House of Commons
(5 years, 8 months ago)
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Prayers
(5 years, 8 months ago)
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Business Before Questions
(5 years, 8 months ago)
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Mr Speaker
It is with great sadness that I have to inform the House of the death of the hon. Member for Newport West, Paul Flynn. A dedicated, principled, fearless and award-winning parliamentarian, Paul represented and championed the Newport West constituency and the wider interests, as he saw them, of Wales for 31 and a half years in this House. From drugs policy to pensions, from animal welfare to Europe, from parliamentary reform to the war in Afghanistan, Paul Flynn spoke with conviction, with total commitment and without fear or favour. He was every inch the exemplar parliamentarian whom he strove over three decades to be.
As many colleagues will know, Paul spent the vast majority of his career as a Back Bencher. I often teased him, affectionately and with respect, about that well-thumbed tome that he penned, “Commons Knowledge: How to be a Backbencher”. He was a fine parliamentarian, a dedicated socialist, and much loved in his constituency and beyond.
I hope that I speak for the House, in concluding my tribute to that very fine man, to whom I last spoke on Saturday 26 January, when I say this. Paul Flynn was a standing rebuke in his parliamentary service to two categories of people. The first are those who think that the only point of coming into politics is to become Prime Minister or a Minister—at the very least that shows a lack of imagination. Paul knew that there were so many other ways in which you could achieve real gains and derive fulfilment.
Secondly—I am sure that there are people on both sides of the House, who sit in certain positions, who will recognise the veracity of what I am about to say—Paul was a standing rebuke to those who thought that it was vital always to be in the closest possible regulatory alignment with one’s Whips Office. It was not. He spoke his mind. He did it his way. He did it with eloquence, with knowledge, with character, and often, as we all know, with mordent wit.
Paul will be greatly missed by his wife of the last 34 years, Sam, and by the wider family. We respectfully remember him, and I hope we always will.
Oral Answers to Questions
(5 years, 8 months ago)
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Helen Goodman (Bishop Auckland) (Lab)
The Secretary of State for Defence (Gavin Williamson)
May I take this opportunity to associate us with your comments about Paul Flynn, Mr Speaker? I remember having the privilege of serving with Paul on the British-Irish Parliamentary Assembly. As you quite rightly stated, he was always incredibly passionate about his constituents and about his beliefs. As a former Chief Whip, I also agree that Labour Members not following their Whip is good advice, but the same is not necessarily true on the Conservative side.
The UK will pursue a distinctive, independent and sovereign foreign and defence policy that meets British interests and promotes our values.
Helen Goodman
Mr Speaker, on my behalf and, I am sure, that of other hon. Members on the Opposition side, I would like to echo your words about Paul Flynn, whom I will always remember for his great independence of spirit and fantastic sense of humour.
I am grateful to the Secretary of State for his answer. On 7 January his junior Minister said, in response to a written parliamentary question, that in the event of no deal,
“the UK would have to withdraw from Common Security and Defence Policy missions and operations”.
What would happen to Operation Atalanta, which is against pirates, and Operation Sophia, which picks up refugees in the Mediterranean?
Gavin Williamson
Those missions will continue, and we will continue to have negotiations with the EU on how we can support those operations in the future.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I would like to echo your kind tribute to Paul Flynn, Mr Speaker. My thoughts and prayers are with his friends and family.
Is it not the case that the vast majority of our industrial collaboration with other European countries is done on a bilateral basis, which will very much continue once we leave the EU?
Gavin Williamson
My hon. Friend raises an important point: 90% of all our collaboration with EU nations and EU defence programmes is done outside the framework of the European Union. I joined him in his constituency to visit Airbus and Boeing, and it was quite obvious how important those bilateral and multilateral relationships are to their growth. It is not through the European Union.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
What contingency measures will the Government put in place to protect the UK defence industry from losing the automatic right to bid for contracts within the European economic area in the event of a no-deal Brexit?
Gavin Williamson
As I touched on in response to my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti), most of our defence procurement and most opportunities in the defence industry are not through the European Union. We will continue to work with the European Union to have access to programmes. That is not only important for UK business; if the European Union wants to succeed in developing a defence sector, it needs countries such as Britain and the United States to be able to participate in these schemes.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Mr Speaker, I associate myself with your eloquent words about Paul Flynn, whom we will all miss very much and whose book I read before becoming a Back Bencher, which I may remain.
Will the Secretary of State expand on how, in our future defence relationship with the EU in the north Atlantic, we will invest in and show continued commitment to protecting that northern flank of Europe?
Gavin Williamson
The high north is an important part of the development of our strategy. At the weekend, I had the opportunity to see our Royal Marines in Norway and what they are doing to support the Norwegian armed forces. We will be deploying our P-8s in 2020, along with Norway and the United States, to deal with the increased threat that we face from Russian submarines in the north Atlantic.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I add the condolences of those on the Scottish National party Benches to the family of Paul Flynn and to the parliamentary Labour party on the loss of a thoroughly decent human being.
The Secretary of State and his predecessors have been clear that NATO is the cornerstone of the UK’s security, but many leading experts, including Professor Beatrice Heuser of the University of Glasgow, see something of a devil in the detail. Much of the recent debate on Churchill missed out the fact that he was one of the architects of the Western European Union—a security-focused grouping that saw all its functions wound up into the European Union post Lisbon. Can the Secretary of State tell us what analysis his Department has undertaken on the difference between the UK’s obligations under article 5 of the NATO treaty and article 42(7) of the Lisbon treaty?
Gavin Williamson
Article 5 is a mechanism that delivers security right across continental Europe and the north Atlantic area. That has been proven. Article 5 has only been used in one situation, which was following 9/11, and we feel that it is a much more substantial guarantee of European security than what is in the Lisbon treaty.
Martin Docherty-Hughes
I am grateful for that response. I am glad that the Secretary of State visited NATO and the Royal Marines during their winter warfare training, and I know that the Norwegians and many members of the Defence Committee will be too. Article 5 obligates members to respond to an attack with
“such action as it deems necessary”,
which, as put to me, could mean a conventional military response, just as it could mean a strongly worded letter. Article 42(7) of the Lisbon treaty, on the other hand, obligates states to react with
“all the means in their power”.
Does the Secretary of State understand that many of our European allies are unnerved by this dilution of the UK’s obligation towards the defence of the continent? What preparations are being undertaken by the Ministry of Defence to ensure that our adversaries do not exploit that loophole?
Gavin Williamson
We have never as a nation shied away from our obligations, and there has been a clear understanding that Britain will stand with our European friends and neighbours in delivering security. Our commitment to security on the continent of Europe was there long before the creation of the European Union or our membership of it, and long before the creation of NATO. We have always been there, and we always will be.
Andrew Bridgen (North West Leicestershire) (Con)
Will my right hon. Friend clarify for the House that it is in fact NATO, not the European Union, that has been and will continue to be the cornerstone of European security and defence?
Gavin Williamson
My hon. Friend is absolutely correct. When we speak to the new nations that have been created out of the collapse of the Soviet Union, to which organisation do they turn to guarantee their security? It is NATO.
Mike Kane (Wythenshawe and Sale East) (Lab)
Mike Amesbury (Weaver Vale) (Lab)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am pleased to say that there is broadening support for the armed forces covenant, which is a priority for the Ministry of Defence. We now have over 3,300 organisations participating in it, and the veterans strategy consultation, which was launched in November, is looking at further ways in which we can expand its support.
Mike Kane
May I too associate myself with your comments, Mr Speaker? Any budding politicians out there should read the part of Paul Flynn’s book where he describes setting on fire his oven’s cooking instructions five years after moving into his flat.
On a more serious note, with an estimated 58 veterans’ suicides last year and the charitable sector saying that it is struggling to cope with demand, does the Minister agree that there is too much reliance on the sector to support personnel leaving the service with mental health disorders?
Mr Ellwood
The hon. Gentleman raises a very important issue. We should not make the automatic assumption that because there is a suicide and the person is a veteran, it is because he is a veteran that there is a suicide. However, that should not prohibit us from understanding more about what is actually happening to those who serve and have served. We are working with the coroner’s department to get better data on this, and we also have a new programme to make sure that people are aware of the mental health support that they can gain once they leave the armed forces.
Mike Amesbury
The Minister will know that there are few very reliable statistics on veterans who are homeless. What does he intend to do to improve that?
Mr Ellwood
This goes to the heart of what the covenant is all about. I want to see all homeless people looked after, and I want to make sure that if they are veterans, the covenant is recognised and enforced. However, if we are to do that, it is not the MOD that needs to do it; it is actually local government. Thanks to the veterans board, we are now enforcing the covenant and encouraging Government Departments to ask, “Are you doing enough?” Each local authority has an armed forces champion, who should be looking at these issues to make sure that the authority is tackling homelessness issues in its area. If there are any areas where there is a problem with that, please let me know.
James Gray (North Wiltshire) (Con)
It is anecdotally alleged, although not necessarily backed up by statistics, that a disproportionate number of prisoners are veterans. What consideration has my right hon. Friend given to making better use of the MOD prison estate—particularly Colchester Prison, for example, which I understand is relatively empty at the moment? Would that not be more appropriate housing for soldiers and veterans who are in civilian prisons?
Mr Ellwood
I pay tribute to my hon. Friend for the experience that he brings to the Chamber. My hon. Friend makes an interesting point, and I would like to pursue these conversations—perhaps with the Prisons Minister, my hon. Friend the Member for Penrith and The Border (Rory Stewart)—to see what more can be done.
Mr Speaker
Well, the Minister is going to pursue it with the Prisons Minister.
Fabian Hamilton (Leeds North East) (Lab)
A recent investigation has revealed that black African soldiers in the East Africa Force, formed in 1940, which encompassed thousands of troops drawn from the British colonies and current Commonwealth countries, were paid only a third of the wage received by their white counterparts. Will the Minister tell the House whether there will now be a full and comprehensive Ministry of Defence investigation of this issue, and whether such an investigation would consider granting appropriate compensation to all surviving veterans?
Mr Ellwood
The hon. Gentleman raises an important point, of which the Secretary of State is aware. It is a Foreign Office lead, and I hope that the FCO will be able to provide more detail on how to move forward given the information presented.
Scott Mann (North Cornwall) (Con)
The Minister for the Armed Forces (Mark Lancaster)
In December 2018, the Department announced the award of three competitive design phase contracts for the Type 31e frigate programme. It remains our intention to award a single design and build contract for five Type 31e ships by the end of this year. Construction of the Type 26 frigates remains under way, with the second batch of five ships to be ordered in the 2020s.
Scott Mann
I thank the Minister for that response. Following the Secretary of State’s recent successful visit to Plymouth, he will know of the south-west’s military shipbuilding capabilities. May I suggest that Plymouth would make a fantastic base for the littoral strike group vessels?
Mark Lancaster
I am grateful to my hon. Friend, who is an absolute champion for his constituency and the south-west. Her Majesty’s Naval Base Devonport and the south-west of England continue to be vital to the Royal Navy and, as we plan to develop a concept for the littoral strike ship, we will look at how it goes. At the moment, no decision on basing has been made.
Matt Western (Warwick and Leamington) (Lab)
Many employees of GE Power in Rugby happen to live in the Warwick and Leamington constituency. Will the Minister update us on what discussions have been had with that company to preserve its quality manufacturing and skills in our country?
Mark Lancaster
I know that, for example, my colleague the Defence Procurement Minister has had several discussions with the constituency MP, my hon. Friend the Member for Rugby (Mark Pawsey). Although of course this is very much a matter for the company, the MOD will look to see in what ways we can provide support.
Mr Philip Dunne (Ludlow) (Con)
Mark Lancaster
My right hon. Friend is absolutely right. May I take this opportunity to thank him once again for the valuable contribution he made through his report last year? He made, off the top of my head, some 41 sensible recommendations, and we are looking to address them shortly.
Douglas Chapman (Dunfermline and West Fife) (SNP)
Since the start of the last Labour Government, we have seen a 39% decrease in the number of Royal Navy ships and a 46% decrease in the number of frigates and destroyers. If the Secretary of State wants a carrier in the south Atlantic and one in the South China sea, where is the drumbeat of orders coming from when we have just lost another 150 jobs at our shipyard in Rosyth?
Mark Lancaster
Let us be clear that we are committed to maintaining the numbers of our frigates and destroyers. Indeed, later this year we will see the second of our aircraft carriers come out of Rosyth. Equally, it is this Government who have secured shipbuilding jobs in Scotland all the way through to the 2030s. Indeed, there are probably some apprentices who will work on the Type 26 programme who are yet to be born.
Toby Perkins (Chesterfield) (Lab)
Mr John Baron (Basildon and Billericay) (Con)
Stephen Kerr (Stirling) (Con)
The Minister for the Armed Forces (Mark Lancaster)
We remain committed to maintaining the overall size of the armed forces, and we have a range of measures under way to improve recruitment and retention. The challenge is kept under constant review. Importantly, the services continue to meet all their current commitments, keeping the country and its interests safe.
Toby Perkins
Many people may see it as an incompetent accident that the Government continually fail to hit their supposed targets on Army recruitment, but is it not the truth that this is a Government without any sort of strategic vision for what they want our Army to do in 2019, and that their failure to get Army numbers up saves budget for the parts of the MOD that they do have a plan for?
Mark Lancaster
I could not disagree more. I think we have a clear vision as to what we want our Army to do in 2019. Equally, the hon. Gentleman should be encouraged by the fact that as of January we have had the highest number of applications to the Army in five years.
Mr Baron
I suggest that the Government should not take any lessons from Labour about manpower shortages, given today’s news about desertions.
The National Audit Office has recently confirmed that Capita has not recruited the required numbers of regulars and reservists in any year since the contract began in 2012. Clearly, extra resources are needed. May I also suggest that the Government consider reinstating 2nd Battalion the Royal Regiment of Fusiliers, which was the best recruited unit in the Army when it was disbanded?
Mark Lancaster
I have been here long enough to be able to pay tribute to my hon. Friend for his consistent defence of the 2nd Battalion Royal Regiment of Fusiliers. The same National Audit Office report states that the Army has already conducted a full review of the current recruitment strategy. As a result, the contract with Capita was realigned and a comprehensive improvement plan introduced. That will take time to bear fruit, but as I said in answer to the previous question we are now beginning to see early signs of the improvement plan bearing fruit.
Stephen Kerr
Will the Minister update the House on the results arising from the Army recruitment poster campaign last month? Has it enticed more women to apply? Has it enticed more people from ethnic minority backgrounds to apply to join the Army?
Mark Lancaster
The Army’s new campaign builds on last year’s successful “Belonging” adverts, which, as I said, took recruitment to a five-year high. The early signs are positive. At the moment, 12.4% of recruits are women and 6.5% are from the black, Asian and minority ethnic community. We are yet to see the audited results for the campaign, but we are confident that progress is being made.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Public Accounts Committee has been looking closely at what skills we have in our armed forces. We know there are real shortages, particularly in cyber, with people leaving early. Will the Minister explain to the House how he is working with others across Government to ensure that we have the cyber skills we need in our armed forces?
Mark Lancaster
That is a very important question. The hon. Lady will be aware of the £1.9 billion investment in cyber across Government. I have taken a particular personal interest in this issue. I want to ensure that the career structure we offer in the armed forces matches these 21st century skills. Historically, it has not done so.
Mr Mark Francois (Rayleigh and Wickford) (Con)
In the past few years, Capita has been 3,000 recruits short. The chief of defence personnel, Lieutenant General Nugee, told the Defence Committee a couple of weeks ago that this year it will be over 4,000, maybe nearly even 5,000, recruits short. Applications are up, but enlistments—those actually joining—are down dramatically. The Secretary of State called its performance atrocious and it is. The Scots Guards are barely at 50% manned. I believe that Capita is so awful that its performance is becoming a threat to one element of our national security. When will the Government come out of denial and sack this useless, hopeless company?
Mark Lancaster
My right hon. Friend is entirely consistent in his views on Capita and I respect that. However, I would say that once again the signs are positive. Sandhurst is now 100% full in terms of young officers, an improvement on the past two years. The infantry training centre at Catterick is now 80% full. Yes, that is 20% lower than we need, but that is a significant increase and improvement on where we were last year. All the signs are pointing in the right direction.
Mark Lancaster
Yes, they are. The challenge we face is that while applications are up, the conversion rate is getting better and that will take time to feed through into the strength of the Regular Army.
Mr Speaker
Having known the right hon. Member for Rayleigh and Wickford (Mr Francois) for 35 years, I hope he will take it in the right spirit if I say that I really do wish he would tell us what he really thinks.
Nia Griffith (Llanelli) (Lab)
Following on from what was said by the right hon. Member for Rayleigh and Wickford (Mark Francois), the reality is that the size of the Army has fallen in every year since the Conservatives came to power. For all the talk, the fact is that the initial applications are not turning into enlistments. Will the Minister tell the House what the trained strength of the Army will be at the end of this Parliament if the current trend and record we have seen so far continues?
Mark Lancaster
I am confident that at the end of this Parliament, assuming that that is 2022, the trained strength of the Army will be higher than it is now.
Nia Griffith
I do not think that gives us very much reassurance. Let me tell the Minister now that, if the decline continues at the same rate it has been over the time the Conservative party has been in government, by May 2022 the Army will be down to just 68,000. Given that the promise to reach 82,000 soldiers was unceremoniously dumped from the Conservative manifesto at the last election, will the Minister tell the House whether the Government are still committed to reaching that number? If so, what is his plan for how to do so?
Mark Lancaster
With respect to the hon. Lady, she talks about “the Army”. I assume that by that, she actually means the Regular Army—when she talks about 68,000. As far as I am concerned, the Army also includes the Army Reserve, giving a combined force of about 112,000. It also includes the approximately 3,500 soldiers who wear a uniform and are proud to call themselves soldiers but are currently under training. I think she needs to think about what definition she is using.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
The provision of veterans’ mental health support is the responsibility of the NHS in England and the devolved Administrations, but the MOD is committed to ensuring veterans are aware of what support is available.
Daniel Kawczynski
I thank the Minister for that answer. The Covenant Fund Trust will play a vital role in providing important organisations such as the Shropshire armed forces community trust with additional resources to help veterans with mental health problems. Will the Minister give me an assurance that he will update the House on how he and his other colleagues are lobbying the Chancellor for additional resources for the Covenant Fund Trust?
Mr Ellwood
The Covenant Fund Trust has increased, but my hon. Friend is absolutely right that it forms a wider package of measures. I join the Secretary of State in saying that we would like to see the defence budget increase not simply because of procurement or training, but because we need to look after our people. This is an illustration of that. We introduced the mental health and wellbeing strategy a year and a half ago. This has helped armed forces personnel to be more aware of what mental health support is available.
Nick Smith (Blaenau Gwent) (Lab)
There is still confusion among clinicians and veterans over how the armed forces covenant guarantee of priority treatment for conditions related to the veterans service is applied, so what discussions has the Minister had with the Health Minister in Wales to support our veterans there?
Mr Ellwood
The Defence Secretary co-chairs the veterans board, which looks at precisely this. We need to make sure, no matter whether it is in England or in the devolved Administrations, that no veterans are left without the support that they need. It is important, no matter which hospital or organisation it is, that they are aware of their covenant responsibilities in looking after our brave service personnel and veterans.
John Mc Nally (Falkirk) (SNP)
Anna McMorrin (Cardiff North) (Lab)
The Secretary of State for Defence (Gavin Williamson)
The Ministry of Defence has conducted extensive planning and preparation to ensure that defence is ready for a range of scenarios including that of a no-deal EU exit. We continue to work closely with other Government Departments, key suppliers and industry partners.
John Mc Nally
I thank the Secretary of State for that answer. Cyber-security is designated as a priority in the modernising defence programme, but given that we will lose the European arrest warrant, access to Europol and the sharing of data using EU frameworks, we face challenges that the programme simply does not seem willing to countenance. How is the Department going to replicate those vital benefits from day one of leaving the EU?
Gavin Williamson
The work that we are doing on cyber-security is done not through the European Union, but through NATO or bilateral agreements with other countries, so I cannot see that having any impact on our continued work on cyber-security.
Anna McMorrin
May I just echo your words about Paul Flynn, Mr Speaker? He was a brilliant, radical and reformist politician and will be greatly missed.
A “No-deal Brexit will make tracking terrorists harder and British public less safe”. Those words are from the Minister for Security and Economic Crime, and this weekend we have heard another Defence Minister threaten to vote against the Government if they fail to rule out no deal. Will the Secretary of State put this country’s security first, and before his own leadership ambition, and rule out no deal here and now, today?
Gavin Williamson
The hon. Lady had an opportunity to vote for a deal just a few weeks ago, but she did not seem to bother.
Mr Philip Hollobone (Kettering) (Con)
Whether we leave the European Union with a deal or without a deal, will the Defence Secretary make it clear to his Spanish counterparts that it is completely unacceptable for their warships to try to intimidate commercial shipping entering British sovereign waters around Gibraltar?
Gavin Williamson
I will make it absolutely clear that we will always be there to defend our sovereign interests and to defend Britain’s national interest.
Kevin Foster (Torbay) (Con)
I know the Secretary of State will agree that throughout European history there has always been an issue when there has been a separation between defending North America and defending western Europe. Will he confirm that his contingency plan for our leaving without a deal remains the fact that with our NATO allies we will still come to the aid of our European allies if they need it?
Gavin Williamson
Our commitment to our European friends and allies is sacrosanct. The Prime Minister has been consistent in saying that as we leave the EU our commitment to European security is one they can truly rely on.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The recent reports that the MOD has begun stockpiling food, fuel, spare parts and ammunition at overseas bases just in case of a no-deal Brexit are extremely concerning, so will the Secretary of State now rule out a no deal and urge his Cabinet colleagues to seek an agreement with the EU based on a permanent customs union and a strong relationship with the single market?
Gavin Williamson
We have legislated to exit the EU on 29 March this year, and the hon. Gentleman had an opportunity to vote for a deal, but he chose not to. The Prime Minister will always deliver the very best for this country, and I very much hope that not only Government Members but the hon. Gentleman will support it.
Sir Henry Bellingham (North West Norfolk) (Con)
The Secretary of State for Defence (Gavin Williamson)
I visited RAF Marham on 10 January. It has been the home of our Tornado force and is now the home of our F-35 Lightnings. It is obviously with a heavy heart but enormous pride that we bid farewell to our Tornados—it is truly the end of an era—but it is right that we now look to the future. The combination of our state-of-the-art F-35s and Typhoons will keep us a world leader in combat air.
Sir Henry Bellingham
I thank the Secretary of State for paying tribute to the Tornado squadrons at RAF Marham. They have been at the forefront of every operation for the last 40 years and are about to start—this week, I think—their farewell flypast. Will he pay special tribute to the pilots and navigators who have shown supreme courage backed up always by their ground crew and their families at home in west Norfolk and elsewhere?
Gavin Williamson
It is a whole community that delivers the Tornado’s fighting capability. In countless conflicts around the globe—be it the first Gulf war, the second Gulf war, or taking the fight to Daesh over the skies of Iraq and Syria—the Tornados have been at the forefront, and the pilots, navigators and ground crew have all been part of it. RAF Marham has an exciting future, however, with the two new F-35 squadrons and the additional training squadron.
Dr Julian Lewis (New Forest East) (Con)
The Minister for the Armed Forces (Mark Lancaster)
Three Phalanx close-in weapon systems will be fitted to each new aircraft carrier. Two are being fitted to HMS Queen Elizabeth during her current capability insertion period, with the third to be fitted towards the end of 2020. Three will be fitted to HMS Prince Of Wales in 2020.
Dr Lewis
May I add to the tributes to Paul Flynn by noting the remarkable physical courage he showed in battling crippling arthritis over many years?
In relation to the Phalanx systems on the aircraft carriers, I agree that, if nothing goes wrong, the fitting of three will offer 360° coverage and protection, but, given that there is a fourth station on each aircraft carrier that could take a fourth system, and given that there are spare systems in storage following withdrawal from operational theatres, would it not be sensible to give some extra insurance by fitting a fourth system, so that if one is lost, there will still be total coverage and protection for these vital naval assets?
Mark Lancaster
My right hon. Friend is, of course, right in his assessment that three Phalanx systems offer a 360° capability, and that there is scope, potentially, for a fourth. We have the ability to adjust that according to the threat. I should also remind the House that the carrier will be at the centre of a carrier group. Protection for that carrier will consist of different layers of security provided by both the frigates and the destroyers, so it will not rely solely on the Phalanx system.
Karen Lee (Lincoln) (Lab)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
We have had a series of debates about the future of RAF Scampton, not just in the Chamber but in Westminster Hall, and the hon. Lady is aware that it is, I am afraid, due to close. I can assure her, however, that the RAF footprint in Lincolnshire will increase.
Karen Lee
As the Minister knows, RAF Scampton is very close to my constituency. It employs more than 600 people, many of whom live in Lincoln and contribute to the local economy as well as to our communities. What specific assurances can the Minister give MOD workers in Lincoln, and throughout Lincolnshire, who fear that they will be made redundant or forced to relocate should the closure go ahead?
Mr Ellwood
The hon. Lady is right to wish to ensure that we look after those workers—who are committed to the RAF—and, indeed, their families. However, as I mentioned earlier, Lincolnshire does well from an RAF perspective. It has RAF Waddington, with its intelligence, surveillance, target acquisition and reconnaissance capability, and RAF Cranwell, with its training capabilities, not to mention RAF Coningsby, with its fast jet capability. I hope that most of the people who are transferred or moved will be able to remain where they live now, although their work will take them elsewhere in the county.
Sir Edward Leigh (Gainsborough) (Con)
As a Member of Parliament representing RAF Scampton, I thank my right hon. Friend for the work that he has done in trying to secure a future for it with our district council, West Lindsey. May I urge him, however, to consider the desire of all Lincolnshire people, which is based not on emotion but on sound, grounded fact, that the Red Arrows should stay in Lincolnshire? We can provide good employment for those 400 people. The three bases that he mentioned are within 15 or 20 miles of each other. We have superb airspace and a great RAF history, so please can we keep the Red Arrows in Lincolnshire?
Mr Ellwood
I pay tribute to my right hon. Friend’s determination to ensure that this place recognises the work, the heritage and the history of RAF Scampton, which will, I think, be noted by his constituents and others. It is important for the museum there to continue.
As my right hon. Friend will know—[Interruption.] Is that okay Mr Speaker? As my right hon. Friend will know, the location of the Red Arrows is partly due to an operational capability to ensure that they are serviced. The airspace is run by the Civil Aviation Authority, and that is the subject of a separate discussion to be had with them.
Mr Speaker
We want to enjoy the benefits of the Minister’s mellifluous tones. That was my only exhortation. It is quite understandable that a Minister looks back at a Member, but the rest of the House wants to savour the experience of hearing him.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
The Secretary of State for Defence (Gavin Williamson)
Last week I joined NATO Defence Ministers to discuss progress made towards fairer burden-sharing and increasing the readiness of all our armed forces.
Michael Tomlinson
Does my right hon. Friend agree that, as we leave the European Union, we will of course continue to co-operate with our European friends and allies, but that it is NATO that is the bedrock of European security? Does also he agree that all talk of an EU army is an unhelpful distraction?
Gavin Williamson
My hon. Friend has put his finger right on the issue. Talk of an EU army is indeed a distraction. It does not help; it does not build security. As we leave the European Union, 80% of NATO forces will be contributed by non-EU countries, but there is also a bigger point to be made. All European countries should be contributing more to defence, and they should all be spending 2% of their GDP on defence.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
May I, too, echo your generous words about Paul Flynn, Mr Speaker? He was a good socialist, and I therefore disagreed with nearly everything he said, but that is the nature of parliamentary debate.
As my right hon. Friend knows, the political declaration talks of co-operation with Europe on future defence operations. Surely, however, the most effective way of keeping the peace in Europe is to concentrate on the primacy of NATO, and in particular to encourage our American partners to keep paying 50-60% of the budget.
Gavin Williamson
We will always co-operate with all organisations right around the world, but my hon. Friend is so right: NATO is what delivers security in Europe. That is where our focus will be; that is what we will be focusing our time and resources on in delivering our security with our NATO allies.
Mr Kevan Jones (North Durham) (Lab)
The Minister for the Armed Forces (Mark Lancaster)
Since 2015, we have published a national shipbuilding strategy, refreshed defence industrial policy to help strengthen UK competitiveness and launched the future combat air strategy. We engage with global primes to create opportunities for all tiers of the UK supply chain.
Mark Lancaster
The one thing we are clear about is that we are constrained in that process because the fleet solid support ships are not warships; they are not frigates, destroyers or indeed aircraft carriers. However, I can reassure the right hon. Gentleman that that competition will be judged not solely on price but also on various other factors, and I am delighted that a UK consortium will be bidding.
Several hon. Members rose—
Mr Speaker
Order. As we are constrained for time, I advise the hon. Member for Bolton West (Chris Green) that his inquiry on missile defence capability can be shoehorned into the current inquiry.
Chris Green (Bolton West) (Con)
Mark Lancaster
My hon. Friend is absolutely right, and he is also absolutely right to cite his constituency company as a fine example of how we can continue to compete on the world stage.
Mr Stephen Hepburn (Jarrow) (Lab)
First, may I thank you, Mr Speaker, for your kind words about our former colleague Paul Flynn, who was a great comrade over the years?
Following on from the question asked by my right hon. Friend the Member for North Durham (Mr Jones), why does the Minister not defer any action until after 29 March, when we will not be under EU procurement rules and we can award this ship—a £1 billion British taxpayers’ order—to a British shipyard?
Mark Lancaster
The hon. Gentleman seems to have a crystal ball—I simply do not—to see exactly what the situation will be post 29 March.
Douglas Ross (Moray) (Con)
Nigel Huddleston (Mid Worcestershire) (Con)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
Some 15,000 armed forces personnel leave the Army, Air Force and Navy every single year. We have invested significantly in resettlement provision, and the two key organisations that help provide that are the Career Transition Partnership, which helps individuals in that preparation, and the Defence Relationship Management organisation, which partners with businesses to make them aware of what skill sets are available.
Douglas Ross
I am grateful to the Minister for that answer. Copernicus Technology, based in Moray, was set up in 2008 with ex-RAF engineers and it provides excellent work for the US Department of Defence on an intermittent fault device. Will the Minister consider looking at the benefits of this in the UK, because it increases the availability of the elements that it is used on and reduces support costs for the US, and we could surely do with that here in the UK?
Mr Ellwood
My hon. Friend raises an important point. In this and many other areas, we can learn from our US counterparts about what support we can provide for veterans. I will be delighted to meet my hon. Friend afterwards and discuss in more detail how we can move this forward.
Nigel Huddleston
Will the Minister join me in commending the work of Only A Pavement Away, which helps homeless ex-service personnel find employment particularly in the hospitality sector, and what else are the Government doing to help ex-service personnel who have fallen on particularly hard times?
Mr Ellwood
I pay tribute to the charity my hon. Friend mentions. There are over 400 service-facing charities out there providing support for ex-service personnel. It is important that those who require support know where it is to be found, and I am pleased that more charities are working through the Veterans’ Gateway, the single portal that allows veterans to know where help can be found.
Tom Brake (Carshalton and Wallington) (LD)
The Secretary of State for Defence (Gavin Williamson)
Europe’s security is our security. Co-operation with our European partners and allies through NATO, bilaterally and through a security partnership with the EU will enable us to address shared threats and defend our shared values.
Tom Brake
May I also pay tribute to Paul Flynn? I suspect that he was less surprised than I was when I had to read out the words to suspend him from the House of Commons after he had accused a Secretary of State—the then Secretary of State for Defence, as it happens—of lying. On the subject of the European Union, the Secretary of State will know that the “National Security Capability Review” stated:
“As we leave the EU, we want a partnership that offers both the EU and the UK the means to combine efforts to the greatest effect, both operationally, and in developing capabilities.”
By what means will we achieve this partnership once we have left the common security and defence policy?
Gavin Williamson
What we set out in our negotiations with the European Union is the opportunity for Britain to opt into various programmes if it is in our national interest to do so. But it still keeps coming down to the most important point: what delivers our security in Europe is not the European Union; it is NATO. It is that framework that will continue to deliver that security.
Dr Julian Lewis (New Forest East) (Con)
The Secretary of State for Defence (Gavin Williamson)
I announced to NATO Defence Ministers last Wednesday a significant increase in our commitment to the alliance, making the UK contribution to the enhanced forward presence in Estonia the largest of any nation. At the Munich security conference, I met counterparts from the global coalition of countries tasked with defeating Daesh, and in Norway, I had the opportunity to further our discussions with the Norwegian Government about how we can enhance our security in the high north.
Dr Lewis
The Secretary of State is far too modest: I was sure he was going to tell us about his dip in the icy Norwegian waters.
On a very much more serious issue, the Secretary of State knows that there are between 200 and 300 war widows who lost their war widows pension on remarriage and who, if they were to divorce or lose their husbands now would have it restored and it could not then be taken away, but who have not had it restored and are therefore in the perverse situation that if they want to get quite a few thousand pounds a year more, they should divorce and remarry their husbands. Everyone agrees that that is an absurd and indeed disgraceful situation, and I know that the Secretary of State wants to do something about it. The war widows have been to see the Financial Secretary to the Treasury, and she has expressed sympathy. When will this matter be dealt with? What is holding it up?
Gavin Williamson
The next time I go to Norway, I will be sure to bring my right hon. Friend along so that we can go for a dip together.
My right hon. Friend raises an important issue, and it is one that has been ongoing for a very long time. I have had the opportunity to meet a large number of those affected, and we are keen to work across the Government to find a solution. This is a burning injustice, and I know that those women feel it very deeply. I am committed to finding a solution, and I very much hope that we can deliver that across all Departments.
Nia Griffith (Llanelli) (Lab)
The Public Accounts Committee’s damning report has found that Ministers have made “little progress” in solving the affordability crisis at the heart of the Ministry of Defence’s budget. Despite a year of bolshie headlines, the Secretary of State has completely failed to get a grip of the equipment plan in the modernising defence programme. Instead of spending his time causing diplomatic rows, when will he come forward with a costed plan to give confidence to the armed forces and our allies that we will be able to afford the equipment that his Government have committed to?
Gavin Williamson
The hon. Lady has been saying that we will not hit our budget for over a year now, yet last year we delivered the Ministry of Defence budget on target and sort of within budget, and we will do that again this year. Over the past few years, we have made more than £9 billion-worth of cost savings, and as part of last week’s announcements, we made a commitment to invest a further £100 million to ensure that we work more efficiently and that we can make more efficiency savings so that we can meet our commitments in the future.
Nia Griffith
The Government’s own analysis shows that a no-deal Brexit would cause serious and lasting damage to our GDP. On the basis of sticking to our NATO 2% commitment, that would mean a massive cut of some 9.3% just because of the hit to our economy. With the Government failing so abysmally to manage the defence budget at present, will the Defence Secretary now drop the bravado and finally admit that leaving the EU without a deal would be so harmful to the UK that we must absolutely rule it out?
Gavin Williamson
Whether or not Britain has a deal with the European Union, we will continue to succeed and thrive. We did so before we were a member of the EU and will do so after we leave. We should have the confidence and belief in our nation that the Labour party obviously does not have.
Mrs Sheryll Murray (South East Cornwall) (Con)
Mr Speaker
Order. I do not want to be unkind to the hon. Lady, but she has taken too long to ask a question about Opposition policy, and we really cannot get into that. Questions are about Government policy, not that of the Opposition.
Stephen Morgan (Portsmouth South) (Lab)
Gavin Williamson
I am not in a position at present to give that timeframe, but I will ask the Minister for Defence Procurement, my hon. Friend the Member for Pudsey (Stuart Andrew), to meet the hon. Gentleman to discuss the plan. Portsmouth plays a vital role in all that we do with the Royal Navy, and we are incredibly grateful to the city for the support that it offers our servicemen and women.
Mr Speaker
I call Ross Thomson. Where is the fella? He is not here. I am sorry that he is not here, but Leo Docherty is.
Leo Docherty (Aldershot) (Con)
The Brigade of Gurkhas has given courageous and loyal service to this country for two centuries. Does the Minister agree that it would be a good idea for us to recruit more of them?
The Minister for the Armed Forces (Mark Lancaster)
I started my military career in the Brigade of Gurkhas, so I declare an interest in that I am biased for obvious reasons. My hon. Friend’s question is timely. We recruit once a year and recruited 400 Gurkhas last year, which is within our agreement with the Government of Nepal. I am travelling to Nepal later this week for further negotiations with the Nepali Government about the future use of Gurkhas.
Alex Norris (Nottingham North) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am grateful to the hon. Gentleman for raising something about which we all need to be concerned because the numbers are worrying. We do what we can to offer a far greater relationship as people depart the armed forces. There is a cohort of veterans who served around the Falklands era who are not benefiting from the education that people receive as they leave the armed forces today. We need to do more, and the hon. Gentleman provides an example of one thing that we can do.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
Will the Royal Navy continue with freedom of navigation operations in the South China sea?
Gavin Williamson
Like so many nations, such as the United States, Australia, France, New Zealand and Canada, we believe in the rule of law and the international rules-based system. We will always be a nation that does not just talk, but one that acts to uphold the rule of law that has benefited so many nations right around the globe, so yes.
Susan Elan Jones (Clwyd South) (Lab)
Mark Lancaster
The pilot training programme has remained unchanged for many years. That is why we are looking at a complete review of the system, which will speed up the process and should rectify the current shortfall in pilots.
Mark Pawsey (Rugby) (Con)
The Minister for the Armed Forces has already referred to the expertise of GE Energy, located in my Rugby constituency, in the manufacture of propulsion systems. Does he agree it is important to retain that capability as an important part of our manufacturing base?
Gavin Williamson
My hon. Friend and I have met to discuss this on a number of occasions, and my Department, along with the Department for Business, Energy and Industrial Strategy, is doing everything it can to help. We are working with GE to see if there are different ways to pull work forward. It is an important capability, and I would very much like to see the technology, which was developed in the UK, continue to be manufactured in the UK. We have been very successful in selling the Type 26 around the world, including to Australia and Canada, and it would be great for Rugby to get that benefit.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Mark Lancaster
The hon. Gentleman raises an important point, and I am delighted that we are committed to buying nine new P-8 aircraft, which will be arriving from next year. Because of the work we have done with the US before they arrive, they will have an almost immediate initial operating capability.
Mary Robinson (Cheadle) (Con)
Snowflakes and gamers are being recruited into the Army, in recognition of the wide variety of talents that people have. In that light, my constituent Zach is interested in joining the armed forces but feels that his autism would be an impediment to his application. Will my right hon. Friend confirm whether the armed forces recruitment drive will consider a similar campaign for people with autism?
Mark Lancaster
My hon. Friend is right to champion this issue. Over the past year, we have held a number of medical symposiums in which we have been looking very carefully at what medical standards we actually require in the military, not least because of the length of military service. Many conditions do not actually become an issue until later in life, when recruits would potentially have already finished their military service.
Nick Smith (Blaenau Gwent) (Lab)
Mark Lancaster
I feel this is a monthly exchange between the hon. Gentleman and me. All I can do is refer him to the answers I gave earlier in this session. The visible signs of progress are now there for all to see.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Will the Secretary of State update the House on how the carrier strike strategy is coming along in terms of the relationship on building it together with other Departments?
Gavin Williamson
As I am sure my hon. Friend is aware, when we make major announcements, including on the delivery of carrier strike, they are shared across the Government. The deployment of the Queen Elizabeth and the carrier group to the Mediterranean, the middle east and the Pacific is an important sign that Britain is a global nation and a nation that wishes to play its role in upholding our interests and, of course, our values. As we have invested so much in our global carrier forces, it is important that we put them to sea and demonstrate Britain’s global presence, our involvement and our ability to act when required.
Liz Twist (Blaydon) (Lab)
Mark Lancaster
No, I do not, and, crucially, I sense that there is no appetite within the armed forces for such a body.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
The MOD’s announcement that all posts in the military would be open to women was certainly welcome. Will the Minister kindly inform the House what specific measures are being taken to ensure that women and girls in school are made well aware that there are no no-go areas for them in the military?
Mark Lancaster
I refer my hon. Friend to the Royal Air Force advert that aired this week, which almost exclusively featured women, as a clear demonstration that not a single role in the RAF, or, now, in the other services, is not open to them
Carol Monaghan (Glasgow North West) (SNP)
We have heard this afternoon about Capita’s abject failure in recruitment. While we are haemorrhaging personnel, there are clearly issues in the armed forces that have to be addressed, so will the Secretary of State support the Bill from my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes), which will be heard on 8 March, to give personnel a voice, through an armed forces representative body with a statutory footing?
Mark Lancaster
I refer the hon. Lady to the answer I gave a few moments ago.
Kevin Hollinrake (Thirsk and Malton) (Con)
Rock2Recovery provides mental health support to service personnel from those who have already served. Does the Minister agree that they can play an important part in solving mental health problems?
Mr Ellwood
I was delighted to meet Rock2Recovery not very long ago and I pay tribute to the work it does, along with all the other charities, as this is so important. No one size fits all in supporting our veterans; there are many avenues by which we can ensure that they get the support and credit that they deserve.
John Woodcock (Barrow and Furness) (Ind)
Is the Secretary of State in favour of other Departments spending a few million so that he can save hundreds of millions from his budget? If he is, will he put the weight of the Ministry behind our drive, with BAE Systems and the community, to make Barrow even more attractive a place to come and stay in, so that we can improve the productivity of the workforce?
Gavin Williamson
Having had the opportunity to visit Barrow a number of times, I know that the town offers so very much. We are very dependent on the residents of Barrow for the amazing work they do in developing our nuclear deterrent. I would be happy to meet the hon. Gentleman to discuss how we can work across the Government to deliver that vision.
Eddie Hughes (Walsall North) (Con)
Following conversations at the recent Munich security conference, does the Minister believe that all European countries are committed to spending 2% of GDP on defence?
Gavin Williamson
It is fair to say that some are more committed than others, but we have to hammer the message home. We need European countries to be spending a minimum of 2% of their GDP on defence, not because it is an issue raised by the United States, but because they should be spending that money on defence for their security and for Europe’s security. That is the reason they need to be spending a minimum of 2%.
UK Nationals returning from Syria
(5 years, 8 months ago)
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Dr Matthew Offord (Hendon) (Con)
(Urgent Question): To ask the Home Secretary if he will make a statement on Government actions in dealing with UK nationals returning from Syria.
The Secretary of State for the Home Department (Sajid Javid)
May I start by paying my respects to the hon. Member for Newport West? Our sympathies are with his loved ones and all those in this House who were close to him.
I welcome the urgent question from my hon. Friend the Member for Hendon (Dr Offord). My priority as Home Secretary is to ensure the safety and security of this country. We cannot ignore the threat posed by those who chose to leave Britain to engage with the conflict in Syria or Iraq—more than 900 people took this path. Without the deradicalisation work of our Prevent programme, there could have been many more. Whatever role they took in the so-called caliphate, they all supported a terrorist organisation and, in doing so, have shown that they hate our country and the values we stand for. This is a death cult that enslaved and raped thousands of Yazidi girls and that celebrated attacks on our shores, including the tragic Manchester bombing, which targeted young girls. Now that the so-called caliphate is crumbling, some of them want to return. I have been very clear: where I can, and where any threat remains, I will not hesitate to prevent that. The powers available to me include banning non-British people from this country and stripping dangerous dual nationals of their British citizenship. More than 100 people have already been deprived in this way. We must, of course, observe international law, and we cannot strip someone of their British citizenship if doing so would leave them stateless. Individuals who manage to return will be questioned, investigated and, potentially, prosecuted.
Our Counter-Terrorism and Border Security Act 2019, which received Royal Assent just last week, provides more powers to prosecute returnees. It extends the list of offences committed overseas that we can act on, and it creates new laws to ban British citizens from entering designated terrorist hotspots without good reason.
Our world-class police and security services closely monitor all who return if they pose any risk. We do not hesitate to use the range of tools at our disposal. That includes using temporary exclusion orders to put in-country restrictions in place, and managing risks through terrorism prevention and investigation measures—so-called TPIMs. Members will have seen the comments that Shamima Begum has made in the media, and they will have to draw their own conclusions. Quite simply, if someone backs terror, there must be consequences.
Dr Offord
There is huge concern in this country about the return of Shamima Begum. This is an individual who willingly travelled to Syria to become a supporter of a terrorist organisation. She has shown no remorse about her decision, and it appears that she wishes to return to the United Kingdom only because of the benefits that this country can offer her. Many people are very angry about that. Her case highlights the problem facing this country and the Home Secretary: as a British national without any form of dual nationality, Begum cannot be refused entry. Does the Home Secretary accept that the removal of citizenship from Britons who travelled abroad to join Daesh is prohibited under international law?
Figures from the Home Office show that 900 British nationals travelled to Syria, and up to 400 have returned. On 11 June last year, the Minister for Security and Economic Crime told the House that of those who had returned from Syria:
“Approximately 40 have been prosecuted so far”.—[Official Report, 11 June 2018; Vol. 642, c. 666.]
That is a reduction on the 54 that, in May 2016, Lord Keen advised had been prosecuted, and it is still only 10% of those who went to Syria and returned.
How many British nationals have returned from Syria? How many have been prosecuted for offences? What offences were they charged with? How many have been convicted? If we do not address this issue, not only do we risk the security of the United Kingdom but we put into doubt the safety of thousands of our Muslim constituents and we put them at risk of discrimination, abuse and violence. I make a great distinction between my hard-working, law-abiding Muslim constituents and the actions of a reckless child from east London. I ask the Home Secretary to take action on this vital matter.
Sajid Javid
I thank my hon. Friend for raising the important questions that he has just put to me. He asked me about the case of Shamima Begum, and I hope he will understand that I am not at liberty to discuss the case of any particular individual. As I have just said, however, we have all seen and heard the remarks that she made in the media, and we can all draw our own conclusions.
My hon. Friend went on to ask me a number of related and important questions. He said that in some cases we can remove British citizenship. That is what I have referred to as deprivation. As I have said, the Government have done so on more than 100 occasions. If someone who has more than one nationality—British nationality plus another, or perhaps more than one other—is deemed a threat, and I consider this to be conducive to the public good, we can deprive that individual of their British nationality, and thereby prevent their return to the United Kingdom.
My hon. Friend mentioned some numbers. From the best numbers we have available, we estimate that, in recent years, 900 people who have been deemed of national security concern in some way or another went to Syria or Iraq to join terrorist organisations. Of those, we estimate that 20% have been killed in the battlefield, and around 40% have returned, leaving about 40% still somewhere in the region.
My hon. Friend asked about those who have returned in recent years. In all those cases, we would seek to make sure, first, that that individual is questioned, investigated and, where there is enough evidence, prosecuted. We would seek to manage that return, so even if they are a British citizen, we can issue temporary exclusion orders. That will remove their passport and require them to travel on a specifically issued designated travel document into a specific port of entry. At that point of entry, they are monitored by police and face a number of other restrictions. If appropriate, we can also use TPIMs to place further restrictions on them while we may or may not be waiting for prosecution. Of course, we will also work with authorities, particularly if young children are involved, to make sure they get the mental health, psychiatric and other types of help that may be necessary.
Finally, my hon. Friend rightly mentioned communities and making sure that, whatever we do, we work towards building more cohesive communities and winning the understanding of all communities, and that is something we always try to do.
Nick Thomas-Symonds (Torfaen) (Lab)
May I begin by joining the Home Secretary in his tribute to the late Paul Flynn? Paul was the first person to show me around the House of Commons, and he was an inspiration to me and many others in terms of entering politics. My thoughts today are with his wife, Sam, and all his family and friends.
The public have a right to protection from anyone thought to pose a threat to this country, and paramount for any Government is the security of their citizens. Will the Secretary of State confirm, first, that UK citizens are entitled to return to this country under international law, but that they should be held to account on their return for their actions?
Under international law, as the Home Secretary said, the Government cannot make people stateless, but they can sensibly take a number of practical steps to safeguard people in line with our respect for the rule of law. The designated areas offence introduced by the Counter-Terrorism and Border Security Act has received Royal Assent in recent days. The Opposition worked with the Government on developing that mechanism, which provides the legal framework to deal with the issue of returning so-called foreign fighters. However, the Government now need to designate areas to ensure that those returning face justice and due process. Is the Home Secretary considering designating parts of Syria in line with that legislation?
Recently, attention has focused on those who have travelled to Syria to join the so-called caliphate. Given that people may start to return to the UK and will face legal proceedings, I will not comment further on individual cases. However, will the Home Secretary confirm that anyone returning to this country as a UK citizen should expect to face justice for their actions, in a legal process in which our police, our prosecutors and our courts will take into account the individual circumstances of each case?
Sajid Javid
I welcome the questions from the hon. Gentleman. First, he asked whether UK citizens are entitled to return. So long as they are still UK citizens, they will have a right to return, but even in that case it is possible to place certain restrictions on them. In response to my hon. Friend the Member for Hendon, I mentioned temporary exclusion orders, which I have used on a number of occasions to put in place a number of restrictions by removing the passport but issuing different types of travel documents that control entry.
The hon. Gentleman mentioned the Counter-Terrorism and Border Security Act and the measures in it to combat terrorism—especially the designated areas offence. I welcome the support of the whole House for the Act and particularly for that offence. He asked whether we are looking at designated areas, and of course we are. In anticipation of the Bill becoming an Act, we had already commenced some work on that. It would not be appropriate at this point for me to say which areas we looked at specifically—for an area to be designated, it has to come before the House and it has to be the will of the House to designate that area, and I do not want to prejudge that—but it is worth pointing out that it will not be retrospective, and the House should keep that in mind.
The hon. Gentleman talked of “if and when” people start to return. As I said a few moments ago, over the last few years several people have returned, and in all such cases I can assure him that we always seek first to try to control entry and question the individual. We investigate the individual, working with the police and the security services, and where appropriate we prosecute. That has always been the case and that will not change.
If we deem someone to be a serious threat to this country and it is in the public interest to prevent them from re-entering the UK and we can do so by legal means by depriving them of citizenship, or preventing entry in the case of a non-British national, we would always look to do that.
Sir Michael Fallon (Sevenoaks) (Con)
With regard to those terrorist fighters suspected of the most barbaric crimes, does my right hon. Friend agree that if we are to avoid British or other nationals ending up in a new Guantanamo, we may need a new international agreement about how such cases are to be handled, and perhaps even an international terrorist court to make sure that they are properly prosecuted?
Sajid Javid
My right hon. Friend speaks with experience of fighting terrorism and he is right. The issue of foreign fighters is faced by several countries, including our European allies, our American allies and others. We are working closely with them to see what more we can do to ensure that in every case justice is done and, where possible, is done in the region.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I echo the comments that have been made about the sad death of Paul Flynn: he was a one-off and will be missed by all of us.
The SNP share the concerns of everybody else in the House and the country about the terrorist threat from Daesh and other extremist ideologies. Nevertheless, the UK still has a responsibility to UK citizens who left to join Daesh and, as the Home Secretary said, the UK is obligated under international law to allow re-entry to UK citizens without claim to another nationality. Shamima Begum, whatever her degree of culpability, was a child when she left the UK and is thought to have been a victim of a grooming campaign, like many other UK children at the time. She is a vulnerable young woman with a newborn child, and the Government should follow international law and allow her to return to face the consequences of her actions.
By showing our commitment to the rule of law, we demonstrate the strength of the democratic system and help to prevent others from being radicalised. Can the Home Secretary confirm whether Shamima Begum was a target of Daesh grooming and whether he has information on the number of UK children targeted by Daesh? I have a particular interest in the issue after meeting Safaa Boular on a visit to Medway secure training centre: what steps is the Home Secretary taking to ensure that a similar wide-scale Daesh grooming campaign could not happen today or in the future?
Sajid Javid
The hon. Gentleman has asked me about a particular individual and it would not be appropriate for me to be drawn into that.
On a more general note, if individuals have left Britain to join Daesh or other terrorist organisations in that region, we can understand why they are considered a threat to individuals and to our values in this country, and to our allies across the world. Those individuals have made that decision, and the Government’s first priority is to protect this country and do whatever is necessary. If those individuals have more than one nationality—again, I will not be drawn on a particular individual—we have the ability where appropriate to strip them of their British nationality. I have done that on several occasions and will continue to do so where I deem it appropriate. If that is not possible, we have other ways to manage the risk.
The hon. Gentleman asked specifically about the grooming of young people by extremists and terrorist organisations, which sadly we have seen in this country and elsewhere. The Government are working with other public bodies to try to stop that, for example through the Prevent programme, which has been very successful to date. It is about safeguarding vulnerable young people who are susceptible to extremists.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
This is a controversial area for our constituents, but surely the Home Secretary has got the balance right in what he has said today. It is important that these people are not left stateless in ungoverned spaces, floating around or consorting with those of ill intention. We have in this country courts and judicial structures, the rule of law and the security institutions of the state. Will he confirm that we have to take responsibility for dealing with these people, and that we cannot just close our eyes and pull up the drawbridge?
Sajid Javid
I thank my right hon. Friend for making that point. Of course it is very important that we take responsibility for doing what we can to reduce the risk to Britain and our people, but we also work with our allies to reduce the risk to them, for example through our deradicalisation programmes, and indeed through the work done internationally by the Foreign Office and the Department for International Development to help stabilise those regions.
Kevin Brennan (Cardiff West) (Lab)
Not all UK nationals trying to return from warzones in the middle east have been consorting with terrorists; some are trapped there through no fault of their own. Will the Home Secretary work with his Foreign Office colleagues to make sure that people like my constituent, who is being held by Houthis in Sanàa and is a UK national, can get back to Britain as easily as possible, even though they do not have documents?
Sajid Javid
Obviously, each case is dealt with on a case-by-case basis and we must consider the individual issues raised. It is important to note that, as we have heard with other cases raised in the House, the travel advice for all British citizens is not to travel to Yemen or Syria. It is important that people realise just how dangerous those areas are. Even if they have some benign intent, they should really think twice about going into a danger zone. But if someone is not connected to terrorism or is not deemed a danger in any way, we should absolutely look at what options are available for offering assistance.
Dr Julian Lewis (New Forest East) (Con)
Although the law on treason is antiquated, the act of treason most certainly is not. From what the Secretary of State has been saying, it is quite obvious that there will be many people coming back for whom it will not be possible to establish by normal standards in a court of law that they committed crimes while volunteering and spending time in the so-called caliphate. I draw his attention to the recommendation by Professor Richard Ekins of Oxford University, published yesterday in The Sunday Telegraph, that Parliament should
“restore the law of treason, specifying that it is treason to support a group that one knows intends to attack the UK or is fighting UK forces.”
Will he seriously address that point?
Sajid Javid
My right hon. Friend makes a very good point. This is a complex situation and we should always be looking to see what tools we have at our disposal to ensure that those who are guilty of terrorism, or of supporting terrorist groups, are brought to justice. That means ensuring that we have the right laws in place. I referred earlier to the Counter-Terrorism and Border Security Act, which received Royal Assent only last week, which gives the courts more powers. There are already powers in existence, including those covering extra-territorial jurisdictions. He made another important point about something else we could look at. I have read that article and heard what Professor Ekins has said in the past, and I think that it is worth considering it carefully.
Sir Edward Davey (Kingston and Surbiton) (LD)
May I pay my party’s respects to the late Paul Flynn, whose contribution to this House and to British politics will be sorely missed?
Does the Home Secretary agree that our country’s long-term security is best served by understanding precisely why a young British girl would go to Syria in the first place? Is it not therefore better for UK security to interrogate and investigate this British citizen in the UK, rather than waste this opportunity to learn incredibly valuable lessons?
Sajid Javid
Again, I cannot speak about a particular case or an individual, but I do not agree with the right hon. Gentleman that it is better in every case to talk to someone who has left to join a terrorist group to try to find out why; I do not think that that is the case. The driving factor on every occasion should be what is best for the security and the national interest of this country. He is right to point to the issue of why so many people—as I said, it is approximately 900 over a number of years, and many of them are British—have been drawn to leave these shores to go and join such a vile terrorist organisation. We at the Home Office and our partners in the police, the security services and others take that work very seriously. When we start to understand more why that happened, we must use those lessons to safeguard more people, especially young people.
Several hon. Members rose—
Mr Speaker
It is time we heard from a Berkshire knight—I call Sir John Redwood.
John Redwood (Wokingham) (Con)
How will the UK authorities go about finding the evidence concerning those UK citizens who went abroad to join a terrorist organisation and to fight or intervene in acts of brutality or support those who did?
Sajid Javid
My right hon. Friend highlights an important issue. Members will understand why it is very difficult to gather evidence when someone has gone to a completely ungoverned space where we have no consular presence and no diplomatic relations of any type, and nor do our allies.
That said, we put a huge amount of effort—I take this opportunity to commend our security services, the police and some of our international partners—into gathering battlefield evidence and having that ready to use whenever appropriate. If we can supply that evidence in some cases to our partners for cases that they wish to bring in front of their courts, we will try to work constructively with them. The UN has also been looking at this. New measures are being considered on battlefield evidence conventions, and Britain, through the Ministry of Defence, is making an incredibly important contribution to that.
Thangam Debbonaire (Bristol West) (Lab)
I completely understand that the Home Secretary wants people who have gone abroad to commit terrible crimes to face the full force of the law, but if they are British citizens, they have the right to be brought back here. So too do their offspring. What steps is he taking to recover, safeguard and protect the newborn baby, who I believe may be a British citizen, now languishing in a refugee camp?
Sajid Javid
I am sure the hon. Lady will understand that I cannot get drawn into a particular case, but I will respond to her general point. As a father, I think that any parent would have sympathy for a completely innocent child who is born into a battle zone or even taken there by their parents. But ultimately, we must remember that it is their parents who have decided to take that risk with their child; it is not something that Britain or the British Government have done. They have deliberately taken their child into a warzone where there is no British consular protection, and there is FCO advice that no one should go there.
Furthermore, if that person is involved with a terrorist organisation, they have gone to either directly or indirectly kill other people’s children, and we should keep that in mind. Lastly, if we were to do more to try to rescue these children, we have to think about what risk that places on future children in the United Kingdom and the risk that they may be taken out to warzones by their parents.
Crispin Blunt (Reigate) (Con)
The armed forces of the Democratic Federation of Northern Syria have done most of the fighting and dying, as our allies, in liberating parts of their territory from ISIS. They now have custody of many foreign fighters, including British citizens who found themselves in those ISIS areas. What is our obligation to the Democratic Federation of Northern Syria?
Sajid Javid
We work closely with our allies in the coalition forces in northern Syria, and both through the Ministry of Defence and other means, wherever appropriate and sensible, we provide support. There is limited information exchange on detainees, but where we are supplied with information, we would of course look at that and try to use it to bring about justice and make sure justice is done. Our priority will always be to see whether justice can be done in the region.
Jim Shannon (Strangford) (DUP)
I thank the Home Secretary for his strong stance and leadership. I have been contacted by a large volume of constituents on this matter—probably because I am a tender-hearted person, I believe. I usually believe that if people have made a mistake and are repentant, we should be forgiving. However, in this case there is no repentance and certainly no apology, and someone who is “unfazed” at decapitated heads in a bin shows no remorse whatever. This is not a mistake; it is a matter of national security. She married a Dutch national, and if we strip her of her citizenship, she will have weight for her and her child in that nation and will therefore not be left stateless. Will the Secretary of State outline his opinion on this case?
Sajid Javid
I hope that the hon. Gentleman will forgive me, but I cannot speak about an individual case—it would not be appropriate for me to do so at the Dispatch Box—although I do understand the points that he has made. As I said earlier, many people, including of course the hon. Gentleman, will have heard the comments of Ms Shamima Begum and they will be drawing their own conclusions.
Sir William Cash (Stone) (Con)
On 1 September 2014, I raised the question of returning jihadists with the then Prime Minister—after the murder of Lee Rigby and before the murder of many other people in Manchester, Westminster and elsewhere. I did say that I thought this was not something that might happen, but would happen. I mentioned article 8(3) of the 1961 United Nations convention on statelessness, which does provide the tools to which my right hon. Friend has referred, if the Government are prepared to take them up. It says that a person may be rendered stateless if he has acted
“inconsistently with his duty of loyalty”,
behaved in a way
“prejudicial to the vital interests of the State”,
or declared
“allegiance to another State”
and shown evidence of repudiation of allegiance. Will my right hon. Friend be good enough to look at that again? I have raised it several times, including with the present Prime Minister when she was the Home Secretary. Will he take another look at this because I do think the situation is now becoming more than critical?
Sajid Javid
My hon. Friend, as we have heard, has long taken an interest in these issues and has contributed greatly in so many ways in trying to fight terrorism. He has raised another important point. In the past, our lawyers have looked at these issues, but he has asked me whether I would be willing to look again. I will certainly do that, and I will write to him.
Anneliese Dodds (Oxford East) (Lab/Co-op)
When will this Government stop maintaining that they cannot liaise with British citizens until they leave Syria? They know that there are many British citizens, including one of my constituents, who cannot leave Syria because their jailers will not release them unless it is to the home country of that captive. Ultimately, these individuals should surely be taken back to the UK, where they can face justice in our courts, rather than our Government totally absolving themselves of any responsibility.
Sajid Javid
First, it is worth pointing out again that the Foreign Office’s advice when it comes to Syria, for many years now, has been that it is very dangerous. No British citizen should be travelling to Syria. If a British citizen has ignored that advice, they will know that there is no consular support there and that we have no diplomatic relations with Syria. If the individual concerned is a foreign fighter who went to join a terrorist organisation to kill, rape and cause enormous damage, there is no way that this Government will risk the lives of British personnel—British soldiers, Foreign Office officials or others—to go and rescue such a person. No way.
Sir Desmond Swayne (New Forest West) (Con)
When we cannot prevent their return, what about internment until they have been sufficiently quarantined?
Sajid Javid
My right hon. Friend might be reassured to know that when we cannot prevent someone’s return, we will in all cases seek to question them, investigate them and, where appropriate, prosecute them. Even if they are mono-national, if they are British citizens, we can strip them of their passport, have temporary exclusion orders and manage their return.
John Woodcock (Barrow and Furness) (Ind)
Wonderful tributes have been paid to Paul Flynn, and few things demonstrated his place as a wonderful contrarian so well as the fact that he lent his support to my hon. Friend the Member for Leicester West (Liz Kendall) in the 2015 leadership contest despite the fact that he seemed to disagree with all her major policy points. Amid those tributes, I am sure that the House will want to register its thanks to Sir Charles Farr, the head of the Joint Intelligence Committee, who passed away last week.
The Home Secretary talks about people facing consequences for supporting terror, but he knows that far too many of them do not face consequences. He talks about doing whatever it takes to bring people to justice, so why is he not making the very valuable designated area offence, for which many of us campaigned, retrospective? Does he really think that the law as it stands, under which people can go to Syria, make themselves jihadi brides and offer their support to foreign fighters yet not have their prosecution guaranteed, is strong enough? Surely it is not. What measures will he take?
Sajid Javid
The hon. Gentleman is absolutely right to mention Charles Farr, who has sadly passed away, and to point out the huge contribution that Charles made to the security of this country, both at the Home Office and as the chairman of the JIC. I am pleased that the hon. Gentleman mentioned that, and he was absolutely right to do so.
The hon. Gentleman talks about the laws that are available and the tools for prosecution, and particularly about the new powers in the Counter-Terrorism and Border Security Act 2019. These are far-reaching powers, and we tried to prepare a Bill that had the support of the House while being well balanced and offering due process. As for the designated powers procedures, as I said earlier, we started work on that in anticipation of Royal Assent, which has now happened. We hope to bring an order to the House as soon as possible.
John Howell (Henley) (Con)
In the European Court of Human Rights, the case of K2 v. the United Kingdom was about taking away nationality in the context of terrorism, and that was found to be manifestly ill founded. Why does that not apply here, since the defendant in that case had only one nationality at the time?
Sajid Javid
I am not familiar with the details of that case, and I do not have them to hand, but if my hon. Friend wants to send me more details I will give a more detailed response. As I said earlier, the tools available to us to remove someone’s British nationality—to deprive them of it—can be used only when they have more than one nationality.
Matt Rodda (Reading East) (Lab)
Thames Valley police has lost several hundred officers thanks to Government cuts. Will the Home Secretary tell the House how he thinks such cuts will affect the police’s ability to monitor returnees from Syria?
Sajid Javid
On security, the hon. Gentleman is right to raise the issue of resources for our world-class police, including those in Thames Valley. That is why I am sure that he would welcome the record increase of up to £970 million in England and Wales for the police. It is a shame, given his concern, that he actually voted against that increase.
Richard Drax (South Dorset) (Con)
With the collapse of ISIL we are going to see more cases like this. Could the Home Secretary remind us of how many fighters, whether male or female, have returned to this country already, and how many are being observed by our security services?
Sajid Javid
What my hon. Friend highlights is that this is not a new problem. We understand why it is so prominent right now in the press, but people have been going to join terrorist groups in Syria and Iraq for a number of years. He is right to point out that with the weakness of Daesh at the moment it is possible that more will seek to return. He asks me how many. We only have estimates. There is no accurate information, but as I mentioned earlier we think approximately 40% of the 900 who we estimate left the UK to join those groups have returned. In every case, we seek to manage that. He also asked me how many are under certain measures, such as TPIMs. That is not something that would be appropriate to discuss.
Carol Monaghan (Glasgow North West) (SNP)
The case of Shamima Begum is of course highly emotive and any of us who have read the interview will find it difficult to be sympathetic. However, I have grave concerns that vulnerable young children or vulnerable young people who have been groomed by extremists could be left stateless. Can the Home Secretary assure us that that will not happen? Will he also detail to the House the steps his Department is taking to tackle online grooming by extremists?
Sajid Javid
I can assure the hon. Lady that we would not knowingly make anyone stateless.
Julian Knight (Solihull) (Con)
The sight of decapitated heads lying in a rubbish bin did not faze Ms Begum. Should the British people be fazed if this individual is left to reap what she sows? No taxpayers’ money should be used in any way to repatriate this individual.
Sajid Javid
Again, I hope my hon. Friend understands that it would not be appropriate for me to talk about an individual or an individual case, but he makes a very important and powerful point. In many cases, the people who left Britain knew exactly what they were doing. They were full of hate for our country and hate for our values. They went out there to murder, to rape, to support rape and to commit many violent and vile acts. We can absolutely imagine why hardly anyone among the British public would have any sympathy for them.
Ian C. Lucas (Wrexham) (Lab)
I speak from the Back Bench because of the inimitable Paul Flynn, who in his superb book “How to be an MP” advised that one’s profile is best displayed from the Back Bench.
May I ask the Home Secretary how many returning combatants have been prosecuted and how many are subject to TPIMs?
Sajid Javid
A number of people have returned from the wars in Syria and Iraq. We have been able to gather evidence through questioning and other means, and they have been prosecuted for a number of offences. A number of TPIMs have been issued; I would not want to get into the exact numbers at this point. There are concerns about what might happen if we publish some of those numbers so readily, but I can assure the hon. Gentleman that where we can, we do prosecute and will continue to prosecute individuals.
Vicky Ford (Chelmsford) (Con)
How effective has the Prevent strategy been in dissuading British people, especially young people, from travelling overseas to join organisations such as ISIS in the first place?
Sajid Javid
The Prevent programme is working; it has been successful. Since 2015, some 780 vulnerable people have been successfully supported away from terrorism. It is worth pointing out that the programme is voluntary and confidential. Over 180 grassroots projects support the Prevent strategy. The Channel programme, which is part of the Prevent process, supports those projects. If it is helpful, I should say that in 2017-18 over 7,000 people were referred. Of those, just under 400 received support from the Channel programme. If I may, Mr Speaker, it is also worth pointing out that, in the last year for which we have full information, about a quarter of referrals were for far right extremism.
Kevin Foster (Torbay) (Con)
Like the Home Secretary, I have little sympathy for those who headed out to the middle east—to Syria and Iraq—to support a form of medieval barbarism that sought to enslave an entire people and that committed genocide while they were there as well. Does he agree that the important point now is to ensure that those who have survived this murderous campaign are brought to justice either here or in an international tribunal?
Sajid Javid
I very much agree with my hon. Friend. The overriding aim with all these individuals, whether they are from Britain or have left countries that are our allies, is to work together to make sure that justice is done in every case. As I said earlier, we will seek to work with our allies to make sure, first of all, that justice can be done in the region, but if that cannot be done, we will look to work with our allies on other means.
Robert Halfon (Harlow) (Con)
Is it the case that the lawyer of the individual concerned has described British law as akin to that of the Nazis? If that is how it was described, will my right hon. Friend condemn that because we are a proud country with our traditions of democracy and the rule of law, and particularly given that ISIS itself was a Nazi, medievalist death cult?
Sajid Javid
My right hon. Friend is absolutely right to raise that point. There are reports today that one of the lawyers who is representing one of the foreign fighters described British law as akin to Nazism. If that is true, these are absolutely outrageous comments. They will be found to be deeply offensive, for example, by holocaust survivors and their families here in Britain and elsewhere, and if this lawyer has an ounce of dignity, they should consider apologising for these wholly insensitive remarks.
Sir Edward Leigh (Gainsborough) (Con)
We would not want to fall foul of the European Court of Human Rights, would we? However, as a member of the Council of Europe, I refer the Home Secretary to recent judgments of the Council and the Court that one cannot deprive somebody of citizenship in an arbitrary way. Without asking him to comment on any individual cases, surely as a matter of law, it would not be arbitrary to strip someone of a passport if they willingly go out to join the jurisdiction of a terrorist organisation that has beheaded people, and all the rest, so I urge the Home Secretary to be robust on this matter. He will have the support not only of the whole country, but even of human rights lawyers.
Sajid Javid
My right hon. Friend has raised an important issue, within which there are two separate issues. One is removing someone’s British passport, which is not necessarily the same as removing their citizenship. It is possible—I have done this on a number of occasions, as have my predecessors—to remove someone’s passport using the royal prerogative if that is deemed in the public interest. Separate to that but related, is, under some circumstances, depriving someone of their British citizenship—I mentioned this earlier at the Dispatch Box. In all cases, none of that can be done—of course it cannot—in an arbitrary way. There is a due process to be followed, but if either of those things are necessary to protect the public, that is exactly what I would do.
Tim Loughton (East Worthing and Shoreham) (Con)
I am sure that it is the view of most people—it is certainly the view of the majority of my constituents who have written to me—that when someone has made their bed, they lie in it, but clearly the course of law must prevail here. My concern is with the children. Since 2013, more than 150 cases of children subject to threats of radicalisation have been heard in the family courts. That figure will rise and our courts are little provisioned to deal with them. What conversations is the Secretary of State having with the family courts and children’s services to make sure that suitable and timely interventions are being, and can be, made with similar such children in future?
Sajid Javid
My hon. Friend rightly highlights the work we do with partners across Government and public agencies through the Prevent programme. That work is all about safeguarding—in many cases, young people and children of all ages—and working with authorities, including social services, local councils, schools and others, to safeguard those children. In terms of deradicalisation, it is one of the most important things we do, and we take it very seriously, which is why I welcome the commitment we made earlier this year to undertake an independent review of the programme to see how we can improve it even further.
Kevin Hollinrake (Thirsk and Malton) (Con)
Will my right hon. Friend confirm that those found guilty of the sort of sick atrocities he described will face a whole-life sentence?
Sajid Javid
My hon. Friend will know that when someone is charged, ultimately it is for the court and judge to decide any eventual punishment, but he can be assured that we want to ensure that justice is done in every single case, either in the region, by helping our allies or in some other way. Justice will be key in every case.
Henry Smith (Crawley) (Con)
Will the Home Secretary confirm that the safety of no British officials, civilians or military, will be put at risk in an attempt to extract those suspected of supporting terrorism in countries across the middle east?
Sajid Javid
I am very happy to confirm that to my hon. Friend. As I mentioned earlier, anyone who has gone to Syria in recent years will have known the huge risk they were taking, and we certainly will not risk the lives of any British officials or soldiers, or anyone else, to help or rescue those who went to support terrorism.
Andrew Bridgen (North West Leicestershire) (Con)
What powers and resources does my right hon. Friend have to ensure that any British citizen returning from the so-called caliphate in whose case the burden of proof does not permit a criminal prosecution will face mandatory and robust deradicalisation programmes?
Sajid Javid
As I have mentioned, this is not a new challenge—we estimate that one way or another more than 300 people have returned in the last few years. When someone manages to return, we first make sure, in the interest of justice, that they are questioned, investigated and, where appropriate, properly prosecuted. Where youngsters, in particular, are involved, however, we also make sure they get deradicalisation help through specific programmes; in some cases, through mental health support; and through support in other ways too. In each case, we will work with partners to create a bespoke programme for that individual and do all we can.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Hon. Friends have mentioned the possibility of withdrawing passports. If a minor has been counselled by Prevent or any other authority in this country and is still intent on going to ISIS or some similar organisation, is there not a strong case for withdrawing their passport for their own safety?
Sajid Javid
My hon. Friend is absolutely right. Generally in the circumstances he describes, if further action is needed, such as the withdrawal of the passport—other measures are available—we would not hesitate to take it.
Mr Philip Hollobone (Kettering) (Con)
Nine hundred British nationals have gone to support Daesh in Syria and Iraq; just 40 have been prosecuted. This simply is not good enough. Daesh may have been defeated in theatre, but Daesh and its sympathisers are in effect tying us up in knots in our own courts, and these people are getting away with it. The Home Secretary has admitted that 360 of these individuals are still at large and likely to return to this country. My constituents do not feel safe with the Government’s response to this threat. I urge him urgently to revisit the legal advice he has been given in several areas, because we need to do better, don’t we?
Sajid Javid
My hon. Friend is right. We do need to do more to ensure that we have more tools to prosecute people who have helped or supported terrorist organisations, whether they have actually gone to Syria—some examples have been mentioned today—or whether they are in our own country, helping those organisations in other ways. Since I became Home Secretary, I have been determined to provide more of those tools. I was pleased that my hon. Friend, and indeed the whole House, supported the Bill that became the Counter-Terrorism and Border Security Act 2019, which will give us far more tools that can be used for law enforcement. We have increased sentences in many instances. The Act will also enable us to step up the work that we have been doing with our allies across the world to gather more battlefield evidence, because evidence is also crucial, especially if we are seeking higher sentences.
My hon. Friend is right to issue that challenge and to say we need to do more, and I agree with him.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I, and the constituents who have contacted me, find it hard to understand how someone who has joined an organisation whose aims are to destroy the values that we hold dear can then cite those same values in an attempt to justify being repatriated to the United Kingdom. May I therefore urge the Home Secretary to stand firm and use all possible legal means to keep these people out of our country?
Sajid Javid
I will not talk about a particular case, but I absolutely understand the sentiments that my hon. Friend has expressed, and I think that they are the sentiments of the vast majority of the constituents whom we are all here to represent. We must indeed use all the legal means that we have to ensure that those who have supported terror groups, either at home or abroad, are always punished for that, and are brought to justice.
James Cartlidge (South Suffolk) (Con)
May I pursue the question from my right hon. Friend the Member for Harlow (Robert Halfon), and mention another—I would argue—ill-judged comment? In an attempt to build sympathy, the lawyer representing Miss Begum has also compared her to a first world war veteran suffering from shell-shock. Does my right hon. Friend agree that that is deeply insulting to many thousands of former servicemen and their families? Those servicemen suffered deep trauma fighting for this country and defending democracy, rather than joining a terrorist group that was out to destroy it
Sajid Javid
That is another of the points that Members have made today about a particular case. Again, the solicitor should be very careful about the remarks that are made, and reflect very deeply on them. My hon. Friend has raised a good example of why that is so important.
Flybmi
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andy McDonald (Middlesbrough) (Lab)(Urgent Question)
To ask the Secretary of State for Transport to make a statement on airline Flybmi going into administration.
The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)
On 16 February British Midland Regional Limited, the east midlands-based airline which operates as Flybmi, announced that it had ceased operations from that date and filed for administration. The group has surrendered its licence to operate in the United Kingdom, which means that it is no longer able to operate flights.
There has already been significant speculation about the reasons behind Flybmi’s failure. Ultimately, this was a commercial matter for the airline. Flybmi operated in a very competitive industry and was exposed to wider pressures faced by the global aviation industry, such as increasing fuel prices. It is very disappointing that it has gone into administration, and we know that this will be a very difficult time for those who have lost their jobs as a result. Many of those affected are highly skilled. We are confident that they will find suitable employment opportunities, and we welcome the moves by the sector to offer such opportunities.
The Insolvency Service’s redundancy payments service is working with the administrators of Flybmi to ensure that former employees’ claims from the national insurance fund, which may include redundancy pay, holiday pay, arrears of pay and compensatory notice pay, are assessed as quickly as possible. However, given that the sector is ready to recruit, I hope that new jobs will be found soon.
I also recognise that this is a disruptive and distressing time for passengers, and the Government’s immediate priority is fully focused on supporting those affected. We are in active contact with airports, airlines and other transport providers to ensure that everything possible is being done to help them. We and the Civil Aviation Authority are working closely with the travel industry to ensure that the situation is managed with minimal impact to passengers.
There are enough spaces on other flights for passengers to return home on other airlines, and we welcome the sector’s move to offer rescue fares for affected passengers. For example, Flybmi has codeshares across the Lufthansa group and passengers on these flights will be subject to the EU passenger protection rules. They will be provided with assistance and rerouted to their final destination. Travel insurance and credit card bookings are worth noting here, and most passengers were business travellers so will be covered through their work. In addition, the Civil Aviation Authority is providing detailed information for affected passengers on its website, including how people can claim back money they have spent on tickets.
The Government recognise the importance of maintaining regional connectivity, which is why we fund a public service obligation route from Derry/Londonderry to London, which was recently extended from 1 April 2019 for a further two years, the norm for PSOs. The chief executive of Derry council has the power to transfer the PSO contract to another airline for up to seven months to allow for a new procurement process to be conducted. Subject to due diligence we expect the council to sign contracts and appoint an airline later this week, and we expect services to resume swiftly. Derry City and Strabane Council takes forward that part; it is its responsibility.
All affected regional airports have been contacted, and while they are disappointed, we are confident that this will not cause them significant issues. A number of airlines have already indicated that they will step in to replace routes previously served by Flybmi. For example, Loganair has publicly announced that it will cover routes from Aberdeen, Bristol and Newcastle. Our priority is to protect employees, passengers and local economies. We are fully focused on supporting those affected and remain in close contact with the industry and the CAA to ensure that everything possible is done to assist.
Andy McDonald
It will not have escaped anybody’s attention that the Transport Secretary is sitting on the Treasury Bench yet has not come to this House to make a statement. He seeks to hide behind his Minister; she has been dropped in it. Perhaps he has been dealing with the bombshell dropped by Honda this morning.
Eighteen months ago Monarch Airlines left taxpayers with a bill for more than £60 million. Clearly the Government have failed to learn the lessons from that disaster. In fact, the Transport Secretary has dithered and delayed for nearly a year, allowing Loganair to cherry-pick the profitable parts of Flybmi before putting it into administration. The Government have clearly done nothing to stop a repeat of Greybull’s asset-stripping of Monarch.
Flybmi has been in difficulty for some time, so what plans did the Department for Transport have for an airline’s collapse? Have not the Government left both Flybmi’s passengers and staff high and dry? Why was the airline allowed to sell tickets only hours before administration? Why are the Government not helping people get home this time?
On Thursday last week, the Government agreed to extend the subsidy for Flybmi’s London to Derry route. Was the DfT aware that the airline was about to collapse when it agreed this commitment of public money? What checks did Ministers do on the airline prior to agreeing this? The Government’s aviation Green Paper boasts of growth and connectivity; in reality, Flybmi is the second UK airline to fail within months, while the UK’s direct connectivity has declined.
The Government’s complacency is staggering. Flybmi has said that
“the challenges, particularly those created by Brexit, have proven to be insurmountable”,
and:
“Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around Flybmi’s ability to continue flying between destinations in Europe.”
So when will this Government wake up to the undeniable truth that their shambolic handling of Brexit is leading our country into an economic disaster?
Ms Ghani
I have never been a woman who has been “dropped in it”; it is my job and I am disappointed that the shadow Transport Secretary wanted to see a he and not a she at the Dispatch Box, but hopefully I can respond to his questions in the best way I can. I am also a little disappointed that the shadow Front-Bench team are all in their seats today considering the bold decisions their colleagues have taken to leave the Labour party because of a number of issues, including leadership and institutionalised antisemitism. We are talking about disappointment, but we should focus on the passengers.
We were made aware of Flybmi going into administration at the weekend. A number of conversations have been taking place. The Aviation Minister has spoken to the Cabinet Secretary responsible for transport in Scotland.
The Secretary of State has spoken to the Northern Ireland Secretary and to the local MP, the hon. Member for East Londonderry (Mr Campbell). Information is being made available on the Civil Aviation Authority website to alert passengers about how they can get home. We must focus on the passengers who may be struggling to get home, but there are lots of alternative flights and that information is being made available. More than 300 staff have been impacted, but it is interesting to note that Loganair and Ryanair are making jobs available and recruiting heavily. The British Airline Pilots Association is also exploring options for pilots with partner airlines.
The hon. Gentleman noted the business case for Flybmi. It was possible to recognise, looking at its accounts, that it had been struggling for a while, including before Brexit and before the referendum. It is not an easy market for airlines to be in, especially regional and local airlines. He mentioned Brexit as a reason for Flybmi going into administration, but it is important to note that several other smaller airlines in Europe have also gone into administration, including Germania, VLM, Cobalt and Primera, and there are lots of different reasons why this takes place. We cannot always blame Brexit when we do not understand the business case.
The hon. Gentleman mentioned the public service obligation and wanted to put the blame at the door of the Department for Transport. In case I did not make myself clear in my opening statement, Derry and Strabane Council is responsible for maintaining and managing the contract. We of course support the route via the public service obligation because it is a lifeline route. I know that that reply must come as a disappointment to him, but that is where the responsibility lies. Derry and Strabane Council has made it clear to the press and to us that it is very positive that an alternative airline will be in place soon enough. It is important to note that the aviation sector in the UK is thriving and that passenger numbers have gone up by almost 60% compared with the numbers in 2000, but it is a very tricky sector to be in, especially for the small regional players in this very large market. I hope that those responses will not be too disappointing for the hon. Gentleman.
John Redwood (Wokingham) (Con)
Is there any known interest from other aviation companies or entrepreneurs in buying assets and taking over the staff in greater numbers, rather than in just cherry-picking the routes?
Ms Ghani
My right hon. Friend makes an important point. The staff are all highly skilled and very professional, and it is important to note that Loganair has already made it clear that it is keen to recruit. I also believe that Ryanair has set up a stall in some of the regional airports to try to bring some of those professional staff on board. We are very positive that they will be able to secure jobs, although this must be a very distressing time for them, as it must be for the passengers. A number of airlines are showing interest in the routes, and Derry Council has made it clear to us that it has some interested parties lined up to take on the route from Derry airport. It will make that information public as soon as it can.
Kirsty Blackman (Aberdeen North) (SNP)
Our thoughts at this time are with the staff, whose future is uncertain, and with those who have had their travel plans thrown into disarray, who are out of pocket or who are stranded as a result of the collapse of Flybmi. I am pleased that Loganair has announced that it is stepping in to cover the routes from Aberdeen to Bristol, Oslo and Esbjerg from 4 March. At a time when Aberdeen is feeling the impact of the loss of easyJet flights, the news of Flybmi going into administration is deeply worrying, particularly because it explicitly mentioned Brexit uncertainty as one of the reasons for this happening. Recent studies have shown that Aberdeen is set to be the UK city that will be the hardest hit by Brexit. It would be helpful if the Minister told us what the Government are doing to protect slots at Aberdeen and other regional airports after Brexit and what they are doing to ensure that airlines are encouraged to use those slots and that our regional airports have access not only to hub airports but to destinations.
Ms Ghani
The hon. Lady makes some important points, focusing on passengers and ensuring that they can continue their journeys and on the staff involved. One of Flybmi’s issues was that its flights were not always full, but the number of people who could have been impacted has been reduced as result. However, everyone whose journey home or to work has become difficult must be taken care of, and I ask them to pay attention to the CAA website for further information. Flybmi’s business model was just no longer working in a competitive market. Its public accounts show that it was in trouble before the referendum, so putting the blame on Brexit really does not wash. The hon. Lady makes a powerful point about Aberdeen, and we will do what we can to ensure that we support all our regional airports.
Andrew Bridgen (North West Leicestershire) (Con)
While the failure of Flybmi’s business model and the loss of 100 jobs in my constituency is a setback causing obvious distress for employees and disruption for passengers, it comes at a time of considerable growth and development in and around East Midlands airport, with over 7,000 new jobs being created over the next two years. Will the Government do all they can to ensure that Flybmi’s highly skilled employees are returned to employment as soon as possible, just as they did in 2012 when Flybmi’s parent company, British Midland, ceased trading with the loss of 1,100 jobs in my constituency?
Ms Ghani
My hon. Friend is a powerful advocate for his constituency and makes some valid points, particularly about the loss of skilled jobs. We were only made aware that Flybmi was going into administration over the weekend, and it is interesting to note the number of other airlines that have nipped in to see who they can recruit. I am confident that jobs will be found. My hon. Friend refers to passengers. The UK has a healthy aviation sector, and we must not dwell on undermining it. We had 284 million terminal passengers in 2017—an increase of 6% on 2016—so the market is healthy.
Paula Sherriff (Dewsbury) (Lab)
The Government have been consulting on arrangements for airline insolvencies for almost a year, so will the Minister explain how yet another UK airline can fail without the Government taking any action? Can I press the Minister to explain why the airline continued to sell tickets just hours before going into administration?
Ms Ghani
An independent review of airline insolvency by Peter Bucks is due to report, and it will make clear what happens to airlines when difficult decisions are made. There is an interesting point to note about how airlines can continue to sell tickets when they are struggling, which is one of the peculiar things that happens in the sector. If an airline were to stop selling tickets, that would make it clear that it was about to go into administration, so airlines do keep selling tickets quite close to the point at which they are about to go into administration. The Peter Bucks review will no doubt examine that point.
Dr Andrew Murrison (South West Wiltshire) (Con)
I welcome the Minister’s restated commitment to the PSO in relation to Derry and Stansted. Given this latest news, what further assessment is necessary of the long-term viability of Derry airport and of the welcome improvements to the A6 between Londonderry and Dungiven, which will increase connectivity to Belfast International airport? What further support does the Minister anticipate in the light of the Derry City and Strabane regional city deal?
Ms Ghani
It is good that my hon. Friend notes the importance of Derry City and Strabane District Council’s role in procuring and maintaining the contract, and it is interesting to note the council’s positivity about other airlines taking on the route. I noted over the weekend that Ryanair was offering flights for less than £10 for those who wished to travel from Belfast, although that means making another journey. We are obviously committed to supporting our regional airports, to holding the CAA to account so that it monitors what airlines are doing when they are struggling and to examining what we can do to help passengers to continue their journeys across the UK.
Mr Clive Betts (Sheffield South East) (Lab)
It is quite frankly astonishing that the Minister did not mention Brexit in her initial comments, because the company certainly did. Flybmi said that uncertainty around Brexit and the possible costs of needing both UK and EU licences in the event of a no-deal Brexit were factors in its decision to go out of business. Will the Minister now make it clear whether all airlines should be planning for a no-deal scenario and looking at how to get dual licences?
Ms Ghani
The EU has been very clear that the UK aviation industry can continue as it is. We have been having good conversations with the EU on this, and we have tabled a number of statutory instruments and regulations to make sure we can continue flying. I just do not buy the argument that planes will not fly.
Colin Clark (Gordon) (Con)
As the Minister mentioned, Loganair has picked up many of the routes from Aberdeen International and is owned by the same holding company as Flybmi, Airline Investments. Will she join me in encouraging Airline Investments to give regional flights priority at this time? Will she reaffirm her commitment to regional airports? And will she make sure the slots are not reassigned to other routes, so keeping these vital regional routes open?
Tom Brake (Carshalton and Wallington) (LD)
This is clearly very bad news for staff and passengers. I know the Minister does not like mentioning the B-word—Brexit—but the fact is that Flybmi has said that Brexit uncertainty was a factor. Not the total reason but a factor, as it was for Jaguar Land Rover, Ford and, as we will no doubt find out shortly, Honda. Is it not time for the Prime Minister to do two things: one, rule out no deal; and, two, establish a Brexit redundancy fund to support businesses that have been put out of business as a result of Brexit?
Kirstene Hair (Angus) (Con)
It is welcome news that Loganair is taking on some of Flybmi’s routes, but my constituents want assurances on their new nearest airport in Dundee. We do not want to see the airport taking on other routes and losing the vital routes from Dundee down to London.
Ian C. Lucas (Wrexham) (Lab)
Aerospace is one of the most important and successful of our sectors. Although the Minister may be having lots of good conversations with our friends in the European Union, there is no regulatory certainty. Does she think that is a good thing or a bad thing for our aerospace industry?
Mr Speaker
Order. The Minister is answering the question and there is quite a lot of sedentary chuntering on both sides, and no shortage of gesticulation, either. I am sure that Mr Knight will now behave with his usual statesmanlike reserve.
Julian Knight (Solihull) (Con)
Thank you, Mr Speaker. The Minister is clearly deeply concerned about this collapse and the wider issues affecting aviation across Europe. Will she assure the House that she will do everything she can to support our regional airports— Birmingham airport, despite its successes, is running at 35% capacity—because they are so important to our country and our regional economic diversity?
Ms Ghani
My hon. Friend has my assurance, and I would be at fault if I did not mention Birmingham airport, which I grew up very close to and to which we are obviously committed, as he can no doubt tell by our commitment to High Speed 2 stopping at the airport. We are committed to all our regional airports, which is why we have the “Aviation 2050” consultation under way to make sure we do all we can to ensure the sector continues to remain healthy.
Mike Kane (Wythenshawe and Sale East) (Lab)
In the event of a no-deal Brexit, there could be no expansion of airline routes from the UK to the EU. That is what is causing the huge uncertainty for operators in the UK. After two and a half years of negotiation, can the Minister not see the damage being done to the sector?
Ms Ghani
I believe the hon. Gentleman is mistaken, as we are working with the EU to deal with deal and no-deal scenarios: we have published no-deal technical notices; we have tabled a number of statutory instruments, which are progressing well; and the EU has confirmed that it will maintain the connection between the EU and the UK to allow flying to continue. But if he is concerned about a no-deal scenario, he should vote for the Prime Minister’s deal.
John Howell (Henley) (Con)
The collapse of Flybmi is to be very much regretted, but does the Minister accept that connectivity is about more than one airline and that she should continue to establish growth in airlines across the country?
Ms Ghani
Absolutely. Even though the airline sector is a tricky market to be in and it obviously favours larger airlines—for example, it is a little easier for them to buy fuel than it is for smaller airlines—my hon. Friend is right to say that competition is good and we should do what we can to support not only our airports, but our regional airlines.
Jim Shannon (Strangford) (DUP)
My hon. Friend the Member for East Londonderry (Mr Campbell) was in touch with the Minister to seek reassurances about this. Flybmi has said that its decision is predominantly an economic one; it was averaging only 19 people per flight, which is not sustainable for any company or business. The public service obligation air route, the first of its kind in Northern Ireland, has been in place since 2017, and the Minister has referred to it. I am thankful for the assurance that the Government will continue to subsidise the route until 2021. Will she please outline whether provision will be made to expand that commitment for a further two years beyond that to encourage other airlines to take on the contract and the route?
Ms Ghani
The hon. Gentleman makes an important point about the PSO, but it does run for this specific period, up to 2021. He noted that the Secretary of State has spoken to the local MP, the hon. Member for East Londonderry, and made a valuable point about the number of passengers per flight, which would have had an impact on the airline’s business model.
Henry Smith (Crawley) (Con)
Of course Brexit has been blamed for other ills. Will my hon. Friend confirm that in the three years leading up to the Brexit referendum in 2016, Flybmi was losing more than £25 million and that its failure has more to do with fuel costs, European regulation and market forces?
Ms Ghani
My hon. Friend makes a valuable point. If we look at Flybmi’s accounts, we see that they were not healthy for many years, even before the referendum. Smaller airlines across Europe are also struggling, and I mentioned some earlier: VLM in Belgium, Germania, Cobalt and Primera. So this is not a UK thing; it is tricky for small airlines to operate, especially if they are regional, in a global sector.
Kevin Hollinrake (Thirsk and Malton) (Con)
If I was the chief executive of a recently failed business, I would probably blame Brexit, too, but the reality is that Ryanair warned only last month of significant overcapacity in the budget airlines sector. Does my hon. Friend agree that this is far more about competitive markets than it is about Brexit?
Ms Ghani
Absolutely. The reason for Flybmi going into administration is that the business has just reached the end of its road. We have an overcapacity here and the power is with the passengers in the choices they make. Those passengers who are now struggling to get home and in distress must be recognised as well, but that is the market we are in.
Nigel Huddleston (Mid Worcestershire) (Con)
I thank the Minister for her statement and the reassurances she has given those who are directly impacted. Does she agree that the UK aviation industry is actually a success story? We have the third largest aviation sector in the world and we would like that to continue to be the case. Will she therefore assure me that she and her Department are working with the industry to make sure that it is planning effectively for all Brexit scenarios? Perhaps the Opposition would like to help out on this by reducing uncertainty by voting for the deal.
Ms Ghani
My hon. Friend makes a valuable point. People who are nervous about uncertainty need to vote for certainty, which would be the Prime Minister’s deal. We should not undermine the UK aviation sector. It is incredibly healthy, even though there are a number of challenges, especially in respect of how passenger numbers are going up. Interestingly, there is far more capacity than there are passengers, so shopping around for a good deal is important. What has come out of Flybmi going into administration over the weekend is that we should remember to make sure we are securing our tickets in a way that means they are insured, so that we can get compensation or refunds.
Mr Philip Hollobone (Kettering) (Con)
Flybmi’s 50-seater planes carried, on average, only 18 passengers per flight. No airline could carry on on that basis. Although Flybmi’s demise is regrettable and very sad, does the Minister agree that it is important to get it into context? East Midlands airport is a huge success story. It has an expansion programme, and passenger and cargo growth is 8% a year. The airport is located in north-west Leicestershire, which has the fastest economic growth of anywhere outside London and the south-east.
Ms Ghani
My hon. Friend makes a powerful point about his part of the world. He is absolutely right; East Midlands airport is thriving, competitive and nimble when it comes to the changes that passengers require and the kinds of services that they want. Even though it is regrettable that Flybmi went into administration over the weekend, it is important to note that the UK has a very healthy aviation sector.
Points of Order
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jessica Morden (Newport East) (Lab)
On a point of order, Mr Speaker. Following on from your very warm tribute earlier, which I know has been much appreciated, I wonder whether I might be permitted, as a constituency neighbour, to put on record condolences to Paul Flynn’s wife Sam and family following the very sad news of his death yesterday.
Paul was certainly one of a kind, and it is hard to know how to even begin to describe his contribution in this place and in his beloved city of Newport. His representation of Newport West spanned 31 years of unbroken service. He was a ferocious campaigner for many causes, in many of which he was far ahead of his time, and he was a tireless advocate for his constituents. He did so with a wit and a humour that cut through any tendency to pomposity in this place, although it is fair to say that he was not the easiest to whip; I say that having been his Whip.
Paul had a few stints on the Opposition Front Bench, most recently taking through the Wales Bill as the shadow Secretary of State for Wales—a role that delighted him not least because, as he said, octogenarians were under-represented on the Front Bench. His grasp of social media put most of us to shame, particularly his incisive tweets and blogging. However, as you said earlier, Mr Speaker, it was the role of Back Bencher that he loved most.
Above all, Paul was an absolutely passionate Newportonian who took every opportunity to champion our city. I know that this weekend he would have been especially proud of Newport County. Their manager is also a Flynn, which led Paul to declare that Flynns “always deliver for Newport”.
On a personal note, Paul was the most generous of constituency neighbours. He was genuinely the most wonderful company, and he was a huge support to me and others in Newport West, including Welsh Assembly Member Jayne Bryant. I know we will all miss him in this place—in the top corner of the Chamber, looking to catch your eye, Mr Speaker—but I know his legacy will live on through his campaigns, through those he inspired and through his books. We send our love to Sam and family and friends.
Mr Speaker
I must say to the hon. Lady that that was the most gracious and beautifully crafted and delivered tribute to Paul Flynn. I know that it will be warmly appreciated by Sam, by the family, by all his constituents, by people across Wales and by his many admirers in this House and indeed, for that matter, in Parliaments across Europe and around the world, where he was very well known. I cannot help but feel that after he left the Front Bench, he felt deep down that he had been promoted to the Back Bench.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Further to that point of order, Mr Speaker. I would be most grateful if you permitted me to add my own words about Paul Flynn. As Chair of the Public Administration and Constitutional Affairs Committee, I inherited him as a long-standing artefact of the Committee who had contributed to and had a huge knowledge of the Committee’s work over a great many Parliaments. I have to say that he and I contributed to some creative and very productive friction on the Committee. Nevertheless, every member of the Committee had a very high regard for his extraordinary commitment and his sense of principle—the fact that at times he was the conscience of the Committee, on issues such as conflict of interest—and we will greatly miss him from our work. I send my best wishes to his family.
Mr Speaker
That was a parliamentarian’s tribute; I do not think I can speak more highly of what the hon. Gentleman has said than to make that observation. I thank both colleagues.
Kevin Brennan (Cardiff West) (Lab)
Further to that point of order, Mr Speaker. I knew Paul long before he was a Member of Parliament, when he was a county councillor in Gwent in the 1980s. I would just like to add to the wonderful tribute from my hon. Friend the Member for Newport East (Jessica Morden) by saying that all of us fall into different categories as politicians: some are factory farmed, and some are free range, but Paul was the most free range, organic of politicians, and we should all aspire to follow his example.
Sir Oliver Heald (North East Hertfordshire) (Con)
Further to that point of order, Mr Speaker. I just wanted to mention that I served on the Parliamentary Assembly of the Council of Europe with Paul Flynn, and he was highly respected in that body by people from all the countries represented in it—he was a very active member of it. He also teased me in his book, and we used to laugh about that quite a bit. He was a very nice man and a very effective parliamentarian, and I just wanted to put that on the record. Obviously, our thoughts are with his family at this difficult time.
Jim Shannon (Strangford) (DUP)
Further to that point of order, Mr Speaker. I would also like to add to the very warm-hearted comments from the hon. Member for Newport East (Jessica Morden). I first got to know the hon. Member for Newport West when I came to this House in 2010. We had many issues we agreed on. There were also many things we probably did not agree on, but we agreed on one thing, and that was human rights. Whenever there was a debate in Westminster Hall, or a debate or a question on that in this Chamber, he would be there putting forward his viewpoints in support of human rights. I was always very pleased to be alongside him, taking the same stance on those things, which we agreed on. In later years, I wondered about his incapacity, and I said to one of my colleagues in the Chamber one day, “If that man was not in that chair, he would move this House by himself, such is his energy and his strength.”
The hon. Lady referred—you will know what is coming, Mr Speaker—to the Flynn of Newport County beating my team, Leicester City. They won against us at football, and I am sure Paul Flynn enjoyed every bit of that—I am afraid I did not, but that is by the way.
I just wanted to add to all the comments that have been made. I found Paul Flynn interesting and funny and a joy to be beside. I know we did not agree on things sometimes, but I was very pleased and honoured to have him as a friend in this House.
Mr Speaker
I thank the hon. Gentleman for what he said. I spoke to Paul’s widow, Sam, on the telephone this morning. It is perfectly possible that she has listened live to these tributes to Paul. However, in any event, I hope the House will be reassured to know that I shall certainly be sending her a copy of the Official Report with a covering letter. In these very difficult and harrowing times, I hope she will derive some succour from knowledge of the affection and esteem in which Paul was held across the House of Commons.
Defence
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I beg to move,
That the draft Armed Forces Act (Continuation) Order 2019, which was laid before this House on 24 January, be approved.
It is a pleasure to seek the support of this House for the order. In doing so, may I immediately begin by paying tribute to those who have worn the uniform and who wear the uniform, both as reservists and as regulars? I also pay tribute to those who support those in uniform; it is those in the armed forces community that we must also pay respect to, and we should be thankful for the sacrifices they make in supporting those who serve in the Army, the Air Force and the Royal Navy.
In Defence questions, we spoke about the duty of care—something that is critical to making sure we continue living up to the standards we have shown over the years. We have an enormous standard of professionalism in our armed forces, as a deterrent. Our allies revere us and want to work with us, and our foes fear us because of who we are.
Toby Perkins (Chesterfield) (Lab)
I entirely support what the Minister says about our recognition of those who support members of our armed forces; the armed forces community is very important. I know the Minister has that community very much in his heart and has their best interests in his mind, and he will be as concerned as I am that satisfaction with pay and pension benefits is the lowest ever recorded. What is being done in armed forces legislation and in the policies of the Government to try to increase morale and satisfaction among the people the Minister paid such warm tribute to?
Mr Ellwood
I am grateful to the hon. Gentleman for highlighting that important point. I will be honest with the House and say that pay is becoming an issue. It was not before—people signed up because of what lay ahead of them, not because of the money. Today, however, the competition that we have in civilian life is such that when people make the judgment as to whether to step forward or not, pay is becoming an issue. We do not want it to be a deterrent to people joining the armed forces.
We are going through the armed forces pay review process, as we do every year, and I will do my utmost to make sure that we are able to pay our service personnel what they deserve, so that it does not become a reason for people not to step forward. I can say the same about accommodation. The reason I articulate these points is that we are shortly to have the spending review. When we talk about the spending review and the armed forces, the immediate assumption is that we are talking about equipment, training and operations. I do not take away from the fact that they must be invested in, but for my part of the portfolio it is critical that we look after the people, and pay is one aspect of that; accommodation is another. I am not able to build accommodation fast enough because of limits in funding.
As we make the case to the Treasury for further defence spending, I simply say that welfare issues must be considered in addition to the other big-ticket items that are normally discussed. Is the hon. Gentleman content with that answer?
Toby Perkins
It is the first time I have ever been positively encouraged to intervene—it could catch on.
I share the Minister’s views about the wider issues alongside pay. One of the other issues raised with me by members of the armed forces community is the sense of strategic vision on what the Army is for now. I challenged the Minister on this in Defence questions an hour or two ago and he said that there was a strong strategic vision for the Army in 2019. Can he tell us a bit more about what that is, because it is not entirely understood by some people who serve?
Mr Ellwood
I apologise for intervening on the hon. Gentleman while he was in a sedentary position.
I will come to defence posture shortly, so I hope that the hon. Gentleman will bear with me.
Dr Andrew Murrison (South West Wiltshire) (Con)
Before my right hon. Friend gets on to defence posture, can he tell us whether he has taken note of the Army Families Federation’s recent report, which suggests that the future accommodation model is a major cause of concern among Army families, and a disincentive to remain in the armed forces?
Mr Ellwood
I pay tribute to my hon. Friend’s service and the work that he has done in this area. I would not go so far as to say that the new FAM is causing the problems that he suggests. It needs to be rolled out faster. Those who are serving want to be able to get on the housing ladder, for example, and perhaps invest in a property outside the wire. We want to give individuals three options—to stay inside the garrison, which they might want to do when they sign up; to rent a property outside the wire; or to invest in a property, perhaps using the Help to Buy scheme, for example. My hon. Friend is right that it has taken longer than we wanted to roll out the pilot schemes to test the model, and I hope that will happen in the near future.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
My right hon. Friend is right to talk about improving pay, conditions and accommodation. In addition, it is important that we collectively continue to say thank you and appreciate the work that our armed forces do. Will he join me in thanking the Royal Anglian Regiment, which happens to have the freedom of the town of Basildon, and all my constituents who serve in the regiment and across our armed services more widely?
Mr Ellwood
I am more than happy to pay tribute to the Royal Anglian Regiment. I served in the Royal Green Jackets, which was another infantry regiment—it is now the Rifles, I say to my hon. Friend the Member for Aldershot (Leo Docherty), who served in the Scots Guards. The Anglians show the benefit of having a local relationship and recruiting from the community. That is how the Army has developed in strength, with reservist communities and so forth. I am very happy to join my hon. Friend in paying tribute to that regiment.
Sir Oliver Heald (North East Hertfordshire) (Con)
My right hon. Friend will be aware that the Society of Conservative Lawyers recently published a pamphlet on the decision to go into a conflict situation. In its foreword, General Lord Houghton makes the point that it is very important for Army morale that a decision made by the Government can be implemented immediately, that the element of surprise over an enemy can be garnered in that way, and that therefore it should not always be necessary to have a parliamentary vote before committing armed forces. What does my right hon. Friend think?
Mr Ellwood
I agree with my right hon. and learned Friend. I am probably going to get into trouble by saying that—thankfully the Whips are not listening at the moment, so I can get away with much. I absolutely agree. The main example in my lifetime is August 2013, when we invited Parliament to make a judgment on whether to send in troops. One MP—I will not say who it was—did not feel qualified to decide and so invited members of the public to inform them of which way to vote. We should be able to make such a judgment—an Executive judgment—ourselves. Sometimes the delay in making a judgment on whether to step forward allows the adversary to regroup, hide or move on.
Sir Oliver Heald
Does my right hon. Friend also agree that we might want to commit forces for something like a hostage rescue, in which case it would be ridiculous to have to telegraph our plans in advance through Parliament?
Mr Ellwood
I say this out of interest, rather than because it is where I want to go, but the United States has the War Powers Act, which obliges the President to go to Congress to seek to continue any campaign that he or she might implement. I think it is absolutely imperative that we get back to that point. It is almost a matter of opinion; I appreciate that. However, if we are to become less risk-averse, we often need to move very quickly. As I will say shortly, there are ever fewer nations that are ready to stand up and protect our values in a fast-changing world. We are one of them, and we should not be held back by having to go through a parliamentary process.
Leo Docherty (Aldershot) (Con)
I would just like to dispel some of the gloom that has been spread by the Opposition in relation to the morale of our armed forces. I frequently meet members of the armed forces in my constituency of Aldershot, which is the home of the British Army. I meet fine young men and women from 1st Battalion the Scots Guards, 1st Battalion the Grenadier Guards, 4 Rifles and the Queen’s Gurkha Engineers, and their morale is extremely high because they are involved in an array of operational engagements overseas, and soldiers like to be busy. Young people watching this debate should be reassured that there is no better time to join the British Army, because they will be operationally deployed and morale is extremely high.
Mr Ellwood
I am pleased to hear that, and I pay tribute to my hon. Friend for the work he does in his constituency—I have joined him there and am aware of those important contributions. I also speak to the families federations, who ensure that my feet are kept on the ground and that I understand the reality of the challenges. Youngsters joining today expect different standards from those that he and I experienced when we joined—they want single-living accommodation and wireless internet access, for example. They want a different set of standards from those that we appreciated in our time. My hon. Friend makes a very valuable point.
Jim Shannon (Strangford) (DUP)
I thank the Minister for what he has said. We are fortunate to have a Minister who has a heart for his job, understands the job and responds to the issues that Members across the House bring to his attention; he does that extremely well. He mentioned accommodation. I gently remind him of the issue of recruitment and the fact that Northern Ireland was able to recruit a greater percentage than the rest of the United Kingdom, which may be an opportunity. Some of the soldiers joining up tell me that they would like the opportunity to train overseas. I want to ensure that that opportunity will be in the strategy, as well as help for the families.
Mr Ellwood
I pay tribute to those who serve and step forward in Northern Ireland. The hon. Gentleman knows that I have visited his neck of the woods a number of times, and I am very grateful for what they offer. He touches on our important commitment to improve accommodation. We have a £4 billion process of upgrade. That requires tough decisions to relinquish some of the armed forces’ assets that we have accumulated over the last couple of hundred years, but it also means that we can regroup and consolidate into super-garrisons, which are fit for purpose and, I hope, will attract the next generation to serve their country.
Mr Ellwood
I am pleased that we are holding this debate in the Chamber, because I have never had such interest when we discuss these annual updates of support for the armed forces up in Committee Room 14.
Kevin Foster
I thank the Minister for giving way, and it is welcome that we are talking about the armed forces on the Floor of the House. We have heard in some remarks a focus on how we can encourage people to sign up, but does he agree that it is more about how we retain people, particularly when they get to the stage in their career when they have a family and perhaps need property beyond the barracks accommodation that they were happy with when they signed up?
Mr Ellwood
My hon. Friend makes an important point. The chances are that when someone joins the armed forces, they are single and have little responsibility. As they move ahead in life, they are likely to develop a family and so forth, and therefore their accommodation requirements will change. The armed forces must accept and be ready for that. That is the single issue that the families federations state as the reason for people choosing to leave, and it needs addressing; there is no doubt about it.
Stephen Metcalfe
Seeing as we are discussing this important issue on the Floor of the House, it might be worth speaking to a wider audience and reminding people that when they join the armed forces as a young person, the training they receive is often through the formal provision of an apprenticeship. Our military services are one of the biggest providers of apprenticeships in the country, and people leave the services with full and proper qualifications.
Mr Ellwood
I am looking around the Chamber, and I see that there is life after the armed forces, with so many characters who have served and ended up here. That is fantastic. On a more serious note, the skillset that people develop in the armed forces arguably is second to none, compared with other areas of life. Grit, tenacity, determination, leadership skills, commitment and team-working are all transferrable skills, and it is so important to recognise that. If we have a challenge, it is the fact that the cohort of people who are familiar with what the armed forces have to offer is getting smaller, because the armed forces do not have the same direct exposure. Our challenge is to ensure that every HR director, personnel officer and person charged with recruitment in a business is aware of what our brilliant armed forces can offer.
It is worth spelling out the wider aspects of what our armed forces do, because we are here to give consent to their continued existence.
Sir Oliver Heald
My right hon. Friend is being very generous in giving way. Does he agree that the real significance of the order is that it continues the system of command and of justice that applies through command in the armed forces? It is therefore crucial that we renew for another year, so that the system of command and discipline can continue.
Mr Ellwood
I do agree, and that goes to the heart of what we are debating. It is important that the disciplinary aspects of the armed forces continue; because they change, we are obliged to come back to the House and re-confirm them.
It is important to recognise that our armed forces do much more than what we see day to day in the newspapers. As Operation Telic and Operation Herrick are removed from the frontlines, and we see less about this on the front pages and hear less and less about these issues, we should recognise what amazing work our armed forces do in keeping UK citizens safe in this country and, indeed, abroad. We play a leading role in NATO, providing collective assurance and deterrence in the posture that we build. Along with our international partners, we are also conducting and targeting counter-terrorism activity.
We support multinational peacekeeping operations and build stability overseas, which ensures the freedom of navigation and the UK’s access to global resources. We safeguard strategic choke points and protect essential lines of communication, not least across our oceans. We also keep the skies safe—not just in the UK, but in Europe and beyond. Newer to the portfolio, we are ensuring we monitor movements in outer space. The House will be aware of what we do to tackle piracy on the seas and high seas, and to reduce poaching in Africa—we have done much to tackle the illegal wildlife trade in Africa—and we of course assist in delivering overseas humanitarian aid relief during emergencies and disasters.
All that involves a wide variety of skillsets, which our armed forces are expected to understand and execute. It is important that we recognise that these are not things we see every day in the newspapers, but they are things that this House expects them to do when a crisis happens. It is to them that we turn when diplomacy fails and when this country faces challenges.
Leo Docherty
My right hon. Friend is being extremely generous with his time. In describing the expansive nature of our military presence globally, does he agree with me that the new naval facility in Bahrain, and the activities and patrolling carried out by the Royal Navy there, are an important demonstration that we are committed to the security of the Gulf and to providing reassurance about the free passage of trade around the peninsula?
Mr Ellwood
My hon. Friend cites an acute example of exactly what we are doing. HMS Jufair is a fantastic illustration of our having permanent exposure, with a permanent facility, and of our working not just with the Bahrainis, but with others in the middle east. We set standards and values and share tactics and operational capabilities, and we improve governance, the rule of law and so forth in doing so. I pay tribute to those who have made that facility work. If memory serves, I actually visited the facility with my hon. Friend in the recent past.
Leo Docherty
I declare an interest in that we both visited that facility, with several other parliamentary colleagues, on a very useful visit last year.
Mr Ellwood
We have touched on the long-established reputation of our armed forces in defending not just our shores, but our values. At this juncture, I would comment on how the world is changing rapidly. It is getting more dangerous and it is getting more complex. The threats are more diverse than ever before. I would argue that if the instability we are seeing is unchecked, it will become the norm. These are threats not just from a man-made perspective—extremism and resurgent nations, as well as cyber-security—but from climate change. We are reaching or testing the limits of what our fragile planet can actually do, and if we do not act soon, there will be huge consequences with migration, the movement of people and so forth, as well as the stockpiling of food and a threat even to our ability to grow the crops we actually need.
The world is changing fast and it requires a collective effort if we are to meet some of these challenges. Britain has been a nation that again and again steps forward to lead the way—not always to do the heavy lifting, but certainly to show leadership. I certainly believe that, as I say, this is an important juncture at which to regroup and look at the rules—established mostly through Bretton Woods, after the second world war—that are now out of date. They need to be reviewed to recognise the new world that we actually face, before this becomes the norm and we are unable to change and set the standards for the next number of years.
The rate of change and level of uncertainty are outpacing governance and unity. The old rules need to be updated, and, because of human empowerment, it is easier for individuals to have greater access to means of causing harm, through computers and so forth.
Stephen Metcalfe
My right hon. Friend is painting a picture of the complexity and severity of the challenges we face. That threat has changed over the years, to the point at which the level of skill required across a broad range of disciplines is growing. I was fortunate enough to be the envoy for the Year of Engineering last year and saw how our armed services use engineers both on the ground and behind the scenes to tackle some of those threats, particularly on cyber-security. Will he therefore join me in promoting engineering within the armed services as a way of meeting and tackling the challenges that he is talking about?
Mr Ellwood
I fully concur. It was a pleasure to participate in the Year of engineering last year. It is important that we encourage STEM subjects—science, technology, engineering and maths—and we are doing that, as was mentioned earlier, through our apprenticeship schemes. The skillsets that even the basic infanteer requires from a technology perspective are enormous, and so different from when I served. It is absolutely important, through schooling, apprenticeships and all aspects of our armed forces, that we encourage these things.
I was talking about the fact that the tried and tested diplomatic instruments and conventions that we have relied on are no longer fit for purpose and about the importance of the fact that we are now threatened with greater human empowerment through technology.
It used to be said that atomic weapons were the biggest threat we faced. I was moved by a book written by David Sanger, a New York journalist and a specialist in cyber-warfare. He now says that cyber-warfare has taken over as the biggest threat that we face, because attacks can be conducted state on state and there are no repercussions and no rules. There is no Geneva convention to say, for example, that elections or hospitals are out of bounds for a cyber-security attack. There are no repercussions or recognition above board of what the penalty or punishment is, or even of what rules a cyber-security attack breaks.
This is more dangerous because, unlike with nuclear weapons, it is not just states that use such attacks—any individual can. That shows the requirements and the pressures of what our armed forces are up against in today’s changing world, with accelerating technological advancement, the increasing environment of stress that I mentioned and, of course, the change in population growths and habitats.
Leo Docherty
My right hon. Friend is painting an interesting picture of our defence requirement. When it comes to cyber-security, both in terms of defence and offence, is he confident and reassured that cyber-capability will be front and centre in the modernising defence programme as it moves from adoption to reality?
Mr Ellwood
My hon. Friend makes an important point. As we discuss upgrading and recommitting the existence of our armed forces, it has traditionally been around those conventional capabilities of Army, Air Force and Navy, and now it must expand to this fourth dimension, which includes cyber and space. These are the volatile and vulnerable areas that we absolutely need to invest more in, and I am pleased to say that that is exactly what is happening.
Nigel Huddleston (Mid Worcestershire) (Con)
My right hon. Friend is articulating a rather alarming picture of the changing nature of the challenges. He has mentioned the resources required. Does he agree that although we are committed to paying 2% of our GDP on defence to make sure that these international threats are adequately attacked, other countries also need to make similar commitments?
Mr Ellwood
I am on the record as saying that we need to spend more than 2%, as that is a very arbitrary target. Ultimately, the important thing is whether people turn up for the fight as well. If we take Operation Ellamy, which was in Libya, as an example, many NATO countries did not bother turning up even though they were NATO signatories. I appreciate the 2% and, yes, we want countries to pay, but ultimately they need to be ready to fight as well.
Mr Ellwood
I will try to make some progress if I may, after this last intervention.
Toby Perkins
I am very grateful to the Minister for allowing me to intervene again. I just want to take him back to the comments he was making a moment ago about cyber-warfare and hybrid warfare. Does he consider cyber-warfare to be warfare? If so, who are we at war with?
Mr Ellwood
The hon. Gentleman makes my point for me. There are no accepted rules, and post Brexit Britain and the rest of world collectively need to recognise that. From a NATO perspective, article 5 does not apply. If there are no rules, how can we punish anybody? How can we identify who is responsible for what? This is a whole world that we need to address very soon indeed.
That point allows me to move on to a point about having an honest conversation with the public—this touches on the 2% issue. The general public have a huge admiration for our armed forces, who are the most professional in the world. However, I would also say that there is a collective naivety about what we can actually do. We are facing some very real threats that we need to wake up to.
I do not mean to digress too much, but because this place made so much noise about potholes, which was because local government made so much noise about potholes, the Chancellor then provided the money to address the problem of potholes. We are not making enough noise about our capabilities and where we are versus the threats we actually face.
Our main battle tank is 20 years old. It has not been replaced in that period. Meanwhile, France and Russia have upgraded their tanks two or three times over that period. We have some fantastic kit coming on board, but there are other areas where we need investment. We need to tell the public that if they want Britain to be able to step forward when it is required, we need to pay for that. That is the conversation we need to have, as well as talking about the threats we have touched on and have articulated quite adequately today. As I say, ever fewer nations are willing to step forward.
Mr Ellwood
I will not give way. I need to make progress because I am getting that look from Madam Deputy Speaker—other hon. Members want to participate as well.
It is important to recognise where we are and to have a more real debate with the public. There is a Russian proverb that says that it is better to be slapped in the face by the truth than kissed with a lie. Without being too provocative, I believe that we are trying to sell a capability of the armed forces, which we are very, very proud of, but that the nation is in denial about the real threats appearing over the horizon. It is our duty as the Executive, as the Government and as parliamentarians to express that to a nation that, if it fully understood the picture, would be more willing to say, “Yes, let’s spend more money.” I hope that message will come through in the spending review.
I turn to the Armed Forces Act (Continuation) Order 2019. We seek the consent of the House through the annual consideration of the legislation governing the armed forces: the Armed Forces Act 2006. The draft order we are considering this afternoon is to continue in force the 2006 Act for a further year, until 11 May 2020. This reflects the constitutional requirement under the Bill of Rights that a standing Army, and by extension now the Royal Navy and the Royal Air Force, may not be maintained without the consent of Parliament.
I am sure the House will be familiar with the fact that the legislation that provides for the armed forces to exist as disciplined bodies is renewed by Parliament every single year. That is what we are doing here today. The requirement for annual renewal can be traced back to the Bill of Rights 1688. Time prohibits me, Madam Deputy Speaker, from going into detail on that, but I am happy to write to hon. Members if they would like further information on that front.
Every five years, renewal is by an Act of Parliament. The most recent was in 2016 and the next will be in 2021. Between each five-yearly Act, annual renewal is by Order in Council. The draft order that we are considering today is such an order. The Armed Forces Act 2016 provides for the continuation in force of the Armed Forces Act 2006 until the end of 11 May 2017 and for further renewal thereafter by Order in Council for up to a year at a time, but not beyond 2021. If the Armed Forces Act 2006 is not renewed by this Order in Council before the end of 11 May 2019, it will automatically expire. If the 2006 Act expires, the legislation that governs the armed forces and the provisions necessary for their maintenance as disciplined bodies will cease to exist. Discipline is essential. It maintains the order necessary for the armed forces to accomplish their mission to serve our country, whether at home or abroad.
The Act contains nearly all the provisions for the existence of a system of command, discipline and justice for the armed forces. It creates offences and provides for the investigation of alleged offences, the arrest, the holding in custody and the charging of individuals accused of committing an offence, and for them to be dealt with summarily by their commanding officer or tried in a court martial. Offences under the 2006 Act include any criminal offence under the law of England and Wales and those that are peculiar to service, such as misconduct towards a superior officer and disobedience to lawful commands. We should not forget that the Act applies to members of the armed forces at all times, wherever they are serving in the world.
If the Act were to expire, the duty of members of the armed forces to obey lawful commands, and the powers and procedures under which this duty is enforced, would no longer have effect. Commanding officers and the court martial would have no powers of punishment for failure to obey a lawful command or other disciplinary or criminal misconduct. Members of the armed forces would still owe allegiance to Her Majesty, but Parliament would have removed the power of enforcement. Service personnel do not have contracts of employment and so have no duties as employees. Their obligation is essentially a duty to obey lawful commands. The Act also provides for other important matters for the armed forces, such as their enlistment, pay and redress of complaints.
In conclusion, the continuation of the 2006 Act is essential for the maintenance of discipline. Discipline, in every sense, is fundamental to the existence of our armed forces and indeed, to their successes, whether at home in supporting emergency services and local communities and protecting our fishing fleet and our shores; playing their role in counter-terrorism or in combating people and drug smuggling; distributing vital humanitarian aid; saving endangered species; or defeating Daesh in Iraq and Syria.
We owe the brave men and women of our armed forces a sound legal basis for them to continue to afford us their vital protection. I hope that hon. Members will support the draft continuation order.
Nia Griffith (Llanelli) (Lab)
Before I begin, I echo Mr Speaker’s words from earlier this afternoon, and the very fitting tribute paid by my hon. Friend the Member for Newport East (Jessica Morden), in respect of Paul Flynn, who served Newport West with absolute distinction and tremendous wit. He was also a great friend to many of us and we shall miss him sorely.
It is a pleasure to serve under your chairmanship, Madam Deputy Speaker. Our armed forces represent this country across the world, fighting to liberate civilians from the scourge of Daesh; providing vital training to other nations; serving on peacekeeping missions; and stepping in to provide humanitarian relief in the wake of hurricanes and other disasters. Most importantly, of course, they stand ready to defend this country day and night. Across the House, we are all immensely proud of our personnel and Labour Members will be supporting the order this afternoon. However, I want to press the Minister in greater detail on a number of issues that we touched on at Defence questions this afternoon concerning our armed forces.
I will deal first with forces numbers and the alarming downward trend across each of the services. When Labour left office in 2010, we had an Army of 102,000 regulars, an RAF of 40,000 and a Royal Navy of 35,000. Now they are all substantially smaller. The Army and RAF have been cut by 25% each and the Navy is down by nearly 20%. The trajectory is most worrying of all: every single service has fallen in every year since the Conservatives came into office. The latest figures are due to be published on Thursday and I sincerely hope that they will buck the trend, because at a time when this country faces growing security challenges, it is simply not acceptable for the Government to be failing to deliver its manifesto pledge to
“maintain the overall size of the armed forces”
year after year.
At Defence questions earlier this afternoon, I asked the Minister for the Armed Forces to confirm that the Government are still committed to a Regular Army of 82,000. While I would not like to suggest that the Minister did not understand that we were talking about the number of full-time personnel, he did seem to get slightly confused and started talking about reservists, so I wonder whether his more courteous colleague, the Under-Secretary, can confirm that the target of 82,000 does still stand.
While I welcome any upturn in interest that recent adverts have stimulated, Members across the House have repeatedly raised the failings of Capita and its botched recruitment contract. It is simply not doing its job of recruiting enough personnel to the Army. I am sure I am not the only Member who has had complaints from constituents because of lengthy delays. I am talking about young people who actively want to join the Army and serve their country but whose enthusiasm is being undermined by Capita’s incompetence.
We have said very clearly that Labour would terminate this contract, and I am glad that the message may finally be getting through. The Secretary of State said recently:
“If it becomes apparent in the next financial year that Capita are continuing to fail in what they do, we are going to have to look at different options in terms of the contract.”
That is welcome, but it does seem to be yet another example of kicking the can down the road in terms of holding Capita to account. It is over a year since the same Secretary of State said he would give Capita a red card if it did not perform. Can the Minister set out what action the Government will take right now to get to grips with the problems?
This is not just an issue of recruitment; it also comes down to retention. The steady decline in service morale is a significant worry. The proportion of Army personnel reporting high morale in 2010 was 58% for both officers and those of other ranks, but that fell to 46% for officers and a mere 36% for other ranks in 2018. As well as it being wrong in principle for personnel to feel this way, we simply cannot afford to have servicemen and women choosing to leave the forces because of their view of service life. What plan does the Minister have to deal with this?
Satisfaction with pay remains at the lowest levels ever recorded, and given the seven years of below-inflation rises, that is hardly surprising. We all welcome the long overdue rise that personnel have received in the current financial year, but that was delayed and paid retrospectively. Will the Minister set out where we are with this year’s settlement?
The Opposition have previously expressed our concern about the future accommodation model and the possibility that it may be used to push more personnel and their families into the private rented sector, with all the uncertainty and added cost associated with that. New research from the Army Families Federation highlights a number of flaws in the information provided on FAM. Forty-eight per cent. of respondents said they had received no information at all about FAM and only 2% said they had received a great deal. Where people had received information, most of it had come from the federation itself, as opposed to the MOD or the chain of command. Uncertainty around FAM was also a feature of the federation’s comments on the covenant report late last year. Will the Minister commit to doing much more to make personnel and families aware of the changes?
Finally, in January, we were all deeply concerned by the report of the Defence Safety Authority that identified serious concerns. Will the Minister update the House on the progress made in implementing all the recommendations in that report?
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. This is a fairly short debate—it needs to finish at 6.38 pm—and the Minister will want to make a short winding-up speech. If colleagues stick to about six minutes, we should get everyone in.
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
This statutory instrument is vital and not Brexit-related. It is an annual requirement that Parliament restate its approval for the raising of our standing Army, Navy and Air Force in the modern world. Without it, we could not defend our citizens from enemies or send our armed forces to assist our allies around the globe.
We have many dedicated and highly skilled armed forces personnel. Our Royal Marines are working with allies to train in the toughest conditions on the planet hundreds of miles north of the Arctic circle, as our Secretary of State for Defence discovered for himself this weekend—we are all grateful that he did not die plunging into the frozen ice. As the House knows, I have visited twice to learn about the survival training that our young commandos undergo in order to take on some of the most challenging military tests. We are also training US marines up there and working closely with Dutch forces to build this uniquely challenging skillset. Furthermore, with the approval of this statutory instrument, we hope this year to see the development of the littoral strike group to allow the Royal Marines to go back to sea—back to their roots.
As the defence lead on the Public Accounts Committee, I hope to see the MOD making efficient and value-for-money purchasing decisions for the ships they will be using. Getting the right kit—not necessarily gold-plated—is so important if we are to offer our exceptional Royal Marines the skills that will enable them to cross the globe to where they are needed, whether for military or humanitarian intervention.
As part of our world-class and worldwide-respected Royal Navy, our Royal Marines will also be an element of the carrier strike group which we hope will develop in the coming year. The new carriers, HMS Queen Elizabeth and HMS Prince of Wales, are world-leading national assets. I look forward to hearing Ministers set out more fully the Government’s strategy for our aircraft carriers. For all the young sailors who are already serving on HMS Queen Elizabeth, it is an exciting and challenging posting, and many will look forward to serving on her in the years ahead. The last commanding officer of HMS Prince of Wales has probably not been born yet, so we will need many more before that last posting is required.
Our Royal Navy reaches across the globe to deter enemies, above and below the oceans, and to keep our sea routes safe for civilian trading traffic. Below the surface, quietly, members of our submarine service are out and about 24 hours a day, seven days a week, 365 days a year. For 50 years this April they have provided a continuous at-sea deterrent to protect our nation, support our allies and ensure that enemies are deterred from taking us on. That is a terribly important part of military procedure, because the nuclear threat is so great. It is, in my view, the greatest weapon of peace that man has ever invented, because it deters—forever, we hope—those who would start world wars.
Those submariners are often forgotten, because they are not seen and we do not generally talk about them, although I do occasionally. We forget, so often, the important and continuous work that they do. While they are under the oceans and the Navy is on the oceans, our own islands are kept safe 24/7, thanks in great part to the quiet but critical work that is done at RAF Boulmer in my constituency. The air defence that is provided by the aerospace surveillance and control system force commander—I had to read that out, because I would never get it right otherwise—is crucial work. It takes place, unseen, in a bunker deep below ground, with remote radar heads across our far northern borders watching the skies.
From RAF Benbecula in the Outer Hebrides—which I was privileged to visit a couple of years ago—to RAF Brizlee Wood, which is in my constituency, to RAF Buchan and the new RAF Saxa Vord on Unst, the most northern of the Shetland Islands, RAF personnel who live in my constituency watch and manage all the data provided by the radar heads, watching for enemy aircraft and so much else. I had the privilege of visiting the bunker recently, and was taught how to identify space junk, the international space station—which comes round twice a day—and much else besides. Extraordinary technicians have learnt to identify those who enter our airspace illegally, and, if necessary, are able to call RAF pilots to challenge them. All that happens quietly underground at RAF Boulmer.
Bob Stewart (Beckenham) (Con)
Space junk intrigues me. Does the hon. Lady think that a piece of nut—that big—can be identified from her constituency?
Anne-Marie Trevelyan
I was not given that much training, but I think it is safe to say that one of the most extraordinary things that was explained to me is that there is now so much space junk—objects that have broken up over the years—that it is incredibly difficult to find a clear route in order to launch any new satellite into space. The ability of our RAF personnel to understand what is there, and to recognise it as it comes round on the radar screens again and again, means that they are vital components, understanding and supporting the civilians who want to work in space and the military who continue to view it as one of the new potential areas of combat. I am enormously proud to represent that team of exceptional RAF personnel, and also to represent their families.
I set up the all-party parliamentary group on the armed forces covenant when I was first elected, because I was shocked by some of the poor housing in which RAF families have to live. I was confused by the fact that the Government had not done more to act on the multiplicity of evidence that clearly exists to show that family comfort is critical to our retention of the highly trained personnel, in whom we have invested so heavily, to serve their country for as long as they want to do so. When the families are unhappy and feel that they cannot cope with the challenges that military life brings, we lose some of our most wonderful personnel. Moreover, they have cost us a fortune: we have invested millions of pounds in some of our most sophisticated and highly trained RAF pilots, for instance. To lose them because family housing is too much of a problem is a bad investment decision, quite apart from the human cost.
In the knowledge that the Minister is passionate about getting this right, let me ask again whether the Government will consider changing their financial models so that we can make joined-up decisions on, for instance, housing investment and how the Defence Infrastructure Organisation spends its money. We do not want to find that commanding officers cannot secure the decisions that they need in order to keep the personnel they want. We should be able to make joined-up decisions on access to schools, so that the Department for Education understands that if a family is moving outside the normal cycle there must be a framework to ensure that the children get into the right schools, and on access to healthcare when families are suddenly posted elsewhere and are no longer able to be on the same waiting list. The theory is there, but the practice does not always work. Our military families, who support the extraordinary people who have chosen a career which, as part of their contract, means that they agree to put their lives on the line for us all, can know that Parliament values them if it demonstrates that through policies that work.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is always a privilege to follow the hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), whose constituency is just across the border from mine.
This is a very important debate, although it may not seem so to some Members who are watching it outside the Chamber. Two members of the Defence Committee are present: its Chair, the right hon. Member for New Forest East (Dr Lewis) and the hon. Member for Aldershot (Leo Docherty). He and I have similar surnames; I will leave it at that.
The Minister set out the requirements for our armed forces, although I wish he had faced the Chamber while he was making his speech; that would have made things a wee bit easier. He told us what was required for the systems of command, discipline and justice, as well as designating the remit of the services police for the jurisdiction of the powers of commanding officers and the military. On a personal level, I fundamentally get that. I have a brother who served both in Iraq and twice in Afghanistan, and I know that the husband of my hon. Friend the Member for Glasgow North West (Carol Monaghan) is a submariner. As was mentioned by the hon. Member for Berwick-upon-Tweed, submariners constitute a section of the armed forces that is seldom mentioned. Many elements of the armed forces do not have a voice, including the medical element, which provides services on the battlefield that save lives—not just those of our own wounded, but even those of adversaries.
I will be brief, because I know that others want to speak. The Minister said that members of the armed forces were not employees. I think that, in the 21st century, that is a dreadful situation. We hear a lot about the state of housing for members of the armed forces and their families, and we hear a lot about pay, which the Minister also mentioned, but where is the voice of the armed forces when it comes to improving those elements?
We are told about the service families who do such a fantastic job—some of them recently gave evidence to the Defence Committee—but when it comes to employee rights, we need a armed forces representative body. That is what my hon. Friends, at least, believe, and indeed, during Defence questions, not only my hon. Friend the Member for Glasgow North West but a Labour Member called for it. It would not have the ability to strike—no one would call for that—but it should be possible, in the 21st century, for members of the armed forces to be able to call themselves employees and to enter into negotiations with their employer. That is possible in many of our NATO allied armed forces systems. It is disappointing that that is not mentioned in the statutory instrument—but of course it would not be, because it is an element that has to be gone through every couple of years—but I hope that the Minister and some of his team, and perhaps Labour Members as well, will be in the Chamber on 8 March, when I will present a private Member’s Bill on the establishment of a representative body, thus making a commitment to my party’s manifesto.
I think it important that we recognise the service given by members of the armed forces. As was pointed out by both the Minister and the hon. Member for Llanelli (Nia Griffith), we should recognise that service not only in the context of military capability, but in the context of the assistance that they provide through peacekeeping. I often reminded myself of these words:
“Nothing is lost by peace; everything may be lost by war.”
Kevin Foster (Torbay) (Con)
It is a pleasure to speak in this debate, and not to be last, which is my usual position in the batting order. I will keep my remarks reasonably brief—I say particularly to those who have had the joy of sitting through my speeches on Fridays—to ensure that the two Members who are waiting get an opportunity to speak in this debate as well.
This order is welcome. It is a practical part of ensuring our armed forces continue and that their structure, law and governance, particularly the court martial system, continue. It is also symbolic, as it is a reminder that the armed forces serve our country—our nation and our democracy. This is not a country where the military can exert power over the institution of the state; it is one where they defend the nation and the democracy that lies at the heart of this nation. Indeed, many people over the past couple of hundred years have sacrificed their lives in doing so, showing the truth of the expression that freedom is not free. Too many times in our history, our military and armed forces have had to be called upon to make those sacrifices.
We must address how we can ensure those in the military today feel that they wish to be doing their job and to give that service. The Minister rightly said people do not just join the military for the salary package or because they think there might be an opportunity for some foreign travel; they join because they fundamentally have a calling to want to serve this nation. That is the core of why people volunteer to serve in our military. Indeed, it is a fact that many volunteer; there has not been conscription in this country for decades. At least two generations of men have not been conscripted into our forces, yet so many do still want to join, but it is important that we do not just rely on their spirit of service always coming first.
That is particularly relevant to the issue of accommodation. The escalating cost of housing over recent years means we have to be practical about the financial and other packages we offer and also about the lifestyle generally that is offered. Those in Torbay who have served in the military often talk about what life was like when they were commissioned; they would go on tours and their wives—as they would have been at that time—were pretty much expected to follow them. At that time, it was highly unlikely that their wives would have careers of their own, but that is clearly no longer the case, and indeed many spouses will be serving officers themselves with an equal commitment to our nation, given the welcome move to open up all roles in our military to both sexes. It is therefore important that those packages are considered.
The Minister touched on looking at the estate. I grew up in Plymouth, seeing the Royal Citadel there. Ironically, it had more guns facing over the town than the sound. That was because of history: it was built by Charles II and he wanted to remind Plymothians what might happen if they rebelled against him as they had rebelled against his father, holding out for Parliament and thereby denying a crucial port to the royalist forces. It is right that 300 years later we move on to having a more modern military estate. Some of my family grew up in Stonehouse and have memories of the Stonehouse barracks. They might be worthy of history, but 300-year-old barracks with dormitory accommodation are not the sort of place where the most elite soldiers we train should be housed in the 21st century.
We must not, however, turn the military into just another form of employment. While I agree with much of what was said by the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), I do not think going down the path of this becoming like any other job is what the vast majority of the military would like to see; nor would it be a sensible decision for our nation. Being in the military is a unique role: it brings with it obligations of service but also a huge amount of respect in exchange for taking on board those obligations. It clearly would never be possible to have some form of strike arrangement, and I suspect the hon. Gentleman made that clear in his contribution, but going down the path suggested would be neither useful nor appropriate. Our system has served us well.
Carol Monaghan (Glasgow North West) (SNP)
How would the hon. Gentleman suggest serving members of the armed forces should raise concerns if they do not have a voice like a representative body?
Kevin Foster
I think it safe to say that one thing that has been consistent since the armed forces were formed is that there have always been gripes and comments put up by those who serve, and rightly so, but we would expect them to be dealt with by chains of command and in appropriate areas. Having a separate representative body of the military would not be the best way forward, and I do not see that as the solution.
Anne-Marie Trevelyan
Does my hon. Friend agree that military families sometimes do not feel that they can, as civilians, contact their own MPs to raise concerns—not about military matters their partners might be involved in, but about matters for the family unit? There is often a real lack of confidence that families can talk to Members of Parliament, and we should be doing much more to help them in that regard.
Kevin Foster
No one should feel afraid to contact their Member of Parliament in any scenario. At the end of the day, we are here to act as our constituents’ advocates and champions, and ultimately, if necessary, to do so confidentially. I am always clear that my surgeries are open.
Leo Docherty
I frequently see serving soldiers in Aldershot, the home of the British Army, some of whom were previously in my own command when I was back in the Scots Guards. I am always there to help them, and any serving member always knows that if they have any kind of personal problem, they can go and see their platoon commander.
Kevin Foster
It is great to hear of the service my hon. Friend is still offering to his constituents where he was once their commander but is now offering that as their Member of Parliament. He brings vital experience to this Chamber from his own military experience, representing the home of the British Army.
I have been going on for seven minutes now and am conscious that other Members are waiting to speak. This motion needs to be passed, and I do not think it will attract any particular opposition given that that would be rather bizarre, even though there might be one or two fringe views in this Chamber about abolishing our military, which we sometimes hear. This motion has my full support, and it is vital that it passes today.
Toby Perkins (Chesterfield) (Lab)
I rise to support the motion, as my hon. Friend the Member for Llanelli (Nia Griffith) did. While this is a motion that many might have expected was limited in scope and was likely to be passed without much comment, the Minister, of whom I am a big admirer in the job he does, has broadened its scope and other Members have taken him up on the challenge he posed. He made a remarkable speech; I cannot think of many times where a Minister has stood at the Dispatch Box and been so implicitly critical of the Government they speak on behalf of. I entirely support his call for greater investment in our armed forces and will expand on some of the arguments he made about our investment in equipment.
Mr Ellwood
I would not want the hon. Gentleman to mislead the House and say I was somehow not supportive of the Government. I am absolutely, of course, supportive of the Government—a loyal Minister. I am simply encouraging the advancement of policy; I think that is how I would delicately put it.
Toby Perkins
People will read the right hon. Gentleman’s speech and make up their own minds on whether he was urging the Government to take action in a different direction, but if he wants the advancement of policy, he is in exactly the right place to do that as a Defence Minister. He was right to say that we absolutely recognise the professionalism of those who serve and to point to the admiration he has—and I have, and Members right across the House have—for people who dedicate their lives to our armed forces, but we must also ask ourselves some serious questions about the way in which we support them, and I will come to those in a moment.
If I was to have an area of disagreement with the Minister, it would be on his challenge to the public about the fact that we need to have an honest conversation with them. It does not seem to me that it is the public who are preventing the Government from spending more on our armed forces or meeting greater than the 2% spending commitment. We had a debate here about having greater spending on our armed forces and there was widespread agreement across the House that that should happen. I have never had a member of the public say to me in my surgeries or when I am out door knocking on a Saturday that they disagree with greater spending on the armed forces. I do not think that we need to convince the public of the need to spend more; in fact, it is the Chancellor of the Exchequer and the Prime Minister who need to be persuaded to spend more money on our armed forces.
The Minister spoke about his commitment to the armed forces community and his disappointment that there was such low morale on pay and pensions. He introduced accommodation as another real bone of contention, and I support him entirely on tackling those issues. He and the hon. Member for Torbay (Kevin Foster) both said that we should not regard a job in the armed forces as being similar to any other job, and I agree with them. Of course there is a level of commitment required from members of the armed forces that is not present in other jobs, but that does not let the Government off the hook when it comes to pay and pensions and to treating people who serve with the respect that they have the right to expect. When it comes to saying to the loved ones of members of the armed forces that we value their support, pay and pensions and accommodation are among the ways in which we can show that we recognise their commitment. I absolutely recognise that working in the armed forces is not the same as any other job, but that does not let the Government off the hook when it comes to ensuring that the pay for members of our armed forces keeps pace with inflation and that they are no worse off at the end of the year than they were at the start of it. That is a very basic commitment.
Another very basic commitment is that we make the necessary investment in equipment, in training, in deployments and in the commitment that we expect of members of the armed forces. We need to pose some serious questions to the Government about those things as well. The Minister said that we had the most professional armed forces in the world, but it is important that we should not be complacent. As he mentioned, the battle tank is 20 years old. As a member of the armed forces parliamentary scheme, I have had the privilege of speaking to members of the armed forces, and they absolutely want me to hold the Government to account over investment in equipment. They share many of the reservations that he has. They also share reservations about the level of experience of some of the people in our armed forces. Huge numbers are leaving, many of whom had been through engagements in Afghanistan and Iraq and were absolutely match fit. The people who are now in those roles, while well trained, are much less experienced than the people who would have been in those arenas eight or nine years ago. I absolutely express our admiration for the people in our armed forces, but we must never be complacent about what we actually have on the ground.
I had the pleasure of going over to Kenya as part of the armed forces parliamentary scheme to visit the British Army training unit Kenya—BATUK—but I know that many training courses have been cancelled over the past year or so and that that facility is being used a lot less than it was previously. That investment in the training of members of our armed forces to ensure that they are used to the different theatres they might face is incredibly important.
My hon. Friend the Member for Llanelli (Nia Griffith) mentioned the Tory manifesto pledge for the Army to be 82,000 strong. Will the Minister give us absolute clarity on whether the Government still consider themselves bound to that commitment, or whether, as it was not featured so explicitly in the 2017 manifesto, it is now more of an aspiration than a commitment? Either way, it is a commitment that is not being met. I entirely support the motion, but I also share many of the concerns that have been raised today. I absolutely pledge my support to the Minister in his campaign to persuade the Treasury to give our armed forces the support that they need and deserve.
Leo Docherty (Aldershot) (Con)
I am grateful for this opportunity to speak in the debate today. I am pleased that the Minister chose to use this opportunity to lay out the challenge of transformation that our national defence faces in this era. I have been pleased to see the outline that the Ministry of Defence has given this in the modernising defence programme, following the doctrine of the need to mobilise, to modernise and to transform. I think we are reassured that this document—the modernising defence programme—is a clear statement of intent that takes us forward to the comprehensive spending review and really goes into battle for a strong national defence. I for one am right behind it, but the proof will be in the pudding when it comes to how much money is secured in the comprehensive spending review. If we want what the document describes as the Joint Force 2025—a maritime task group, a deployable land division with three brigades including a strike brigade, a properly resourced combat air group and a special forces task group—we will have to pay for it. We will also have to pay for the equipment programme, which involves some excellent new platforms but also has some significant financial holes. As I have said, the proof will be in the pudding.
As well as needing to pay for all this, there are other things that we will need to do if we are to make the vision in this document a reality. We must ensure value for money, and that is about ensuring that we use big data to make the management of our military much more efficient, especially in areas such as fleet management and the management of large numbers of people. We have to use big data in order to become more efficient, and we need to reform the way in which we do defence procurement. We also need to win the data war. We have heard from the Minister about the cyber threats that we face, and we need to up our game in that regard. We need to acknowledge that the world is connected in a way that it has never been connected before. That is not just a matter of defence; it is also a matter of offensive cyber.
We also need to adopt a global posture. The global deployments in Bahrain, in other middle eastern countries and around the world are a force multiplier, and I am proud that soldiers from my constituency are involved. The Scots Guards are deployed in Cyprus, the Grenadier Guards are in Iraq and Afghanistan, and 4 Rifles—a specialised infantry battalion that is absolutely match fit and purpose built for engagements that involve the training of foreign troops—are deployed right around the world. They are a terrific force multiplier, and that is something we should be proud of.
Alarmingly, the document does not mention our defence response to China. That is a central challenge that we will have to grapple with in this new era of transformation. I invite the Minister to mention that in his closing remarks. Whether we like it or not—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Hopefully not, because it is not in the debate. I have allowed the hon. Gentleman to carry on, but he must not drag the Minister into something that is not covered in the debate.
Leo Docherty
Thank you, Mr Deputy Speaker. Moving on swiftly—we will also bring our allies with us. We are committed to NATO, but we need to demonstrate that commitment by exercising at scale. Perhaps we could do a “brigade plus” exercise in Poland to show resolve against threats on our eastern flank. We need to nurture sovereign industries, such as the ones in my constituency, which in turn nurture incredible defence innovation. We also need to get the legal framework right for foreign deployments. If we are to have a military that deploys with confidence to inflict violence on our behalf, soldiers need to be able to do that without fear of being pursued through the courts on their return.
I want to turn to the central argument in all of this. It is the argument, which we need to win, about hard power. The Minister mentioned this, and it is the central argument that we will be making as we move forward to the comprehensive spending review. We have been somewhat bruised by the past 18 years of the war on terror, which has informed this generation’s understanding of conflicts abroad, and it is easy to think that the public have a limited appetite for foreign intervention or foreign deployments. However, I actually believe that the reverse is true.
The British military conducted itself in Iraq and Afghanistan with such remarkable professionalism and courage that, whatever one thinks about the politics, there is wholehearted support among the British public and an acknowledgement that our armed forces can and will do a remarkable job on our behalf when deployed. There is absolutely no hesitation at all among the British public when it comes to supporting increased defence expenditure, as the hon. Member for Chesterfield (Toby Perkins) noted. That argument is wrong, we need to debunk that myth, and we need a new commitment to a fully funded national defence in the comprehensive spending review. I look forward to making that argument in a clear, resolute and confident manner for the sake of a strong national defence in this great era of transformation.
James Cleverly (Braintree) (Con)
The Minister made the point that this renewal—this continuation statutory instrument—is not normally discussed on the Floor of the House, but being able to do so is a great opportunity. The SI goes to the heart of the existence of our armed forces, because the British armed forces quite simply cease to exist without it. The Bill of Rights 1689 contains an assertion that the Army, and by extension the RAF and Navy, cannot exist without the explicit consent of Parliament. Provisions within this SI also enable the chain of command to deliver good governance within the armed forces themselves.
I do not intend to rehearse the arguments that may come about during the proceedings on the Armed Forces Representative Body Bill. It is an interesting idea that has been taken up by other armed forces around the world, but I think that the responsibility and the nature of the relationship between the chain of command in the British armed forces and the soldiers, sailors and airmen and women that they command is dependent on a fundamentally different relationship, which I think a representative body would be in danger of undermining.
Carol Monaghan
I ask the hon. Gentleman to look at how representative bodies work in other NATO countries.
James Cleverly
I have, and I do not like it.
Also inherent in this SI are provisions for enlistment, pay and the redress of complaints, and all those things at heart are J1 considerations, so I intend to restrict my short speech to the people carrying out the J1 function—the men and women who serve in our armed forces—and our responsibility and, as the Minister mentioned during his opening speech, our offer to them.
The armed forces currently face a challenge with regard to recruitment and retention. Ironically, it is a challenge that has been brought about through good news. The British economy currently has record low levels of unemployment, including record low levels of youth unemployment. It is the sad truth that it is a lot easier to recruit into the armed forces when there are few jobs available in the civilian world. Therefore, because actually unemployment is at a record low, the talented young men and women that we seek to recruit into our armed forces have other credible options.
The shadow Minister mentioned that the delay in the processing of recruitment applications through Capita has had a detrimental effect on our ability to recruit the brightest and best young people whom we need and want in our armed forces. People who are credible—people who have other employment options—are exactly the people we want to recruit and exactly the people who will be snapped up by civilian employers, who are currently competing with our armed forces to recruit them. We have a duty to improve and speed up the recruitment process—not just a duty, but a self-interest.
Anne-Marie Trevelyan
Does my hon. Friend agree that we must ensure that we change part of the medical assessment program for recruitment? Those who are diagnosed with autistic spectrum disorder—often Asperger’s—should not automatically be disbarred from applying. We are looking to select young men and women who have that sort of skillset—that particular unique kind of mind—and we need to find a way to ensure that the system is changed so that those people make it through the system.
James Cleverly
My hon. Friend makes an important point—one that I will touch upon briefly later in my speech—about the changing nature of conflict and the skills mix that we require from young people coming into the armed forces. We need to ensure that we are able to be a meaningful and relevant set of armed forces in the here and now, rather than think about the conflicts that we have had in the past.
Toby Perkins
I agree entirely with what the hon. Gentleman is saying about recruitment, but that is only one side of the picture. The other side is the huge number of people who have left the armed forces in the past few years, and people left because they were kind of encouraged to do so by the Government, who made it absolutely clear that they were looking to reduce the size of the British Army. This is not just about recruitment, but about the skills we have lost.
James Cleverly
The hon. Gentleman makes an important point about the loss of skills, and that is particularly true of what may be thought of as legacy skills. We have been very focused on two main conflicts over the past decade or so—Operation Telic and Operation Herrick—but it is important that we are able to be active in a whole range of future potential scenarios or conflicts. This is not necessarily true of the old cold warriors, but we do not want to lose the skills of people who were trained in a more diverse range of potential conflicts. We must ensure that they are able to pass on that knowledge and experience to new generations.
I turn to recruitment. The British Army advert that was rather lazily described as the “snowflake” advert was greeted with a degree of derision. In my experience, that was unfair, and this goes to the point made by my hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan). There was a time in the not too distant past—about a century ago—when there were passionate advocates for the retention of the horse as the main method of conducting conflict, and they fought hard against the mechanisation of the British Army. We have a habit—this has also happened in militaries around the world and throughout history—of fighting the last war, rather than gearing ourselves up to fight the next war.
Bob Stewart
The definition of a snowflake—I had to look this up—is apparently someone who whinges a lot. I did 28 years in the Army, and I have never known a soldier who did not whinge, so the snowflakes outside will be joining the snowflakes inside the armed forces.
James Cleverly
I thank my hon. and gallant Friend for that intervention. I was once told by my commanding officer that I did not need to worry about much, but if my soldiers stopped moaning, I needed to start worrying. However, the point about the recruitment campaign is that it highlighted the need not only for people who are physically robust and self-reliant, but for people who have empathy and are able to develop and deploy soft skills. When the toughest soldiers in the British Army, the Special Air Service, were deployed during the Malaya insurgency, they really understood the requirement for hearts and minds. Winning conflicts through kinetic means—through bombs and bullets, to pick two words at random—is one way to do it, but doing it through hearts and minds really matters.
I am getting those looks again, so I will draw my remarks to a conclusion shortly. We must make sure that the skills of the young people we recruit and retain in the armed forces match the threats and risks presented not just in the here and now but in the timeframe of their service. The people we are recruiting in the here and now have to be ready, able and capable of matching the threats that could present themselves in 10, 15 and 20 years’ time. That means people with adaptability as a core skill and who have the intellectual flexibility to take on new skills. Lifelong learning should not just be available to people in the civilian world; it should be available to people in the armed forces, too.
I am particularly proud of two things that my party has introduced in government. The first is flexible working throughout the armed forces. It would be unacceptable if talented, well-trained, experienced soldiers, sailors and airwomen were prevented from fully reaching their potential because they have taken maternity leave. Soldiers, sailors and airmen who also wish to make good on their family commitments should also have the opportunity to take periods out of frontline service so they can discharge their familial duties as well as their military duties and not feel that their promotion will be held back because of it. We do not have the luxury of seeing such talented people as disposable items, and we have to make sure they are valued throughout their time of service.
Finally, allied to that is that all roles in the military are now available to any woman who is good enough to discharge them. Quality should be the only metric against which selection is made. The fact that we have now done that and that our armed forces are now gender blind and focused purely on quality is a step in the right direction.
Mr Ellwood
This has been a far more thorough and wide-ranging debate than I imagined it would be, and I welcome that. I hope that in future years, when we come to update the House on the continuation of the armed forces, we can have the debate in the main Chamber.
I hear what the hon. Member for Llanelli (Nia Griffith) says about recruitment and Capita—she raised the point in Defence questions, too. The Minister for the Armed Forces is better able to respond, so I will ask him to write to her with more details. The future accommodation model is about choice, and I have touched on that.
The hon. Lady also mentioned the Defence Safety Authority and its report, which I take very seriously. I stress to the House that there have been fewer fire issues than in previous years, but the issue is about management, and every effort is being made to make sure we honour the report’s recommendations. Again, I will write to her with more details on how that will be achieved.
My good and hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) made a wide-ranging speech. She underlined the importance of the bond between US marines and the Royal Marines and their work to create a formidable relationship, which has developed over the years. She also praised the Secretary of State for jumping into the Norwegian sea—he is doing a fantastic job. She also touched on the Kessler effect, and a spiral of junk satellites bumping into each other is a huge concern. It would take us back to the 1950s, and we are working on it.
Mr Ellwood
I am afraid that I do not have time to take interventions.
The hon. Member for West Dunbartonshire (Martin Docherty-Hughes) mentioned peacekeeping, and anyone in uniform will recognise its importance. It is not so much about defeating the enemy as enabling the local population, and nowhere is that more pertinent right now than in Iraq and Syria. Murders are happening every day, and ISIL is still active. ISIL is not in our headlines, but that is not to say it has dispersed. We need to make sure that we help with stabilisation, peacekeeping and rebuilding those nations in whatever way we can, obviously with their agreement.
The hon. Member for Chesterfield (Toby Perkins) spoke about being honest in our conversation with the public. I make it clear that France is about to overtake us in defence spending. We have to make the case to the nation, because we queue up with every other Department in asking for more funds from the Treasury. If we take the nation with us in calling for it, we are more likely to get where we want to go.
I have mentioned tanks, but we had 30 RAF squadrons in Operation Ellamy, and we are now down to seven. We cannot build two new aircraft carriers without extra money and not have an impact on the rest of the surface fleet. These are important issues, which is why the Defence Secretary and Defence Ministers are all making a potent case through the defence modernisation programme, which my hon. Friend the Member for Aldershot (Leo Docherty) mentioned, to say that we need to upgrade the defence budget. I am pleased with my hon. Friend’s contribution; he touched on the importance of cyber. If we think the last 10 years have seen a change in our world, wait for the next 10 years. Artificial intelligence, 5G and the internet of things will change our world fundamentally, and I am not quite sure whether we are ready.
My hon. Friend the Member for Braintree (James Cleverly) speaks with such experience. He talks about our offer—what is our offer to our armed forces?—and that is so important for us to recognise and understand. More than 20 operations are taking place around the world, and Operation Toral, the continuation in Afghanistan, is just one of them. They do not make the headlines, so they are not the recruitment sergeant that Iraq and Afghanistan have been. Because of the greater employment rate, it is a testing environment to let people recognise how the armed forces can be a fantastic career. He also touched on flexible working, which is important, and how roles have been opened up to women right across the piece.
Following this full debate, I hope the House will support the draft order and recognise its contribution to upholding the constitutional position that the armed forces may not be maintained without the consent of Parliament.
My final words are to anyone thinking of signing up. I could not encourage you more. You will learn things about yourself that you did not know, you will do things that you never thought possible, and you will visit places that you never thought you would be able to visit. When you finally march off that parade square, after you sign up, you will not only be serving your country but you will be making your mum and dad so proud of you.
Question put and agreed to.
Resolved,
That the draft Armed Forces Act (Continuation) Order 2019, which was laid before this House on 24 January, be approved.
Exiting the European Union (Financial Services)
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:39 - The House divided: - Ayes: 201 / Noes: 150 - Question accordingly agreed to.
19:53 - The House divided: - Ayes: 203 / Noes: 150 - Question accordingly agreed to.
Mr Deputy Speaker (Sir Lindsay Hoyle)
With the leave of the House, we will debate the two instruments on financial services together.
The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the draft Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019, which were laid before this House on 21 January, be approved.
Mr Deputy Speaker
With this we shall take the following motion:
That the draft Money Market Funds (Amendment) (EU Exit) Regulations 2019, which were laid before this House on 24 January, be approved.
John Glen
As the House will be aware, the Treasury has been undertaking a programme of legislation under the European Union (Withdrawal) Act 2018 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 United Kingdom. The two statutory instruments being debated today are part of this programme. The disclosure regulations, as corrected by the corrections slip published on 12 February, will address deficiencies related to the UK’s implementation of EU rules that govern the exchange of confidential information between European economic area and third country regulatory and supervisory authorities. Once the UK is outside the single market and the EU’s joint supervisory framework for financial services, amendments will be needed to these rules so that they continue to operate effectively in a scenario where the UK leaves the EU without an agreement. The money market funds regulations will fix deficiencies in UK law on money market funds and their operators to ensure they continue to operate effectively post exit. The approach taken in these pieces of draft legislation aligns with that of other statutory instruments being laid under the 2018 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.
Let me deal first with the Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019. As Members across the House will know, an important function performed by financial services regulators is the gathering of supervisory information from firms. Regulators use this information so that they can ensure that regulated firms are operating in a way consistent with regulatory requirements and so they are alerted to any development that may need supervisory intervention. As a great deal of financial services activity takes place across borders and across regulatory regimes, the ability of national regulators to co-operate with each other and to exchange information is vital if they are to discharge their supervisory functions effectively.
The information gathered by regulators is often confidential and often commercially or market sensitive, so it is right that there are strict rules and safeguards on how regulators share such information with other regulatory authorities. EU law currently plays an important role in setting these rules. In order to ensure the effective functioning of the single market in financial services, the EU has developed a joint supervisory framework for national regulators and supervisory bodies in the EEA. This makes co-operation and the sharing of certain supervisory information between EEA national regulators mandatory.
In addition, the EU has established the European supervisory authorities—ESAs— which are responsible for co-ordinating the approach of EEA national regulators. Co-operation and sharing of certain information with the ESAs is also mandatory for EEA national regulators. As well as setting out what information should be shared, EU rules also include restrictions and safeguards. In the UK, these rules are implemented in Part 23 of the Financial Services and Markets Act 2000 and the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001.
For third country authorities, there are additional restrictions when disclosing confidential information. The UK regulator may need to be satisfied that the third country authority has protections for confidential information in place that are equivalent to those of the EU. There may also be a requirement to enter into a co-operation agreement with the third country authority. In addition, if the UK regulator is disclosing confidential information to a third country authority which originated from an EEA authority, the UK regulator may need to seek the consent of the EEA regulator which originally disclosed the confidential information.
If the UK leaves the EU without an agreement, the EU has confirmed that it will treat the UK as a third country and the UK will also need to treat EEA states as third countries. The UK will be outside the single market and the EU’s joint supervisory framework, so references in UK legislation to this framework, and to EU legislation and EU bodies, will be deficient and will need to be corrected so that the UK’s disclosure rules for confidential information will work effectively. In particular, the rules will need to be amended to reflect the third country relationship that will exist between the UK and EEA states. After exit, it would not be appropriate to provide for different rules and protections on the disclosure of confidential information by UK authorities depending on whether confidential information is being shared with EEA authorities or the authorities of non-EEA states. If this is left unamended, the UK would afford additional protections and less onerous restrictions to EEA states compared with other third countries. In addition where there are currently requirements to seek the consent of an EEA authority before the onward disclosure of information, these requirements will be retained only if an equivalent requirement also exists in relation to seeking consent from non-EEA authorities.
This instrument also provides for a transitional arrangement that will ensure that any confidential information received by a UK regulator before exit day will continue to be treated in accordance with the relevant provisions that existed before exit day. While it is necessary to amend the UK implementation of rules around disclosure of confidential information to ensure that they continue to operate effectively once the UK is outside the EU, it must be stressed that these amendments are in no way intended to diminish the level of co-operation that exists between UK and EEA regulators.
The Government and UK regulators believe that effective co-operation and co-ordination is essential for the effective supervision of financial services. UK authorities will be doing everything possible to ensure that effective co-operation continues. UK regulators have always been key players and key voices of sanity in the global supervision of financial services, as is demonstrated by the close and co-operative arrangements we have with regulators in countries outside the EEA. After exit, it will be necessary for the UK regulators to enter into co-operation agreements with EEA national regulators and with the ESAs. These agreements will help ensure that a high level of co-operation and information sharing will continue.
Kirsty Blackman (Aberdeen North) (SNP)
I am seeking some clarity on the first of these SIs and which day the Minister expects the disclosure of information regulations to come into operation. Am I right in thinking that exit day means exit day unless there is an implementation period, in which case it means at the end of the implementation period?
Kirsty Blackman
With respect, that is not what it says in the explanatory memorandum for the first SI, which suggests that it is needed in the event of any Brexit and not just in the event of a no-deal Brexit. The second one covers a no-deal Brexit, but I had understood that the first one was needed for any Brexit.
John Glen
I will examine that and, if I may, I will come back to it and seek to clarify it when I wind up this debate.
Both the Government and UK regulators attach very high priority to putting these agreements in place, and I am pleased to report that UK and EU regulators are making good progress in their discussions to finalise these agreements. The Treasury has been working very closely with the Bank of England, the Prudential Regulation Authority and the Financial Conduct Authority in the drafting of this instrument, and there has also been engagement with the financial services industry, including the publication of this instrument in draft, along with an explanatory policy note on 9 January. In summary, the Government believe that the proposed deficiency fixes are necessary to ensure that the UK has a clearly defined and operable set of rules for the disclosure of confidential information.
I turn now to the Money Market Funds (Amendment) (EU Exit) Regulations 2019, which relate to the establishment, management, and marketing of money market funds. Such funds invest in highly liquid instruments, and provide a short-term, stable cash-management function to financial institutions, corporations and local governments. They are commonly used by investors as an alternative to bank deposits. The regulations formed part of the response to the 2008 global financial crash to preserve the integrity and stability of the EU market, and to ensure that money market funds are a resilient financial instrument. They do so by ensuring uniform rules on prudential requirements, governance and transparency for managers of these funds.
Money market funds can either be structured as undertakings for collective investment in transferable securities—UCITS—or as an alternative investment fund. Therefore, they are regulated as UCITS or as an alternative investment fund, in addition to being regulated as a money market fund. The regimes for UCITS and alternative investment fund managers have been separately amended to reflect the UK leaving the EU by the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 and Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2018, which were taken through Committee, where I believe I was joined by the hon. Member for Oxford East (Anneliese Dodds), and have now been approved in both Houses and will be made shortly. In a no-deal scenario, the UK would be outside the EEA, and outside the EU’s legal, supervisory and financial regulatory framework. EEA money market funds, which currently provide the majority of money market services in the UK, would not be able to continue to service UK clients. The money market funds regulation therefore needs to be updated to reflect this and ensure that the provisions work properly in a no-deal scenario.
First, these draft regulations remove references to the Union which are no longer appropriate and to EU legislation which will not form part of retained EU law. These references will be replaced by references to the UK and to relevant domestic and retained EU legislation. Secondly, in line with the general approach taken to the onshoring of EU legislation, the SI will transfer functions currently within the remit of EU authorities; from the European Securities and Markets Authority to the FCA, and from the European Commission to Her Majesty’s Treasury.
As the UK’s regulator for investment funds and the current national competent authority for money market funds, the FCA has extensive experience in the asset management sector, and it is therefore the most appropriate domestic institution to take on these functions from the European Securities and Markets Authority. This statutory instrument transfers all powers exercised by ESMA to the FCA. The FCA will become responsible for technical standards on how funds should stress test their funds, and it will gain two operational powers to establish a register and reporting template for money market funds.
This statutory instrument transfers any power currently exercised by the Commission to the Treasury, in line with the other statutory instruments that we have taken through. Those powers all relate to creating rules concerning standards for money market funds, such as their liquidity and quantification of credit risk.
As I have mentioned, EU money market funds are structured and further regulated as UCITS or alternative investment funds. This statutory instrument makes provision to ensure that EU money market funds can use the temporary marketing permissions regime, as legislated for in the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 and the Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2018. Following an assessment by the FCA and the submission of a written statement to both Houses, the Treasury will be able to extend that by a maximum of 12 months at a time. It will also allow for EU money market funds that are currently marketing into the UK, and any subsequent UCITS sub-funds, to continue to market into the UK for up to three years after exit day.
This statutory instrument amends the scope of the regulation to apply to the UK only, with the effect of only allowing the marketing of UK-authorised MMFs or MMFs managed by UK fund managers. However, further amendments maintain the eligibility of EEA MMFs with temporary permissions to continue to market in the UK at the end of the temporary marketing permissions regime if they gain the required permissions to market as a third country fund under the UK domestic framework.
Money market funds that are UCITS will be required to gain authorisation under section 272 of FSMA, while the managers of money market funds that are alternative investment funds will need to notify under the national private placements regime. The UK currently has a very small domestic market that relies heavily on EEA money market funds, so these provisions address the cliff-edge risks that could arise as a consequence of defaulting to a UK-only market. That will ensure that local government, businesses and other UK investors can continue to access their investments and have a choice of money market funds to use for cash management.
As with the previous statutory instrument, the Treasury has been working very closely with the FCA in the drafting of this statutory instrument and engaging with the financial services industry. I would like to put on record my gratitude to TheCityUK for convening appropriate representative bodies throughout the process. In November the Treasury published the statutory instrument in draft, along with an explanatory policy note, to maximise transparency to Parliament and industry.
In summary, the Government believe that the proposed legislation is necessary to ensure that the framework for money market funds continues effectively, and that the legislation continues 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 would like to respond to the point raised by the hon. Member for Aberdeen North (Kirsty Blackman). Parliament will amend the regulations as necessary for a deal scenario. If we have a deal, an amendment process would apply to all the regulations that we have taken through. Most of them would need to be repealed, but we would do so according to the terms of the deal. I have nothing more to say at this point, and I commend these regulations to the House.
Anneliese Dodds (Oxford East) (Lab/Co-op)
First, may I associate myself with the heartfelt tributes that have been paid to my hon. Friend the Member for Newport West (Paul Flynn), and I express my sympathies to his family?
We are here to discuss two no-deal statutory instruments appertaining to financial services. Members will be aware that the Conservative Government refused to allow a debate on the Floor of the House about arguably the most significant such SI—the one concerning the markets in financial instruments directive, which was sufficiently complex to require a Keeling schedule. The Government did agree to a recent debate on an SI concerning securitisation, but of course that was not a no-deal SI, and the debate only happened when the Opposition prayed against the SI. Members may be forgiven for scratching their heads about why the Conservative Government have adopted such a different tactic this time; I am sure Members can come to their own conclusions on why this debate is taking place on the Floor of the House today.
These statutory instruments make provision for a regulatory framework after Brexit in the event that we crash out without a deal. The volume of such legislation is deeply concerning for accountability and proper scrutiny. The Government have assured the Opposition that no policy decisions are being taken as part of the no-deal process. However, establishing a new regulatory framework inevitably involves matters of judgment and raises questions about resourcing and capacity. Secondary legislation ought to be used only for technical, non-partisan and non-controversial changes, because of the limited accountability it normally allows; instead, the Government continue to push through far-reaching financial legislation via this vehicle.
As legislators, we have to get this right. The regulations could represent real and substantive changes to the statute book, and as such, they need proper and in-depth scrutiny. I am slightly surprised to see some Government Members shaking their heads at the idea that we need appropriate scrutiny. It is incredibly important, and in the light of that, the Opposition would like to put on record our deepest concerns that the process regarding regulations in the event of no deal is not as accessible and transparent as it should be.
The rationale for these SIs is preparation for a no-deal Brexit—something that continues to be retained on the table by the Conservative Government despite clear evidence of the harm that that is doing to our economy. Last week in this Chamber, I mentioned the concerning slowdown in growth rates and the shift into recession of our manufacturing sector. The financial sector has not been immune; quite the opposite. As many Members will know, Ernst and Young has created what it calls a Brexit tracker, which monitors the public statements of more than 200 of the biggest financial services companies operating in the UK. As of January this year, the tracker showed that more than a third of the financial services companies that were tracked indicated that they are considering moving or have confirmed that they will move some of their staff or operations outside the UK. As we consider these two financial services SIs, we must reflect on why the current Government continue to retain the so-called option of no deal, especially given that the House has emphatically shown its opposition to such an outcome.
The first SI appears to cobble together three sets of legislative changes to a variety of parent legislation. The Minister, as he always does, made a valiant attempt to present a coherent case, but we are talking about three different sets of changes. As with other SIs that the Opposition have contested, the parent legislation includes primary legislation, not least, as the Minister acknowledged, FSMA. Yet again, we see here the operation of Henry VIII powers.
In connection with that, I note that as of last Thursday, 288 changes have been made to FSMA as part of the preparation for no deal. That is an enormous number of changes to primary legislation, and it has been delivered in a completely piecemeal manner. We have no indication of when Government will present us with a finalised and integrated version of the new no-deal legislation, coupled with the primary legislation that it amends. Perhaps the Minister, in his concluding remarks, can tell us whether his Department has such an overview and, if so, whether it would be willing to share it with the House and the public so that we can better understand what the financial services regulatory system would look like in the event of no deal.
The explanatory notes for the regulations were truly a masterpiece of the kind we have come to know well from no-deal SIs. I note that Her Majesty’s Treasury uses the crystal mark on some of its documents. I am sorry to speak so bluntly, but HMT would perhaps have done well to use the crystal mark’s drivel detector—its words, not mine—on the explanatory notes. All they did was to list the bits of legislation that were being changed. In no case did they explain why, aside from maintaining that doing so was necessary to address deficiencies. Yet again, we find questionable decisions being taken with no explanation.
Not all the changes in the regulations appear even to relate to the EU. For example, there are changes relating to disclosure requirements and to the Panel on Takeovers and Mergers—in regulation 2—but there is no indication why those changes have been made. Again, definitions are changed, such as that for short selling regulation information, but it is not clear whether that definition will be replaced elsewhere or, indeed, why it had to change in the first place.
Perhaps most worryingly, we see yet again a shift away from EU requirements, which suggests that these measures are potentially going beyond direct transposition and instead diluting existing provisions. For example, the wording of one article of the EU regulation on short selling and certain aspects of credit default swaps—sorry, that is not a lovely name to pronounce—is amended from “shall, where possible” to “may”. From my reading, the amended provisions relate to the obligation to liaise with third countries concerning the identification of where shares are traded, but it is not clear why that obligation should be watered down. There is a similar change to the 2014 market abuse regulation, where “shall, where necessary” is altered to “may”. It appears that the UK’s co-ordination with non-EU countries and its relations with the EU27 are being altered through these measures. The withdrawal Act does not provide the authority to do that.
The Minister appeared to suggest that this was to do with the exchange of confidential information and that we needed to have a different process. Surely, however, there are different ways of responding to the issue; there could have been measures in this legislation to deal with the problems and to ensure that information was appropriately guarded against anybody who might use it in an inappropriate way. However, we do not have that; instead, we have these provisions, with no explanation why.
Relatedly, there is no clear indication of the process to be used to determine which countries might be chosen for the conclusion of disclosure agreements mentioned by the Minister, or of the process required for those agreements. I absolutely agree with the point made by the hon. Member for Aberdeen North (Kirsty Blackman). Obviously, she was referring to the overall import of these regulations, but there are other ambiguities about timing. When it comes to the conclusion of disclosure agreements, does the process have to be completed by exit day? If it does, has that process started? If it has started, on whose authority has it started? Presumably, it is not the authority of this House. In addition, it would be helpful to understand why the Government have decided to follow a bilateral approach, rather than one that might have been integrated, with an integrated disclosure agreement that could have been signed with the European Securities and Markets Authority.
Finally, we are again informed that an impact assessment has not been conducted on this instrument, even though the explanatory memorandum states that there has been engagement with relevant stakeholders concerning the SI. It would be helpful if the Minister provided further details about that engagement.
Let me move now to the Money Market Funds (Amendment) (EU Exit) Regulations 2019—I will just talk about MMFs from now on. Obviously, the regulations are intended to implement the EU’s MMF regulation of 2018. As described by the Minister, that regulation was intended to make money market funds more resilient against disturbances in the financial markets, reduce the risks of runs in the markets, limit cross-border contagion and improve investor protection. That regulation immediately applied to new MMFs, from July of last year, but it came into practice for existing MMFs very recently—just last month. I will not go into all the details of the use of MMFs, but I would just add charities to the list the Minister talked about—there are a number of different bodies that use these funds.
The process of creating the regulation was led by a UK Labour MEP in the European Parliament, Neena Gill. As many Members may be aware, the process was controversial; it was not entirely straightforward, and there was huge debate about whether the UK should exactly follow the US approach or not. There was a lot of scepticism about whether the system of MMFs, in and of itself, should be encouraged. Many have described it as a system of shadow banking, because of its relative lack of transparency.
As with other SIs tabled by the Government, there are a number of problems with this legislation. First, it provides a new definition of money market funds that is arguably circular. It describes them as
“instruments normally dealt in on the money market which…satisfy…Article 2a(1)”
of the regulation. That is quite a different approach from the one taken by the EU, even back in the days of the Committee of European Securities Regulators. Before ESMA was created, there was an inclusive list of activities that would lead to classification as an MMF. A different approach is taken here.
Secondly, again as with other pieces of no-deal financial services legislation, there is no indication why and how the FCA, in particular, is meant to adopt the regulatory approach suggested in this SI. Regulation 6 provides it with the power to regulate MMFs, but without explaining how that will impact on its existing activities. The Minister intimated the different kinds of activities that the FCA will have to take on as part of this process, but they are very onerous. Just in relation to reporting templates, ESMA produced a 135-page report after consultation with stakeholders about what should go into those templates. I assume that similar levels of detail might be required for the FCA. This will not be a light-touch area to move into. Again, there is a lack of clarity about the extent of industry consultation on this SI.
As has often been the case with these SIs, we have had some rather strange throwaway comments in relation to this SI. The guidance accompanying it states that it does not include provisions that may be necessary to ensure Gibraltarian financial services firms can have continued access to UK markets in line with the UK Government’s statement in March 2018 and other provisions dealing with Gibraltar more generally. It also says that, where necessary, provisions covering Gibraltar will be included in future SIs. Does that mean that provisions for Gibraltar should have been covered but that there just was not time to consider them properly, or is there a procedural reason why they are not covered here? Again, will we need an omnibus SI at some point covering regulatory arrangements for Gibraltarian financial services?
Anneliese Dodds
I am really pleased to see the Minister nodding, and I look forward to his explanation of why this has been an issue.
Above all, we see secondary legislation being used expansively here, with no overall indication of how it will interact with other pieces of secondary legislation and, indeed, primary legislation. There appears to be no rhyme or reason why the Conservative Government wish certain SIs to be taken on the Floor of the House and others to be taken in Committee—aside, that is, from a desire to fill the timetable for this week, after their mismanagement of the Brexit process. Issues of such importance as our nation’s financial stability and resilience surely deserve better than this.
Kevin Hollinrake (Thirsk and Malton) (Con)
It is a pleasure to be called in this important debate. I must say that I am at a bit of a loss as to why the hon. Member for Oxford East (Anneliese Dodds) has such an issue with these statutory instruments. They are simply about bringing current legislation from the European Union into domestic law; there are no significant policy changes. I was also a little mystified as to why she thought this was an appropriate time to take no deal off the table, particularly when this is such a sensitive time in our negotiations.
I would like to raise a couple of points and to take this opportunity, as we bring this legislation back from the European Union, to press for some sensible changes in regulation, principally to make our regulation more effective. Obviously, some of this legislation gives more power to our regulator—the Financial Conduct Authority. As my hon. Friend the Minister will probably recognise, the FCA has had some shortcomings in terms of its regulatory capability. I would like us to move towards having less of an expectation that the regulator will be responsible for all regulation and more towards giving individuals more power to hold our financial institutions to account.
The FCA will always be a watchdog at best, and not a bloodhound—it cannot be in all places at all times. What I have seen in my role as the co-chair of the all-party parliamentary group on fair business banking and finance—a role my hon. Friend the Minister is very familiar with, because we have talked about these issues many times—is the abuses of small and medium-sized enterprises, particularly over the last 10 years. Some 16,000 businesses got very poor treatment from the Royal Bank of Scotland, in particular. At Lloyds HBOS, a number of senior managers ended up going to jail, with a collective sentence of 47 years. Other banks were involved—the CYBG and others—in swaps, interest rate hedging products and payment protection insurance on the consumer side of things.
It was not the regulator that brought those matters to light. Incredibly, 3,500 people work at the FCA and its predecessor, the Financial Services Authority, but it was not those bodies that found out what was going on in the banks; it was determined and committed individuals. A guy called Lawrence Tomlinson, who worked for the Business Secretary at the time, first established what was happening in those financial services organisations and banks, and how they were treating our small businesses. Even when these matters were brought to the attention of the FCA, action was not taken for some years. At HBOS, it was Nikki and Paul Turner who established what was happening. The bank tried to repossess the Turners 22 times, but the regulator did not step in to protect them, even though the evidence that they had produced was later verified and crucial in the investigation and subsequent prosecution. Similarly, at Lloyds HBOS the whistleblower Sally Masterton was disgracefully treated when she brought these matters to the attention of the FCA and the bank. Action was not taken to support her.
We have to try to move away from simply thinking that regulation and regulators can solve all the problems, because they patently do not always do so, and move to a situation in which we give individuals tools to hold the institutions to account. The Minister has done a fine job in persuading the banks to bring forward mechanisms to do that in the historical cases review that will hopefully be brought forward in the not too distant future. UK Finance has come forward with a voluntary scheme—it needs to be voluntary, because many of the cases are outside the statute of limitations. As business banking is not regulated, it also had to use a fair and reasonable test that would not apply in a court of law today. That is welcome progress, although we have some distance to go before we get this right. I thank the Minister for his excellent efforts in persuading UK Finance to come to the table.
The Minister knows that I think that we need to make sure that robust measures are in place alongside the regulator—we are not scrapping the regulator—to allow individual voices to be heard. That is why the all-party group thinks that we should have a financial services tribunal. That proposal has support across the House, and I know that the Minister will continue to look at this. We do not want a huge amount of regulation of commercial lending, because we want to make sure that banks are still confident to lend, but it is reasonable that banks treat their customers fairly and reasonably, and that those principles are actionable if things go wrong. That is not the case at the moment, as he knows, but we want to see that simple change to regulation and a tribunal that works similarly to employment tribunals—if employees are mistreated by an employer, they know they have an affordable mechanism for justice that means they can hold the employer to account. Most employers would do a good job anyway, but they are careful to ensure that they adhere to employment law, because they know that if they do not they could end up at a tribunal. It is pretty easy for an employee to take a case.
We do not need armies of regulators to regulate employment law. In my business, we do not have an employment regulator coming in to inspect our files. We do not need that: we know that we will be held to account if we get it wrong. The same principle should apply in the business banking world, where there is a huge imbalance of power between banks and businesses. If people have the mechanism to be able to hold the bank to account if things go wrong, we will not need armies of regulators. We simply need a simple process. That is far more important than a regulator.
If I had to choose between the FCA—even though some very fine people work there—and a financial services tribunal, I would take the tribunal every time, and I say that as a business person. Many people I speak to who have lost out through the actions of banks feel the same.
I just sound a note of caution, as we bring this legislation back into domestic law, that we should see this as an opportunity to make banks and other financial organisations more accountable, without being over-burdensome in terms of regulation. That would have a profound effect on confidence between businesses and banks and, therefore, UK plc.
Kirsty Blackman (Aberdeen North) (SNP)
I am impressed by the hon. Member for Thirsk and Malton (Kevin Hollinrake) making a valiant attempt clearly not to stretch the time out, but to make an excellent speech. It was unfortunate that he did not listen a little more carefully to the speech by the Labour spokesperson, who raised the issue of powers that were being changed beyond the scope of simply rewriting the EU law into UK law. Powers are being changed in that regard.
In relation to the disclosure of information SI and to be fair to the people who wrote the explanatory memorandum, there are two whole pages on the deep and special partnerships that the UK desires to have with the EU, although not on the substance of the information in the SI. I commend them for including all that information, although it could have been written in any SI, to be honest.
The instrument redesigns the requirements on EU member states in various pieces of EU legislation that are to be read as applying to the UK after exit, according to a line in the explanatory memorandum, which did not make a huge amount of sense to me. The explanatory memorandum seems to suggest that this UK SI is amending EU legislation that applies to EU countries, which it clearly cannot do, because the UK Parliament does not have the power to amend EU legislation as it applies to other EU countries.
The SI contains some interesting stuff about the requirement to seek the consent of EU organisations and countries before disclosing information. There is currently a requirement for the UK to seek the consent of EU countries before passing on the financial data that it may need to pass on. The SI would remove that requirement. How does that accord with the UK being keen to have a deep and special partnership if it is removing the requirement to seek consent? Removing a requirement to seek consent seems like a bit of an odd thing to do, given that the requirement to seek consent presumably ensures that there are more safeguards in place. We seem to be reducing the number of safeguards in relation to EU countries but not in relation to third countries, because currently we do not need to seek that consent. It is a bizarre thing to do.
My other question is whether the EU has announced plans to change its legislation so that it does not need to seek consent from the UK to pass on financial information. I have raised this issue before and the Minister will know what I am about to say. In some cases, the UK seems to be agreeing on reciprocity—my understanding is that it is on a case-by-case basis by whoever happens to be heading the Department’s SIs and there is no overall policy from the Government on whether they will agree EU reciprocity on such matters, but will the EU change its law? Has it signalled its intention to change its law and is that why we are seeking to change our law?
The explanatory memorandum states:
“The UK and the EU have agreed the terms of an implementation period”.
I am little confused about the definition of “UK” in this regard. The House certainly has not agreed to the terms of an implementation period. The Prime Minister’s deal lost by 230 votes, so we cannot say that it has been agreed. It may have been negotiated, but I would not go so far as to say that it has been agreed. The Prime Minister certainly seems keen to reopen negotiations on the withdrawal agreement, so surely it cannot possibly have been agreed at this point.
The explanatory memorandum states:
“The powers in the EUWA”—
the European Union (Withdrawal) Act 2018—
“are not intended to be used to make policy changes”,
yet the powers in both SIs are being used to do just that, by changing how the law operates, and not just replacing EU regulators with UK regulators. They contain more wide-ranging changes.
The explanatory memorandum states that it would be “inappropriate” to continue sharing information. I am not sure how that would be inappropriate. If we are switching from “shall share information” to “may share information”, surely there will be cases in which it would be appropriate to continue sharing information.
I have a question about the co-operation agreements that will potentially be signed for the disclosure of financial information. I am interested to know how much work will be involved in negotiating those co-operation agreements. Clearly we do not have to do any such negotiating with the EU currently because we are part of the single market and of that framework. Brexit will be overwhelmingly bad, whatever happens. Even if we have a deal, we will end up at a huge disadvantage, compared with our current position. On this specific point, how much additional work will be generated as a result of having to negotiate and sign those co-operation agreements, and at how much of a disadvantage will we be put as a result?
I am still dealing with the first SI, on the disclosure of information. The regulations were published in draft on 9 January this year, but the corrections were made less than a week ago, on 12 February. The copy that I got from the Vote Office did not include the corrections, so I had to find them online. I am interested to know why corrections were needed.
Kirsty Blackman
If they simply correct typos, that is absolutely fine. I was worried that they might have been the result of concerns raised about the legislation. I welcome that clarification.
The explanatory memorandum states that no consultation was undertaken. Once again, I think that consultation should have been undertaken on the SIs, and particularly the one that makes changes to the legislation. The explanatory memorandum states that no impact assessment was done, but it does say that
“a de minimis impact assessment has been carried out.”
This is the first time that I have seen that phrase used in an explanatory memorandum on a financial SI, and I do seem to be spending quite a lot of my life dealing with them—I am sure that the Minister is spending even longer. I do not know what a de minimis impact assessment is, and I do not know where I could find it, because it is certainly not provided on the website. I can find no further information on this thing that has apparently been done to assess the impact.
We have criticised the Government before for not carrying out impact assessments. I think that it would have been useful to have an impact assessment on this. In fact, I fully intend to challenge the Government on this. They carry out an impact assessment only when there is likely to be an impact of £5 million or more on businesses. They do not carry out impact assessments when there is likely to be an impact of millions, or indeed hundreds of millions, on consumers or individuals living anywhere in these islands. It strikes me that, according to the Government’s own better regulation guidance, this process is entirely unfit for purpose, given that it involves literally hundreds of SIs coming through, many of which could do with an impact assessment.
I will move on to the Money Market Funds (Amendment) (EU Exit) Regulations 2019, which is a no-deal SI. The Labour spokesperson made a comment about taking no deal off the table. [Interruption.] Mr Deputy Speaker, it would be easier to speak if it was a little quieter in the Chamber. We are not asking the Government to take no deal off the table now—the hon. Member for Thirsk and Malton said that we were doing so at a critical point in the negotiations; we have been asking them to take no deal off the table pretty much since the Brexit process started, because it should never have been an option in the first place. We are not asking for it to be done now; we were asking for it to be done almost three years ago.
The regulations also change the powers of the Financial Conduct Authority. I have raised concerns before about the powers of the FCA, and the fact that the Government are making piecemeal changes without any kind of overall strategy on what they expect it to look like at the end of the process. I know that the FCA can request more money from Parliament, and I assume that it will have to do so in order to carry out the additional functions that are being delegated to it as a result of all the SIs coming through.
The explanatory memorandum for the money market funds regulations states that HM Treasury will have
“the power to make delegated acts specifying quantitative and qualitative liquidity requirements on MMFs.”
I would appreciate it if the Minister could seek some divine intervention on this and let us know how those delegated acts will be introduced. Will SIs be introduced under the affirmative or negative resolution procedure, or will the Treasury simply be allowed to make its own regulations without any recourse to Parliament? It would be useful if Parliament were across this, given that it is an area that Parliament is not in the habit of dealing with, because it has been an EU area. I think that, in the event of no deal, Parliament would benefit from having some input into those requirements on MMFs.
The commencement provisions for both SIs state that they will take effect on “exit day.” Now, I understand that exit day is defined in the European Union (Withdrawal) Act, which sets out a definite date and time. I am told that the SIs that refer to “exit day” mean that date and time. However, the withdrawal Act also gives the Government the power to vary exit day. If the Government vary exit day, presumably the SIs would come into effect only on the day that they have decided is to be exit day.
I want to know what will happen if we approve these SIs. The process is as follows. If an SI is approved, it does not get Royal Assent—that is not something that happens to SIs. Instead, it basically sits in a pile of SIs that are waiting to be “made”, and they are “made” at a date and time of the Government’s choosing. I was unable to get any further information on that, other than that it is the Government who decide—is it the Cabinet Office or the Prime Minister?
When we were asked to approve these SIs, I genuinely thought that the first one was not to do with a no-deal Brexit, because nowhere in the explanatory memorandum could I find the words “no deal”. The second SI, however, is very clearly to do with no deal. We are being asked to approve the money market funds regulations, which the explanatory notes state will come into effect only if there is no deal, but there is nothing to stop the Government from making this SI, or indeed any other, at a time of their own choosing; it would then apply after exit day. The House of Commons is basically being asked to agree to all these SIs coming into force on exit day, and then the Government have carte blanche to make any of them whenever they desire.
The Minister and I were both a little confused about the provisions of the disclosure of information regulations, given that I thought they applied in any circumstance. I am not sure what will happen if there is a deal now, because I do not know how the disclosure of financial information will work, because we have not been provided with an SI that works in the event of a deal scenario—surely we should have been, because there would be deficiencies in EU law.
What happens in that event? How do the Government decide when to make these SIs? If there is a deal, will they suddenly rush through provisions? The House of Commons has so many SIs in front of it, and we are now only dealing with no-deal SIs. In the event of a deal, will we have a mad situation where the Government have to make edits to each of these SIs and bring them through the House again so that we can approve them, followed by some sort of procedure to put them in place?
There have been screw-ups of monumental proportions in relation to everything to do with Brexit. Specifically in terms of the SI process, we have not seen all the SIs for a no-deal scenario. Apparently we will not even see some of the SIs for a deal scenario until the Prime Minister manages to get something through the House, and who knows when that may be? Are we going to continue with this shambles? For people who are interested in House of Commons procedure, it is wonderful to see it not working. It is great to see the millions of places where House of Commons procedure is completely deficient, and it is particularly great to be able to discuss these SIs and raise those issues on the Floor of the House.
I understood that the disclosure regulations were for the event of any deal or no deal. If they are only for the event of no deal, what information will the Minister provide about that? What information will he provide about the powers of the FCA and what it will look like in future? How will he ensure that the FCA is adequately funded to fulfil its obligations? Lastly, these two SIs and all the other financial services SIs we have seen have not been adequately consulted on, and I would appreciate it if the Minister commented on the consultation process.
John Glen
I have listened carefully to the hon. Members for Oxford East (Anneliese Dodds) and for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), and I will endeavour to respond substantively to their points as succinctly as I can.
Before I get into the detail, it is important to set the context. The Treasury’s role is to take through the House the statutory instruments, 53 of which relate to financial services, that would be needed in a no-deal scenario, as well as the in-flight files Bill. Those two activities constitute the Treasury’s necessary intervention to ensure that if a deal is not forthcoming—obviously, the Government’s expectation and what we are working towards is that one will be—we will have a functioning regulatory regime in place. These two SIs sit underneath the powers taken in the withdrawal Act, and they do not seek to change the legislative effect. They seek to onshore legislation that already operates through our membership of the EU.
Craig Tracey (North Warwickshire) (Con)
The Minister has talked a lot about the importance of financial services, and I completely agree with that. There is often a perception that financial services are all London-centric, but the insurance industry, for example, employs 300,000 people, and two thirds of those are around the UK. It is fair to say that getting this legislation right will protect all our constituents across the country.
John Glen
My hon. Friend is right: 63% of the 1.1 million jobs in financial services are outside London. It is important that we have this provision in a no-deal situation.
The hon. Member for Oxford East opened her remarks with concerns about the purpose of a debate on the Floor of the House. I am happy to have a debate on the Floor of the House or in Committee tomorrow morning, tomorrow afternoon, Wednesday morning or Wednesday afternoon, just as I was happy to have the debate last week on securitisation, which was also a business-as-usual SI.
A range of points have been raised, and I am happy to try to tackle them. The hon. Member for Oxford East talked about there being no policy explanation in the explanatory memorandum for the disclosure regulations. The explanatory memorandum clearly sets out the reasons for the amendments, which are essentially to make consistent the safeguards that apply to EEA and non-EEA regulators. She asked about the consolidated text not being available for the debate. It is not normal practice for the Government to provide consolidated text for secondary legislation debates, but I will look carefully at her remarks and write to her if I can give any more clarification.
The hon. Lady asked about the reliance on secondary legislation. As I said, the central objective of the SIs is to provide legislative continuity as far as possible for firms, and the withdrawal Act does not allow policy changes beyond what is necessary to ensure that legislation is operable on day one of leaving the EU. I note the areas where she alleges that there is that effect. I will look carefully at that and give her more clarification if I can, as I have always done in our debates in Committee.
The SIs are subject to the usual scrutiny provided by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee. Additionally, in the case of financial services SIs, the Treasury has taken the step of publishing drafts of the legislation in advance of laying, to maximise transparency about the provisions and ensure that stakeholders are aware of the changes. I note the hon. Lady’s comments about the EY report, and I also recall the remarks of the deputy governor of the Bank of England, Sam Woods, with respect to contingency arrangements made by firms in the City. That is broadly being played out at the moment. It is an uncomfortable process, which is why it is imperative for us to get the deal that is the Government’s policy, although it is right that we make these arrangements in case that does not happen.
The hon. Members for Oxford East and for Aberdeen North asked about the impact assessment of the disclosure regulations. The legislation on the disclosure of confidential information primarily relates to how the UK, EEA and third country authorities disclose confidential information with one another. There is nothing in these regulations that will require firms to change how they do business.
The definition of money market funds has been updated to reflect that, in a no-deal scenario, only those funds that have been authorised under this UK regulation at this point may use the strict designation of money market funds—the hon. Member for Oxford East rightly explained the genesis of it—and to allow those funds that are permitted through the temporary permissions regime to use that designation.
The hon. Members for Oxford East and for Aberdeen North also asked about the FCA’s resourcing. For the House’s edification, the FCA has a total of 158 full-time employees working on Brexit; that number increased from 28 in March last year. The hon. Member for Oxford East asked about Gibraltar. The SI dealing with Gibraltar has been laid and will be debated in due course.
I have addressed a number of the common themes raised by the hon. Members for Oxford East and for Aberdeen North. I will now briefly turn to the comments from my hon. Friend the Member for Thirsk and Malton. He used the debate to rehearse some of his normal themes about bank regulation. I always listen carefully to what he says. We had a conversation last week, and I will write to him on the matter he raised and reflect carefully on his comments.
These SIs are required to ensure safe disclosure of confidential information in the event that the UK leaves the EU without an agreement, that the regulation of money market funds continues and that the legislation functions appropriately if the UK leaves the EU without a deal. The approach taken in these SIs aligns with other SIs that we have laid and will ensure a smooth transition, to reflect the UK’s new position outside the EU. I hope that Members across the House will join me in supporting them in the Lobby.
Question put.
Exiting the European Union (Mediation)
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
20:27 - The House divided: - Ayes: 198 / Noes: 137 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)
I beg to move,
That the draft Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019, which were laid before this House on 21 January 2019, be approved.
This draft instrument forms part of our ongoing work to ensure that if the UK leaves the EU without a deal our legal system will continue to work effectively for our citizens. It is solely related to our no deal preparations. If Parliament approves the withdrawal agreement, which includes an implementation period, and passes the necessary legislation to implement that agreement, the Government would defer the coming into force of this instrument until the end of that implementation period. Once a deal and our future relationship with the EU had been reached, we would review whether this instrument needed to be amended or revoked.
This statutory instrument relates to mediation. That is a process whereby parties to a dispute attempt voluntarily to reach an agreement to settle their dispute with the assistance of a mediator but without a court needing to rule on it. In the civil and commercial field such a dispute might for instance relate to a contract, a debt or contact with children.
John Howell (Henley) (Con)
As my hon. and learned Friend knows, I am hoping to become an associate of the Chartered Institute of Arbitration. I have spent much of my political life championing mediation as a means of settling disputes. To what extent are the Government committed to mediation for the future as a result of these measures?
Lucy Frazer
My hon. Friend is a member of the Justice Committee and has taken part in many debates on this subject. I know he has extensive experience of arbitration as well as mediation. I am very pleased that he is planning to go further on that. He must rest assured that the Government remain committed to mediation. It is a very important tool in the armoury to help people to resolve their disputes. Outwith this statutory instrument and the EU rules that we already have, as I will go on to explain, we have very strong domestic provision for mediation, and that will continue. The reason to bring forward this statutory instrument and the approach we have adopted is that the current arrangement with the EU is reciprocal and that following our leaving the EU we cannot rely on any reciprocity. This statutory instrument will therefore revoke the EU legislation.
In 2018, the European Council agreed a cross-border mediation directive which sought to harmonise certain aspects of mediation in relation to EU member state cross-border disputes. The aim of the mediation directive is to promote the use of mediation in such cross-border disputes. An EU cross-border dispute can be one between parties who are domiciled or habitually resident in two or more different member states, or it can be a dispute where judicial proceedings or arbitration are started in a member state other than the one where the parties are living. The UK, as a member state, enacted domestic legislation which gave effect to certain aspects of the mediation directive. I say certain aspects, because in many areas, such as ensuring the quality of mediation or information about mediation to the public, our existing arrangements already met the requirements or standards set out in the directive. However, to implement the directive the UK had to introduce some new rules for EU cross-border mediations involving UK parties.
The new rules first specify that if a time limit in a domestic law during which a claim could be brought in a court or tribunal expired during the mediation process, the parties could still seek a remedy through the courts or tribunals should the mediation not be successful. Secondly, the new rules define the rights of a mediator or someone involved in the administration of mediation to resist giving evidence in civil or judicial proceedings arising from information disclosed during a mediation. Various changes were also made to court rules to supplement the changes and to implement the requirements of the mediation directive relating to enforceability of agreements resulting from mediation.
Under the European Union (Withdrawal) Act 2018, the legislation implementing the mediation directive is retained EU law upon the UK’s exit from the EU. However, should the UK leave the EU without an agreement on civil judicial co-operation, the reciprocity on which the directive relies will be lost. Even if we were to continue to apply the enhanced EU rules to EU cross-border disputes, we would be unable to ensure that the remaining EU member states applied the rules of the directive to cross-border disputes involving parties based in the UK or judicial proceedings or arbitration taking place in the UK that were not otherwise in scope.
Accordingly, and in line with the Government’s general approach to civil judicial co-operation in the event of no deal, this instrument will repeal, subject to transitional provisions, the legislation that gives effect to the mediation directive’s rules on confidentiality and extension of limitation periods. It amends the relevant retained EU law in England, Wales and Northern Ireland, and in Scotland—in so far as it relates to reserved matters. Separate instruments will amend the related court rules in England, Wales and Northern Ireland. There is other legislation implementing the directive that is within the legislative competence of the Scottish Government, and I understand that they have decided to bring forward their own legislation in this area.
Turning to the impacts, this instrument is necessary to fix the statute book in the event of a no-deal exit. We have assessed its impact and have published an impact assessment. By repealing the domestic legislation that gave effect to the mediation directive, we will ensure clarity in the law applying to mediations between UK parties and parties domiciled or habitually resident in EU member states. We will also avoid a situation where mediations of an EU cross-border dispute conducted in the UK are subject to different rules on confidentiality or limitation from other UK mediations.
As I indicated, the instrument will change only the rules applying to what are currently EU cross-border mediations, and only in two respects: time limits and confidentiality. On time limits, claimants involved in such mediations who no longer have the benefit of an extended limitation period would, if they wanted more time to allow for mediation to take place, be able to make an application to the court and ask it to stay proceedings. Overall, this instrument will ensure that, post EU exit, UK-EU mediations are treated consistently under the law with mediations between UK-domiciled or habitually resident parties, or UK parties and parties domiciled or habitually resident in non-EU third countries.
Bob Stewart (Beckenham) (Con)
As I read it, fundamentally, for people who are seeking mediation, there will not be much change if the instrument is enacted.
Lucy Frazer
That is precisely the position. All that is happening with this SI is that we are going back to the position before the directive was implemented. It was implemented in 2011, so it has been in place for only a number of years, and we will still have all the rules that regulate domestic mediations, which take place across the country in various jurisdictions. This measure will impact only two very small areas—time limits and confidentiality—and as my hon. Friend highlighted, much will remain the same.
As I have set out, without a deal in place on 29 March 2019, certain EU cross-border mediations involving UK-domiciled parties—except for those that had started before exit—would no longer be subject to the mediation directive rules in EU member states. The Cross-Border Mediation (EU Directive) (EU Exit) Regulations fix that deficiency and ensure that both the courts and UK citizens have clear and effective rules to follow during a cross-border mediation dispute.
Imran Hussain (Bradford East) (Lab)
Across Parliament and throughout the legal sector, there is serious concern that the Government’s inadequate planning for justice co-operation after Brexit puts the most vulnerable people in our society at risk. The Chair of the Lords EU Justice Sub-Committee took the step of writing to the Secretary of State in October to criticise his lack of planning and warned:
“The government needs to wake up to the reality of what having no answers on family justice will mean after Brexit.”
Many people are concerned that the Government’s failure to secure agreement on a form of continued participation in the European arrest warrant will leave us less safe.
We currently benefit from a well-established, frequently updated and comprehensive set of reciprocal justice arrangements with the EU. These cover everything from disputes over child custody to medical negligence abroad. As a recent House of Lords European Union Committee report states, these specific EU regulations provide “certainty, predictability and clarity”. Without an agreement with our European partners on what the future of those reciprocal arrangements looks like after we leave the EU, people who are forced to go to court or mediation to protect their rights could face extremely damaging consequences. Whatever claims the Minister makes about the secondary legislation that the Tories are bringing in, the Opposition need to see concrete action, not words, to defend rights, because we simply do not trust the Government to protect working people’s rights.
Mike Wood (Dudley South) (Con)
The shadow Minister puts a lot of store in comments made by various House of Lords Sub-Committees on this statutory instrument. Will he tell us whether the Joint Committee on Statutory Instruments raised any objections to it?
Imran Hussain
A number of objections have been raised, as I have set out, but the bottom line is that these regulations repeal legislation and mean effectively that the higher European standards will not be followed and that, instead, lower international standards will be.
Bob Stewart
But I thought I just heard the Minister say that in the matter of mediation, there will be very little difference, and that is what we are talking about: mediation.
Imran Hussain
Absolutely. The hon. Gentleman is right; we are talking about mediation. The Minister will know, and rightly pointed out, that there are two issues: time limits and confidentiality. This statutory instrument will repeal legislation that allows for extra time for that mediation, so that is substantially different. Perhaps the Minister can clarify that position in her closing remarks, because my understanding is that there is a substantial difference.
This statutory instrument would revoke and repeal the domestic legislation that enshrined in law the mediation directive. Many Members will be unfamiliar with the purpose of the mediation directive, but it is one of many examples whereby, through co-operation with our European partners, we have raised legal standards and protections across Europe. The European Statutory Instruments Committee—as raised by the hon. Member for Dudley South (Mike Wood)—considered whether this instrument could diminish rights. It found that it
“repeals legislation that extends the time limit for bringing certain claims in civil courts and employment tribunals to enable mediation”.
Some people may claim that legislation setting out the time limits for bringing civil claims is a minor issue, but it can have substantial real-world consequences. It could mean the difference between people being able to reach a mediated solution to a child contact case or not. The Government’s explanatory memorandum makes it clear that maintaining the standards of the mediation directive was an option available to the Government, but they have not sought to maintain the highest possible standards in all circumstances.
Why has the Minister not sought to maintain the highest possible standards? Can she guarantee today that if the statutory instrument passes and we move away from the high European mediation standards, people who rely on mediation for a family law matter—for example, a dispute over custody of a child—will be no worse off than they would have been had the mediation been conducted under the current European standards? I wait for her response, but she knows that the answer to that question is no.
For decades now, people from across the UK have travelled, lived and done business across Europe, safe in the knowledge that if something goes wrong they will be protected by legal systems that work, and work together. Many people from elsewhere in Europe have made their lives in the UK—some have started families, some created businesses, others are working in the NHS and other vital services—and they, too, trusted that they could rely on cross-border legal co-operation if something went wrong. That is why the Government’s failure to secure full judicial co-operation after we leave the EU is so damaging—it puts people’s rights at risk by lowering standards—and that is why we will vote against the SI. We in the Opposition know the Tories cannot be trusted to defend people’s rights.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Since that fateful day in June 2016, the Scottish National party has consistently raised justice co-operation post Brexit. No mitigation can replicate the arrangements we have as members of the EU. On the face of it, this statutory instrument seems less important than the grand examples of fleeing businesses, uncertainty about medicine supply chains and failed shipping contracts with firms with no ferries that result in millions of pounds being wasted, but it remains an important and undeniable example of utterly pointless self-harm. In this SI, the UK is willingly taking a course of action that will put both British and EU citizens in a worse position. Jim Cormack, QC, of Pinsent Masons, has said:
“The significance of the repeal is perhaps more symbolic as it explicitly recognises that Brexit results in the end of reciprocity in this respect between the UK and the relevant remaining member states of the EU”.
Scotland has a separate legal system and approach to justice that is closely integrated with EU law, so the SI applies to Scotland only in a limited way. As the Minister identified, Scotland will legislate separately to repeal the relevant provisions within the legislative competence of the Scottish Parliament, including on court rules. Nevertheless, this is a significant SI, as it flows directly from the UK Government’s decision to leave the EU without showing due regard to the fact to two nations of this so-called precious Union of equals voted to remain—Scotland emphatically so.
Scotland is, then, being ripped out of the EU against its will, and I have serious concerns about the impact this will have on our justice system, which I remind the House has always been separate and distinct—even if the right hon. Member for Islington North (Jeremy Corbyn) was unaware of this fact when he visited Scotland recently. Over the past 40 years, EU law has become woven into the fabric of both Scots and UK law, and this has overwhelmingly been to our benefit, yet, even though these effective arrangements for judicial co-operation benefit victims, families, businesses and communities in Scotland and elsewhere in the EU, they face being repealed or are under serious threat.
What makes this worse is that throughout the whole Brexit process the Scottish Government, the Scottish Parliament and all our civic organisations have been roundly ignored, while the Prime Minister ploughs on with the least popular Westminster initiative since the poll tax. No attempt has been made to win over Scotland or even to listen to any of the concerns expressed in the country, which raises certain questions. For example, what consultation was carried out in Scotland with the Scottish Government, the Law Society or any other civic body?
Lucy Frazer
I thank hon. Members for their important contributions, and I will respond briefly to some of the points raised. The shadow Minister, the hon. Member for Bradford East (Imran Hussain), made broad criticisms of the Department’s justice planning, but we in the Department take our governmental responsibilities very seriously. We have laid before Parliament several SIs for no-deal planning, many of which we have debated and passed; we have the £17 million from the Treasury to prepare; and we are liaising and working with Her Majesty’s Courts and Tribunals Service and the judiciary to ensure that we are ready should we leave on 29 March without a deal. That said, the best way to avoid a no-deal outcome is to approve the Prime Minister’s deal. That is why I voted for it. If the hon. Gentleman would like to avoid a no-deal exit on 29 March, that option is open to him as well.
I will deal now with the shadow Minister’s specific points about the SI. We have always had very high mediation standards. Domestic mediations take place across the country in a wide range of jurisdictions; they did so to a high standard before this directive came into force a few years ago; and they will maintain those high standards when we leave the EU. As I said in my opening speech, we are revoking the EU directive because we cannot rely on reciprocity in the future—that is the approach we have taken in our SIs—and where we will not get reciprocity, we are revoking the instruments by which we are currently bound.
Imran Hussain
Will the Minister confirm that as a direct result of the SI standards will be lowered, particularly with regard to mediation, because time limits will be reduced?
Lucy Frazer
If someone wants to stop a time limit running in mediation, they need only issue proceedings before a court, because that stops time running. If someone issues proceedings and asks for a stay of those proceedings, time stops running. That measure is available to people in mediation.
I will respond to the few points made by the hon. Member for Paisley and Renfrewshire North (Gavin Newlands). I recognise that the Scottish system is a distinct legal system, but I challenge his claim that we have ignored the Scottish Government. I was in Scotland—in Edinburgh—two weeks ago sitting with members of the Scottish Government and other devolved Administrations, and I was pleased to hear Scottish Ministers praise my Department for our work at official level liaising with them on matters of justice. We have, then, been working hard to involve the devolved Administrations in these measures.
For those reasons, and because it will maintain clear and effective rules for our courts and citizens to follow during challenging EU cross-border mediations, I commend the instrument to the House.
Question put:
Serious Violence
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Sajid Javid)
I beg to move,
That this House has considered serious violence.
We cannot ignore the rise of serious violence. Already this year we have seen seven fatal stabbings on London’s streets. I have met families of victims and seen at first hand the devastation that brutal violence can cause. I have seen police on the frontline working flat out to make our streets safer, and we must of course all do that we can to help them.
As Home Secretary, my No. 1 priority is to keep Britain safe. To do this, I am tackling serious violence head-on. As the threat has increased, so too has our response. I have listened to expert advice and acted wherever and whenever I could. I have been relentless in this mission so far, but it is clear that more must be done to stop this senseless slaughter; for the sake of all our young people, we are determined to deliver. That is why we published our serious violence strategy last April. We set out a tough law enforcement response that made it clear that this alone was not enough.
The strategy placed a strong focus on prevention and early intervention, preventing young people from being drawn into violence in the first place. It stressed the importance of a multi-agency response, with education, health, social services, housing, youth services and others all playing a part. The strategy also pinpointed the importance of tackling the drivers of serious violence, including the changes in drugs markets. Changes in the way drugs dealers operate and the rise of county lines gangs are fuelling the brutality on our streets. Social media also play a part, with gangs taunting each other online and ratcheting up tension and the risk of reprisal attacks. The strategy addressed those and other risk factors, such as exclusion from school. It set out our plans to do all we can to reduce serious violence.
We are delivering on the commitments we made in the strategy, and we are doing much more. I would like to take this opportunity to update the House on some of the progress we have made so far. First, we are tackling the root causes of violence and investing in our young people’s future. Our early intervention youth fund of £22 million is already supporting 29 projects in England and Wales, and more than £17 million has already been allocated to projects delivering interventions to young people at risk of criminal involvement, gang exploitation or county lines. The remainder of the money has been earmarked to help young people over the next two years. Indeed, our investment is increasing, with an additional £200 million for the youth endowment fund.
Secondly, we are taking a multi-agency public health approach to tackling violent crime. Cracking down on serious violence will take the whole of society: everyone has to play a part, so in October I launched this comprehensive new approach. This was underpinned by a package of measures including the youth endowment fund and the independent drugs misuse review. We will consult shortly on a new statutory duty on all Government Departments and public agencies to tackle serious violence. This will ensure that the whole of the public sector is playing its part to the max, working together on serious violence with everyone treating it as a priority.
Thirdly, we have introduced the Offensive Weapons Bill. We are taking a tough law enforcement approach to ensure that those who turn to violence have nowhere to hide. The Bill will close the net around violent criminals by giving the police more powers to tackle knives, acids and firearms. It will make it harder for young people to possess and purchase these dangerous weapons. The Bill will shortly complete its passage through the House of Lords.
Fourthly, I have announced the introduction of knife crime prevention orders. I have been clear that I will not sit back and wait another decade for the current cycle of violence to end. We continue to look at what more we can do, so no options are off the table if they can save lives. The police asked for this extra tool, so I intend to introduce these orders through an amendment to the Bill. Some people have expressed concerns, and I understand that. They have suggested that the orders are designed to criminalise young people, but that is absolutely not the case. The orders will be preventive, not a punishment. They will enable the police and other agencies to help those who are most vulnerable to carrying a knife to escape a life of escalating violence.
Bob Stewart (Beckenham) (Con)
Does this mean that when a person has a knife crime prevention order placed against their name, a police officer will be able to come along and check that they are not carrying a knife, just in a random way?
Sajid Javid
I would not quite say that it will be in a random way. The orders can be placed only with the permission of the courts. A police officer will suggest that an order is placed on an individual, but the courts will independently oversee that. The orders can carry a number of restrictions. They will be used, for example, in cases where the police believe there is a high risk of an individual being drawn into carrying knives and even using them, perhaps because he or she has been hanging out with the wrong kind of people, including those who have already been convicted of gang membership, carrying knives or serious violence. The measures will allow the police to ensure that the order is being observed, but I would not use the phrase “in a random way”.
Bob Stewart
I thank my right hon. Friend for letting me intervene again to rephrase my question. I do not mean stopping someone in a “random” way, but in a checking way to ensure that the knife crime prevention order is working and that, if the police are worried, they can stop the person and just check him or her.
Sajid Javid
I agree. My hon. Friend puts it appropriately. It is worth taking this opportunity to emphasise that the whole purpose of the order is to prevent people, especially young people, from being drawn into a life of crime in the first place. It is a preventive measure. The police have asked for it and it is supported by the Mayor of London. The serious violence taskforce has discussed it with experts, and it should be considered carefully by the House.
Fifthly, we are doing what we can to dismantle county lines—a horrific and often highly violent form of criminal child exploitation. We have provided £3.6 million to establish a new national county lines co-ordination centre. This will enhance intelligence sharing across the country to ensure that vulnerable children are being identified and safeguarded, and we are already starting to see some good results. Since the centre became fully operational in September, it has carried out two separate weeks of co-ordinated national action, resulting in over 1,100 arrests and 1,000 individuals safeguarded.
Sixthly, we are supporting the police response to serious violence. We know that the demands on police are high, and rising violent crime is stretching them even further. That is why we are giving them the support they need, raising police funding by up to £970 million next year, including council tax. I am delighted that police and crime commissioners collectively plan to strengthen their forces as a result and are consulting on plans to use their additional funding to recruit 2,800 officers. This will help to fight serious violence on the ground. It represents the biggest uplift in police funding since 2010, yet it is notable that some Members did not vote for the settlement.
We continue to back Operation Spectre—co-ordinated national police action on knife crime. The results of this latest drive speak for themselves, with over 1,000 arrests and more than 9,000 knives already taken off the streets. In addition, last year I announced £1.4 million to support a new national police hub to tackle gang-related activity online. It will be fully operational from May, focusing on disrupting criminality and referring content to social media companies to be removed. These companies must be prepared to do much more, and I have already been very clear that I am prepared to legislate if they do not play their part.
Finally, we are acting to tackle the drivers of serious violence. As part of our public health package, I launched an independent drugs misuse review to investigate how the trade is fuelling serious violence. Earlier this month I appointed Professor Dame Carol Black to lead that vital work, and I take this opportunity to thank her for her efforts.
I hope the importance that I place on tackling serious violence is very clear. I have no greater priority than saving lives, providing peace of mind that our loved ones will be safe when they step out the door, and making everyone feel secure on our streets. I have set out our approach and the range of work that is under way to try to achieve those aims, how that has been stepped up since I became Home Secretary, and how we will continue to strive to do more. This Conservative Government are clear that this senseless violence must stop, and we will do everything in our power to make sure that happens. I commend this motion to the House.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Few aspects of crime frighten our constituents more than violent crime. The sad truth is that, under this Government, violent crime continues to spiral.
I begin by declaring a personal interest and concern. I have been an MP in the heart of the east end for 30 years. I am immensely proud of being a Hackney MP. It is an amazing community, and we lead the way in tech, fashion, fine art, music and all types of culture, but a person cannot live and work in Hackney for the number of years I have and not be aware of the harsh reality of violent crime. For my constituents and me, violent crime is not just a newspaper story but the cause of tragic incidents that haunt friends and neighbours and regularly scar our community.
Let me remind the House of the parameters of the violent crime wave we face. The latest data from the Office for National Statistics reveal that violent crime soared 19% to 1.5 million offences in the year to last September. Consider that for a moment: it equates to an average of more than 4,000 offences a day. The ONS also reports that it includes a 14% rise in homicides and an 8% rise in knife crime, which equates to 110 knife offences daily. Murder and manslaughter are at their highest levels for more than a decade.
The Home Secretary sometimes tries to hide behind the fact that the rising figures are the result of better reporting and recording. That may be a factor for some types of crime, but the ONS says:
“We have also seen increases in some types of ‘lower-volume, high-harm’ violence including offences involving knives or sharp instruments.”
To look at the issue of violent crime from another perspective, there has been a 15% increase in the number of hospital admissions in England for assaults involving a sharp instrument. That is not better police recording; it is our A&E units across the country being swamped by the effects of serious violence. In fact, a report published by Her Majesty’s inspectorate of constabulary in 2014 found that violent offences had actually been substantially under-recorded by 33% nationally. We are in the middle of a crisis.
Behind the statistics are a thousand personal tragedies: the victims of violence; the people who have been robbed or attacked on the street; the innocent young men and women caught up in the crossfire in a club or on the street where they live; the vulnerable young people caught up in the drugs trade, and possibly the county lines phenomenon; the mothers who lie awake most nights until their son or daughter returns home; the parents who dread the phone call from the police or the hospital to tell them that a family member has come to harm; and the young men who will never come home again.
As the Home Secretary reminds us, almost a year ago his predecessor launched the new Home Office serious violence strategy. The strategy has many theoretical elements that the Opposition would support, but we contend whether the money made available for it actually offsets all the cuts in local government funding that have contributed to the crime wave we now see. I will return to that subject.
Ministers’ responses to violent crime have included calling for more stop-and-search, knife crime prevention orders and asking the internet companies to stop videos that glorify violence. All those ideas have their merits, but I stress to the House that random, non-evidence-based stop-and-search has never worked. Properly targeted stop-and-search can play its part in reducing crime but, in New York, Mayor Bill de Blasio got rid of what they call “stop and frisk” altogether and crime went down.
When she was Home Secretary, the current Prime Minister came to the realisation that random stop-and-search does not work, because that is what the Home Office’s own research reveals. The Opposition can only speculate on how long it will take the current Home Secretary to come to that understanding.
There were also concerns about knife crime prevention orders. We have to contemplate that, on the grounds purely of suspicion, people as young as 12 will be targeted, put on a curfew and prevented from accessing the internet. There are already laws against the carrying of knives, threatening to use them and actually using them, but there is a problem with enforcing those laws. That issue relates to police numbers and person power, and I will return to that point.
Douglas Ross (Moray) (Con)
The shadow Home Secretary is mentioning powers against knife crime and enforcing them. Does she believe it was wrong for the Leader of the Opposition and the shadow Chancellor to oppose the change in legislation in 2014 that means anyone caught carrying a knife twice would face a custodial sentence?
Ms Abbott
The idea that the answer to knife crime is a simplistic multiplication of the sentence mistakes the drivers behind knife crime, which I will come to later in my remarks.
The new orders stopping young people from accessing the internet appear reasonable at first sight, but have Ministers never heard of young people creating multiple online identities? Labour Members have grave concerns about how these orders will be used, with the possibility that they will target poor communities, and black and minority ethnic boys and girls. We have yet to be given the reassurances that care will be taken to ensure that particular communities and groups of young people will not be unfairly targeted.
I agree with the Home Secretary that the internet giants have a role to play here in the type of material they allow, but, as he will know, that is true in respect of all sorts of crimes, from online fraud to child pornography and terrorism. All of that is too easy online, and the Government must do more than have a cosy chat with the companies that allow it. So I was glad to hear him say that he is actually prepared to act. It is long overdue for the Government to use their powers against companies that fail to act on these issues.
However, the underlying problem with violent crime is that there is also a crisis in policing. It is all very well for the Home Secretary to say that the police are having the biggest increase in grant since 2010, but this Government and their predecessors since 2010 have imposed austerity policies on the police, as they have done in every other area of our public services.
The result is there for all to see: since 2010, 21,000 policemen and women have been axed by Tory-led Governments of one kind or another. That has undermined the entire capacity of the police services in this country to tackle crime of all types, including violent crime. Community policing has been decimated. Every MP in this debate, on either side of the House, will know of the negative consequences that the fall in police numbers has had in their area: the lower police presence; the decimation of community policing; tardiness in responding to 999 calls, with them sometimes not getting replied to until the next day; and the resultant fall in public confidence.
The Home Secretary talks about increasing investment, but the cuts across almost every other area of public spending have helped to fuel the rise in crime, including the rise in violent crime. Those cuts, particularly as they fall on local authorities, have exacerbated the causes of crime. They include the crisis in housing, growing inequality, and the crisis in our schools, including school exclusions. Too many pupil referral units are just academies for crime.
A one-time director general of the Prison Service who went on to head Barnardo’s, Martin Narey, said that on the day when a child is expelled from school, we might as well give them a date and time to turn up at prison. Ministers have to pay more attention to this pipeline from educational failure—school failure—to the world of crime. The other issues that help to promote criminality are the hopeless job prospects for many of our young people, the collapse of the youth service in many areas of the country and the crisis in mental health care.
When we ask senior police officers, as I am sure the Home Secretary has done, they tell us, “You can’t arrest your way out of this”, and of course they are right. Rounding up whole drug gangs, as the police sometimes do, often means simply opening up turf wars as neighbouring gangs move into the vacant territory. Under this Government, the police cannot even make the arrests that they should be making, and arrest and conviction rates have plummeted.
As I said at the beginning of my remarks, all our constituents engage with the question of violent crime with fear and concern. It is one thing to pay lip service to the causes of crime, including violent crime, as the Home Secretary did in his remarks, but the Opposition say that the rise in violent crime since 2010 is connected to the reluctance to give the police the funding they need to fight all types of crime. The violent crime epidemic that we face is at least partly to do with austerity, the policies of this Government and the funding of the police. The Opposition are committed, when the time comes, to taking serious, co-ordinated action to start to push back on this rise in toxic and frightening violent crime.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. There is, as colleagues will see, quite a short time for the debate, but if everybody could stick to about six minutes, that would be helpful in getting everybody in.
Priti Patel (Witham) (Con)
It is a pleasure to speak in this debate, which has great significance. The first duty of the state is to protect its citizens; that is why we have our outstanding armed forces, and why we have the police and the criminal justice system. I commend the police officers across my county of Essex. They often put themselves in harm’s way to do the right thing—to protect the public and bring to justice those responsible for serious crime. On that point, I give a special commendation to our police and crime commissioner, Roger Hirst, and to our new chief inspector, B. J. Harrington. Essex borders London and is part of the home counties. We face a range of issues, which the Home Secretary mentioned, including county lines and the associated criminality, which can travel quickly.
We all know of the heroic acts of bravery undertaken by the police, and we all have examples from our own constituencies. Each and every one of us knows of the sacrifices that our frontline officers make and the threats that they face daily. I also want to comment on the actions of others in our local communities—especially the voluntary sector and community groups, who work tirelessly and with great devotion to steer people away from criminality. They are the unsung heroes in our constituencies who bring calm, and who work with criminal enforcement agencies to prevent crime and steer young people, in particular, on to the right path.
Despite such efforts, there is a sorry state of affairs in our country today. Far too many criminals are walking our streets and acting with impunity. We have heard from the Home Secretary about the individuals who terrorise our communities. They target vulnerable children and adults, and they profit from causing harm and misery. All too often, the criminal justice system fails to stand up for the victims and fails to punish the perpetrators for the crimes that they commit.
We have heard many examples, and I am sure we will hear others from Members today, of cases in which the police have worked hard to gather evidence on offenders so that they can be prosecuted, brought to trial and found guilty, only for the courts to set them free or let them off the hook with soft sentences. That means that the offenders do not spend enough time in jail on rehabilitation, where people can spend time with them and invest in them as individuals so that they do not go back out and commit more offences.
I do not have time to go into all the many figures today, but the National Crime Agency has published a conservative estimate of the number of active county lines participants across the country. Those individuals get caught up in the criminal justice system, and their lives are ravaged by a spiral of drugs, abuse, debt and crime. It is fair to say that we would urge the Government to strengthen the ability of our police to ensure that those responsible for organising criminal acts are subject to the right kind of actions in prison and in the criminal justice system so that they do not go back and destroy other people’s lives. That is something we should not forget.
In the few minutes I have, I would like to give two examples of where my constituents have been betrayed and let down by the justice system. The first involves a lady who was the victim of an abusive ex-partner. He inflicted serious violence on her over a prolonged period and beat her so severely and violently that she was left blinded in one eye. When she worked up the courage to seek justice, she was let down by the criminal justice system.
This vulnerable victim of domestic abuse was tormented over a prolonged period and had life-changing injuries, but the Crown Prosecution Service did not stand up for her and press for compensation or the right kind of justice for her. This is where we must look at not just police enforcement and serious crime, but how the whole criminal justice system stands up for victims. At the end of the day, we as Members of Parliament have a duty to victims of crime and to access justice for them so that they can get the right course of action.
The second case is that of a constituent who came to me recently, who was the victim of a serious violent assault last year in Brighton. He was beaten up and left injured—punched multiple times in an unprovoked attack. His injuries and recovery stopped him from working, and he lost his business. The offender was violent and aggressive. What kind of sentence did he receive? He received a 12-month community order and was made to do 80 hours of unpaid work and five days of rehabilitation, and to pay costs of £85. My constituent was awarded compensation of just £100. He said:
“I now have no job. I couldn’t work for a couple of weeks and because I was self-employed all my customers left.”
He has no sense that justice was done. He was a victim of crime, and he is still left suffering.
That is the point. Where is the justice? It is down to this Government to have a much more integrated approach. In fairness to the Home Secretary, he spoke in his remarks about how the severe problem of serious crime affects communities and individuals. However, we must square the circle: we must not allow perpetrators of crime to go and brag on Facebook, which is what happened in this case. We need to see and show that the Government have the right approach to the criminal justice system and that the punishment fits the crime.
To conclude, if we are to tackle serious and violent crime in our society, we have to use many methods—nobody in this House would dispute that. Yes, we need better education and more support for vulnerable people and those at risk of becoming serious and violent criminals: absolutely. We also need better rehabilitation for offenders. However, we cannot ignore the need to defend victims of crime, to keep our communities safe and to make sure that offenders face the right sanctions. Failure to do so means that public trust and confidence are undermined, and that is not what we want. It is down to the Government, through the actions that my right hon. Friend has spelled out, to ensure we have an integrated approach to serious crime and tackling the many issues that blight our communities.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The first responsibility of any Government is, of course, to keep their citizens safe. Much of that responsibility in Scotland falls to the Scottish Government, and it is worth while discussing the Scottish experience with violent crime.
Serious violence is an emotive subject in this Chamber and across the country. The emotive nature of the subject has meant that politicians are too often pushed towards reactionary and populist “tough on crime, tough on the causes of crime” policies without properly addressing the latter sentiment. These mistakes can be made because politicians can too often play into the public's fears or can perhaps be consumed by their own base instincts. More often than not, taking this tough Daily Mail, Old Testament approach is the easy thing to do—it is simply the politically expedient thing to do.
As much as I understand this urge—I am a politician—I believe we can aspire to a criminal justice system that is more effective at reducing crime, as well as to a fairer justice system that encompasses a whole-system approach that sees violent crime for what it is: as a societal disease that can be treated, and as a crime that is all too often based in poverty and that can be, if not eradicated, then reduced with a rational, systematic and evidence-based approach. I am therefore convinced that the public health approach is the best strategy to deal with violent crime, particularly knife crime, which is rampant on the streets of London at the moment. That approach was outlined almost two decades ago by the World Health Organisation and first implemented in Scotland. Its adoption elsewhere has been slow. The public health approach recognises that we all have a collective responsibility to tackle violent crime. It is an approach that emphasises rigorous and objective methods, using knowledge from a range of fields. It pools the best practices from everything—economics to education, sociology to medicine, and every discipline in between. In essence, it takes the best we have to offer and turns it on the worst problem we have in justice—generational violence.
Where attempted, the public health approach has been proven beyond doubt to work. It saves lives and allows people to live a life where violent crime is a much smaller risk: it gives peace of mind as we go through days already fraught with worry. It leads to safer communities, better social cohesion, and better mental health and security. The only regret I have is that these steps were not taken far sooner.
Scotland took the first steps towards the public health approach in 2005 when Strathclyde police launched a holistic public heath strategy. This strategy resulted in the creation of the violence reduction unit which has led the way in bringing Scotland to the lowest recorded crime rates in 40 years. The VRU goes by a simple, but powerful motto:
“Violence is preventable, not inevitable.”
Strathclyde Police was the only police force in the world, at the time, to adopt the public health approach and it is now a national centre of expertise on violence and visited by many UK Government Ministers. Since it was founded, it has led the way in good policy deliverance which is making a real positive impact on people’s lives and our communities across Scotland.
In 2005, violent crime in Scotland was at epidemic levels, and Glasgow was infamously crowned by the World Health Organisation as the murder capital of Europe. It was the same year that the United Nations called Scotland the most violent country in the developed world. The VRU carried out its own analysis and it showed that the areas where violence was most out of control were the most deprived: they had the highest rates of addiction, teenage pregnancy, suicide, and domestic abuse, the latter of which I will come on to address.
The Scottish Government provided the VRU with £12 million and has supported violence reduction and prevention programs such as Medics Against Violence, which targets young people who are at risk of being killed or becoming victims of serious life-changing injuries. Health volunteers are used to deliver education sessions in high schools focused on talking to young people about the consequences of violence and how to keep themselves safe. The Mentors in Violence Prevention Programme is another initiative by the Scottish Government which aims to empower young people to challenge and speak out against violent and abusive behaviour.
Fast forward to today, and Scotland has been recognised by the World Economic Forum as a leader in violence reduction. Indeed, the UK Government have praised the approach that the Scottish Government have taken. Moreover, I have been heartened by the recent proactive, perceptive and progressive approach taken by Ministers in the Ministry of Justice and, to an extent, the Home Office. I wish them luck in advancing this approach in politically sensitive areas, such as the presumption against short sentences. Just last week, the chief executive of Community Justice Scotland, Karyn McCluskey, who helped to set up the VRU, met the Justice Committee to outline Scotland’s approach in this area, our successes, our failures and our future challenges.
Douglas Ross
The hon. Gentleman mentions future challenges. Does he think it is correct that someone in Scotland could be punched, kicked or even hit with a weapon and it would not be considered a violent crime? If we are going to truly assess this issue, we have to get the criteria correct for what is and what is not a violent crime.
Gavin Newlands
I thank the hon. Gentleman for his intervention. I am by no means a policing expert, and obviously such crimes are recorded differently across jurisdictions. The fact is, however, that violent crime in Scotland has reduced by 49%, as has been recognised by his colleagues in the Scottish Parliament: Liam Kerr said that we have to recognise that Scotland has turned the corner when it comes to violent crime.
Good policy and effective policing strategy should not be controversial, which is why I am glad that similar initiatives have begun to be rolled out, such as the London violence reduction unit announced by Mayor Sadiq Khan.
In addition, the Scottish Government continue to provide real-terms protection to the resource budget for policing and have committed to protecting that budget for every year of the current Session of the Scottish Parliament. That amounts to a significant increase in investment of £100 million by 2021. As of April last year, the SNP has ensured that the police will also fully benefit from being able to reclaim VAT of around £25 million a year, which for far too long was stolen and kept by the Treasury here in Westminster. [Interruption.] I hear chuntering from the Government Benches that we knew it from the start, but the Scottish Conservatives also knew it from the start, yet it was in their manifesto too.
In England and Wales there are now 21,000 fewer police officers than there were in 2010, which makes it the lowest number since comparable records began. Those figures mean a decrease of nearly 15% from the previous nine years. However, I do not want to be complacent, and I stress that there is still plenty of room for improvement, but Scotland is becoming a much safer country thanks to the public health approach.
As chair of the all-party parliamentary group for the White Ribbon Campaign, I draw particular attention to the importance that domestic violence plays in a public health approach to violence. This is an area where we have much further to go, both north of the border and across the rest of the UK. Gender-based violence is a national shame in every part of the UK. In 2016-17 there were nearly 59,000 reported cases of domestic abuse in Scotland, and in nearly 80% of those cases women were the victims. Although the way the data is collected can differ between countries, it is demonstrably higher than in similar small European nations such as the Republic of Ireland.
Domestic abuse clearly has a serious effect on the mental health and development of future generations. Around 16% of adverse childhood experiences are caused by witnessing domestic violence in the household. The vast majority of this, of course, is perpetrated by men against women. That is the largest contributor to ACEs of any household environmental factors. Compared with someone with no ACEs, someone with four or more is more likely to experience a range of negative outcomes in adulthood. For example, they are 16 times more likely to perpetrate violence, and 20 times more likely to be incarcerated at some point in their lifetime.
The Scottish Government are taking action to reduce domestic violence in households through an increase in health visitor numbers and the roll-out of family nurse partnerships, and through targeted investment in projects and services that support parents and families to cope better, keep children safe and prevent children from going into care. Although that falls outwith the Scottish Government’s policing strategy, it is steps like this that help people participate in society, tackle serious violence at its root cause and stop the cycle of violence perpetuating itself on and on.
In conclusion, the most compelling stories are the ones that are true. Over the past decade we have seen Scotland go from being called the murder capital of Europe to being the safest nation on these islands in which to live. I fear that in many crucial ways the serious violence strategy for England and Wales was a missed opportunity to tackle the problem in a completely objective and holistic manner, as we have done in Scotland. I implore Members across the House to see violence for what it is: a resilient societal disease. Although the symptoms must be appropriately punished, the root causes also deserve to be treated. We can no longer waste time and human energy trying to deal with the symptoms of generational violence.
While Scotland is enjoying lows in recorded crime that have not been seen for decades, violent crime in England and Wales is rising to deeply worrying levels. Thanks to the Scottish Government, and particularly the violence reduction unit, Scotland is becoming a safer country. I urge that a similar approach be tried and tested across the rest of the UK so that we may learn from each other. We need to understand better why violence happens, we need to be as objective as possible in tackling it, and we need to be mindful of the many forms that it comes in. We need an all-encompassing public health approach to violent crime.
Douglas Ross (Moray) (Con)
I shall be mentioning policing in Scotland, so I refer the House to my entry in the Register of Members’ Financial Interests. My wife is a serving police officer, although she is actually in her final week of work before taking maternity leave as we prepare for the arrival of our first child in a few weeks’ time.
Much of my remarks, while focusing on some elements that are devolved in Scotland, will be based on my experience as a member of the Home Affairs Committee, because we are currently undertaking an inquiry into serious violence. I have to say that the evidence session we had last October with parents of children who had died as a result of serious violence was one of the most compelling I have sat through. I feel it appropriate to repeat some of the evidence that we heard in the Committee, because it really puts into perspective what we are discussing this evening.
Philippa Addai’s son Marcel was stabbed 14 times by a gang of seven in September 2015. Yvonne Lawson’s son Godwin was stabbed while trying to break up a fight involving some of his friends. Yvonne’s testimony about her reaction on being told what had happened to her son was compelling. She said:
“I remember being at home. There was a knock on the door. Typically, I just thought it was Godwin knocking on the door. There were three police officers who came to tell us that Godwin lost his life. I remember hearing that word that Godwin died. I was in denial… I just kept ringing Godwin’s number. I just could not believe that the police officers were saying that Godwin has taken his last breath on the street alone.”
Caroline Shearer, whose child Jay was also killed, recalled how she put on perfume when she was told by the police to go to the hospital. It was an irrational thing to do, but that is what she remembers. The next thing she remembers is being in the back of the police car and getting out at the hospital, where an officer bent down to tell her that her son had died before she could see him. The next thing she tried to do was steal that officer’s Taser and put it in her mouth. Finally, Darren Laville’s son Kenichi Phillips was shot dead in 2016. Kenichi had a whole life ahead of him and had just that day been given a new job as a personal trainer.
Those four testimonies have stayed with me since our evidence session in October, but there were positive legacies. Each and every family were determined that their child would not die in vain and have started charity work to ensure that more youths are saved from that end, which will hopefully complement the work that the Government and all parties are doing on serious violence.
I would like to focus on some of the elements that affect Scotland. I am fortunate that my Moray constituency does not have a particularly high crime rate, but, as the Home Secretary said, county lines affect us all. A crime that starts in London can progress right up to Aberdeen and potentially across to Moray, so it is important that Government investment here is matched at a UK level, and I know that work is ongoing in Scotland to deal with county lines.
I agree with the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) about the pioneering violence reduction unit. It is important that we treat violence as a disease that is preventable and not inevitable. However, the Scottish crime and justice survey shows that at least two thirds of crime in Scotland goes unreported. It goes on to say that the result of violence in Scotland is more likely to be seen in A&E departments than police stations, because more people go directly to hospital than report it to the police. While I welcome the figures that the hon. Gentleman quoted about violence reducing in Scotland, we have to realise that a large amount of violence is unreported.
A number of Members want to speak in the debate, so I will make my final plea to the Home Secretary and the Under-Secretary of State for the Home Department, my hon. Friend the Member for Louth and Horncastle (Victoria Atkins). The Home Secretary was clear that he is looking at all options to reduce knife crime and the fatalities caused by it. My constituent Hugh Broadley, who came to my surgery in Buckie on Friday, believes he has designed a knife that can significantly reduce the number of fatalities from knife crime. Will someone from the Department meet me to look at his designs? It is important that we listen to all offers to deal with this issue, and if Hugh Broadley believes that his design could prevent just one death, that is important. I would welcome any opportunity to discuss that important matter with the Minister or the Home Secretary.
The Parliamentary Under-Secretary of State for the Home Department (Victoria Atkins)
I would be happy to.
Mr David Lammy (Tottenham) (Lab)
I am grateful to have the opportunity to speak in this debate. I have worked with the Home Secretary and the Minister on these issues, and I am grateful to them for extending an invitation to me to the serious violence taskforce.
Sajid Javid
May I take this opportunity to thank the right hon. Gentleman for his membership of the serious violence taskforce and the hugely important contribution he makes?
Mr Lammy
I am grateful to the Home Secretary for that.
This is a very serious issue. Over the almost 20 years that I have been in public life, very sadly, I have had to comfort far too many parents who have lost their children to violence. In fact, when I reflect on my career one day, and this is an apposite day on which to say this, as a member of the serious violence taskforce moves off in a different direction—I am of course thinking of the hon. Member for Streatham (Chuka Umunna)—it is right to say that two cases stand out in my mind. The first is the young woman, Pauline Peart, who, at the beginning of my political career back in 2003, was shot in a car in my constituency and lost her life. The other was on bank holiday last year, when a young woman, Tanesha Melbourne-Blake, was also shot and killed.
It is right to say that that event sparked the current national concern about violent crime in our country. At that point, there was a lot of comment about the murder rate in London overtaking that of New York. I do not think we are quite in that place, but it nevertheless caused tremendous alarm. I think it was because it was a young woman who found herself in those circumstances, just having walked out of her home with a friend to go a newsagent’s, and lost her life, that it caused such concern on that public holiday.
I guess the important thing in such a debate—this subject is probably the one I have spoken about more than other subject in this Chamber and in this House—is to ask: is the situation getting worse, is it stable or is it getting better? My judgment is that we have not got over the problem, and the situation feels significantly worse over the last period than it has done in the past. I have seen other spikes. I recall the spike back in 2008, and I remember that Ken Livingstone was the Mayor of London, but lost his post in part because crime became a very central issue in the campaign. There have been spikes over this period, but we are clearly in the grip of something at the moment.
I want to reflect briefly on some of the contexts of this spike and the national concern. The first is that, once upon a time—when I started, we talked about yardie gangs and Operation Trident had just been set up—I really thought this problem, which we had imported almost from downtown America, would go. It does not feel like that today; sadly, it feels almost a permanent feature of our urban life, and of course it has spread to areas that are very different from my own constituency. That is the first context that is very disturbing.
Why is that? We tend to focus on the violence and on the knives and the guns, but the real issue that drives much of this is not the knives or the guns. It is drugs, money and demand, as well as the increasing quality of cocaine across our country and the drop in price of that product. It is prolific, and I was first struck by how prolific it is when sitting in Highbury magistrates court behind a young man—I think he was 17—who had been arrested for trafficking that drug on county lines, and I was staggered that he had been arrested in Aberdeen. What was my young constituent doing in Aberdeen, when I have never been to Aberdeen? I wish that I had been to Aberdeen, but I have not been there. I thought, “Why was he there?” He was there because it turns out there is quite a rich market for cocaine in Aberdeen. There is a middle-class life, with some money and some spend, and like a lot of places here in London and a lot of parts of our country, cocaine is particularly rife.
I welcome the review by Dame Carol Black that has been announced. This does open broader questions about drugs in our country, about the war on drugs and its failure, about our position and the repositioning of public policy on drugs, and—I have to raise this with the Home Secretary—the successive cuts in our Border Force. If we want enforcement on drugs and not to relax our position—although I think that is highly unlikely for cocaine—we have to police our borders.
When I met people at the National Crime Agency recently, they explained that they cannot possibly prevent the vast majority of drugs from coming into this country, although they do their best. Our Border Force is seriously stretched to police the market that is coming across the Atlantic, up through Spain, or across from Holland.
Drugs are the first major issue, and then it collides. My right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), the Opposition spokesman, has raised this, and I hate it being such a partisan issue, but there are real issues at a local authority level. Local authorities set the strategies for youth. They set the strategies for youth violence. They do it alongside the police—we turn to the police so often—but much of this falls to local authorities. My sense—I got around a lot when I was doing the review for the Government on the disproportionality of the criminal justice system for black and ethnic minorities—is that it is patchy across the country. It is not just patchy in terms of strategy and approach, but in terms of resource to address some of the problems, so investment in new services is important. It certainly means that issues such as how the pupil referral units are working and how alternative provision is working are central to this discussion.
The subject has come up in the serious violence taskforce and I remain concerned about the amount of young people who are effectively excluded from school, who are not getting an effective education and who are falling into the hands of adults who are exploiting them. That takes us to another issue: how do we address not the young people but the grown men who are exploiting them and trafficking them across the country? Is the law robust enough to send the message to these modern-day pimps—because that is how we should describe them—who are exploiting these young people in this way? The frustration is that we can go back quite a number of years, back to Dickens, and there will always be adults there to exploit young people. We have to bear down very hard on them.
The other colliding force affecting all young people across our country is of course social media and technology and, in this context, some of the rabbit holes down which young people can go in relation to particular types of music and particular types of violence. My concern is that much of that remains heavily unregulated and voluntarily policed by the industry. We have to do more to protect young people. It affects all young people. We see it in terms of suicide, anorexia, bulimia and those sorts of mental health issues among young people. In this area, it has a bearing on some of the increase in violent crime as well. I look forward to continuing to work with the Home Secretary, but there are issues with funding. It does not all fall to the police. The local context is important, and I am very concerned about the rise in drugs in this country, the rising market and the need to fully grip what we, as a nation, are to do about it.
Maggie Throup (Erewash) (Con)
It is a pleasure to follow the right hon. Member for Tottenham (Mr Lammy) and to hear him explain the work he has done, as well as his experiences. I commend him for his knowledge of the subject and his contribution to trying to make things better.
This is a very timely debate, not because crime is increasing or decreasing in Erewash nor, I hasten to add, because we see serious violent crime in Erewash, but because there appears to be an increase in the use of cheap synthetic cannabis in our market towns as well as in our cities and because it appears so invasive. The issue has been highlighted to me by my constituents over recent weeks, as they have shared their concerns about visible drug dealing, mainly in synthetic drugs such as Mamba and Spice, and the resulting zombie state that is so distressing for my constituents to see, especially when young children see it as well.
It is completely unacceptable that the day-to-day lives of residents are being disrupted by people taking drugs. I have personally spoken to the local police inspector. As a result, the presence of uniformed police patrols has increased in the area where it is happening. I would like to take this opportunity to commend my police officers across Erewash for their work, not just on this issue but day in, day out tackling everything that comes up. They never know what will be around the next corner.
Sadly, many of those targeted by the dealers are those who are the most vulnerable. I am also concerned that the dealing and use of drugs can so readily lead to more serious crimes. That is why I welcome the serious violence strategy published by the Government last year, in particular the action to tackle county lines, which other hon. Members have spoken about, and the misuse of drugs. I look forward to the Minister, in responding to the debate, providing an update on the progress being made to tackle the county lines issue. Work on intervention and prevention is vital if we are to get a grip on the pervasive use and abuse of drugs. For too many young people, their involvement in county lines and the resulting involvement in violence has, as we have heard, resulted in lives being lost and young people being seriously injured in gang attacks.
On a recent visit to one of the hospitals that serves my constituency, the Queen’s Medical Centre in Nottingham, I was able to see at first hand the work of the charity Redthread, which is supported by the Home Office. It runs a youth violence intervention programme in the hospital’s emergency department, in partnership with the major trauma network. It is having a real impact, changing young people’s lives and moving them away from crime.
Redthread and other such charities provide the evidence that if we are to be successful in tackling all types of crime, we must understand that partnership working has the most success. It is not just about what the police do; it is also about collaboration with a wide range of statutory bodies and agencies. It is only by working together that low-level and more serious crime and violence will be tackled effectively.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. Serious violence is an issue that we in Northern Ireland know better than most, but tonight we are discussing a different kind of serious violence. I would first of all like to welcome the Home Secretary’s commitment and the important measures he suggested to tackle knife violence. Many right hon. and hon. Members have referred to county lines and the right hon. Member for Tottenham (Mr Lammy) referred to drugs. Drugs seem to be the key issue for most of what is happening.
I want to make a quick comment on firearms. The statistics show that those who have the legal right to have a firearm, through licences and firearm certificates, are the most law-abiding people in the land. It is therefore important that the focus is put on those who have illegal firearms and on deactivating firearms. I am reminded of a slogan I saw in Canada many years ago, which said “When all the guns are outlawed, the only people who will have guns will be the outlaws.” The message is clear: those who want to have guns illegally will find a way to do so.
In the short time available, I want to refer to serious domestic violence. Like other types of violence, serious domestic violence is about the psychological, physical, sexual, financial, emotional, controlling and coercive behaviour that can lead to a pattern of threats, humiliation and intimidation to harm, punish or frighten the victim—all serious violence. The level of domestic violence has dropped slightly in the past few years. That is good news as it shows that some things are working. At the end of the day, however, there were still 1.2 million female and 713,000 male victims in 2016-17. Also, 26% of women and 15% of men aged 16 to 59 had experienced some sort of domestic abuse since the age of 16. That equates to some 4.3 million female and 2.4 million male victims, which again, indicates the immensity of domestic violence and why it is important that it is addressed.
The Government have brought in a number of methods to address the issue, including domestic violence protection orders whereby a perpetrator can be banned from returning to their home and from having contact with the victim for up to 28 days. That is good stuff—the right sort of thing that we need—but again, it is important that victims are given the time and space to access support and consider their options. The domestic violence disclosure scheme—Clare’s law, which many will be aware of—has been rolled out across England and Wales since March 2014. The scheme means that an individual can ask the police to check whether a new or existing partner has a violent past. I wish that we had some of that legislation in Northern Ireland—it is the sort of legislation that we would like. The police will consider disclosing the information under the “right to know”.
The Government rightly committed some £80 million to a strategy on ending violence against women and girls. They have committed another £20 million to that as well, so some £100 million has been committed in total. In the Queen’s Speech of 2017, the Government promised a courts Bill that would
“end direct cross examination of domestic violence victims by their alleged perpetrators in the family courts and allow more victims to participate in trials without having to meet their alleged assailant face-to-face”.
Will the Minister tell us what is happening in relation to that?
A couple of very helpful recommendations, again, came out of the Home Affairs Committee inquiry—a comprehensive review of funding of support for survivors of domestic abuse and sexual violence, and the suggestion that the proposed domestic abuse commissioner should instead be established as a violence against women and girls and domestic abuse commissioner. I believe that that recommendation reflects, importantly, the gendered nature of domestic abuse and its links to other forms of gender-based abuse.
I want to finish with something that it is important to put on record. Today, one of my constituents contacted me—I am not going to mention her name; I am just going to tell her story. She said:
“I have been the victim of domestic violence. In August 2017 my husband tried to strangle me and he set fire to our home. My 3 and 5 year old girls witnessed the abuse and my now 6 year old is still experiencing flashbacks, nightmares and dealing with panic attacks due to the trauma. Social services have said my ex husband is still not safe to have direct contact with my children however he is still seeking access through the courts. Next month I face being questioned by my ex husband in family court. This is a man who has a suspended jail term due to his abuse of me, a non molestation Order to stop him harassing me and the judge gave a 2 year restraining order due to the level of abuse I have suffered and then next month he will be allowed the opportunity to have direct contact with me! The domestic abuse bill”—
I know that that is not your responsibility, Minister—
“is a start in improving the situation for victims and survivors of domestic abuse and their children but in Northern Ireland”
we do not have it yet, as she and I would like. I know that it is not your responsibility to do that, Minister—[Interruption.] It is not your responsibility either, Mr Speaker—I am sorry, I do that all the time. I was trying to get away from using the word “you”. I apologise—when we are in the middle of all this EU stuff, it is very hard to distinguish the two.
I am sure that the Minister has been touched, as I was, by that heartfelt plea from a lady who has been through nightmarish scenarios to get safety for her children and is begging for us to make a change so that other people do not have to go through this. Again, for the record, we need the domestic abuse Bill and these proposals to be put forward here in the UK mainland and in Northern Ireland—I wish we had them.
Vicky Ford (Chelmsford) (Con)
Thank you for giving me time to speak in this very important debate on serious violence, Mr Speaker. As many Members have said before me, we are seeing a dramatic change in the type of violence that takes place in our country.
As a statistician, I go back to the statistics, and it is interesting to see that while the level of knife crime is increasing, just recently the level of gun crime seems to have come down. The level of homicides is also increasing, but I was comparing the statistics with those in other European countries and I noticed that our homicide rates are actually well below those of the Netherlands, Belgium and Scandinavia—less than half of the rates in those countries—and well below countries like Germany and Italy.
However, when it comes to violence, lives are not statistics. Violence has a real impact on communities and families, and I have been very pleased to see the Government working to address these issues not only through the serious violence strategy, but by looking at how to address the changing nature of online crime. On the Science and Technology Committee, we recently took evidence on the impact of social media on young people’s lives. We heard chilling evidence of how serious gangs use online tools, such as YouTube, to seduce young people to get involved in their gangs, resulting in young, especially vulnerable, teenagers taking part in criminal activity. Last Saturday night, Essex police saw two people running from a vehicle when they spotted the police. The police gave chase and apprehended them. The car contained drugs and knives, and the number plates were false; the driver was 16.
When it comes to fighting crime, our police are on the frontline. Ten days ago, I attended the passing-out parade of 55 new police officers in Essex. They are in addition to the 150 extra officers who joined the force last year and are part of the 240 joining this year. They are vital to our police’s future and are proudly funded by the Essex taxpayer. It is beyond belief that the Labour party refused to vote for the funding that made those police officers available. I spoke to every one of the new recruits. Many were on the fast track to become detectives under a programme established to bring new skills into the modern force, many were women, and many had experience in the armed forces or other civil occupations.
In Essex, our police have been working hard to target knife and drug-related crime, and stop and search is a vital part of their toolkit. In the last three months of last year, Chelmsford police undertook about 500 stop and searches—compared with only 80 the year before—and it works. One third resulted in a positive outcome—finding that the person was carrying something they should not have been, such as a weapon or a drug. This visible, pro-active work on the streets has resulted in many arrests and a tougher approach to fighting crime. I am pleased that stop and search has been extended to people suspected of carrying corrosive substances or acid in public places. Many young people in my constituency have raised with me the fear of acid attack.
Fighting crime is not just about the police, however, but about partnerships. Our excellent police and crime commissioner in Essex, Roger Hirst, who has been mentioned before, asked me to mention the violence and vulnerability strategy, which we have had in place since last summer, and which brings together partners to work on prevention and intervention. It was the first framework of its nature in the country. I also thank the Home Office for the £664,000 it invested in the early intervention youth fund, which was matched by £500,000 from the county council. Such measures are positive incentives to getting partners aligned and have a positive impact.
In Essex, our children’s services have just been rated outstanding by Ofsted and No. 1 in the country. The joined-up work of the gangs intervention team was particularly praised—
Mr Speaker
Order. I have allocated six minutes to each Front-Bench spokesperson, so last sentence please.
Vicky Ford
In conclusion, this joined-up approach to early intervention does work and should be a focus of the upcoming spending review.
Karen Lee (Lincoln) (Lab)
I thank all right hon. and hon. Members who have taken part in this debate, although I do not plan to go through all their contributions because time is so limited.
As my right hon. Friend the shadow Home Secretary pointed out, this seems like a very rushed debate. It has been rushed forward with no indication that any action will follow. Based on the contributions, the Government’s continued inability to tackle the rise in serious violent crime seems unlikely to alter. It is clear from today’s debate that right hon. and hon. Members are deeply concerned about the rise in serious crime, and the Government’s lack of decisive action is also concerning. Ministers have failed to tackle the underlying causes of crime. In fact, their policies have made them worse.
Ministers are relying on eye-catching initiatives designed to achieve good headlines, but these do not amount to a strategy, or even to effective initiatives. The latest are their knife crime prevention orders, for which there is no evidence, and these follow Ministers’ support for more random stop and searches, more Tasers, more spit hoods, and so on and so on, none of which measures is supported by evidence.
Ministers have still failed to answer some basic questions about the knife crime prevention orders. They have failed to explain on what evidence the Home Office has based its new policy; if there is evidence, it should be made available to the House. They have failed to explain what oversight of the orders there will be, and what review or appraisal will be made of their effectiveness or otherwise. It is hard to see how, without evidence, the Minister can reasonably expect the orders to have any appreciable effect in reducing knife crime. There has also been no indication of what safeguards have been introduced to prevent the issuing of incorrect or inappropriate orders, and of whether we shall see any report examining the subjects of the orders by region, locality, family income and, of course, ethnicity.
This is all of a piece with the Government’s previous announcements. As my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) has pointed out, the evidence does not support an increase in stop and search. In November last year, researchers from the Centre for Crime and Justice Studies examined data including a study commissioned by the Home Office, and concluded there was
“limited evidence of the effectiveness of stop and search in reducing crime”.
That is absolutely in line with the Home Office's own research, and with separate analysis conducted by the College of Policing. There is a similar absence of evidence to support the use of spit hoods, which are almost designed to humiliate those who are stopped, and the same is true of Tasers.
However, the Home Secretary and the Government do not seem to operate on the basis of evidence at all. In fact, their assurances about their own policies do not bear scrutiny. At the beginning of October last year, the Home Secretary announced that the Government were taking a dramatic turn towards the adoption of a public health approach to tackling violent crime, including knife crime. If that statement was not made simply as an irrelevant soundbite, can the Minister tell us, even now, how the new policy on knife crime prevention orders accords with the previous announcement of a public health approach?
The truth is that since 2010 the austerity policy as a whole has had the effect of worsening the causes of crime, and that since that year, successive Tory-led Governments have axed the jobs of 21,000 police officers. This is the real record on serious violence: it is a toxic cocktail of failure. Moreover, nothing has changed. Austerity continues in all areas of social policy, and it continues in policing. The latest police settlement is a cut in real terms, once the funding for police pensions is taken into account, and that is why I voted against it.
There is an alternative. There is Labour's alternative, which means truly ending austerity in every aspect of social policy, and, specifically, ending austerity in funding for the police. We will recruit thousands of extra police when we are in government, because that is what we need to tackle crime in the short and the medium term. The Government continue to operate as though it were possible to have safety and security on the cheap, but their own record shows that it is not. A Labour Government are needed to end this failure.
The Parliamentary Under-Secretary of State for the Home Department (Victoria Atkins)
I thank all Members who have spoken for their passionate and moving speeches, although I note—as I often need to—that the hon. Member for Lincoln (Karen Lee) has perhaps misjudged the tone of the debate.
Across our country, serious violence is robbing people of their futures, families of their loved ones, and children of their lives. My hon. Friend the Member for Moray (Douglas Ross) spoke of the experiences of the families of Marcel, Godwin, Jay and Kenichi, and also spoke movingly of the work that their parents are now doing to try to stop knife crime. The right hon. Member for Tottenham (Mr Lammy) spoke compellingly, as he always does—particularly about Pauline and Tanesha, two women who were killed in his constituency some 20 years apart.
This issue transcends party politics. Serious violence is a matter of grave concern to all of us, and to those whom we represent. If we in this place can be united in our anger, we can also be united in our efforts to tackle violent crime. As the Home Secretary said at the start of the debate, tackling violent crime is an absolute priority for the Government, but just as there is no one cause of serious violence, there is no one solution. It can only be effectively tackled though the combined efforts of Government, law enforcement and civil society—and, crucially, through a coherent short, medium, and long-term approach.
Through our serious violence strategy and our serious organised crime strategy, we are tackling those who ensnare young people in criminality, while intervening earlier to prevent them from being drawn into these terrible webs of violence. With immediate effect, the Government have set up the national county lines co-ordination centre. We are taking the Offensive Weapons Bill through the House. We are also introducing knife crime prevention orders at the request of the police because they believe that this is one way to help prevent young people from being drawn into criminality. We have also handed out money through the anti-knife-crime community fund; I am grateful to my right hon. Friend the Member for Witham (Priti Patel) and my hon. Friend the Member for Erewash (Maggie Throup), who spoke about the contributions made by the voluntary sector in their constituencies. This has all been overseen by the cross-party serious violence taskforce, which includes the right hon. Member for Tottenham, for whose attention we are most grateful.
In the medium term, we are investing in our early intervention youth fund across the country to work with children and young people and steer them away from gangs and crime. We know of the link between drug markets and serious violence, so the news of a major independent review into drug misuse has been welcomed by hon. Members, including the right hon. Member for Tottenham and my hon. Friend the Member for Erewash, who spoke about the impact of synthetic cannabis in her constituency.
The Home Secretary has announced £1.4 million to enhance the ability of the police to tackle gang-related activity on social media. Colleagues across the House have spoken about the impact social media can have on gangs, including through bragging, as my right hon. Friend the Member for Witham mentioned, and the chilling evidence heard by the Science and Technology Committee, as set out by my hon. Friend the Member for Chelmsford (Vicky Ford). The new social media hub will help the police and the tech companies bear down on those who would use social media to spread their criminality.
Our long-term strategy seeks explicitly to identify and tackle the root causes of violent behaviour. The only solution is prevention. That is why we are carrying out a consultation on a new legal duty to underpin a multi-agency public health approach to tackling serious violence. In practice, a duty would mean that police officers, education providers, local authorities and healthcare professionals would all have a legal responsibility to act to prevent violent crime.
A new £200 million youth endowment fund, delivered over 10 years, will support intervention with those children and young people most at risk and provide interventions to deliver long-lasting change. It is only by reaching out to the most vulnerable that we can combat violence now and in the future.
Members mentioned the role of exclusions in the vulnerability of children to being drawn into violent crime, or indeed being victims of it. The Home Office is working with the Department for Education on this issue, and alongside the exclusions review the Department for Education is providing £4 million through the alternative provision innovation fund to improve outcomes for children in non-mainstream education.
I am also grateful to colleagues who raised the role of adverse childhood experiences, as the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) mentioned, and in particular the role that domestic abuse plays, sadly, in the lives of children drawn into violence. My right hon. Friend the Member for Witham and the hon. Member for Strangford (Jim Shannon) both raised the issue of domestic abuse. From the work I have done in visiting youth workers and speaking to former members of gangs, it has been clear that domestic abuse is a theme that runs constantly through these young people’s lives. That is why the Domestic Abuse Bill will, as well as tackling domestic abuse, have huge positive impacts on the life chances of children who live in abusive households. I know there are colleagues across the House, including in the Opposition, who will be helping the Government bring that very important piece of legislation through. I hope the hon. Member for Strangford will forgive me if I promise to write to him rather than addressing the particular points he raised about domestic abuse in this debate, because we are, sadly, running short of time.
We are working to tackle the threat of county lines, to impede the supply of weapons and to identify those young people most at risk of violence, but I join all colleagues across the House who tonight have thanked their police officers working in their constituencies on the frontline, including the 55 new officers in Essex.
I was delighted to see the video on the social media pages of my hon. Friend the Member for Chelmsford. I also want to thank the police and crime commissioners and those in the voluntary sector who do so much work with these young people. We heard tonight about the great work of Redthread, and there are many more charities that help us in this sphere. No one should have to face the pain and devastation that violent crime can cause a person, a family and a community, and by working together we will stop this—
Business without Debate
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Speaker
We now come to motion 6, on the Joint Committee on the draft Registration of Overseas Entities Bill. Motion not moved. We now come to a series of motions, and for the convenience, and with the agreement, of the House, I propose to take them together. I am fairly confident of what is going to happen, but we will see. I ask the Whip to move motions 7 to 17. Motions not moved.
Finance Committee
Ordered,
That Helen Jones be discharged from the Finance Committee and Bambos Charalambous be added.—(Mark Spencer, on behalf of the Selection Committee.)
Stirling and Clackmannanshire City Region Deal
(5 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stephen Kerr (Stirling) (Con)
I am delighted to have secured this Adjournment debate on the Stirling and Clackmannanshire city region deal. I am proud, too, that this Conservative and Unionist Government have made it possible for every single one of Scotland’s cities to have a city deal, adding up to billions of pounds of public investment unlocking many billions more in private investment. It is a Government record that all Scottish Conservatives can and should be proud of, and one that will bear fruit for Scotland’s economy and Scotland’s people well into the future. City deals drive investment in infrastructure. A city deal sends a strong signal from the Government that they have confidence in the future of the city and the region and that they are prepared to commit public funds to make that future a reality. City deals are designed with the intention of transforming the local economy and creating a landscape in which individuals, communities and businesses are enabled to explore their full potential.
The genesis of the Stirling city deal was the realisation that Stirling’s economy had several structural weaknesses that needed to be addressed. First, while Stirling is the best place in Scotland for people to set up and start a business, and the best place in Scotland for a large established business to continue its journey—
Luke Graham (Ochil and South Perthshire) (Con)
I thank my hon. Friend for giving way. He is of course speaking about the Stirling and Clackmannanshire city region deal, and Clackmannanshire shares the accolade of being one of the best places to start a business in Scotland.
Stephen Kerr
I am grateful to my hon. Friend for his well-intentioned correction.
While Stirling is also a great place for large established businesses to continue their journey, we have a real issue locally when it comes to small businesses scaling up to become successful larger businesses. The lack of scale-up businesses is due in part to a shortage of the right kind of business space and a shortage of the skills most needed by employers to grow their businesses. The situation is not helped by a shortage of housing of all types in Stirling, and the need for microbusinesses to be given the practical business support they need to help them on their commercial journey. Secondly, Stirling’s economy is held back by wealth inequality. We have some of Scotland’s wealthiest and poorest postcodes, and we need a more inclusive approach to economic development.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on the good work that he does. He is a very assiduous Member for Stirling, and this is an example of just how hard he works. Well done! My constituency will gain from the Belfast city region deal, and I am grateful for that, but does he agree that local councillors are looking at lists and could perhaps think of better projects to fund? Does he agree that more weight should be given to the development departments in local councils? I certainly do.
Stephen Kerr
I agree with the hon. Gentleman. City deals are nothing if not a partnership between all levels of government, and their success will depend on the ability of all those levels of government to work together successfully.
Douglas Ross (Moray) (Con)
I am grateful to my hon. Friend for securing this excellent debate. I hope he will allow me to make one further correction to his speech. As well as city deals, there are also general growth deals. Moray might not be a city, but we are well on the way to securing the Moray growth deal, which will unlock great untapped potential in our local economy.
Stephen Kerr
I am grateful to my hon. Friend for his intervention, but the debate, of course, is about the Stirling and Clackmannanshire city region deal.
Many of the good, well-paid jobs in Stirling are located outside the local area, while many of the jobs created within Stirling are filled by commuters. Access to the local job market is too limited for many people in some of Stirling’s most deprived areas, particularly in rural Stirling, due to skills shortages, the lack of high-value pathway jobs and entry-level positions, and basic transport infrastructure shortcomings.
Kirstene Hair (Angus) (Con)
I thank my hon. Friend for bringing this important debate to the Chamber. City deals are a fantastic way for the UK and Scottish Governments to work together, which all our constituents want. He mentions rural initiatives, and the Tay cities deal included broadband funding in Angus. The Scottish Government’s roll-out has been slow, and we have seen extra investment from the UK Government, so city deals can bring such important initiatives.
Stephen Kerr
Again, I am grateful to my hon. Friend for that intervention. I know Angus really well, and I concur with what she says about the importance of broadband in revitalising Scotland’s rural economy, and I will come on to that later—should I be able to.
The deal needs to tackle the issues that I have tried to describe and deliver inclusive economic growth and opportunities right across the district. We need to build a confident future in which businesses can grow, people can access good employment, young families can own their own homes, and young people can have a bright future, without having to leave the area.
Paul Masterton (East Renfrewshire) (Con)
I thank my hon. Friend for giving way and congratulate him on securing this debate. Does he agree that city deals also provide a fantastic opportunity for local employment and for local small businesses and contractors to get involved in bids for carrying out city deal work, both in the original design-and-build phase and in continuing employment on projects?
Stephen Kerr
I completely agree. There would be little point in city deals, with the investment that comes with them, if the work was not done by businesses and people who live in that area. If we did not take that approach, the whole thing would be rather pointless and unsustainable.
The deal is now at an advanced stage. We have the signed heads of agreement, which demonstrates the commitment made not only by the UK Government, but by the Scottish Government and the local council. The University of Stirling is a major partner in much of this, as is Forth Valley College. Both institutions benefit from having visionary leadership. The university is likely to be a major beneficiary of the city region deal, as much of the investment is aimed at promoting the commercialisation of the university’s research and development capabilities. The good name of the University of Stirling will only continue to increase in esteem.
The city region deal sets out several commitments that have already been made. The international environment centre will be based across the region but centred at the university, where a new research and policy centre will bring in dividends from the environment sector. It will become a catalyst for the set-up and scale-up of new environmental companies, building on the international reputation our area already has in this field. The new institute for aquaculture and global food security will also secure Stirling’s worldwide reputation as a centre of excellence for research and breakthrough solutions in the sector. Existing business interests in the sector will be supplemented by new ventures.
The national tartan centre will be a significant economic asset. I often feel I must remind colleagues about the global importance of tartan not just to Scotland’s traditional heritage sector, but as a part of today’s global fashion industry. Stirling is perfectly positioned to take up the mantle of hosting the national tartan centre as Bannockburn was a centre for manufacturing and design of tartan for much of its history. The tartan centre will become the UK-wide showcase for tartan and help to launch new design and fashion houses, building on its iconic global reputation. It will also become a hub for family history research, attracting new businesses into the growing global phenomenon and fascination people have for discovering their ancestry.
The Ministry of Defence has agreed to hand over the land at the recently vacated Forthside—a military base specialising in the maintenance of Army equipment. The site is of key importance because it sits between the river and our industrial estate and will become a grow-on space for businesses right in the heart of the city. It will combine with work that is already under way to host a third sector hub and a public sector innovation hub, creating a corridor of opportunity for public, private and third sectors to innovate and share ideas well into the future.
There will be a comprehensive regional energy masterplan, which will see new investment in schemes and projects to harness the power that can be generated from our natural resources in Stirling.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
I compliment my hon. Friend for securing this debate and for sharing his enthusiasm for the Stirling and Clackmannanshire growth deal. Will he join me in commending the hard work of the teams at the three Ayrshire councils that have come together to drive this forward?
Stephen Kerr
I absolutely commend the council teams, and I will talk about Stirling Council if I have time.
We have natural resources in Stirling and Clackmannanshire, and the masterplan is already delivering a combined heat and power project in the city centre that derives heat from our sewage treatment works to warm commercial and public sector buildings throughout Stirling. Beyond that, geothermal, wind, hydro and solar will all play a part, and the opportunity for innovation and commercialisation is unlimited. Skills and innovation go together not only in ensuring the creation of job opportunities that can be accessed by all but in specific schemes in the neighbouring area of Clackmannanshire. The skills that businesses need can be delivered in the local area, and everyone can benefit. This joined-up working between the two areas allows capital sums to be best utilised across Stirling and Clackmannanshire, recognising how interconnected the two areas are.
I now come to the meat of what I want to say. Stirling is ready to go. We have an engaged and energised private sector that is ready to invest, and we have a local authority that stands ready to deliver. All the local parties in Stirling share a commitment to delivering the city region deal. We just need to sign off on the business case. The individual projects are well thought out and planned, and I am sure the Minister will want to assure the House tonight that the UK Government are fully energised behind the Stirling and Clackmannanshire deal.
Waiting for perfection and for everything to be planned out across all areas of the deal will only delay the creation of jobs and prosperity in Stirling. There is no perfect slate of projects, and it is essential that we get things moving so that we can deliver. We need to see hi-vis jackets, hard hats and cranes on Stirling’s skyline. It is time for us to start the work.
Kirsty Blackman (Aberdeen North) (SNP)
The hon. Gentleman is making a great case for his local area. Will he join me in welcoming the £5 million top-up that is coming from the Scottish Government, in addition to the city deal funding? Will he also join me in pressing the UK Government to match the Scottish Government’s funding for city deals across Scotland?
Stephen Kerr
I have no hesitation in doing so, and I was challenged on this earlier. Do I welcome the positive actions of the Scottish Government? Of course I do, and I welcome the additional investment that the Scottish Government promised for the city deal. It is targeted, and I support the Scottish Government’s utilisation of public funds in that way.
We need the MOD land at Forthside to be released. The site needs to be decontaminated and handed over as soon as possible. How soon can that be done?
The new-build tartan centre will bring additional private sector investment almost immediately. We must start on the national tartan centre soon, and I would love to see one of my right hon. Friends on the Treasury Bench coming up to Stirling with spade in hand to turn the sod and start the construction. Why not?
Luke Graham
I look forward to those same Ministers coming across to Clackmannanshire to help start the international environment centre in Alloa west. Does my hon. Friend agree that the £8 million capital fund set aside by the UK Government to assist Clackmannanshire, which had less regional assistance spending to develop its business cases, is unprecedented? It is a first for any city deal in Scotland and has enabled us the time and space to develop new projects that will benefit Clackmannanshire in the short term and for many years to come.
Stephen Kerr
I pay tribute to my hon. Friend for his work in securing that unprecedented amount of money for an untagged project. He and I have had long discussions about the importance of the UK Government being active in the Scottish economic scene. I will come on to say something more about that, with which I hope he will agree.
We need to make sure that all parts of Stirling, whether geographic or social, can benefit from this deal. In rural Stirling, we want to see financial and other practical support for rural business hubs. Some of these are already delivering for their communities, and the businesses that will be located there will grow and diversify the local economy—that is badly needed. We need them in other areas of Stirling, especially in the eastern villages of Cowie, Plean and Fallin.
Digital connectivity was mentioned earlier by my hon. Friend the Member for Angus (Kirstene Hair) and it is important, and our bid should be to ensure there is digital connection that these villages in rural areas can benefit from. No area should be left behind. We need to build a digitally connected district beyond the city centre. Local full fibre networks are a great way to do this, and we have commercial investment happening in Stirling though CityFibre. This fantastic investment will make Stirling truly a digital city, but in rural areas, including the eastern villages, we need this investment. I call on the Government, who have responsibility for connectivity, to make direct investment in these areas and make that a reality.
We need government, especially the Scottish Government, to get serious about rural infrastructure. Whether we are talking about getting a new bridge for Callander, which would transform the economy there, or turning the A811 Stirling to Balloch road into a trunk road, the needs are there to be seen. I would like to see these projects treated as major upgrades to the national infrastructure, because of the positive economic benefit they would bring far beyond the communities where those items of infrastructure would be constructed. These benefits would be real, impactful and immediate. It is imperative that all levels of government pull together in such areas.
Today, I ask the Minister to comment on what additional support could be given. We have the commitment for funding on the projects, but what I feel is lacking is a stronger overall commitment from the UK Government to get more heavily involved in promoting and investing in the Scottish economy; I am concerned about a lasting thought of “devolve and forget” in the UK Government. I want to hear assurances from Ministers that the UK shared prosperity fund will be used for this purpose by the UK Government in Scotland.
There are very few UK Government departmental offices in Scotland, with the only significant presence of any Department being that of the Department for Business, Energy and Industrial Strategy in Aberdeen, where an office is dedicated to promoting the oil and gas industry. The Scottish economy is more varied than that, and the case for a UK Government presence in central Scotland is compelling.
Patrick Grady (Glasgow North) (SNP)
The hon. Gentleman will of course be aware that the Department for International Development has a significant presence in East Kilbride, so will he take this opportunity to confirm, as perhaps the Minister might, the Government’s commitment to retaining DFID as an independent Department? I hope that you do not mind, Mr Speaker, but as everybody else has mentioned their city deals, I should ask: is there not a lot to learn from the Glasgow city deal as well?
Stephen Kerr
Oh, there is a great deal to learn from the Glasgow city deal. Of course I acknowledge the existence of DFID in East Kilbride and the amazing work it does. As the hon. Gentleman knows, I am great supporter of the work of that Department, and I would hate to see it absorbed into the Foreign Office, for example. Whether the Treasury, BEIS, the Department for International Trade or the Home Office, these Departments serve the purposes of the wider Union, and Scotland needs to see that it is part of the United Kingdom. London must not be the be-all and end-all when it comes to sharing out UK Government functions and personnel, and the city deal in Stirling and Clackmannanshire offers us an opportunity, not only to see the Union flag flying on projects in Stirling, funded by taxpayers from the whole UK, but to see that commitment made real on the ground, with Departments of the Union there supporting, and not remote and distant.
I mentioned the work of Stirling Council earlier. I will close soon, so that the Minister can reply, but I should mention the excellent work done by the officers of Stirling Council, who have shown themselves to be skilled and able to punch well above the weight one would expect of a council of that size.
Luke Graham
My hon. Friend is making an excellent point about how different levels of our government work together. Having been part of two city deals, it has been clear to me that we need to use these deals as a learning point. Both the central Government in Westminster and the devolved Administration need to look at how they work with each other and to find methods that are more transparent and effective at delivering for our constituents.
Stephen Kerr
I agree with my hon. Friend. He and I have the scars from our learning experience with the city deal we are discussing tonight, and the learning from Glasgow and Edinburgh needs to be taken on board. There are better ways to do the things that we do. There is always room for continual improvement.
Jim Shannon
It is obvious from what the hon. Gentleman is saying that this is about Westminster, the Scottish Parliament and the councils together. Does that not underline the fact that we can do much better if we are all together as the United Kingdom of Great Britain and Northern Ireland—and that includes our good friends the Scots nats?
Stephen Kerr
The hon. Gentleman sums it up beautifully. One might say “better together”, and that is exactly the case. The council officers at Stirling Council have done an incredible job of pulling together the city deal, and I give them credit. Knowing their tenacity and their entrepreneurship, I have every confidence that they will deliver on the outcomes predicted for the city region deal. Would it not be great if the council could point to UK Departments—on the ground, right next to it—and know that it has their backing, that they share its ideals and goals and that they are as close to the detailed delivery as it is? Can we have a BEIS taskforce assigned to Stirling and Clackmannanshire to help with the execution of the city deal? I have asked for that before, and I would really like the Government to make a practical and real commitment of that nature.
Our Stirling economy—the Government have demonstrated that they have confidence in it—can be a shining beacon of how different levels of government can work together to attract and retain high-quality business investment. It will be a place to which business from around the UK and the wider world will flock when they see how government at all levels devotes itself to the development of the area. I want nothing less than for this city region deal to be the engine that drives the whole of central Scotland forward. Stirling is a burgh that received royal recognition some 900 years ago, and this city region deal will build on that long and illustrious history. It will build a future in which innovation and investment are harnessed to create good, well-paid jobs and to bring better life prospects to all people in all parts of my constituency.
The Parliamentary Under-Secretary of State for Wales (Nigel Adams)
I congratulate my hon. Friend on raising the Stirling and Clackmannanshire city region deal. I pay tribute to him and to my hon. Friend the Member for Ochil and South Perthshire (Luke Graham) for their role in advocating for this deal across the Government and securing investment for their constituencies. We were delighted that the £45 million UK Government investment was matched by the Scottish Government.
I am pleased that we are committed to funding deals in each of Scotland’s seven cities, including Stirling and Clackmannanshire. That represents a total investment of £1.2 billion by the UK Government. With contributions from our friends in the Scottish Government and other partners, the total figure is even higher. My right hon. Friend the Secretary of State for Scotland has further ambitions, and that is why the Government are rolling out deals beyond the city regions in areas such as Ayrshire, Moray and the borderlands. With further investment from other public and private partners, the total value of these deals amounts to several billion pounds. They represent a fantastic opportunity to give local and regional economies across Scotland a significant, real and transformational boost.
Douglas Ross
Will the Minister confirm that although it is important that the city deals are taken forward, it is right that the UK Government have committed to extending such deals across Scotland? Moray, which does not have a city, could benefit from a Moray growth deal in the same way as the cities have done.
Nigel Adams
My hon. Friend is absolutely right in that regard. We are committed to having 100% coverage of Scotland. As he will be aware, a commitment to the Moray growth deal was announced at the Budget. It involves some very exciting projects, including an energy pipeline, employability programmes for service families and a college hub looking at innovation in manufacturing. While the figure has not yet been clarified, the Treasury has provisionally agreed a sum of around £25 million for that growth deal, which I am sure he and other hon. Friends will welcome.
To get back to the Stirling and Clackmannanshire deal, the UK Government are pleased to be supporting the University of Stirling’s international reputation as a centre of excellence for aquaculture, with an offer of investment in new facilities that will not only safeguard the sector in Scotland and Wales—it can be very significant in supporting rural employment in often remote areas—but allow our world-class researchers to develop technologies that we will be able to export around the world.
In speaking about developing the infrastructure at Stirling, which will have an international focus, I of course want to take this opportunity to commend to my hon. Friends the excellent facilities at the Centre for Sustainable Aquatic Research at Swansea University. As the UK Government Minister for Wales, it would be remiss of me not to slip that into this speech about the Stirling and Clackmannanshire growth deal.
We are also supporting the establishment of the international environment centre, which will take full advantage of the natural environment and heritage of the region to bring together academic expertise from across Scotland to explore some of the key challenges of our age.
The region already represents a major draw for visitors, and local partners have been clear about their desire to do even more in that regard. Of course, any visitor to Scotland will know there is nothing more emblematic than tartan, which is why the UK Government are delighted to provide the investment needed to build the Scottish tartan centre. I am not yet aware of a particular Adams tartan. I hope that there will be one, and if I say that loud enough during the debate, perhaps someone will do a bit of research. However, I would be more than delighted to come up when the Scottish tartan centre is open—if my hon. Friend is brave enough, I will even put the relevant tartan on as well. The centre will provide an historical narrative encapsulating key developments in the history and evolution of tartan, along with related themes that will engage with a diverse audience. I am sure that hundreds of thousands of people will flock to his area to view this fantastic centre.
We are doing further work to identify additional projects in the Clackmannanshire Council area, and those will be worth around £8 million, as we have heard. I would like to take this opportunity to congratulate my hon. Friend the Member for Ochil and South Perthshire on everything he has done to help secure that additional money from the Treasury. It is no easy feat wrestling money from the Treasury, so he should be commended.
My right hon. Friend the Secretary of State for Scotland is planning on announcing more details on that deal shortly. As part of the deal, we are pleased to be releasing some surplus MOD land for development in the centre of Stirling, and the Department for Work and Pensions is running a bespoke scheme in Clackmannanshire to help lone parents return to work.
Let me quickly refer to the point made by my hon. Friend the Member for Stirling about the MOD land. At first sight, the land is due to be made available under the defence estates review in 2022, which is well within the 10-year scope of the deal. The office of the Secretary of State for Scotland and the MOD are working together to ensure that the land at Forthside is ready to be released in a fit state.
On my hon. Friend’s other very valid point, I would just like to politely remind him that the UK Government are committed to Scotland—it is not a case of devolve and walk away. As I have said previously, the UK Government have committed over £1.2 billion to support development in Scotland through the city and growth deal programme. That is what I call real commitment.
These investments represent a significant package that will help to transform the economies of Stirling, Clackmannanshire and Scotland. Growth deals should be transformational and show the real benefits that can be brought about when Scotland’s two Governments work together instead of pulling apart—[Interruption.] I agree with the hon. Member for Strangford (Jim Shannon) that we are much better together.
My right hon. Friend the Secretary of State for Scotland signed the heads of terms for the deal in May last year and expects to agree the full deal in the summer. That will herald a 15-year programme of investment and growth that will bring real and tangible benefits to all those who live and work across the region. My hon. Friend the Member for Stirling is right. He wants to see hi-vis jackets and spades in the ground: I am happy to go up there with a spade and break the ground myself if necessary. In my view, the deal will be the engine that drives the whole of Scotland forward.
Question put and agreed to.
Draft Equine (Records, Identification and Movement) (Amendment) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)
I beg to move,
That the Committee has considered the draft Equine (Records, Identification and Movement) (Amendment) (EU Exit)Regulations 2019.
It is an honour to serve under your chairmanship, Mr Sharma. The draft regulations will make technical amendments to ensure that retained EU law on equine identification remains operable following the UK’s withdrawal from the EU, ensuring that the human food chain continues to be protected and that equines can continue to be traded and moved into and through the European Union. The current equine identification system is set out in EU legislation, primarily by Commission implementing regulation 2015/262—the equine passport regulation. I stress that the draft regulations will make no changes to the current policy or enforcement.
I will briefly summarise the draft regulations and the principal changes they will make. Part 2 sets out technical amendments to the text of the retained EU equine passport regulation, to ensure its continued operability following our exit. Part 3 makes similar technical amendments to certain retained Commission decisions also relating to equines, namely on the collection of data for competitions, the recognition of stud books and the co-ordination of information exchange between those stud books. Part 4 amends the European economic area agreement as retained in UK law under the European Union (Withdrawal) Act 2018.
The necessary technical amendments to ensure operability involve changing references to the Union in the current EU regulations to refer instead to the UK, or, where the admission of equines with appropriate ID from the EU is concerned, to refer to equines from both the EU and the UK. References to authorities in member states will be amended to refer to the appropriate authorities in the UK; in relation to Scotland it will be Scottish Ministers, and so forth.
Parts 2 and 3 omit certain articles of the Commission regulation and of Commission decisions because they contain provisions that will no longer have any relevance once section 2(2) of the European Communities Act 1972 is repealed. Omitted articles will become redundant. However, where relevant, necessary provisions that have already been given effect by domestic legislation will be preserved and continue to have effect by virtue of the EU (Withdrawal) Act.
I will briefly outline the context in which the draft regulations are set. It is important to understand how rules on equine identification operate, and the legislation that underpins the rules. I will then move on to why the draft regulations are necessary and, indeed, vital. The system of equine identification is long established in EU law.
Scott Mann (North Cornwall) (Con)
The Minister might be aware that my patch in North Cornwall has moorland ponies. I went out with the Redwings charity to do some tagging—moorland ponies breed on the moors and are not chipped. When these provisions are in the gift of the UK, will the Government consider facilitating the chipping of moorland ponies so that these great animals do not enter the food chain?
David Rutley
I thank my hon. Friend for his contribution; I thought he was going to talk about the derogation, which obviously will continue. I will seek some inspiration and come back to him in my closing remarks.
At present, the EU’s 2015 implementing regulation on horse passports applies directly in the UK, as it does in all member states. The EU law is supported by UK domestic enforcement legislation. After exit day, the EU legislation will be retained under the withdrawal Act. The draft regulations have the important, immediate job of making the necessary technical amendments to the retained law so that the movement of equines into the EU can continue.
Caroline Flint (Don Valley) (Lab)
The explanatory memorandum states:
“Equine welfare is enforced by local authority Trading Standards and robust identification information makes it easier to deal with cases of abandoned, lost or stolen equines.”
In my constituency, and many others, horses and ponies are abandoned on private land. One farmer had 70 left on his land, and there was little enforcement by the local authority, because there are not the powers to deal with those ponies and horses and they do not have identification. Post Brexit, will we have a better system for dealing with ponies and horses that are already in our country and whose owners are hard to identify?
David Rutley
The right hon. Lady makes a good point, to which I will come back later. Clearly, provision is in place under the Animal Welfare Act 2006, and in recent years we have made other changes that make it easier to address the issue of stray horses, but also those that have been tethered. We will need to take further steps in that direction.
The draft regulations ensure that the food chain continues to be protected and that the contribution of equine identification to animal welfare and biosecurity continues to be made. EU law requires that equines be identified by way of a passport. In most cases, equines born after 2009 must also be uniquely identifiable by way of a microchip; I will say more on that point in a moment. The passport contains important information about the equine, including its unique equine life number, a microchip number when one has been inserted, and a silhouette on to which the equine’s markings are drawn. The passport also records details of any veterinary medicines administered to the animal and its current food chain status eligibility.
The equine passport is long established, and these draft regulations will maintain the status quo for the vast majority of people. Domestic legislation on the identification of equines—the Equine Identification (England) Regulations 2018—has recently been updated. That includes a new provision that equines, regardless of age, must be microchipped. Therefore, we are taking further steps, notwithstanding the fact that we probably need to do more. The devolved Administrations have prepared equivalent instruments.
Having all equines microchipped, except for those recognised and listed as belonging to semi-wild populations —an issue raised by my hon. Friend the Member for North Cornwall—will significantly enhance our equine identification credentials as a third country and mark us out as a leader among our peers. Underpinned by domestic legislation, the UK’s central equine database was launched at the national equine forum on 8 March 2018 and now contains data about virtually every equine in the UK.
I draw hon. Members’ attention to an additional process change made by the draft regulations, namely the insertion of a new article 15A. As a third country, the UK will be required to generate a supplementary travel document to accompany some equine movements. Equine IDs issued by passport-issuing organisations in the UK will not suffice for that purpose under EU law, because the ID must be issued by the competent authority of the third country—for example, the Department for Environment, Food and Rural Affairs in England. The travel document is likely to be necessary only for unregistered equines, provided that the Commission agrees to recognise our stud books relating to registered equines. The Animal and Plant Health Agency has drawn up a simple single-page document that will meet the requirements of the legislation and which can be printed off and signed by the vet at the same time as other travel documentation is issued. That would be the export health certificate. APHA has confirmed that it is on track to being fully resourced to accommodate that change.
The House of Lords sifting Committee specifically raised the cost of blood tests for equines moving into or through the EU following UK withdrawal. Let me make the position completely clear. European rules state that third countries must be assigned a disease risk status, and there are seven possible categories, based on the geographic region of the third country and the level of associated health risk. Blood testing is a mandatory requirement for all equines from third countries. The number of tests required reflects the disease risk category assigned to the third country. Given the UK’s high health status and high welfare standards, of which we are rightly very proud, we would expect to be assessed as low risk and therefore subject to the minimum number of such tests. That would limit the cost impacts on the sector, which we understand to be in the order of £200 to £500, depending on the third-country category in which the UK is placed by the EU.
I stress that the testing requirements, as with the need for an additional APHA-issued travel document, are not in any way due to the legislation. Both requirements are a consequence of the UK withdrawing from the EU and becoming a third country, where we would be subject to already existing laws set down for third countries. The equine sector is already very familiar with blood tests. It is the industry norm for current movements from the UK to third countries. The equine sector has been receptive and welcoming of the new equine regime introduced over the past year and has been calling for the changes for some time. The draft regulations will back up those existing rules.
To summarise, the draft regulations seek only to make technical amendments to retained EU law following the UK’s withdrawal from the EU, ensuring the continued operability of the rules after exit and that UK horses are compliant with EU requirements for third-country equines. The regulations do not make any substantive change to policy or enforcement. Retention of the system and the rules regarding equine identification are vital to protect equine health and ensure the safety of the human food chain and the continued orderly movement of equines into and through the EU.
I trust that Members will agree that it is important to have the draft regulations in place in order to ensure that retained law is operable following our exit. They preserve our high standards of equine identification, ease of movement, welfare and protections of the human food chain. I therefore commend the draft statutory instrument to the Committee.
Sandy Martin (Ipswich) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. The draft statutory instrument is simply the latest in a flood that is necessary to make provision for the regulatory framework after Brexit and for us crashing out without a deal. Surely part of the point in having the two-year period for the article 50 withdrawal mechanism was to enable all these issues to be dealt with in a measured and careful manner, rather than thrust upon us in a panic without any time or opportunity to consult stakeholders or assess any possible issues or problems.
Labour Front Benchers do not believe that the Government’s approach to secondary legislation is helpful or worthy of a Government who claim to be bringing sovereignty back to Parliament, and we will continue to say so. In particular, the Opposition put on record our disquiet at the lack of notice for these SI Committees and the unreliability of dates even once they have been given. Any process that takes Members of Parliament and outside stakeholders by surprise cannot possibly be as accessible and transparent as it should be.
As with many other statutory instruments, the draft regulations involve considerable cost, duplication, opportunities for confusion and the possibility of future regulatory divergence from the rest of the EU, which would lead to difficulties in trade. That calls into question the wisdom of preparing for a no-deal Brexit when every Member of Parliament, including the Minister, should be doing everything in their power to prevent that eventuality. Will he come clean on what his Department believes will be the cost to the equine industry of a no-deal Brexit? Whatever it may be, it will certainly be more than the £5 million of additional administrative costs quoted in the SI.
As the explanatory memorandum makes clear, the SI would not in itself prevent significant additional costs for those moving horses from this country to the rest of the EU, if additional blood tests or other procedures are required. It is hard to think of any measures that could be taken in this country to ameliorate the effects of a no-deal Brexit on this or any other sector. That is particularly pertinent to the Republic of Ireland, which has close links to the UK in the equine world. How that close link between the UK and our friends and cousins in the Republic will survive all the additional problems arising from a no-deal Brexit is just another problem to add to the serious damage that no deal will do to the UK and in particular to Northern Ireland. What negotiations has the Department had with equine industry representatives from the Republic, or indeed from Northern Ireland?
At present, EU veterinarians have to sign off on various responsibilities during movement, which means that some of the checks will occur outside the UK. After Brexit, most or all of those responsibilities will fall to UK vets, which may increase both the work required of them and the associated costs, assuming movement still occurs at the current rate. The plus side is that UK veterinary standards are the highest in Europe, but the downside is that a high proportion of the vets are EU nationals, some of whom are already deciding to return to their countries of origin. Just when our need for additional vets will grow, we will find ourselves with significantly fewer than we currently have. That will be a problem whether we leave with a deal or not, and we would like the Minister to make clear the plans for dealing with that likely shortage.
The Opposition deprecate the situation in which we find ourselves. The organisation of the process is lamentable. The ability of this SI or any other to provide a future for equine industries that is not significantly worse under a no-deal Brexit is nil. However, there is nothing of substance in the SI to which we object, and so we will not oppose it.
Mr Owen Paterson (North Shropshire) (Con)
It is a great pleasure to serve under your chairmanship, Mr Sharma.
This is not a registered interest, but I think it is appropriate that I declare that my wife is chairman of Aintree racecourse and a steward of the Jockey Club, as it is on the subject of thoroughbred racing that I would like to quickly touch.
The racing industry is our second-biggest sport: it turns over £3.5 billion, it employs about 17,500 people directly, £11.5 billion is bet on horses and just fewer than 6 million people attend racecourses. It is a massive industry with enormous consequences. Almost exactly a week after Brexit day, on 6 April, about 75,000 people will turn up at Aintree for the grand national, with 9 to 10 million watching it on ITV and about 600 million watching worldwide. It is important for this country that the grand national goes smoothly, and it is of particular interest to our Irish friends—I am sure you read the Racing Post, Mr Sharma—who have, I think, 47 entries this year.
As I understand it, in the case of the withdrawal agreement going through, the current tripartite agreement will carry on in the implementation period. That agreement has served the horse industry of the UK, the Republic of Ireland and France well for many years. Will the Minister clarify what will happen if there is an agreement? I am also particularly interested in what will happen if there is no agreement. As I understand it, we would become a third country and horses would be able to come into the country.
It is worth touching also on the breeding industry. Some 52% of Irish thoroughbred foals come to Great Britain and 50% of French thoroughbred exports come to the UK as well, so it is not just about racing. However, with the huge international focus on the national, I am particularly interested in what arrangements will be in place by then. I understand from the British Horseracing Authority that there have been very satisfactory discussions with DEFRA, and we had the announcement last week in an SI Committee from the junior Digital, Culture, Media and Sport Minister that proposals had been going through, but I would like to know how it will work for horses that come into the country for the race, almost certainly from Ireland. I know of only one French horse that might be running, Borice, and he will not be a problem because he is already being trained in the UK.
The tripartite agreement has worked well, effectively giving a derogation from the directives requiring inspection, a route plan and a passport—I understand there will be a replacement passport. Will we be using TRACES—the trade control and expert system—in future? That is the arrangement under which the tripartite agreement currently functions.
Lastly—I hope that I do not catch the Minister out with this—it is not only thoroughbreds that come over. The French have AQPS—autre que pur-sang—horses that mainly go jump racing, and it is also worth mentioning Arab horses, which come over in numbers for racing purposes and for breeding.
I thank the Minister for his explanation of the draft regulations. Will he explain where we will be on horse movements in the event that we do not have a deal and there is no time to immediately replace the tripartite agreement?
Caroline Flint
It is a pleasure to serve under your careful stewardship while debating this important matter, Mr Sharma. Following the right hon. Member for North Shropshire, I put on the record Doncaster’s proud racing heritage. The Northern Racing College is actually in my constituency—there are only two racing colleges in the country, and we are proud that the northern one is based in Don Valley—and the St Leger stakes, which is one of the classics, takes place every September at Doncaster racecourse. We have a huge interest in bloodstocks as well, which is important to many people who enjoy the races in Doncaster and to the many businesses that rely on that industry from one year to the next.
I will ask a couple of questions and make a point or two about the draft regulations. I sit on Committees such as this every single week, and I listen with bated breath to hear what will be forthcoming from Ministers and shadow Ministers. It has always seemed total common sense to me to not throw the baby out with the bathwater as we leave the European Union. Where we have established procedures that work for the EU and will continue to work for us in the future, there should be a simple process of transposing into UK law that which we currently share with our EU neighbours. In fact, I suggest that on many occasions, given our rich heritage when it comes to horse-racing and horses more widely, we have been at the forefront of the negotiations and discussions in the EU to ensure the highest standards for the transport of horses and ponies, and for animal welfare. I have no doubt that we will continue to be at the forefront of that debate.
I say gently to those on my own Front Bench that if it was the other way around and we were in government, we too would try to find a way to sift through the less controversial statutory instruments and regulations, and to focus more time on the more debatable ones. We should not make a mountain out of a molehill on every single occasion.
I have a couple of questions for the Minister. My hon. Friend the Member for Ipswich made a pertinent point about the number of available vets. My most recent discussion on this issue was in a Public Accounts Committee hearing on our border readiness just last week, at which we had the permanent secretaries for Transport and for Environment, Food and Rural Affairs.
I was pleased to hear that the staff at DEFRA have worked so hard on these statutory instruments, and I commend those civil servants and staff for the work they have done in very difficult circumstances to get all these SIs through. If I am correct—I am sure the Minister has the figure to hand—we are almost at the end of the rainbow when it comes to this matter, with only five statutory instruments likely to have to be taken after 29 March, to tie up legislation in certain areas. I commend DEFRA for that work.
However, on the border and the role of vets in licensing and inspection—this is connected to the point my hon. Friend the Member for Ipswich made—I have a few concerns about DEFRA relying too much on the market to deliver, without ensuring that it really understands the state of play and the pressures that might come to bear on those working in this field. I would welcome it if the Minister could reassure us that, even at this late stage, every opportunity will be taken to double check that the facilities and services are there.
I thank the Minister for what he said about the microchipping of horses. Throughout my 20 years as an MP, the matter of horses being left, particularly on private land, has been a perennial problem. Local authorities and the police are often hesitant to remove horses that are not getting the best welfare and whose owners are hard to track down. I look forward to that legislation coming into being.
David Rutley
I will respond to the points that were made in that fascinating series of contributions, for which I thank hon. Members. The right hon. Member for Don Valley spoke with enthusiasm about her racecourse. Credit to Doncaster Rovers, who played incredibly well at the weekend, although they did not quite get the result they wanted.
The right hon. Lady made some important points about the number of SIs that we have to get through. To say that we are at the end is perhaps a bit optimistic, but we are at the beginning of the end. The end is in sight. The contribution that DEFRA officials have made has been extraordinary; they have worked phenomenally hard. Credit to the permanent secretary, whom the right hon. Lady was able to question. There has been a really amazing transformation in what DEFRA does, the number of people being brought on board and the number of projects that are taking place as we onshore our agriculture, fisheries and environment policies. It is an extraordinary endeavour, and I thank her for her comments.
I want to reassure the right hon. Lady, the hon. Member for Ipswich and others about what we are doing with vets and how we are making sure that we are ready for EU exit if there is no deal. We have been working very hard with the veterinary industry, the British Veterinary Association and the Royal College of Veterinary Surgeons. The evidence that has been provided to the Migration Advisory Committee strongly supports the return of vets to the shortage occupation list. While the UK prepares to leave the EU, DEFRA is working closely with the Home Office to ensure that there is a long-term strategy for the veterinary workforce as part of the future immigration policy.
To try to take the pressure off our vets in the work they are doing in their official capacity, we are creating the new role of certification support officer, which is designed to provide administrative support to official veterinarians for the processing of export health certificates. That takes work away from the official vets, but the certification support officers will be under close supervision by vets.
A point was made about the number of official veterinarians. The APHA has been working very closely with the veterinary industry to ensure that sufficient OVs are available for certification on day one. The preparations are in good shape.
The hon. Member for Ipswich asked whether discussions are ongoing with Northern Ireland and Ireland. We are having a close discussion with all the devolved Administrations and the Republic about this and many other issues. He spoke about the cost to the industry that this will bring about. There will be changes in the costs associated with vets, but they are not related to the regulations. There are costs in the process. The processes will be designed simply. Our aim is to ensure that the processes enable this to take place effectively, given that the industry often transports animals to third countries already. This is just bringing the EU into line with that approach.
My hon. Friend the Member for North Cornwall made a point about tagging. We are sympathetic to the issue that he raised, and we have had discussions with the sector to look at ways in which it can be facilitated. I will gladly meet him separately after this Committee or on another day so that we can talk about it further.
My right hon. Friend the Member for North Shropshire characteristically made some probing technical points, to which I will endeavour to respond to assure him that the issues he raised are being addressed. He asked whether horses competing in the grand national will be able to return to the EU. I think many people in the country will be interested in that. The answer is yes, absolutely, assuming that the EU provides us with listed status. We understand that that process is moving along well. All equines returning to the EU will need to follow the same process, regardless of where they are going, because we will lose access to the tripartite agreement in the event of no deal.
My right hon. Friend asked whether the tripartite agreement would remain in place in the implementation period. Yes, it would. In a no-deal situation, there would be a process to enable French and Irish horses to enter the UK. Our imports policy will remain the same in principle on day one. Importers will need to pre-notify the APHA of their intention to travel to the UK, but no additional documentation or checks will be required.
Mr Paterson
I understand that it will be easy for horses to get into the country, but obviously—the breeding season started last week—they have to get back. As I understand it, they will get back, but they will probably have to go through a border inspection post. I think that would be Dún Laoghaire in Ireland’s case, and possibly Larne in the case of Northern Ireland. Will the Minister confirm that it will be easy to take horses back to their home country?
David Rutley
Yes, I can confirm that. The processes will be different, but they will be simple. Yes, horses will have to go through a border inspection post.
Finally, my right hon. Friend asked what the export process for AQPS—French non-thoroughbred horses—would look like. The process for export will not differ depending on which EU country an equine is destined for. That means horses moving to France and Ireland will have to follow the same processes as all other equines, which I referred to earlier. Again, that is because we will lose access to the tripartite agreement in the event of no deal. As I said, we will not alter our import policy on day one, so French horses will be able to enter the UK, following the procedures as they are now.
I thank Committee members for their contributions. It is important to ensure the continued operability of retained legislation so UK equines can continue to move into and through the European Union following the UK’s withdrawal from the EU. We cannot be left in a situation where our horses may be held up at the border or prevented from moving into the EU. I trust that Members agree about the importance of ensuring that the draft regulations find passage through Parliament, and I once again commend them to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Equine (Records, Identification and Movement) (Amendment) (EU Exit) Regulations 2019.
Draft Air Traffic Management (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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The Chair
Good afternoon. Hon. Members may remove their jackets if they wish to do so, but preferably nothing else—this is not the “Today” programme. [Laughter.] There is a clue in the title of the regulations. This is not an opportunity to discuss the whole future of the European Union. We have only an hour and a half, and although I wish to be as facilitating as possible, let us confine ourselves to the contents of the regulations.
The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
I beg to move,
That the Committee has considered the draft Air Traffic Management (Amendment etc.) (EU Exit) Regulations 2019.
It is always a pleasure to serve under your chairmanship, Sir Roger. The draft regulations are made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the EU without a deal. This statutory instrument retains the regulatory tools to ensure the continued provision and oversight of air navigation services after the UK leaves the EU and is an essential element of our contingency planning for a no-deal exit. The instrument neither extends nor diminishes regulation; it just ensures continuity.
The draft SI amends single European sky legislation: the four basic regulations that provide the framework for EU air traffic management regulations and the implementing regulations that set out the detailed requirements. As Committee members will have seen from the papers, they are detailed, technical matters, which I will quickly explain.
The implementing regulations cover air traffic management interoperability: the manner in which the UK works with other states to deliver air navigation services; the organisation of airspace; the safety and oversight of air navigation services; new technology and how it is to be used; and a system of performance and economic regulation for air navigation services. The single European sky legislation supports the EU initiative to improve the efficiency of air navigation services while maintaining safety within the European air traffic management system.
The delivery of air navigation services is vital to ensure that congested airspace can be used safely and efficiently. The services regulated by the single European sky legislation support air traffic growth by ensuring the safe separation of aircraft. If services are not provided in an efficient way, it can cause considerable delays to traffic with resultant costs and disruption to airlines and passengers. The instrument will ensure the effective regulation of air traffic management so that the arrangements in the UK continue.
The draft instrument addresses areas where retained EU law will no longer function effectively after leaving the EU by removing the roles of EU bodies that cannot be performed by the UK after exit, and provisions where there is already satisfactory UK legislation. Where possible, roles currently undertaken by the European Commission and EU bodies are being transferred to the Secretary of State or the Civil Aviation Authority; but where they relate to pan-European functions, including air navigation services delivered by more than one state, they are being removed. The instrument includes arrangements to recognise EU-based certifications and authorisations existing immediately before exit day. The certifications and authorisations will be preserved for a maximum of two years, subject to any earlier expiry or termination, providing continuity until another agreement is reached with the EU on such issues.
The single European sky legislation includes a regulatory framework for the development and deployment of new technology and ways of using it: the single European sky air traffic management research and development programme—a mouthful that is abbreviated to SESAR. The EU regulations set up organisations and arrangements in which the UK will no longer be able to participate and which the UK cannot legislate for as a third country. We are, however, retaining requirements for deployment of new technology by UK operational stakeholders, predominantly the UK’s air navigation service provider, NATS—formerly National Air Traffic Services—to ensure interoperability with the EU air traffic management system is retained.
The instrument also ensures that the UK will continue to comply with its international obligations, such as those set out in the Chicago convention on international civil aviation. That is done by retaining the regulations that dictate how we comply with the standards and recommended practices adopted by the International Civil Aviation Organisation under that convention.
As I said, the instrument is an essential element of our contingency planning for a no-deal exit. It makes no changes to the objectives of the EU single European sky regulations. Instead, it maintains the existing regulatory framework of technical requirements for air traffic management to ensure the continued provision of efficient, safe air navigation services, to uphold the effective regulation of the UK air traffic management system, and to maintain interoperability between the UK and the EU after the UK has left the EU.
Hon. Members may be interested to know that the devolved Administrations and NATS have been consulted on the statutory instrument and are happy for it to proceed. I commend it to the Committee.
Karl Turner (Kingston upon Hull East) (Lab)
It is always an absolute pleasure to see you in the Chair, Sir Roger, and a privilege to serve under your chairmanship. I do not intend to detain the Committee long.
As the Minister said, the instrument makes changes to the EU-derived retained single European sky legislation, which arises as a result of the UK leaving the European Union. It will ensure the regulatory framework for air traffic management and the continued provision of air navigation services when we leave the EU. It is vital that the ATM regulatory framework is in place when we leave the EU, and the industry wants it to continue, so we support the instrument.
The big fear for the aviation sector is that we crash out without a deal. The EU proposes in the event of no deal to cap the number of movements between the UK and the EU27, which would be a crushing blow for our aviation sector. A large portion of funding for the single European sky project, SESAR, comes from the EU. As the Minister knows, some of the committed projects, to which millions of pounds of funding have already been committed, run up to 2024.
Can the Minister reassure the Committee that in the event of no deal, all funding commitments will be honoured by the Treasury so that the airports and other parties carrying out such projects can continue to do so with confidence? Does he agree that a no-deal Brexit would be a disaster for the aviation sector? What discussions has he had with his EU counterparts about the impact of no deal?
My hon. Friend the Member for Middlesbrough (Andy McDonald), the shadow Secretary of State, is currently in the main Chamber asking an urgent question about the collapse of Flybmi over the weekend. As the Minister knows, Flybmi has said that Brexit uncertainty added to its collapse. The Secretary of State cannot be trusted, so will the Minister do the right thing for the aviation sector and tell the Prime Minister that she must take no deal off the table?
Brendan O'Hara (Argyll and Bute) (SNP)
I will detain the Committee for even less time than the hon. Member for Kingston upon Hull East, who was absolutely right when he said that we live in hope—indeed, we expect—that the UK will not leave the European Union without a deal. We have to be prepared, however, for that catastrophic eventuality, so we too will not oppose the statutory instrument.
The consequences for the UK’s aviation industry of a no-deal exit from the European Union are unthinkable. I fully support what the hon. Gentleman said to the Minister about ensuring that no deal is taken off the table, even at this late stage, because it would have catastrophic consequences for the aviation industry and beyond.
I have looked through the explanatory memorandum released by the Government, and I have a couple of questions for the Minister. I appreciate that the Government have had regular engagement, but from what I can see they have not consulted specific stakeholders other than the CAA. Why is that the case? Are they satisfied that they have taken every precaution and spoken to every stakeholder in depth and at length in putting the SI together?
When was the statutory instrument published in draft form on the legislation.gov.uk website? Does the Minister know how many people viewed it? What changes, if any, were made to it based on the feedback that was received?
Andrew Jones
I thank hon. Members for their consideration of the instrument and their questions, which I will try to answer.
On the SESAR funding, if there is a no-deal exit, the Government will underwrite what would have been paid to the UK under the current arrangements. That provides certainty and continuity for those involved.
Our understanding is that the European Parliament does not want to see a capacity freeze on flights to and from the EU. That would be very bad for business. The Commission has put forward an idea that has not been met with much warmth from the European Parliament. We will continue to monitor the situation, but it looks likely that there will not be a capacity freeze. Obviously, that is very positive.
No deal: should it be taken off the table? We have had quite a number of discussions about that in Delegated Legislation Committees and the Chamber, and it is pointless to revisit them. The way to avoid no deal is, of course, to vote for a deal. There is a deal on the table to be voted for. The Prime Minister has said on a number of occasions that that it is not possible to take no deal off the table, for reasons that have been rehearsed.
I mentioned in my remarks that the devolved Administrations, NATS and other stakeholders have been consulted. There has been engagement in confidence with the relevant stakeholders. Ministers and officials have had regular engagement with the aviation industry, air navigation service providers and airspace users through meetings, workshops on EU exit and our long-established stakeholder forums. A number of issues relating to the UK’s withdrawal from the EU have been addressed, including plans for making this secondary legislation to ensure the statute book continues to function irrespective of the outcome of negotiations. There has been support for continuity of the regulatory framework among stakeholders, as the hon. Member for Kingston upon Hull East said. It is in everybody’s interest to ensure smooth continuity so that this important sector can continue to operate. We work closely with the CAA on all aviation matters, including preparation for EU exit. That work and the consultations will continue.
I think that answers hon. Members’ questions. I close by saying that this is an important SI to land, because we need to prepare for every eventuality, including a no-deal scenario. The instrument is essential to ensure that we have an effective regulatory framework for air traffic management in the UK from exit day. I commend the regulations to the Committee.
Question put and agreed to.
Draft Shipments of Radioactive Substances (EU Exit) Regulations 2019
(5 years, 8 months ago)
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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 Shipments of Radioactive Substances (EU Exit) Regulations 2019.
Usually, for such occasions, Mr Gray, it is written into my speech that it is a pleasure to serve under your chairmanship, but with you it is a real pleasure.
Today, according to the news this morning, MPs are quaffing champagne—we always “quaff” it—on the ski slopes, but here we are not. We have quaffed a few confectionary items, if one can quaff those, but I am in Committee to talk about the draft regulations that were laid before the House on 21 January 2019.
This new draft statutory instrument is being made under powers set out in section 8(1) of the European Union (Withdrawal) Act 2018. The regulations will address specific inoperabilities arising from the UK’s withdrawal from the European Atomic Energy Community, which is known more commonly and colloquially as Euratom, and will only come into force on exit day in the event of no deal between the UK and the EU. The draft instrument corrects deficiencies in retained EU law by revoking and replacing Euratom regulation 1493/93 on shipments of radioactive substances between EU member states.
The new draft regulations demonstrate the UK’s continuing commitment to the highest safety standards in radioactive substances’ control. The instrument will apply to the whole of the UK. The regulations will ensure that prior written declarations must continue for shipments of sealed radioactive sources from the EU into the UK in the event of no deal. They will allow the UK’s competent authorities to check that our importers of sealed radioactive sources comply with the requirements for safe storage, use and disposal of sources before shipments are made from the EU to the UK.
The process of advance declarations maintains the oversight of UK authorities with respect to the destinations and recipients of sealed sources that are shipped into the UK. Therefore, in relation to imports, the draft regulations provide continuity for regulators and operators in a no-deal scenario. The instrument will cover the shipment of the sealed radioactive sources from EU member states to importers. For the record, it is important to point out that a “sealed radioactive source” is a radioactive material encapsulated by another material, usually metal, to prevent exposure. In common language, that would be a box—but not just any box.
Sealed radioactive sources are widely used in industry, agriculture and medicine—for example, in special devices to inspect the quality of welds on gas and water pipelines during construction, to kill harmful bacteria in food or cancer cells in medical patients, or to sterilise medical equipment. About 100 businesses in the UK import sealed radioactive substances, and the vast majority of them are in England. The draft regulations do not delay or restrict our ability to import such sources from the EU, as their primary purpose is simply to provide continuity with existing practices.
Following exit, our importers of sealed radioactive sources from the EU will be required, as now, to make prior written declarations to demonstrate that they comply with national requirements for the safe storage, use and disposal of sealed sources before shipments from the EU to the UK can take place. The declaration is sent to the relevant competent authorities in the UK, which will acknowledge receipt, much as they do now. Those authorities are the Office for Nuclear Regulation for nuclear site licences, it being the regulator of such sites; and the different environment agencies for non-nuclear site licences: the Environment Agency in England, the Scottish Environment Protection Agency, Natural Resources Wales and the Northern Ireland Environment Agency.
The importer forwards a declaration and acknowledges receipt to the EU-based exporter before the shipment can be made. Declarations can last up to three years and cover more than one shipment, in the same way as under the previous process, and we will continue to recognise all declarations made before exit day following our withdrawal from the EU. Shipments can continue to be made under existing declarations unless and until those declarations reach the end of their life span.
In the event of no deal, as a result of the UK’s no longer being a member state, it will not be possible for the system to continue to operate in exactly the same way, because we will be a third-party state. The instrument will maintain current arrangements in so far as possible, with three areas of operational change. I am sure the shadow Minister will be very interested in those differences, but I have been through them very carefully and I believe they are necessary.
First, the instrument will apply only to imports from the EU into the UK. It will not apply to our exports to the EU, as the Euratom regulation does now, because, unfortunately, it reflects the UK’s position outside the EU. The instrument can cover only the arrival of shipments in the UK, because that would be the only thing within our power in the event of our leaving the European Union without a deal.
Secondly, the obligation for exporters in EU member states to submit a quarterly return of all shipments will no longer apply, because we will not be able to place an obligation on EU exporters to submit such a return to a UK-based competent authority, as the Euratom regulation does.
Thirdly, the instrument places a legal obligation to make a prior written declaration on the UK importer, whereas the Euratom regulation placed a legal obligation to obtain a prior written declaration on the EU exporter. That technical legal change is made for obvious jurisdictional reasons, but it will make no difference to what is required in practice. The practical requirements for obtaining the declaration for UK importers remain the same. The changes do not place any additional practical requirements on industry or regulators.
The shadow Minister normally asks me for an impact assessment. In this case, as the one-off cost to all industry will be between £1,400 and £9,100, the impact will be de minimis and absorbed as part of day-to-day business. It is just about getting used to the new technicalities; the process really is the same.
Richard Harrington
I do not know whether Hansard can indicate that the shadow Minister nodded, but he did. That happens rarely during my speeches, but in this case it did. He may well have denied it, in which case I would have had to set the record straight.
Subject to Parliament’s approval of the draft regulations, guidance on their operation will be published online in March, alongside targeted operator engagement. Officials have engaged with affected operators and stakeholders through a number of forums and channels, including the Environment Agency’s small users liaison group and the radioactive substances policy group. I am pleased to say that the instrument was drafted in collaboration between officials in my Department and those in the devolved Administrations, as well as the different environment agencies and the ONR.
In conclusion, the draft regulations are essential to demonstrate our commitment to the highest safety standards in the area of radioactive substances control and ensure maximum continuity for UK importers.
Dr Whitehead
It is a pleasure to serve under your chairmanship, Mr Gray. The Minister may correct me if I am wrong, but I think the draft regulations are pretty much the last of the various SIs that have been put in place to create a regime in the UK that is as good as the Euratom regime. I did not intend to be quite as kind as this will sound, but I think we have got to a position where pretty much everything is in place. That cannot be said for every area of regulation, but we are almost there as far as the future of Euratom is concerned.
Richard Harrington
I can confirm that this is the last Euratom SI for no deal. As usual, the shadow Minister is very well informed.
Dr Whitehead
There is the small matter of chasing an agreement with Japan, but that is a different matter.
Dr Whitehead
Indeed.
It would be remiss of me not to welcome the fact that we have now got to the final point, and therefore today we do not want to stand in the way of the regulations proceeding. However, I ask the Minister for a brief explanation of one particular aspect, which is bound up to some extent with the fact that, as he said himself, what was previously a two-way process in regulations now becomes a one-way process, because we have no means of forcing anybody in an EU country to make declarations in a way that we might like, and we will therefore record receipt, rather than across the board, as far as exchanges are concerned.
That concerns me to the extent that the Minister has talked this afternoon of sealed sources of radiation. He stated that those are in a special box. They are effectively in a box, but they are sealed, to make what can be highly dangerous radiation not impactful on anybody who is dealing with it. So it will be sealed in metal, or glass, or whatever, to make it non-impactful on the outside.
The current regulations cover a second category—unsealed sources. That does not mean unsealed to the extent that they are on a paper doily laid out for everyone’s approval. The safety of those materials should give cause for concern, but they are not in the same category as the materials that have to be sealed so as not to harm anybody outside. They are called unsealed, but they are still protected, and we ought to know about them as far as possible.
The problem is that previously, the transit of both sealed and unsealed material could be traced one way or another, either through the forms that had to be filled in before material was transported, or they would be subject to a three-monthly report of the transit of all materials, which was held within the EU but available to all member states. Now that will not be available to us any more, so in principle we will have no knowledge of what is happening to the transport, both in and out, of unsealed nuclear material.
I do not wish to hold up this particular SI, but I nevertheless invite the Minister to reflect upon whether, for the longer term, that is an entirely satisfactory way to do things. The explanatory memorandum states that that is not a matter of great consequence, but I would have thought that what happens to the transport of these items is important, so that we do not face a possible future scandal of missing material, or material going to the wrong place or into the wrong hands, or performing the wrong role. We ought to have some known record of what is going on.
I may have misunderstood how this SI will work, and perhaps we will in some way have a record, but on the face of it, it looks as though we will have a record only on the basis of voluntary arrangements by the shippers, and not a definite and certain arrangement for those shipments.
On the overall arrangements for sealed goods, I absolutely agree with the Minister, and I also agree with him that there should not be an impact assessment for this SI, because the same things are going backwards and forwards, and it is not a question of there being any serious changes in procedures; it is just a question of how those procedures are being organised. However, there is a question to be answered about sealed and unsealed materials, and I hope the Minister can answer it in a way that puts my mind at rest about the procedures.
Sir Robert Syms (Poole) (Con)
It is a pleasure to serve under your chairmanship, Mr Gray. I was involved with the Nuclear Safeguards Act 2018 and I have sat on a number of related statutory instrument Committees, so it is pleasing to hear that all the building blocks are now in place. As a brief observation, the Minister has done a good job. He has been cheerful and open, and he has got on with it. If other Ministers took the same attitude, the job of Government would be a lot easier.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I echo my hon. Friend’s comments. The Minister has done a thoroughly competent job and he is well on top of the issue. It is great that we have got to the end of the series of statutory instruments on nuclear decommissioning.
The 65th report of the Public Accounts Committee, on which I sit, about the Nuclear Decommissioning Authority says:
“In 2017-18, the NDA spent £2 billion on activities at Sellafield”
and—this is really serious—
“It expects operations to decommission Sellafield to continue for over 100 years at an estimated cost of £91 billion.”
What consideration is being given to building up more and more of those materials that are taking a long time to decommission at Sellafield?
Richard Harrington
I am flattered by the compliments from my two hon. Friends, and by the good grace with which the hon. Member for Southampton, Test has responded throughout the progress of the 2018 Act and the statutory instruments that have followed. Every time, we hope that he will be late so that we can start without him and the illustrious Opposition Whip will have to deal with the issues, but he has never let us down—or at least, he has never let the Opposition Whip down.
The hon. Gentleman’s points are interesting. Being who he is, he will be aware that advance declarations have never applied to unsealed sources, so that is not new.
Dr Whitehead
Just to clarify, that has always been my understanding. It is a question of what goes into the three-monthly declarations from the EU about all transport—unsealed and sealed. That was previously the source from which one could keep a record of what was going on.
Richard Harrington
Perhaps I can answer by saying that that does not pose a concern, because the devolved environmental permitting regime allows the UK environment agencies to require sites that receive sealed and unsealed radioactive sources to record their receipt. Under the EU regulations, as I have explained, the import of unsealed sources was captured only by the quarterly returns. As that is no longer a requirement, unsealed sources are not covered by the regulations, so it is a completely different matter with a completely different system.
To answer the question of my hon. Friend the Member for The Cotswolds about Sellafield and the Public Accounts Committee report, if he will indulge me, I think it would be better for me to write to him on the subject or for us to meet to discuss it.
Richard Harrington
Thank you very much, Mr Gray. With that, I commend the last statutory instrument on Euratom to the Committee.
Douglas Chapman (Dunfermline and West Fife) (SNP)
I was expecting to be called, as is normal for the spokesperson for the third party in Parliament.
Douglas Chapman
We oppose the regulations. We feel that the UK may leave the Euratom treaty on the same day as we leave the EU. Since regulation will still be automatically based in EU law on exit day, and we will no longer be a member state, we have some concerns about the future relationship.
The Minister has mentioned our concerns, but the requirement to make a quarterly return will not be replicated under the draft instrument, and the obligation to make a prior written declaration will apply to UK imports, but not vice versa. We are in favour of retaining relationships that are as close as possible beyond Brexit, but despite the Government’s best attempts to ensure continuity, we oppose the instrument on the basis that we do not believe that the Government have explored all the relationships that we would want to see in place before the regulations are put into practice.
Richard Harrington
I apologise to the hon. Gentleman for not including him within the bulk of my remarks. To clarify, I think that this might answer his point: the draft regulations are in the event—I hope, the very, very unlikely event—of no deal. The Government’s intention, however—as he and his colleagues would find out were they to vote for the Prime Minister’s withdrawal deal—is to have as close a relationship as possible with Euratom, basically in an agreement as part of the legislation to follow, assuming the Prime Minister’s deal is passed. At that time, I think I would be able to satisfy him—certainly our policy is to do so, and to have a relationship that would replicate so many things in the wonderful relationship we have had as part of Euratom. I hope that will satisfy him for the moment. We are all working on the assumption that the draft regulations—assuming that they are passed by the Committee—will be completely irrelevant and not needed.
Question put and agreed to.
Petition
The future of maintained nursery schools
Written Statements
(5 years, 8 months ago)
Written StatementsRead Full debate Read Hansard Text
Hague Convention
(5 years, 8 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Europe and the Americas (Sir Alan Duncan)
The Government have decided to opt in to the European Commission’s proposals for Council decisions authorising the acceptance by certain member states of the accession of named countries to the 1980 Hague Convention on the civil aspects of international child abduction, in the interests of the EU. The acceptances are as follows:
Austria, Cyprus, Croatia, Luxembourg, Portugal, Romania and the United Kingdom to accept Dominican Republic;
Austria, Luxembourg and Romania to accept Belarus and Uzbekistan;
Austria to accept Ecuador and Ukraine;
Austria and Romania to accept Honduras.
The UK has already accepted Belarus, Uzbekistan, Ecuador, Ukraine and Honduras and therefore these Council decisions do not instruct the UK to take any action.
All EU member states are party to the 1980 Hague Convention, the primary civil law international instrument which provides a mechanism to seek the prompt return of wrongfully removed or retained children to their country of habitual residence.
When a country wishes to accede to the convention, it is necessary for an existing contracting state to accept that country’s accession before the convention can apply between them. It is the European Commission’s view that there is exclusive competence on the EU for all matters relating to the 1980 convention and that therefore member states must be authorised by the EU to accept accessions by third countries and must do so collectively through Council decisions.
Although not anticipated in the proposals, the Government believe that the UK opt in under the protocol to title V of the treaty on the functioning of the European Union applies and it has therefore asserted its right to choose whether to opt in and have decided that it is in the UK’s best interests to do so.
The Government believe that the wider significance of these proposals for external competence mean that it is in the UK’s interests to participate fully in these negotiations, including having the ability to vote. These proposals must be agreed by unanimity within the EU Council.
[HCWS1339]
Probation Services: South-West England and Wales
(5 years, 8 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr David Gauke)
I wish to inform the House regarding future arrangements for probation services in the south-west and Wales.
The House will be aware that community rehabilitation companies were set up just over four and a half years ago (with contracts awarded in December 2014). They were a new idea and part of probation reforms which extended supervision on licence each year to an additional 40,000 offenders released from prison sentences of less than 12 months. These companies do not deal with high-risk offenders—who are managed by the National Probation Service—but with low and medium risk offenders. They have been set up in a range of ways. There are 21 companies, the majority of which are private sector owned with a range of voluntary sector third party suppliers. Their particular purpose is to work with low and medium risk offenders, supervise them, develop plans for them, and provide them with rehabilitative services, in order to reduce the reoffending rate.
On Thursday 14 February 2019, Working Links (Employment) Limited, and its three CRCs: Wales CRC, Bristol, Gloucestershire, Somerset and Wiltshire CRC, and Dorset, Devon and Cornwall CRC, went into administration. The Ministry of Justice has been in discussions with Working Links and has taken immediate action to ensure that probation services are fully protected in these areas. Our central priority is of course to protect the public, ensuring that we have the right supervision of offenders in place, and that probation staff are supported in their important work. We have undertaken significant work to determine the most sustainable option for future management of probation services in Wales and the south-west and have transferred staff and services to Kent, Surrey and Sussex CRC, which is owned by Seetec. This change has been made via a variation to Kent, Surrey and Sussex CRC’s existing contract. Seetec has a good track record in Kent, Surrey and Sussex and we are satisfied that they are well- placed and well-equipped to take over these services and run them effectively. Plans have been implemented to ensure that probation staff and other key probation stakeholders are well-informed with regards to the transition.
We are also working towards more bespoke arrangements for the services in Wales, specifically that offender management services in Wales be transferred to Her Majesty’s Prison and Probation Service before the end of the current contractual period, to better dovetail with the future design for probation delivery in Wales. Our intentions are to transfer these services by the end of 2019, rather than the previously planned date of 2020, and we are currently working at pace with Seetec to accelerate this process.
We also recognise the impact of Working Links’ administration upon its other public sector contracts in the UK, and have been engaging with the Department for Work and Pensions and the Scottish Government. DWP will be working with Working Links and the administrators to identify all participants of its programmes who are potentially affected to ensure appropriate advice and support is provided.
The Government continue to work to improve the effectiveness of the wider probation system. We have already taken action to stabilise and improve probation delivery. Last year, we announced we intended to end CRC contracts early and held a consultation on proposals to improve future probation services. We also agreed contractual changes with current CRCs to improve performance in key areas. We want to create a better system in future which will prevent these kinds of things happening again. We intend to better integrate public, private and third sector providers, putting in place a more stable and resilient probation system, which works effectively to protect the public and tackle reoffending. We will announce detailed plans later this year.
We know probation is vital to ensuring justice is done and the cycle of reoffending is broken. We will work closely with Kent, Surrey and Sussex CRC and Seetec in the next weeks and months to ensure the continuation, stability and improvement of services.
[HCWS1338]
House of Lords
Death of a Member: Baroness Falkender
The Lord Speaker (Lord Fowler)
My Lords, I regret to inform the House of the death of the noble Baroness, Lady Falkender, on 6 February. On behalf of the House, I extend our condolences to the noble Baroness’s family and friends.
Brexit: Options
(5 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Dykes
To ask Her Majesty’s Government what assessment they have made of the different options Parliament has in relation to leaving the European Union.
The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)
My Lords, the Motion passed on 29 January in the other place seeking legally binding changes to the Northern Ireland protocol is the only way to deliver a sustainable majority. The Government will continue to pursue this to ensure that we leave with a deal on 29 March. If MPs do not vote for the deal, the default legal position is that the UK will leave without a deal at the end of March.
Lord Dykes (CB)
Surely the Government could also do something useful at the moment, such as sending Ministers to urgent anti-self-harm corrective therapy sessions. However, should they not also now promise the House to extend Article 50 and start preparing for a people’s vote as well in case things go wrong on 27 February?
Lord Callanan
I can tell the noble Lord that, instead of sending Ministers to self-help therapy sessions, we are sending them to Brussels.
Lord Callanan
It may well be the same thing. My right honourable friend the Secretary of State is in Brussels today; the Attorney-General will be going this week; the Prime Minister will also be going this week; and, just to add to the contingent, I myself will be going to Brussels later this afternoon.
Baroness Hayter of Kentish Town (Lab)
My Lords, I think I heard the Minister say that the default legal position if the Government cannot get a majority is to leave without a deal. That may be the default legal position, but it is clearly not the default moral position. Will the Government start thinking about the country and be more serious about looking for cross-party, cross-Parliament support for a deal that can command a majority in the Commons as well as the support of the country?
Lord Callanan
I am sorry to tell the noble Baroness that it is the default legal position. It is what Parliament voted for, it is what the legislation says and we are preparing accordingly. However, of course we do not want to leave with no deal; we want to leave with a deal, which is why we are intensively engaged in discussions to try to produce a solution that is acceptable to Parliament as a whole.
Baroness Ludford (LD)
My Lords, the Brexit analyses that the Brexit Select Committee in the other place finally forced the Government to publish showed that Brexit in any form whatever, let alone a chaotic no deal, will be very damaging to the British economy, to the extent of an up to 8% hit to GDP. Will the Government now accept the proposal that is being discussed in the other place—that it would approve the Prime Minister’s deal, whatever that turns out to be, subject to it being put to the people to decide between that and remaining in the EU, which is far superior?
Lord Callanan
It will come as no surprise whatever to the noble Baroness to hear me say that, no, we will not. We do not think that another people’s vote is the correct way forward. We have already had a referendum, and we all know its result. I admire the nerve of the Liberals in continuing to pursue this option. I notice that, in the various debates in the House of Commons, they have not put it forward as a subject for a vote; they know very well that there is no majority for it.
Lord Marlesford (Con)
My Lords, did my noble friend study the interesting speech last week by the noble Lord, Lord Alderdice, in which he suggested that a solution to the border problem would be an all-Ireland solution for trade? This would involve having a border in the Irish Sea—where it would be invisible—but it could be a good idea for Northern Ireland to be in the customs union with the EU, and such a border would in no way limit the extent to which Northern Ireland is part of the United Kingdom.
Lord Callanan
I did of course listen carefully last week to the speech of the noble Lord, Lord Alderdice, and I paid tribute to him at the end of the debate. But, as the noble Lord will be aware, we do not think that a customs union border in the Irish Sea is acceptable for the constitutional integrity of our country.
Lord Rooker (Lab)
Are any Ministers going to Tokyo to discuss with Honda the announcement it has just made about closing the Swindon factory in 2022? Is this not relevant to parliamentary opinion at all?
Lord Callanan
That news was just breaking as I came into the Chamber. The noble Lord will accept that it would be wrong for me to comment on something that has not yet been formally announced. However, I am sure that Ministers will want to react in the strongest possible way once we have found out the truth or otherwise of the situation.
Lord Garnier (Con)
My Lords, there are three obvious options between now and 29 March: the Prime Minister’s deal, some other deal or no deal. Would it not be of assistance to us all if, every Monday, the Government were to publish a list of those pieces of primary and secondary legislation that need to be passed by 29 March, so that we can place our thinking in some kind of context?
Lord Callanan
We are being very open and transparent about the legislation that is required. On secondary legislation, I can update the House that 449 statutory instruments have been laid—that is over 70% of the total—and 210 of them have now completed their passage; there will be further action on this in both Houses this week.
Lord Brooke of Alverthorpe (Lab)
Does the Minister agree with the Prime Minister’s view that, with a deal, the country will be no poorer than it is at the moment? When will she be honest with the country about how poor we will be without a deal?
Lord Dobbs (Con)
My Lords, will my noble friend the Minister give some thought to the concept of the “hard border”? The more I push the Government for a clear definition, the more it wobbles like jelly, yet this is fundamental to the ongoing discussions. Rather than try to answer on his feet, can he perhaps go away and get from the Government a clear understanding and definition of a hard border, so that potentially we can have fruitful discussions about it?
Lord Callanan
My noble friend makes a good point, although the definition of a hard border is of course complicated; it is generally understood as being related to the installation of border infrastructure.
Baroness Butler-Sloss (CB)
My Lords, why are the Government not asking for an extension?
Lord Callanan
Because we do not believe that an extension would solve our problems; it would only delay the date by which a decision must be made. As I have said before, the legal default in legislation passed by both Houses is that we leave on 29 March, with or without a deal.
Lord Cunningham of Felling (Lab)
My Lords, is it not continuously misleading for the Minister to present the number of secondary legislation instruments that have been tabled as though that were the end of the matter? There is a big difference between the number that have been tabled and the number that have been subject to scrutiny. While I draw attention to that again, let me also say that the Treasury has now developed the habit of tabling instruments without any impact assessment in them at all, which is surely totally unacceptable in respect of the effective scrutiny of instruments.
Lord Callanan
I totally agree with the noble Lord that I said how many had been tabled, but I also said how many had been completed. If I did not, the number is 210, so I totally accept that there is a long gap in the process in between. The appropriate scrutiny must be provided, and I pay tribute to the work of the noble Lord’s committee and that of my noble friend Lord Trefgarne in the excellent scrutiny work that they are providing on this important legislation.
Vehicle Pollution: Children’s Health
(5 years, 8 months ago)
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Baroness Seccombe
To ask Her Majesty’s Government what steps they are taking to reduce air pollution from vehicles and what assessment they have made of the impact of such pollution on children’s health.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, the clean air strategy, which has been praised by the World Health Organization, sets out action to reduce emissions from a range of sources to improve public health. Alongside that, the more than £3.5 billion planned to tackle roadside nitrogen dioxide concentrations includes £1.5 billion to support the uptake of ultra-low-emission vehicles and grants for 85,000 domestic electric vehicle chargers. Long-term exposure to air pollution is a particular threat to vulnerable groups including the very young, whose lungs are still developing.
Baroness Seccombe (Con)
My Lords, I thank my noble friend but in the side roads near the tented city opposite there are drivers sitting in their parked cars with their engines idling, discharging poisonous fumes. We know that this is illegal but it still persists. I worry about the effect on passers-by but my main concern is for little vulnerable children with little vulnerable lungs and the effect that it has on them. What can be done about this?
Lord Gardiner of Kimble
My Lords, my noble friend is right: it is already an offence to leave a vehicle running unnecessarily while it is stationary. I know that in the City of Westminster idling around schools and in the West End is a particular concern; I know that that council is working on it and issuing warnings and, if necessary, fixed penalty notices. The main point here is that we have to change behaviours and raise awareness. Many local authorities are now doing this, and more will do so.
Lord Winston (Lab)
My Lords, I declare an interest as the chairman of the Genesis Research Trust, which does research into miscarriage and stillbirth. The question is not just about born children; it is about unborn children. There is now considerable evidence from the National Institutes of Health that pollution may contribute to not only miscarriage and stillbirth but also cancer in the long term as an epigenetic effect. Is research being actively proposed, either by the Department of Health or by someone else, to look into the issue of stillbirth? There are over 3,200 stillbirths a year in Britain, one of the largest figures of any developed country, and it is a massive shock that most of them are unexplained.
Lord Gardiner of Kimble
My Lords, I do not have specific detail on the stillbirth issue and I will look into that. However, a joint survey by the UK’s leading children’s charity UNICEF UK and the Royal College of Paediatrics and Child Health found that 92% of child health experts believed that the public were more concerned about the negative impact of air pollution. That is undoubtedly one of the reasons why it is imperative that we all act. It is why, in working with local authorities, we need to deal with not only the over-exceedance of nitrogen dioxide but all sources of pollution.
Lord Fox (LD)
My Lords, the Minister spoke about reducing vehicle emissions. As he knows, the Road to Zero is a very long road; it reaches its conclusion in 2040. Meanwhile pollution is increasing and people are being damaged today, as the noble Baroness pointed out. What is happening now that will reduce pollution today?
Lord Gardiner of Kimble
That is precisely why we require local authorities to come forward with plans. Nottingham, the first authority with an agreed plan, is retrofitting 171 buses to reduce emissions and replacing heavy, high-polluting vehicles such as bin lorries with electric vehicles, all under its current plan. Leeds is putting in a clean air zone, starting from 6 January next year. A number of immediate plans are taking place this year and next year, but in the meantime, this is obviously a continuum to reaching the point we want—zero emissions and many fewer pollutants.
Baroness Bull (CB)
My Lords, we are increasingly aware of the impacts of air pollution on physical health, but recently published evidence has shown a convincing link between air pollution and mental health. In particular, research has found that children exposed to air pollution at age 12 have an increased likelihood of depression and conduct disorder when they reach age 18. Can the Minister confirm that in assessing the impact of air pollution on health, we will take both mental and physical health into account?
Lord Gardiner of Kimble
That is a very good point. I know that the Committee on the Medical Effects of Air Pollutants has started to consider the effects of air pollution on adverse birth outcomes, which may address the question from the noble Lord, Lord Winston. However, what the noble Baroness said about not only the physical but the mental aspects of air pollution is hugely important.
Baroness Jones of Whitchurch (Lab)
My Lords, is it not the case that the Government have been very slow in taking action on this very serious issue of the effect of air pollution on child health? The fact is that they have been dragged to the courts to make them take action, but their response has been too little, too late. What is stopping the Government now revisiting that 2040 deadline for the sale of polluting vehicles, and replacing it with a more demanding, immediate and urgent target? That would save people’s lives, particularly children’s lives.
Lord Gardiner of Kimble
My Lords, clearly there is an end target. As I have already set out, a lot of work is being done during that time, but much more needs to be done. The World Health Organization has complimented us on our clean air strategy, saying that it is an example to the rest of the world. I think that is a very good thing for our country.
Baroness Couttie (Con)
My Lords, I declare my interests as set out in the register. Does the Minister agree that awareness is extremely important in tackling this issue? Does he agree that initiatives undertaken by councils such as Westminster—which uses not just wardens but volunteers, particularly round schools, to knock on people’s windows, telling them to turn their engines off, and informing them about the problems that the air pollution they are creating causes—are extremely valuable in the fight against this terrible scourge?
Lord Gardiner of Kimble
My Lords, I am well aware of my noble friend’s expertise and leadership on this matter. As I said earlier, a number of local authorities—the Surrey Air Alliance, the Sussex Air Quality Partnership, the London boroughs of Hackney, Islington and Tower Hamlets, and the City of Westminster—are raising awareness. However, it is for us to change our behaviours; we must stop parents idling their cars outside schools, for instance.
Small Business Index
Lord Harrison
To ask Her Majesty’s Government what assessment they have made of the findings of the Federation of Small Businesses’ Small Business Index, published on 21 January.
Baroness Vere of Norbiton (Con)
My Lords, the FSB report makes fascinating reading: more than half the businesses answering the survey expect to grow in the next 12 months; nine in 10 businesses do not see access to finance as a barrier to growth; seven out of 10 firms applying for finance got it; and twice as many firms expect to increase investment as those expecting it to decline. This Government’s policies are creating a positive environment for all businesses, large and small.
Lord Harrison (Lab)
My Lords, I have been reading the wrong report. As I understand it, the FSB acknowledges that things have got worse, to the extent that it now complains, understandably, that the economy has declined in the last 10 years. Could the Minister address some of the domestic problems that confront small businesses, such as the late payment of commercial debt—which I have been standing here complaining about for so long—and access to finance and skilled workers? In what ways will the Government address the clear difficulties that will accrue from Brexit?
Baroness Vere of Norbiton
I pay tribute to the noble Lord for the work he has done on the late payment of commercial debt. As he will know, a year ago the Government set up the Small Business Commissioner. In the course of the year that Paul Uppal has been in place, he has managed to recoup £2.1 million in unpaid invoices for businesses, but there is so much more to be done. When I was the finance director of a medium-sized business, large businesses often used every trick in the book to avoid paying small businesses, which is unacceptable. We will work with the commissioner to find ways to develop systems to identify these large companies and make sure that they pay their bills on time.
Lord Naseby (Con)
Is my noble friend aware that there is concern among small businesses because their VAT and other returns have to be totally computerised by 4 April? Against that background, can she assure me and others who know these areas in some depth that there has been sufficient trialling of the software to ensure that it works, and that there is a back-up policy if it does not? The precedent of the rating appeals does not fill one with great confidence.
Baroness Vere of Norbiton
My noble friend refers to the Making Tax Digital initiative, which was announced in 2015, and he is right that it is due to become mandatory in April of this year. Ninety-eight per cent of businesses already file their VAT returns online; I certainly used to do so and it is by far the easiest way. We are working closely with software industry suppliers to develop sector-specific software to ensure that all businesses can comply. More than 100 products are now available, some of which are free, but I reassure noble Lords that nobody who is unable to go digital will be forced to do so.
Baroness Burt of Solihull (LD)
My Lords, I have to agree with the noble Lord, Lord Harrison. The Small Business Index paints a dismal picture and late payment is a very big issue for the FSB, which is launching a campaign on it today. But even on government-procured projects, small businesses are still being let down. This could be addressed through project bank accounts, which stop tier 1 suppliers such as the Carillions of this world using smaller suppliers as a piggy bank to assist their own cash flow. The Chancellor promised action in the last Spring Statement. Will the Minister ask him whether this simple step could be implemented in the coming Spring Statement?
Baroness Vere of Norbiton
The noble Baroness raises a very important point and I will certainly write to her with any further information I have about whether we will set up project bank accounts. Working capital does indeed sometimes get sucked out of small businesses and into large companies, and it is unacceptable. She referred to the report as “dismal” and I have to disagree. I agree with her that it is mixed; however, the annual change in confidence is minus 7.4, compared with an average annual change of minus 8 over the last four years, so we are nowhere near the dreadful situation we were in a few years ago.
Lord Hunt of Kings Heath (Lab)
My Lords, I pay tribute to my noble friend Lord Harrison and say how good it is to see him back in his place. What message would the Government like to give to small traders in Swindon, who will be damaged incredibly by the Honda decision? Is this the Brexit dividend that the Government promised us?
Baroness Vere of Norbiton
My noble friend has already referred to the news that came out of Swindon shortly before we came into the Chamber today. From what I have seen to date, it looks as if the closure will happen over a three-year period. The Government will be working very closely with all the suppliers, be they large or small, and with all the employees who may need to find alternative employment over the next few years.
Lord Lexden (Con)
How are the Government getting on in ensuring that all their bills from small businesses are paid extremely promptly?
Baroness Vere of Norbiton
It is the ambition of government that we pay our bills as promptly, or more promptly, than some large companies do. If I can find any more information as to detailed stats, I will write to my noble friend.
Baroness Hayter of Kentish Town (Lab)
My Lords, I was particularly worried when the noble Lord, Lord Callanan, said that he only knew about Honda as he walked into the Chamber. We also know that the Government were blindsided by Flybmi. It is really alarming that our Government do not seem to know what is happening in their own industries.
Mike Cherry of the FSB also mentioned part of the reason for the dismay. He asked how, two and a half years from Brexit, politicians could allow a situation whereby small businesses have no idea what environment they will be faced with on Brexit day, in less than 10 weeks’ time. We have already heard about the need to extend Article 50. That is not just so this House can consider the legislation; these companies need certainty in time to do the necessary planning.
Baroness Vere of Norbiton
My Lords, obviously, we are in contact with many of the large employers around the country. The news was breaking as we came into the Chamber. We have had discussions with many of the large employers as we go through this Brexit period. On the noble Baroness’s question about Brexit, there is a significant amount of guidance for businesses on GOV.UK around whether there is a no-deal Brexit. Companies can sign up for updates that are sector-specific. We engage regularly with all sorts of businesses. A business readiness forum, which was set up in January, meets every single week. Thirty organisations attend it, including the FSB.
Schools: Racist Incidents
Baroness Chakrabarti
To ask Her Majesty’s Government what progress has been made in meeting the recommendation of the Report of the Stephen Lawrence Inquiry, published in February 1999, that schools record all racist incidents and that the numbers of racist incidents are published annually on a school by school basis.
Viscount Younger of Leckie (Con)
My Lords, schools are best placed to monitor and tackle racist incidents. We do not mandate that schools record or publish these, but they are required to have a behaviour policy that outlines measures to prevent racist and other forms of bullying, and are held to account by Ofsted. They are also required to take steps to advance equality of opportunity, foster good relations and eliminate racial harassment. We provide support to schools to do this.
Baroness Chakrabarti (Lab)
I am grateful to the Minister for that Answer. I take this opportunity to pay tribute to my noble friend Lady Lawrence of Clarendon, perhaps the greatest campaigner for race equality that this country has ever known. When I think of the last 20 years since the publication of the Lawrence report and the challenges that those years have brought to the cause of race equality, I think of terrorism, anti-immigration sentiment, rising inequality, and sadly even recent debates around Brexit. Too often, social media has been an engine and vehicle for the transmission of race hate before, during and after class. Will the Minister set out his thinking on what can be done on the part of the Government to better resource hard-pressed teachers and schools to tackle this, and what the Government intend to do about it?
Viscount Younger of Leckie
I echo the thoughts of the noble Baroness and pay my own tribute to the noble Baroness, Lady Lawrence. We have an inaugural Stephen Lawrence Day coming up on 22 April, and I am sure many schools will want to take part. We trust the professionals in our schools to act in the best interests of their pupils. What counts is what is happening on the ground. Schools do not operate in isolation so issues soon come to light, and schools work closely with local authorities, regional schools commissioners and their governing bodies.
Baroness Garden of Frognal (LD)
My Lords, now that the Government at last have the power to make PSHE compulsory in all schools, including academies, what steps will they take to ensure that racial and religious discrimination forms an essential part of that curriculum?
Viscount Younger of Leckie
Racism of any kind is completely unacceptable and abhorrent in any setting. The Government are fully committed to eradicating it and are taking several actions. The DfE is providing over £2.8 million of funding between September 2016 and March 2020 to four anti-bullying organisations to support schools to tackle bullying; again, it is action on the ground. Those include the Anne Frank Trust, which we are funding to develop and deliver its “Free to Be” debate programme.
Baroness Berridge (Con)
My Lords, my noble friend is correct that the professionals and schools are at the front line of dealing with these issues. In the past, one issue has been the lack of diversity in the workforce in our schools. What progress has been made in ensuring ethnic diversity in the workforce, and particularly in the leadership of our schools?
Viscount Younger of Leckie
My noble friend is right. The Government recognise the importance of a representative and diverse teaching workforce, which is vital for both teachers and their pupils. That is why we published a statement of intent last year, alongside 10 co-signatories including the ASCL, the NAHT and the NGA, to commit to work together to address the diversity of the teaching workforce. The latest figure that I have, as of November 2017, indicates that 7% of head teachers in primary schools and 8% in secondary schools were from ethnic minorities; there is always more work to do.
The Lord Bishop of Ely
My Lords, the Minister will be aware that the Church of England is responsible for many schools where the majority of pupils are from a BME background. Those schools operate in great harmony. That is along with our initiative, Living Well Together. It would be good to hear more about how the DfE makes use of the information and statistics that it receives. There is an issue about holding the whole estate accountable, which cannot be left entirely to the local situation.
Viscount Younger of Leckie
The right reverend Prelate is right to raise that point. The DfE has an integrated communities strategy, which I am sure he is aware of. Education has a vital role in promoting integration. Through education, we can ensure that the next generation learns the values underpinning our society. All schools are required to promote mutual respect for and tolerance of those with different faiths and beliefs, as well as democracy, the rule of law and individual liberty. I hope that is clear.
Baroness Lawrence of Clarendon (Lab)
My Lords, as you are aware, my interest in this subject is around the Stephen Lawrence inquiry, where schools are given a definition of a racist incident and what they are expected to do in the circumstances, which is to record, report and publish. In researching online, I found it difficult to find any results on this. All I could find was material about filling in forms. An academy in Swindon said that:
“Schools should be aware that there is no … requirement to collect data relating to racial incident reporting as academy schools are not obliged to share this information with the LA”.
The Parent Zone website states that:
“Schools are required to record and respond to racist incidents”.
What steps have the Government taken to make sure that schools take racist incidents seriously and report and publish them on an annual basis?
Viscount Younger of Leckie
The noble Baroness raises an important point. As I said earlier, schools should develop their own approaches to monitor bullying, including racist bullying, and exercise their own judgment on what will work best for their pupils. We have not gone down the route of mandating figures to be published because, for some schools, it will mean recording incidents so that they can monitor incident numbers and identify where bullying is recurring between the same pupils, but other schools may prefer to survey their pupils anonymously to identify bullying trends and gauge how safe pupils feel at school. As I have said, it is work on the ground that counts.
Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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Lord Young of Cookham
That the draft Regulations laid before the House on 5, 13 and 17 December 2018 be approved. Considered in Grand Committee on 4 February.
Northern Ireland (Ministerial Appointment Functions) Regulations 2019
(5 years, 8 months ago)
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Lord Duncan of Springbank
That the draft Regulations laid before the House on 9 January be approved.
The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)
My Lords, this Government are committed to the Belfast agreement. At the heart of that agreement is devolved power-sharing executive government. Restoring the Executive remains our priority. Northern Ireland needs the political institutions of the Belfast agreement and its successors to be fully functioning. However, in the absence of devolved government, the UK Government must ensure the maintenance of good governance and public confidence in Northern Ireland.
In November last year, my right honourable friend the Secretary of State for Northern Ireland brought forward legislation which, among other things, addressed the need for urgent appointments to be made to a number of public bodies. The initial phase of appointments under the Act has enabled the reconstitution of the Northern Ireland Policing Board, which recently met for the first time in its fully constituted form. This has also allowed: the recruitment of a new chief constable for Northern Ireland to be initiated; the replacement of the outgoing chair and board members of the Probation Board; appointments to the Northern Ireland Judicial Appointments Commission; and the initiation of a recruitment process to appoint a new Police Ombudsman for Northern Ireland.
Under the 2018 Act, the Secretary of State also committed to make further appointments that are required in the absence of an Executive. The purpose of this instrument is to specify which further offices require appointment. In preparing this instrument, my officials have worked closely with the Northern Ireland Civil Service to identify those critical appointments that will arise soon. This instrument would add to the list in Section 5 of the Act, enabling the Secretary of State, as the relevant UK Minister, to exercise Northern Ireland Ministers’ appointment functions in relation to the following offices: the Northern Ireland Commissioner for Children and Young People; the Northern Ireland Local Government Officers’ Superannuation Committee; the Northern Ireland Housing Executive; the Attorney-General for Northern Ireland; the Livestock and Meat Commission for Northern Ireland; and, finally, the Commissioner for Victims and Survivors. These are important offices for which the exercise of appointment functions in the coming months is vital for the continued good governance of Northern Ireland. I beg to move.
Lord Empey (UUP)
My Lords, the Minister has brought forward a further list of appointments to public bodies. Although I have no objection to those in principle, I want to put on the record the difference between the Government’s approach to, say, the appointment of a member of the Livestock and Meat Commission and to an issue which I have raised in this House many times: the mess and crisis in our health service. Is the Minister aware that, against a target of 95%, only 62% of patients are being dealt with in emergency departments? The comparable figure in England and Scotland is 89%. English doctors recently put out a statement saying that they believed people were dying as a direct result of those figures. Yet our figures are infinitely worse and are getting worse every quarter. Time and again I have raised the more than 280,000 patients waiting for consultant-led appointments. Nearly 100,000 of those are waiting for longer than 12 months.
The Minister has said that his right honourable friend in the other place is taking the initiative and that meetings with the parties have been called. I welcome that, although it does seem somewhat ill prepared. We are a few weeks before a set of elections, so whether we can expect a positive outcome is open to question. The Minister will also shortly be returning to this House with further pieces of legislation, including a budget for Northern Ireland—the third one that the Minister has proposed—even though there is now no prospect of using the former Executive’s spending plans as a template because they are so out of date. He will also be coming forward with the second portion of the legislation under which this set of appointments has been made, because it has to be looked at again after five months.
There is a set of priorities here, but the priorities coming from the Government seem to be the wrong ones. I would have thought that people’s lives and welfare were a higher priority than some of the things in these regulations, albeit that I am for them. I have no objection to them, but they are being done against a background of hoping that if we pull the blankets over our heads the problem will go away. It will not. The Minister may find that in the talks that are being initiated next week, I believe, we will all be proved wrong, a massive amount of good will will flow and we will get devolution back—I hope that that takes place. If I am not surprised and pleased by that—if we find that it is not the case and things drift on—what will the Minister and his colleagues do? Are they just going to leave these health figures to get worse and worse, or are we actually going to do something?
Lord Lexden (Con)
My Lords, I operate in this House on one principle above all: to agree with everything that my noble friend Lord Empey says. I am happy to adhere to that principle again today.
I have three specific points that I want to raise on this instrument. First, it reaches us just days before a new Northern Ireland Commissioner for Children and Young People needs to be appointed. Why was the instrument not brought forward earlier? Secondly, the instrument specifies, as my noble friend has said, six appointments deemed to be critically important. What criteria were used to establish which appointments are critical and which are not? My third and final point follows from that and concerns offices not deemed to be of critical importance. What is to happen to them? Are they to remain vacant when their current holders reach the end of their term, pending the restoration of devolution, which today seems but a distant hope?
Lord Bruce of Bennachie (LD)
I think that the noble Lord, Lord Empey, was concerned with sins of omission rather than commission in terms of the content of the statutory instrument. He raises the point that effectively we are going on and on in this limbo of democratic nihilism, if I can call it that, having to institute ad hoc measures as and when necessary to fill the gap in the absence of real political initiatives. I presume that the Minister will be back here in less than five weeks, when the first term of the 2018 Act expires, because it is difficult at the moment to see that we are going to be in a position to restore the Assembly by the end of March—I do not believe that anybody would think that at all likely. So the question that arises is: what practical steps are the Government going to take to ensure that we do not get to the end of March, let alone the end of August, without having got to a position where functioning decision-making by the elected representatives of the people of Northern Ireland can return? I am sure that the Minister does not find it comfortable to come to the House and say, “Please allow me the right to nominate these particular posts”. However, perhaps he could say something about Friday’s meeting, which I gather lasted 90 minutes. I am not aware that any specific proposals were on the table, which has not been well received.
I hope, from the Minister’s point of view, that the Government have started to think about what they can do to break the deadlock. The Minister will not be surprised to hear me say that a Secretary of State in a UK Government who are propped up by a hard-line unionist party in Northern Ireland is likely to find the perception of her office somewhat compromised in Northern Ireland. I repeat what my colleagues have said on numerous occasions: is it not time to find some independent authority that might bring parties together and start to identify what it would take to break the deadlock and get things back to normal?
Therefore, my specific questions on this statutory instrument—somewhat along the lines of what the noble Lord, Lord Lexden, said—are, first, what were the criteria that made these urgent, and what other appointments are coming down the track that may require us to be back here in the very near future? Secondly, much more to the point, what assurances can we have that there is any reasonable momentum to try to ensure that we get the political process back, or will we have either to impose direct rule—which I think many of us would regard as a disastrous failure—or institute new elections? Nobody is particularly happy about that either, but it may be the only way to unlock the democratic logjam.
The Minister is always entirely and highly constructive, conciliatory and thoughtful—if I may say so, I would rather he was in charge of the talks; if that was the style we might make more progress. It is important to try to find out what the real obstacles are, not the synthetic ones that have been put up, and how we can build, through trust, a means of getting these decisions away from this Parliament and back to the Assembly, where they belong.
Lord Dubs (Lab)
My Lords, I congratulate the noble Lord, Lord Empey, on his consistency on the issue he has raised and on the fact that he is completely right—a pretty powerful combination. Are the Government cherry picking what they are seeking to do? I know that “cherry picking” is now a fashionable expression, but it seems that the Government are cherry picking appointments. What about other appointments? Why have these ones been selected—is there a particular reason for it? Also, what about the functions to be carried out by these appointments? Are there any constraints on how these individuals can carry out their functions, given that there are serious constraints on how government departments in Northern Ireland can carry out their functions?
The whole position seems extremely illogical. We need an indication of progress—I endorse the comments that have been made. Surely the time has come, not just for the Secretary of State to say that she is doing her best—I am sure she is—and for the Minister to say that he is sure that the Secretary of State is doing her best, but to have a new initiative on knocking heads together and bringing the parties together. Surely an impartial umpire/facilitator is needed. Let us get on with making that appointment, then we can have some progress.
Lord Wigley (PC)
My Lords, these questions go beyond the direct area of Northern Ireland, although obviously that is the greatest priority. They affect the workings of the intergovernmental mechanisms that bring Wales, Scotland and England together as well. There is a danger of that dimension picking up its own momentum and of Northern Ireland not being adequately involved. I hope that that will also be borne in mind as we try to make progress on these matters.
Lord Trimble (Con)
My Lords, I support what the noble Lord, Lord Empey, said. I agree entirely with the comments of the noble Lord opposite, but I want to open up something that touches slightly on what he said—and I am afraid that in doing this, I may add to the list of things that the Minister has to consider.
I noticed that in his introduction the Minister made reference to the Belfast agreement. The Belfast agreement is in a very difficult situation at the moment, because the Government’s withdrawal agreement takes the heart out of the Belfast agreement and rips it to pieces. To give detail on that, I draw Members’ attention to a paper that may be on the Policy Exchange website this afternoon, but which will be generally available quite soon thereafter, by Graham Gudgin, who has gone in detail through the ways in which the withdrawal agreement destroys the Belfast agreement—it is as strong as that. That will also impact on the possibility of doing something through the mechanisms of the agreement for consultation between the Government and the people of Northern Ireland and bringing in other parties. This is another matter which cannot be left in abeyance. Does the Minister have any thoughts about what the Government can do to restore the health of the Belfast agreement?
Lord Cormack (Con)
My Lords, on Thursday last, my noble friend came to the Dispatch Box and gave another interim Statement, saying that he hoped before long to come back with definitive pronouncements. I asked him specifically about two issues. First, if we cannot have the Executive restored, which we would all like, surely the Assembly, which has been elected and the Members of which are still paid, could meet. There is no insuperable obstacle; my noble friend Lord Trimble has made this point on several previous occasions and is nodding now.
The other point I referred to was the appointment of what my noble friend referred to as a “facilitator”—I do not much like the word—who would be impartial and would preside over the meeting of interested parties. We must recognise the fact referred to by the noble Lord, Lord Bruce, I think: namely, that the very existence of a pact between the Government and the DUP means that there is a perception that the Government are not as even-handed as I am personally convinced that they are. That is a problem.
My noble friend referred to my next point last Thursday and I bring him back to it. We are having a series of holding Statements and measures such as the one this afternoon—I endorse what my noble friend Lord Lexden asked: what are the criteria?—but there comes a point, and it is coming very soon, when a real initiative must be taken by the Secretary of State to try to get the Assembly functioning and the power-sharing Executive restored. It is now more than 20 years—almost 21 years, I must get my maths right—since the Belfast agreement: an historic agreement which gave great comfort and joy to many people and which, for a time, worked extremely well. We are now teetering on the brink of the imposition of direct rule—and we must face up to that, because we cannot go on like this.
No one in his or her right mind wants the reimposition of direct rule, with all the problems and regression implicit in it. So I beg my noble friend to add a little, when he comes to respond, to what he said on Thursday last. We all admire him—I am one of those who believe that if he had been put in charge, things might have moved at a slightly faster pace—but we want him to tell us something that will give real, positive encouragement and will amount to a promise of a true initiative taken, I very much hope, before 26 March.
Lord Murphy of Torfaen (Lab)
My Lords, this debate has been short but important. This statutory instrument is not about Brexit. It is not a dry, uninteresting, bureaucratic instrument that needs to be passed on the nod—although of course we on this side will support it. But it is symbolic of what is wrong in Northern Ireland. Of course, the instrument is important; these ministerial appointments must be made, otherwise things in Northern Ireland will go wrong—so I repeat that we will support it.
Government and democracy in Northern Ireland have collapsed because of the absence of the institutions of the Assembly and the Executive. There is no representation of nationalism in either Chamber in Parliament. The Assembly does not meet and has not done so for more than two years. Of course, as the noble Lord, Lord Lexden, said some months ago, that means that the only people operating in Northern Ireland are members of local authorities, which have very limited powers. So Northern Ireland is the least democratic part of our United Kingdom—which is ironic given that 21 years ago we spent a great deal of time building up the Good Friday agreement to make Northern Ireland the most sophisticated democratic part of not only the United Kingdom but probably the world. That has also meant that decisions on important issues such as health and education are being made by civil servants. In effect, institutionalised bureaucracy is running Northern Ireland at the moment. It is a terrible state of affairs.
Worse, the absence of these institutions threatens the Good Friday agreement considerably. Over the past few months, we have argued that Brexit is a major threat to the agreement—which I believe it is—but this is a major threat, too, because central to that agreement was the establishment of the Assembly, the Executive and the north-south ministerial bodies. They were all agreed on in a very sophisticated peace process, but they have been gone for two years now.
One of the Brexit issues affecting this—a point which I think the noble Lord, Lord Trimble, was hinting at—is that, had there been an Assembly or an Executive, it is likely that those bodies would have resolved the issue of the backstop, because nationalists and unionists would have come together to try to work things out. That is the purpose of the arrangements in Northern Ireland. What has occurred there is a tragedy. Every Member who has spoken in the debate echoes those sentiments and the need for the Government to change tack and become much more urgent in trying to restore those institutions.
Of course this is happening against the backdrop of the current Brexit negotiations. I cannot imagine the Prime Minister or the Taoiseach going to Belfast in the next few weeks when all these other things are happening. Incidentally, they could have gone there more frequently in the past; both Governments are to blame for the fact that they have not done so. Once again, Members of your Lordships’ House have referred to the need for an independent chair or facilitator, such as George Mitchell, and to the fact that proper all-party talks should take place, with every party represented there and a proper structure. Based on what we are seeing at the moment, there is even a case for taking the parties away somewhere like they did in the past, when they took parties to various parts of the United Kingdom and locked them up in rooms for weeks on end until they came to an agreement. These things can happen—it has been done before—but there seems to be no urgency in all this, even though there is a deadline, as there is for Brexit. Nothing is happening.
It is worth reminding the parties in Northern Ireland, including Sinn Féin—which is not represented in Parliament even though its members were elected to it—that by not having these institutions, they are breaking the provisions of the Good Friday agreement which people in the north and south of Ireland voted on. I hope that in a few moments’ time, the Minister will tell your Lordships’ House that we will make those ministerial appointments and also give us an indication of a change of direction, a greater sense of urgency and more structured talks to ensure that we make progress in Northern Ireland. If it does not happen, this drift will end in direct rule—and when you are in direct rule, it is the devil’s job to get out of it.
Lord Duncan of Springbank
My Lords, as with other debates on Northern Ireland, this is one of two halves. I will focus on the first half, which concerns the instrument itself and some elements of it, and then move on to the wider issues which have been raised.
My noble friend Lord Lexden asked a number of questions to which I will attempt to provide answers. The first thing to emphasise is that the appointments have been identified by the Northern Ireland Civil Service. The principal criterion for that identification was obviously timing. My noble friend is absolutely right to say that this should have been brought before the House earlier, but we have to bring all the measures together. I accept my noble friend’s first point and apologise to him: they should have come forward earlier.
The second point concerns when the broad functioning elements of the boards become, if you like, out of kilter with the membership. There needs to be a recognition of the balance of the members on the individual boards themselves. A number of the appointed chairs and vice-chairs have reached the end of their terms, which in itself creates the need to move forward. Some have indicated their intention to accept an extension, and that is the likely outcome. However, again, the key aspect has been identified by the Northern Ireland Civil Service, not by Ministers in the Northern Ireland Office. It is our intention to do so only as far as the legislation allows, in order to move the situation forward in that regard, following the detailed advice we have received. There may be other information I can provide and if so I will make sure that it is conveyed to my noble friend directly and shared more widely. I have no desire to keep secrets on this issue.
My noble friend is also correct to say that there will be others unless we resolve this matter. In answer to the question, “Which others?”, it will be all the others, frankly, unless we can get this moving. Every appointment will be done in this way until we actually have a functioning Executive. I am not trying to exaggerate the case or make it seem worse than it is, but that is the reality of where we are. Until there is an Executive, this legislation will allow us to move forward with each appointment that is required. While it is true to say that we may think that some are more important than others, all of them are important to the good functioning of governance in Northern Ireland, be it those I have iterated today or those that will be need to be iterated in the future, should we not make progress on an Executive. Perhaps that is a rather dispiriting answer, but it is the correct one.
Before I turn to the broader elements, I should say that I welcome the support of the House for the instrument, which is a necessary one and will help in the functioning of these bodies. I was anticipating a broad discussion, so perhaps I may say this. On Friday of last week all the parties gathered together in Northern Ireland. It was the first time that that had happened in more than a year and it was an attempt to move things forward in a fashion which would ultimately lead to the creation of a sustainable Executive. Noble Lords may have read about the outcome of that meeting. It was not wholly supported by the Sinn Féin party, which has made its points very clear in the newspapers, which your Lordships are more than at liberty to read. I was saddened to read those reports but they are a matter of public awareness. That is not good and there is no point in pretending otherwise.
The Northern Ireland Office had hoped that, using this, we would be able to see the steps which could be taken to bring about the very things that the noble Lord, Lord Murphy, has put to us. He mentioned the notion of an independent facilitator. Like my noble friend Lord Cormack, I do not like the term either, but I accept that it is one we are using at the moment. I also recognise the need to think outside the traditional, such as, “Let us always meet in the same office space”; rather, we should be thinking of new places. I had hoped that out of these gatherings a clear timetable would emerge to bring about those very things, and to be able to stand before noble Lords today repeating a Statement from the other place on what we all hoped would happen. We did not make the progress we had hoped for, and for that I am sad and sorry. That does not mean that we stop or that this is the end of the journey, but it has not led to the breakthrough I hoped to see. That is a simple statement of fact.
None the less, we cannot in good conscience fail to address the issues raised by the noble Lord, Lord Empey. He is correct to say that noble Lords will be seeing a bit more of me over the next few weeks, I am afraid, because I will be bringing forward further legislation. Not the least will be the Northern Ireland Budget, and I do not doubt that the noble Lord will make the points that need to be made on the health service, the wider education service and so on.
You might recall that this time last year, when I spoke of that Budget, I said it was getting ever more difficult to plot the trajectory from the point of the outgoing Executive and their spending ambitions to where we are now. It is getting considerably harder. Last year I said that that would be the last time I would make that point, and events have made a liar of me: it was not the last time. I hope the one coming will be the last time, but the noble Lord rightly raises his eyebrows, and I take that on board. There is also the issue of the five-month extension window, anticipated in the Act of last year, within which we can look at delivering the Executive. The noble Lord, Lord Empey, is quite correct that that will necessarily have to be brought forward in the next few weeks as well. He is right to flag these things up.
I struggle to find new ways to tell noble Lords the same thing. I do not wish to sound complacent as I do so, but finding new ways to say this is proving difficult. Ultimately, the only way we will be able to move this forward is for the parties themselves to recognise the need for progress. Until that happens, the Government themselves will be unable to create the “eureka” moment. It is not wholly in their gift.
Lord Bruce of Bennachie
The Minister is making a powerful and practical point, but why cannot the Government proceed with some kind of independent mediator? Exactly as others have said, the perception of a Government who are parti pris does not help and makes it much easier for Sinn Féin to do and say the things it does. I am not naive—I am not saying that it would not say that to an independent mediator—but why are the Government finding it so difficult to move forward on that?
Lord Duncan of Springbank
The noble Lord is right to raise that point. There are only so many times I can talk about the box metaphor and thinking outside it before noble Lords become tired of that. We had hoped, through those discussions last week, to get some coherent agreement on moving things forward on that basis, and we were not able to do so. We now have to think afresh. We have to think whether that can be done without the support of all the parties involved. These things need to be thought through again. I am not trying to postpone answering the noble Lord’s question, but I am aware that we have not been able to resolve it in the fashion I would like. That remains at the heart of the problem.
Lord Lea of Crondall (Lab)
My Lords, I hope I will be forgiven for reverting to a point made five minutes ago: the DUP being the only actor in London on the backstop question. Many other things could have been said and could have led to more constructive engagement if there had been discussions on that question between all the parties in Northern Ireland. I do not know what the agenda, the scope or the protocol was for last week’s discussions, but is it not rather intriguing that such a remark can be made at this critical moment without putting any flesh on the bones of that scenario?
Lord Duncan of Springbank
The noble Lord, Lord Lea, raises a slightly cryptic question, and I am not wholly sure I can answer it in the manner I would like. The UK Government, Ministers and civil servants have been engaged in a series of bilateral discussions with all parties—it has been ongoing for quite some time—to find the means by which we can bring people into the same room to have appropriate discussions, out of which will emerge the structures and necessary elements for talks that will lead to the formation of a sustainable Executive. That is not a secret; that is our ambition—it always has been—and we have been doing it for quite some time. It is appropriate to put the point that the noble Lord, Lord Murphy, made at the end of his speech, which the noble Lord will perhaps accept as an answer of sorts. Had there been a fully functioning Executive and an Assembly discussing the Irish backstop, they may well have come up with an answer. Just let that sink in. But for many different reasons, the political parties in Northern Ireland have not been able to find the right means whereby the Executive can be restored, and that voice has been silenced. There is no point in pretending otherwise.
There has been debate in Northern Ireland; it just has not been taking place in Stormont. There has been serious engagement, but mostly through the pages of the media. Politicians have been involved, but not sitting in a forum such as this where they have a particular, structured debate. So voices are being raised, but the Executive themselves and the function they represent have been missing in action. When the history books come to be written of this moment, I do not doubt that a great omission in Northern Ireland will be seen, especially on the issue of the backstop. Above all others, this is the time when we need a fully functioning Assembly and Executive in Northern Ireland to thrash out, backwards and forwards, all the issues.
Lord Lexden
Is there any reason why all the parties should not be brought together specifically to discuss the backstop?
Lord Duncan of Springbank
That is an interesting issue. I suppose the question is whether they are brought together in the form of an Assembly, which has certain logistical elements, or in a different configuration. I would like to see the parties brought together to have a serious discussion on the backstop, now more than ever. This is the time when we need to make sure that the voices of those people who live in Northern Ireland, for whom the border is a real issue, are heard. Far too many experts on Northern Irish issues have suddenly appeared over the past few weeks and months—which has been somewhat resented, I think, by the people of Northern Ireland.
Lord Cormack
I do not want to labour the point, but surely what my noble friend has just said illustrates the good sense of getting the Assembly together. It could be done. That could be the item on the agenda. It cannot put us back, but it could possibly take us forward.
Lord Duncan of Springbank
That is constructive advice, as indeed all noble Lords have given today. I will take it away and make sure that it is heard by those who need to hear it. I would dearly like to make progress on that; I am tired of giving the same speech over and over again, and noble Lords are tired of hearing it. If we can get to the stage where we can move on to new ground and new issues—where we simply applaud the good governance in Northern Ireland—what a great step forward that would be. The noble Lord, Lord Empey, would stop raising his eyebrows at me when he mentions health issues, and I would be much happier in those moments. However, here we are—again.
I was trying to find a way to describe the events of Friday. It was not easy to find a positive way to do it, but I did find one way, which noble Lords may or may not find useful. Many noble Lords will be of an age that they can remember Angela Lansbury in her prime in “Bedknobs and Broomsticks”. She sang a song—
Lord Duncan of Springbank
I will.
“After all it’s a step in the right direction
It’s a step in the right direction after all”.
The rest of the song, I will not sing. I merely note it is a reminder that even small steps, as long as they are taken in the right direction, can make us go forward. I hope that the step taken on Friday is a small step in the right direction and will lead to some serious movement.
I must return to the matter at hand: the regulations. I have a form of words that I have to say—I have it in a bundle somewhere.
Lord Empey
While the noble Lord is looking for his music score, I will say that it is good that we can have a moment of humour on an issue like this. But the question was asked about the backstop and the role that Northern Ireland could play. When we asked what input people from Northern Ireland would have into the whole Brexit debate, we were told repeatedly that there would be consultations and so on. It did not happen that way.
In my view, instead of the Belfast agreement being used as an obstacle, parts of it could be the solution. The noble Lord, Lord Wigley, referred to the other parts of the agreement. We are forgetting that the agreement is a complicated mixture. Even at this late stage in the process, I ask the Minister: what alternative thinking is going on in the NIO as to how we might replace Stormont? I have not had an answer to that, either today or on other occasions when it was raised. The bits and pieces of the jigsaw are all on the table, but nobody is putting them together in the right way.
Trade flows across the Irish border represent 0.1% of European trade flows. How is it that, as a nation and as a continent, we are in such a state over that when we are ignoring the very institutions that are a part of the solution? Will the Minister reflect on this and consult with his right honourable friend in the other place? Perhaps he should serenade her, as he has a talent for it.
Lord Duncan of Springbank
I thank the noble Lord for giving me a moment or two to find my place in my notes and for the reminder that these are serious issues. He is correct, I did not give him an answer to his question. He will be aware that I was not able to find the right answer to give—and that is part of the challenge, to be frank.
I am also aware that I have not appropriately answered the question of the noble Lord, Lord Trimble. I will reflect upon that, come back to him on it and share the answer more widely with other Members of the House. I am conscious that the noble Lord, Lord Wigley, made the point about seeing this not simply through the lens of Northern Ireland but through a broader sense of the devolution settlements. He is absolutely right. We cannot lose sight of that fact, either.
However, I have found my form of words, which are: I beg to move.
Data Protection (Charges and Information) (Amendment) Regulations 2019
(5 years, 8 months ago)
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Lord Ashton of Hyde
That the draft Regulations laid before the House on 17 December 2018 be approved.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde)
My Lords, I declare an interest which every Member of this House who speaks will have to declare so perhaps I can save them the bother. I will benefit from the fact that I will not have to pay the £40 charge if the regulations are approved. Secondly, my wife is a parish councillor and will also benefit.
The original regulations were debated and approved in this House on 20 March 2018. Noble Lords may recall that those regulations introduced a new charging structure to fund the Information Commissioner’s Office. The authority for doing so derived at the time from the Digital Economy Act 2017, now superseded by the powers set out in Section 137 of the Data Protection Act 2018. As we promised during those debates, we are now looking to implement a new exemption from the annual data protection charge for elected representatives, candidates for election and Members of the House of Lords for processing that they undertake in the course of fulfilling their democratic duties.
The new data protection framework is about protecting personal data—that is, information that can identify individuals. Some of us in this House will be data controllers—we may hold personal data—and are responsible for how that information is processed. There may be a number of reasons why we hold that personal data—for example, we may have been entrusted with it by members of the public for particular aspects of parliamentary work—but, as data controllers, we have various obligations under the Data Protection Act, including how we look after that information.
While we have previously debated the importance of having an adequately funded regulator, there will be some situations where it would be unreasonable for some data controllers to pay the charge or where the charge would give rise to unintended negative consequences. For that reason, Schedule 1 to the funding regulations details a number of exemptions to the payment of the charge. For example, any data controller who processes personal data only for staff administration purposes, or purely for advertising, marketing and public relations reasons, is not required to pay.
During the parliamentary debate of the original funding regulations on 20 March last year, the Government undertook to review these exemptions. A public consultation took place last summer and has been available online since June 2018. The consultation sought views on whether each of the exemptions was still appropriate; a proposed new exemption for elected representatives, prospective candidates for election and Members of the House of Lords; and whether any other new exemptions should be introduced. Respondents were broadly supportive of the current exemptions regime. However, there was also support for one new exemption for elected representatives, candidates, including prospective candidates for election, and Members of the House of Lords.
The Government’s view is that activity deriving from elected representatives’ public offices and functions should not be liable to a charge. Charges of this nature potentially represent a perceived or actual barrier to democratic engagement. A number of respondents supported this view. In light of this support, we have decided to take this amendment forward for implementation, so I now come to the details of the instrument.
The amendment introduces an exemption for: Members of the House of Lords who are entitled to receive a Writ of Summons to attend this House specifically for the purposes of related functions; elected representatives, as defined in paragraph 23(3) of Schedule 1 to the Data Protection Act 2018 in connection with the discharge of their respective functions; and relevant processing undertaken by candidates, prospective and nominated, seeking to become elected representatives. These exemptions cover those who are acting on instructions or on behalf of such Members and elected or prospective representatives. Importantly, that is not to say that all processing of data conducted by those listed in the amendment, including all Members of this House, is automatically exempt from paying a charge. The instrument makes it clear that the exemption relates solely to processing carried out by these parties in connection with their democratic functions.
In the case of prospective candidates, the exemption would apply only to processing in connection with those activities related to election or re-election in a post. It is important to extend the exemption to anyone seeking to become an elected representative, not just to nominated candidates. This is because formal nomination, the stage at which candidates are defined in electoral legislation, occurs only in the immediate lead-up to an election. Activity to support re-election is likely to predate this stage. Excluding prospective candidates from this exemption would place them at a financial disadvantage compared with their incumbent counterparts. We have restricted the application of the exemption to data processing associated with the functions of our respective roles. This provides a safeguard against misuse, for example by individuals falsely claiming to be prospective candidates.
I want to be clear that the exemption relates only to the payment of the annual data protection charge. It is not an exemption from data controllers’ important data protection responsibilities. Anyone who does not adhere to those responsibilities and principles will face enforcement action by the ICO.
I hope noble Lords will agree that this amendment is important to encourage wider participation in the democratic engagement process. The removal of a requirement to pay the annual data protection charge to the ICO will ensure that all prospective candidates will start their electoral campaigns on a footing equal to that of elected representatives already in post. It also reflects the high regard the Government place upon those undertaking public functions. I beg to move.
Lord McNally (LD)
My Lords, we welcome this statutory instrument and the exemptions provided for. Like the Minister and, I think, everybody in this House, we do not want a tax on democracy, but people should be assured that the legal responsibilities remain the same and can be quite onerous. The Minister’s last remark was that we must not allow people to use the candidate or even the MP or Peer as cover for activities that would be outside the narrow exemption of this House.
This reminds me of debates we had some 20 or even 30 years ago—in the early 1990s—when we brought in legislation about the financing of political parties. I remember that those of us who had experience of working for political parties were very conscious that they are all made up of volunteers, often amateurs. There was a danger in that legislation—and I think there still is—of putting on to enthusiastic volunteer amateurs, who make our democracy work, very onerous financial responsibilities in terms of election spending and, in this case, very onerous data protection responsibilities. There might be a case for giving political parties some funding for advice, training and support to make sure that these responsibilities are understood and work well.
What the Minister has had to say is very welcome, and we are all involved in this, but it appears that the initial advice was a little confusing and caused concern. Once these regulations are approved, as I am sure they will be, I wonder whether the House authorities can issue some clear and definitive advice that will be of benefit to Members of this House. We look forward to this SI being passed.
Baroness Ludford (LD)
My Lords, I just want to add to what my noble friend Lord McNally has said. I am glad that this matter is being cleared up, because we had very confusing advice a few months ago. I also want to note, as one of the people who was involved in the European Parliament’s proceedings on the GDPR, that it is a UK decision to impose a fee on data controllers. The mandatory requirement was removed from the GDPR, and it is a unilateral UK decision to fund the ICO in this way so that, in effect, data controllers in the UK will not feel the change which perhaps will be felt by data controllers in other EEA states, where Governments make a decision to fund their data protection authorities from, for instance, general taxation. I realise that that decision was made in the Digital Economy Act rather than in last year’s Data Protection Act, but it is imposed not by Brussels but by Whitehall and Westminster.
Baroness O'Neill of Bengarve (CB)
My Lords, these amendments represent a little island of calm in a turbulent ocean. For once, I am referring not to Brexit or the backstop but, rather, to the fact that we are in the middle of some very turbulent changes in our regimes for the protection of data and privacy and many other aspects of communication. This morning, we saw the publication of the report of the Digital, Culture, Media and Sport Committee of the other place on disinformation and “fake news”. In so far as I have got into the report—which is not very far—it is very welcome in that it represents a much broader view of the threats to democracy from the present regime for controlling the use of data. There is much more to be said, and I hope that the Minister will be able to say something about the ways in which the broader picture will be taken into account. These amendments do not need changing because of the broader picture, but it is curious to fiddle with the small stuff when such major and serious issues are happening in this domain.
Lord Griffiths of Burry Port (Lab)
My Lords, this seems a sensible measure and the issues have been well rehearsed. There was one area where there was some confusion in my mind, and I hope that noble Lords will not mind my bringing it to their attention now. I, too, am looking forward to not having to pay £40—that is good news, but in exempting Members from both Houses, candidates and so on from the need to pay that charge, we recognise that many of us have other duties and obligations not related to our being Members of this House. We are in employment, we run things and so on, and we handle people’s data other than in the sense that has been described. I guess they will have to pay their £40 or whatever it is, but my confusion lies in the hinterland between those two modes of operation: information gained in respect of activities of one kind can without too much imagination become useful in respect of those of another kind. I wonder whether some thought has been given to handling that kind of confusion and, if so, how. It would be helpful if the Minister could say something about that; otherwise, this seems like common sense and we would have no hesitation in wanting it to go forward.
Lord Ashton of Hyde
My Lords, I am grateful to all noble Lords who have responded. This statutory instrument is unique among those I have dealt with recently in having gained a speedy and generally favourable response; I am grateful for that.
I am grateful to the noble Lord, Lord McNally, for his welcome. He spoke about financing political parties and the need to give advice—as indeed did the noble Baroness, Lady Ludford. I can say that the House authorities will take that on board and provide some clear advice, taking into account the new requirements if this statutory instrument is passed; I am very pleased about that.
I acknowledge—the noble Baroness, Lady Ludford, was right about this—that the approach to funding the ICO was originally set by the Digital Economy Act, which was superseded by the Data Protection Act. The method of funding the ICO, and the question of whether it is adequate, have been occupying us for several years. I am pleased that we have finally resolved it. The noble Baroness is right that we decided to do it this way and not as part of the GDPR. Supervisory authorities can be funded in a number of ways. The reason for doing it this way was that it did not involve much practical change from the ICO funding arrangements under the Data Protection Act 1998 and a register is not necessary.
The noble Baroness, Lady O’Neill, talked about an ocean of calm within a broader picture that is possibly not so calming. I agree with her that it is a small but important issue. It is right to deal with an issue that promotes—or at least does not prevent—demographic engagement; and a commitment was made when the regulations were debated last year that we would look at this and take it forward. It is important to carry forward what we said; I take on board her points about the issues alluded to in the DCMS Committee’s report, as outlined this morning. Generally speaking, we have not yet had time to analyse it in great detail but, together with the Cabinet Office, we will be taking forward a lot of these issues around disinformation and its effect on elections, particularly through the online harms White Paper, which will be coming out soon.
The noble Lord, Lord Griffiths, mentioned that Peers have other duties; he asked about the way this exemption would apply in relation to their duties in the House of Lords and elsewhere. He is quite right that, if they are a data controller and have other duties that are not subject to an exemption, they would be required to pay the charge. I will mention this to the House authorities when they issue their advice and hopefully they can be clear. Ultimately, the Data Protection Act says that you must have lawful authority to handle personal data and it is up to you to make sure that is the case; if you handle personal data—other than data that has some limited exemptions provided in the Act—then you will have to pay the charge.
Lord Griffiths of Burry Port
I wonder if I could ask for a little more resolution on the matter. My mind is filled with pictures of activities that I myself have engaged in where, by doing work for which I am remunerated, I gain some kind of control of people’s data or the use of it, and at the same time I can be involved in an area where I am exempt from all that. Because of the homogeneity of the activities, one paid and one not, it is not difficult to see that the dividing line between what qualifies and what does not might be difficult to establish, even with the good will of the authorities of the House who write the best guidance that has ever been written.
Lord Ashton of Hyde
If the guidance does not produce clarity in the noble Lord’s mind, then I think the answer is to avail himself of the ICO’s telephone hotline, which is there specifically to answer questions such as the ones that he has asked. He will be able to give them the specific examples of where he is unable to be clear. That applies generally to people in public office such as him but also, importantly, to other small businesses; there is a specific small-business hotline that is there exactly to answer questions like his. I hope that has covered most of the issues.
Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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Lord Ashton of Hyde
That the draft Regulations laid before the House on 14 January be approved.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, today we are concerned with the protection of personal data once the UK has withdrawn from the EU, when EU law will cease to apply in the UK.
Noble Lords will recall from debates last year on the Data Protection Bill that much of our current data protection framework derives from EU measures. When the UK leaves the EU, the GDPR will be retained in domestic law through the European Union (Withdrawal) Act 2018. That Act also permits fixes to be made so that the retained version of the UK GDPR continues to be operable in a domestic context. That is what the regulations before the House today are designed to do.
Before we look at the changes in more detail, it is important to make clear the general approach. The purpose of this exercise is to correct deficiencies arising from our departure from the EU. As such, these regulations do not significantly affect UK businesses or erode people’s data protection rights. We are looking to maintain continuity. This approach will put the UK in the best possible position to receive a positive adequacy decision from the EU.
Many of the amendments made to the GDPR by these regulations simply replace European Union-related terminology with UK equivalents. For example, there are many references in the GDPR to “member states” or “member state law”. These references have typically been amended by these regulations to refer to “the UK” and “domestic law” respectively, or removed altogether. For greater clarity post exit, the retained version of the GDPR as amended by these regulations will be known as the UK GDPR.
However, simply replacing European terminology with UK equivalents does not address all the deficiencies that arise as a result of our exit from the EU. The Government have given careful thought to how the UK GDPR and the Data Protection Act 2018 should approach these remaining deficiencies. I shall address a number of these important issues in more detail.
The GDPR and Part 3 of the Data Protection Act 2018, which implemented the law enforcement directive, restrict the transfer of personal data to third countries unless certain safeguards are met. One of those safeguards is where the third country concerned, or a sector within the country, has been deemed “adequate” by the EU Commission. Once an adequacy decision has been granted, data can flow freely to that country or sector. In the absence of an adequacy decision, data can still be transferred to third countries, but the onus is on controllers to make sure that alternative safeguards, such as standard contractual clauses or binding corporate rules, are in place to ensure that the data is protected.
Lord Adonis (Lab)
My Lords, if the Minister will forgive me, this is a crucial issue in what is going to happen. Where there is a data controller outside the United Kingdom in a no-deal scenario, will there be a requirement for it to have a representative inside the United Kingdom to replicate the existing EU arrangement? It was not clear from what the Minister has just said whether that will be an absolute requirement.
Lord Ashton of Hyde
If they fulfil those conditions that I mentioned, the answer is yes.
I would like to touch on what our exit from the EU might mean for the applied GDPR, as provided for by Chapter 3 of Part 2 of the Data Protection Act 2018. Noble Lords will recall that we created a separate regime which provides for broadly equivalent standards to the GDPR to apply to processing activities that are outside the scope of EU law and covered by neither Part 3 nor 4 of the Act, which deal with processing by law enforcement and intelligence services respectively. This regime currently applies, for example, where a controller other than the intelligence services is processing for national security or defence purposes.
As the EU GDPR will not, as a matter of domestic law, apply directly to any general processing activities when we leave the EU, these regulations are intended to simplify matters by providing for a single regime for all general processing activities. Those provisions in the 2018 Act that provide for the applied GDPR, together with other references to the applied GDPR in legislation, are removed. Importantly, the provisions in the applied GDPR which currently provide exemptions from specified provisions where these are required for the purposes of safeguarding national security or for defence purposes have been retained in the merged regime. These exemptions balance the need to protect personal data against ensuring that the UK’s security and intelligence community can continue to carry out its vital work to safeguard national security. I should emphasise that the merger does not itself alter the purview of EU law so where aspects of domestic data protection law were outside EU competence before exit day, this will not change as a result of this instrument. We have included provisions in the regulations to make that point clear.
I believe that the approach the Government are taking is an appropriate way of addressing the deficiencies in domestic data protection laws resulting from the UK leaving the EU. The aim of these regulations is to ensure continuity for data subjects, controllers and processors by maintaining the same data protection standards that currently exist under the GDPR and the Data Protection Act 2018.
My remarks have focused on the changes made to the GDPR and the Data Protection Act because they are the most significant. For completeness, I should add that the regulations make a number of minor amendments to other legislation, consequential on the amendments we are making to the UK GDPR and Data Protection Act 2018. For example, they amend references to the “GDPR” in other legislation to refer to the “UK GDPR”.
They also address a small number of non-exit-related issues. They clarify that the GDPR definition of consent applies for the purposes of the Privacy and Electronic Communications (EC Directive) Regulations 2003, and address two minor drafting issues that were identified in Schedule 19 to the Data Protection Act 2018, shortly before it received Royal Assent. I commend these regulations to the House
Lord McNally (LD)
My Lords, I am not sure the Minister is going to have quite the easy ride he had with the first statutory instrument. My eye was caught by a very detailed briefing by the law firm Fieldfisher on the consequences of this SI. It was the final paragraph that caught my eye. It says:
“From a broader perspective, the creation of a new data protection regime in the UK may present additional complexities for controllers and processors who are caught by both European and UK law and will therefore need to comply with both the GDPR and (in relation to UK customer data) something that looks like the GDPR but which may start to move away from it as time goes on”.
Those last words are ominous. There is no doubt that the GDPR was a great success for European co-operation. The noble Baroness, Lady O’Neill, reminded us earlier of the wide range of issues that we will have to take into account in protecting our democracy from data abuses. There are similar dangers in the protection of our commercial and business life. The value of the GDPR is that it gives us a strength of certainty of European legislation.
I will delay the House a little with a reminiscence. Between 2010 and 2013 I was the Minister at the Ministry of Justice responsible for the earlier negotiations on GDPR. I went to a meeting in Lithuania and throughout the day I noticed that there was one person sat at the table who never participated, voted or said anything. At the end I turned to the British ambassador and asked, “Who is the guy at the end of the table—he has not said anything?” “That is the Norwegian,” he said. “He can come and listen, but can’t vote and he is not involved our decisions.”
I often think of that when I hear people banging on about sovereignty. Sovereignty was best exercised by British Ministers at the table briefed, I have to say, by officials who were the people to go to. I will not name any particular official, but there was one man to go to as GDPR clunked its way through the machinery. There were “light touchers” and those who had quite recently experienced a Stasi or state abuse of personal data and privacy, and balancing the requirements of GDPR was part of the diplomacy our officials showed. I was also greatly assisted by our parliamentarians in the European Parliament: my noble friend Lady Ludford was very influential in steering the GDPR through some choppy waters.
The noble Lord, Lord Forsyth, who is not in his place, said a few weeks ago in one of our Brexit debates that the first time he went as a Minister to Brussels he felt resentment and animosity that he was being, as it were, dictated to by these foreigners. I do not think that I am being too misleading in saying that; I am sure that he will correct me later if I am wrong. He certainly did not feel at home there.
Lord Ashton of Hyde
Just to be clear, I did not say anything about the speed with which the European Commission would provide its decision.
Lord McNally
Oh, dearie me. It is always the EU’s fault that we have got ourselves on this particular window ledge.
Lord Ashton of Hyde
I am not blaming anyone, but an EU adequacy decision can be given only by the European Commission. It is not a question of blame; it is just a fact.
Lord McNally
I will close with another one where I am sure that the Minister is not going to blame the European Commission but say that it is its responsibility. During the period that I am talking about, the stature and influence of our then Information Commissioner had a major impact on how we put the GDPR in place. Again, the Minister was unable to give us any real reassurances about whether we will be at the table in co-operation, or whether it is these difficult foreigners who are going to stop us doing that.
Lord McNally
It is no use the Minister saying otherwise, because this is the reality.
Lord Ashton of Hyde
I am sorry, I cannot let that pass. I never said anything about difficult foreigners.
Lord McNally
The Minister never said anything about difficult foreigners, but there has always been the impression that this would all be as smooth as smooth. “Do they not understand that we are trying to be helpful?”, we ask, when we have caused Europe so much disruption and cost by this act. In this case, it is essential that we are part of the ongoing dialogue. This GDPR is not the end of the process. As the House was discussing last week, these European laws are going to develop. How we then act and deal with them is going to affect where jurisdiction lies—with European or British courts.
Lord Adonis
The noble Lord has raised a litany of concerns about the GDPR regime after Brexit and cited a number of people who briefed him about it, including QCs and Members of the European Parliament. However, he will have noticed that there has been no public consultation at all on these regulations. There has been no opportunity for people directly affected to publicly brief us. Does he share my concern about that? Would he like to comment on the process of public consultation on these regulations?
Lord McNally
It is, of course, a farce. These regulations are all being rushed through at the last minute and we know that we have to put them in place as the cliff edge approaches.
I do not want to be rude to Fieldfisher, because it provided some excellent briefing but, my God, the lawyers must be rubbing their hands at the cornucopia that is going to be tipped out to them as companies and individuals try to make sense of the reality. Whether we get a deal, or fall out, it will be a jagged, uncertain, unclear leaving.
Lord Howard of Rising (Con)
Does the noble Lord accept just how unclear and what a complete pig’s breakfast the thing is already? I do not think you could make it worse. I have to deal with this on a day-to-day basis. It is a complete and utter mess and no lawyer can even give you a definitive opinion.
Lord McNally
My Lords, I was planning a peroration, but I think I will leave it at that.
Baroness Ludford (LD)
My Lords, first I have a couple of housekeeping questions which I hope are not too banal. I find considerable difficulty using the legislation.gov.uk website and its search function. Will the Minister ask his civil servants to check it out? Even if you search for “data protection 2019” under UK SIs, both the previous one and this are difficult to find. There was a 19 December version of these regulations, which were replaced in January. I must admit that I have not pored over every line of both to find the differences. Will the Minister explain why that was necessary?
Secondly, I want to ask about the absence of an impact assessment. Paragraph 12 of the Explanatory Memorandum states that:
“There is no, or no significant, impact on business, charities or voluntary bodies arising from this instrument”.
The pretext is that, while the Government recognise that:
“Data flows from the EEA to the UK may be restricted post-exit”—
because, if there is no deal, we will be plunged into a situation where there is no legal framework and no adequacy decision—
“that is as a consequence of the UK leaving the EU, not as a result of this instrument”.
That is the justification for having no impact assessment. However, if we left with a withdrawal deal and a transition there would be a legal framework, so this instrument, which provides for both a no-deal scenario and one in which there would be no adequacy decision, surely merits an impact assessment as well as the consultation to which the noble Lord, Lord Adonis, referred.
As the ICO has made clear, and as has been mentioned already, businesses may have to deal both with the ICO and with European data protection authorities in every EU and EEA state where they have customers. They may need a European representative if they process the data of people resident in the EEA or have customers in the EEA. There would be additional complexity if they had to comply with both the GDPR and the UK GDPR. They could face concurrent legal claims in both the UK and the EEA. Will the Minister amplify the justification for having no impact assessment? Data flows are crucial to many businesses, not just the tech industry—there is hardly a business or other organisation that they do not affect—so the rather blasé claim that no impact assessment is needed is not justified.
I am a bit confused—it may just be my lack of understanding—about the situation regarding EU adequacy decisions on third countries. Paragraph 2.8 of the Explanatory Memorandum says there will be,
“incorporated into UK domestic law … EU decisions on the adequacy of third countries and on standard contractual clauses, both of which are relevant for … international transfers”.
Paragraph 2.13 says:
“It will not be necessary to retain the EU decisions on adequacy and standard contractual clauses … so these are revoked by this instrument”.
If I have understood the Minister’s presentation, this is explained by the fact that we are recognising and incorporating past EU adequacy decisions, but that in the future, in a no-deal scenario, the UK will take over that function: I venture to suggest that that is not very clearly explained in the Explanatory Memorandum.
Lord Ashton of Hyde
Would it help if I just said that the noble Baroness is absolutely right in her interpretation?
Baroness Ludford
I do not often get that response from Ministers, so that is very gratifying.
Also, a second version of these regulations was published at the end of last week—I think the Minister referred to it—which is specifically about privacy shields in the US. I am rather surprised that we will have two separate considerations: why could they not have been incorporated into this debate? As the ICO pointed out in a notice a while ago, US companies will need to update their privacy shield commitments to state that they apply to transfers of personal data from the UK. That is a big deal for many companies. It is another reason for what I said about the need for an impact assessment. If that does not happen, a lot of companies will be in serious difficulty.
Will the Minister tell us what advice the Government are giving businesses on using standard contractual clauses or binding corporate rules in the absence of an adequacy decision? The European Data Protection Board issued a notice about this last week, on 12 February. Are the Government going to advise businesses, large and small, exactly how this will work? Lastly, what progress is being made on an adequacy decision? The Minister will know from discussions during the passage of the EU withdrawal Act and the Data Protection Act that many of us are worried about this issue. Last summer, the Government expressed their aspiration for a legally binding agreement that would be more than a unilateral adequacy decision and which would enable the ICO to have a seat on the European Data Protection Board. Essentially, it would be Brexit in name only and would retain all the benefits of being in the EU with regard to data protection structures. That aspiration is not recognised in the political declaration, which talks only about an adequacy decision, so the UK has been knocked back in that area. Perhaps the Minister could tell us precisely where we are. What signal is he getting from the Commission on an adequacy decision? Are we talking months or years?
Lord Adonis
My Lords, the noble Baroness, Lady Ludford, has raised some important points. It is totally unjustifiable that there is no impact assessment for this regulation; I hope that the Minister will address and explain that. The noble Baroness also made an important point about the way that data adequacy will be assessed if we are outside the EU, particularly in a no-deal scenario.
I will extend that to cover my perennial theme of consultation. No issue affects businesses and individuals across the country more than data. Indeed, we went through the whole GDPR exercise precisely because this is so central to our individual and community life. The fact that there has been no consultation at all on this regulation seems truly indefensible, so I hope that the Minister will say why that has been the case. The noble Lord, Lord McNally, said that data is now the new oil. He is absolutely right; it is as important to the functioning of our economy and our society as energy—it is a form of energy—and there clearly should have been consultation. Can the Minister say why there was no consultation? I assume that he will tell us again that there was no time, which begs the question of why we are going through this no-deal process at all if there is not time to conduct the normal processes of government in respect of it.
As ever, there is a bizarre twist to the statement on consultation. Paragraph 10 of the Explanatory Memorandum states:
“The government has not consulted publicly on this instrument”.
I presume that that means that they have consulted privately, and the House needs to know who has been consulted privately. The only body mentioned in paragraph 10 is the Information Commissioner’s Office, with which, it states, the regulation has been developed in consultation. Who else has been consulted privately and what were the selection criteria? Since the regulation was published, there have been representations. What representations have been made to the Minister’s department and what was their content?
The noble Baroness, Lady Ludford, also raised the issue of trying to assess the impact. Again we have doublespeak in respect of the regulations. We are told that their literal interpretation means that there is no further impact over and above the operation of existing European law. However, that is after, in the words of the White Queen in Alice in Wonderland, you have believed six impossible things before breakfast. Paragraph 12, entitled, “Impact”, states:
“There is no, or no significant, impact on business, charities or voluntary bodies arising from this instrument”,
but concludes:
“Data flows from the EEA to the UK may be restricted post-exit, but that is as a consequence of the UK leaving the EU, not as a result of this instrument”.
It is impossible to separate the instrument from the fact that we are leaving the EU. The noble Baroness put her finger on a very important point, which is that if we leave the EU with a deal on the basis recommended by the Prime Minister, the impact might be radically different from that envisaged under the instrument, for two reasons. First, there will be a transition period in which nothing changes but, secondly, the political declaration heralds negotiations on a whole set of issues, including trade and data flows, which might well lead to our continuing in the existing GDPR regime. So the last sentence of paragraph 12 is not true. It is not true to say that the issue of data flows and the regulation of data is dependent on the UK leaving the EU, not as a result of the instrument. There is a crucial difference between leaving the EU with a deal—in particular, with a deal that maintains the status quo—and without a deal.
When the noble Lord, Lord McNally, cited one of his expensive lawyers, who had suggested that there may be additional complexity—
Lord Adonis
I was not suggesting that they were his personal expensive lawyers, just expensive lawyers who have chosen to brief him; I know that he could not possibly afford expensive lawyers. When he said that it depends on what happens as time goes on, he put his finger on a very important point. The whole point of no deal, with a separate regime under our ICO, is that we could quite quickly find ourselves diverging, and as we diverge, that will quickly impose burdens over and above those that would apply even if we left the EU with a deal.
I am also not sure it is true to say that there would be no burdens as a result of the regulations even at the outset. I am a lay man in this business, and trying to understand what is going on is very difficult, particularly because there has been no consultation and we do not have the opportunity to assess what people who are expert and directly affected have said. The reason I intervened on the Minister in his opening remarks is that, having been a company director who has had to deal with the implementation of the GDPR, I know that having a representative dealing with data matters inside the EEA is very important. Many companies have offshored a lot of their data-control activities, and the requirement of the GDPR that they must have a representative inside the EEA—which I think is the correct thing to do—is a definite burden. It means that companies not only have to employ additional individuals but have to set up additional offices, in essence, to cope with those flows in many cases, particularly if they are dealing with significant data-handling exercises which are outside the EEA at the moment. This happens all the time with call centres in India; many companies are in this territory.
My understanding of what the Minister said in our earlier exchange is that if we leave with no deal and therefore must set up our own UK data-monitoring regime immediately, there will be a requirement for every company operating outside the EEA—which must, under the GDPR, have a representative inside the EEA—to have a representative in the United Kingdom. I would be grateful if the Minister could confirm that because if it is true, that is an immediate and potentially significant burden.
The other important point is that people need to understand that these arrangements are reciprocal. One reason why we as a country have such a good services industry is that a lot of companies based in the UK do substantial business in the EEA and beyond. That is great. My assumption, although it is not spelled out in the Explanatory Memorandum, is that in a no-deal scenario, data controllers who are based in the UK but do substantial business in the EEA will be required by the European Union to have representatives in the European Union over and above their data controllers in the UK; these are not currently needed. I would be grateful if the Minister could address that point. This flows logically from the new regime being set up. I would be astonished if that is not the case because I do not think that the European Union would regard having a data controller in the United Kingdom as meeting its standards of data adequacy. I would be grateful if the Minister could confirm that.
On that point, it is apparent that this immediately imposes a burden, potentially a significant one, on every company that handles data in the European Union or the EEA, as opposed to just in the UK. That represents a substantial proportion of our companies. If we had had an impact assessment, as the noble Baroness, Lady Ludford, suggested, this issue would have been brought out and we would know its effect. If there had been public consultation, we would know, but there has been none—and we have had no impact assessment. To my surprise, the Select Committees of this House that oversee instruments and put them to us have not raised these issues, which seem substantial and should have been raised before these instruments came to this House.
Lord Rooker (Lab)
I think my noble friend has not quite got it. I assure him that, as the noble Lord, Lord Cunningham, said earlier, Sub-Committee B is in the process of sending a letter to the Treasury complaining about the national policy it laid down on not having impact assessments for these instruments. Every week, we are seeing dozens of instruments with references to both informal consultation and none, but now it has been picked up that there is a national policy not to have impact assessments.
Lord Adonis
Is my noble friend saying that the Select Committee did raise these concerns?
Lord Rooker
Yes. As I speak, a letter is winging its way from Sub-Committee B to the Treasury. It was agreed at our meeting last week, the committee having discussed it in previous weeks.
Lord Adonis
That raises the issue of why that is not in any of the information before your Lordships. I was not aware of that at all. It is not flagged up in any of the documentation. Like other noble Lords, I appreciate hugely the work done by our Select Committees but the committee’s view is not always completely clear to the House when these instruments come before it, unless the committee has issued a formal report. We do not get full value from our Select Committees in the way that their work is presented. For instance, I am surprised that the chairs of these Select Committees do not comment on these instruments based on the committees’ work. I see that one of the chairs is sitting opposite; perhaps he would like to intervene.
Lord Trefgarne (Con)
All I can say at the moment is that the letter to which the noble Lord, Lord Rooker, referred has not gone quite yet.
Lord Rooker
That is because of a dispute between the two chairs. Sub-Committee B agreed in discussions last week about the terms of that letter and will meet tomorrow. I do not know what has happened today in Sub-Committee A, but Sub-Committee B made a decision, based on the statutory instruments it saw, to object to the Treasury’s objectionable policy. If Sub-Committee A does not agree, I hope that Sub-Committee B—which is dealing with half of these instruments—will send the letter on its own. Another member of Sub-Committee B is currently sitting in the Chamber.
Lord Adonis
My Lords, I appear to be flushing out an important dispute that is taking place between the chairs of Sub-Committee A and Sub-Committee B.
Lord Adonis
I have to say that this for me is a black box. Because of my other duties I have not been able to spend time analysing what is going on in Sub-Committees A and B, but this is very important because hundreds of these instruments are coming to us.
I turn to the issue of there being no consultation, which my noble friend Lord Rooker referred to. I have been going on about it for weeks. This has been true of every single no-deal instrument that has come to your Lordships. It is deeply and profoundly unsatisfactory. In my view this ought to have been flagged up for each of these instruments from the beginning and ought to have been a reason for them not to come before the House. How can we possibly conduct the proper business of the nation in terms of changing the law when we do not have any public consultation with any of the sectors that are affected by these instruments? We are dependent on the expensive lawyers of the noble Lord, Lord McNally, even to spell out the most basic features of these regulations—which, first, will not be apparent to those of us who are lay people and, secondly, which those people who are affected have had no opportunity to present except through the agency of expensive lawyers who seek to make a living. Of course, the expensive lawyers referred to by the noble Lord, Lord McNally, will now advertise their wares to companies, telling them what the impact of these things is going to be because they did not have a chance to engage with them earlier and make their views known, particularly if they start being adversely affected.
Lord McNally
My Lords, I never described them as expensive lawyers—otherwise they might never write to me again. I said that they were distinguished lawyers.
Lord Adonis
Perhaps I misheard the noble Lord—we will call them distinguished lawyers.
However, there is a dispute going on between the chairs of Sub-Committee A and Sub-Committee B. I do not know how these disputes are resolved. Do they come to the House? Perhaps they should come to the House.
Lord Trefgarne
My Lords, I can assure both noble Lords, Lord Adonis and Lord Rooker, that agreement is very close.
Lord Adonis
My Lords, I hope that it is close, because meanwhile we have another seven of these instruments to consider today and the whole of the Order Paper for Wednesday has, I think, another dozen of them. We also have hundreds more coming next week. Perhaps I may say to the noble Lord that I hope that this can be resolved extremely quickly and that we can find a satisfactory way forward, because the issue of the lack of impact assessments seems to be entirely arbitrary. We have some on the later instruments that will be introduced by the noble Lord, Lord Bates, but there are none on these. However, no formal consultation has been carried out on any of the instruments.
Baroness Kramer (LD)
I have some fear that I will raise the noble Lord’s blood pressure even higher, but if he takes a look at the impact assessments that are provided, I think that he will be shocked by their inadequacy. They do not move us very far on from having no impact assessment at all.
Lord Adonis
My Lords, I do not think that it is possible for my blood pressure to be higher on these matters. However, I hope that the blood pressure of the House is high, because we are supposed to be legislating on behalf of the country, and the proceedings of your Lordships in respect of these no-deal statutory instruments are an absolute farce. I do not think that the procedures of the House are working well. The fact is that the two chairs of our relevant sub-committees cannot even agree on a letter to send to the Treasury in respect of the handling of consultation. The fact that it is about six months after we started getting the initial flow of statutory instruments on this matter coming to the House is in itself deeply unsatisfactory and is not a good commentary on the way our parliamentary proceedings are working. Moreover, the fact is that what we get are bromides from the Government that there is no change, based on there being no impact assessments, no consultation and a complete misreading of what the situation is in any event, because it involves a denial of all of the negative consequences that will flow from leaving the European Union, which of course is the underlying fact that they should be grappling with in the first place when conducting consultations and impact assessments. It is deeply unsatisfactory.
The right thing for this House to do would be to reject these instruments. We should not be a party to such an abuse of our constitutional procedures as is taking place with these no-deal instruments. What we will be faced with, though—I feel this pressure myself—is that we could crash out of the European Union in an unconscionable act of misgovernment in the course of five weeks’ time, so we have to do our level best to ensure at least that there is a statute book in place for that eventuality. But I and other noble Lords want to put on the record that the situation we are faced with, and which gets worse with every debate that flushes out more facts about what is actually happening, is a complete abuse of our constitutional procedures.
Lord McNally
That last point is very important. Somebody pointed out the other day that one day there will be a full judicial inquiry into how this process has been carried through. Ministers and civil servants should be aware that one day there will be accountability for the way this has been done.
Lord Adonis
The noble Lord is right, but I do not think that that day is far off; I think it will come soon. Let us be clear: we are not talking about a natural disaster. As a Minister, I often had to deal with those. When there are ash clouds and volcanoes erupt, you have to take very difficult and extreme decisions at short notice. Here we are talking about an act which the Government are inflicting on the country, with no external agency whatever. Not only that, but the Government could this afternoon terminate the situation we are faced with, in respect of these no-deal regulations, by the Prime Minister announcing that she is not proceeding with no deal and that she will, on behalf of the United Kingdom, submit a request to extend Article 50—or, as we now know she can do from the judgments of the European court, rescind it unilaterally. This will be a big matter for the public inquiry that the noble Lord, Lord McNally, is referring to. All the consequences of this no-deal situation are caused by the Government, and the remedy for them is entirely at the disposal of the Government. It is our absolute duty to point this out all the way through this process, so that at least some of us in the parliamentary system can point to the fact that we did our level best not to take the nation to the edge of the cliff where we are now at.
Coming back to this instrument, it is totally unacceptable that we are dealing with such an important set of regulations relating to the fundamental issue of data and data protection and there has been neither an impact assessment nor any public consultation.
Baroness Ludford
My Lords, I asked the Minister about the state of play on an adequacy decision. I am told that the Minister in the other place, Margot James, confirmed a few weeks ago not only that those discussions can start—at least formally—only after the UK leaves the EU, but that they would take two years; that was her estimate. So that multiplies the gravity of having no impact assessment; if we crash out without a deal, we will have a legal void for a long time.
Lord Adonis
The noble Baroness raises a very important question, to which the Minister should respond: how long will it take to consider this? Noble Lords who woke up to the “Today” programme this morning will have been astonished to find that Dr Liam Fox and the Foreign Secretary had written to the Japanese Prime Minister telling him to get a move on in signing a trade deal with Britain—as if we, because we are putting ourselves in a position of great jeopardy and undermining existing international agreements in five weeks, can now start instructing foreign Governments on the timescales in which they should conduct international negotiations. This is utterly humiliating to us as a country. It is a fundamental breach of the proper conduct of public affairs. What the noble Baroness said about it taking another two years even to get the basis of data adequacy agreements with the EU, because of our act of withdrawing from the European Union, simply underlines the point.
Lord Griffiths of Burry Port (Lab)
My Lords, in the middle of all that I shall provide a still, small voice of calm for a moment—perhaps—in keen anticipation of the response of the Minister, who will have to orchestrate the energies that have been released and deal with the blood pressure of my noble friend Lord Adonis.
I have looked at this statutory instrument. I can see 65 pages of intricate cross-stitching, as an untold number of lawyers for untold numbers of hours have pored over pieces of legislation, harmonised what can be harmonised, tweaked what can be tweaked and produced at the end an unreadable pastiche, leaving us reliant on the Explanatory Memorandum. As I sat at my kitchen table on the sunniest weekend we have had this year so far, with pieces of legislation spread out all around me, there was no other method available to me.
I read of changes to the GDPR and the law enforcement directive,
“over which our Information Commissioner’s Office and UK civil servants have had considerable influence”.—[Official Report, Commons, Sixteenth Delegated Legislation Committee, 14/2/19; col. 1.]
That we, once among the architects of how we handle our data as a continent, should now be in the position we are in is a great sadness. I would say the same thing for the European Court of Justice, which we had a formative contribution in shaping. That we are arguing these points in this way is a dreadful place to be.
I echo what has been said to my left and to my right about reciprocity, adequacy and all that. At the moment of leaving, we will, I suppose, accept the remaining members of the European Union as having passed the adequacy test. Indeed, through the Privacy Shield scheme in the United States, we will offer that sense of adequacy even beyond Europe. But, as has been said, the negotiations to have some reciprocity and adequacy expressed for our own case will take an indeterminate time—two years has been mentioned, and the Minister will respond to that in due course. It seems such a strangely asymmetrical presentation of these important facts. I want to ask, as others have done: is it true that the assessment of adequacy for the United Kingdom might take as long as that?
In his opening remarks, the Minister mentioned that, at such-and-such an item in the political agreement, there is reference to the urgency with which certain of these things must happen. Perhaps he will excuse my ignorance on this point, but, if there is no deal, is there no deal in respect of the deal and of the political agreement? If so, the item he referred to falls, as indeed does the deal.
The noble Lord, Lord Balfe, made a speech last week on what happens once you have reached a fixed point, which has again been hinted at in this debate. At the moment, all we are talking about is something that will come to pass on a particular date, just five weeks away, at which point things should square up with each other. But what happens in the two years it will take for adequacy for us to be granted by the negotiating process that will then begin? What happens if decisions about how to act in the area of the management of data begin to diverge? It is not a fixed position. What mechanisms do we have to handle a shifting scene?
My noble friend Lord Adonis mentioned Japan. It did not come into the picture because, at the time this statutory instrument was written, something was happening that had not yet been brought to a conclusion. But we now know what the conclusion is, and we see that Japan will be a much more difficult case to crack than we had thought. Once again, we are in a bad place.
Without a deal—or even, it seems, with one—the ICO will no longer sit on the European Data Protection Board. The noble Lord, Lord McNally, referred to the loneliness of the Norwegian, and it is worth emphasising that all over again. It will be a dreadful thing for us to send our top person to such discussions and have her sit out and have no real practical influence—this is the United Kingdom we are talking about—nor will she be able to participate in the GDPR’s one-stop shop mechanism. This is another terrible place to put her. How should we feel about this? I think it is important.
Incidentally, I see why there is no impact assessment or public consultation: all the people who might have been available to harness such an impact assessment or consultation have been disentangling laws and working as drones to put this SI together. I cannot feel that we are doing anything that any of us would be other than ashamed about with the passage of time.
On the age at which consent is deemed to have been given, are the Government, in opting for 13—there was a spread of ages between 13 and 16 when we considered the Data Protection Bill last year—achieving by secondary legislation what we were reluctant to do just a year ago with the primary legislation? What is our duty of care in such circumstances?
Lord Ashton of Hyde
My Lords, I took the advice of the noble Lord, Lord McNally, that it would not be easy—and he has proved to be right. It is reasonable to take on board the frustrations that some of these SIs have caused—in my view, not so much because of the process which is gone through but the fact that some noble Lords do not want to leave the EU and are highlighting the effects. What they are highlighting may well be the case, but when we are trying to pass an SI such as this one we need to concentrate on its effect and—that did not take long.
Baroness Ludford
I am sorry but the Minister must accept this. It is absolutely true—I speak for myself and my Benches—that we would prefer to remain in the EU, but that is not the point about an impact assessment. There is a difference between crashing out with no deal and a transitional period when EU law would continue to be applicable and we would not need all these arrangements. That is what an impact assessment would have to assess. This is about a no deal crash-out and it is perfectly valid to distinguish that from an advocacy of remain.
Lord Ashton of Hyde
I agree. That is why the Government are making all efforts to secure a deal. We agree that a deal is the best situation for the country. We are at one with that.
In answer to the noble Baroness, I will start with something which is my responsibility—the legislation.gov.uk website provided by the National Archives. I will take up the matter with it. I am told that it may be helpful to search for “draft statutory instruments” rather than “statutory instruments”. I certainly listened to what she said about the website not working and will check what we need to do.
The noble Baroness, the noble Lord, Lord Adonis, and others talked about the impact assessment and asked why it has not been published. The impact of this instrument, not the impact of leaving the EU, was assessed in line with standard practice following the existing Better Regulation framework. It is focused on the direct impact of the relevant SI compared with the current legislation. The whole point of this SI is to maintain an equivalent regulatory framework to protect personal data. The noble Lord, Lord Adonis, quite rightly pointed out that it affects not only UK businesses but mostly EU and EEA businesses, which will have to have representatives in this country, and I will come to that. It is a reciprocal arrangement. If these regulations come into force and we have a UK GDPR, the same necessity for representatives will take place both ways, and I will come to that.
The analysis, to the best of the Government’s ability, of the wider impact of the UK’s exit from the EU was published in the Long-term Economic Analysis in November last year. The noble Lord, Lord Adonis, talked about representatives and Article 27. He is correct that data controllers who offer goods and services to or monitor the behaviour of data subjects in the UK will need to appoint a representative in the UK, but that is a cost to non-UK businesses, which is what the impact assessment is meant to address. He is also correct that there will be organisations in the UK that will be required as a matter of EU law to appoint a representative in the EEA. The ICO provides data controllers with advice on this obligation and will continue to do so. If controllers and processors based abroad are routinely processing data, it is right that they should be accountable in the UK and have a presence here because this is about maintaining the status quo as far as possible, not about rolling back protections for individuals, so the representative is a point of contact for the data subject as well as the supervisory authorities, such as the Information Commissioner.
Lord Adonis
I understand that the Minister is saying that my supposition is correct that after a no-deal Brexit a UK data controller doing business in the EEA will have to have a representative in the EEA as well as in the UK because this will be a reciprocal obligation—the Minister is nodding, so he agrees. The key point is that that is a significant burden on businesses. There is no way of getting away from it. That is a new and significant burden on UK businesses as a result of the regime put in place by this instrument, so why is it not flagged up in the Explanatory Memorandum to this order? Indeed, to take up the point made by my noble friend Lord Rooker, why did our Select Committees not point this out in their analysis of this instrument? My reading is that this is going to be a burden on a very substantial proportion of businesses which conduct business that involves data. Therefore almost all of them that do business on the continent will be required to have a representative on the continent for GDPR purposes which they do not have to do now and will not have to do if there is a deal because we would have continuity of the existing GDPR arrangements.
Lord Ashton of Hyde
It is true that they may be required to have representatives in the EEA, and it is a reciprocal benefit. The impact assessment looks at the specific requirements of the SI, not at the requirements of leaving the EU. The long-term consequences for business—
Lord Wallace of Saltaire (LD)
I thought I was going to listen to a debate on a specific SI, but there are some very large principles here about the way in which this House should be handling the very large number of SIs which we are expected to get through in the next two to three weeks. If it is correct to say that the Treasury has now laid down that there should be no impact assessment because we can all rely on what the Government told us in general about the implications of leaving the EU, that seems to be close to being totally improper and at the very least to require a formal Statement to this House about how we are expected to deal with this very large number of statutory instruments.
In the circumstances, the most appropriate thing would be for the Minister to withdraw this statutory instrument and to come back in a few days after there has been some consultation on it among the Front Benches. If he is not able to do that, at the very least he should promise that tomorrow there will be a formal Statement to the House on how statutory instruments will be handled from now on. It seems that we are heading into an area where statutory instruments are not being properly scrutinised by this House.
Lord Ashton of Hyde
I find it difficult to understand how the noble Lord can say that the SIs are not being properly scrutinised by this House, particularly in comparison with the scrutiny that this instrument received in the other place.
Lord Ashton of Hyde
I agree with the noble Lord who is saying from a sedentary position that that is why he is here and why it is important. However, taking my personal experience of the telecoms SI, an hour and a half in the Moses Room and an hour in the Chamber seems to be pretty reasonable scrutiny. As for how the House in general and the Government are handling SIs—
Baroness Kramer
This is not just a matter of time; it is whether people have the appropriate information to be able to raise and challenge issues. That is the underlying issue that the Minister is running into in this House.
Lord Ashton of Hyde
I understand that point, and the noble Lord, Lord Adonis, made it to me forcefully in the Moses Room. This SI has been laid for some time and there have been opportunities for noble Lords to talk to and engage with anyone from the DCMS. I take the point that it is sometimes difficult for Back-Benchers to get information if they do not ask the department. However, I think that the Front Benches have been fairly open in exchanging information on any SI—that is certainly the case in my department. I offered the noble Lord, Lord Adonis, opportunities to ask questions well before the debate, as I think he acknowledged.
It is not for me to say how the House and its sifting committees behave and how the two committees have liaised with each other. However, I will take the noble Lord’s request back to the usual channels. I will not commit to there being a Statement tomorrow but I will certainly take back his point to make sure that the usual channels listen to what he has said. The making of Statements will be up to them—that is not for me; nor is it for me to comment on the work of the sifting committees of your Lordships’ House.
Lord Wallace of Saltaire
My Lords, this morning I read a new Commons briefing on the amount of legislation that needs to have been completed to enable us to leave the EU on 29 March in good order. The answer is eight Bills, as well as, still, several hundred SIs. The Government Front Bench keeps telling us that it is perfectly possible to manage that within the next six weeks but, in spite of the remarkably light business that we have this week, it seems that we are very much in Alice in Wonderland territory here. We cannot manage all that within that period, even if we are asked to skimp on the SIs. We know that part of the problem is that the Civil Service cannot manage the impact assessments for these SIs because it is so overloaded and this Chamber is unable to do its job appropriately. The Government have therefore left it too late to be able to leave the EU in good order constitutionally and legislatively on 29 March. I would like the Minister to take that back to the rest of the Government Front Bench, and a Statement to the House on how we should manage this from now on would, I think, be appropriate.
Lord Ashton of Hyde
I thank the noble Lord for his view. It is clearly not for me to promise a Statement to the House. As I said before, I will agree to take back what he said and put both interventions to the House authorities. They may or may not agree. If they do not, I am sure that he will be able to raise it in an appropriate forum direct with the usual channels—both via his own Chief Whip and also directly with the Leader of the House and our Chief Whip. However, it is not appropriate, in considering an SI, to move beyond that to the wider method used by the House to address statutory instruments. Ministers certainly feel that they have been scrutinised considerably. I do not see that the noble Lord, or others who have spoken on this, are suffering from a lack of information with which to scrutinise these statutory instruments; they seem to be scrutinising fairly effectively as far as I can tell.
My response to the point made by the noble Lord, Lord Adonis, about the effect of representatives on business, is that the need to have a representative in the EEA is not as a result of this statutory instrument—it is as a result of EU law. Therefore, as I said before, the fact that we will no longer be part of the EU means that EU law will apply to us as a third country; until now, we have not been a third country.
Lord Adonis
I seem to have misunderstood. I thought we had got clarity on this situation. While we are a member of the EU, a company needs to have only one representative in the EU—if I have got that right—whereas under the no-deal Brexit scenario, if the company is based in the UK and does business involving data exchanges or transfer in the EEA, it will need to have two. That is a very important point. It is not the case that the status quo will continue: there will be a fundamental difference once we are outside, because then we will be a third country as far as the EU is concerned. The reciprocal arrangements mean that UK businesses doing business on the continent will need to have a data representative in the EU and vice versa, which is not the case at the moment in respect of the EEA. Is that correct?
Lord Ashton of Hyde
I do not think that is correct, but I will write to the noble Lord to confirm it.
Lord Adonis
This is a fundamental issue; it goes to the heart of these regulations. The House should absolutely not agree to these regulations without us being clear in this debate on whether there will be a requirement to have data representatives in both the UK and the EEA reciprocally in the event of a no-deal Brexit. That is fundamental. My reading of these regulations is that this will be a requirement and that is what I took the noble Lord to be confirming earlier in the debate.
Lord Ashton of Hyde
I think the noble Lord has mis-stated it. The reciprocity is that an EEA company will be required to have a representative in the UK and, likewise, a UK company will be required to have a representative in the EEA.
Lord Adonis
That is not the case at the moment, while we are in the European Union. That is the key point, is it not?
Lord Adonis
There will be a fundamental and massive increase in burdens as a result; this is the key point that I am trying to get across, which is not in the Explanatory Memorandum at all. It is not necessarily a point about leaving the EU. If we have an agreement, with an implementation period and so on, there will not be that requirement until we leave the existing regime. These are fundamental issues, which should have been brought up well before this debate started. The fact that the noble Lord cannot even definitively confirm the arrangement is quite a serious problem for us.
Lord Ashton of Hyde
I am sorry, but I do not agree with the noble Lord. When we have the UK GDPR, which these regulations will bring into place, there will be reciprocity in the need to have representatives in each other’s countries. I agree that this will be a change. We do not need them at the moment because we are in the EU, but this will be a result of leaving the EU.
Baroness Kramer
I want to get some clarity on this and perhaps the Minister will be able to help me. He is quite clear that, for a wide variety of companies, there will need to be one representative in the UK and, he seems to imply, one representative in the EEA. Is that correct, or does there need to be one in each country within the EEA—or does the individual in the EEA have to deal with different regimes because of the different local regulators and because it is representing a third country in its work? I am trying to work out how great the burden that he has indicated will be, even though he does not think that it will be part of the impact.
Baroness Ludford
Before the Minister answers, I would like to press again this idea that an impact assessment is not needed since the impact comes from leaving. I say no to that; it depends how you leave. The Minister and I may differ on the desirability of the Prime Minister’s deal, whatever that is going to be, but there is a difference between crashing out and having a transition with a political declaration which may avoid the need for duplication; we do not know what the data protection provisions will be in the future relationships. We all hope that there will be a strong degree of mutual recognition, but the immediate impact of crashing out with no deal—with a void where any adequacy decision or future reciprocal relationship between regulators would otherwise be—is quite different. First, it is different from having a standstill transition and, secondly, it is different from having the prospect, or at least the hope, of a long-term relationship that preserves something of the single market. We need the impact assessment to assess the difference between those two scenarios; that is what the Minister does not seem to grasp.
Lord Ashton of Hyde
I agree with the noble Baroness that, if we leave with a deal, that is a different scenario from leaving with no deal. That seems an obvious fact and it is why the Government are trying to leave with a deal, which is what the Prime Minister is trying to achieve. This is a no-deal exit SI to prepare for that eventuality. If we leave with no deal, the object of the exercise will be to preserve the GDPR standard of data protection, which this SI will do. To return to the point raised by the noble Lord, Lord Adonis—sorry, it might have been raised by the noble Baroness, Lady Kramer—the requirement to appoint one representative in the EEA is, as I said, a result of EU law.
I say again to the noble Lord, Lord Adonis, regarding the impact on business of Article 27, that we think that if controllers based abroad are routinely processing the data of people in the UK then it is right that they should be accountable and have a presence in the UK, because it is about trying to maintain the status quo as far as possible for individuals and not rolling back their data protection. The representative is a point of contact for the data subject as well as supervisory authorities such as the Information Commissioner.
I turn to the points made by the noble Lord, Lord McNally, about the complexity for organisations potentially subject to dual regulation. The point of this instrument was to ensure the minimum disruption to organisations and to data subjects by trying to retain the effect of the data protection legislation where possible. The relationship is absolutely changing but the instrument ensures that we can co-operate on an international level with not only the EU supervisory authorities but those in other countries; that is why we have kept Article 50 of the GDPR. Where he is right, and I accept that he is right in this, is that if we move away from the GDPR—if the UK GDPR moves away from the EU GDPR—that will have consequences for the adequacy decision that we hope to achieve, which will be reviewed by the EU Commission. It is important that the EU has confidence that our data protection regime is “essentially equivalent”, which is what the adequacy decision is based on. Anything that we do in future will have to bear in mind that our data regime is essentially equivalent so that it gives the EU confidence.
I agree with the noble Baroness, Lady Ludford, that in previous times there were elements that were outside EU competence that it could not look at, but now of course in an adequacy decision it will be able to look at those. Again, as it does in other adequacy decisions, it will look at the overall adequacy requirement and say whether or not it is essentially equivalent. That is why the adequacy decision is not immediate. Where we start in a good place compared to other regimes is that we have started with an equivalent regime to the extent that we have enacted the GDPR, which other third countries have not. We start on a level playing field in that respect.
The noble Baroness talked about the US privacy shield and the reason why we are going to lay another set of regulations. The discussions on the US privacy shield were ongoing when this SI was laid and therefore we could not wait. It was our priority to lay this SI so that we had an ongoing regime in the event of no deal. Now that that has been agreed between us and the US, though, another SI will be laid—it may even have been laid—to ensure that the US requirements continue, and I think that will happen very soon.
The noble Baroness asked about the EDPB’s recently published guidance on the implications of the UK’s exit. That guidance confirmed that, if the EU Commission does not make an adequacy decision in respect of the UK, EU firms will need to put in place alternative transfer mechanisms, such as standard contractual clauses to continue to transfer personal data to the UK.
The noble Baroness suggested that the political declaration only covered adequacy. That is not right: paragraph 9 addresses the free flow of data while paragraph 10 addresses regulatory co-operation.
The noble Lord, Lord Adonis, and the noble Baroness, Lady Ludford, talked about consultation. The difference between this SI and many others is that the Data Protection Act came into force less than a year ago; it was enacted after extensive discussions in this House and the other place, after the referendum discussion had taken place. Those noble Lords who participated in the Data Protection Act discussions, which lasted for many weeks, all know that matters such as data adequacy were raised numerous times. The whole purpose of the Act, and the mixture between regulations and derogations from regulations, was that we would be on as level a playing field as we could be when it came to getting an adequacy decision.
Lord McNally
I withdraw the word “farce”. However, while the Minister is putting great emphasis on the good fit between what he is proposing and the GDPR, the reason why that good fit exists, as I said in my remarks, is that the GDPR itself was massively influenced by British officials, who played a major role in its construction. What he is gliding over in his assurances is that if, as is likely, there are changes in the European GDPR in future then we will be coming, like the Norwegians, only to listen and accept—because, make no mistake, if there are changes in future, it will be massively in Britain’s interest to accept them. This is the loss of sovereignty that the whole process is trying to glide over. We will not have the same influence on data protection in future as we have had in the GDPR itself, which is why the fit is so comfortable at the moment.
Baroness Ludford
Forgive me, but I would like to follow up on that. I really think the Minister is overselling what is in paragraph 9 of the political declaration. Last June, the Government issued a technical note about wanting a legally binding data protection agreement, and I described that earlier as a “Brexit in name only” kind of arrangement. They wanted that because there are,
“benefits that a standard Adequacy Decision cannot provide”.
Except for one sentence in paragraph 10 that talks about arrangements for appropriate co-operation between regulators, paragraph 9 is about a standard adequacy decision—no less but certainly no more. It talks about the European Commission recognising,
“a third country’s data protection standards as providing an adequate level of protection”.
It is not what the Government hoped for last June. I do not understand why the Government are trying to pretend. We can all read paragraph 9 once we have googled it and reminded ourselves, so to say that it is more than an adequacy assessment process is simply not true.
Lord Ashton of Hyde
I understand the point from the noble Lord, Lord McNally, that our new position will not be the same as being in the EU. If we were a third country, I would expect us to have less influence than if we were a member of the EU. I am not denying that; it seems obvious. He is absolutely right that the GDPR was influenced by the UK, not only by officials in the negotiations but specifically by the ICO, which is regarded as one of the leading regulators in Europe. Of course, it will not have the same position as it did if we are not in the EU; I take that point.
However, I do not base everything on just the political declaration, which may or may not have some influence. It is also that we have retained Article 50 of the GDPR. I cannot remember the exact words, but it is on the basis of that that the EU talks about international co-operation with third countries, so there is a mechanism. As I said to the noble Lord, Lord McNally, it will not be the same, but there are bases for international co-operation. The EU wants that to happen and understands that in things such as data protection, you have to have an international consensus. In fact, on that, it is more important to go beyond the EU and do it internationally. Other organisations should—and do—take views on this. I think we are at the start of the journey on control of cross-border data flows and it will provide a further basis to influence behaviour.
On adequacy, it is easy to ask for detailed timelines on when this will take place. It will not take place on exit day, because it is not possible for the EU to give an adequacy decision unless you are a third country. Preliminary discussions—which, as the noble Baroness, Lady Ludford, has indicated, may take some time—could begin now and we are ready to begin those discussions as soon as we can. We are already liaising with the European Commission—in fact, senior officials were in Brussels for talks last week—and we have liaised with member states on this subject. When the EU is ready to begin discussions, we are confident that we will be ready, but it is impossible to say how long that will take because, as the noble Baroness said, it is not a decision that is in our gift.
However, we start from a position of regulatory alignment on data protection. We implemented the GDPR and the law enforcement directive. We have also taken a GDPR approach on data protection to areas that were outside EU competence, such as law enforcement and national security, so we start in a very good position. In fact, it is such a good position that the UN special rapporteur on the right to privacy declared that the UK now co-leads in Europe and globally on privacy safeguards, and has made significant improvements in its oversight system since 2015. He said that,
“the UK has now equipped itself with a legal framework and significant resources designed to protect privacy without compromising security”.
It is important to note that there is a strong mutual interest in data adequacy.
The noble Lord, Lord Adonis, said that it is unsafe to pass this SI. I would like to point out what that would mean, if it is not passed and we have a no-deal exit. It would mean that we would cease to have properly functioning data protection law. The whole basis for adequacy decisions, which I think we all agree is very important, would go, because we would not be on a reciprocal basis—
Lord Adonis
Would the noble Lord agree that a better course would be for the Government to rule out no deal?
Lord Ashton of Hyde
I am talking about data protection. We want a deal; I think everyone agrees on that. The question is whether going into a negotiation saying that is a good way to approach the negotiation.
As well as the basis for adequacy going, there would be no transitional arrangements to enable lawful personal data to transfer to the EEA. The noble Lord, Lord Adonis, is concerned about business expenses; for that reason, that would not be a sensible way of going forward.
On the adequacy decision which my honourable friend Margot James mentioned, I do not have her remarks before me, but I believe she said something about two years. I think what she meant was that other countries’ adequacy decisions have sometimes taken two years, but we see no reason for it to take two years in the UK’s case, because, as I said, we are equivalent. I think I have answered most of the points that noble Lords raised.
Lord Wallace of Saltaire
I apologise for interrupting the Minister again. He said we are now undertaking “preliminary discussions” about how this would be handled if we leave without a deal, but that these discussions “may take some time”—I think I heard him say that. Is he suggesting that, if we leave without a deal on 29 March, there will be an unavoidable gap in mutual recognition of data protection law, which we—or rather businesses—will have to cope with somehow? That may have a significant adverse impact.
Lord Ashton of Hyde
Yes, because it is literally impossible to have an adequacy decision until you are a third country. Therefore, you cannot have an adequacy decision in advance. What you can do, and I should have said preliminarily that we have been discussing this—I raised it over a year ago—is start the discussions with the EU, but the decision itself cannot be made before exit day. It is impossible.
Lord Ashton of Hyde
There are mitigations which prevent that—standard contractual clauses and binding corporate rules. Plus, it depends a lot on the proportionate approach that the regulators in the EU take. There would be an impact; we would have to arrange mitigations, which would be a cost to business. That is what has been set out in the technical notice to business.
Baroness Ludford
The Minister is making a very good case for why there should have been an impact assessment.
Lord Ashton of Hyde
I am making a very good case for why we want a deal. As I have said several times, we want a deal.
I think I have been through most of the questions raised by noble Lords. The important thing about this statutory instrument is to have a fully functioning data protection regime. If we go back to the original reasons why we passed the Data Protection 2018 with a fair bit—a lot, I would say—of cross-party support, the reason that it is important is to give individuals protection for their personal data. We must bear that in mind. These regulations will preserve that protection for individuals and set us on the road to a successful conclusion of our adequacy agreement when we get to the stage where the EU will allow us to negotiate it. That is why I beg to move.
Syria: UK Nationals
Baroness Barran (Con)
My Lords, with the leave of the House, I shall now repeat as a Statement the Answer given in the other place by my right honourable friend the Home Secretary to an Urgent Question on UK nationals and Syria. The Statement is as follows:
“Mr Speaker, may I start by paying my respects to the honourable Member for Newport West? Our sympathies are with his loved ones and all those in this House who were close to him.
Can I welcome the Urgent Question from my honourable friend? My priority as Home Secretary is to ensure the safety and security of this country. We cannot ignore the threat posed by those who chose to leave Britain to engage with the conflict in Syria and Iraq. Over 900 people took this path. Without the deradicalisation work of our Prevent programme, there could have been many more. Whatever role they took in the so-called caliphate, they all supported a terrorist organisation and in doing so have shown that they hate our country and the values that we stand for. This is a death cult that enslaved thousands of Yazidi girls and celebrated attacks on our shores, including the tragic Manchester bombing that targeted young girls.
Now this so-called caliphate is crumbling and some of them want to return. I have been clear that, where I can and where any threat remains, I will not hesitate to prevent this. The powers available to me include banning non-British people from this country and stripping dual nationals who are dangerous of their British citizenship. Over 100 people have already been deprived in this way, but we must, of course, observe international law and cannot do this where it would leave someone stateless. So, where individuals manage to return, they will be questioned, investigated and potentially prosecuted.
Our Counter-Terrorism and Border Security Act, which got Royal Assent just last week, provides more powers to prosecute returnees. It extends the list of offences we can act on when they are committed overseas and it creates new laws to ban British citizens from entering designated terrorist hotspots without good reason. Our world-class police and security services closely monitor all those returning who pose any risk. We do not hesitate to use the range of tools at our disposal, including using temporary exclusion orders to put in-country restrictions in place and managing risk through terrorism prevention and investigation measures.
The House will have seen the comments that Shamima Begum made in the media and will draw its own conclusions. Quite simply, if you back terror, there must be consequences”.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I thank the noble Baroness, Lady Barran, for repeating the Answer given to an Urgent Question in the other place earlier today. I endorse the comments made about the honourable Member for Newport West in the other place.
Keeping our country safe must be the number one priority for the Government, and they will always have my full support in doing that. We must not forget the countless victims of ISIS and the caliphate who have been murdered and abused. Can the Minister confirm that, notwithstanding the comments of the Home Secretary, anyone returning from Syria will find themselves subject to a rigorous police investigation and potential prosecution to the full extent of the law? Will she also confirm that, as this country believes in the rule of law, democracy, freedom and justice, anyone found in that position will be given the opportunity to seek legal advice and prepare a defence for themselves in court, if the appropriate tests are met and charges brought, and will benefit from a fair trial?
Can she also comment on any plans that the Government may have to designate parts of Syria, as permitted by the Counter-Terrorism and Border Security Act 2019? Finally, can she comment on what happens to those individuals who in the end do not have charges brought against them when they are back in the UK?
Baroness Barran
I thank the noble Lord for his questions and am happy to confirm that anyone returning to this country would be questioned and investigated and, if there is sufficient evidence, prosecuted. The principle of a fair trial is one that this country has held dear for many years and we do not intend to change that.
In relation to the new proscribed areas, I will take this opportunity to thank the noble Lord for the support we received from him and his colleagues on the Opposition Benches in the passing of the Counter-Terrorism and Border Security Bill. In anticipation of introducing the proscribed areas, we have been working on those, but I remind him that it will require the approval of Parliament for any new area to be so designated—and there will not be retrospective designation.
Baroness Hamwee (LD)
My Lords, the Statement mentions observing international law—without any huge degree of enthusiasm, as I read it. Can the Minister tell the House what nationality is Ms Begum’s child? Does the UK have any responsibility towards him as it does to all British citizens—as of course the Minister knows?
Baroness Barran
I cannot comment on any individual case or the nationality of Ms Begum’s child, but I can make a few comments in relation to children more generally who return to this country. Obviously, each case is taken on its merits, but the noble Baroness may have heard my right honourable friend say in the other place that it is the responsibility of the parent to consider the risks that they subject a child to by going to a country that has been clearly advised as unsafe to travel to, and without any consular presence there. This Government have made more than 50 children wards of court to prevent them leaving. My right honourable friend in the other place also pointed out the risk to future children in such situations—but, unquestionably, having any child caught up in such circumstances is a tragedy.
Baroness Berridge (Con)
My Lords, can I clarify something that my noble friend the Minister outlined? Although she cannot comment on specific cases, where the Home Secretary has to make a decision and the decision involves a parent and a child, how many decisions are actually being made? There is a long-standing principle in our family courts that the interests of the children are often not the same as those of the parent. It cannot be the case here that they are, when the parent has obviously been involved in some kind of terrorist activity or sympathy with it, but the baby clearly has not. It is important to know from the point of view of judicial review how many decisions the Home Secretary has to make in any case where a parent and a child are being considered if, under the Nationality Act, they are almost certainly both British citizens.
Baroness Barran
I thank my noble friend for her question. I will have to write to her in relation to numbers—I do not have that information at my fingertips—but she is right to point out the risk and harm that these children have experienced. We expect children returning from Syria to have been exposed to conflict, potentially indoctrination, and almost certainly to have experienced severe trauma. A range of specialised support will be necessary to address those concerns, with all aspects of safeguarding being considered and tailored to the needs of the individual child.
Lord Faulks (Con)
My Lords, the House may have heard the lawyer representing Ms Begum asserting that there was no law which was in any way going to be found adequate to deal with what might or might not be considered offences committed by her. My noble friend may recall that during the passing of the Counter-Terrorism and Border Security Bill, my noble friend Lord Hodgson of Astley Abbotts and I put down an amendment suggesting that it was time to update the 1351 law in relation to treason, based on a Policy Exchange paper. Might my noble friend care to reconsider the Government’s opposition to that amendment, and to take into account that a suitably updated law would in fact deal with many of the problems that are now coming up?
Baroness Barran
I thank my noble friend for his question. I am ashamed to say that I did not remember that it was his amendment, but I do remember the amendment. This point was raised in the other place, and my right honourable friend the Home Secretary confirmed that he would always keep under review all the tools at our disposal. Obviously powers have been increased and developed through the Counter-Terrorism and Border Security Act that came into law just last week, but he reassured the other place that he would continue to look at these issues carefully.
Lord Cormack (Con)
My Lords, why cannot my noble friend comment on the nationality of the child?
Baroness Barran
I thank my noble friend for repeating the question. I know no more than is in the newspapers. It would appear that the child has a British mother and a Dutch father, but I know no more than that.
Lord Marlesford (Con)
My Lords, will the Minister assure us that this Government will never divert the all too limited resources that are available for giving refuge to the innocent, to giving facilities for enemies of this country to enter or return to this country?
Baroness Barran
I can only repeat that obviously the security of our citizens remains our pre-eminent concern, and hope I can reassure the noble Lord on his concerns.
Flybmi
(5 years, 8 months ago)
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The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)
My Lords, with the leave of the House, I will repeat in the form of a Statement the Answer given by my honourable friend the Parliamentary Under-Secretary of State for Transport to an Urgent Question in the other place. The Statement is as follows:
“On 16 February 2019, British Midland Regional Limited, the East Midlands-based airline which operates as Flybmi, announced that it had ceased operations from that date and filed for administration. The group has surrendered its licence to operate in the UK, which means it is no longer able to operate flights. There has already been significant speculation about the reasons behind Flybmi’s failure. Ultimately, this was a commercial matter for the airline.
Flybmi operated in a very competitive industry and was exposed to wider pressures faced by the global aviation industry, such as increasing fuel prices. It is very disappointing that Flybmi has gone into administration, and we know that this will be a very difficult time for those who have lost their jobs as a result. Many of those affected are highly skilled; we are confident they will find suitable employment opportunities, and we welcome the moves by the sector to offer opportunities to those affected.
The Insolvency Service’s redundancy payments scheme is working with the administrators of Flybmi to ensure that former employees’ claims from the National Insurance Fund, which may include redundancy pay, holiday pay, arrears of pay and compensatory notice pay, are assessed as quickly as possible. With the sector ready to recruit, I hope new jobs will be found quickly.
I also recognise that this is a disruptive time for passengers, also very distressing, and the Government’s immediate priority is fully focused on supporting those affected. We are in active contact with airports, airlines and other transport providers to ensure everything possible is being done to help them. We and the Civil Aviation Authority are working closely with the travel industry to ensure this situation is managed with minimal impact to passengers. There are enough spaces on other flights for passengers to return home on other airlines, and we welcome the sector’s move to offer rescue fares for affected passengers. For example, Flybmi has codeshares across the Lufthansa Group. Passengers on these flights will be subject to EU passenger protection rules and will be provided with assistance and rerouted to their final destination.
Travel insurance and credit card bookings are worth noting here. Most passengers were business, and this will also be covered through their work. In addition, the CAA is providing detailed information for affected passengers on its website, including how people can claim back money they have spent on tickets.
The Government recognise the importance of maintaining regional connectivity, and that is why we fund a public service obligation route from Derry/Londonderry to London, which was recently extended from 1 April 2019 for a further two years, the norm for PSOs. The chief executive of Derry Council has the power to transfer the PSO contract to another airline for up to seven months to allow for a new procurement process to be conducted. Subject to due diligence, we expect the council to sign contracts and appoint an airline later this week, and we are expecting services to resume swiftly. Derry and Strabane Council will take forward that part—it is its responsibility.
All affected regional airports have been contacted and while they are disappointed, we are confident this will not cause them significant issues. A number of airlines have already indicated they will step in to replace routes previously served by Flybmi. For example, Loganair has publicly announced that it will cover routes from Aberdeen, Bristol and Newcastle.
Our priority is to protect employees, passengers and local economies. We are fully focused on supporting those affected and remain in close contact with industry and the CAA to ensure everything possible is done to assist”.
Lord Tunnicliffe (Lab)
My Lords, I thank the Minster for repeating the Answer to the Urgent Question. Eighteen months ago this House questioned Ministers on the collapse of Monarch Airlines, and we were promised things would change—yet here we are.
The Transport Secretary has dithered and delayed for nearly a year in bringing forward new rules on airline insolvencies, so we must ask Ministers what they have been doing. Flybmi has been in difficulty for some time, so what plans did the DfT have for an airline collapse? What plans does it have, or is it putting in place, should another airline be forced into this position?
Why was the airline allowed to sell tickets only hours before entering administration? The Minister detailed some of the actions being taken to support passengers left stranded by cancellations. Do the Government have an estimate of how many UK residents have been affected?
The Minister alluded to the fact that last week the Government agreed to extend the subsidy of Flybmi’s London to Derry route. We have gone from a ferry company with no ferries to a flight path with no flights. Was the DfT aware that the airline was about to collapse when it agreed this commitment of public money? What checks did Ministers do on the airline prior to extending the commitment?
Baroness Sugg
I thank the noble Lord for his questions. On how we are dealing with airline insolvency in the future, we have commissioned an independent review led by Peter Bucks to review consumer protection in the event of an airline or travel company failure. It is looking at options including an orderly wind-down of an airline so that it is able to conduct and finance repatriation options without impact on the taxpayer. The review is also looking at the lessons learned from the collapse of Monarch, and will identify potential market reforms necessary to ensure that passengers are protected when an airline fails. This is a complex issue and it is an extensive report. We are expecting the report in the spring.
Initial estimates are that fewer than 1,000 affected UK-originating passengers are overseas. Many will have already made their way back; many will have been planning to stay abroad. We understand that about two-thirds of those booked to return were on code shares, and those bookings will be honoured.
On the PSO, the department and the CAA were not informed of the administration until very shortly before the directors agreed to it. To be clear, the contract for the PSO is directly with the city of Derry and Strabane council. They are the people who run that contract and it is they who will re-let it shortly.
Baroness Randerson (LD)
My Lords, I thank the Minister for her Statement. The company cited Brexit as one of the reasons for its problems. First, the fall in the value of the pound in the past two and a half years has obviously meant that people are finding it more difficult to afford holidays abroad. It mentioned the spike in fuel and carbon costs caused by our exclusion from full participation in the EU Emissions Trading Scheme—we have been suspended from that until the withdrawal agreement is in place. The company said that it was unable to secure valuable flying contracts in the EU because of Brexit uncertainty.
On Saturday, we had Flybmi; today, we have the very sad news about Honda in Swindon. The trickle of job losses has become a steady flow. Today as well, we have the UK Trade Policy Observatory estimating some 750,000 job losses—that is a conservative estimated—as a result of Brexit uncertainty. What plans do the Government have to retrain people who lose their job because of Brexit uncertainty? What plans do they have to find new jobs for them? Have they estimated the total cost to our economy of retraining people and providing them with benefits while they are unemployed?
Baroness Sugg
Both the UK and the EU have made it very clear that we want flights to continue after Brexit. We and the EU are taking the necessary actions to ensure that this will be the case in the event of no deal. This sad event is a commercial matter for the airline in a competitive industry. BMI has been exposed to wider pressures faced by the global aviation industry such as increasing fuel prices and intense competition. Other EU airlines have collapsed in recent years; for example, Germania, Primera Air, Air Berlin and flyvlm. This is not just a UK issue. I agree with the noble Baroness that businesses want certainty. I am afraid that that I do not have any figures on jobs and retraining, but I regularly hear requests for certainty from the aviation industry. That is why we are working to deliver a deal and the implementation period that comes with it. I hope that that will be agreed soon so that we can give businesses the certainty they need.
Lord Carlile of Berriew (CB)
Does the Minister agree that this diminution in services to and from provincial airports in the United Kingdom raises real questions about the viability of some of those airports? Does she also agree that having a good network of provincial airports is extremely important to the UK economy and the passenger group who wish to travel? Will she assure us that the Government will look at this problem as a matter of urgency?
Baroness Sugg
I agree with the noble Lord on all those points. We are seeing supply outstrip demand on many of these routes. BMI cited 19 passengers per flight on a 50-seater plane; obviously, that would be very difficult to sustain. We are seeing other regional airlines take on those routes, but there is an excess of capacity. I agree with the noble Lord also on the importance of regional airports. Maintaining that regional connectivity is key. We provide a PSO on lifeline routes. Our aviation strategy, on which we published a consultation in December last year, looked at how we might support regional airports. They are important in providing connectivity not only for people but for freight and trade, and can act as a multiplier for local and regional economies. It is very important that we support them.
Baroness McIntosh of Pickering (Con)
My Lords, will my noble friend further address overcapacity, which she just mentioned? When airlines such as Ryanair and EasyJet are not making money, seeing their share price fall and issuing profit warnings, it obviously has implications for the whole industry.
Baroness Sugg
I agree with my noble friend. It is a challenging time to be in the aviation industry at the moment for many reasons. We are seeing airlines having to address those challenges. Ultimately, they are commercial enterprises, and the share price will be dictated by demand and their profitability. Through the aviation strategy consultation, we are looking to support the industry. The UK aviation sector is incredibly important to the UK economy, providing £22 billion per year and hundreds of thousands of jobs. We want to make sure that our aviation strategy helps it continue in its success.
Lord Blunkett (Lab)
My Lords, I have a tangential interest. I know that the Minister, for whom I have enormous respect, has an interest in what are called in technical jargon passengers with reduced mobility; that is, those who require assistance. Is she satisfied that the industry and government are doing enough to help those who will be stranded? Quite a number of them are extremely worried.
Baroness Sugg
I thank the noble Lord for his question. Yes, we are satisfied that we are doing everything we can to help those passengers who are stranded. The CAA and the department are working closely with airlines. Detailed information on that is on the website. As always, we need to make sure that we pay special attention to PRMs, as they are called, to ensure that they receive the support they need to get home.
Lord Kilclooney (CB)
I welcome the Statement by the Minister. I thank the Government for the speed with which they have attended to the problem in Londonderry and the north-west of Northern Ireland. Airlines depend on passengers. The special support that the Government are giving the route from the City of Derry Airport to London is very much appreciated, not only in Northern Ireland but also in the Republic of Ireland, because Donegal uses the airport. Does the Minister recall that more than two years ago, when there was no such thing as Brexit, Ryanair withdrew from the Derry to London route, not because of Brexit—because it did not exist—but of lack of passengers?
Baroness Sugg
The noble Lord is quite right that these routes will be dictated by passengers. However, as I mentioned previously, we have public service obligations, where the Government will provide funding to maintain these important routes. Perhaps I may provide further reassurance on the PSO route from Derry. Derry City and Strabane District Council have been in contact with a number of airlines. An emergency process is being invoked which allows the council to appoint another airline to take over the PSO for seven months without the full tender exercise. The department is working closely with the council to find a suitable alternative carrier on that route. We hope that an announcement will be made shortly.
Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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Lord Bates
That the draft Regulations laid before the House on 17 January be approved.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, this SI is an important part of the Treasury’s programme of legislation under the European Union (Withdrawal) Act 2018. It will address deficiencies related to the EU’s equivalence framework for financial services, and will make provisions for elements of the UK’s stand-alone equivalence framework for financial services, in a scenario where the UK leaves the EU without an agreement.
Many noble Lords will be familiar with the EU’s framework for equivalence. EU legislation allows the European Commission to determine that a country outside the EU—often termed a third country—has a regulatory and supervisory regime in a particular area of financial services that is equivalent to the corresponding EU regime. Granting equivalence is a key component of financial services regulation and supports cross-border activity. Equivalence decisions can reduce or eliminate overlaps in regulatory and supervisory requirements, thus decreasing regulatory burdens on firms. Some equivalence decisions provide improved prudential treatment, or facilitate the exchange of services. This can lead to increased competition, which benefits firms and consumers, while protecting financial stability.
Before making equivalence decisions, the Commission will undertake an assessment and may ask the European supervisory authorities for technical advice to support it. As an EU member state, any equivalence decisions made by the Commission currently have effect in the UK. In a no-deal scenario, the UK would be outside the EU’s equivalence framework. The Government place significant importance on having a functioning, stand-alone equivalence regime which will support our future relationship with the EU and other financial centres with which we want to build stronger partnerships.
Noble Lords will be aware that other Treasury statutory instruments which have completed their passage in Parliament have already transferred some equivalence responsibilities from the Commission to the Treasury, and functions from the ESAs to the UK financial regulators. Through these SIs, the Treasury has maintained the same substantive criteria that the EU uses to judge equivalence.
The SI does three main things to support a stand-alone UK equivalence framework in the event of a no-deal exit. First, it replaces the functions given to the ESAs with functions for the UK financial services regulators and creates an obligation for the Treasury and the UK regulators to enter into a memorandum of understanding that sets out how they will support equivalence assessments.
Secondly, the SI corrects deficiencies in existing equivalence decisions made by the Commission—for example, replacing references to the “Union” with references to the “United Kingdom”. Fixing these decisions is important to minimise disruption for some UK firms with businesses in equivalent third countries, and for some overseas firms which currently rely on these decisions.
Thirdly, the SI creates a temporary power for Ministers to make equivalence and exemption decisions for EU and EEA member states by direction for specified equivalence regimes listed in the SI. This is separate from the permanent arrangements for making equivalence decisions, which will become available only after exit and will require regulations subject to the negative resolution procedure. This temporary power is needed to prepare for the particular circumstances we would face if we left the EU without a deal.
As an EU member state, the UK has not previously needed powers to determine whether the EU is equivalent. However, in a no-deal scenario it will be important for the Treasury to have powers to make such decisions in time for exit day, to respond quickly and effectively to any risks to the financial system and to avoid disruption for firms and markets. To illustrate why these powers are required, I point the House to the European Commission, which has published several draft legal Acts granting certain technical exemptions to UK public bodies in a no-deal scenario. The Government would grant similar exemptions for relevant EU bodies in such a scenario, and this SI contains the powers to allow such exemptions to be put in place by exit day.
To ensure transparent use of the temporary power, this SI will oblige Ministers to lay directions before Parliament and to publish them. Noble Lords may have seen that the Treasury Select Committee wrote to the Economic Secretary to the Treasury on 7 February asking if 12 months was long enough for this power, given that other transitional regimes in financial services have been passed with longer periods. The Treasury’s response to the committee, published last week, emphasised that this power was needed only to mitigate the risks around exit. The Treasury expects that the permanent mechanism for taking equivalence decisions by regulations, subject to the negative resolution procedure, will be ready soon after exit day. As a result, the Treasury judges that 12 months is sufficient for this power.
The Treasury has worked closely with the Bank of England, the Prudential Regulation Authority and the Financial Conduct Authority in drafting this instrument. The Treasury and the regulators have also ensured that the resources are in place to take on these functions. The Treasury has engaged the financial services industry and will continue to do so. The regulators and key industry stakeholders have expressed support for the provisions in this SI as necessary to mitigate disruption and to provide legal certainty about the UK’s equivalence system.
This Government believe that the proposed legislation is needed to ensure that the UK has an operable equivalence framework in a no-deal scenario. The powers it contains are needed to ensure that the Treasury and UK regulators are properly equipped to respond if the UK leaves the EU without a deal or an implementation period. I hope noble Lords will join me in supporting these regulations and I commend them to the House.
Lord Sharkey (LD)
My Lords, the equivalence SI shares the same consolidated impact assessment with the next three SIs. I am grateful that this was published in advance of today’s debate and was available in good time in the Printed Paper Office. That is a significant and welcome improvement on last week’s lamentable performance. I would have preferred individual impact assessments, rather than this consolidated one. However, consolidation has the merit of making absolutely clear the unsatisfactory vagueness about the costs and benefits of these SIs and that this arises chiefly from the lack of consultation.
The summary sheet in the IA for this package of SIs notes that the likely cost for all of them is “Unknown: likely significant” in all three defined categories. The benefits are also unquantified, but are said to be “significant”. This rather dramatically illustrates the point made by the noble Lord, Lord Adonis, in his later amendments. There has been no real consultation on any of these instruments. This is unsatisfactory and is entirely the Government’s fault. Had the Treasury started preparing these entirely predictable SIs earlier, consultation would have been possible. Why has the Treasury left things until the last moment? Although I sympathise strongly with the spirit of the amendments in the name of the noble Lord, Lord Adonis, I hope he will not press the fatal ones to a vote as we would not support him in a Division. It is critical to the functioning of our financial services that we make the changes—no matter how unhappily—set out in these SIs.
I turn to the detail of the consolidated impact assessment. The first 40 paragraphs are clear, but some questions arise in subsequent paragraphs and apply generally to all the SIs. Paragraph 44 explains that,
“it has not been possible to discuss the impact of the full package of changes with firms as this impact assessment was being produced, and has therefore not been possible to produce a monetised estimate of their full impact at this stage”.
This is more than a pity: it is tantamount to a dereliction of duty. It would not be the case if the Treasury had started the process earlier. It has had plenty of time to do this: the deadline can hardly have come as a surprise.
Paragraph 50 acknowledges explicitly that the impact assessment,
“is not able to fully quantify the potential impact of these SIs on industry”.
It undertakes, as a result of this self-generated inability, that if these no-deal SIs come into effect in March,
“it will at the appropriate time complete further analysis considering all of the relevant SIs as a package”.
The word “appropriate” is very vague; what does it really mean? Does it mean, for example, in less than three months after a no-deal Brexit?
I do realise that the promised analysis is shutting the stable door long after the horse has bolted, and even longer after the horse gave notice that it would bolt. Nevertheless, Parliament should still have a chance to review the real impact of these SIs on industry. Could the Minister help the House with an explanation of the limits implied by “appropriate” and confirm that Parliament will be given an opportunity to debate the subsequent analysis?
Lord Deben (Con)
I wonder whether the noble Lord is being a little too kind to the Government. Is not the reason we have not had these figures—and we have not had them because we did not start to do the figuring early enough—that when you actually add up the figures you discover that the cost of Brexit is enormously greater than anybody has pretended, and therefore it is to the convenience of the Government and of those who want Brexit not to provide the figures? Does he know of any other occasion when the Government have proposed huge changes and not provided at least some estimate of the bill?
Lord Sharkey
I am grateful for that intervention. The short answer to the final question is: no, I do not. I shall try to be slightly less kind as I move on.
Paragraph 52 of the consolidated impact assessment notes that each of the SIs covered,
“contains provisions with indefinite effect and this is the majority of the content. For this reason, we have concluded that the standard 10 year appraisal period is appropriate”.
This seems to me an entirely perverse conclusion. Ten years is far too long for an appraisal of the effects of instruments containing such wide powers in a complex and critical field, which were produced in very great haste and which lack proper consultation or impact assessment. It would make more sense, and reduce any inadvertent harm, if we were to appraise after, say, two years. I am sure that if the industry were eventually consulted, it would agree with this timing. I would be grateful if the Minister would say why he is proposing 10 years for appraisal and what is wrong with two. Will he reassure the House that he will reconsider the timing of the appraisals? Perhaps he will write to us with his conclusions.
Finally, paragraph 73 of the consolidated impact assessment deals with the impact on the public sector:
“Where changes to the regulators’ rulebooks, or to EU technical standards, are required as a result of leaving the EU, the regulators intend to consult on these changes wherever possible”.
This “wherever possible” is alarming, especially in view of the Treasury’s failure to consult in the preparation of these SIs in the first place. Can the Minister give examples of situations in which it would not be possible to consult on the changes to the rulebooks or the technical standards?
Lord Deben
My Lords, I declare my interest as chairman of the organisation that represents financial advisers and those who manage other people’s money. I come back to the point that the noble Lord has raised. It is very difficult for the industry to understand why the Government have not found it possible to talk in a lot more detail about the costs that are going to be placed upon the industry. After all, the industry pays these costs.
I am a great believer in regulation: I think good regulation is very important. I do not like the way that people sometimes mix bad regulation with the need to have no regulation, but if we are to have good regulation, there are two very important elements. First, it must be clearly understood, and, secondly, the cost must be clearly adumbrated so that people can make proper provision. I agree with the noble Lord who spoke last that it is unacceptable that, first, we do not know in advance; secondly, we will not know until after we have passed these things; and, thirdly, we will have to wait 10 years until we know whether or not we got it right. I have enormous respect for my noble friend, as well as enormous concern, given the difficulties he faces.
Lord Deben
As much sympathy as one can possibly have. I can think of no other Minister I would be more sympathetic to, but I have to say to him that it is pretty difficult to think of another occasion on which a Minister has had to get up and tell the House that he does not know how much something is going to cost, he will not know how much it is going to cost, it is impossible to work out how much it is going to cost, we will not know until after it is all costed, and then we will not know for another decade. I do not think that the Minister will be a Minister in another decade.
Lord Adonis (Lab)
Was the noble Lord in the House to hear the exchanges between the chair of Sub-Committee A and my noble friend Lord Rooker about a letter which apparently is going to be sent to the Treasury, but has not been made available to your Lordships, complaining about the way that consultation and impact assessments have been conducted? It came out only in the course of debate that this letter is in preparation: apparently, the chairs of the two Select Committees cannot agree on the terms of the letter, even though we are in the midst of debating literally dozens of these statutory instruments. Does he not think it would have been a good idea if we had had this letter before this debate? If the relevant authorities of the House are about to write to the Government fundamentally questioning the way that the Government have approached the process of consultation and assessing the impact of these regulations, surely it is not satisfactory for us to be considering these regulations in advance of the completion of that process.
Lord Deben
I was indeed in the House to hear that exchange. It was an amazing, remarkable exchange and another example of the total removal of this whole discussion from reality. It was so unusual that I left the House to recover some sense of sanity. First, it is obviously true that we should have had that letter. We thought that the letter, according to a senior member of the committee, had gone. We were then told by the chairman of the Joint Committee that it was almost gone, or nearly gone, or on the way to going. We did not understand whether it would go or whether it still had to be recovered and discussed. The fact of the matter is, I can think of no more appropriate role for the House of Lords than to tell the Treasury that it needs to be very much more precise and correct in its treatment of this House and of the other place. The answer is that it must at least give the figures, and to do that, it has to have a useful impact assessment, not one which is merely a matter of form.
Lord Adonis
My Lords, the noble Lord is a distinguished parliamentarian of long experience. Does he not worry that the tone of self-congratulation which we always adopt in this House for the way we conduct scrutiny and the excellence of our processes is coming under serious strain as a result of this no-deal regulation process? The earlier exchanges raise fundamental questions as to whether we are fit for purpose in the way that we are conducting this process ourselves. If it has taken us six months into this no-deal regulation process even to seek to agree an approach to the Government on how they should conduct consultations and impact assessments, does that not fundamentally question the whole process which we are ourselves adopting in holding the Government to account? Earlier a noble Lord made reference to horses bolting and stable doors being closed. Already 100 or so of the statutory instruments have bolted before the Select Committees of this House have been able to agree on what the procedure should be for considering them, let alone whether they are adequate in their own terms.
Lord Deben
I feel philosophically and religiously opposed to self-congratulation, so of course I will not suggest that we should congratulate ourselves. As I said earlier, it is quite clear that our processes do not admit the proper consideration of the issues being put before us. However, the second thing which is quite clear—and after this, I really will sit down—is that the world outside thinks that we are absolutely barmy and wonders what on earth Parliament as a whole is doing. The world outside has become less and less willing to accept that our system is fit for purpose. We all know that all political parties—I mean all of them—are not seen by the vast majority of the population as in any way reflecting what they think, want and expect. We are engaged in a serious situation, and one of the sadnesses is that, if we are trying to do the job as well as we can, we have to be involved in them. However, we are involved in them in a way which may well mean that we are ourselves part of the very situation which is undermining the whole reputation of this, the oldest of Parliaments.
Lord Adonis
My Lords, I have amendments down in respect of the later statutory instruments, and on the substance of this statutory instrument I do not have much to add to what we have heard so far from the two noble Lords. However, the earlier exchanges raise significant questions. I put on record my hope that when we have the next string of these statutory instruments on Wednesday, the chairs of the two sifting committees might address us on what their procedure will be in respect of the handling and processes of consultation and impact assessments for regulations. I hope that the letter which is to be sent can be agreed—apparently there is a dispute between the chairs of the two sifting committees—and sent tomorrow. It sounds urgently necessary that it should be agreed and sent; indeed, that should probably have happened six months ago, not now. At least we are shutting the stable door after only half the horses have bolted, which I suppose is better than after all of them have left. I put on record that if the letter can be agreed, it is important that it is circulated to your Lordships before the debates on Wednesday, because it will have an important bearing on our proceedings. It may even be possible to slightly shorten our proceedings as a result. I feel obliged to make a speech on each of these statutory instruments about the inadequate processes of consultation and impact assessment, but if the relevant committees of your Lordships’ House are making these points about all the statutory instruments and requiring the Government to improve their regime in respect of all of them, we will not have to go through this gruesome process, statutory instrument by statutory instrument.
The Earl of Kinnoull (CB)
My Lords, I remind the House of my interests in financial services, particularly in international financial services for quite a long time.
Many of the speeches in this debate have given the Government a poor grade on things. However, it is important to remember business, which is at the centre of this. I always find that there is some confusion about what equivalence is. For financial services, there are 11 directives or regulations which give rise to powers to grant equivalences, 35 countries have taken advantage of that, and 279 equivalences have been granted—those are the figures from October on europa.eu. I gave evidence in respect of one of those 279 to try to get an equivalence for Bermuda—a successful achievement—some years ago, so I am very familiar with the process and also extremely familiar with how important it is for international business to have that equivalence.
The areas that are covered by equivalence, where obstacles and barriers are lowered or removed by granting it, include: accounting and auditing; capital requirement measurement; risk exposure measurement; and reliance on other markets’ regulators that reduces the amount of senior management time that is taken up, making sure that regulators feel comfortable with whatever the business is that you are running within their regulatory environment. It is therefore very important indeed that we have this instrument in place, if there is a disorderly Brexit, in the first instance. I agree with many of the points that have been made about how the Government’s performance has not been that good on this, or indeed on other statutory instruments. However, this is vital for business and is a key part of our economy, so I hope that the House will hurry it through.
Lord Leigh of Hurley (Con)
My Lords, I welcome this statutory instrument. I note that paragraph 77 of the consolidated impact assessment states:
“This does not remove the general need to review and improve legislation, which HM Treasury remains committed to doing in due course and where appropriate”.
Following the debates we had on the Financial Services (Implementation of Legislation) Bill, there are areas which might improve the financial services community and be for the benefit of the public and companies seeking to raise capital without the confines of some EU regulations; in particular, for small companies and for existing public companies that are seeking to raise capital from existing shareholders. At the moment, due to the expensive costs of a prospectus, they are prohibited from so doing. Although I have never prepared an impact assessment, I cannot imagine how one can be prepared in this sector, because there are so many potential benefits that might arise from this. I refer your Lordships’ House to my registered interests.
Baroness Bowles of Berkhamsted (LD)
My Lords, I too declare my interest in the register with regard to the London Stock Exchange.
I will make a couple of points on specifics, but before that I will say that I agree with noble Lords who have spoken about the manner in which things have had to be done and are done, rather than possibly what is done. By and large, the Treasury has performed well in fixing what it has to fix, but it has fallen down, possibly through lack of time, sometimes on Explanatory Memoranda and definitely on impact assessments. One of the things is that the public hardly seem to appear in the commentary. When the Minister introduced this statutory instrument, he said that equivalence was beneficial—it is in several ways—because for one thing it aided competition. He then said that that was to the benefit of consumers. That was about the only reference to consumers.
If prudential requirements are lower, does that benefit the consumer? It surely does in one sense: if the costs to businesses are less, perhaps the services to the consumer are less, but what does that do for stability? There are lots of questions about that, and the whole scene is not set. If I may say so, I may be the only person who was in the room when every one of these equivalence provisions was put in place, so I know why they are different, but it is still very difficult on some of the other SIs that we are dealing with even for me to work out exactly what is going on.
Lord Lilley (Con)
My Lords, I hope that the noble Lord, Lord Adonis, will not be shocked to hear that as I have wandered through the corridors of this place, I have heard some noble Lords expressing the view that they are a little tired of his obsession with the statutory instruments. I hope that he will not be even more shocked to know that I am coming to his defence. I think that he is doing an important job and is highlighting one of the great benefits of Brexit. He is bringing to our attention the fact that, after 45 years when we have had to accept these accumulating piles of statutory instruments with scarcely a debate, with no possibility of rejection—that is why there has been no debate—with no hope of altering or amending, which is why we have not, up to now, considered any of the statutory instruments, now, because of Brexit, we are able to do so because, to coin a phrase, we are taking back control of our laws. We should be grateful to the noble Lord for being a convert to this. There is more joy in heaven over one sinner that repents than over 99 just men who have no need of repentance—and I rejoice with him.
Along with the noble Baroness, I have the privilege of sitting on the Secondary Legislation Scrutiny Committee of your Lordships’ House, which goes through these regulations and changes to ensure that they accord with what they are supposed to accord with, to highlight any aspect of them which we think needs to be brought to the attention of the House and, if need be, to upgrade them. I have to say that it has been a revelation to me to see the scope, scale, detail and complexity of legislation which, in the past, has been implemented simply because it is EU legislation. Even if the whole House had rejected it, it would still have become the law of the land.
The noble Lord, Lord Adonis, is right to be concerned about several things. He is right to be concerned about consultation, because now consultation will matter. There will be some point in listening to what people think about statutory instruments because we will, in extremis, be able to reject them, and certainly to suggest to the Government that they might choose to do things differently, and it will be possible for them to do so.
The noble Lord is also right to point to the need for impact assessments and measures of cost. My noble friend Lord Deben—another great convert to Brexit—pointed out that these were important and suggested that the failure to cost these things was because the Treasury was anxious to hide them. I can tell him that today our committee considered one measure which concerned the European budget. We suggested that there should be a costing of that, because there would be a saving of between £10 billion and £12 billion net from no longer being part of the European Community if we leave without a withdrawal agreement on 29 March.
Lord Deben
I do not quite understand how we can know the net saving if we have not estimated the actual cost of any of these statutory instruments. That, surely, is the issue. Although we all understand my noble friend’s very amusing and charming way of putting it, many of us realise that the reason why we have these things in this form is that it gives us real equivalence. The problem we are now faced with is that we have fake equivalence. We decide what we want, but if others are not prepared to go along with it, our financial industry will be very much disadvantaged.
Lord Lilley
I am trying to get the full gist of my noble friend’s intervention, which was, first, that he seemed to think that the cost of all the statutory instruments which have not been costed—although many of them have—might somehow accumulate to anything approaching the £10 billion to £12 billion a year net contribution that we will save as a result of this one statutory instrument that we have been discussing in the Secondary Legislation Scrutiny Committee today, which will remove us from the EU budget. If he thinks that they are on that scale, I invite him to name one that might be worth £1 billion, for example. I suspect that he will not be able to do so.
My noble friend went on to talk about equivalence, which is important and can be valuable; that is the substance of this SI. It is worth the House remembering that equivalent regulation is not as important as superior regulation. It is far more important for this country to have good regulation—that is, the best in the world, which is not to say the most detailed or intrusive regulation but effective, appropriate, not-too-onerous regulation that ensures good quality of business. That has been the City’s great strength over the years. Better regulation than other countries has often been more important than identical regulation. The Eurodollar market is in London, not New York, because of bad regulation in America: Regulation Q, or whatever it was, drove all the business out of America. Our success in the trade in German state bonds was because the majority of it took place in London, due to our regulatory system being superior to the Germans’ before we introduced the single market and they had to improve theirs somewhat. Likewise, we carried out a high proportion of the trade in French equities because our regulatory system was superior, rather than identical, to that of France.
We should remember that the four great financial centres in the world—New York, Singapore, Hong Kong and London—all have something equivalent to each other and are great financial centres because they have in common common law and all the infrastructure built on that, such as legal and accounting processes, which make them flexible and desirable places to do business. In effect, they outpaced countries with different legal systems. We should welcome equivalence where appropriate but be very glad that we will not have to have regulation identical to that of our friends and partners on the continent. It is almost certainly beneficial to London to be a rule-maker, not a rule-taker.
Baroness Kramer (LD)
Perhaps I could explain to the noble Lord, Lord Lilley, that one reason why so many of us are making comments and expressing concerns about procedure, including about the impact assessment and the limitation on what we can do with statutory instruments—we cannot amend or change them—is because the whole process pales greatly in comparison to the equivalent process available to us as we dealt with these fundamental issues as EU members. Then, we were framing the overarching directive that set the context through extensive and transparent consultation and scrutiny, via a process in the European Parliament and the European Council. Typically, we then engaged our regulators for the final stretch, but in the context of all that work in discussion and negotiation. One of the reasons for London’s great success is that it was able to shape so much of that discussion in the way it thought appropriate, bringing all its experience to the table. That is what made it Europe’s premier financial centre and the great global financial centre it is today, all of which it achieved in the context of EU membership.
Lord Lilley
The noble Baroness makes an important point but one that deflects a little from reality. When I was a Treasury Minister, I had to negotiate things in Europe. I suppose we had a certain influence, but at no point did the House get involved much, rightly or wrongly. She should not create an ideal world that did not exist.
Baroness Kramer
I accept fully that this House did not get involved, but I do not consider democracy as having only one locus. Our Members of the European Parliament were democratically elected as democratic representatives. The Ministers we sent to Councils engaged with democratic representatives. I do not think that this process happens in only one place. It seemed to me that as a consequence of that representation, we had real importance. Now, we face two situations—
Lord Lilley
The point being made by the noble Lord, Lord Adonis, and others is that we should not leave that process to Ministers. The noble Baroness seems to be saying that our doing so in the past was jolly good because they defended our interests.
Baroness Kramer
Well, we also had MEPs, for whom I have great respect, and engaged broadly in the process.
One of my problems is that the equivalence SI we are dealing with today essentially puts, for the next 12 months, all relevant decisions on whether we remain equivalent or, as the EU makes changes, become equivalent in any new area into the hands of the Treasury alone. Not only does that not engage this House—I suppose you could consider the Chancellor to be involved—but it represents the most disengagement we have ever had at an absolutely critical time. If we leave the EU, how we behave on equivalence in the coming months will shape the context of any negotiation on the economic future of the UK, this being its most important economic sector and a major contributor to taxes and jobs. It is pivotal to the economy, yet the Treasury alone will make many of these key decisions. All we have for context are the comments in the political declaration. I will not repeat discussions we had earlier today, but those comments are exceedingly limited and give very little sense of direction.
To make matters almost worse, it is quite clear in the SI that, beyond that period, future decisions will be made through negative SIs—not through some policy framework in this House, engagement with your Lordships in broad debate or extensive consultation, but through the negative procedure. That will make it even harder for us to be engaged in the process. I can tell the noble Lord, Lord Lilley, that all the Brexit issues we are dealing with lead to the massive democratic deficit of great concern to many of us.
Lord Deben
Did the noble Baroness notice that my noble friend said, “I think we may have had influence”? Is it not true that we have been at the centre of these discussions and that the European Union is much more transparent and open when it comes to them than the British Government have ever been—certainly more so than the Government now propose to be under these statutory instruments?
Baroness Kramer
I can only agree. We have major transparency problems. I am working on the Trade Bill; it is unconscionable that we do not have available to us information that the EU would not only put automatically on a website but constantly report back on, with discussion between the Commission, the Council and the Parliament.
Let us set that aside so I can move on with this particular instrument. I reinforce the concerns about the impact assessment. I must say that the consolidated impact assessment discussed by my noble friend Lord Sharkey contains three pages dedicated exclusively to this SI—I am sure that the Minister will point that out—but anyone who cares to read it will discover that, although it is usefully descriptive, telling us a bit more about the instrument, what used to happen in the EU and what will happen under this instrument, it cannot be called three pages of impact assessment. It does not even attempt to monetise the impact and give us a sense of the costs and the value of the benefits—that is beyond it—and it never deals with the risks in any way. Never in my commercial life have I seen impact assessments that did not assess risk—but these do not even begin to do so.
That is very disappointing, particularly for the businesses which will be picking this up. They want to make sure that this SI goes through, because anything that reduces uncertainty in any area where there is not a cliff edge will be of great value to the relevant businesses—but, my goodness, they would have welcomed something much richer in terms of the discussion to give them some forward vision rather than one that just deals with the very short period of time that will immediately follow departure under a no-deal scenario. I find that very frustrating and a real weakness in the way in which impact assessments are being dealt with here.
That takes me to perhaps the last issue that I will address, which was touched on to some degree by my noble friend Lady Bowles. There is very little discussion in any of this about what I call reciprocity. In order for equivalence for the industry to be able to function without any kind of cliff edge in no deal, not only does the UK need to provide equivalence but the EU needs to grant equivalence as well. In many instances it has not done so, but it may do so in the future. My interpretation is that at the moment it is doing so only in areas where it thinks that not granting equivalence would cause financial instability, rather than looking at broader market access issues.
I take this as a real shot across the bows that we need to take on board, framing the EU intent as to where it will take future negotiations in this area. That is important and I am rather concerned that the Government do not deal with those kinds of issues in this impact assessment, because an honest discussion of that is crucial for businesses as they use the product and everything that we are printing to try to understand what the context is going forward. It has made me feel very gloomy that we will see a much more fragmented set of financial services. I am sure that London will remain a crucial global centre, but I can see the way in which the pattern is developing. It will have some very significant rivals that will take away very significant pieces of business. Over the long term that has real consequences for the UK.
In all that we have here there is one last issue which perhaps the Minister would address, because it could be my deficiency in reading all of this. At the moment we know that third countries operate, as it were, within the EU because the EU has granted them equivalence. As I understand it, the UK will be granting identical equivalence under this SI for the day that we leave if it is a no-deal scenario. But I am unclear about how many of those third countries are granting us reciprocal equivalence. Not only do we have questions about in which areas the EU is granting us third-country equivalence, I am not clear where we stand, for example, in terms of the US. Will we be granting the US equivalence using exactly the same pattern as that of the EU currently? It is not clear whether the US is granting us equivalence and on what terms—and that is just one of the many different countries with which we have built up a kind of network through mutual equivalence that has been established over the years.
Equivalence is extraordinarily complex. It is not a matter of a simple one-hour discussion about four or five easy to understand factors. It is exceedingly complex, it often comes with conditions and it may be limited in a whole variety of ways such as by time and by content. It may have many issues attached to it, and therefore negotiating new equivalence arrangements from scratch would concern me a great deal. I say that in particular because of what we have seen with some of the trade deals, where Liam Fox was absolutely confident that we could take existing trade deals between the EU and the 71 other countries with whom we had free trade agreements and roll them over. He has now been woken to the fact that most of those countries see this as an ideal opportunity to improve their position and to renegotiate. It has become a much slower, much more difficult and much more complex process. I want to try to understand where we are with our equivalence agreements, because potentially the situation is exactly the same. It is very different having an equivalence agreement to have access to the market in the UK from having access to a market of 500 million people. I do not know how many of these equivalence agreements are in play.
Lord Tunnicliffe (Lab)
My Lords, I shall be brief on this instrument and brief to the point of extinction on some of the others. I wish I thought that that would have any significant impact on the length of the debates we are going to have, but I fear that my brevity may be somewhat wasted tonight.
Every time we look at a bunch of these instruments, I hope to be forgiven for making the simple, formal statement that I regret being here doing these SIs. Her Majesty’s Government should rule out no deal. The Prime Minister is behaving irresponsibly in not doing so, but unfortunately no deal seems increasingly possible. From my limited understanding of history, most bad things that have taken place were by accident. Unfortunately we have a Government who are playing a game of chicken and hoping that the EU will blink first without realising that one of the outcomes of a game of chicken is mutual disaster. Accordingly, we will not obstruct Her Majesty’s Government’s legislation in preparing for no deal because it is a genuine probability. It was good that at least one speaker in the debate—I think that it was the noble Earl, Lord Kinnoull—pointed out that industry needs these SIs in order to get on with its business.
Virtually all the Treasury SIs have three parts. They tend to transfer functions, to transfer references, and to have a little policy where a decision has to be made if it is not self-evident where the status quo lies. This SI is similar. Its substance is set out in Regulation 2(1), which states:
“The Treasury may, by direction”,
and so on. In the Explanatory Memorandum there is a very important statement on this power:
“It provides ministers with a temporary power, for up to twelve months after exit day, to make equivalence directions and exemption directions for the EU and EEA member states. This power is intended to be used only in cases where it is necessary to make equivalence decisions for the EU and EEA member states quickly and efficiently to support UK market activity and the continuity of cross-border business”.
Unfortunately, nowhere in the SI is that assurance made. There is no limitation on the powers in the statutory instrument itself. As a minimum I hope that the Minister will repeat the essence of what is in the Explanatory Memorandum and assure us that this power is designed to be very limited. As I understand it, the power can be and in fact will be used after exit day. What I would value is if the Minister could explain the parliamentary process that will be associated with it because, so far as I can see, it boils down to nothing. I assume it just boils down to a Written Ministerial Statement. I hope that he can give us some more comfort that whenever this power is used, we will know about it and that he will be making a statement of some kind.
Finally, towards the end of Regulation 2—one usually runs out of energy before one gets to the end of these—paragraph (6) states:
“The power of the Treasury under paragraph (1) includes the power to revoke or vary an equivalence direction at any time”.
Could the Minister make it clear whether that paragraph dies after 12 months, like the power in paragraph (1)? The power to revoke or vary an equivalence direction—which seems almost as powerful as the power to create a direction—is pretty important and should die at the same time as the power in Regulation 2(1).
I will not make any other general comments, other than to note that all the SIs this evening, as far as I can tell, do not have reciprocity. The whole issue of the negative impact that leaving without an agreement brings is that there is no reciprocity. All we can do is create the rules that allow us to make the move towards the EU, and we have to hope the EU sees the sense in making reciprocal powers. This is just one more reason why crashing out of the EU is a thoroughly stupid thing to do.
Lord Bates
We could probably start with agreement across the House in saying that that is certainly something the Government do not want to happen. There is a very easy way for the noble Lord to ensure that that does not happen: to ensure that his colleagues support the deal before the House. This would then be unnecessary. This is not in any shape or form an objective this Government relish. It is a possibility that any prudent Government must prepare for. That is its status—nothing more, nothing less.
Given that we are going to be in for five substantial debates tonight, I will set one thing in context at the beginning. I will not cover some of the points, because I know they will come up in later debates, so I will try to not test the patience of the House by repeating answers five times to five different SIs. I will try to keep them as concise as possible so we can move through them at some pace.
I thank the noble Lord, Lord Sharkey, as the official spokesman for the Liberal Democrats and the noble Lord, Lord Tunnicliffe, as the official spokesman for the Opposition, for stating their intent to let this legislation go through, because they recognise that—whatever their concerns—there is a greater concern to ensure that there is a functional statute book in the unlikely event of no deal. I recognise that responsible approach, and I am sure it will be welcomed by the industry. The noble Earl, Lord Kinnoull, and the noble Lord, Lord Leigh, spoke from that perspective.
I want to put this on record, because I think it is really important. In their presentations the noble Baroness, Lady Kramer, set out brilliantly and the noble Baroness, Lady Bowles, set out extremely well—and indeed the noble Lord, Lord Sharkey—the outstanding work that the Parliament and the Commission did in regulation. The UK has been a leader, an influencer and a shaper of regulation. It really has been a good process. Every single one of the SIs we are dealing with through this entire process has gone through that scrutiny. We are not dealing with something that has never been thought of before; this already exists and has been subject to scrutiny—not only in the Parliament but, let us not forget, in another important group that does incredible work in this House: the European Union Committee and its six sub-committees. They scrutinise all the regulations and directives that come out. Then we had the European Union (Withdrawal) Act, in which we said—because it included a revocation of the European Communities Act 1972—that we needed to bring a lot on to the statute book. That is what we are doing: bringing on SIs, directives and regulations from the EU that have been subject to scrutiny by a UK Minister, the European Parliament and your Lordships’ House in the sub-committees, at the instruction of Section 8 of the European Union (Withdrawal) Act. Many of us recall the long and painful process of that working its way through the House. I looked it up: we spent 10 hours on Section 8, which gives us the powers and sets up the process we are now following.
The idea is sometimes presented that somehow what we are doing here is bringing onshore a whole load of stuff that we have never prepared for and that industry has not had any clue about dealing with. Industry is working with it, and we are now bringing it onshore. The process by which we deal with new regulations in future—the point made by the noble Lords, Lord Lilley and Lord Leigh—is something we need to look at. What we are doing at the moment is bringing across what is already in existence and has already been considered through a rigorous process, and putting it on the UK statute book.
Baroness Kramer
Perhaps this is my misunderstanding, but as I read the SI I did not have the understanding that the Treasury, following exit day with no deal, would be able to act only in exact accordance with the pre-existing rules established under European directives but that it could make fresh and new decisions to revoke, effectively amend or make new decisions for a 12-month period; a process would appear at some point in that time that was not Treasury-only, but it would be structured around a negative SI. I thought that was part of this whole package.
Lord Bates
The powers the Treasury will have are the powers the Commission currently has. The Commission cannot have them because we will have left the EU without a deal. Somebody therefore has to have them, and it goes to the Treasury because that is the equivalent body. Where the European markets authority was the regulator, that is transferred to the regulator here. We are simply doing all the things the noble Lord, Lord Tunnicliffe, has said at least two dozen times when we have discussed these points. He looks to see if we are actually following the rules as set down in Section 8 of the European Union (Withdrawal) Act. That is what we are doing. We are not making substantial policy changes, just correcting deficiencies and making fixes. The noble Baroness is absolutely right; that is the process.
Baroness Kramer
I accept what the Minister says. The Treasury in effect becomes the Commission, but without the checks and balances that normally exist on the Commission because we do not have the democratic process. That is the only point I am trying to make.
Lord Bates
I know the noble Baroness is seeking to make a point, but the Treasury does have a representative in your Lordships’ House. I know the noble Lord, Lord Deben, thinks, with the Chief Whip present, that I will be here today, gone tomorrow. That may well be the case.
Lord Deben
The only suggestion I made was that the noble Lord might not be here in 10 years’ time. That is a very different comment.
Lord Bates
Perhaps the noble Lord was not aware that he and I served in the same Government 25 years ago. He was a personal hero of mine because he abolished the hated Cleveland County Council and returned it to the North Riding of Yorkshire, which was greeted with absolute acclamation. However, it was still not enough to get me past the 1997 general election, so I find myself here in your Lordships’ House. Indeed, the noble Lord, Lord Young, was there 40 years ago—so there is form.
My point is that the Treasury is accountable to Parliament. It is possible to question a Treasury Minister here in the House of Lords in the way that noble Lords could not question a Commissioner in the House of Lords, so I do not want us to run down that particular track. Nor do I want to overegg the situation and say that it is perfect. We are having to prudently prepare for a set of circumstances that nobody in this House wants but for which we need to prepare because the industry requires that assurance.
Let me try to deal with some of the specific points in this debate. The noble Baroness, Lady Kramer, asked what third countries will do to declare the UK equivalent. The Treasury and the regulators have been in close contact with third-country authorities, including the United States regulators. We expect to replicate all arrangements with third countries which are based on equivalence. The UK will have grandfathered all existing Commission decisions through the EU withdrawal Act, and there will be retained EU law—the point I referred to.
The noble Lord, Lord Tunnicliffe, asked about a no-deal scenario, and I have dealt with that.
The noble Baroness, Lady Kramer, asked why the negative resolution procedure is considered appropriate for equivalence. We went through this whole area. I will not repeat it, but, if the House will bear with me, it is good that the usual channels are here. As part of the EU withdrawal Act, there was intense discussion and debate about the correct process for considering the large body of regulation that would be coming onshore. A comprehensive system of scrutiny—involving sifting committees, the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee—was set out for your Lordships, and it has been working. I am sure that the noble Lord, Lord Adonis, will come back at a later stage to some of the debate we had, which was probably as interesting to me as it was to him as we listened to Sub-Committees A and B. But the reality is that that scrutiny work is going on through your Lordships’ House and is following exactly the process set out in the Act and agreed through the usual channels.
The noble Baroness, Lady Bowles, said that the legislation is hard to follow. The Government are committed to ensuring that the law is transparent and accessible. That is why the National Archives will publish online a collection of documents capturing the full body of EU law as it stands on exit day. It will also gradually incorporate retained direct EU legislation into the Government’s official legislation website, legislation.gov.uk. She also asked whether decisions will be reviewed every three years because of the forthcoming SI. The future Treasury SI deals with making sure that equivalence directions fit into part of the existing FSMA framework. It does not mean decisions will be reviewed every three years.
Further, the noble Baroness asked why the SIs are being undertaken in such a piecemeal way and wondered why changes cannot be assessed holistically. A number of legislative changes will be necessary to ensure that there is a functioning statute book on exit day. HM Treasury has been as open as possible about this legislation and the potential impact, particularly by publishing draft legislation in advance of laying, alongside explanatory policy decisions.
The noble Lord, Lord Sharkey, asked whether we could provide examples of consultation on proposed rule changes. The regulators have undertaken extensive consultations on the proposed changes to their rules and technical standards. However, the powers in the EU withdrawal Act allow them to proceed without consultation, where necessary, to ensure that the necessary regulations are in place for exit day.
Does relying heavily on secondary legislation leave room for departments to push through unpopular or controversial legislation? These are powers granted under scrutiny by the EU withdrawal Act, as I have already explained.
Let me turn to another point raised by the noble Lord, Lord Sharkey, and my noble friend Lord Deben. They asked why we have chosen a 10-year appraisal period. This is not about when we review the legislation; this is a technical issue about the period over which the costs are allocated. We have committed to further analysis and, if the SIs come into effect, we will need to consider what an appropriate time is, but it will be much less than 10 years.
The noble Lord, Lord Sharkey, asked about consulting and whether we would allow more than is quantified in the impact assessment. The limitations set out in the impact assessment would not be overcome by consultation at this stage. Firms need to consider all the changes made by these SIs, alongside the broader changes that occur at the point of exit, which cannot be known in advance.
The noble Baroness, Lady Bowles, asked why we have not mentioned the public in the commentary. Consumers benefit from both competition and financial stability. This instrument will allow the Government to have due regard to both.
The noble Lord, Lord Sharkey, asked why no one has come forward to provide transparency around the costs of Brexit. The impact assessments for these SIs focus solely on their direct impacts; the wider costs of Brexit were covered in the cross-government analysis.
When we talk about the costs of these SIs, which just bring onshore regulations that already exist, has anybody thought for a moment to consider what the costs would be if we did not have them ready by exit day? What would that mean for the financial services industry? It would be cataclysmic. It is absolutely the reason that the noble Lords, Lord Sharkey and Lord Tunnicliffe, were right to say that, while they recognise the need for scrutiny, they also recognise how important it is for the industry that we get these measures through.
I will come back to some of the other issues in later debates on this evening’s SIs.
Lord Tunnicliffe
Will the noble Lord consider my point on paragraph 2.1 of the Explanatory Memorandum? It assures us that these powers will be used in a narrow way to manage the transition and not to introduce new policy. That is quite a strong statement, but it is nowhere on the record and there is nothing in the instrument to limit the use of the powers mentioned in paragraph 2.1.
Lord Bates
The noble Lord did ask me to assure that that will apply, and I am happy to do so. With those assurances, and conscious that we will touch on many of these matters again later in the evening, I beg to move.
Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019
(5 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
21:04 - Division on the Amendment to the Motion. - Ayes: 21 / Noes: 121 - Amendment to the Motion disagreed.
Lord Bates
That the draft Regulations laid before the House on 21 January be approved.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, I beg to move that the House considers the draft Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019—
Lord Tunnicliffe (Lab)
For once, it would be nice to get it right. The Minister is moving that they be approved.
Lord Bates
I am always very happy to take correction from the noble Lord. If he would like, I am happy to ask that the House approve these regulations.
Let me try again. 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 taken place here and in the House of Commons. The SI being debated today is part of this programme.
The SI will fix deficiencies in UK law relating to the UK’s listing regime, prospectus regime and transparency framework to ensure they continue to operate effectively post exit. The approach taken in this legislation aligns with that of other SIs 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 the SI, many noble Lords will be familiar with the prospectus directive, the transparency directive and the consolidated admissions and reporting directive, or CARD, and with related legislation that is implemented into UK law to set the listing regime, prospectus regime and transparency framework that regulate capital markets activity in the UK.
The transparency directive harmonises transparency requirements across the EU by requiring issuers with securities, such as shares and bonds, admitted to trading on a regulated market to disclose a minimum level of ongoing information to the public. It built on and amended CARD, which co-ordinates the conditions for the admission of securities to official Stock Exchange listing.
A prospectus contains information on an issuer that is seeking to offer securities to the public or is seeking admission to trading on a regulated market. The information they provide is used by investors to make investment decisions. The prospectus directive contains the harmonised rules governing the content, approval, format and distribution of the prospectuses that issuers must produce when securities are offered to the public or admitted to trading on a regulated market in a member state of the European Economic Area.
In a no-deal scenario, the UK would be outside the EEA and outside the EU’s legal, supervisory and financial regulatory framework. The UK legislation implementing the prospectus directive, the transparency directive, the CARD and related legislation therefore needs to be updated to reflect this to ensure that the UK’s listing regime, prospectus regime and transparency framework operate properly in a no-deal scenario. These draft regulations therefore make the necessary amendments to the retained EU legislation to ensure these regimes are operable in a wholly domestic context.
First, this SI will transfer responsibility for powers and functions currently within the remit of EU authorities to the appropriate UK institutions. Specifically, it will transfer powers from the European Commission to HM Treasury, such as the ability to make delegated acts pursuant to the relevant legislation. It also transfers powers to the Financial Conduct Authority from the European Securities and Markets Authority to create and amend certain binding technical standards. This transfer of functions mirrors the current split between the legislative power of the Commission and the regulatory role of ESMA.
Secondly, it alters the scope of the legislation by ensuring that, post exit, EEA issuers wishing to access the UK’s capital markets will be required to have their prospectuses approved directly by the FCA, as any other third country would have to do. Currently, EEA issuers can passport prospectuses approved by other EEA regulators for use in the UK. This aligns with the approach taken across other financial services SIs laid under the EU withdrawal Act.
The SI also introduces grandfathering arrangements that will allow any prospectus approved by an EEA regulator and passported into the UK before exit day to continue to be used up to the end of their normal validity, as well as supplemented with additional information. The end of validity is usually up to 12 months after the prospectus is approved.
Thirdly, this SI extends the exemption under the prospectus directive for certain public bodies from the obligation to produce prospectuses to the same set of public bodies of all third countries post exit. If a UK-only approach were taken, EEA state public bodies that are currently accessing the UK market would be obliged to produce a prospectus to issue securities in the UK that they would not be required to do to issue securities in EEA states. Additionally, extending the exemption to public sector bodies of third countries is consistent with the UK treating EEA member states and third countries equally.
Fourthly, as the explanatory information for this SI states, in a no-deal scenario, the Treasury intends to issue an equivalence decision, in time for exit day, determining that EU-adopted international financial reporting standards can continue to be used to prepare financial statements for UK transparency and prospectus requirements. This will allow issuers registered in EEA states with securities admitted to trading on a regulated market or making an offer of securities in the UK to continue to use EU-adopted IFRS when preparing their consolidated accounts. This decision is consistent with the Government’s approach to provide continuity following the UK’s exit from the EU. This has been welcomed by the industry and is supported by the Financial Conduct Authority.
Additionally, this SI removes obligations within retained EU law for the FCA to co-operate and share information with EU regulators, as this obligation, with no guarantee of reciprocity, would not be appropriate as of exit day. However, the FCA will still be able to co-operate with EU regulators through the existing framework in the Financial Services and Markets Act as it is currently able to do with all other third countries.
This SI makes further amendments to retained EU and UK legislation to ensure that the UK’s listing regime, prospectus regime and transparency framework operate effectively once we leave the EU. It is important to note that, while this instrument covers the UK legislation implementing the prospectus directive, there is no power to domesticate the provisions of the prospectus regulation that apply from July 2019 in the Financial Services (Implementation of Legislation) Bill. These additional provisions make significant changes to the prospectus directive.
Certain provisions of the prospectus regulation have applied since July 2017 and July 2018, with the remainder of the legislation due to apply from July 2019, after the UK leaves the EU. It is the Government’s intention to domesticate the remaining provisions as they will constitute the prospectus regulatory regime from July 2019. However, the EU withdrawal Act will only convert EU legislation into UK law that is already in force and applies immediately before exit day. Therefore, remaining provisions of the prospectus regulation will be domesticated via a statutory instrument laid under the Financial Services (Implementation of Legislation) Bill. The Bill, as currently drafted, requires the affirmative resolution procedure for every statutory instrument made under it, providing Parliament with an opportunity to debate and discuss each file that the Government are implementing. This change, I acknowledge, was as a result of the scrutiny the legislation received in your Lordships’ House, and we are grateful for it.
The UK has played a leading role in shaping the prospectus regulation for the benefit of consumers and industry. It is welcomed by industry and acts to cut the cost to business of producing a prospectus in the UK.
The Treasury has been working closely with the Financial Conduct Authority in the drafting of this instrument. It has also engaged the financial services industry on this SI, and will continue to do so going forward. On 12 December 2018, the Treasury published an instrument in draft, alongside an explanatory policy note on 21 November 2018, to maximise transparency to Parliament and industry.
The Government believe that the proposed legislation is necessary to ensure that the UK’s listing regime, prospectus regime and transparency framework can continue to operate effectively post exit, and that the legislation will continue to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope noble Lords will join me in supporting these regulations, and I commend them to the House.
The Deputy Speaker (Lord Geddes) (Con)
My Lords, for the avoidance of doubt, I say that the Motion before the House is that these draft regulations, laid before the House on 21 January, be approved. The Question is that this Motion be agreed to.
Amendment to the Motion
Lord Adonis
At the end insert “but this House regrets that no consultation was undertaken on this instrument despite the impact on businesses, particularly those involved in capital markets.”
Lord Adonis (Lab)
My Lords, perhaps also for the avoidance of doubt I should make it clear to the noble Lord, Lord Sharkey, that this is not a fatal amendment; it is a regret amendment. I have laid other amendments to the later statutory instruments.
The noble Lord, Lord Lilley, who made a fleeting appearance in our proceedings earlier, said that I have a reputation in the corridors of the House for being obsessive about these statutory instruments. I take that as an extreme compliment because, in my experience of politics, it is only the obsessive people who tend to get things done. Indeed, it is because of the Brexit and Eurosceptic obsessives, whose work goes back now 30 years, that we are in this mess to begin with. If it was not for obsessive anti-Europeans and Brexiters we would not be here. It is time for obsessive moderates like myself to start asserting ourselves. Unless the obsessive moderates assert themselves, the obsessive extremists, who seem to have taken charge of both our major political parties at the moment, will triumph. That is not in the national interest. I plead guilty to being an obsessive. I shall be obsessive about many more of these instruments, both this evening and for many days to come, because it is in the public interest that we are.
When the Minister, for whom I have great respect—I never cease to be astonished that he and the noble Lord, Lord Young, are still members of this Government as they are one of the most extremist Governments I have ever observed in my political lifetime—says that these regulations are necessary in order that we do not crash out with no deal, it is the Government of which he is a member that have a unilateral power to end no deal. This evening the Government could end the prospect of no deal by either making clear that they will apply for an extension of Article 50 or by using the power that they have to unilaterally revoke Article 50. For the noble Lord to try to cast on us the responsibility for a no-deal Brexit, which is entirely the creation of Her Majesty’s Government, is a true Alice in Wonderland situation.
Lord Bridges of Headley (Con)
I should declare an interest as I am an adviser to Banco Santander and take considerable interest in these matters. Is the noble Lord saying that the finance industry, including UK Finance, agrees with him that there has been no consultation whatever?
Lord Adonis
My Lords, there has been no public consultation. The bank to which the noble Lord is now an adviser may have been consulted. I do not know. He can perhaps tell us—because private sources of information are the main ones—whether it has been one of the organisations which have been engaged with privately by the Government.
Lord Bridges of Headley
I had not had direct contract with the Government on these matters. However, I shall read to the noble Lord a newsletter that has just come into my inbox from the CEO of UK Finance:
“We are working closely with members and partners with regard to onshoring, to emphasise continuity with EU law and to avoid sudden and unpredictable legal changes in the UK in light of a ‘no-deal’ outcome. We have to date assessed close to 40 legal instruments relating directly to financial services which have been published and/or laid in Parliament, with a handful more to come. We have also responded to a number of onshoring relating consultations issued by the Financial Conduct Authority … and the Bank of England”—
a point that I am sure the noble Lord will have heard Sam Woods make to the Select Committee in the other place last month. Therefore, what precisely does he mean when he says “no consultation”? Does he mean “no consultation” or “extensive engagement”?
Lord Adonis
I mean precisely what the Government themselves say in paragraph 10 of the Explanatory Memorandum of these regulations:
“HM Treasury has not undertaken a consultation on the instrument”.
That is what I mean.
Lord Bridges of Headley
The noble Lord needs to be very clear, because that paragraph then goes on to say that the Treasury,
“has engaged with relevant stakeholders on its approach to financial services legislation under the European Union (Withdrawal) Act 2018, including on this instrument, in order to familiarise them with the legislation ahead of laying”.
Therefore, there has been extensive engagement. Perhaps the noble Lord would be very precise on this matter.
Lord Adonis
My Lords, I read the words of paragraph 10 very precisely. Regarding the engagement with stakeholders, the noble Lord should be very careful about making himself a defence industry for the Treasury on these matters. The reality is that there has been engagement with stakeholders—it says so here. However, the only way that we will know about the engagement is if those who have been engaged with relay that to us. If they are fortunate enough to have former Ministers such as the noble Lord retained for these purposes, those people may tell the House via a circular route what has been happening. However, the way in which our parliamentary processes should work is that the consultation should be conducted formally and publicly, with the results being formally published and reported. That is not happening in the regime that is being set up at the moment.
The noble Lord is a former Minister in the Cabinet Office. It is the rules of the very department in which he was a Minister that require in all other circumstances, apart from these no-deal regulations, a formal 12-week public consultation. I am surprised that he should somehow think that it is adequate for that to be replaced by engagement with relevant stakeholders, undefined in paragraph 10.1. The noble Lord has aided the House greatly by starting to read out some of those who have been consulted with. There is no other way, apart from his intervention, in which we would have known who these stakeholders were. The way that this whole process is being conducted at the moment is utterly inadequate.
Lord Bridges of Headley
I am making the point that the noble Lord’s amendment—I am obsessive about these things—includes the words “no consultation”. This House should be absolutely aware that there has been plenty of engagement. I am sure that if he were to write to UK Finance and others, he would find out more. I totally accept the point that several on the Liberal Democrat Benches have made about the inadequacy of some of the processes. I was fully aware of that when we started and that point was well made. However, it is very important that when we have these debates we are very accurate. As far as I understand it—I have not been directly involved in this matter at all myself—there has been quite extensive engagement, so I would like the noble Lord to make that clear to the House.
Lord Adonis
My Lords, the noble Lord said that I should be precise and accurate. My amendment to the Motion says that,
“this House regrets that no consultation was undertaken on this instrument”.
Paragraph 10.1 of the Explanatory Memorandum in respect of these regulations says:
“HM Treasury has not undertaken a consultation on the instrument”.
Those are the exact words, so I cannot understand at all the point that the noble Lord is making. He is trying to excuse the fact that there has not been a consultation by saying that there has been a lesser form of engagement. However, that engagement is not a substitute for formal public consultation. Is he suggesting that it is an adequate substitute?
Lord Bridges of Headley
I am more than happy to rise on this point. Obviously I would much rather not be in this situation, having voted to remain, but, given the time that we have, I think that the Treasury has done an extremely good job with the level of consultation that it has undertaken, as have the regulatory bodies. I completely understand the desire of the noble Lord and others in this House to have proper scrutiny of this SI, but I just wish to make sure that all Members of this House are aware of the situation. The noble Lord is quite right that there has been no formal consultation but there has certainly been extensive engagement and it is very important that we make that clear.
Lord Adonis
I am grateful to the noble Lord for making that clear. However, perhaps I may also make it clear to him that the time we have available is down to the Government. It is not because of some extra-terrestrial force that has been at work; it is because of the Government that we are operating within these confines. It is therefore absolutely appropriate that noble Lords who do not accept that we should be in this straitjacket in the first place do not accept for a moment the point that the noble Lord has just made—that dispensing with normal parliamentary and government procedures in respect of consultation is satisfactory because we are limited for time.
Lord Davies of Stamford (Lab)
My Lords, the noble Lord, Lord Bridges, has told the House, quite correctly, that at present he has a role with Banco Santander. Although in my case there is no possible financial interest and the relationship occurred 30 years ago, I ought, in order to be completely transparent, to reveal that when Banco Santander initially installed itself in this country in the 1980s, I was its financial adviser. I am very pleased that at that time I was connected with a transaction that has proved to be extremely fruitful for Banco Santander and the British economy. Therefore, I genuinely wish the noble Lord every success in the role that he is currently playing for this distinguished financial institution. It has expanded over the decades in this country and I hope that that happy position will continue, although all of us—at least, on this side of the House—have some fears about that at present.
There is no doubt about the importance of this issue. We are talking about financial transparency and disclosure. Anyone who knows anything about the financial markets knows that, together with the avoidance of conflicts of interest, those are the most important foundations of a successful financial marketplace. When either of those two foundations have been weak, the human race has invariably ended up substantially regretting it. People have been ruined and even economies have, sadly, been seriously affected.
The European Union now has a good system. Together with the United States, the European Union has the longest experience of successful financial regulation in this area. People come from all over the world to discuss with us how we do things here and very often they follow our example. That is very sensible and desirable for things such as the prospectus directive, which has been imitated around the world. The whole business of regular financial disclosure—annual reports, interim reports and so forth—have, again, been very widely imitated around the world. Everyone knows that if you want to have a financial market where companies can raise serious sums of money, these things are essential.
I have always had a strong feeling that the scrutiny of secondary legislation, both in the Commons and in the Lords, is the most dubious and problematic area of parliamentary activity and the one most in need of reform. Like everybody else in the two major parties, when we were on the Back Benches in the Commons we were regularly press-ganged—I do not think that is too strong a word—by the Whips to sit on statutory instrument committees. They were absolutely deplorable occasions. They were a real travesty of good parliamentary scrutiny. I used to hope that the public would never come into the sessions because they would be horrified at what we were doing. In fact, I never saw a member of the public there, although occasionally one would see lobbyists of some kind. However, the fact is that we had no opportunity to brief ourselves, no opportunity to question Ministers—although of course in the Lords we do have that opportunity, which is a great improvement—and we had the system that we have here, which was that we could not modify these instruments if we thought it necessary to do so.
How can Parliament possibly do its job, or make a contribution, if it cannot modify a proposition for a statute or Bill by amendment? This is quite extraordinary—complete rubbish—and we should do something about it. It results in an enormous amount of legislation going through that is not properly scrutinised. In this series of statutory instruments, we see literally hundreds of important statutes supposedly being renewed—although whether they are renewed or modified is something one can never be quite sure about—and going through at a rate of knots. No one can judge the pace at which this is happening other than negatively; it is quite frightening, and a very bad moment for Parliament.
The situation is made much worse by the absence on these occasions of proper consultation or, in most cases, of impact assessments—as it happens, there is an impact assessment on the statutory instrument before us but, mostly, there are not. I want to clear up the controversy that exists between my noble friend Lord Adonis and the noble Lord, Lord Bridges. Consultation is an important term; it implies a set and standard process for consulting those likely to be impacted by legislation, and passing on to Parliament before it legislates—that is, before it is too late—the results of the interchange that has taken place with the stakeholders or parties who have an interest in the sectors of activity being regulated. This should be a standardised practice; we ought not to have to ask in each case, “What kind of consultation did you have? How many banks did you speak to? Who did you speak to: the directors, compliance officers, researchers, parliamentary affairs departments—a lot of companies have these kinds of things—or PR people?”
We should not need to ask these sorts of questions because we should know exactly what a consultation exercise involves. There should be—I am sure there is—a template in the Treasury and other serious departments, which indicates what you need to do to meet your obligation for a proper consultation when proposing legislation. A proper consultation has not been done here. What has happened here is engagement. The noble Lord, Lord Bridges, is proud of the distinction he has made but, frankly, engagement can mean what you want it to mean. No one knows, unless they have specifically asked the question, what it has actually involved, or indeed whom it has involved and not involved—who has been left out, perhaps deliberately, because the Government or department concerned did not want to hear some people’s negative views.
All these things are possible if you do not have a standardised system of consultation. It should be a permanent part of parliamentary procedure that you expect that consultation has been carried out and that everybody knows the principles under which it has been conducted. That does not happen here, and so we face this situation where we are being asked to vote through a whole lot of legislation at great speed. We do not know whether the impact will be what the Government say it will be; we do not know whether other people have been asked their opinion, or who has been asked. That is a very unsatisfactory situation. Has there been no consultation in the way that there normally would be? Let us be honest about it.
I come to my final point. The reason why there has been no consultation in the way that ordinarily there would be is, we are told, that we are under tremendous pressure. I say to the noble Lord, Lord Bridges, and others on that side of the House that that is a form of blackmail. I would not dream of listening to blackmail, whether about my business life, my past, my private life, or my political or governmental responsibilities. Anybody who attempted to blackmail me would be thrown out of the door; there is no question about it—I would not be interested. The Government are saying, “You have to pass these things or there will be terrible consequences for British industry and all these different sectors. You will be at fault if you haven’t done what we have told you to do”. That is no good; we should not listen to such nonsense. This is the responsibility of the Government. They got us into this mess and they should be expected to do their best to get us out of it, or at least to minimise the damage that there certainly will be.
As my noble friend Lord Adonis has said, it is entirely the Government’s fault that we find ourselves in this position. Any day they like, the Government could withdraw their notice to quit under Article 50. They could negotiate. We have been told by the continentals that any such request would be positively considered—that we could, if we wished, negotiate an extension to that date. More than that, the Government could have conducted these negotiations very differently. Unless I am very much mistaken, the Prime Minister accepted in December 2017 the idea that we would be permanently part of a customs union with the Republic of Ireland and therefore with the rest of the European Union. Then when she returned to the UK, she was rapped over the knuckles, or worse, by both the ERG and the DUP—two groups of extremists who have an unfortunate hold over British politics at the present time. She had to go back to the EU pathetically and say, “I am sorry, I thought I could agree that but actually I can’t”.
That is the whole history of this negotiation. It is deplorable. It has made us look idiotic across the world and, of course, has created a climate of uncertainty that is doing palpable, concrete economic damage to this country. This is a very important matter. We should show that we mean seriously what we say on the subject of consultation. It should be a standard provision—a right, if you like—which is respected, and always expected, in the case of new legislation put forward on a statutory instrument basis. Such is the importance of this matter and of recording our feelings on it that, if my noble friend feels moved to put his amendment to a vote, I will certainly support him.
Lord Sharkey (LD)
My Lords, I can be very brief. I declare an interest as chair of the Hansard Society, which is almost as obsessed with the effective scrutiny of secondary legislation as the noble Lord, Lord Adonis, is. I agree with everything that the noble Lord, Lord Davies of Stamford, has said about scrutiny, but I also have no objection to this SI per se. After listening to the exchanges, I understand the difference between consultation and engagement, and I support the view of the noble Lord, Lord Adonis, that there should have been consultation as well as engagement on this SI and the other SIs that we are considering today.
The Earl of Kinnoull (CB)
My Lords, I rise to put the case for poor old business because once again it is the Government who are being blamed. This SI is about access to capital. Without good access to capital, business is constrained and we do not have the means to create the wealth that we need in our country. I have a lot of experience with prospectuses relating to both equity and debt and I am old enough to remember, and have produced prospectuses for, the 2003 prospectus directive. I have been invited, although I have not actually been, to many conferences to discuss the prospectus directive, the transparency directive and CARD—the consolidated admissions and reporting directive. This is very much in UK capital-raising mode. It is the devil that everyone knows, and these SIs grandfather through for British business a very important route to capital. It is not the only route but it is the listed route to capital here.
Here I want to say something very complimentary about the UK Listing Authority, which many noble Lords probably do not know. I have dealt with listing authorities in other countries as well, and the UK listing authority is exceptionally good. It is good at giving clear guidance and responding swiftly when it needs to give comments on a draft prospectus, and that is certainly not the case in some of the landlocked European places that are trying to snaffle our business. Again, it is of absolute importance that this SI goes through.
Turning briefly to the amendment of the noble Lord, Lord Adonis, I think that of the various amendments that he has tabled today, this is very much the back marker, in that I do not think the case for it is nearly as strong. I note that the original policy note for this came out on 21 November last year and the draft SI surfaced on 12 December and was laid on 21 January. So this is the 89th day that this has been around, because the policy note was spot on that there have not been any changes. In fact, the appearance of the policy note produced a tremendous number of emails into my inbox from all sorts of the expensive lawyers that the noble Lord, Lord McNally, was talking about earlier—
The Earl of Kinnoull
Yes, I am sorry, we have now decided that they are distinguished lawyers—and others of the huge number of advisory people in London who help people get access to capital. There were a lot of notes in November and more in December, and what is interesting is that they have all been positive on this SI. So I am not sure what a full consultation would have produced in excess of the current SI. Anyway, that is what we have, and I very much hope that it too will sail through shortly.
Lord Leigh of Hurley (Con)
I very much agree with the noble Earl, Lord Kinnoull. His remarks were spot on. This has been around for some time, everyone in the industry is adamant that it is necessary for ongoing financial services success, and there is no quibble about its importance. The only quibble that I might have with the noble Lord, Lord Adonis—who has explained that he is not a financial services expert—is about what he was focusing on in note 10: the underestimate of 2,113 firms having to bear the cost of £700 each. Of course, the £700 is calculated assuming that firms will use lawyers at £330 an hour in each and every case. I can assure noble Lords that my firm, for one, will not be.
Baroness Bowles of Berkhamsted (LD)
I declare my interest as a director of the London Stock Exchange, the relevance of which I am sure your Lordships can appreciate. I sometimes stop and wonder, “Okay, what would actually happen if we didn’t have one of these SIs?” Prospectuses would not go away; we would just have some annoying things to do with the EU and our regulators having to deal with it that would be single-ended, and I am not sure how it would all work. I am not suggesting that that is a solution but I am not sure that we would entirely be falling into a bottomless pit.
I have two fairly generic comments to make about this SI. First, in paragraph 92—I am not quite sure of what; I think it is the impact assessment—there is quite a good explanation of the transfer of functions that has been going on for loads of the statutory instruments that quite often have been debated in a much more lonely way in the Moses Room. As has been said, the Treasury takes over the powers of the Commission and then the binding technical standards go to the regulators. By and large that means that we are not really going to see a great deal of detail because the basic legislation is already done and in our legislation, and from now on significant changes are probably going to come in the technical standards. Of course, we do not have an entirely equivalent position with the EU here because we do not get a vote on the binding technical standards, whereas the European Parliament gets a vote, as indeed does the Council, if it wishes to negate the equivalent standards that come from the European supervisory authorities. From that point of view, it is sad that there has not been some kind of public consultation because it might have been the only sniff that they will ever get at it, unless there are more people like me, who make a nuisance of themselves by responding to the stakeholder consultations that regulators put out.
That was a general statement. There are two asymmetries in this piece of legislation that illustrate what is going on quite a lot of the time. One is that we will continue to recognise EU international financial reporting standards. That is a good thing in terms of openness and the ability and ease with which a prospectus can be done in the UK, but the other side of the coin is that the EU has said that it will not recognise, for example, audits done according to UK IFRS. I do not know whether it will continue with that as a generic ploy—I think it hurts the EU rather than us—but it illustrates the difference in openness and the position that the UK is taking on these things. A similar asymmetry occurs with grandfathering. We are saying, “Okay, if the prospectus has already been agreed before we leave the EU, it will be honoured for the 12-month duration that it’s allowed”, whereas I am afraid the EU has said that it will be cut off at the time of Brexit.
I do not think that those asymmetries harm us at all, but there are quite a lot of them spread throughout and some do operate in a harmful way. There are some of these—what was it?—“distinguished” lawyers who advise companies that they are better to operate out of the EU because the EU will not recognise us, whereas we will recognise the EU. I am not suggesting that we could necessarily operate in a different way, but industry has not always got what it wanted out of these engagements and would have sometimes preferred the Government to be a little more equivocal and to have waited to see on one or two of these things, so that, if you like, the balance of lack of knowledge was roughly the same.
Lord Davies of Stamford
I am most grateful to the noble Baroness for giving way. She just said something that alarms me greatly, which is that there will now be two forms of IFRS, one for the EU and the other for the UK. That seems to be a matter of enormous significance, and extremely undesirable. It means that you will not be able to make exact comparisons between potential investments in the UK and the rest of the EU.
Let us suppose you are doing a study of the pharmaceutical industry and you find that, in earnings per share, Glaxo or AstraZeneca has been progressing at a certain rate over the years, and German equivalents such as Bayer have different figures for growth of earnings per share. You are making comparisons, but the comparisons are falsified because of the different accounting conventions. Some of them might be very substantial. For example, if you change the conventions on amortisation of good will, that can be a very substantial figure in a balance sheet in a profit and loss account; it has a bearing on how you account for it. This is very serious, because it would be a serious reduction in the transparency of the financial markets, which would be of great disadvantage to individual investors, of course, but ultimately to firms themselves and their ability to raise money, and to the health of the financial markets, which we all depend on.
Baroness Bowles of Berkhamsted
I thank the noble Lord for that intervention. A statutory instrument on the endorsement of IFRS will be coming along from BEIS—I am already taking an interest in that. IFRS will still be a global standard, but I think there are now 144 countries that adopt and endorse them, in their own particular way. They normally go straight through, but there is sometimes a certain amount of adjustment; the Japanese have made some adjustments, as have the Australians. In fact, the EU has also done so here and there. I do not think the intention is that the UK-endorsed IFRS will differ from the EU ones, but—I say this with regret—that does not stop the EU saying that it will not recognise as equivalent those that are endorsed in the UK.
Recognising the need for continuity and stability in the financial markets, although the UK might have made rather a mess of it at the Brexit negotiation level, we probably have the high ground when it comes to how we are dealing with the conversion of legislation, given that it has to happen. However, I am just pointing out that some of the asymmetries—not these two, particularly—cause some difficulty. I think the IFRS one, such as it is, will cause more difficulty to the EU than to the UK.
Baroness Altmann (Con)
My Lords, I rise briefly to express my concern from these Benches that we may set some dangerous precedents in the processes that we are adopting in discussing and passing these SIs. I understand the difference between consultation and engagement on these issues but I have significant concerns. If the SI was indeed ready on 21 November, there has been time for a proper consultation, which does not seem to have occurred. It would be helpful to the House if we had more information on what engagement has taken place.
I fully accept that, as my noble friend Lord Leigh has said, industry is in favour of adopting these regulations, should we enter a no-deal scenario. However, there are reasons for us to be concerned across the House at the procedures taking place. We are being asked to approve legislation based on evidence that we perhaps feel is incomplete. I will not vote against the Government but I would like to express my concerns.
Lord Tunnicliffe
My Lords, in trying to take my role seriously, I staggered my way through the Explanatory Memorandum to try to understand this SI. It all seemed pretty straightforward. Basically, at the moment if you have a prospectus approved by an EEA regulator, it can be used in the UK. We are foolishly—no, that is not the party line, is it?—considering crashing out of the EU and we need some substitute regulation. It seems that the bulk of this statutory instrument is saying that whereas before you would have it approved anywhere in Europe, now if you want to market it in the UK it has to be approved in the UK. That seems to be a consequence of leaving the club. I regret that we have not had the level of consultation that Members would have liked but I find it extraordinarily difficult to believe that the alternative—not approving this SI—is anything like as consequential as the intrinsic costs. No matter how much consulting we did, we would still have come to the conclusion that we should approve the SI.
As ever, I tried to look at the Explanatory Memorandum in the context of the basic assumption of the withdrawal Act: everything is transferred and no new concepts are introduced. The one area where I have some questions is on a very narrow point, which is the exemption for certain government and local authority securities. The memorandum says:
“Under the current Prospectus Directive rules, certain public bodies are exempt from the requirement to produce a prospectus when they undertake to offer securities to the public or request the admission of securities to trading on a regulated market. This includes EEA States, EEA local authorities, EEA central banks, and public international bodies of which one or more EEA States are a member”.
The dilemma is whether we continue that exemption. There is an argument that we should but, in order not to recognise EEA states, there then comes the decision to extend that exemption.
There are two ways that that exemption is described. The third bullet point of paragraph 2.5 of the Explanatory Memorandum states:
“Extending the existing exemption from the requirement to produce a prospectus and certain exemptions under the Transparency Directive that currently apply to certain EEA public bodies, to certain third country public bodies”.
That would seem to be a controlled extension of the exemption, which took account of the countries to which the exemption was applied, whereas paragraph 7.22 says:
“To address this deficiency, the government will extend these types of public bodies exemptions to the same types of public sector bodies of all third countries”.
I think Venezuela is a third country, and the idea that the public offers of securities in Venezuela should be treated the same as those in other EEA states would seem somewhat anomalous.
Lord Bates
Again, I thank noble Lords for their contributions to this debate, which has been very useful and has focused on two themes, as will I. The first is about process, the second about the level of consultation or engagement. I will try to put some points on the record and address the specific technical points raised by the noble Baroness, Lady Bowles, and the noble Lord, Lord Tunnicliffe.
What we are doing here is onshoring the regulations that already exist, which have gone through a scrutiny process involving the European Commission and regulators in the EU, the European Parliament and our own House. We are onshoring those to the UK. These are exceptional circumstances; they are not normal circumstances in which we are doing it.
The criticism seems to be: why have we waited so long? It is worth putting on the record here that the powers by which we are undertaking this process were set out in some detail by the EU withdrawal Act. I think I said, wrongly, that there were only 10 hours of consideration about the Section 8 process. In fact there were 12 hours of consideration of this process, which was then adopted by both Houses of Parliament.
However, the EU withdrawal Act did not get its Royal Assent until 26 June. I tried to find out—given that the enabling power we had was available on 26 June last year—when the first of our SIs was laid under this process, given that the charge that has been made is that the Treasury has been somewhat dilatory in its approach. The first SI was laid on 16 July. That is not exactly a long gap between Royal Assent, having the power and actually beginning the process. We started debating these for the first time—the noble Lord, Lord Tunnicliffe, the noble Baroness, Lady Kramer, and many familiar faces will remember our first hour in the Moses Room talking about the broad principles—on 17 October, and we have been going more or less every week since then with new SIs coming through.
I want noble Lords, particularly my noble friend Lady Altmann, who I know has a great deal of expertise in this area, to feel reassured that what we are dealing with here are rules and regulations which the industry was already operating by, but under a different regulatory system, that we are now bringing onshore and applying fixes using powers and scrutiny that were set out by the EU withdrawal Act. In a timely process, we have brought that forward. I cannot claim that that will satisfy everybody, but it is worth putting that position on the record.
On whether it was consultation or engagement, in many ways we are discussing the words and phrases of it. What we are talking about here is not a normal consultation. I readily accept the point made by the noble Lord, Lord Adonis, that the rules on consultation are laid down by the Cabinet Office. As set out, they involve a particular process. That is why we are always very careful when we say “consultation” at the Dispatch Box; it has a particular formula attached to it. We might instead say “engagement”. We have consistently used the term “industry engagement” through this process. As came out in the contributions from the noble Earl, Lord Kinnoull, and my noble friend Lord Leigh, industry has been almost the wind in our sails, urging us to get on with this, because of the consequences of not having these safeguards in place, leading to a cliff edge. There has been a push. My noble friend Lord Bridges highlighted the report by Stephen Jones in his UK Finance newsletter. I see my noble friend Lady Wheatcroft in her place, so I hesitate to summarise it in this way, but in terms of the City there are effectively only two main bodies: there is UK Finance, which represents a substantial body of financial services, and TheCityUK. My noble friend Lord Bridges referred to UK Finance.
Lord Adonis
Everything that the Minister has said is based on the premise that we are dealing with a no-deal situation. All the bodies to which he has referred, given the choice between no deal, a deal and not having Brexit at all, would infinitely prefer having no Brexit or having a deal. The circumstances in which the Minister seeks to justify the use of what are essentially exceptional decree-making powers on the part of the Government are circumstances entirely of the Government’s own making.
Lord Bates
This is a separate debate. The noble Lord is moving his amendment, expressing regret from your Lordships’ House that there has been no consultation with industry on this measure. That is what his amendment says, as my noble friend Lord Bridges pointed out. I am not trying to raise the temperature to the same level as perhaps existed earlier in the Chamber; I am trying to maintain it at a level where we are focusing on the legitimate scrutiny which the noble Lord and the noble Lord, Lord Davies, are applying to this process. My noble friend Lord Bridges talked about UK Finance; I was about to quote TheCityUK.
Baroness Kramer
I thank the Minister but he is rapidly losing me. Had the noble Lord, Lord Tunnicliffe, not raised it just now, I would not have known that we are about to give approval for the issuance in the UK of Venezuelan sovereign bonds. That may not have been of particular interest to TheCityUK or UK Finance because of the way in which they look at the world, but I suggest that, had we had a 12-week public consultation, somebody would have come in with that information, which might have been of great interest to this House and created some pressure on government to re-examine that provision and clause. While industry bodies are crucial, there are many other stakeholders with an interest which by necessity have apparently been excluded from this process so far. Underscoring their importance is the issue in front of us today.
Lord Bates
If that is the case, it is happening under the existing rules. All we are doing is replicating those rules to avoid a cliff edge.
Lord Davies of Stamford
The Minister’s description of the position is not at all what I understood. As I understood it from my noble friend Lord Tunnicliffe—who spotted this, to his great credit—at present the prospectus directive provides that certain state bodies within the EEA do not have to produce a prospectus. So the Government of France do not have to produce a prospectus if they go to the markets and seek more money. That is a reasonable situation. Far from not changing the substance when they switch from an EU directive to an SI affecting only this country, it appears that the Government have made a significant change in the wording. It no longer says “any EEA sovereign body”—or words to that effect—but “any sovereign body anywhere in the world”. So, as the noble Baroness, Lady Kramer, pointed out, you would have a situation where the Government of Venezuela—if there is one—or of Eritrea, or wherever, could issue a prospectus in London. I cannot believe that that would really happen, but if it did it would be an invitation for the most appalling financial crisis. People would lose all faith in the whole system and the credibility of the prospectus arrangements that we have here.
Lord Bates
In those circumstances, we would be dealing with a third country. We would not be part of the EEA, so we could not give them the terms that apply within the EEA at the moment. We had quite a bit of debate on this last time. They would be a third country like any other. We want to develop a very close relationship, but that is a matter for negotiation and discussion.
Lord Tunnicliffe
The suggestion that the EEA does not exist, because we are out of the EU, is surely not valid. Many regulations specify how they apply to different countries. It would be entirely available to the Government to say that the exemption for public moneys should apply to EEA countries and not to other third countries. It is an entirely possible outcome; I am not saying whether it is good or bad. I want to know why the Government have moved from the EEA to everybody, including Venezuela.
Lord Bates
To allow the House to make progress on this, I will seek some advice on that point.
Baroness Kramer
Is there any hope that there might be some in-flight information on this? I had understood, from listening to this debate, that this is not a rollover of the current rules; it is a way to make the rules more palatable—presumably to many of the Brexit community—by saying, “We will recognise that EEA state organisations do not have to use prospectuses, but don’t worry, we’re not treating them as special, we’re now going to allow it for every other country, even if they don’t have equivalence”. That is a policy shift. All I am saying is that a consultation would surely have surfaced that issue and the Government would have dealt with it in a different way.
Lord Bates
The official position here is that, under international trade law, we cannot favour some countries’ public bodies and not others. It is all or nothing. I take it that I may have other opportunities this evening—perhaps into early morning—to put on record the words of Miles Celic, chief executive of TheCityUK, and of the Investment Association, responding to the engagement which they have had with us. A lot of the issues which have been raised will come up again and I will respond to them then.
Lord Adonis
My Lords, the longer this debate has gone on, like so many of our debates on these no-deal regulations, the clearer the case has become for having this consultation. In the last 15 minutes, prompted by my noble friend Lord Tunnicliffe, a very important issue has arisen about the distinction between EEA and non-EEA states when it comes to the new listings and publications regime. The noble Baroness, Lady Kramer, brought up the exceedingly important policy point underlying it. This is not my area—my role is simply to facilitate the proper scrutiny by Parliament of these important changes to the law—but it has become ever clearer as this debate has gone on, let alone all the others we have had, why there should have been proper consultation.
Some noble Lords have said that these are exceptional circumstances. I repeat the point that, first, these are exceptional circumstances of the Government’s own making. We are not talking about acts of God here; these are acts of the Government and the Government could correct these acts. The second point was made by the noble Baroness, Lady Altmann, and is incredibly important. The precedents we are setting in the examination of the statutory instruments and the processes we require to put in place, given that we are going to have a cascade more—particularly if we do indeed Brexit at the end of this process, because we are going to have literally hundreds of these, year by year—will all be cited.
The noble Lord, Lord Bridges, says that it is all very well, we have engagement not consultation, and the noble Earl is relieved that his industry is not actually going to be trashed by this regulation, although there are many others that will do so in due course if we Brexit. He says that we should get on with it and that the people he knows are very grateful that they have at least had the opportunity to engage. I tell the House that, once these precedents start to be cited, we can wave goodbye to the normal Cabinet Office processes and procedures for conducting consultations. That is what will happen. That is what always happens once you start sliding down this kind of slippery slope.
The Minister quoted TheCityUK in respect of this instrument. It is important to understand TheCityUK. I have been reading its representations and what it thinks about how the Government have handled the Brexit process in relation to financial services. Shortly after the Brexit referendum, in September 2016, the same guy the Minister quoted said:
“While at this stage it is too early to talk about conclusions from the Brexit negotiations, access to the single market on terms that resemble, as closely as possible, the access the UK currently enjoys is the top of our list”.
That is what this organisation said.
Then, when the Government published the political declaration with the withdrawal agreement at the end of last year, which marked a significant retreat from the objectives that were set out before in terms of mutual recognition, TheCityUK said:
“Mutual recognition would have been the best way forward. It is regrettable and frustrating that this approach has been dropped before even making it to the negotiating table”.
That is what these vital sectors of our economy think about what is happening at the moment. The fact that they are clutching at the straws of having no-deal regulations in place that prevent catastrophe if we leave in five weeks’ time with no arrangement whatever with the EU is no excuse at all for the way this whole business is being handled and for the discarding of our normal processes and procedures.
I make no excuse for detaining the House at this hour. I would be very happy to carry on these debates with the Minister into the early hours if it would bring about change in government policy. He is normally very open to these matters, so maybe it is an invitation to keep going for a long period, because we might then get proper processes of consultation and engagement in place. As a poor substitute for that, I beg leave to test the opinion of the House.
Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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Lord Bates
That the draft Regulations laid before the House on 24 January be approved.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, this instrument, laid under the EU withdrawal Act, will fix deficiencies in UK law relating to the regulation of financial benchmarks to ensure that it continues to operate effectively post exit if the UK leaves the EU with neither a deal nor an implementation period. This legislation is important for the regulation and integrity of financial markets in the UK.
The SI makes amendments to retained EU law on financial benchmarks, known as the EU Benchmarks Regulation—BMR—to ensure that the UK continues to have an effective framework to regulate financial benchmarks. Benchmarks are publicly available indices used in a wide range of markets to help set prices, measure the performance of investment funds or work out amounts payable under financial contracts. They play a key role in the financial system’s core functions of allocating capital and risk, and impact on huge volumes of credit products and derivatives. The EU BMR sets requirements on benchmark methodology, transparency and governance.
Benchmarks must be approved to be used in the EU after the conclusion of the EU BMR’s transitional period at the end of 2019. To provide benchmarks for use in the EU after this, benchmark administrators located in the EU may apply for authorisation or registration. Third-country administrators or benchmarks may be approved through equivalence, recognition or endorsement. Approved administrators and benchmarks are placed on to the public register maintained by the European Securities and Markets Authority.
In a no-deal scenario, the UK would be outside the EEA and outside the EU’s legal, supervisory and financial regulatory framework. The UK legislation implementing the BMR and related legislation therefore needs to be updated to reflect this and to ensure that the UK’s benchmarks regulation operates properly in a no-deal scenario. These draft regulations therefore make the necessary amendments to the retained EU legislation to ensure that these regimes are operable in a wholly domestic context.
First, this instrument amends the scope of the BMR to apply in the UK only. From exit day, benchmarks and administrators outside the UK will be subject to the onshored third-country regime and must be approved via recognition, endorsement or equivalence for use in the UK. Secondly, this instrument establishes a requirement for the Financial Conduct Authority to create a UK benchmarks register, which it will maintain from exit day. Following the transitional window in the BMR, supervised entities may use benchmarks in the UK only if either the relevant administrator or benchmark is on the FCA register. This instrument ensures that benchmark administrators that the FCA has already authorised or registered ahead of exit day are automatically migrated from the ESMA register to the FCA register on exit day. It does the same for third-country benchmarks or administrators that the FCA has already recognised or which UK firms have endorsed.
Thirdly, this instrument includes a new transitional provision to take EU and third-country administrators and benchmarks that appear on the ESMA register at exit day—as the result of an approval under the BMR outside of the UK—and temporarily migrate them on to the FCA register for 24 months, beginning with exit day. This will enable continued use of these benchmarks in the UK for a 24-month period, unless and until an application for approval in the UK is refused or unless they are removed from the ESMA register during this time. This will provide continuity for administrators and users, and minimise market disruption. Administrators or benchmarks subject to the transitional provision must be approved by the FCA under the third-country regime to enable their continued use in new contracts in the UK after this period.
Fourthly, under the BMR certain regulatory functions are carried out by EU authorities, primarily the European Commission and the European supervisory authorities, including ESMA. Once the UK leaves the EU, EU bodies will no longer have a mandate to carry out these functions, and therefore this SI transfers the functions of the Commission to the Treasury, including the power to adopt delegated Acts based on the underlying legislation. The SI also transfers the functions of ESMA to the FCA. This includes the power to make binding technical standards. This SI also removes obligations within retained EU law for the FCA to co-operate and share information with EU regulators as this obligation, with no guarantee of reciprocity, would not be appropriate as of exit day. However, the FCA will still be able to co-operate with EU regulators through the existing framework in the Financial Services and Markets Act as they are currently able to do with other third countries. The SI makes further minor amendments to retained EU legislation to ensure that the UK’s benchmark regimes operate effectively once we leave the EU.
These measures, when taken together, will ensure that the UK retains an effective framework to regulate financial benchmarks. The Treasury has been working closely with the Financial Conduct Authority in the drafting of this instrument. It has also engaged with the financial services industry on this SI and will continue to do so. The Treasury published the instrument in draft form on 8 January to enhance transparency to Parliament, industry and the public ahead of laying. In summary, this SI is needed to ensure that UK benchmarks regulation can continue to operate effectively post exit and that the legislation will continue to function appropriately if the UK leaves the EU without a deal or an implementation period. I hope that noble Lords will join me in supporting these regulations and I commend them to the House. I beg to move.
Amendment to the Motion
Lord Adonis
Leave out from “that” to the end and insert “this House declines to approve the draft Regulations because no consultation has taken place on them despite Her Majesty’s Government’s economic assessment indicating that transition and associated costs will be significant”.
Lord Adonis (Lab)
My Lords, the same issues basically apply on this regulation as on the last and I am not going to repeat the arguments. However, I would like to ask the noble Lord a question about the impact assessment which is published alongside the instrument. The costs in respect of this benchmark regulation, although considerable for each individual firm at £520, are less considerable overall because it is a much smaller number of firms. However, the footnotes to the impact assessment say:
“This refers to the current number of approved benchmark administrators. Given the regime is not yet fully in force, we expect this number may increase”.
Can the Minister give some indication of what level the number is expected to increase to? Again, I am not familiar with this sector and I do not know whether we are talking about it increasing by dozens or hundreds. However, I would like to get some sense of whether the total burden which this regulation alone is going to impose on the sector is in the thousands of pounds or the millions of pounds. It would be useful to have the figures. I would be grateful if the noble Lord could tell us what the estimate is, as the new benchmarks regime comes into place, of how these numbers will increase, so that we can put on the record a more accurate sense of what the actual burden is going to be.
Baroness Kramer (LD)
My Lords, I have a really serious question that I want to put to the Minister. I am concerned that one of the effects of this SI—I am not going to oppose it because I think that we have no choice but to allow it through—is to separate ESMA from the UK regulators of benchmarks administered in the UK. In this House and elsewhere, and I am sure that I have said it myself, we frequently talk about the excellence of UK regulators, but I am afraid that the history of the UK regulation of benchmarks is one where we frankly have to hang our heads in shame. The Libor scandal, which was finally exposed six or seven years ago, had clearly been a scandal in play for at least a decade. It represented a prolonged period in which Libor particularly, but other benchmarks as well, was being manipulated by the banks to achieve particular outcomes.
The regulator did not identify the problem and, when the regulators decided that they must act after much of this was exposed—primarily by US regulators and in the US media—found that at the time it was not even illegal to manipulate a benchmark in the UK. Consequently, the regulators were pretty powerless. I think that a couple of people have been brought to account, but very few of those who were engaged in or knew about this process—and certainly not the raft of senior management that benefited from the exceptional profits that led to higher pay for chief executives and others, year after year. It was a huge scandal.
Immediately after the scandal was exposed, the United States took the view that the UK regulators were so weak and so essentially complicit in this area that the US itself, particular for any dollar-denominated transactions, should become the locus of benchmarks. Obviously the UK fought back, because it is an iconic role seen as significant to underpinning the UK’s status as a global player in financial services. While I do not know many of the details, I believe that the link to ESMA—the reassurance that there is more than one set of regulator eyes covering the way in which benchmarks have been administrated—has been important in keeping the primary benchmarks in play in London.
I understand that the role of this SI is to say that benchmarks administered in the EU can still be used in the UK—that is almost the sole purpose. But, as I say, I am concerned that the future standing of the UK as the locus of most of the benchmarks used across the globe in nearly every transaction, no matter where that transaction takes place, is potentially undermined by the kind of separation that the Minister has just described. Is he aware of any aggressive moves by the United States to say that the situation is changing? We now have the UK regulator standing alone once again. We certainly hear from the UK a great deal of language about how regulation needs to become lighter touch and should not be so heavy-handed, and how we should be much more inclined to allow greater risk taking and greater profit taking. Will this become the occasion where the United States acts to use its weight, its authority and its legislative force to try to undermine London as a locus? Should there be something in the whole language that surrounds this of an ongoing co-operation and element of supervision that continues to involve ESMA to provide a defence for London in this arena?
Lord Mackay of Clashfern (Con)
My Lords, I have a great respect for the noble Lord, Lord Adonis, as I heard him many times answering questions as a Minister. The answers were always clear and a full answer to what he was asked. I also remember his difficult time as a Minister of State in the Department for Education, struggling with the impediments being placed to the implementation of his policy by judicial reviews, which he described in one of his books. But I have listened to a good number of these debates we have been having recently, and I regret to say that I cannot agree with the way in which he approaches this matter. I think that this is all part of the decision to leave the EU that the electorate took, advising Parliament that they wished that to happen.
Industry generally, and the financial industry in particular, is well aware of the situations that may arise as a result of that. Therefore, I would expect representatives to get in touch with the Treasury, for example, if they had any concerns in relation to these instruments. I wonder whether the noble Lord, Lord Adonis, has had any communication from any financial services people as to whether or not they would like him to succeed in his amendment to decline to approve these regulations.
The Earl of Kinnoull (CB)
It is a pleasure to follow that stream of logic, with which I agree entirely.
I wish to say two things. The Explanatory Memorandum was published initially on 23 November, so we are now in the 87th day after that. It generated a great deal of comment, which was widely circulated to people who were interested. Again I rang round various people in the course of the past few days and no one has raised any objection to this. In fact, everyone has said how important it is.
In answer partly to what the noble Baroness, Lady Kramer, said, I notice that paragraph 2.6 of the Explanatory Memorandum states:
“Without these provisions, the FCA would not have an effective framework designed to prevent benchmark manipulation in the UK, affecting the integrity and attractiveness of the UK’s financial markets”.
The Explanatory Memorandum is right behind the noble Baroness in her point about the necessity of having the benchmarks properly looked after.
I have looked at a list of all the benchmarks and it is worth saying that many of them have been invented here in London—they are British—and so it is unsurprising that the naughty behaviour took place here and that the skills lie with our own regulators to prevent misbehaviour.
Baroness Kramer
Part of the problem is that it was not our regulators that identified years of benchmark manipulation but the US regulator and the US media. We need to be clear about that. Our regulators came in late in the day and only after a huge amount of pressure and exposure.
Secondly, while banks were manipulating Libor and some of the foreign currency exchange rates in order to increase their profits to suit certain circumstances, they were doing it, they thought, quite openly. People were shouting at each other across various trading floors that X would like the benchmark set here and Y bank would prefer it to be set there and whether they could do them a favour. The Bank of England was then implicated in instructing various banks to manipulate the rate at the time of the financial crisis in order to disguise from the wider market how difficult banks were finding it to raise financing. So, rather than reporting the actual rate they were being offered in the market, they were reporting a lower rate to suggest that they were being looked at more favourably; and because the Bank of England saw this as necessary for financial stability, it is itself implicated in some of the manipulation.
One of the concerns that I have that underlies this is that the FCA will be in a position with this SI to be the administrator, but it now becomes the sole administrator rather than one working in partnership with other EU administrators. That could lead to a vulnerability, with the challenge coming not from the EU but from the United States.
The Earl of Kinnoull
Thank you for that. I do not want to be the defence attorney for the regulators but the FCA would argue that it did not have the relevant powers beforehand. However, I shall not go there.
Again, this will be the effective framework to enable the FCA to do that work. Without this SI there is no framework.
At the end of the paragraph in the Explanatory Memorandum headed “Why is it being changed?” it states:
“If this instrument were not made, there would be significant market uncertainty among UK and third country providers over whether they would still need to be compliant by 2020, and among users over which benchmark they could lawfully use”.
In other words, it is a complete mess. The size of the markets that are affected by these benchmarks is vast. I am not sure that I quite understand the reasoning behind the amendment moved by the noble Lord, Lord Adonis, to decline these regulations. It seems he is trying to take aim at a government process and is actually clobbering the City. I feel that is wrong and I very much hope he will not press his amendment.
Lord Tunnicliffe (Lab)
My Lords, I am afraid that despite my efforts I can find nothing wrong with this statutory instrument. It seems to be perfectly straightforward and necessary to manage the situation. I thank the noble Baroness, Lady Kramer, for reminding us of the Libor scandal. It was a dreadful period in British financial services history, and we forget it too easily, I fear.
If my noble friend intends to divide the House on his amendment I make it absolutely clear that he will not be supported by the Opposition Front Bench. We would support a fatal amendment on a statutory instrument only in exceptional circumstances and only after very careful consideration of the reasons and widespread consultation. We will therefore be sitting on our hands if my noble friend divides the House.
Lord Bates
I again thank the noble Lord, Lord Tunnicliffe, for his responsible approach to these regulations. It is quite right that there should be scrutiny, but the amendment which we are now debating would effectively be fatal. It would prevent these regulations appearing on the statute book when their purpose is, as the noble Earl, Lord Kinnoull, and my noble and learned friend said, to avoid the type of abuse of market power and benchmarks that was sadly the case in the past. To avoid all the progress we have made in that in the event of no deal would be regretted.
However a number of points were made, including by the noble Lord, which should be responded to as part of the scrutiny, so I shall launch into them, if I may. The noble Earl, Lord Kinnoull, asked why it is important to have this SI in place. If it were not it would cause significant legal uncertainty and disruption for firms about how they were able to provide benchmarks for use in the UK and for other users about which benchmarks they could legally use. Many of them have already submitted applications or created business models on the basis of market compliance with the regime. That is why the noble Earl was right to cite paragraph 2.6 of the Explanatory Memorandum and my noble and learned friend was right to raise the importance of these regulations.
The noble Baroness, Lady Kramer, questioned the ability of the FCA to enforce these regulations given the previous situation with the Libor scandal. We do not accept that EU regulators are better regulators than ESMA. The EU regulation was created after the Libor scandal and introduced a comprehensive framework to ensure that the business integrity of benchmarks is maintained. We are confident that the FCA will enforce these regulations. She also asked about how EU and UK regulators will co-operate going forward. The FCA will use the information to ensure that on exit day any administrators or benchmarks which are on the ESMA register at 5 pm on the day exit occurs are copied over to the FCA register. FCA-approved benchmarks or administrators will be copied over permanently and those approved by other EU national competent authorities will be copied over for a temporary period of 24 months. This SI removes obligations in retained EU law for the FCA to co-operate and share information with regulators. The FCA will still be able to co-operate with EU regulators through the existing framework in the Financial Services and Markets Act.
The noble Lord, Lord Adonis, asked how we arrived at the number of firms affected by this SI. The number is the current number of approved benchmark administrators. The regulators that we are working with are seeking to understand the full range of administrators that will seek approval, but it is difficult to provide a final figure for the number located in the UK and the EU.
I think that that covers most of the points raised. Again, I thank noble Lords for their contributions on this SI. On behalf of the Government and the Opposition—and I am sure that on this occasion I speak for the Liberal Democrat Benches and perhaps the Cross Benches too—I express the hope that, despite the scrutiny that, rightly, is called for in the amendment, the noble Lord will not press it and will accept the regulations. It is necessary to put them in place in order to protect investors in this country.
Lord Adonis
My Lords, I shall not press the amendment. I am extremely grateful to, and flattered by, the compliment paid by the noble and learned Lord, Lord Mackay. He said that he does not understand my opposition to these regulations, but he will appreciate that there is no way in which I could conceive of being a Minister proposing to put arrangements in place for a no-deal Brexit. I would regard that as a fundamental betrayal of the national interest. Therefore, if he accepts as a premise that the whole activity that the state is engaged in at the moment is, in my view, fundamentally illegitimate, he might accept that the course that I am pursuing is at least logical.
Lord Mackay of Clashfern
Perhaps I should respond by saying that I did understand that. Fundamentally, the noble Lord, Lord Adonis, believes that his wisdom is superior to that of the 17 million who voted the other way.
Lord Adonis
And I am very anxious that they should have an opportunity to cast their vote on the deal which they can now see but which they did not know about three years ago because it did not exist. I am fairly confident that if the electorate of this country had any idea that three years ago they might have been putting in place arrangements for a no-deal Brexit, they would not have gone anywhere remotely close to the situation that we have today. However, on that note, I beg leave to withdraw.
Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019
(5 years, 8 months ago)
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Lord Bates
That the draft Regulations laid before the House on 9 January be approved.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, 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 EU withdrawal Act to deliver this. A number of debates on these SIs have already taken place both in this House and in the House of Commons. This SI is part of that programme. It will fix deficiencies in retained EU legislation relating to packaged retail and insurance-based investment products, or PRIIPs, to ensure that it continues 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 it where necessary to ensure that it works effectively in a no-deal context.
I turn to the substance of the SI, which amends the PRIIPs regulation. PRIIPs are investment products offered to retail investors and considered as an alternative to, for example, depositing cash in a savings account. They include financial products such as investment funds, life insurance policies that have an investment element, derivatives and structured investment products. As such, PRIIPs are primarily sold by asset managers, insurers and banks.
The EU PRIIPs regulation introduced a standardised disclosure document called a key information document, or KID, to be provided when a PRIIP is advised on or sold to retail investors. It came into application on 1 January 2018. The PRIIPs regulation aims to make it easier for retail investors to compare similar financial products by requiring certain information about the product, such as the risks, performance scenarios and costs, to be disclosed in a standardised way on the KID. In a no-deal scenario, the UK would be outside the EU and outside the EU’s legal, supervisory and financial regulatory framework. The retained PRIIPs regulation therefore needs to be updated to reflect this and to ensure that the provisions work properly in a no-deal scenario.
First, the SI amends the territorial scope of the retained PRIIPs regulation to reflect the UK’s withdrawal from the EU. Currently, the EU regulation applies to any firms that manufacture, advise on or sell PRIIPs to investors in the EU. This SI ensures that, after exit day, the retained PRIIPs regulation will apply only to those firms that manufacture, advise on or sell PRIIPs to retail investors in the UK.
Secondly, the PRIIPs regulation contains an exemption from its requirements for certain securities issued or guaranteed by EEA public sector bodies. This SI expands the exemption, so that such securities issued by public sector bodies in the UK or any other third country are covered within the exemption. This is to ensure that no new securities are captured in the scope of the PRIIPs regulation in the UK on exit day, and that the UK treats EEA member states and third countries equally.
Moreover, the current regulation contains an exemption from its requirements for all Undertakings for Collective Investment in Transferable Securities funds until 31 December 2019. UCITS funds are a common type of retail investor fund and must be domiciled in an EEA state. Both UK and EEA-domiciled UCITS are sold widely in the UK and are subject to a specific disclosure framework set out in the UCITS directive, separate to the PRIIPs disclosure framework.
The instrument maintains this exemption for both UK and EEA UCITS until 31 December 2019. This is to ensure that both UK and EEA funds are able to continue to adhere to the existing disclosure framework for UCITS until the exemption ends. Furthermore, the SI transfers the functions carried out by EU bodies under this regulation to the relevant UK authorities. Following exit, EU bodies will have no mandate to carry out such functions in the UK. The instrument corrects this deficiency by transferring the functions of the European Commission to the Treasury, and the functions of the European supervisory authorities to the FCA. Powers to make and correct deficiencies in binding technical standards are also transferred from the ESAs to the FCA. This is in line with the approach taken across financial services legislation.
Finally, this SI deletes provisions in the retained PRIIPs regulation that will become redundant once the UK leaves the EU. It deletes certain powers for and references to EU regulators and EU member states, as well as administrative sanctions powers for national regulators which have already been brought into UK law and granted to the FCA through UK implementing legislation: the Packaged Retail and Insurance-based Investment Products Regulations 2017. The instrument also removes obligations in the PRIIPs regulation for the FCA to co-operate and share information with EU counterparts, as this obligation would not be appropriate after exit day. The FCA will instead be able to use existing domestic provisions for co-operation and information-sharing under the Financial Services and Markets Act 2000, to share information with EU authorities.
The Treasury has been working very closely with the FCA, and has engaged with industry bodies in the drafting of this instrument. On 22 November 2018, the Treasury published the instrument in draft, along with an explanatory policy note to maximise transparency to Parliament, industry and the public ahead of laying. The Government recognise the issues raised by industry regarding problems with the underlying PRIIPs regulation and KIDs. I fully recognise the significance of these issues. However, the EU withdrawal Act does not give the Government the power to make general policy changes to retained EU legislation. We can use the powers only to fix deficiencies arising from the UK’s exit from the EU.
However, the FCA has taken action in relation to issues with the PRIIPs regulation to date. The FCA launched a call for input in July 2018, to seek input from firms and consumers on their initial experiences of the requirements introduced by the PRIIPs regulation. This call for input closed for responses on 28 September 2018 and the FCA is in the process of reviewing all responses. It expects to publish its feedback statement in quarter 1 this year.
In summary, the Government believe that the proposed legislation is necessary to ensure that the disclosure framework for PRIIPS continues to function appropriately if the UK leaves the EU without a deal or an implementation. I hope noble Lords will join me in supporting these regulations, which I commend to the House.
Amendment to the Motion
Lord Adonis
Leave out from “that” to the end and insert “this House declines to approve the draft Regulations because no consultation has been undertaken despite Her Majesty’s Government’s economic assessment indicating transition and associated costs will be significant.”
Lord Adonis (Lab)
I have nothing to add to my remarks on the previous regulations. The issues are exactly the same, regarding consultation and the conduct of assessments.
Lord Tunnicliffe (Lab)
When I read the SI with care, it seemed straightforward and to do its work. I was seeking to see if there was any new policy, and the new policy that I discovered was the Venezuela point. I hope the Minister will be kind enough to write to me explaining whether “all countries” has that worldwide application and why the Treasury does not perceive that there is any danger in such an extension. Other than that, I am entirely content for this SI to go through.
Lord Bates
I am happy to give the noble Lord that assurance; I will write and be clear on that question. I thank the noble Lord, Lord Adonis, for not pressing his amendment.
Public Record, Disclosure of Information and Co-operation (Financial Services) (Amendment) (EU Exit) Regulations 2019
(5 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bates
That the draft Regulations laid before the House on 21 January be approved.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, as a great deal of financial services activity takes place across borders and across regulatory regimes, the ability of national regulators to co-operate with each other and to exchange information is vital if they are to discharge their supervisory functions effectively. As noble Lords will know, an important function performed by financial services regulators is the gathering of supervisory information from firms. Regulators use this information so they can ensure that regulated firms are operating in a way consistent with regulatory requirements so that they are alerted to any development that may need supervisory intervention.
The information gathered by regulators is often confidential and commercially or market-sensitive, so it is right that there are strict rules and safeguards on how regulators share such information with other regulatory authorities. EU law currently plays an important role in setting these rules. In order to ensure the effective functioning of the single market in financial services, the EU has developed a joint supervisory framework for national regulators and supervisory bodies in the EEA. This makes co-operation and the sharing of certain supervisory information between EEA national regulators mandatory. In addition to that, the EU has established the European supervisory authorities—ESAs—which are responsible for co-ordinating the approach of EEA national regulators. Co-operation and the sharing of certain information with the ESAs is also mandatory for EEA national regulators.
As well as setting out what information should be shared, EU rules include restrictions and safeguards. In the UK, these rules are implemented by Part 23 of the Financial Services and Markets Act 2000—or FiSMA, as it is known—and the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001. For third-country authorities, there are additional restrictions when disclosing confidential information. The UK regulator may need to be satisfied that the third-country authority has protections for confidential information in place that are equivalent to those of the EU. There may also be a requirement to enter into a co-operation agreement with the third-country authority. In addition, if the UK regulator is disclosing confidential information to a third-country authority which originated from an EEA authority, the UK regulator may need to seek the consent of the EEA regulator which originally disclosed the confidential information.
Lord Adonis
At the end insert “but this House regrets that no consultation was undertaken on these Regulations.”
Lord Adonis (Lab)
I do not have anything to add on consultation or assessment, but the Minister just said that discussions with the EU about a new regime are in progress. He was speaking extremely quickly, but I think he said that good progress was being made. Could he tell the House whether he expects that an agreement will be reached by 29 March? I beg to move.
Lord Sharkey (LD)
We support this statutory instrument, but I have a couple of quick questions. In paragraph 2.7, the EM notes that:
“In certain exceptional instances, a similar requirement to seek consent from the originating regulator applies where the confidential information originated from a third-country regulatory authority”.
That seems a little opaque. I could not find anywhere in the SI what these exceptional circumstances might be. That may well be my fault but I would be grateful if the Minister could point me at the relevant parts of it or, even better, explain what these circumstances are.
Finally, I was puzzled as to why the SI’s introduction of transitional provision, described in paragraph 2.16 of the Explanatory Memorandum, was necessary. That paragraph says:
“In addition, this instrument introduces a transitional provision so that any confidential information that was received on or before exit day will continue to be treated in line with the relevant provisions in EU regulations and directives as they had effect before exit day”.
That raised two questions for me. The first is one of necessity. Would this eventuality not be covered by the general transposition of EU law into UK retained EU law? The second is to do with the wording of the paragraph in the EM, which refers to information received on exit day. But we are scheduled to leave the EU at 11 pm on exit day, so what happens to confidential information received between 11 pm and midnight on exit day?
Lord Tunnicliffe (Lab)
My Lords, looking through this statutory instrument to see whether there were any policy shifts, as far as I can understand it, the EEA countries have better protection for their confidential information than third countries do. This statutory instrument takes that special protection away and then requires agreements to be concluded. That would seem to be the wrong way around. I would have thought that the protection which the EEA states have—that before the information can be passed on, permission must be sought from the originating country—would be better extended to other third countries. This would be a better position for the management of confidential information than what is referred to in the Explanatory Memorandum as a series of agreements, followed by instructions to staff. It is a bit late to have a debate on such an obscure point but if the Minister were to read Hansard tomorrow and send me a letter on this point, I would value that.
Lord Bates
Again, I thank noble Lords for their scrutiny and questions. I give notice that I may need to write on one or two of them, if they would accept that, but I will say a little about how the negotiations are going. In my enthusiasm to communicate the details of this instrument to the House, I perhaps went a bit fast but I did indeed say that the negotiations were going well.
UK and EU authorities have made good progress in their discussions on a memorandum of understanding, which includes essential provisions for confidential information-sharing and co-operation. It is our hope that these will be in place by exit day. Both UK and EU regulators recognise the importance of effective co-operation and are working hard to finalise co-operation agreements. We fully expect these agreements to be in place by exit day, as part of preparations to deal with a no-deal scenario. More broadly, Members will be well aware of the top priority we have attached to putting in place a range of transitional arrangements, designed to mitigate the impact of no deal.
The noble Lord, Lord Sharkey—eagle-eyed as ever—spotted the gap between 5 pm and 11 pm. I am guessing that it is a standard cut-off point—a sort of close-of-business setting on the day in question—but perhaps that is not the case. I am told that exit day is defined in the EU withdrawal Act as 11 pm on 29 March, specifically; yes, I am aware of that. I think the point was made that it says 5 pm but there might be something else winging its way to me.
The noble Lord, Lord Sharkey, also mentioned confidential information and made a good point on that. Under Section 348 of FiSMA, “confidential information” means information which,
“relates to the business or other affairs of any person”,
that was received by the FCA, the PRA, the Bank of England, the Secretary of State or specified people instructed or employed by them for the purpose of discharging their functions; and it is not prevented from being confidential information because, for example, it has already been made available in public.
I will take advice from my noble friend Lord Young and perhaps just pause there with the assurance that I will write and follow up on this, and thank noble Lords for their contributions.
Lord Adonis
At this late and extreme hour, the noble Lord, Lord Sharkey, seems to have discovered a missing six hours in the regulatory regime that is going to govern the financial services industries of the United Kingdom and Europe, and what might happen for the exchange and disclosure of confidential information. Assuming that those six hours can be repaired overnight, I beg leave to withdraw.