adjournment debate, as does my poor Parliamentary Private Secretary.
Everyone has been speaking without political bias and with one voice, and that voice wants patients to benefit from effective treatments for cystic fibrosis. So do I, and the Government wholeheartedly share that view. We have urged Vertex to accept the fair offer that NHS England has made to the company, which would guarantee immediate access for NHS patients to all Vertex’s cystic fibrosis treatments. I hope that the pleas we have heard from my hon. Friend and other Members once again this evening will go some way to persuade Vertex—I agree that it will be listening intently—to consider NHS England’s fair and best offer.
Steve Brine
I will give way once—and that is it—to the hon. Gentleman who rose first.
Mr Lewis
I thank the Minister for giving way, and I congratulate the hon. Member for North Herefordshire (Bill Wiggin) on securing this Adjournment debate. We have been debating this in this place for months, and the fact is that our constituents and patients still do not have access to Orkambi. May I say to the Minister that it is time that Ministers themselves took over these negotiations and responsibility for sitting face to face with and eyeballing the company so that our constituents get the justice they deserve? These negotiations between NHS England and the drug company have got us nowhere, despite the efforts of right hon. and hon. Members in this House. Will Ministers now directly get their hands dirty, roll up their sleeves, participate in these negotiations and bring this matter to a conclusion on behalf of our constituents?
Steve Brine
Okay, the hon. Gentleman has got his press release with his intervention. Perhaps I should go back on what I said at the start. All he has done is to take away time, on what is a very complex issue, from my trying to set out a response to my hon. Friend’s Adjournment debate.
My hon. Friend has called on the Government to consider making use of the legal provision in UK patent law of Crown use licensing to break, as he rightly puts it, the current “deadlock”. As the hon. Member for Bury South (Mr Lewis) said, in a reasonable part of his intervention, it is a deadlock and it has been going on for some time. I commend my hon. Friend’s efforts in raising this. Indeed, it is right that we consider every possibility. Every effort must be made to ensure that effective medicines are made widely available to cystic fibrosis patients. There is no doubt and no debate about that.
I can assure my hon. Friend that we, too, have considered this option. Indeed, I have received initial advice on Crown use licensing. While the use of these mechanisms is not our preference, we are looking at all options. Crown use licensing is complicated, and it would not represent a quick solution to ensuring patient access to Orkambi. My hon. Friend the Member for Newton Abbot (Anne Marie Morris) mentioned that in her intervention and, sadly, she is right.
The UK is one of a limited number of countries that actively protects the role of intellectual property in medicines development in international forums. We believe, however, that there is a balance to be struck between providing incentives to create and commercialise new medicines and ensuring that they remain affordable to the taxpayer—our constituents.
The 2019 voluntary scheme for branded medicines pricing and access, alongside the statutory scheme for branded medicines, are two mechanisms that are in place for ensuring branded medicines are affordable to the NHS. The 2019 scheme provides for flexible commercial arrangements between companies and NHS England—in other words, the customer in this scenario.
In theory, Crown use licensing could be utilised with respect to Orkambi. However, in the past Crown use has only really been intended or designed to deal with emergencies, where a particular patented product is not available in the UK at all. Crown use has not historically been intended to circumvent commercial agreements or to create a mechanism for the production of medicines at a lower price.
The relevant legislation on Crown use states that compensation would need to be provided to the original patent holder—in this case, Vertex, and that would stick in the throat of many of us—which would need to take into account any loss of profit from not being awarded a contract to supply the patented medicine. Unless an agreement could be reached with Vertex, it would be for a court to decide on an amount in this instance. This would of course need to be paid from the public purse. If a Crown use licence were issued, then there would be a subsequent, critical question about how the medicine would be produced and authorised as the usual licensing requirements would apply, with approval required by the Medicines and Healthcare Products Regulatory Agency.
Vertex has protections in the form of both data and marketing exclusivity for Orkambi, and it will continue to have these for a number of years. As such, unless another manufacturer conducted its own clinical trials, there are no realistic alternatives at this time to produce it and the NHS does not hold such a capacity. Using this route, it could take several—many—years before the drug was available on the market, and it would, in all likelihood, be very expensive for another manufacturer. The total length of time and cost of manufacturing and licensing—plus the compensation to the patent holder and a potential appeals process through the courts, which seems inevitable everywhere we turn these days—could be potentially significant.
We also do not know what impact Crown use would have on the other medicines that Vertex supplies to the NHS or the pipeline of products that it is developing. We should remember—and my hon. Friend reminded us of this in his opening speech—that around 50% of people with CF would benefit from Orkambi; in other words, 50% would not.
Crown use could have the effect of putting patients at a disadvantage, jeopardising access to future medicines and potentially setting a precedent of issuing further licences at very high cost.
Steve Brine
Just because I cannot resist the hon. Gentleman, I will give way to him.
Ian Austin
I am grateful to the Minister for giving way. He is setting out all the arguments against Crown use licensing. I agree with the point that he has made in the past—that Vertex needs to show flexibility on this—but I think we all think that the Government also need to show flexibility and to think carefully about whether the NICE guidelines work when evaluating these new, precision medicines. What we would all like to hear from him tonight is what he proposes to do, and what the Government are going to do, to break this deadlock and bring these negotiations to a conclusion.
Steve Brine
In response to the hon. Gentleman and to one of the other interventions about compromise and meeting in the middle—there is lots of talk about compromise at the moment—I suggest that the £500 million offer is a pretty good first step from the Government. I suggest that that is a pretty good attempt to meet in the middle. That is our constituents’ money.
Steve Brine
I will not.
The hon. Member for Dudley North (Ian Austin) talked about breaking the impasse and breaking the deadlock. I said in response to the point from my hon. Friend about Crown use that I have not closed the door on it tonight. I am not trying to put obstacles in the way. I have been asked a question at the Dispatch Box about the practical realities of making this policy move, and I am setting out for the House’s benefit—on the record for everybody listening and for Members—the practicalities.
My hon. Friend talked about use of similar mechanisms by other countries. It is always interesting to understand what other countries are doing and what they are considering and implementing in their health services—there is much that we can learn from each other. However, I cannot comment on the circumstances that would prompt another country to take these steps; other countries have different health systems, and they do not have NICE. We have said—the hon. Member for Dudley North touched on this in his intervention—that we are looking to review the NICE processes, but we should also remember that NICE is respected around the world. If we did not have NICE, we would probably have to invent NICE—that is the truth for Ministers in this Government, as it would have been for Ministers in the previous Government.
I understand the sense of frustration in this Chamber.
Steve Brine
I said I would not.
I think the House gets a minuscule sense of my frustration about the situation. I want this sorted. I have constituents who contact me about this too. I am sure the key question we are all thinking about is, where does this leave us now? I suppose that is the point of the intervention that the hon. Member for Dudley North made. I just want to be clear that we are still taking a very close interest in this matter.
The reason I responded so robustly to the earlier intervention about Ministers getting their hands dirty is that I do not think that is particularly helpful. Ministers are not the customer here; NHS England is the customer, Vertex is the seller and NICE is involved. Ultimately, we have made a very, very generous offer to this company, and I think that it should look again, and look long and hard, at its moral obligations as much as anything else, as somebody mentioned in their intervention.
Of course I recognise the impact that these protracted discussions are having on the daughter of my hon. Friend’s constituent. I heard the lady on the “Today” programme this morning on Radio 4, and it breaks our hearts to hear these stories. Of course we want this sorted. For many of the patients who suffer from this debilitating disease, including constituents of my own, it is extremely disappointing that Vertex rejected the final offer made by NHS England, as well as rejecting the opportunity for NICE to appraise its new medicines.
I have talked about the £500 million over five years; it is the largest ever commitment of this kind in the 70-year history of the NHS—it is not insignificant. It is a huge sum of money and of course NHS England must also fund other drugs for other distressing diseases. My hon. Friend made reference to that. I do not often get asked to come and answer Adjournment debates about spending less on precision drugs for other conditions. There are many, many other drugs that demand our funds. Vertex must re-engage with the NICE appraisal process. We understand the frustration of the CF community. However, it has been made crystal clear to Vertex that its drugs need to be priced responsibly and that any reassessment of Orkambi’s effectiveness must be carried out by NICE’s established process.
The position of Vertex is unreasonable. It is unacceptable to us, to patients and to our constituents. I know that other countries also worry for their patients because of Vertex’s unfair pricing of this drug, so let me put on record once again that Vertex should and must take up the very generous offer that NHS England has made. That offer will improve the lives of eligible cystic fibrosis patients and their families. For all the reasons I have set out, it is far and away the quickest and simplest way to resolve this matter.
Question put and agreed to.
Draft Data Protection (Charges and Information) (Amendment) Regulations 2019
(5 years, 9 months ago)
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The Minister for Digital and the Creative Industries (Margot James)
I beg to move,
That the Committee has considered the draft Data Protection (Charges and Information) (Amendment) Regulations 2019.
It is a pleasure to serve under your chairmanship, Mr Bone.
The purpose of the amendment regulations is to implement a new exemption from the annual data protection charge for elected representatives, candidates for election and Members of the House of Lords. Any individual or organisation that decides what happens with the personal data of others is considered a data controller under the Data Protection Act 2018, and that includes many of us in this room, as we have responsibility for often highly sensitive personal information about our constituents.
This House debated the Data Protection (Charges and Information) Regulations 2018 in March 2018 and they came into force on 25 May 2018. The new charging structure they introduced provides increased funding for the Information Commissioner’s Office, which supports the office’s vital work in protecting the information and privacy rights of individuals. Individuals’ personal data is increasingly becoming a commodity in its own right and it is therefore more important than ever that we have a strong and adequately resourced regulator to investigate any data controllers who fail in their data protection responsibilities.
Under the regulations, all data controllers are required to pay an annual data protection charge, unless a relevant exemption applies. There are three levels of charge: micro-organisations, including individuals, pay £40; small and medium organisations pay £60; and large organisations pay £2,900. It is not always appropriate or fair for data controllers to be subject to a charge, which is why the Government have created a number of exemptions. The exemptions ensure that we maintain a fair and flexible framework and do not impose undue financial burdens on, for example, small and medium-sized businesses.
When the 2018 regulations were debated, the Government committed to holding a public consultation on the exemptions, which included the consideration of a new exemption for elected representatives. The consultation, which took place last summer, also sought views on exempting prospective candidates for election as well as Members of the House of Lords, and the Government response was published in November 2018. The consultation exercise was a success, with the Department receiving 430 responses from the public, private and third sectors, as well as from individuals. The consultation demonstrated that there was public support for the current exemptions. It also demonstrated broad public support for the proposed new exemption for elected representatives, prospective candidates and Members of the House of Lords, and it is that exemption that is the subject of the amendment regulations before the Committee.
Dealing with personal and often highly sensitive data is central to the role of elected representatives. A vital part of our duties is to help individuals, and that inevitably involves receiving and using personal data. That is applicable not just to those of us who serve in Westminster or the devolved Parliaments, but to local representatives—councillors, police and crime commissioners—and representatives across all tiers of Government. The Government believe that imposing an annual data protection charge on individuals who are fulfilling their democratic duties to the public is wrong and could present a barrier to democracy and disincentivise people from putting themselves forward for election. Similarly, the Government do not think that prospective or nominated candidates for elected offices should be liable to a charge for the processing of personal data undertaken in support of their candidacy. If incumbents would not have to pay the charge, that would be undemocratic and unfair.
The Government also accept the value-for-money concerns raised by hon. Members during last year’s debates on introducing the charge structure. Many representatives reclaim the charge, either through the Independent Parliamentary Standards Authority or, in the case of local government, from their local authority. That creates an inefficient and duplicative charge on the public purse and does not represent value for money for taxpayers.
As I have mentioned, there was support for the exemption proposed today in the consultation responses. Some responses recognised that processing personal data was an important function of elected representatives.
Chris Bryant (Rhondda) (Lab)
I presume that the Minister will come on to this point, but she keeps on talking about elected representatives, and I do not understand why Members of the House of Lords are included. They do not have responsibility for constituencies and they are not elected. Why are they included?
Margot James
The issue was debated and it was felt that although Lords are clearly not elected, they handle personal data in the course of their work, or they may do so if they are involved in the passage of legislation or a campaign. People may well contact them and reveal personal data in the course of the campaign, or they may reveal their views on particular legislation in which their lordships are engaged.
Some responses to the consultation recognised that processing personal data was an essential function of our work. The regulations therefore propose a new exemption from payment of the data protection charge for the processing of personal data by Members of the House of Lords; elected representatives, as defined in paragraph 23(3) of schedule 1 to the Data Protection Act 2018, where that processing is in connection with the discharge of their respective functions; and candidates —prospective and validly nominated—seeking to become elected representatives.
The proposed exemption only refers to payment of the annual data protection charge. It does not exempt elected representatives and others from adhering to data controller responsibilities under current data protection legislation. We all have a fundamental duty to uphold and protect the information rights of the individuals whom we serve. The ICO can and will still take enforcement action for non-compliance against any data controller, including those covered by exemptions from charges.
The Government have a duty to ensure that the ICO is adequately funded to deliver on its incredibly important remit. Approximately 18,000 data controllers will fall within the new exemption, which will lead to a loss of approximately £720,000 in the ICO’s total income for any given year. However, I am confident that the impact is manageable. The effects will be mitigated by an increase of approximately £18 million in the ICO’s income in 2018-19 alone, with further growth predicted for future years.
We have of course engaged with the Information Commissioner and her office on the introduction of the exemption. I can report that the ICO is content that the exemption will not impact on its ability to effectively deliver its remit. The ICO will continue to be a staunch protector of individuals’ information rights and continue to provide essential guidance and support to data controllers across the UK. I conclude by assuring the Committee that the Government are committed to maintaining a strong data protection framework, reflecting not only the needs of data controllers and individuals, but also providing a fair and flexible funding model for the important work of our regulator. That includes an exemption structure that ensures that charges are paid only where it is appropriate and proportionate.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone. I am grateful to the Minister for setting out the case for this important exemption. The debate was rehearsed during the passage of the Data Protection Bill and in previous Delegated Legislation Committees, and the regulations enjoy cross-party support.
I want to put two requests to the Minister. The first is for her to underline in guidance to Members of both Houses precisely what their obligations are when it comes to the payment of data processing fees. She will remember that at the back end of last year, the Independent Parliamentary Standards Authority got into a bit of confusion in overstating some of the new responsibilities. In particular, the authority seems to find it difficult to spell out the difference between caseworking data and data collected during the course of canvassing, for example, or other such political campaigning functions. Both are covered by the terms of the Data Protection Act. We, as data processors, can process both kinds of data, but the proximity of a candidate, or Member of Parliament, and a political party working in this field will often lead to some confusion about who precisely is responsible for what, and who therefore pays what. As it happens, political parties, candidates and Members are covered in terms of the data processing obligations, but none the less there remains some confusion overhanging from last year.
The second point of clarity that I seek from the Minister concerns regulation 2(3)(c), which is drafted incredibly broadly in saying that the exemption will be enjoyed by
“a person seeking to become (or remain) an elected representative”
or, indeed,
“a person acting on the instructions”
of someone who is seeking office. In the Minister’s remarks, she used the phrase “validly nominated”. That is not the definition used in the regulation. There is nothing about valid nomination in the regulation, which is pretty de minimis in that regard; it simply defines the exemption as being for a candidate who is seeking office.
What does that mean? Does that mean someone who is seeking office a long time before an election, or a candidate who is seeking office and has been approved by a relevant political party, because political parties are regulated with all sorts of important regulations? Furthermore, what on earth are the safeguards around a person acting on the instructions of someone who is seeking office? When in the electoral cycle does that particular exemption bite? There was a degree of dissonance between the Minister’s remarks and the regulations as drafted. Perhaps she could clear that up before we approve the motion.
Margot James
I am grateful to the right hon. Gentleman for his questions, and his support for the amendment regulations. With regard to the issues that all Members had with the Independent Parliamentary Standards Authority’s guidance last year, in the immediate aftermath of the passage of the legislation, Members were rightly very concerned about the guidance that some of their staff members were receiving from officially sanctioned courses and training. For a period, there seemed to be something of a debacle around that issue, but we were able to clarify it.
I think the problem arose because the courses were designed before the legislation had fully progressed through both Houses, so they did not take account of the various amendments that we debated and passed—notably, the exemption for people in elected office to use the lawful basis of democratic engagement to process personal data. I think we have clarified that.
I was not aware, but the right hon. Gentleman has made me aware, that there was similar confusion about charges. Before we created the exemption, elected officials and all the other categories that we have discussed this afternoon were, strictly speaking, liable in law to pay a charge to the ICO. That is why we have introduced the exemption. We debated the exemption during the passage of the Bill, but we have been able to bring it into law only today.
There should be no further confusion about charges. We, as elected representatives, are data processors. Candidates are also data processors as soon as they start dealing with people’s inquiries in their constituencies or wards.
Liam Byrne
The Minister uses the word “candidate”, which elides two important definitions. One is that set out in the regulations:
“a person seeking to become (or remain) an elected representative”.
The second is that of an individual who is in that position and has been nominated by a political party. Most Members present think of a candidate as someone who has been validly nominated, rather than the definition in the regulations.
Margot James
I was going to come to that, because the right hon. Gentleman made that point clearly in his earlier remarks. I will look into the discrepancy in the language. He has raised an important point. I agree that valid nomination is the definition that we want, and if that is not in the amendment regulations, I will look into that and write to him. I should also point out that the Information Commissioner herself is developing a code of practice for political parties regarding their use of data, and this matter may well be something that she touches on during that work.
Liam Byrne
The Minister has sought a test that is not in the regulations, so she is inviting the Committee to approve them using a definition that is not in the regulations, but in her speech. Will she undertake, before she concludes her remarks, to write to me and provide an assurance that she will re-present the regulations if necessary? I am happy to give them our leave this afternoon, but I am also happy for her to re-present them if she thinks the definitions need tidying up to bring them within the definition that she set out in her remarks.
Margot James
I will certainly write to the right hon. Gentleman. Since I last rose to speak, I have been informed that the regulations apply to both prospective and validly nominated candidates. We have kept it deliberately broad to prevent unfairness between incumbents and those starting out on the democratic process. I think I have already covered that point.
Liam Byrne
I am grateful to the Minister for being very generous and giving way again, but that is not good enough, because anyone could seek to stand for elected office. If she and the Information Commissioner want to avoid a very large number of people seeking those exemptions and destroying the economic base of the ICO, the Minister must act, because otherwise that is what she will get. I think she will have to re-present the regulations, but let us just get something in place now to ensure that there is no lacuna in the law. However, please introduce stronger proposals.
Margot James
I will certainly write to the right hon. Gentleman. If it is clear that we need to tighten the definition up, I am happy to re-present the regulations.
Question put and agreed to.
DRAFT DEVOLVED INCOME TAX RATES (CONSEQUENTIAL AMENDMENTS) ORDER 2018
(5 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Mel Stride)
I beg to move,
That the Committee has considered the draft Devolved Income Tax Rates (Consequential Amendments) Order 2018.
It is a pleasure to serve under your chairmanship, Mr Gapes. The order makes changes to ensure that Welsh taxpayers obtain certain tax reliefs, or are taxed on certain types of income, at the appropriate Welsh rates once Welsh rates of income tax come into effect. The amendments follow as closely as possible the situation already in place for Scottish taxpayers, providing consistency of treatment of taxpayers across the United Kingdom to the extent that the different devolution settlements allow. The order makes two parallel amendments affecting Scottish taxpayers. These two changes make it certain that Scottish taxpayers will obtain tax reliefs or be taxed at the appropriate Scottish rates.
The amendments are minor and technical and affect a small number of people in a limited set of circumstances. The Wales Act 2014 introduces Welsh rates of income tax, which will be implemented in April 2019 and mean that anyone living in Wales and paying income tax will, from 6 April next year, pay the new Welsh rates. Members of Parliament for Welsh constituencies, Assembly Members and Members of the European Parliament for Wales will also pay Welsh rates, regardless of where they live. The Welsh rates will be set by the National Assembly for Wales and will apply to the non-savings, non-dividend income of Welsh taxpayers. Her Majesty’s Revenue and Customs will continue to collect income tax from Welsh taxpayers as usual.
The introduction of the Welsh rates will have implications for other parts of the income tax system. This instrument makes consequential amendments to those aspects of the income tax regime that are not devolved, to ensure that taxpayers obtain reliefs or are taxed at the appropriate rates.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Anybody reading the explanatory notes will understand that a tax-sharing arrangement between the British Government, Welsh Government and Scottish Government, which is what these measures deal with, is a complicated business. The driver of tax devolution was accountability for the devolved institutions and to incentivise them to develop the economies in Wales and Scotland. If those are the two drivers—accountability and incentivisation—would it not be better to devolve a tax in its entirety than to have a tax-sharing arrangement?
Mel Stride
I think that is an ingenious attempt to open up a wider debate about the provisions of the 2014 Act and the basis on which taxation, or income tax in this instance, will be devolved. However, as the hon. Gentleman will be aware, what we are about this afternoon is some of the consequential changes that need to be made to UK-wide income tax legislation.
The changes made by this instrument will establish that Welsh taxpayers receive tax relief or tax credits at the appropriate Welsh rates on their pension contributions to relief-at-source pension schemes; on their contributions to charities under gift aid rules; from settlor-interested trusts; or when calculating deficiency relief available when a life insurance policy ends. The changes will also ensure that Welsh taxpayers are taxed on income from some trusts and deceased estates, or subject to certain special tax charges, at the appropriate Welsh rates. The amendments will provide for the Welsh basic rate to be used when calculating the tax reduction available under the tax allowance for married couples and civil partners who are Welsh taxpayers.
In the case of charitable donations under gift aid rules and residuary income from deceased estates, we are taking this opportunity to make similar changes to ensure that Scottish taxpayers are taxed or entitled at the correct rate in the event of the Scottish basic rate differing from that in the UK.
HMRC is on track to deliver the Welsh rates of income tax in time for the start of the next tax year, as required by the 2014 Act. These minor technical changes are necessary to ensure that all Welsh taxpayers continue to pay income tax or obtain relief at the correct rates following the introduction of the new Welsh rates and that the devolved income tax rates operate as intended. I commend the order to the Committee.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to serve on this Committee with you in the Chair, Mr Gapes. I am grateful to the Minister for his helpful explanation. As he set out, this is a relatively straightforward set of measures that are consequential on the 2014 Act and the current situation with Scottish income tax. We obviously needed to have some of this secondary legislation laid before the House, to ensure that income tax reliefs, deductions and PAYE continue to operate with the Welsh rates of income tax component and also with the changes that have occurred in the Scottish situation.
Obviously, this instrument is in keeping with the established procedures relating to devolved powers and we will therefore not oppose it. However, I have one question for the Minister—it might be easier for him to write to me afterwards—about the arrangements for gift aid donations. The explanatory note states that the approach being taken will ensure that no donor will be made worse off as a result of having made a gift aid donation. Similarly, the impact assessment states that there will be no or negligible impact on charities as a result of these measures. Presumably, however, there would be some impact on the Exchequer, given that there is an assumption that individuals would be treated in practice as if they were still UK basic rate taxpayers, and obviously we already see some changes in the Scottish system around the income tax structure. It might therefore be helpful to have a little more information on this. However, that is really the only question I have about these measures.
Mel Stride
It is a pleasure to respond to the hon. Member for Oxford East on this occasion, because normally she has 20 or 30 questions. Today there is but one, which is a great relief—although that denies me the opportunity of selecting which of the 20 or 30 questions I will respond to. I will respond directly to the one question that she has put, on the matter of gift aid, which is a perfectly reasonable question.
The way that gift aid will operate under these circumstances will be that the charity, or the recipient, of the gift will receive relief at the UK rate, that being 20%, as our current basic rate tax is set at that level. The relief that will fall due to the donor under those circumstances, given that they would be a Welsh taxpayer, would be the difference between that and whatever the Welsh higher tax rate or additional tax rate was at that time. At the moment there is no change about to occur due to the decisions taken by the Welsh Assembly in respect of its own tax rate. However, I will write to the hon. Lady on her question about the potential Exchequer impacts from the way in which that system works. On that note, I hope that the Committee can agree to the order.
Question put and agreed to.
Draft Companies, Limited Liability Partnerships and Partnerships (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Fiona Bruce (Congleton) (Con)
May I draw attention to an interest recorded in the Register of Members’ Financial Interests? My law firm, of which I remain a partner, is a limited liability partnership.
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 Companies, Limited Liability Partnerships and Partnerships (Amendment etc.) (EU Exit) Regulations 2019.
It is a pleasure to serve under your chairmanship, Ms Buck. The draft regulations, which were laid before the House on 10 January, will address deficiencies in retained EU law in relation to the Companies Act 2006 and supporting secondary legislation. They will ensure that UK law in the area continues to function after exit day. Hon. Members will notice that their provisions cover many different areas; I shall briefly summarise them.
The changes to the 2006 Act and the supporting secondary legislation will ensure that the system of regulation underpinning how companies report to and register with the UK companies registrar, Companies House, makes sense after we have left the EU and the European economic area. They will also remove the UK from ongoing participation in two EU-based processes in the field of company law: the cross-border mergers regime and the business registers interconnection system.
The draft regulations also cover other matters. They include a small number of amendments to address how businesses with membership, access and listing on EEA-regulated markets are dealt with; they will remove preferential treatment in such instances and in relation to EEA entities where there is a potential breach of the World Trade Organisation’s most favoured nation rule. Where there is no such breach, and where it is appropriate to do so, we have maintained the status quo to offer certainty and consistency for business, including EEA businesses.
The main practical changes for business that stem from the draft regulations will be filing changes with an impact on some UK and EEA businesses after exit day, including a requirement for UK companies with an EEA-based corporate secretary or director to file two additional details with Companies House. Additionally, after exit day, EEA companies on the overseas companies register will be treated in exactly the same way as non-EEA companies, meaning that EEA companies that register with Companies House will be required to provide some additional details, while EEA companies that are already registered will have three months to provide the additional information required by the draft regulations. Linked to these filing changes is a requirement for EEA-based companies on the overseas companies register to provide additional minor details in their public-facing material, such as their website and letterhead; again, the draft regulations provide three months from exit day for the affected companies to do so.
In line with those changes, the draft regulations will also revoke legislation on two EU-based processes or systems currently administered by Companies House. The first is the cross-border mergers regime. Hon. Friends and noble Lords in Committees of both Houses have drawn attention to the removal of the current process for UK companies. I understand their concern, because I know that certain companies welcome the fact that it allows companies to merge across EEA jurisdictions. However, that is possible only under the EU cross-border mergers regime, which requires legal entities based in two EEA states. As the UK will no longer be an EEA member after exit, it will not be possible to continue to allow cross-border mergers, but companies will be able to transfer assets and liabilities using contractual arrangements.
The other system of which the UK will no longer be part after exit is the business registers interconnection system—a very new system, introduced only in 2017, that is used mainly to identify companies undertaking a cross-border merger or foreign branches of companies. All the information currently provided publicly on the Companies House register will still be available; the only thing that will cease is Companies House’s access to the register to register connections across the EU.
I will now explain the changes made as a consequence of the insertion of a new definition of “regulated markets” into another statutory instrument, in line with regulations that Her Majesty’s Treasury has laid before the House, and its effect in certain sections of the Companies Act 2006. In most places where it occurs, the change will have no material effect. There are only two occurrences where we have made the decision to apply the same requirements to EEA companies as we do to third-country companies. We judged that without such a change, there would be a risk of breaching the World Trade Organisation’s most favoured nation rule.
The practical effect of each change is that certain intermediaries who deal in securities will no longer be able to hold shares in their parent company where they are a UK-based holding company. This benefit will, after exit, be extended only to intermediaries with access to UK-regulated markets. We are providing a one-year transition for that change. Certain investment companies will no longer be able to benefit from some relaxations on controls on their distribution of profits unless they have access to a UK-regulated market. In addition, we will treat EEA-based credit reference agencies in the same way as third-country credit reference agencies after exit. Companies House will no longer be able to send the protected information that it holds on directors to EEA credit reference agencies and processors.
My officials have worked extensively with Companies House throughout the development of these regulations, and I thank them for their expertise. It is also relevant to point out to hon. Members that this has been done alongside ensuring that the UK’s company registry fully reflects the UK’s departure from the EU on exit day. That includes updating all relevant forms that companies use to file information, as well as updating guidance. That should be emphasised, because it means that companies will have certainty and clarity on what they need to do when the UK leaves the EU. We completed a de minimis impact assessment of the regulations, which shows that the overall costs to business are expected to be small.
As the Committee has heard, the regulations provide numerous technical changes to the operation of UK company law, and they respond to the reality of the UK’s leaving the EU. They are not overly burdensome for business and they will ensure that the UK has coherence in its approach to overseas companies. I therefore commend the regulations to the Committee.
Bill Esterson (Sefton Central) (Lab)
It is a pleasure to serve under your chairmanship, Ms Buck. At the end of the Minister’s speech, I was taken by her remark about “certainty and clarity” when we leave the EU. Oh, my word—nothing could be further from the truth. I do not know whether she was trying to find out whether anybody was listening to her speech. Perhaps it was a test. I heard her, and I can only assume that that was said in a moment of great irony and humour, because it is the last thing that will happen if we leave without a deal, which is what a lot of the regulations are about.
Once again, the Minister and I are here to discuss a statutory instrument that makes provision for a regulatory framework after Brexit in the event that we crash out without a deal. On each occasion, my Labour Front-Bench colleagues and I have spelled out our objections to the Government’s approach to secondary legislation. The volume and flow of such legislation is deeply concerning for accountability and proper scrutiny. In this case, it appears that dozens and dozens of regulations are being changed. They are set out in detail in paragraphs 6.1 to 6.6 of the explanatory memorandum. I shall not go through them all, but Members can count up for themselves to see whether my description is right.
The Government have assured the Opposition that no policy decisions are being taken. That is a very odd thing to claim, because establishing a regulatory framework inevitably involves matters of judgment and raises questions about resourcing and capacity, which are surely policy matters. Secondary legislation ought to be used for technical, non-partisan and non-controversial changes because of the limited accountability it allows. Instead, the Government continue to use it as a vehicle for pushing through contentious legislation with high policy content.
As legislators, we have to get this right. The regulations represent real and substantive changes to the statute book and, as such, they need proper, in-depth scrutiny. As I said at the start of my response to the Minister, there is no certainty or clarity for business—or anybody else—if we leave without a deal, which is ultimately what the regulations are about. In the light of that, we put on record our deep concern that the process surrounding the regulations is not as accessible and transparent as it should be.
The Minister spoke about filing by businesses in the UK and in the EU, and she said that EEA businesses would have two additional filings as a result of the changes. She also said that if the regulations were implemented as a result of a no-deal Brexit, EEA and non-EEA companies would be treated the same.
Companies have three months to implement the changes that the regulations set out, and that does not sound like a long time to ensure that every affected company finds out. Can the Minister tell the Committee what plans the Government have to make sure that every single company affected by the regulations is aware of the changes that it needs to make to be compliant with UK law? If companies are not made aware of the changes, there will be significant consequences for them. I am interested to know what plans the Department has and what process will be followed.
The Minister mentioned the business registers inter- connection system, which is the EEA system that joins our Companies House system with similar systems across the rest of the EEA, if I understand correctly. We will no longer be involved in BRIS when we leave the EU, and that will have an impact on foreign branches of EEA-based businesses. Given her comment that internationally based companies will be treated the same, regardless of whether they are EEA or non-EEA, and that there will not be access to BRIS, what will be the impact for anybody who wants to use the EEA systems —the equivalents of Companies House—that are part of BRIS?
In my experience, we in this country use Companies House to check the legitimacy of a business, inspect accounts, find out who the shareholders are, find the registered office address and carry out checks before trading with another business. It is important for business-to-business activity and to enable consumers to understand whether they are buying from a reputable trader. That is a domestic matter, but at the moment, BRIS means that a straightforward and updated system can be used for such activity across the EEA. As BRIS is ending, what system will replace it?
My assumption—the Minister can confirm it or not—is that for all EEA companies, we will move to the system that we have for companies based in countries outside the EEA. For businesses that are based in the EEA and have branches in the UK, that could lead to a delay in updating the registers. If information is not up to date, the consequence for businesses buying or selling, or for consumers buying, could be that they do not get a true picture of the status of a company that they seek to trade with. Will she clarify whether that explanation is accurate? What plans are in place to deliver the best possible replacement arrangements for international cross-border trade, for businesses and consumers? The existing arrangements provide immediacy, certainty and confidence, which is why BRIS was set up in the first place.
Those are my key questions, but I have a small number of additional comments. In paragraph 7.8 of the explanatory memorandum, the Government refer to the measure applying to a “very few companies”. Will the Minister say how many companies are a “very few”? My other points are, as ever, about consultation and impact. We have this discussion every time we debate a statutory instrument of this sort, and I will not disappoint Members by omitting it today. Paragraph 10.1 indicates that the Government have not been able publicly to consult. That is cause for concern, and it is a reminder that the Minister’s statement about certainty and clarity is odd for yet another reason. Will she explain why the Government were unable to consult before laying these regulations before the House? I know that the Law Society helped to draft the regulations, but without wider input from those who will be affected by them, it is difficult to see how confident we can be that they are entirely satisfactory.
As ever, I remind the Committee that when other jurisdictions, such as the European Union, carry out an impact assessment, they consider the wider impact, and not just the very narrow direct impact of the regulations. It would be extremely advisable for the Government to change their policy and carry out a proper impact assessment. Perhaps the Minister will wish to reconsider her comment that these measures deliver certainty and clarity for when we leave the EU; they do not.
Kelly Tolhurst
I thank the hon. Gentleman for his comments. I said that the measures give clarity and confidence to business. This statutory instrument is intended to do exactly that for company law, and to provide companies with clarity about how retained EU law and the register will operate if we leave the European Union in a no-deal situation. Although the hon. Gentleman thought I was joking, I actually meant what I said.
Let me pick up a couple of the points that the hon. Gentleman has made. He mentioned EEA companies, and I assume that he was talking about EEA corporate appointments. A UK company that makes a corporate appointment of a director or a secretary will have to file two extra pieces of information, which we have identified as being of low cost to business. Some 1,900 of those businesses have already been identified by Companies House, and they will all be written to. We have already updated the advice and guidance from Companies House on that. The regulations also refer to EEA companies that will register on the UK overseas companies register, and we estimate that to be 3,200 companies. Again, Companies House will write to the companies affected, and the guidance has been updated. As he will have seen from the regulations, those companies have to provide more basic information to Companies House, which is an administrative task. As I mentioned in my opening comments, the front-facing aspects—the websites and letterheads—will also need to show additional information. The guidance will be updated.
BRIS is a publicly accessible database, and the hon. Gentleman is correct to say that we will no longer be part of it if we leave the EU in a no-deal situation. Currently, people outside the EEA can access that information via the website, as we do in the UK through Companies House, so access is not restricted.
I could not find the paragraph in the explanatory memorandum that the hon. Gentleman mentioned that referred to a small number of companies. I think he was referring to the number of companies affected by the changes in the regulated markets.
Bill Esterson
I am happy to help. Paragraph 7.8 says:
“This measure applies to very few companies, but transitional provisions have nevertheless been provided that will allow sufficient time for impacted companies to consider the impact of the change on their operations and take appropriate action”.
My question was about how many companies she means by the phrase “very few companies”, which refers to:
“Investment companies that only have shares admitted to an EEA market”.
Kelly Tolhurst
I thank the hon. Gentleman for that clarification; that was the area I was thinking of. As far as intermediaries are concerned, five companies would be affected, but our records show that no investment companies have been identified as being affected.
On consultation, as I outlined, we have consulted, worked with and used the expertise of Companies House to ensure that we are making the best provisions to enable UK companies to implement the regulations that we require for them to be legal if we leave the European Union without a deal. By working with those experts, we believe that we have devised the simplest and best way forward.
As I set out, the changes in the regulations cover a variety of amendments to the UK company law framework, so that, on exit day, the UK statute book is workable and coherent. It should be emphasised that certainty is crucial for business confidence. In some cases, the changes are not material and will have no impact on business; they are simply provisions to tidy up the Companies Act 2006 and related secondary legislation. The communication of pre-emption offers to shareholders is one example. The changes are no less important for that reason, however, and they will mean that UK statute is on a stable footing on exit day.
As I have set out, other areas will have an impact. They include the level-down approach for EEA companies in relation to certain filing requirements for the register, as well as the changes for some entities in relation to benefits that are currently based on access to EEA-regulated markets. The removal of the cross-border mergers regime is another example of where businesses will notice a change to processes that existed as a result of our membership of the EU.
The regulations cover many different changes, but, taken individually, their impact on business will be small. My officials are working with Companies House and others to ensure that the register will be operational for exit day, and that will significantly reduce the impact felt by companies that are affected by the changes. Overall, the regulations will ensure that the UK’s company law framework remains coherent, operable and under- standable for business, and I commend them to the Committee.
Question put and agreed to.
Draft Construction Products (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Maria Eagle (Garston and Halewood) (Lab)
On a point of order, Mr Bailey. Could I have your guidance on whether it is in order for the documentation to which the regulations before the Committee refer not to be present in the room for Members to consult?
The Chair
What is being considered is the documentation that you have in front of you. The Government could have provided other documentation, but it is in order to go ahead with the documentation that we have at this moment.
The Minister for Housing (Kit Malthouse)
I beg to move,
That the Committee has considered the draft Construction Products (Amendment etc.) (EU Exit) Regulations 2019.
These regulations were laid before both Houses on 18 December 2018. They are part of the Government’s programme of legislation to ensure that, if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime. Leaving the EU with a deal remains the Government’s top priority—that has not changed—but the responsible thing to do is to accelerate no-deal preparations to ensure that the country is prepared for every eventuality. The regulations are being made using powers in the European Union (Withdrawal) Act 2018 to fix legal deficiencies in retained EU law, in order to reflect the fact that the UK will no longer be an EU member state after exit day.
Kit Malthouse
Let me make a bit of progress.
I will start by providing some context, or background, to the regulations. The construction products regulation, or CPR, is an EU regulation that is directly applicable in all EU member states. It seeks to remove technical barriers to the trade of construction products, and applies UK-wide.
Kit Malthouse
I will not, sorry.
The CPR harmonises the methods of assessment and testing, the means of declaration of product performance, and the system of conformity assessment of construction products. It does not harmonise national building regulations, and individual member states remain responsible for safety, environmental, energy and other requirements applicable to construction works. When a harmonised standard exists for a product, the CPR places obligations on manufacturers, distributers and importers of that product when it is placed on the market, including that the product must be accompanied by a declaration of performance and affixed with the CE mark. At the point at which the UK leaves the EU, the CPR will become retained EU law and will therefore form part of our legal system.
Kit Malthouse
In a moment, please.
Without the amendments made by this instrument, the CPR’s provisions would not have practical application in the UK, because the UK will not be an EU member state. The CPR also confers several functions on the European Commission that will no longer have effect in relation to the UK.
Maria Eagle
I am grateful to the Minister for finally giving way, and it is good to hear his explanation of the regulation that this instrument amends. Can he tell the Committee why there are no copies of that regulation in the room for Members who are meant to be scrutinising the instrument to consult?
Kit Malthouse
As I said in my opening remarks, the instrument has been before the House since 18 December. It has been perfectly possible for Members to investigate it and to seek those documents for the past month and a half. If the hon. Lady has failed to do so, that is not our lookout.
Mr Mark Prisk (Hertford and Stortford) (Con)
The Minister may not recall, but during the long period of the Labour Government, when I was in opposition, there were numerous occasions on which not only amendments or documents were not present—
Mr Prisk
My question—which I am trying to ask without interruption from the Opposition—is this. Does the Minister agree that the fact that this instrument has been tabled since before Christmas, and that Opposition Members have not taken the opportunity to do anything about it, suggests that their anger today is somewhat synthetic?
Kit Malthouse
My hon. Friend has put his finger on the button. From the start of this sitting, it has been obvious that all this is not really about the EU construction products regulation; it is about a rejection of the whole process of properly preparing the country for all eventualities. I know that the hon. Member for Garston and Halewood regards herself as an assiduous Member of Parliament, but I am afraid that I cannot compensate for her dilatory approach to these regulations by producing a paper that she has had well over a month to look at and research.
Maria Eagle
I was simply raising the reasonable suggestion that if we are being asked to look at detailed amendments to a regulation, to which the Minister is referring, it is normal practice—it certainly was when I was a Minister—to have enough of every document that an instrument is amending in the Committee Room for Members to consult and look at during our proceedings. That is not unusual; it was quite normal when I was a Minister and it is not unreasonable. I am not angry, but I do not think it is reasonable for us to have proceedings such as these without being able to see those documents as we consider the SI. It was quite normal when I was a Minister to ensure that all those documents were present in the room, so it is a matter of some concern that on this occasion they were not.
Kit Malthouse
I note the hon. Lady’s concern. I would have assumed that, in her no doubt extensive preparation for this sitting, she would avail herself of the facilities in the Library and elsewhere to find those documents and study them, if she was giving a speech or preparing interventions on this subject, but I note her concern for the future.
Kit Malthouse
No.
Back to the point: the general policy is to keep the same requirements but convert them into a UK regime. These regulations do not change the key requirements currently in place. This instrument would ensure that the same standards applied immediately after exit day as applied before the UK left the EU.
The effect of these regulations can be considered in five parts. First, they would preserve current European harmonised standards as UK designated standards. This would mean that, immediately following exit day, the UK’s product standards under the CPR would be identical to those under the EU’s regime, so there would be no change to the standards that businesses must meet. Thereafter, new UK standards would be designated by the Secretary of State, informed by expert advice from the national standardisation body.
Secondly, where a third-party conformity assessment is required for UK standards, it would be undertaken only by approved bodies established in the UK. These regulations grant approved body status to current CPR conformity assessment bodies based in the UK. Where an approved body undertakes the third-party conformity assessment that would be required under the relevant UK standard, the manufacturer must affix the new UK mark, which would be established under a separate instrument laid by the Department for Business, Energy and Industrial Strategy. Details of the mark and guidance for industry were published at the weekend.
Thirdly, alongside the domestic arrangements that I have outlined, we are putting in place a continuity approach for products that comply with the European regime. This would mean that products meeting requirements under the European CPR could continue to be placed on the UK market without any need for retesting or additional marking. This would apply in all cases where the relevant UK and EU product standards remain the same, provided that any third-party conformity assessment has been carried out by an EU-recognised conformity assessment body. As I have mentioned, all EU and UK standards will be the same immediately after we leave the EU. These arrangements are intended for a time-limited period, and we would ensure that businesses are given sufficient notice in advance of this period coming to an end. This approach would ensure that goods continue to flow into the UK market and would help to minimise disruption for businesses and consumers, which is vital to support the UK’s housing and infrastructure ambitions.
Fourthly, there would be an optional route available to enable products that are not fully covered by a UK-designated standard to be UK-marked. This would work in a very similar way to how the CPR currently works on an EU-wide basis.
Fifthly, and finally, this instrument would give the Secretary of State regulation-making powers to enable the UK to make technical updates to the CPR framework. This would replicate the role of the European Commission under the CPR to make “delegated and implementing acts”. This provision is necessary to ensure that the UK’s CPR regime can respond to technical progress and to new or emerging issues. This would enable Parliament to scrutinise any new measures, and provides a similar level of oversight to that of the EU’s regime. Transferring this function is in line with the Government’s approach, across multiple policy areas, to transferring functions currently within the remit of EU authorities to the relevant UK bodies. Transferring this power to the Secretary of State would be the most effective way of ensuring that the regime remains fit for purpose after the UK’s exit from the EU, while allowing for an appropriate level of parliamentary scrutiny.
I should note that the regulations also make a number of technical operability fixes to correct deficiencies arising from EU exit in the market surveillance regime provided for under domestic legislation.
Our overall approach to the amendments is completely in line with the policy and legal intent of the withdrawal Act and enacts the policy that the Government set out in a technical guidance note to industry in September. The regulations serve a very specific purpose: to prioritise stability and certainty if the UK leaves the EU without a deal or an implementation period. Thereafter, they provide a stable basis for Parliament to change the law where it is in the UK’s best interests.
To conclude, I believe that the statutory instrument is necessary to ensure that construction products regulation continues to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope that colleagues will join me in supporting the draft regulations, which I commend to the Committee.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey. I thank the Minister for outlining the purpose of the statutory instrument and for giving me some interesting reading over the weekend when, thankfully, there was a lot of snow in Durham and I was snowed in, otherwise I am not entirely sure I would have got to the end of it. I gently say to him that the regulations are very complicated. It would be helpful if he assisted the Committee in its deliberations as much as possible, which means ensuring that information is available not only to himself, but to all members of the Committee.
I am pleased that the Minister made clear that we are having to consider the SI only because the Government have refused to take off the table a no-deal scenario for leaving the EU. It would probably make much more sense to all of us in this room if the Government had, instead of having to go through this lengthy process with all the costs involved—instead of going through SI after SI to try to put in place arrangements to allow for a no-deal scenario—just agreed to take no deal off the table.
If the Government are irresponsible enough to get us to a no-deal situation, I guess we have to recognise the importance of the SI. We must pay attention to the safety of construction products, which is always important, but is especially so post Grenfell. Given that, I can see why the SI is needed.
Paragraphs 2.2 to 2.9 of the explanatory memorandum clearly set out how the Construction Products Regulations 2013, accreditation systems and notifiable bodies work under EU law. It is clear that the system must change immediately if no transition arrangements are in place for leaving the EU. The Opposition recognise that the regulations are needed and we will not press them to a vote, but I have some questions for the Minister.
Paragraph 2.14 of the explanatory memorandum states:
“Existing European harmonised standards will become UK ‘designated standards’”
and “will be identical”. How long can we expect them to be identical? Will the Minister set down a particular period before they can be reviewed or changed?
Secondly, the statutory instrument presents two routes to designate a standard. Will the designation be the same as currently? What dictates the route chosen? Is it that the Secretary of State mandates a UK standardisation body to develop a standard following appropriate consultation, or does the Secretary of State designate that a harmonised standard adopted by the EU standardisation body should be adopted? The instrument states that will happen on a case-by-case basis, but what does that mean in practice? What criteria are to be used?
Paragraph 2.17 makes it clear that existing notified bodies will become approved bodies, but new ones can also be created. Does the Minister intend to ask the Secretary of State to approve new bodies, and is the process outlined in paragraphs 40 and 41 in part 8 of schedule 1 the same one that is currently used to designate such bodies under EU law?
I understand from paragraph 2.19 of the explanatory memorandum that products that meet the EU construction products regulation will be able to be used in the UK. What is less clear, and I would appreciate the Minister saying something about this, is whether the EU, and indeed the rest of the world, will accept the new UK mark.
Paragraphs 2.20 and 2.21 of the explanatory memorandum could be read as quite alarming, and I would be grateful for reassurances from the Minister that providing a route to UK marks for products not fully covered by the CPR will be exactly the same as at present, and that that route will not lead to a lowering of the quality and safety of products entering the UK.
There are other areas of possible concern. For example, paragraph 19 in part 5 of schedule 1 gives the Secretary of State the power to withdraw the reference to the designated standard where it is no longer considered appropriate. We need more explanation of how and why that would happen, and critically an assurance that that provision would not be used to dilute standards, but only to improve them.
Also in part 5, paragraph 28 states:
“The Secretary of State may make regulations, in accordance with Article 60, to establish classes of performance…of…products.”
Again, we need reassurances that any changes to those classes, and how they are applied, will be about improving the quality of products and their safety, not diluting them once new classes are made.
Moving on to paragraphs 40 and 41 in part 8, can the Minister confirm that the process for designating approved bodies will be exactly the same process as used at present, and that the power to remove them under paragraph 50 will be the same as at present?
Lastly, can the Minister tell us what paragraphs 70 and 71 in part 12 mean? They are clearly about market surveillance. Again, we need to know whether the system of surveillance will change or remain exactly the same.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I thank everybody who has worked so hard on the regulations, and I thank the Minister for the discussions that he has had with the devolved Governments on these issues.
It is important that regulations maintain standards and safety, while ensuring minimal disruption to business right across the United Kingdom. I agree that there has to be flexibility, and that ongoing scrutiny is essential. Will the Minister say what discussions have been had with the EU and beyond on the recognition of the UK mark?
Kit Malthouse
The hon. Member for City of Durham asked a series of questions. I hope to answer them all; if I fail to, I am happy to write to her with some detail.
Although they are intended to be time limited, the hon. Lady is right that the regulations do not denote a time. That would be a matter for the Secretary of State, but fundamentally we will consult industry, as we have done in drafting the regulations, before we make any further changes.
On the hon. Lady’s question about harmonisation, as standards are introduced at EU level, our intention is, again, to consult business. As she will know, we are effectively going through a reform of the building regulations, and in particular the construction product process post Grenfell, and that process is necessarily very consultative with industry as we go. We are very keen to buy them in to a change of culture, both within the industry and regarding a new system of regulation around building safety and in particular around products. Frankly, that will be quite a large amount of work for the Department and the industry over the next few years, so it is vital that we stick together.
As for the EU accepting the UK mark, I do not believe that that matter has yet been concluded. It is obviously a matter for the EU; people would have to ask the EU about that. One would hope that, given that things will be identical—certainly initially—the EU would accept the UK mark, but that is obviously subject to the final agreement.
Dr Blackman-Woods
Can the Minister say something about the rest of the world, as well as the EU? What process do the Government have in place to ensure that the EU and other countries accept this mark?
Kit Malthouse
As I am sure the hon. Lady knows, the recognition of UK products around the world is subject to a number of agreements, some of which go via the EU and some of which do not, and are global, forming the regulatory regime that is constructed by other bodies.
We want to try to ensure through these changes to regulation that there is as much continuity—certainly initially—for the industry as possible, and that where there may be divergence or changes that are deemed to be in the best interests of the UK in the future, that is done on a very consultative basis with the industry, because although we may have views in the UK about how we want our building products to be manufactured and constructed, we obviously also have to bear in mind their saleability overseas, and where possible, we want to avoid manufacturers having to create two or more products for different sorts of markets.
Much of the attraction for somebody like me who voted to leave the EU is that we can play a much greater part in a global regulatory environment around particular product areas where we excel and where we will do well, because although there is a common regulatory environment within the EU, the hon. Lady will know that that is not true across the whole of the globe. We think that some of those growing markets in India, China and South America would benefit from having a global direction in terms of regulation, and we want to be able to play a part in that. For example, it is quite obvious that pharmaceuticals is moving to a global regulatory alignment, and that can be nothing if not good for a country such as ours, which leads in that sector.
The hon. Lady asked about trading standards being able to enforce this regime. On exit day, UK rules and standards will be the same as the EU’s. That means that the risk of products that do not comply with UK rules entering the UK will be no higher than it is now. The approach to enforcement is now, and will continue to be, intelligence-driven and risk-based.
The hon. Lady also asked a number of questions that were essentially about whether I am able to bind future Secretaries of State or Governments into an ever-upwards ratchet. Certainly, my own aspiration would be that any divergence, whether it is regulation of classes of performance or other matters to do with these products, should lead to an improvement in standards. However, as I say, I cannot speak for future Ministers, Secretaries of State or indeed Governments who might decide to do something other.
Dr Blackman-Woods
Does the Minister understand that that is the crux of the issue about this particular instrument? A number of consumers and citizens of this country are concerned because, when we leave the European Union, we do not want the quality and standards of our building products or any other products to be part of a race to the bottom. Therefore, I think that he needs to give the Committee at least a degree of assurance that at least this Government will seek to improve the standards of quality and safety, and will not weaken or dilute them.
Kit Malthouse
I am happy to give the hon. Lady exactly that assurance. As I said earlier, all this work is taking place against the backdrop of our overall work on building regulation and product standards, and indeed product testing, and the entire regime around these products. Our aspiration is to maintain or improve standards—hopefully, improve. Having said that, in the regulations before us we are keen to retain some flexibility, as I said in my speech, to cope with changes in technology and new developments, positive and negative. We now sadly know that, to our cost and in tragic circumstances, aluminium composite material cladding is not a product that should be allowed on the market. There are big questions to be asked about whether the building regulation regime and a product standard regime were functioning correctly.
Retaining flexibility to cope with new standards, technology and developments in the industry is important, not least because the UK is a world leader in some of these developments, and new products might emerge for which the EU, should we separate without a deal, does not have a regulatory regime that is immediately equivalent, and we might need to create one in real time. Who knows? There might be graphene-coated products that come forward for use in construction. We are certainly spending a lot of time and energy on modern methods of construction. The Government are supporting new forms of manufacturing homes, particularly offsite homes, but we need to retain a little flexibility.
Finally, the hon. Lady asked about market surveillance. As far as I can see, the current situation will not change, and our ability to take enforcement action is unchanged by the regulations.
The Government believe the regulations are needed to ensure that the construction products regulations continue to function if the UK leaves the EU without a deal or an implementation period. I hope the Committee has found the sitting informative and will join me in supporting the regulations.
Question put and agreed to.
Draft Solvency 2 and Insurance (Amendment, Etc.) (EU Exit) Regulations 2019
Draft INSURANCE DISTRIBUTION (Amendment) (EU EXIT) Regulations 2019
DRAFT FINANCIAL CONGLOMERATES and Other Financial Groups (Amendment Etc.) (EU Exit) Regulations 2019
(5 years, 9 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 Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019.
The Chair
With this it will be convenient to consider the draft Insurance Distribution (Amendment) (EU Exit) Regulations 2019 and the draft Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019.
John Glen
It is a pleasure to serve under your chairmanship, Sir Henry.
As the Committee will be only too aware, the Treasury has been undertaking a programme of legislation to ensure that if the United Kingdom leaves the European Union without a deal or an implementation period, there will continue to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying statutory instruments under the European Union (Withdrawal) Act 2018 to deliver that. Debates on such SIs have already taken place in this place and in the House of Lords, and the SIs we are debating are part of that programme. We have at least 13 more to come.
The draft SIs before us will fix deficiencies in UK law on the prudential regulation of insurance firms, insurance distribution and financial conglomerates to ensure that they continue to operate effectively post exit. The approach taken in the legislation aligns with that of other SIs being laid under the EU (Withdrawal) Act, providing continuity by maintaining existing legislation at the point of exit but amending it, where necessary, to ensure that it works effectively in a no-deal context.
Three SIs are being debated today: draft amendments to the Solvency 2 regulations, the financial conglomerates and other financial groups regulations, and the insurance distribution regulations. The Solvency 2 regulations set out the prudential framework for insurance and reinsurance firms in the EU. Prudential regulation is aimed at ensuring that financial services firms are well managed and able to withstand financial shocks, so that the services that they provide to businesses and consumers are safe and reliable. Solvency 2 is designed to provide a high level of policyholder protection by requiring insurance and reinsurance firms to provide a market-consistent valuation of their assets and liabilities, to understand the risks that they are exposed to, and to hold capital that is sufficient to absorb shocks. Solvency 2 is a risk-sensitive regime in that the capital that a firm must hold is dependent on the nature and level of risk that a firm is exposed to.
The insurance distribution regulations set standards for insurance distributors as regards insurance product oversight and governance, and set information and conduct of business rules for the distribution of insurance-based investment products. The financial conglomerates and other financial groups regulations set prudential requirements for financial conglomerates, or groups, with activities in more than one financial sector.
The three draft SIs that we are debating amend those regulations so that they function properly in a no-deal scenario. The amendments to be made by the draft Solvency 2 regulations, first, remove references to the European Union and EU legislation, and replace them with references to the UK and UK legislation. It is important to stress that the high prudential standards of Solvency 2 are not being altered. Changes are being made to ensure that the Solvency 2 regime continues to operate as originally intended once the UK is outside the EU.
Secondly, the draft statutory instrument alters the arrangements for the regulation of cross-border European economic area groups of insurance and reinsurance firms that provide services in the UK. As in other areas of EU regulation, insurers and reinsurers are subject to the EU’s joint supervisory framework. That enables the requirements of Solvency 2 for a cross-border EEA insurance or reinsurance group to be applied to the group, with one EEA supervisor allocated lead responsibility for supervision of the group, in addition to supervision of solo firms by their respective EEA supervisors. Supervisory co-operation takes place through a college of supervisors in which all the interested EEA supervisors take part.
After exit, however, in a no-deal scenario, the EU has confirmed that it will treat the UK as a third country and that the UK will be outside the joint supervisory mechanisms that are the basis for the current treatment of groups in the EEA. Cross-border EEA groups may therefore become subject to group supervision by both UK and EEA supervisory authorities in the absence of equivalence decisions.
The statutory instrument will transfer responsibility for making equivalence decisions in relation to third-country regimes. Currently, a third country’s regulatory or supervisory regime may be deemed by the European Commission to be equivalent to the approach set out in Solvency 2. After the UK leaves the EU, Her Majesty’s Treasury will make equivalence decisions for third-country regimes.
The statutory instrument will transfer responsibility for a number of important technical functions from the EU authorities to the UK. Most significantly, the risk-free rate—the rate that insurance and reinsurance firms must use to value their liabilities—will be transferred from the European Insurance and Occupational Pensions Authority to the Prudential Regulation Authority. The PRA is the most suitable UK body to undertake the technical function of compiling the risk-free rate. It will also take on the responsibility of publishing the risk-free rate. In addition, responsibility for making binding technical standards, which are currently developed and drafted by the EU supervisory agencies, will be transferred to the PRA, in a manner consistent with the approach taken in the other statutory instruments that we are laying under the withdrawal Act.
The statutory instrument removes obligations for EU competent authorities to share information with each other. If the UK leaves the EU without a deal, it will no longer be appropriate to require UK regulators to share information with EU regulators. UK regulators will continue, however, to be able to use their discretionary powers to share information when doing so might be necessary to ensure that supervisory responsibilities are carried out effectively.
Preferential risk charges for certain assets and exposures that originate from within the EEA, and which are held by UK insurance and reinsurance firms, will be removed. A UK firm’s exposures from the EEA will now be treated in the same way as exposures from any other third country. The EU has confirmed that it will treat UK exposures as third-country exposures if we leave the EU without an agreement.
I will now turn to the draft Insurance Distribution (Amendment) (EU Exit) Regulations 2019. This instrument fixes deficiencies in the regulations and relates mostly to removing inappropriate cross-references to EU bodies and legislation. The instrument transfers to the Financial Conduct Authority the power to make technical standards for a template presenting information about general insurance policies—a standardised document to help customers compare policies and make informed decisions. That power is important as it enables the Financial Conduct Authority to update the document in the future, to ensure it continues to deliver useful information for consumers.
The instrument also transfers relevant legislative functions to the Treasury. Those functions give the Treasury the powers to make regulations about conflicts of interest, inducements, assessments of suitability, appropriateness and reporting to customers, and specifying principles for product oversight and governance.
Finally, I will address the draft Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019. This statutory instrument makes changes to the definition of “financial conglomerate”. Under the EU financial conglomerates directive, a financial conglomerate is defined as a group with at least one entity in
“the insurance sector and at least one…within the banking or investment services sector”.
One of those must be located within the EEA. The others can be located anywhere in the world. This statutory instrument will amend the geographical scope of the definition, so that one entity must be located within the UK, rather than the EEA, to be subject to the UK regime.
This statutory instrument amends the definition of “competent authority” so that it no longer includes regulators based in the EEA. It transfers a number of functions from the EU authorities to the UK regulators. The European financial conglomerates directive requires EU authorities to publish and maintain a list of financial conglomerates, for example. That function will now be carried out by the FCA and the PRA. In addition, as with other financial services files, the responsibility for developing binding technical standards will pass from the European supervisory authorities to the appropriate UK regulator.
Finally, as is the case for the statutory instrument that amends the Solvency 2 regulations, this statutory instrument removes obligations for EU competent authorities to share information. If the UK leaves the EU without a deal, it will no longer be appropriate to require UK regulators to share information with the EU. However, the UK regulators will continue to be able to use their discretionary powers to share information where this might be necessary to ensure that supervisory responsibilities are carried out effectively.
The Treasury has been working closely with the PRA and FCA in the drafting of these instruments. It has also engaged the financial services industry on these statutory instruments and will continue to do so going forward. The Committee will have heard from the Association of British Insurers, in a letter of 1 February, how meaningful that engagement has been. In late 2018, the Treasury published these instruments in draft, along with explanatory policy notes, to maximise transparency to Parliament and industry.
Sir John Hayes (South Holland and The Deepings) (Con)
On the issue of familiarisation costs, which are dealt with in the SI and are specified more precisely in the explanatory memorandum, it is clear that business is impacted and will endure what are said to be one-off costs in the notes. Will the Minister say a word about that to assuage any doubts?
John Glen
My right hon. Friend is right to draw attention to the impact assessment, which covers two of the three statutory instruments. One of them, of course, did not require one because of the de minimis impact. We have done our very best to be as transparent as possible and to quantify those. In the vast majority of cases, it has been about one-off familiarisation costs rather than an enduring burden. I thank my right hon. Friend for giving me the opportunity to clarify that.
In summary, the Government believe that the proposed legislation is necessary to ensure that insurance and reinsurance firms, insurance distributors and financial conglomerates continue to operate effectively in the UK, and that the legislation will continue to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope colleagues will join me in supporting the regulations. I commend them to the Committee.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Sir Henry. Once again the Minister and I are here to discuss a statutory instrument that makes provision for a regulatory framework after Brexit in the event that we crash out without a deal. On each of those occasions, I and my Front-Bench colleagues have spelt out our objections to the Government’s approach to secondary legislation.
The volume of EU exit secondary legislation is deeply concerning for accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are being taken. However, establishing a regulatory framework inevitably involves matters of judgment and raises questions about resourcing and capacity. Secondary legislation ought to be used for technical, non-partisan, non-controversial changes, because of the limited accountability it allows. Instead, the Government continue to push through far-reaching financial legislation via this vehicle. These regulations could represent real and substantive changes to the statute book. As such, they need proper in-depth scrutiny. In light of that, the Opposition want to put on record our deepest concerns that the process regarding the regulations is not as accessible and transparent as it should be.
Our request for a debate on the Floor of the House regarding the markets in financial instruments directive in December 2018 was rejected, but I note that in the Treasury Committee’s oral evidence session last Tuesday, the Chair said that she was writing to the Leader of the House to ask for a debate on the draft Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019. Given that we now have more parliamentary time due to the cancellation of the February recess to focus on this very issue, I hope the Government will heed the calls now coming from across the House for more in-depth and open debates on these matters.
Today we turn our attention to three items that make provision for the UK insurance industry in the event that we leave without a deal. The UK insurance market, centred on Lloyd’s of London, is the world’s oldest insurance industry of its kind. It attracts business from all over the globe as it is often the only place where the combination of specialists can be found to provide products to cater for all of today’s highly complex risks, especially those of terrorism, cyber-attack and natural catastrophes. From its humble beginnings as a coffee house in the 17th century, Lloyd’s of London has become central to world insurance markets, paying out more than £18 billion in gross claims in 2017. Yet the insurance sector, which is so fundamental to the way in which businesses and individuals manage daily risks, is still in complete limbo over its post-Brexit future.
As I have said in this Committee before, relying on equivalence arrangements will fall short of what our financial sector as a whole needs if we are to use it when we leave the European Union. For the insurance sector, it is obviously even worse, as there is simply no equivalence framework for brokers under the insurance distribution directive. We would therefore be going into uncharted territory. The London Market Group, which represents brokers and underwriters, has said:
“It would be unacceptable to see EU clients left in a detrimental position, not knowing whether their claim would be paid or not.”
Inevitably, we have seen the consequences of that as the insurance community has been forced to move forward with its own contingency plans in the absence of any clarity from the Government. Lloyd’s became authorised to write EEA business from the beginning of the year, and is now working on transferring all EEA business to Lloyd’s Brussels before the end of 2020. Brokers here in London intermediate business all over the world, but the third-country regime was not designed for market participants already operating globally; it was intended to bring external countries into the regime.
The Minister has presented three instruments that the Government argue will allow for a basic framework to function in the event that we crash out without a deal. The first is the draft Solvency 2 and Insurance (Amendments) (EU Exit) Regulations. Given the systemic importance of the insurance industry, there has been a co-ordinated effort over the past decade to ensure that capital requirements are sufficient to protect insurers and policy holders against insolvency. Those regulations have been vital to building a more robust insurance sector post-financial crisis. It is critical, in the view of the Opposition, that there is no move to water them down in the wake of our exit from the EU.
Typically, the industry representatives I meet have no desire to bring about a bonfire of regulation, but there is no guarantee that there are not forces who wish to see that outcome in the UK and plan to lobby for it. The Opposition are strongly against any adaptation of Solvency 2 in such a way that would weaken capital requirements. Although I see no evidence of that in this instrument, the area that is cause for concern relates to the end of preferential treatment for EU sovereign debt.
As we discussed during the Committee on the draft Capital Requirements (Amendment) (EU Exit) Regulations 2018, if we crash out without a deal, the zero risk weighting for EU sovereign debt will instantly change. It will no longer receive preferential treatment, but instead be treated as third-country debt. The reverse would apply with regards to UK sovereign debt. That has the potential to be highly disruptive, as big institutions would be expected to recalculate capital ratios and recapitalise when there has not been any real change in risk.
Sam Woods of the Prudential Regulation Authority insisted during a Treasury Committee evidence session, which the Minister participated in, that this is a decision for Parliament, which is why it has been included in an SI. However, he also emphasised the need for making the change very carefully, through proper risk processes and governance, as it will affect reported capital ratios. In a no-deal scenario, where market conditions are likely to be volatile, the last thing needed is for banks and insurance companies to be uncertain about their published capital ratio.
I therefore ask the Minister: what provisions are the Treasury making for that scenario? It is not mentioned in the impact assessments that have been circulated, which is of deep concern to the Opposition. We urgently want to know what provision is being made. As the Association of British Insurers has directly highlighted:
“The Government has already publicly stated its commitment to applying transitional relief in this area, but it is vital that the PRA applies this effectively so that firms can consider their asset portfolios and make any necessary changes in an orderly fashion.”
Moreover, the ABI has underlined further outstanding concerns shared by the Opposition. The PRA is assuming hugely important decision-making powers, and therefore the ABI views the structure as an emergency process to address immediate challenges. As the ABI has publicly stated, there must be genuine checks and balances on how the PRA exercises those functions, replicating the European Parliament’s existing role in scrutinising how those functions are currently exercised at EU level.
I have made this point in Committees related to other items of financial services legislation: the Government cannot simply port over the same regulatory framework as the European Commission and its regulators, when our Treasury and supervisory authorities do not interact in the same way. In the Opposition’s view, that then becomes an implicit policy decision.
On the draft Insurance Distribution (Amendment) (EU exit) Regulations, the insurance distribution directive was a relatively new piece of legislation that helped to level the playing field for consumers buying insurance and to improve conduct standards. As such, there could be a significant consumer detriment in removing those protections, which try to ensure that policy holders are treated fairly and consistently.
However, our real concern is that we continue to lack any kind of equivalence provision for the IDD in a post-Brexit world. As the London & International Insurance Brokers’ Association wrote in its letter to the Prime Minister in 2018, an enhanced equivalence regime will see intermediaries losing access. Our primary concern must be that markets can continue to function and that there is no consumer detriment, or any legal risks, created for insurers or brokers. Can I therefore ask the Minister to provide some clarity on whether any progress has been made in that field?
I would also like to know why the term “insurance-based investment product” is being redefined here. It is not clear how that flows from the European Union (Withdrawal) Act. Regulation 12 transfers insurance-related regulation-making functions to the Treasury. Why the Treasury, and not the PRA? Why have the Government not publicly rationalised their transfer of some functions to different bodies? As I have said, simply porting functions over to institutions in the UK ignores the fact that EU institutions and regulators interact entirely differently. There should be a wider debate about those decisions, so we can ensure the right checks and balances are in place.
Moving on to the third statutory instrument, the draft Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019, the Opposition has the same concerns with regard to capital buffers and how they are calculated if preferential treatment for EU sovereign debt is removed. Regulation 3 suggests an amendment referring to the “relevant competent authority”. Can the Minister clarify who that might be, and why it is not possible to specify that yet? That is all I wish to ask. Subject to the Minister’s reasonable reassurances, I do not intend to divide the Committee on these draft regulations.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Sir Henry, and to join all hon. Members for another Delegated Legislation Committee. I look forward to the 30 more to come; I am sure it will be a delight for us all to spend so much time together.
I agree with an awful lot of what the hon. Member for Stalybridge and Hyde said, and I share his concerns about the way in which this secondary legislation is being made, about scrutiny and about the plans as we go ahead. As an SNP Member, I do not want Brexit to happen and I certainly do not want a no-deal Brexit—that is not what Scotland voted for. In July last year, TheCityUK reported that the number of financial services jobs in Scotland rose 6.6% to 161,000 in the preceding year, outstripping London, which had a rise of 5%. Financial and related services now account for 8.9% of the Scottish economy, so it is no small business that we are talking about, but an essential component that we have to get right. The particular strength of my home city of Glasgow is insurance; I have a strong interest in keeping those insurance companies functioning in Glasgow, with all their employees.
I am glad to see that there is an impact assessment for the draft Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019; that is helpful. The familiarisation cost for those alone is £230,000. I appreciate that for some companies, that is not a huge amount of money, in the wider scheme of things, when it is divided up. It is, however, additional money that they have to come up with. I note also that the provisions place an additional burden on the Prudential Regulation Authority. It would be interesting to know from the Minister exactly how that is being met in the PRA; how many extra staff and financial resources will be required for the additional regulatory burden? More insurance firms will fall into PRA supervision, and there will be increased regulatory and compliance costs for UK firms as a result. It would be interesting to know whether he can put any kind of figure on that, because it may be additional resource that firms have to find, outside the familiarisation costs.
I note the ABI’s concerns about duplication; it says that this will be an additional burden, which could place firms at a disadvantage to their European counterparts. The ABI’s points about those issues were well made, and the hon. Member for Stalybridge and Hyde made most of those points. The ABI wants some assurance about the long-term future of the regulatory structure, and it wants to be part of the review. It says that new regulatory architecture should be within a defined timescale at the end of the process. We are going into a pretty uncertain period, and it needs to know what will happen in advance, for planning and other things.
The impact assessment states:
“The impact on individual firms will depend on the exposures they have, which we do not currently hold information on. Therefore, it is not possible to quantify the estimated impact on the insurance industry in the time available to complete this legislation.”
That comment goes to the heart of the situation we are in. We are building this legislation but we do not have time to deal with it, and there is a prospect of no deal looming. That is a huge worry for many firms and their employees, who do not know what they will be dealing with.
On the draft Insurance Distribution (Amendment) (EU Exit) Regulations 2019, I am concerned about the consumer welfare aspect, because of the powers that the Treasury gives itself to adopt delegated acts, and to make regulations about conflicts of interest, inducements and assessments of suitability, appropriateness and reporting to customers. Can the Minister tell us a wee bit more about how he will ensure that consumers do not lose out as a result of this change and what the intended framework will be in the years ahead?
I note that in order for the PRA and the FCA to carry out their functions, the draft Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019 remove the requirement on firms to report to the ESAs and replace it with a requirement to report to the UK regulators. It would be good to get a bit more detail on how that process might work, because there is a change from one thing to another. It would be good to know what kind of notice firms require for that, and how easy it will be.
There will also be a transitional cost. I believe it is below the threshold for the impact assessment, but it would still be good to get more of an idea of what it will be. Again, for some firms there may well be duplication—having to report twice—and that would be another additional cost. Any additional information on what that cost might amount to for firms would be useful.
As the hon. Member for Stalybridge and Hyde said for the Opposition, we do not seek to vote against these statutory instruments. However, I reiterate my concern that they are incredibly late in the day, that we do not have much time left and that it is very difficult to get a real handle—besides the very helpful briefing from the ABI—about their impact, because things are moving very fast.
John Glen
I thank the hon. Members for Stalybridge and Hyde and for Glasgow Central for their thorough examination of these three statutory instruments, and I note their consistent objection to the use of that mechanism to deliver such changes. All I can say is that the Government have pursued the changes consistent with the powers in the Act, and that great care and diligence have been taken to liaise with regulators and the industry, and to engage with industry participants, as I think the ABI has confirmed.
Of course, the process is designed as insurance in the circumstances of no deal; it is not the Government’s policy that the regulations will need to come into effect. I fully accept the point made by the hon. Member for Stalybridge and Hyde about the broader need to look at the future in a fair way, and the concerns of the London Market Group representative, whom I will meet tomorrow to look at global financial partnerships. The Treasury is not just focused on no-deal planning.
Both hon. Members raised a number of specific points, which I will seek to address as succinctly as I can. They expressed concern about relying on secondary legislation to push through controversial legislation. I re-emphasise that the powers granted in the European Union (Withdrawal) Act 2018, under which the majority of exit SIs are being made, have restrictions to ensure the appropriateness of their use. The central objective of the SIs is to provide legislative continuity, which is what market representatives have sought. Such SIs are, of course, subject to the usual scrutiny provided by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee. In addition, the Treasury has taken the step of publishing drafts of financial services SIs in advance of laying them before the House, to maximise transparency.
The hon. Member for Stalybridge and Hyde asked about equivalence and whether it was sufficient to protect UK industry. I agree that equivalence is not a sufficiently good outcome, and that is why the Government are working for a deal that aims for enhanced equivalence, which we would embed in the new relationship with the EU by June next year. Obviously, however, if there is no deal, we have to cover ourselves.
The hon. Gentleman also asked whether Solvency 2 can still operate effectively if preferential treatment for EU assets is retained, and whether removing preferential treatment is a political decision that the Government have made. The Commission has made clear that it intends to treat the UK as a third country after exit in the absence of a withdrawal agreement, and therefore we expect EEA regulators to remove current preferential treatment. It is only appropriate for the UK, in the absence of a reciprocal agreement, to treat EEA assets and exposures in the same way. We recognise that that may have a day one capital impact on insurers with EEA assets and exposures; that is why we intend to provide regulators with a transitional tool, as I discussed at the Treasury Committee last Tuesday morning, to ensure that firms have sufficient time to comply with changes overall with respect to legislation and rules.
The hon. Gentleman reflected on the concerns that the ABI expressed in its letter about too much power being transferred to the PRA for Solvency 2. The PRA has the expertise and resources to take on the technical functions being transferred from EU institutions and to ensure that they are met on an ongoing basis. There are existing safeguards within the Financial Services and Markets Act 2000 that place conditions on the PRA’s ability to exercise its powers. The Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 also require the Treasury to approve changes to technical standards by regulators to correct any deficiencies before exit day.
The hon. Gentleman asked which functions would come to the Treasury. Wherever the Commission exercises a legislative function, that is transferred to the Treasury, which can make changes to these regulations only through SIs in Parliament, where parliamentary approval will be required. On the lack of democratic accountability for the PRA, the changes are not intended to be long term; regulators, the Treasury and industry will work together to address the framework in the long term.
That will be a significant change, and one that I hope we do not pursue; I think there is a lack of understanding about how significant that change would be. However, we would do everything we could to ensure that we set that framework in the right way. Accountability to Parliament will be a priority whatever happens, and only functions carried out by EU regulators are being transferred. The hon. Member for Stalybridge and Hyde also asked why there cannot be more specificity regarding the relevant competent authority with reference to the conglomerates. The legislation specifies that it is either the PRA or the FCA, depending what type of regulated firm is covered, which fits with the UK’s existing framework.
The hon. Member for Glasgow Central again reflected on the ABI’s concerns, this time about the inefficiencies being created by making cross-border insurers subject to dual group supervision. We recognise that dual regulation may create additional costs for UK insurers that operate across the UK-EU border. However, that is a consequence of the UK’s decision to leave the EU rather than of this instrument, and in applying Solvency 2 in a UK-only context, the PRA needs to apply group supervision at the UK level, as it can no longer participate in the formal college of EU supervisors. Basically, the PRA will need to take account of the systemic risks that exist, and ensure they are covered for.
The hon. Member for Stalybridge and Hyde asked why insurance-based investment product definitions are being changed. The definition is not being changed; it will operate as before, but references to EU institutions and EU law need to be fixed. If there are outstanding issues on that point, I am very happy to correspond with him.
The hon. Member for Glasgow Central challenged the need for the Government to take additional powers in the draft insurance distribution SI. The instrument transfers relevant legislative functions of the European Commission, contained within the insurance distribution directive, to the Treasury. As the hon. Lady clearly understands, the Treasury has the powers to make those regulations about conflicts of interest, inducements, assessments and so on. They are important, because the IDD came into force only last year, and as such the Commission held those powers to ensure that the regulatory regime for the sale and distribution of insurance could be updated. Transferring them to the Treasury is in line with the Government’s standard approach to such powers as part of this process.
The hon. Lady asked about the resourcing of the PRA. As we have also discussed before, regulators are independently funded by levies on industry. The regulators have prioritised Brexit; I seem to recall that the FCA now has 158 full-time equivalents, up from 28 in March last year. I meet with Andrew Bailey regularly. I met him this morning and he confirms that those resources are in place, but if more is required he would be at liberty to raise a levy to secure those.
The hon. Lady referred to consumer welfare concerns about the IDD. I can reassure her that consumers will not lose out. There is no substantive change in the policy requirements on firms under this SI. Firms will still be required to prepare the standardised statement, with the same content as is currently the case and, indeed, as industry wishes.
I hope that I have dealt with the substantive points that were raised. I have a lot more material that I could go through, but I think I have faithfully addressed what was said. I hope that the Committee has found the sitting informative, and will be able to join me in supporting the three statutory instruments.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019.
Draft Insurance Distribution (Amendment) (EU Exit) Regulations 2019
Resolved,
That the Committee has considered the draft Insurance Distribution (Amendment) (EU Exit) Regulations 2019.—(John Glen.)
Draft Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019
Resolved,
That the Committee has considered the draft Financial Conglomerates and Other Financial Groups (Amendment etc.) (EU Exit) Regulations 2019.—(John Glen.)
Draft Buckinghamshire (Structural Changes) (modification of the local Government and Public Involvement in Health Act 2007) Regulations 2019
(5 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I beg to move,
That the Committee has considered the draft Buckinghamshire (Structural Changes) (Modification of the Local Government and Public Involvement in Health Act 2007) Regulations 2019.
It is a pleasure to serve under your chairmanship, Mr Austin. These regulations were laid before the House on 14 January. If approved and made, they will pave the way for further statutory instruments to give full effect to my right hon. Friend the Secretary of State’s decision to implement the locally led proposal to replace the five existing Buckinghamshire councils with a new single unitary council. The regulations are therefore an enabling element in the process of implementing that locally led proposal.
If approved by Parliament and made, the regulations will allow orders to be made under the Local Government and Public Involvement in Health Act 2007 to implement the Buckinghamshire proposal. They provide for part 1 of the 2007 Act to be varied in relation to Buckinghamshire so that first, proposals may be made for the purposes of the 2007 Act by any principal authority in Buckinghamshire on its own initiative; secondly, any proposal received from Buckinghamshire councils by the Secretary of State —including proposals existing before the regulations are made—may be implemented by order, with or without modification; and thirdly, the requirement for the Secretary of State to consult the councils affected by the proposals and other persons will not apply, reflecting the extensive consultation undertaken by the county council and the subsequent period for representations.
The regulations would expire at the end of March 2021, to allow sufficient time for all necessary orders to be made under the 2007 Act to give full effect to the proposals. The Cities and Local Government Devolution Act 2016 requires that, for regulations made on or before 31 March 2019, at least one of the councils must give its consent for those regulations to be made. Buckinghamshire County Council has given its consent to the making of these regulations.
In conclusion, we are responding to a locally led proposal to replace the existing, unsustainable local government structures in Buckinghamshire with a new council that will be able to deliver high-quality, sustainable local services to the people of Buckinghamshire and provide effective leadership at both the strategic and most local levels. All the existing councils have made clear their commitment to delivering the best services for Buckinghamshire communities. These regulations open the door to delivering that commitment, and on that basis I commend them to the Committee.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Austin. The Opposition do not intend to divide the Committee on these regulations, but we have some questions about the Government’s approach, and it would be helpful to get some feedback on those.
We accept that the initiation of a review has been locally led, but that is not the same as saying that the Government’s current position has universal support at local level. I will highlight a couple of points: first, as has been mentioned, there was an extensive public consultation to which there were over 3,000 responses. However, only 35% of those who responded supported the proposal for a single unitary council covering the whole of that geography. A greater number of respondents —47%—supported the creation of two unitary councils, so it is not correct to say that the current proposal for a single unitary council has local support. It is also the case that four district councils have opposed the plan that has been tabled.
Of course, the county council is supportive, but that brings me to a further concern: it is my understanding that the Government have decided to impose on the new authority the leadership of the county council leader, and I would like the Minister to explain why the Government think that is appropriate. Surely the leader of any local authority should command the support of that authority, and be either directly elected by the population or elected by the membership of that body; I am not sure that it is in the spirit of localism for the Secretary of State to impose a leader on a local authority. I wonder whether the Minister could point to an example of that action being taken in recent times, so that we can understand a bit more about why the Government have taken that decision. It would always be controversial—there has always been a disproportionate amount of power in a county council compared with the district councils. To move forward in a unified way on a shared platform, surely it would be helpful not to make such a contentious decision right at the start of that new relationship.
My second point is about the drivers for the change. As I understand it, quite a lot of them were the efficiency savings that can be realised when local authorities come together, and I recognise some of the numbers that have been referred to. However, those local authorities combined used to receive £88 million of central Government funding, but by 2020 they will receive zero. Many local authorities around the country are forced to look at new ways of saving money and being efficient—something which many central Government Departments could learn from.
The Government have refused to invest in people-driven services; meanwhile, demand is going through the roof. In particular, in adult social care and children safeguarding, the Local Government Association points to an £8 billion gap in local government funding, which the Treasury has refused to fund. In those circumstances, it cannot be the case that reorganisation is being led solely by the starving of funding from central Government. It is not acceptable that, even when reorganisation is seen as needed, or at least as needing review, central Government come in and impose a plan, which does not have majority support of those who took part in the consultation, involves a difference of opinion between the district councils and the county council, and in which the Government decide that they, instead of the membership of that new authority, should determine who its leader should be.
The Minister needs to outline why the Government have arrived at that decision and point to a very recent example of such a case that we can look at after considering this statutory instrument, so that, hopefully, we can move forward in a way that creates not just a unified local authority, but a sense of common purpose. If the Government do not listen to local concerns and continue to impose a model from the top down, against local public opinion, against where the district councils in that area are at, and then, on top of that, impose a leader, I fear that that is not in the spirit of localism and will not create a sense of common purpose at all.
Dame Cheryl Gillan (Chesham and Amersham) (Con)
Thank you for calling me to speak, Mr Austin. As you know, I am not a member of this Committee. I am allowed to speak, but unfortunately I cannot vote. I was very surprised to hear the hon. Member for Oldham West and Royton declare that he would not force this particular SI to a vote. Obviously, he has made that decision. I encourage colleagues and Opposition Members to vote against this particular piece of subsidiary legislation.
It falls to me to be the only voice for Buckinghamshire in the room.
Ms Angela Eagle (Wallasey) (Lab)
I assure the right hon. Lady that I will say a few words after her in support of the points that I suspect she will make.
Dame Cheryl Gillan
I will take support from any part of the House. Perhaps I should have said that I would be the only elected Member for a Buckinghamshire constituency to speak. The hon. Lady and I have been in this House for exactly the same length of time, so she will forgive me for my inadvertent error. I look forward to some support from her.
When the local government reorganisation propositions were put forward from certain quarters in Buckinghamshire, I was one of the few voices at the time to ask myriad questions of both Secretaries of State who have been involved in these plans. Although I am not intrinsically against local government reorganisation—indeed, it can be very beneficial—I questioned what problems in Buckinghamshire they were trying to solve with this particular set of proposals.
As has been said, the reorganisation was driven by one quarter from the county council and by the local enterprise partnership—one of the LEPs, because unfortunately we have two LEPs in Buckinghamshire. I remain to be convinced that the path the Government have chosen is the best for Buckinghamshire. I am standing up today to represent partly my views, but mostly those of Chiltern District Council, because the constituency of Chesham and Amersham has contiguous boundaries with Chiltern District Council, and if someone is a Chiltern District Council council tax payer they are a constituent of mine.
Chiltern District Council has asked me to speak on its behalf today, because the combined single authority was certainly not its choice. It has said all along that if there was going to be reorganisation, it should be by evolution, not revolution, and I particularly evidence the fact that Chiltern District Council and South Bucks District Council have been working together for years, putting their back rooms together, if people will forgive that expression. They have both put their administration together to save money for council tax payers and to deliver better and more efficient local services.
I would have thought that that very progress that was being made by those district councils coming together would be the way forward and the way to encourage local government reorganisation. There is also the fact that Buckinghamshire is an exceedingly large area, with great differences between the north and the south of the county, and there is much more synergy between the three southern district council areas than there is between all the four district council areas that make up Buckinghamshire County Council. I am afraid, however, that such a way forward was not to be. Nevertheless, my district authority said on the record that if this reorganisation is going to happen, it wanted to work together with the other councils. Until it saw the detail, that was indeed its plan.
I will just mention a few points that Chiltern District Council has raised with me, because I think that they are important for members of this Committee. When the Cities and Local Government Devolution Act 2016 was passed in this House, the Minister said that it was to overcome obstacles to combined arrangements and devolution. However, the Minister—James Wharton MP, as he was at the time, the Parliamentary Under-Secretary of State—actually said that
“it is indeed the Government’s intention to build that consensus…We are not going to impose change on areas that do not want it.”—[Official Report, 7 December 2015; Vol. 603, c. 723.]
While considering an amendment during the passage of that Bill, he said it was important that these matters were delivered in a “straightforward” way as part of a deal, “where there is consensus”.
I think that it is quite obvious that there is not consensus, because sadly four out of the five authorities—the four district councils—did not consent to a single authority. The Minister in the Lords, Baroness Williams of Trafford, who was then the Parliamentary Under-Secretary of State, said, when looking at this area particularly, in a Government response concerning whether a single authority vetoed the change:
“During the passage of the Bill, it became very clear that in certain circumstances, and in particular in relation to structural or boundary change, the consent provisions as initially drafted gave to any single council in an area an effective power of veto over any such change, even if as might be the case in two tier local government, another council in that same area was in favour. The potential for the exercise of such veto may close down consideration and discussion of any such proposals regardless of the wider benefits they could bring to an area or the degree to which they had local support.
Amendment 36 removes that barrier to discussion and consideration of proposals, and, as has been made clear in debate in the Commons, is designed to facilitate the continuation of such wider conversations which it would be hoped would lead to a consensus across the area. We have made very clear that whenever the Secretary of State exercises these powers, he will maintain the preference for consensus, but with this Amendment there is greater flexibility to deliver devolution deals and the underpinning governance which areas want and need.”
I am afraid that there is no consensus.
Furthermore, upon consultation I think that people will find that, as was said by the Opposition spokesperson, there was only one survey that was robust in terms of its statistical analysis, and that survey of residents supported two unitary authorities.
Polls of the parishes also showed over 70% support for two unitaries, and there was greater support for two unitaries from business and stakeholders.
The Secretary of State admitted in his written ministerial statement that there was broad local support for two unitaries, so there is no consensus. I therefore ask the Minister to justify the use of section 15(5) of the 2016 Act, with which he will be familiar. It was intended to be used as a last resort. At the time, the Local Government Association worked with parliamentarians
“to secure assurances from the Secretary of State that the powers to determine the composition of local governance arrangements and remove functions from local authorities without local consent will be used sparingly and only as a last resort.”
In fact, the Minister, James Wharton, said:
“The Government’s intention is to work with local areas to deliver economically sensible areas of devolution, with structures that sit beneath them that allow those things to be delivered and that potential to be realised.”—[Official Report, 7 December 2015; Vol. 603, c. 773.]
There is no devolution deal or combined authority proposal in Buckinghamshire; this is a straightforward local government reorganisation, which, as that junior Minister was at pains to point out, the Secretary of State already has powers to carry out, just as he is doing right now in Northamptonshire by means of an invitation that requires him to carry out local public consultation, so that he properly understands the views of the local area before reaching his decision.
The proposals are not part of a pilot; they are being rushed through. Under section 15(8) of the 2016 Act, the regulation-making power expires—guess when?—on 31 March 2019. The end of March will be such an exciting time. The regulations are being pushed through Parliament before that power expires to circumvent the time limits in the parent Act.
These regulations are being laid before Parliament before the associated order—I have a copy of the draft order here—is laid before Parliament. I think the regulations have been separated from that order to get the regulations through Parliament on time. I understand that officials would advise Parliament to consider the two together; I do not understand why the Minister is not doing that, though if we did, we would not be able to meet the ambitious timetable of the end of March. We know what happens when one is up against timetables: one starts to rush things. I feel strongly that the Committee is being asked to put the cart before the horse, and to judge before we have seen the whole picture.
The Minister mentioned the requirement in the Act for the consent of at least one authority to the regulations being laid before Parliament. Four out of five authorities did not consent. The only authority that consented did so conditionally. The resolution of Buckinghamshire County Council’s cabinet made it clear that it was a subjective consent, based on certain terms in the order that were set out in a letter from the Secretary of State. The order giving effect to the decision set out in the letter is yet to be laid before Parliament.
The county council has said:
“In line with the main report Unitary Transition Arrangements Cabinet is recommended to confirm that the County Council gives consent to the making of the Regulations.”
So far, so good; the council is giving consent. Then comes the rub:
“This consent is on the basis of the Secretary of State’s decision on the draft Structural Changes Order as set out in the letter at Appendix 2 and detailed in the table at paragraph 1 below.”
That order has not yet appeared. The result is that three of our district councils are subjecting the Department to judicial review: Wycombe District Council, South Bucks District Council and my council, Chiltern District Council. They argue that the regulations are ultra vires. I want to hear what the Minister has to say about all of those points. I could probably write his speech for him—they are all going to be brushed aside—but it is important to Chiltern District Council that they are put on the record, so that they are all out in the open.
Dislocating the regulations from the order means asking Members of Parliament to blindly open the door to an order that would impose undemocratic arrangements on Buckinghamshire. As the gentleman who speaks for the Opposition, the hon. Member for Oldham West and Royton said, the imposition of a leader and the usurping of the powers of the shadow executive is likely to result in a new council being created in the image of one of the old ones, Buckinghamshire County Council. That is not a bad council, but the principle is to create a new council that takes the best from all the local councils involved. Effectively giving Buckinghamshire County Council a majority on the executive and potentially imposing that council’s chief executive as implementation leader is not what that process should be about. In addition, without the order, how can Parliament properly scrutinise the modification regulations that are before the Committee?
Creating an irrational executive dominance of the shadow authority—which, as currently drafted, the order that is not before the House does—is going to be a major problem. The functions of the shadow authority will be provided for throughout the order, and will theoretically be extensive: it will have powers to formulate the executive arrangements, the code of conduct and members’ allowances, and must prepare, review and revise an implementation plan. However, in practice, those functions are all but extinguished by article 16, which effectively usurps the shadow authority’s functions. They are to be exercised by the shadow executive itself.
The default position in the order that should come before the House is that the shadow authority is disempowered at the hands and whims of a shadow executive, in a context in which that shadow executive is heavily dominated by the county council and can take any decision by steamrolling over legitimately critical opposition within it. That appears to grant the shadow executive a line of patronage to key offices in the shadow authority, including the appointment of the substantive chief executive of the new council. It reduces those offices’ independence and creates the perception that their scrutiny of the executive is weakened.
I appeal to the Minister to think again. If we are to have local government reorganisation in Buckinghamshire, it will be a once-in-a-generation opportunity to improve local government. Irrespective of any political differences, all of us in this House strive to provide services to our constituents, and to ensure that local government and services are provided at reasonable cost and with reasonable efficiency. The non-consensual approach that is being adopted by the Government carries with it a high risk of creating a new, but unhappy, council that is not on the road to success and could be on the road to failure. I urge the Minister to try to secure local consent for a model that will genuinely be based on excellence, rather than on short-term expediency and the rapid timetable that he is working to, so that we can be seen to be working in the best interests of our residents. I think that is a goal that we all share, and I look forward to hearing the Minister’s response.
Ms Eagle
It is a pleasure to serve on this Committee under your chairmanship, Mr Austin. I am glad that I am able to follow the right hon. Member for Chesham and Amersham, who has filled in a bit of the local colour that I assumed might exist when I read the documents that the Committee has been provided with. She has raised some extremely important questions, which I hope the Minister has extremely good answers to.
While looking at the documents, I noticed that, funnily enough, effectively all of the smaller local authorities in the Buckinghamshire area that are going to be swallowed up are against what the Minister is suggesting. Four local authorities—South Bucks District Council, Wycombe District Council, Aylesbury Vale District Council and Chiltern District Council, which covers the right hon. Lady’s constituency—have rejected the final plans for a unitary authority. It sounds to me, listening to the right hon. Lady’s comments a moment ago, that they have reasonable worries, which ought to be properly answered. However, given that the Minister’s powers will expire at the end of March, what we have here appears to be a bureaucratically driven exercise, which is trying to force a change through, despite there being plenty of evidence of local worries and a complete lack of local consent to some of these changes.
Does it matter that the people who object happen to come from the smaller district councils, rather than the leviathan county council, which will be empowered, it seems to me, by these plans? It ought to matter to those of us who are interested in local democracy being meaningful. If these kinds of things are to be done appropriately and in a successful way, it is not appropriate for the Minister to do it in a top-down, fast way, empowering the largest and most powerful local authority in the area, so that it can dominate the rest of the authorities that have been swallowed up by it. That will lead to getting off on the wrong foot, resentments, which will not disappear quickly, and the alienation of local people, who believe that their district council is being swallowed up in a way that leaves them with little chance to influence the new unitary authority that is being created.
In my area, we have experience of being forced to become unitary: our metropolitan council—the Merseyside one—was simply abolished, with no consent either, it must be said. That leads to a struggle. Despite the fact that we may in principle want authorities to be unitary, surely, if there is local democracy, there must be a local, democratic way of bringing that about, which does not just mean that the largest fish swallows all the smaller fish, whether they want to be swallowed or not.
It seems to me that in their bureaucratic efforts to get this done and dusted in time, the Government are riding roughshod over perfectly reasonable local interests. The fact that the Government have not seen it fit to lay before Parliament the appropriate documentation, so that we can check the assurances that they say they will give us, is a disgrace. This Committee should not be meeting without the appropriate documentation in front of it.
I hope the Minister will consider withdrawing these regulations, until he can sort himself out and bring to the Committee the appropriate documentation, so that everyone in Parliament can have a proper look at what we are meant to be approving. I certainly hope that if the Minister does not do that, the Opposition Front Bench will consider voting against this proposal.
The proposal is half-baked, it does not have the consent that it claims to have and the Minister has not even bothered to provide the appropriate documentation for us to consider. He ought to go back to the drawing board and come back with all the appropriate documentation. I look forward to him explaining that consent does not mean the consent of four of the five local authorities. It looks to me that there is a reasonable case for judicial review, because of the Government’s lack of ability to put before Parliament and the people in Buckinghamshire the appropriate documentation in an appropriate and timely fashion. I look forward to the Minister’s response, but I would like him to say that he will withdraw this SI temporarily, and bring it back when he has all his ducks in order and has done the appropriate amount of work.
Simon Hoare (North Dorset) (Con)
It might come as a disappointment to my hon. Friend the Minister and the shadow Minister that I do not intend to reprise my mammoth, 55-minute address in support of the reorganisation of Dorset councils. I just want to make a couple of remarks.
I know the Buckinghamshire area reasonably well, having served for three years as a county councillor on the neighbouring authority of Oxfordshire. I shall address my remarks to my right hon. Friend the Member for Chesham and Amersham. I guess the spur to reorganise broadly replicates the spur that forced Dorset to seek reorganisation, which was better value for money for the taxpayer and the delivery of quality services at a time when—I say this as a vice-president of the LGA—the local government family has sustained a significant and sustained financial hit since 2010. Some 45% of its income has been lost, and that has often acted as an impetus to find new ways of doing things.
I hear what my right hon. Friend says, but we had this in Dorset as well. District councils buddy up and work closely together. They screw the maximum amount of savings out of operational costs, but the pressure for savings and greater efficiencies continues, creating the need to re-engineer the local government architecture.
There is little or no doubt that with any change to local government—I empathise entirely with the viewpoint of my right hon. Friend—people feel a strong emotional tie to their district councils, particularly if they have been good ones. However, I think the Minister is right and that the general thrust of the Government’s approach is right. First, Her Majesty’s Government look for grassroots-up proposals and not top-down enforcement. That is really important because one size clearly does not fit all. There will be different models for different geographies.
Dame Cheryl Gillan
Having sat on the LGA, my hon. Friend will know that the LGA guidance said that this particular enforcement from central Government was intended to be used as a last resort, and that the power to remove functions from local authorities without local consent would be used sparingly. With respect, Buckinghamshire is very different from Dorset, and the change is being imposed on Buckinghamshire. As for the savings, a new entity is being created, so most of the workers will have to be TUPE-ed across, and the savings need to be looked at very carefully because they might not be achieved.
Simon Hoare
I agree with my right hon. Friend on the latter point. On the idea that the powers were to be used “sparingly”, I would say define “sparingly”. My definition would be “not very often”. I am not aware that the Department and the Government have used that power very often. I therefore suggest it has been used sparingly.
Dame Cheryl Gillan
My hon. Friend is always charming. In this case, why should Buckinghamshire be singled out as the only one? Why should it be us? Surely we have a voice and a right to be heard? The residents that voted for two local authorities have a right to be heard, but that is being denied to them.
Simon Hoare
I think that is probably a question for the Minister, but in anything that my right hon. Friend read out from earlier correspondence either here or in the other place in reference to the sparing use, I did not hear her say, “but never Buckinghamshire”.
Simon Hoare
Buckinghamshire might be the only one, but the point still applies.
Mr Austin, I do not want to fall into my trap of speaking for 55 minutes. All I wanted to say to the Minister was all power to his elbow, because I think he is rightly focused on assisting local government to chart a way through in order to deliver even better and more efficient services to their taxpayers. He is absolutely right to recognise that universal support or unanimity will never be found in these things. No one council or third party that has a locus in the process should have a right of veto.
I must say to my right hon. Friend the Member for Chesham and Amersham that, although I understand the knee-jerk reaction to dash off for a judicial review, I know, having had one of our councils in Dorset do exactly that against legal advice, wasting both time and precious public money, that it is not something to be entered into lightly. I say to her that of course such proposals stir emotion and great ties of loyalty to a certain geography, and very often the very worst case scenario is afeared, but we go into our Dorset unitary elections in May, where we have two councils coming forward—because the geography and the scale worked for that—and the organisation and the shadow authority have been working incredibly hard to get it right.
Although the decision may be a disappointment to a number of district councils within the county—disappointment that I understand and with which I empathise—I would suggest that now is the time for everybody with good will towards the electors of Buckinghamshire to put their shoulder to the wheel to make it work, and to deliver for those people who send us either to this place or to the council chamber to serve their needs and best interests.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to see you chairing this troublesome Committee, Mr Austin. I say “troublesome”, as one who is presently reading Isabel Hardman’s book “Why We Get the Wrong Politicians”, which goes to some lengths in attacking the delegated legislation process, and statutory instrument Committees for not doing their job properly. I am not sure whether this Committee fits that description.
I am grateful to the right hon. Member for Chesham and Amersham for attending to defend her local interests. She put some very serious questions to the Minister, to which I am sure he will respond in due course. I share the concerns of my hon. Friend the Member for Wallasey, who said that the Opposition should perhaps vote against the motion. However, I recognise that the shadow Minister, for whom I have high regard and who has considerable experience in local government, did not intervene to indicate that he was likely to change our position. Given that I am in a bit of trouble with my Whips Office at the moment for recent votes, I will follow the shadow Minister this afternoon. Added to that is the fact that the regulations are to be made under local government legislation from 2007. I was just out of the Department for Communities and Local Government at the time, so my dabs might be on the original of this somewhere.
However, I think that the Minister has some questions to answer. There was a similar situation in a Delegated Legislation Committee last week when the Government were challenged by our Front-Bench spokesperson for introducing a document that we believed had been revoked, but the Government were bringing it back. Now they are introducing a piece of legislation that the right hon. Member for Chesham and Amersham says is relevant to an order that has not been laid. They seem to be getting into some kind of a muddle in respect of the order in which papers are to be laid. I very much look forward to the Minister responding to the right hon. Lady and persuading the Committee to follow him, as it looks as though we probably shall.
Andrew Percy (Brigg and Goole) (Con)
It is a pleasure to serve under your chairmanship, Mr Austin. If we are all fessing up to our part in this, as the hon. Member for Poplar and Limehouse did, I feel that I should fess up to mine: I was the Devolution Minister for a period when the proposal was under consideration.
I will respond to a couple of points. I think the premise of the contribution made by the hon. Member for Wallasey was that the regulations were not thought through properly. This proposal has been in the mix for a number of years. There were lots of engagements when I was the Minister with various stakeholders—different council leaders, and different Members of Parliament. It has done the rounds. I do not want to go too much into Buckinghamshire in particular, because I spent quite a bit of time trying to kick the can down the road—that seems to be Government policy on a number of issues at the moment—in the hope that something would come along.
I want to respond to the point about consent. It is not possible with such reorganisations always to gain consent. Of course it is not unreasonable for local authorities to object to councils being abolished. My own region has been through that experience several times in recent years. Horribly, we were put into a county called Humberside, which never really existed, our borough councils were all abolished, and then we were restructured again when Humberside was abolished. Nobody has been able to create consensus in our region on what local government structures should look like.
I congratulate the Minister on having the chutzpah to proceed with what is generally a fairly sensible reorganisation. Leaving the matter of Buckinghamshire aside, it is time we dealt with this nonsense of two-tier authorities. There is no reason, in this day and age—[Interruption.] I am not talking specifically about Buckinghamshire; I do not want to upset my right hon. Friend the Member for Chesham and Amersham.
Dame Cheryl Gillan
Obviously I am talking specifically about Buckinghamshire. The problem is that everybody looks to local government reorganisation to deliver the best possible services at the best possible price for the taxpayer, but the consultations point towards two local authorities. I believe that the original proposals began as a result of Aylesbury Vale District Council wanting to go off on its own, but then the county decided to create a huge leviathan of a council. Surely that is not common sense. Surely people should be listened to. The responses were in favour of two district councils; as my hon. Friend the Member for North Dorset says, the geography lends itself to two councils, not one. There would have been a good consensual way forward, so why are we now in a position where the three southern district councils are judicially reviewing the Government’s decision? It seems a sad state of affairs.
Andrew Percy
All that I will say on the geography point is that I represent a constituency in the largest unitary authority in the country and I do not necessarily accept the arguments being made. In local government reform, everybody can always make the argument that a particular solution does not fit the unique geography of their area. It is no surprise that whenever there are reorganisations there is always a district council seeking to create a unitary authority based around itself or one of its neighbours. That is not unusual; there have been similar discussions in the other part of my constituency.
All I will say in response to hon. Members’ comments is that this has not been done on the back of a fag packet. There have been years and years of—[Interruption.] I know that my right hon. Friend did not say that; I am not suggesting that she did.
Andrew Percy
I will finish my point, if I may, but I will give way before I sit down.
There can never be total consensus. When Durham County Council was unitarised in 2009, there were probably people opposed to that. The shadow Minister, the hon. Member for Oldham West and Royton, made a comment about leadership being imposed, but that is not unusual in such reforms. As he will be aware, when we created the combined authority in the Greater Manchester area, the then police and crime commissioner —the hon. Member for Rochdale (Tony Lloyd)—was appointed as interim mayor without any election. Such a situation is not unusual.
Andrew Percy
No, because the hon. Gentleman and I sat on all the Delegated Legislation Committees on the matter at the time. I have heard many similar speeches from him, he has heard many similar speeches from me, and I suspect that we have nothing new to add.
Andrew Percy
I will give way one final time to my right hon. Friend, given that the debate affects her constituency.
Dame Cheryl Gillan
I am most grateful. If I felt that this had been done on the back of a fag packet, I would probably have spoken even more vociferously today, but the point is that we hope that the reorganisation will last some years into the future. Reorganisation does not happen every five or 10 years. Across the northern part of the county, we are just about to embark on the Oxford to Cambridge connecting routes, with all the resulting housing development and growth. As part of that, the Aylesbury Vale area will therefore be growing rapidly, despite the objection that with only 300,000 people it is too small. In addition to that rapid growth, we will face all the housing pressures from Slough and Wycombe in the southern areas of the county. It would have made much more sense to go for the consensual option that people want: two authorities. We are creating a monster for the future, and frankly I think it will need reorganisation much sooner than we anticipate.
Andrew Percy
I did not suggest that my right hon. Friend had said that the plans were made on the back of a fag packet; I was referring to another speech. She makes her point, but I consider 300,000 a very small population for an authority and I urge the Government to go much further with reorganisation—I include my own area in that. I have two unitaries, one of which, at 170,000, is too small. We need to come up with proposals to make it a much bigger unitary, potentially by merging it with neighbouring authorities. Some of them would not like that, but it will have to be enforced, if necessary.
I hope that the Minister will have more chutzpah than I did in the same role and will push forward unitarisation. I can be much braver now because I am not the one who has to do the Delegated Legislation Committees and it will not affect my diary quite so much. We really need to deal with the issue. I also ask him to look at the number of councillors. I believe the new authority will have 147—
Andrew Percy
I see. I hope that it becomes a more sustainable figure in future.
Rishi Sunak
I thank all right hon. and hon. Members for their helpful contributions. It is particularly helpful to have contributions from Members who have served in my Department. I pay particular tribute to my right hon. Friend the Member for Chesham and Amersham for the tenacity with which she has represented her district councils’ case, not just today but for many months preceding this debate.
I will take the various issues in turn and pick up on the questions that were posed. I will start by informing the Committee of the Government’s general approach to reorganisation, which my hon. Friend the Member for Brigg and Goole touched on. There is a formal set of criteria that my predecessor, the hon. Member for Nuneaton (Mr Jones), outlined when he had this job. The Government will consider locally led and locally developed proposals according to three criteria: that they would improve local government in the area; that they represent a credible geography; and that they command a good deal of local support.
I agree with my right hon. Friend the Member for Chesham and Amersham; the Government received two proposals, both locally developed and led. As my hon. Friend the Member for North Dorset said, there is no top-down imposition here. One of the proposals was received at the end of 2016 and the other at the beginning of 2017. As we have heard, the process has been going on for some time, in order to get this right. When both the current Secretary of State and his predecessor evaluated the proposals according to the criteria, they concluded that both of them satisfied the criterion regarding demanding a good deal of local support.
We heard some statistics earlier, and it might be worth informing the Committee that there was widespread support from everyone for the principle of reorganisation in general, to simplify the local government structure. For example, 75% of survey respondents said that they believed in supporting reorganisation and 87% of the representations received by the Government also supported the principle. Similarly, all public sector bodies and business groups supported in general the principle of local government reorganisation in Buckinghamshire. There was, of course, disagreement about whether it should take the form of a single unitary or two unitaries, but it is worth the Committee knowing that all public sector providers were in favour of the single unitary proposal, as were the majority of respondents to the open questionnaire, which totalled just shy of 2,500, the majority of opinion in the focus groups, the Buckinghamshire Thames Valley local enterprise partnership, Buckinghamshire Business First, which represents about 10,000 local businesses, and the children’s services commissioner.
That said, both proposals commanded local support. The question for the Secretary of State, therefore, was whether they both also satisfied the two other criteria for local government reorganisation: improving local government and representing a credible geography. For reasons that have been outlined in various statements, the Secretary of State felt that the proposal for two unitaries was not in keeping with those two criteria. One of the LEPs thought that the proposal did not represent a credible geography, and there was concern, especially from the children’s services commissioner, about the fragmentation of services in Buckingham if we went for the option of two unitaries.
As my hon. Friend the Member for Brigg and Goole said, there was a significant question about size. One of the unitaries would have 188,000 people in it, which is considerably below the Government’s published recommendation that local government reorganisation should happen in areas in excess of about 300,000 or 350,000. That judgment is based on research and analysis carried out by the Department and others, which suggests that the optimal size for a unitary authority is 400,000 to 600,000. As my hon. Friend said, some smaller unitaries are more concerned about financial stability, their ability to attract high-quality leadership and other such things, given their small scale.
On that basis, the Secretary of State decided to implement this locally led proposal. I would be the first to acknowledge that it came as disappointing news to the district councils, but the Government and I have strived hard to work with them to alleviate their concerns about the implementation of the proposal. I have had a very constructive meeting with all the district council leaders, and my officials have had several meetings with them. We are currently working with them on the nuts and bolts of the implementation of the proposal, and we are making good, constructive progress.
I draw the Committee’s attention to the press release that all district councils issued when the decision about this proposal was announced. It said:
“This is a golden opportunity to transform all service provision in Bucks”.
I hope that is a statement of their constructive attitude. That is what I have found when dealing with them.
There was mention of a judicial review. I am pleased to quote from the letter received from the district councils, which states:
“The legal action is not intended to frustrate the process of creating a new council. We have been working with our district and county colleagues and will continue to do so.”
I thank them for that.
Dame Cheryl Gillan
I judge that the Minister is about to conclude his remarks?
Dame Cheryl Gillan
That is good, as I will have another opportunity to intervene later.
On the judicial review, I think the district councils have taken that action because they feel that not enough progress has been made. If the Minister is now offering me assurances that progress will be made with my district council and the other two district councils involved in the judicial review, that gives me some cause for optimism. Will he perhaps say when he will meet them again, and what progress he has made since the judicial review was instigated?
Rishi Sunak
It would be remiss of me to comment in detail on legal proceedings or the legal strategy that district councils might wish to pursue. I met them right at the beginning of the process to understand their concerns and to ensure that the Government work with all the district councils and the county council to put in place structural change orders that can command widespread support.
The Secretary of State’s special adviser is meeting all the leaders tomorrow, and I would be happy—as I always am—to meet them to follow up anything that requires my attention. We have been discussing things such as the number of councillors, the timing of elections and whether the new authority should be a continuing authority. I am pleased to say that, on almost every item of business that the district councils raised with me, we have been able to meet their requirements. There is of course one sticking point, which is the leadership of the shadow executive. The hon. Member for Oldham West and Royton raised that issue, and I will come to it in a second. I am pleased to say that, on almost every other concern they have, the Government have shown them that we are willing to work with them—as, indeed, is the county council, which also deserves credit for its constructive attitude. I remain positive and optimistic that we can all come together, and that the structural change orders, when finalised, will command broad support from all concerned.
That brings me to the question of leadership. It was alleged that the Government are imposing top-down leadership on the new body. It was said that that is not good for localism and is something that the district councils are concerned about. The hon. Member for Oldham West and Royton asked specifically about precedent. I am pleased to tell him that there are considerable precedents for central Government specifying the leader of a shadow executive or an implementation executive in such situations. He may be keen to know that in the last wave of large unitarisations—carried out by the Labour Government in 2009, in Cornwall, Durham, Northumberland, Shropshire and Wiltshire—the Government specified a particular leader for the shadow or implementation executive in all cases. That was also the case in Bedfordshire and Cheshire. I hope that he feels that there is suitable precedent in that regard, at least from his own party.
We are going one better than that, because we believe in localism. From day one, the shadow executive will have the ability to elect its own leader or change the leader that has been appointed, but it will start with an appointed leader who is named. Thereafter, we are specifically discussing that kind of issue with the district councils. I hope that the hon. Member for Oldham West and Royton is reassured that that outcome respects localism and local choice.
I turn to the specific questions about process and the suggestion that the right papers have not been laid, which is not at all the case. As I outlined, we are discussing the regulations that enable the process to take place. The orders that have been mentioned will be the subject of a full parliamentary debate, such as this one, when they have been finalised after discussions with the district councils. There is no question of Parliament being deprived of the opportunity to scrutinise and debate those orders. I look forward to the contributions of Opposition Members and Members on this side of the Committee who have expressed an interest in those orders when we return for that fixture, hopefully in a few weeks or months.
There is no legal requirement for the structural change orders to be laid at the same time as the regulations. That has been possible in the past but, in this case it was not, as the orders are still being worked on with the district councils. That said, a draft of the orders is very much in development and has been shared with all the district councils as it is being worked on and finalised.
On the suggestion that we did not have the right consent to lay the orders, I am pleased to tell the Committee that we received subsequent and unambiguous consent from Buckinghamshire County Council. If there was any suggestion that its original consent was conditional, I would be more than happy to place a copy of that letter in the House of Commons Library, if that will please hon. Members. I assure them that all suitable consents for the regulations have been sought.
Dame Cheryl Gillan
I have two things to say. First, I read a direct quote, as I understand it, from a letter from the Secretary of State that said that that consent is on the basis of his decision on the draft structural changes order. So that is a strange thing for the Minister to say, when that was set out in a letter—I do not have the date it was sent. Certainly, that is how I was advised by my district council.
Secondly, I hope that we will resolve this and get all our councils working together and pulling in one direction, but there needs to be some meeting of minds and joint working. This morning the county council put out a press release, announcing unilaterally its members of the shadow authority, rather than working with the district councils and announcing that jointly, which is not a strong indication that it will work with the district councils. I hope that jumping the gun and doing things unilaterally will become things of the past. If elected representatives would like the new authority to work positively, they should do things together, not separately or individually—that is a red rag to a bull.
The Minister knows that it has been an uncomfortable time in Buckinghamshire for many reasons, and we would like to see that healed. I am sorry that my colleagues are not here to speak up on such matters from their perspective, but I hope that I have put forward the case of Chiltern District Council and the other district councils that are having problems with the way this is moving forward. I urge him to try to find a speedy solution.
Rishi Sunak
That is a perfect place to conclude. I completely agree with my right hon. Friend. It is time for a fresh start for Buckinghamshire. It is time for people to forget about what has happened in the past, leave aside the tags of district and county, and come together to work for the benefit of residents. I hope that I can work collectively with my right hon. Friend, all hon. Members who are interested in the area and all local government agents in Buckinghamshire, to ensure that we foster that new sense of purpose and of new beginnings. Based on my experience in meetings, I remain positive and optimistic that that is happening. Of course these things are difficult, but we are moving through them positively. I remain confident that, before too long, we will have a happy resolution to all outstanding matters, and that the people of Buckinghamshire can look forward to a bright future.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Buckinghamshire (Structural Changes) (Modification of the Local Government and Public Involvement in Health Act 2007) Regulations 2019.
Draft Recognition of Professional Qualifications (Amendment Etc.) (EU Exit) Regulations 2018
(5 years, 9 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 (Richard Harrington)
I beg to move,
That the Committee has considered the draft Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018.
Before your elevation, Sir Gary, I used to say that it was an honour to serve under your chairmanship; now, I can say that it is an extreme honour.
The purpose of the regulations is to ensure that, in the event of the UK exiting the European Union without a withdrawal agreement, the system for the recognition of European economic area and Swiss professional qualifications in the UK, for the purpose of access to regulated professions, continues to function effectively, and that existing recognition decisions for EEA and Swiss professionals remain valid.
The effect is to create a system that retains the best aspects of the current system while providing regulators with more freedom to rigorously check the standard of qualifications prior to granting access to a profession. The regulations will provide certainty to individuals with recognised EU professional qualifications already working in the UK, and the businesses and public sector organisations employing them. For example, that includes approximately 32,000 secondary school teachers who have had their qualification recognised in the UK in the 10 years from 2008 to the end of 2017. Furthermore, this statutory instrument will ensure that the future supply of professionals into the UK in certain key sectors can be maintained. It makes changes to existing regulations using the powers conferred by section 8 of the European Union (Withdrawal) Act 2018.
Before I turn to the detail, I shall provide hon. Members with some relevant background on the 2005 EU directive, which sets out a reciprocal framework of rules for the recognition of professional qualifications across borders. It applies to EU member states, EEA and European Free Trade Association states, and Switzerland by virtue of being annexed to the EEA agreement and Swiss free movement of persons agreement.
The directive provides several routes for recognition of qualifications, including automatic and general systems for the purposes of establishment, and a mechanism for those who want to work on a temporary or occasional basis. The directive covers a large number and wide range of regulated professions, including teachers, lawyers, engineers, underwriters, analytical chemists and a plethora of others. It does not include, I believe, Members of Parliament, as that is not a recognised professional status—perfectly understandably, I might add.
The directive is implemented into UK law by a number of pieces of legislation including the European Union (Recognition of Professional Qualifications) Regulations 2015, the earlier European Communities (Recognition of Professional Qualifications) Regulations 2007 in respect of Switzerland, and a number of pieces of sector-specific legislation for certain professions.
Following our withdrawal from the EU, the directive will no longer apply to the UK and the domestic legislation implementing it would not operate effectively because it would place obligations on UK regulators that they would be unable to fulfil outside the EU, for example, the obligation on regulators under the directive to use the internal market information system—IMI—to process applications and exchange information. As the IMI is a European Commission service, the UK will no longer have access to it after leaving the EU and will not be able to process applications, even unilaterally, using the service. The regulations are therefore necessary to ensure that the domestic legislation underpinning the recognition system operates properly.
Let me set out the effect of the draft regulations in more detail. First, they will protect recognition decisions made before EU exit and will allow applications for recognition made before exit to be concluded after exit under the pre-exit rules, as far as possible. Secondly, they will enable professionals who have started offering services on a temporary or occasional basis before EU exit to complete this service provision. Thirdly, they will enable qualifications to be recognised in the future. The changes that we are making will allow us to retain a version of the general system for recognition, under which UK regulators will be required to recognise EEA and Swiss qualifications of an equivalent standard to UK qualifications in scope, content and level. They will provide certainty to professionals who are already working and living here and will ensure continuity and stability for UK businesses and public services.
Some things will change under the draft regulations, however. First, we are amending the scope of the existing regulations so that the basis of recognition will be determined not by the nationality of the applicant but by where the qualification was obtained, since it will no longer be appropriate to give preferential treatment to EEA and Swiss nationals once the UK is no longer part of the European Union. Secondly, our regulators will not be obliged to offer compensation measures and partial access to professions in circumstances in which EEA and Swiss qualifications are not deemed equivalent to UK qualifications. Thirdly, we are removing the obligation for UK regulators to offer EEA and Swiss professionals a mechanism for providing services on a temporary or occasional basis.
Finally, farriers and certain healthcare professionals, such as physiotherapists, will no longer be in the scope of the amended 2015 regulations; they will be covered instead by related sector-specific legislation. The draft regulations and the amended 2015 regulations do not apply to nurses, midwives, doctors, dentists, pharmacists, architects and veterinary surgeons, who are entitled to automatic recognition on the basis that their qualification meets the EU’s minimum training conditions. The system for the recognition of qualifications in those professions is currently governed by legislation for which other Departments are responsible, and the relevant Ministers are laying their own no-deal statutory instruments to amend legislation accordingly. The European Qualifications (Health and Social Care Professions) (Amendment etc.) (EU Exit) Regulations 2018 were considered in a Delegated Legislation Committee last week, for example.
Nigel Mills (Amber Valley) (Con)
I should declare that I am a qualified chartered accountant and my wife is a pharmacist, so we may both be within the regulated professions.
How reciprocal a process does the Minister envisage? He mentioned that in some professions the UK regulator will have to accept that an overseas qualification is equivalent to a UK qualification. Is it possible that a perverse situation could arise in which we think a Cypriot qualification is okay for practising in the UK, but Cyprus does not agree that a UK qualification is sufficient for practising in Cyprus? Will he therefore encourage regulators to look at whether it works both ways? If we do not get reciprocal access to other markets, perhaps we should not be quite so generous in recognising their qualifications.
The Chair
If the Minister would prefer to reserve his answers to hon. Members’ questions until after the Opposition spokesperson’s speech, he is free to do so, but it is entirely up to him.
Richard Harrington
I am happy to do that, Sir Gary; I think it is probably best.
The draft regulations are vital to maintaining the operability of the framework for recognition of professional qualifications and providing certainty to businesses and professionals. I am pleased that my hon. Friend the Member for Amber Valley is a chartered accountant, not a farrier or a member of any of the other professions outwith the regulations’ scope.
The impact of the draft regulations on businesses and the public sector will be minimal. To answer my hon. Friend’s question, at least in broad terms, we seek to ensure continuity where it makes sense to do so, in order that those who hold European qualifications can continue to come to the UK when they meet our standards and vice versa. Regulators will not need to make significant changes to their current systems. If they wish to do so and have the appropriate powers, they can choose to continue to offer mechanisms for compensation measures, partial access and temporary and occasional service provision; we are merely removing the obligation for them to do so.
I very much look forward to hearing what hon. Members have to say about the proposed changes.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Gary. I will not attempt to out-do the Minister, who is famous throughout the House for his courtesy and compliments, but it is a real honour to be in this Committee.
I am less happy about the fact that we are discussing a statutory instrument that would make provision for the regulatory framework after Brexit in the event that we crash out without a deal. On the many occasions that we have had these discussions so far, my Labour colleagues and I have spelled out our objections to this Government’s approach to secondary legislation. Many of my shadow ministerial colleagues have made clear that the volume and flow of European Union exit secondary legislation is deeply concerning for accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are being taken. However, establishing a regulatory framework, for example, inevitably involves matters of judgment and raises questions about resourcing and capacity.
Secondary legislation ought to be used purely for technical, non-partisan, non-controversial changes, because of the limited accountability it allows. Instead, this Government continue to push through contentious legislation with high policy content via this vehicle. As legislators, we have to get it right. These draft regulations could represent real and substantive changes to the statute book. As such, they need proper, in-depth scrutiny. In that light, the Opposition put on record our deepest concerns that the process regarding these draft regulations is not as accessible, transparent or well scrutinised as it should be.
This statutory instrument deals with what would happen in the event of a no-deal Brexit. Labour believes a no-deal Brexit would risk huge damage to our economy, jobs and living standards. The vote last week shows that a majority in Parliament agree. Labour has called on the Government to take no deal off the table. I welcome the regulations’ transitional provisions to ensure certainty for individuals who have already had their qualifications recognised and for those who have already submitted an application. The General Medical Council said:
“this SI provides us with the necessary transitional arrangements to avoid any legal vacuum for applications made or actions begun but not yet completed by 29 March 2019, thus providing legal certainty for both regulators and professionals during this time.”
As the Minister set out, the regulations amend the European Union (Recognition of Professional Qualifications) Regulations 2015, which currently apply only to EEA and Swiss nationals. After the UK leaves the EU, it will no longer be appropriate to retain preferential treatment for EEA and Swiss nationals, so the SI means that individuals from third countries will be treated the same as those from the EEA and Switzerland when recognising professional qualifications. It also makes the primary consideration the country where the qualification was obtained, not nationality; the amended regulations will apply to anyone who holds an EEA or Swiss qualification and will no longer apply to third-country qualifications held by EEA or Swiss nationals.
The 2005 directive, which the Minister referred to, is a central component of freedom of movement as it allows EEA and Swiss nationals to have their professional qualifications recognised in other EEA states and Switzerland, allowing professionals to work abroad. Qualifications including chartered certified accountant, chartered engineer, and chartered surveyor are all subject to a system that requires regulators to recognise qualifications if they are considered equivalent to the same or similar UK qualifications. If they are not, the regulator must offer compensation measures or partial access if feasible. The draft regulations remove those obligations, allowing regulators to decide for themselves the application process, whether to grant access for equivalent qualifications and whether to put in place any compensation measures.
I have been in contact with various professional associations, including the General Medical Council, the Law Society, the Institute of Chartered Accountants in England and Wales and the Engineering Council. I am pleased to report that the Government have been in consultation with them, too. The Engineering Council welcomed the draft regulations and said that
“taken as a whole, these provisions would allow the UK to maintain the flow of competent engineering professionals who wish to be recognised in the UK while providing realistic safeguards.”
Those associations broadly support these changes, although some flagged potential issues, which I will turn to in a moment.
First, I will make what may be a declaration of interest. Before I came to the House, I was a professional. I have a professional qualification as a chartered electrical engineer. In that capacity, I worked all over the world, including in the European Union but also in the United States, Nigeria and other countries. Engineers, as well as chemists, accountants, lawyers and other professionals, are often highly mobile. Being able to work abroad not only allows them to develop their careers and have exciting opportunities but benefits the UK when they return, bringing back skills, knowledge and networks. There are many British professionals—lawyers who advise clients in Brussels on European Union law or work on global investigations, for example—whose job involves criss-crossing the channel.
Although what regulators in other countries decide to do is beyond the scope of the draft regulations, giving regulators freedom to choose the regulation process and which qualifications are equivalent may lead to accusations of unfairness or to European regulators refusing to recognise British professional qualifications in retaliation. The Institute of Chartered Accountants in England and Wales warned me:
“Elements of the SI are open to interpretation. A UK regulator could refuse an EEA applicant by saying the EEA qualification is not equivalent in some way. There is a chance that EU members states will notice this and potentially do the same in their provisions for considering UK nationals/UK qualification holders.”
What discussions has the Minister had with EEA and Swiss regulators about the recognition of UK professional qualifications?
The UK benefits from having access to a wide pool of professionals from Europe and beyond, so I welcome the fact that the draft regulations would open up access to third-country professionals. Several British industries rely on access to professionals from Europe and across the world, and we must avoid having a shortage after we leave the European Union. The draft regulations give individual regulators the power to introduce their own application processes. It is vital that those processes do not become too difficult or expensive and leave us with a deficit of highly skilled workers.
If regulators are unable to secure co-operation with EEA and Swiss regulators, responsibility for obtaining relevant documents may fall to applicants. That would put an additional burden on applicants and may prolong and complicate the application process, potentially dissuading talented individuals with the skills we need from coming to work in the UK. What discussions has the Minister had with regulators about the ease of future recognition processes for applicants and the protection of certain professions, such as engineer, that currently are not protected in EU law but are protected in certain European countries? I do not advocate that; I just wonder whether he has considered it.
As the Minister mentioned, once we leave the EU we will lose access to the internal market information system—the IMI—and the alert mechanism, which enables regulators to exchange information about applications and qualifications, and notify other states of professional or criminal sanctions and of professionals whose activities have been restricted or prohibited. This statutory instrument encourages regulators to communicate voluntarily with EEA and Swiss regulators. Regulators will have to request documents confirming the applicant’s fitness to practise and professional standing. It is vital that good co-operation is secured among regulators so UK regulators have full access to all the information they need to determine whether a person is allowed to work in sensitive positions—for example, as a solicitor or accountant.
What discussions has the Minister had with EEA and Swiss regulators about their willingness to co-operate with UK regulators on the sharing of information and documents? Finally, what discussions has he had with EEA and Swiss regulators about their willingness to co-operate with UK regulators to notify them of an individual’s professional or criminal sanctions?
Dr Philippa Whitford (Central Ayrshire) (SNP)
I declare an interest: I am a breast cancer surgeon and my husband is a GP. Although this statutory instrument is not focused on health and health-related professions, a lot of the issues are similar. The benefits that we are talking about all evolved to allow freedom of movement. The problem is that trying to hang on to some of them as we—sadly—celebrate the loss of freedom of movement is quite difficult.
The hon. Gentleman opposite—I apologise; I do not know his constituency, and I have lost my glasses so I cannot even look it up—talked about reciprocity. That is what we have had; people have been able to move to the EU, whether they are in the medical profession or one of the other professions, and EU citizens have similarly been able to come here.
In fact, we have a great need for people to come here. We have workforce shortages in many professions, including medicine, engineering and other STEM areas. We therefore do not want barriers. The burden may fall on individuals, because regulators will find it harder to recognise qualifications, to prove fitness to practise and to prove that someone has no sanction outstanding. The danger is that people who are mobile in their profession will simply choose to go somewhere else, because the workforce shortages are Europe-wide.
I welcome the fact that those who are already here will not face any loss of their qualification, that for those who have already applied, the process will go on to complete, and that those who come here on a transitory or occasional basis have a year in which they can still continue, but what will we do afterwards? In many professions and industries, people come for quite short periods of time to work in the UK, and vice versa. The danger is that we will make it difficult for people at the top end of the medical profession, the oil industry and the construction industry.
My biggest concern is about the loss of the IMI, which will make the processing more difficult, and of the alert mechanism. From a medical point of view, the alert mechanism has been critical, but there are other professions in which it is important to know that someone has sanctions against them before they are recognised. We are losing those benefits of being in Europe. I echo the comments of the hon. Member for Newcastle upon Tyne Central: we are having to rush this because of the threat of leaving the EU without any kind of deal. I abhor that. That is not how it should be done, and the Government should take it off the table.
In Scotland, we need people in general, and we certainly need people from the professions. Anything that makes it harder for our industries or public services to recruit and retain people will make life more difficult.
Nigel Mills (Amber Valley) (Con)
I have a few questions for the Minister on some of the practicalities. I welcome the statutory instrument and think it eminently sensible, but even those of us who have more concerns about free movement than the hon. Member for Central Ayrshire accept that we need skilled people to come here, and if they can meet whatever immigration rules we put in place we should enable that and not try to make it harder. We want it to be reciprocal, so that people who have trained here and have good qualifications have the chance to work abroad if that is their desire.
My first question is: if we end up with a clean Brexit at the end of March—I know the Minister is not totally keen on that as an idea—what happens to some of those qualifications and their recognition at that point? Do we expect regulators to have gone through their assessment and published which EEA qualifications meet the requirements in the UK by 29 March, or will there be a period during which we can assume that whatever has been happening until that point will continue, so that if someone wants to come here on 30 March but has not already made an application their qualification will still be recognised, at least for a run-on period? In previous Delegated Legislation Committees we have been told that we will effectively honour the two-year transition period. Is that the case here as well?
My second questions is: what happens when we have different bodies doing the regulatory function in different parts of the UK? I mentioned that I am a chartered accountant. The Institute of Chartered Accountants in England and Wales does England and Wales and there is a Scottish institute that does Scotland. Might we get a perverse position in which we would recognise a Maltese accounting qualification in Scotland and not in England and Wales? Could someone go and work in Edinburgh but not come to work in London? That does not seem to be a sensible situation. Will there be a requirement for the regulators to work together and have a joint approach?
My third question is, are there separate provisions for Irish qualifications? Irish nationals will still have much more generous rights to come and work in the UK, without a visa or permission, so will we have a more blanket recognition of Irish qualifications, which are generally quite similar to ours, or will they be treated in the same way as any other EEA qualification?
Finally, are we still allowed to impose language requirements for certain sensitive professions? I know we are not dealing with medical ones here. Regulation 41 seems to suggest that, so can the Minister confirm that if someone is adequately qualified but does not have adequate English we perhaps do not have to let them come here and start working straightaway?
Richard Harrington
There is quite a bit to be going on with; I shall do my best.
First, I must politely not accept the shadow Minister’s view that this is the wrong vehicle for the process. I perceive it as necessary; there are many SIs like it. I accept the hon. Lady’s fundamental point, but on other Committees we have discussed the subject and deem this to be the only available vehicle to achieve our objective which, as she and other speakers mentioned, is to have as much continuity as possible, given that we are leaving the European Union.
I agree entirely with what the shadow Minister said about a hard Brexit—crashing out—causing huge damage to the economy and to living standards, and I hope that she and her colleagues will consider that and vote for the Prime Minister’s deal when it comes back to the House, because most of it is in the areas that she, I and others have talked about. I do not accept the view of my hon. Friend the Member for Amber Valley that that would be a clean Brexit. I think it would be the dirtiest of Brexits. I am in favour of a clean one: a sensible transition period and then a sensible arrangement, so that for most of the business we do it is business as usual. That is what I call a clean Brexit. On the valid point my hon. Friend made about reciprocal rights, we are unilaterally recognising EEA and Swiss qualifications to mitigate the immediate impact of a no-deal exit, because it ensures the very continuity that anyone would want.
The shadow Minister made some good points about how much this country has benefited from people coming not just from the European Union but from all over the world, and vice versa—many people go to Switzerland and other countries to work, in the way that they should. What we have suggested at least means that we will have a system in place on exit day that recognises professional qualifications and that retains the essential parts of the current situation.
On meetings with the regulators about future recognition processes, I have not met the regulators—I do not want to give the impression that I have—but my officials have met them regularly. We reached the conclusion, as the hon. Member for Newcastle upon Tyne Central said, that on the whole, they support the changes. None of them anticipate extensive future burdens on applicants, which would be a very bad part of the system if they were to happen.
That also applies to our engagement with the devolved Administrations through regular meetings. The Department has had technical discussions about the proposed amendments to the regulations and how the policy approach and proposed amendments could have an impact on service provision in the devolved nations. I would not like any Committee member to think that that had been forgotten about or that we were just telling Edinburgh, or anywhere else for that matter, “This is what we are doing.” I hope that that has been fed back to the hon. Member for Central Ayrshire, who has excellent connections with the Scottish Government. We have not picked up anything adverse and I am sure she would be the first to bring something to our attention.
On the point about our professionals not automatically being able to work in the EU or EEA afterwards, because obviously we are giving unilateral rights, the European Commission has previously published guidance on that. Decisions made by another EU member state before exit day about the recognition of our professionals will not be affected by our withdrawal from the EU, but the Commission has advised holders of UK qualifications living in the EU to obtain recognition in an EU27 member state before exit. The Commission will ask member states to consider pending applications made by UK nationals before exit day as if we were still a member state.
In a no-deal scenario, the recognition of qualifications will be assessed under host member state rules. In that scenario, after exit day, our nationals will not be able to provide temporary and occasional professional services as they previously could under the directive, but that will be subject to their host members state’s laws and regulatory frameworks.
Chi Onwurah
Just to clarify, given that British citizens living in the European Union will be required to regularise their professional qualifications, does the Minister envisage that there could be circumstances in which they would not be able to continue working without doing so?
Richard Harrington
I envisage that there could be those circumstances, depending on the individual EU member state, as I explained, but I have every reason to believe that there will not be. The only way that that could not happen is for there to be no crashing out and for there to be a proper arrangement, which I am sure everybody wants to be the case. The hon. Lady has made valid point; I would not say it was a ridiculous point.
Dr Whitford
Have British citizens been given the advice that they should apply to have their UK qualification recognised before the end of March to ensure that they do not run into trouble?
Richard Harrington
I am not sure of the answer to that, so I will drop the hon. Lady a note about it tomorrow, if that is acceptable. If she wishes to discuss it further, I would be happy to do so.
Chi Onwurah
It would be desirable if the Minister could ask his officials to look at the potential for those circumstances and the two or three areas that would need to follow, which would be to identify where UK citizens working in the European Union might be and to alert them to that potential, and to do some kind of impact assessment—or at least to write to me to say whether he considers that that needs to be done.
Richard Harrington
An off-the-cuff response—I know one should not give off-the-cuff responses—would be that given the current European Union regulations, and given that there is not a registration procedure at the moment, I do not know how we would know which UK nationals were working abroad. However, that is just an off-the-cuff answer, and the hon. Lady is probably going to tell me that I am completely wrong.
Chi Onwurah
I would never put it quite like that. What I would say is that my concern is not to identify the particular individuals, but the professions and the circumstances in which this situation might occur.
Richard Harrington
I apologise for my misunderstanding. I understand exactly what the hon. Lady is saying, and I will happily clarify that issue for her in the next day or so, if that is acceptable.
Dr Whitford
I totally understand that the whole point of freedom of movement is that we have no idea who is here and who is in Europe, but I suggest that when taking this issue forward, the Minister might consider publicity, whether through social media or alerting British consulates and embassies in the host countries. With so little time to go, it is really important that people are given warning.
Richard Harrington
That is a sensible suggestion. However, all of this information was in the technical notices that were distributed, I think, in October last year, although one might say that people do not read them. There was a lot of information in those notices, but I will look into how we can make sure that there is an easily acceptable and consumer-friendly way of getting that information. I accept that technical notices are somewhat technical, and might be quite dry.
Nick Smith
Does the Minister know, through the various professional organisations that his officials may have been in touch with, how many UK citizens are working as professionals in the European Union at the moment whose role may be affected if we crash out of the EU?
Richard Harrington
I do not know whether my officials have that information, but I will communicate with the hon. Gentleman directly. I must say that he and I are probably quite unique on this Committee in not explaining that we ourselves have professional qualifications. I am certainly in that position, and I might be doing the shadow Whip a disservice, but I think he is in the same boat as me. I have learned a lot about professional services in the course of this SI and others, but I cannot answer the hon. Gentleman’s question. I will make sure that it is answered in the next couple of days.
I have done my best to answer the questions I can, and hon. Members know that I will be very approachable afterwards if they wish to take up some of these issues. With that in mind, I beg the Committee to accept this SI.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018.
Westminster Hall
(5 years, 9 months ago)
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Leaving the European Union
(5 years, 9 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Paul Scully (Sutton and Cheam) (Con)
I beg to move,
That this House has considered e-petition 224908 relating to leaving the European Union.
It is a pleasure to serve under your chairmanship, Mr Hanson. This is certainly not the first petition that relates to leaving the European Union; it is not even the first this month, and nor is this the first debate on such a petition that I have led.
Paul Scully
Exactly: we return to it. I will read the petition, entitled “Brexit re article 50 it must not be suspended/stopped under any circumstances”, into Hansard so that it can have its full say:
“The full details are well known to everyone the media has covered it fully, the British people MUST be given the Brexit they voted for anything else is not acceptable to the British public ARTICLE 50 must not under any circumstances be hindered/suspended/stopped for any reason whatsoever the time is here to take action as there has been excessive feet dragging/delaying tactics by those opposed to Brexit.”
The petition ran for six months and received 116,470 signatures.
Obviously this issue continues to exercise members of the public, just as it exercises Members of this House, and it will continue to do so. In recent debates, we have seen that passions run high and that there are different opinions in the House. Similarly, I am sure, colleagues’ inboxes will reflect the number of people saying a variety of things. Although I am a London MP and my situation will be different from that of MPs for other parts of the country, the number of my constituents who want to have a second referendum or stop Brexit entirely is probably equal to the number of people who do not want to go through the process and who want to leave tomorrow with no deal. A whole load of people are in the middle, including myself. I voted leave and campaigned for Vote Leave.
I was happy to support the Prime Minister’s original deal because it did most of the things that I required, although clearly not all of them. It allowed us to leave the EU’s political institutions, to stop paying the huge membership fees to the EU each year, to end freedom of movement—not so we can stop immigration, but so we can have a controlled, better managed immigration system—and to start the process of striking trade deals with countries around the world, and even to ratify them The deal was imperfect because we would not have been able to get started on putting those deals into place until after the implementation period and we had that future relationship agreed with the EU.
The main sticking point that seemed to trouble a number of colleagues was the Irish backstop. Other issues concern some people but, as we saw in recent votes, the Irish backstop seems to be the main sticking point. Having questioned the Prime Minister, Ministers and civil servants, I concluded that I was a bit more relaxed about the backstop than other Members were, because I believe it is not comfortable for the EU to have it, any more than it is for the UK. I do not buy the line that the EU would want to keep us in the backstop forever, through a pseudo-permanent customs union, because if the backstop were ever to come into force, Northern Ireland would suddenly become the most competitive region of the European Union. It would have full access to both the UK market and the EU single market. Economically, that would be very uncomfortable for the EU because it would allow us to cherry-pick. The EU said, right at the beginning of the negotiations, that we would not be able to cherry-pick and break down any of the pillars, but actually the backstop would allow us to do it, because it would allow us to have access to the single market and customs union, without freedom of movement. Imagine a member state such as Hungary allowing that arrangement to stand for any length of time.
The backstop would allow us to have access to the single market and customs union without paying the membership fees. Imagine France, who would bankroll us, allowing that to stand for any length of time. Looking at new trade deals that the EU would want to happen, those countries looking in would say, “Well, hold on a sec. What is happening with the UK?” It would suddenly become Europe’s backstop, because those countries would not be sure about the relationship they had with the UK for any length of time.
That was my thought process, but unfortunately not enough colleagues agreed. The one good thing about that evening’s vote was that it did not take me long to vote and get through the Lobby—there were not enough colleagues with me. Clearly, the House has had its say. Following the second set of votes, including on the so-called Brady amendment, I am pleased that we now have a clear signal to send the Prime Minister back and say, “Okay, fine. I know we spent a long time negotiating this, but if you”—the EU—“just shift a little bit we can get this done.”
Wera Hobhouse (Bath) (LD)
Why did the hon. Gentleman’s leader—the Prime Minister—say for months and months that there will be no deal that does not include a backstop? Why would she have said that, and was she wrong?
Paul Scully
At the time, she was not wrong. We will have to wait and see whether there is a backstop or an amended backstop, which is the whole point of negotiation. As we speak, Members are meeting to discuss alternative arrangements. The key thing about the amendment tabled by my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) is that it seeks discussion of alternative arrangements to the Irish backstop, which might include the ability to leave unilaterally, a time limit or sunset clause, or what has become known as the Malthouse compromise, proposed by my hon. Friend the Member for North West Hampshire (Kit Malthouse).
All those sorts of thing need to be discussed over the next couple of days, so that we can go to Brussels with a clear ask. However, as I was saying, the amendment stating that we need to investigate alternative arrangements to the Irish backstop, and that the chances are that it would then go through, passed the House and has now given the Prime Minister a strong hand to be able to say to Brussels, “If we can get this right, we can do what I hope both sides want: enable the UK to leave in an orderly fashion as possible.” It would be of benefit to the UK to respect the referendum and the will of the 17.4 million people who voted leave while taking on board as many people from the UK who did not vote leave but who acknowledge the result of the referendum, and to ensure that the EU can continue to trade seamlessly with the UK. We can discuss ad infinitum the importance of UK markets to the EU, just as many EU markets are important to the UK. All these things are important.
The vast majority of us who campaigned to leave simply want to be friendly neighbours with the EU rather than its awkward tenants. This is not just a power struggle. The vast majority of people, including me—my main motivation was to leave the EU’s political institutions—wanted to tell Brussels, “You are going in a direction that we do not want to go as a country. Let’s step aside and allow you to develop in the way you want in terms of an ever-closer political union, but let us go in our own direction. We still need to co-operate and collaborate.”
That is why a deal is so important. We can talk about whether a no-deal scenario is a World Trade Organisation scenario, but I am sure the shadow Minister will make the same point that he made last time. He is correct to say that a no-deal scenario covers just trade, which is the whole point of WTO. It does not cover security, education, medical research and so on, which is why a sensible, collaborative deal would be so much better for this country and would allow us to continue relatively seamlessly in the coming months.
Given that the Prime Minister’s hand has been strengthened, I believe that if we develop a clear ask over the next few days, Brussels will give us a bit of flexibility. We are not saying to Brussels, “We’re going to go toe to toe with you.” I still believe that, with a reasonable amount of flexibility, we can get this deal done within the timeframe and will not need to extend article 50.
It would be a democratic travesty were we to follow the line of some of the amendments proposed recently and extend article 50 for months and months. That would let people down. If there is a deal on the table and we just need to dot a couple of i’s and cross a few t’s, I could see it being extended for a week or two, but some people are saying that it should be extended for nine months.
Mrs Sheryll Murray (South East Cornwall) (Con)
It has already been two and a half years since the people instructed us to leave. Does my hon. Friend agree that extending article 50 any further would be treating them with contempt and would be a slap in the face for democracy? People expect us to get on with the job now.
Paul Scully
I absolutely agree. All I am saying is that if we had a deal and just needed to dot the i’s and cross the t’s—if there were a technical reason to extend article 50 for just a week or two—it would be churlish not to do that. I and a number of my hon. Friend’s constituents have taken this decision for 40 or 50 years, not for the short term, so let us get it right. I do not mind an extension of a few weeks, but my hon. Friend is absolutely right that it would be a travesty to say, “Let’s extend article 50 so we can start the discussion again. Let’s have a second referendum and extend the uncertainty and division that this country finds itself in.” People expect much more of us.
Wera Hobhouse
I always welcome people trying to come together to discuss things openly and honestly, and perhaps come to an agreement. I only regret that the other parties are not involved in this coming together; it seems to be something that is done just within the Conservative party. I am a member of the Brexit Committee, and the proposals that seem to be on the table, such as trusted trader schemes or equivalences, have been looked at over the past two and a half years. The Committee has listened to many experts who have ruled them out, and the European Union negotiators have done so, too. Why does the hon. Gentleman think that something that has not been agreed in the past two and a half years can suddenly be agreed with the European Union in the next two and a half days or the next week?
Paul Scully
There is a good reason why I believe it can happen: Michel Barnier himself said recently,
“My team and I have done a lot of work on virtual, decentralised controls, which will be useful in all hypotheses…Even in the absence of an agreement, we will do our utmost not to create a hard border in Ireland”.
If it is good enough to use decentralised border checks that do not require a hard border in a no-deal scenario, why is it not good enough to use them in a deal scenario? Michel Barnier is trying his best to use the existing processes to avoid putting in a hard border in the event of no deal. It will be the EU’s responsibility to do that, because the Government have said clearly that we will not put in a hard border, and so have the Irish Government. It will have to come from Brussels. The EU will be the final arbiter if it insists on a hard border. Michel Barnier is clearly saying that he will do everything he can, should we leave with no deal, to ensure that does not happen. Let us hope he can give us a bit of flexibility and does everything he can to make that happen if there were a deal. That would help us with so many other issues.
There is more to be done. We just require more flexibility, not wholesale change. When the former Prime Minister, David Cameron, went to the EU to negotiate ahead of the referendum, he did not get a lot to bring back; in my view, he did not ask for enough, but if he had got a bit more from the EU—if the EU had showed a bit more flexibility at that time—I believe that the referendum result would have been very different. We would almost certainly have voted to remain. I hope the EU will look back at that, reflect on it and say, “Let’s not make the same mistake again. Let’s not dig in our heels in at the end of the process.” As my hon. Friend the Member for South East Cornwall (Mrs Murray) says, this has taken two and a half years. We have come all this way, so let us not trip up at the last step.
The EU just needs to show flexibility. We are not asking for wholesale change. I know that, in all negotiations, people need to save face. There is always a dance at this point in negotiations. We will dance around a bit so the Taoiseach can appeal to his domestic audience; I know he has a difficult balance to strike. I am sure our Prime Minister wants to be able to say that she has delivered on the promise of the referendum, and all parties in this House will want to say that they have done their best for their constituents and their country. Germany, France, Belgium, Hungary, Spain and Greece—all the member states and the negotiating team in the middle of Brussels—all want to take the credit for it. Frankly, I do not care who takes the credit for it. Some of us have been working on this for 20 or 25 years. We just want to leave the EU now. If we all keep our heads and use the right language, I see no reason why we cannot do this within the timescale.
On the point that the hon. Member for Bath (Wera Hobhouse) made about collaboration in this place, people—the media, especially—often say that the Conservatives are arguing among themselves. There is a simple reason why there are often two Conservatives on panels. The Labour party leadership effectively wants a general election. I have made the point several times that if the Leader of the Opposition wrote a deal, gave it to the Prime Minister and had it presented back to him, he would vote against it because he wants a general election. There are many in his party who have a different view. The Lib Dems want a second referendum, and SNP Members have made the honest point that they do not want to leave. Fine—that is probably the most straightforward and honest point. I fundamentally disagree, but that that is nature of debate. Effectively, the Conservative party is the only party saying, “Yes, we want to leave, but how do we do that? Is it with a deal? What kind of deal is it? Or is it with no deal?” That is the vibrant—often tense—discussion that we are having within our party.
I will finish where I started: we must get together and keep our heads. Another reason why we need to keep no deal on the table is so that we have all the options. If Brussels thinks that the options are that we accept the deal or do not leave at all, it will obviously want to keep us in the EU. Imagine someone going to an estate agent and saying, “I don’t want to pay full price for the house. I want at least £20,000 discount, please.” If the estate agent looks over the person’s shoulder and sees their spouse measuring the curtains, that somewhat undermines their negotiating position. That is why keeping no deal on the table is really important. If we just have a bit of flexibility and allow people to pivot and reflect on the alternatives, I truly believe we can do what the petitioners want. We can get a decent deal that allows us to leave in as orderly fashion as possible within the article 50 timescale. We will not have to suspend article 50, and we can leave on 29 March.
Wera Hobhouse (Bath) (LD)
It is a real honour to serve under your chairship, Mr Hanson. You will not be surprised to hear that I am going to put forward the opposite view to that of the hon. Member for Sutton and Cheam (Paul Scully).
We are seven weeks away from Brexit and we have no agreement. There is no agreement in Parliament or, as I can see from my mailbox, among the people.
Brexit supporters, including the Prime Minister, say that 17.4 million people—a small majority—voted for it. So why do we not have an agreement? Why was the Prime Minister’s deal not voted through? If Brexit means Brexit, if 17.4 million people voted for it, and if the Government and the two main parties are committed to it, why are we still arguing? Why has everybody not voted for the Brexit deal that the Prime Minister brought to Parliament? It is because the fundamental flaw of the referendum was that “Brexit” was not defined. Some who voted for it wanted or had no deal in mind; some wanted something like the Prime Minister’s deal. Some wanted to be a lot closer to the European Union—staying in the customs union, for example.
Wera Hobhouse
In a minute.
Brexit was not defined, so how many of the 17.4 million voted for the deal that is now on the table? How many voted for a no-deal Brexit? Six million? Eight million? Never as many as the 16 million who voted to stay in the European Union, which was a defined proposal.
Mrs Murray
I thank the hon. Lady for generously giving way. Does she accept that members of her party voted to have a referendum? Indeed, the former leader of the Liberal Democrats was the first person to say that he was going to give the British people a say on whether to remain in or leave the European Union. He did not say anything about there being different choices. Can she explain that, please?
Wera Hobhouse
I am a new Member of Parliament. Obviously, I followed the discussions about the referendum for many years. Yes, we are a party of democracy—I always believe that we should give people a say. Since the vote was so narrow and we are still arguing about what Brexit should look like and how we should leave the European Union, what is the problem with saying, “Now we have a defined Brexit proposal in the Prime Minister’s deal or we have a no-deal proposal, but we also still have the option of staying in the European Union”? That is the most democratic way of dealing with the issue.
I cannot for the life of me understand why more democracy should mean less democracy. Why can we not honestly put that to the people, now that we have so much more information about what leaving the European Union would actually mean? People can continue to vote for what they voted for in 2016. I do not mind that—I am just looking for some clarification.
Mrs Murray
Could the hon. Lady please confirm that, as far as she is concerned, the former leader of the Liberal Democrats had no intention of honouring the result of the referendum that he was the first to promise the British people?
Wera Hobhouse
I think I answered that question before. We—myself included—honour the referendum result in saying that Parliament cannot cancel Brexit: we had a referendum and we, as parliamentarians, cannot just stand here in Parliament and say, “Let’s not do Brexit.” That is why I believe that we need to put it back to the people. That is most democratic way of going about this. I cannot see a reason why putting something back to the people and letting them have the final say is less democratic; I believe that to be democracy in its full sense.
Damien Moore (Southport) (Con)
Does the hon. Lady agree that we have had two votes on Brexit? The first was the referendum and the second was the general election, in which 80% of votes cast were for parties that wanted us to leave the European Union.
Wera Hobhouse
I do not agree. In the 2017 general election, many other elements played their part. For the people, it was not clear what leaving the European Union would mean or what the Brexit deal on the table would be, and we knew nothing about the backstop. We now know what that all looks like.
I truly trust in people and I believe that when I put things in front of them, with the honest options on the table—outside the heat of the media and the competition of political parties—they will make good decisions. That is why, by the way, I am very much in favour of citizens’ assemblies. If we get to the point of extending article 50—I believe that we must because we are simply running out of time—we should precede that with several citizens’ assemblies where we put the options to focus groups and where people can discuss them honestly.
I have said time and again that I believe that people will make very good decisions. I trust in them and, if they confirm their former opinions—whether that is a no-deal Brexit or the Prime Minister’s Brexit—and there is a majority of more than 50% for a specific Brexit deal, I will accept it. That is a final say. We have always said that the people must have the final say and that we must give it to them.
Mrs Anne Main (St Albans) (Con)
I note that the hon. Lady said that the people should be asked whether they want a no-deal Brexit or the Prime Minister’s Brexit. She was very clear. I have heard other Liberal Democrats add another option. Has she left off her list a staying put option? Can she clarify? I hear both versions and I am absolutely not certain about what the Liberal Democrats are asking for. There could be an argument for asking about the two versions of Brexit, but there certainly is not one for putting the issue back to the people as a three-way referendum.
Wera Hobhouse
To clarify: absolutely. The ballot paper has to have the option to remain, because in the previous referendum, 48% voted for that. When I consult my mailbox, and when we consider polling, a majority—
Wera Hobhouse
I want to make progress. Now that we have defined Brexit options on the table, a majority of people—if we trust the polling—would vote to remain. How many people actually voted for a no-deal Brexit? Eight million people? Certainly not as many as would vote to stay in the European Union. How many people would vote for a no-deal Brexit or the Prime Minister’s Brexit? The fundamental flaw of the 2016 Brexit vote, as I insist on saying, was that “Brexit” was not defined.
In all honesty, if we leave and want to do Brexit properly, we have to give the final say to the people, because Parliament is divided. That is why we are here; I believe in Parliament. There is no majority for a no-deal Brexit, yet the people who write to me the most seem to be those who want us to leave without a deal. If we strip the numbers down, however, we see that they are a minority of 30% maybe—not an all-out majority. We need to clarify things with the British people. That is why we need an extension of article 50.
I understand that the European Union will agree to an extension if either a general election or a people’s vote is on the table. I hope that an extension of article 50 would give us and the British people time to properly discuss all the options. That would mean discussion in citizens’ assemblies—as proposed by the amendment tabled by the hon. Member for Walthamstow (Stella Creasy), which I supported—so that we can properly discuss the things on the table, rather than being drowned out by media hysteria and by political interests.
People visiting the Electoral Reform Society website will see that it held a citizens’ assembly in Manchester, post-Brexit, with mostly Brexiteer focus groups. The choice of that citizens’ assembly was for a very close relationship with the European Union—including single market and customs union membership—that I would call “Brexit in name only”. That is what people think we should do because, in the end, we do not want a Brexit that damages our economy or our security prospects. If people want a Brexit that truly serves their interests, they will come to the conclusion that the best deal is the one that we already have: membership of the European Union. But hey-ho! Let us put the choice to the people: a painless Brexit, a painful Brexit or a pointless Brexit.
I believe that people will come to the conclusion that the best deal is membership of the European Union and not the deal on the table. Let us ask the people again; let us have an extension of article 50; let us have proper grown-up discussions with members of the public in proper focus groups; and let us have a referendum and see what the people say. Let us ask for an extension of article 50, to which I think the European Union would agree.
Mrs Anne Main (St Albans) (Con)
I am pleased to be called to speak in this debate, Mr Hanson, because sometimes those in the main Chamber are so crowded that it is difficult to get in. This is wonderful—I am told we have hours, which is great—because we can really explore the options.
The important thing for me is to look at the petition. I listened with interest to the hon. Member for Bath (Wera Hobhouse), who spoke with great passion. The Liberal Democrats contested my seat hotly at the last election, making it a Brexit election, but to be fair, they have a fixed view: they do not want to leave the European Union. However, as the hon. Lady said, they offered a referendum and—this is on my wall as a poster—Sir Nick Clegg featured in a leaflet saying, “Only the Liberal Democrats offer you a true referendum, in or out.” I thought, “Fair enough, that’s a fair question.” Now, and this was confirmed by the hon. Lady—I wanted to check—the “in or out” talked about in that leaflet is not the referendum that the Liberal Democrats want to offer; the new referendum, if that were to be considered, would be a three-way choice, which would split the vote considerably.
Wera Hobhouse
A democracy is a place where things move and are dynamic. The hon. Lady is not being helpful if she keeps harking back to what was said in the past. We are where we are, and we are in a very difficult situation. Is it not important to look at the present, instead of always harking back to the past?
Mrs Main
I completely agree, but we have to learn from the past, which forms part of our future trajectory. All I am saying is that the in-out referendum that the House promised the British people is the only way to go. The three-way referendum now supported by the hon. Lady’s party and others would ask people to choose between what she would describe as a hard Brexit—a no-deal Brexit, perhaps—the Prime Minister’s Brexit, and staying in. That could not be countenanced as democratic.
As I understand it, the EU would have no truck—I do not blame it—with us wanting to kick the whole thing into the long grass during a long drawn-out process. My hon. Friend the Member for South East Cornwall (Mrs Murray) said that the British public would never forgive us; certainly they would never forgive us for trying to twist the arm of the EU, and saying, “Please can we extend article 50, so that we can offer a three-way referendum?”.
Sandy Martin (Ipswich) (Lab)
The hon. Lady says that the British people would never forgive us for asking them again, but would they ever forgive us for a serious economic collapse as a result of a no-deal Brexit?
Mrs Main
That is interesting. The other day in the main Chamber, I tried to intervene on the Leader of the Opposition many, many times. I wanted to know whether the policy of the Labour party is to offer another referendum. The economic collapse, I believe, is a much-hyped fear factor.
The British public had 40 years of trying out the European project, which is certainly not the Common Market that my late parents voted for. That was a vote for one thing. After 40 years of ever closer political integration, the British public were asked if they wanted to re-endorse that membership, or if they would like to say, “We’d like to leave.”
It is not as though we have not discussed the possibility of leaving, or our unhappiness with having treaties foisted on us. The British public have a lot of experience—the history that the hon. Member for Bath does not want to draw on—of looking at how they were treated, how they were talked to, and how they were being sucked into closer integration, which they were not happy with. As my hon. Friend the Member for Sutton and Cheam (Paul Scully), who opened the debate, said, that is what many people were unhappy with. The British public knew that they did not like it, so they decided that they wanted to leave and be an independent, self-governing and sovereign nation again. That is the argument that was made.
I campaigned to leave, and I made it very clear to my constituents that I was for leaving—I did not hide that, or take the easy option—although most of them voted to remain. I made it clear that I believed in leave, but that I was only one vote. Those members of the British public who were of voting age that first time around, however, had seen the direction of travel, which was towards ever closer integration, and they did not want to go there, so they decided get off that bus.
I do not like to talk of winning or losing, but the only way to describe a referendum is in those terms. The leave campaign won because there was more heart in the campaign to get back our sovereignty than there was in saying, “We know the EU’s not perfect, that it should change, that lots of you have had grumbles and complaints over the years, and that we keep trying to change things and it never gives us much—but I am sure it will at some point in the future.” That did not cut it.
Lilian Greenwood (Nottingham South) (Lab)
The hon. Lady makes the important point that people knew what deal we already had, but I take her back to the wording of the petition:
“the British people MUST be given the Brexit they voted for”.
Can she tell me what the Brexit that they voted for was?
Mrs Main
The convention is to answer an intervention before giving way again, and I would like to do that. I am sorry.
It was made clear that there would be no second asks—I remember hearing that several times during the campaign—and that if we left, we would take back control of our borders and so make our own immigration policies. I am quite relaxed about numbers, although some people are not, but leaving would mean a level playing field on immigration policy. Also, it was clear that we would deliver on the vote of the British people; Parliament would not tinker and water it down. The referendum was about bringing back a level of control to Parliament—eventually, not right this second—from the European Union. We have got caught up in the argument that that means going back to parliamentarians having control over the people, but the people voted to bring back control from Brussels to Parliament; it was very clear, and they expect us to deliver on that.
Lilian Greenwood
The hon. Lady’s answer to my intervention was not what I hoped for. Do not all of us in the House of Commons have different versions of what an acceptable Brexit deal would look like? Some advocate a close relationship with the single market and a customs union; some support the deal that the Prime Minister made; and many in her party say that that is not the Brexit that they voted for. Surely the British public are just as split, if not more so, than parliamentarians here in the Palace of Westminster. If we are to have the trust of the public, we have to present them with a deal and check whether that is the Brexit that they feel that they voted for.
Mrs Main
To me—unless someone would like to iterate a different view—it seems that the official opinion of the majority of Labour Members is that they support the view of the Liberal Democrats. They want what they describe as a people’s vote; some would call it a remoaner’s ask. There seems to be a growing chorus of, “It’s in the ‘too difficult’ box, so let’s put it back to the public.” If that happened, I would be the first to call for the best of three, particularly if the wording was not exactly the same as last time, and did not ask, “Do you wish to leave or stay?”. If the wording was different or three options were offered, I would say, “You’re not asking the same question.” To get to the nub of what the petition is about, the public are beginning to be fearful about whether we will honour and do what we said we would do.
I was at Prayers this morning—I am pleased that we have Prayers, because it concentrates the mind for a few moments—and one of the things that we are asked to do in Prayers is not be concerned with the desire to please. In this place, we can try desperately to please everyone, but the reality is that we cannot. We can, however, come to a settled opinion and try to do our best. The difficulty is that Members of Parliament overwhelmingly voted to remain, and are trying to deliver something that they do not really believe in. We cannot get away from the fact that that is a tension. But we have to deliver what we said we would deliver, and not just try to please, which would be the easy option.
Wera Hobhouse
The hon. Lady is generous in giving way. She will be pleased to know that I agree with her, and I go to Prayers, too. Irrespective of religion, I very much believe that it is important to discuss things honestly, accept our differences and come to a conclusion together. If we are delegates, we are just delivering what the people have said, but if we are not delegates, we are representatives. Is it not for us to make a decision according to our conscience and to what we believe is best for our country? That is exactly what we are all grappling with, including the Liberal Democrats. It does not help to denounce one another all the time and to call some people remoaners.
Mrs Main
The hon. Lady has made her speech and interventions; if she does not mind, I will leave it there and we will have to agree to differ.
My concern is that we may end up looking weak because we cannot get behind a deal by the Prime Minister. My hon. Friend the Member for Sutton and Cheam said that he could settle for the withdrawal agreement. When I went to see the Prime Minister before Christmas, I said, “I truly believe you are trying to do your very best on this.” Whatever anyone from any political party thinks, the Prime Minister has a very difficult job. Her tenacity is astonishing. I said, “At the moment, whether people believe in leave or remain, we have the absolute right to walk out the door, shut it behind us and say, ‘We will not put up with any more interference in our legislation from a group of countries.’ We can choose, but we will not be obliged.” We have the absolute right to do that, but I said we were like a load of nervous sheep in a pen.
I cannot hover around the idea of a backstop that 27 other countries may hold the key to. We are trying to get back sovereignty; we must not dilute that sovereignty by giving 27 other countries the whip hand over us. They have their own agendas. Each country would have a veto. It may well be that Gibraltar, or our fishing, comes up on the agenda. I agree with my hon. Friend the Member for Sutton and Cheam: I do not think the EU will want to keep us in the backstop, but I fear what they will exact to let us out.
Mrs Murray
My hon. Friend has been extremely generous in giving way. Does she agree that the myth that people did not know what they were voting for must be dispelled? Prime Minister David Cameron spent more than two years trying to negotiate a better deal for the UK by going around and speaking to the European Commission and all the other member states. He got a deal and put it in a leaflet that was delivered to every single home in the UK. We know that the majority of people—17.4 million—voted to reject that.
Mrs Main
My hon. Friend is absolutely right. At the time, I was very worried about whether there was some undue influence, whether we should have purdah and other things that were taxing our brains at that point. The European Union was advocated for by the leader of the Government at the time; a lot of big names tried to make the case for it, and a lot of money was associated with that. Even so, the British public had 40 years of knowing what they had, and they did not like it. People want to call them stupid or deluded—those are some of the things thrown at my constituents who voted to leave—but they were prepared to take the opportunity to leave.
There was a split decision, but did anyone ever think it would be more decisive than it was? It struck me how many people participated in the referendum—it was overwhelming. When I was out knocking on doors, people told me they had not voted for many a year, but they were going to vote. The referendum galvanised and engaged people in a way that we often struggle to. If we do not get on with this, the public will ask, “What is the point of taking part in any votes whatever? We got ourselves out the door for that special occasion; we were motivated.”
I do not know what motivated some people; they may have had different motivations, but they still wanted to leave the club. That is why they got out the door that morning in vast numbers and went to vote. This petition reflects a frustration; people think that we are cloth-eared in here and did not wake up to the sheer number of people who decided they had to vote to leave. This was a topic that had engaged them, if nothing else, for decades. No party, leaflets or knocking at their door had got them out, but this did. The former Prime Minister would not like to hear that some people did not bother to read his leaflet, but some people felt they had enough personal experience to make up their mind; the leaflet was not going to change that. They were glad of the opportunity of the vote.
I do not believe the European Union will want a “kick the can down the road” delay to article 50. I agree with my hon. Friend the Member for Sutton and Cheam: if it were for a few weeks, that might well be tolerated, so long as it was just to dot the i’s and cross the t’s. In that respect, I disagree with the petition, but I have sympathy for where it is going.
I could not vote for the withdrawal agreement, and 240 people felt the same way. When I went to see the Prime Minister after the big defeat, I said, “Will I want to pay £39 billion? No; it will stick in my craw, but it is a one-off. Do I want the European Court of Justice to have jurisdiction over us during the implementation period? No, but I can stand it. Can I lock us into a backstop? No.” I have gone through the debates, arguments and thought processes; that has to be fixed.
I agree with my hon. Friend the Member for Sutton and Cheam: Brussels said that it will not tell us what we want to hear, but I believe and hope that it will listen, now that things have been distilled down. I do not wish to be the teenager trashing the flat, as someone said; I wish us to have a good relationship. I do not want us to be rancorous. I hope the people who have signed this petition will accept that we have not ignored the fact that 17.4 million people, many of whom said they had not voted for a very long time, got out the door that day because this was the one thing they wanted delivered. It is up to us to deliver it.
David Hanson (in the Chair)
In the absence of any further Back-Bench contributions, I call the hon. Member for Glasgow North, who, with the two other Front-Bench speakers, has approximately two hours and 20 minutes to speak.
Patrick Grady (Glasgow North) (SNP)
It is a real pleasure to serve under your chairmanship, Mr Hanson, and a rare pleasure to be back in Westminster Hall. Before I was appointed Chief Whip for the SNP, I covered a lot of Brexit debates in here; in fact, we called it the Brexit Minister hall, because we discussed the subject so frequently. It is good to see that has not changed. I do not think I will speak for two hours, but as a Whip this is a rare opportunity for me to speak. As the hon. Member for St Albans (Mrs Main) said, the Chamber is usually so busy.
The petition is quite intriguing. It jumps out at me that article 50 must not “under any circumstances” be extended, whether for technical reasons, as the hon. Member for Sutton and Cheam (Paul Scully) said, or for a general election, a zombie apocalypse, alien invasion or any circumstances. Brexit must go ahead on 29 March. But that date is not some sort of geological fixture or part of the fundamental laws of physics. It is a date that was put in to a piece of legislation, largely as a sop to Back Benchers. The original European Union (Withdrawal) Bill talked simply of “exit day”, which would be defined by statutory instrument. I wonder if we might be in a much calmer place if the original clause had stood. People are becoming fixated on 29 March—at least that is what the people who signed the petition seem to think must happen.
I want to dwell on the point made by the hon. Member for Nottingham South (Lilian Greenwood). We hear that the British people must be given the Brexit they voted for and that anything else is not acceptable, but what is the Brexit they voted for? All the ballot paper said was, “to leave the European Union.” That might simply mean leaving the political institutions, as the hon. Member for Sutton and Cheam said and I suspect a lot of people thought. The hon. Member for St Albans said people had had 40 years of Europe and they did not like it. I have had slightly less than 40 years of European membership—only slightly less—and I have quite liked it.
Perhaps some of the people who voted to leave did not like the bogeyman that the European institutions had become. Perhaps they did not like the political institutions. Perhaps they did not like the political establishment that argued for remain, of which many of us in effect find ourselves a part. It is more difficult to make the case that they did not like their European health insurance cards, which allow them to access medical treatment wherever they go in Europe, that they did not like being able to travel visa-free across the European continent and take advantage of sunnier climates and cheaper holidays, that they did not like the medicines they get access to through the European Medicines Agency and that they did not like the safe regulation of nuclear materials.
Mrs Murray
May I give the hon. Gentleman the benefit of my experience? I voted to stay in the European Union when Labour held the referendum in 1975, but I voted to stay in a trading partnership, which is what it was sold as. Of course, this time I voted leave, and I know that a lot of my constituents, and probably a lot of his, feel the same way. As he said, he did not know anything other than the European Union, I thought he might like the benefit of my experience and age. Life did not end before 1972, when we were not members of the European Union.
Patrick Grady
I absolutely take that point. Of course, if we want to keep going back into history, the European Coal and Steel Community was founded in response to the second world war to link European economies, and peace has prevailed on this continent for longer than at any other time in the past several centuries largely as a result of closer European integration. The hon. Lady says the Common Market back then was very different from the European Union today, but rejoining the Common Market—or Common Market 2.0, which some Members are discussing—is not what the House is currently being asked to vote for. If anything, we are being asked to move further away from that.
Let us look again at what people voted for. They were told by the now former Foreign Secretary, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), that there would
“continue to be free trade, and access to the single market.”
The current Environment Secretary said we would be
“redefining the single market, not walking away from it.”
The current International Trade Secretary said in 2016:
“The free trade agreement that we will have to do with the European Union should be one of the easiest in human history.”
All that is collapsing in front of our eyes. Shortly, the business in the main Chamber will move on to a statement about Nissan in Sunderland and the consequences of our plunging off the cliff with a no-deal Brexit on 29 March.
Patrick Grady
Well, that is where its parent company is and where it currently has factories it can easily locate to. The point is that it is not choosing to stay here in the United Kingdom precisely because of all the uncertainty.
Patrick Grady
I take that point. Nevertheless, jobs are at risk and there is massive uncertainty, and it is in large part to do with the cliff edge that we face because of Brexit.
From the SNP’s point of view, three things should happen, two of which are related. One of the effects of extending article 50 would be to rule out a no-deal Brexit. As I said, 29 March was just picked and written on a bit of paper. Frankly, that is true of all the Brexit negotiations. All this comes down to people in a room being willing to talk to one another. It is not rocket science. It is not changing the fundamental laws of physics. It is about there being political will among the negotiating parties to speak to each other and reach an agreement.
Of course, we are still in the European Union. We will continue to be members until such time as something called Brexit does or does not take effect. The easiest option—the simplest, safest and best option—is to continue on those terms. As the hon. Member for Bath (Wera Hobhouse) said, by definition, the best possible relationship with the European Union is membership; otherwise, nobody would want to be a member. Everybody would want the better deal. Everybody would want those terms and conditions. The point of leaving has to be that somehow we will have more benefits because of our relationships with the rest of the world, but there is absolutely no evidence of that. All the trade treaties we were told we would have simply are not in place.
Mrs Murray
The hon. Gentleman will correct me if I misheard him, but did he not say that we should stay in the European Union no matter what? He is sending the message to all those people in Glasgow North who voted to leave the European Union that he knows better and we should stay in.
Patrick Grady
Well, 22% of the people who voted in Glasgow North voted to leave the European Union. Some 78% voted to remain, and recent analysis suggests that figure will be even higher if and when we get a people’s vote.
Damien Moore
The hon. Gentleman said 78% of people in his constituency voted to remain. Was it a soft remain or a hard remain?
Patrick Grady
That is highly amusing. They voted to remain under the conditions we currently have. I will come back to what the relationship between Scotland and the European Union should be.
I believe we should remain—I believe that is the best option—but the point is that people should now be given a choice, because we now know what leave looks like. The Prime Minister set red lines—incidentally, I think she did so without the agreement even of her Cabinet; she announced them at the Mansion House or somewhere equally grand up the street. She did not set them after consulting on a cross-party basis, as she is now trying to do, or after putting forward a proposal or a Bill for the whole House to agree. They were set arbitrarily. Having set those arbitrary red lines, the deal now is probably, more or less, the only deal that could have been got. The Prime Minister wants to leave the ECJ, to stop free movement of people, to be able to negotiate our own independent trade deals, and whatever the fourth one is. Those red lines are very restrictive, and they inevitably lead us to a much more damaging relationship than the one we have or one we could have. Nevertheless, if we set those red lines, that is the deal we get.
That deal should be put to the people. Why should they not have the opportunity to have their say? What are the Brexiteers afraid of? If the Prime Minister’s deal is so glorious—if it is going to launch mother Britannia into a new position of ruling the waves, global leadership and all the rest of it—why are they so afraid to put it back to the people? Why would people not vote for it? The Environment Secretary said to me in the main Chamber a couple of weeks ago that other countries would be looking enviously at the United Kingdom’s deal. If that is the case, why would the people of the United Kingdom not back it in a people’s vote?
Damien Moore
Can the hon. Gentleman say that, in such a campaign, the remain side would be honest about some of the things the European Union has in store, such as further integration and a European army? Some of those things would be terribly unpalatable to people—even those who want to stay.
Patrick Grady
The United Kingdom has consistently negotiated derogations, alternative arrangements, opt-outs and so on throughout its history. The point of membership of the European Union is that, within the Union, a country can help to shape its direction and its future. Brexit will take us out completely.
Wera Hobhouse
Does the hon. Gentleman agree that, “We want to become a sovereign country again,” is a completely misleading phrase? All of us in the European Union are sovereign members; we are sharing and pooling sovereignty. That is the whole point about the European Union.
Patrick Grady
I was going to make that exact point in my peroration. Members can probably guess what that will be.
The problem is that this deal is not good enough. It has already been rejected by Parliament, and the Prime Minister has had to accept that it needs to be renegotiated so that we have these magical alternative arrangements. That in itself demonstrates that if the House—if parliamentarians, whether we are delegates or representatives—cannot agree on the shape and form of Brexit, then it has to be put back to the people, either in a people’s vote or in a general election. I assure the House that the Scottish National Party fears neither of those.
Patrick Grady
No, because we support remaining in the European Union. That brings me to my final point, which is about the treatment of Scotland in all of the debate. As I said to the hon. Member for South East Cornwall (Mrs Murray), 78% of my constituents voted to remain, which was one of the highest proportions in the United Kingdom. I want to listen to and understand the people who voted to leave, but I am not afraid or ashamed to stand up for the vast majority of my constituents. Some 35 residents of Glasgow North signed this petition—it is interesting to look at its geographical spread.
The day after the 2016 referendum, the First Minister of Scotland said that we had to respect the results of both the 2014 independence referendum and the 2016 UK-wide referendum on the European Union. The Scottish Government have consistently put forward alternatives, compromises and ways forward that could respect the result of the Brexit referendum across the United Kingdom. I meant to say at the start that the SNP voted against having the Brexit referendum, as we did not think it was necessary. We are not in the position of the Liberal Democrats, who now want to revisit an answer that they did not like.
The Scottish Government have not been listened to at all. For example, we proposed ways of retaining single market or customs union membership for Scotland—and potentially for Northern Ireland and parts of the United Kingdom that had voted to remain—and none of that was paid attention to. The promises made to people in Scotland, both in 2014 and 2016, have been broken. The major promise in 2014 was that voting no to independence guaranteed that Scotland remained a member of the European Union, which has proven to be false.
In these circumstances, the people of Scotland will come to the conclusion that it is not the European Union that is failing, but the Union of the United Kingdom; they will choose their own course, whether through a referendum or at a general election, and choose to take back control for themselves. As alluded to by the hon. Member for Bath, independent countries nowadays are defined by their interdependence; a country is known to be independent precisely because it is a member of the United Nations, because it has chosen to pool sovereignty through the European Union or because it has chosen to join any number of international organisations. That is the positive trend that the world should be aiming for, but instead Brexit represents a retrograde step.
Patrick Grady
I was coming to a conclusion, but if the hon. Lady is very keen I will give way.
Patrick Grady
I think that would be completely unnecessary. Clearly, there are going to have to be arrangements made for the border with Northern Ireland. If it is possible to do that in Northern Ireland, then it ought to be possible to do when Scottish independence comes. The best solution would be to revisit the whole issue through a people’s vote and ultimately give the people of the United Kingdom the option to remain in the European Union.
Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to wind up for the Opposition with you in the Chair, Mr Hanson. I congratulate the hon. Member for Sutton and Cheam (Paul Scully) on his introduction to the debate. I did not agree with absolutely everything he said, which he will not be surprised to hear, but he set the framework for the discussion in his characteristically thoughtful way, so I thank him.
The hon. Gentleman was right when he talked about the passions around this debate. The number of Members here today reflects the fact that we have had days, weeks and months exercising those passions, and there is an important statement in the Chamber at the moment. There are many issues that we could discuss—many have been touched on—but I will focus on the specific issue of the petition in relation to the extension of article 50.
We need honesty in this discussion. The Prime Minister could have given a lead in her answers over recent days by recognising the complexity of the issue and the different challenges that we face, but on this—as so often before—she has reduced things to a simple binary yes or no: we will or we will not. She has been digging herself into a position, as she has so many times on Brexit over the past couple of years, that will change when she is confronted with a cold dose of reality.
It all started with the phasing of the negotiations. As Members will remember, the Prime Minister insisted that there would be no separation of the discussion on withdrawal from the discussion on our future relationship. Back in 2016, the first Brexit Secretary, the right hon. Member for Haltemprice and Howden (Mr Davis), promised the “row of the summer” on that issue, until he rolled over without dissent because he recognised that that was the way that things would inevitably go.
Then there was the transition. Recognising the risks of a cliff-edge departure on 29 March, we argued back in August 2017 that there should be a transitional period and that business should not have to adjust to different sets of regulations as we left. “No”, said the Prime Minister: No. 10 said that was
“a weak attempt to kick the can down the road.”
That comes from the can-kicking experts. When she secured the transition in March 2018, she claimed that it—or, as she then described it, “the implementation period”—was one of the great achievements of her negotiations. Then we had the mantra of “no deal is better than a bad deal.” Some of the nonsense around that has fuelled the idea that we might crash out on whatever terms, or in the absence of any terms, on 29 March. It was nonsense, but it was endlessly repeated—“no deal is better than a bad deal”—until the Prime Minister struck a bad deal, which will shrink the UK economy by 4%. Then she slipped into reverse gear, with a new mantra, which said, “Support my deal, because the alternative of no deal would be disaster for the country.”
Mrs Murray
Will the hon. Gentleman explain why the leader of his party would take no deal off the table? Is that not a bit like a trade union going over to Europe and leaving strikes at home as an option, when they were negotiating?
Paul Blomfield
We are very clear why we would take no deal off the table. As the Prime Minister now acknowledges, as the Chancellor has spelled out and as the Treasury analysis has demonstrated, it would be a disaster for the economy.
Paul Blomfield
If the hon. Lady lets me finish the point, she can intervene again. By the Government’s analysis, no deal would shrink the economy by about 10%. The impact would be particularly negative in manufacturing areas, many of which have been left behind in the period of economic change we have seen over the last generation.
Mrs Murray
As I understood the Government figures, they said that the economy would not grow as much as it would have done, in the short term—not that it would shrink. Secondly, when someone is entering into a negotiation, surely taking their main negotiating lever off the table means they will roll over and cave in. That seems to be the message we are getting from the Leader of the Opposition, and his party.
Paul Blomfield
The hon. Lady is right, although she is playing with words, on the Treasury analysis. It is not that the economy would shrink 10% from the point where it is now; it would shrink 10% from the point where the Treasury projects it would otherwise be. The net effect is that we would be 10% worse off through a no-deal Brexit.
David Hanson (in the Chair)
Order. The Chair is here, and the dialogue is there. I should prefer it if both Members addressed the Chair, as part of their dialogue.
Paul Blomfield
There would be 10% less money for public services, 10% fewer jobs, and we would be 10% less wealthy than we would otherwise be. The Treasury was right to share that with the British people.
As to a no-deal Brexit as a negotiating lever, it has value only if those on the other side of the negotiations believe that it is meant seriously. No one thinks that a no-deal Brexit is in the British interest, and no one believes it will influence the outcome of the negotiations.
Mrs Main
The hon. Gentleman is being very generous in giving way—and his tone is very emollient. I want to reassure him. I was terrified when the Chancellor said each household would be £3,000 a year worse off if we voted to leave, but the economy has done very well. Just have a little faith: that is what I am really trying to say. Such predictions are often way out of kilter.
Paul Blomfield
It is always fascinating to hear Conservative Members rubbishing their own party’s Chancellors and former Chancellors. The economy may not have lived up to the former Chancellor’s worst expectations, but the pound has crashed and we have moved from being one of the fastest growing economies to one that is growing less quickly. There has been a negative impact already but, as the hon. Lady will recognise, we have not left the European Union yet.
Wera Hobhouse
It is clear that all Brexit scenarios leave the economy worse off. Does the hon. Gentleman agree that the negotiating position of keeping no deal on the table is a little bit like a cartoon that I saw the other day, with the caption “Unless you give me what I want I am going to shoot myself”? Is not that the idiotic negotiating position, which no one believes in anyway?
Paul Blomfield
I did not see the cartoon, but I think that was a line from a Mel Brooks movie, and the hon. Lady is right to characterise things in that way. That is why the idea that threatening no deal would be a great negotiating card for us never had any credibility.
Damien Moore
The hon. Gentleman has mentioned the economy and the pound, but the pound is pretty much at the same level against the euro as it was in 2012, and people were not talking then about the economy crashing out.
Paul Blomfield
We could measure the pound at different points, but the hon. Gentleman will know that the pound has fallen since we took the decision to leave. That produced a short-term benefit in additional exports, although the consequences are now beginning to have an effect, because the component parts of many of those exports are now coming in at higher prices. We could debate these issues for a long time. However, I do not think anyone has yet argued successfully against my contention—the Chancellor’s contention—that no deal would be a disaster for the country. That, of course, is why Parliament has voted twice now against leaving without a deal.
After what happened with the phasing of the negotiations, the transition and the ridiculous mantra on no deal, we are here again, with article 50. Every time the Prime Minister is confronted with the growing reality that 29 March may not be a feasible departure date, she insists that we are still leaving. She seems to be in some sort of parallel universe, which is not occupied by many of her Cabinet. The Foreign Secretary said on Thursday that we might need some extra time. The Justice Secretary told The Daily Telegraph that he agreed, and it reported that nine Cabinet Ministers believe it, too. The ever-thoughtful Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington), wrote yesterday that
“we have to grasp the nettle of an extended article 50 period”.
I shall be interested to know, when the Minister responds to the debate, which side of that argument within the Conservative party he is on.
Paul Blomfield
We will come to that shortly.
When she is questioned, the Prime Minister just keeps hitting the repeat button. She knows it is nonsense and, what is worse, she knows that everybody knows she knows it is nonsense. It did not have to be like this. The hon. Member for Glasgow North (Patrick Grady) has highlighted the original drafting of the European Union (Withdrawal) Act 2018. There was provision for multiple exit days for multiple purposes, which was sensible. It was the Government’s proposal.
However, to throw some red meat to those whom the Chancellor described as the Brexit “extremists” of the European Research Group, the Government fixed 29 March on the face of the Bill for all purposes. It was a gimmick, and a time-consuming and irresponsible one. The Opposition told the Prime Minister that it was a legislative straitjacket and that the Act would have to be amended. We tried to help her out, and tabled amendments to that effect, but the Government rejected them. They rejected proposals that would have given Parliament control over the dates.
The Prime Minister is now preparing to return to Brussels, following last week’s vote. The hon. Member for Sutton and Cheam talks about the EU giving some flexibility. Let us just remember what the Prime Minister is returning to do. She is going to ask the EU27 to change the backstop that they did not want, but that she pressed them hard to accept. The backstop is a UK Government proposal. We can imagine their bewilderment when, having conceded it when pressed by the Prime Minister, they will face her telling them “You know that backstop? We have got to change it.”
Sandy Martin
Does my hon. Friend agree that if the Prime Minister had made a little more effort to secure a deal among her own Members of Parliament it might have been easier for her to get a decent deal with the European Union?
Paul Blomfield
I shall be echoing my hon. Friend’s point in a moment.
The immediate task that the Prime Minister has set herself is to reopen the deal that she said, two weeks ago, was unreopenable. On 15 January, she said:
“Some suggest that there is a fourth option…to vote this deal down in the hope of going back to Brussels and negotiating an alternative deal. However, no such alternative…exists.”—[Official Report, 15 January 2019; Vol. 652, c. 1112.]
It is worth remembering, too, with all this focus on the backstop, that the backstop was not the primary objection for the majority of us who voted to reject the deal. It was the impact that the deal would have on jobs and the economy. The hon. Member for St Albans (Mrs Main) is right to say that we have the right to walk away, but we also have the responsibility to the British people to outline the consequences of taking that sort of step, and we have exercised that to some degree in terms of the impact of no deal.
With the country currently despairing of our politics and with business confidence collapsing, the Prime Minister might reflect—to return to the point made by my hon. Friend the Member for Ipswich (Sandy Martin)—that it did not have to be like this. At the outset, she could have said, “The British people have voted to leave the European Union, but by the closest of margins; it is a mandate to end our membership of the EU, but not a decision to rupture our relations with our closest neighbours, our main trading partner and our key allies.” She could have added, “Therefore, we will seek a deal that reflects that position: a deal that is right for people’s jobs and livelihoods, in a customs union, close to the single market, in the agencies and partnerships”—some of which the hon. Member for Glasgow North mentioned—“that we have built together over 45 years, retaining the rights and protections for workers, consumers and the environment, and keeping up with those rights and with the EU as we move forward.” If she had said those things, she could have secured a majority in Parliament. She could have united a country that had been so bitterly divided by the referendum, and the issue of the Northern Ireland border would never have existed.
Paul Scully
I set out a brief list of the reasons why I voted to leave: leaving the institutions, stopping the payments, stopping freedom of movement and being able to do trade deals. In the customs union that the Opposition are suggesting, can the hon. Gentleman outline which of those would be available?
Paul Blomfield
The hon. Gentleman will recognise that freedom of movement has nothing to do with membership of the customs union. Our position is that we cannot be a member of the customs union of the European Union, because we will no longer be a member of the EU, but we should have a customs union that replicates those current arrangements. That means having a common external tariff; it means recognising that we would not be able to negotiate our own trade agreements, but that we would benefit from the trade agreements, which we were part of negotiating as a member of the European Union, that exist with 70 countries, and hoping to have a say—not a deliberative say, but a say—in future trade agreements. Does that answer his question?
Paul Blomfield
The hon. Gentleman raises a much broader question. There would not be fees in relation to the customs union, but, as the Government have acknowledged, there clearly will be payments for other schemes and partnerships that we might want to be part of; the Minister might want to comment on that. There are no fees in relation to the customs union, but there would be if we were to be part of the Horizon 2020 framework programme 9 on research across the European continent. We would pay something in and we would get something out.
There are many other schemes, if we were part of the agencies and partnerships: take Euratom, the European Atomic Energy Community. We are spending an enormous amount of money replicating arrangements that we could have continued to benefit from as a member of Euratom. There is no additional benefit to the UK in that; it is just a separation of functions because of the obsession with the jurisdiction of the European Court of Justice, which has never ruled on anything relating to Euratom that would be of any concern to the United Kingdom.
My point is that, at that juncture after the referendum, there was an opportunity to reach out to the majority that existed in Parliament for a sensible Brexit. I campaigned to remain, but I recognise the outcome of the referendum. Instead, the Prime Minister let the ERG set the agenda, set the red lines and box her in, leading to the deeply damaging proposal that the House so overwhelmingly rejected a couple of weeks ago. She is putting her party before her country, just as David Cameron did before her, and the country is facing the consequences.
It is not too late. As an Opposition, we are willing to talk about that sensible Brexit deal—a relationship with a customs union, single market, rights and protections, agencies and partnerships. To answer a question that I was anticipating the hon. Member for St Albans would ask, although she did not: if the Prime Minister will not go there, we will consider the option of a further public vote to break the impasse. Nevertheless, whatever happens over the next seven weeks, we cannot and should not rule out an extension of article 50.
The Parliamentary Under-Secretary of State for Exiting the European Union (Chris Heaton-Harris)
It is a pleasure to serve under your chairmanship, Mr Hanson. You have obviously heard my speech many times before; I believe that is why you are just about to scoot off to do better things. I thank you for the generous way in which you have chaired the debate. I also thank my hon. Friend the Member for Sutton and Cheam (Paul Scully) for the thoughtful way in which he introduced the debate. He, like me, campaigned to leave; he, like me, knows that there are many different ways of leaving, but that the British people gave an instruction to their Government, and he, like me, knows that the Government are intent on delivering on it.
I should answer a couple of the points raised in the debate. It is always a pleasure to hear the hon. Member for Bath (Wera Hobhouse) telling us that we cannot cancel Brexit; in general, the Lib Dem policy is, “We can’t cancel it, so we’ll try any other means whatever, parliamentary or otherwise, of undermining that result.” Realistically, I struggle with the Lib Dems when they say pretty much anything, because I remember in 2010 their campaigning vehemently to get rid of tuition fees and then, as soon as they got into Government, doing exactly the reverse. She says she is not campaigning to cancel Brexit now, but I absolutely know that she is, so I think she should be a bit more honest in the debate.
Wera Hobhouse
The Liberal Democrats, including me, have never made any bones about the fact that we think the best deal we can get is staying in the European Union, but we acknowledge that we have had a referendum, so what I am saying is: “We have had a referendum, and we now have a deal, so we need to clarify with the British people whether they think this is actually what they voted for.” That is a very democratic way of going forward. But if there were such a referendum, of course I would campaign to stay in the European Union.
Chris Heaton-Harris
That is remarkably clear for a Liberal Democrat. The hon. Lady mentioned that of those writing to her, the biggest group are people arguing for no deal. That is no surprise, when they have seen the political class argue as we have done. What those on the outside see is people trying to stop Brexit, and that is why they get frustrated.
Mrs Main
On a point of clarification regarding the answer the Minister had from the hon. Member for Bath, can he remember any group that campaigned saying, “And when we’ve got the answer, we’ll make sure we come back again and double-check”? I do not think anyone thought we could unpick all this without doing some form of negotiation. Did anyone make the case that we would double-check and then go back to the EU again?
Chris Heaton-Harris
To the best of my knowledge, I did not hear anybody mentioning that in the campaign, or in the debates in Parliament that led to the referendum being granted. I can honestly say that I never heard that until possibly the day after the referendum result. I was going to come on to my hon. Friend’s contribution; as there are now two Chairmen in the room, I should make the point that they both need to go back to Mr Speaker and ensure that my hon. Friend gets higher priority on the speakers’ list, because more people need to hear what she has to say on this subject. She made a huge amount of sense, and I think she underestimates her value to this place and this debate. She said that she campaigned to leave, and that she was but one vote, but she was joined by 17,410,741 others, of which I was one, and that is a decent-sized number.
[Mr Philip Hollobone in the Chair]
I completely take my hon. Friend’s point, and that is why I get slightly anxious in some of these debates to ensure that we are not seen to be cloth-eared here. We have a referendum result that we are delivering on. I agreed with pretty much every word that she said, including about my contribution to whatever debate there was around the deal. I absolutely voted for the deal the first time around. With my personal experience of the European Union, I trust it to deliver on matters that it signs up to, so I was happy to go into the Aye Lobby. However, I can guarantee her that the Government will not ignore the fact that 17.4 million people voted in the way they did.
It is always a pleasure to listen to the hon. Member for Glasgow North (Patrick Grady), who, as the Scottish National party’s Chief Whip, is now too silent. It was a pleasure to deal with him when I was a Government Whip. He is always courteous, polite and completely on the money. He will never go back on his word, and that is true in this case, too. He wears his heart on his sleeve in these matters, and he articulated very well that he is a passionate pro-European. I guess I should ask him to forgive me for being exactly the same, but coming from the reverse position.
I would love to quote parts of the hon. Gentleman’s speech back to him—perhaps I can do so over a beer some time—including the bits about how staying within a Union gives people a chance to shape its future and all that sort of stuff. However, we will leave that for another day.
Wera Hobhouse
Does the Minister question my honesty about being a passionate pro-European?
Chris Heaton-Harris
I absolutely do not. I just wish that the hon. Lady’s party was as honest as her.
I always enjoy debating with the hon. Member for Sheffield Central (Paul Blomfield), as I do with anybody from the Labour party Front Bench, because it is interesting to see which part of the Labour party they are from. Is he from the bit that wants a second referendum? Does he agree with his party’s leader that article 50 should have been activated the day after the referendum? Is he part of the democratic socialist movement, which actually believes that the result of the referendum should be respected? Or is he from the authoritarian or the metropolitan intelligentsia parts of the Labour party, which believe that the people got this completely wrong?
The hon. Gentleman is a wise pro-European of long standing and is principled on these matters. I do not doubt his sincerity. However, again, I struggle with his party’s position, which seems to be ever changing. [Interruption.] Those outside must have heard that I had started speaking; I like to get that sort of response.
It is fascinating to see people talk about taking no deal off the table, as the hon. Gentleman did. That is not the wisest thing to do in any negotiation.
Paul Blomfield
If the Minister thinks that that is not the wisest thing to do, why did the Chancellor reassure businesses that that is exactly what is happening?
Chris Heaton-Harris
Because we are working towards a deal. There is a deal on the table. When Parliament took back control last Tuesday, it actually gave some indication that there is a possible deal out there. The Government want to deliver a deal, but a responsible Government plan for all eventualities. We are planning for a no-deal eventuality, just as the European Commission and the 27 other EU member states say they are in all the announcements that they make about what might happen in a no-deal circumstance. That should give the hon. Gentleman some limited comfort that a no-deal situation will not be as bad as he fears.
The hon. Gentleman wants to take no deal off the table, for the reason that it would be disastrous for the economy. To extend that logic to its obvious conclusion, I take it that he will try to persuade fellow Labour MPs not to contest the 2022 general election. We all know that Labour Governments lead to worsening economic conditions and make people poorer in general. If we should not do anything that makes people potentially poorer, the obvious conclusion is that he should not stand as a candidate in that general election. I thought he might want to rise to respond to that, but I understand if he wants to go for a cup of tea.
I thank all those who participated in today’s debate, and Clive Grenville, who set up the petition. He should be pleased with the number of people who signed it. Fundamentally, it asks the Government to respect the outcome of the 2016 referendum and deliver our withdrawal from the European Union, which millions voted for. I assure my hon. Friend the Member for Sutton and Cheam and those who signed the petition that the Government remain committed to delivering on the instruction given to us by the British people to leave. We remain clear that our policy is not to revoke article 50, or to extend it, delay or hold a second referendum on exit.
Paul Blomfield
For the sake of absolute clarity, is the Minister saying that there are no circumstances whatever in which the Government will seek an extension of article 50?
Chris Heaton-Harris
I will carefully repeat what I just said: we—the Government—remain clear that our policy is not to revoke article 50, extend it, delay or hold a second referendum on exit. Perhaps it will help the debate if I re-outline the now very familiar reasons why the Government have taken this position. I remind hon. Members of the immense progress we have made towards delivering the exit that we, as a Government and as a Parliament, were entrusted to deliver.
First, let me deal with the overarching question of revoking article 50. As I have made clear, the Government’s policy remains that we should not and will not revoke our article 50 notice to withdraw from the European Union. To revoke article 50 would betray not only the vote of the British people in 2016, but the mandates on which the majority of us were elected at the last general election. I emphasise again to hon. Members the strength of the mandate and the clarity of the instruction given to us by the 2016 referendum, which illustrates why we must respect the result and why the Government’s policy is not to revoke article 50.
In the summer of 2016, millions of people came out to have their say, trusting that their vote would count and that, after years of feeling ignored by politicians, their voices would be heard. The referendum enjoyed a higher turnout than any previous referendum, with 17.4 million people voting to leave the European Union. That is the highest number of votes cast for anything in UK electoral history, and the biggest democratic mandate for a course of action ever directed at any UK Government. As I have reminded the shadow Minister and the House, the passion with which people voted was quite extraordinary. Those of us who toured polling stations on the day will remember pencilgate: people refused to put their cross in the box using a pencil, for fear that the Government would rub it out. The battles over trying to get a pen into a polling station to vote with were quite extraordinary.
Mrs Main
I went round various areas campaigning to leave, and I talked to people who said that one reason why they were voting was because the referendum was a nationwide vote. Some said they did not usually bother voting because there was no way to change the Member of Parliament, so there was no point, but at the referendum, their vote was counted nationwide.
Chris Heaton-Harris
I heard that many a time. [Interruption.] No, it is not a call for proportional representation. Members should be careful what they wish for. I was elected under proportional representation for the first time in 1999. While it was a lovely system for getting me elected to the European Parliament, it is not a good system for voters who want democratic choices to be delivered.
Parliament overwhelmingly confirmed the referendum result by voting with clear and convincing majorities in both Houses for the European Union (Notification of Withdrawal) Act 2017. Parliament, informed by the will of its electorate, voted to trigger article 50 and leave the European Union. Further still, in the 2017 general election, more than 80% of voters voted for parties committed to respecting the result of the referendum. Not only Government Members but Opposition Members were elected on manifestos committing to respecting the decision of the people.
We made promises and commitments to the people we represent from when we held the referendum to when we as a Parliament voted to begin the process of implementing its result. The British people must be able to trust in their Government to both effect their will and deliver the best outcome for them. As the Prime Minister said:
“This is about more than the decision to leave the EU; it is about whether the public can trust their politicians to put in place the decision they took.”
To do otherwise would undermine the decision of the British people and disrespect the powerful democratic values of this country and of this Government. We therefore cannot and must not frustrate the will of the people by revoking article 50.
Despite that, I understand that there are those who advocate revoking, extending or otherwise delaying our article 50 notice. Parliament is clear that it does not wish to deliver no deal; it expressed that last week in the House. The obvious conclusion is that we must secure a deal to deliver the exit for which people voted. The only alternative, as the Prime Minister has laid out, is revoking article 50. That is not Government policy and it would, as she said, disrespect the biggest vote in our democratic history. The Prime Minister has also been clear that other delays, such as through extending article 50, would not resolve the issue of the deal with which we leave the European Union. Moreover, as she reminded the House this week, the 29 March 2019 exit date is the one that Parliament itself voted for when it voted to trigger article 50. The Government are clear on their notice to withdraw under article 50 as instructed by the British people.
I reiterate to hon. Members that this Government are committed to delivering on the result of the referendum. It remains our policy not to revoke article 50 and not to frustrate the outcome of the 2016 referendum, which I trust will please the petitioners. Instead, we continue to work to overcome the challenges and seize the opportunities to deliver on the result of the vote by the British people in the summer of 2016 to leave the European Union.
Mr Philip Hollobone (in the Chair)
Paul Scully has one hour and 20 minutes to sum up the debate.
Paul Scully
It is a pleasure to serve under your chairmanship, Mr Hollobone. I will get my 40-slide PowerPoint presentation ready, if you do not mind. No, I just want to take a few minutes to say thank you to everyone who has contributed to the debate. Yes, there has been some knockabout fun, shall we say? But on the whole, this matter has been dealt with in the right spirit—in the knowledge that people are looking to us in this place to hold such debates in this way. We can differ, but we can hear and, more importantly, listen to one another; we can hear a lot of things, but unless we listen, we never learn.
We have to look to the time when this process is finished. Yes, the result was 52% versus 48%. We have to work out how to heal the divide—in Parliament, but most importantly, out there in the country—and ensure that we can secure a Brexit that works for everyone. With regard to securing that Brexit, the petitioners and the 116,000 people who signed the petition can rest assured: the Government and a lot of Government Members certainly do not want to revoke article 50, but we do not want to extend article 50, either.
My hon. Friend the Member for St Albans (Mrs Main) agreed with my view that no one is going to die in a ditch about a couple of weeks, if there is a technical position to consider—a few of us have talked about that —but people saw what happened in the voting Lobbies a few weeks ago. My right hon. Friend the Member for Broxtowe (Anna Soubry) and my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) were in the same voting Lobby, celebrating the same result. If we do not end up with a deal, one of those people—they are colleagues—is going to be sadly disappointed. They cannot both be right, given the positions that they took at that time. The obvious way to get through this in time to be able to leave on exit day, 29 March, is to ensure that we secure a deal.
I hope, as I said at the beginning, that we put forward a reasonable proposal to Brussels, in a reasonable way that allows people there the space that our colleagues in this place have had over the last week or so, ahead of that vote. That is what I urge. What changed over the previous weekend was that there was more emollient language from people on all sides of the debate, which allowed people to calm the temperature down a little. The hope is that we can do the same with Brussels. If people there are looking at alternatives in order to avoid a hard border and no deal, surely they can just look at this again and give us what we need on the Irish backstop to ensure that we can get a deal through. That would help us, clearly, but it would also help the EU—and without encouraging other people to leave. All we want is to be able to do our thing and to allow the EU to progress in the way it wants to. Let us be friendly neighbours—let us not be awkward tenants—and let us do that in the most clear way we can, so that we can all progress and move on.
Question put and agreed to.
Resolved,
That this House has considered e-petition 224908 relating to leaving the European Union.
Written Statements
(5 years, 9 months ago)
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Race Disparity Audit
(5 years, 9 months ago)
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The Minister for Universities, Science, Research and Innovation (Chris Skidmore)
I am pleased to make this statement jointly with the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, my right hon. Friend the Member for Aylesbury (Mr. Lidington).
At the launch of the Race Disparity Audit in October 2017, the Government committed to “explain or change” the ethnic disparities on the audit’s website Ethnicity facts and figures.
Since October 2017 the Government have taken action in education, employment, health, criminal justice, including most recently in October 2018, taking action to see employers adopting fair employment practices which ensure all staff, particularly those from an ethnic minority background, do as well as they are able in terms of recruitment and progression in the workforce.
The audit’s website Ethnicity facts and figures has been continually updated and extended to allow the public to see if ethnic disparities are improving or not across over 160 important areas of public life. This has included the publication of data on undergraduate degree results and entrants at different higher education providers with high, medium and low entry tariffs.
On Friday, the Government announced action to tackle disparities in access to, and successful participation in, higher education for ethnic minority students; and disparities in recruitment and progression for ethnic minority academics. Friday’s announcement aims to tackle challenges that we know are particularly acute for ethnic minority students in higher education, such as their levels of non-continuation, the degree class they achieve compared to their peers, and their progression on to good quality employment.
In addition to the steps already taken to address this, including establishing the Office for Students and legislating for greater transparency and scrutiny through the Higher Education and Research Act, these actions will include:
Asking the Office for Students to ensure higher education providers demonstrate how they are tackling differences in access and successful participation for students from ethnic minorities—the Office for Students will be expected to hold providers to account, in particular through access and participation plans, which set out how higher education providers will improve equality of opportunity for under-represented groups, to access, succeed in and progress from higher education. The Office for Students will be expected to use its new powers to challenge providers failing to make progress.
Asking league table compilers to consider performance on tackling inequalities between ethnic groups in university rankings—working with a wide range of experts, stakeholders and league table compilers.
Encouraging higher education providers to eliminate ethnic disparities in their workforce—using tools such as the race at work charter and race equality charter.
Supporting student choice through better information, advice and guidance—by reforming the Unistats website using evidence from research with students from disadvantaged and underrepresented groups.
Building the evidence base on ‘what works’ for improving ethnic minority access and successful participation—encouraging the winning bidder of the newly established Evidence and Impact Exchange to make improving the evidence around addressing ethnic disparities a priority.
These actions will be supported by the Office for Students in its role as the regulator, Advance HE which will launch a review of its race equality charter, and UKRI which will signal its support for reducing ethnic disparities in research and innovation funding.
[HCWS1297]
DFID's Work on Safeguarding
(5 years, 9 months ago)
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The Secretary of State for International Development (Penny Mordaunt)
Ahead of the forthcoming anniversary of the first media stories about the Haiti case, and further to my ministerial statement of 25 October, I would like to update the House on preventing and responding to sexual exploitation and abuse and sexual harassment in the aid sector.
Delivering 18 October summit commitments
My last statement was shortly after the international summit I hosted in London on 18 October where donors representing 90% of global official development assistance, NGOs, suppliers, multilateral organisations and others agreed robust actions to deliver root to branch change in the way the international aid sector tackles these issues and I announced specific initiatives supported by DFID.
The five-year project with Interpol to stop perpetrators of sexual exploitation, abuse and harassment moving around the aid sector is getting under-way. It will strengthen and digitise criminal record checks, improve information sharing between countries and train staff, so ensuring a more robust law enforcement response against predatory individuals.
The disclosure of misconduct scheme will prevent individuals with a record of misconduct from moving around the NGO sector undetected. Fuller details were published in December and more NGOs are signing up.
DFID is supporting work to verify that our partners meet the global standards on preventing and responding to sexual exploitation and abuse as agreed by donors in October.
The resource and support hub will provide guidance, training and support on safeguarding to smaller charities which are those most likely to need it. There has been strong interest from potential suppliers and DFID expects to sign a multi-year contract by August.
We are working with the UN Victims’ Rights Advocate to develop a statement of victims’ rights for publication this year which will help survivors of abuse and exploitation better understand the redress and support available to them.
In November, the UK NGO platform Bond incorporated the UK NGO summit commitments into the Bond Charter, so covering over 450 organisations.
DFID is working with Dutch counterparts on an action plan for the ombudsman proposal.
Recent cases
The case at the International Planned Parenthood Federation underlines the value of the much tougher safeguarding standards I introduced last year. Those standards have required the reporting of this case and robust action to be taken. The case is ongoing and DFID’s Safeguarding Investigations Team created last year is looking at it in more detail.
Charity Commission figures show an increase in safeguarding cases reported by charities last year. I expect to continue to see more reports as people feel safer to speak up and organisations take their obligations seriously.
DFID continues to co-ordinate closely with the National Crime Agency on shared objectives. The draft Domestic Abuse Bill proposes that more types of sexual offences committed abroad by a UK national can be prosecuted in England and Wales. We have recently seen other countries take action against suspected criminal sexual activity in the aid sector.
Looking ahead
DFID continues to meet regularly with representatives from across the aid sector and is working with them to develop appropriate accountability mechanisms for the commitments announced at October’s summit.
I plan to participate in meetings on safeguarding at the UN Commission on the Status Of Women in March, the World Bank spring meetings in April and the UN General Assembly in September to drive forward progress. DFID is leading a process in the OECD to agree a mechanism this year to monitor the performance of all 30 major global donors on safeguarding.
I welcome the International Development Committee’s continuing focus on safeguarding and look forward to my discussion with them in May. DFID continues to work across Government to drive a coherent approach to safeguarding in ODA projects and to improve the capability of staff.
I sent a clear message a year ago that the whole sector must make zero tolerance on sexual exploitation and abuse and sexual harassment a reality. Today, I repeat that message.
Work led by DFID in the past year has generated good momentum, domestically and internationally. But there is much more to do, and we will continue to lead the way and work with others in the months and years ahead.
[HCWS1294]
EU-Japan Economic Partnership Agreement
(5 years, 9 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Government wish to inform the House that on Friday 1 February, the EU-Japan Economic Partnership Agreement (EPA) between the EU and Japan came into force. This date was confirmed by the European Commission to EU member states on 12 December 2018.
The UK has been a long-standing supporter of the EU-Japan EPA, which was approved overwhelmingly by the UK Parliament after it was debated on the Floor of the House of Commons on 26 June 2018 with 317 votes in favour and only 1 against.
The EU-Japan EPA was signed on 17 July 2018 in Tokyo, Japan.
The coming into force of the EU-Japan EPA is positive for the UK, the wider EU and global free trade. At its entry into force, 91% of tariffs will be eliminated, rising to 97% over the long term.
Japan and the UK are the world’s third and fifth largest economies respectively and are committed to working together in support of global free and fair trade. In line with this both Prime Ministers have reaffirmed their commitment last month to use the Japan-EU EPA as the basis for our future economic partnership and to work quickly to establish this. Under the withdrawal agreement, the UK would continue to benefit from this agreement during the implementation period.
[HCWS1293]
Parole Board: Reconsideration Mechanism and Rules Review
(5 years, 9 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr David Gauke)
The Parole Board decision to release John Worboys, and the subsequent legal action taken by the victims to challenge that decision, revealed the need to improve the way the system works. I have been determined to address fully the issues that case highlighted and to continue to make improvements to the system of parole.
An initial review I commissioned into Parole Board decision making, which reported in April 2018, has led to a programme of reform—in particular to increase transparency and to improve the way victims are engaged and communicated with.
I conducted a public consultation on proposals to create a new mechanism to allow for Parole Board decisions to be reconsidered in certain circumstances and ordered a review of all the Parole Board rules. I am pleased today to announce the outcome of that work and to launch a tailored review of the Parole Board which will examine further options for longer-term reform.
The Government’s response to the consultation on a reconsideration mechanism is published today and I can confirm that I intend to proceed to bring forward changes to the Parole Board rules which will introduce such a mechanism. This will make it possible for Parole Board decisions to be looked at again and, if necessary, re-taken where it appears there may have been a legal or procedural flaw with the original decision. It will not be necessary to bring a judicial review, as happened in the Worboys case, making it easier to challenge decisions.
Victims who believe a decision may be fundamentally flawed, rather than having to resort to the courts and engage legal representation to argue their case, will be able to make a case for reconsideration to my officials. Officials have access to all the information and evidence —as well as legal resources—and therefore are best placed to put together a fully-informed application to the Parole Board where there appears to be an arguable case for reconsideration. This will also make the process as simple and straightforward for victims as possible. Judicial members at the Parole Board will determine the reconsideration application and how the case should be dealt with—whether the decision should be re-taken and whether a further hearing is required. Reasons for their decisions will be provided to victims.
This new mechanism, together with the introduction of decision summaries provided by the Parole Board from May last year, brings much greater transparency and scrutiny to how and why parole decisions are made; and a means of challenging those decisions where it appears there may have been a fundamental error that requires the case to be looked at again.
I am also publishing today a report on the outcome of the review of the Parole Board rules.
The report sets out the measures taken by the Department and the Board itself to ensure the issues highlighted by the Worboys case were addressed and which deliver on the commitments made by last year’s initial review. The report also explains what more will be done to further increase the transparency and openness of the parole system and to improve the experience of victims. Improvements have been and will continue to be made to the Victim Contact Scheme (VCS), training and approaches to the way Victim Liaison Officers (VLOs) communicate with victims; and the commitments in the Government’s victims strategy published in September will further strengthen the entitlements and support victims should rightly expect to receive.
Changes to the Parole Board rules will be brought forward by way of statutory instrument in the coming months. This will implement the new reconsideration mechanism and the other changes identified by the review that have the potential to improve the system. Between now and then we will be making preparations for the implementation of those reforms—in particular by putting in place the resources, guidance, training, and documentation needed to operate the reconsideration mechanism.
Other key changes announced in the report include:
A series of Standard Practice guidance documents will be published by the Parole Board. This will improve transparency and public awareness of the approaches the Board follows in reaching its decisions—and will support greater consistency in how the Board reviews cases.
A new operational protocol between the Parole Board and Her Majesty’s Prisons and Probation Service (HMPPS) which will clarify roles and responsibilities within the parole system and set out how the two organisations work with each other.
A new policy framework on the parole process will be published, setting out the HMPPS policy and approach, which will include improvements to the timescales the review found could make the process more efficient.
The review has examined how the rules, parole processes and practice can be improved over the short term within the current primary legislation governing the parole system and the existing constitution and functions of the Parole Board. It has been important to take swift action to address the immediate issues and concerns and to restore trust in the system; I believe the reforms announced in the report published today will help to achieve that.
But I would like to examine what further, more fundamental measures might be possible over the longer term, including the possibility of primary legislation. A tailored review of the Parole Board provides the opportunity to do that. I am required to undertake a tailored review of all the arms-length bodies sponsored by my Department once every Parliament and I have decided that now is the right time to launch such a review of the Parole Board.
The tailored review will explore, in light of the rules review changes, whether there is a case for more fundamental reform that requires primary legislation—including whether to change the powers or responsibilities conferred on the Parole Board or whether it should be reconstituted to deliver its functions in a different way. I aim to publish the outcome of the tailored review in the summer.
Copies of the Government’s response to the consultation on reconsideration of Parole Board decisions and the report on the review of the Parole Board rules have been laid in both Houses and are available on www.gov.uk.
[HCWS1295]
Lighthouses: Light Dues 2019-2020
(5 years, 9 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)
A strong and growing maritime industry is vital to the economy of the United Kingdom and it is critical that we treasure and protect this vital artery if we are to remain a world-leading maritime centre.
The work of the general lighthouse authorities, which provide and maintain marine aids to navigation and respond to new wrecks and navigation dangers in some of the busiest waters in the world, is crucial to underpinning that vision while maintaining our vigorous safety record and continuously improving standards of safety.
Reductions in the three general lighthouse authorities’ running costs have enabled the UK to reduce light dues for four successive years. For 2019-20 intend to freeze light dues rates at 37½ pence per net registered tonne. This will mean that light dues will have fallen by 28% in real terms since 2010.
Light dues rates will continue to be reviewed on an annual basis to ensure that the general lighthouse authorities are challenged to provide an effective and efficient service which offers value for money to light dues payers.
[HCWS1296]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Public Procurement (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, procurement by the Government and public sector bodies represents a significant sector of the UK economy. It is essential to the day-to-day running of government and is appropriately regulated. The Government are committed to ensuring the continued functioning of this important marketplace when we leave the EU. If a transitional deal is agreed with the EU then the existing procurement regulations will remain in place during the transition period. However, if no deal is reached with the EU then certain aspects of the existing regulatory scheme for public procurement will be deficient and will simply not work. The draft regulations before the Committee seek to address those deficiencies that would arise in a no-deal scenario.
The amendments made to the legislation reflect the UK’s new status outside the EU. It provides a balance between the need to maintain continuity based on established principles and the existing framework with the need to correct deficiencies to the extent permitted by the European Union (Withdrawal) Act. This will ensure the legislation is operable, effective and makes sense. This instrument primarily makes amendments to three sets of regulations—the Public Contracts Regulations, Utilities Contracts Regulations and Concession Contracts Regulations—that regulate public procurement in England, Wales and Northern Ireland. These sets of regulations implement EU directives on awarding contracts and concessions in the public and utilities sectors, outside the fields of defence and security.
This instrument amends or revokes various EU regulations and decisions relating to public procurement that will become retained direct EU legislation on exit day. It also makes small amendments to various pieces of domestic legislation, including some primary legislation, that are not primarily about public procurement but which contain public procurement references that will become deficient on exit day. These changes address the UK’s new position outside the EU while continuing to facilitate a functioning UK internal market.
As we leave the EU, the UK is working to join the WTO government procurement agreement in its own right. We are currently a GPA member through being an EU member state. I am pleased to say that the other GPA parties have agreed in principle to our market access offer and accession. We have taken precautions against the UK’s accession not being fully completed by exit day. One of the amendments to the public procurement regulations ensures continued guaranteed access, rights and remedies on current terms for suppliers from existing GPA countries for a time-limited period from exit day. Without this amendment, suppliers from GPA parties would no longer have the guaranteed access, rights and remedies that they currently enjoy in our public procurement contracts. This will mitigate the risks of a short gap in GPA membership by facilitating continued market access.
Through the amended regulations, control over public procurement is returned to the United Kingdom. All notices for public procurement opportunities will in future be published on a new UK e-notification system. Business continuity is meanwhile assured through the transitional provisions that will generally apply the amended regulations, even in relation to procurements that are already under way on exit day.
In a no-deal scenario, this instrument reflects the UK’s status as a non-member state, at the same time as ensuring a functioning internal market exists that complies with the requirements of the GPA. It provides the continuity and legal certainty required by public procurers and suppliers. I commend the regulations to the Committee and beg to move.
Baroness Hayter of Kentish Town (Lab)
I thank the Minister for introducing the regulations, and those who drafted them for their hard work. Shall we get the good points out of the way first? I thought there were three. The first is that any regulation-making powers under the 1958 list will be by affirmative procedure—a tick for that one. The second was the ban on convictions being carried over as grounds for exclusion—tick. Thirdly, it looks as though Gibraltar has been included, which I assume is with the agreement of the Government of Gibraltar—tick. However, I have a number of questions.
One of my major questions is about the bold statement that no impact assessment has been made, despite the regulations introducing a requirement for businesses to use a new e-notification system that might include considerable changes to their own data systems, requiring software changes and internal training. These things never just happen, and preparing for them could well be expensive for the companies involved. That is a concern, given that the Explanatory Memorandum also states that there has been “no consultation”. It is hard to see how on earth it could have been decided that there would be virtually no cost to the companies affected, particularly small and medium-sized companies. It is exactly those companies, which do not have their own sophisticated IT departments, that could therefore face quite a challenge. It would be helpful to have some explanation of why no consultation and testing took place with them, and how it was therefore possible to take the view that the change would have no impact.
My second question relates to the exit date. I think that I am right that no definition is given in the regulations, presumably because they are made under the withdrawal Act of 2018, which itself defines exit day. I know that the Minister will not comment on this, but a number of us think it extremely unlikely that we will leave on 29 March and that there will very likely be a request for an extension to Article 50, and therefore a change of exit date. Should exit day be amended by statutory instrument under, I think, Section 20(4) of the Act, does that automatically amend the date on which these regulations would come into force? Would the eight months after which Regulations 6, 8 and 10 would come into force automatically follow the new exit date?
My third question is about e-notification, which I touched on earlier. I am worried about it because this is a no-deal preparatory statutory instrument, which sort of assumes that there will be no deal in seven weeks’ time. It would be helpful if the Minister could indicate when he considers that the e-notification system will be up, ready to run and fully tested; hopefully, it will be pre-tested with potential users. Some response on that would be helpful—as would some thoughts on what happens if it is not ready on exit date, particularly as another part of the regulations says that notices cannot be published on any other national portal until they have appeared on the e-notification system. Since we know that these things do not always appear quite on time, what happens if the system is not ready by 29 March? Can the Minister also tell us what sort of training and support will be given to those who need to access it? Perhaps he might know, or be given guidance on, how different this system is from the one currently used with EU procedure.
My fourth question turns to the GPA. The Minister said that the other parties have agreed in principle to us becoming a member of the WTO Agreement on Government Procurement. However, I am interested to know why, both in the regulations and in what he says, there is an indication that that might not have happened by exit date. Paragraph 7.20 of the EM suggests that it may not have happened. Can he explain why there might be a delay, given that we have applied, I assume, and he has heard that the other parties are happy? Basically, what is the problem?
My fifth question is about the CMA. The purpose of these regulations is to ensure that the “award of public contracts” is done in a market which is,
“open and competitive and that suppliers are treated equally and fairly”.
As I understand the regulations, the CMA will oversee and enforce this but that is something of a problem in that we do not yet know the nature of the state-aid regime post Brexit. We do not know the anticipated regime, nor exactly how it will oversee and enforce it. Obviously, state aid is very relevant to procurement, but the market is populated by international actors. They, and our people doing the procurement, will need to be clear about what the regime is. The relevant SI for the CMA bit of this was laid only on 21 January, and there is no indication of when the CMA will publish its policy statements. It says it will be before the end of March; should we come out on 29 March without a deal—which is what this instrument is about—there will be almost no time for anyone to know what the policy on which it will work to oversee the market is.
The Minister will be very pleased to know that I have only seven questions. My sixth question is about the financial threshold. The role of converting the GPA threshold into sterling will fall to the Cabinet Office Minister under these regulations. I was not clear about how this decision will be communicated. At the moment this is done through the normal EU channels but once that no longer happens, what is the transparency? This should be quite a simple decision and how it will happen is laid down, but it would be good to know how it will be communicated.
My last question is about something that I am sure everyone in the Room except me knows, so I ask it very much for my own benefit. It is about social obligations. A contracting authority can refuse to award a contract to the lowest bidder if the bidder,
“does not comply with certain … obligations in the field of social, environmental and labour law”.
I understand what environmental and labour law cover, but I am personally unsure whether “social law” would include consumer law, or whether it is more about social benefits and so on. For my benefit, could the Minister clarify whether consumer law would be covered? I am sorry that I have lots of questions, but that is partly why I asked my colleagues if they minded me going early. I think that gives other people in the Room a chance to find the answers before the Minister has to reply.
Lord Wallace of Saltaire (LD)
My Lords, having read this lengthy SI and being conscious of the other 600 or so coming our way, my sympathy for the officials working on Brexit is deeper than before. My despair at the Government refusing to rule out a no-deal Brexit is deepened when I think that some of all this is to guard against the contingency of no deal and would not be necessary if we ruled out that possibility. I know that a huge amount of extra work is going on across Whitehall to guard against a contingency that Parliament would not accept if we found ourselves drifting towards it. However, in the event of a withdrawal agreement, we will still have public procurement issues.
I want to ask primarily about the agreement on government procurement and the adjustment of moving to WTO terms, so to speak, in moving from the EU regulations to the GPA. Like the noble Baroness, Lady Hayter, I heard the Minister say that others have “agreed in principle” to this and that we are “working to join” the GPA, which suggests that we will not have joined by the end of March. I hope that he can tell us when we might do so and what will happen if we leave in an orderly fashion in the next few months—I do not know how we will manage that but we will try to do it somehow—before we have joined the GPA, with a gap in between.
I note that paragraph 12.3 of the Explanatory Memorandum says that,
“in a no deal scenario where the UK is not participating in the GPA, it may be that economic operators would no longer have guaranteed access to the procurement markets of GPA parties (including the EU) or the remedies provided for by them”.
I understand that to mean that British companies will suffer in having no access to other countries’ markets. What would the situation be? Can the Minister explain a little about the difficulties we appear to have run into between October and November last year in applying to become an independent member of the GPA? Why was the United States so resistant to UK admission, as some of the documents I have looked at suggest? Are Her Majesty’s Government confident that, in rejoining the GPA as an independent country, we will find that procurement in the United States—by states as well as by the federal Government—will be open to the UK? I recall from my time in the US as a student that other countries constantly complained about how they could access federal procurement but states did not think that they were bound by international agreements of that sort.
Why did New Zealand express reservations about the UK becoming a full member of the GPA? Given that Liam Fox provides constant assurances that New Zealand is willing to offer open arms to the UK through the most generous possible trade deal after Brexit, it struck me as rather odd that its Government did so. New Zealand is a massive friend to the UK, ever grateful for having been colonised by British people. One would have thought that there would be no problems what ever.
Will Irish firms be in an intermediate position in any way in terms of access to government procurement? I am conscious that the Belfast agreement and our future relationship with Ireland are not exactly foreign matters. Can the Minister say anything about our confidence in standards of enforcement in the GPA? Moving from the EU framework to the World Trade Organization GPA framework represents moving to a looser framework. It is a bit like moving from Europol to Interpol. Standards of enforcement tend to be lower; for example, I know that China is about to join the GPA but I cannot imagine the Chinese opening their domestic state procurement market as fully as we have managed with France, Italy or Spain. Is a little more assurance on that point possible or are we simply accepting that we are moving from a tighter, more effective framework to a looser and less effective one?
Lord Adonis (Lab)
My Lords, I will begin by asking the noble Earl some specific questions, and then make some wider remarks. First, what status would British public procurement contracts have in the Official Journal of the European Union? In a no-deal scenario, is it the intention that the United Kingdom would still advertise its contracts in the Official Journal? Indeed, would it be legally possible for it to do so? If it does not, either because it is not legally possible or because it is a policy of the Government not to do so in a no-deal scenario, will that not in practice mean that our procurement market in the United Kingdom is a great deal less competitive after than it was before because, if people do not know about contracts and there is not a level playing field for them to apply, fewer people will apply? That is an important point. I simply do not understand the position in a no-deal scenario.
Secondly, from what the Explanatory Memorandum says, I assume that it will still be entirely open to UK companies to bid into the EU procurement market, in the same way as it is open to countries outside the EU at the moment. It is the issue about the advertising of contracts in respect of the United Kingdom that seems significant.
My third question relates to the point just raised by the noble Lord, Lord Wallace, of the slightly conditional language used by the noble Earl in his opening remarks about whether we will or will not be a member of the GPA by 29 March. I took him to say that we might be, but he could not give a guarantee. Having looked at the statements made by the WTO and Julian Braithwaite, the United Kingdom’s representative there, my under- standing is that our application has been accepted in principle but that there are a number of issues still being worked through. Perhaps the noble Earl could update us. That seems a point of some importance for people in these markets to understand—whether we definitely will or may not be an independent signatory to the GPA by the end of March—not least because of the remarks made by the noble Earl himself in his introduction, where he said, I think, that having that independent membership would give us,
“continued guaranteed … rights and remedies”.
I assume the reverse is also true: if we are not an independent member at the end of March, then for the period when we are not we will not have guaranteed rights and remedies, and this could leave British companies seriously vulnerable in enforcing their rights.
My fourth question relates to paragraph 7.39 of the Explanatory Memorandum and what the regime will be in respect of state aid. A number of questions arise from the paragraph, so I will quote it:
“In respect of abnormally low tenders submitted by bidders who may have been in receipt of state subsidies, the intention”,
of the Government,
“is to treat non-UK economic operators on a level playing field. Further, although a new UK State aid regime is envisaged in which the function for enforcement is to be conferred on the Competition and Markets Authority, in the area of public procurement, it would be inappropriate for economic operators established in the UK to be required to demonstrate that aid provided by the UK Government was compatible with the UK’s State aid regime in contrast to economic operators not established in the UK”.
Is my understanding of this correct, namely that whereas we intend to apply state aid rules to European bidders for our contracts, we are not intending with these regulations to insist on those same state aid rules being applied in respect of UK bidders for European contracts? The obvious point which arises if that is the case is that it will not be accepted at face value by our European partners, who will of course presumably continue to insist on the application of their state aid rules, which are the same as now. They will not change those rules. I therefore do not understand the actual effect, because the implication in paragraph 7.39 is that the UK could start, for example, flouting existing state aid rules to support UK bidders for EU contracts. As I understand it, that would be legal under the regime envisaged. What is the point of allowing that if those same rules are going to be applied by the EU in the first place? Let us think about real-life situations. It is not in the interest of the United Kingdom that we be regarded as an unreliable bidder in respect of state aid for EU contracts. If a belief gains ground that because these rules do not apply we are content for UK companies which are in receipt of state aid to bid, that will in quite short order lead to significant tension between us and the European Commission. Would a better arrangement not be to say that if we are so keen on state aid rules being applied in respect of EU bidders for UK contracts, the right, reasonable and collegiate thing for us to do would be to insist that those same rules applied in UK domestic law to UK bidders for European contracts? Is the noble Earl with me on those points? They are technical but extremely important for bidders for these contracts.
More broadly, we are again in a slightly surreal Alice in Wonderland situation. We are told—it comes up again in the impact assessment and the statement on consultation—that these changes are technical. Indeed, they are technical in the sense that they replace an existing procurement regime which operates within the European Union market with one that operates within the UK, only with minimal changes. That is certainly correct, and for that reason there is no impact assessment and there has been no consultation. However, at another level they are anything but technical; this relates to a point that my noble friend Lady Hayter made. The act of leaving the EU with no deal means that we are at one stroke potentially rupturing our entire access to these markets and the entire access arrangements of EU bidders to our market. As the noble Earl does not appear even to guarantee that we will be a member of the GPA—subject to what he says in his response—we cannot even be sure that we are able properly to enforce existing contracts which United Kingdom operators have entered into, because the ability to enforce those contracts depends upon our membership of the GPA.
While the technical wording of the rules may not have changed in terms of how we intend to operate public procurement, the act of leaving the EU will fundamentally rupture the entire regime for public procurement, including potentially closing European markets to UK operators over time and closing UK markets to EU operators. This goes against the whole drift and success of EU policy over the past 20 years, which has been systematically to open public procurement markets. I see from the latest EU statement on the three directives in this area that they are estimated to be worth €1.9 trillion a year, paid by 250,000 public buyers across the EU. This is a very significant reason why we engaged in the construction of the single market, why we have played such an active role in setting up the rules and why we have been absolute hawks on issues of state aid and intervention by EU Governments—some of our fellow European Governments have not been as open to the concept of competition in public procurement markets as we have been.
As this statutory instrument goes through, it is important to note that the loss to the UK will be huge. It relates directly to paragraph 12.3 of the Explanatory Memorandum, which was quoted by the noble Lord, Lord Wallace. Those of us who are becoming familiar with these statutory instruments after dozens of them are now used to this formula. The technical changes made in this statutory instrument to make it compatible with UK law on exit are minimal. However, the actual act of leaving the EU in relation to the real-world operation of the law is massive. Paragraph 12.3 is another statement exactly in that tradition. It says:
“An Impact Assessment has not been prepared for this instrument because the framework and principles underlying the Regulations have not been substantially amended”.
Three sentences later, however, it goes on to say:
“It will be open to UK economic operators to continue to respond to contract notices published on OJEU by member States but in a no deal scenario where the UK is not participating in the GPA, it may be that economic operators would no longer have guaranteed access to the procurement markets of GPA parties (including the EU) or the remedies provided for by them”.
Those euphemistic words amount to the undermining or closing of a substantial part of the markets in which UK companies currently operate. The fact that it is caused not directly by these regulations but by the decision to leave the EU in a no-deal scenario—which underpins these regulations—will not greatly satisfy or mollify those companies whose livelihoods are trashed as a result of a no-deal Brexit.
Earl Howe
My Lords, I thank all noble Lords who have spoken for their questions. If noble Lords will bear with me I will do my best to answer them, although not necessarily in the order in which they were asked.
The first question of the noble Baroness, Lady Hayter, was about the lack of an impact assessment. As I said in my opening remarks, this statutory instrument was designed to ensure continuation of the current system where possible. The impact of the amendments, including the replacement of the OJEU with the UK e-notification service, was deemed, after a de minimis impact analysis, to be below an annual cost of £5 million, which is the critical figure in this context. Consequently, in line with published guidance, a full impact assessment was not required or produced. We do not anticipate that the costs of complying with the amended regulations will be very great: in fact for all practical purposes they will be unchanged, because this amendment only fixes deficiencies and removes reciprocal rights—it does not change processes and procedures that would affect the cost of running or participating in a procurement under the regulations. That is why there was no consultation.
Lord Wallace of Saltaire
If I understand the Minister correctly, paragraph 12.3 should therefore read: “Provided that there is a withdrawal agreement, the impact will be limited, but in the event of no agreement there will be a considerable and adverse impact”.
Earl Howe
No, my Lords. These regulations are designed to ensure that the experience of businesses using the public procurement system is virtually unchanged from today. Our aim has been to produce as smooth a transition as possible—even in the event of no deal. Of course, as the noble Lord, Lord Adonis, has pointed out, there will be changes in the wider context of bidding in the European market; I will come to that in a minute.
The noble Baroness, Lady Hayter, asked what would happen if exit day was deferred. If that were to happen, and the withdrawal Act amended, that would feed directly through into these regulations, so no specific amendment would be required for that. She also asked me about the GPA thresholds and how they will be published. To update the thresholds, the Minister for the Cabinet Office will need to exercise the new regulation-making powers conferred by this instrument. The new thresholds will, therefore, be reflected in the public procurement regulations themselves and be publicly available and notified by procurement policy notice.
The noble Baroness, and the noble Lord, Lord Wallace, asked about the GPA. As I said in my opening remarks, the UK currently participates in the GPA via its EU membership. We need to accede to the GPA in our own right to maintain legally guaranteed access to public contract opportunities that the GPA provides. The offer that we have made to GPA parties maintains our existing commitments in the UK part of the EU schedule. The European Union (Withdrawal) Act 2018 aims to ensure as much continuity as possible. It is, therefore, the UK’s intention to join the GPA in its own right and, ultimately, to transpose the other international agreements between the EU and third countries. Accordingly, all suppliers should continue to be treated equally and fairly through open competition. Keeping our procurement market open to international competition clearly ensures better value for money for the taxpayer and facilitates UK suppliers being offered reciprocal rights to participate in procurements abroad.
Noble Lords asked me what would happen if our GPA accession did not take place by exit day. We have made good progress in our accession process and, as I said, we have received agreement in principle to our GPA market access offer. Despite this progress, we have taken the necessary precautions in the event that the UK’s application to accede has not been fully completed by exit day. In this scenario, economic operators established in territories and states that are GPA parties would no longer have the guaranteed access and associated remedies that they currently have in relation to UK public procurements. One of the amendments in the public procurement regulations guarantees continued access, rights and remedies for suppliers from GPA countries for a time-limited period from EU exit. This approach has been taken to mitigate the risk of a short gap in GPA membership. This will facilitate UK suppliers being offered reciprocal rights to participate in procurements abroad.
The noble Lords, Lord Wallace and Lord Adonis, asked about the attitude of other countries—New Zealand and China in particular—to what we were doing in relation to the GPA and standards. New Zealand has, in fact, accepted our final market access offer. It continues to be interested in other aspects of the UK’s WTO membership. China’s application has been in train for many years and I am advised that it is unlikely to be completed in the near future. There will be no change to the standards that we currently operate. A draft decision inviting the UK to join has been sent to all GPA parties. It is expected that the formal invitation will be issued at a committee meeting this month. Parties were interested in how the decision described the UK’s relations with the EU during the transition period.
The noble Lord, Lord Wallace, also asked about oversight carried out by the Competition and Markets Authority. This instrument does not provide for oversight by the CMA of the public procurement regime. Aggrieved suppliers will, however, continue to be afforded the remedies provided for in the regulations. In that way, contracting authorities and other entities will be held to account by the courts.
The noble Lord, Lord Adonis, asked various questions about the Official Journal of the European Union and the publication of contract opportunities. In a no-deal scenario, the UK is unlikely to be afforded access to the Official Journal for the purposes of advertising public contracts. That is simply a facet of no longer being a member of the EU, and that is why we have developed our own system to which UK bidders, EU bidders and bidders from the rest of the world will have access and in which they will be able to see UK public procurement opportunities. UK authorities may continue to advertise some types of procurement opportunity in the Official Journal—where the UK is participating in EU research and development projects, for example—though we anticipate that being a relatively rare event.
Lord Adonis
Is the noble Earl saying that to advertise in the Official Journal of the European Union you are required to be an EU member? Could he say—or follow up in writing afterwards—whether Norway and Switzerland, countries with very close economic associations, including membership of some of the economic institutions of the EU, do or do not advertise public procurement opportunities in the Official Journal? If it is possible to advertise in the Official Journal without being an EU member, it would be good to know whether the United Kingdom could continue to do so, since it would be a big advantage to be able to advertise our public procurement opportunities in that way.
Earl Howe
I take the noble Lord’s point entirely. I need to seek advice on the question that he asked me about Switzerland and Norway, as I do not have that information to hand, but clearly, to the extent that we are allowed to avail ourselves of the OJEU in any public procurement context, it will be an advantage. However, I am advised that the new UK e-notification system which is being developed will be accessible by the same portal that suppliers use at the moment. To that extent, the process which they go through will feel quite normal. I can advise the noble Baroness, Lady Hayter, that the new system is on track to be in place by 29 March 2019.
Lord Wallace of Saltaire
My Lords, am I correct in thinking that provided we have an agreement as we leave and therefore also a transition period, during that transition period many of the same arrangements will continue? If so, it is possible that the answer to the question asked by the noble Lord, Lord Adonis, is that during the transition period we will continue to have access. The question of what happens after 2020, 2021 or whenever it is has to be negotiated; the future relationship negotiations have not yet begun.
Earl Howe
The noble Lord is absolutely correct. Clearly if the agreement proposed by the European Commission is agreed, or something like it is agreed, the implementation period will kick in, and therefore we will be as if a full member of the European Union for purposes of public procurement. There will then be the question of what long-term arrangements are negotiated by and through the Commission.
Earl Howe
I have just alighted on my note to that effect. The noble Lord, Lord Adonis, essentially asked whether the implication of the Explanatory Memorandum is that the UK could start flouting the EU state aid regime. On leaving the EU, the UK will no longer be bound by the Treaty on the Functioning of the European Union, so economic operators will not be subject to the EU’s state aid regime any more than a third-country supplier receiving state subsidies would be. The UK has developed its own state aid regime, but it is important to remember that this instrument does not disapply the state aid rules. Rather, contracting authorities will simply no longer be required to look behind an abnormally low tender to investigate whether a bidder was in receipt of unlawful state subsidies. That is because the UK will no longer be a participant in or bound by the EU’s single market and competition rules.
Baroness Hayter of Kentish Town
I asked a question about whether the description of social law includes consumer law. I am happy for the Minister to write to me if he needs to check that.
There was one question I omitted to ask. It is not particularly relevant or specific to these regulations, but the Minister may know the answer anyway. It is: assuming this goes through, is approved by the House, therefore becomes law and then we get a deal, what happens? Do all these statutory instruments get repealed? What would be the status of all these no-deal statutory instruments should we get a deal?
Lord Wallace of Saltaire
In that case, the impact assessment for no deal should have been part of the statutory instrument. I read it as being partly about no deal and partly about the withdrawal agreement, because if we leave with a deal before we have completed joining the GPA the consequences could be quite substantially adverse.
Earl Howe
The two situations would indeed be very different. The Government hope that Parliament will agree a deal, which will make for a much smoother transition in the implementation period for businesses, private citizens and everybody else than if there is no deal. However, as has been said many times in the Chamber, it behoves a prudent Government to prepare for these contingencies. Unlike the statutory instrument we will debate next, this one is purely designed to address the contingency of no deal.
Defence and Security Public Contracts (Amendment) (EU Exit) Regulations 2019
(5 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, a responsible Government plan for all eventualities. It is essential that, as part of our preparations to leave the EU, we make sure that our legislation governing defence and security procurement functions properly beyond exit day in a no-deal scenario. It is the first duty of the Government to keep their citizens safe and the country secure. As part of that, the Government need to be able to procure the critical equipment and capabilities they need smoothly and with confidence. In the event of no deal, these amending regulations will provide procurers and suppliers with legal continuity and certainty, giving them the stability they need to conduct business after 29 March.
Clearly, the amendments to the legislation reflect the UK’s new status outside the EU in a no-deal scenario. However, the framework and principles underlying the defence and security procurement regime remain otherwise unchanged. This is in accordance with the powers given to amend retained EU law in the European Union (Withdrawal) Act 2018. That Act does not allow major policy changes or the introduction of new legal frameworks beyond those that fix deficiencies to ensure the law continues to function properly or remove any reciprocal obligations that are no longer appropriate from exit day.
Brexit will offer us real opportunities, including reform of our defence and security procurement regulations. In the near term however, these amending regulations ensure that the UK’s defence and security procurements continue to function smoothly in a no-deal scenario, but with that all-important autonomy from the European Union. To protect the UK’s essential security interests, the amending regulations will maintain the effect of Article 346 of the Treaty on the Functioning of the European Union by writing its substance into the existing regulations. The regulations already make it clear that they can be trumped by Article 346. Article 346 enables us to disapply the defence and security procurement rules when necessary to protect essential national security interests.
Through the amendments, control over our procurement is returned to the United Kingdom. For example, the Secretary of State for Defence will take the power previously held by the European Commission to modernise, although not broaden, the 1958 list of warlike stores that falls under Article 346 (1)(b). All notices for defence and security procurement opportunities will in future be published on a new UK e-notification system. Business continuity, meanwhile, is assured through the transitional provisions; there will be no defence procurement cliff edge.
Competition remains the cornerstone of defence procurement policy to ensure we equip our Armed Forces with the right capabilities at the right price. Currently, we allow bids from suppliers outside the EU, although the existing regulations provide only the legal right of market access required by EU law for suppliers based in the EU. Any restrictions on bidding, for example, on national security grounds, are made clear from the outset of any procurement.
The amending regulations provide a legal right of market access for suppliers based in the UK and Gibraltar which currently enjoy rights under the EU defence and security directive. After exit day, we will still allow bids from suppliers in the EU on the same basis as we do now for suppliers currently outside the EU. This reflects the UK’s new status as a third country outside the EU.
Although the amending regulations are mainly about EU exit in a no-deal scenario, they also make some updates and corrections to the Defence and Security Public Contracts Regulations 2011. They will come into force before exit day regardless of whether there is no deal.
To sum up briefly, it is through these amending regulations that the Government will ensure that UK defence and security procurement continues to function properly and appropriately, with solid legal foundations underpinning it. It is this instrument that will give procurers and suppliers the confidence and continuity in procurement they need in a no-deal scenario. I commend these regulations to the Committee. I beg to move.
Baroness Smith of Newnham (LD)
My Lords, this is the first statutory instrument related to Brexit that I have had the joy, or misfortune, to be involved with. In that sense I am quite glad that it has two purposes, one of which is valid regardless of whether there is a no-deal Brexit. However, one does wonder, given that the relevant legislation was repealed in 2011, why it has taken Her Majesty’s Government quite so long to bring this to our attention in the SI.
On the other aspect of the SI, many of the questions I have noted are very similar to the questions raised by noble Lords on the previous SI. According to the statutory instrument, Regulations 3 and 4 come into effect on exit day. Will the Minister explain what would happen in a transition period? Exit day would still presumably be 29 March, but at that point we would stop using the Official Journal to advertise things. Will we be in a situation where, somehow, the statutory instrument does not come into effect? Is it like the previous SI and will come into effect not on exit day, but only after some transitional period? Otherwise there would seem to be a bit of a gap. The UK would not quite be at a cliff edge, but the situation would be somewhat unclear because we would not have the situation I envisaged would be the case during the transition period.
I will ask various questions that go beyond the nitty-gritty of the regulations. Will the Minister explain what Her Majesty’s Government envisage by the statutory instrument in terms of access to UK markets? There is already a whole set of questions about overspends and the Public Accounts Committee has asked questions about defence procurement. If we are in a new world where EU defence contractors are treated like third-country defence contractors, have the Government modelled the impact this is likely to have on defence procurement? Will it mean that the UK will spend more on defence procurement than was the case when it was a member of the European Union? Similarly, what work have Her Majesty’s Government done on evaluating the impact on our arms export industry of not being part of the single market? If we are treating the EU 27 as third countries, presumably they will not exercise the reciprocity of access to their defence industry and defence exports that we have enjoyed. There are some wider questions on the impact the Government think we will see from Brexit if we are not part of the single market for defence exports.
I have various technical questions. Like other noble Lords, I have spent quite a long time reading the Explanatory Memorandum. I am intrigued to note that the Minister can confirm that it meets the required standard. What counts as the required standard, and what can we expect to see in an EM? Are there things that we might find even more useful for understanding what is going on? The memorandum is certainly rather easier to follow than the SI as it is drafted.
Lord Adonis (Lab)
My Lords, the noble Baroness has asked a number of pertinent questions. I hesitate to intervene in this area, because this is the first time I have ever made any remarks in the House on defence issues. I have always regarded the defence of the realm as so capably safeguarded by other noble Lords, not least the noble Earl himself—and, indeed, his family historically—that I never thought I needed to intervene in such affairs. I have two questions, which will reveal my ignorance but seem to be important in the context of us leaving the European Union in a no-deal scenario. The noble Earl said that once we have left in a no-deal scenario, we will allow bids in the defence sector from inside the EU on the same basis as we currently allow them from outside it. What is that basis? Is it codified? Looking at it from a great distance, I have always thought that we are extremely selective in the countries and suppliers outside the EU from which we are prepared to entertain bids for defence contracts. For example, I do not believe that at the moment we entertain bids from Chinese companies—and some other countries—for extremely good reasons. What is the noble Earl saying? Is there a document to which he can point me, and those who will be reading these proceedings, showing the basis for bids being entertained? The noble Earl may correct me, but if the basis on which we allow bids from outside the EU at the moment is essentially arbitrary, will that be the same basis on which we allow bids from existing EU states after Brexit?
I know that the noble Earl was simply reading his brief, but in his positive-sounding remarks at the outset he said that there would be real opportunities in procurement from leaving the EU, which I took to mean also in a no-deal scenario. It is not immediately obvious what those real opportunities are. Will he tell the Grand Committee something about them, as there are many disadvantages in leaving the EU? Readers of our proceedings will be delighted to know that there are some opportunities and would be grateful for any optimism that the noble Earl can provide for the world after 29 March if we leave without a deal.
Lord Tunnicliffe (Lab)
My Lords, I thank the noble Lord for introducing this statutory instrument. On the other hand, that is not really true: the facts of life are that I would rather not spend my weekend studying SIs for a scenario that is deeply absurd and the Government should have ruled out many months ago. It is, however, forced upon us.
Initially, I tried to read the Explanatory Memorandum while applying the test that I have been using so far—that there is no new policy except what is necessary to smooth the transition. That is essentially the test of the withdrawal Act. He has already said, however, that this SI goes beyond what is allowed in the withdrawal Act. I noticed that the SI also prays in aid the infamous—as I would call it—European Communities Act 1972, which must have the grandest powers of any piece of primary legislation. Since, therefore, this is quite important—that the Government are seeking to mix the two—I would be grateful if he could give a little more detail on where the 1972 Act has been used and where he is praying in aid the 2018 withdrawal Act.
I found the Explanatory Memorandum difficult to understand because it requires considerable previous knowledge. I can find only one area of concern. In general, the references to the requirement for a new organisation—for new parts of government to take over what is happening in the EU—all seem to make sense.
Essentially, I think the Minister has said that this SI leaves the situation unchanged. Does that mean that the requirement to put defence procurement up for both domestic and international tender is unchanged, except where derogated under provisions similar to Article 346, which I assume is written into the regulations? Does the derogation for national security reasons remain unchanged? Has it been decided that it should not be enhanced, as many of us would argue it should, to include wider, more long-term considerations, such as the preservation of UK sovereign capability by favouring UK firms in some circumstances? This measure seems to create a situation where the rest of the world can bid for UK contracts except where derogated. Does that mean that UK firms will be able to bid for foreign contracts, particularly opportunities in the EEA?
Finally, can the Minister indicate what will happen to these regulations in the event of a deal? Do they die in total or in parts? How will the deaths be managed?
Earl Howe
My Lords, once again I thank the noble Lords who have contributed to this debate for their questions, which I will do my best to answer. The noble Baroness, Lady Smith, and the noble Lord, Lord Tunnicliffe, both asked a similar question about the coming into force of these regulations and the circumstances in which they might not come into force. These amending regulations apply only in a no-deal scenario, other than the changes being made under Section 2(2) of the European Communities Act.
The noble Baroness, Lady Smith, was slightly unclear as to how we could avail ourselves of powers under that Act if we are not a member of the community. The answer is that we are still a member of the European Union and we can avail ourselves of the powers under the 1972 Act until such time as we cease to be members. The very minor adjustments we are making will come into force regardless of whether there is a deal or no deal. If the withdrawal agreement enters into force, the UK, with certain specific caveats, will be treated as an EU member state for the duration of the implementation period. Therefore, the current DSPCRs will continue to apply for that period, albeit with the updates and corrections made in Regulation 2.
The noble Baroness and the noble Lord asked about those changes. They are very minor. They are, in the main, changes required to resolve outdated references and to correct an omission arising from an amendment to the European Economic Area agreement. There is an amendment to the definition of “member state” to add Norway and Iceland, ensuring that economic operators from those two EEA states are covered. Again, that amendment is required regardless of whether the exit-related changes come into force. There are various other minor changes that I can read out, but I think it would be tedious if I were to do so.
The noble Baroness and the noble Lord, Lord Adonis, asked about the effect of the coming into force of these regulations on UK companies and what the benefits to UK industry are likely to be. The main benefit for both UK and Gibraltarian suppliers will be stability and continuity of working regulations, which are well established, understood and practiced. Importantly, UK and Gibraltarian suppliers will continue to enjoy legal rights to participate in UK defence and security procurements. Other non-UK economic operators, save for those in Gibraltar, will not have these rights under the amending regulations. I make it clear that that is not to say that only UK or Gibraltarian suppliers can bid for defence and security procurements. As noble Lords will know, the UK has a long-standing practice of allowing overseas suppliers to participate in defence and security procurements where there is no need for restrictions on who can bid in some way—for example, on national security grounds.
The noble Lord, Lord Tunnicliffe, asked whether UK companies would be disadvantaged regarding their access to the EU market. As a matter of EU law, EU member states will no longer be legally obliged to open their defence and security procurements to UK suppliers, as the EU defence and security directive will no longer apply to the UK after exit day. However, it has to be said that our UK suppliers are recognised as world class. They offer extraordinary experience and expertise in defence. Individual EU member states therefore may choose to give UK suppliers access to their competitions to maximise the effectiveness of their procurements in the same way as the UK does. There is a strong case in terms not only of value for money but of other considerations, such as interoperability and cutting-edge capability.
Lord Tunnicliffe
I feel that I have lost my place. Is the Minister saying that non-derogated invitations to tender will be restricted to the UK suppliers and Gibraltar, or will they be available to worldwide competition, with certain exceptions?
Earl Howe
It will depend on the procurement. If it is determined that the procurement rate relates to an issue necessitating the protection of UK sovereign capability, as in the case of the construction of warships, we would restrict the tendering process to UK-based suppliers. However, the generality of defence procurement is opened up to the widest market possible, although, as was pointed out, we make clear in certain procurements that we will not entertain bids from certain countries. Each procurement has its operational basis made clear at the outset.
The noble Baroness, Lady Smith, asked whether we will give state aid to suppliers. We have no intention of providing state aid to UK suppliers, which is incompatible with our state aid regime. I am sure she will not be surprised to hear that. Having said that, it is important to understand that there are ways we can alert our home-based industry to forthcoming procurements to enable them to prepare their bids in good time and understand our needs. That process is already under way; we are clear that the entire procurement process needs to be smoother than it perhaps has been. That is not the same as state aid, however.
The noble Baroness also asked whether the Government have modelled the impact of the change on UK defence exports. As I said, defence suppliers will lose their legal rights to participate in procurement in the EU 27, but the quality of our companies should ensure that many EU member states will still wish to entertain bids from our defence industry. As the noble Baroness knows, the UK defence industry participates in co-operative defence projects, such as Eurofighter; that will not change either.
Lord Tunnicliffe
I am sorry to ask the same question over and again, but it is important: putting the derogated areas covered presently by Article 346 to one side, do the regulations—noble Lords must realise that I cannot read them; it took all my time to read the Explanatory Memorandum and try to understand it—require the UK to put non-derogated opportunities to international tender, or is that a matter for the United Kingdom Government’s discretion on a project-by-project basis?
Earl Howe
It is important to understand that competition remains at the heart of our approach to defence procurement. Currently, we routinely allow bids from suppliers outside the EU, although the current legislation provides a legal right of access only for suppliers based in EU member states. Where we restrict who can bid in some way—for example, on national security grounds, as I have mentioned—we would make that clear at the outset in the advert or in any pre-procurement documentation.
That position will not change after exit day. Suppliers in the EU and elsewhere will still be free to bid for procurements where no limitations are specified. What is changing is that bidders from the remaining EU member states will not have a legal right to bid for defence contracts; this is the same position as for suppliers currently based outside the EU. I hope that answers the noble Lord’s question.
Lord Adonis
If the noble Earl will forgive me, I think I follow what he is saying, but I invite him to say whether I have understood him correctly. Because we will no longer be part of the EU procurement regime, we will have no statutory obligation to make these contracts available to bidders from the EU, but we intend to continue to invite applications from those countries. Is he saying that, in practice, for suppliers from the EU—leaving aside those from outside the EU about which we have security concerns—there will be no change in the bidding regime as a result of a no-deal Brexit? If that is not correct, and there will be a change, could he tell the Grand Committee what that change would be?
Earl Howe
For UK Government defence procurements, the process from the point of view of an EU supplier will be no different. What it will experience is the need to bear in mind two separate portals or bidding channels; one is the UK e-notification system, which I mentioned earlier, and the other is OJEU. It will need to keep an eye on both if it wishes to participate in the Europe-wide market; in using that phrase, I include the UK as still being a European country, even if not a member of the EU.
Lord Tunnicliffe
The noble Earl says there will be no changes. I understand that at the moment, in non-derogated areas, EU suppliers have a right to bid and we have an obligation to take their bids seriously. I think that under the new situation they do not have this right and that whether they are allowed to bid will be a matter of policy. That policy could change year by year or Government by Government.
Earl Howe
That is technically right. It is our policy to maintain access for EU member states—and indeed, non-EU states—in many, if not most, instances of procurement. A good example might be the fleet solid support ships. We invited tenders from all over the world to build those ships and that should provide the best value for money. We all hope that UK suppliers will feel confident in bidding for that contract, but we wish to benefit the taxpayer as well as the Royal Navy and the process will be an open one.
To answer one point which the noble Lord, Lord Adonis, alluded to, there will of course be opportunities to reform the defence procurement rules after we leave the EU. The current rules are generally seen as out of date, compared to the PCR 2015. We have the opportunity to take a fresh look at what is needed for defence procurement—
Earl Howe
They are the Public Contracts Regulations 2015. This will involve public consultation to ensure that we strike the best balance between value for money and protecting national security. However, I emphasise that that is a long-term project and does not relate to the regulations before us today.
The noble Baroness, Lady Smith, asked about exit day in the event of a deal. As with the non-defence procurement that we debated earlier, any amendment to exit day as a result of a deal will track through from the EU withdrawal Act to these regulations. Therefore, the no-deal element of the amendments will not come into force.
I hope I have explained clearly the effect of Article 346 and why we have replicated it in the regulations but, just to make doubly clear, it is to ensure we can continue to disapply the procurement rules when required to protect our national security interests. For example, if we did not do so we would be required to advertise our sensitive procurements as a matter of domestic law. In so far as I have not answered noble Lords’ questions I will certainly do so in writing, as for the previous debate, but I hope that my responses have clarified any points of uncertainty.
Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Young of Cookham
That the Grand Committee do consider the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019
Lord Young of Cookham (Con)
My Lords, as this instrument has been grouped, I will speak also to the Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019. The Treasury has been undertaking a programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying SIs under the European Union (Withdrawal) Act to deliver this, and a number of debates on these SIs have already been undertaken here and in another place. The SIs being debated today are part of this programme and have been debated and approved in the other place.
These SIs will fix deficiencies in UK law on investment funds to ensure they continue to operate effectively post exit. The approach taken in this legislation aligns with that of other SIs being laid under the EU withdrawal Act, providing continuity by maintaining existing legislation at the point of exit but amending where necessary to ensure that it works effectively in a no-deal context.
Turning to the substance of these instruments, noble Lords may remember previous debates relating to alternative investment funds and their subcategories on 16 January. Those instruments, along with these being debated today, will ensure there is a functioning legislative and regulatory system for investment funds in the UK. The first instrument focuses specifically on the regulation of Undertakings for Collective Investments in Transferable Securities, commonly known as UCITS, which are funds aimed at retail investors. The second instrument relates to long-term investment funds, a further subcategory of alternative investment funds that promote long-term investment, such as in infrastructure and small and medium-sized enterprises. In a no-deal scenario, the UK would be outside the EEA and the EU’s legal, supervisory and financial regulatory framework. Retained EU and domestic law relating to the regulation of UCITS and long-term investment funds needs to be updated to reflect this.
I will begin with the collective investment schemes regulations. First, this instrument removes references to the Union and to EU legislation that will no longer have legal effect, replacing them where appropriate with references to the UK and UK legislation. It removes obligations to co-operate with EU authorities and defunct references to the EEA passporting system. However, as set out in FSMA and other legislation, it maintains the ability for co-operation between authorities which may be in the interests of both the UK and the EEA.
Baroness Kramer (LD)
My Lords, we have allowed my noble friend Lady Bowles to go off to her committee today so I am afraid that there is somebody on these Benches with a far less-detailed knowledge of the intricacies of the relevant pieces of legislation. That may be of some relief but she will be back on future occasions so the respite is only temporary.
We have no objection to these two SIs, although I would like to probe around them a little. Clearly the UK Government should make this move because, frankly, EEA UCITS with a presence here in London suddenly fleeing because of a lack of temporary permissions would be a hole beneath the waterline for the future of fund management in London. The measure is absolutely necessary. The vast majority of those funds have said that if they had to go back and apply again as third countries for third-country permissions to keep their existing funds in place, they would prefer to exit. That is the situation with which we are dealing so the Government’s move is appropriate.
However, noble Lords will be aware that a great deal of money has already fled London. Two or three weeks ago, EY provided a report setting the number of assets to have left the City, primarily funds, at around £800 billion. With the latest Barclays announcement, that takes the number to about £1 trillion, which is a reasonable amount of assets under management to have left because of Brexit. So that everybody understands, I say that this is not about people being disloyal or unpatriotic. One of the companies involved, Somerset Capital Management—co-founded by Jacob Rees-Mogg—domiciled two recently launched funds in Dublin, apparently because of the demands of various clients. Clearly, a great deal of the movement out of London has been client-led.
That is a problem because conglomeration is a very powerful factor in driving this industry forward. Losing something like £1 trillion of funds under management and finding that many players are playing double-handed, with a presence in both London and somewhere else—typically in Dublin but perhaps in other places in the EU 27—puts into doubt a future never before doubted: that London would dominate in this area. Did I understand correctly from the Minister—and do I understand correctly from reading the instrument—that the transitional arrangements described are simply to provide continuity for existing London-domiciled EEA UCITS? Has there been any assessment of the likelihood of new funds to open choosing London for their headquarters? Has there been any assessment of whether the limited reach of the regulations means that, if we leave on 29 March, funds to open later in the year are far less likely to be London-domiciled because they will have to apply through a third-country process? I would be interested to understand that.
In a sense, that leads me on to the impact statement, which is peculiar. The Minister is absolutely right that the statement is recent: I think it went online on Friday and was printed only today. The costs are defined in the summary as “Unknown: likely significant”. But the description which follows that brief table says that the only really quantifiable costs on businesses are,
“marginal compared to the … costs arising from the UK leaving the EU”—
thank goodness, as this is one tiny area—and that they,
“mainly consist of familiarisation costs”.
Has there been any attempt in that estimate of significance to estimate the changing pattern of investment for new funds that will follow, because of the limited nature of this new SI? From a cost perspective, I do not know whether that has been included in the numbers.
The benefits are described as “significant” but, again, we have no numbers around any of that. I suppose that one person’s significant differs from another’s but it seems that it is significant compared to having nothing to protect us from a cliff edge. I can certainly understand that that is significant but it seems peculiar, frankly, to suggest it as a benefit. The status quo is clearly the benefit; there are no costs and there is no reduction in the future location of funds in the UK. A benefit that basically avoids the damage of a cliff edge seems a terribly odd description.
Finally, I saw the humour on the Minister’s face, and I share it, at the second SI, which deals with long-term investment funds. Since, as I understand it, this is a continuity and rollover SI and there are no funds, can he help me with the logic of why we are bothering with it? I do not mind it being on the statute book but it seems slightly redundant to provide for the continuity of nothing. I thought that the Minister might help me in this context with these issues, but we will of course oppose neither instrument.
Lord Young of Cookham
I think I can help the noble Baroness on that. There are no UK-based funds of this nature but there are some based in the EU—about five—that market into the UK. Those are the ones that will be able to apply for a temporary passport.
Baroness Kramer
I find that very helpful and I thank the Minister for saying that.
Lord Tunnicliffe (Lab)
I thank the Minister for introducing this statutory instrument but I repeat my concern that we are considering such instruments at all. I and my party feel that the Government should have given a commitment that we would not have a no-deal exit; day by day, there is growing evidence that such an exit will be disastrous for our country. I will say no more on that but try to process these SIs on their merits against—how shall I put it?—the strict limitation that we are assuming a no-deal situation and recognising that things have to be done to achieve that.
The Treasury, I assume to be consistent, has reproduced the same eight paragraphs in all the Explanatory Memorandums. Paragraph 7.4, which I will repeat, says:
“These SIs are not intended to make policy changes, other than to reflect the UK’s new position outside the EU, and to smooth the transition to this situation”.
It is against that test that I spent my time studying the Explanatory Memorandum. It seems to do all the right things: it creates a new name; it says that passporting dies; and it goes on to offer a temporary permission regime. This regime may last for up to three years, or three years and 12 months, or three years and 24 months, or perhaps for ever. One has to view the SI in the light of that regime.
Lord Young of Cookham
I am grateful to all noble Lords who have taken part in this debate for their broad support for the statutory instrument before us. The noble Baroness, Lady Kramer, implied that she was not well informed on financial matters, but we all know that not to be the case. I agree with what she said about the TPRs. These are sensible measures, not least for seeking to keep the City of London’s pre-eminent position in financial markets at the forefront of our priorities.
The noble Baroness mentioned the migration of funds. I, too, saw the EY report. The £800 billion figure was an estimation of firms’ stated intentions rather than of actual assets transferred. The report states that the estimate is a “modest” sum when compared to the total assets of the UK banking sector, which stand at almost £8 trillion. None the less, it underlines the case for taking forward measures such as this to prevent any unnecessary migration of funds out of the UK. She also asked whether new funds could be established. The answer is that where there is an umbrella fund with lots of sub-funds, an existing umbrella fund with a sub-fund approved under the TPR can then get another sub-fund approved subsequently because it shares the same governance structure as the original one, so it has already been validated. Otherwise, a brand new one would have to start from scratch, in the way that the noble Baroness implied.
The noble Baroness asked about the impact assessment, She is quite right that it was published recently. These impact assessments focus narrowly on the changes that these SIs make and how businesses will need to respond. They do not deal with the broader economic impact of leaving the EU. The whole point of these SIs is to try, wherever possible, to maintain stability and continuity and minimise the amount of turbulence for firms involved. An impact assessment for the EU withdrawal Act deals with the impact of the parent Act; the Government have also published analysis of the potential economic impact of a range of scenarios, including no deal. These SIs mitigate the impact of leaving the EU without a deal. As the noble Baroness said, if they were not in place, there would be substantially more disruption and turbulence for the industry as a whole.
I think I have dealt with temporary marketing permissions. New EEA UCITS that are not sub-funds with temporary permissions, as I have just described, will have to use the third-country regime to market into the UK after exit day. The instrument does not change the process for authorising UK UCITS; that remains the same. There should be minimal change for the domestic industry.
The noble Lord, Lord Tunnicliffe, reiterated his opposition to no deal, which I understand and which he has made absolutely clear on earlier occasions. The best way to avoid no deal is to agree a deal; as I think he knows, the Prime Minister wants to meet others to identify what would be required to secure the backing of the House.
I think I answered the question from the noble Baroness, Lady Kramer, about removing LTIFs, in that some market and want to go on doing so. It will allow for EEA funds that market into the UK before exit day to continue to do so through the temporary marketing permission regime. The noble Lord, Lord Tunnicliffe, is right that it can be renewed at the end of three years. The TMPR can be extended only by the Treasury, pursuant to an FCA assessment on the effect of extending, or not extending, on financial markets, funds in the TMPR and the FCA’s objectives. It must also go through the House.
I was asked, if reciprocity is so important that they can continue marketing into this country, what about the reverse? The answer is that we can legislate only in relation to EEA funds and managers that passport into the UK. We cannot, through our own unilateral action, oblige them to do the same to us. That is why we are seeking to agree a deep and special partnership with the EU, as well as an implementation period—important for both of us—so we can have this reciprocity.
Baroness Kramer
On reciprocity, we know that some temporary permissions are now being provided by the EU. For example, the London Clearing House has been given 12 months. Does the Minister anticipate temporary permissions in this area? Some guidance would be extremely helpful for the industry.
Lord Young of Cookham
The noble Baroness makes a valid point. The answer may become available before I sit down. I agree that it would be of great value to firms based in this country if they could continue marketing into the EU in the event of no deal. I have just been handed the answer to an earlier question, which I have already replied to off the cuff. There may be some more in-flight refuelling.
On the response of industry to what we are doing, I draw the Committee’s attention to the remarks of Richard Withers, the head of government relations for Vanguard in Europe—one of the world’s largest asset management firms. He said that the collective investment scheme regulation that the Committee is debating now is a well-considered and well-drafted piece of secondary legislation, which removes possible disruptions to the UK public’s long-term investment and pension savings activity while also ensuring that the UK remains an attractive and pre-eminent target market into which global fund management companies distribute their products.
On the last point, it looks as if I may not be able to give a response to the very good question aimed at what representations are now being made by the Government or City institutions to encourage the EU and the relevant authorities there to do to us what we are in the process of doing to them. If I have not got the information by the time we reach the end of the next statutory instrument, I will write to the noble Baroness, Lady Kramer. I beg to move.
Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019
(5 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Young of Cookham
That the Grand Committee do consider the Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019
Motion agreed.
Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018
(5 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Young of Cookham
That the Grand Committee do consider the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018.
Lord Young of Cookham (Con)
My Lords, as this instrument has been grouped, I will speak also to the Financial Markets and Insolvency Amendment and Transitional Provision (EU Exit) Regulations 2019.
As with the instruments we have just debated, these two instruments are also part of the same legislative programme to ensure that if the UK leaves the EU without a deal or an implementation period there continues to be a functioning legislative and regulatory regime for financial services in the UK.
Turning to the substance of the over-the-counter derivatives, central counterparties and trade repositories SI, many noble Lords will be familiar with the European market infrastructure regulation known as EMIR, which the EU implemented in 2012. It is Europe’s implementation of the G20 Pittsburgh commitment in 2009 to regulate over-the-counter derivative markets in the aftermath of the financial crisis, reduce risk and increase transparency in derivative markets. It should be noted that EMIR, and the financial markets and insolvency SI which we will come on to in a moment, concern activities that mainly take place on financial markets. EMIR imposes requirements on firms that enter into any form of derivative contract and establish common organisational, conduct-of-business and prudential standards for trade repositories and central counterparties. Central counterparties, for example, stand between counterparties in financial contracts, becoming the buyer to every seller and the seller to every buyer. They guarantee the terms of a trade, even if one party defaults on the agreement, thereby reducing counterparty risk.
This SI addresses deficiencies within EMIR and related UK legislation to ensure that after the UK has left the EU an effective legal supervisory and regulatory framework for over-the-counter derivatives, central counterparties and trade repositories remains. This instrument is the last of three key SIs that fix deficiencies in EMIR, and it follows two SIs which have already been debated in your Lordships’ House and which have subsequently been made: the central counterparties SI and the trade repositories SI.
Firstly, the SI continues key requirements of EMIR that include the clearing obligation, which requires firms to clear certain types of derivative contracts at a CCP, the reporting obligation, which requires firms and CCPs to report derivative trades to a registered or recognised trade repository, and margin requirements, which compel firms to put forward money to cover the costs associated with trades. In order to have a framework in place to facilitate these requirements the relevant functions are transferred from the European Commission to the Treasury, and from the European Securities and Markets Authority—ESMA—to the UK regulators, namely the Financial Conduct Authority or FCA, the Prudential Regulatory Authority, known as the PRA, and the Bank of England.
Secondly, the power of granting equivalence decisions for non-UK trade repositories is transferred from the European Commission to the Treasury and functions for recognising non-UK trade repositories are transferred from ESMA to the FCA. The SI also transfers powers from the Commission to the Treasury with regard to equivalence decisions on over-the-counter derivative requirements and whether non-UK markets are recognised for the purpose of trading exchange-traded derivatives.
Thirdly, a temporary intragroup exemption regime provides continuity by ensuring that exemptions from EMIR requirements for intragroup transactions will continue after exit day. The regime will last three years from exit day to allow time for consideration of an equivalence decision by the Treasury and for the FCA to determine a permanent exemption. This period can be extended by the Treasury if necessary. Under the MiFID II legislation, there is an exemption from clearing and margining for certain energy derivative contracts, and this exemption is maintained by this instrument. Finally, EU processes which will become redundant are removed and replaced with equivalent UK processes.
I turn now to the financial markets and insolvency SI. This instrument, broadly speaking, concerns insolvency-related protections that are provided to systems and central banks under the EU settlement finality directive, or SFD. Systems are financial market infrastructure, such as central counterparties, central security depositories and payment systems, which provide essential services and functions relied upon by the financial services sector.
Currently, if an EEA-based system is designated under the SFD and receives funds or securities from a system user—for example, a UK bank—those funds or securities cannot be clawed back in the event of the UK bank being subject to insolvency proceedings. Importantly, this framework also benefits system users, who could receive services on less favourable terms, or not at all, if the EEA system were not protected from UK insolvency law. In certain cases, membership of a system is contingent on these protections. Designation is therefore important as it facilitates the smooth functioning of, and confidence in, financial markets.
In order to become a designated system, a system must be approved by its designating authority—the Bank of England, in the case of the UK. The Bank then informs ESMA, which places it on the EU register of designated systems. The SFD provides similar protections to central bank functions across the EEA. Collateral received by an EEA central bank in accordance with its functions, such as emergency lending, cannot be clawed back if the relevant counterparty to the central bank is subject to insolvency proceedings.
The relevant EU laws—the SFD and the financial collateral arrangements directive—are implemented in the UK via the Financial Markets and Insolvency (Settlement Finality) Regulations 1999, the Companies Act 1989, the Financial Collateral Arrangements (No. 2) Regulations 2003 and the Banking Act 2009. Should the UK leave the EU without a deal or an implementation period, there will be no framework for the UK to recognise systems designated in EU member states, which in turn may risk continuity of services from those designated systems for UK firms.
This SI therefore establishes two main measures to mitigate these risks and ensure that settlement finality protections continue to operate effectively following the UK’s withdrawal. First, this SI establishes a UK framework for designating any non-UK system, while maintaining existing designations for systems that were designated by the Bank of England before exit day. To do this, the Bank of England’s powers to designate, and charge fees to, UK systems will be expanded to non-EEA systems, such that they can be designated under UK law. Moreover, the Bank will be able to grant protections to non-UK central banks, including EEA central banks, which already receive protections under the SFD. This will help maintain the effect of the current framework, providing continuity to UK firms accessing systems and central banks, while assisting UK firms in accessing the global market.
Secondly, the SI establishes a temporary designation regime. This provides temporary designation for a period of three years to existing designated EEA systems that intend to be designated under the UK’s framework. The purpose of temporary designation is to allow time for designation applications to be processed by the Bank of England while ensuring continuity of access for UK firms to relevant EEA systems immediately after exit day. The SI also gives the Treasury the power to extend this regime should more time be required to consider these applications.
The Treasury has been working very closely with the regulators in the drafting of the instruments. It has also engaged the financial services industry on these SIs and will continue to do so going forward. The Treasury published these instruments in draft alongside Explanatory Notes to maximise transparency to Parliament, industry and the public. That took place on 22 October and 31 October 2018 respectively for the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 and the Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019. Furthermore, the Treasury published the impact assessment that accompanies these SIs, providing further transparency regarding the reasons behind, and foreseen impacts of, these proposals.
The Government believe that the proposed legislation is necessary to ensure the smooth functioning of financial markets in the UK if the UK leaves the EU without a deal or an implementation period. I hope that noble Lords will join me in supporting the regulations. I beg to move.
Lord Sharkey (LD)
My Lords, as the Minister noted, the first SI—dealing with OTC derivatives, CCPs and trade repositories—was published in draft on 22 October last year. The second, dealing with financial markets and insolvency, was published in draft on 31 October last year. The impact assessments for these SIs are contained in a consolidated batch of nine HMT impact assessments, which themselves rely occasionally on references to IAs for other SIs. That batch was published on 29 January, three months after the publication of the drafts and two working days before we were scheduled to debate them. Even one working day beforehand, last Friday morning, the IAs were not available in the Printed Paper Office. Can the Minister explain the very late appearance of the SIs and why the PPO did not have copies by Friday? Can he reconcile this late publication of IAs with giving Parliament proper time for scrutiny? Can he assure the Committee that future Treasury IAs will be published in good time and lodged with the PPO?
The consolidated IAs contain a headline assessment of cost and benefits. As to costs, there are three headings: “Total Transition”, “Average Annual” and “Total Cost”. In each case, the IA estimates the costs as “Unknown: likely significant”. This is unsatisfactory and raises the question of whether HMT understands the role that IAs play in parliamentary scrutiny. It is of no help that the consolidated IA reckons the benefits to be “significant” but declines to attempt to quantify them. In the remaining 52 pages of the impact assessment there is no real detailed examination or quantification of likely costs and benefits, apart from a reading time-based estimate and a passing reference to the trade repositories SI where costs are estimated, apparently, at £500,000 per TR. I say “apparently” because there is a typo in the cost reference for these TRs, so it is not clear whether the figure is meant to be £50,000 or £500,000. Perhaps the Minister can clear that up. I think that it would help the Committee in its scrutiny of future Treasury SIs if consolidation was avoided and we returned to individual impact assessments in proper form for each SI.
Turning to each SI, I found it quite hard in parts to follow the EM for the OTC derivatives, CCPs and TRs SI. I would be grateful for some clarification from the Minister. In paragraph 6.1, the EM notes that the SI revokes two pieces of delegated legislation. Will the Minister expand on what these are and why they are being revoked? The EM does not say why—or if it does, I could not find it. In paragraph 7.7, the EM explains that:
“As a general principle, the UK would need to default to treating EU Member States largely as it does other third countries, although there are cases where a different approach would be needed including to provide for a smooth transition to the new circumstances”.
The EM does not explain what these cases may be or what the different approach might be. Will the Minister tell the Committee what these cases are, or may be, and what different approaches will be needed, and why?
Paragraph 7.12 of the EM states:
“Where the Commission has taken equivalence decisions for third countries before exit day, these will be incorporated into UK law and will continue to apply to the UK’s regulatory and supervisory relationship with those third countries—with the exception of those taken under Article 25 EMIR as set out in the CCP Regulations”.
Will the Minister explain what these exceptions are and why they exist?
In paragraph 7.16, the EM notes that the SI introduces a power that allows the FCA to suspend the reporting obligation for up to one year, with the agreement of HM Treasury, where there is no registered UK TR available. Surely the Treasury must know how likely this is and who it will affect. Again, the EM and the impact assessment do not help—or at least did not help me. Will the Minister say how likely this suspension is, who it will affect and what its consequences and impact might be?
I turn briefly to the second instrument, the financial markets and insolvency regulations, which is, by comparison, a model of clarity and straightforwardness. My only question relates to paragraph 1.76 of the impact assessment, which explains that the relevant EEA systems will be required to notify the Bank of England, before exit day, to enter the regime. What happens if they do not? What risks does this generate, and what procedures are in place to mitigate them?
I realise that I have asked quite a few quite detailed questions, and if the Minister prefers to respond in writing I would be happy, as long as we have the answers before the SIs reach the Chamber. I emphasise that I feel strongly that the consolidation of IAs makes proper parliamentary scrutiny significantly more difficult, and the very late production of IAs, as in this case, really does not help.
Lord Tunnicliffe (Lab)
My Lords, there is much that I would support in the intervention by the noble Lord, Lord Sharkey. I particularly like the way he sneaked in the fact that he got to page 41 of the IA.
The first instrument is on an area that I knew little about before I read it. With that limitation, it seems generally to make sense. It is clear about the transfer of functions, who will be responsible for equivalence decisions and information exchange—data comes over with a discretionary relationship. It is clear that the object of the exercise—at least this is how I read the Explanatory Memorandum—is to retain the discipline of EMIR. In view of its importance, I was surprised that a UK name for EMIR was not created, as was done in a previous SI, so that we would all know what we were talking about, given that the E in EMIR stands for European.
Going a little way into the detail, as the noble Lord pointed out, paragraph 7.16 allows a reporting obligation to be suspended for one year. From what I understand of the overall regime that this is part of, its very essence is open reporting of transactions. That is what the G20 came up with to create this regime. Will the Minister give us some feel for what risks are being taken by Part 2 of the instrument, which creates an opportunity for reporting to be suspended for up to one year? It also has what seems a fairly reasonable exemption for intragroup activity. It is a classic three years, plus however often the Treasury wants to extend it. It also has an exemption for energy derivative contracts up to 3 January 2021, but I could not see where that date came from; perhaps it is something to do with an international agreement.
Baroness Kramer (LD)
This is quite an important question. At the moment, LCH is the dominant clearing house globally and it is certainly the dominant player for any euro-denominated transactions. There is a shift under way to take some of this activity to Paris. The real question for a lot of the UK players is whether they have to relocate part of their operation to Paris to be able to play in both parts of what will become a much more fragmented European clearing system. That matters a lot for terms of compression and deciding what levels of margin companies have to keep. The reciprocal play matters. Today, the Bank of England and ESMA signed an MoU on how they will regulate these central counterparties. I do not know whether, or to what extent, that is the context. Am I being clear? No, I am being confusing.
Lord Tunnicliffe
No, that is very good. It might turn my casual question into quite a substantial one.
I notice that all the Treasury SIs that the Committee has discussed say that there will be no consolidation and no guidance. I do not know how we can carry on like this. I have found it absolutely impossible to understand the overall scene that these SIs relate to. The scrutiny that one is able to give is therefore entirely dependent on the Explanatory Memorandums. As a generality, these assume quite significant previous knowledge and it is an uphill battle to get a feel for these SIs and to give them the appropriate scrutiny.
Lord Young of Cookham
My Lords, I am grateful to all noble Lords who have taken part. I detected no objection to the basic premises on which these SIs are based. I will sweep up some of the points raised in earlier debates that are also relevant to this one.
The noble Lord, Lord Tunnicliffe, asked about the FCA’s resources to cope with the new responsibilities being imposed on it. We are confident that the FCA is making adequate preparation and is effectively resourced ahead of March this year. In its 2018-19 business plan, a significant proportion of its resources are already focused on the forthcoming exit, including arrangements to implement any necessary changes. It has increased its staff numbers in response to increases in the scope of its regulatory activity, including EU withdrawal. It will publish its 2019-20 plan this spring, setting out its planned work for the coming year. As I said in response to an earlier SI, the chief executive of the FCA, Andrew Bailey, has said he expects to hold FCA fees steady for a year or two, assuming there is an implementation period. If there is not, it can increase its fees should it need to do so in the event of no deal.
The noble Lord, Lord Sharkey, asked about the impact assessment being published late. This issue was raised in another place and was dealt with by my ministerial colleague John Glen. We do recognise the importance of making impact assessments available for parliamentary scrutiny. We find ourselves in a unique situation. While we have tried to ensure that these impact assessments are published before debates, this has not always been possible. We acknowledge that some firms will incur costs as a result of these SIs but, as the noble Baroness, Lady Kramer, said in an earlier debate, the situation for these businesses would be much worse in the absence of this legislation. As a whole, these SIs will reduce costs to business in a no-deal scenario as without them the legislation would be defective. In response to the points raised by both noble Lords and the noble Baroness, we have agreed to undertake further analysis of these SIs in the event that we leave the EU without a deal and they come into effect.
The noble Lord, Lord Sharkey, asked whether we could have independent assessments for SIs. I understand that, but there are some complex interdependencies between some of the SIs. Also, the work that the regulators are undertaking cannot always be neatly pigeonholed between the SIs. Given that, it has not been possible to fully quantify the impact of the individual SIs at this stage. However, this is something that Miles Celic, the chief executive of TheCityUK, noted in a letter to the RPC in November. As I said a moment ago, we are committed to undertaking further analysis of the impact of these instruments at an appropriate point, should they come into effect, either in the event of leaving without a deal—
Lord Tunnicliffe
We hear that explanation and I have great sympathy for the civil servants involved with this task. However, will the Minister at least have the grace to admit that it was entirely in the Government’s hands to decide when to start this process? If they had started it earlier we would not be in this mess now. We have had impact assessment after impact assessment delivered after we have approved the instrument. That is not satisfactory and I doubt whether the Treasury will be able to catch up.
Lord Young of Cookham
I plead guilty as charged. As I said a moment ago, we recognise the importance of parliamentary scrutiny. We will try to do better and make sure that the relevant impact assessments are available in time.
Lord Sharkey
I asked about the absence of the impact assessments from the Printed Paper Office. That is the route by which most of our colleagues get the information. They were transmitted electronically to some noble Lords on 29 January, but they were not available in printed form until this morning. That seems a very odd lapse.
Lord Young of Cookham
Again, I take that seriously. Would the noble Lord allow me to make some inquiries within the machinery of government in this House to find out what exactly went wrong there? I understand that they were delivered to the Printed Paper Office on Friday.
Baroness Kramer
Having gone to the Printed Paper Office myself well into the afternoon, I know that if the Printed Paper Office had received them, it was not aware it had, so there is something there that needs investigation.
Lord Young of Cookham
We need a post-mortem on this, which I will authorise.
In response to the question put by the noble Lord, Lord Sharkey, regarding the numbers on the impact assessment, and how they relate to trade repositories, I say that there are eight trade repositories operating in the EEA that are in scope of familiarisation costs. The impact assessment confirmed that we anticipate that the IT costs for those TRs will be approximately £10,000 to £15,000 per TR—although this cost is also dependent on the size of the TR—and, for firms that will need to update their systems, £5,000 per firm. Costs to the FCA associated with supervising the trade repositories, as well as new IT systems to connect to trade repositories, would be approximately £500,000 per trade repository, although this cost is also dependent on their size. The impact assessment also acknowledged that there may be other costs associated with trade repositories connecting to the Bank of England.
I think it was the noble Lord, Lord Tunnicliffe, and it may have also been the noble Lord, Lord Sharkey, who asked about the FCA’s power to suspend the need to report if there were no trade repositories. That is most unlikely. There are a number of trade repositories in the UK and there are arrangements in the legislation to passport them so they carry on. There are also arrangements for relatively speedily authorising any new TRs. It was slightly odd that a city such as the City of London did not have any TRs, so we think it most unlikely that the FCA will utilise its power to suspend reporting obligations against that background.
In the earlier debate, the noble Baroness, Lady Kramer, asked me whether the EU was considering reciprocity to UK funds in a no-deal scenario. The EU has not done the same for UK funds passporting into the EU, but many UK asset management firms operate EU fund ranges, and they have welcomed the creation of the temporary marketing permission regime, which enables them to market them into the UK.
I was asked what happens to an EEA system that does not notify the Bank of England of entering the TDR. Such a system will not enter the temporary designation regime and it will therefore not have recognition for UK insolvency law purposes. A notification is not an onerous requirement; the Bank of England provided details of this last autumn. The noble Lord, Lord Tunnicliffe, pointed out that under Section 8 we cannot create any new criminal offences, or, I think, create new taxes or new public authorities, and I am confident that nothing in the SIs goes against that restraint.
Lord Tunnicliffe
The appropriate paragraph does say that you are substituting one set of criminal offences with another. I can find it and read it if you like; it is a real question. I think the answer is in the word “relevant”.
Lord Young of Cookham
The noble Lord asked a good question: is the creation of a criminal offence consistent with the withdrawal Act? Section 8 outlaws the creation of a relevant criminal offence. This is defined in Section 20 of the Act as an offence with a possible prison term of more than two years. The criminal offence in this SI is not caught by that definition, so it is permitted.
Following an intervention from the noble Baroness, Lady Kramer, I was asked about unilaterally recognising EEA systems as central banks with no EU-wide reciprocal action. Extending settlement finality protections unilaterally reduces the risk that UK firms will be refused access to EEA financial market infrastructures, known as systems, and central banks once the UK leaves the EU. It also reduces the legal uncertainty and settlement risk these systems and central banks would face regarding UK law without such protections, so it ensures that the UK remains an attractive place to do business in a global context and supports broader financial stability.
I am conscious that I might not have answered all the penetrating questions from the noble Lord, Lord Sharkey, or some others that have been raised. If I have not, I will write to noble Lords, I hope with an authoritative reply.
Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019
(5 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Young of Cookham
That the Grand Committee do consider the Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019.
House of Lords
Introduction: Baroness Blackwood of North Oxford
Oaths and Affirmations
Health: Public Health Grant
Baroness Barker
To ask Her Majesty’s Government what assessment they have made of the impact of the decision announced on 20 December 2018 to reduce the Public Health Grant to local authorities for 2019/20 by £85 million.
Baroness Manzoor (Con)
My Lords, despite funding pressures, councils are successfully improving people’s health, and most indicators of public health are stable or improving. Since 2011, the number of smokers has dropped by a fifth. Last year, 98% of adults accessing drug treatment services did so within three weeks and 90% of people with HIV were treated successfully. Future budgets will be influenced by the next spending review, when we intend to make a robust case for the value of prevention.
Baroness Barker (LD)
My Lords, local authority public health budgets have been reduced by £700 million since 2014. Due to rising rates of gonorrhea and syphilis and the problems young people have in accessing contraception, does the Minister not think there is an urgent need to rethink the Government’s strategy?
Baroness Manzoor
My Lords, as I said, we will be making a robust case for the value of prevention in the spending review. The reduction to the grant to which the noble Baroness refers is not a new cut. It was agreed in the 2015 spending review in a difficult financial environment. Local authorities have been aware of these cuts for over a year and have been able to plan accordingly. But there is much more to public health than the grant itself—for example, our national childhood obesity strategy and NHS England’s world-leading diabetes prevention programme. As the noble Baroness knows, the NHS long-term plan has an emphasis on prevention.
Lord Lansley (Con)
My Lords, I was the Secretary of State who introduced the public health grant to local government. Is my noble friend the Minister aware that this was done because many of the wider social determinants of health can be better influenced through the action of local authorities than by the NHS alone? That was the reason why the public health grant was included within the ring fence in 2010 to 2014, which guaranteed a real-terms increase in the public health grant to local authorities; this was reversed in 2014. Will my noble friend the Minister consider restoring the value and growth of the public health grant in the context of an agreement with local authorities to act on those wider social determinants of health?
Baroness Manzoor
I agree with my noble friend, and that is why we are making a robust case to the Treasury in relation to the spending review. Health improvement is about far more than the services funded through the grant, as my noble friend says. The transfer of local health responsibility to local government provided the opportunity to join up public health with decisions on other local services such as housing and economic regeneration. We see local authorities commissioning different kinds of public health services which better fit local circumstances and priorities and deliver improved value. We therefore recognise the importance of the grant.
Lord Cashman (Lab)
My Lords, I refer to my entry in the register of interests. I want to develop the question from the noble Lord, Lord Lansley. Demand for sexual and reproductive health services is rising. Public health data has indicated a 13% increase in attendance at sexual health services between 2013 and 2017, and over the same period the Health Foundation has found that health budgets have been cut by 25%. Will the Government’s prevention Green Paper therefore include a call for fully funded local authority public health services?
Baroness Manzoor
My Lords, the noble Lord, Lord Cashman, is right: spending on sexual health in 2017-18 has reduced by 4.3% from 2016-17. However, a reduction in spend does not necessarily mean a deterioration in outcomes. For example, the number of hospital admissions for drug-related mental health and behavioural disorders has dropped 16% since 2015-16. The Green Paper on prevention will set out further plans in much more detail, considering the best available evidence.
Lord Laming
My Lords, does the Minister agree that it is actually not in the interests of the NHS to cut local authority public health services? Local authorities should be celebrated for what they are doing in many different fields, not least in supporting charitable bodies that are doing so much, in addition to what we have all heard of, by supporting people who are socially isolated and depressed and would otherwise be admitted to hospital.
Baroness Manzoor
My Lords, local authorities and charities are doing an excellent job and I commend the work they are doing, but the Government are investing £16 billion during the current spending review period on the provision of local authority public health services. That is on top of funding for Public Health England and what the NHS itself spends, which includes over £1 billion on immunisation and screening programmes and £340 million in 2016-17 on vaccine stocks. I agree that local authorities do a great job in challenging times.
Baroness Thornton (Lab)
My Lords, can we return the Minister to the original Question? Does she agree that increasing spending for the NHS, including a prevention vision, in the 10-year plan while cutting funding for services that impact on public health is a false economy? Could she please explain to the House the dichotomy of saying, “We want to spend more money on public health”, but actually cutting public health spending? Frankly, I am stumped.
Baroness Manzoor
I think I have already answered the Question. The reduction in the grant to which the noble Baroness has referred is not a new cut, as I have already said. It was agreed in the 2015 spending review, in a difficult financial environment. Difficult decisions had to be made. Local authorities have been aware of these cuts for over a year and have been able to plan accordingly. I have already stressed the balance we have between prevention and ensuring we address that. We are going to be putting £4.5 billion into primary and community care services, in addition to the money we are already putting into current services.
Baroness Jolly (LD)
My Lords, we seem to be relying more on local government: additional preventive health campaigns; local five-year plans as part of the integrated care system; and greater social care provisions. Can the Minister please articulate exactly how the December 2018 reduction of the public health grant can have any positive impact for local authorities?
Baroness Manzoor
I understand the point that the noble Baroness is making, but I have already said that this is part of a longer plan. The grant in itself is not the only part of the NHS plan. There is much wider spending by the local authorities and joined-up thinking. The Green Paper that I have already mentioned, Prevention is Better than Cure, was published on 5 November 2018. This will support healthy life expectancy, by at least five extra years by 2035, and close the gap between the richest and the poorest. The Government are taking concerted and proper action to address these issues.
NHS Staffing: Long-term Plan
Baroness Wheeler
To ask Her Majesty’s Government how they will ensure that there are sufficient nurses, doctors and community specialist care staff to deliver the National Health Service long-term plan, published on 7 January 2019.
Baroness Manzoor (Con)
My Lords, the Secretary of State for Health and Social Care has commissioned the chair of NHS Improvement, working closely with the chair of Health Education England, to lead a number of programmes to engage with key NHS interests to develop a detailed workforce implementation plan. These programmes will consider proposals to grow the workforce, including consideration of additional staff and the skills required to build a supportive working culture and ensure first-rate leadership for NHS staff.
Baroness Wheeler (Lab)
I thank the Minister for her Answer. Both the NAO and the Commons Public Accounts Committee have stressed that the NHS long-term plan is at risk and cannot be delivered if current staff shortages of over 100,000 are not addressed, and if we do not recruit more staff in key specialities to meet future need and demand. Last Thursday’s major debate on the plan showed that this view is shared across the House.
Today is World Cancer Day. The ambition in the plan, for example, to diagnose 75% of cancers at stage one or two by 2028 is welcome, but there are chronic staff shortages in the cancer workforce across both primary and acute care, with more than one in 10 diagnostic posts currently unfilled. It is the same scenario for other key priority ambitions in the plan, but the long-term workforce implementation plan, as the noble Baroness said, has yet to be drawn up, developed and costed, and is not included in the extra funding promised for the NHS. Do the Government have any idea how they are going to take the NHS plan forward?
Baroness Manzoor
We absolutely do. The NHS employs record numbers of staff now compared to any other time in its 70-year history, with significant growth in newly qualified staff over the period from 2012. There are almost 13,400 more nurses on our wards since 2010. However, the noble Baroness is right—the current vacancy levels are not sustainable. Therefore the Government have put several actions in place to increase nursing workforce supply, covering improving staff retention, return to practice, overseas recruitment, expanding nursing associates, improving sickness absence and a review of language controls.
Lord Naseby (Con)
Bearing in mind that one of the key problems facing doctors is those leaving the NHS as soon as they qualify—a significant number, both male and female, choose to go abroad—should the Government not have a look at the Singapore system, where they have to sign up for five years once they qualify and after that it is entirely free, regarding their medical practice?
Baroness Manzoor
I thank my noble friend for that question. I am certainly aware of the Singapore model. I reassure him that we are expanding undergraduate medical education by funding an additional 1,500 medical school places in England. We have also recently announced the removal of doctors and nurses from the ambit of the cap on tier 2 visas, which means that all overseas doctors needed in the UK should be able to come and work here. We have more doctors than ever before, but there is no doubt that the pressures are huge. That is why we want to train more doctors. However, I understand the point that my noble friend makes, which is perhaps something we need to consider.
Baroness Finlay of Llandaff (CB)
Do the Government recognise the GMC’s statement that the medical profession is on the brink of breaking point, that up to a third of doctors report being burnt out and that around 10% at times have depression? There is evidence that errors are twice as likely to be made by people who feel burnt out. Do the Government recognise that this is urgent and whatever plans they have to train more people will take several years to come through the system?
Baroness Manzoor
I agree with the noble Baroness: we need to take care of our workforce and ensure that supportive mechanisms are in place so that there is greater flexible working. We are already looking at medical training and different modules. We want a first-class workforce and we will do everything in our power to support doctors so that they stay and remain healthy while they work in the NHS.
The Lord Bishop of Lincoln
Is the Minister aware that we have recently opened a new medical school in the University of Lincoln? We hope that this will assist the recruitment and retention of more doctors. However, what are the Government doing to mitigate the increased cost of specialist community nursing provision in remote and sparsely populated rural areas?
Baroness Manzoor
I am delighted that a new medical school is being opened in Lincoln, which is very welcome. On community nursing, we are trying to attract more nurses and medical practitioners to areas where there is greatest need, which are community nursing, psychiatry, mental health and learning disabilities. Last year, the Secretary of State announced golden hellos. We are also looking at further, more flexible training to enable a greater number of people to enter the profession.
Baroness Tyler of Enfield (LD)
My Lords, with concern being voiced about current vacancy levels among mental health professionals, let alone the additional 21,000 mental health practitioners the Government have said will be needed to treat a million more people by 2021, will the Government agree to fund a collaborative mental health careers campaign aimed at secondary school, college and university students, particularly psychology graduates, to help plug this gaping hole?
Baroness Manzoor
My Lords, we are looking at allied professionals and more creative ways of bringing a wide range of people into the profession. I cannot comment precisely on the question that the noble Baroness has asked. However, as she is aware, HEE has published the mental health workforce plan, which has the stretching ambition of delivering 21,000 new posts and employing 19,000 additional staff. As well as increasing recruitment and retention in mental health training, the NHS is creating new roles such as physician associates, nursing associates and allied health professional associates as well as looking at advanced clinical practitioners. On the specific question asked by the noble Baroness, I shall write to her.
Lifeboats: Ceredigion
(5 years, 9 months ago)
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Baroness Bloomfield of Hinton Waldrist
To ask Her Majesty’s Government what the impact will be on the coastguard of the RNLI’s decision to downgrade the all-weather lifeboats capacity in New Quay, Ceredigion.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)
My Lords, the RNLI is an independent organisation that declares its lifeboats available to Her Majesty’s Coastguard. It determines how and where it deploys the resources that it has available. Based on historical incident data and the outputs of the RNLI’s risk-assessed five-year review, we do not anticipate that its decision to replace the all-weather lifeboat with an Atlantic 85 vessel at New Quay will have an impact on HM Coastguard’s capability to co-ordinate search and rescue in Cardigan Bay.
Baroness Bloomfield of Hinton Waldrist (Con)
I, too, hesitate to criticise such a respected charity, but the replacement of the all-weather lifeboat with an Atlantic 85 inshore vessel, which cannot be launched in stormy conditions exceeding force 7, leaves a gap of 63 nautical miles in all-weather search and rescue provision. This and the alleged lack of a proper, open consultation with any local stakeholders concerned with sea safety in Cardigan Bay are a matter of grave concern to the local community. Will my noble friend the Minister intervene and ask the RNLI to publish its evidence and perhaps also to review its decision?
Baroness Sugg
My Lords, the RNLI’s decision was underpinned by extensive research of incident reports as well as information gathered in face-to-face meetings and workshops at the lifeboat station both before and after the coast review visits, to ensure that local knowledge and concerns were considered. The decision is a significant investment by the RNLI in the area—which of course we are very grateful for—with new, faster boats at all three RNLI stations. The RNLI view is that that is the optimal combination for future life-saving in the area. It has shared a 30-page extract of the report with the lifeboat operations manager, and I understand that it is in dialogue with a campaign group to ensure it has the appropriate information.
Lord Morris of Aberavon (Lab)
My Lords, I declare an interest as a former Lord Lieutenant of the county and my wife is from a long line of New Quay sailors. The Government have paid £3.5 million since 2014 to increase capacity and resilience in rescue, so they cannot wash their hands entirely to the RNLI. Since it is proposed that all-weather lifeboats will be as far away as Pwllheli and Barmouth, will the new inshore lifeboat at New Quay diminish capability? Will there be a gap in safety provision in Cardigan Bay in severe weather?
Baroness Sugg
My Lords, the noble and learned Lord is right to point out the change in provision. Three 17-knot Mersey class all-weather lifeboats are being replaced with two Shannon lifeboats at Pwllheli and Barmouth and there will be a smaller but faster lifeboat at New Quay. This was based on a risk-based review that looked at the entire area and the RNLI’s decision to replace the all-weather lifeboat was, as I said, underpinned by extensive research. It is convinced that this is the optimal amount of resource for the area.
Lord Harries of Pentregarth (CB)
I declare a personal interest as someone with long-standing family connections in the area and as a supporter of this campaign. The RNLI of course does wonderful work, but I am afraid that in this instance it has been totally lacking in transparency with the people of New Quay about the reasons for its decision. Despite what the Minister said, independent research shows that in severe weather conditions—force 7 in daylight and force 6 by night—it does increase the risk. There is a 70-mile gap, as I understand it, between the nearest all-weather lifeboats and it simply takes that much longer to get there. Should not an organisation such as the RNLI that depends on trust be more open about its decisions and in this instance look again at the increased risk of this decision?
Baroness Sugg
I thank the noble and right reverend Lord for his question. I know of his long-standing interest in the area. The RNLI, as I said, has shared a 30-page extract of the report and is working closely with a campaign group. I understand that the campaign group is made up of passionate people who want to ensure that they have the optimal provision in the area. As I said, along with the replacement new boat, the all-weather lifeboats in the surrounding area will be replaced with much faster ones. There is also a new helicopter base in St Athan, and the new boats, the helicopter and the increase in lifeguarding on the coast will not only maintain but improve life-saving provision in the area.
Baroness Humphreys (LD)
The RNLI’s decision to move the all-weather facility from New Quay has led to huge public disquiet in the area—an area where people understand the important role fisheries play in providing a livelihood for commercial fishing and angling vessels. They also understand the danger to the fishermen who brave all weathers. What assessment has the noble Baroness made of the importance of the all-weather lifeboat to the safety of fishermen in Cardigan Bay?
Baroness Sugg
My Lords, the RNLI carries out a coastal safety review every five years. It is a very extensive review based on extensive research; it considers all the rescue records and looks at all the reports of launches and incidents carried out by the lifeboat stations. It has concluded that services by the New Quay RNLI all-weather lifeboat could have been carried out safely and effectively by an Atlantic 85 inshore lifeboat, supported by the new, faster lifeboats at neighbouring stations if required. I understand that people who have long experience in this area locally are concerned about it. The RNLI continues to have conversations with them and will ensure that they are given the appropriate information.
Baroness Smith of Basildon (Lab)
My Lords, the Minister was asked just now what assessment she had made of the need in the area. She told us what assessment the RNLI had made. She referred to the campaigners as being passionate. We can also say that the RNLI is passionate, because day in and day out volunteers are out there saving people’s lives and collecting and raising the funds to do so. This is a difficult decision that has been made. What engagement do the Government have with the RNLI to ensure that the interests of the public are taken into account, so that the Government can assure themselves that the work it is doing takes public safety into account? That may allay some fears of those who are concerned about this decision, or who may be in a position to provide funding so that they do not have to make this decision.
Baroness Sugg
My Lords, lifeboat provision in the UK is delivered by independent charitable organisations that declare their lifeboats available to Her Majesty’s Coastguard. As I said, we are very grateful for their work. It is the responsibility of the organisations to decide on the specific operational capacity they consider appropriate, but of course the MCA works closely with the RNLI on the coastal review. The noble Baroness was quite right to pay tribute to the scale of volunteers in this area—it is extremely impressive. The Coastguard Rescue Service is made up of approximately 3,500 volunteers; the RNLI has 5,000 volunteer lifeboat crew; and, as the noble Baroness said, there are more than 23,000 volunteer community fundraisers. They all contribute to providing the excellent service on our coasts.
Broadcasting: Public Sector Content
(5 years, 9 months ago)
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Baroness Benjamin
To ask Her Majesty’s Government whether they intend to introduce legislation to ensure that public sector content continues to be easily discoverable by viewers, regardless of how they are accessing broadcasting content.
Baroness Benjamin (LD)
My Lords, I beg leave to ask the Question on the Order Paper, and declare an interest as per the register.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, Ofcom has consulted on proposed changes to the linear EPG code and on how the prominence regime may need to change to ensure that public service content remains accessible, regardless of how consumers access it. That consultation closed in October 2018 and we look forward to receiving its findings in due course. If Ofcom makes it clear that there is a problem which needs fixing by legislation, we will look to bring that forward.
Baroness Benjamin
My Lords, children are being increasingly exposed to inappropriate content on social media, and public service broadcasting plays an important role in providing parents with a safe, trusted space where children can access high-quality, entertaining educational content—especially now that the new BFI contestable funding will be available to programme makers. However, it is difficult to find these PSB channels because no two electronic programme guides are the same. They are confusing and very frustrating. Does the Minister agree that it is essential we update the EPG rules as a matter of urgency, to ensure that viewers can easily access this excellent PSB content?
Lord Ashton of Hyde
I agree that PSB content is important—in fact, 83% of people think that children’s provision by public service broadcasters is important. Ofcom’s consultation on the rules for prominence and proposed changes to the linear EPG includes a proposal for prominence for children’s PSB channels. Ofcom already has the powers to review and revise the code, so any final decision on changes to the linear prominence regime is a matter for it.
Lord Griffiths of Burry Port (Lab)
My Lords, it is unusual for both of my questions, carefully prepared, to have been answered before I put them, but that will not stop me asking the Minister to repeat the assurance he gave that, if the Ofcom report suggests that legislation is necessary, the Government will do it.
Lord Ashton of Hyde
I can do better than that. I will repeat what the Secretary of State said to the DCMS shadow Secretary of State:
“The Government has made clear that if the Ofcom report concludes that there is a problem with the current prominence regime that needs fixing with the legislation, then we will look to bring that forward”.
Lord Hamilton of Epsom (Con)
My Lords, does public sector content include “Songs of Praise”, which the BBC insists on moving about to different times on Sunday, presumably with the ambition that it should eventually lose its audience altogether?
Lord Ashton of Hyde
As my noble friend knows well, editorial decisions are for the BBC, not the Government.
Viscount Colville of Culross (CB)
My Lords, the Sky Q box prioritises access to its services over PSB catch-up services. Many television manufacturers have partnered with Netflix to prioritise its services on their channel controllers. Is the Minister not concerned that the PSB digital channels, paid for with public money, are losing out in the battle for channel prominence to the video-on-demand giants?
Lord Ashton of Hyde
My Lords, I recognise that most of what we have talked about today is for linear services. Of course, a change is taking place: people now have subscriptions for watching on-demand programmes on their internet browsers. This creates a number of challenges and we have agreed that, if Ofcom makes suggestions that take that into account, we will bring legislation forward when the time arises.
Baroness Bonham-Carter of Yarnbury (LD)
My Lords, I fear I will ask the Minister to repeat, yet again, what he has said. Does he not agree that prominence is not a perk for PSBs but a fair and essential exchange? I do not know how many of you listened this morning to Radio 4’s “Start the Week”—a really quite frightening public service broadcast programme about the tech titans’ struggle for our individual attention. Will the Government commit to supporting the urgently needed updating of prominence rules through legislation?
Lord Ashton of Hyde
My Lords, I think I have done that—twice. We are aware that the technology is changing, and noble Lords might be interested to hear an example. More UK households now own a voice-activated smart speaker than own Britain’s third most popular pet: a rabbit.
UK Shared Prosperity Fund
(5 years, 9 months ago)
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Baroness Hayter of Kentish Town
To ask Her Majesty’s Government what progress it has made on the design and implementation of the proposed UK Shared Prosperity Fund in the light of reports that the Prime Minister is considering providing additional funds to former steel and mining communities and industrial towns.
Baroness Hayter of Kentish Town (Lab)
My Lords, I beg leave to ask a Question of which I have given private notice.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, we intend to launch the single prosperity fund consultation shortly, as confirmed by my right honourable friend the Prime Minister in the other place last month.
Baroness Hayter of Kentish Town
My Lords, first, is the money that the Prime Minister has been scattering around actually new money, or is it money that would otherwise come out of this shared prosperity fund? Secondly, we might need this fund in seven weeks’ time. How come, therefore, we have yet to have a consultation on it? We do not know whether it will be allocated on the basis of need or prosperity. Can the Minister assure us that, if it is needed in seven weeks’ time, it will be up and ready for the communities it is to serve?
Lord Bourne of Aberystwyth
My Lords, first, the noble Baroness will be aware that current EU programmes will run their course—in some cases, beyond 2020—so I do not quite recognise the urgency of which she speaks. At the same time as the Prime Minister announced that the consultation would be short, she talked about the importance of tackling inequalities between communities—something I am sure the noble Baroness welcomes, and it may well be something that the right honourable Member the leader of the Opposition chose to discuss with the Prime Minister. I am sure that she would hope so because, clearly, this is very important. We have been doing a lot of work with engagement events around the country. The consultation will start shortly and the decisions will be made in the spending review.
Lord Fox (LD)
My Lords, in a letter in today’s Times, my noble friend Lord Thomas of Gresford makes it clear that the offer of cash subsidies to an MP for the benefit of constituents provided that the MP votes for the Government’s withdrawal agreement is in breach of Section 1 of the Bribery Act. Does the Minister agree that having ad hoc, specific discussions of this nature is not just legally unwise but a disreputable act of a desperate Prime Minister?
Lord Bourne of Aberystwyth
My Lords, I bow to nobody in my discipleship of the noble Lord, Lord Thomas of Gresford, on legal issues, and I am sure that what he says is correct, but noble Lords should not believe everything that they see in the newspapers. What is important in regard to any fund—such as the shared prosperity fund, on which we will consult shortly—is that it tackles inequalities across communities. I am sure that the noble Lord would agree with that, and I would think that he would want to engage in the consultation on that basis.
Lord Tomlinson (Lab)
My Lords, in his usual generous way, when the Minister answered the question from my noble friend Lady Hayter, he answered more than she had asked. However, he did not answer the crucial part of her question, which was whether it was new money.
Lord Bourne of Aberystwyth
My Lords, I answered that, to the extent that I said that any spending decisions would await the spending review. However, the noble Lord will be aware of the amount that is currently spent on EU programmes—more than £1 billion per year—which I am sure will inform that review. Any decisions will await the spending review, but I am sure that that is a good guideline figure.
Lord Watts (Lab)
My Lords, do the Government agree that many of these steel and mining areas have been left to rot for many years, and it is about time that the Government provided funds to address some of the poverty in those communities?
Lord Bourne of Aberystwyth
My Lords, it was on that basis that I said that the Prime Minister was very keen to say that this was about tackling inequalities between communities, which I would think noble Lords would welcome very widely—I hope that the Labour Party does—and we will be keen to stress that in the consultation and the future spending review.
Lord Scriven (LD)
My Lords, twice now the Minister has referred to inequalities being a key factor in the shared prosperity fund. How does that sit with the latest consultation on the fairer funding formula, where deprivation and need have been excluded? Will this not mean robbing Peter to pay Paul when it comes to inequality and need?
Lord Bourne of Aberystwyth
My Lords, I will make two points. First, I referred to inequalities in communities because that was in the Written Statement on the UK single prosperity fund made by my right honourable friend the Secretary of State for Housing, Communities and Local Government in July; it was restated by the Prime Minister, and in looking at that consultation we have talked about the importance of people, infrastructure, business, environment, ideas and place. The noble Lord referred to the fairer funding formula but did not do so totally fairly, if I may say so. He will be aware that deprivation is recognised as a key factor in many areas, such as health.
Lord Campbell-Savours (Lab)
My Lords, to come back to the question asked by the noble Lord, Lord Thomas of Gresford, can we have the position made absolutely clear, that the money that was being talked about over the weekend is not in any way conditional upon support for the Government in the House of Commons? Can that be made absolutely clear at this Dispatch Box?
Lord Bourne of Aberystwyth
My Lords, I will make two points. The first is a relatively minor one, but lest the Order Paper appear strange, the noble Lord, Lord Thomas, did not table the Question but was cited in another question. In relation to the content of the letter that was read out, I am sure that the noble Lord is right legally. I say simply that the context of this consultation, when it happens shortly, is about ensuring that we address inequalities between communities. That is the essence of what we are looking at.
Lord Shipley (LD)
My Lords, will the Minister confirm that if any meetings are held with individual MPs, the minutes of those discussions will be published immediately after they have taken place?
Lord Bourne of Aberystwyth
My Lords, that is well beyond my brief. I am not quite sure whose discussions the noble Lord is referring to. As he will be aware, many confidential discussions are held, and both MPs and Ministers respect their confidentiality. It is unthinkable that a Government Minister is breaching the law in the way that has been suggested—directly and, in some cases, indirectly—in the Chamber today. Once again—your Lordships should not need encouragement in this—noble Lords should not believe everything they read in the newspapers.
Baroness Quin (Lab)
My Lords, in view of the Minister’s concern for former steel- and coal-mining areas, I ask that it be extended to areas devastated by the demise of the shipbuilding industry. On the allegations of bribery, does that not apply to the agreement between the Government and the DUP?
Lord Bourne of Aberystwyth
My Lords, the noble Baroness is fair. I shall address the first part of her question, which is certainly fair; the second, I think, was a throwaway comment. I am sure she is more concerned about the shipbuilding industry than scoring political points. On shipbuilding, I address her to the fact that much of the EU funding that will no longer be in place has been to assist such areas—the north-east, which I know she is familiar with and concerned about, is one of those areas. As I said, it is about addressing inequalities in communities, so I am sure those communities would be part of that; for example, there has been an engagement exercise in Gateshead, where I am sure this policy issue would be considered in framing a consultation. There have been engagement events around the whole country—the UK, not just England.
Lord Roberts of Llandudno (LD)
My Lords, will this policy affect Airbus or Vauxhall in north-east Wales? It will cause tremendous devastation of the economy in those areas. Does he really think that coming out of Europe will be to our benefit and ease the austerity in Wales and other places?
Lord Bourne of Aberystwyth
My Lords, I bow to no one in my respect for Airbus, but I would not be as keen as the noble Lord is to write it off. He will be aware that it is in an area not currently in receipt of cohesion funding, and I shall not be making decisions here—I do not have the writ to do so anyway—about who gets money after the consultation and the subsequent spending review. Those are the parameters: the consultation will happen shortly, the spending review later, and that is when decisions will be made which will shape what happens post Brexit.
The Lord Bishop of Durham
My Lords, will the Minister confirm that in the consultation, local community organisations will be assured that they can access the new fund so that local issues really do rise to the surface in use of the funding?
Lord Bourne of Aberystwyth
My Lords, I thank the right reverend Prelate for raising the matter. I can confirm that this will be a wide consultation. I very much hope that the sorts of organisations he referred to will participate, and obviously we will react to what we find in the consultation.
Arrangement of Business
Lord Taylor of Holbeach (Con)
My Lords, I should like to make a short business statement about our sittings in February. Noble Lords on all sides of the House will have noticed that, last Thursday, the Leader of the House of Commons informed that House that it was no longer the intention for it to have a February recess in the light of the significant decisions taken by that House last Tuesday.
In our House, we have discussed our sitting patterns on the Floor of the House on several occasions in recent months. Noble Lords will be aware that I have always said that I thought it would be necessary for us to sit throughout February. Had the House of Commons decided to proceed with its anticipated February half-term, I would have suggested that we have a long weekend to allow all Members and staff some additional time away.
However, given that the Commons will now sit throughout February, I believe it would be wrong for us to do otherwise. I assure the House that we will have plenty to do in the weeks ahead. Whatever noble Lords’ views on Brexit, I think everyone agrees that we must allow the maximum time for scrutiny, and that is what I propose we do.
Baroness Smith of Basildon (Lab)
My Lords, I am grateful to the noble Lord the Chief Whip for making the announcement. When he last spoke about this and we pressed him on dates, he said that he was speaking in code and that if we looked at Hansard we might get a better idea. Many of us did, and still had no idea. Perhaps now we understand why. We certainly understand the volume of work that has to be undertaken. If the Government were to rule out no deal as an option—or, as the Prime Minister seems to think, a sword of Damocles if her deal is not accepted—the workload may be slightly less. Of course, we stand ready to play our part.
The Chief Whip will be aware that the business this week in this House is rather light. The House of Commons has risen early on several occasions recently, and there are two Bills currently stalled in the Commons that this House has been waiting for: the Agriculture Bill completed Committee on 20 November, but there is still no date in the other place for either Report or Third Reading; the Fisheries Bill finished Committee on 17 December, and there is no date scheduled for the Commons Report or Third Reading. Both need to be through Parliament by 29 March. The Healthcare (International Arrangements) Bill has its Second Reading tomorrow, but there have been two months between Committee and Report in the Commons. It seems that while we will sit longer to undertake this business, the Commons and the Government have been rather tardy in bringing forward the needed legislation. I assure the Chief Whip that we stand ready to play our part, but we expect the Government to do so as well.
Lord Campbell-Savours (Lab)
My Lords, I wonder if the Chief Whip might explain something to us. Under “Business of the House”, today’s Order Paper says:
“The Lord Privy Seal … to move that Standing Order 40(4) (so far as it relates to Thursdays) and (5) be suspended until Monday 3 June so far as is necessary to enable notices and orders relating to Public Bills, Measures, Affirmative Instruments and reports from Select Committees”.
What is the relevance of Monday 3 June?
Lord Taylor of Holbeach
It has none at all to the matter we are discussing. My noble friend the Lord Privy Seal will move a business Motion to follow what I have just said.
Baroness Jones of Moulsecoomb (GP)
My Lords, could the Chief Whip explain just how much all these extra days we will sit will cost the taxpayer? It seems to be a concern.
Lord Taylor of Holbeach
Noble Lords are not obliged to claim their expenses but, should they wish to do so, they can. I think this House offers the taxpayer very good value for money, and I am not at all ashamed of its deliberations and their necessity. We should be proud of this House. I am very grateful to the Leader of the Opposition for registering her support for the programme we will have to consider over the next couple of months. We know that we will be busy and I am grateful for the support of noble Lords in going through that process together.
Business of the House
(5 years, 9 months ago)
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Baroness Evans of Bowes Park
That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on Thursday 7 February to allow the Finance (No. 3) Bill to be taken through its remaining stages that day.
Business of the House
(5 years, 9 months ago)
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Baroness Evans of Bowes Park
That Standing Order 40(4) (so far as it relates to Thursdays) and (5) be suspended until Monday 3 June so far as is necessary to enable notices and orders relating to Public Bills, Measures, Affirmative Instruments and reports from Select Committees of the House to have precedence over other notices and orders on Thursdays.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, in agreeing the Procedure Committee’s first report of this Session on 4 December 2017, the House decided that Thursdays after the end of January this year should be used for legislation rather than general debates. As with the equivalent Motion last year, this Motion simply allows legislation to take precedence over other types of business that would otherwise have priority on a Thursday. I beg to move.
Trade Bill
Monday 4th February 2019
(5 years, 9 months ago)
Lords ChamberRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 127-IV Fourth marshalled list for Committee (PDF) - (31 Jan 2019)
“Future partnership with the European Union: services
It shall be the objective of an appropriate authority to take all necessary steps to implement a future trade agreement with the European Union that—(a) ensures no additional barriers to trade in services between the European Union and the United Kingdom are erected after exit day;(b) protects—(i) the right of UK nationals and businesses to provide or receive services in the European Union, and(ii) reciprocal rights for EU nationals and businesses to provide or receive services in the United Kingdom;(c) protects—(i) the right of UK businesses to establish a company in an EU member state, and(ii) reciprocal rights for EU businesses to establish a company in the United Kingdom.”
Lord Stevenson of Balmacara (Lab)
My Lords, Amendment 45 is in my name and that of the noble Lord, Lord Purvis, for whose support I am very grateful. We are reaching the last quarter of our time on this Bill in Committee, and we have never touched, in any serious way, the question of services, which make up 80% of our GDP; they are an important part of our economy now and will be in the future. That curious absence of services has prompted this amendment; it is a probing amendment in the sense that I do not think there is any issue between the Government and us on this. We both recognise the importance of it and want to make sure that it is successful, but it is an opportunity for the Government to set out clearly what they intend to do in this area and to bring forward any thoughts they have about how the importance of services might continue, as the negotiations, which are currently with the EU and will return to the other place shortly, progress.
We hear a lot, importantly, about manufacturing and the physical goods that this country makes and imports. We do not hear nearly as much about services, and that is curious. It is important to be clear why that is. Direct trading of services across borders by purchasing or selling architecture, legal opinion or forms of insurance is a well-known measure of activity. This area has grown considerably and the UK economy is strong and strengthened by that. Business services, financial services and other aspects such as travel, including the tuition fees of foreign students who study in the UK, transportation and telecommunication information services make up the huge proportion of our activity in this area. Most trading of this type is with the EU. It is over 50% if Switzerland is included in the figures, but we also have considerable trade outside the EU and we should not forget that.
It is also important to recognise that, in some senses, exactly how this takes effect is hidden from plain sight. I should explain: we know a lot about the physical movement of things like car parts, because we are told, time and again, that the issue in modern-day trade is not so much the individual purpose of creating a particular object, machine or type of equipment; it is the assembly of the various parts. In the case of a car, bumpers, injectors and all sorts of things that go into the modern car cross the channel several times before being assembled, either here or elsewhere, in the final product, which is then sold. We are concerned about that and much of the Bill has this as part of its process, but the point is that this is not just about physical material. There is also a question about knowledge, intermediate input, services, financing and having the right people in the right place, which is necessary for this complicated pas de deux to work.
The single market, which underpins all this in the EU, plays a pivotal role in facilitating this process of increasing specialisation, because it includes as its basic point—this is derived from consideration within the GATS treaty under the WTO—the four freedoms for moving goods, services, capital and people. Hence, a focus on manufacturing the individual item sees only part of the story.
Why do services not feature more strongly in our discussion and debate? There are three reasons. First, services agreements are a relatively new form of trade negotiation. There are not that many around. They are difficult, because you have to negotiate and consider individual aspects, often regulatory and non-tariff barriers, to the way the trade happens. They cannot always be done by fiat from government; they have to involve large numbers of other companies and organisations. They are bureaucratic; they are not necessarily all organised from a particular aspect in government, such as BEIS or the Department for International Trade, because regulators and government departments will be involved in legal services and other areas. Finally, because different regulations belong to different bodies, it is more difficult to trade one sector, as it were, against another. There is not really an easy route through this, and that may explain why it is often left to the last.
I welcome the Government’s response on that, but it is a cynical response. We have done so well in services trade in recent years and our performance is one of the strongest in the world. We have more to lose in trade negotiations that focus on individual hardware and machinery parts if they do not also make sure that those trading in legal and other services are considered as well. We are in a quandary. We can argue the easy option of a goods-only agreement, because the rules for that are relatively straightforward: the tariffs are already very low anyway and we are not talking about substantial changes to the way in which we would do it. But if you include services then we are talking about a whole range of new activities, new players and the offering of new types of discretion. I will wait to hear the Government’s response, but it could be argued that we in Britain are not yet ready to engage with that successfully.
In that context, the opportunity is there for the Government to respond positively on how we are going to take forward this issue and how important it is to make sure that we get it right, and to make sure that we in this country do not suffer simply because the dog that did not bark—services—is still not barking. I beg to move.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the noble Lord, Lord Stevenson, for moving the amendment, which I happily signed. It will be no surprise that we on these Benches favour, still, the United Kingdom continuing as part of the single market of the European Union. However, in many respects this is a mitigating amendment on the basis that, if we are to leave the European Union, the most significant non-financial services sector for the British economy is, as the noble Lord, Lord Stevenson, said, the services sector. It is right, therefore, that we give proper focus to it in this Bill.
Up until this point, we have discussed the emerging elements of the continuity agreements. We have seen so far only one published, that of Switzerland, and are awaiting others. In the continuity agreement, Switzerland has components on services, and guarantees free movement of people for those providing services. That is beyond the elements in the immigration White Paper and in the withdrawal agreement from the European Union, and it is beyond what the Government have said. There are, however, some indications that the Government recognise that services are critical to the British economy. But it goes beyond that, as do our discussions with Switzerland, which are on the gold market and property.
This affects all parts of the United Kingdom. The UK is more dependent on services, especially non-financial, than perhaps any other country in the world. We export more in absolute terms than any country other than the United States. We have been able to get to that position because we have been doing so within an integrated market of the European Union. In many respects, we in the United Kingdom have been the driving force of the emerging integrated markets in the European Union. It is an irony that, as the architects of this approach to developing the services markets across the European Union to benefit our country, we are going to leave it.
If we are to have a future relationship, it is critical that we focus not only on tariffs and non-tariff barriers but on what is necessary to ensure that we can continue to benefit, at least to some degree, from a services relationship with the European Union. This applies particularly in digital services, as well as in the wider elements of research and development.
Many months ago, your Lordships’ committee reported on this, and in December 2017, in the name of the noble Lord, Lord Whitty, this House had an opportunity to debate the significance of the non-financial services sector to the British economy. Now, we have the Government’s clear position: we will be leaving it. We are choosing to leave an integrated market, which we have led, so how do we focus on some of the component aspects?
In the withdrawal agreement, we have seen some elements of mutual recognition of qualifications and some elements of professional standards being aligned so that those working in the services sector can be part of a wider operation on the continent and with the European Union. However, this is only a very small aspect of the overall need to have a much closer alignment. It requires government honesty: we may well be leaving the single market, but it needs to be clear what very close alignment would look like.
This applies to the discussions taking place this week and next week on the alternative to a backstop. The arrangements for the Northern Ireland backstop were as much to do with the continuity of the services sector for those providing professional and trade services from north to south and south to north as they were with the checking of the origin of goods at a border for tariff purposes. The all-Ireland economy is, by and large, an all-Ireland economy because of services. We are treaty-bound to protect that, so it is very important to have more clarity from the Government on what they expect to see as alternative arrangements to the Northern Ireland protocol if we are to protect the core elements of an all-Ireland services economy.
We know that we cannot rely on a much wider alternative, which is the WTO. In its last set of discussions, it could not even agree on a communiqué about taking forward future services agreements on a WTO basis. We know that the USA and China are in dispute not only on trade in goods, but also on services, and we know, as the noble Lord, Lord Stevenson, said, the complexity of even the European Union introducing services components to third-party trade agreements. If we know that it has been difficult, with the UK as the driving force, to secure agreements with other third countries, why do the Government think that it will be easy for the European Union to do it with us?
This amendment, therefore, is very important. I hope that it will allow the Government to be much clearer, because the services sector of the United Kingdom has, in many respects, been the driving force of growth in the UK, one that we cannot afford to put at risk.
Lord Hamilton of Epsom (Con)
My Lords, both the noble Lords, Lord Stevenson and Lord Purvis, have stressed how important the services sector is to the economy of this country and to the exports that we sell. However, anybody involved in the financial services industry would say that they have not been much helped by the single-market provisions of the EU, which have put up many non-tariff barriers, to which the noble Lord, Lord Stevenson, referred. It is probably quite ambitious, if we hope to have a free trade deal with the EU, to think that we are actually going to lower the non-tariff barriers that have been erected during our membership of EU, when the single market was supposed to provide a market for services as well as goods but effectively has not actually done so. I will be very interested to hear what the Minister has to say about this very important sector of the economy. We have not been much blessed by reciprocal agreements with the EU over financial services and very many other services in the past because of the non-tariff barriers that have been erected against them.
Lord Liddle (Lab)
My Lords, I strongly support this amendment, which is of profound importance. I apologise for an intervention that I made in Committee last week, where I was ticked off by the noble Viscount, Lord Younger, for intervening on an amendment when I had not been present for the start of the debate. I apologise again; I should know the rules better.
I was privileged to serve on the EU Internal Market Sub-Committee of your Lordships’ House. We conducted an inquiry into non-financial services, and I was very struck, not having known much about this before, by the importance of non-financial services. The sector makes up something like two-thirds of the total of the services trade. This is important, particularly for people who think that services just mean finance and the City. It is far broader than that and a lot of members of my own party might better understand that point.
Baroness McIntosh of Pickering (Con)
My Lords, I follow the noble Lord, Lord Liddle, in pursuing the aspect of services, and I have a specific question for my noble friend Lord Bates, who I think will be summing up. This debate is not dissimilar to the one that we had on the free movement of professions, and I am mindful of the fact that my noble friend Lady Fairhead has said on a number of occasions that the Bill before the Committee today is all about continuity. I also have regard to what my noble friend Lord Hamilton said—that there has been precious little reciprocity in terms of setting up and establishing services elsewhere in the European Union to date. So that does not fill me with confidence about what the legal position will be going forward.
There are some very helpful pages on the European Commission website about what the position will be as regards professions after 29 March and in the longer term, but there is precious little about establishing companies. This is becoming a matter of increasing urgency because we can see, in particular if we look at financial services, that the issue is not just free movement of people but free movement of services and capital. We have recently seen an increasing exodus of capital and people moving from the City of London to bases in Dublin, Frankfurt and Holland—and even Paris and Copenhagen are pressing for people to go and set up businesses there.
I would like to ask my noble friend the Minister how we are pursuing this on a reciprocal basis. We saw with professions, in the case of lawyers, that we have adopted the statutory instrument and the necessary regulation. What is the legal position of a UK company that wishes to establish itself and offer its services, first in the event of no deal after 29 March, secondly in the event of a deal during the transition phase, and thirdly at the conclusion of the transition period, whether it is as planned or extended? It strikes me that many of us are focusing on businesses already established in the UK and providing services. My concern is how much the ability of those looking to set up and establish themselves will depend on the right of residence, either now or at some future date in what will be a third country after 29 March.
Lord Davies of Stamford (Lab)
My Lords, I think that this is a very good amendment and I will come to the substance of it in a second. I just want to make two points by way of introduction. First, here we are at the beginning of February—a new week and a new month—and we are still in an absolutely ludicrous position, presenting an almost unbelievable picture to the world of a country with a Government doing their best to damage their own economy. Every day we have new evidence of this. Today we had the worrying story from Nissan. Many of us who have focused on the mess the Government are in could speak on the subject for hours.
There is another example from the last few days. We say that when we leave the European Union we want to sign trade agreements with those countries which currently have trade agreements with the EU. One of those countries is Japan. Japan has just signed a trade agreement with the EU. At the very best, I suppose, if the Japanese were to give us exactly the same terms—which is unlikely because our bargaining power vis-à-vis Japan is nothing like the power that the EU has—it would take a minimum of five years, and probably nearer 10, to conclude this deal. So the Government are saying that we are walking away from a trade agreement in order to spend a vast amount of time and money and suffer a lot of uncertainty before perhaps, in many years’ time, finally reaching another trade agreement that may not be as good as the one we now have. I put it to the Government: what kind of reason or logic is that? What a way to run a state. What a way to look after not only this generation but future generations of British people and make sure that they have a viable economy on which they can actually base a reasonable standard of living and a reasonable level of public services.
The Government are already under attack in this place, quite rightly, for their delivery of public services. We had a very interesting series of Questions earlier about the health service. The Government are undermining the future ability of the British economy to deliver the wealth we need to maintain our public services at acceptable international levels. This is quite apart from the impact of their policies on individual wealth and prospects for individuals who want to travel or study abroad or benefit from all the other freedoms we will be giving up. It is a very serious matter. The muddle the Government are in about the damage that is being done makes the whole picture even more disgraceful—that is the only word I can use.
I think my noble friend’s amendment is excellent. I agree with everything he said when he introduced it—and that noble Lords on both sides of the House said—about the importance of services. We all know that they are 80% of the British economy. But I have one question. Why has he not put goods in there as well? It seems to me that exactly the same principles apply to goods. I just looked at the amendment, and if you were to add the words “goods” wherever “services” are mentioned, you would not produce any particular anomalies or logical or linguistic problems. I do not know why goods have been left out of this particular picture. As I said, exactly the same principles apply. We want there to be no new barriers—that sums up everything. “Barriers” includes tariffs, quotas and non-tariff barriers, so the ground would be covered quite well by doing that.
My noble friend rather implied that he was putting forward this amendment in order to have a debate on an important subject—which is a very worthy thing to do in this place. Perhaps I have that wrong, but it sounded as though that was what he had in mind, and we are of course having that debate at the moment. However, it seems to me that it would be even better if we got this proposed new clause on to the statute book. We would be doing a very good day’s work for the country if we could manage to do that. Therefore, I ask my noble friend why he came to his decision. I am sure that there must be a very good reason, which perhaps I am being foolish in not anticipating, but I do not understand why we do not include goods.
These debates are becoming extremely unreal. One likes to think that one’s service in Parliament, whether in the Commons or in the Lords, is based on being clear in one’s mind and discussing and working out with colleagues what is the best policy for this country. But we have a Government who are not pursuing the objective of the best policy for this country. We have a Government who are destroying British industry and commerce where they can—so it is a very unreal situation. I do not know how much longer this country can go on in the hands of people who take that attitude when they have in their charge the very considerable, and in my view very important, responsibility of governing the United Kingdom to the benefit of our citizens both of today and of tomorrow.
Lord Lansley (Con)
My Lords, in following the noble Lord’s remarks, perhaps I may say that the unreality of debates in Committee on this Bill will be exacerbated if we not only have amendments that, quite properly, raise relevant issues that are not presently included in the Bill but we then use them as the basis for a wide-ranging debate on every occasion. Let us not do that. On occasion, we in this House look broadly at what the resolution to our current impasse might be, but we also have a responsibility to use our time well on this Bill to try to ensure that it is effective legislation, because we might need it.
In that context, there is a very simple reason why trade in services is not in the Bill: the General Agreement on Trade in Services is multilateral, not plurilateral, so there is no need to legislate for this as it is something we are a party to only by virtue of our membership of the European Union. That is why the government procurement agreement has got into the legislation. If that were true for the General Agreement on Trade in Services, that would have to be included as well, but it is not; every member of the WTO is a member of the GATS.
However, the question is: do we want to legislate to mandate the Government in the negotiation on a future free trade agreement to seek to provide for a continuing and complete reproduction of our current relationship with the European Union, or at least to the extent that the amendment asks for that? As far as I can see, it asks for it up to mode 3—it does not include mode 4 arrangements, which allow for natural persons to be present in other member states—thus excluding the free movement of individuals for the purpose of the delivery of services in other member states. Therefore, it is not a continuity amendment, or at least it cannot be presented as such.
From the point of view of Ministers, broadly speaking at the moment it is important for us to understand to what extent free trade agreements that might be reproduced by way of continuity agreements in the event of a no-deal exit might lead to the perverse situation whereby we have greater service sector access to third countries than we do to the European Union, which would mean considerable dislocation for service industries in this country.
Finally, much as I wish that we were staying in the European Union and continue to argue that we should be in a customs union with a degree of regulatory alignment—we will come on to that briefly later—I certainly would not go as far as the amendment implies, which is that effectively we should be rule-takers on services with the European Union. That could be a very unhappy place for us to be, given that services make up 80% of our economy, as has been said. The fact that we are in a customs union for goods will therefore not preclude us from engaging extensively in discussions on trade in services with third countries, which is where much of the action may well be in future trade negotiations.
Baroness Neville-Rolfe (Con)
My Lords, 80% of the UK economy—in fact, I think the figure is 85%—comprises services. I support the noble Lords, Lord Stevenson and Lord Purvis, in bringing forward this probing amendment although, for the reasons given by my noble friend Lord Lansley, I am not convinced that we should change the Bill and make ourselves rule-takers on services. If noble Lords will allow, I would like to keep the issue of the free movement of people separate. The question is: do we lose as much from losing the single market on services? It is not very well developed at all. I know this because I tried to cut down barriers on services within the EU when I led the presidency work in BEIS in 2016.
Last week the Chancellor spoke at the UK Finance dinner, which I attended. I was sorry as a result of that—the timing was unhelpful—to miss the last group of amendments, of which mine formed part. The Chancellor talked about liberalising trade in services—a sort of WTO services round—going forward. Of course, this would also extend to the European Union if it were to happen.
I have two questions about services for my noble friend the Minister, the answers to which will help me when we consider the Bill on Report. First, can he elaborate on the Chancellor’s idea, or emerging Treasury ideas, of doing something on services beyond the European Union, which would help us in the European Union as well? Secondly, can he confirm that the Government’s proposed deal—the withdrawal agreement or the political declaration—would not get in the way of bilateral deals with third countries on services, given that the multilateralism that I love is very hard going? In other words, would we be able to conclude a deal with the US—again, very tough—or, perhaps more realistically, with the emerging and already emerged countries of Asia, where we are now selling a lot of services and where it seems that aligning some of the rules on services could be extremely valuable?
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, on behalf of all those who have spoken, I thank the noble Lords, Lord Stevenson and Lord Purvis, for bringing forward Amendment 45, the purpose of which is to provide an opportunity for the Government to put some remarks on the record about our approach to services which, as we all agree, is of crucial importance. So, before coming to some of the specific questions that have been raised during this short debate, I will take advantage of that opportunity to set out the Government’s position as it now stands.
As my noble friends Lady McIntosh and Lady Neville-Rolfe, and indeed the noble Lord, Lord Stevenson, said, the UK’s services economy is a global success story. Our internationally competitive industries play host to world-leading firms as well as thriving small and medium-sized enterprises, and we have undertaken significant engagement with the sector on issues related to EU exit.
I would like to reassure the House that the Government are seeking arrangements for services and investment that cover all modes of service supply—my noble friend Lord Lansley correctly referred to the variations; that provide substantial sectoral coverage, including measures on professional business services, which my noble friend Lady McIntosh referred to; that go well beyond both sides’ WTO commitments as set out in the General Agreement on Trade in Services, which my noble friend Lord Lansley also mentioned; and that build on the provisions in existing EU agreements.
Moreover, through the political declaration we have secured a commitment from the EU 27 that our future trading relationship will be ambitious, comprehensive and balanced, and will include market access commitments to ensure that service suppliers and investors do not face quantitative restrictions such as monopolies, economic needs tests or joint venture requirements, which my noble friend Lord Hamilton expressed concern about; national treatment commitments, to ensure that UK service suppliers and investors are not discriminated against by the EU 27 and vice versa, as my noble friend Lady McIntosh referred to; new arrangements on financial services, grounded in economic partnership, providing greater co-operation and consultation than is possible under existing third country frameworks; appropriate measures on the recognition of qualifications, as referred to by the noble Lord, Lord Purvis, to support UK professionals practising in the EU 27 and vice versa; arrangements that allow for temporary entry and stay in each other’s territories for business purposes, including visa-free travel for short-term visits, as the noble Lord, Lord Liddle, rightly identified from his extensive work examining the internal market as a member of the Select Committee; and mechanisms to promote voluntary regulatory co-operation to guard against the introduction of unnecessary barriers to services, trade and investment, to which my noble friend Lady Neville-Rolfe referred. I pay tribute to the work that she did at BEIS in seeking to remove those barriers.
We have also been clear that after we leave the EU, the UK will have an independent trade policy covering all aspects of goods and services. To deliver that objective, it will be important to retain regulatory freedom where it matters most for the UK’s services-based economy.
I turn to some of the points that have been raised.
Lord Davies of Stamford
Before the Minister moves on to detailed points, perhaps this might be a good moment for him to tell the Committee, out of all the countries with which we would like to have our own free trade agreements after we leave the EU—if we leave it—how many have indicated that they wish in principle to negotiate and sign such an agreement with this country; how many have said that they would do so on terms identical to their existing free trade agreement with the EU; and how many have indicated that they would not want to pursue such a negotiation at all?
Lord Bates
The noble Lord will remember from day three of Committee last week that one of the questions asked was whether we could provide the Committee with some running status on where we are with all those free trade agreements. That is a perfectly reasonable approach and it is something that my noble friend Lady Fairhead agreed to take back to look at and come back on ahead of Report. Rather than using this opportunity to rehearse that, I will say that it is something that we are looking at. Specifically on the EU and Japan, I was going to come to that topic and say that there is a working group with Japan to seek to replicate its effect as part of the continuity arrangements.
Lord Liddle
My Lords, on the point about freedom of movement, I have two specific questions for the Minister. I accept what he has said, but I would like to quote a personal example and declare an interest. For a period, my wife was chief executive of the English National Ballet. It was a requirement for the success of the English National Ballet that ballet dancers from all over the world were able to join, but the ENB had great difficulty with ballet dancers from outside the EU because they do not earn anything like the money that is put down in the Immigration Rules to justify easy entry. Are the Government prepared to be flexible on the earnings requirement to enable cultural organisations, which are very important to the British economy, to easily access talent from the EU, where people’s salaries will not initially be that high?
Secondly, if you are a small business in services and trying to expand by getting jobs, projects and contracts on the continent, one of the obvious business strategies you would pursue is recruiting young people from the countries in which you hope to do business. You take them into your consultancy, or whatever, and that gives you language and personal links into the markets you are trying to target. Again, there is no guarantee that, under the immigration policy outlined by the Home Secretary, young people coming from European countries would be able to get jobs in that kind of situation. We asked for a clear statement of the Government’s trade policy. The Government have to be clear on these issues before we can proceed on the Bill.
Lord Bates
I am happy to do that, and perhaps get some notes—I know we have a group coming up on the mobility framework, to which those points will perhaps be pertinent. I will, if I can, address them there. I also draw the noble Lord’s attention to section 9 of the political declaration, paragraphs 50 to 59 inclusive, which sets out the Government’s position on that.
The noble Lord, Lord Stevenson, and my noble friend Lord Hamilton pointed to or asked a very important question on bilateral services-only trade agreements. There is no precedent for a bilateral services-only trade agreement. Where service agreements exist, they are notified to the WTO alongside a wider agreement that also covers goods. We are leaving the customs union so that we can set our own tariffs and have an independent trade policy tailored to the strengths and requirements of our economy, which therefore includes—by implication and explicitly—the importance of services to our economy. The political declaration sets out a plan for a UK-EU free trade area for goods, including no tariffs, with ambitious customs agreements. This will be the first such agreement between an advanced economy and the EU.
The noble Lord, Lord Purvis, referred to the situation in relation to Northern Ireland. Without wanting to revisit that whole area in this group, the situation is that in Northern Ireland, under the common travel area, the rights to work, study and access social security and public services will be preserved on a reciprocal basis for UK and Irish nationals in the other state.
I turn to the questions raised by my noble friend Lady McIntosh and, in particular, the two questions raised by my noble friend Lady Neville-Rolfe. My noble friend referred to the Chancellor’s speech on liberalising services and looking for a more ambitious way forward. I am sure that is at the core of government policy, otherwise the Chancellor would not have said it. I do not have the text in front of me, so I cannot comment on its full meaning, but I will write to my noble friend on that point. My noble friend Lady McIntosh also asked a three-pronged question. For a company setting up in the UK, what would its situation be in the event of no deal on day one; in the event of the implementation period; and at the conclusion of a future economic framework? Some of those outcomes will depend on the extent of the negotiation, which we have set out in the heads of agreement in the political declaration. Between Committee and Report, I will write on my noble friend’s specific point relating to that. Again, I thank the noble Lord for giving us an opportunity to raise this very important issue.
Baroness Neville-Rolfe
Can my noble friend clarify the point about services and goods? I asked whether we would be able to continue to do deals on services if we had a tight agreement—a customs union or whatever —with the EU. He was saying that goods and services tend to be linked in trade agreements and are never separate. Would that mean that we could not have services agreements, assuming we got something quite tight on goods? That would obviously be a problem. I know that they are linked—often, the service for your car and the computer in it are as important as the car itself—but I had seen them as distinct in the WTO. If my noble friend could write to me on that, I would be very interested.
Lord Bates
I will be glad to do so. In a lot of such agreements, especially for the major manufacturers, the bulk of the value of the trade or the deal is the service package and the support provided thereafter. I will be very happy to write to my noble friend ahead of Report.
Lord Kerr of Kinlochard (CB)
In the early part of his speech, the Minister read out an impressive list of points that had been achieved or secured before he moved on to his brilliant ex tempore dealing with the questions raised in debate. I confess that I did not recognise those points. I cannot remember seeing them in the withdrawal agreement. Was he perhaps referring to the relevant part of the political declaration, in which case surely those points have not been secured or achieved and what has been agreed is that all these things may be discussed over the next three, four or five years as the long-term relationship is considered?
Lord Bates
Yes, except that the political declaration was of course part of the withdrawal agreement negotiated with the EU 27, so one hopes that it will form the basis of our future economic partnership.
Lord Purvis of Tweed
The noble Lord, Lord Lansley, and I have referred to the WTO. My understanding is that there have been objections to the UK’s submission of services schedules to the WTO and therefore they are unlikely to be certified if we leave at the end of March. We can still trade on them, but they are likely to be uncertified. Can the Minister give a little context about what concessions we might make or what discussions we would have with those countries that have lodged their objections? Clearly, they feel that we will not provide the same kind of market access to UK services as under the existing agreements. We could be starting from a situation that is much worse than simply carrying on with where we are at the moment at the WTO. If the Minister cannot respond at the moment, perhaps he could write.
Lord Bates
I am very happy to give further detail on that in the general update between Committee and Report, but, as the noble Lord knows, the schedules were tabled in December followed by a 90-day consultation period. There can be a variety of perspectives on them before they are finally adopted. I will get an update as to where we are on that before Report.
Baroness McIntosh of Pickering
To clarify, my concern is about British companies establishing their services in what will be a third country, another EU country. I would be happy for my noble friend to write to me.
Lord Bates
I am grateful for that clarification. I shall make sure that that is what is addressed.
Lord Stevenson of Balmacara
My Lords, it sounds as if we are starting off a new train of activity or various letters. I suspect that it might also be helpful if we had a short meeting on some of the issues just to draw them together. Like the noble Lord, Lord Kerr, I was entranced by the detailed nature of the early part of the Minister’s response and I got a bit lost—I think it was on the fourth point the second time round. We will need to read him and understand not only what he was saying but where these points are to be found in more detail. The chance to be able to do that in the context of the very rich debate we have had would be helpful.
That is not to say that I think there is that much between us: with friends like the noble Lord, Lord Hamilton, how can I complain? We are on the same side here, most unusually and extraordinarily, agreeing on points of some substance. There is some progress, it has not always been easy going and I think the noble Lord, Lord Lansley, was right to point out that this is partly because we are centring on an agreement which is brokered by the WTO through the GATS system. He is correct—his background in the chambers of commerce means that he reads these documents carefully and understands their provenance—that the wording of the amendment is indeed taken from the four pillars, but I was unable to get the fourth pillar in; the clerks would not accept that. The noble Lord, Lord Fox, managed to get it into the next amendment but one, so we will have that debate shortly. That complication sets us off in slightly the wrong direction: we are not trying to change that structure in essence, because that is the overarching world system and we have to be careful we do not try to take on too many battles at the same time.
The political declaration is not the same as the agreement and of course all that gets wrapped up into some form of yet-to-be-understood free trade agreement which may or may not include both customs elements and services agreements. I think the noble Baroness is right to pick up the question of how all that melds together: will we be able to trade off some aspects of our services in order to achieve a better tariff arrangement, or is it better to keep them separate and deal with the different arrangements? I do not think we have a clear answer to that, but I do not think we are very far apart on it. We want this to be the best for Britain. We have done pretty well, against all the odds. Why change it if it is not certain that the changes are going to be beneficial to us?
Having said that, the question from my noble friend Lord Davies is right: what is the point of this amendment if it does not improve where we are? That is where the test has to be. We must look carefully at the responses and make sure we have the right view. There may be some argument for having something, either in this Bill or in the non-continuity Bill yet to come, if that is the Government’s intention. However, at this stage we are unable to say that, so with that in mind, but with thanks to all who have contributed to a very rich debate, I beg leave to withdraw the amendment.
Lord Lansley
“Free Zones
(1) Within three months of the passing of this Act the Treasury must launch a consultation on proposals for the establishment in the United Kingdom of Free Zones, as defined by the Customs and Excise Management Act 1979.(2) The Treasury must lay a report of the consultation under subsection (1) before both Houses of Parliament within six months of its launch.(3) The report under subsection (2) must include—(a) proposals for the Free Zones to be established, and(b) an account of the extent to which each proposed Free Zone would allow UK manufacturers to secure an integrated supply and value-added production.(4) Within six months of the report under subsection (2) being laid, a Minister of the Crown must by regulations made by statutory instrument make provision for the establishment of Free Zones as set out in the report under subsection (2). (5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.”
Lord Lansley
I am grateful for this opportunity to raise the issue of free zones. I thought I was likely to end up moving this amendment at about 10 pm last Wednesday, so it is a pleasure to have it on in prime time but, recognising the value of this time, I will be as brief as I can.
The point about this amendment is that free zones were legislated for way back in 1979. Indeed, they featured, not least during the 1980s, as part of a broader industrial strategy. I do not propose today to debate the merits or otherwise of free zones, because there are arguments that cut both ways. They are, by their nature, a distortion: they distort the customs and regulatory framework in favour of specific geographical locations. None the less, there can be significant benefits associated with that happening in circumstances where one needs to advantage certain geographical areas. That is why, for example, they have been used in the past, and are used widely around the world, in relation to some more disadvantaged economic areas, and specifically in relation to ports of entry—not just seaports but airports and the like. The reasoning there is that the ports of entry to an economy are often in competition not so much with other parts of the geography of that country as with other ports in neighbouring areas.
The European Union has a general disinclination towards free zones because the single market effectively creates one single customs territory. Arguing against myself, if we were to be in a single customs territory with the European Union, the question of free zones would probably not arise at all—but if we are not to be, it ought to arise. Under these circumstances, it would be good to legislate in the Bill to encourage Her Majesty’s Treasury to bring forward both a consultation allowing the merits of free zone designation and its use in this country to be debated, and proposals to Parliament about how that designation might be deployed.
There are ports that are interested in this, and the Treasury’s approach—that it is happy to consider free zone designation under the 1979 legislation—is understandable. But it is for the ports themselves to decide whether they wish to do this. I understand some ports may wish to; Teesport and Humberside are interested, and Associated British Ports is interested. If we leave the European Union and do not form part of a customs territory with it, they may well bring forward proposals. In the interests of the legislative approach to this, we should have something that encourages that to happen as quickly as possible in an ordered way. That is why the deadlines in the amendment are swift: to initiate a consultation within three months, and to report on that consultation within six months. In quite short order after exit day, we in this country could see to what extent our ports would need and benefit from free zone designation to enable them to compete more effectively with other ports—not least those on the other side of the North Sea or the English Channel.
That is the reason we should think about this. Those bringing their goods to Europe have never previously had to think about customs or other formalities, or the imposition of duty on those goods if they are brought to the United Kingdom and then re-exported elsewhere in Europe. Unfortunately, they may have to think about that.
Lord Davies of Stamford
I am grateful to the noble Lord for giving way. As he rightly says, free ports are distortionary by definition. If you create a free port close to another port, one will survive and the other will probably disappear altogether. Does he think his Government would be tempted by the thought that they could say, “If we have a local MP who votes for us and supports this Government, we will make the port free; but if we have an MP who dares to vote against us, we will make the port unfree and ruin it”?
Lord Lansley
The noble Lord will observe that the amendment seeks a consultation on the part of the Treasury, and that consultation would undoubtedly enable these issues to be explored on an even-handed basis. In the scenario I was describing, any port would be free to come forward and seek designation. It is not something that would be handed out on the basis of any partiality; rather, it would be done by examining the cases made by those ports. The point is that whereas in the past we may have concluded that there was no basis for introducing such a distortion into our economic activity, if and when UK ports are principally having to compete in international trade with other European ports, we may conclude that it is not a distortion to trade inside the United Kingdom. Actually, it is an aid to competitiveness for the United Kingdom in relation to ports elsewhere in Europe. I beg to move.
Lord Bates
My Lords, I thank my noble friend Lord Lansley for moving this amendment. He has managed to get on to prime time in this territory. I once represented a seat on Teesside, which is very close to my heart. The idea has been advocated by the excellent mayor there, Ben Houchen, and by some of the local MPs, such as Simon Clarke and Rishi Sunak.
To reassure my noble friend, the Customs and Excise Management Act 1979—CEMA—allows for the designation of free zones, as he mentioned. The Taxation (Cross-border Trade) Act, which the Government passed through your Lordships’ House last September, allows HMRC to make regulations regarding goods kept in a free zone. Under CEMA, operators are free to apply to become a free zone. The Government are open to any ideas that might deliver economic advantages for the UK and will continue to examine the role that free zones may play as part of this. Assuming that we will have an independent trade policy, we will be able to have these types of examinations and innovations.
Existing customs facilitations in the UK offer the same benefits as free zones, but are not geographically limited and can be accessed anywhere across the country, thereby potentially having more widespread benefits for the UK as a whole. For example, a manufacturer could import materials for its products and store them in a customs warehouse anywhere else in the country, without duties being paid on them. The manufacturer or its supply chain could then use those materials in its manufacturing process under inward processing relief and could export the finished goods without any UK customs duty ever having to be paid. Those existing facilitations, therefore, avoid the distortions to which the noble Lord, Lord Davies, referred, which can arise from free zones where a manufacturer or its supply chain would be required to locate on the same site to benefit.
The UK’s ability to formulate a free zone that diverges from the Union customs code will depend on the future relationship with the European Union. The Government have also been clear that it is a commercial decision for operators to make on whether they want to apply for designation of an area as a free zone, and we will review any applications made. I am not able to be more helpful than that to my noble friend at this point, much as I may wish to be.
Lord Lansley
Since there is no recent substantial experience of free zones, does my noble friend not think it would be helpful—if we arrive at the point where we exit the Union customs code—for the Government at least to initiate a consultation to look at the criteria that would be applied in examining the designation of free-zone status?
Lord Bates
My noble friend will be aware that “consultation” has a specific meaning now in legal terms, which is quite an onerous responsibility of the process. We could seek ways to discuss—perhaps with BEIS as part of the industrial strategy—or to engage with others who are interested. He mentioned Humberside, Teesside and others, and I think we could look at ways in which that could be done. I am very happy to take that thought back to the Treasury and write to him further on that.
Lord Lansley
Once again, I am grateful to my noble friend and that is a very welcome comment. I look forward to further discussion about that but, on that basis, I beg leave to withdraw the amendment.
“Trade agreement with the EU: mobility framework
It shall be the objective of the Secretary of State to take all necessary steps to secure an international trade agreement with the European Union which includes a mobility framework that enables all UK and EU citizens to exercise the same reciprocal rights to work, live and study for the purpose of the provision of trade in goods or services.”
Lord Fox (LD)
My Lords, we have come to the fourth day of Committee on the Bill. Before the noble Lord, Lord Liddle, became herald to this issue, we really had not talked about people. Trade is about people—it is about people who make and sell things, people who sell their services abroad, and people who come to this country to sell their services and goods to us. There are strong arguments for the preservation of free movement in any future treaty. Amendment 66 requires the UK to negotiate with the EU an international trade agreement that allows UK and EU citizens to continue to work, live and study abroad.
Free movement is good for the economy: it boosts efficiency and innovation. Meanwhile, its impacts on public services, crime and unemployment are generally positive—I will come back to those points shortly. There is a cultural and societal benefit which comes with the opportunity to work, live and study in other cultures and develop mutual understanding and friendships. These are often set to one side and referred to as “soft power” in a way which suggests that they are somehow less useful than hard power. However, these are important things, to do with the influence of our country in the rest of Europe. I will focus on the first two elements of the benefits from free movement.
In no small measure, we have a Prime Minister who is obsessive about the need to end free movement; this is reflected fully in the political declaration and the way we are moving forward. As the Minister set out, there is some outline in the political declaration, but of course, as the noble Lord, Lord Kerr, pointed out, it is merely a wish and not a reality. The political declaration says that free movement of people will end—we know that that is what the Prime Minister set out to achieve. The UK and the EU will provide visa-free travel, but only for short-term visits; both parties will consider visa conditions for research, study, training and youth exchanges; both parties will consider addressing social security co-ordination; both parties will consider measures to minimise border checks; both parties will seek to co-operate on parental responsibility measures; and there will be a framework to enable people to travel temporarily to the other territory for business purposes. The exception to this is the common travel area within Ireland, which will be unaffected. However, the rest of the immigration process, just like the rest of Brexit, is left hanging.
I am interested in what the Minister can say; clearly, he may not be able to say it directly. Those bullet points are interesting, and are clearly a result of a joint discussion between the European Union and the United Kingdom. Which of those points arose from the United Kingdom’s point of view and wish list, and which of them came from the European Union? In other words, what was the thinking of the two parties going forward?
Before we look at the trade influences specifically, I want to make the point clearly that ending the free movement of people in and to this country is a stupid idea. I shall take as my text to prove this the Migration Advisory Committee’s report of 18 September. When it comes to the impact of economic migrants from the EEA, the committee finds that, overall, there is,
“no evidence that EEA migration has reduced employment opportunities for UK-born people on average”,
and that overall there is,
“no evidence that EEA migration has reduced wages for UK-born workers on average”.
The committee notes that there is:
“Evidence that immigration has, on average, a positive impact on productivity”,
and:
“High-skilled immigrants increase innovation”.
I remind your Lordships that those two issues of innovation and productivity are key objectives of the Government’s Industrial Strategy. The committee also notes that EEA migrants,
“make a larger contribution both in terms of money and work to the NHS than they receive in health services”,
and that there is:
“No evidence that migration has reduced the quality of healthcare”.
Quite the contrary, I would say. Indeed, it is clear that the social care sector struggles to recruit sufficient people. With the current freedom of movement calling that into question, what will happen in the future?
The House of Commons Library estimates that in 2017 there were 10,705 doctors, 20,276 nurses, and 14,247 clinical support staff in the NHS who were EU nationals. It estimates that in the last two years the net number of nurses and midwives who were EU nationals, for example, has fallen by over 5,000. We heard in today’s Question Time about the struggle that the NHS is having to recruit future doctors. There were 41,000 nursing vacancies in England, and the Royal College of Nursing estimates that this will rise to 48,000 by 2023 as fewer start nursing degrees each year. In social care, things are much worse, with about 110,000 vacancies.
The Migration Advisory Committee found no evidence that migration has reduced parental choice at schools. Nor has it reduced attainment, and there is no evidence that it has an effect on the overall level of crime. The committee noted that EEA migrants pay more in taxes than they receive in benefits for public services. However, and tellingly, the committee is also not convinced that sufficient attention is paid to ensuring that the extra resources that have come in from those migrants is being spent in the areas where they live. That is a very important point.
Housing raises another important nuance. In pointing out that only a very small fraction of migrants occupy social housing, the committee also pointed out that, given that virtually no new social housing was being built, any migrant in social housing is excluding a UK-born tenant. The committee also found that migration has increased housing prices. It then went on to note that the housing issue cannot be taken in isolation from other government policy. “Hear, hear”, I say to that. For my part, it is clear that the woeful performance in housebuilding by successive Governments is a much larger irritant on the housing issue in this country than migrants. The evidence points to the need not to stop the beneficial flow of economic migrants but for targeted government investment in the communities that have generally been termed to have been left behind.
As the noble Lord, Lord Heseltine, so eloquently put it in his speech during our debate before Christmas, these communities will not be benefited by making Britain poorer, and one way to make the UK poorer is to end free movement.
It is fair to say that there is a huge cognitive dissonance between the published evidence of the Migration Advisory Committee and the political declaration and immigration White Paper. Her Majesty’s Government are seeking to exclude a group of people who contribute positively to our national life. Worse than that, in justifying their policies, they vilify that group for issues that are caused by government mistakes and mismanagement.
The immigration White Paper makes clear distinctions between what are termed skilled and unskilled workers—here we come to the point raised just now by the noble Lord, Lord Liddle. It uses the existing salary threshold of £30,000 to differentiate between those two groups of future employees. Yes, it makes the process of applying for tier 2 visas easier by proposing to abolish the 270,000 annual cap and the resident labour market test, which was a heavy administrative burden on businesses trying to hire from overseas. However, the salary cap is a fundamentally wrong proposal, because it conflates salary with skill. There are many jobs, not least in research and development, where experts are paid below that cap. They still have fabulous skills to offer this country, but they earn less than a £30,000 salary. The White Paper itself estimates that, overall, those restrictions would reduce the net inflow of EEA long-term workers by about 80% in the first five years. This would result in GDP being up to 0.9% lower in 2025.
So-called unskilled workers will not be offered a route into the UK in the long term, according to current proposals. In the interim, the Government will allow unskilled workers to apply for temporary, 12-month visas. This fails the logic test. High-skilled workers may be contributing more in tax, but lower skilled migrants are offering a huge contribution in the services they offer to this country. The Migration Advisory Committee report makes that clear.
There is also a tacit admission in the Government’s own words when they allude to work-related schemes. Once we start looking for sectors that might need such schemes, frankly, we can include the vast majority of the UK economy, but given that agriculture and the hospitality industry are two important parts of our international trade, perhaps the Minister can explain what volume of work-related immigrants the Government anticipate being admitted and how that equates to the stated needs of those two industries.
I am also anxious to learn the Government’s view on how self-employed people or freelancers will trade across the EU-UK border. Here I declare an interest, as I have at least one family member who is a freelancer. Self-employed people are vital to our service industry and dominate in particular sectors. I know that my noble friend Lord Clement-Jones will speak on their role in the tech and creative sectors, for example. How will self-employed people be able to contribute, going forward?
Lord Framlingham (Con)
I am listening very carefully to the noble Lord. Does he accept or acknowledge that there are any problems at all with the freedom of movement?
Lord Fox
If the noble Lord reviews what I said in Hansard, he will see that I talked about two particular issues highlighted by the Migration Advisory Committee.
In addition to listening for the reaction of the Labour Front Bench in this House, from the Government I am listening for the Minister to publicly acknowledge the benefits that EEA migrants have brought to the lives of all of us in the UK. More than that, I hope to hear the Minister confirm that Her Majesty’s Government understand that trade is intrinsically about people, whether working alone or in companies and organisations, and—as previous speakers have brought out—that this is even more important in an economy centred on services, such as ours. Therefore, the more they can move and trade, the better it is for the United Kingdom’s economy. I wish to hear that the Government understand that to restrain the trade of EEA nationals in the UK will not only forfeit the benefits they bring but materially restrain hundreds of thousands—if not more—UK people trading in the EU 27. I would like the Minister to rule out the use of this as a bargaining chip in negotiations. That is why I would like to write this into the Bill. I beg to move.
Lord Clement-Jones (LD)
My Lords, my noble friend Lord Fox has introduced his amendment extremely eloquently and convincingly. In supporting it, I highlight the fact that without the right deal on movement of talent and skills, our creative industries will face major challenges. Some 5.7% of the UK workforce is made up of EU 27 nationals. However, 6.1% of the creative industries workforce is made up of EU 27 nationals. More than that, 10% of the design, publishing and advertising workforce are EU 27 nationals. Some 25% of our visual effects in film—VFX—workforce is from the EU, and that rises to 30% in gaming. We are highly dependent, in those areas of the creative industries, on EU 27 nationals.
Take the music industry, for example. Some £2.5 billion was generated by music in export revenue. Germany, France and Sweden are among our top export markets, and are major destinations for our musicians. In the recent ISM survey of musicians, 39% said that they travel to the EU more than five times a year; 12% travel to the EU more than 20 times a year. More than one in eight performers had fewer than seven days’ notice between being offered work and having to take it, and more than a third of musicians said they received at least half their income from working in the EU 27. There are warnings from these musicians from their experience with the rest of the world. More than a third of musicians had experienced difficulties with visas when travelling outside the EU. In fact, of those experiencing difficulties, 79% identified visas as the source of those difficulties. Musicians in particular rely on being able to work and tour in Europe freely, easily and often with little notice.
It is equally important that the other people vital to touring, such as roadies and technical staff, are able to travel on the same basis. It is also vital that instruments and equipment can be moved around easily, and this must be a reciprocal arrangement. On touring, the Government have said that the UK will look to reach an agreement allowing musicians and museums to tour major events with their equipment and goods. What is considered a major event is not clarified and there are few details on what an agreement would look like.
The Government propose that the new immigration system will preserve the current rules for employing non-visa nationals for short-term work to join a UK production. This allows them to work for up to three months without a visa, requiring only a certificate of sponsorship from their employer, which is cheaper and easier to obtain. For periods longer than three months, the Government are reaffirming that the current tier 5 creative and sporting route, which caters for creative workers such as musicians, actors or artists who are working and touring in the UK, will continue. This is welcome but, again, without the right reciprocal provisions, Brexit is likely to make touring much more difficult for musicians and crews to move across Europe. Increased red tape will make it harder to promote music overseas.
Then, if the withdrawal agreement is agreed, from January 2021 non-visa nationals looking to take up permanent employment in the UK, such as VFX workers, will need to obtain a tier 2 visa. This requires sponsorship from an employer, which must pay a skills charge to make the recruitment. Workers must meet a minimum salary requirement to be eligible for a tier 2 visa. Like my noble friend, I welcome that the Government now plan to consult on the appropriate level for this requirement in the coming year, but the Migration Advisory Committee—MAC—has recommended that it stays at £30,000. There will need to be considerable changes to these proposals if the Government are to ensure that sectors such as the creative industries continue to thrive post Brexit. As the Creative Industries Federation has said,
“high skills do not always command a high salary”.
There is still a huge lack of clarity. The UK Screen Alliance has criticised the plans for a post-Brexit visa system. It says the Bill’s proposed visa system will “severely limit” the VFX and animation industries’ access to international talent. It also says that expensive new EU visas will add significantly to operating costs and impact on the sector’s competitiveness in the global market. Alan Bishop, the chief executive of the Creative Industries Federation, said about the White Paper:
“Unfortunately there is very little in this white paper which will give creative businesses and freelancers in the UK any confidence for the future … government has failed to recognise the challenges freelancers face within the current immigration system—a significant challenge for the Creative Industries Federation where 35% of creative workers are self-employed. Freedom of movement has given British businesses access to the best and brightest freelancers from the EU, presenting those businesses with opportunities to grow and contribute to the continuing health of the UK economy. For international non-EEA freelancers however, the current immigration system provides no long-term route. This is why the Federation has called for the introduction of a freelance visa”.
Those are the words of two significant organisations in this field.
The Government have had plenty of time to consider all these issues and have had plenty of sound advice, not least from quarters such as the July report of the House of Lords European Union Committee, Brexit: Movement of People in the Cultural Sector. That is why this amendment is so important, and I very much hope that the Minister will reflect in his response that the Government fully understand the needs of the creative sector.
Lord Stevenson of Balmacara
My Lords, a powerful case has been made by the party to my left. My sadness is that the framing of the amendment before us deals largely with how any future trade agreement with the EU should have a relaxed approach to the mobility framework and, picking up the point of our earlier debate, tries to insert in some measure the fourth pillar of the GATS process, which allows for individuals to travel in support of goods and services.
The case we heard, and the emotion it raises, are about the much broader ideas of freedom of movement and the ability to transfer skills, particularly in the creative industries. Although it was not specifically mentioned, presumably it seeks to try to loosen the way in which the Government currently treat overseas students. There is a wider, richer, deeper and more important argument about the need for mobility, its importance for any modern nation state and the contribution it can make to our economy and our culture. That needs to be answered, but it is not picked up particularly by this amendment.
We too discovered this problem when tabling amendments. The title of the Bill means that we can not have as broad a discussion as we would wish. However, there is an immigration Bill coming, and others in your Lordships’ House will want to pick up many of the points made here and raise them in the context of a much wider and more appropriate set of immigration conditions and arrangements, which will satisfy much of the discussions we have heard this afternoon.
On the narrow question of where we move, it would be wrong to try to seek a broader solution to the problems identified through a generic approach. There is no doubt that what appeared to be—and it was appearance rather than reality—unbridled immigration was a factor in the referendum that led to the formation of the Brexit arrangements. We would be stupid to ignore that. There are probably answers and solutions that would be satisfactory to all concerned, but not in this amendment. Nevertheless, I will listen carefully to what the Minister says in response to this point. This issue will not go away and we look forward to returning to it at a future stage.
Lord Bates
I am grateful to the noble Lord, Lord Fox, for introducing this amendment, which deals with an important area already touched on this afternoon. It will of course be pored over in some detail as the immigration Bill makes its way to your Lordships’ House.
There is no dodging the key line in the political declaration. At paragraph 56, I think, it makes it clear that free movement will end as the UK leaves the EU. The noble Lord is passionate in his advocacy of free movement, and he has expressed his view that it is a stupid idea—I think I quote him correctly—to get rid of it. But, as the noble Lord, Lord Stevenson, identified, this issue is more complex. To use his term, unbridled immigration was an issue, and we would be stupid to ignore that. Therefore, there is a difference of views here but, as the noble Lord invites me to set out the Government’s position, I will put it on the record if I can.
I appreciate the desire to ensure that businesses and individuals who trade in services and goods between the UK and the EU will have the ability to move across borders to do so. The Government are committed to securing the best deal for UK businesses. We have set out a clear proposal for an ambitious future relationship with the European Union, including a reciprocal framework for mobility. This was reflected in the political declaration on our future relationship. The detail will be discussed in the next phase of our negotiations.
The Earl of Clancarty (CB)
My Lords, earlier the Minister mentioned crossing borders. Would that include onward movement, which is a particular concern of not only individuals and self-employed people in this country but British people living in Europe? Time and again, I have heard that that is a particular concern.
Lord Bates
I may not be able to get a categorical answer on that, but I am happy to undertake to write to the noble Earl ahead of Report to clarify that point.
Lord Purvis of Tweed
The Minister said that perhaps this amendment would be better placed elsewhere, but I wondered why, in the sequence of events, the UK did not agree a temporary arrangement with Switzerland on continuity, for example, in the case that I raised earlier in Committee. Instead, the Government have agreed a permanent relationship arrangement with the Swiss for free movement of people for three months a year if they are providing services. Clearly, the Government thought it was not sufficient to wait until we debated the Immigration Bill, when we could have considered that aspect of our relationship with Switzerland and others. But the Government have made a decision. So as my noble friend Lord Fox indicated, it is right that we press the Government much more. Why did the Government make a case for giving Swiss nationals a permanent right of visa-free travel and work for three months a year, but are taking a distinct approach to other countries, including our EU partners?
Lord Bates
Obviously, those are discussions that will have to be concluded in the future framework. On the specific point about Switzerland, however, the noble Lord suggested that the services elements were additional to the Government’s policy on immigration as set out in the Immigration Bill. That is not correct; it is not inconsistent with the provisions in that Bill.
On the point made by the noble Earl, Lord Clancarty, on onward movement for EU nationals, the UK pushed strongly for the inclusion of onward movement rights during the first phase of negotiations on citizens’ rights in the withdrawal agreement but the EU was not ready to include them at that time. I made that point about reciprocity earlier. We recognise that onward movement opportunities are an important issue for UK nationals in the EU and we remain committed to raising this during detailed discussions on our future relationship. That is the latest position we have at the present.
Lord Stoddart of Swindon (Ind Lab)
There has been a lot of concern in the past that the position of the Commonwealth, relative to that of the EU, has been bad—that EU citizens and EU goods can come to this country without let or hindrance, whereas people and goods from the Commonwealth are unable to do so and have to take their place with the rest of the world. As I understand it, following our departure from the EU, our Commonwealth will be in the same position as people from the EU, and indeed the rest of the world. Can we be assured that the Government’s future policy in relation to the Commonwealth will ensure that it will have equal access?
Lord Bates
I listened very carefully to the final words that the noble Lord used when he talked about “equal access”, and I draw back from that a little. But on the broad principle, when we talk about the scheme of preferences and economic partnership agreements that we have with Commonwealth countries, if we have an independent trade policy, of course we will be able to take that into account. We would be free to do that. Similarly, if we are not part of free movement within the EU and have our independent immigration policy, we are in a position to set out the terms on which we want to admit people to work in this country. I hope that is helpful to the noble Lord.
Lord Fox
My Lords, I thank noble Lords for the minimal debate that we have had around this. I will look closely at Hansard, but I did not hear the Minister refer to the £30,000 threshold issue and the false dichotomy between skilled and unskilled. Between now and Report, I would like the Minister to come back to that, and I apologise if he did indeed raise it.
Lord Bates
Before the noble Lord sits down—I have always wanted to say that—I did have some notes on that. Perhaps I could intrude on the noble Lord’s wind-up to say that the Government are committed to ensuring that the future immigration system works in the international interests of all the UK. The Migration Advisory Committee advised that the £30,000 salary threshold should still apply. The Home Office is undertaking an extensive programme of engagement on its White Paper proposals and will discuss with business and a variety of other sectors, including the creative industries, what a suitable threshold should be. If a skilled job is considered to be in shortage in the UK, a lower threshold is likely apply. I hope that helps the Committee and the noble Lord.
Lord Fox
It helps somewhat, and I urge the Government to consult extensively with the care and food service sectors. Hygiene skills, for example, benefit the food sector a lot. I am sure most employees there earn less than the scheduled threshold. There is also the issue of freelancers and self-employed people. I will not get the Minister up again but I will be looking for a response on that. I also did not hear from Her Majesty’s loyal Opposition anything other than what I would call a very weak response. It was, frankly, disappointing. With that proviso, I beg leave to withdraw.
Lord Lea of Crondall
“UK membership of EFTA and the European Economic Area
It shall be the objective of an appropriate authority to achieve before exit day the implementation of an international agreement to enable the United Kingdom to become a member of the European Free Trade Association and continue as a signatory to the EEA Agreement.”
Lord Lea of Crondall (Lab)
My Lords, I will begin by reading the amendment to set out what I am trying to do here:
“It shall be the objective of an appropriate authority to achieve before exit day the implementation of an international agreement to enable the United Kingdom to become a member of the European Free Trade Association and continue as a signatory to the EEA Agreement”.
It will be recalled from last summer that this policy had—has, I guess—the support of this House. I now wish to scrutinise some of the practical issues of attaining it. Given that all the other ideas seem to have fallen by the wayside, one after the other, like dominoes, I think this is the only one standing. It now has even more steam behind it.
Before I come to the main issue, I should like to make a point about Nissan and Sunderland. This is central to why we need to stay in the single market and customs union. Reading between the lines, Nissan is saying almost as much in those terms. There is a slow-burn catastrophe of collapsing foreign direct investment in Britain. I made a speech a year ago saying that the plans—not forecasts but plans—were down 80%. I was talking to the FDI people around a table. This is now exemplified by the huge Nissan setback. By the way, many Members here, in their previous incarnations, have worked very hard to secure that work. On this occasion, no one is blaming the workers or their trade unions. That is a change, is it not? They blame those who play to the gallery. Boris Johnson and his press acolytes spring to mind, with their self-serving and grossly misleading propaganda two years ago and since. They ought to be ashamed of themselves.
Even now, on the options before us, Her Majesty’s Government are still in denial about the vital requirement to enhance and protect our world market share of investment and trade by staying part of the customs union and the single market/common market. That, in turn, is the secret of Europe’s world market share vis-à-vis the USA and China, as well as Japan and other parts of Asia, as a preferred production location. The same applies to many services.
Lord Stoddart of Swindon (Ind Lab)
My Lords, I really had to get to my feet since I was referred to by the noble Lord, Lord Lea of Crondall, to tell him that it was not puzzlement on my part. It was thinking about what he was saying about the Social Chapter, because the Labour Government at the time opted out of it. What I am concerned about—
Lord Monks (Lab)
Just to correct that statement, it was John Major’s Government who negotiated an opt-out from the Social Chapter in the context of the Maastricht treaty.
Lord Stoddart of Swindon
As soon as I said that, I knew it was wrong, but in fact Mr Blair continued that way and did not introduce the Social Chapter. What I find strange about the noble Lord, Lord Lea, and others, is that they do not seem to understand that once we are an independent nation we can make the rules that we want, which may be better than the rules that 27 other member states—or 28 with ourselves—make in relation to the rights, privileges and wages of workers in this country.
Lord Lea of Crondall
That is the central point. The reason we could not do it at national level, whether in Europe or the wider world, is that our employer would say we will be uncompetitive. However, in a big bloc like the EU where we negotiated at Brussels level under the Social Chapter, they cannot say that—at least for the most part within the family of the European Union. That is the point that the noble Lord, Lord Stoddart, has not answered.
Lord Stoddart of Swindon
That, of course, is a matter of opinion. There are others who say that because we are members of the EU we cannot make the laws that we want in this country, which would benefit the whole country including the workforce. People should have more confidence in this country, the way it is governed and those who can govern it.
The noble Lord, Lord Lea, blamed—or seemed to blame—Brexit for Nissan reneging on its agreement to make its new model in this country. However, Nissan itself has said that the world decline in demand for vehicles, particularly diesel vehicles, was the main reason it wished to save money by developing the vehicle in Japan. We ought to be careful that we do not blame Brexit for everything that goes on in the world and this country. I hope that the noble Lord understands that I was not puzzled about what he was saying—I was merely thinking about what he was saying. Of course he will realise that I was actually listening to him, as I always do.
Lord Finkelstein (Con)
I thank the noble Lord for his compelling and persuasive speech. For those of us who are determined that we should not leave the European Union without any deal whatever, it is important to think about the points that he has raised. We are at the stage now where someone like me needs some guidance. There is no point haring off after something that it is not going to happen. We had a discussion in this House on these very questions, and when we had plenty of time to implement this solution, Labour Benches decided to vote against it and therefore implied that they were not in favour of it at that point, and probably that they would not be in favour of it at any point. I suspect that is still the case.
Before we get ourselves embroiled in Norway-plus as an alternative, I would certainly find it useful to know whether it is the noble Lord’s view that the Labour Party Front Bench is ever likely to support this proposal—
Lord Lea of Crondall
I can help the noble Lord on that. In the six months since the summer, Jeremy Corbyn—whether you think his policy is that of a snail or a crab—has moved to say that we in the Labour Party are in favour of staying in the customs union and a/the single market. That is Front-Bench Labour Party policy.
Lord Finkelstein
I think it is access to the single market, and we are both aware of the difference between those two things. Also, it is “a” customs union; I noticed that the noble Lord referred to “the” customs union. That is also something different, so his view is not quite that.
There is a second question: whether if the Labour Party decides it is going to move to this position—either as a snail or a crab; those were the noble Lord’s chosen animals—that it would then support the withdrawal agreement, which would be needed in order to pave the way for this. If it is not going to, that is significantly less attractive to someone like me looking to ensure that we do not leave without a deal. These questions are not put as a challenge—they are a genuine dilemma for those of us who are now looking at what the solutions are, who are not persuaded after the Brady amendment that we are going to get very big changes from the European Union, and who want to be sure that we can all agree on something.
Lord Lea of Crondall
If the protocol of the House allows me, I will answer questions as they come in this way. The proposal I made at the end of a negotiation involving the EU as well as EFTA is one way of getting out from under the dilemma that some future for Britain within the common market and the customs union could be found. It would not simply be “the” withdrawal agreement; it would be the withdrawal agreement/going along with EFTA under the EEA umbrella agreement, with an understanding between the 27 and us. That is my proposal.
Lord Finkelstein
It is a credible proposal, but only if it has some sort of political support. The questions I put are merely a matter of guidance to me—and I am sure to lots of other people like me—and I am hoping that we will get a little bit of illumination from both Front Benches that will help us along the way.
Viscount Trenchard (Con)
My Lords, against the framework of what the future relationship will be, I do not think that the proposal of the noble Lord, Lord Lea, that we do not follow the procedure set by Article 50 for withdrawal but instead combine a withdrawal agreement-plus with seeking to accede or re-accede to EFTA would find much support among our European friends and partners. They would say that that is not what Article 50 says.
The noble Lord has made clear on many occasions his view that the UK should seek the softest possible Brexit, and his amendment would achieve that. If we were to become a member of EFTA—I think that Norway, for one, has not expressed any enthusiasm for our accession or re-accession—it is true that we would escape the jurisdiction of the ECJ and instead be subject to the EFTA Court, but that court follows closely ECJ judgments.
The leader of Norway’s European Movement has stated clearly that it is in neither Norway’s nor the UK’s interest for the UK to become again a member of EFTA. Continued membership of the EEA would require us to accept future EU rules and regulations, but without a seat at the table and with a greatly reduced voice in the formulation of those rules and regulations. It would also prevent the UK having its own trade policy and remove the raison d’être of my noble friend the Minister and the Department for International Trade. We would not be able to enter new free trade agreements with other countries or accede to broader free trade partnerships such as the CPTPP, which includes Japan, an enormously important trade and investment partner, and leading Commonwealth countries such as Australia, Canada and New Zealand, whose trading regulations, policy and law share origins with our own.
The EEA/EFTA proposal would make this Bill redundant, because we would have no need to novate existing EU FTAs and it would negate the whole upside of Brexit, leaving us as effectively a vassal state of the EU. That is not what the people voted for and your Lordships’ House would not be serving the nation’s interest by supporting the amendment.
Lord Stevenson of Balmacara
I hesitate to become too involved in this debate, which seems rather above the level at which I am accustomed to operating, but one or two things came to mind. As the noble Lord, Lord Lea, explained to me and as came through in his address, the purpose of the amendment is to make sure that we explore all possible options before coming to a conclusion on the many difficult issues before us today. He has done that clearly and it will be interesting to hear what the Minister has to say in response.
It would probably defeat any prospect for active negotiation to play the card that has been played in this amendment at this point, but it is worth bearing in mind the issues that it raises and the much broader point that the noble Lord, Lord Finkelstein, was keen to explore: so many strands to our positioning are being coalesced into a single deal/no deal debate, squeezing out our opportunities for further, richer and more flexible solutions to the long-term problems that we have all recognised and debated today. At this point, it would be best to hear from the Minister what the official line is and then see whether there are issues that we need to come back to on Report.
Lord Bates
I thank the noble Lord, Lord Lea, for setting out the rationale for his amendment. He was sincere in his attempt to persuade us and very thorough, as I would expect of a distinguished economist, in setting out in some detail his thoughts on where this option might go. Whether it is plan B, C, D or E, the reality is that it is a proposal that the Government take seriously and I want to respond to it in that manner.
As my noble friends Lord Finkelstein and Lord Trenchard have mentioned, the very topic of EEA membership was debated in another place in relation to the EU withdrawal Act on 13 June last year and again in relation to this Bill on 17 July. The outcome was clear: the EEA is not the right model for the UK.
Membership of EFTA and the EEA would mean accepting the continued free movement of people, which both Conservative and Labour manifestos pledged to end at the last election—which I suspect is why the noble Lord, Lord Stevenson, suggested that this might be a debate that the Labour Front Bench wished to sidestep; of course, on the Government Bench we do not have that luxury.
Lord Lea of Crondall
I thank the Minister for that very courteous reply. I do indeed believe that he has taken the points very seriously, as I would have expected of him. Neither of us is Wittgenstein. I say that because I fear that Wittgenstein would not have been very happy with some of the logic that has been heard in the last 20 minutes, which tends to be along the lines of, “We can’t do X because that is governed by Y”, as though that were the end of the argument, when in fact I dealt with that proviso in what I was putting forward. It is very difficult across the Chamber, if not impossible, to untangle the tortuous web we weave, but that is what I have been endeavouring to do. I would add that the EEA Council would undoubtedly be able to open a discussion with us: who is going to tell it that it cannot do that? Whether, technically, at that moment, Britain is a third party is a separate question, I would have thought. The agenda is, first, what can we do to avoid tripping over each other in sequential negotiations with the EEA and EFTA? That is a serious problem, given the asymmetry between the technical questions affecting the single market and the customs union.
British pragmatism and common sense—not that there is much of that around these days—is the territory that I am trying to get into. I very much hope that, in the spirit of what a number of people have said, there is food for thought in what I have been saying and, in the two or three weeks before we come back on Report, who knows? A day is a long time in politics at the moment. I beg leave to withdraw the amendment.
Lord Purvis of Tweed
“(a)”
Lord Purvis of Tweed
My Lords, I shall speak also to Amendment 68. These are probing amendments the purpose of which is to seek clarity not only about the Government’s intentions towards negotiations on the future relationship with the EU, but about the Bill and Clause 6 in particular.
Since Committee started we have seen one tangible example of what leaving the European Union means, because it also means that many European Union institutions are leaving the United Kingdom. When the flags were lowered and folded at the EMA headquarters last week, the director of the Wellcome Trust said that it was:
“A very sad day for the UK, a great day for the Netherlands”,
where the EMA will now have its temporary headquarters. I am fully aware that, in advance of our discussing this amendment today, many decisions have already been made at the EMA. I am also aware that, if we are leaving the European Union, our membership of EU institutions gives rise to significant complexities. However, that does not alter the fact that membership of the EMA is imperative to the United Kingdom’s medicines industry, our patients and consumers of pharmaceuticals.
The EMA is essential to the functioning of the single market for medicines in the EU, and the UK played a pivotal role in that process, not just in hosting the EMA for 23 years but also through the contribution of our scientists and researchers and our regulatory expertise. The agency’s work is vital and will continue to be so, providing EU citizens with effective, safe and high-quality medicines and maintaining a regulatory environment that fosters innovation and development of new medicines. It is vital that the UK continues to have a relationship, and my amendments seek clarity on how the Government see that relationship. We know that we are no longer able to engage as co-rapporteurs for new marketing authorisations applications—this will end regardless of what happens on 29 March 2019, agreement or no agreement. The only way we can stop this is if we continue our membership of the European Union, which is by far the most preferable of all the options, but on the basis that that will not happen, we also know that from March onwards the UK’s position will be considerably weaker.
Last April, the EU 27 completed the redistribution of the UK’s portfolio of more than 370 centrally authorised products to rapporteurs from the EU 27 plus Iceland and Norway. We know that significant damage has already been done. To put this in context, more than 40 million pharmaceutical packages are exported from the UK to the European Union every month, and more than 30 million are imported into the UK from the European Union. The UK pharmaceutical industry is integrated into the regulatory regime of the European Union, and separating this out has been a very painful process. The question remains: what will the relationship be going forward?
Paragraph 24 of the political declaration states—assuming this is still the Government’s position—the following:
“The Parties will also explore the possibility of cooperation of United Kingdom authorities with Union agencies such as the European Medicines Agency (EMA), the European Chemicals Agency (ECA), and the European Aviation Safety Agency (EASA)”.
What do the Government mean by co-operation? The Bill says—at the moment—that the Government should,
“take all necessary steps … to fully participate … in the European medicines regulatory network”.
It is for the Government to explain the disparity between the two. Why does the political declaration say simply,
“explore the possibility of cooperation”,
when the Bill says that the Government’s objective is full participation in the regulatory network? Why the disparity in language? Was this on the insistence of the European Union, or because the Government did not do what the House of Commons instructed it to do, taking a much stronger position in the Bill, with full participation as their intention?
Lord Lansley
My Lords, I just want to say a word on this. I will not add much, because the noble Lord, Lord Purvis of Tweed, has illustrated the nature of the issues here very well. I would just emphasise that, if the Government are looking to vary Clause 6 as it came from the other place, it is important for them to do so while recognising the importance of seeking to maintain and maximise our co-operation and partnership on medicines and clinical matters across Europe. There are issues such as European reference networks for rare diseases, which are valuable mechanisms for co-operation; there is work together on clinical trials and the implementation of the clinical trials directive.
As far as the European Medicines Agency is concerned, none of us realistically expects that, if we leave the European Union, we will have mutual recognition of authorisations between the Medicines and Healthcare products Regulatory Agency in this country on the one hand and the EU on the other. Even if we were to offer to recognise European Medicines Agency authorisations in this country, I do not think that will be offered, because the European Union will not contemplate a third country providing what it regards as the equivalent of its own authorisations with its own control of data and jurisdiction under the European Court of Justice. That is not going to happen.
However, from early on in the negotiations it was clear that we should aim, if possible, for the scientific evaluations presently carried out by the Medicines and Healthcare products Regulatory Agency, prior to the authorisation process, to continue to be done by the MHRA. That is not presently anticipated by the European Medicines Agency, and that is one of the reasons why the Dutch, Germans, French and others are gearing up their medicines regulatory authorities to do much more of this work. They recognise that—to give perhaps the maximum illustration—over 40% of the work on the authorisation of medical devices across Europe is done by the MHRA, and an even higher percentage for the more complex and significant medical devices. It is far from the case that this can be readily adopted and delivered in other EU member states. It is in their interests and ours to continue to work together—something like 80% of the total work is in the scientific evaluation rather than in the subsequent authorisation process.
I know Ministers are continuing to think about how we can achieve this level of co-operation, and I hope that, in that spirit, even if Clause 6 does not end up providing this mandatory structure for the negotiations, Ministers will be forthcoming none the less about how we might make progress in the direction that the noble Lord in his amendment is aiming for.
Viscount Younger of Leckie (Con)
My Lords, I start by thanking my noble friend Lord Lansley, who has paved the way quite well for some of the remarks I will make on this issue. This amendment, spoken to by the noble Lord, Lord Purvis, raises an important issue which the Government are committed to addressing, and that is our future relationship with the European Medicines Agency.
Medicines regulation is inextricably linked to the UK’s fantastic life sciences sector. The UK has one of the most productive health and life sciences sectors in the world. The sector is critical to the UK’s health and economy, contributing over £70 billion a year and 240,000 jobs across the country.
We have been clear since the referendum result that our overarching aim for medicines and medical device regulation is underpinned by three clear principles: first, that patients should not be disadvantaged; secondly, that innovators should be able to get products to the UK market as quickly and simply as possible; and, thirdly, that the UK should continue to play a leading role in promoting public health. This is why the Government, in their White Paper The Future Relationship between the United Kingdom and the European Union, set out their aim to secure active participation in the EMA. The noble Lord, Lord Purvis, used the word “imperative”, and that is very much noted on this side.
However, the clause binds our hands ahead of negotiations with the EU on our future relationship. We have always been clear that continuing to share our skills and expertise is the best outcome for UK and EU patients. The noble Lord, Lord Purvis, cited part of the political declaration; that declaration underlines the UK and EU’s mutual commitment to working together in the future on medicines regulation, and to negotiating the UK’s ongoing co-operation with the EMA. That particular area was raised by my noble friend Lord Lansley, but I will go slightly further, because the noble Lord, Lord Purvis, picked up on the word “co-operation”. I say again that we want to retain a close working partnership with the EU to ensure that patients continue to have timely access to safe medicines and medical devices. The political declaration explicitly makes allowance for a spectrum of outcomes and commits both the UK and the EU to exploring the UK’s relationship with the EMA.
The Government, as I said earlier, set out their ambitions for the future relationship in the July White Paper, making it clear, again, that we are seeking participation in the EMA. I can provide the Committee with some additional detail, however, some of which has been alluded to by my noble friend Lord Lansley. The UK is seeking an agreement that will allow the UK regulator to be able to conduct technical work, including acting as a “leading authority” for the assessment of medicines, and participating in other activities, such as ongoing safety monitoring and the incoming clinical trials framework.
I hope these brief comments provide enough reassurance to the Committee. Given that continued EMA participation is already a negotiating objective of ours, we do not believe that this amendment is necessary. The Government are already committed to ensuring that, after we leave the EU, UK patients can access new medicines at the same rate as they do now.
The Duke of Montrose (Con)
I am most grateful to the Minister for giving way. A case in point that my noble friend Lord Lansley was talking about is not just medicines but vaccines. Apparently, in this country we no longer make any vaccines for human use, but all the European vaccines from all around the world are vetted by the Moredun Research Institute in Edinburgh. It will no longer be able to vet vaccines, and it has been told to destroy all its cultures if a no-deal Brexit goes through.
Viscount Younger of Leckie
I very much take note of what my noble friend has said. I have no doubt that that point, and so many others, will be taken into account when these negotiations commence.
I wanted just to clarify one point that the noble Lord, Lord Purvis, raised on the issue of “all necessary steps”, which is engrained in the clause to which his amendment refers. It is a point that the Government are reflecting on, but I absolutely reaffirm our objective of as close a relationship as possible with the EU in this particular subject. I hope the noble Lord will withdraw his amendment on the basis of those remarks.
Lord Purvis of Tweed
I am grateful to the Minister for his characteristically thorough response, except that we still have Clause 6 in limbo to some extent. I am not sure how long the Government can reflect on the language of their Bill, which the Government brought to the House without stating whether they intend to bring forward amendments on Report to change it. I think the noble Lord, Lord Lansley, made a very good point: this is a very significant issue that requires a degree of forewarning on what the Government’s intentions will be. I suspect we may just have to wait; we have pressed the Government enough at this stage with regards to getting some clarity on that point. It is frustrating that we still have some question marks that are being raised over the language of the Government’s legislation.
On the second point, I understand what the Minister says. There will not necessarily be any easy answers to this, but my point was that there can well be a marked difference between co-operation with, and participation in, European institutions—I think this is the point the noble Lord, Lord Lansley, was making, and I share his view. The European Union has been clear on that in the past. Indeed, on the previous day of Committee, my noble friend Lord Foster took part in the debate on communications and the regulatory bodies in the European Union for that. More recently, the European Union has changed its position to make it even harder for third countries to participate in the European agencies. Our bodies co-operate with the Food and Drug Administration in the United States. We have co-operation which is very deep, but when it comes to the key elements of whether medicines or vaccines are licensed, whether the research will be accepted on a reciprocal basis, and whether data is shared and can be legally shared between the two regulatory bodies, there are still issues that need to be identified.
It is reassuring to know that it is the Government’s intent, from the White Paper onwards, that we would have active participation, but at the moment it seems as if the political statement trumps that because it is more recent. However, the Government have reissued their position on active participation and, in advance of waiting to see what they bring forward on Report—if, indeed, they do so—I beg leave to withdraw my amendment.
“Objective to reform WTO procedures
(1) It shall be an objective of an appropriate authority representing the United Kingdom in meetings of the World Trade Organisation to ensure that the World Trade Organisation modifies its procedures in a way which secures the supremacy of international treaties arrived at under the auspices of the United Nations over trade agreements not arrived at under the auspices of the United Nations.(2) The Secretary of State must lay before each House of Parliament at least once in each calendar year following the commencement of this section a report on any progress made in achieving the objective under subsection (1).”
Baroness Jones of Moulsecoomb (GP)
My Lords, I shall try to keep this brief, so I will not read out my amendment. We have heard a lot about the WTO over recent months; it is becoming the lazy answer to a lot of complex questions about how we withdraw from the EU. Some people are using the phrase “WTO terms” as if they are magic words that will solve all our problems. I was relieved to see the International Trade Secretary pouring cold water on those fantasies this weekend and I hope the Minister will take this opportunity to reinforce these statements in her response to my amendment.
For people such as me, who have spent most of their lives extremely sceptical of unaccountable, international governance structures, WTO terms are not the answer to our problems—they never have been. In fact, they are part of a global giant which undermines democracy and restricts the sovereignty of nations to implement their own policies. I find it hard to comprehend how anyone can complain about the EU being undemocratic and then champion the WTO as our saviour, using WTO terms to justify the most destructive and damaging route out of our current political stalemate. Many Greens, environmentalists and social justice campaigners have rallied against the WTO for decades and my amendment asks our Government to work towards adding some accountability to the WTO for reasons I will outline.
After the Second World War, there were two parallel, somewhat competing, initiatives which sought to establish an international system of rules and norms. One of these strands of thought gave rise to the United Nations, which has pursued peace, social development, environmental action and anti-colonialism as some of its fundamental aims. The opposing project established the Bretton Woods agreement, birthing the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade, which later became the WTO. This second strand of international co-operation placed the economic interests of the West, particularly the United States, far above the demands of developing countries, which were represented in the United Nations. Empires were dismantled but international institutions continue the exploitation of former colonies and the extraction of their precious resources. It is in this context that the WTO and the UN can be seen as somewhat at odds with one another.
More recently, the WTO has protected international economic management and trade from the environmental and social initiatives of the UN. I do not want to overstate the point because there are some WTO rules that allow environmental and other pressing needs to be addressed, but the WTO’s overarching purpose remains promoting international trade and eliminating barriers to trade. There are a number of examples of WTO rulings that interfere with environmental initiatives. The WTO intervened in an initiative of the Indian Government to rapidly increase the country’s production of solar panels and create a strong climate policy. Other WTO decisions have prevented companies adopting conservation rules that would protect endangered and declining species, such as dolphins, sea turtles and tuna.
There are many more examples of the WTO interfering with national sovereignty and international co-operation. The WTO has recognised that there are conflicts between itself and multilateral environmental treaties. It has identified 20 international environmental treaties that it considers could affect trade, such as banning trade in certain species or products—perhaps ivory, for example. The WTO notes on its website that no formal trade disputes have been brought with regard to these multilateral treaties, but I suggest that it is only a matter of time and must be playing on policymakers’ minds when making decisions.
The unique and complex problems posed by climate change, environmental damage and species loss, are not restricted to national borders. These issues are more important than trade. We know that there are now only—I was going to say 12 years—11 years and eight months to make fundamental changes to our economies if we are to have any hope of avoiding catastrophic climate change and ecological collapse. The fact that the WTO itself recognises that there is conflict between its rules and the multilateral treaties designed to avoid environmental disaster is proof that urgent reform is needed.
Our Government talk a good talk on the environment, but at some point they must deliver. That is why, with my amendment, I am asking the Government to negotiate to ensure that UN treaties are given priority and not undermined by the WTO. I hope that this amendment will be supported by everyone who recognises the urgency of the issues facing our planet and the need to reform global governance in response. I beg to move.
The Minister of State, Department for International Trade (Baroness Fairhead) (Con)
My Lords, I thank the noble Baroness, Lady Jones, for providing this opportunity to discuss these issues by tabling her amendment.
With regard to the World Trade Organization, we operate under WTO terms if we are not in a free trade agreement—that is, if we are not a part of the EU or currently part of an FTA. For example, WTO terms operate for most of our current trade with the US. On the noble Baroness’s point about how we do not wish to leave without a deal and move exclusively on to WTO terms, that is the subject of a future amendment, to be discussed later this evening. I stress once more that that is not the Government’s priority, which is to secure a deal.
I will touch on the reform of the WTO. This is a key global priority, which was highlighted in recent meetings of the G20 and mini-ministerial summits held in Canada last year, and at the annual meeting of the World Economic Forum in Davos. I agree with the noble Baroness that WTO reform is essential to address the functioning of the organisation, including the strengthening of its negotiating arm. Indeed, when I attended the OECD Ministerial Council Meeting in Paris last year as the UK Government’s representative, I emphasised the importance of, and the UK’s commitment to, advancing WTO reform discussions.
This is important, given that trade discussions relevant to some of the most critical global issues, such as climate change—which the noble Baroness so passionately commented on—are currently stalled. This House discussed the current state of the WTO’s environmental goods agreement in Committee the week before last. I restate that we are strongly in favour of seeing these negotiations restart and of playing a key role in them, given the important contribution this agreement would make to tackling climate change, which is a key priority for the Government and this country.
However, the UK cannot require the WTO to modify its procedures in a way that secures the supremacy of international treaties that were arrived at under the auspices of the UN over trade agreements that were not. The WTO and the UN, I am informed by our lawyers, are two distinct independent organisations, with two distinct bodies of international law. The WTO is not part of the UN system and exists independently in international law. That position is combined with the fact that there is an established principle of international law that there is no hierarchy of sources of international law. Reform of the WTO therefore requires reform of the WTO’s own treaties, which has nothing to do with UN law, nor can it. Trade agreements, too, whether they seek to reform the WTO, or are secured bilaterally, must comply with the relevant law, which is WTO law. They exist outside UN law. I hope I have provided clarity on the legal situation in this area.
Baroness Jones of Moulsecoomb
Does the Minister accept that climate risk has to be part of any sort of trade negotiations, in that it could disrupt all sorts of mechanisms worldwide—not only weather patterns but movement of peoples and so on?
Baroness Fairhead
My Lords, I think I have reiterated just how important climate change is to the Government’s priorities. The question is: what is the appropriate and most effective way to discuss climate change and to get rules put in place? There are differences of view over the most effective mechanisms, and many would say that trade agreements are not the right place. Others are more effective on that point. However, as we have tried to do and as the noble Baroness will have seen with our most recent trade agreements, such as CETA, we also include references to environmental standards.
Lord Stevenson of Balmacara
I am trying to help both sides come to an arrangement. I do not think that the noble Baroness whose amendment we are talking about is trying to set out a route map for the Government—if she is, she is doing it in a very gentle and responsive way. I think she is struggling, as we all are, with the question: if you want to make changes—which she so evidently does, and which a lot of us would support—what is the best way of doing that? Obviously, the noble Baroness has made it clear that you can do it on three levels. You can do it on a case-by-case basis as trade agreements come up, inserting the points you want to make. Alternatively, you can go through the United Nations, which is separate but still obviously influential as regards the wider tone and context in which these matters operate. But the central point, as the noble Baroness said, is that the WTO itself is in some difficulty. It may be all we have and the only way we can do it, but is the Minister seized of the arguments being made that the status quo is not satisfactory in so many ways that there needs to be some sort of movement around the whole issue, but presumably focusing on the WTO, and does she support that?
Baroness Fairhead
I thank the noble Lord for his intervention. Absolutely; I hope I restated that the WTO needs reform in areas such as digital, speed of processing and a number of others. We will continue to be an active participant in those discussions. Therefore, I can say yes to reform. On the particular area of climate change, we also have a clear objective: the Government want to improve the culture of climate change and the approach to it. It is about what is the best way to achieve that, and that is what we are focusing on. With those clarifications, I ask the noble Baroness to consider withdrawing her amendment.
Baroness Jones of Moulsecoomb
I thank the Minister for her answer and I thank the noble Lord, Lord Stevenson, for suggesting that I am in any way gentle; that is not a word normally applied to me, so I feel flattered.
I disagree so strongly with the government line that trade agreements are not the place to discuss, promote or encourage any sort of climate change mitigation measures. We cannot ignore any option for ameliorating what will be a climate crisis in a very short time. Therefore I very strongly disagree on that but, having made that disagreement clear, I beg leave to withdraw the amendment.
“Territories forming part of a customs union with UK: amendment to the Taxation (Cross-border Trade) Act 2018
(1) The Taxation (Cross-border Trade) Act 2018 is amended as follows.(2) Omit section 31(5) (customs union with UK: import duty).”
Lord Stevenson of Balmacara
Although this group of amendments points in different directions, the amendments have a common starting point, and it is therefore not inappropriate that they should be debated together. Amendment 77 is in my name, joined by other noble Lords, and others have put their names to Amendments 78, 79 and 80, to which I shall also speak.
The history is important, because it raises a wider point than we have recently discussed, although we have from time to time touched on it: the fact that the Taxation (Cross-border Trade) Act and this Bill are really two sides of the same coin. They deal with aspects of trade which need to be in place in the unfortunate event that we crash out of the EU, but they are also pointers towards how we would carry out our trade policy and activity in the event of either crashing out or, as the Government would wish, having an extended period during which various other agreements would be added to the withdrawal agreement and political declaration.
The question that underlies the amendments is: are we in a good place to take forward those future discussions, given the two pieces of legislation that we are looking at? Because of how the Taxation (Cross-border Trade) Bill was defined as it went through the other place, it came in a form expertly handled by the Minister but which allowed us only a limited degree of comment and an occasional question, which he was of course well able to answer but which did not allow us to either amend or question in any serious way how the Bill was framed or where it pointed.
In addition, at a very late stage in the process in the Commons, the Government accepted a group of amendments tabled by the rather quaintly named European Research Group which, to many people, were tabled very late, rather surprising and subject to little debate—they certainly did not go through Committee. So the Taxation (Cross-border Trade) Bill, unscrutinised by your Lordships’ House, was not even scrutinised to any great extent in the Commons after the later amendments arrived which changed its nature.
At the time, we felt that there were issues that could have been raised in debate, but we were unable to do so. Of course, the presence of the Trade Bill before your Lordships’ House and its ability to amend previous legislation opens up the opportunity to make some changes, if the House feels that to be an appropriate way forward.
In crude terms, Amendments 77 to 80 would reverse the late amendments made by the European Research Group to the Taxation (Cross-border Trade) Bill in the other place. In so doing, obviously one looks at the impact that those amendments had and tries to frame our amendments in relation to both the Bill and wider policy arrangements. Briefly, it is fair to say that the conclusion that we on this side have come to is that those amendments do not strengthen our position in general terms and that it should be the duty of this House carefully to consider whether they should be removed, because that would return the Bill to a much better place in terms of where we may require powers set out in the Taxation (Cross-border Trade) Act to be utilised.
For example, Amendment 77 removes the restriction in Section 31 on creating a customs union with the European Union by requiring a separate Act of Parliament to be passed before the designated powers could be used. We think that that should be amended because the restriction under the previous amendment will make it difficult for the Government to negotiate a customs union—or even the customs union—should that be the way that they wish to move in forthcoming discussions.
As it stands, the collection of taxes and duties on behalf of the European Union would be banned unless there are reciprocal arrangements, but Amendment 78 would change that. I think the debate has moved on here, and it could be argued that Amendment 78 is probably the least important of the group. Nevertheless, it was a change perhaps made in haste and, at leisure, the Government may come to the view that it is not the best way to try to open a negotiation if the possibilities one is offering are already restricted by the Act.
Amendment 79 would make it legal for the Government to enter into arrangements that would see Northern Ireland forming a separate customs territory from the rest of the UK. Although I gather that this has support from the DUP, it still makes it a very different situation and context for any discussion about the backstop arrangements. Other noble Lords may expand on that issue. As it stands, the Bill seems again to cut off an opportunity for future discussion and debate—which is even more important than when the amendments were tabled.
Amendment 80 concerns a rather significant change to the way in which VAT is charged in a customs union. It is perhaps of some interest to your Lordships’ House that we have not, within the duopoly of legislation with which we are currently dealing—the Taxation (Cross-border Trade) Act and the Trade Bill—dealt with the question of why the VAT rules that operate within the EU have not also been subject to attention. It will be interesting to hear the Minister’s response.
Of course, VAT is dealt with under separate rules under a separate agreement among the countries in the EU; it is not part of the EU as such, nor part of any other arrangements which normally interpose with trade. To that extent, the Schedule 8 arrangements in the Taxation (Cross-border Trade) Act are distinct and different. It is therefore important that we should have some response from the Government about how this should be taken forward.
The amendment proposed by the European Research Group and inserted into the Act is not the only story that needs to be told on this, but we may not wish to go all the way down that route, although expertise is available should we wish to do so. The Government should be very clear about how they intend to take this forward. I beg to move.
Lord Hannay of Chiswick (CB)
My Lords, I support the amendment in the names of the noble Lords, Lord Stevenson and Lord Purvis, and the noble Lord, Lord Bowness, who asked me to mention that he is unable to be here but that he continues to support the amendments. The noble Lord, Lord Stevenson, introduced the amendments admirably and explained very clearly why those parts of the Taxation (Cross-border Trade) Act which we seek to change are either unnecessary or damaging. He is absolutely right to say that the least important is probably the European Research Group amendment passed at a very late stage in the Commons, which we had no chance to intervene on effectively when it came through this House because it was a money Bill.
However, one part of it makes collection of customs duties possible only if the European Union collects customs duties and gives them to us. The original idea was that we would collect duties on behalf of the European Union; this was an essential part of the—now lost in the mists of time and buried deep under the soil—Chequers plan. The European Research Group amendment, frankly, neutered the Chequers plan, but as the European Union was never going to accept it anyway and made it clear at Salzburg and later that it would not accept it, there seems no point leaving it on the statute book.
The last point made by the noble Lord, Lord Stevenson, relating to Amendment 80 about VAT is actually extremely important. Anyone who seriously believes that preventing the British Government maintaining a VAT union, if you would like to call it that—a system that enables trade across borders between us and the European Union without the need for extremely elaborate VAT calculations, inspections, payments and so on—and doing away with that which exists now and going back to where we were before that existed will not put a huge amount of friction on our trade simply does not understand the realities. The VAT aspect is just as important as the tariff aspect and is separate from it. Unfortunately, the European Research Group—in its usual extraordinarily constructive way—has managed to insert something here that would be really damaging to our interests if it is sustained when we go into negotiations with the European Union about future trade arrangements. The only sensible thing to do—I hope the Government will give careful thought to this—is to get rid of this now and take it out of the Taxation (Cross-border Trade) Act.
We cannot be certain now what the Government and the European Union will do when negotiating our future trade arrangements. The Government are quite right to say they cannot guarantee how that will go. But they can remove this great ball and chain around their ankle, put there by the European Research Group, which would be really damaging to us if it ever came to be a central part of our future trade relationship. To say that relationship will be frictionless if the VAT aspect is not dealt with is just a bad joke, frankly, if you have to have VAT inspections, payments and all that sort of thing on goods that are passing. After all, the VAT levels are different in every member state, and the current system enables us to live with that without slowing down or impeding trade; that would go. So I really hope the Government—if not tonight, at least before Report—could say that they will take out that amendment, which should never have been allowed in. This is the single most important amendment in this group of four.
Lord Purvis of Tweed
My Lords, I am very happy to have my name attached to these amendments. It shows the Government there is a degree of cross-party consensus that it is important that these aspects—which, as the noble Lord, Lord Stevenson said, did not get the level of scrutiny they deserved in the Commons—get scrutiny in Parliament. This is after the event, because in effect we are scrutinising legislation, but there is no harm in a bit of post-legislative scrutiny of the taxation Act. In an exchange the Minister and I had during the very brief proceedings in this House on the Taxation (Cross-border Trade) Bill, the Minister said there would be ample opportunities for scrutiny, such as during the upcoming Trade Bill, so we are taking him at his word and offering the Government a chance to give a full-throated defence of the ERG amendments passed in the Commons.
As the noble Lord, Lord Hannay, said, there are perhaps some unintended consequences of these amendments that we now need to properly scrutinise. It is an extraordinary position we find ourselves in where Members of the Government’s party moved amendments to the Government’s Bill that would in effect render the Government’s then policy on the facilitated customs arrangement largely inoperable. Now those same Members are meeting the same Government today to breathe new life into the very systems of a facilitated customs arrangement that they themselves rendered largely inoperable by their amendments. I was struggling for an analogy on the way to the Chamber this afternoon. I could not find one as ridiculous as the position we now find ourselves in. If it is the purpose of the so-called alternative arrangements working group that is now meeting to try to find solutions to the problems that they themselves created, I do not think that any alternative arrangements will come out of this working group.
The ERG amendments now sit most uncomfortably with the process under way, so it is right that we give them proper scrutiny. The Government say one of the amendments they accepted—that there would need to be a stand-alone statute for any customs arrangement agreed with the European Union—is not necessary for any other trade agreements. If I understand it correctly, the positon of the Government is that the free trade agreement with the European Union would undergo a CRaG process, which is an affirmative process to be approved because there is a treaty, but a secondary customs arrangement that would come with that would have to have a stand-alone statute. Why? What is the Government’s rationale for that? In the Commons, the Government simply said they thought it would be appropriate that there would be a stand-alone statute. I do not understand why, so I hope the Government might be able to tell us why that would be the case.
Lord Hain (Lab)
My Lords, following the excellent speeches we have just listened to, beginning with my noble friend Lord Stevenson, I support this group of amendments and appeal to the Minister seriously to consider reversing the ERG amendments, not just for the detail and well-founded points and reasons that have already been made, but because the Government did not choose to accept them. They were foisted upon them, because of the arithmetic and politics of the situation, and wanting bigger fish to fry. As a result, we have a defective Bill, even by the Government’s own objectives. I ask the Minister seriously to consider on Report, rather than facing a possible vote and even defeat given the cross-party support that exists, getting the Bill back to where it was before the ERG plundered it.
Lord Lansley
My Lords, what connects this group of amendments is that they are European Research Group’s amendments in the Commons that were accepted by the Government. I do not think they should be treated by my noble friends on the Front Bench as if they all had the same merit or otherwise.
The single UK customs territory, which is now Section 55 in the Taxation (Cross-border Trade) Act, specifies that there should not be a separate customs territory between Northern Ireland and Great Britain. Frankly, I cannot see the circumstances in which this House or the other place would find this acceptable. That being the case, I cannot see any merit in this House seeking to ask the other place to think again about that issue. I do not think anybody in the other place is proposing to revisit it, so my suggestion is that we do not go down the path of thinking that Amendment 79 has merit.
I do not disagree about Amendment 80. I listened with care, but I would not like to try to explain it to somebody else and I am sure the noble Lord, Lord Hannay, is right about that.
I support Amendment 77 because I cannot see any good grounds for why legislation should require the Government to seek new primary legislation to have a customs union of any character with the European Union in the future. If, for example, we want to have a customs union with the United States of America, it could be done by an Order in Council. There is no basis for a distinction of that kind, other than the politics of the moment, and legislation should not be governed by the politics of the moment. If there is a proper process for the scrutiny and approval of a customs union, it should be set out in legislation and apply to any other country with which we establish a customs union and not discriminate and impose additional requirements specifically in relation to the European Union.
That just leaves Amendment 78. I confess I saw this being slightly of the moment, in that it was intended to entrench into statute the provisions in the Chequers White Paper relating to reciprocity in the collection of import duties on behalf of the European Union by the United Kingdom. But as I understood the White Paper, it did not necessarily mean that the European Union would collect import duties on our behalf. There was some suspicion on the part of our colleagues in another place that the negotiations might lead to such an eventuality, and that we would collect duties for the European Union but they would not collect duties for us, so they put this into the legislation. Frankly, that is not where the negotiations are now. We are either in a customs union or we are not; I do not think we are going to be in some sort of asymmetric customs arrangement of that kind. Nobody is debating that presently.
Amendments 77 and 80 have merit. I hope they are not going to be pressed at this point, but my noble friends should certainly think carefully about amending them when we come to Report to enable the other place to think again.
We discussed the customs union last Wednesday. That was the day before an interesting report was produced, principally by German economists at the Ifo Institute. I was encouraged by it, not least because I agree with it. It basically said that, to break the deadlock, both sides have to move from their red lines. In the United Kingdom’s case, that means no longer excluding the possibility of being in a customs union with the EU. In the European Union’s case, it means not treating such an arrangement necessarily to mean that the United Kingdom has to remain a member of the existing customs union or the Customs Union Code. They therefore propose the establishment of a European customs association, in which both the United Kingdom and the member states of the European Union would have voting rights. As a consequence, in the event that the European Commission operated as the representative of the European customs association, it would do so based on a mandate in which the United Kingdom continued to exercise the same kind of authority it presently exercises on the European Union’s customs arrangements.
This customs union would extend only as far as the present custom union applies inside the European Union. The document Hard Brexit Ahead: Breaking the Deadlock contains precisely the kind of discussion we have been having. It is not about whether we are in the customs union; it is what a customs union between the United Kingdom and the European Union might look like in the future.
It is doubly encouraging to see that not only put forward but put forward by prominent German economists. I hope that Ministers will continue to look at that in the time available before they have to come back and talk once more to the other place about what the next meaningful vote should be on.
Lord Kerr of Kinlochard
My Lords, I support Amendment 77 for the reason that the noble Lord, Lord Lansley, has just given, and I strongly support Amendment 80, for the reason that my noble friend Lord Hannay gave.
Amendment 78, however, is very strange. I support it, but we are in Alice in Wonderland territory here. It is an entirely academic interest, because it seems to me implausible that Mr Barclay and Mr Paterson, and their high-powered alternative arrangements group, would come back to this alternative arrangement—the Chequers proposal—given that they ambushed the Government to take it out by their amendment to the taxation Bill.
It was always rather a fanciful idea anyway. In its brief life, it had several forms. First, it was proposed as a reciprocal arrangement. The foreigners would have to clog up Rotterdam, Antwerp, Hamburg and Bremen collecting our tariffs and operating our quotas, segregating our goods from goods going to the EU, which would be charged EU tariffs and subject to EU quotas. Once segregated, in some magic way, our goods would then proceed to the United Kingdom, having paid UK tariffs at their first European port of entry. That was never going to happen.
The second form, once noises from Brussels had been heard, was that we would do it for EU goods but the EU would not be required to do it for our imports at its ports. It was that, I think, which provoked the ire of the ERG: why should we collect foreign tax? But there was no possibility of the EU at any stage agreeing that we should collect its tariffs at our ports.
There are several degrees of lunacy here, and we have this very strange prohibition on the statute book. I think that the statute book should not contain nonsenses, and so I support the amendment. However, it does not matter. The EU would never agree this proposal in any of its incarnations. Mr Paterson, Mr Barclay and these other trade experts are not going to come up with it as an idea in the alternative arrangements committee, because they were dead against it. Therefore, although I support the amendment, I do not think one need spend a lot of time on it.
Lord Bates
My Lords, I rise more in hope than expectation of being able to persuade your Lordships. I pick up the sense from the Committee that this is probably something that your Lordships will want to return to in more depth on Report. Perhaps the best service I can offer at this stage is to put on record the Government’s position, respond to some of the precise points and then await further developments as they may unfold between now and Report.
Amendments 77, 78, 79 and 80 relate to changes passed in the other place during the passage of the Taxation (Cross-border Trade) Act 2018. This Act is important legislation as the UK leaves the EU. It enables the Government to create a stand-alone customs regime by ensuring that the UK can charge customs duty on goods, set and vary the rates of custom duty, and suspend or relieve duty in certain circumstances.
I turn now to the substance of the original amendments to the Act, which these amendments seek to remove. Amendment 77 relates to Section 31(5), which requires further parliamentary scrutiny in the event that the power under Section 31(4) is used to implement a customs union with the EU. The Government support the principle of further parliamentary scrutiny in this case. My noble friend Lord Lansley suggested that this was perhaps reflective of the politics of the movement. As a distinguished former Leader of the House in another place, he will be very familiar with how that side of things works. However, as this House is aware, the Government have made it clear that they are not seeking to be in a customs union with the EU as part of our future economic partnership—I say that without wishing to reopen the many debates we have had on “a” and “the”.
It is important to reflect why the Government have taken this view and to consider what leaving the EU means. It means the ability to strike out on our own to forge new trade deals. In order to do this, one important element is to have the ability to set our own tariffs. Being in a customs union would deny the UK this ability and fundamentally undermine our capacity to negotiate new trade deals with old friends and new partners.
The noble Lord kindly outlined, as he saw it, the way in which Amendment 78 arrived, referencing first the Bill and then the amendment. The Government have been clear in their White Paper that the arrangement they are seeking will ensure that both the UK and the EU get their fair share of the revenues from the rest of world trade. Section 54 of the Taxation (Cross-border Trade) Act is in line with the proposals that the Government set out with a view to achieving just that.
Turning to Amendment 79, Section 55 of the Taxation (Cross-border Trade) Act 2018 requires a single UK customs territory. This is a statement of government policy and ensures that the Government will not act incompatibly with the commitments made in the joint report of December 2017, where they committed to protect the constitutional integrity of the UK.
Lord Purvis of Tweed
I apologise for interrupting the Minister. I want to add perhaps another degree of lunacy to the several mentioned by the noble Lord, Lord Kerr. New Section 31 of the taxation Act, which Amendment 77 seeks to rectify, contains the following phrase:
“In the case of a customs union between the United Kingdom and the European Union”.
The Government said that that would not apply because the customs territory they are seeking to have will not be a customs union. So even if just to make the legislation neater, it should be taken out.
On defining the scope of the single customs territory, which we are seeking to do, the Government’s Legal Position on the Withdrawal Agreement, command paper 9747, says it is that,
“under which the UK aligns itself with the Union’s external tariff and there can be no tariffs or quantitative restrictions on imports and exports between the UK and the EU. The single customs territory therefore constitutes a customs union for the purposes of GATT19, but it is not the EU’s customs union as defined in Article 28 TFEU”.
It can either be one thing or the other, but the Government’s own document on the legal position says that the customs territory will be a customs union.
Lord Bates
I will make some progress, but I will come back to that point—when inspiration arrives.
No UK Government, regardless of their political leanings, could ever accept such a carving up of the United Kingdom—I am referring here of course to the division between Northern Ireland and the Republic of Ireland. Indeed, on 15 October, in another place, the Prime Minister said:
“We have been clear that we cannot agree to anything that threatens the integrity of our United Kingdom, and I am sure that the whole House shares the Government’s view on this. Indeed, the House of Commons set out its view when agreeing unanimously to section 55 in … the Taxation (Cross-border Trade) Act 2018 on a single United Kingdom customs territory, which states: ‘It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain.’ So the message is clear not just from this Government but from the whole House”.—[Official Report, Commons, 15/10/18; col. 410.]
Turning to Amendment 80—before I come to some of the points raised during the debate—the Government’s position is that they will not seek to be in a customs union with the EU. We have debated this issue in this House and in the other place throughout the passage of this Bill—leaving aside the very clear response that is on its way to the noble Lord; he should be prepared for that. As has already been highlighted to the House, at Report stage in the Commons, MPs rejected an amendment seeking to keep the UK in a customs union with the EU.
On the specific points relating to import VAT, it is clear that the Government are highly cognisant of the concerns raised. I will deal with that point now because the noble Lord asked some very good questions on VAT treatment, and it is good to have an opportunity to put the position on the record. Goods from third countries are treated as imports, with VAT due accounted for on import or by the 15th of the following month as duty of customs. This means that, unlike acquisitions, there is a cash-flow impact because traders have to pay the import VAT and potentially recover it later when they submit their VAT returns. It also means that there needs to be an option to pay import VAT on the border, as not all businesses have the necessary guarantee to defer payment until the following month. Generally, import VAT is paid sooner on goods from non-EU countries than on goods from EU countries. This provides a cash-flow benefit to companies importing goods from the EU compared to businesses that import from non-EU countries. Without an UK-EU agreement to retain this treatment, goods entering the UK from the EU would be treated as imports and would be subject to the same rules as businesses moving goods from non-EU countries. This would mean businesses paying VAT on imports from the EU sooner, affecting their cash flow. The Government published a series of technical notices in August 2018 to help businesses prepare for the unlikely event of a no-deal scenario. The VAT technical notice, “VAT for businesses if there’s no Brexit deal”, announced that the Government will introduce postponed accounting for import VAT on goods brought into the UK.
The noble Lord, Lord Stevenson, asked why we accepted Section 54—originally New Clause 36—of the Taxation (Cross-border Trade) Act 2018. The Government did so because it was consistent with our position. It requires the Government to negotiate a reciprocal arrangement for the collection and remittance of VAT, customs and excise duties. The Government have been clear that both the UK and EU should agree a mechanism for the remittance of relevant revenue. The Government set out in their July White Paper that they propose a revenue formula that takes into account goods destined for the UK entering via the EU and goods destined for the EU entering via the UK.
The noble Lord, Lord Purvis, asked whether the customs territory is a customs union under GATT, and he deserves a full answer to his detailed question, so I commit to writing to him. That should be very clear to the noble Lord and all Members of the House—well worth waiting for.
Lord Berkeley of Knighton (CB)
I ask this question as someone who is not a politician and who therefore sometimes gets quite confused about the repetition of entrenched views, which have led us to the undoubted stalemate that we are in. This really concerns the point made by the noble Lord, Lord Lansley. I heard the Minister’s response, but it seems to me that everything I hear about Brexit suggests that the Northern Ireland backstop is a real sticking point. Is it not conceivable that, to get around that problem, the Government might have to consider some form of customs union?
Lord Bates
It is a challenge when someone with the noble Lord’s intellect begins a sentence by apologising for not being a politician and then asks for clarity at the present time. We are discussing this legislation, but we all know that we are in one of the most fast-moving, dynamic episodes of negotiation that this country has ever entered into. We are gradually working our way through. The White Paper was published at a moment when we were seeking to flesh out exactly what the Government’s position was in response to the Commission saying, “We don’t know what the UK’s position is; we don’t know what they want”. Therefore, the White Paper was introduced at that point. Then there was the clamour for clarity for business—what it would do in the event of no deal—so the technical notices were issued. Then, we got to the position where we reached an outline agreement with the European Commission in December, against many people’s expectations, along with heads of terms for what a future economic partnership might be. That was then presented to the other place and roundly rejected. Therefore, we have now begun another process, so I readily accept that if one wants to score points by stopping the clock at various stages along the process and pointing to certain inconsistencies in it, the Government are pretty easy fare for that.
Lord Kerr of Kinlochard
The Minister is making a very gallant effort and I applaud it. I enjoyed many of the things he said, particularly when he referred to a no-Brexit deal. I thought that was a very encouraging concept. I really cannot let him get away with where he is now, in this fast-moving situation he describes. Put yourself in the place of the EU 27: what are they supposed to think when the Prime Minister scuttles her own fleet? She orders her party to vote down the backstop in the treaty. The backstop is 21 articles, 10 annexes and 172 pages. The Prime Minister’s officials have negotiated that line by line, month by month and it is there because we asked for it. Then she decides that the best thing to do with it is to replace it with alternative arrangements, which are now being devised by Mr Owen Paterson and Mr Stephen Barclay. The Minister tells us that this is a fast-moving situation and it is quite hard to keep up with it, but there is nothing happening in Brussels but sheer astonishment at the failure of our system.
Lord Bates
That is the noble Lord’s position on this: the reality is that the Prime Minister is seeking an agreement that can command a majority in the other place and that requires compromise. That is what the agreement represents. The House made its view on the withdrawal agreement clear; she is now seeing whether that can be addressed with the Commission. Personally, I wish her well and every possible success, as opposed to my own mis-speaking. Lest it be on the record, I am sure that Sigmund Freud would have observed that perhaps I had momentarily let slip an inner feeling, which, of course, has nothing to do with the position of Her Majesty’s Government, which I consistently seek to put forward from this Dispatch Box and proudly support.
The noble Lord, Lord Purvis, asked about support for government amendments that preclude the facilitated customs arrangements. We would argue that there is nothing about the amendments made to the Taxation (Cross-border Trade) Act in the other place that is inconsistent with the draft political declaration that will inform the future relationship. On the point made by the noble Lords, Lord Hannay and Lord Stevenson, about insufficient focus on VAT implications, the Government have been clear that we are aware of the potential impact on businesses of any move away from the concept of acquisition VAT, but we have also set out that in any scenario we are seeking to avoid any adverse effects. Amendment 80 does not affect that in our view.
Lord Fox
On that last point, we keep talking about 29 March, but of course sales are already being made and shipping has already been arranged that may well arrive in this country or continental Europe after 29 March. The business decisions to invest, to make things and try to sell them have already been made, so minimising the impact is not possible. The impact has already started.
Lord Bates
Yes, there is a reason why we have brought back the agreement—to resolve the situation.
As for whether the amendments have been considered in the other place, the other place voted for two of the original amendments and had the opportunity to vote on another two but decided not to do so, so the other place made its view clear on that point.
Lord Hannay of Chiswick
On this point about VAT, I hope the Minister will forgive me for saying that he and I are probably slightly out of our depth on the detail of how this will work. From what he just said and from the guidance that he read out at some stage, it sounds as though the Government and HMRC understand that potential friction will come into our trade with the EU if we do not ensure that something like the present arrangements continue. Back in the 1980s, when I was involved in the matter, we avoided a perfectly appalling idea by Lord Cockfield of having a clearing house in Brussels into which everyone would pay all this VAT. We have a frictionless system and it sounds as though the Government understand that that should be preserved. But I rather doubt that that is consistent with the Taxation (Cross-border Trade) Act, because of the amendment on VAT that was put in by the ERG.
The best thing that we could ask of the Minister this evening is to go back and consider very carefully whether the Government should either accept Amendment 80 or give some fairly lengthy explanation of what they will do and how that is—if it is—consistent with the Act now on the statute book. That would be best. Then, when we return to this on Report, we will all have probably learned quite a lot.
Lord Bates
I am very happy to give an undertaking to the noble Lord that I will reflect with colleagues, particularly my noble friend Lady Fairhead, on the comments made on these amendments, notwithstanding the points that I have put on the record about the Government’s position. We can return to these on Report and I will seek to give some further information in the gap in between Committee and Report. I hope, in the meantime, that the noble Lord will feel able to withdraw his amendment.
Lord Stevenson of Balmacara
That was an interesting and enlivening evening. I have come up with a brilliant title for my forthcoming novel—Seven Degrees of Lunacy, or could it be eight? That might be easier, although I doubt it. I have speculated at length about whether we are in Alice in Wonderland, as was suggested, but my favourite suggestion is that we are in Gormenghast, because we seem to be trapped in structures not of our own making, with a design that is not of our wish and with an outcome that is very uncertain and probably leads to madness. But enough of that.
One unifying thought was summed up neatly by the Minister in his last remarks when he said that we needed to think a little harder about what the problem is. Everyone who has spoken, other than the Minister, took the view that these issues had a common theme—the reasons may be different but the theme is that they all have the potential to derail us later down the track. The Government should think about that issue rather than the particularities of these issues. If it is going to be problematic to get an agreement in both Houses on a Motion for an extension of a customs union, because of the argument made by the noble Lord, Lord Lansley, about the inherent asymmetry of one set of rules for the US and another for the EU, that may not be helpful. I do not think we are saying any more than that. There is an opportunity here to do something to ease the roadblocks that we can see down the track, whichever track we go down.
Amendment 78 was part of the Chequers arrangements but is now otiose and it is not beyond the wit of others to point out that it still exists in statute and might cause difficulty further down the line. Amendment 79, as my noble friend Lord Hain said, bears directly on the backstop. Is it really sensible to have this power hanging over us in another piece of legislation as we get to the later stages of that, if that is what is going to happen? On VAT, it is not really about the agreement that might be coming but a broader issue about VAT in general, because there might be a better way of collecting VAT that originates outside the UK. It is complicated and a short meeting might be a way to find the common ground that we want to take forward. I am grateful to the noble Lord for wading through that and having the doubtful honour of assigning his name to it in Hansard. It is useful to have it there and we will study it carefully.
I think there is time to have another look at this. Even if we disagree on some of the issues, it cannot be right for Parliament to pass legislation that it knows is not going to be of any use. I think that was the point the noble Lord, Lord Berkeley, was making. If this is where we are, why do we just not do it? We could do it differently and see if we can use the time to clear it up properly. That is the way I would like to see it go forward but it is not in my hands. I beg leave to withdraw the amendment.
Baroness McIntosh of Pickering
My Lords, I am grateful for this opportunity to debate whether Clause 9 and Schedule 4 should stand part of the Bill. I just want to raise one or two points that, as my noble friend the Minister will recall, arose during our meeting way back in October or November, for which I was extremely grateful.
I tabled my opposition to the clause and schedule immediately after Second Reading because a number of issues relating to the role and powers of the Trade Remedies Authority arise from the increasing threat from the volume of imported products. I am particularly concerned about bricks, tiles and ceramics due to my interest in, for example, the York brick company, which I had the honour to work with as the local MP. These products emanate from potentially unsustainable sources, often from developing countries, and they are having a negative impact on our domestic production, as seen through the latest retaliatory tariffs from the US and, subsequently, China. I have some general and some specific comments that I wish my noble friend to respond to. I am particularly grateful to the Law Society of Scotland for raising these issues.
Paragraph 12 of the report of the Select Committee on the Constitution sets out the concern that there is a singular lack of detail on the functions and powers of the Trade Remedies Authority and that enormous discretion is given to the Secretary of State in relation to the constitution of this body, the appointment of its members and its operations. In particular, I draw my noble friend’s attention to the committee’s conclusion that,
“in constitutional terms, creating and empowering an important public body in such a manner is inappropriate”.
In connection with Clause 9 and Schedule 4, can my noble friend indicate the length of appointment for members of the Trade Remedies Authority, and do the Government envisage these appointments being renewable and for a similar length of term? If we are inviting people to serve on this body, it is important that they are at least given security of tenure. That goes to the heart of their independence and impartiality, and it would detract somewhat from the ministerial discretion that currently lies with the Secretary of State. Under what conditions would the Government envisage the office of an official serving under the Trade Remedies Authority becoming inappropriate and how could it be removed? It would help the Committee to know that.
In addition, perhaps I may confirm with my noble friend that, in connection with the injury calculation which is the outcome of the Trade Remedies Authority’s conclusions, the regulation will be laid before the House by the affirmative rather than negative procedure.
I am sure that my noble friend does not need me to rehearse the importance of the bricks, tiles and ceramics industry. A total of 2.5 million people overall are employed in the UK manufacturing sector, and this is a very strong part of that industry. As regards ceramics covering tableware and tiles in particular, these have already been affected—or one could say protected—by the two EU trade remedies in place for ceramics. It is important to give a message to the industry this evening that we will create in the Bill similar provisions to those that exist in the European Union at present.
Can my noble friend the Minister confirm that the injury calculation will be by affirmative procedure and—as some of the Commons amendments did not cover this point on the economic interest and public interest tests—that the Government will put on record how these tests will be interpreted in court and by the authority going forward? This is purely intended as probing. I obviously wish Clause 9 and Schedule 4 to remain part of the Bill, but I wanted to make some of these general points before we go on to discuss the amendments in the next grouping.
Baroness Neville-Rolfe
My Lords, I have some sympathy with my noble friend Lady McIntosh of Pickering but for a quite different reason. As I said all those months ago at Second Reading, we need a highly professional team to look after the UK’s trade interests, but I am not convinced that we need a new authority separate from the trade department. I may be out of date, but my recollection is that the work in Brussels is done by the Directorate-General for Trade, not by a special agency—and it seems to get along very well, as we keep hearing.
I might not be able to convince my noble friend the Minister, but I emphasise that the proposed body must be of a very special type. The agency, if we must have it, should be run by people who are independent-minded with Civil Service values, not representatives of any particular stakeholder sector. Such people must be able to stand up to the vested interests who will approach them in the way that they approach Brussels under the current arrangements. I remember lobbying DG Trade on bra quotas in Brussels. I have to say that I was one of many very fluent stakeholders interested in the cargos that were sitting on the sea and not arriving in the shops in Britain.
Lord Stevenson of Balmacara
My Lords, we are dealing with a clause stand part amendment in the name of the noble Baroness, Lady McIntosh. But she and the noble Baroness, Lady Neville-Rolfe, have raised a number of points that actually come in the next group. I wonder if for the convenience of the House we should merge these groups and hear now the speech by my noble friend Lord McNicol, which I have had the privilege of seeing. It covers much the same ground as that covered by the noble Baroness, Lady McIntosh, and the noble Baroness, Lady Brown, will probably come in on the ceramics aspects. It might be easier to finish this group together, so I suggest that my noble friend Lord McNicol speaks next.
Baroness McIntosh of Pickering
I am grateful to the noble Lord and will be content as long as my noble friend the Minister can answer my specific questions. My only concern is that they do not get lost in the general wash of the next grouping, as they are very specific.
Lord McNicol of West Kilbride (Lab)
My Lords, my noble friend Lord Stevenson talked about a speech, but I think he might have overemphasised what we are going to go through. I have pulled together a few comments and was looking to move Amendment 83, but many of the issues overlap with the last two speeches so I will weave in some of the themes.
The group beginning with Amendment 83 deals largely with the setting up and running, as has been touched on, of the Trade Remedies Authority. I will deal with some of the specific amendments and work through them quite quickly because we have another two groups to work through this evening. Many of them are probing amendments to solicit further clarity and details from the Minister on the running and formation of the TRA.
Amendment 83 itself touches on consumers and would add a third subsection to Clause 10(2) not just looking at countries, exporters or producers but adding a further consideration—the consumer. That is a sensible consideration that the TRA should be asked to look at when making any decisions.
Amendment 84 touches on the annual reports that the TRA needs to prepare and sets out a bit more detail about those, looking at any of the guidance, advice or assistance that is given to the Secretary of State. Probably most important is the final part of it regarding the laying of the report in front of Parliament. That is not touched on in detail in the Bill just now, and this adds in that little bit extra.
The noble Baroness, Lady Brown, and others will touch on Amendment 101A, but suffice to say that including and involving UK producers and trade unions is obviously a sensible way forward. It would not tie the hands of the Minister, the chair or the chief executive, but would bring in organisations and individuals who could bring wide and independent knowledge to the formation of the TRA.
Amendment 102 seeks that the chair be vetted by the International Trade Committee of the other place, which is just sensible good practice and happens already with many other bodies of similar stature to the TRA.
Amendment 104 touches on non-renewable terms. The reason for tabling it is that, all too often, individuals who have been appointed to boards have an eye on the reappointment that is coming at the end of their time. Single-term appointments are becoming more common on boards, which means that those individuals can be far sharper and clearer, not tied up in any considerations about the next set of appointments.
Amendment 105 and 106 tie together quite neatly and delve a little more into the detailed knowledge and expertise that we would expect members of the TRA to have. The Bill itself does not go into any specific detail on this so the amendments would put in a little more detail about the individuals and their having knowledge and expertise. God forbid that someone would be appointed to a board for a political reason by the Secretary of State. The amendment would just add a little more depth and weight to those individuals.
Amendment 106 again touches on the criteria, looking at consumers, producers, trade unions and workers being involved with that.
Amendment 107 brings more detail in the clause regarding individuals, going back to the earlier question about how you set what “unfit” is. The Bill itself is quite bland on this; this amendment just brings a little bit more clarity and detail to it. Sub-paragraphs (a), (b) and (c) have been used by many other boards for the ability to exclude individual members if they fall below the expected standard.
Lord Lansley
My Lords, if we are going to anticipate the longer group of amendments, which impact on Schedule 4, I will say a word about Amendments 103A and 107A, which are in my name.
I shared, I confess, the view of my noble friend Lady Neville-Rolfe for quite a long time. The conclusion I came to is that we pretty much have to accept the structure which says that we have an independent Trade Remedies Authority, rather than one integral to the Department for International Trade. The analogy is with competition activity. The European Commission runs its own competition regime from a directorate-general of the Commission, with a commissioner in charge. We may think that is right or wrong, but the point is that it is internationally recognised that in that respect, the Commission operates at a significant remove from the day-to-day political pressures in a single country. In this country, we do not operate on the basis that we have a government department providing the competition authority; we do it independently. There is a better analogy there. There is also the analogy of the International Trade Commission in Washington, which is recognised as operating independently of the day-to-day political pressures that otherwise might be exercised in the US Administration or if it were subject directly to Congress. There are analogies that cut both ways, but I am persuaded that having a separate Trade Remedies Authority is best.
It is tricky, because we do not have that many people who are very good at managing trade remedies. We are going to end up with one set of them in the Trade Remedies Authority and another set sometimes in the Department for International Trade having to judge the recommendations being made by the Trade Remedies Authority. I am not quite sure that we shall have enough people to do all those tasks. I hope we do, but it will not be immediately obvious.
Paragraph 2 of Schedule 4 states that a chief executive of the Trade Remedies Authority is to be,
“appointed by the Chair with the approval of the Secretary of State or, if the first Chair has not been appointed, by the Secretary of State”.
My Amendment 107A would simply leave out paragraphs 17 to 23, which all relate to the circumstances where a chief executive is appointed by the Secretary of State. We do not want to leave in statute for the longer term that the Secretary of State may appoint the chief executive. It should be the responsibility of the board. That is generally true for most other independent bodies of this kind. I do not see any reason why we should trespass across that if the independence of the Trade Remedies Authority is integral to its function.
All this seems to have been written in the expectation that it would become law at about the same time as the Taxation (Cross-border Trade) Bill did back in September. Back then, there was not a chair-designate of the Trade Remedies Authority, nor was there a chief executive-designate. We now have both. There is no practical reason why the chair cannot be appointed alongside other members of the board, so that they can take responsibility for the appointment of the chief executive. I see no grounds for leaving in the Bill this statutory provision compromising the body’s independence.
My Amendment 103A would specify that, when the Secretary of State came to approve the appointment of a chief executive as proposed by the chair of the board, that should be subject to a report from the International Trade Committee of the House of Commons. I looked at the January 2019 updated guidance from the Cabinet Office on the 50 leading appointments made with pre-appointment hearings by Select Committees. Back in 2008, when I was Secretary of State in the Department of Health, we had seven such appointments, which I think was the largest number of any single department. The Department for International Trade has no such appointments—it is quite a new department—but this is its principal body. In so far as the Select Committee on International Trade is to have a view, it seems that it should have a view about the chief executive and the chair of the Trade Remedies Authority. To be honest, I may have got the amendment wrong; it may be that it is better that the chair be appointed by the Secretary of State following a report by the International Trade Committee—forgive me if I have got it in the wrong place—as the chair is more likely to be the person who should be the subject of scrutiny by the committee. I may reserve that point, as distinct from what is written in Amendment 103A.
I cannot see a good reason why there should not be such scrutiny. The criteria seem threefold: is it important, does it have impact, and does it require independence? All three seem to apply in the case of the Trade Remedies Authority. The amendment would not require the approval of the Select Committee; it would simply require a hearing to take place and a view to be expressed. We know from precedent that on nine occasions Select Committees have made a negative report on appointments proposed by Ministers. In six of those cases, Ministers have proceeded in any case. The amendment is not to prevent Ministers making the appointment that they wish to make; it is to give the Select Committee in another place an opportunity to make a report on the proposed appointment of a chair.
Baroness Brown of Cambridge (CB)
My Lords, I shall speak to Amendments 101A and 103B in my name. I thank my noble friend Lord Kinnoull for adding his name to both amendments and the noble Baroness, Lady McIntosh of Pickering, for supporting 101A. I have two further amendments in the next group—do not worry, I am not suggesting that we amalgamate these, but I will provide some common background that applies to all four amendments before I speak briefly and specifically to Amendments 101A and 103B.
Materials are very important to us. I happen to be a materials scientist, so I would say that. They are important economically and strategically: obviously, they are the start of the supply chain for anything we manufacture. Advances in materials underpin the technologies and devices we depend on, from the structures and blades of wind turbines, to batteries for electric vehicles, to materials which allow the slow release of drugs in the body, to materials that enable faster communication of data—do not worry, I shall not give a long list. While we have world-leading academic expertise in materials, many of our materials industries are under pressure, as the noble Baroness, Lady McIntosh of Pickering, highlighted. Many of these industries share some common features and it is these common features that make the Trade Remedies Authority so important for them.
Many, such as steel and ceramics, are energy-intensive, so as we decarbonise our economy they will increasingly need to invest in new technologies, such as carbon capture and storage, hydrogen-fired kilns and things to drastically reduce or eliminate their CO2 emissions. They are affected by our very necessary requirements for high environmental standards. Many are located in economically vulnerable parts of the country and, as the noble Baroness, Lady McIntosh, mentioned, many have experienced serious problems in the past arising from dumping and subsidy by overseas Governments. Current world trade issues, such as the US-China trade dispute, resulting in overproduction in many areas in China, and Brexit, are understandably causing concern.
So our materials producers, along with many other industry sectors, welcome the establishment of the Trade Remedies Authority in the Bill. They think the UK needs a strong and independent authority to investigate alleged dumping and subsidy cases and to recommend remedies. Producers need to know that the TRA will be a body that understands the impacts of dumping and subsidy on UK companies, to give them the confidence to continue with their investment programmes—investment that will be critical to delivering the Government’s clean growth strategy. We have already heard a bit about the definition of the membership of the TRA and its governance. Both Clause 10 and Schedule 4 make the independence of the TRA a very clear objective. However we have already heard that this does not sit entirely comfortably with the chair and non-executives being appointed entirely at the discretion of the Secretary of State. By contrast, the TRA will have wide discretion in the way it conducts trade remedy investigations, which is clearly crucial for its independence.
However, in combination, these factors build a degree of uncertainty into the system for manufacturers. A strong message about the composition of the TRA board, giving assurance that individuals with current experience in the manufacturing industry, from both a management and worker perspective, would be there alongside trade remedy experts, economists, academics, legal experts and people with other relevant skills would help remove uncertainty and risk for UK producers. Indeed, as the noble Lord, Lord Lansley, reminded us, because trade remedies have been a Brussels competence, trade remedy expertise is likely to be in somewhat short supply in the UK. It is critical that the TRA board is not made up mainly of theoretical modellers and economists but has a real balance of theory, analysis and practical, hands-on experience. The recent move by the Government to accept the principle of involving those most affected by trade policy in its development—for example, through the recruitment of a diverse stakeholder strategic trade advisory group—is very welcome. Trade remedies should be no exception, with both producers and trade unions involved.
Amendments 101A and 103B would ensure that both manufacturing and trade union experience are present on the TRA board, and that there is consultation with stakeholders before appointments are made. I hope the Minister will be able to confirm that the Government recognise the benefits of this broad approach for the TRA membership.
Lord Fox
My Lords, I am struggling, because I fear we are mixing our drinks a little. On the one hand, we have had some debate—particularly from the noble Lords, Lord McNicol and Lord Lansley—on the mechanics of a TRA. That is, what sort of people do we want, and how will they be governed? We clearly want competent people, which is to some extent going to be a tough ask—not because people are not clever enough, but because they have not practised this particular activity. On the other hand, the noble Baronesses, Lady McIntosh and Lady Brown, are talking about the politics and economics of trade remedy. In a sense, the noble Lord, Lord Lansley, alluded to the nexus between that decision—the politics of trade—and the role of the TRA. This debate is not unpicking those two activities.
We talk about having a wholly independent TRA, but as a country there seems to be some political convergence around the idea that we have an industrial strategy. Are the Government going to run one independently of the other? I am not sure that Germany does that. Even though Germany is beholden to Brussels, I am pretty sure that its trade policy—the way in which it works through Brussels—is very much beholden to its industrial strategy. Further homework is required for all of us.
I sympathise with the speech of the noble Baroness, Lady McIntosh, on the ceramics industry. That industry benefited in this country from the political clout of Spain and other countries which have similar problems. If we leave the European Union, that support and clout will be gone. That will be true for many industries in this country, not just ceramics—agriculture is a huge loser in terms of lobbying in a post-Brexit world.
The question to ask ourselves is how much clout this TRA will have, when you have got the United States, the European Union and China. Let us say that this is a steel-dumping question. Does it matter what the TRA will do in the face of those challenges? We are arguing all sorts of important things, but by coming out of the European Union, we are reducing any kind of clout we will have in future trade decisions.
The Earl of Kinnoull (CB)
My Lords, I rise briefly in support of the noble Baroness, Lady Brown, and associate myself with all her remarks. I also associate myself with the noble Baroness, Lady McIntosh—I agreed very much with what she had to say.
Amendments 101A and 103B are probing in nature, and I will address a few thoughts to this TRA membership question. In Schedule 4, the TRA is proudly declared to be independent. That is important in trade, because, as one goes through Article 6 of GATT, and the 1994 associated agreement on that article, one sees that the whole idea behind trade remedy processes is that they are fair and are not being used as political weapons by the countries wielding them. That independence is therefore philosophically important to preserve. And yet, in Schedule 4 we find that the Secretary of State will appoint all the non-executives. In addition, the non-executives will always be in the majority, and the Secretary of State can fire all of them. To add icing to the cake, the Secretary of State has the power to issue guidance, and the TRA must “have regard” to it. That does not look to me like a recipe for independence. It would mean that the TRA would begin life with a bad image, and it would be difficult for it to appear a useful, independent tool internationally.
I worry that, if another body had a similar structure which might have political interference—although I do not think we would actually operate it badly—we could be on the wrong end of something. We would not be able to criticise, because it would have the same structure. I join other noble Lords in very much looking forward to what the Minister has to say about the independence of the TRA, and about the points that I and others have made.
Baroness McIntosh of Pickering
My Lords, I shall speak to Amendment 101A and, without rehearsing the points, I entirely endorse what the noble Baroness, Lady Brown, and the noble Earl, Lord Kinnoull, said in speaking to the amendment. The Minister was kind enough to have a meeting with the team and myself, but I have this awful feeling that she will not support this amendment. I would like to give her a bit of bottle this evening and say why she must adopt the amendments, particularly Amendment 101A. A similar amendment was not carried in the House of Commons but by a very narrow margin and it goes to this point that a number of noble Lords have said this evening—the process must be, and be seen to be, fair in appointing and sustaining members of the TRA, and they must operate independently and impartially. I make this plea to the Minister: the Government must be seen to rein in some of the powers of the Secretary of State, which will be pretty broad if we let the Bill go to its final stages without making these points.
I entirely support what my noble friend Lord Lansley said about why an independent Trade Remedies Authority is required, and I should have declared an interest: I spent a very enjoyable six months in 1978 when I was very young, very keen, and very green, with the EU Commission—DG IV, now known as DG Comp. We did important things, such as read the Financial Times, which was amazing because a number of companies were announcing they were merging without having told the European Commission or the UK home authority, so it is absolutely vital that we have an independent authority such as the Trade Remedies Authority.
To respond to the point made by the noble Lord, Lord Fox, we need to give the businesses in this country the knowledge that there will be a remedy which replicates the remedies that are currently available. I entirely support his point that it will not be EU-wide, but we do need some anti-dumping and retaliatory measures at our disposal in this country.
Baroness McIntosh of Pickering
It will be hard, but I do not think we can let the matter go. That is why Amendment 101A should be on the Marshalled List and not consigned to room 101.
Lord Purvis of Tweed
My Lords, I wish to make two brief points in this large but important grouping. The first is in response to the point made by the noble Baroness and my noble friend Lord Fox. When the Secretary of State spoke at Second Reading of this Bill in the other place, he indicated that the Government’s position on the anti-dumping remedies regime would be public long before we considered this Bill. We are, to some extent, debating blind in not knowing what the Government’s proposals are. That is regrettable, so if the Minister can give some clarification, that would be very helpful.
The second point is really stimulated by the noble Earl, Lord Kinnoull, and the noble Lord, Lord Lansley: why are the Government continuing with Schedule 4 as it is currently drafted? As the noble Lord, Lord Lansley, said, the proposal would have been that the Secretary of State would appoint the chair of the TRA and then the chair would appoint the chief executive —that is in Schedule 4(2)(1)(a) and Schedule 4(2)(1)(c). If no chair had been appointed, the Secretary of State would appoint. In the Government’s Statement on 26 October, they announced the appointment of both the chair designate and the chief executive designate at the same time. I do not know how that interacts with this legislation, and on what basis the chief executive designate was appointed. I am not questioning those two individuals. If the intention was to have a truly independent body, the fact that the first chair had been the UK Trade & Investment representative raises some questions. I am not questioning the quality of the appointments. However, I am not sure how the fact that the announcement of both appointments was made on the same day interacts with the Bill, and on what basis both the chair and the chief executive were appointed as designate at the same time. As the noble Lord, Lord Lansley, said, either that is not consistent with the Bill, so the Government acted beyond how they said they would act, or perhaps we should just delete this aspect in its entirety for the sake of neatness.
Baroness Neville-Rolfe
On Amendment 101A, I agree with proposed new subsection 1(c), where you have,
“a chief executive appointed by the Chair with the approval of the Secretary of State or, if the first Chair has not been appointed, by the Secretary of State”.
The latter has already happened, so, as the noble Lord said, that becomes redundant. However, I am not convinced that all the executive members should be appointed by the chair without reference to Ministers. I have been involved in lots of appointments in different bodies over time, and the fact of the matter is that normally appointments are put forward and are approved ministerially, and this helps make the appointments sensible, enduring and independent.
For the same reason, I do not agree with the suggestion of the noble Baroness, Lady Brown, that we should require representatives of different groups. I can see exactly what she is trying to achieve, which is to have good, sensible people who would care about economics, people and devolved Administrations. However, my own experience is that if you restrain yourself in this way, you find that you are looking for somebody who has to be in a specific category, maybe there is nobody of quality at that time—especially as the pay rates in quangos are quite low compared with other opportunities for these people—and you get yourself into difficulty. I would favour simplicity, and independence achieved by having a separate agency, whatever my views may be on that.
Baroness Fairhead
My Lords, I thank all noble Lords for their contributions to this debate. In particular, I thank my noble friend Lady McIntosh for the first grouping, and the noble Lord, Lord McNicol, for the second. I confess that I was grateful to the noble Lord, Lord Stevenson, for helping me merge these two groupings, but I was probably even more grateful to the noble Baroness, Lady Brown, for saying that she would not extend that to the next grouping as well.
I will try to address these as best I can, given the significant number of elements that were raised. Clearly, a key priority of the Government is to help businesses expand their global presence. However, while we work to help increase exports, we must ensure—I hear complete agreement on this around the Committee—that our domestic industries are shielded from the damaging effects of unfair trading practices and unexpected surges in imports. That is exactly why the Government are setting up the new Trade Remedies Authority—TRA—to give that safety net to businesses, which is provided for by Clause 9 and Schedules 4 and 5.
My noble friend Lady McIntosh of Pickering asked how this related to the Constitution Committee’s report. I can confirm that the Government have responded to that report. The main functions and powers of the TRA are set out in the Taxation (Cross-border Trade) Act, and setting up the body, as we are doing in this Trade Bill, is normal practice.
Free trade does not mean trade without rules. The WTO allows its members to provide a safety net, which we are doing. This safety net usually takes the form of an increase of duty on imports of specific goods following an investigation. Trade remedies, as these increased duties are known, are vital to level the playing field and restore our competitive balance. That is critical in areas such as ceramics, steel, and a number of other sectors. Failing to put the trade remedy function in place would have a damaging effect on those industries and the UK economy more widely, and we cannot let that happen.
As several noble Lords have mentioned, this is currently an EU competence. Investigations, decisions and monitoring are carried out by the EU Commission on behalf of EU member states. Once the UK leaves the EU, the European Commission will no longer perform those functions. That is why we are creating the TRA. This will ensure that we can continue to provide that safety net and help protect the 2.5 million people who work in the ceramics industry, for example. The framework for our trade remedy system is set out in the Taxation (Cross-border Trade) Act 2018. My officials worked with UK industry, including the ceramics and steel industries, during the development of that framework.
My noble friend Lady McIntosh asked about secondary legislation on injury calculations. The detail of the technical assessments of the TRA will be set out in secondary legislation under the Taxation (Cross-border Trade) Act. This has already been passed by the other place, which agreed that the negative procedure is the appropriate scrutiny mechanism.
Baroness McIntosh of Pickering
This is a new procedure, but presumably it is open to an individual Member of your Lordships’ House to intervene to say that they do not agree with the negative procedure and switch it to the affirmative if they made the right case to do so.
Baroness Fairhead
I confess that I am unaware of the protocol in this regard. It is a ways and supplies Act and was deemed by the Speaker to be such, but I will leave that point to those who are more au fait with protocol.
Lord Stevenson of Balmacara
I am not sure that this will help very much, but a negative procedure is a negative procedure. It can be questioned, but the way to do so is by tabling an amendment within the requisite period after the order has been laid that would be fatal to it. That is normally described as the nuclear option, which suggests that it does not happen very often—in fact, it has happened only once in the past five years, I think; and we on this side of the House are certainly chary about doing it. The affirmative procedure is actually not that much more effective: you still need the nuclear option, but at least there is a requirement on the Government to bring it to the House, so it will be debated, irrespective of their wishes.
Baroness Fairhead
I thank the noble Lord for that clarification.
My noble friend also raised the economic interest and public interest tests and how they would be interpreted by the courts. The economic interest test will be based on the list of economic criteria set out in the Taxation (Cross-border Trade) Act—I think I will call it the TCBTA for brevity. The TRA must take all of those into account, and so must the courts. With regard to the public interest, as part of the final decision-making, the Secretary of State will have an opportunity to intervene where there are circumstances in which the imposition of trade remedy measures are not, in his or her view, in the public interest. This could include national security considerations, for instance, but other examples may arise in individual cases, so it is important that the Secretary of State has a degree of discretion in this area such that all wider public interest considerations are taken into account. The ability of Ministers to undertake a final sense check in this way is a common feature in many comparable regimes, such as Australia and Canada.
Stakeholders have expressed their support for the establishment of the TRA. The CBI said that it strongly supported the initiative to set it up, and the British Ceramic Confederation called for the Government to prioritise the TRA to ensure that it will be fully operational by the March 2019 deadline, and this must include appointing the board.
The final area raised by my noble friend was about whether poor social and environmental standards would be taken into account. We recognise that the EU has recently introduced reform to take poor social and environmental standards into account. The UK plays an active role in upholding labour and environmental standards across the world both as a member of the ILO and by actively promoting human rights. However, our view is that trade remedy cases are not an appropriate vehicle for such issues, and these factors are not referred to in the WTO. We want to ensure that economic growth, development and environmental protection go hand in hand. We are exploring all options in the design of future plurilateral and bilateral trade and investment agreements, including with regard to human rights and environmental and labour protections. In practice, any cost advantages enjoyed by an exporting country as a result of low labour or environmental standards or costs will be reflected in its export prices and hence will already be taken into account when calculating the injury margin.
I turn now to Amendment 82, tabled by the noble Lord, Lord Purvis, and Amendment 83, tabled by the noble Lord, Lord Stevenson. I assure the Committee that Clause 10(1)(b) already allows the Secretary of State to seek,
“advice, support and assistance … in connection with the … functions of the Secretary of State relating to trade”.
This could include the conduct of trade within a customs union and the impact of third-country trade remedy measures on UK consumers. Were we to accept this amendment, it could undermine the intended non-exhaustive nature of the current drafting and potentially make it less effective.
On Amendment 84, tabled by the noble Lord, Lord McNicol, we appreciate the need for the TRA’s activities to be transparent. Paragraph 31 of Schedule 4 already requires the TRA to report annually on the exercise of its functions. We would therefore expect the TRA to record any requests from the Secretary of State for advice, support and assistance in its annual report. This is because this would be considered part of the TRA’s statutory functions. We therefore do not feel that this amendment is required.
Turning to Amendments 101A and 103B, tabled by the noble Baroness, Lady Brown, whom I met last week, I confirm that we are committed to supporting UK manufacturers and producers. That is why we have engaged so extensively with industry during the establishment of the TRA. However, we do not believe that representatives of any specific organisation should be on the TRA board. It is vital that it is, and is seen to be, wholly impartial, and for the membership to be based on securing the right blend of skills and expertise. That said, I assure the Committee that the TRA chair job description makes it clear that they will be expected to maintain effective relationships with stakeholders—including manufacturers, trade unions and the devolved Administrations—and to incorporate their perspective into board discussions where appropriate. We will also ensure that the appropriate terms on working with stakeholders are included in the terms of the TRA chair’s contract. Some of the TRA’s wider senior leadership, including its non-executives, may have experience in a particular sector, devolved nation or region. However, that alone must not be why they were chosen. The noble Baroness, Lady Brown, also asked whether we could have specific representatives. We believe that could possibly undermine the TRA’s independence and impartiality, and we want to make sure that the TRA’s expertise is complete by allowing the board members to be appointed not on the basis of where they are from but because they have the right skills and expertise for the blend of skills required on the TRA.
On Amendment 102, I assure the Committee that we are committed to ensuring the independence, impartiality and expertise of the board. That is why the Secretary of State has requested that the Commissioner for Public Appointments regulates all public appointments to the TRA.
My noble friend Lady Neville-Rolfe asked why we were setting up a new body rather than just exercising the function within government. I agree entirely that the important thing is that the board has to be independently minded. Decisions on these cases can have a profound impact on the markets. That is why we need an objective and independent investigation process that businesses can trust. The TRA will be responsible for carrying out detailed technical investigations and delivering impartial recommendations on trade remedies to the Secretary of State. The Secretary of State will then be responsible for making a final determination on whether to accept or reject recommendations to impose measures.
We have also been asked—again, by my noble friends Lady Neville-Rolfe and Lord Lansley—why we have not established the TRA as an executive agency. We looked at best-practice comparable agencies across the world, and we are trying to ensure the right balance between independent, impartial, objective investigations that our businesses and trading partners can trust and accountability. That is the critical thing that we looked at.
The Commissioner for Public Appointments will be responsible for providing independent assurance that the Secretary of State follows the Governance Code on Public Appointments when appointing TRA non-executives. He or she will be required to comply with the governance code, which outlines rules around term lengths and renewing the appointments of non-executive members. Executive members will be TRA public servant staff, whose recruitment will be made in compliance with the usual public sector rules. The governance code makes it clear that:
“The ultimate responsibility for appointments … rests with Ministers”.
It states that there is an important role for Parliament in ensuring Ministers are held,
“accountable … for their decisions and actions”.
However, this scrutiny should not extend to approving or vetoing their appointments. This would be an expansion of standard Select Committee powers.
Amendment 103, tabled by the noble Baroness, Lady Jones, concerns maintaining safety and public confidence in the food we eat. She is not here, so all I can do is confirm that this Government will remain committed to environmental protection standards once we have left the EU.
Amendments 103A and 107A were tabled by my noble friend Lord Lansley. I reassure noble Lords that this power is intended simply as an operational contingency measure in the TRA. As such, it can be used only before the first chair has been appointed. My noble friend and other noble Lords asked whether that still makes sense given we now have a chair-designate. I will definitely reflect on that, because it is a good point. On appointing the chair, as I said, the chief executive will be a public servant and, as my noble friend Lord Lansley agreed, it would not be appropriate for a Select Committee to be involved in their recruitment. I assure the Committee that the chief executive-designate has been recruited on merit following a fair and open competition, in line with the Civil Service Commission Recruitment Principles. All future TRA chief executives will be appointed on the same principles.
My noble friend Lord Lansley and the noble Lord, Lord McNicol, asked whether the ITC should conduct pre-appointment scrutiny. It is the view of officials in the department that the TRA chair role does not meet the Cabinet Office’s criteria for determining whether public appointments should be subject to Select Committee pre-appointment scrutiny. However, we are committed to ensuring that appointments are conducted in the right way, consistent with standard practice across government. The governance code states:
“Ministers when making appointments should act solely in terms of the public interest”,
and, likewise:
“All public appointments should be governed by the principle of appointment on merit”.
We therefore feel that there is already sufficient oversight and scrutiny of that process in place.
Lord Stevenson of Balmacara
I will intervene before the noble Lord, Lord Lansley, does—I am sure he was just about to. I do not want to extend this, but the noble Baroness has just spent slightly longer than three or four minutes playing up how important this role is and how crucial the new body will be to the future of our trading policy. She explained, in some detail, the difficult position, the reason it is independent and everything else. She cannot also then argue that it does not fulfil the very clear lines given by the noble Lord, Lord Lansley, on the important need for independence and for it to be seen to have the trust of all concerned, including Parliament. Will she take that back?
Baroness Fairhead
I am happy to take that back. I have heard the point. I asked whether there was a practice and was advised that this was the view we had arrived at, but I will certainly reflect on what the noble Lord said and take it back for further consideration.
On Amendment 104, tabled by the noble Lord, Lord McNicol, it is important that the Secretary of State has the ability to ensure that the TRA has the right leadership in place. Again, I reassure the noble Lord that the practices and procedures will be followed.
My noble friend Lord Lansley speculated on whether we could use an existing arm’s-length body rather than create a new one. There are two reasons why we believe we need to create a new non-departmental public body. First, no existing NDPB possesses the required pool of talent and expertise, or, secondly, offers the right balance of independence and ministerial oversight, to deliver the trade remedies framework as set out in the TCBT Act. I can confirm that we reached that decision following a thorough review of the arm’s-length bodies landscape.
Amendments 105 and 106 refer to the Secretary of State, rather than the chair, appointing executive members of the TRA board, and would therefore expand the Secretary of State’s appointment powers. We believe that might undermine the TRA’s independence. It would also be undesirable to include a statutory requirement to have regard to this set of criteria, as it might be unnecessarily restrictive. My noble friend Lady Neville-Rolfe has great expertise in this area. As she knows, it is important to have the right skills and the right blend on a board. For example, it may be important for some executive members to have HR or finance experience to ensure the TRA’s smooth operation. This would be a decision for the TRA chair.
Turning to Amendment 107, under paragraphs 9 and 10 of Schedule 4, the TRA chair is able to remove an executive member of the TRA board, and the Secretary of State a non-executive member, if they consider that person,
“unable or unfit to carry out the functions of the office”.
This already allows the TRA chair and the Secretary of State to determine whether to remove board members in the event that they become insolvent, receive a criminal conviction or are otherwise deemed unsuitable. We therefore do not believe that this amendment is necessary. In addition, all members of the TRA will be required to comply with the Cabinet Office’s Code of Conduct for Board Members of Public Bodies, which sets out the seven principles of public life that should govern the behaviour of public officeholders.
Turning to Amendment 108, let me assure noble Lords that the TRA will be required to follow the relevant provisions in Managing Public Money, which sets out that arm’s-length bodies must maintain a register of gifts. We would also expect the TRA to record in its annual report any gifts it receives.
I thank the noble Lord, Lord Stevenson, for tabling Amendment 109. We welcome the devolved Administrations’ interest in the TRA and understand the need to ensure that they are able to engage with it in the right way. I can confirm that the Secretary of State has committed to sharing the TRA’s annual report with the devolved Administrations once he has received it. I can also confirm that we have been in contact with, and will shortly be writing to, the devolved Administrations setting out further commitments.
On Amendment 110, tabled by the noble Lord, Lord McNicol, there are certain situations where the Secretary of State will need to issue guidance to the TRA. That is why it would not be appropriate to set out certain detail in legislation. Issuing guidance instead of legislation would give the TRA the operational flexibility it needs to be able to decide how to deal with matters on a case-by-case basis. However, to protect the TRA’s independence, and to ensure that this power is used only in appropriate circumstances, we have placed clear statutory restrictions on the Secretary of State’s ability to issue that guidance.
I am aware that I possibly have not fully answered the question from the noble Baroness, Lady Brown of Cambridge. We recognise the critical role played by producers and manufacturers: that is exactly why we have put a system in place and engaged extensively. We look forward to continuing to do so.
My noble friend Lady McIntosh suggested that it was not adequate that the Secretary of State was required only to have regard to the independence, impartiality and expertise of the TRA. The imposition of a duty on the Secretary of State is a common approach and can be found in other relevant legislation. For example, the Higher Education and Research Act 2017 requires the Secretary of State to have regard to the need to protect the institutional autonomy of English higher education providers when issuing guidance to the Office for Students. These are statutory requirements and cannot be ignored.
Lord Purvis of Tweed
I do not wish to make a glib point, but the Minister has referred to the Office for Students. The episode in relation to that office should remind us why we take seriously these aspects about the recruitment of those who will be the most senior in the TRA office. The Office for Students should be a good example for the Government of how an appointment process, while it might be prescribed in legislation, can be conducted very badly in practice. We are trying to avoid a repeat of what happened with the Office for Students.
Baroness Fairhead
I am grateful for that clarification, but that is one example that was just plucked out and it has a clear statutory requirement.
On the basis of the information I have given and my commitment to take some of these points back for reflection, I ask noble Lords not to press their amendments.
Baroness McIntosh of Pickering
I am most grateful to the Minister for her full response. Picking up the mood of the Committee, I think there are a number of issues here on all sides that were reflected in the other place. We do not wish to delay the debate this evening, but we will return to this issue on Report. That is no reflection on my noble friend’s views, but perhaps on the intransigence of her department.
“Appeals against decisions by the TRA and Secretary of State
(1) This section applies to the following decisions—(a) a decision by the TRA under provision made by or under Schedule 4 to the Taxation (Cross-border Trade) Act 2018,(b) a decision by the Secretary of State under provision made by or under Schedule 4 to the Taxation (Cross-border Trade) Act 2018.(2) A person affected by a decision to which this section applies may appeal against it to the Upper Tribunal.(3) The means of making an appeal is by sending the Tribunal a notice of appeal in accordance with Tribunal rules.(4) The notice of appeal must be sent within the period specified, in relation to the decision appealed against, in those rules.(5) The notice of appeal must set out—(a) the provision under which the decision appealed against was taken; and(b) the grounds of appeal.(6) The grounds of appeal must be set out in sufficient detail to indicate—(a) to what extent (if any) the appellant contends that the decision appealed against was based on an error of fact or was wrong in law or both; and(b) to what extent (if any) the appellant is appealing against the exercise of a discretion by the TRA, by the Secretary of State or by another person.(7) In this section references to a decision under Schedule 4 to the Taxation (Cross-border Trade) Act 2018 includes a decision not to use an action available under the powers in that Schedule.(8) For the purposes of this section a decision to which effect is given by the exercise or performance of a power or duty conferred or imposed by or under an enactment shall be treated, except where provision is made for the making of that decision at a different time, as made at the time when the power is exercised or the duty performed.”
Lord Stevenson of Balmacara
We can be relatively brief on these amendments; they are substantial in their drafting, and the points have been made so we do not need to repeat them. We have been dealing until now with the procedures and set-up of the new body. These are proposals for guidance on some of the ways in which future policy might be developed and taken forward. Having said that, Amendment 85 follows an exchange in the other place, where it was confirmed that there would be an appeals mechanism, but there is still no reference to that in the Bill, as far as I can see. This is a suggestion for a way in which the appeals mechanism—which should be there or, as agreed in principle, will be there—against decisions by the TRA and the Secretary of State might be set out. I offer it to the Government for their consideration.
Lord Lansley
I am not clear. Is the noble Lord’s intention behind the amendment that the Upper Tribunal would look at the merits of the decision or simply at the processes? Are we simply talking about a judicial review process?
Lord Stevenson of Balmacara
I read that a few moments ago and now I have lost it. I think it is on the merits and on the process. To that extent, because this is a probing amendment, I will not push this too hard and it is for the Government to decide. In my limited experience in your Lordships’ House, every time that I have led on a Bill we have come up against this question of what an appeal actually means. I have detected that the Government have gradually been moving away from merits-based appeals, because they seem to take up an awful lot of time, and argue that appeals done simply on a JR basis are becoming increasingly softer-edged, rather than being simply about the process. Therefore, the two come together and the legislation has tended towards being purely on the procedural elements.
I retain the rather purer view that there should always be an appeal system in some way, in which case it should not simply be limited to the procedures because that just restarts the clock. It should also include merits. But that is a matter for the Government to consider. The question was: if, in the other place, the Secretary of State has confirmed that there would be an appeal system, what is it and can we please have it clearly explained before we get to Report?
Baroness Neville-Rolfe
Has the noble Lord considered whether one could have an appeal to the courts? Of course, on the EU model that we were discussing earlier, the appeal is to the ECJ.
Lord Stevenson of Balmacara
I will get through this very quickly and then questions can flow in. Amendment 85, which has already been accepted, therefore sets out an appeals process for the Government to respond to. Amendment 86 relates to how these are disposed of and the procedures for that. The two go together and will be difficult to separate, but again the Government must take that forward.
We have already had reference to how recommendations from the TRA for action or no action would be based on two issues—an economic interest test and a public interest test—but we do not have any definition of those. They are obviously good ideas and sensible approaches, around which decisions can be placed, but the narrow question of what they constitute and, more importantly, how they would be kept in scope with how people’s views change over time, is not dealt with in the Bill. Therefore, Amendment 87, which deals with the public interest test, and Amendment 88, which deals with the economic interest test, set out not so much the detail of what they consist of but the process under which they might be organised.
Lord Lansley
I agree that the public interest test is not defined anywhere, but is the economic interest test not defined in paragraph 23 of Schedule 5 to the Taxation (Cross-border Trade) Act?
Lord Stevenson of Balmacara
I am grateful to the noble Lord for his interventions, which are always helpful, but I was going on to say that the economic interest test is different from the public interest test because some aspects of it are fleshed out. But the intention of Amendment 88 is to extend that slightly to ensure that two things happen. The first is that there should be a consultation about what the economic interest test is among those whose interests might be affected by it. Those involved in,
“employment, economic health and prosperity, and productivity”,
which includes trade unions, businesses and consumers, should be consulted on how one constitutes the economic test.
Secondly, it is important that the test must reach not just for a national economic view but down to a regional, or even sub-regional, point of view. The suggestion would be for the devolved Administrations and for the various regions of England to be parts of a group that could respond on things. Clearly, an economic test dealing with a small aspect of the ceramics industry based in a particular area will be different from one dealing with a major national employment issue.
Again, these amendments are not meant to be accepted as written, but they are probing suggestions to get the Government to flesh out in more detail their thinking behind this.
We always talk about what is in the public interest but never define what that means. I am not trying to define it. I am saying that it would be useful to have a process under which, from time to time, a Secretary of State who wished to employ that as part of the process for the TRA had to consult and then come forward with proposals through Parliament for what that constituted. That is what these amendments are all about.
Finally, Amendment 89 in my name suggests that TRA investigations can be considered complete only when they involve the devolved Administrations and the devolved authorities. I hope that will also commend itself to the Government. I beg to move.
Baroness Brown of Cambridge
My Lords, I will speak briefly to Amendments 90A and 90B in my name. Again, I thank my noble friend Lord Kinnoull for adding his name to both amendments.
As we have heard, the Taxation (Cross-border Trade) Act sets the overarching rules under which the UK’s new Trade Remedies Authority will operate. The Act states that trade remedy measures do not need to be adopted if the TRA or the Secretary of State decides that they do not meet the economic interest test, as we have heard. When applying the EU’s equivalent—the Union interest test—special consideration must be given to the need to remove the injurious practice, that is the dumping or subsidy by another country, and restore competition. It is this special consideration that gives the EU test a presumption in favour of the adoption of measures. The materials industry, in particular, is concerned that this consideration is absent in the UK Act.
I appreciate that government amendments at Report stage of the Taxation (Cross-border Trade) Act improved the wording around the economic interest test and Ministers have assured manufacturers that the intention is that there is a presumption in favour of adoption. However, the words contained in the Act fall short of such a presumption. Amendment 90A would give clearer direction to the TRA in exercising its duty to conduct an economic interest test. The intent is to establish firmly a presumption in favour of adoption of measures and hence to continue the protections that UK manufacturers currently benefit from while we are members of the EU. I recognise that the Government have indicated that the presumption in favour of adoption is their intent and that there may be other ways to strengthen this message to support and assure our manufacturers. I look forward to the Minister’s response as to how this might be addressed.
I think we have probably already discussed Amendment 90B. The noble Baroness, Lady McIntosh of Pickering, already highlighted the issue of rules about the operation of trade remedies coming through secondary legislation as a result of the provisions of the Taxation (Cross-border Trade) Act. I will not go on for much longer about it because we have already heard the Minister’s response. But I would like to take the chance to emphasise again that these are hugely important rules that will have a profound impact on UK manufacturers’ ability to get a level playing field when overseas competitors are not playing by the rules. I also emphasise my strong conviction that these statutory instruments should be affirmative ones, approved by resolution of both Houses.
The Earl of Kinnoull
My Lords, I do not want to comment on the two amendments I have signed. I want to urge some support for the noble Lord, Lord Stevenson of Balmacara. I have in front of me Article 13 of the 1994 agreement which supplements Article VI of GATT. Entitled “Judicial Review”, it says:
“Each Member whose national legislation contains provisions on anti-dumping measures shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews of determinations within the meaning of Article 11”.
It then goes on to say that the tribunal must be independent of the authorities that have made the determination. It is an international obligation for there to be exactly what the noble Lord, Lord Stevenson, proposes in his amendments. I think we need to pick that up and put it in the Bill.
Baroness Neville-Rolfe
My Lords, I apologise to the noble Lord, Lord Stevenson, for interrupting him. Of course, there is a requirement to have proper appeals, as has just been elegantly explained by the noble Earl, Lord Kinnoull, but I was interested in whether they had to be the subject of special tribunals or whether they could in fact be fitted into the existing court system. My main concern as a former business person is with speed. Sometimes tribunals, public interest tests and so on can be a field day for lawyers and the whole thing can take a very long time. That is not what we want. We want to be able to make sure that the interests of our industries and other players are properly protected.
Lord Lansley
The noble Lord, Lord Stevenson, is absolutely right that the economic interest test is present in both Schedules 4 and 5 to the Taxation (Cross-border Trade) Act. As set out there, the test seems to me to be capable of being, and is required under the legislation to be, taken down to the level of individual industries, looking specifically at affected industries and consumers and the likely impact on particular geographic areas or particular groups. It seems to me that the economic interest test is already capable of being disaggregated in the ways that the noble Lord is calling for.
The noble Lord and I have joined together on the issue of the public interest test in the past. I am not sure that you can define it in advance—that is the difficulty with it. Trying to write down what public interest the Secretary of State has to weigh up seems to be intensely difficult, as distinct from the economic interest test. It might include defence industries and security interests, and we see that coming through in relation to competition. We also see it in broadcasting and competition regimes. There are a range of competition-specific public interests, and I do not think that we are necessarily looking to restrict the test in that way in this legislation. Frankly, we might be better off simply looking at it and, if there are particular public interests that have to be protected as time goes on, we should perhaps have the power to add to them by way of regulation, as is the case with competition legislation.
Baroness Fairhead
My Lords, I thank the noble Lords, Lord Stevenson and Lord McNicol, and the noble Baroness, Lady Brown, for tabling these amendments. I take the opportunity to clarify initially that the Trade Bill does not set out the policy framework that the TRA will be responsible for operating. These provisions are already set out in the TCBT Act 2018, including the economic interest test, which places a requirement on the TRA to consider the wider economic impacts of imposing measures on other affected groups, such as downstream users and consumers.
The economic interest test provides continuity from the Union interest test in the current EU system. However, we listened carefully to concerns that the Union interest test is, for example, too opaque and does not set out how different interests are to be considered. Therefore, as my noble friend Lord Lansley correctly stated, the Act specifies the economic factors which must be considered under the test, and that will provide businesses with greater clarity over how the test is applied. That is what business has asked us to do. In terms of the public interest test, I can only endorse what my noble friend Lord Lansley said.
In addition, there is an explicit presumption in the Act that, where injury is caused by dumped or subsidised goods, the TRA will make a recommendation to the Secretary of State for the imposition of measures. The Government amended the legislation during its passage to make that absolutely clear. The burden of proof rests on the TRA to show that measures will be detrimental to the wider economic interest; otherwise it must make a recommendation, and any failure to do so will be subject to appeal. I assure your Lordships—particularly the noble Baroness, Lady Brown, who raised this matter—that this presumption will have the effect of ensuring that special consideration is given to the injury caused to UK industry by imports of dumped or subsidised goods. I wanted to say that explicitly in Committee here because I know of some of the concerns in the ceramics industry.
The Act also places the same presumption for the imposition of measures on the Secretary of State and makes clear that the Secretary of State can only reject the TRA’s recommendations for measures on public interest grounds, or where he determines that the economic interest test is one the TRA could not reasonably have made. Any such decision can be appealed by interested parties and must be explained in a Statement to the other place.
With respect to Amendment 87, tabled by the noble Lord, Lord Stevenson, I remind the Committee that we are committed to ensuring that our industry receives protection. That is why we will transition those EU measures that matter to UK industry, including on steel, ceramics and chemicals, into our system once we have our own, independent trade policy. We will monitor the effectiveness of the trade remedies system and, if we find that it is not working as it should, we will of course make any changes necessary.
As I mentioned before, I am sure that the Committee will understand that the public interest issue is not something we can review or consult on. What constitutes public interest will change depending on the economic and geopolitical circumstances of the day, and the Government must have the flexibility to respond to such changes. This is a power that we expect to be used in rare cases and, when it is, again the Secretary of State will be required to lay a Statement before the other place justifying its use.
Your Lordships have raised rightful questions on the role of the devolved Administrations in relation to trade remedies. Importantly, the economic interest test mandates that account must be taken of particular geographic areas, as well as other economic matters that may be considered relevant. This will ensure that the impacts of measures on different regions—including Scotland, Wales, Northern Ireland and regions of England—are given due consideration where appropriate and will include any information that is shared, or issues that are raised, by the devolved Administrations.
Further, regarding Amendment 89, tabled by the noble Lord, Lord Stevenson, I reassure the Committee that any party not defined as an interested party may register its interest in a particular case with the TRA and will then become a contributor. This will include the devolved Administrations. Contributors will be invited by the TRA to submit relevant information, which it will be obliged to take into account in the investigation as appropriate. My officials will advise the devolved Administrations when an investigation is opened by the TRA, which will alert them to the need to take a decision on whether or not to register.
Where the TRA terminates an investigation without recommending the imposition of measures, it is required to publish details of its recommendations and decisions. Contributor status will mean that DAs will automatically be notified by the TRA of actions it has taken. But I recognise that they will also—rightly, in their capacity as devolved government—have an interest in the decision made by the Secretary of State, including in having an opportunity to offer views on relevant public interest considerations which he should take into account when arriving at a decision. I can confirm that my officials will work with their colleagues in the devolved Administrations to put appropriate arrangements in place.
I turn now to Amendment 90B and thank the noble Baroness, Lady Brown, for tabling this amendment. As I have explained, the Taxation (Cross-border Trade) Act has already been considered, and passed, by the other place, which has accepted that the negative procedure is the appropriate scrutiny mechanism, as we discussed earlier.
With regards to Amendments 85 and 86, the noble Lord, Lord McNicol, is right that there should be an appeals process; indeed, this is necessary to be compliant with our WTO obligations. We do not support the amendment, but I assure noble Lords that there are already powers in the Taxation (Cross-border Trade) Act to establish an appeals system for the UK’s trade remedies system, and my officials have been working closely with the MoJ to develop a clear, transparent process. I completely accept the point made by the noble Earl, Lord Kinnoull, about how critical this is. I also agree with my noble friend Lady Neville-Rolfe that speed matters to companies too.
There will be an initial consideration when an appeal is raised by the TRA, followed by a right of appeal to the Upper Tribunal. This ensures that basic administrative errors can be resolved more quickly and effectively than moving straight to the tribunal, so limiting those cases to more substantial issues of law. It combines independence, as required by WTO law, with the advantages of a proportionate and efficient system. As the Secretary of State informed the International Trade Select Committee in his letter of 14 January, the judicial route for appeals will be to the tax chamber of the Upper Tribunal. The Tribunal Procedure Committee, the responsible statutory body, has recently completed a consultation on the rule changes required to allow the Upper Tribunal to hear trade remedy cases. Once that process has been fully completed, the necessary appeals statutory instrument will be laid in due course and scrutinised in the normal way.
Our proposed regime draws on international best practice from comparable WTO members. Its measures provide for the assessment of whether there was an error in law based on the evidence that was available to the decision-maker at the time, and some include processes akin to the TRA’s reconsideration.
I hope my responses have provided reassurance to your Lordships and that the noble Lord feels able to withdraw his amendment.
Lord Stevenson of Balmacara
I am very grateful to the Minister for that very full response. I think she covered most of the points that I raised. I am very happy to read Hansard but I am sure I will be satisfied when it comes to it.
The only issue that I would like to leave with her and her team is that she said, with particular reference to the operation of the public interest test and the economic interest test, that if they were not working they would be changed. Obviously learning from experience must be right, but my question is: are there powers in the existing draft legislation to allow that? If not, would it not be sensible to take them at this stage? We would be happy to co-operate on that in those circumstances. With that, I beg leave to withdraw the amendment.
“Conditions of commencement
The provisions in Parts 1 to 3 of this Act may only come into force if—(a) a withdrawal agreement and a framework for the future relationship have been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown for the purposes of section 13(1)(b) of the European Union (Withdrawal) Act 2018, or(b) the House of Commons has passed a motion “That this House approves of the United Kingdom leaving the European Union without a withdrawal agreement and a framework for the future relationship”.”
Lord Stevenson of Balmacara
By this stage of the proceedings the Minister is usually tearing up her notes and packing her bag while the team are leaving the Box, and the Committee is allowed to descend into a sort of torpidity at the end of a long and heavy day—day four, in this case—while we heave a sigh of relief. However, I have always wanted to table an amendment about the commencement of a Bill because it is something that we always forget to look at.
I was mulling this over a few weeks ago and thinking about what aspects of commencement one could look at. It is all very straightforward, although Clause 7(1) has a strange thing where it says:
“Regulations under section 1(1) or 2(1) may … make transitional, transitory or saving provision”.
I was wondering what on earth they were and thinking about a suitable probing amendment when I happened to run into the noble Lord, Lord Hannay, who said, “I’ve been thinking about commencement and we ought to do something about it”. Out of that we hatched this wonderful amendment, which is the last one that we are going to move tonight, and I hope the Committee will accept it as it stands. It provides a sensible and clear exposition about what position Ministers should be in before they begin to implement these procedures. It is very simple, inserting a new clause further to Clause 15(2), which says that the powers that would otherwise,
“come into force on such day as a Minister of the Crown may by regulations made by statutory instrument appoint; and different days may be appointed for different purposes”,
Those are two quite clear conditions that have to be met. I beg to move.
Lord Purvis of Tweed
My Lords, I am happy to contribute to the successful realisation of the noble Lord’s ambition to have an amendment on commencement.
I want to make two final comments because I know the Committee has been working hard in offering scrutiny to the Bill, but before I do so I wish to thank the Ministers, and indeed the whole team, who have tried to answer on what was on some occasions an impossible situation. Earlier the noble Lord, Lord Bates, aptly commented on how fast things have been moving, and I think the Ministers have had a degree of sympathy from the Committee. However, this is serious. As the noble Baroness, Lady Neville-Rolfe, said, businesses need urgency as they operate. They need urgency in their day-to-day practices but also when it comes to knowing what the Government’s position is.
In advance of the next stage, if there is one, it is helpful that all the usual channels are here. I do not think the Committee needs any reminding of the decision of this House, very clearly stated, that greater information is needed on both the Government’s policy and intentions on how it sees trade agreements being put in place, as well as the relationship with the devolved Administrations. If that is not forthcoming, the House has sent a clear signal that there will not be a Report stage. However, on the basis that there will be, the information that is needed on the current position on the intended trade agreements needs to be forthcoming. There also needs to be clarity on—if we are going to be crashing out on WTO rules—the position of operating on non-certified WTO rules.
The relationship with the devolved Administrations, while a little clearer, needs more fleshing out. This is not just about constitutional courtesies with the Scottish and Welsh Parliaments and Northern Ireland authorities. Trade agreements could disproportionately affect parts of the United Kingdom, which will affect livelihoods and public services in those areas. They need to be not just consulted, but involved. Contrary to the Government simply wanting continuity agreements for trading relationships, we also want to see the rolling over of the same amount of parliamentary scrutiny that the European Parliament would afford trade agreements, which this Parliament will be denied unless this Bill is amended.
Finally, we need to be looking forward to the future. The noble Lord, Lord Lansley, and others, have made very constructive contributions. If we are to have a customs arrangement—which, if it covers the majority of our trade with our biggest market, will be a customs union—then the clarity about how that will be conducted will be important. While we are at the end of the Committee stage, I hope that the Minister has received strong signals that there are still questions that need to be answered. Those answers need to be forthcoming before this House will consider the Report stage.
Lord Hannay of Chiswick
My Lords, I am not sure that the noble Lord, Lord Stevenson, did me a great favour by alleging that I had partial paternity of this amendment, but I will leave that to one side. It is a very simple amendment, setting in statute the view that has been expressed twice by this House, by massive majorities, and once in the House of Commons last week: that leaving the European Union on 29 March by default without an agreement should be excluded. That is what this amendment proposes to do. It does not prevent this Act, as it would be, coming into effect in the event of the meaningful process being successfully completed in the other place. Nor does it do so if the other place should, in the extraordinarily unlikely circumstances, actually decide that we should leave without a deal. However, it rules out leaving by default as a condition for the entry into force of the provisions in this Act. No more needs to be said, and I have a feeling that we may wish to debate that rather more decisively on Report.
Lord Lansley
My Lords, I am speaking on behalf of my noble friend Lady Altmann, who is unable to be here and asked me to extend her apologies. I think she would have shared the view of the noble Lord, Lord Hannay, that Amendment 98 would not prevent our exit without an agreement, which is the default situation under the statute law as it remains, but it would certainly enable one to put into the equation consideration of the damage and chaos that would result if one were to leave by default without an agreement and without the statute book and continuity agreements being in place. Both Houses would have to think hard about that. It is a contest between different visions of what kind of chaos might ensue. Unfortunately, that is essentially where we are.
My noble friends on the Front Bench have done a grand job, not least in keeping us on track, wherever possible, in understanding the importance of getting this legislation into the right structure rather than being distracted too often and too far into discussion of Brexit. I think we agreed at Second Reading that the Bill is occasioned by Brexit but is not really about it; nor, technically, is it about the future processes and structures of free trade agreements. Their approach has enabled us to have what I think will be some interesting, positive and constructive discussions on Report, arising out of this Committee, when we can really focus on one or two specifics. My noble friends will have been given an indication of what kinds of considerations will be important to the House in thinking about free trade agreements as they come along.
Lord Hain
My Lords, I realise that the hour is late, but I rise to support Amendment 98, which would make it much more difficult for the Government to preside over a default no-deal Brexit, and to encourage the development of alternative strategies.
Due to the failure of the Government to develop a credible Brexit strategy, there is now a grave danger of the UK crashing out of the European Union on 29 March—in just over 50 days’ time—as the default option. This would have truly devastating consequences. However, because of the Brexit-related legislation already on the statute book defining exit day as 29 March 2019, it is possible that Parliament will not have the powers to stop it happening.
The amendment would therefore put a limitation on the commencement of the Trade Bill and provide that Clause 2(1), which gives the Government powers to implement international free trade agreements, can be implemented only on the condition that either: Parliament has approved a negotiated deal; the Government have requested an extension of Article 50; Parliament has approved a no-deal departure; or Parliament has voted for a second referendum. It would also offer your Lordships’ House a chance firmly to reject the possibility of the UK crashing out of the EU in a no-deal scenario.
The hard Brexiteers of the European Research Group, who assert that no deal would be an acceptable option, argue that Britain’s trade outside the EU is increasing at a much faster rate than trade with EU countries. However, this ignores the fact that measuring growth starting from a much lower base is always higher in percentage terms. They also fail to mention that trade with non-EU countries is not a binary choice and has been boosted by the EU’s own trade agreements with those countries, from which the UK benefits as an EU member—witness Germany’s spectacular trade increases with China, for instance. If noble Lords have any doubt about this, they should look at the website of the Department for International Trade. In the case of the recent trade agreement between the European Union and Canada, we read:
“UK trade with Canada up 14% since new free trade agreement introduced”.
This is a reference to CETA, the Comprehensive Economic and Trade Agreement between the EU and Canada, which was signed in 2017 after seven years of negotiations. EU free trade agreements with non-EU countries such as Canada, South Korea and Japan were negotiated with the leverage and weight of the 500 million-strong market of the whole EU, which the UK will lose after Brexit. Brexiteer fantasies about WTO rules ignore the complexity of the necessary reallocation of the UK’s share of EU tariffs and quota schedules, which will require difficult negotiations. They also disregard the application of rules of origin to UK goods trying to enter the EU market, which the Government have previously estimated could cost firms between 4% and 15%.
Baroness Fairhead
My Lords, I am delighted to allow the noble Lord, Lord Stevenson, to realise his ambition, but I also agree with the noble Lord, Lord Purvis, that this is important. Therefore, no torpidity is allowed, even at this late stage.
As this is the last group of amendments, I hope the Committee will indulge me with a short concluding comment, allowing me to record my appreciation to noble Lords who have taken part in all the debates. The quality and constructive nature of the engagement has been incredibly valuable—not just in the Chamber, but outside in meetings. I particularly thank the noble Lords, Lord Stevenson, Lord McNicol and Lord Purvis. On a personal level, I also thank the Bill team for some tremendous work, and my valiant and true noble friends Lord Bates and Lord Younger.
The Committee has provided us with a valuable opportunity to probe the detail of the Bill. It has also allowed all sides to listen to other noble Lords’ sometimes conflicting points of view. We now have some time in which to reflect on the views we have heard in these debates. We shall be using that time carefully, and I look forward to debating the Bill further on Report.
Before addressing the specifics of the amendment moved by the noble Lord, Lord Stevenson, it is important to outline the Government’s approach to leaving the European Union in the light of recent events in the other place. As this House is aware, the other place rejected the proposed withdrawal agreement and political declaration, with just 202 MPs voting in favour. However, following the debate last week, a majority of MPs have now said they would support a deal with changes to the backstop.
Combined with measures to address concerns over Parliament’s role in the negotiation of the future relationships and commitments on workers’ rights, the Government are now confident that there is a route that can secure a majority in Parliament for leaving the EU with a deal. The Government will now take this mandate forward and seek to obtain legally binding changes to the withdrawal agreement that deal with concerns on the backstop, while guaranteeing no return to a hard border between Northern Ireland and Ireland.
As the Prime Minister said, we acknowledge that there is limited appetite for change in the EU, and negotiating it will not be easy. However, in contrast to a fortnight ago, Parliament has made it clear what it needs to approve the withdrawal agreement. Tuesday’s vote shows that Parliament does not want to leave the EU without a deal, and the Government are therefore working hard to achieve one. The noble Lord, Lord Hain, eloquently talked of the importance of the EU trade deal.
However, simply opposing no deal is not enough to stop it, and the Government must now redouble its efforts to get a deal that Parliament can support. The Prime Minister has agreed to discuss the best way the Government can deliver what I would call the Spelman amendment.
The amendment to the Trade Bill here today would not prevent a no deal. The only ways to prevent a no-deal outcome are either with a deal or by revoking or extending Article 50, which is not government policy. The Trade Bill cannot therefore be used as a sort of proxy to prevent the UK leaving the EU without a deal. This amendment, or other tweaks, will not stop a no deal, but will simply increase the risks of a worse outcome in a no-deal scenario. We are clear that the very best way to leave the EU is with a deal and an implementation period, and that is absolutely the aim of this Government.
I also repeat that, although leaving with a deal which ensures an implementation period is our clear aim, any responsible Government must also develop contingency measures in case of no deal.
I turn to Amendment 98, tabled by the noble Lords, Lord Stevenson, Lord Hannay and Lord Purvis, and my noble friend Lady Altmann. I have welcomed the debate and your Lordships’ scrutiny of the Bill, which really underlines the value of this House. The challenge has been constructive, extremely helpful and underpinned by the genuine knowledge of so many noble Lords. The Government will reflect carefully on the points; we have committed to come back with proposals and will do so before Report. Having gone through Committee, I hope the whole Committee will acknowledge the importance of the provisions in the Trade Bill, and the need for any responsible Government to bring forward these provisions whether or not there is a deal with the EU.
As the Committee will be aware, the Trade Bill covers four important and essential areas to ensure continuity for consumers, businesses and our international trading partners. The purpose, as we said—I was trying to keep the number of repetitions low—is continuity. The Bill provides: powers needed for the UK to implement the GPA, maintaining the access of UK companies to some £1.3 trillion-worth of business, and to ensure that we get the best deal for taxpayers; powers to enable the UK to transition trade agreements that currently exist between the EU and other countries, and to which we are currently a signatory via our membership of the EU to prevent any disruption to UK businesses or our consumers; critical powers to establish a new UK Trade Remedies Authority to provide that critical safety net to protect domestic industries from unfair practices; and powers to collect and share data on trade. This will help us build a richer picture of UK trading patterns to help the Government identify new opportunities, and provide data to support TRA investigations. I hope the Committee will recognise that these are sensible measures and that any reasonable Government would be legislating in these areas in the light of our exit from the EU.
Last week’s vote in the other place shows us that Parliament does not want to leave the EU without a withdrawal agreement and future framework. Although I recognise the position of many in this House is not to leave without a deal, as I said at the start, this mandate from Parliament is not enough on its own to stop no deal. That is why the Government will now redouble their efforts to get a deal that Parliament can support. It is for those reasons that I urge the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
I am grateful to the Minister for her kind words and the way in which she turned down our hope of a late but well-deserved goal. I always say to my colleagues that they must stop using sporting metaphors because they do not work for half the population of the House but here I am, about to refer to the second half. I am sorry about that.
In her thanks, the Minister should have also recognised herself; I will do it for her because I am sure she is too embarrassed to do it. It is almost impossible to believe that this is the Minister’s first Bill. She has handled us with considerable assurance and a wonderful sense of calm. Every time she rises it is a great balm to those who might otherwise want to cause trouble and do terrible things in a House which is noted for its civility and gentility. I do not know what the word is for sororal approaches—I will probably get in trouble for that as well. It has been a very good experience so far; we look forward to the second half—sorry about that. We think we can work together and there are things here we can work together on, and we should try to hammer out such agreements that we have. There may be differences—quite principled ones which we need to address—but I do not think we should worry about that; the House should be asked for its views on a number of points that we have covered in Committee. It has been a good experience and I am happy to withdraw the amendment.