Draft Employment Allowance (Excluded Persons) Regulations 2020
(4 years, 9 months ago)
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The Financial Secretary to the Treasury (Jesse Norman)
I beg to move,
That the Committee has considered the draft Employment Allowance (Excluded Persons) Regulations 2020.
It is a delight to see you in the Chair, Ms Buck. This draft legislation allows the Government to target the national insurance employment allowance to businesses that need it most. Employers pay class 1 national insurance contributions on employee earnings above the secondary threshold, which is set at £8,632 this year. Those contributions are charged at 13.8% and constitute the largest business tax by revenue in the UK.
The employment allowance was introduced in 2014 to help businesses with the cost of employment and to encourage them to grow and to hire more staff. More than 1 million employers claim the employment allowance to reduce their employer NICs bill by up to £3,000 and, since its introduction, it has taken 590,000 businesses out of paying national insurance contributions altogether.
The employment rate is at an all-time high of 76.2%. Since 2010, youth unemployment has been halved and 3.7 million more people are in employment. That is a nationwide phenomenon; in the last year, three quarters of employment growth was outside London and the south-east.
All businesses—from greengrocers to Goldman Sachs; from butchers to Barclays; from pubs to Primark—are currently eligible for Government relief of up to £3,000 of their total employer NICs bill. Big businesses get the same benefit as small ones, but for larger businesses, that £3,000 is a small—perhaps tiny—amount relative to their total employment costs, so it is unlikely to encourage them to take on more staff, contrary to the purpose of the policy. It is right therefore to target the support at smaller businesses, for which the £3,000 relief makes a real difference to the cost of doing business.
That is why the Government decided to restrict the employment allowance to smaller businesses in the 2018 Budget. As a result, from April 2020, only businesses with an employer national insurance contributions bill below £100,000 will be eligible for the employment allowance. More than 99% of microbusinesses with fewer than 10 employees and 93% of small businesses with fewer than 50 employees will remain eligible for the employment allowance. Of the businesses that currently receive the employment allowance, around 8%—all of which will have a pay bill above £700,000 per year—will lose the allowance.
Targeting the employment allowance at smaller businesses means that it falls under EU de minimis state aid regulations. De minimis state aid refers to small amounts of aid that can be given without notifying the European Commission. Most businesses can receive up to €200,000 of de minimis state aid cumulatively in a three-year period. Under the de minimis regime, to claim the employment allowance, businesses need to notify Her Majesty’s Revenue and Customs annually as part of the existing claims process and confirm that they can receive the employment allowance without exceeding their cap. After consulting widely, the Government have removed the requirement to specify exactly how much state aid businesses have received, to make it easier for them to claim the reformed employment allowance.
As the Prime Minister announced, the Government will develop a separate independent UK policy on subsidies, for use when the transition period has ended. That will be a modern system designed to support businesses in a way that fulfils British interests. Although the employment allowance supports small businesses, I hope that the Committee agrees that giving every large business with a wage bill of £700,000 or more £3,000 off its national insurance contribution bill is not good value for money. The Government are committed to furthering their support for small businesses as we look to level up opportunity and growth across the country.
Over the course of this Parliament, this reform is projected to raise more than £1 billion that can be used to fund important public services and to target support for small and medium-sized businesses.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is always a pleasure to see you in the Chair, Ms Buck, and I thank you for the opportunity to respond to the Minister.
I thank the Minister for his explanation of this measure. I am aware that it has been in the pipeline for some time and I can understand the Government’s desire to focus the allowance on smaller businesses. However, I would like to ask the Minister several questions to aid the Committee’s understanding of its likely impact.
First, the Minister said that he believed that this would raise £1 billion a year. Will he share with us some of the Government’s analysis as to how many businesses, which were previously able to claim this allowance above the £100,000 threshold, will be affected from 6 April 2020? I ask that, with reference to the revenue, because this seems to be a significant undertaking in terms of the administration being asked of the recipients. Will the Minister explain who is affected and how those savings justify the change that is being proposed? As we often discuss in debates on Finance Bills, constant tinkering with allowances can be unhelpful, as it creates confusion among businesses as to what they are entitled to and when.
Secondly, I would like to ask about the reclassification of this payment as state aid under EU rules. Given that we have left the European Union—although we are still in the transition period—why is this reclassification necessary and what relevance does the Minister anticipate this will have in the future under UK law?
Finally, I am aware that an administrative change is associated with this amendment to the allowance, in that companies will no longer have an ongoing rolling entitlement, but will instead fill out a new claim each year. I want to ask the Minister to address the unnecessary bureaucracy and paperwork that might, therefore, be put on to all business owners, on top of the implementation of Making Tax Digital and the likely increase in bureaucracy as a result of Brexit. How will this change be communicated to all those it will affect? How are the Government communicating this to small business owners, so that they understand that they will not be affected, in a timely manner and with adequate support?
I hope the Minister can respond now to those points, but if not, he can respond in writing.
Amy Callaghan (East Dunbartonshire) (SNP)
Thank you, Ms Buck, for the opportunity to ask the Minister questions on this matter. The Scottish National party supports a reduction in employers’ national insurance to boost jobs. That was clearly outlined in our manifesto, on which won 80% of seats in Scotland.
Although Scotland has a strong labour market, crippling Brexit uncertainty is putting jobs at risk. How can these savings be justified? Does the Minister understand the adverse effect that they could have on businesses in Scotland, given the uncertainty already occurring in this sector due to Brexit?
Jesse Norman
I am delighted to answer the questions put to me. In response to the hon. Member for East Dunbartonshire, I think I am right in saying that SNP policy was to double the employment allowance, rather than to restrict it. I think that would have had the effect of continuing the mis-targeting, which we have identified, on the largest companies. Therefore, we do not think that would be a good policy and we think it is much better to have the support targeted where it will have an effect on increasing the marginal appetite to retain or hire employees.
In relation to the questions from the hon. Member for Stalybridge and Hyde, I mentioned in my speech that some 8% of current businesses—about 80,000 businesses —would not be eligible for the employment allowance, as it is now proposed to be targeted. He will appreciate that it is designed in such a way that there should be a reduction in paperwork, because we have managed to avoid the situation that would have been mandated otherwise under EU rules, in which the specific amount of state aid received would have to be indicated. There was feedback in the consultation on the question of paperwork. The decision was taken that the application would be put through payroll software and should be as light touch and straightforward as possible.
The hon. Gentleman also asked about state aid. The trouble is that by restricting the scope of the allowance and by targeting a group, it automatically engages in EU state aid rules, and looks like preferential treatment. The Government have no option if they wish to introduce it. I do not detect any difference in the policy goal between us and the Opposition. It is a necessary part of doing that. I hope he can take some comfort from the fact that at the end of the transition period we expect to at least assess the scope for redesign of the policy if there is serious evidence of any adverse impact on those it is meant to support.
I have indicated that the allowance will be paid through payroll and will be communicated through the usual channels online, through public media support, and with the active collaboration of stakeholders, small business groups and other relevant organisations to make sure that it has the widest possible take-up. Since this is a universally understood allowance already, I expect take-up to be high from the beginning.
Question put and agreed to.
Draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 14) Order 2019
(4 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Justice (Chris Philp)
I beg to move,
That the Committee has considered the draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 14) Order 2019.
It is a pleasure to serve under your chairmanship, as always, Sir David.
The purpose of the draft instrument is to enable the Secretary of State to make alcohol abstinence and monitoring requirements available across England and Wales. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 required that pilots be run before these measures were introduced across England and Wales. Those pilots have now been run in London and Humberside, so this statutory instrument provides for the roll-out across the country by bringing into force section 76 of the LASPO Act, which itself inserts section 212A into the Criminal Justice Act 2003.
This legislation will give courts a new tool to directly address alcohol-related offending. As part of a community sentence, judges and magistrates will be able to impose a ban on drinking alcohol for up to 120 days, using continuous electronic monitoring.
Alcohol-related crime places a huge strain on our society. The most recent figures published in the crime survey for England and Wales of 2018 estimated that 39% of violent incidents were connected with the influence of alcohol, so it is a serious issue. Through enforcing abstinence, AAMRs are designed to mitigate the offending behaviour driven by alcohol and to interrupt the consumption of alcohol that has caused a particular offender to behave as they have done.
As I mentioned, there have been two pilots, as required by the 2012 Act. The first was in London, initiated by the Prime Minister when he was Mayor of London, and the second took place in Humberside, Lincolnshire and North Yorkshire. Those pilots have been subject to five separate evaluations. It is worth saying that AAMRs are imposed on offenders who do not have treatment requirements imposed on them. Where someone has an alcohol problem that requires medical treatment, we do not use an AAMR—it is one or the other.
During the course of the pilot, about 1,500 AAMRs were—[Interruption.] We welcome support from all corners of the House. The hon. Member is extremely welcome; we are a very broad church these days. During the pilots, compliance with those 1,500 AAMRs was extremely high. There was a 94% compliance rate in terms of the process being completed, and the compliance rate with alcohol abstinence was 98% in the Mayor’s Office for Policing and Crime area—the London area—and 97% in Humberside and North Yorkshire. The evidence suggests that AAMRs are extremely effective at persuading the offender to abstain from drinking alcohol.
On the kinds of offences for which AAMRs were imposed, in London 45% of the orders were used for violent offenders, and in the Humberside pilot 31% were for offenders where there was a domestic abuse offence.
Sentencers have welcomed the use of these measures. It so happens that one of my parliamentary caseworkers is a magistrate at Croydon magistrates court in London, and anecdotally she has reported that she feels the orders work well. That has been reflected in the more formal feedback via the five studies.
The police also welcome these measures. The Humberside police and crime commissioner, Keith Hunter, said:
“The period in which the offender is tagged will give rehabilitation agencies a real opportunity to work with the individual and get them to recognise and change their behaviour, hopefully for good. I would like to see these orders available nationally as a standard feature of the Criminal Justice System.”
That is precisely what we are doing this afternoon. Moreover, Julia Mulligan, the North Yorkshire police, fire and crime commissioner, said:
“This has proved to be a successful pilot, with many lessons learned along the way. We know alcohol can play a key part in offending for some people, and this appears to have been a positive intervention—reducing offending markedly among those wearing tags.”
It is clear, Sir David, that this has been a successful pilot, and it is right that we activate section 76 of the LASPO Act and get on with making this provision available to magistrates and Crown courts across the entire jurisdiction. In the roll-out, we intend to follow a similar process to that used during the pilot, in that we will do it region by region, starting this year. We expect the full national roll-out to take about 12 months. Once fully rolled out nationally, we estimate that about 2,300 offenders per year will be subject to the orders, although that is a matter for judges, magistrates and the Crown court to decide when passing sentence.
We intend to publish a White Paper on sentencing later this year, which will look at toughening community sentences more generally. I am keen, as is the Lord Chancellor, to make sure that where someone has a substance or alcohol addiction problem, or a mental health problem, we do more to treat the underlying health causes rather than giving a short custodial sentence, which can be ineffective. We are not proposing to abolish short custodial sentences, but where treatment is appropriate we would like to make sure that people receive it to address the underlying causes of their behaviour. That is consistent with our general direction of travel.
In conclusion, the pilots have been successful, and judges and the police welcome the measure. I commend the statutory instrument to the House.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is a pleasure to serve under your chairmanship, Sir David.
We recognise that alcohol is a serious driver for offending in cases of violent assault and domestic abuse. We further recognise that alcohol monitoring tags provide clear benefits and have a prominent role to play in reducing reoffending that is linked to alcohol. We therefore support giving those who impose sentences the power to use sobriety tags and AAMR orders, where they are appropriate.
We are clear that our support for the tags and AAMR orders is based on the evidence that has been provided by the Government, which the Minister set out eloquently. It shows that there is a high level of compliance and that AAMR orders are an effective way of reducing reoffending driven by alcohol. However, that does not mean that there are no questions that the Government must answer over the national roll-out of AAMR orders.
While the Government have carried out two pilots of AAMR orders in London and across the Humber, Lincoln and North Yorkshire region, we are concerned about the significant length of time that they were in place before the national roll-out. The Government must clarify why the pilots were in place for a number of years—much longer than would have been presumed necessary—and why, after having hopefully learned so much over such a length of time, AAMR orders are now being rolled out nationally only in an incremental way.
The Government must set out whether the two pilots will be independently evaluated, and whether their findings will be publicly available and widely circulated to demonstrate that the evidence base for a national roll-out is built not just on enthusiastic backing from certain stakeholders, but on credible data that demonstrates beneficial impact. Pilots of new technology and procedures will almost always be welcomed to get things right and iron out any issues, but they must also always be open and transparent to ensure that the right lessons are learned.
We are concerned about the Government’s track record on electronic monitoring contracts, with the fiasco over 24/7 GPS location tagging fresh in our minds. Originally announced in 2011 for a national roll-out in 2013, those location monitoring tags ended up being delayed for five years at a cost of millions of pounds to the taxpayer, with the supposed cost-saving benefits not now expected to be fulfilled. That alone is serious enough, and should disqualify those involved from participating in the programme of rolling out and administering the use of sobriety tags, but the issues with the tagging contracts go much deeper.
In 2013, the Serious Fraud Office was forced to investigate the irregularities in Serco and G4S’s handling of the GPS location tagging contract. A criminal investigation found that Serco had charged the Ministry of Justice for tagging people who were dead, in prison or abroad. With such a record, G4S and Serco must not be allowed anywhere near another tagging contract if the public are to have confidence in the system. The Minister must guarantee today that the delays and costs of the GPS location tags will not be repeated in the case of sobriety tags, so that security and value for money are delivered for the taxpayer.
The Minister must make it clear that, unlike what has been done with the probation service, he will not further reward the failure of private companies in the criminal justice system. Under the Ministry of Justice’s public procurement regulations, there is a clear basis for disqualifying Serco, G4S and any others involved in fraud from bidding for and participating in the sobriety tagging programme on the grounds of a significant deficiency, so he must categorically rule it out.
With the prison system stretched to breaking point and internal MOJ figures reporting that our prisons will be full by the end of the year, the Government must set out what provisions are in place to ensure that offenders who breach AAMR orders do not put further undue pressure on our prisons. The Government must ensure that existing alcohol and substance misuse treatment services in our prisons, which are in a dire state, are strengthened to ensure that offenders do not have problems with alcohol and drugs, but have the support that they need.
The London pilot reported that the use of AAMR orders did not place a significant additional burden on stakeholders and responsible officers. The Government must guarantee, however, that that will also be prevented in the national roll-out, particularly considering the substantial understaffing and overworking of people in the National Probation Service that was recently reported by Her Majesty’s chief inspector of probation.
With alcohol abuse a significant factor in many domestic abuse cases, I hope that the Minister will heed the advice of stakeholders in the MOPAC pilot, who stated that AAMR orders should be imposed alongside specialist programmes, such as the building better relationships programme, to address the thinking and behavioural causes of domestic abuse reoffending and the ongoing risk of further abuse and harm. I hope that the Government will commit to naming a date by which the domestic abuse Bill will finally be reintroduced to Parliament after being dropped twice. I have learned that it may receive its First Reading tomorrow, but I wait to hear if the Minister is aware of that.
I hope that the Minister will commit to ensuring that the national roll-out of sobriety tags will not end up like previous MOJ contracts, give a guarantee that the contracts will neither overrun nor overspend, and make a firm pledge that G4S and Serco will be disqualified from the process, based on their previous conduct, so that the public and sentencers can have the confidence they need in the programme.
Chris Philp
I will respond briefly to some of the points raised by the shadow Minister. I thank him for his intention not to divide the Committee and for the constructive and thoughtful tone of his remarks.
The hon. Gentleman mentioned the domestic abuse Bill. It is not my policy area, but I believe that it is the intention to introduce it in the House in the extremely near future, so it will be taken forward. We have clearly had a somewhat disrupted 12 months or so, with various things impeding the passage of legislation, but the Bill is important, as he rightly says, and we are moving on with it at pace now that we have a more stable political environment.
The hon. Gentleman asked why the pilots took so long. When we are piloting a new criminal justice intervention, it is right that we do it thoughtfully, rather than in a hurry. There are examples of interventions that were rushed and not properly thought through. It is reasonable that, before we change the law, as we are doing today, we pilot a measure in a considered and thorough way. As I said, five evaluations have been conducted. He asked about the roll-out programme and, again, we do not want to rush it. We want to make sure that it is done properly in each region in turn. Getting it done in the space of 12 months or so is not an unreasonably long time.
The hon. Gentleman asked about the release of the evaluations. The evaluations are independent, and we believe that those done on behalf of MOPAC and on behalf of Humberside, Lincolnshire and North Yorkshire will be published publicly. He will be able to read them in due course.
There have in the past been serious problems with the tagging contracts, which the hon. Gentleman referred to. Of course, any private sector contract, particularly in the area in question, will be monitored carefully for all the reasons he mentioned.
The hon. Gentleman asked about breach. Clearly, if someone who is given an AAMR breaches the requirement by taking the tag off or drinking when they are not supposed to, that will in the first instance be a matter for the probation service. It could escalate the matter to, for example, a magistrate who would be able to take appropriate follow-up action. The magistrate’s range of options would include another community order, a fine or, in extreme cases, imprisonment.
I completely agree, on the question of treatment, that it is critical that if someone has a serious health problem—whether that is drug or alcohol addiction or a mental health problem—we seek to treat it. AAMRs are not about treating people with serious addiction. Alcohol treatment requirements are designed to do that. However, AAMRs have a role to play with people whose drinking is problematic but falls short of addiction meeting the medical threshold requiring treatment, for which separate ATRs are in place.
John Howell (Henley) (Con)
The Minister makes a distinction between the AAMR and medical treatment. Is he happy that that is a robust distinction that can be upheld in practice?
Chris Philp
Of course, it is always for the magistrate or Crown court to decide on which side of the line a particular patient falls, but, as I have said, we shall be returning to this area in the sentencing White Paper to be published later in the year. A critical part of that will look at ways to deepen and widen treatment for people who have addiction and mental health problems. The question that my hon. Friend raised will be addressed in the White Paper and I strongly encourage him, and others with expertise of the kind he has, to contribute to the thinking about that. It is exactly the sort of question that we shall address.
I hope that I have been able to respond, briefly, to some of the questions that were raised. I once again commend the instrument to the Committee.
Question put and agreed to.
Draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2020
(4 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Scotland (Douglas Ross)
I beg to move,
That the Committee has considered the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2020.
It is a pleasure to serve under your chairmanship, Mr Sharma. I am grateful for the opportunity to debate the draft order, which was laid before the House on 31 October 2019.
The draft order is part of the Government’s ongoing commitment to devolution. The Scottish Government have committed to introduce a grant called the job start payment for young people aged between 16 and 24 years who have been out of paid employment for six months or more and who submit an application for such a payment, but Scottish Ministers do not have executive competence to provide assistance to that cohort of young people for the purpose of helping them to retain employment. Section 31 of the Scotland Act 2016 gives the Scottish Parliament powers in that area by creating some exemptions to the reservation of the subject matter of the Employment and Training Act 1973, but those exemptions do not extend to providing such assistance. My right hon. Friend the Secretary of State for Work and Pensions has therefore agreed to share with the Scottish Government the existing powers in the 1973 Act, which allow for the making of arrangements to provide that assistance. Under section 63 of the Scotland Act 1998, the draft order will achieve that by amending the 1973 Act to make those powers exercisable concurrently by the Secretary of State and Scottish Ministers.
To be clear, the order will only give Scottish Ministers the necessary powers; it does not set the policy itself, which is a matter for the Scottish Government under the scrutiny of the Scottish Parliament. Furthermore, the powers of the UK Government will not be reduced as a result of the order, as the functions are simply being shared with the Scottish Government.
I will explain briefly what the Scottish Government intend to do with the powers transferred under the draft order. As I said, the Scottish Government will introduce a grant to be known as the job start payment. The proposal is for a one-off cash payment of £250 for young people who do not have children, and £400 for those who do, to help with the initial costs associated with entering and remaining in work. It can be used for food, travel or clothing, thus removing some of the initial pressure of starting a new job. Eligible young people will be able to apply until their 25th birthday. Care leavers will be able to apply until their 26th birthday, and will only have to be out of paid work on the date of their job offer, rather than for the previous six months, in order to be eligible.
The job start payment is expected to be introduced in spring 2020; it depends on this order being made. The payment will be administered by Social Security Scotland, the Scottish Government’s benefits delivery agency. Any costs associated with delivering the payment will fall solely on the Scottish Government. It is for the Scottish Parliament to scrutinise the spending decisions of Scottish Ministers. In the Scottish Budget for 2020-21, announced on 6 February, £2 million was allocated to fund the benefit expenditure for the job start payment.
The UK Government view the draft order as an addition to the support already provided across Great Britain to people searching for work within the reserved competence. It demonstrates that the UK Government remain committed to strengthening the devolution settlement and shows Scotland’s two Governments working together. On that note, I commend the order to the Committee.
Tony Lloyd (Rochdale) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. Neither I nor the Minister anticipate any dissent, but I have a number of technical questions about the draft order. I will be grateful for a response.
Extra provision for those who have left care is obviously welcome. It is important to recognise the extra burden faced when obtaining employment by those who come through the care system anywhere in this United Kingdom. Will the Minister state for the record what I think is the case, which is that residence in Scotland will be a necessary condition of being able to apply for the grants, but anyone who has come through the care system in any part of the United Kingdom—England, Wales or Northern Ireland—will be eligible to apply for, and to be granted, the same facilities as those who have come through the care system in Scotland?
My second question is slightly more difficult. Probably something in the order of 700,000 people in Scotland are on a zero-hours contract. Such new and unusual forms of employment contract lead to very different work-life balances from those we would have assumed in the past. Clearly, there may be complications for those on low or zero hours in having their employment status recognised for the purposes of the grants. Can the grants be extended to people in that situation? Obviously, these unusual contracts exist in problematic work all over the UK, and it would be difficult—indeed, unfair—for those who are making their best effort to get into the world of employment to find themselves shut out of the scheme because of technicalities.
My final point is arguably much more political. We know that one issue we still face is low pay in work. The grants—£400 for those with children, £250 for those without—are a powerful incentive and go some way to recognising the real costs of moving into the world of work for those who do not have previous experience. Had the Government accepted the minimum wage of £10 an hour proposed by the Labour party during the last election, the uplift would have been considerably bigger, putting £2 billion into the Scottish economy and in effect floating a considerable number of those seeking work way above the level of the grants.
I do not want to be churlish and pretend that this scheme is not welcome, but I hope the Minister accepts that the politics of low pay and of bringing the whole of these four nations of ours up to an acceptable working wage is real. For younger people aged between 18 and 20, the living wage will be little more than £6.45 an hour. That is a low wage by any standard. Clearly, the capacity to lift those people beyond that would make a real difference. Nevertheless, we give our wholehearted support to the order.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Mr Sharma. I do not think anybody will be surprised to hear that Scottish National party Members support the measure. It is the right thing to do. Of course, Scottish Ministers should already have the power to make this change themselves, without recourse to this place. The transfer to the Scottish Government of power over areas covered by the Employment and Training Act 1973 will enable the Scottish Government to assist young people between the ages of 16 and 24. As the hon. Member for Rochdale said, this payment will be a powerful incentive, so I make no apology for repeating the details of this great initiative.
The Scottish Government are introducing a new job start cash payment of £250, and £400 for a young person with children, available to those between the ages of 16 and 24 who have been out of work and receiving a low-income benefit for six months prior to finding employment. As mentioned, care leavers will not have to meet this qualification and will be supported until their 26th birthday. This change has the potential to have a transformational effect for a lot of young people seeking to make their way in the world. The payment can help with travel costs, clothing, lunches and other expenses that need to be met before someone receives their first salary. If all goes well in this place, it will be launched this spring.
The Scottish Government are doing all they can within the constitutional and financial restraints placed upon them to build a social security system for Scotland based on dignity, fairness and respect. Clearly, we are pleased that the UK Government have agreed to share this function of making arrangements so that the Scottish Government can deliver the new payment, but I feel compelled to say that it is ridiculous that Scottish Ministers are forced to get permission from the UK Government, instead of having the powers themselves. We want the Scottish Parliament to have full power over social security, so that we can introduce inclusive and progressive policies, without being at the whim and favour of the Westminster Government.
Douglas Ross
I thank those who contributed to the debate, which was generally consensual, with some exceptions towards the end of the remarks by the hon. Member for Inverness, Nairn, Badenoch and Strathspey.
Let me start with the remarks by the hon. Member for Rochdale. A shiver went up my spine as soon as he said he had some technical questions, given his questioning of the Secretary of State at Scotland questions a couple of weeks ago. The hon. Gentleman asked about people resident in Scotland who left care in other parts of the UK. An individual will be eligible for the policy when they are resident in Scotland on the day of the job offer; they could, therefore, have left the care sector in England or Wales and moved up to Scotland. Where they are based on the day they apply under the policy and they have a job offer will determine their eligibility.
The hon. Gentleman also asked about zero-hours contracts. The Committee has not yet discussed the consultation the Scottish Government held on the policy. There were 96 responses to that consultation. As a result of suggestions in those responses, applications can now be made in respect of employment expected to average 12 hours per week over a four-week period, rather than the original 16 hours per week. That addresses some of the concerns the hon. Gentleman raised. That point was raised by a number of people who responded to the consultation, and the reduction from 16 hours to 12 hours was made as a result.
Finally, although the hon. Gentleman said he did not want to be churlish or too political, he said there would have been greater benefits for Scotland if the Labour party’s proposals for a minimum wage had been adopted. I try not to be too churlish or political when I say that the Scottish Labour party went from seven MPs to one at the last election, and that Labour was returned as an Opposition party and we were returned as the Government, with the biggest majority since Margaret Thatcher’s. We broke down the red wall because we had policies that people across the United Kingdom related to. They believed this Government and this Prime Minister would improve their lives, and I think that is why we were returned with such a large majority. I will come back to the point, Mr Sharma; I was trying to address the issues that were raised, which strayed slightly from the proposals in the draft order.
Although the hon. Member for Inverness, Nairn, Badenoch and Strathspey was a bit critical and asked why the Scottish Government should have had to ask for the draft order—that is the devolution settlement we have—he welcomed it, which shows that we can work well together. The policy shows that we have the shared interest of ensuring that young people can remain in employment when they get a job offer. We want to work together as a UK Government and a Scottish Government to deliver for the people of Scotland, and this policy does exactly that. The SNP Government held a consultation in Scotland, we introduced the draft order, and we have held discussions in this place and the other place. Surely, the fact that the UK Government and the Scottish Government can agree on such policies to improve the lives of young people through work is something we can all celebrate.
This Government are committed to working collaboratively with the Scottish Government to ensure a functioning settlement for Scotland. The draft order facilitates the introduction of the job start payment for young people in Scotland, which shows the UK Government’s commitment to working with the Scottish Government to deliver that.
Question put and agreed to.
Draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) (Amendment) Regulations 2020
(4 years, 9 months ago)
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The Minister for Housing (Christopher Pincher)
I beg to move,
That the Committee has considered the draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) (Amendment) Regulations 2020.
It is a pleasure to serve under your chairmanship, Mr Davies. The draft regulations were laid before the House on Monday 3 February 2020. Client money protection gives landlords and tenants confidence that their money is safe when being handled by an agent. The Government made it mandatory for all property agents in England holding private rented sector-related client money to obtain membership of the approved client money protection scheme on 1 April 2019.
The client money held by agents primarily includes rent paid directly to the agent and funds provided by landlords to the agent for the purposes of making property repairs. The Government have approved six client money protection schemes, protecting £3.4 billion of client money across the schemes. Nearly 10,000 letting agents are now members of a scheme.
Increasing the financial protections for landlords and tenants through mandatory client money protection is a positive step towards driving up standards in the private rented sector. Furthermore, that brings the letting agents sector into line with other sectors where client money is held, such as the legal profession and travel operators.
Before setting out the detail of the draft regulations, Mr Davies, I wish to establish the legislative context, so I hope that you and the Committee will bear with me. The Housing and Planning Act 2016 provides powers for the introduction of mandatory client money protection. Following the passage of that Act, the Government invited Baroness Hayter of Kentish Town and Lord Palmer of Childs Hill to chair a client money protection working group, which reported in March 2017. Its recommendation to make client money protection mandatory was accepted by the Government. In November 2017 the Government consulted on implementing mandatory client money protection. There was broad support for our proposal.
In June 2018 the Government introduced two sets of regulations: first, the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018, or the approval regulations, established the procedure for the Government to approve privately run client money protection schemes; and secondly, the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019, or the requirement regulations, required agents in the private rented sector to belong to one of the approved schemes if they handled client money. The two sets of regulations together provide the framework for client money protection.
In late 2018 we reviewed the regulations, considering new concerns that had come to our attention. Those included difficulties that agents in Scotland were facing in obtaining pooled client accounts following the introduction of client money protection there in January 2018. Addressing those concerns, the Government used the Tenant Fees Act 2019 to amend the client money protection regulations. To address the issues highlighted in Scotland, we permitted client money protection schemes to accept as members agents who are making all reasonable efforts to obtain a client account but are unable to do so for reasons beyond their control. We applied that grace period for 12 months, to 31 March this year.
The amendments to the approval regulations were made and commenced on 14 February 2019, which allowed schemes and letting agents to comply with our regulations ahead of 1 April 2019, when the requirement for agents to be members of a client money protection scheme came into force.
I will now introduce the draft regulations, which simply extend the initial grace period for letting agents struggling to obtain a pooled client account for a further 12 months, to 1 April 2021. I note that an error was made in the explanatory note when this statutory instrument was laid before Parliament on 3 February. The note referred to a “full impact assessment” but, as the measure falls within the de minimis exemption, we have not produced an impact assessment. With the agreement of the statutory instrument registrar, we have issued a correction to the explanatory note, stating that “no, or no significant” impact is foreseen.
Now that mandatory client money protection has been in place for several months, there is some evidence that UK banks are reluctant to offer pooled client accounts to agents. That requires attention because one of the key requirements of the 2019 regulations is for letting agents to hold their clients’ money in a client account. For the majority of letting agents, the only workable model is to hold the money in a pooled client account, avoiding the need for thousands of individual client accounts. That presents money laundering risks, however, because funds from multiple sources can be co-mingled and moved rapidly through a pooled client account, which presents challenges in identifying the true owners of the funds.
To address those risks, money laundering regulations place specific requirements on non-regulated firms, including the large majority of letting agents. Those requirements include banks conducting due diligence on both the customer that holds the pooled account—the letting agent—and that customer’s clients. That enhanced consumer due diligence has made it difficult for some letting agents to obtain a pooled client account because banks, driven by a concern to ensure compliance with anti-money laundering regulations as well as other commercial factors, may be reluctant to offer them.
We continue to monitor quarterly the number of agents affected. I am happy to report to the Committee that the number of agents reporting such difficulties to client money protection schemes remains low. In the period between October and December 2019, which is the last quarter for which we have data, 251 letting agents reported difficulties in obtaining a client account—that amounts to around 2.5% of agents that currently belong to a client money protection scheme.
The joint money laundering steering group’s forthcoming guidance for banks on their obligations under money laundering regulations will help to address the need for proportionality when assessing the risk of non-regulated firms such as letting agents. We had expected that final guidance to be published before the end of the grace period—before 31 March—but its unexpected complexity means that a draft for consultation is not expected until spring.
We have considered the case for ending or extending the grace period, in consultation with client money protection schemes, and concluded that there is a strong case for offering a further 12-month extension. That extension will guard against the risk that some agents will be unable to comply with the regulations through no fault of their own, with attendant sanctions of up to £30,000 for non-compliance. The extension allows the time needed for the joint money laundering steering group’s guidance to be published and to inform the commercial decisions that the banks then make.
We will also encourage client money protection schemes to urge agents who struggle to secure a client money account to make exhaustive efforts to do so. The fact remains that most agents do hold such accounts with banks. Agents should not assume that the grace period will be extended again beyond 2021.
Mandatory client money protection is an important part of the Government’s suite of existing and proposed policies to enhance standards in the private rented sector and give to landlords and tenants the confidence that they need when using an agent. I am grateful to you and the Committee for your forbearance, Mr Davies, and commend the regulations to the Committee.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. You will be pleased to learn that I do not intend to detain the Committee for long. The Labour party does not intend to vote against the measures, but the Minister has some questions to answer.
We are told by the Government that a private trade body, the joint money laundering steering group, is updating its guidance to help banks understand better the low risk that letting agents actually present. The Department told us, as the Minister said, that it had expected the final guidance to be published before 1 April 2020, but, due to unforeseen complexity, it will not be, so the Government are having to extend the grace period for another year, to 2021. Why is it taking so long? How on earth can people handing over thousands of pounds, if not hundreds of thousands of pounds, have confidence that their money is safe while the Government allow agents a grace period when they can, in effect, do what they like with their tenants’ cash?
According to data given to the Secondary Legislation Scrutiny Committee, as of 31 December 2019 some 9,978 letting agents holding just under £3.4 billion in funds had obtained membership of an approved client money protection scheme, of which all had an appropriate client account or were making every reasonable attempt to obtain one. Does the Minister know how many such memberships there are and how many letting agents are still making a supposedly reasonable attempt to get one?
Some 251 letting agents reported difficulties in obtaining an account during the period of October to December 2019. If nearly 10,000 letting agents have managed to obtain the necessary account, why have those others failed? Are they simply not getting their finger out because no one is cracking the whip? Is it not their responsibility in any shape or form? If everyone else managed to do it, why did they not? What estimate has the Minister made of the total number of letting agents who handle client money but do not have a separate client account, including those not part of a client money protection scheme? What estimate has his Department made of the amount of landlords’ and tenants’ money held by letting agents not in a separate client account? Does he have the answers to those questions? If not, will he find out and publish that information?
Let us not forget that mandatory client money protection is crucial to give landlords and tenants confidence that their money is safe when it is being handled by an agent, and they do not currently have that. A failure by Ministers at the Department to get a grip of the process means that there will be a further delay in many landlords and tenants getting that protection and reassurance. What chance do Ministers have of fixing the broken market for private renters if they cannot get even a simple money protection scheme in place?
Why did Ministers outsource the job of providing reassurance to banks that providing client money accounts would not fall foul of money laundering regulations to the private joint money laundering steering group? What is the unforeseen complexity we are told has been experienced in producing the guidance, according to the Department’s guidance to the Secondary Legislation Scrutiny Committee? How long has the group had to produce the guidance? What deadline has the Minister set for that guidance to be provided? That failure lets down tenants and landlords. I hope that the Minister may be able to publish some guidance for the protection of landlords and tenants who end up having to hand over their hard-earned cash to agents who have yet to provide the protection that their money needs. Will he do that?
Mr Kevan Jones (North Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I do not object to the regulations, but are we setting up here a system for wholesale fraud and money laundering by unscrupulous individuals? I do not suggest for a minute that most letting agents are unscrupulous; most are legitimate businesses providing a service, and anything that protects clients’ money is important. However, I am concerned about these pooled accounts. As the Minister said, they are not like ordinary bank accounts, because they contain not the business’s money but someone else’s money. Some large letting agents could hold money from several hundred thousand people in one account. Who is going to ensure that these pooled accounts will not be used as a way of money laundering?
Surely an easy way around it would be to have fictitious tenancies. Say for example that I invented you as an individual, Mr Davies, and said that you had rented a property and given me £2,000, and I put it into an account, and several months later I say that the tenancy has finished and I have to pay you the money back. Are we not possibly creating a problem for the banks in how they monitor these accounts?
Likewise, if we have individuals who legitimately give a letting agent £100, but what is put into the account is another £900, or £1,000 altogether, there is no way of linking individuals. Will the bank have any oversight of how many individuals the money covers? Otherwise, it does not take a genius to work out how someone could quite clearly manipulate these accounts to launder quite large sums of money, especially if we are talking about large numbers of individuals.
I do not object to the regulation, but I wonder about the way it has been set up, who will be looking at these accounts and whether there will be a random audit, for example, of individual pooled accounts. Otherwise, it could be open to a lot of fraud. I am not suggesting for one minute that the majority of letting agents would do this, but it is interesting to note that whenever the Government or the state invent a new tax or a new system, there are always people looking for ways to exploit it. This would be an obvious one for them to be able to do so.
Christopher Pincher
I am grateful to the spokesman for the official Opposition for agreeing to support this statutory instrument, and to the right hon. Member for North Durham for his questions.
The hon. Member for Stockton North asked a number of questions. He began by asking how letting agents and their clients can have confidence that their money is not being in any way misappropriated or misused. I point him to the statistics, which show that since 1 April 2019, there have been only 37 valid client money protection schemes, totalling less than £14,000, against the scheme, which manages £3.4 billion of client money. Therefore, the confidence levels of those people, whether they be landlords or tenants, should be high. That also goes some way to addressing the questions asked by the right hon. Member for North Durham.
Mr Kevan Jones
I am talking about how bank accounts will be operated in practice and who will look at them. I should think that the majority are perfectly fine, but who will be looking at whether those pooled accounts are proper pooled accounts or are being used for fraudulent activity? Who will actually do it?
Christopher Pincher
The right hon. Gentleman is perfectly entitled and right to ask those questions. We have robust anti-money laundering legislation, as he knows—he has probably debated it in the Chamber of the House of Commons. We believe that the counter-terrorist financing supervisory regime is comprehensive. The banks have to look at the money passing through their accounts, and that is one reason we are here today, because they are taking care, as they properly should, to ensure that the money passing through the accounts they manage is clean. That is placing a burden on a small number of letting agents, who we do not believe are engaged in any money laundering and whose funds we do not believe are significant, but who none the less want to conclude their business.
Tim Loughton (East Worthing and Shoreham) (Con)
Perhaps I can aid the Minister on the line of inquiry of the right hon. Member for North Durham. Is it not the case that there are already quite stringent requirements on letting agents and other property agents to ensure that the money that goes through their hands is clean, in terms of the legitimacy of a tenant to be in this country and rent a property? An agent found guilty of letting to somebody who is not legitimately in this country can be fired. There are also unexplained wealth orders, which put legal requirements on agents to ensure that the sources of funds are legitimate. In answer to the right hon. Member, the requirement is on those agents working for landlords to ensure that the moneys that they accept to go into such deposit and other protection schemes are legitimate.
Christopher Pincher
My hon. Friend makes the point even more eloquently than I can. Fundamentally, we have robust systems in place to protect against money laundering. I do not think that the extension of the statutory instrument will undermine them in any way.
Mr Kevan Jones
I am not suggesting that; all I am saying is that we are opening up a potential route for money laundering. There is clear evidence, in my constituency and others, where property prices are very low, that a good way of laundering illicit gains is to buy a property and, in some cases, to rent them out through individuals whom the hon. Member for East Worthing and Shoreham might want to say are legitimate. In some cases they are not. All I am trying to get to is the money laundering mechanism, and what we will do to ensure that banks, or anybody administering those pooled accounts, are scrutinised. I ask the question to put it on the record.
Christopher Pincher
The right hon. Gentleman makes his point. Pooled accounts exist already, and are managed by regulated organisations and groups. We are trying to ensure that the unregulated bodies—the smaller organisations that we do not believe present a significant risk—can do their business as well. That is why the joint committee is doing its work.
The hon. Member for Stockton North asked why the joint committee is doing that work, rather than some other body. It is because the joint committee combines the United Kingdom trade organisations and representatives of the financial services industry. We believe that it is best placed to ensure that the right level of regulation can be put in place—the right method of ensuring that banks can feel that the systems that they operate are sensible, compliant and deliver safeguards against money laundering.
Alex Cunningham
I am interested to understand—I have lost my point. I beg the Minister’s pardon. I will come back to it.
Christopher Pincher
I am grateful. In the course of his remarks, the hon. Gentleman asked how many agents are in difficulty. The figures that I have suggest that the number of agents who reported difficulties in obtaining a client account as of 30 June 2019 were 488. More recently, as of 31 December 2019, that number had fallen to 251—about 2.5% of the total membership.
The hon. Gentleman also asked why that small number of agents are unable to get an account, and why they are not, as he put it, “pulling their finger out”. The regulation states that letting agents must make all reasonable efforts to secure a client money account. We would therefore expect them to demonstrate that they have gone to a bank to open a relevant account, but were refused and have the documentation to demonstrate it. We would then expect them to work with the approved scheme of which they are a part to find an alternative bank offering pooled client accounts to letting agents, and open an account with them. Mechanisms are in place to ensure that those people who are as yet unable to open an account are doing the right thing and “pulling their finger out”.
Alex Cunningham
The shadow Minister has now managed to get his finger out as well. I asked how long the relevant body has had to produce the guidance so far, and whether he had placed any deadline on it—or could we be back here in 12 months’ time because of further complexities?
Christopher Pincher
We expect the committee to conclude its work this spring—so in short order. As I have made clear to the hon. Gentleman and to you, Mr Davies—and as our words are recorded in Hansard the industry will hear this too—we shall not be extending the statutory instrument beyond April 2021. We expect it to report shortly, but clearly it has to do so, and conclude its business, within the year.
I think that I have answered most of the questions. If I have not, I am happy to write to Members with further particulars. However, I hope we can now give this fairly straightforward SI a smooth and quick passage.
Question put and agreed to.
Draft Extradition Act 2003 (Amendments to Designations) Order 2020
(4 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Security (James Brokenshire)
I beg to move,
That the Committee has considered the draft Extradition Act 2003 (Amendments to Designations) Order 2020.
Thank you, Mr Davies, and a happy St David’s day for yesterday to you too. It is a pleasure to serve under your chairmanship and to move the draft order. The order is required for the UK to fulfil its obligations under bilateral extradition treaties with Kuwait and Morocco and an extradition agreement between the European Union, Norway and Iceland, to which the UK is party during the transition period. I shall explain in a little more detail why the changes are being brought in at this time and the effect that they will have on our extradition arrangements.
First, the Extradition Act 2003 (Designation of Part 1 Territories) Order 2003 will replace the current designation of Norway and Iceland as part 2 territories based on the European convention on extradition. It will make clear that Norway and Iceland will become territories designated under part 1 of the Extradition Act 2003, based on the surrender agreement between the EU, Norway and Iceland, which entered into force on 1 November 2019. The agreement facilitates the exchange of warrants between judicial authorities, which are executed through a simplified system based on judicial decisions. Norway and Iceland will therefore be treated in a similar way to EU countries for the purposes of extradition. However, there are some differences—notably, parties can refuse to extradite their own nationals and can refuse extradition on the basis that the offence concerned is political. The agreement also allows parties to require that the relevant offence is an offence in both the requesting and the requested country—a rule known as dual criminality.
As the Committee is aware, during the transition period, the EU justice and home affairs tools that the UK has opted into, including this agreement, will continue to apply. The legislation will ensure that there is no disparity between our international obligations and domestic law, which could result in legal uncertainty and impunity for wanted fugitives.
The second part of the order will implement the extradition treaties concluded between the UK and Morocco in 2013 and the UK and Kuwait in 2016. The designation of these countries under part 2 of the 2003 Act will allow the UK to process extradition requests from Kuwait and Morocco in line with the obligations in the treaties. Both treaties set out a timeframe in which a full extradition request must be provided to the UK by Kuwait and Morocco when an individual has been arrested on a provisional arrest warrant.
The order therefore ensures that that is reflected in our legislation, by setting out that, in the case of Kuwait and Morocco, the judge must receive the papers within 65 days of the person’s provisional arrest, in line with standard practice. That will allow for the countries to provide the request to the Secretary of State within 60 days, as the treaty provides for, and for the Secretary of State to have five days to certify the request and send it to the appropriate judge. Once the designations have been made, the Kuwait and Morocco treaties will be ratified. Morocco and Kuwait are both important partners for the UK, and the treaties will enhance our ability to work in close co-operation with both on important issues.
The introduction of the formal bilateral basis for extradition for conduct covered by the treaties will lead to a more efficient and effective process for extradition between the UK and respective countries. I urge the Committee to consider favourably the amendments made by the statutory instrument, to ensure that the United Kingdom can comply with its obligations under the relevant international extradition arrangements.
When considering any request for extradition, our arrangements are balanced by provisions in the 2003 Act, which serve to protect an individual’s rights where extradition is not compatible with our law. We must remember that extradition is a valuable tool in combating cross-border crime. Offenders should not be able to escape justice simply by crossing international borders; no one should be beyond the reach of the law. Having efficient extradition arrangements that are clear and effective is vital for safeguarding our security and preventing fugitives from escaping justice. I commend the order to the Committee.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under you as Chair, Mr Davies. I also add my belated good wishes for St David’s day, as a fellow Welsh Member of Parliament.
The Opposition do not oppose the statutory instrument. It is in the public interest to have appropriate extradition arrangements in place with as many countries as possible. It reduces the number of safe spaces there are in the world where those who harm us can hide, escape to and get beyond the reach of our law enforcement.
However, I have a number of points about these proposals, which I hope the Minister will be able to deal with in replying at the end of this short debate. I will begin with the addition of Norway and Iceland. As the Minister set out, Norway and Iceland already have an extradition agreement with the European Union, as set out in the surrender agreement, which came into force in early November last year. The aim of the agreement was to speed up the transfer of suspected and convicted persons and to ensure sufficient controls on the execution of arrest warrants. The aim, if I may say so, is very similar to the current structure of the European arrest warrant.
Now that the United Kingdom has left the European Union and is in the transition period, it is right that Norway and Iceland should be incorporated into our current extradition process, and the Opposition of course support that principle. I would, however, be grateful if the Minister could give further clarity on the future security relationship in this regard with the European Union.
On Thursday, the Government published their negotiating mandate with the European Union, and today both parties sit down to start negotiations. I was alarmed by point 51:
“The UK is not seeking to participate in the European Arrest Warrant as part of the future relationship. The agreement should instead provide for fast-track extradition arrangements, based on the EU’s Surrender Agreement with Norway and Iceland which came into force in 2019, but with appropriate further safeguards for individuals beyond those in the European Arrest Warrant.”
Over the past few years in this role, I have argued for the Government to take the future security partnership extremely seriously. The European arrest warrant has proven to be an incredibly useful tool for fighting and preventing crime. In 2017-18, the last year for which there are statistics, 17,256 requests were made by UK law enforcement or EU counterparts, and the EU made 296 requests to UK law enforcement.
As we pass this arrangement today—if the Committee is minded to do so—can the Minister set out how the Government will create a structure similar to the European arrest warrant by the end of December this year? If they fail to have a future trade agreement in place, how will he assure UK law enforcement and UK citizens that the law in relation to some of the most serious criminals will not simply lapse? Stronger action is required, and I hope the Minister will give an assurance that he will be lobbying ministerial colleagues on how important this issue is.
I now turn to the addition of Kuwait and Morocco in part 2 of this statutory instrument. Both these countries are listed as category 2 countries; in other words, they still carry the death penalty. According to Human Rights Watch, in 2017, Kuwait carried out seven executions, the first since 2013, including of two Kuwaiti nationals, a member of the royal family, a woman from the Philippines, two Egyptian men and a Bangladeshi man. Similarly, three men were sentenced to death in Morocco in July 2019, although it is not clear whether the penalties have been carried out. The Labour party stands totally against the use of the death penalty. I understand the Government’s position is the same. However, it is important that there are reassurances today in that regard.
The treaty with Kuwait sets out that an extradition could be blocked
“if the Requested Party has serious grounds for believing that the request for extradition has been made for the purpose of prosecuting or punishing a person on account of that person’s race, religion, nationality, sex or status, or political opinions, or that that person’s position may be prejudiced or his or her liberty restricted for any of those reasons”.
I am sure the Minister will share the view that there are worrying aspects of the Kuwaiti penal code—for example, article 193, which outlaws same-sex relations and carries a maximum prison sentence of up to seven years, and which also criminalises forms of gender expression.
I note that the Kuwaiti extradition treaty gives a carve-out if extradition would breach the human rights of the person sought, and of course there are safeguards that already exist in the extradition process. However, there remain concerns about the judicial system in Kuwait. In 2018, Lord Collins of Highbury took part in a debate about that extradition treaty with Kuwait, and the then Government Minister, Baroness Goldie, stated:
“This Government are committed to upholding human rights and oppose the death penalty in all circumstances as a matter of principle. The safeguards available in the Extradition Act are strong and reliable in that respect. Extradition from the UK is not possible if it would be incompatible with a person’s human rights. The Home Secretary must not, in law, order an individual’s extradition if they have been, will be or could be sentenced to death.”—[Official Report, House of Lords, 30 October 2018; Vol. 793, c. 1286.]
I would be grateful if the Minister could repeat that assurance today.
There are also some wider issues about not just the criminal penalties that exist in Kuwait but the very nature of the system. Human Rights Watch has raised concerns that it is difficult for defendants to get a fair trial. With our proud tradition of an independent judiciary and the rule of law, I hope the Minister will be able to reassure me that, when considering cases under this treaty, there will be an emphasis on those who are extradited receiving due process and a fair trial, irrespective of what the penalty for that particular offence is.
Although the Opposition support the statutory instrument and the principle of having extradition treaties in place, I would at the same time be grateful for the Minister’s response to the observations I have made.
John Mc Nally (Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. I, too, wish you a belated happy St David’s day. I will be very brief as well.
The only conclusion I can make about the UK withdrawal from the European arrest warrant is that it will only bring benefits to criminals. The Government are making the current system, which is fairly straightforward, complicated. That will lead to an inevitable impact on public safety, stretching the use of public services, money and resources. That will be increased by increasing the delays in extraditions. This is actually a time for closer co-operation between neighbouring countries, rather than turning inwards and attempting to go it alone, which I think is a huge step in the wrong direction.
To finish, the system that we had was pretty fairly and honestly fixed, and all that the Government’s proposal today does is succeed in breaking that system up.
James Brokenshire
I will respond briefly to the points that have been made. Equally, I welcome the support for the order.
The hon. Member for Torfaen raised the issue of our future relations in discussions regarding the position post-transition. Equally, he made reference to the negotiating mandate that has recently been published. I stress to the Committee that the safety and security of our citizens is the Government’s top priority, and we stand ready to discuss an agreement on law enforcement and criminal justice co-operation in criminal matters. That agreement should equip our operational partners—the police and other law enforcement agencies—on both sides with the capabilities that help to protect citizens and bring criminals to justice, promoting the security of all our citizens. The hon. Member made reference to the negotiating mandate. That does underline that, although we do not intend to participate in the European arrest warrant, the agreement should provide for fast-track extradition arrangements with appropriate further safeguards for individuals.
The hon. Member asked what precedents we can point to. The order indicates that it is possible to create fast-track arrangements in the way that Norway and Iceland have. We go into these discussions in an even-minded fashion, as a shared endeavour and with a shared desire to have a system that works well, but, clearly, with the issues that we have set out in the negotiating mandate.
Nick Thomas-Symonds
What does the Minister believe is defective about the European arrest warrant arrangement?
James Brokenshire
It is important to understand that we will be in a fundamentally different relationship with the European Union, and that is the approach to the negotiations that we rightly take. We are seeking to enshrine further important safeguards in our extradition arrangements, including the ability for a judge in the UK to dismiss a warrant from an EU member state on the basis of proportionality, for example, or if there has not yet been a decision to charge and try the wanted person.
Judges will also be required to establish that the offence is also an offence in the UK—that is, the dual criminality issue. The order refers to Norway and Iceland having negotiated those arrangements with the EU, which underlines that doing so is entirely possible and practical. Indeed, on the issue of the EU court, Norway and Iceland have sought to manage that and to find a resolution in terms of dealing with disputes that does not take that into account. Therefore, the order practically underlines the way in which we should be positive about what can be secured through these negotiations.
The hon. Member has rightly highlighted concerns about human rights—an issue that he raised specifically in relation to Kuwait. I can categorically confirm the opposition of the UK to the death penalty in all circumstances as a matter of principle. The death penalty undermines human dignity, and any miscarriages of justice are, by their nature, irreparable. The Extradition Act is clear: an individual cannot be extradited if
“he could be, will be or has been sentenced to death”.
It is important to underline that. The hon. Member may know that, under the category 2 process, which Kuwait and Morocco would fall within, there has to be satisfaction in relation to that point. If the individual
“could be, will be or has been sentenced to death”,
that bar clearly exists, unless there is an “adequate” assurance that
“a sentence of death—(a) will not be imposed, or (b) will not be carried out”.
That is understood in how this issue is approached.
To highlight some broader human rights issues, I reassure the Committee that, although this is not linked explicitly to the treaty, we have a regular dialogue with Kuwait, including about fair, open and transparent systems and the rule of law. Those are things that we in this country hold dear, and we will continue to underline their significance to our friends, allies and partners. Our ambassador and our Ministers regularly raise the issue of human rights with their Kuwaiti counterparts.
Nick Thomas-Symonds
On the subject of the Government’s commitment to human rights, can the Minister confirm that it is the Government’s policy to remain signatories to the European convention on human rights?
James Brokenshire
It is beyond a certainty that we are members of the European convention on human rights, which is a separate legal jurisdiction. Sometimes people conflate what is EU law and what is ECHR law, but, obviously, while we leave the European Union, we firmly remain subject to the jurisdiction of the European Court of Human Rights.
With those assurances, I will draw my comments to a close and seek the Committee’s approval for the order.
Question put and agreed to.