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Oral Answers to Questions
(4 years, 6 months ago)
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Andrew Percy (Brigg and Goole) (Con)
The Secretary of State for International Trade (Elizabeth Truss)
I spoke to my Canadian counterpart Mary Ng last week, and we talked about progressing our bilateral trade and working together to promote free trade across the world.
Andrew Percy
Bilateral trade between the UK and Canada is worth £20 billion a year. It grew exponentially following the implementation of the Comprehensive Economic and Trade Agreement. In comparison, our bilateral trade with New Zealand is worth £3 billion a year. We have opened formal negotiations with New Zealand on a new trade agreement. Can we not go further with Canada and seek something much more comprehensive than simply a roll-over of CETA?
Elizabeth Truss
I know that my hon. Friend is committed to Canada, having served as trade envoy and done a fantastic job. As part of our ambitious free trade agreement programme, we announced yesterday our intention to accede to the CPTPP, which is an advanced trade agreement covering chapters such as data and digital and goes far beyond what the EU has been willing to agree. Canada is one of the key players in the CPTPP, alongside countries such as Australia and New Zealand.
Cat Smith (Lancaster and Fleetwood) (Lab)
Stephen Morgan (Portsmouth South) (Lab)
The Minister for Trade Policy (Greg Hands)
The Government are committed to meeting their ambitious environmental objectives. We are exploring all options in the design of future trade and investment agreements, including environmental provisions within those, to ensure that we uphold the UK’s high environmental standards.
Cat Smith
Last year’s free trade agreement between Mexico, the US and Canada ran to 250 pages but failed to mention climate change or global emissions. What assurances can the Minister give the House that the free trade agreement being negotiated by his Government between the UK and the US will not make the same mistake and will put climate change at the heart of it?
Greg Hands
The hon. Lady raises a good question. The UK is absolutely committed to our international climate change agenda; that is one of our key objectives. We have not included that because the US is withdrawing from the Paris accord, which we regret. She mentioned the United States-Mexico-Canada Agreement. That agreement does include 30 pages of environmental commitments, including, for example, on sustainability, forestry, air quality, marine plastics, multilateral agreements and so on. There is plenty of potential for us to go further on the environment with our US trade agreement.
Stephen Morgan
There is no point in the UK achieving our own zero-carbon targets if the trade deals we reach with other countries are pushing them ever further away from achieving theirs. Can the Secretary of State ensure that all future FTAs agreed by the UK reinforce the legal primacy of emission targets established in the Paris climate change agreement?
Greg Hands
It is worth pointing out that nothing in any trade agreement would prevent the UK from reaching its targets under the Paris agreement and to go net zero by 2050—we are the first Government to commit to doing that, and no trade agreement will prevent us from doing that. We remain on the front foot in our advocacy, making sure that the international response remains extremely strong, including through multilateral agreements and the UK contribution to the global climate fund.
Emily Thornberry (Islington South and Finsbury) (Lab)
Last year, Brazil lost an area of rainforest the size of Yorkshire, and the new land reforms proposed by the Bolsonaro Administration will make the scale of deforestation and commercial exploitation in the Amazon even worse. In the light of that, can the Minister tell us what environmental conditions are attached to his Department’s £20 million trade facilitation programme with Brazil? Will he promise to suspend that programme if the Bolsonaro Administration persist with their proposed land reform laws?
Greg Hands
This question is about trade agreements, and it is worth pointing out that we are not currently in negotiation with Brazil on a trade agreement. The European Union is, by the way. When it comes to trade agreements, the right hon. Lady needs to get her own house in order. Yesterday at this very Dispatch Box, she praised EU trade agreements with Pacific rim countries in the CPTPP. The only problem for her is that those on the Labour Front Bench voted against CETA and did not support the EU-Japan agreement. Worst of all, she led her troops to vote against the Trade Bill—
Greg Hands
The Labour Front Bench at the time. She led her troops to vote against the Trade Bill, which would roll all these EU trade agreements over to become UK trade agreements.
Mr Speaker
Chris Loder, who had the next Question, is not here, but I will still take the SNP supplementary questions—I call Stewart Hosie.
Stewart Hosie (Dundee East) (SNP)
Thank you, Mr Speaker. Scottish Land and Estates has said that food and farming is critical, and it is concerned that UK producers are not placed in an impossible situation where they have to compete in an effective “race to the bottom”. What guarantees can the Secretary of State give that cheaply produced agrifood imports will not lead to that race to the bottom?
Elizabeth Truss
First, we have the independent Food Standards Agency, which is committed to high food standards. All the food standards that are currently with us through EU law are put into UK law as a result of the withdrawal agreement, so those standards are not going to be lowered, and they are not going to be negotiated as part of any trade agreement.
Stewart Hosie
I thank the Secretary of State for her answer, but I did not ask about food quality standards; I understand that. I am asking about production standards. As the National Farmers Union of Scotland has pointed out, there is deep concern about the importation of agrifoods into the UK that may be produced to an inequivalent and uncompetitive standard. How will she guard against agrifood imports produced to that inequivalent standard, which is much cheaper and simply could not or would not be done in the UK?
Elizabeth Truss
Scottish beef and lamb is a very high-quality product and highly competitive. When the beef ban is ended with the US, we will have the opportunity to get British beef into the US market—there is £66 million-worth of opportunity for that product—but in every trade agreement I negotiate, I will always make sure that our farmers, with their high standards, are not undermined.
Bill Esterson (Sefton Central) (Lab)
Food standards were not a matter for the Agriculture Bill—at least that is what MPs, including Conservative Back Benchers, were told on Report. They were told that they would be included in the Trade Bill. I am sure agriculture Ministers were telling the truth, so will the Government accept Labour’s amendment to the Trade Bill to enshrine in law the principle that food imported under any free trade agreement must maintain our farming industry’s high production and safety standards?
Elizabeth Truss
The reason they were not part of the Agriculture Bill is that the import standards that we already have and which already ensure that we import only high-quality products into this country are being transported into UK law through the European Union (Withdrawal) Act 2018. That is already there. There has been a lot of scaremongering going around about these lowered standards. That is simply not true. We are maintaining exactly the standards we have, which are in place, for example, through agreements with Canada.
Mr Speaker
Richard Holden—another one not here. Oh my word. We now go virtual—to Angus Brendan MacNeil.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]
Tapadh leibh, Mr Speaker. We hope to see the Secretary of State at the International Trade Committee next week, as requested by Committee members for a number of weeks. At yesterday’s Committee hearing, the NFU, the CBI and the TUC all coalesced around the figure that Brexit would cost the UK about 4.9% of GDP and an American trade deal would benefit it by around 0.16% of GDP—a thirtieth of what is being lost by Brexit. They said that gains from the Japan deal would be a lot less than the paltry lot from the US deal, so can any Minister furnish the House with the figure for what would be gained as a percentage of GDP from a Japan-UK trade deal?
Elizabeth Truss
First of all, I am extremely happy to appear in front of the hon. Gentleman’s Committee, and I will ask my office to immediately set that up in the diary. I am very keen to communicate with the Committee about the various trade deals we are negotiating.
We published figures for the scoping study on the Japan free trade agreement, but this is not an either/or. We want to get a good trade deal with the EU. We want to get a good trade deal with the US. We also want to get access to CPTPP, which is a very fast-growing part of the world. That is what we want. We want global Britain to sit at the heart of a network of free trade agreements.
Bill Esterson
In March, the Government said that Japan must show “increased ambition” and set a higher headline target on reducing carbon emissions ahead of COP26. Is that still the view of the Secretary of State? Will she show increased ambition and include more stretching, measurable and binding climate targets in the new free trade agreement she puts in place with Japan?
Elizabeth Truss
We have a huge opportunity to achieve our environmental objectives in many of the free trade agreements we are negotiating. For example, with New Zealand, which is a leader in this area, we will be looking for very advanced environmental clauses, and of course we will seek those in negotiations with Japan. But the hon. Gentleman should understand that there are a number of routes through which we are pursuing our objectives, namely our leadership of the COP26 summit, and it is right that that process should be the primary focus of where we achieve our climate change objectives.
Steve Double (St Austell and Newquay) (Con)
The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena) [V]
I know that my hon. Friend is a great champion of business in his constituency, including the dairy industry. I can assure him that every region and nation will benefit from our trade deals, and that includes every industry from farming to FinTech to boot. In the south-west, exports of dairy amounted to more than £46.7 million last year and these businesses stand to benefit even further from the removal of US tariffs.
Steve Double
I am delighted to see my hon. Friend in his ministerial position.
Whether it is our excellent butter, cheese and cream, our amazing beef and lamb, our stunning fish and seafood, or our beer, wine and gin, Cornish food and drink are among the highest quality and most sought after in the world. The Minister will be aware that food producers are concerned that our high standards will be undermined in trade deals, so what reassurance can he provide to Cornish food producers that their interests will be protected, and what opportunities does he see for export?
Mr Speaker
We go back to the Minister, who looks as though he is a fan of James Bond—“Dr No” no less.
Mr Jayawardena
Who wouldn’t be, Mr Speaker?
Like my hon. Friend, I am also proud of the high-quality produce from British farmers, including from those in Cornwall, and I can assure him that trade deals will help deliver economic security for Britain and protect us all from new trade barriers and tariffs that could harm jobs and industry. I can assure him that Cornish food producers will be supported at every turn and will continue to be highly competitive. Negotiations will certainly reward them through providing access to new markets.
Rachel Hopkins (Luton South) (Lab)
The Minister for Trade Policy (Greg Hands)
We continue to work tirelessly across Government to secure vital equipment and PPE from overseas partners, including from the US, Malaysia, China, Turkey and South Africa. We have sourced more than 18 billion items from across the globe to be shipped and delivered to the frontline to our NHS.
Rachel Hopkins
As the Minister will be aware, many imports such as medical products enter the UK as cargo in the hold of passenger flights. Given that the imposition of an illogical quarantine is having a negative impact on passenger confidence and flights coming into many of our regional airports, such as Luton airport in my constituency, will the Minister confirm whether he made any assessment of the impact of quarantine on the import of medical goods, and, in the light of that, does he agree with me that the quarantine should be lifted for less blunt measures, such as fast-track testing, to facilitate the import of medical goods and support the recovery of our aviation industry?
Greg Hands
I have to say, Mr Speaker, that I was woken at 4.40 this morning by a passenger flight coming into Heathrow and then by another one at 4.45 am. It strikes me that although passenger traffic coming into the country is much reduced, it is still very much facilitated. I am not aware that any disruption that may be caused by the quarantine regulations is having any direct impact on our ability to import vital PPE into the country.
Mr Speaker
I am very impressed that the right hon. Gentleman knows the difference between a cargo flight and a passenger flight.
Gareth Thomas (Harrow West) (Lab/Co-op)
At the last International Trade questions in May, my hon. Friend the Member for Easington (Grahame Morris) asked about reducing global tariffs on soap, which average at 17% among World Trade Organisation members and range as high as 65% in some countries. The Minister of State said that it was a very good question and that the Government were working tirelessly to reduce or remove those sorts of barriers. I am sure that that has been the case, so will he tell us what progress he has made on the specific issue of soap tariffs over the past month?
Greg Hands
Mr Speaker, you will know that on 20 March, which was the start of the UK lockdown, the EU Commission wrote to Her Majesty’s Revenue and Customs and HM Treasury alerting them to the existence of the potential mechanism by which tariffs in VAT could be waived on certain imports in the light of the covid-19 crisis. We have identified more than190 products that are in scope, ranging from PPE to soaps and disinfectants. When these products are imported by an organisation covered by the relief, the tariff will be zero.
Peter Aldous (Waveney) (Con)
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
Our food and drink sector is vital to our economy. In 2019, exports increased by nearly 5% to £23.7 billion. We want to see that success continue and will shortly be launching a bounce back strategy for the industry as the world recovers from covid-19.
Peter Aldous
I am grateful for that answer. I draw your attention, Mr Speaker, to my entry in the Register of Members’ Financial Interests. There are significant opportunities to increase agricultural exports, but for the UK to make the most of them, there is a need to dramatically increase food and drink processing capacity. What discussions has my hon. Friend’s Department had with the Treasury, the Department for Environment, Food and Rural Affairs and the Department for Business, Energy and Industrial Strategy, so as to ensure that the right fiscal and grant arrangements are in place?
Graham Stuart
My hon. Friend is right to raise that important issue. My Department is working closely with DEFRA, BEIS and Her Majesty’s Treasury to understand the market and investment trends in the agriculture and food processing sector in a post-covid environment. The Department for International Trade’s high potential opportunity—HPO—programme, which is part of our levelling-up agenda, is already attracting investment in food and drink programmes throughout the UK. For instance, there is agricultural engineering in Telford and aquaculture in Dorset. However, we want to do more, which is why, in partnership across Government and as part of our forthcoming export strategy, we will work to identify new investment opportunities in the sector and its supply chain, so that UK agriculture’s full potential can be realised internationally.
Alan Mak (Havant) (Con)
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
I know that my hon. Friend is, like me, proud that the UK tech sector is the dominant and most successful in Europe. With 79 unicorns and counting, last year the sector attracted a third of all European tech investment—more than France and Germany combined. That success has continued this year, and just last week the Secretary of State launched a new tech strategy to support the internationalisation of our firms, including a digital trade network across the Asia Pacific.
Alan Mak
British entrepreneurs are at the cutting edge of developing technology medicines—from apps to medical devices—in the fight against coronavirus. What support is my hon. Friend giving to our health tech start-ups to access overseas markets where British innovation can help to save lives?
Graham Stuart
My hon. Friend is right: companies such as Cambridge-based C2-Ai, which last week won the CogX award for covid-19 health innovation, are leading the way in the UK’s cutting-edge health tech sector. C2-Ai saves lives by predicting avoidable harm and mortality to free up capacity in intensive care units for covid-19 patients. My Department is supporting dozens of firms just like C2-Ai that are looking to provide covid-19-related treatments. We have also produced a directory of those British digital health companies that provide covid-19 solutions and shared that with our international network, in response to inquiries from Governments around the world.
Ian Levy (Blyth Valley) (Con)
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
In 2018, Northumberland and Tyne and Wear exported goods worth £496 million to the US, £130 million to Japan, £24 million to New Zealand and £216 million to Australia. Against a backdrop of rising trade barriers, our FTAs will secure and protect existing trade, and, according to our analysis, FTAs with the US, Japan, Australia and New Zealand will go further and bring additional export opportunities to every part of the country, including Blyth Valley.
Ian Levy
In Blyth Valley we have many successful companies that trade globally. As we move closer to the deadline of 31 December 2020, will my hon. Friend please advise the House as to what steps the Department has taken to help companies such as Dräger Safety and Tharsus in Blyth, and Miller engineering and Renolit in Cramlington—to name just a few—so that they can take advantage of free trade agreements?
Graham Stuart
My team is developing a new export strategy, which will align DIT support for exporting businesses, such as the ones my hon. Friend mentions, with our FTA and market access work. In February, my right hon. Friend the Secretary of State visited Tharsus and Port of Blyth, and they emphasised to her how important data and digital chapters were for them. Blyth Valley companies will be supported by ambitious FTAs, an enhanced network of international trade advisers in the northern powerhouse, and teams in 108 countries around the world.
Dr Luke Evans (Bosworth) (Con)
The Secretary of State for International Trade (Elizabeth Truss)
We are determined to remove barriers so that more of our fantastic British produce can be sold internationally. We have now become a net dairy exporter for the first time in recent years. A US-UK FTA can reduce tariffs of, for example, 26% on beef and more than 25% on some dairy products.
Dr Evans [V]
Some of my constituents in Bosworth have written to me concerned about food standards. What discussions is my right hon. Friend having with DEFRA regarding the Food Standards Agency to guarantee that the agency is fully supported to ensure and enforce that our food standards are up to scratch in our new trade deals as they come to fruition?
Elizabeth Truss
It is very important to note that we are not going to be lowering our food standards in any of our trade negotiations. British food standards—or certainly those in England and Wales—are a matter for the Food Standards Agency, and it is down to the agency to ensure that standards are upheld. Those standards are also in UK law, transferred as part of the European Union (Withdrawal) Act 2018, so they are guaranteed, and the Food Standards Agency is an independent body designed to ensure that they are upheld.
Lia Nici (Great Grimsby) (Con)
Dr Neil Hudson (Penrith and The Border) (Con)
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
When the UK left the EU, we had successfully signed trade continuity agreements with 48 countries, accounting for £110 billion of UK trade in 2018. Now we are seeking new trade agreements so that UK trade is diversified and better aligned with global growth. Analysis shows that the US deal, for instance, will benefit all parts of the United Kingdom, although Scotland and the midlands will gain most. That US deal could reduce tariffs and non-tariff barriers for everything from Scottish cashmere to automotive manufacturing in the midlands, machinery manufacturing in the north-west and our world-class services sector in the south-east, the midlands, Northern Ireland and elsewhere.
Graham Stuart
The Humber ports contribute so much to the UK economy, providing a critical trade route into Europe and beyond. Like my hon. Friend, I am proud that the Humber is one of the busiest and fastest growing trading areas in Europe, is responsible for a quarter of the UK’s seaborne trade and hosts 30,000 international shipping movements each year, yet it can do so much more; and, with the help and support of my hon. Friend, it will do so. I cannot comment on any individual free port bids, but I encourage anybody who wants their views taken into account to respond to the Government’s consultation before it closes on 13 July.
Dr Hudson [V]
Does my hon. Friend agree that trade options such as free port status will add a major boost to our local economies, and that free port bids, such as the one involving Carlisle Lake District airport in my constituency of Penrith and The Border, warrant serious further consideration?
Graham Stuart
As I have said, I cannot comment on individual free port bids, but as I am someone who was born and brought up in Carlisle, my hon. Friend can certainly expect support and sympathy in this part of the Government.
Tom Randall (Gedling) (Con)
The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena) [V]
This is an important question. Free trade agreements will certainly help Britain to bounce back from coronavirus, and will bring better jobs, higher wages, greater choice and lower prices to consumers and businesses across the country. That means that in the east midlands lower tariffs and barriers will help to diversify the supply chain and reduce reliance on any single country for businesses that seek to thrive in the new global trading network which we are going to be at the heart of.
Tom Randall
I am particularly pleased that we are now finally able to open direct negotiations with some of our oldest and closest allies. Will my hon. Friend tell me what steps the Government are taking to support businesses in the east midlands to make the most of the new opportunities created by these future trade agreements?
Mr Jayawardena [V]
As a newly independent trading nation, we will be able to champion free trade, fight protectionism and remove barriers at every opportunity. That includes tariffs. We will be trading on British terms with our new global tariff, which will cut red tape and cut costs for consumers and businesses in Gedling and in the region. My Department and our experienced international trade advisers will continue to support companies across the east midlands access exporting opportunities, and to provide export credit and insurance through UK Export Finance.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Dave Doogan (Angus) (SNP)
The Secretary of State for International Trade (Elizabeth Truss)
We have launched negotiations with both the US and Japan. We want to secure ambitious trade deals that benefit every part of the United Kingdom. Scotland is expected to be a particularly strong beneficiary from those deals.
Patricia Gibson
Despite what the Secretary of State said in response to previous questions, there are persistent concerns about the lifting of the ban on pathogen reduction treatments, which would permit chlorine washes over food as part of future trade deals. That would be bad for us and bad for animal welfare. To address those concerns once and for all, will the Secretary of State commit to enshrining minimum food standards into law? If she will not, will she devolve the necessary powers to Scotland to allow us to do it for ourselves?
Elizabeth Truss
I would point out that Scotland has its own food standards agency, which is responsible for upholding food standards in Scotland. I would also point out that the standards already are in the law and will continue to be in the law.
Rehman Chishti (Gillingham and Rainham) (Con)
The Minister for Trade Policy (Greg Hands)
The freedom of religion is a universal human right. The UK has a strong record of safeguarding human rights and promoting our values globally. Our strong economic relationships with trading partners allow the Government to have open discussions on a range of difficult issues, including human rights and religious freedom. The Government will continue to encourage all states to uphold international human rights obligations.
Rehman Chishti
I thank the Minister for that answer. He knows that I lead for the Government on freedom of religion or belief as the Prime Minister’s special envoy and on taking forward the Truro report. The Minister also knows, from our previous work when I was a trade envoy covering Pakistan, that there was a GSP plus—generalised system of preference—trade clause which meant that human rights had to be respected. Around the world at the moment under covid-19, religious minorities have suffered immensely. Can we ensure that our future discussions on trade cover fully and frankly our concerns on freedom of religion or belief and wider human rights?
Greg Hands
My hon. Friend has done superb work as the Prime Minister’s special envoy on freedom of religion and belief. He references the Truro report, which was set up by the previous Foreign Secretary. Its overall approach is very much endorsed by this Government. He also draws reference to his time as the Prime Minister’s trade envoy to Pakistan, when I worked with him very closely. The GSP plus scheme will be rolled over into a UK scheme. Obviously, that will include key human rights obligations, including freedom of religion and expression.
Kerry McCarthy (Bristol East) (Lab)
James Murray (Ealing North) (Lab/Co-op)
The Secretary of State for International Trade (Elizabeth Truss)
We have just commenced round 2 of trade negotiations with the United States. Talks so far have been positive and constructive, but I am absolutely clear that we will only sign up for a deal that benefits all parts of the UK and all sectors of the UK.
Kerry McCarthy
In the absence of any final agreement between Britain and the EU on trading arrangements beyond the end of this year, is it not impossible for the UK and the US to have a meaningful discussion about the extent to which the UK’s regulatory framework can diverge from the EU’s in any future trade deal? Does that not mean that the chances of actually getting a deal with the US done and through Congress before the November election are virtually nil?
Elizabeth Truss
Let me be absolutely clear that we have not set a timetable for completion of the negotiations with the United States, because we are concentrating on getting a good deal rather than meeting any particular negotiation timetable. I am afraid that the hon. Lady is absolutely wrong with respect to the EU, because we have been clear that we are not aligned with EU regulations. We have our own independent regulatory regime and we are negotiating with all our trading partners, whether it is the US, Australia, New Zealand or Japan, on that basis.
James Murray [V]
The Government have repeatedly promised this House and the British public that they are committed to non-regression on food standards. However, there is great concern over a number of practices in the US that are currently banned in the UK, such as the widespread use of antibiotics to increase growth in animals. As the Government approach their negotiations on a trade deal with the US, does the Secretary of State accept that it is time to put that commitment to non-regression on food standards into law?
Elizabeth Truss
I could not have been more clear: these food standards are already in British law as part of the EU withdrawal agreement, and we are not negotiating those as part of our negotiations with the United States or any other trade partner.
Mr Virendra Sharma (Ealing, Southall) (Lab)
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
I know that the hon. Gentleman will welcome the unprecedented support for businesses and workers, including small businesses and the self-employed, that this Conservative Government have put in place. SMEs are the backbone of our economy and will be at the heart of the Department’s new export strategy as our response to covid-19.
Mr Sharma [V]
Do the Government recognise that, aside from covid-19, one of the biggest threats to small businesses in the UK is reaching the end of the transition period with no trade deal? What assessment have they made of the number of SMEs in the UK that would go bust if faced with the toxic combination of covid-19 and a no-deal Brexit in December?
Graham Stuart
The hon. Gentleman is absolutely right about the importance of SMEs. They need Government support to enter international markets, and that is why the DIT exists. We are not responsible for negotiation with the EU, but we are confident that we will reach a good deal with it. The Department is putting SME chapters in our trade deals with other countries. It is a pity that the Labour party opposes every trade agreement and continually shows its indifference to small business and enterprise, but I am looking to the hon. Gentleman, as he may be able to do what no others have done and lead the shadow Secretary of State away from being an enemy of business and towards supporting it, as he does.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
The automotive industry will see more change in the next 10 years than it is seen in the past 100. That is why we are investing so heavily in research and development to ensure that the UK industry can be a global leader in clean transport. Lowering trade barriers is an essential step in attracting further investment and allowing the industry to thrive at a time of unprecedented change.
Stephen Metcalfe [V]
The Society of Motor Manufacturers and Traders and the Japanese Automobile Manufacturers Association say that a UK-Japan agreement would greatly benefit economic prosperity in the UK and Japan. What opportunities for the sector does the Minister see in future FTAs that would help businesses such as Ford UK, based in Basildon?
Graham Stuart
My hon. Friend and the SMMT are both right. Turkey—as well as Japan—is important, not least to Ford. We prize our trading relationship with Turkey and recognise how important Turkish supply chains are to our automotive manufacturers, including Ford of Britain. I am pleased to say that UK and Turkish officials are working hard to ensure that trading arrangements transition into a bilateral agreement at the end of the implementation period, and I thank my hon. Friend for highlighting, unlike the right hon. Member for Islington South and Finsbury (Emily Thornberry), issues that will help prosperity, jobs and businesses in this country instead of posturing and posing for the benefit of the hard left.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Zarah Sultana (Coventry South) (Lab)
The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena) [V]
We assess all export licence applications on a case-by-case basis against the consolidated EU and national arms export licensing criteria. We draw on all available information, including reports from NGOs and our own overseas network. I can assure the hon. Lady that we will not license the export of equipment where to do so would be inconsistent with the consolidated criteria.
Mrs Lewell-Buck
I thank the Minister for his response, but there is a worrying pattern here. Last year, the Secretary of State said that her Department had inadvertently allowed licences for arms destined for Saudi Arabia to use against Yemeni civilians. Now she has failed to answer the clear questions of my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) regarding the export of riot control equipment to the US and its use against civilians involved in the Black Lives Matter protests. Is that because the Secretary of State has inadvertently allowed those exports too, or does she simply not know what is happening in her own Department?
Mr Jayawardena
Not at all. The United Kingdom has issued licences to the United States in a number of different areas, and those have been provided in written answers to the shadow Secretary of State, but we continue to monitor developments in all countries, including the United States, very closely, and we are able to review licences, and suspend or revoke them as necessary, when circumstances require. That would be done in line with the consolidated criteria.
Zarah Sultana
Arms export criteria state that licences should not be granted if
“there is a clear risk that the items might be used for internal repression”.
In the light of the police in America using tear gas and rubber bullets, which may have been supplied by the UK, to attack Black Lives Matter protesters, will the Minister cancel licences involved in the arming of repression? On a technical point can he tell me whether tear gas equipment is covered by the open general export licence for the US-UK defence trade co-operation treaty?
Mr Jayawardena
I refer the hon. Lady to the answer that I have just given. We will continue to monitor developments closely. We will review where necessary. On the technical points that she refers to, I welcome her probing question. We believe that criterion 2 is very important. It addresses the respect for human rights and fundamental freedoms in the country of final destination, and that is something that Her Majesty’s Government will certainly bear in mind as we review situations in the United States or elsewhere.
Kim Johnson (Liverpool, Riverside) (Lab)
The Minister for Trade Policy (Greg Hands)
The UK has commenced trade negotiations with the United States, Japan, Australia and New Zealand. The UK has a strong history of safeguarding human rights and promoting our values globally, and our strong economic relationships with like-minded trading partners allow the UK to open discussions on a range of difficult issues, including human rights. We continue to encourage all states to uphold international human rights obligations.
Kim Johnson
I thank the Minister for his response, but does he agree that the Government’s de-prioritisation of human rights in favour of trade has been exacerbated and highlighted by Brexit, and has been part of a long-running trend dating back to the coalition Government? Pragmatism on human rights has been particularly clear when it comes to the promotion of trade, and there has been a conscious decision not to seek the inclusion of clauses relating to human rights in most of the post-Brexit agreements. The Government have listed 16 countries and trading blocs where negotiations are ongoing about rolling over existing EU trade deals beyond 31 December, so can the Minister tell us whether human rights are part of those discussions, and will he guarantee the inclusion—
Mr Speaker
Order. It has to be a question, and it has to be fairly short. I am sure the Minister has a grip of what he needs to say.
Greg Hands
Let us be absolutely clear: there has been no relaxation or watering down of the UK’s complete commitment to human rights. That is valid right across the Government, including in the Department for International Trade and in trade deals. The hon. Lady referred to the continuity EU agreements. Part of the issue there is that the Cotonou agreement itself is expiring. What we have sought to do is to ensure that the practical outcome of that element of the existing EU trade deal is maintained in the rolled-over deal. That applies to such things as the Andean agreement and other agreements that we have with developing-world countries, ensuring that human rights remain at the core of the agenda and that there is no watering down of the human rights commitments in existing trade agreements.
Kerry McCarthy (Bristol East) (Lab)
The Secretary of State for International Trade (Elizabeth Truss)
We have launched trade negotiations with four of our closest partners: the US, Japan, Australia and New Zealand—close allies with shared values, believing in democracy and free enterprise. We are prepared to walk away if any deal is not in the national interest. We will not lower our food standards. They are overseen by the independent Food Standards Agency and are in UK law. Ambitious free trade agreements will deliver on the Brexit promise to drive an industrial revival in this country and level up the UK.
Kerry McCarthy
I note the response that the Secretary of State gave to her opposite number earlier when talking about Brazil, but we are still trading with Brazil. Between 2013 and 2019, British financial institutions provided over $2 billion in financial backing to Brazilian beef companies linked to Amazon deforestation. How can we ensure that there is greater transparency in our supply chains so that we are not unwittingly, through exports from Brazil, contributing to such environmental degradation?
Elizabeth Truss
First, we are doing a lot of work on our supply chains, looking at vulnerabilities and resilience and making sure we have more transparency in supply chains. That work is being led through the Department for International Trade and Project Defend. Through our climate change negotiations, as we head towards COP26, that is precisely the type of issue that the Business Secretary will be looking at.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Minister for Trade Policy (Greg Hands)
First, I praise the long-standing work that my hon. Friend has done in local government leadership over many years. Local government and councils will play a key role. This week, I have spoken to civic leaders, including Andy Burnham in Manchester and candidate Shaun Bailey in London, and impressed on them the importance of trade and investment decisions in our biggest cities. Trade and investment is a whole-of-the-UK effort involving all four nations, and all regions and cities, including councils and local government. I praise my hon. Friend for his work.
Emily Thornberry (Islington South and Finsbury) (Lab)
On Monday in Yemen, 13 civilians travelling by road, including four children, were killed in an alleged Saudi airstrike—the latest innocent victims of this barbaric war. A year ago this week, the Court of Appeal ruled that it is unlawful for the Government to license any more exports of arms to Saudi Arabia for use in the war in Yemen, and ordered the Government to review all extant licences in the light of that judgment. A full year later, can the Secretary of State tell us whether that review of extant licences is complete and, if not, why not?
Elizabeth Truss
As the right hon. Lady knows from the written ministerial statement I made earlier this year, we have been reviewing our processes and making sure all the work we do is compliant with the consolidated criteria.
Emily Thornberry
I thank the Secretary of State for that answer, but the fact is that, a year on from the Court of Appeal ruling, British firms are still exporting arms for use in Yemen, and that is unacceptable.
On a related issue, the Government refuse point black to tell us whether British-made tear gas and other riot equipment have been used in the United States over the past month. I ask the Secretary of State a very simple but important question that goes alongside that: does she condemn the tear gassing and beating of unarmed, peaceful protesters and journalists, and will she make it clear that riot equipment should never be used in that way?
Elizabeth Truss
Of course we are all extremely concerned about what has happened in the US—in particular, the killing of George Floyd. We are very, very concerned about that. However, we have one of the strictest arms licensing regimes in the world and we are absolutely clear—I have made this clear to the team—that we always comply with the consolidated criteria.
Theo Clarke (Stafford) (Con)
Elizabeth Truss
I thank my hon. Friend for her commitment to this important cause. I am convening a meeting of Commonwealth Trade Ministers, due to take place this autumn, and the issue of female empowerment and entrepreneurship and the SheTrades initiative will be on the agenda for the meeting.
Chris Bryant (Rhondda) (Lab)
Elizabeth Truss
I am working very hard to get rid of the small ruminant rule in the United States, which prevents the export of our fantastic Welsh lamb to the market—[Interruption.] I hear the hon. Gentleman shouting from a sedentary position. The US is the second largest importer of lamb in the world. It is a massive opportunity for lamb. In fact, this afternoon, I have a call with some Welsh sheep farmers to talk to them precisely about these opportunities. I suggest that he gets behind the US trade deal rather than shouting from the Back Benches.
Shaun Bailey (West Bromwich West) (Con)
Greg Hands
This is very opportune, because last week, I was the guest speaker at the Black Country chamber of commerce, and they were uniformly enthusiastic about the Government’s free trade agenda and trade and investment agenda. Perhaps if the Opposition were to go along, they might hear that, and some of this enthusiasm might rub off on them. I remember taking a question from a particular firm, Thomas Dudley, in the area about the roll-over of the CARIFORUM agreement with the Commonwealth Caribbean countries and the Dominican Republic. It was very concerned to hear that the Labour party is opposed to the Trade Bill, which would see the roll-over of that EU agreement and make an operable UK agreement. They were shocked at the seeming disregard by—[Interruption.]
Mr Speaker
Order. I think you have made the political points very well, but it is not an election yet—I think you can hold your fire a little bit longer. I would be more worried that people will be asking who you sat next to at the dinner.
Alex Davies-Jones (Pontypridd) (Lab)
Greg Hands
We engage with the devolved Administrations on a regular basis. Baroness Morgan is my opposite number in the Welsh Government and we have a very good relationship, both on free trade agreements and on the whole relationship on trade between the UK Government and the Welsh Government. We make sure, through the ministerial forum for trade, that the devolved Administrations are updated and kept constantly apprised of our free trade agreement agenda. I look forward to continuing our excellent work with the Welsh Government.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
Elizabeth Truss
I completely agree about the fantastic products such as Wensleydale, Yorkshire beef and lamb and all these opportunities. In fact, the first cargoes of British beef will be leaving UK ports this summer destined for America, now that the beef ban has been lifted. That is worth £66 million to the industry over the next five years. Of course, there is nothing nicer than a Sunday lunch and a nice bit of beef and Yorkshire pudding.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP) [V]
Elizabeth Truss
I thank the hon. Lady for her positive question about Chile. Chile is an important trade partner of the UK. Of course, it is a key member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which we want to join. We want to have a better trading relationship with Chile and the 11 fast-growing members of that agreement.
Duncan Baker (North Norfolk) (Con)
Elizabeth Truss
As I have said, we are absolutely committed to maintaining our high animal welfare standards and our high import standards and also to making sure that our farmers do not face unfair competition. That is something I am going to negotiate in every trade agreement we are discussing. There are huge opportunities, such as with malting barley. We are the second largest exporter of malting barley into Japan, and there are fantastic malting barley producers all across Norfolk who will benefit from lower tariffs and more trade.
Wendy Chamberlain (North East Fife) (LD)
Elizabeth Truss
If the hon. Lady looks at the analysis of the US agreement, it shows that UK farming benefits. That is because people in the United States want to buy high-quality, high-welfare UK produce.
Robert Courts (Witney) (Con)
Greg Hands
My hon. Friend will know that the Food Standards Agency is extremely well placed on this issue. He will know that the chair, Heather Hancock, sent a letter to all parliamentarians, which I recommend all parliamentarians read and digest. There was also a letter from the Secretaries of State for Environment, Food and Rural Affairs and for International Trade about the important work of this non-ministerial Government department. To be clear, decisions on standards will be made separately from trade negotiations.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Elizabeth Truss
I have already answered a letter from the shadow Secretary of State on precisely this issue. Quarterly, we publish exactly which export licences we issue as a Department. We are completely transparent, and we operate in line with the consolidated criteria.
Sir Roger Gale (North Thanet) (Con) [V]
Elizabeth Truss
I can give my right hon. Friend an absolute assurance that all the regulations we currently have in place with the EU will be transposed into UK law. However, it is not the case that we ask other countries to follow our domestic regulations. We currently import produce from Canada on zero tariffs without those requirements. We currently import goods from the developing world without those requirements. What is very important, and what I am committed to in all the trade negotiations, is making sure that any deal we achieve does not undermine our domestic production standards.
Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]
Greg Hands
Obviously the whole of government is extremely concerned by the situation in Kashmir. It is primarily of course a matter for the Foreign, Commonwealth and Development Office. However, I can tell the hon. Lady that trade assists dialogue and assists countries and peoples to come together. In reference to India, we are having a JETCO—India-UK Joint Economic and Trade Committee—shortly to talk about trade between the UK and India. In relation to Pakistan, as I said earlier, we are rolling over the GSP-plus arrangements that the EU currently has with Pakistan, which also include a key human rights element. Making sure that dialogue continues and that trade continues will assist in that.
Mr Speaker
I am sure the House would like to be with me in prayers and thoughts for the sad news that Dame Vera Lynn has died—one of the great British icons.
In order to allow safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.
Petition
Alan Brown (Kilmarnock and Loudoun) (SNP)
I rise on behalf of the constituents of the constituency of Kilmarnock and Loudoun who have sent this petition in the consideration of a food standards commission. They are rightly concerned about food quality in the UK post Brexit. They understand that, despite assurances of the UK Government about keeping out the likes of chlorinated chicken and hormone-injected beef, proof of the UK’s intent was evidenced by the refusal to accept a cross-party amendment to the Agriculture Bill. They know that all bets are off when it comes to a trade deal with the US. They understand that trading under WTO rules in a no-deal Brexit crash-out means that these products cannot be banned; that is the position under most-favoured nation rules. They know that, with the number of free marketeers within the Tory Cabinet, there needs to be an independent food standards commission to protect the standards of food and drink on our shelves and to protect the Scottish farmers, who produce such high-quality goods.
The petition states:
The Petition of residents of the United Kingdom,
Declares that the UK Government has not put proper safeguards in place to protect food standards post the United Kingdom’s exit from the European Union; notes that the Government has rejected cross party amendments to the Agricultural Bill that aimed to protect standards of imports and ensure that any imports would not be able to undercut UK producers; further notes that leaving the European Union without a deal on 31 December 2020 will mean trading on World Trade Organisation (WTO) terms, and that the most favoured nation status will mean that the UK cannot prevent the import of hormone injected beef or chlorinated chicken from the US; further notes that the consumer group Which? has stated that a US trade deal poses the biggest risk to food standards since the BSE crisis and notes that the current deals struck by the EU provide the necessary protections; further declares that an extension to the transition period would create a short term protection against low standard imports, and that a Food Standards Commission with the remit of ensuring quality and welfare standards of food and drink imports in any trade deals could provide longer term protections for our farmers and growers in Scotland and the wider UK.
The petitioners therefore request that the House of Commons urges the Government to consider the establishment of a Food Standards Commission to monitor any trade deals involving food and drink products and to protect UK welfare standards and value our farmers and growers who produce in Scotland and the wider UK.
And the petitioners remain, etc.
[P002581]
DFID-FCO Merger
(4 years, 6 months ago)
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Wendy Chamberlain (North East Fife) (LD)
(Urgent Question): To ask the Secretary of State for International Development if she will make a statement on the merger of the Department for International Development with the Foreign and Commonwealth Office.
The Secretary of State for Foreign and Commonwealth Affairs and First Secretary of State (Dominic Raab)
I begin by thanking the hon. Lady and welcoming this opportunity to respond to her question on the merger between DFID and the FCO. On Tuesday, the Prime Minister announced that they will merge to become the Foreign, Commonwealth and Development Office. I can tell the House that the process will start immediately and will be completed by September. Alongside this merger, Her Majesty’s trade commissioners will now report formally to the ambassadors and high commissioners in their respective countries. The Prime Minister will set the UK’s overall international strategy, through the National Security Council, and by integrating development policy with our diplomatic network, the UK will be following a similar model to that of some of our closest international partners, such as Australia and Canada.
This move is about placing our world-class aid programme at the beating heart of our foreign policy decision making. We will integrate the development expertise and know-how that DFID does so well with the diplomatic reach and clout of the Foreign Office, ensuring that our impact abroad is bigger than the sum of its parts. Far from diminishing our ambitions, it will elevate them. As the Prime Minister set out on Tuesday, we retain our commitment to spending 0.7% of our gross national income on development, but through closer integration we will maximise the impact of our aid budget in helping the very poorest in the world, while making sure we get the very best value for taxpayers’ money.
For too long, we have indulged an artificial line, dividing the goals that our aid budget and foreign policy serve. This coronavirus crisis has confirmed just how artificial that line is. Across Whitehall, I have chaired the international ministerial group, bringing all relevant Departments together to support the most vulnerable countries exposed to covid-19; to energise our pursuit of a vaccine, working with our international partners; to return stranded British citizens from abroad; and to keep vital international supply chains open. In every one of these areas, we have been compelled to align our development, trade, security and wider foreign policy objectives. As in many a crisis, necessity has proven the mother of innovation. For example, at the GAVI vaccine summit, which the Prime Minister recently hosted, we smashed the target for vaccine funding, with $8.8 billion raised. That was a major success, where our development and foreign policy objectives had to be integrated to serve our dual aim of securing a vaccine for the British people, while making it accessible for the most vulnerable people, right across the world. Likewise we are working to bolster the health systems and institutional resilience of the most vulnerable countries, doing so not only out of a sense of moral responsibility, but to safeguard the UK from a potential second wave of the virus. I am afraid those demarcating a boundary between our national interests and our moral responsibilities in the world are mistaken. Covid has reinforced just how inextricably interwoven they are, just how much they reinforce each other and why we need to integrate them in our foreign policy decision making. It is to boost our impact and influence in the world, and that is exactly what we are doing.
Wendy Chamberlain
On Tuesday, the Prime Minister U-turned on free school meal vouchers for disadvantaged kids in England, only to stand at the Dispatch Box and cancel meals for the world’s poorest. UK aid reduces suffering. It is not some “cashpoint in the sky”; we will look to the £900,000 military plane makeover for that. DFID is a world leader. It is what global Britain is all about. No wonder the proposed merger with the Foreign Office has been roundly condemned by three former Prime Ministers.
We have to question why this merger is happening now, in the middle of the coronavirus crisis, when our aid is needed most. Why is this happening prior to the integrated review? The Prime Minister insisted that massive consultation had taken place. Which non-governmental organisations were consulted? To my knowledge, none was. Can the Foreign Secretary confirm that DFID employees only heard the news on social media? Were unions consulted? Can the Foreign Secretary commit to retaining all jobs, including the 200 EU nationals who work for DFID and those in East Kilbride? What assessment have the Government made of how much this will all cost?
Is the Secretary of State for International Development happy with this change? It is striking that she has as yet made no statement on the matter. It is almost as though the merger has taken place overnight. Will international development retain a Cabinet Minister and a seat on the National Security Council, so that humanitarian concerns are heard at the very top of Government? The Government have committed to 0.7% of GNI on aid spending, but can the Foreign Secretary confirm that this will be overseen by the Independent Commission for Aid Impact? If not, how will the Foreign Office—poorly rated for official development assistance transparency—be held to account? Can the Government commit to maintaining the International Development Committee?
Can the Foreign Secretary guarantee that this will not open the door to tied aid? Do the Government have any intention to repeal or amend any legislation about international development, and if so, in what way? Do the Government intend to continue to use the Development Assistance Committee definition of aid, and if not, what definition will they use? Will the Government ensure that poverty reduction is central to our approach, and how is this consistent with the Prime Minister’s ambitions to take aid away from Zambia and give it to Ukraine?
Finally, what will happen to all new DFID projects, which reportedly have been paused, and will the Foreign Secretary have a say? How will this decision impact on current recipients of DFID’s spending? Will it impact on the UK’s Gavi commitments referenced by the Prime Minister, and will the Government commit to equitable access to covid-19 technologies?
Dominic Raab
I thank the hon. Lady. It is good to hear that she is championing global Britain, and I agree with her on her points about the centrality of UK aid to our foreign policy, including our soft power. I totally agree with her on that. Her instincts and ours are entirely aligned.
I have explained and set out in my answer to her question exactly why we are doing this now. Covid-19—the crisis, the challenge—has forced us to align and integrate more closely than we have done before, and that was a positive step, but it has also shown how much further we can go if we integrate the formal decision-making structures. The discussions about and consideration of this have been going on for several weeks and months, but it has been under debate for considerably longer.
The hon. Lady asked about the financial repercussions of the merger. Of course, there are opportunities to save administrative costs, but as we have made clear, there will be no compulsory redundancies or anything like that. We are committed to the 0.7% of GNI commitment, which is something she asked. I can give her reassurance about that. We want the aid budget and the development know-how and expertise that we have in DFID—it has done a fantastic job, including under respective Development Secretaries—at the beating heart of our international decision-making processes.
The hon. Lady asked about the Select Committee. It is ultimately, I believe, a matter for the House, but certainly the Government’s view is that normally the Select Committees would mirror Government Departments. However, as I say, that is a decision for the usual channels and, ultimately, for the House.
The hon. Lady then asked about the National Security Council. Ultimately, the Prime Minister leads the foreign policy of the day. He does that, in practical terms, through his chairmanship of the National Security Council. The role of Secretary of State for the new Department will be to make sure, in an integrated and aligned way, that aid is right at the heart, not just of the Foreign Office, but of Cabinet discussions and NSC discussions.
The hon. Lady also mentioned the Gavi summit. The Gavi summit is an exceptional example of why it makes sense to integrate our decision-making processes in this way, because it links our development means and goals with our wider foreign policy goals. We want a vaccine for the people of this country, but we also know, as a matter of moral responsibility but also good sensible foreign policy, that we must do more to uphold the most vulnerable countries and help them weather the crisis, so that we do not get a second wave of this crisis.
My right hon. Friend the Minister for the Middle East and North Africa has just come back from a virtual meeting on Yemen. Yemen is another exceptionally good example of where our foreign policy interests in bringing an end to that terrible conflict align with our development and aid goals—with trying to alleviate the humanitarian plight. I would hope that is something that Members in all parts of the House could get behind.
Tom Tugendhat (Tonbridge and Malling) (Con)
My right hon. Friend has already spoken about various opportunities. Will he please speak very clearly about the ethos of the international aid Department, and how much that ethos will be kept in the new structure? Because clearly Britain’s soft power really does rely on a fantastic team of people, who have done amazing work over the years to develop an independent and very powerful voice for the UK in standing up for the world’s poorest. Now I think that can be integrated with our politics; in fact, I think it is fundamental to our foreign policy that we champion both together, but clearly it does require maintaining those people, keeping that ethos and maintaining the morale of an amazing team.
Dominic Raab
I thank my hon. Friend, the Chairman of the Foreign Affairs Committee. I know that he has looked at this very closely. We have discussed the integration of foreign policy on many occasions. That is absolutely essential, and I agree with him entirely that we want to keep not just the funding but the expertise, the know-how, the branding, the soft power—the elements that make the United Kingdom a development superpower—in the new structure. However, the reality is, and I thank him for his agreement on this, that we have an opportunity to do even better if we focus our aid and our foreign policy, and indeed, we are more aligned on trade and defence and wider security matters in a more focused way. That is the exciting opportunity that this merger allows, but I agree with him entirely on the point that he raised.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I thank my hon. Friend the Member for Rotherham (Sarah Champion) for her important urgent question.
“The effectiveness with which DFID is able to deliver aid is because the Department has decades of honed experience in understanding the most effective and targeted ways of spending taxpayers’ money”—[Official Report, 10 June 2020; Vol. 677, c. 276.]
—not my words, but those of the Secretary of State for International Development, last week, who now appears to have simply been completely overruled.
Scrapping a Department that is crucial to global vaccine development provides health care and aids the world’s poorest in the middle of a global pandemic is irresponsible and counterproductive and wrong. The Government should be totally focused on steering our country through the challenges we face right now. We have had one of the highest death tolls from covid-19 in the world. Millions of children are out of school and face the worst unemployment crisis in a generation, which will hit young people and the lowest-paid the hardest; and these challenges are global too.
Instead, the Prime Minister has decided to undertake a large-scale restructure, which will cost millions of pounds of public money, and he will abolish a Department that is the most transparent, the most effective and a global champion at delivering value for money for British taxpayers. Instead, UK aid will be spent through Departments, which, TaxPayers Alliance found,
“neither”
contribute
“to poverty reduction or the national interest.”
So can the Foreign Secretary tell me: when did the Prime Minister decide this matter? Why did he not wait for the conclusion of the integrated review? Did the decision go through the National Security Council? Which civil society and development partners were consulted? How much will the reorganisation cost and what legislative changes are planned? Will the DFID budget be ring-fenced in the new Department?
The Foreign Secretary also mentioned trade envoys. What role now for the Department for International Trade? Multiple former Prime Ministers, from both sides of the House, have criticised the decision. A former Conservative Secretary of State for International Development said:
“Most British diplomats lack the experience and skills to manage 100 million pound development programs…Trying to pretend these two very different organisations are”
the same
“damages both.”
Laurie Lee, the chief executive of Care International, said,
“this is the worst decision on aid since the Pergau dam scandal”
and
“In the middle of a national crisis, the Prime Minister has chosen to spend time, focus and effort on fixing a problem which does not exist…it’s not too late…to think again.”
This is not global Britain. This retreat from the global stage is a mistake, and we firmly oppose this attempt to abolish the Department. It will not only have a life-threatening impact on the world’s poorest and most vulnerable people, but it will reduce our ability to make the world safer, fairer and better for all.
Dominic Raab
I thank the hon. Gentleman, and welcome the opportunity to debate this issue with him. He asked a number of questions, including on timing. The covid crisis has required the Government to act and operate in ways that we have not done before—
Dominic Raab
He is shaking his head before he receives the answer—I thought we were going to have a sensible debate about the pros and cons of this change. I listened carefully to what he said, so he might do me that courtesy in return. We had an integrated approach, and we brought the alignment as far as we conceivably could on covid, the repatriation of nationals, the hunt for a vaccine, and keeping supply chains open. However, this situation has brought to light and made clear to us how much more effective we can be if we integrate through this merger.
The hon. Gentleman asked when the Prime Minister made the final decision. Obviously he spent weeks considering it, but he announced the change on Tuesday, swiftly after the conclusions had been resolved. The hon. Gentleman asked whether the aid budget will be protected, and we are committed to the figure of 0.7% of gross national income—I think that reassures those who are concerned that somehow the aid budget will be cut as a result of this change, which is not true.
The hon. Gentleman asked about DIT and trade, and as the Prime Minister made clear on Tuesday, we will ensure that our trade envoys are responsible for formally reporting to ambassadors and high commissioners in their respective countries. More broadly, the International Trade Secretary, who answered questions in the House a few moments ago, is doing an exceptional job in striking those free trade deals, which are a great opportunity for businesses and consumers in this country. That will continue. The hon. Gentleman also mentioned third party support. There has been widespread agreement on this from the Chair of the Select Committee, from my predecessor as Foreign Secretary, and from the HALO Trust, which is a charity that deals with landmines and welcomes this move.
I will leave the hon. Gentleman with one thought: of OECD developed countries, only one has a separate Ministry of Development. Indeed, the tide has been in the direction of integrating foreign policy with aid and development, as that is the progressive thing to do. I understand why the Labour party, which set up DFID, feels proprietorial about it, but what matters is the effectiveness of foreign policy. What we have learned during coronavirus is that this merger will ensure that we can be as effective as possible, and deliver more efficient value for taxpayers’ money.
Dame Cheryl Gillan (Chesham and Amersham) (Con) [V]
In the past week we have seen three changes to the machinery of government, including the merger of the FCO and DFID. All those moves are designed to maximise our resources, as we reignite and re-establish the UK’s global position. In order to continue that restructuring and make it even more comprehensive, particularly with the trade commissioners reporting to the ambassadors, what plans does my right hon. Friend have to support our business export activities, by eventually bringing the Department for International Trade into the Foreign, Commonwealth and Development Office? Surely that would now make sense.
Dominic Raab
I thank my right hon. Friend, and pay tribute to her expertise and experience in this area. We are not proposing to integrate DIT into the new Foreign, Commonwealth and Development Office, but through the structure with trade envoys we want to maximise our impact in those countries where we are seeking to liberalise, free up, and open up greater access for British businesses and British exports.
Mr Speaker
We now head to Scotland and the SNP spokesperson, Chris Law, who has one minute.
Chris Law (Dundee West) (SNP) [V]
The decision to abolish the Department for International Development and rechannel funds for eradicating global poverty to further diplomatic and commercial interests is unforgivable, particularly amid a global pandemic. The last three Prime Ministers opposed this merger, as does every development organisation that has been in touch, and the SNP. Today the International Development Secretary is not even present to answer any questions. Will the Foreign Secretary say whether the Cabinet was consulted? Were international development organisations consulted, and which, if any, supported this decision?
How will aid spending be scrutinised in the new Department? Will the UK continue to follow the Development Assistance Committee definition of official development assistance, or will the Government try to redefine aid on their own terms? Finally, today we learned that one of the UK Government’s recent Secretaries of State would like the HMS Royal Yacht Britannia to be funded on the back of the poorest, most vulnerable and marginalised people in the world. Is the royal family even aware of that? Is it not the case that such a move is led not by a vision of global Britain, but by the myopic Prime Minister of “let them eat cake” Britain?
Dominic Raab
I thank the hon. Gentleman for his constructive and measured response to this proposal. He asked a series of serious questions, and it is incumbent on me to respond to them. He asked about protecting the aid budget. We have made clear that we remain committed to 0.7% of GNI. He asked about consultation. Of course, there were discussions across Government about this, and it has been looked at closely. The Prime Minister had indicated, with the establishment of joint Ministers across the FCO and DFID, that we wanted to take steps down this path to further integration. As I mentioned in my previous responses, what has really focused our minds is what we have learnt in coming through the challenge of coronavirus on the international level.
The hon. Gentleman asked about third-party support. The former Foreign Secretary, Sir Malcolm Rifkind, has welcomed it. My right hon. Friend the Member for South West Surrey (Jeremy Hunt) has welcomed it. The Chair of the Foreign Affairs Committee has welcomed it. He said that no NGOs did, but I can quote James Cowan, CEO of the HALO Trust, a landmine clearance charity, who said that he welcomes this decision because UK policy
“is very siloed… and needs to be broken down”
and brought together. We certainly endorse that. Aid policy and the aid budget will be at the centre—it will be the beating heart—of our international decision-making.
Mr Speaker
I am probably going to run this session for 20 minutes, so we need speedy questions and answers.
Robert Halfon (Harlow) (Con) [V]
Will my right hon. Friend consider using overseas aid to create a large-scale, nationwide voluntary overseas apprentice scheme, sending young people overseas to work with charities and businesses to help developing countries but also develop the skills that they need?
Dominic Raab
I thank my right hon. Friend, the Chair of the Education Committee, who always manages to get apprenticeships into every question he asks with fantastic zeal and enthusiasm. I share his passion. I would be very interested to look at any suggestions he had. One of our priorities is ensuring that every young girl can have a quality education at least up to the age of 12, and that is a good example of where we want to maximise, strengthen and reinforce development policy within our wider international agenda.
Sarah Champion (Rotherham) (Lab) [V]
This rushed merger was done without consultation with the sector, Parliament, staff or the staff trade unions, at a time when the global south is about to be hit by a global pandemic. The Government urgently need to clarify the implications of the merger on the 3,600 DFID staff. Does the Foreign Secretary agree with the Prime Minister that there needs to be an ODA Select Committee? Is he committed to the Conservative Independent Commission for Aid Impact? Can he confirm that existing DFID projects will continue and funding agreements will remain in place, and what will happen to the current review of DFID projects?
Dominic Raab
I pay tribute to the work that the hon. Lady does in this area. I do not think it is right to say that we are having no scrutiny. I am here before the Chamber, the Prime Minister has made a statement to the House, and we want to continue that as we go through this process. She asked about accountability. Of course, we want maximum accountability for not just the process but the new Foreign, Commonwealth and Development Office, in terms of the structures that apply to it and here in the House of Commons.
I have already answered the question about the Select Committee. Our view is that, in the normal course, it is right for Select Committees to mirror Government Departments, but ultimately that is a matter for the House. There is a huge opportunity in this process to leverage the very best of our aid—not just money but ethos, passion and commitment—with the muscle and clout that comes with our diplomatic network, and that is what we are committed to delivering.
Kate Osamor (Edmonton) (Lab/Co-op) [V]
As the coronavirus pandemic has laid bare, the interconnectedness of the modern world means that no one is safe until we are all safe. The UK’s commitment to international development is even more vital in the response to covid-19 at home and abroad. The sudden merging of DFID and the FCO and the absence of any parliamentary scrutiny or consultation means that we must focus on the quality of aid now spent through the Foreign Office. Can the Foreign Secretary give the House a commitment that the aid budget will not be tilted towards richer countries like Ukraine and that we will continue to spend at least 50% of aid in the least developed countries? Can he give a yes or no answer to this: will there be a retaining of a Cabinet Minister responsible for international development—not the Prime Minister—with a place on the National Security Council, so that humanitarian and development considerations are heard at the top of Government?
Dominic Raab
I share the hon. Lady’s passion and commitment in this area. We have made the commitment to 0.7% of gross national income. We will discuss and scrutinise all the questions around accountability and the structure of the new body. Aid will be represented not just in foreign policy but in the NSC and at the Cabinet table by the Secretary of State for the new Foreign, Commonwealth and Development Office—that would obviously be me—and the Prime Minister will oversee it through the NSC, which he chairs.
Bob Seely (Isle of Wight) (Con)
First, will the Secretary of State confirm that claims that this merger will take money from the world’s poorest are simply false? Secondly, will he say whether this is a one-off move or part of a programme to give greater coherence and integration to British overseas policy?
Dominic Raab
I thank my hon. Friend for his question. In fact, I wanted to say in relation to the previous question that we are absolutely committed not just to safeguarding and protecting but to improving the work we do to help and lift out of poverty the most vulnerable and the poorest around the world. My hon. Friend asked whether this was a process. I think we are on a process of further integration, but our current plans are the ones that we have announced, and we are very focused on making sure we get maximum effectiveness out of this merger.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP) [V]
Approximately 600 jobs in the Department for International Development in East Kilbride in my constituency may be placed at risk by the shocking Government plans announced this week—shocking to staff, who found out just a few hours before the announcement, and shocking to the international community. They have caused considerable anxiety for local staff and all their families, who have been contacting me. Will the Secretary of State agree to meet me to discuss these crucial issues for my constituency and to guarantee that those highly skilled DFID jobs will remain in East Kilbride?
Dominic Raab
First, may I give the hon. Lady the reassurance she needs that the office in her constituency will not be closed? Is it not fantastic to have an SNP Member of this House asking for and giving value to the work that the United Kingdom Government do in Scotland, both domestically and around the world? We welcome her support in that regard.
Harriett Baldwin (West Worcestershire) (Con)
I had the privilege of being a merged Minister in both the Foreign Office and the Department for International Development, and I could see how well our embassies and high commissions worked across Africa presenting a “one UK” face to the world. Will the Foreign Secretary reassure me on three points: first, that he will be a strong voice in Cabinet for the world’s poorest and most dispossessed; secondly, that the proportion of the aid budget that is spent in the poorest and most conflict-affected countries will continue to be significant and at least where it is now; and thirdly, that he will prioritise the campaign for 12 years of quality education for every girl?
Dominic Raab
I pay tribute to my hon. Friend for the fantastic job she did. It is hard to believe but we do believe we can do even better by integrating, through this merger, the aid and foreign policy functions. She asked three specific questions; it is a yes on all three counts. Indeed, one of the first things I did yesterday was speak to Professor Paul Collier, one of a number of experts in the field, to look at how we can maximise our aid effort alongside our foreign policy, our trade and our wider international security objectives.
Stephen Timms (East Ham) (Lab)
For 20 years, since the success of the Jubilee 2000 campaign, there has been a consensus across the House about the importance of international development, and I commend the Churches in particular for delivering and establishing that consensus. I deeply regret that this downgrade is bringing it to an end. Does the Foreign Secretary recognise how many people in the UK profoundly disagree with his claim and believe there is a profound difference between focusing on doing good in the world—tackling poverty and dealing with the climate crisis—and what he and his colleagues regard as our own national interests?
Dominic Raab
I thank the right hon. Gentleman for his question. He is one of those Members of this House I always listen to with great care and interest, and he has a track record on these issues as well as on financial issues and many others. I made this point in my opening remarks that we have to be careful about this artificial dividing line between what serves our moral sense of duty and what serves a harder, grittier perception of the national interest. I think that that is an artificial dividing line. I believe in a sense of moral self-interest, an enlightened self-interest, and if he looks at what we are doing on vaccines at the Gavi summit, he will see that that will crystallise the opportunity for us to do things that serve the people of this country, by securing a vaccine, while helping the most vulnerable in the world.
Gary Sambrook (Birmingham, Northfield) (Con)
Britain is not alone in unifying its foreign policy, so does my right hon. Friend agree that we can learn from countries such as Australia, Canada and New Zealand, which run well-respected and well- funded development programmes from their Foreign Ministries?
Dominic Raab
My hon. Friend is absolutely right. It is perhaps one of the reflections of the debate in this country that very little attention is paid to the fact that of the OECD countries, there is only one now with a separate Ministry for Development. Indeed, the trend since 2009 has all been in the opposite direction—in Belgium, Australia, and Canada. The zeitgeist and the progressive thing to do is to bring together those functions to ensure that they have maximum impact together.
Hywel Williams (Arfon) (PC) [V]
The Pergau dam aid for arms scandal under the Conservative Government more than 25 years ago exposed the dangers of tying aid to foreign policy. Indeed, in 1994, in a landmark judgment, aid for Pergau was declared unlawful. Is the Foreign Secretary fully confident that there is no danger at all of history repeating itself?
Dominic Raab
I understand the point the hon. Gentleman is making. It is a perfectly respectable one, but the world has moved on, policy has moved on, and accountability and governance have moved on since the 1980s. Of course we are in a different place. I pay tribute to all the work that DFID has done since 1997. I understand why the Government, through that period, thought it was right as of and in its time. The best way now, the progressive way now, to integrate foreign policy with aid and development is to bring those functions together, and that is where most of the developing countries—indeed almost all of them—have gone.
Mrs Maria Miller (Basingstoke) (Con)
Departmental fragmentation is a very real problem in Government, which is why I welcome the announcement made by my right hon. Friend. This Government’s commitment to international aid is, of course, enshrined in law. How will he ensure that social justice programmes, such as those that he has already talked about, including 12 years of quality education for girls, which has been championed by the Prime Minister, continue to receive the priority they need within a much more complex framework?
Dominic Raab
I thank my right hon. Friend and former Chair of the Women and Equalities Committee. Of course she will know from the equalities agenda how easy it is for cross-cutting issues to fall between the cracks of individual Government Departments. We remain absolutely committed, and she will know that I am personally committed, to our campaign to ensure that there are 12 years of quality education for every girl in the world, not just as a matter of moral duty but because it is one of the best levers to raise poverty in those countries. I also cite COP26 and climate change as another example of where we need to bring together our domestic ambitions and our international ambitions across the board and unite our diplomatic muscle and leverage with our development goals.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The spread of covid-19 has pushed half a billion people into poverty and 265 million to the brink of starvation. This merger is a massive distraction in the middle of an emergency. Can the Foreign Secretary assure the House that official development assistance will not be misspent on foreign security projects, which risk the UK contributing to human rights abuses abroad?
Dominic Raab
I thank the hon. Lady for her question. I know that she takes a very close interest in this matter. In relation to conflict situations in particular—I have mentioned Yemen, but I can think of other situations around the world—integrating the aid and development budget and policy is the way that we will get a coherent approach, which not only brings the conflict to an end and alleviates the humanitarian crisis, but is the best vehicle for protecting human rights sustainably.
John Howell (Henley) (Con)
In my role as the Prime Minister’s trade envoy to Nigeria, may I say that that our best high commissions around the world, such as that in Abuja, already work on an integrated basis? Does not this merger merely justify what is already happening on the ground?
Dominic Raab
My hon. Friend is absolutely right. Indeed, we are taking advantage of those officials—I have asked Nic Hailey to head up some of this work in the Foreign Office, as he has experience in Kenya doing exactly what my hon. Friend described in Nigeria—to help us knit together the aid, the development and the wider foreign policy functions. It is misplaced, but I understand why, to think that these functions, including the international security functions in those countries, should remain siloed. The most effective way, with the highest impact, is to bring them together.
Jim Shannon (Strangford) (DUP)
For the past two decades the world has witnessed the impact of DFID’s life-saving investments in the HIV response and the wider global health arena. That critical UK global leadership on HIV, health and international development must not be squandered at a time when years of progress are already at risk of being unravelled. How does the Secretary of State believe this level of focus will be achieved in an already overstretched FCO?
Dominic Raab
The hon. Gentleman raises exactly the point at issue. We want to maximise our focus and funding, but also our political effort, on those key priorities and ensure that we are delivering with the very highest impact. HIV and some of the other ground-breaking areas where we have helped to reduce disease, malnourishment and poverty are absolutely a top priority in the new administrative structures.
Simon Jupp (East Devon) (Con)
This important and necessary change provides the crystal clear clarity of purpose needed to boost and bolster global Britain. Our commitment to spend 0.7% of our national income on aid is enshrined in law. Does my right hon. Friend agree that we owe it to the people of our nation and the many we help across the world to make the best use of every penny?
Dominic Raab
My hon. Friend is absolutely right, and that is exactly what this merger is all about. Ultimately, it is not about the institutional mechanics, but about the strategic objectives and ensuring that foreign policy, aid and our wider international objectives are brought together, and that we demonstrate at home and abroad—in all the areas he described—that we are bigger than the sum of our parts.
Richard Burgon (Leeds East) (Lab) [V]
Mr Speaker,
“some giant cashpoint in the sky that arrives without any reference to UK interests”—[Official Report, 16 June 2020; Vol. 677, c. 670.]
That is how the Prime Minister describes aid to the poorest and most exploited nations and people in the globe. In a Spectator article, he previously mocked such aid as “politically correct”, with aid workers building toilets that people will end up living in and handing out condoms. In the same article, he said of British colonialism in Africa:
“The problem is not that we were once in charge, but that we are not in charge any more.”
Is it not the brutal truth that the Prime Minister is not interested in poverty reduction at home or abroad?
Dominic Raab
No; after all that bluff and bluster, there is really only a one-word answer. Look at what this Prime Minister did when he was Foreign Secretary—his commitment to making sure every girl has 12 years’ education; the passion that he has brought to the COP26 agenda—a conference that we will host; his commitment to making sure that we promote media freedom throughout the world, as well as all those wider aid and development functions. This is someone who has direct experience of foreign policy and knows, as I understand, that we can maximise our impact in all those areas where we share aspirations and objectives right across the House, and that we can get better results for the people we are trying to help across the world, but also for taxpayers’ money in this country.
Dr Andrew Murrison (South West Wiltshire) (Con)
I very much welcome this merger, which is good for global Britain, good for aid beneficiaries, and good for our ability to explain and advocate international development among a generally sceptical population. Can the Foreign Secretary say, however, what the Independent Commission for Aid Impact’s role will be in the merged Department? Also, since DFID’s terms and conditions of service for its staff tend to be rather better than those for Foreign and Commonwealth Office staff and diplomats, will there be a levelling up or a levelling down?
Dominic Raab
May I thank my right hon. Friend and say what a fantastic Minister he was in the Foreign Office? I worked very closely with him and he was exceptional. He will know from his brilliant work on Yemen the importance of bringing together conflict resolution foreign policy objectives with the aid and development budget and programme that we have been delivering. We will come forward with the details he described as soon as practical so that this House can scrutinise them, but I can certainly tell him that we will want to maintain, if not increase, maximum scrutiny over the aid budget and the functioning of this merger.
Mrs Heather Wheeler (South Derbyshire) (Con) [V]
I thank my right hon. Friend for his answer to the urgent question. This move mirrors similar situations in countries such as Australia, with its well respected Aussie Aid. In the merger of the FCO and DFID, what importance will be attached to the provision of sexual and reproductive health rights and family planning as a key component of ODA going forward?
Dominic Raab
May I thank my hon. Friend and say what a fantastic Minister she was for the Asia-Pacific region? She will know first hand what can be done when we combine all the resources, expertise and efforts right across Government in the international sphere. On the public health goals she mentions, we will not be diluting or dimming the development goals in any way, shape or form.
Alyn Smith (Stirling) (SNP) [V]
The reorganisation of Government Departments is day-to-day business; what we object to is the explicit and deliberate politicisation of international aid. Will the Foreign Secretary at least commit to meeting the international development non-government organisations to discuss, for the first time, implementing this selfish vanity project in the least bad way possible?
Dominic Raab
The hon. Gentleman talks about not politicising and then he comes up with a comment like that. Of course, we will look very carefully. We understand—I want to be clear about this—why NGOs are not universally, shall we say, welcoming this merger. Over £1 billion goes into NGOs’ budgets every year from the aid budget, so I understand why they take a very close interest. I have given the reassurance that we are retaining the 0.7% commitment. Ultimately, in the last analysis, we have to ensure that our policy and taxpayers’ money is brought together and invested in a way that can deliver the most effective results for the strategic objectives of alleviating poverty for the most vulnerable, and delivering on climate change and on the wider international agenda that we on the Conservative Benches passionately support.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
As chair of the all-party parliamentary group for Africa, I would like to put on record my view that the takeover of DFID by the FCO will undermine Britain’s influence in Africa, not enhance it. Diplomacy is not development. Diplomacy must and should be driven by British interests. Development must be seen to be in the interests of the country concerned. DFID benefited from not being seen as an arm of British foreign policy. Will the Foreign Secretary take this opportunity to confirm that this takeover will not lead to a reduction in the proportion of aid that goes to Africa?
Dominic Raab
I fundamentally disagree with the hon. Lady, but I respect her view. I actually think that Africa—we mentioned Nigeria and Kenya as two examples—is an area where we really need to bring together, in one united, forged effort, development, aid and foreign policy objectives in conflict zones. I started my career as a war crimes lawyer—I worked in the FCO—and I saw the risk of having a shadow aid foreign policy at the time of conflict resolution. Bringing those things together will lead not only to a more effective aid and development set of objectives, but to more effective foreign policy. I think that will be at its highest and greatest in Africa.
Huw Merriman (Bexhill and Battle) (Con)
Having spent time with DFID teams around the globe, I was initially concerned when I heard about the merger. However, they always worked positively and I believe we should too. I therefore wish my right hon. Friend well in looking after the aid budget. I know that he believes in social justice and results, so I trust him to do so. As I am sat next to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), may I ask the Foreign Secretary to ensure that we deliver value for money with our aid budget?
Dominic Raab
I agree with everything my hon. Friend says. He mentions our right hon. Friend the Member for Sutton Coldfield. I pay tribute to the incredible work he did at DFID. We are absolutely committed, with even more passion and even more zeal, to those objectives, while at the same time, as my hon. Friend rightly says, making sure we can deliver the best bang for our buck with British taxpayers’ money. The best way to do that is in a co-ordinated and integrated way. That is what the merger will achieve.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
After failing to consult the Cabinet let alone the sector, does the takeover not spell the end of collective responsibility and transparency, and show us that it is not the Foreign Secretary or the Prime Minister in charge but another Dominic—and he has got to go?
Dominic Raab
I had thought we were on the cusp of a very serious question but it descended into political cut and thrust. Actually what we are really focused on, and what this crisis has proved, is that necessity is the mother of innovation and invention. We have to try to drive greater effectiveness not just domestically as we tackle coronavirus but in our international effort, and that is what we are focused on.
James Sunderland (Bracknell) (Con)
I welcome the merger for all the benefits of co-ordination and synergy that it promises. Could the Foreign Secretary please confirm that it will also come with a more comprehensive strategy for combining all the multiple threads of soft and hard power?
Dominic Raab
We have of course taken this merger decision now because we can see that we need to be as effective as we possibly can be during this coronavirus challenge. Equally, it will help to galvanise the integrated view that will bring into play all the wider security factors that my hon. Friend mentioned.
Mr Speaker
In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am now suspending the House for three minutes.
Business of the House
(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House please give us the forthcoming business?
The Leader of the House of Commons (Mr Jacob Rees-Mogg)
The business for the week commencing 22 June will include:
Monday 22 June—Second Reading of the Extradition (Provisional Arrest) Bill [Lords].
Tuesday 23 June—Remaining stages of the Medicines and Medical Devices Bill followed by motions relating to the establishment of an independent expert panel to consider cases raised under the independent complaints and grievance scheme.
Wednesday 24 June—Opposition day (9th allotted day). There will be a debate on a motion in the name of the official Opposition, subject to be announced.
Thursday 25 June—If necessary, consideration of Lords amendments followed by a debate on a petition relating to the recognition and reward for health and social care workers; followed by a debate on a petition relating to the support for UK industries in response to covid-19. The subjects for those debates were determined by the Petitions Committee.
Friday 26 June—The House is not expected to be sitting.
Valerie Vaz
I thank the Leader of the House for giving us the business for next week. Let me start by sending my condolences to Dame Vera Lynn’s family and friends. [Hon. Members: “Hear, hear.”] The Queen mentioned some of the songs that we all know: we will all meet again someday.
I thank the Leader of the House for allotting another Opposition day. Obviously, we will be dealing with highly topical subjects. I do not know what we have done to deserve another day, but we may yet force another U-turn, as we did through our “Holidays Without Hunger” campaign. He has not announced the recess dates and it is important for us to know them, as well as details of the business, as we are keen to get on with the legislative programme that he says he wants to get on with. Mention has also been made of a mini-Budget in September, and it will be useful to know when the Session will end—whether it is to be in November or in May.
Can the Leader of the House say when the Intelligence and Security Committee will be set up? It looks as though the Government are either hiding something or incompetent—perhaps it is both.
The Environment Bill is in Committee and is apparently due to report on 25 June. The shadow Environment, Food and Rural Affairs Secretary has said that about 18 sittings have to be completed, so I wonder whether the Leader of the House could enlighten the House on that.
Mr Speaker,
“it’s reign of terror now and, inevitably, reign of error next”.
Those were the words of Tim Montgomerie, lately of the Leader of the House’s parish. It seems that we are already into the reign of error, because shop workers, who have worked their socks off, keeping us all in food, and who have been so polite and helpful, may be asked to work extra hours on Sunday—that is cruel. We are opposed to that, and I hope the Leader of the House will do a Marcus Rashford and work with the Opposition to make sure the Government do a U-turn on that. The Union of Shop, Distributive and Allied Workers has just done a survey, finding that 92% of shop workers oppose the move and two thirds of them feel they are under pressure when they are asked to work on a Sunday.
What about the reign of error on school meals? That went right to the wire. The Government were going to vote against us until it went right to the wire; the shadow Secretary of State for Education was about to stand up and then she had to admit that the Government had done a U-turn.
Again on the reign of error, not one but three former Prime Ministers think that the Prime Minister is wrong. I do not know whether the Leader of the House heard what the Prime Minister said:
“it is no use a British diplomat one day going in to see the leader of a country and urging him not to cut the head off his opponent and to do something for democracy in his country, if the next day another emanation of the British Government is going to arrive with a cheque for £250 million.”—[Official Report, 16 June 2020; Vol. 677, c. 674.]
That shows that the Prime Minister does not understand international development.
We can look at international development, first, as reparation for former colonialism. It goes to organisations on the ground. It is about education and health, and economic development. It provides support to people in their own countries so that they do not feel that they have to leave their countries to search for a better life somewhere else. Most importantly, it gives people hope and it was the right thing to do. I know that the Foreign Secretary said that we are following Australia and Canada, but we in Britain lead, we do not follow. I want to say thank you to Jan Thompson, the acting high commissioner in India, for bringing back all my stranded constituents. She is a diplomat; she is not dealing with international development. It is diplomats who are involved in freeing Nazanin, freeing Anoosheh and freeing Kylie, who, if reports are correct, has been beaten because she has started a choir. I wonder whether the Leader of the House could find out about that. May we have a statement, not just an urgent question granted by Mr Speaker, from the Secretary of State for the Foreign, Commonwealth and Development Office on exactly how the Department will be set up? This is chaos and incompetence, without any idea for the infrastructure of the machinery of government.
Another machinery of government change was slipped out in a written statement last week. Apparently, border controls are now in the Cabinet Office. It seems that the Chancellor of the Duchy of Lancaster wants to wear a uniform and a cap so that he can count people in and count people out. But, really, are we to have border controls in the Cabinet Office? We need an urgent statement on what that is going to look like.
We see the reign of error again in the chaotic and incompetent policy announcement on racism and the Black Lives Matter movement. The Prime Minister obviously does not trust any of his Ministers to do the work, but for those who cannot remember, it was a Labour Government in 1976 who put through the Race Relations Act and the Commission for Racial Equality, which said:
“We work for a just and integrated society, where diversity is valued. We use both persuasion and our powers under the law to give everyone an equal chance to live free from fear, discrimination, prejudice and racism.”
Those of a younger generation who do not think they face racism—it is because we had the Commission for Racial Equality, which changed society.
The Government have to stop dragging the BBC into politics. They know that the over-75s commitment was made by political parties. The BBC has educated, informed and entertained us through this lockdown. The Government must do the right thing in the middle of this crisis and fund the free television licences.
Last week, I missed our Chief Whip’s birthday. I want to put on record his fantastic record. It was on Saturday, the same day as the Queen’s official birthday. He has served five leaders over four decades, and two Prime Ministers, and we thank him for all his work, and also thank Sir Patrick Duffy, formerly of this place, as Member for Colne Valley and for Sheffield, Attercliffe. He is 100. He published his autobiography at 94, and the title is “Growing up Irish in Britain and British in Ireland and in Washington, Moscow, Rome and Sydney”. Sir Patrick, I am sure the whole House wishes you a very happy birthday.
Mr Rees-Mogg
I agree with the right hon. Lady that the whole House sends its condolences to Dame Vera Lynn’s family. She sang uplifting tunes that ensured the nation’s morale was good at a time of desperation. It is noticeable that when we had a difficult time recently, it is once again her words that our sovereign reached for. We look forward to “bluebirds over the white cliffs of Dover” as we get blue passports back, so as people come in they will be looking for bluebirds waving their blue passports. We commemorate and remember her for the great contribution she made to boosting the nation’s resolve and morale.
I appreciate the right hon. Lady’s gratitude for Opposition days. I always do my best to ensure that there is contentment on the Opposition Benches. In that spirit, may I add to the celebratory comments about the Opposition Chief Whip’s birthday and his service to Parliament, for which I think he has a genuine commitment and love? I think that has been good news for how this place has operated in some, although not necessarily in all, ways, because he is also a very effective party politician. [Interruption.] I am in favour of effective party politicians. I think it is a perfectly reasonable thing to do. There is no criticism in that; it is part of making a democracy work.
Recess dates are always subject to the progress of parliamentary business and that remains the case. As soon as I can bring an update to the House, I will do so. The Environment Bill is an important Bill. Obviously, because there were no Public Bill Committees during the period when we were entirely hybrid, there have been delays. It would be very unlikely for it to be out of Committee at the date currently proposed.
I am very glad the right hon. Lady welcomes the Government policy on free school meals. The Government are a Government who listen, and that is quite right. It is very odd that the Labour party should come late to a party asking for something, and then when the Government give it, complain that the Government have given it. I do not really see the logic in that. I think the Government have done absolutely the right thing.
As regards the merger of DFID and the Foreign Office, this is an absolutely brilliant policy. It is one that commands support across the country, because it is putting British interests first. It was not from this Dispatch Box, but from a Dispatch Box in a very similar place—it had to be replaced after the damage caused by the bomb—that Lord Palmerston pointed out that we have eternal interests. Our nation’s interests must be served by the structures of government, and that is what is being done. We must ensure that taxpayers’ money is well spent, and taxpayers have a right to demand that their money is used carefully.
The Prime Minister has been here to make a statement to the House. You, Mr Speaker, rightly keep Her Majesty’s Government on their toes when announcements are not made to this House, and sometimes they creep out at press briefings, which is something you deprecate, but when the Prime Minister comes and makes the statement to this House, does he get the laurels that he deserves—the paeans of praise that should come to him? No, not at all; we get grumbling, moaning and complaining that it is not enough. It has to be said that some people can never be satisfied.
The right hon. Lady called for a uniform for the Chancellor of the Duchy of Lancaster; I can tell her that as Lord President of the Council, I am entitled to a uniform but, as I understand it, the uniform has not been worn by any Lord President since the coronation of George V. I therefore do not intend to resurrect that ancient tradition. [Interruption.] I do not have the uniform and nor will I be seeking to get the uniform. I do believe that the Chancellor of the Duchy of Lancaster is entitled to have a flag on his official car, but I understand that that practice has also fallen into disuse.
The right hon. Lady referred to the Government’s commitment to racial equality, which is a very important subject. It was clear in our manifesto that we will ensure that Britain is a fairer society and tackle racial and ethnic inequalities where they exist. The new commission has been set up to have a fresh and positive approach to try to ensure that we have as fair a society as we possibly can. The seriousness with which the Government take the issue is shown by the seniority of the person put in charge of the commission, working from Downing Street.
Finally, the right hon. Lady questioned whether the BBC was being brought into politics. It is noticeable that it is the left that likes to see much higher funding for the BBC; I wonder why that is.
Mr Speaker
I thank the Leader of the House for confirming that the Prime Minister will make that statement here first.
Sir Robert Syms (Poole) (Con)
May we have an urgent debate on aviation, for two reasons? First, because many of us want to express our support for BA staff, who are currently having a very difficult time with their management; we need to stand up for them. Secondly, because the 14-day quarantine in aviation is such a good policy that it needs rapid improvement to air bridges or testing. We need to get the aviation industry going and those two issues need fully to be discussed in the House.
Mr Rees-Mogg
I am grateful to my hon. Friend for raising an important question. Many of us represent constituents who have worked for British Airways and given long service over many years, and there are concerns about the way that they have been treated. This matter has quite rightly been brought before the House under an urgent question, and I think could be debated next week in the Petitions Committee debate relating to support for UK industries in response to covid-19. The matter clearly comes under that heading, so the debate will be available.
I note the point that my hon. Friend makes about the quarantine regulations, which of course are for a period and will be reviewed. The issue of safe countries is being looked at, as the Foreign Secretary said on the wireless this morning.
Tommy Sheppard (Edinburgh East) (SNP) [V]
First, may we have a debate on how the fiscal framework within which the devolved national Administrations operate should be changed to improve their capacity to deal with the current pandemic and its aftermath?
To date, the Scottish Government have spent more than £4 billion on covid-19. Most of it will be funded through Barnett consequentials, but several hundred million has had to be diverted from other priority spending. For the UK Government, that would not be a problem, as they can overspend if necessary and borrow unlimited amounts to cover the cost. Neither of those options are available to the Scottish Government under the fiscal framework. I hope the Leader of the House will agree that when the framework was devised, no one had in mind the need to cope with a crisis on this scale. On Tuesday, four out of the five parties in the Scottish Parliament united behind a call for additional fiscal responsibilities. Their motivation was practical, not ideological. When can we discuss this Parliament’s response to that call?
Sticking with responses to coronavirus, we have discussed previously how the crisis sadly brings out the worst in some people, and we now hear that companies such as BA are intending, under cover of the pandemic, to execute mass redundancies and then hire back fewer people on worse pay and conditions. My hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) has launched a Bill, with cross-party support, to outlaw such Dickensian employment practices. It would be an easy matter—would it not?—for the Government either to make time to discuss that Bill or to bring forward proposals of their own.
Finally, I return to the matter of voting during the current emergency. It seems the Government are determined to do just about anything to stop Members voting remotely, including introducing new technology, as we have seen this week. Why do they not stop messing about and do the common sense thing by switching the e-voting system back on: a tried and tested system that not only allows Members who cannot attend to vote but makes it much safer for those who are on the premises?
Mr Rees-Mogg
To take the last point first, voting was carried out using parliamentary passes very effectively last night and with a proxy scheme that means that people can be present in the House. I think my hon. Friend the deputy Chief Whip voted for more than 40 Members of Parliament, and a similar figure was true for a leading Whip on the Opposition Benches. There are advantages for the Whips in the scheme, but it ensures that people are able to express their views, and that we have Parliament back, which means that we are getting the work done.
We have four Bill Committees up and running. We are working through the legislative programme, which we committed to doing in the manifesto. The British people expect us to be back at work. We are leading by example, and it is right that people are back, and that we have made provision for people who cannot be back. In that context, private Members’ Bills will be coming back in early July. That will be the opportunity for the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) to introduce his Bill, so that it can be considered in the normal way for private Members’ Bills.
As regards money, £3.7 billion has gone from the central Exchequer to the Scottish Government—their share from the extra expenditure in relation to the coronavirus—so the funds that are going through are very substantial. Of course, part of the devolution settlement is that the Scottish Government have discretion regarding how they spend money and what they spend it on, and they have to work within that discretion.
Ms Nusrat Ghani (Wealden) (Con)
The failure of the diplomatic community to end the plight of hundreds of thousands of seafarers stuck at sea is shameful—all down to covid travel restrictions. Without our mariners working in a healthy environment, our supply chains will be damaged and obviously world trade will be as well. Will my right hon. Friend consider an urgent debate to call on the diplomatic network of the Foreign Office and the Prime Minister’s global Britain agenda to get an agreement internationally on crew changes?
Mr Rees-Mogg
I am grateful to my hon. Friend for raising an important point that will be of concern to others in the House. There are Transport questions on 2 July, but I suggest that she applies to you, Mr Speaker, for an Adjournment debate to begin the process of the matter being discussed more fully.
Mr Speaker
We are heading up to the north-east with Ian Mearns, the Chair of the Backbench Business Committee.
Ian Mearns (Gateshead) (Lab) [V]
Thank you, Mr Speaker; I am grateful for your indulgence. I hope that the Leader of the House enjoyed the coronation of George V, which I believe was 110 years ago. Will the Leader let us know when the anticipated estimates days debates are due to take place, and how many days of such debates the Backbench Business Committee will have to allocate? We probably need to do that work next week.
Also, this afternoon the House will debate the effect of covid-19 on black, Asian and minority ethnic communities. Although I welcome the measure of protected time, it would be a great shame if contributions to such an important and well-subscribed debate had to be limited to only two or three minutes.
Lastly, could the Leader of the House crave the indulgence of some of his colleagues in the Business team to look at what Newcastle United are doing in terms of being an outlier within the premier league by completely and unnecessarily withholding refunds for tickets for games that they know will not be played in front of fans? It is withholding those refunds from fans: paying customers, many of whom, frankly, in the current climate could do with the money.
Mr Rees-Mogg
The hon. Gentleman asks about the estimates days. I will bring forward business in the normal way. We have, as he will know in terms of Backbench business more generally, been prioritising Government legislative business to start with, but we are beginning to get back to a more normal way of working, with another Opposition day next week, and using time, admittedly for the Petitions Committee next week rather than his Committee, to ensure that all the important subjects that get raised have time to be aired.
Time limits on speeches are really a matter for you, Mr Speaker, rather than me, but we hear the hon. Gentleman’s requests for protected time, to ensure that debates have a reasonable amount of time, subject to the other business going on in the House.
As regards refunds, it would not be fair of me to talk specifically about an individual company or sports organisation making refunds. This is an issue across the economy, with many businesses very stretched for cash but consumers expecting to get their money back. It is a problem that the Government are aware of, and there are a variety of routes for people to get their money back. If the company directly is not able to do it, sometimes the credit card company may be able to help.
Mrs Natalie Elphicke (Dover) (Con)
May I say that Dame Vera was a true friend of our white cliffs country, working with us to see off the planned sell-off of the port? She has the thanks and prayers of our community.
In Dover and Deal, we are already working on an exciting local recovery plan, but we cannot do it by ourselves because it includes duty-free cruises to France, border controls and new trade and customs activities. In drawing up the legislative programme for the remainder of this year, will my right hon. Friend give time for the House to do whatever it takes, for as long as it takes, to maximise the opportunities of Brexit and secure recovery and prosperity for us all?
Mr Rees-Mogg
My hon. Friend is right that there are great opportunities to be had from the restoration of powers from the continent to the United Kingdom. She and her predecessor have both been exemplary in their championing of Dover and Deal, to great effect. The town has never been better served than it has been in the past decade. It is thanks to the commitment of Members on both sides of the House, in their role as lawmakers, that we have returned physically and are making progress with key legislation that will allow us to take back control of policy making, whether it be agriculture, immigration or trade. From that, there will be more bluebirds over the white cliffs of Dover.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
I welcome the robustness of the Government’s latest six-monthly report on Hong Kong. I draw the Leader of the House’s attention to early-day motion 616 on China’s national security law, which I co-signed with the hon. Member for Romford (Andrew Rosindell) and other Members across the House.
[That this House notes with surprise and concern the decision by HSBC Bank Plc and Standard Chartered Plc to support China’s proposals for a new National Security Law in Hong Kong; recognises that financial institutions, particularly those enjoying the benefits and protections of being based in the UK, have a duty to uphold and promote democratic principles and human rights around the world, wherever they may trade; warns that the proposed National Security Law is likely to be in direct breach of the Sino-British Joint Declaration; and calls on the Government to set out the measures it will take to encourage HSBC and Standard Chartered to review their support for that proposed legislation from the Chinese Communist Party, which has a serial record of violating human rights and undermining democratic principles.]
What more can we do in the House of Commons to show our fullest support for all the promises made in the joint declaration and the upholding of democratic freedoms and rights enshrined in the Basic Law of Hong Kong, and show our unequivocal support for Hongkongers to live peacefully and without fear in a free society?
Mr Rees-Mogg
I am grateful for the hon. Gentleman’s question. The rights and freedoms of the people of Hong Kong are something that the Government take deeply seriously, and I hope I can assure the hon. Gentleman that this is a priority for the Government. My right hon. Friend the Foreign Secretary has updated the House and, I am sure, will continue to do so. He last did so on 2 June, when he provided a statement on Hong Kong.
The Government are deeply concerned about China’s plan to impose national security legislation on Hong Kong and have urged it to reconsider. Imposition of this law by China would undermine the principle of one country, two systems, under which Hong Kong is guaranteed a high degree of autonomy, and it would be in direct conflict with China’s international obligations under the joint declaration—a UN treaty—which was signed on our behalf by Margaret Thatcher and is something that the Chinese Government ought to be proud of. If China continues down this path, we will look to amend the arrangements of those with British national (overseas) status, to allow them to come to the UK and apply to work and study for extendable periods of 12 months. This House will share the role of ensuring that the Chinese Government are under no misapprehension about the fact that Her Majesty’s Government are very serious about expecting the joint declaration to be observed.
Jerome Mayhew (Broadland) (Con)
Will the Leader of the House consider giving time for a debate in which the House can discuss how the Chancellor could best reshape the economy to lead the country out of recession? Could such a debate take place in good time to inform the Chancellor’s deliberations prior to any statement on the economy?
Mr Rees-Mogg
My hon. Friend is right to highlight the work of the Chancellor, who has managed an unprecedented crisis with characteristic ableness, crafting a considered and suitably bold approach. Our priority has been to support people, families and businesses through this crisis, but there will be more steps to be taken, and the wisdom of this House will be invaluable in helping the Government to shape policy for the future. As I announced earlier, there will be a debate next Thursday 25 June that will allow the economic circumstances around the pandemic to be discussed in broad terms, and I am sure that Ministers will pay careful attention to that debate.
John Spellar (Warley) (Lab)
May I first report that yesterday I spoke to Pat Duffy, who not only was in very good spirits and fine form, but was polishing off his first glass of champagne to celebrate his 100th birthday? Yesterday, I also raised with the Equalities Minister the ongoing scandal of the operation of the disclosure and barring service—the DBS. This can blight people’s lives, often for minor crimes or even cautions in their youth, for decades. It prevents people from turning their lives around and is highly discriminatory. Members from both sides of Parliament and across the political spectrum recognise this injustice, as indeed did the Equalities Minister yesterday. The blockage seems to be the dead hand of the Home Office, so will the Leader of the House mobilise his office to knock departmental heads together, not for another study, inquiry or commission, but for rapid change, action and then a statement to the House?
Mr Rees-Mogg
The right hon. Gentleman raises a very important point: with the DBS system, it is important to recognise that people can reform and that people ought to be given, in a fair society, a second chance, and that is something we as politicians should be very committed to. I will use my office in whatever way I can to try to encourage other Ministers to come to a conclusion on this and to look at it in the serious way that he suggests, though I may be a bit cautious about knocking heads together, because I am not sure that meets the requirements of social distancing.
Nigel Mills (Amber Valley) (Con) [V]
Will the Leader of the House find time for a debate on procurement practices across the public sector, so that we can ensure that the businesses across the country that stepped up and provided the personal protective equipment we needed have a fair chance to bid for longer-term contracts?
Mr Rees-Mogg
This is an important issue, and we will have considerable freedom as to how procurement is developed and used once we have left the European Union, when we will be much less tied in to the very dirigiste approach taken under the single market. The Government have done remarkably well in opening up to other suppliers, especially during this crisis, to try to get the best available equipment where necessary.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
The chemical and pharmaceuticals industry is the UK’s largest manufacturing exporter, and during the covid-19 pandemic, it has played a positive and essential role. Can we therefore have a debate in Government time, or, at the very least, a statement, on the work of the sector and how we stimulate its economic demand while supporting a decarbonisation-focused national recovery that will provide for a realistic energy transition, enabling the industry to deliver clean water, effective medicines and sufficient food production?
Mr Rees-Mogg
The hon. Gentleman is absolutely right to pay tribute to the pharmaceutical industry. The UK’s pharmaceutical industry is world beating and has made an enormous contribution in recent months. In terms of the debate that he is asking for, once again, that is a matter that could be raised under the debate next Thursday in response to the Petitions Committee.
Steve Double (St Austell and Newquay) (Con)
It is widely accepted that our coastal communities are set to be most severely impacted on by the coronavirus crisis, and it is reported that the town of Newquay, which I have the honour of representing, is set to be the most severely impacted on in the whole country. Can we have a ministerial statement on the Government’s strategy for supporting and investing in our coastal communities to ensure that economic recovery happens as soon as possible, as we come out of lockdown?
Mr Rees-Mogg
Again, this is a point of the greatest importance, and I am grateful to my hon. Friend for his question about support for coastal communities. He is a true champion of his community—an idyllic part of the world—as much of the Chamber is for those in the coastal communities he refers to. The communities on our coastline are of huge importance to this country, and their tourist economies have been particularly hit by the economic downturn of the pandemic. This is a matter that can be taken up at the next Department for Environment, Food and Rural Affairs oral questions on 25 June, but once again, it can also be raised in the debate next week on the general economic effects of the crisis.
Chris Bryant (Rhondda) (Lab)
We are a resilient community in the Rhondda, but I honestly do not think that we can take any more without significant help from outside. We had some of the worst flooding in the country earlier this year—hundreds of homes lost everything, many of them without any insurance at all—and last night, we had another bout of flooding, which has affected about 200 homes. I spoke to one woman last night who was in floods of tears because she had only just managed to get builders to sort her home out. She was about to move back in and now it is all ruined all over again. On top of that, we have a tip, half of which has fallen down into the river. Sixty thousand tonnes have to be moved and the whole thing has to be made safe, because we do not want another Aberfan. The council is completely strapped for cash. We know that we need £60 million to mend the culverts, to make sure that this does not happen all over again in three months’ time, in six months’ time or in a year. We need £2 million to move the 60,000 tonnes of earth. Please—I do not want a debate, if I am honest; I really just want the Leader of the House to make sure that we get the support we need in the Rhondda.
Mr Rees-Mogg
I think the whole House will have heard what the hon. Gentleman had to say and the emotion with which he said it, and the effect this must have on his constituents. It is hard to think of anything worse than that which his constituents suffered—just having got back to a house that was redecorated and restored and then having it flooded and destroyed again—and the worry that must remain in any community with a tip in it where people think back to Aberfan and know of the terrible disaster that that caused.
I know that my right hon. Friend the Secretary of State for Wales will speak to the leader of the hon. Gentleman’s local council today about the flooding overnight. There are significant Government funds available—£2.6 billion—but I am aware that when I speak from this Dispatch Box about large amounts of Government money when people are sitting at home worrying about whether a tip may collapse, that is not enough. I will take it up with Ministers, and I will ensure that the message he has brought to this House is known across Government.
Sir David Amess (Southend West) (Con)
Will my right hon. Friend find time for a debate on VJ-day on 15 August? Because of the national crisis, VE-day celebrations were somewhat muted. I have been talking to Dame Vera Lynn’s daughter, Virginia, and I very much feel that we should make this a very special celebration. We owe her mother a great debt of gratitude for the way her wonderful voice lifted spirits during our darkest hours. To quote Dame Vera, she very much felt that our boys in the far east had been forgotten.
Mr Rees-Mogg
I thank my hon. Friend for raising this important occasion. The Government fully recognise the importance of VJ-day, 15 August. That is also the feast of the Assumption, so it is a day that many celebrate every year for other reasons too, but we will be celebrating particularly on this 75th anniversary of VJ-day. I do not actually know what anniversary it is of the Assumption; I am not sure what year that happened in.
This important anniversary is an occasion for us to acknowledge once again the sacrifices made on our behalf by the veterans of the campaign, and to remember all those who lost their lives and the many military prisoners of war and civilian internees who suffered in captivity. The Government and our partners will take into careful consideration the changing national situation as we continue to tackle the coronavirus outbreak. We will always put the health and wellbeing of our veterans at the forefront of our plans. We are committed to creating a programme that will allow members of the public to remember and give thanks to the second world war generation in appropriate and fitting ways, but my hon. Friend is right that we must not allow those troops who were in the far east to be forgotten.
Hannah Bardell (Livingston) (SNP) [V]
May we have a debate on the vital importance of the theatre and arts sector to the economic and social recovery of our societies? Local theatres such as the Howden Park Centre in my constituency bring so much to our community and economy, but in an interview with The Observer, Rufus Norris, the artistic director of the National Theatre, revealed that without additional Government support, 70% of theatres will be boarded up by Christmas. Festivals such as the Edinburgh fringe recently received a £1 million support package from the Scottish Government. Will the Leader of the House press for a debate in Government time and put all possible pressure on his colleagues in the Department for Digital, Culture, Media and Sport and the Treasury to step up and support these vital sectors?
Mr Rees-Mogg
The hon. Lady is right to raise the concerns of the theatre and the arts. The general context is of a Government that have taken enormous steps to help a wide range of businesses. It is worth bearing in mind that 8.9 million people are currently using the job retention or furlough scheme, which cost taxpayers £19.6 billion. That is in addition to the £7.5 billion that has gone to the 2.6 million self-employed, which is perhaps particularly relevant as so many people in the theatre and the arts are self-employed. In addition to that, there are business bounce-back loans. There are many schemes in place to help businesses survive, but the hon. Lady is none the less right to highlight the particular problems of theatre and the arts.
Chris Grayling (Epsom and Ewell) (Con)
It is unusual for me to follow on from an SNP comment that I rather agree with. We do have to look after our arts sector; it is enormously important.
Can we, before too long, have an update on the restoration and renewal project? Although the country is going through very difficult times, we must remember that we have a legal duty to maintain this world heritage site. We must not lose sight of the very real problems with this building’s infrastructure. If we leave them untouched for too long, it faces disaster. I ask the Leader of the House to provide an update in due course, and to remain committed to a project that I believe we have a legal, moral and historic duty to maintain.
Mr Rees-Mogg
My right hon. Friend is a very distinguished predecessor in this role, and did a great deal of the work to ensure that people understand the problems that the Palace a whole faces. With the then Leader of the House of Lords, he chaired a Joint Committee, which I sat on, that looked into this issue. His question is of great importance. Everyone in the House recognises that the Palace needs a significant amount of work. It is a masterpiece—a showpiece of our belief in our democracy and our willingness to ensure that it is something we can be proud of across the world. As he knows, the Sponsor Body has been established, and it now has the responsibility for the plans to implement the strategy for R and R. It is reviewing the situation that it has inherited and the current circumstances, but it must ensure that whatever is done represents good value for money. There is not a bottomless pit of money.
Kevin Brennan (Cardiff West) (Lab)
Can we have a debate on the fact that, yesterday, the UN extraordinarily removed the Saudi-led coalition from the blacklist for violating children’s rights in Yemen, despite admitting that it killed or injured 222 children in Yemen in the past year? My constituent Luke Symons, who is held captive by the Houthis, was in Taiz in 2015 when the Saudis bombed and devastated it. He was on the phone to his relatives in Cardiff at the time, and they heard the carnage that was going on. Can we have some pressure from the Foreign Office for a total ceasefire from the Saudi-led coalition so that humanitarian aid can go in and we can arrange for the release of prisoners such as my constituent Luke?
Mr Rees-Mogg
It may be helpful if I give the hon. Gentleman the latest update on Luke Symons that I have from the Foreign Office. Officials are in touch with his family, but we have no consular presence in Yemen, which means that we are unable to provide direct assistance. That has been the case since 2015, but the Government continue to press the Houthis to release Luke on humanitarian grounds. The case is being raised at the most senior levels within the Houthi regime, and we continue to call for Mr Symons’s release regularly, particularly in the light of the coronavirus. The Government are committed to doing everything we can to ensure his release.
The hon. Gentleman is right to raise those broader points about the situation in Yemen. It is troubling, and the Government have previously called for a ceasefire.
Selaine Saxby (North Devon) (Con)
Will my right hon. Friend update the House on when we can expect a statement from the Secretary of State detailing when the tourism and hospitality industry can safely reopen so that it has sufficient time to prepare and put social distancing measures in place?
Mr Rees-Mogg
My hon. Friend represents a constituency that relies heavily on the tourism industry, and this is a particularly difficult time. The strategy for reopening the country is conditional and subject to the five tests being met, but as soon as it is safe to do so, we will be encouraging everyone to get out, book a great British holiday and support our brilliant tourism industry. Ministers have regularly provided statements in the House, and I am sure they will be eager to do so again as soon as we can encourage more of our hospitality and tourism sector to open its doors, and encourage people to have a staycation this year to help boost our domestic economy.
Jim Shannon (Strangford) (DUP)
On Monday 15 June, the all-party parliamentary group for international freedom of religion or belief, which I chair, published a report, which was launched on Zoom, entitled “Nigeria: Unfolding Genocide”. The report found that Nigerian Christians are experiencing devastating violence, with attacks by armed groups of Islamist Fulani herders, resulting in the deaths of thousands and the displacement of hundreds of thousands. Will the Leader of the House agree to a statement or a debate on that urgent and dire subject?
Mr Rees-Mogg
The House is always grateful to the hon. Gentleman for his commitment to persecuted minorities and for trying to ensure that their persecution is known around the globe and that Governments who allow persecution are shamed. The Government are trying to do what we can to protect persecuted communities. I cannot promise him time for a debate, but I remind him—he probably knows this already—that Foreign Office questions are coming up on 30 June.
Lee Anderson (Ashfield) (Con)
Politicians have a duty to set a good example, especially during these difficult times. The missing Mayor of London refuses to condemn mass gatherings during this pandemic. Will the Leader of the House please remind MPs that it is irresponsible and foolish to gather in mass demonstrations, and will he also remind the Mayor of London of his responsibilities to the citizens of London and to our brilliant emergency service workers?
Mr Rees-Mogg
My hon. Friend raises a crucial point. We have put in place clear and strict guidance on social distancing, and I believe that our elected officials have a responsibility to see it upheld. We strongly support the right to protest peacefully, but it is vital that people stick to the rules to protect themselves and their families. These are not normal times, and to protect us all and stop the spread of coronavirus, any gatherings of more than six people are unlawful. The actions we have seen over the previous weeks were not the right way to be proceeding, with dozens of police officers injured. The police have our full support in tackling any violence, vandalism or disorderly behaviour, and I would like to echo my colleague—my colleague? I mean my right hon. Friend—the Home Secretary’s view that those responsible will face the full force of law. That is the right way to proceed, though I fear it is unlikely that the Mayor of London will take any advice from me, because if I were to advise him, I would say: make way for a Conservative.
Mhairi Black (Paisley and Renfrewshire South) (SNP) [V]
The right hon. Gentleman has been flattering himself with his belief that MPs can only do their job by physically attending a Parliament that can hold only 50 people. Given the fact that £1.3 million has been invested in the hybrid proceedings, allowing Members to vote and participate in debates remotely, it is scandalous that the Government are already attempting to dismantle it at every turn. Would he agree that it is far more cost- effective, inclusive and safe to reinstate full hybrid proceedings, and that abandoning them is both undemocratic and discriminatory?
Mr Rees-Mogg
I am sorry to disagree with the hon. Lady, interesting though it is to observe the guitar that is behind her, given the fascination that we have in being nosey about where people are calling in from. We have ensured that the proper Parliament can continue. When scrutiny was impossible without hybridity, we had hybridity. Now that it is possible for reasonable numbers to come back, we are coming back as far as possible while continuing to make arrangements for people such as the hon. Lady to vote by proxy if they so wish and to appear remotely in interrogative sessions. That is the right way to proceed. People who can go back to work because they need to be back at work should go back to work, and we are leading by example.
Joy Morrissey (Beaconsfield) (Con)
Mr Speaker,
“Tomorrow, and tomorrow, and tomorrow, creeps in this petty pace from day to day”.
May we therefore not allow another moment to creep by without a debate on British theatre? All the world’s a stage, but today the British stage is dark, from the west end to community theatres such as the Richings Players in the Ivers in my constituency. May we therefore have a debate in Government time on British theatre and the performing arts, in the context of a wider debate on preserving our British cultural heritage?
Mr Rees-Mogg
Indeed,
“All the world’s a stage, and all the men and women merely players”.
My hon. Friend makes her point extremely well. As we have heard previously, these are matters of concern across the House. As I said earlier, the Government are taking steps to help the artistic community, as they are helping the whole of the economy. The Secretary of State for Digital, Culture, Media and Sport has acknowledged that social distancing makes staging performances exceptionally difficult for theatres, and that the industry will need a different approach form other sectors. We might end up with different ways of going to the theatre and with more live streaming and so on. Over the next few weeks my right hon. Friend will be convening experts in a targeted way and bringing together our leading performers from theatres, choirs and orchestras with medical experts and advisers in the hope that a solution can be found that will preserve our heritage in the way that my hon. Friend suggests.
Mr Speaker
In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am now suspending the House for three minutes.
Virtual participation in proceedings concluded (Order, 4 June).
International Development
(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Rosie Winterton)
I understand that it is the will of the House that motions 1 to 5 on international development be debated together. The debate will last up to 90 minutes. When the first motion has been decided, I will call the Minister to move the other motions formally. If a Member objects, the motions will be taken separately. I now call the Minister to move the first motion and speak to all five motions.
The Parliamentary Under-Secretary of State for International Development (James Duddridge)
I beg to move,
That the draft African Development Bank (Fifteenth Replenishment of the African Development Fund) Order 2020, which was laid before this House on 19 May, be approved.
Madam Deputy Speaker
With this it will be convenient to discuss the following motions:
That the draft African Development Bank (Further Payments to Capital Stock) Order 2020, which was laid before this House on 19 May, be approved.
That the draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on 19 May, be approved.
That the draft International Development Association (Nineteenth Replenishment) Order 2020, which was laid before this House on 19 May, be approved.
That the draft International Development Association (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on 19 May, be approved.
James Duddridge
Thank you, Madam Deputy Speaker. It is good to see you in your place. The orders will permit the UK Government to make financial contributions to the African Development Bank and the African Development Fund, in addition to the World Bank International Development Association, up to the stated values on the orders. I propose to start with the three statutory instruments on the African Development Bank, then move on to the two SIs on the World Bank IDA before concluding.
As the House knows, Africa remains the poorest continent on the planet, and 24 of 30 poorest countries are on that continent. Sadly, by 2030, 90% of extreme poverty is likely to be concentrated on that continent, and instability remains a persistent challenge. Until last year, Africa was growing fast, and in 2019 it experienced 3.4% growth in gross domestic product. Covid has had a significant negative impact, however, and recent World Bank estimates suggest that GDP in Africa will shrink by just under 3%. Sadly, 26 million more people will be pushed into extreme poverty. The African Development Bank is a key regional partner for the UK in delivering development, prosperity and our security objectives in Africa. It has significant financial clout, a strong regional identity and deep knowledge, and it is very much a trusted partner across the continent, which allows it to tackle sensitive issues.
Sir Desmond Swayne (New Forest West) (Con)
That is very reassuring. Does my hon. Friend acknowledge that of those scandals that have driven the readers of the Daily Mail into a state of apoplexy over the past decade, 99% of them, I will wager, were administered not by the Department for International Development, but by other Departments? Will he ensure that this reorganisation is a genuine merger and not a hostile takeover?
James Duddridge
I assure my right hon. Friend that it is a genuine merger. As he knows, I am not a betting man, but it is important that official development assistance is used well not only by the Foreign Office but across all Departments. This merger is about taking a step up, not levelling down to the lowest common denominator. There is an opportunity to put development at the heart of everything we are doing more generally, but I will not stray into comments that were made earlier today about the merger, and with the House’s permission, I will focus specifically on the African Development Bank, and later on the World Bank.
The ADB’s five key areas are to light up and power up Africa, to integrate, to industrialise, to feed, and to improve the quality of life across the continent. Those are closely aligned with the UK’s priorities. The majority of the bank’s lending is targeted at addressing the large infrastructure gap across the continent, and it is focusing very much on transport, energy, water and sanitation issues.
Jim Shannon (Strangford) (DUP)
I had a chat to the Minister prior to this debate. In my constituency of Strangford, many churches are involved in work across Africa, particularly the Eden Mission in Newtownards, which does significant work in Eswatini, which those of us from further back know as Swaziland. The Minister referred to infrastructure investment, and there is a real need for investment in the electricity market. South African supplies have a sharply inflated price, which is holding back technology, and even learning for children, who have been provided with shared computers from Northern Ireland as learning tools. Will the Minister consider some help for Swaziland, to ensure that it can run those sites with the electricity it needs?
James Duddridge
I know my Big Bend from my Piggs Peak, having lived in Mbabane for a year, a number of years ago, and I knew the problems of flickering lights and power stability. I am saddened to hear that it is still a problem with Eskom and South Africa, but power distribution across the continent is a key issue. I am not absolutely sure whether such funds are the right mechanism, but I would be more than happy to commit to talking to the hon. Gentleman about that, alongside our high commissioner in Eswatini—that is one of the new posts that opened up relatively recently—and to discuss what more we can do in Eswatini on electricity and a number of other issues. I thank the hon. Gentleman for his helpful contribution.
The African Development Fund is also supporting the continent to respond to covid, providing $10 billion of financing and technical assistance to help to mitigate the economic and social impacts, and to support recovery beyond health and humanitarian issues.
Turning to the specifics of the order, the first order permits the Government to purchase new ADB bank shares. This will maintain our 1.7% shareholding, and to do so we would need to pay £95 million over eight years. This order also makes provision to put in another £50 million of capital provisionally to allow the additional purchase of shares in the future should the situation and budgets allow. The bank provides non-concessional yet inexpensive loans to middle-income and to credit-worthy low-income countries, and also critically, to the private sector in Africa.
Last October, governors agreed to a 125% increase in their general capital to boost the capital stock, enabling it to lend annually from £5 billion currently to more than £13 billion in 2030. The bank has made strong policy commitments in UK priority areas, expanding its climate facility and private sector operations.
The second order permits the UK Government to provide a contribution of up to £633 million to the African Development Fund’s 15th replenishment. The fund provides grants, low-interest loans and technical assistance to Africa’s poorest countries, and it is replenished normally every three years. The negotiations for replenishments concluded last November and an overall envelope of £6 billion was agreed, financed by repayments of existing loans and new donor pledges of £3.8 billion over the three-year period. Our pledge would maintain the UK’s position, providing significant influence over the fund’s operation. Over the next three years, the fund is expected to provide 6 million people with electricity connections. Six million people will benefit from improvements to agriculture and more than 20 million will benefit from improvements to transport. The fund will support 1 million jobs.
The third and final order on the African Development Bank is to amend an existing order and to permit the Government to provide an additional contribution of £66 million to support the African Development Fund’s participation in the multilateral debt relief initiative, which is very similar to the final order for a different institution. The multilateral debt relief initiative supports debt relief and enables countries to release resources, or to have released resources, to spend on poverty reduction and development that would otherwise be spent on unserviceable debt. The African Development Bank remains an important strategic partner across the board, particularly on climate change.
Let me turn now to the final two remaining orders relating to the World Bank and the International Development Association. This is the institution that provides grant finance, low interest rates and technical assistance to the world’s 76th poorest countries—countries that are not credit-worthy. Many of the most fragile countries at risk of instability and conflict are covered within this number. In recent months, these countries have been particularly hard hit by the covid-19 crisis, making the case for these orders even more poignant. IDA has responded to the covid crisis by making rapidly available additional support. It has a strong record of delivering results—for example, on supporting vaccines to millions of children and supporting childbirth.
IDA combines donor contributions with repayments from previous lending operations and market borrowing to provide more than three times the amount of leverage to get new financial commitments. IDA replenishments have taken place every three years since its establishment in 1960 and discussions took place last December and were concluded in this replenishment round, which includes 50 donors, including the UK, with pledges of more than $23 billion. The World Bank expects that to be leveraged up to around $82 billion of financing over the next three years.
The fourth order permits the UK Government to provide a core contribution of up to an average of £1 billion a year to IDA’s 19th replenishment over three years. This will help to vaccinate 140 million children and to provide safe childbirth for 80 million women, electricity for 50 million people, and a social safety net for 40 million beneficiaries.
The final order, as I said earlier, is similar to an existing order that permits the UK Government to provide an additional contribution of £562 million to support IDA’s participation, alongside the ADB, in relation to the multilateral debt relief initiative.
In conclusion, these five orders are in the UK’s national interests and also serve our development equities and interests, not only in Africa but around the rest of the world, through the World Bank.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I welcome these orders and agree that they should be taken together. We will not be opposing them. I welcome the support that they indicate for tackling poverty and disease and removing the burden of debt in Africa and elsewhere across the world.
However, in the context of the Prime Minister’s announcement earlier this week and the urgent question answered by the Foreign Secretary today, it is very important that we recognise that the decision taken will have an impact on our relationship with the African Development Bank and the World Bank institutions, including IDA. It is sad to have to contrast the positive impact of these orders with some of the ill-informed rhetoric that we heard from the Prime Minister on Tuesday on a decision that fundamentally risks undermining our relationship and influence with IDA and the African Development Bank in terms of the impact and oversight of these replenishments, and the debt relief. This decision has been criticised from many quarters, including by Members on both sides of the House and by some of the world’s leading experts. One of those, of course, is the former Prime Minister, David Cameron, who said that it
“will mean less expertise, less voice for development at the top table”—
that is, the top table of these institutions. Gayle Smith, the former administrator of USAID, also said that it was a dangerous step backwards. Does the Minister agree that in fact, and in contrast to what the Prime Minister said earlier this week, in the majority of contexts there has always been close co-operation and co-ordination between the different arms of UK international policy, including in Africa, and in relation to the IDA part of the World Bank and its other institutions, as well as the African Development Bank?
It has been particularly concerning, given that we are focusing so much on Africa in these orders, to see the false dichotomy that was set up by the Prime Minister’s comments. He spoke about Zambia and Tanzania, for example, and contrasted them with priorities in places like Ukraine and the Balkans. This is particularly concerning because Zambia and Tanzania have been supported by funds from the African Development Bank and IDA in the past, and of course by DFID’s bilateral programmes. They are both long-standing members of the Commonwealth and countries with which we have had very constructive partnerships over many decades.
This is particularly relevant in relation to the impact of the covid-19 pandemic on Africa and elsewhere, which the Minister spoke about. He and I have discussed that issue outside the House. I want to thank him for the courtesy that he has shown me since my taking on this role in discussing a number of matters on which there is no division across this House. For example, the African Development Bank has been supporting the One WASH programme in Ethiopia. The bank and other partners’ funding has been supporting that ambitious national programme to serve 110 million people in Africa’s second most populous country. As well as the ADB, key partners include the World Bank, the Department for International Development, the Government of Finland, and UNICEF. The programme has been embracing safe water development systems, including boreholes, hand pumps, diesel pumps, gravity pumps and electric grid power to bring safe, potable water to Ethiopians. Water development commissioner Mogesse said recently:
“The One WASH National Program did not plan for the COVID-19 pandemic. But it has prepared us to fight the pandemic better than we would have been without the program, especially in the unserved rural communities.”
That example highlights the sort of impact that the ADB and other funding the UK has provided to the multilaterals has had, not only on tackling covid but on tackling wider water and sanitation issues.
Mr Mitchell
I am most grateful to the hon. Gentleman for giving way. May I take him back to his point about Zambia and Tanzania, and the Prime Minister’s point about how he would rather spend money in Ukraine? Did it not strike him as rather odd that the Prime Minister—he is, after all, the Prime Minister—needs to abolish the Department for International Development to achieve that? Surely he simply needs to pick up the phone to the Secretary of State for International Development, hold a meeting of the National Security Council and say he has decided that those are to be the priorities.
Stephen Doughty
Indeed, and it did strike me as very odd and very concerning, and it will no doubt have been noted with concern in the capitals of many of those countries that we have enjoyed strong partnerships with for many years.
On that note, can the Minister assure our partners in countries across Africa, and indeed across the developing world, including Ethiopia, Tanzania and Zambia, that we will continue to partner with them and their citizens, to tackle the coronavirus pandemic and continue our long-term work to tackle poverty, disease and inequality, tackle gender injustice and urgently deal with the climate change crisis?
The UK role on the boards of the multilateral financial institutions has often been such that we have been able to influence the direction of those institutions, which have not always had the right focus or agenda, for the better. The former Secretary of State will know that well; I know he took a keen interest in these matters, and I am sure the Minister does, too, and I too have seen that at first hand.
I want pay tribute to the officials and successive Ministers across the parties that have seen Britain’s role as one for global good in these institutions, contributing to multilateral action, so that we can achieve a bigger impact than the mere sum of our parts. That very much, for me, was global Britain in action, and not the Britain that I fear we now seem to be heading towards. So can the Minister confirm: who will determine the future role of executive directors at the World Bank and the African Development Bank, and who will they take their orders and policy steer from in future? Will they still have the same mandate to focus efforts on poverty reduction, or do we risk seeing them go the way of, for example, the badly run Newton Fund, overseen by a non-DFID Department, which was recently criticised heavily by the Independent Commission for Aid Impact and the Sub-Committee on the Work of the Independent Commission for Aid Impact—and indeed the Chair of that Sub-Committee, the hon. Member for Stafford (Theo Clarke), who is not in the Chamber at the moment, but I know takes a keen interest in these matters?
Turning to the two specific institutions and the replenishments, the record of global Britain in action is reflected in a history of partnership with the African Development Bank, and we have contributed over many years to programmes and initiatives such as the African water facility, the Congo Basin forest fund, the sustainable energy fund for Africa and, indeed, the actions on covid that I have just described in Ethiopia. The Minister spoke about the “high five” focus points of the African Development Bank—power Africa, integrate Africa, feed Africa, industrialise Africa and improve the quality of life in Africa, and I hope that he, in his remarks, can confirm that that will continue to be a UK priority for our role in those funds.
On development for women and girls, we were very happy to see that 80% of the new African Development Bank operations were categorised as having gender-informed design; of course, developments cannot succeed without economic development, health and education for women and girls. So will the Minister and his Department continue to negotiate with the African Development Bank and ADF to ensure that funds go to women-led and women-and-girl-directed programmes? I also understand that the pledge rightly includes an element of performance-based funding dependent on positive results reported at the mid-term review, so will he clarify how much was disbursed or held back at the same point in the last replenishment round? It is important that we hold these institutions fully to account.
On the IDA part of the World Bank—a crucial institution, in which we have played a key role in over many decades—for every £1 of grant finance that the United Kingdom and other donors put in, IDA is expected to deliver more than £3 in development commitments for its clients, and we remain one of the largest donors—in fact, the largest donor in 2019. with an appropriate share of the budget. Could the Minister outline how we will seek to ensure that IDA programmes focus on issues like climate change, public health and education, and women and girls. Given some of the discussions that the Minister and I have had about fragile states, what focus will the new funding round have on investment in those? What performance-related measures will be taken in relation to the replenishment?
I want to ask a specific question about the World Bank’s private sector arm, the International Finance Corporation, because that has delivered a proportionate share of its profits as grants to IDA in the past, but in the past few years we have seen the pattern reverse, with IDA now effectively helping to fund IFC shortfalls. I understand that in 2020 it will be a net recipient of $2 billion-worth of IDA-financing-supported investments. How does he expect IFC returns to be further affected by the global economic crisis relating to the pandemic, and does he expect them therefore to be a greater draw on IDA resources even than was perhaps expected for the year ahead?
I have already mentioned one example of a programme that helps Ethiopia prepare for and mitigate the impacts of covid 19. Over the past few weeks, my Labour colleagues and I have met and been listening to senior experts and African voices from the Africa Centres for Disease Control and Prevention, the World Health Organisation and other national agencies and Governments and, indeed, workers on the frontline in countries from Sierra Leone to Zimbabwe. Some of the stories that they have shared with me have obviously been of great concern, and I have discussed those with the Minister. The effects of covid-19 are already having a significant impact on the continent. That impact is on health—whether directly or indirectly—but also on the economic prospects and stability of many countries and regions, although it appears to be diverse and heterogeneous across the continent. That is also the case when we look at who is affected within countries because, like in this country, covid-19 is often a disease of poverty and disadvantage. The worst affected are likely to be: the low paid; the marginalised; women and girls; those in conditions exposing them to greater risk, such as care workers, workers in health services, people who provide security, food processing and transport, and those who work in places with low ambient temperatures and poor ventilation such as ships, and prisons; and, of course, people who live in the slums and dense settlements that we see in many locations across the global south.
I have been impressed and inspired by the clear and growing African solidarity and leadership on tackling the virus, as in so many other things. We could learn much from that, but it is also clear that there are going to be substantial short, medium and long-term challenges. Global solidarity and support—for example, through this funding and replenishment—is not only a moral duty, but in our common global interests. Would the Minister say a little bit about what he understands about how both IDA and the African Development Bank will seek to focus their programming to deal not only with the immediate short-term needs—obviously there have been substantial changes, which he mentioned, particularly in relation to IDA—but with long-term needs? Has he had discussions with them about how they might facilitate investments that support the roll-out of any vaccine treatments and critical medical supplies on an equitable basis?
Reform is crucial with these institutions, so it is crucial that we continue to seek these reforms. The multilateral aid review rated the African Development Bank and IDA as good—very good, in some cases—but there are areas where they were ranked as weak. Will the Minister say a little bit about how he is going to use our position on the boards of both those institutions to continue to push a reform agenda?
On debt relief, it is almost 15 years ago to the week that I helped to co-ordinate the historic march of a quarter of million people around the streets of Edinburgh in a white band as part of the Make Poverty History movement, which called for life-changing aid, debt cancellation and justice. I know that the right hon. Member for Sutton Coldfield (Mr Mitchell) was a strong supporter of that campaign, which happened in the run-up to the historic Gleneagles G8 summit. It was a true example of what global leadership can achieve both for our country and for our fellow human beings.
The multilateral debt relief initiative was one of the proudest achievements of the last Labour Government, and has enabled us to make substantial progress towards the global goals—both the millennium development goals and their successor, the sustainable development goals. Will the Minister tell us how much debt UK support has enabled IDA and the African Development Bank to cancel over the recent accounting period, and what expectations he has in relation to these orders, given the changed global economic output?
We will not oppose these orders today, but I reiterate that the speech that I had hoped to make, which would have been full of positivity and support for the measures, has unfortunately been tempered by the announcement by the Prime Minister earlier this week and the many unanswered questions, particularly in relation to our influence and role in institutions such as the African Development Bank, IDA and the World Bank. I fear that the past global leadership that we have shown—for example, on debt relief—may now be in jeopardy.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Just before we move on, let me say that it is quite important that we focus our remarks on the SIs in front of us, which are quite narrow, and perhaps not relive too many other debates that may have taken place earlier today.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
On that point, as we are not allowed to have points of order at this time, may I just say that there has been a statement and an urgent question in the last week on the dismantling of DFID, neither of which, for slightly different reasons, I was able to contribute to under the current rules of the House? Let me say through you, Madam Deputy Speaker, that I would hope Mr Speaker might keep those rules under strict review and perhaps introduce some discretion if they are to persist in their current form for very much longer. Having said that, I thank you, Madam Deputy Speaker, for allowing me to contribute to this debate.
I draw the attention of the House to my interests, which are laid out in the Register of Members’ Financial Interests, including that I am a strategic adviser to the African Development Bank—something that I do for the sum of £1 a year in order that there should be a contract. The House will no doubt have differing views on whether the bank gets value for money for that sum.
In recent years, the bank has been massively reformed, first by Donald Kaberuka, the highly respected former Finance Minister from Rwanda and, I think, the first elected president of the bank. Those reforms have been continued by his successor, Dr Akin Adesina, whom I advise and who I think will shortly be elected for a second term. During that time, the bank has made huge progress, as set out by both Front-Bench speakers. I wish to add a little colour to the comments that have been made and to explain why this is such good expenditure and why the UK is absolutely right to focus on building up the African Development Bank and helping it to be ever more effective.
The Minister mentioned the basic programme of the bank, which is encapsulated in the High 5s, which are: first, lighting up Africa; secondly, feeding Africa; thirdly, industrialising Africa; fourthly, integrating Africa, on which the Department for International Development has been extremely good at advising across the continent, where time spent at borders massively disrupts trade—Britain has been good at addressing that; and fifthly, improving the quality of life of African people.
The results over the past five years of President Adesina’s time in office have been spectacular. If we take them all together, we see that 18 million more people have access to electricity; 141 million more people have access to better farming techniques, food security and advice; 13 million people have access to finance from private sector investment programmes; 101 million people have had access to better transport, partly for the reasons I described; and 60 million people have access to water and sanitation—in our world today, nearly 2 billion people do not have access to clean water, and that has dire effects. The direct impact of the bank on the lives of a third of a billion Africans over that period is clear: there has been a higher rate of progress than at any time since the bank was established in 1964. The bank has retained its triple A status from all five global rating agencies, thus maintaining financial probity as well.
The Minister’s announcements today will ensure that the UK is able to help with the expanding capital base of the bank to accelerate all its objectives. That is the reason for the 125% increase in its capital. Once the money has landed in the African Development Bank, we will see those five key endeavours continue to be built on: 105 million more people will get access to electricity; 204 million people will be able to benefit from better farming technology; 23 million people will benefit from investments in private sector companies; 252 million people will gain access to improved transport and integration; and 128 million will gain access to improved water and sanitation. Those are very important changes to the quality of life of some of the poorest people in the world. The bank directly helps to support low-income countries.
In addition to that, the bank has shown a strong leadership response to the coronavirus crisis, managing to get together $10 billion to help African countries with support. It has raised $3 billion to fight covid-19, through a social bond on the global capital markets. It is the largest ever US dollar-denominated social bond listed on the London stock exchange, underlining how development links in some of the great British institutions that are not immediately seen as part of international development, and it is now over-subscribed, with orders of $4.6 billion. The Fight Covid-19 bond and the other funds that the bank has managed to bring together will be a huge boost to help private companies—particularly, pharmaceutical companies, which the bank intends to do everything it can to assist, for very obvious reasons—to survive after the crisis is over.
I wish to mention two or three other matters. In the last year, the bank has set up the Desert to Power Initiative, which will ensure that there are 10,000 MW of solar power across 11 countries in the Sahel, that belt of middle Africa. That will result in electricity for 250 million of the poorest people in the world, of whom 90 million are off grid. It is a $20 billion investment and will be the world’s largest solar zone.
There has been very strong input from the United Kingdom, with expertise from specialists at DFID made available to help the bank, and a very good relationship exists between DFID and the bank in making all of that happen.
The work on affirmative action for women in Africa is extremely important, and $3 billion is now available for financing women’s businesses, which is the largest ever such initiative. Publish What You Fund lists the African Development Bank as one of the four most transparent institutions of 45 global institutions.
The AFDB has had very strong support from the United Kingdom, as I have tried to set out. DFID has sent some of its cleverest and most effective officials to work in Abidjan to help build up the bank. We want the African Development Bank, rather than the World Bank, to be seen as the Africa bank that brings everything together. Under the leadership of both Donald Kaberuka and Akin Adesina, we are seeing that before our eyes.
I hope the Minister will consider any way in which we might increase our shareholding in the bank, because our influence is much greater than our very small shareholding. It would be helpful to have a continuous presence at the bank in Abidjan, rather than a rotating executive director role. That is not an easy ask, because of the way the bank is set up, but I think the bank would benefit from having the expertise of a British executive director all the time.
Finally, I hope that, just as we have with the World Bank, we will be able to see a much greater use within the African Development Bank of the trust fund structure. That would enable Britain to put money into a particular project or meet a particular ask where we want the bank to have a catalytic effect. The trust fund mechanism is now in common use elsewhere, and greater use of it would greatly benefit the African Development Bank and Britain’s desire to drive forward such objectives.
Thank you very much, Madam Deputy Speaker, for giving me the opportunity to address these points, to support what those on the Front Benches have said and, most importantly of all, to support this replenishment. It will do nothing but good for the overall aims that Britain so clearly has in wanting to do something about the appalling discrepancies of opportunity and wealth that disfigure our world today.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I echo the comments of the right hon. Member for Sutton Coldfield (Mr Mitchell) about how we often see, through the budget of the Department for International Development, examples of the UK at its best—trying to address the discrepancies, as he put it, in poverty and wealth between nations and peoples across the globe. If we were to use the language of global Britain, that might be one of the best examples to turn to.
The orders are welcome in their attempts to address global poverty. Much mention has been made of Africa, and at first glance it looks as though it will be business as usual for our international aid budget. However, if you will permit me, Madam Deputy Speaker, I would like to explain briefly why I do not think that that is the case, welcome though today’s announcements are.
Once we discount most—not all, but most—Tory MPs, there is no disguising the fact that the momentous decision and announcement this week has caused great alarm. It will have far-reaching consequences for the poorest people in the world—the poorest people on earth. The overwhelming consensus of opinion would bear that out, certainly among experts who work in the field of international development.
I cannot help but notice that, despite her name being on the Order Paper for the very welcome measures that have been put forward, the outgoing Secretary of State for International Development is not here today. I wonder whether her conspicuous absence should be seen in the light in which it appears. Perhaps she also has concerns about the recent announcement that has been made.
The announcement could not stand in greater contrast with the lesser course that many of us in the House fear is now being steered towards international aid. We have rightly heard today much praise for the work of the Department for International Development, and one wonders why a Department that has garnered so much praise and attracted so much admiration should suddenly find itself downgraded. The move has been described by those working in the field as an “act of political vandalism”. I will leave others to judge for themselves, but in my constituency, questions are being asked about whether this decision is ideological.
Chris Grayling (Epsom and Ewell) (Con)
May I remind the hon. Lady that, in the hypothetical situation of an independent Scotland, the policy of the SNP is to have foreign affairs and international development in the same Department?
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Before the hon. Lady responds, I want to remind her and other Members in the Chamber that we are addressing the orders, rather than getting into a whole other debate. That is what we are here to scrutinise.
Patricia Gibson
Thank you, Madam Deputy Speaker. I will endeavour to make my remarks as brief as possible. I would say in response to the right hon. Gentleman’s question that the Scottish Government have a Minister in charge of overseas development. The right hon. Gentleman might want to reflect on that, because that is the importance we in Scotland place on overseas development.
The House welcomes these measures, but the fear is for the future. The fear is that putting the word “super” in front of the Foreign Office is not going to cut it, and it will not address the concerns. As set out in the measures, we have historical responsibilities to the poorest nations around the world, as well as moral responsibilities, as we seek to take our place on the international stage.
It is worrying—this is no secret—that aid is now to be used to pursue security and diplomatic aims. There might be an argument to make for that, but that is not what aid is for. Aid must be driven by need. I fear that in the future, we may have fewer of these measures that are so welcome, through which we seek to put a hand out and help up those countries that need and deserve the help of the international community. It must be based on need.
We hear much from Government Members about global Britain—well, whatever floats your boat. If they want to float that particular boat, they may want to take their place on the international stage and lead in the area of international development, instead of downgrading it and using it as a way of pursuing their own diplomatic aims. We in the SNP will not oppose these measures—we welcome them—but we have profound fears about the future and how aid will be administered from hereon in.
Sir Desmond Swayne (New Forest West) (Con)
I find that my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) has eaten my sandwiches, so I shall be more brief than I intended. I am greatly reassured that my hon. Friend the Minister is in charge of this brief. He will recall that we worked on it together when he was Minister for Africa and I was responsible for the economic development portfolio in DFID. In those halcyon days when travel was permitted, we would cross paths at airports in Africa. As a fellow former regime loyalist, I congratulate him on his survival skills and, indeed, his resurrection. He will recall that I was not so fortunate, but then, to coin a phrase, one might say that I had it coming.
This is the most important agenda. This brief, concentrating on economic development, and particularly infrastructure that promotes the ability of African countries to trade with one another and so generate livelihoods, has to be our focus when the world is in desperate need of jobs to address the growing generation of unemployed and underemployed peoples in sub-Saharan Africa. We know that if we do not provide those livelihoods for them, they will be seeking livelihoods elsewhere, driving this wave of migration. It is the most important brief.
If I may caution the Minister, he may not recall it but I chaired a committee that met monthly. He will know that DFID has an international reputation for transparency. Everything it spends is arrayed for view and scrutiny on its website. However, I chaired a committee that met monthly where we discussed things and there would be requests for them not to be published. Overwhelmingly, those requests came from ambassadors in Africa who did not want relatively small amounts of money, which had been rather embarrassingly misspent, to be revealed. That was the cashpoint in the sky. As I say, they were relatively small amounts of money, but nevertheless that is where the danger lies.
We all understand realpolitik. There will be times when we want to oil the wheels of diplomacy by perhaps pushing money towards some pet project—although I will never understand how or why we sponsored a one-armed juggler in the Lebanon. Nevertheless, that is the agenda the Minister must be so careful about, because it undermines, so entirely unfortunately and unjustifiably, the whole international development pitch. We are doing a great job. It is something about which we should be proud. We should not let it be undermined by those niggles.
Chris Grayling (Epsom and Ewell) (Con)
You will be delighted to know, Madam Deputy Speaker, that I do not plan to talk about Government organisations.
I want to speak briefly on one of the key areas in which the African Development Bank operates. We have heard a lot from the Minister, from the Labour spokesman, the hon. Member for Cardiff South and Penarth (Stephen Doughty), and from my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), a previous Secretary of State, about the important work being done to alleviate poverty, improve infrastructure and bring in water supplies. I want to talk about another aspect of the Bank’s work, particularly right now as we head towards a delayed COP summit and the conference on biodiversity next year: the need to stop and then start to reverse the process of deforestation in Africa. The African Development Bank is doing a lot of important work in this area. DFID is also doing a lot of important work, both with the Bank and elsewhere, but we must step up this activity for two reasons.
First, such activity can play a vital role in climate change. We know the impact that deforestation around the world has had on climate change. We tend to talk a lot about the Brazilian rainforest, but there has been a much greater degree of deforestation on the African continent. There is the potential over the next 10 years for that to continue and to get much worse. For example, in the Congo basin there has already been a significant loss of forest cover. It is a politically unstable area and it has not been commercially exploited in the way that some other parts of Africa have been. We cannot afford to see those huge rainforests disappear. We must also start to recreate some of the forestation that has been lost.
The second crucial reason is the protection of endangered species. With the disappearance of forest cover, more and more habitats have disappeared, and more and more species have found themselves in critical danger. We must therefore do more through our development budgets to halt and reverse the process of deforestation. If that is done wisely, it can provide commercial, professional and tourist opportunities that can help to boost those economies.
Our Government are already doing good work. The African Development Bank is also doing good work, for example in Niger. In other parts of Africa, we have seen where it is possible to make a real difference. Ethiopia, a country that has suffered extraordinarily from land degradation over the years, has done an amazing job in starting to replant areas of forest. We also know that planting can generate genuine commercial opportunities. Let us take, for example, the Zambesi teak tree. The general view is that if a 100-year-old tree is lost, it cannot be replanted and brought back, but I have been to a recreated rainforest in Borneo, which 20 years ago was a palm oil plantation. Today, it is a thriving area of rainforest. It can be done. Plants such as the Zambesi teak tree can grow to full height in 20 years. If stewarded carefully, they can provide a resource for economic activity, as well as the opportunity to recreate habitats which have been lost.
So this is an enormously important area. I very much hope that the funding that we are going to approve today—the support that goes into the African Development Fund and through it into the international forest projects—can make a real difference.
I urge the Minister to put absolutely at the heart of what this Government do in the coming years the support that is so desperately needed for the recreation of what were once fertile, forested areas and are now areas of arid landscape. We should do everything we can to put money into supporting the existing forestation in those parts of Africa where we cannot afford to lose it and where we, in doing so, play a central part in what is going to be necessary in the fight against climate change.
This is not just about electric cars, solar energy, welcome though it is, as my right hon. Friend the Member for Sutton Coldfield said, and the exploitation that we are seeing of the enormous potential for solar power in Africa; it is also about recreating habitats and replanting forests, protecting and recreating mangrove swamps, and helping African farmers to maximise the potential of what they have, while protecting the environment at the same time.
I feel passionately about recreating habitats and removing the threat caused to so many species by the disappearance of the areas in which they live. We are already doing good things, but my message to the Minister today is: please, as we plan the strategy of our international aid in the future, can we make sure that the recreation of habitats and the protection of forests are absolutely at the heart of what we do in supporting the African Development Bank, and projects in Africa and around the world?
Wendy Chamberlain (North East Fife) (LD)
I welcome the opportunity to debate these statutory instruments regarding the ADB and IDA. This is clearly a timely moment to discuss how the UK gives its aid, how much it gives and in what form. We should note that this week’s announcement has been described as a big, big blow for Africa by one African Minister. The funds the Government intend to release to the ADB will, via the African Development Fund, help the poorest countries in Africa. The general capital increase will improve the bank’s lending capacity, allowing it to have an even greater impact. We should laud the fact that the fund’s replenishment is estimated to create more than 1 million jobs. I also wish to pay a particular tribute to the leading work the fund is doing to promote clean energy and green growth, not only improving lives, but doing so in a sustainable way. It is good that further commitments have been secured from the bank towards climate finance over the next five years. Of course, that is totally in line with our commitments to help to achieve the sustainable development goals, too.
The UK’s funding of the IDA will support £82 billion in development financing, which will have an impact on immunisations, clean growth and measures that will support gender equality. We should be particularly proud that the UK is the largest donor to the IDA and ADF replenishments. That is, no doubt, one thing that has resulted from the UK’s statutory commitment to spend 0.7% of gross national income on official development assistance spending. As Members would expect, I will remind them that that commitment was enshrined in law by the Liberal Democrats. Our aid programme is about not just our bilateral partnerships, but our multilateral role. We have our own seat on the World Bank IDA board, which allows us to exert disproportionate influence, because of the reputation of DFID. It is important that we remember that.
It is also important that we continue to make aid available to multilateral institutions and to non-governmental organisations as we seek to combat coronavirus. When this replenishment was agreed late last year, we knew nothing of how the world would be turned upside down. There is no doubt that the latest tranche of funding committed to these funds will be used to assist vulnerable countries as we fight to recover from this pandemic. We should remember that, although we might be past the peak in the UK, case numbers are picking up in many parts of Africa. The public health challenge is so much greater in very vulnerable countries such as the Central African Republic or the Democratic Republic of the Congo, where access even to clean water is limited. Earlier this week, we celebrated the findings that the drug dexamethasone cuts the risk of death by a third for covid patients on ventilators and by a fifth for those on oxygen, but in the most vulnerable places there are miniscule numbers of ventilators, and hospitals with oxygen supplies are few and far between.
In conclusion, we welcome these statutory instruments to provide further funding to the ADF and IDA. We are the largest donor to both institutions. The successor funding that this country has provided has helped reduce poverty in some of the most vulnerable countries in the world. These statutory instruments will allow that progress to continue. But following the Government’s announcement on Tuesday, there is sadly a question mark over whether we will continue to be a global leader. I urge the Government not to turn their back on that commitment, and I hope that this replenishment of the bank will not be the last that the UK leads on.
Rob Butler (Aylesbury) (Con)
There is a saying that charity begins at home, and over the past few months we have witnessed extraordinary acts of charity and kindness across the United Kingdom. Confronted by coronavirus, people have volunteered to help neighbours who are shielding, donated to food banks to help the hungry and contributed to appeals raising funds. We have truly seen the best of British. However, charity does not end at home. Our help is needed not just here, but in other countries and on other continents—perhaps nowhere more so than in Africa. That is why I whole- heartedly support these measures and will speak specifically to those affecting the African Development Bank.
The bank is, as we have heard, an important player in African nations’ development, and crucial in the reduction of poverty. Right now, there is a pressing need for the bank to help African countries cope with coronavirus. Many of them do not have the resilience that exists here in the UK. A considerable number have to cope with malaria, and Congo is tackling an outbreak of Ebola. There are fears that covid-19 could lead to a wider food and health crisis, and deep concerns of lasting damage to economies that are already fragile. Although there has undoubtedly been considerable progress in economic development over the past 10 years or so, there is a real risk of that being undone. The African Development Bank is being called on to ensure that that does not happen and to provide immediate help in many parts of the continent.
That underlines the role that the African Development Bank has built in recent years. Its High 5s initiative focuses on providing infrastructure through prioritising the needs that are most pressing across the continent: sanitation and water, energy, transport, finance and agriculture. Those are ultimately all about enabling and equipping the people of Africa to improve their own lives.
The UK’s contribution to the replenishment of the African Development Fund will undoubtedly have a marked beneficial impact on the objectives of inclusive and green growth. The greater focus on climate and gender in designing projects agreed as part of this replenishment are extremely welcome reforms to the bank. I am also pleased to see a commitment to speedier delivery of project funds. Similarly, it is encouraging to see that approximately £100 million is dependent on a positive mid-term review, underlining the need for contributions from the UK to be based on effective performance. I look forward to hearing more from the Minister about how that will be assessed.
On the instrument on further payment to capital stock, it is worth highlighting the beneficial impact that a relatively modest immediate payment for shares brings, as the increased capital stock then enables the bank to leverage its balance sheet on the capital markets to mobilise private sector financing for projects. It is a matter not simply of giving money, but of demonstrating confidence and thus building even greater capability.
The instrument on the multilateral debt relief initiative honours our commitment to cancelling the debt of some of the poorest nations in the world, and I fervently hope that the UK’s financial assistance to the African Development Fund will make a material difference to those countries’ ability to tackle poverty and develop economically now that the burden of unmanageable debt has been relieved.
Although the UK’s shareholding in the African Development Bank is relatively small, I know from conversations with senior members of staff at the bank that we are seen as a very important stakeholder. Our commitment at this time sends a strong message to other shareholders and donor nations. That is surely welcome.
One reason I was keen to speak on the African Development Bank is that, among multilateral development banks, it is in a unique position. It is headquartered and based in Africa and has teams on the ground that really understand African nations and can interact with Governments to help both public finance management and governance. With technical and financial expertise, it is able to mobilise resources and improve capacity so that countries can reduce their dependence on donor funding.
These instruments today are a reminder of the potential for the UK and African nations to forge closer and stronger relations, especially as we leave the transition period following our departure from the EU. Our historical relationship and, in the case of many African countries, shared membership of the Commonwealth also provides opportunities. The president of the African Development Bank himself said on a visit to London in January:
“As wealth grows in Africa, it leads to wealth growth for the UK.”
He pointed out that our strong trading and cultural ties give British investors a head start in Africa, where, as he put it, there are
“huge markets, brimming with enormous investment opportunities.”
It is therefore perhaps something of a pity that foreign direct investment from the UK to Africa has fallen by a third since 2015, but I hope that the Government’s commitment to the African Development Bank, as demonstrated by this new funding, will provide at least a nudge to investors to consider the potential for imaginative and bold action that could bring mutual benefit.
It is important that the British taxpayer has confidence that the money devoted to development is spent wisely and carefully. There have been too many cases in the past of waste, profligacy and worse. Wherever our development funds are sent, there must be thorough auditing of projects and robust analysis of their real-world impact on the people in greatest need.
Mr Mitchell
Does my hon. Friend agree that the prime way of ensuring that there is really good value for money, apart from all the structures that have been put in place, is the Independent Commission for Aid Impact, which was set up by the coalition Government in 2010? It is the taxpayer’s friend. It is independent of Government; it reports not to the Executive or to the Department but to Parliament and, at the moment, to a Sub-Committee of the International Development Committee. Does he agree that it is very important, for precisely the purpose he set out, that ICAI should be retained in full?
Rob Butler
I do indeed, and I take the point that my right hon. Friend makes. I was going to mention that I am indeed pleased that the Independent Commission for Aid Impact is currently conducting a review of the effectiveness of DFID’s support for the African Development Bank Group. It is perhaps a pity that it was not able to report before the decisions that will be taken today, but that is understandable given the limitations caused by coronavirus. As a general principle, it surely makes a lot of sense to have the independent scrutiny that my right hon. Friend refers to.
Additional scrutiny of how we spend development money is inevitable. As here in the UK we confront the worst recession we have known, it will be vital to demonstrate how supporting development initiatives is beneficial to us all. I feel confident that Ministers will ensure that that is the case with the moneys we are discussing. The Minister may even wish to provide me with some reassurance on that momentarily.
It is right that, even in difficult economic times at home, we continue to support those elsewhere who are much worse off. These funds for the African Development Bank and those for the International Development Association of the World Bank illustrate how Britain can be a force for good by making solid financial and political commitments that contribute towards economic development and social progress around the globe.
James Duddridge
Glancing down at my notes, I think I have about 50 things to come back on. To assist the House, I will keep my comments to five minutes and then look through the report of the debate forensically and come back with some of the more technical detail where individuals have asked me questions, but I will try to cover everything.
I assure the House that we are completely committed to development. We are completely committed in the longer term to funding through these two long-standing mechanisms. This is not just something for today; it is something for the future. We are committed to the African continent specifically and to our Commonwealth partners, including Tanzania and Zambia, which were mentioned. Sadly, because growth in Asia is in excess of growth in Africa, it is probably inevitable that over the next 25 years there will be more poor people and people in extreme poverty in Africa than elsewhere. If anything, that will mean that we have to refocus more, not less, assistance on that area, separate from the broader debate that is being had.
A number of points were made about the ADB and how we leverage our shareholding. We leverage our shareholding in many ways, but at a very high level we have helped leverage 40% of investment into climate. There were concerns about money being focused on the poorest; 90% is focused on fragile states, partly because of how we have leveraged our shareholding.
I listened carefully to my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell). I do not quite know why he ate the sandwich of my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), but that is perhaps due to a lack of familiarity with the terminology. My right hon. Friend the Member for Sutton Coldfield is incredibly well-informed.
As I go round Africa more generally, his name often comes up not only in obvious places such as Abidjan and Kigali, but across the continent. He is hugely respected. I look forward to working with him. I have already had an initial chat with the previous president, Donald, and look forward to working with the current president and other individuals.
On the important point about the constituency of which we are a member alongside Italy and the Netherlands, we are proud that we have someone from DFID representing that constituency at the moment. I am interested to see how we can build on that and I particularly welcome my right hon. Friend’s highlighting of solar energy across the Sahel, which is a really important issue and a really important region. It is the only region that was explicitly mentioned as part of the five shifts in NSC strategy.
There were various contributions from Scotland. I am a little confused because I thought that the Conservative party was moving towards the SNP position of having a single Department, which I agreed with rather than the position that was suggested today. I understand the points that were made. On a more consensual point, let me say that, as well as being the Minister for Africa, I am the Minister for Abercrombie House, and I look forward to visiting it, talking to employees and assuring them of their job security during this transition. I know that it is a concern for individuals, particularly for those who are away from Whitehall.
My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) raised a number of issues, including the inter-relationship between trade and migration, which is important. I remember fondly our meetings at airports around the world. Sometimes I knew that he was going to be there, and sometimes it was a surprise that he was there, thus demonstrating that we need to be a little more co-ordinated across Whitehall.
My right hon. Friend the Member for Epsom and Ewell (Chris Grayling) went into a little more detail, eloquently, on forestation. I was particularly interested to hear about the work in the Congo Basin and would like to speak to him more about that. On the reforestation of palm oil areas, we are very aware of the problems of palm oil more generally.
My hon. Friend the Member for Aylesbury (Rob Butler) talked about effective performance, which was also raised by the Opposition. Let me report back on some of those figures: we held back 25% of £152 million sterling—£38 million sterling—in June 2018, £30 million of which was released in October, based on progress and a performance plan. In 2019, we did not withhold any further—
Stephen Doughty
Given that these orders are made under the International Development Act 2002, does the Government have any plans to change or amend that Act given the importance of all these orders being focused on poverty eradication?
James Duddridge
That is a legitimate point, but I am not sure how it relates directly to the SI. I am not aware of any changes, which might perhaps give the hon. Gentleman some reassurance. There is some additional information about the other fund, which I will write to him about.
I thank my hon. Friend the Member for Aylesbury for his points on foreign direct investment in Africa, which is incredibly important, whether it is through some of these funds or completely independent of Government institutions.
My right hon. Friend the Member for Sutton Coldfield raised the issue of trust funds. We have very few trust funds at the African Development Bank, but we are supporting initiatives on sustainable energy, climate risk finance and women’s economic empowerment and very much welcome a discussion around how we can use trust funds more effectively through that fund. Having lived in Abidjan as a 20 year-old, I am keen to get back there and talk to him more—[Interruption.] He is looking shocked. I am not sure whether that is because I was once young, or that I was once in Abidjan. Perhaps it is both. I was aware of the African Development Bank back in my time at Barclays in Abidjan and I look forward to getting back as alternate governor. I was asked who would be representing the bank. I suspect, given the changes, that as deputy governor or alternate governor, I will be spending a bit more time with all the regional development banks. Even prior to the changes, I was going to be the primary person dealing with the African Development Bank.
I welcome the consensual nature of this debate, particularly given the context. I can reassure the House that, in my heart and the heart of Government, we are trying to do the right thing by development. This merger is very much about trying to bring the full force of HMG together, not shifting from one foot to an entirely different foot.
Question put and agreed to.
Resolved,
That the draft African Development Bank (Fifteenth Replenishment of the African Development Fund) Order 2020, which was laid before this House on 19 May, be approved.
Resolved,
That the draft African Development Bank (Further Payments to Capital Stock) Order 2020, which was laid before this House on 19 May, be approved.
Resolved,
That the draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on 19 May, be approved.
Resolved,
That the draft International Development Association (Nineteenth Replenishment) Order 2020, which was laid before this House on 19 May, be approved.
Resolved,
That the draft International Development Association (Multilateral Debt Relief Initiative) (Amendment) Order 2020, which was laid before this House on 19 May, be approved.
Liz Twist (Blaydon) (Lab)
On a point of order, Madam Deputy Speaker. At the end of this month, production of the British passport will cease at the De La Rue plant in my constituency, following the Government’s decision some years ago to award the contract to Gemalto. Yesterday, De La Rue announced that the production of bank notes on the site will also stop, with the loss of a further 255 jobs. It is devastating to see this reduction. Are you aware of any statement to be made to the House by a Minister about that issue in the forthcoming business?
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the hon. Lady for that point of order. I think she may have been here for the business statement. I have not been made aware of any forthcoming statements from Ministers about it, but she has put her concern on the record, and I am sure she will find ways, as she has done today, to raise that concern about her constituents.
To allow the safe exit of Members participating in this item of business and the safe arrival of those participating in the next, I will suspend the House for three minutes.
Backbench Business
Covid-19: BAME Communities
(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Rosie Winterton)
As I am sure colleagues will have seen, this is a very well-subscribed debate, so I intend to impose a six-minute time limit straight away so that we can get everybody in. I know that the hon. Lady is aware that she has around 15 minutes for her opening speech.
Dawn Butler (Brent Central) (Lab)
I beg to move,
That this House is concerned about the level of deaths from covid-19 among Black, Asian and minority ethnic communities; notes that structural inequalities and worse health outcomes for Black, Asian and minority ethnic people go hand in hand; calls on the Government to review the data published by the Office for National Statistics on 11 May 2020 on Coronavirus (COVID-19) related deaths by occupation, England and Wales: deaths registered up to and including 20 April 2020, the Report published by the Institute for Fiscal Studies in May 2020 entitled, Are some ethnic groups more vulnerable to COVID-19 than others? and the full report by Public Health England on Disparities in the risk and outcomes of covid-19; and further calls on the Government to set out in detail the scope and timeframe of the Government’s review and urgently to put a plan in place to prevent avoidable deaths.
I thank the Backbench Business Committee and its Chair, my hon. Friend the Member for Gateshead (Ian Mearns), for securing this important debate. Many Members who wanted to speak cannot do so, and it is a shame that they cannot participate remotely. The Government are more focused on subverting democracy than protecting lives, but we will not go into that. Their decisions are increasingly illogical and irrational. They finally did a U-turn the other day and now children will be fed this summer; I am glad the Government are doing U-turns. I thank everyone involved, including the all-party group on school food and Marcus Rashford, who joins celebs such as Raheem Sterling, John Boyega and others who are finding their voice and using their position for change.
This is a sobering debate. We all watched the brutal, very public lynching of George Floyd—our lives were interrupted by the killing—but racism does not just manifest itself in brutal ways that can be caught on camera and shared on social media. “I can’t breathe”, the last words of George Floyd, could apply to the disproportionate numbers of black, African-Caribbean and Asian people dying from coronavirus in this country.
Every time the Government get dragged kicking and screaming to do the right thing, I can’t breathe. I can’t breathe every time the Government hide a report or kick an issue into the long grass by announcing another commission or report. I can’t breathe. My breath is taken away by the lack of care, empathy and emotional intelligence shown by the Government time and again. For months, we stood at our doorways and clapped for our key workers, the ones on the frontline—the doctors, the nurses, the carers, the cleaners, the ones driving the buses, the cabs and the forklift trucks or serving people in supermarkets. The people we clapped for are the ones who are being underpaid and who are, disproportionately, dying.
The death rate for covid-19 has exposed and amplified what has been going on in society for decades. The concentration of deaths in areas where people are just about managing should worry us all. As a country, we are better than this. According to the Office for National Statistics, the burden of covid-19 has been felt more strongly in regions with greater deprivation. In those areas, people are dying from the virus at double the rate of those in more affluent areas. According to the ONS, adjusting for age, black people are more than four times as likely to die from covid as white people. Pakistanis and Bangladeshis are more than three times as likely and Indians more than twice as likely.
BAME people account for 13.4% of the population, but they make up 34% of patients admitted to an intensive care unit. My constituency of Brent sadly has the highest number of registered deaths in London. In line with findings from the Office for National Statistics, those areas of greatest deprivation, such as Harlesden, have the highest number of deaths.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I thank my hon. Friend for the powerful way in which she makes these crucial points. Does she agree that the approach taken by my constituency colleague and the Welsh Minister for Health and Social Services, Vaughan Gething, on the disproportionate impact of these issues on BAME communities—we have seen tragic deaths in my constituency too—has been in stark contrast to the approach taken by the UK Government? Vaughan Gething has understood this issue, and led on it from the start.
Dawn Butler
I thank my hon. Friend for that intervention. We can learn a lot from the approach in Wales, including how people are approaching the disproportionate number of deaths from covid-19 in the BAME community. I thank him for everything he does in his constituency on that issue.
We did not get to this point by accident, and we must make a concerted effort to dismantle the structural and systemic racism that exists in society, and that affects life chances from the moment someone is born.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
I spoke to NHS doctors from EveryDoctor, and they told me that 63% of BAME doctors felt pressured to work in wards treating covid patients, compared with 33% of their white counterparts. Does my hon. Friend agree that the Government must do more to address workplace discrimination that affects ethnic minorities?
Dawn Butler
I thank my hon. Friend for that important intervention, and I will come to that point later in my remarks. As constituency MPs, it is important for us to talk to doctors, and to understand and learn what is going on. I wish the Government would also take that on board.
Structural and systemic racism is also a health issue, and the Institute for Fiscal Studies revealed that the jobs that are most at risk are over-populated by African, Caribbean, Asian, and minority ethnic people. We must be honest with ourselves and ask why that is. The higher BAME death rate is apparent across all grades of the NHS, even in the highest socioeconomic groups. We must be honest with ourselves and ask why that is. If we shy away from the truth, nothing will change. The publication of the first report on this issue stated that 17 doctors died, 16 of whom were BAME. Eastern Eye then reported that, since 2 June, when that report was published, another 18 doctors died after saving lives, 17 of whom were BAME. We must be honest with ourselves and ask why that is.
The Public Health England report that the Government tried to hide states that, as my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) said, there were numerous examples of doctors who were not able to access appropriate PPE to protect themselves adequately. It also stated that requests for risk assessments or additional PPE from BAME workers were more likely to be refused, and that requests were less likely to be made because of the fear of adverse treatment.
Mary Agyeiwaa Agyapong, a nurse, was still working at a hospital while heavily pregnant. She sadly died of covid-19. They managed to save her baby girl by emergency caesarean. That is so tragic, and we must ask ourselves why she was forced to work. Let me give a couple more examples. Two black employees in London, a taxi driver and one transport worker, Belly Mujinga, died after allegedly being spat at by somebody who claimed they had covid-19. Belly had an underlying health condition and should not have been put in danger. She requested to work in the ticket office, but that was refused. We must ask ourselves why such things are happening. The Government must urgently implore and ensure that all employers carry out risk assessments in all workplaces. As lockdown is eased, those most at risk are in greater danger unless the Government introduce structural requirements for employers.
Chris Stephens (Glasgow South West) (SNP)
I thank the hon. Lady for what she has said so far. She talks about employers carrying out risk assessments. It is important that that includes Government Departments and the Government’s outside contractors, because, as she will be aware, many of the workers in these outside contractors—cleaners, for example—are from the BAME community.
Dawn Butler
I thank the hon. Gentleman for that intervention. It is not one rule for Government Departments or Parliament and one rule for the rest of the country: we have seen that play out way too often. He is absolutely right that that has to be taken into consideration.
More than two in 10 black African women are employed in health and social care roles, Indian men are 150% more likely to work in health or social care roles, and 14% of doctors in England and Wales are Indians. Covid-19 does not prefer one person’s lungs to those of other ethnicities. It is not the pandemic that discriminates—it is society. It is almost as though being black is a pre-existing condition that results in worse outcomes for health, employment and education. That does not for one moment mean that it cannot be overcome. It is not a victim mentality that has put us in this situation, any more than it was indolence that put British citizens on planes and deported them during the Windrush scandal or bad sportsmanship that subjects our players to abuse on the field. We must call it what it is, because if we do not call it what it is, how can we identify it, how can we cure it, how can we stop it? It is racism, and it has become more structural and systemic. It is not just about individuals. Structural and systemic racism can exist without individual acts of racism, but it is an unfair, unequal discriminatory system—and it is literally killing us.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does my hon. Friend agree that at the heart of Government there is huge ignorance about this agenda, and we need the Government to learn from what has happened? As we ease lockdown, the Government urgently need to do the risk assessments so that families who are at risk through inter-generational living and all those issues are taken into account and action is taken to protect people from further risks of dying.
Dawn Butler
I thank my hon. Friend for that intervention. It is absolutely vital that the Government ensure that risk assessments are carried out in workplaces so as to have fewer deaths.
As I say, this is literally killing us, and just like the killing of George Floyd, we can all see it. If anyone does not believe me—if anyone does not believe that structural racism exists—believe the body count.
Incremental changes are no good if structural barriers still exist. Breaking down systemic and structural barriers will build a society that is better for everyone. Every life matters—of course it does, but not all lives are treated equally. Interestingly, some of the things that would most benefit and save black and Asian lives are the same things that will save everybody: risk assessments, test and trace, and easy access to in-date PPE. What the country needs now is a Government who are going to deliver fast and decisive action. Everyone in this House should stand up and say, “No longer should discrimination, cultural exclusion, poverty and class be allowed to determine whether you live or whether you die.”
That is why this debate is so important. It is said that if a house is on fire in a street, of course all the houses in the street are important, but the focus needs to be on the house that is burning—and right now this situation needs fixing for the BAME community. Right now we have a group of people who are dying at four times the rate of anybody else. It is the same demographic as the people who died in Grenfell Tower just three years ago. It is the same group of people who were subjected to the hostile environment just eight years ago. It is the same people who have been told to stop being victims. There is a pattern here, and we need the Government to show some urgency to address the racial inequalities that exist in the UK.
At first the Government said, “We will not publish the PHE report because it is too sensitive in relation to Black Lives Matter.” On 4 June, the Minister stood up and said, “We’ve asked Professor Kevin Fenton, a black surgeon, to lead on this review”, but apparently he did not lead on it. The Minister then said that the review was not part of the report. Confused? I know I am.
The Minister also stated that PHE did not make recommendations because it was not able to do so, but we know she was aware of the second set of recommendations made by PHE. When she gets to her feet, will she apologise on behalf of the Government for misleading the House? Why did the Government try to bury the PHE report? I was not the only one who was trying to get to the bottom of it. Eastern Eye, Channel 4 and Sky have doggedly pursued the issue because something just did not feel right. That is why people have taken to the streets—they are tired of the dishonesty.
The Government have form on whitewashing reports. Baroness McGregor-Smith’s review has seen very little progress. The Lammy review has not had any recommendations implemented. The 2018 race disparity audit has not been acted upon. The Windrush lessons learned review was edited and delayed for a year. It was published, had sections deleted and it was still not acted upon. The Government need to stop trying to erase from their reports the injustices towards black and brown people and working-class people. It is a disgrace.
The Government announce reviews and consultations to get themselves out of trouble, and then think that everybody will just forget as we stumble into the next crisis. We see what they are doing and we are calling them out on it, because they produced a document a few years ago that talked about “explain or change”. The Government said:
“When significant disparities between ethnic groups cannot be explained by wider factors, we will commit ourselves to working with partners to change them.”
I ask the Minister: what is stopping the Government from acting? The murder of George Floyd and the death toll of covid have forced us to have these overdue, open and, hopefully, honest conversations about race, so that we can ensure a fairer and more equal society.
As a member of the Science and Technology Committee, I have listened to many scientists talk about covid-19, and it is not genetics that have resulted in a higher death rate. It is not internal, and that means it is external. To back up the findings of the PHE report—the one that the Government tried to hide—it is noted that covid-19 potentially has had a less severe impact in the Caribbean, Africa and the Indian subcontinent. That raises questions as to why BAME communities in England are so severely affected. It is suggested that issues such as structural racism and discrimination and a failure to adequately protect key workers may have contributed disproportionately.
I am pleased that I have a covid testing centre in my constituency in Harlesden, which has been so hard-hit. If anyone is interested, they should register with Brent Council. As we build a better life after covid, we must do better. The UN found that the
“structural socio-economic exclusion of racial and ethnic minority communities in the United Kingdom is striking.”
The Minister and the Government should be embarrassed.
Some people have always had worse health outcomes—that is not new. Poor people have always had worse health outcomes, but the virus has magnified the scale of the inequality. Colour of skin, economic background and social and structural racial barriers and infrastructure are all factors as to whether someone has a good chance of surviving this pandemic.
The killing of George Floyd in the middle of a pandemic is a pivotal moment for the world. “I can’t breathe” is as true for covid-19 as it is for racism. History will judge each and every one of us in time on that moment when the world stood still for 8 minutes and 46 seconds. History will judge us on our actions and history will judge the Minister on her response. Minister, before you get to your feet to respond, ask yourself what will be written by your name.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Lady knows that she must not address the Minister directly. She speaks through the Chair. She does know that.
Dawn Butler
Apologies, Madam Deputy Speaker.
History will judge each and every one of us. Before the Minister gets to her feet to respond, she must ask herself what will be written by her name.
Government Ministers are revealing trauma on one hand and then saying that racism does not exist on the other; it is cruel. I do not think the Minister should not give a speech. I think the Minister should list actions. What will the Government do and when will they do it? She should tell the House and the country when the Government will start to implement the 150-plus outstanding recommendations from previous reports and reviews, not focus on the new commission that the Prime Minister mentioned. We know that that is designed to agitate and gaslight us, just like the Foreign Secretary’s comments on taking the knee.
Black Lives has more in common with white working-class people, the LGBT+ community and people who are under-represented than this cruel Government do. In the words of the late, amazing Jo Cox, we have
“more in common than that which divides us.”—[Official Report, 3 June 2015; Vol. 596, c. 674-75.]
I stand to tell the Government that we are done with the games, we are done with the platitudes and we are done with kicking this issue into the long grass. Enough is enough. Now is the time to act. Now is the time for action. Now is the time to get the Government’s knee off the neck of the black, African, Caribbean, Asian, minority ethnic communities.
Caroline Nokes (Romsey and Southampton North) (Con)
I congratulate the hon. Member for Brent Central (Dawn Butler) on having secured this important and timely debate. She picked up on several themes that I will probably echo, but she also spoke about voices, focusing on Marcus Rashford and Raheem Sterling—people who have used their voices effectively. In my speech, I will concentrate on the voices of BAME workers in our health service.
At the very start of the pandemic, we had a debate in this Chamber about the emergency covid legislation. I vividly remember receiving a briefing from the Equalities and Human Rights Commission that spoke about how the pandemic might affect different groups of people differently. It is interesting to read and review that briefing with 2020 hindsight. When it spoke of BAME communities, it mentioned their employment opportunities, including the likelihood that young BAME people in particular would be working in unsecure employment in the gig economy and on zero-hours contracts. What it did not speak about was their health.
I think that the death toll has shocked us all. But it is not only the death toll, is it? As the hon. Member for Brent Central highlighted, BAME people are more likely to be hospitalised. If hospitalised, they are more likely to end up in intensive care units. And if in intensive care units, they will be there for longer. As we have learnt over the course of the pandemic, all those things have a significant impact on people’s wellbeing going forward because the longer that someone is in ICU, the longer it will take them to recover and to return to their home, their family and their employment.
At the start of the pandemic, the Women and Equalities Committee launched an inquiry into the unequal impact of covid. That has now split into three separate inquiries looking specifically at: the impact on disabled people and their access to services; the gendered impact of covid; and—the inquiry that we have launched within the last couple of weeks and on which we have already taken significant evidence—the impact on our BAME community. As I said to Committee members last week before we had the first evidence session, “If there is one thing you can rely on from the Women and Equalities Committee, it is that our inquiry will come up with recommendations for the Government to act.”
Yesterday we heard from Dr Chaand Nagpaul and Professor Kamlesh Khunti. I do not wish overly to paraphrase their evidence, but I only have six minutes so I really will have to. They both reiterated what can be found in the NHS England and NHS Improvement briefing on the disproportionate impact of covid—that BAME staff are over-represented in the lower grades of the NHS hierarchy, that there is not enough diversity in management structures, and that, as a direct result, BAME staff are worried to speak up when they do not have the right PPE. Those staff are not having their voices heard—or, worse, they are too scared to use their voices. That is Britain in 2020: BAME staff in the NHS are scared to speak up. We have to make sure immediately that channels are open for people to be able to do so, whether they work in the NHS or in other frontline roles such as bus drivers, retail workers and nursery assistants—the people without whom, to be blunt, our country would have ground to a halt over the course of the last 12 weeks.
The Committee heard from Professor Sir Michael Marmot, who did a review back in 2010. He refreshed his review in February this year—hard up against the start of the crisis.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The right hon. Lady makes a valid point about the NHS, in which there is not a great record on whistleblowing but at least many of those workers would be in regular jobs. Does she agree that there is a disproportionate number of black, Asian and minority ethnic people in insecure employment, for whom raising an issue could mean losing their jobs? They should not have to make that choice.
Caroline Nokes
The hon. Lady is absolutely right. That is why I specifically raised those who are working in transport and the gig economy, who do not have those routes. In the NHS they should at least be there; in some sectors, they do not exist in the first place.
We heard from the hon. Member for Brent Central some uncomfortable truths—issues that may be difficult for us to hear—but we cannot just listen and review; we must act. When I rather proudly told one of my constituents, as Chair of the Women and Equalities Committee, that we had launched an inquiry, her instant response was not great: it was, “Not another inquiry. Not another review. Please, can you come up with some action?” She was right.
The race disparity unit in the Cabinet Office was set up specifically to obtain data, but it needs to do more than just get data. It needs to be able to look at datasets and understand them—of course it does; we have to know where the structural inequalities lie—but it is of no use to accurately record a growing deficit, or perhaps a shrinking deficit. We have to have actions. We need policy levers to effect change, so that the young Caribbean boy in the constituency of the hon. Member for Brent Central has the same educational opportunities as the white girl in mine; so that the job opportunities and chances of progression in work—and that is absolutely key: it is about not just getting a job but getting a good job getting, a better job—are available whatever someone’s ethnicity; and so that someone’s ability to speak out when they do not have the right PPE is the same regardless of their gender, ethnicity, religion, age, sexuality or disability.
I cannot stand here and predict the outcome of my Committee’s inquiry—it would be wrong to do so—but I can predict that we will expect delivery from Ministers, not warm words, not more reviews and not more commitments to get better data. We want action and improvement.
Covid-19 is of course a novel virus and we have been forced to learn about it at pace, but it has highlighted health inequalities that are real and current: if someone lives in overcrowded, poor-quality housing, they are more likely to be negatively impacted; if someone is in frontline, public-facing work, they are more likely to be negatively impacted; if someone’s English is poor or they have learning difficulties, they will not be able to receive the important public health messages that they need; and if someone lives in multigenerational families, they are more likely to be negatively impacted, as are those whose work is insecure. Of course, a person may well have no choice but to carry on working at the height of a pandemic to feed their family. No one can be a careworker, a retail worker or a transport worker from the safety of their own home.
We have not had a public health crisis like this since the Spanish flu 100 years ago, and I do not know whether our generation will see another, but we cannot lurch to another crisis without having worked out how to risk-assess our frontline workers; without having established culturally intelligent ways to disseminate information; and without having empowered people in the workplace to voice their concerns and enabled the routes to redress.
I know that the Minister and her colleagues across Government will work hard on this issue. We heard last week from my hon. Friend the Minister for Equalities about the importance of the work that the race disparity unit is doing, but I urge the Minister present to come forward with what is actually going to happen, because that is what our BAME communities up and down the country wish to hear.
Mrs Maria Miller (Basingstoke) (Con)
I pay tribute to the hon. Member for Brent Central (Dawn Butler) for calling for this debate, and to the Backbench Business Committee for granting it. It is a great pleasure to follow my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), who is now the Chair of the Women and Equalities Committee; I commend her for all the work that she is doing.
I also pay tribute to all the NHS workers in Basingstoke, in Hampshire and throughout the country who, despite all the headlines and despite the fear, kept going. I think particularly of those from different black and ethnic minority groups, who face particular fear and challenges. We should pay tribute to them in this debate.
My right hon. Friend the Member for Romsey and Southampton North talked about the fact that when we discuss issues affecting BME communities, we often talk about employment and education. In this pandemic, it has been the differential impact on health that has shocked us all to our core. She is right that we need to give people a voice to speak out on that.
It was particularly concerning for me when I was approached by individuals in my constituency from different sectors of my thriving and vibrant BAME community about their fears and about what this meant to them. It struck me that the information available was so vague and general that it was difficult for me to respond to their questions. One particular individual from my Indian community asked, “Does this mean I’m more at risk?” I could not answer that, so I looked carefully at the research from Public Health England when it came out. I will come on to that in a moment.
We have to be careful when we look at this issue. I know that the hon. Member for Brent Central will agree that we have to take great care not to simply treat BAME communities as one homogeneous group. We run the great risk of coming to the wrong conclusions if we speak as though they all have the same challenges—indeed, if any of us have all the same challenges. We know as Members of Parliament that our opportunities in life are too often determined far too much by our socioeconomic backgrounds, by the occupation of our parents or by the healthcare that we receive throughout our childhoods. It is the same for every group in our society. The way that we can address this is by understanding each group individually, and having accurate data is important in trying to disentangle and understand this particular issue, which the hon. Lady so eloquently outlined in her opening speech.
It was with some bemusement that I read the Public Health England analysis, because it was, frankly, incomplete. It did not include a breakdown of individual occupations, it did not look at comorbidities, and it treated people from the BAME community as if they were one homogeneous group, which I think we have just agreed does not exist. This was incredibly concerning, and I hope that the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Bury St Edmunds (Jo Churchill), will be able to address this directly when she speaks at the conclusion of the debate.
I took some time, after reading that Public Health England report, to go back through one of the reports done by the Women and Equalities Committee in September 2018, on the race disparity audit. It was a good report that was well received by the Government, and it called for distinct changes in the way in which Government organisations collected data, precisely so that we did not end up with a homogeneous approach to these issues. In particular, I would be grateful if the Minister could update the House on the work that has been done around the conclusions of that Women and Equalities Committee report, because it is unacceptable in 2020 Britain that Public Health England would not include an analysis of those particular factors in its analysis of this health pandemic.
I know that PHE is reliant on the Office for National Statistics and other organisations for the data that it is given, but that is exactly the issue that we focused on in the Women and Equalities Committee report. We identified the need for the standardisation of data and the need to ensure that we did not have a homogeneous approach, particularly when we talked about the analysis of data relating to different ethnic minority groups. Perhaps my hon. Friend the Minister could also update the House on the quality improvement plan that was going to be put in place, where the race disparity audit was going to work with the ONS centre for expertise on inequality. A key recommendation was that the Government should have an action plan to improve data collection to ensure that disaggregation was far easier and that more data was collected. The Select Committee also called for the inter-ministerial group on race disparity to work more closely with the ONS on these issues, and perhaps the Minister could update the House on the work of that particular sub-Committee.
It is a tragedy that we are having this debate today, but it is an important debate not just for covid-19 but for the way in which we understand these problems more generally.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I thank my hon. Friend the Member for Brent Central (Dawn Butler) for securing this important debate. Without doubt, the nation needs a full independent public inquiry into the Government’s handling of the covid crisis, but one area in particular that demands scrutiny is the Government’s handling of the effects of covid-19 on the black, Asian and minority ethnic communities. Why have Ministers ignored the evidence, dragged their feet and almost certainly contributed to a situation where people from BAME communities have been disproportionately ravaged by this terrible disease?
For me, this is personal. I have lost loved ones to covid, such as Jagir Kaur, my lovely grandmother, our family matriarch, from whom I learnt so much, but whose coffin I was not even able to carry on my shoulder. Satnam Singh Dhesi, my fun-loving, Slough taxi-driver uncle was taken away from us way too early, and then I had to endure the indignity of watching his funeral online via Zoom. Hemraj Jaymal, my brother-in-law’s father, somehow contracted covid in a Slough care home, and, inexcusably, none of us was there to hold his hand when he breathed his last. May they all rest in peace and may we be forgiven for not being there. Families cannot attend bedsides and because the usual rituals and rights of funerals are disrupted, it makes loss even harder and grief even harsher, and there are tens of thousands of people suffering bereavement.
Back in April, we saw BAME people being disproportionately affected by covid-19 as data came in from emergency admissions to hospital from more than three months ago. On 22 May, King’s College London research showed that patients from BAME groups admitted to hospital with covid-19 are, on average, a decade younger than white patients. In May, the Office for National Statistics reported that black people were more than four times more likely to die from covid-19 than their white counterparts; that Bangladeshi and Pakistani people were more than one and a half times more likely to die from covid-19; and that the situation was similar for people with an Indian heritage. That was published more than a month ago.
Of course, Ministers have had a wealth of evidence from BAME organisations presented to Public Health England, which Ministers initially tried to delay, then cover-up and have released under pressure only this week. The evidence tells us what we already knew: ethnic inequalities in health and wellbeing in the UK existed before COVID-19, and the pandemic has made these disparities more apparent and undoubtedly exacerbated them. Why is this? One major reason is racism, and this racism, unfortunately, is also within our lovely NHS.
Figures released last week by the NHS Confederation show that the number of ethnic minority chairs and non-executive directors of NHS trusts in England has almost halved from 15% in 2010 to a mere 8% in 2018. Quoted in the Eastern Eye newspaper, Dr Ramesh Mehta, the president of the British Association of Physicians of Indian Origin, said that this was down to “rampant discrimination” and a “club culture” within NHS professions.
Representation matters, and the dismally low number of executive directors of NHS trusts is inexcusable. If BAME doctors and nurses are good enough to die on the frontline, surely they are good enough to lead. While I am proud to be a part of the most diverse party and the most diverse Parliament ever, the lack of leadership positions in most key industries is shocking, including the all-important finance sector, where the majority of FTSE companies still have all-white boards. Rather than just tweeting about Black Lives Matter, those companies need to take a long hard look at themselves to judge whether they are indeed a part of the change that they proclaim to be.
Diversity is crucial because it brings in people with fresh perspectives and different priorities, thereby enhancing and improving the overall performance for all of us, so perhaps the Minister can comment on how she intends to tackle the racial discrimination within the NHS. It took until 16 June for Public Health England to publish its seven-point plan, but surely this should have been done from the very start. We do not just want to carry on collating data.
Of course I pay tribute to the frontline NHS staff across my Slough constituency, including at Wexham Park Hospital, who undoubtedly face incredible challenges and risks, but the British Medical Association reports that 90% of doctors and 60% of NHS staff who have died are from BAME backgrounds. Those absolutely staggering statistics should make us realise that something is very wrong.
We are lacking time, so in conclusion I want to ask the Minister to reflect on the plans to commemorate all those who have lost their lives, with a focal point of remembrance, and assure us that we will learn the lessons. More than anything, I hope she can allay my concerns. Black lives matter, and we demand deeds, not words.
Ms Nusrat Ghani (Wealden) (Con)
It is a pleasure to follow the passionate speech of the hon. Member for Slough (Mr Dhesi). I first want to thank all NHS workers, who have done a tremendous job during this covid period. My speech will not be so friendly, so I want to start by thanking the Minister, who has been tremendous in supporting me in Wealden, where we have a particularly large care home system—I have a lot of older constituents. Regardless of the day of the week and the time of day, she has been incredibly responsive. Unfortunately, the rest of my speech will not be so flattering, so I will just crack on.
Like so many people in this country, I have lost loved ones to covid. I also have loved ones working on the frontline dealing with covid. We had the experience and network to highlight quite early on that we saw a pattern forming, but we were met with, “We don’t have the data”—it is 2020, and we do not have the data. I understand the argument that this is an unusual situation, and that we did not have the statistics to deal with this particular pandemic, but we do have data about how viruses spread. We also understand the long-standing institutional biases of NHS England and Public Health England, which have failed in their leadership, are unaccountable, and hide behind the catch-all, “We just don’t have the data.” It is shameful.
Caroline Nokes
Does my hon. Friend agree that we did not actually need data, given that we could open up the pages of any newspaper and see the photographs?
Ms Ghani
I agree with my right hon. Friend. That goes back to my earlier point: Public Health England needs far more functioning leadership.
Public Health England’s report says:
“It is clear from discussions with stakeholders the pandemic exposed and exacerbated longstanding inequalities affecting BAME communities in the UK.”
That is nothing new. Moreover, it confirms to me the wilful blindness of Public Health England and NHS England in addressing racial inequalities and their inability to put in place measures to address workplace risk and make sure that so many BAME staff were not exposed. In the time it took for Public Health England to review the disproportionate number of BAME deaths, another 17 doctors passed away. Sixteen of those were BAME.
What else do we know? We know that there is a significantly higher proportion of BAME healthcare workers in England across our health system; without BAME workers, there would not be a health system. We know that BAME workers are in lower-paid jobs and that they cannot work remotely. We know that BAME workers tend to work in high-risk areas, and that the families they go home to are high-risk individuals. It was a high-risk strategy, yet Public Health England and NHS England continued to expose high-risk staff to high-risk shifts.
We know that 94% of doctors who died were of a BAME background. In the biggest survey of its kind, ITV News asked the UK’s BAME healthcare community why they thought more of their BAME colleagues were dying than their white counterparts, and 50% felt that discriminatory behaviour played a role in the high death toll. One respondent described the treatment as “very unfair”, adding that “all BAME nurses” have been
“allocated to red wards and my white colleagues”
are “constantly in green wards.” Perhaps more worryingly, ITV found that 53% of BAME respondents said that they felt they could not comfortably raise concerns about deployment, so they risked their health as against their employment.
To me, that suggests that the problem is related not to covid but to long-standing institutional inequalities. I want to hear from the Minister a resolute commitment to hold Public Health England and NHS England to account, and to ensure that the recommendations are acted on, reviewed and assessed by the real workers on the frontline who are most at risk—by that I mean BAME workers—and that all the data, good and bad, is shared in good time. I hope that the Minister understands that I have very little confidence in particular in Public Health England.
As we champion our frontline key workers, we also need to give them confidence that we have their backs. Like all public workers, they want to do their jobs, but many are concerned that if there is a second wave of covid they will be risking their lives or their families’. The BAME community has already been severely hit. I am not sure that it could take a second wave. For BAME health workers to die at such a rate frankly amounts to negligence on the part of NHS England and Public Health England, but perhaps it is not that surprising. Their leadership boasts 46 individuals; yet only four of them are from BAME backgrounds.
The country was united in tackling covid, but Public Health England and NHS England let down BAME health workers. They have time to put the record straight. Either we are in this together or we are not. I hope that the Minister can confirm that the Department is committed to ensuring that Public Health England and NHS England will treat, manage and support all their staff equally, so that we do not see a second wave of disproportionate BAME health worker deaths.
Lilian Greenwood (Nottingham South) (Lab)
I congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing the debate and on her powerful and moving speech. I also thank the Backbench Business Committee for ensuring that the debate was allocated time this afternoon.
I will not speak for too long, but the impact of covid-19 on black and minority ethnic communities has been so shocking that I feel I must put on record my concerns, and add my voice to those calling for urgent and decisive action. We have known for months, as the hon. Member for Wealden (Ms Ghani) has just said, that BAME people are being hit very hard by this pandemic. Last month, the Office for National Statistics found that black men and women are four times more likely to die from covid-19 than white men and women, and that people from Bangladeshi, Pakistani, Indian and mixed ethnic groups also had a raised risk.
The Health Service Journal reported that more than 90% of doctors who have died during the pandemic have been BAME—more than double the proportion in the medical workforce as a whole—and that, although BAME groups count for 21% of all NHS staff, they account for 63% of those dying from covid-19. Similar inequalities have been exposed by our universities, the Institute for Fiscal Studies and many others, and of course they have been confirmed by Public Health England’s review. However, this is not just about numbers; it is about people. It is about the families and communities that have lost loved ones, including hon. Members present this afternoon.
That is why dozens of my constituents have written to me about Belly Mujinga. They did not know Belly, but they understand that failing to protect black and minority ethnic people from covid-19 leaves behind devastated families. They are appalled by the story of her death and they are demanding action. They want to know what the Government will do to ensure that things change. They want to know that the inequalities that have produced this disproportionate impact will be tackled, and they want to know that it will be done quickly. The virus has not gone away, and we all know that the risks of a second wave are very real.
Why are we seeing the disproportionate impact? We know that poverty matters. Both ethnicity and income inequality are independently associated with covid-19 mortality. People from the most deprived communities are almost twice as likely to be admitted to intensive care as the least deprived.
We know that housing matters. The Marmot report found that BAME people are more likely to live in overcrowded housing, making self-isolation more difficult. Some 30% of Bangladeshi households and 15% of African households were overcrowded, compared with just 2% of white British households. Where that over- crowding coincides with multi-generational households, it can make shielding impossible.
We know that where you live matters, with links between poor air quality and increased susceptibility to covid-19. The places most affected by pollution are also more likely to have higher BAME populations and are home to more deprived communities.
We know that where you work matters. People from BAME backgrounds are more likely to work in jobs that cannot be done from home, in frontline roles where they are dealing with the public—as taxi, private hire and public transport drivers; security workers; retail workers; and especially health and social care staff, where there is a higher risk of exposure to covid-19. If people do not get sick pay, or if it is so low that they cannot live on it, they might be forced to choose between risking their health and that of others and managing to put food on the table.
We know that racism and race discrimination really matter. If someone has experienced racism at work or already feels isolated, of course it is harder for them to speak up or raise concerns about safety. The British Medical Association found in 2018 that BAME doctors were twice as likely as white doctors to say that they would not feel confident raising safety concerns. More recently, BAME doctors told the BMA that they were more likely to feel pressured to see patients without adequate PPE. If people have had bad experiences of using health services in the past, they are less likely to seek treatment. If someone is worried that they might be challenged about their right to be here, they might not seek hospital help and care. That is a real impact of the hostile environment.
Tackling these inequalities is urgent. It requires efforts across Government and by employers and other organisations, and it must be done in collaboration with BAME people themselves. When the Minister responds to the debate, she must tell us that the Government will act now to implement all seven recommendations in the Public Health England report as soon as possible. More than that, we need to hear that there is a detailed plan setting out how they intend to do so. Perhaps most of all, we need to hear that the Government understand that systemic racism is real and that we do not need another review. We need Government to act on the recommendations of not just this report but all the others that are sitting gathering dust—as my hon. Friend said, deeds, not words.
Naz Shah (Bradford West) (Lab)
I thank my hon. Friend the Member for Brent Central (Dawn Butler) for securing this debate. “Unprecedented” is a word we have heard bandied around a lot in the last few months. The new ways of working and interacting with our communities may be unprecedented, but sadly, the effect of covid-19 on black and minority ethnic communities does have precedent. If the Government had taken the findings of previous reports seriously, not only is it possible that many of these black and minority ethnic deaths could have been avoided, but we would not once again have to be asking the Government to ensure that more people do not lose their lives to this horrible disease.
In 2017, the Lammy review and the race disparity audit were published. Both highlighted the structural inequalities experienced by black and minority ethnic communities. Asian and black households and those in other ethnic minority groups were more likely to be poorer and most likely to be in persistent poverty. The ethnic minority population is more likely to live in areas of deprivation—especially black, Pakistani and Bangladeshi people. Around one in 10 adults from black, Pakistani, Bangladeshi or mixed backgrounds were unemployed, compared with one in 25 white British people. Overcrowding affects ethnic minority households disproportionately. London has one of the highest rates of overcrowding of all regions in England. There has been an increase in the number of ethnic minority households accepted by local authorities as statutorily homeless over the last decade.
The Government will tell us that tackling racism is at the core of their efforts. Last week, I asked the Ministry of Housing, Communities and Local Government how much it spends on tackling racism. The response said that the Department
“paid approximately £219,00 to projects specifically to target racism in the financial year 19/20.”
People across this nation are watching. Black and minority ethnic communities have faced structural racism for decades, and we are having to have the same conversations 20 years on. People are concerned and, rightly, angry. Although I support both Show Racism the Red Card and the Anne Frank Trust, which the Government fund, is this the message that the Government want to give—just £219,000 of the Department’s annual budget is spent on racism, yet the Prime Minister is willing to spend £900,000 on rebranding his plane? Can somebody tell me what kind of message that sends to our country? The message is that this Government care more about the colour of a plane than fighting racism, bigotry and discrimination for people of colour. Is this the message the Government are sending? Is that the Government’s priority? And they wonder why people are so angry.
Morally, the Government’s priorities are not in the right place and nor are they economically. The McGregor-Smith review found that black and minority ethnic career progression could add £24 billion a year to the UK’s economy. If we could tackle racial inequality, we would be billions better-off. Yet I ask the Government how much they are spending specifically on tackling this type of race inequality. If the Minister wants to tell the House how much is spent on trying to retrieve up to £24 billion lost to the economy, I am happy to give way.
On 9 April, I also wrote to the Secretary of State for Health and Social Care. Over the past few months, the Government have published significant material on covid-19 restrictions and guidelines on the Government website, and Ministers have been briefing the nation on air every single day. Yet I have still not received a response, despite me reaching out to the Government to support them in their efforts to reach minority communities. On a community level in Bradford West, the Al Markaz Medics, the Bradford Teaching Hospitals NHS Foundation Trust and the Bradford Council for Mosques all put out their own communication. It did not come from the Government. Nationally, lot of organisations such as the Muslim Council of Britain did what they needed to do for their own communities, but the Government did not. We have had to take it upon ourselves. The Government failed to acknowledge the significant language barriers that exist in communities, despite this being a pandemic where everyone has needed to receive clear messaging.
I am a former commissioner. From my commissioning days, I remember the Rocky Bennett inquiry. In 1998, Rocky Bennett was held down by five nurses. He could not breathe either and he died. The report, published over 20 years ago, made recommendations to the Department of Health to
“cure this festering abscess”—
racism—
“which is a blot upon the good name of the NHS.”
Rocky Bennett was a 38-year-old black man with huge ambitions who had been offered a traineeship with Chelsea.
Structural inequalities are what this comes down to. Even in this place last year, a young man who had grown his Afro for years had to cut it to even be considered for an interview. Structural racism exists in this place. The Government need to listen and stop papering over with more reviews. We know what the issues are. Now is the time for action.
Theresa Villiers (Chipping Barnet) (Con)
It has been deeply disturbing to watch and witness the impact of covid-19 on people from black, Asian and minority ethnic communities. It has been equally moving to hear the speeches so passionately made this afternoon.
It has been truly heartbreaking to see the photos of the health and care workers who have lost their lives, so many of them from BAME backgrounds. Like others, I want to take this opportunity today to pay tribute to all BAME workers on the frontline in the NHS, in social care, in transport, in council services, in retail and in the police, especially those in my Chipping Barnet constituency. For their sake, and to ensure that we do all we can to protect BAME communities from harm, it is vital that we have intensive research into why covid has had this disproportionate impact.
We also need to get much better at delivering public health messages effectively in a way that works for all communities. As a civilised society, we can no longer tolerate the health inequalities that the covid epidemic has exposed and intensified. The NHS long-term plan has a strong focus on the prevention of ill health. That needs to be turned into results which see people of all backgrounds and ethnicity living longer and healthier lives.
I believe this country has come a long way in recent decades towards tackling discrimination, combating racism and building a more cohesive society that is proud of its ethnic and cultural diversity. I feel that particularly strongly about my constituency and the borough of Barnet, which is one of the most diverse in Britain, but the covid emergency and the cry of pain that has arisen after the appalling killing of George Floyd are wake-up calls—both of them. They are a stark reminder that while we have come a long way, there is still a long road to travel before we can say that everyone in this nation is being given the chance to go as far as their talent and their hard work will take them, whatever their faith, ethnicity or cultural background.
As everyone has pointed out, we have had a long list of reports on this. Now is the time to press on with measures that tackle the problems that those reports have identified and which are holding people of colour back from realising their potential. That includes tackling not just health inequalities but educational under- achievement and the worrying prevalence of young black men in the criminal justice system, and of course it must include doing more to combat racism and prejudice, both conscious and unconscious, structural and individual.
I want to conclude by quoting from a British Tamil intensive care nurse. British Tamils are one of many minority communities represented in my constituency, and I have always been hugely impressed by the immense contribution they make to our national health service. Nurse Thibyaa Mahasivam told the Tamil Guardian:
“Not one of us hesitated to step forward… Yes many of us complained, we had every right to—this was how we were able to unload our stress and worries. But when given the choice to relocate elsewhere the vast majority of us chose to put our lives on the line.”
We owe our BAME doctors, nurses and frontline workers so much. We now need to ensure that gratitude delivers lasting social change that backs aspiration, hope and fairness and gives everyone in this great country, with all its diverse communities, a fair chance to get on and make a success of their lives.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr, Dirprwy Lefarydd. I thank the hon. Member for Brent Central (Dawn Butler) for her trenchant speech in opening this debate.
Members have risen to speak in the House on matters relating to inequality and BAME communities with depressing regularity over the years. I thank the right hon. Member for Chipping Barnet (Theresa Villiers) for saying we have come a long way. I will refer a little to my own history. I am very aware that I am a white woman speaking on this matter, but before moving to Wales I was raised in Eltham, in south-east London. Stephen Lawrence’s murder in 1993 compelled that community—my old home community—to deeply question its values. The Macpherson report in 1999 made 70 recommendations aimed at tackling institutional racism, primarily within the criminal justice system, yet 20 years later and black people in Wales are five times over-represented in the prison population, Asian people are 1.7 times over-represented, and people from a mixed ethnic group are 2.7 times over-represented. This is a significant indicator of the structural racism and inequality in our society.
This is the hard reality of criminal justice and inequality. Our police forces are indeed very different from those of 1993, but disproportionately too many young men and women have blighted lives and spend much of their lives in the criminal justice system. Those figures reveal that all the good intentions of report after review after commission in no way reflect the lived experience of too many black people, and this is the background of today’s debate.
Many hon. Members have spoken already today about the pernicious effect of institutional racism within healthcare and the wider community. Many have questioned why it has taken the covid-19 crisis to make heroes of health and care staff and to show us clearly exactly how many of those frontline workers are from BAME communities. Representing a constituency now in north-west Wales, I hope that one of the messages we can get from this is: look at how dependent we are on people and look at what the outcomes have been for these people. Are we content for our society to ignore this?
Members have pointed out the obvious: there have been enough reviews, enough commissions and enough descriptions of how racism oozes from private attitudes into public experience. Covid-19 and the Black Lives Matter campaign together are reforging our values and forcing us to question our cultural heritage. Thinking again of Stephen Lawrence and all the battles that his brave parents, Neville and Doreen Lawrence, have fought in the intervening years, the people my family knew in Eltham back then did not think of themselves as racists and we did not think of ourselves as racists, but look what happened in Well Hall Road.
People like us would have been horrified to be called racists and people like us are still horrified to be called racists, but that is not enough, is it? It is not enough to be not racist. Our social media feeds tonight will almost certainly include comments that “all lives matter”. Of course all lives matter, but it is not an indictment of anybody for us to be calling for this particular attention. One person’s gain is not another person’s loss. If we are not racists, we must be anti-racist. Do not commission; act on what we already know.
Felicity Buchan (Kensington) (Con)
This debate is very important to me and to my constituency of Kensington. As hon. Members may be aware, Kensington has some of the most extreme health inequalities in the country. The difference in average male life expectancy between my richest ward and my poorest ward is a massive 16 years. Clearly, we need to work on levelling up.
I have a very significant BAME community, and I want to start by paying tribute to my BAME community. Many of them are frontline workers—in the health service, in the police, in education—and many are at the forefront of their communities in providing charity and aid.
I welcome the report from Public Health England and the fact that the Equalities Minister will bring this forward, but I cannot stress enough that this cannot be some academic exercise. There need to be practical plans, and they need to be implemented with a sense of urgency.
One of the key tenets of my general election campaign was equality of opportunity throughout the constituency in health, in education and in housing. I want to stress that this is in all our interests. It is in all our interests that we harness the maximum talent of all our citizens. I am proud to be part of a party that values diversity, and which has a BAME Chancellor of the Exchequer, a BAME Home Secretary and a BAME Attorney General.
Meg Hillier
I take the hon. Lady’s comments in good part, and she is right to highlight the rise of people of all backgrounds in government. However, it still disturbs me and many—most—of my constituents that the Prime Minister under whom she serves has described people as “piccaninnies” with “watermelon smiles”. That is completely against the tone of this debate so far. Does she agree with the Prime Minister, or does she call him out, as we do?
Felicity Buchan
I would agree with the hon. Lady that language is incredibly important in these sensitive times, and it is not language I personally would have used.
I want to talk about levelling up. We talk a lot about levelling up, and normally it is exclusively in the context of the north versus the south, but clearly there are huge disparities in our inner cities. We have already heard that our cities have been worse affected by covid, often due to overcrowding and deprivation. I therefore urge my hon. Friend the Minister to ensure that, when we focus on levelling up, we focus on our cities just as much as our regions. I also want to talk about prevention and screening, which are critical, not necessarily in the context of coronavirus but in the context of mitigating health inequalities. Only if we have proper prevention and screening can we extend people’s lives. I am glad that the NHS has a diabetes prevention programme, for instance; clearly, that has a comorbidity with coronavirus.
In summary, I thank the hon. Member for Brent Central (Dawn Butler) for securing the debate, and I urge the Minister, on behalf of my constituents, to proceed with pace with this review and to ensure that its recommendations are implemented with a sense of urgency.
Apsana Begum (Poplar and Limehouse) (Lab)
I, too, congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing this important debate.
My constituency is one of the most diverse in the country, with a large Bangladeshi population, and it is one of the most deprived, with the highest rate of child poverty in the country—and now we have suffered a high percentage of excess deaths due to covid-19. That is no coincidence. In particular, it is not random that British Bangladeshis are one of the groups most vulnerable to the virus.
Discrimination and structural racism continue to dictate who gets dumped and who gets resources—who suffers events worse. BAME individuals are more likely to work in jobs that cannot be done remotely, obviously increasing their risk of contracting covid-19. Not only are we yet to have justice for workers such as Belly Mujinga, but many are still being forced to work in unsafe conditions. Shockingly, a study by the Royal College of Nursing even revealed that BAME nursing staff experience the greatest PPE shortages.
Data from the annual population survey in 2018 revealed that Bangladeshi workers are disproportionately employed in distribution, hotels and restaurants, and transport and communication, which includes road transport drivers as well as key workers such as sales assistants and retail cashiers. That is one of the many reasons why it is incomprehensible that a full regulatory impact assessment had not been prepared for the statutory instrument relating to health regulations that we considered this week.
Likewise, BAME individuals continue to face an unfair pay gap, on average having lower incomes than their white counterparts. Workers of Bangladeshi heritage have the lowest median hourly pay of any ethnic group and are over-represented in the most deprived neighbour- hoods in England—the very areas where deaths from covid-19 occur at double the rate in more affluent areas. Households with a low income are more likely than higher-income households to be overcrowded and have damp problems, because they cannot afford to move to a larger house or fix damp problems. That is highly relevant as covid-19 attacks the respiratory system, which can be compromised by chronic exposure to damp conditions.
I raised the issue of overcrowding when I spoke in the House all the way back on 18 March. Since then, it has become clear that the probability of being infected by covid-19 is likely to be higher in close-contact settings, and that social distancing and self-isolation rules are much more difficult to uphold in overcrowded households. Moreover, the evidence points towards an increase in the mortality rate among ethnic minority people living in more densely populated, more polluted and more deprived areas, including among key workers.
According to campaigners, more than 40% of the population in my borough, Tower Hamlets, lives in areas with unacceptable air quality, with the situation predicted to get worse. Our children are growing up with reduced lung capacity due to nitrogen dioxide exposure, and they are at greater risk of developing lifelong breathing disorders—the exact symptoms that affect an individual’s vulnerability to covid-19. It is not just that BAME people are held back by economic and health inequalities; research suggests that they also experience poorer access to services and poorer quality of services. Privatisation and underfunding continue to undermine the daily efforts of our health workers. We have demanded urgent measures to safeguard the health and wellbeing of migrants, including an amnesty for undocumented migrants, an immediate suspension of the NHS charging for migrants and the scrapping of the no recourse to public funds policy, yet undocumented migrants, in particular, in my constituency, are still contacting me on a daily basis in despair.
I have been moved and inspired by Black Lives Matters protesters all around the world and I truly hope that the Government are listening. However, last week, as people were calling out the state regarding racism, Islamophobia and discrimination, the Counter-Terrorism and Sentencing Bill received its Second Reading. That Bill delays the long-awaited review of Prevent, which fosters discrimination against Muslim people and introduces significant curtailments of civil liberties, which will disadvantage BAME communities. It is time for some joined-up thinking and plain speaking: from now on, every decision by government or other public authorities needs to consider and act on addressing the needs of BAME communities. Lockdown restrictions should not be eased further unless it is safe for everyone. I continue to repeat over and over again: urgent and immediate action must be taken; the lives of people in my constituency and all over the UK matter.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I thank the hon. Member for Brent Central (Dawn Butler) for securing this debate and the Members who have made such powerful and thoughtful speeches throughout the debate. I wish to focus on the PHE report and, as it is a theme that has emerged from this debate, a call for action.
The recent PHE report on the disparities in risk and outcomes of covid found that being from a black and minority ethnic background is associated with a significantly increased risk of death from covid. That is a deeply concerning and worrying finding. The researchers were able to control for the effects of age, sex, socioeconomic deprivation and, to a limited extent, occupation, as all those things are increasingly understood as risk factors for death from covid. However, it remains unclear whether the effect of ethnicity is in part mitigated by obesity or other health conditions, such as diabetes or high blood pressure, which are known to be more prevalent in the BME community. That is a health inequality in and of itself, but the study was unable to control for it. It was also unable to provide a detailed and granular understanding of the effect of occupation, especially for those working in public-facing or care roles. The report further concludes that research needs to be done in this area. It is absolutely right that the Government are urgently looking into this. By getting detailed scientific data, we can understand better the complicated relationships between these factors and not only shape our respond to covid, but continue to inform future health policy to address the needs of those who are currently being left behind. We have to do that very quickly.
The PHE stakeholder report makes several recommendations for change, which Members have mentioned. The one I wish to highlight in this debate is the need to accelerate efforts to target culturally competent health promotion and disease prevention programmes, as the importance of that cannot be overstated. Broad-brush approaches to interventions may work for the majority, but they can miss out some of the people most in need, and we need to ensure that our public health programme has the right message, at the right time, delivered in the right way, for the individual to exert change.
Many people still face health inequalities in the UK. I have already mentioned socioeconomic deprivation, an important driver of those inequalities that I wish to discuss a little further. Socioeconomic deprivation is a factor in almost all acquired health conditions. I am sure that that is on our minds at this moment, given the possible long-term impacts of the lockdown. We must ensure that everyone has the same opportunities in life, which means tackling inequalities, socioeconomic deprivation and all the factors that drive it, with access to quality education being key.
The coronavirus pandemic is a pandemic of inequalities that hits those who are already worst off the hardest. This Government, and the one before it, have worked hard to tackle health inequalities in the black and minority ethnic communities. For example, one aim of the independent review of the Mental Health Act 1983 was to examine and change the increased likelihood of people from a black and minority ethnic background being detained under that Act. As a mental health doctor, I took part in that review and sat on one of the working groups. That work was to help shape a White Paper and reform our mental health laws for the future. It is now time for us to publish that White Paper and drive forward those much-needed reforms.
This pandemic is likely to have a grave impact on those struggling with mental illness in society, and while I do not know this, I worry that that will disproportionately impact the black and minority ethnic community. Now more than ever is the time for definitive action. We need a public health revolution to tackle the burning injustice of health inequalities in the black and minority ethnic community. We must ensure that the pandemic does not end up entrenching inequality, and the way to do that is to move public health from the margins to the centre of our national health strategy.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
I congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on successfully securing the debate, and I share the concerns raised by the Black Lives Matter movement about the stark inequalities and injustices that are faced by black people and other ethnic minorities. Covid-19 has been devastating in our communities, care homes and hospitals. So many hearts have been broken by loss, and today we have heard powerful statements from the heart.
This debate is rightly focused on the impact of coronavirus on black, Asian and minority ethnic communities—a point extremely pertinent to my constituency. In her maiden speech, my predecessor, Jo Cox, said of Batley and Spen:
“Our communities have been deeply enhanced by immigration, be it of Irish Catholics across the constituency, or of Muslims from Gujarat in India or from Pakistan, principally from Kashmir.”—[Official Report, 3 June 2015; Vol. 596, c. 674.]
I quote Jo Cox in the week of the fourth anniversary of her murder, and she is still desperately missed in this place and in Batley and Spen. That quote perfectly describes the diversity of my constituency. That community is already exposed to underlying health conditions such as diabetes, high blood pressure and asthma, and we now know that there is also a raised risk of death involving covid-19, when compared with people of white ethnicity.
As a proud GMB MP, I know that GMB supports many thousands of ancillary staff, from hospital porters to cleaners, ambulance workers and admin staff, and it has pressed for risk assessments. Sadly, those risk assessments came too late for many staff, and when they did come, they focused on access to PPE and social distancing challenges.
Naz Shah
I think my hon. Friend and I might have been on the EveryDoctor briefing together, which highlighted that although BAME staff make up 17% of the NHS workforce, only 11% of them are in senior management, and that figure then drops to 6.4%. A BMA survey stated that 64% of BAME staff felt pressured into working without PPE, compared with 33% of non- BAME staff.
Tracy Brabin
My hon. Friend makes a powerful comment, and I will get to that point later in my remarks. We must not allow pressure on people to do their job to affect health outcomes for them and their family, and I thank her for that brilliant intervention.
With all that in mind, plus the fact that Pakistani deaths are 2.9 times as high as deaths among white British people, it sadly seems as though my diverse constituency is at a greater risk of being disproportionately affected by covid-19. It is therefore with some optimism and relief that I note the most recent statistics, which show that the Kirklees local authority area remains one of the lowest affected by covid per size of population, with 179.6 cases per 100,000 people. On Tuesday this week, no new deaths were recorded at Mid Yorkshire Hospitals NHS Trust over the previous 24 hours. These low figures clearly reflect the sacrifices of the people of Kirklees and of Batley and Spen, who listened to Government advice and followed the guidance to protect our NHS. I would like to thank the leadership of Kirklees Council and of Mid Yorkshire Hospitals NHS Trust, who have worked tirelessly to keep the public and stakeholders informed so that we can all work together to keep people safe.
One serious worry is that the results of the covid testing regime are being held centrally and not shared with the trust, which could make the most of the data in an increasingly fluid situation. That does seem extremely odd. Our NHS trust is the local expert and the institution that people look to to keep them safe, so if it could factor in testing—how many tests are done and in what geographical location—and build a response based on the breakdown and composition of positive results, we would all be better served.
The impact on my community goes further than falling ill. The economic impact also affects my BAME community more deeply than others as we are a large manufacturing region and manufacturing is particularly exposed in an economic downturn. As the Institute for Fiscal Studies data showed only this week, workers in shut-down sectors are more likely than average to be BAME women and part-time workers, with 15% from BAME backgrounds in comparison with the workforce average of 12%. Let us not forget that these are a group of workers already disadvantaged in the labour market, with the ONS showing pre-covid BAME unemployment at 6.3% in January to March 2020, compared with 3.9% of the whole population. Anxiety about money and job prospects will also have a profound impact on their mental health.
As we know, according to the report from Public Health England, racism can make people from BAME backgrounds less likely to ask for help or insist on PPE. Some 90% of the doctors who died during the pandemic were from BAME backgrounds. Doctors from these communities were three times more likely to say that they had felt pressured to work without protective equipment. We must do more to tackle institutionalised racism in the care sector and the NHS. For that to happen, we need to have better data reporting, to support those in low-paid jobs to speak up, to develop a risk assessment for BAME staff members exposed to large numbers of the general public, to deliver culturally sensitive messaging across the community and to intensify health messages around the conditions that can lead to vulnerability.
Before I finish, let me say that each and every one of the statistics has family and friends mourning their loss. I would like to pay tribute to the wonderful, thoughtful and very well liked Dr Nasir Khan, who worked on one of the medical wards at Dewsbury and District Hospital in my constituency. He fell ill with the virus last month and, as a resident of Bolton, was admitted to Bolton NHS Foundation Trust, where he sadly died. His son made a moving tribute to his father. He ended with the words:
“We strive to achieve the greatness that was my dad and fulfil the dreams he has left behind.”
Let us hope that Dr Khan’s sacrifice was not in vain, and that Government will now implement the changes needed to ensure that black, Asian and minority ethnic workers are not allowed to be collateral damage in this fight.
Marco Longhi (Dudley North) (Con)
May I start by thanking the hon. Member for Brent Central (Dawn Butler) for securing this debate, while also apologising to her for missing the initial stages of her speech?
Last week in this Chamber, I spoke of forgotten people, particularly in my constituency of Dudley North. Sometimes, it takes an extraordinary event to bring to light weaknesses and underlying problems that perhaps would otherwise simmer below the surface, unseen, leaving people to suffer in silence. So many have lost family, friends and colleagues to this disease, and nearly all are experiencing the impact that this disease is having on their communities, with all the significant social, physical and mental health impacts and complications that come as collateral to the disease.
I want to reiterate today the need to level up support and to listen to and help our forgotten communities—communities that are impacted disproportionately socially and economically and that might have poor experiences of healthcare or at work that mean they are less likely to seek care when they need it or to speak up when they have concerns about their safety and welfare at work.
My election in December gave me an opportunity to make new friends. I think of Haji Malik, who has lived in Dudley for many, many decades, a pillar of the community there. Meeting him and getting to know him and his family, and many others, has been a very real learning experience for me, which I want to continue with as far as lockdown measures allow it.
What is clear to me, having visited Russells Hall Hospital in my constituency on several occasions, is the very noticeable proportion of staff who are from BAME communities, so the very people we are identifying as being at the greatest risk from covid-19 are the ones fighting this disease on the frontline in our health service. I very much welcome the suggestions in a report by the Royal College of Psychiatrists, which highlights structural inequalities such as difficulty in accessing leadership teams and being heard, fewer opportunities for non-mandatory training, and higher risks of being bullied. In the longer term, steps towards improving organisational culture and capability will also enhance risk management. This is a leadership question that starts in this place, and it should then be delivered in every trust board in the country and, indeed, in every other institution in the country.
While not comprehensive, there is a lot of data in the recently published Public Health England report, which hon. Friends have already mentioned, that I hope will help our scientific community to better understand and fight this awful disease, to protect the most vulnerable, and to help our hospitals cope with potential future pandemics. I am encouraged that PHE has made a series of recommendations that could make a significant difference in improving the lives and experiences of BAME communities specifically. The Government’s commitment to deliver £33.9 billion of investment in the NHS—the largest cash boost in its history—can make reducing health inequalities possible by delivering opportunity for change. But change needs to be large-scale and transformative, and action is needed to change structural and societal environments such as homes, neighbourhoods and workplaces, not solely focusing on individuals.
We have a legal duty and a moral responsibility to our constituents to reduce inequalities. There are real, practical measures we can take to help tackle these inequalities and help the victims. The Royal College of Psychiatrists has suggested that every trust carry out a risk assessment on the impacts that covid-19 has on its BAME staff. It has warned of the potential for long-term psychological impacts on healthcare staff, and specifically BAME staff. I would be keen to hear my Government colleagues’ plans to support this suggestion and to support the long-term mental health and wellbeing of our healthcare workers, particularly BAME staff, once this initial pandemic is over.
Claudia Webbe (Leicester East) (Lab)
First, I declare that I am a member of the Backbench Business Committee. I thank my hon. Friend the Member for Brent Central (Dawn Butler) for bringing this debate to the House today.
As the representative of Leicester East, one of the most diverse constituencies in the country, it has been extremely concerning to see the disproportionate impact of the coronavirus on African, Asian and minority ethnic communities. This was proven by the Government’s own report, which they shamefully published only after repeated pressure, and which does not outline any protective measures to deal with the disproportionate impact of covid-19. In a constituency like mine, which has a significant number of people from the affected communities, I worry about the processes of tracking, testing and so on, and whether that will be put right, because we can imagine what impact a second outbreak would have on such constituencies.
The Office for National Statistics has found that black people are 1.9 times more likely to die of covid-19 than white people, people of Bangladeshi and Pakistani descent are 1.8 times more likely to die, and people of Indian descent are about 1.5 times more likely to die. Those figures reflect the severe racial disparities in our economy.
We already know from a Resolution Foundation think-tank estimate that black, Indian, Pakistani and Bangladeshi employees experience an annual pay penalty of £3.2 billion. Analysis from Public Health England shows that once in hospital, people from African, Asian and minority ethnic backgrounds are also more likely to require intensive care. Those communities accounted for 11% of those hospitalised with covid-19, but 36% of those admitted to critical care.
Many have tried to dismiss the imbalance in deaths as being explained by cultural or even genetic factors. I have been dismayed by some of the information that has come through my inbox about what people need to do to tackle these genetic problems. Yet discrimination is not about that; it is deeply ingrained in the social, political and economic structures of our economic system. The scourge of institutional racism results in unequal access to quality education, unequal access to healthy food and unequal access to liveable wages and affordable housing, which are the foundations of health and wellbeing. That is the context in which the coronavirus crisis is operating. The virus itself may not discriminate, but our economic and social system certainly does.
Existing racial and class inequalities coupled with inadequate Government support mean that working-class communities, migrants and African, Asian and minority ethnic communities are at greater risk from exposure to covid-19. The severe racial disparities in our economy mean that those communities are more likely to fall through the cracks in the Government’s financial support and therefore more likely to be forced to work in unsafe conditions. A decade of cruel austerity has deepened the racial and class inequalities that exist in our society. Last year, a UN Human Rights Council special rapporteur reported on discrimination in the UK. We know that one of the grim findings was:
“Austerity measures in the United Kingdom are reinforcing racial subordination.”
NHS staff are at considerable risk from the virus, as we know. It is vital that we repay the extraordinary contribution of frontline workers with a permanent extension of migrant rights. That means an end to the hostile environment. That means shutting detention centres and ending them, and it means granting indefinite leave to remain to all NHS workers, to carers and to their dependent families. Recent reports indicate that migrant NHS workers and carers are still being charged for using the health service that they work in. That is despite the Government saying that they would end that.
As the inspiring crowds of protesters across the country have shown in recent weeks, it is crucial that we in the UK do not assume that we are immune from the disease of institutional racism. The failure of the Government to outline any protective measures, despite being evidentially aware of the disproportionate impact of covid-19, is yet another instance of the institutionalised neglect of African, Asian and minority ethnic communities.
Mr Deputy Speaker (Mr Nigel Evans)
Order. We have to move on; the time limit is up.
Jeremy Corbyn (Islington North) (Lab)
I congratulate my hon. Friend the Member for Brent Central (Dawn Butler), who is my great friend, on securing this debate and on the incredible work that she has done—not just today, but over many years—to expose racism, inequality and injustice in our society, and to persuade us that we should all learn and teach history much better in this country in order to conquer the inequalities and injustices faced by so many people.
There have been many absolutely brilliant speeches this afternoon, for which I commend colleagues. I particularly want to express my sympathy to another great friend, my hon. Friend the Member for Slough (Mr Dhesi); to not be able to attend the funerals of close family friends, and not be there to carry the coffin, is something that will live with him for the rest of his life and live with the family forever more. This crisis will have a huge effect on people’s lives and mental wellbeing for a long time to come.
The motion that my hon. Friend the Member for Brent Central so excellently crafted requires the Government to respond to this debate. I hope that when the Minister replies, the Government will give us some indication that they do take seriously the health inequalities that have been exposed by the covid crisis.
Some 40% of our doctors and 20% of nurses come from BAME communities, as well as a very large number of people working in social care and a group of people who were decried as unskilled migrants by previous Home Secretaries: the cleaners who clean our care homes, hospitals and schools. They are the heroes in all this because they are the ones who are helping to keep us safe. This virus has exposed the necessity of communities working absolutely together, but it also shows a disproportionate number of deaths among people from the BAME community, who are 50% more likely to die from covid-19 than those who are not from the BAME community. The same figures apply for admissions to emergency care and intensive treatment units in hospitals.
The health inequalities exposed by the pandemic are not actually new. Professor Douglas Black’s report was published in 1980—40 years ago—and exposed health inequalities in Britain. The Tory Government then tried to suppress that report. I hope that no Government ever try to suppress the levels of knowledge of inequality that exist in our society. As colleagues have pointed out, it is low wages, overcrowded private rented accommodation and unsafe working conditions that lead to under- achievement in schools and to those children having great difficulty getting through.
A couple of days ago, I was talking to a headteacher of a primary school in my constituency. More than three quarters of the children in her school are entitled to free school meals. The school has done its best to deliver food to those children during the crisis. Teachers also want them to learn online, but many of the children do not have access to computers or laptops. If they do, there is one for a very large family and the children end up squabbling over who gets to access it. The school is therefore spending money posting lessons out to children. That is the effect of inequality and injustice in our society.
Life expectancy is shorter for people from BAME communities, and there is a lack of community facilities in so many areas. I want to say thank you to all our public service workers for what they have achieved and for the way in which they have come together. I also thank the volunteers who have come together in the food banks and food hubs, such as the one that I have been working on in my constituency over the last few weeks. I also say a special thank you to the Whittington Hospital in my constituency for its work. Last week, the staff there reported no new covid cases at all; well done them.
Covid has exposed inequality in our health service and society, and the injustice in our society. Post covid, let us invest for the future and not cut with yet another new regime of austerity. The virus has also exposed global health inequalities on a massive scale, with the poorest in the poorest countries suffering the most, as the lack of access to any health facilities makes life very difficult and the quality of life that many have makes social distancing absolutely impossible. When the World Health Organisation calls for universal access to healthcare, the response of the west is too often to say, “Introduce a payments scheme or an insurance-based health service” or something like that. No—we are all at risk. If anyone is at risk anywhere in the world, surely that has to be the lesson from this covid crisis; universal healthcare is very important.
In the last few seconds, let me say this: there are 65 million people on this planet who have no home to call their own, and no country to call their home. They are refugees or internally displaced people. By and large, they have no access to healthcare. They are at a greater risk than absolutely anybody else. Let us ensure that our approach to the coronavirus crisis is fair and just in this country, and that we have international trade and development policies that tackle health inequalities and injustices across the world to give us all a better and safer future.
Sam Tarry (Ilford South) (Lab)
I thank my right hon. Friend the Member for Islington North (Jeremy Corbyn) who, as we all know, has campaigned so passionately on many of these issues for a very long time.
This is a deeply troubling moment for many minority communities, not least in my constituency of Ilford South, where minority communities—black communities, Asian communities, people representing nearly every corner of the globe—represent over 53% of the population, and growing every year. Ilford South has a tapestry of communities that coexist, that work together. Through the recent covid crisis, I have had heartening moments with local people, such as when the local gurdwara has provided over 4,000 meals a week to help the vulnerable and those in need. People have been working together—churches alongside mosques alongside synagogues. And yet it is our local community that has suffered so badly. On my Facebook page, I see people from the Bangladeshi community putting up posts asking us to make prayers for their friends and family members who have lost loved ones. The impact has been difficult and dark for many people in my community.
So many people have taken the time to reach out to me, to write in to me—I have had hundreds of emails and letters on this issue. Not just about the death of Belly Mujinga, who was a member of my former union, the TSSA, and rightly took the time, a few weeks ago, to challenge Govia Thameslink directly over the lack of protective equipment and the way that she was forced to go and work on the platform, rather than safely in the ticket office where she normally worked. So many people have lost loved ones during this pandemic and in some cases, I am afraid to say, it appears to be avoidable. Many more have been terrified to leave their home for fear of contracting this deadly disease.
Actually, in many BAME communities, the proportion of people who work in frontline services, whether it be bus drivers or people working in the NHS, is incredibly high and people are fearful, and they are angry that they and their communities have not been prioritised by the Government in the way that they should have been. These are rational fears. In my Bangladeshi community —my own friends—the risk of death has been double that of people of white British ethnicity. In other communities—Indian, Pakistani, other Asian, Caribbean, black communities—the risks have been 10% to 50% higher than for white British people, and yet many of those people were the first to be put on furlough, the first to lose their jobs, and have had the greatest burden in terms of how many they have seen die from their own community.
There are many factors behind these deaths. One would appear to be a lack of support, in that they often feel too scared to speak out. But I have been working on it, and this week we are having another Zoom meeting—something that has seemed ubiquitous recently—and I am expecting hundreds of people to join up from local black communities, to talk about these issues. There will be a moment of self-reflection for those of us who have real privilege, about what we can do to be genuine allies to communities facing oppression and always finding themselves at the bottom of the pile. I look forward to that, and I thank the hon. Members who will be joining me for that call later this week.
I would like to talk a little bit about one of the cases that I have had about frontline health care staff. You know, we were quite proactive in Redbridge. When we realised that many of our care homes did not have the PPE that they needed, we sought out what in old-fashioned parlance might be described as a local rag trade company —a manufacturer of garments—and begged them to turn their machinery to producing the garments needed for our care homes, so that people working there could have the protection that they needed. Yet we found too often, time and again, that frontline workers were sent into the firing line, despite being ill-equipped and despite being in vulnerable categories. That is still so unacceptable.
I think that many of us will look back on this period and ask what more we could have done, and our Government could have done, to protect these communities, which have borne such a heavy toll.
Over the past few months, one thing that I have found particularly difficult has been the increase in not just fear but racism—that some communities have almost been targeted, perhaps because of online rumours that their community is more likely to be bringing in this awful disease. That is totally unacceptable. From the Bangladeshi community to the Chinese community, so many communities have faced racism. It has been really tough for my own family. My son happens to be mixed-race Chinese, and some of the comments that his mother has had have been pretty appalling.
We as a nation need to put those who too often find themselves at the very bottom to the very top of our priorities. Comments from the Scientific Advisory Group for Emergencies and decisions by people such as Dominic Cummings have meant that the trust that even some of my constituents had in the Government has been utterly eroded. We can never have a situation—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am sorry, but we have to move on. I call Christine Jardine.
Christine Jardine (Edinburgh West) (LD)
Thank you very much, Mr Deputy Speaker. It is a pleasure to follow the hon. Member for Ilford South (Sam Tarry). I add my voice to those paying tribute and thanks to the hon. Member for Brent Central (Dawn Butler) for introducing the debate.
I have to say I am disappointed and ashamed that we have got to this stage in our country. Here we are in 2020, and it has taken a pandemic like covid-19 and the protests from BLM to make us recognise something that was in front of us all along. Covid-19 has certainly shone a very stark spotlight on our society, and shown quite clearly that there are cracks that we may have thought we had mended, and inequalities that we hoped we had addressed. There are still gaping holes, and inequalities that have gone not just unaddressed but largely unacknowledged.
Our society’s acute emotional response to the disproportionate impact of covid-19 on BAME communities has been perhaps the one saving grace in this shocking failure to protect our communities, so many of whom were at the forefront of tackling the virus and have paid the ultimate price. The impact of covid-19 is only part of that unacceptable picture. Another is the economic crisis, which may grow and which is also hitting our BAME communities particularly hard. They are disproportionately likely to be on zero-hours contracts. Only 31% of BAME workers have been furloughed; 20% have already lost their jobs.
If the Government are serious about tackling the systemic racial inequality that is now absolutely and undeniably clear in this country, what we need is not just another review setting out specific points. There are immediate steps that they could take. They could scrap the hostile environment. They could stop suspicionless stop-and-search. They could amend the Domestic Abuse Bill. There are so many steps that they could take now. The review is a first step, and I hope that it will make recommendations, but we already have 35 recommendations in the Lammy report, 110 in the Angiolini review, 30 in the Windrush lessons learned review, and 26 in Baroness McGregor-Smith’s review. We have reports, reviews and recommendations on the shelves in Whitehall, which are weighed down with them. What we need now is action.
More than that, I believe we need a race equality strategy for the whole of the UK. If this Government are serious about tackling racial injustice, that is what they need. The commission may be a first step, and it shows that the BLM protests are having an impact, but it must not be a way of avoiding tackling the issues that they have brought to light. We need that racial equality strategy. In truth, we needed it decades ago. So often I have believed that we were turning a corner. So many of us hoped—indeed, believed—that the Macpherson report after the murder of Stephen Lawrence would prove a turning point. We now realise that despite all the work that has been done by so many people, there is so much—too much—still to do. We cannot afford another false dawn in this country.
I am disappointed that I cannot pay tribute to the BAME community in my constituency or anywhere in Scotland and talk about the impact on them, because National Records of Scotland does not record deaths by ethnicity—it is voluntary—so the impact could be anywhere between 1% and 10%. I find it unacceptable that the Scottish Government do not have the figures to recognise that and address the issue in the way that we are at least attempting to in Westminster. I ask them to do that now. In fact, I ask our Ministers here at Westminster to impress on the Government in Scotland the need to act now, so that we can have a cross-government race equality strategy like the one recommended by the Equality and Human Rights Commission, effective across the United Kingdom.
This has been a difficult time for all of us. Standing here as a white woman, I acknowledge that, while I might sympathise, I cannot fully feel the injustice that so many of our communities are feeling today. But I do know that we all feel that this must be our moment for change. We have to change our society, and we have to change it now.
Ms Lyn Brown (West Ham) (Lab)
I am grateful to my hon. Friend the Member for Brent Central (Dawn Butler) for giving us the opportunity to speak about this today. It is a pleasure to follow the sage, sad and passionate contribution from the hon. Member for Edinburgh West (Christine Jardine).
In Newham, we have statistically the second highest mortality rate from covid in the country. We have lost Ramesh Gunamal, who worked on the front desk at Forest Gate police station. We have lost Dr Louisa Rajakumari, who taught English at Kingsford Community School. We have lost Dr Yusuf Patel, a much missed GP from Forest Gate, and Abdul Karim Sheikh—sometimes a political opponent, mostly a friend, and a man always dedicated to the best for our communities. Those are just a few of the people who Newham and West Ham mourn deeply.
We know that deprivation doubles the risk from covid, and Newham is deprived—of that, there is no doubt. Like many of my friends’ areas, we have beautifully diverse communities, which means that they have been hurt massively by the pandemic. Those from our Bangladeshi community have twice the risk of death, and that is more than 12% of my constituents. Those from the Pakistani community have a 44% higher risk, which is 10% of us in Newham. Those from the Indian community have a 22% higher risk, which is 15% of us in Newham. Those from the black Caribbean and black African communities have a 10% and 6% higher risk, which is 4% and 11% of us in Newham.
Some 73% of us in Newham are from an ethnic minority, so we need this Government to act before we see a second wave. We need action so desperately that I have broken shielding to be here today so that I can demand it. The fact that I had to do so is wrong, but that is not nearly as wrong as the denial of equal protection for my constituents from this terrible virus.
I have written to the Minister for Women and Equalities, the Health Secretary and others about this twice. The first letter was sent more than six weeks ago. I do not think the urgency of my language could have been misunderstood. I wrote again two weeks ago, expressing, again, a desperate need for action. I have received absolutely no response of value. However, I was pleased to hear yesterday that there is finally going to be an urgent review of evidence and possible action on vitamin D deficiency. I hope we get that very, very soon, because if there is a second wave and we have constituents dying for the simple lack of a vitamin supplement, the Government know there will be a price to pay.
We know that it goes further than vitamin D. Staggeringly, despite the fact that black and minority ethnic communities are at greater risk of death, they are under-represented in clinical trials. Why? What possible excuse is there for that? In my humble opinion, it is incompetence, at the very best.
Let us look at the Government’s approach to covid-19 across this pandemic: it has been about slowing down its spread, which depends on two weeks’ full isolation. But in poor communities where there is no spare cash— there are no savings—excessive living costs have to be met week in, week out. Frankly, we all know that statutory sick pay just is not enough to keep people afloat, so sick people go to work. They put themselves at risk, they put the people on the tube with them at risk, they put the people who are on buses with them at risk, and they put their co-workers at risk, all because they are not paid enough money to enable them to stay at home like the rest of us can do, and recover. The Government have not even suspended the no recourse to public funds policy so that people can isolate. Why? Why do they not understand what these actions mean?
In Newham, many of us live in overcrowded homes—even my home feels a bit overcrowded at the moment with just me and my husband—which means that people at home cannot self-isolate. I accept that the Government are not going to be able to eliminate overcrowding overnight, but it would be great if they made a start. The fact that they cannot means that the other policies, such as track and trace, are really important. If we have a second wave, as I fear, and black and minority ethnic communities die in numbers out of all proportion again, we will be holding the Government to account for those excess deaths.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing this important—indeed, essential—debate. Her opening speech was incredibly powerful. She set out eloquently the relationship between the Black Lives Matter movement and black key workers dying. She showed the connection between George Floyd’s long, slow death and his dying words, and Belly Mujinga dying of covid-19 here.
My hon. Friend said that being black is a pre-existing condition. It is a condition that I celebrate—I am proud to be a black, Geordie, Nigerian, Irish Brit—but it should not be a co-morbidity. My right hon. and hon. Friends have said so much that is so true, so eloquently—one of the joys of being a Labour MP is the support of my brothers and sisters—that I shall focus my remarks on three things: what covid-19 tells us about the reality of racism today; what it tells us about the failure of this Government on racism today; and what it tells us what about what the Government should do.
First, let me address the realities of structural racism today. Like the Home Secretary, I experienced significant racism as a child, including name calling and worse, although I was supported by a strong community, family and school. Over the last few years, name calling, physical abuse and hate crimes have unfortunately risen, but when the name calling stops, that does not mean that racism has gone away. It is instead in the structures and systems that define how we live. That is what we mean by structural racism: crowding BAME people into worse housing; putting up barriers to BAME people going into higher-paid professions; making it more likely for BAME people to live in deprived areas and have to take up precarious jobs; and putting BAME workers in the lower-paid roles in the NHS, while the higher-paid upper echelons remain snowy white. Some 14% of the UK population are black, but 34% of those who work in intensive care are BAME.
The statistics that demonstrate the levels of inequality that still exist in our society are one of the reasons why the Black Lives Matter movement has such resonance here. Some 25% of BAME nursing staff have no confidence that their employer is doing enough to protect them from covid-19. BAME staff networks in the north-east have called for the risk assessments to which they are entitled to ensure they are protected.
That is the reality of racism today, and covid illustrates the Government’s response to it. Whether it is a Foreign Secretary who thinks that taking the knee is from fantasy fiction or a Prime Minister who speaks of “smiling piccaninnies”, the Government have demonstrated a lack of interest in the racism that we face. We do not need another report; we do not need another investigation. We have enough recommendations. This Government need to take action. Covid-19 has shone a light on the discrimination that so many black and minority ethnic people suffer in this country. The Government need to act to change that and ensure that it does not continue, as it has for so many years. We do not need another review.
I am proud that, in Newcastle, our community stands strong together in its different identities and works together. I was deeply saddened by the violence in our city this weekend. Valuing black lives is not about devaluing white lives; it is about asking why black lives are more likely to be lost. The Government have waited far too long to look for an answer to that question. They must now take action to ensure that we are not in the same situation in a year, five years or 10 years.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I am delighted to speak in this debate, and I want to thank my hon. Friend the Member for Brent Central (Dawn Butler) for securing it. I am proud to represent the diverse constituency of Vauxhall in Parliament, not least because my constituents have fought on the frontline of this pandemic, including at St Thomas’s Hospital, where our Prime Minister was treated so well. But tragically, we have seen more than 500 deaths in my borough of Lambeth as a result of coronavirus, and 40% of those deaths have been black, Asian and minority ethnic people. Those deaths are not just statistics. They are mothers, fathers, brothers and sisters. They are sons and daughters and they are grandparents. A number of my constituents were not able to say goodbye to their loved ones.
Public Health England has found that the death rate from covid-19 is much higher for people from BAME backgrounds than for white ethnic groups. It has also found that black males are 3.9 times more likely to die than white males, and that black females are 3.3 times more likely to die. This is not a coincidence. We should not be surprised or devastated by these statistics—shocked, yes; surprised, no. The report shows that BAME communities continue to catch covid-19 and that they are more likely to live in overcrowded housing, more likely to live in deprived areas and more likely to have jobs that expose them to this deadly disease. I might add that it is those crucial jobs that have kept our country going over the last few months: the bus drivers, the nurses, the midwives, the care workers, the taxi drivers and the security guards. They are really crucial jobs.
Nor should we be surprised to read in the report that the pre-existing structural inequalities that BME communities face are a factor in those high death rates. For me, the most damning sentence in the report reads:
“It confirms that the impact of COVID-19 has replicated existing health inequalities and, in some cases, has increased them.”
It is there in black and white. Those deaths cannot and should not be separated from the tragic death of Belly Mujinga here in the UK, or from the shocking death of George Floyd in the USA. Those deaths cannot and should not be separated from the deeply entrenched structural inequality and racism that our BME communities continue to face every single day. We cannot begin to tackle the disproportionate impact of this virus until we acknowledge the deep-rooted cause and the deep-seated racism that still tragically exists in 2020. That is the racism that I and many other colleagues on both sides of this Chamber have faced, and we have spoken about it in this Chamber. We continue to experience that racism.
The report also highlights the direction that we should be taking. It concludes:
“These results improve our understanding of the pandemic and will help in formulating the future public health response to it.”
It goes on to say:
“It seems likely that it will be difficult to control the spread of COVID-19 unless these inequalities can be addressed.”
They have to be addressed. If the Government are really serious about tackling this real issue and making sure that we have concrete action to tackle racial inequality in our society, they must show leadership by acting on the failures that have led us to this debate today.
Kim Johnson (Liverpool, Riverside) (Lab)
I would also like to thank my hon. Friend the Member for Brent Central (Dawn Butler) for organising this debate this afternoon. As the first black MP for Liverpool, I know only too well the impact of deeply entrenched systemic racism and inequalities, and I welcome the opportunity of speaking in this important debate today on the level of deaths from covid-19 among black communities. The unequal impact is linked to a number of factors, including structural racism, discrimination and health inequalities increasing the risk of serious illness. The Office for National Statistics reports that black men and women are four times more likely to die from covid-19 than white men and women, and it is clear that covid-19 did not create these health inequalities, but rather that the pandemic exposed and exacerbated long-standing inequalities affecting black communities in the UK.
In “Health Equity in England: the Marmot review 10 years on”, Professor Marmot stated that health inequality was
“even worse for minority ethnic population groups”,
and commented that the pandemic will entrench and make worse existing inequalities. Recent analysis suggests that black individuals account for 63% of all NHS staff deaths from covid-19, including 64% of deaths among nursing and support staff and 95% of deaths among medical staff. Black people are more likely to work in occupations with a higher risk of covid-19 exposure, more likely to use public transport to travel to work and less likely to access the necessary PPE to protect themselves.
Race equality has been firmly placed on the agenda in the past couple of weeks, but we all know only too well that countless reports and commissions tell black people what we already know: that we are disadvantaged simply because of the colour of our skin. I say enough is enough. Now is the time for action and change. I do not want my grandsons having the same debate in years to come. Public Health England has published two reports now and the Government are setting up another commission that will report back at the end of the year. They must act now to reverse these long-standing, systemic inequalities and move form rhetoric to reality.
Stephen Timms (East Ham) (Lab)
I agree with my hon. Friend the Member for Liverpool, Riverside (Kim Johnson) and congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing this debate on how she opened it.
I want to focus on one point. The Public Health England review says:
“People of BAME groups are also more likely than people of white British ethnicity to be born abroad, which means they may face additional barriers in accessing services”.
I want to highlight one barrier in particular, and that is the “no recourse to public funds” restrictions on leave to remain, which has already been touched on this debate. We are talking about families who have leave to remain in the UK, who are law-abiding and hard-working, often with children born in the UK and who may well be British nationals and have British passports. Typically, they are on a 10-year route to securing indefinite leave to remain, and in the meantime they have to apply four times, getting two and a half years to remain each time. Throughout that 10-year period, when they are working here, typically very hard, doing exactly the kinds of jobs we have been talking about, they have no recourse to public funds.
That is a formidable barrier that those people face. It is exactly the kind of barrier that the Public Health England report refers to. I asked the Prime Minister yesterday about this, and I asked him about it at the Liaison Committee three weeks ago. His answer then was that hard-working families in that position should have help of one kind or another. I absolutely agree. Unfortunately, he did not say that when I asked him about it yesterday, but it is what he said to me at the Liaison Committee, and he was right on that occasion. The problem is that those families are not getting that help.
It comes as a shock to a lot of people to learn that the parents of children who have been born in the UK and might well be British nationals cannot claim child benefit for them, because no recourse to public funds excludes that. The families cannot apply for universal credit either, or access the safety net that so many people have had to depend on during this crisis—2 million additional people have been claiming universal credit since the beginning of the crisis. That safety net is not there for people with no recourse to public funds. That has created a very serious problem of destitution, a huge increase in food bank demand in many parts of the country and, in my area, the return of something I never thought we would see again: soup kitchens, where people are handing out free cooked food just to keep others alive.
Meg Hillier
My right hon. Friend raises a very important point, and a very pertinent point in our London constituencies particularly. No recourse to public funds means no housing benefit, and it is impossible pretty much to rent privately on a low wage, or even quite a good wage, in my constituency. Does he agree that that underlines how this policy is now out of date?
Stephen Timms
I do agree, and I am grateful to my hon. Friend for making that point.
How many people are there in this situation? The Home Office does not know to how many people it has given the status and refuses to answer even the most basic questions on this subject.
Last month, I asked the Home Office a written parliamentary question: how many people were given leave to remain with no recourse to public funds in 2019? I received the reply on 20 May:
“The information you have requested is not assured to the standard required by ONS for publication and as it would be too costly to do so, we are unable to provide it”—
in other words, “We’re not going to bother answering the question.” I have asked the UK Statistics Authority what it makes of that answer and the attempt to hide behind the Office for National Statistics. I am looking forward to receiving the chair’s reply, which will arrive, I believe, quite shortly. Fortunately, the Children’s Society has made an estimate, drawing on the work of the Migration Observatory at the University of Oxford. Its estimate is that at least 1 million people in the UK have leave to remain, but no recourse to public funds, including over 100,000 children.
I think most people in this situation are overseas students who have leave to remain, leave to study, but no recourse to public funds. I must raise the question: is it really right that we want to completely abandon those who—in many cases, at great sacrifice to themselves and their families—have come to the UK to study? They have been supporting themselves through working and their work has stopped. They have absolutely nothing, and they are depending on the soup kitchens I have referred to.
There is a form on gov.uk, which appeared on 3 April, allowing people to apply to be exempted from no recourse to public funds. The Home Office refuses to answer questions about how many people have applied, how long it is taking it to answer those applications and what proportion of the applications are successful, but from the experience of my constituents, it seems to be taking between two months and two and a half months to respond to applications to be exempted from no recourse to public funds. If someone is destitute, they cannot be expected to wait for a couple of months until a struggling Government Department gets around to deciding whether they might be able to get some help. I have had one person in touch with me who has been waiting since the middle of February for an answer.
As we have already been reminded by my hon. Friends, some people have had to carry on working during this crisis who should not have done for their own sake and for the sake of wider public health, but they have had no alternative because it has been the only way they have been able to achieve any sort of income. What would any Member of this House have done in that circumstance, with no money at all?
Finally, I want to pay tribute to organisations in my constituency that have been helping, including the Bonny Downs Baptist church and the Bonny Downs Community Association, a long-standing food bank that has had a massive increase in demand; the Masjid Ibrahim mosque; the Malayalee Association of the UK, representing people from south India; the London Tamil Sangam; and my friend and colleague Councillor Lakmini Shah, who has been supporting—single-handedly, I think—several dozen families in this position. The no recourse to public funds restriction must be suspended for the duration of this crisis.
Zarah Sultana (Coventry South) (Lab)
I congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing this very important debate.
I would like to begin by marking two anniversaries that speak to the heart of this debate. The first was on Sunday, which marked three years since 72 lives were cruelly cut short in the Grenfell Tower fire. That night will forever be seared in my mind—the blazing inferno of the tower, the live-streamed videos of victims reciting prayers before they passed away, friends and families desperately searching for loved ones, the firefighters exhausted and shellshocked having done everything they could and the multiracial working-class community coming together to support one another.
What happened at Grenfell was a tragedy, but it was not a natural disaster. It was avoidable and foreseeable. Residents raised concerns, but they were not listened to. They were not listened to because they were working class, because many were migrants and because the community was majority black and brown. That is why the structures of power neglected them, exploited them and discarded them. It shames this Government that, three years on, survivors are still living in temporary accommodation, and 56,000 people are still living in homes wrapped in unsafe, flammable cladding.
The second anniversary, which also speaks to this topic, is on Monday. That day marks 72 years since HMS Windrush arrived in the UK. Black Britons came to the UK and helped to rebuild this country after the war, and we know how they were repaid. A Government determined to stoke division and target migrants created the racist hostile environment and had black and brown people detained, deported and denied their rights. Again, the structures of power neglected black and brown people, exploited them and discarded them. Even now, compensation totalling just £360,000 has been paid to just 60 victims of this scandal, so let us call it what it is: systemic racism, and the disproportionate deaths of black and brown people from coronavirus is a third striking example of this.
The evidence is clear that people with Bangladeshi backgrounds face double the risk of dying from covid-19 compared with white people, while people from Chinese, Indian, Pakistani, Caribbean and other black ethnicity backgrounds face a 10% to 50% higher risk of death. This is not some innate vulnerability of black and brown people. It is not something natural—it is social. It is because black and brown people are disproportionately poor and that makes them more likely to have ill health. They are disproportionately in overcrowded housing and are therefore more likely to spread this deadly disease, and disproportionately in jobs exposed to the virus, from being over-represented in the NHS, to being in the low-paid, often precarious, frontline key worker roles. Again, what we see is a system that neglects black and brown people, exploits black and brown people, and all too tragically discards black and brown people.
These are neither discrete incidents nor aberrations from the norm. They are reminders of what is painfully clear to many people outside this Chamber: that race and class are the dividing lines between two very different Britains. The people of Grenfell Tower lived and died in the shadow of immense wealth in Kensington and Chelsea. The Windrush scandal exposed the second-class citizenship for black and brown people in Britain today and the contempt with which migrants are treated. The coronavirus pandemic has revealed the fatal inequities that are rife within our society and are truly a matter of life and death.
This systemic racism is not incidental. It has a history, and thanks to the action of Black Lives Matter campaigners, light is being shed on this history. It is a history of colonialism and conquest, empire and enslavement, and inequality and exploitation. It is a history of the rich and powerful using their influence to maintain control and spread hate. Today, their newspapers run stories spreading fear about migrants arriving on our shores. Tomorrow, it might be about Muslims or young black men or Gypsies or Roma, and it is done with the same purpose: to divide the people, deflect blame and protect their rotten system. That is why they target minorities, and we see it with the threat to the trans community at the moment.
Systemic racism is causing black and brown people to disproportionately die from coronavirus. This needs to be urgently addressed, with workplace risk assessments, PPE and tests for everyone who needs them, but it needs deeper change, too. We need to tackle the system that drives these inequalities and empowers people in this Chamber and in Parliament and the billionaire press barons who whip up fear and exploit and discard working-class people, black, brown and white alike. We need to tackle this system, and in its place, build a society that has equality and freedom at its heart. That is the call of socialism and it is more timely than ever.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I speak today not just for my constituents, but to represent my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), which may surprise most people, because in her 33 years in this place, I think everyone would agree that she has never needed anyone to speak for her. She has been perfectly capable, able and talented at speaking up on inequality repeatedly in her 33 years, and she was the first ever black woman to be elected to this place. Sadly, the Government’s refusal to allow remote participation means that she is unable to attend today because she is shielding, but she wanted me to speak for our borough together, because of the concerns we both share about the number of deaths from covid-19 of black, Asian and minority ethnic people. I am proud to stand with her. She has spoken up for the marginalised for many years, and I am proud to have her as a neighbouring MP and a friend.
My right hon. Friend highlights that black deaths from covid-19 have been particularly traumatising for the black, Asian and minority ethnic communities, who are very likely to know someone who has died. We have heard that very firmly in the Chamber today. I also want to highlight the very important work of Councillor Carole Williams, a cabinet member on Hackney Council, who highlighted this inequality at an early stage. She was ahead of the curve of many people in this Chamber today, and of the Government. It is because we live and work in the community, and understand its needs and its trauma, that we really wanted to raise these points today.
Hackney is the 22nd most deprived local authority district in England and the third most densely populated. Our housing overcrowding is severe, as I have often mentioned in this House. When we break that down in terms of ethnicity, over 70% of people on our housing waiting lists are from ethnic minority backgrounds. These are inequalities that we are all weary of raising. As my hon. Friend the Member for Brent Central (Dawn Butler), who has done a great job in securing the debate today, highlighted, it is a pattern that we recognise and are weary of having to highlight again and again and again. I echo the points raised by my hon. Friend the Member for Slough (Mr Dhesi) and my right hon. Friend the Member for Tottenham (Mr Lammy) about the need for action now. We know a lot of these problems. We have raised them repeatedly. We need to see action.
Hackney has the third-highest death rate per 100,000 people, at 183, of all local authority areas. With 40% of our population from BAME backgrounds, it is not surprising that we have had 175 deaths from covid-19, but 70% of those deaths were of people born outside the UK and 60% of the deaths were of people employed in routine and manual occupations. As my right hon. Friend the Member for Hackney, North and Stoke Newington highlighted when we were discussing this matter today, we also know that it is not just a matter of underlying health conditions. Black people are disproportionately employed, as other colleagues have highlighted, in sectors exposed to covid: transport, social care and the NHS. They are more likely to be agency staff or in roles with zero-hour contracts, so feel less empowered to insist on proper PPE. This goes very much to workplace rights as well and the ability to call out something when it is wrong. If you call it out and lose your job, it is of course harder to do that.
Mr Dhesi
Does my hon. Friend not agree that with more than 200 recommendations from previous reviews already gathering dust, the reason why so many of us are pointing out, again and again, that we need action and not more reviews and investigations is that we have not even implemented a single recommendation from the previous reviews?
Meg Hillier
I agree with my hon. Friend. My right hon. Friend the Member for Hackney North and Stoke Newington is calling for a public inquiry into black deaths from covid. I support her in that, but, as my hon. Friend highlights, it must not be an excuse to kick this issue down the road. We need action now for the people at the frontline who are still affected by this. If we have the second peak that we all fear is coming, they need to be protected. If people are moved out of frontline jobs to be shielded and protected because of their greater risk of death, they must not see detriment to their career path. We need action now. We need workplace plans to support people. It is a tragic and visible reminder of the inequalities we see.
Black, Asian and minority ethnic households are nearly five times more likely to be overcrowded than white households. I have repeatedly raised in this place the tragedy of families who are living in double households, with one family in the living room and one in the bedroom. My right hon. Friend the Member for East Ham (Stephen Timms) highlighted how no recourse to public funds also feeds into that, and 43.9%—so nearly 44%—of London NHS staff are from black, Asian and minority ethnic backgrounds. A staggering 67% of adult social care staff in our capital are from black, Asian and minority ethnic backgrounds.
One interesting and important point is how we communicate public health messages. Sometimes one size does not fit all. If you live in an overcrowded household and are told to self-isolate, it is a different challenge than if you live in a home with spare bedrooms, studies, extra living rooms, large gardens and big kitchens. People need advice about how to manage the public health situation in their own domestic situation and their own workplace. The digital divide is a big concern in my constituency when it comes to getting that message across, with 11% of Hackney residents having no access to the internet.
This is near Shoreditch. Shoreditch is part of my constituency—part of the borough that my right hon. Friend the Member for Hackney North and Stoke Newington and I represent together—yet just over one in 10 residents have no access to the internet and 20% say they are not confident using the internet.
This has been a thoughtful, measured debate, and I do not doubt that every Member here, and many others who would have liked to have spoken, means every word they say about action now. The Under-Secretary of State for Health and Social Care, the hon. Member for Bury St Edmunds (Jo Churchill), is a reasonable and thoughtful woman and I look forward to her response, but I must repeat that the Prime Minister under whom she serves has repeatedly used racist language. Where is the word “piccaninnies” from? I am not going to give a history lesson, but look it up. It is not acceptable for a Prime Minister of this country to have only in recent times described people in those pejorative terms, using the phrase “piccaninnies” with “watermelon smiles” and talking about women in burqas with “letterbox” slits.
That does not set the tone or give me confidence that the Government will act. I believe that there are good people in the Government. There are good people in the Prime Minister’s party, but he needs to shape up. Just as Marcus Rashford educated him about the poverty and hunger of children on free school meals, my right hon. Friend the Member for Hackney North and Stoke Newington and I stand ready, with our constituents and with colleagues across the House, to educate the Prime Minister about how badly wrong he is getting the messaging on this. He needs to act now.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. We will go to a five-minute limit in order, I hope, to get everybody on the list in.
Kerry McCarthy (Bristol East) (Lab)
Before I move on to the specific topic of the debate, I think it is important to acknowledge, as many others have, that we cannot debate this in isolation; we have to see it in the context of Black Lives Matter and the grievances stretching back not just decades but, in many cases, centuries. Bristol was of course very much in the forefront of the Black Lives Matter demonstrations earlier this month with what our Mayor, Marvin Rees, the first democratically elected black Mayor in Europe, described as an act of “historical poetry”—the hugely symbolic removal by protesters of the statue of Edward Colston.
The Observer headline this Sunday was, “The day Bristol dumped its hated slave trader in the docks and a nation began to search its soul” but in fact the reverberations from the removal of Colston were not just national but global. What is interesting is that the statue of Colston was not erected until 1895, more than 170 years after he died. Professor Madge Dresser says that was part of a bid by the city elite to quell increasingly radical stirrings among the lower classes. They were trying to rally people around a civic identity based, supposedly, on our glory days—our heyday, when the city prospered as a result of slavery—rather than have people rallying around class or an organised labour movement. It is fitting, now that Colston has come down, that we do not just talk about statues and monuments and about place names and road names, although all that discussion is happening, but that we shine a light on structural inequalities, class, poverty, deprivation and health inequalities.
Earlier in the covid crisis, Bristol City Council, under the leadership of Mayor Marvin Rees and our Deputy Mayor Councillor Asher Craig, commissioned a rapid research review from University of Bristol academics. The resulting report on the impact of covid-19 on black, Asian and minority ethnic communities was published on 20 May. The verdict, as we heard from the Public Health England report and we know from our own experience, was that the risk from covid-19 is generally higher among BAME communities, even after adjusting for risk factors such as age, gender, comorbidities, increased likelihood to live in urban areas, and so on. BAME people are more likely to be admitted to critical care and more likely to die. No one factor alone can explain it, but contributing factors include being poorer, where people live, overcrowded housing, types of jobs, other illnesses and access to the health service.
The recommendations in the Bristol report include ensuring adequate income protection for those in low-paid or precarious employment and reducing occupational risk; what other Members said about the increased vulnerability of BAME healthcare staff and other frontline workers, such as Belly Mujinga, is really important. The report also said that we need to improve public health communications and tailor them to culturally specific challenges, such as preventing transmission in overcrowded households or shielding vulnerable people in multi-generational households. It also called for the removal of all NHS charges so that no migrant or individual from a BAME group delays seeking healthcare or risks death through fear of being charged for their NHS care. It was quite shocking, as my right hon. Friend the Member for East Ham (Stephen Timms) said, that the Prime Minister did not even seem to know what “no recourse to public funds” meant when he appeared in front of the Liaison Committee. The report also recommended that ethnic groups should be included in health inequalities work, that we should collect more data, and that there should be meaningful engagement and involvement of minority ethnic communities in the services. This is now being taken forward by a BAME working group.
In research published in January 2017 looking at ethnic inequalities in education and employment, the Runnymede Trust judged Bristol to be one of the most unequal cities in the UK and one of the worst places when it came to racial equality. We ranked seventh out of the 348 districts of England and Wales on the index of multiple inequality. We are seemingly prosperous; people think of Bristol as a wealthy, thriving city. We are the only city outside London to make a net contribution to GDP. We are consistently voted as one of the coolest cities and one of the best places to visit. All that gloss masks the underlying inequalities. In the same way that the Colston statue presented a false image of wealth and philanthropy masking the true horrors of how many were enslaved, mistreated and died in the pursuit of that wealth, the gloss is masking the real picture in many of the deprived communities in Bristol. We absolutely know that we have a long way to go in Bristol—that taking down the statue is just one historical marker on a long, sometimes difficult and sometimes daunting journey—but we are absolutely committed to doing this.
Siobhain McDonagh (Mitcham and Morden) (Lab)
It is the pride of my life to represent the big, diverse constituency that I was born and brought up in, from those like my parents who came over in the ’40s to the newer communities from west Africa and Sri Lanka. Many of the children in those communities are doing well in our schools and will be the professionals of the future—as long as they manage to get through the circumstances in which they find themselves in overcrowded accommodation and houses in multiple occupation. As soon as we heard the advice about how to avoid getting coronavirus, we knew what would be the likely outcome. For those who do not have their own bathroom or kitchen but instead share them with four or five other families, the advice was impossible to follow.
It is not that I believe that people in positions of authority want to be overtly racist; I sincerely believe that they do not. However, even as we stand here, the health service in my area is ignoring the advice in the Public Health England evidence. There are plans to move the A&E, the maternity unit and all the acute services at St Helier Hospital further away into Sutton, in spite of the evidence that that takes them further away from BAME communities who are more likely to be dependent on them. The evidence is damning. Of the 66 lower output areas in the catchment with the highest proportion of BAME residents, just one is nearest to the proposed site in Belmont. Meanwhile, 64 of the 66 are nearest to St Helier, 32 of which are in the bottom two quintiles of deprivation, increasing their likely reliance on acute services.
The people running the programme know this; it just does not matter enough for them to want to do anything. Their own impact assessment states clearly:
“As higher densities of the BAME community and those with long term health conditions…live within areas in the highest quintile of deprivation, these groups may also be expected to be disproportionately impacted compared with others”.
But the programme carries on. Despite the overwhelming pressures facing the NHS, the programme’s consultation culminated at the peak of the pandemic. Yet the impact assessment states:
“A reduction in the number of hospitals providing…acute services could potentially have a negative impact on the resilience of services, if for example, there is an unplanned event…on the single major acute hospital site which may restrict service delivery. It is recognised that the likelihood of such a situation occurring is unlikely”.
It happened, we saw it, and it may come back again—and perhaps in an area with higher BAME density where the services will then be gone.
On 4 June, those at the programme confirmed that they will not have concluded their analysis of the impact of the pandemic on their proposals and that they have no intention of releasing the analysis they are undertaking. Their runaway train carries on full steam ahead, coronavirus or no coronavirus, no matter who dies or who does not; it is irrelevant, it is their plan and they are going to have it, come what may.
In conclusion, I want to ask the Minister about two cases in my constituency. The first is that of Mr Salih Hasan, a cleaner at St George’s Hospital for the past 18 years. He worked for two outsourced contractors ISS and Mitie, but he was a part of the team at St George’s. Will his family be the beneficiary of the lump-sum payment for those who die of coronavirus in the NHS? The second is that of Mr Antwi, who worked for a private transport company in hospital transport. He died, leaving his family to pay for a funeral they could not be afforded. Surely, his family too should receive some of that fund.
Rushanara Ali (Bethnal Green and Bow) (Lab)
First, I want to congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing this important debate. The way in which different groups and communities have been affected by this coronavirus shows how scarred by inequality, and social and racial injustice, we are as a society. Coronavirus has laid bare the deep inequalities, particularly those faced by BAME communities and by white disadvantaged communities. It is truly shocking that BAME communities are more likely to contract the disease, with some groups, such as those of Bangladeshi origin and background, twice as likely to be affected as their white counterparts. As others have pointed out, the disparities report highlighted the fact that other BAME groups are between 10% and 50% more likely to die if they contract coronavirus than their white counterparts. The evidence is very clear. What we need is urgent action, and that is what has been lacking.
The PHE report, coming on top of the work the Office for National Statistics had done, again showed the massive disparities and the dangers for those in certain sectors, particularly in frontline jobs. We have heard a lot about that in terms of the disproportionate impact on those working in the NHS. We have seen the toll taken on those who have worked in those sectors, from BAME communities, in particular. We mourn the loss of all those who have lost their lives, of all backgrounds, but this debate is about how we can ensure that the Government learn the lessons quickly, so that we do not continue in this appalling direction of further fatalities.
My constituency has the highest number of Bangladeshi- origin constituents and a sizeable Somali community, and since this pandemic began my constituents have been mourning the loss of loved ones. In every part of our community, we have seen people having to deal with the fact that they have had to organise burials very quickly, without being able to attend funerals together as a community. I know that experience is shared by all of us across the country, and it is so painful. Those communities that have been hit the hardest, such as the BAME communities and those from white disadvantaged backgrounds, have been hurt the most in our country. We need to look at how we address these structural inequalities, and how we address race and class discrimination in our country, if we are to learn from this appalling period in our experience as a country and ensure that we do not continue in this way. If there is anything we can gain from what has happened so far, it is by ensuring that we do not see the further loss of life.
Moving forward, we need the Government to look at some of the specific issues that affect BAME communities. They include severe overcrowding, and the high prevalence of health inequalities in those communities. People live in intergenerational families, and the Government were too slow to see that, even though we warned them. We need greater investment in housing, and we need to deal with those structural inequalities with more investment in primary health care and prevention to protect different communities. As we ease lockdown, we must ensure that we carry out risk assessments to protect those who are shielded, and to ensure that those who have family members who are shielding, but who are being asked by their employers to return to work, are properly protected. Otherwise, more people will die.
We need the Government and Ministers to learn fast as they move towards easing lockdown. If our exit from lockdown is not done properly and responsibly, we will see the double catastrophe of more people in BAME communities dying, as well as more people from poorer backgrounds facing death. I hope that the Minister will reflect on the points that have been raised today, and act quickly.
Bambos Charalambous (Enfield, Southgate) (Lab)
I congratulate my hon. Friend the Member for Brent Central (Dawn Butler) on securing this important and timely debate, and on her excellent speech.
Some 16% of the population in my constituency come from a black and minority ethnic background, and even before we knew the hard data about covid-19 deaths, the BAME community could sense that it was disproportionately affected. My local community joined in mourning the tragic death of 26-year-old care worker, Sonya Kaygan. Sonya died from covid-19 in mid-April after being exposed to coronavirus in the care home where she worked. Sonya leaves behind a three-year-old daughter, who is now growing up without a mother.
Sadly, Sonya is one of thousands of people from the BAME community who worked in frontline services and have lost their lives. As we watched the news and heard about the disproportionate number of BAME lives being lost, people rightly asked, “Why is this happening to our community?” Although some of it can be put down to social gatherings between different communities, that is by no means the only explanation.
Two weeks ago Public Health England published its first report on the disparities in the risks and outcomes of covid-19, but although it showed the bare facts it provided no explanations, which led to more questions than answers. Why were BAME Britons who contracted coronavirus twice as likely to die as white Britons? Why do black and Asian groups have the highest death rates from coronavirus? Why was race and ethnicity such a prevalent factor in the death stats?
Last week, we learned of the existence of Public Health England’s second report “Understanding the impact of COVID-19 on BAME groups”, which had not been released. It made for shocking reading. The report stated that structural racism had significantly impacted the effect of covid-19 on the BAME community, and that historical racism had made BAME NHS staff less likely to speak up about a lack of personal protective equipment or the increased risks they faced. Dr Chaand Nagpaul, who chairs the British Medical Association, said in response to the report that more than 90% of doctors who died during the pandemic were from BAME backgrounds, and that BAME staff were three times as likely to say that they felt pressured to work without sufficient PPE.
The PHE report echoed those comments and stated:
“Historic racism and poorer experiences of healthcare or at work mean that BAME individuals are less likely to seek care when they needed it”
and they are also less likely to speak up if they have concerns about risks in the workplace. The report further states:
“The unequal impact of covid-19…may be explained by a number of factors ranging from social and economic inequalities, racism, discrimination and stigma,”
as well as differing risks at work and underlying health conditions.
Data published in the Health Service Journal on BAME deaths from covid-19 highlighted that BAME groups accounted for 21% of NHS staff, but 63% of covid-19 deaths. Among medical staff, those from BAME backgrounds accounted for 44% of the staff, but 95% of the covid-19 deaths. These figures are truly shocking, and we cannot shy away from the fact that underlying racism is a key factor in these covid-19 deaths.
During the course of this debate, other colleagues have made the point that the BAME community is also over-represented in other frontline services, leading to more public interaction and exposure to covid-19. I shall not dwell on that now, but we must also remember those public transport workers, such as Belly Mujinga, who contracted the virus and died.
The Government’s failure to release the second report on time does not inspire confidence that they are serious about taking action. Action is needed to tackle the inequality among health workers. Viewed together with the failure of the Government to implement the recommendations of the Lammy review, the Wendy Williams Windrush review and Baroness McGregor-Smith’s review on race in the workplace, we have to wonder whether they have any intention on tackling structural racism at all. I challenge the Government to prove me wrong. Implementing the recommendations of the reports in full would be a start, but if the Government truly believe that black lives matter then they will be judged on their actions.
Chris Stephens (Glasgow South West) (SNP)
I had to change my seating arrangements earlier as I was told that the microphone where I was originally sitting was not working—not that that has stopped me in the past.
First, let me pay tribute to the hon. Member for Brent Central (Dawn Butler) for her brilliant speech. I thank her for allowing me to intervene so that I could mention some of the topics on which I now wish to start my own speech.
I was standing in this very spot last night when I started my Adjournment debate by condemning completely the far-right violence that we saw in George Square in Glasgow last night. The far right targeted a peaceful protest by asylum seekers who were protesting about the living conditions that they have been put in by the Home Office. Such violence and thuggery must be condemned, and is condemned, by many proud Glaswegians.
There are a number of issues that I have had to deal with on behalf of BAME constituents, which are just plain wrong and which show systematic racism. The first one I will touch on involves the Foreign Office, which was trying to bring back constituents who were stuck abroad. When we made the case that these were individuals who needed to be brought back home, who had health issues that needed to be addressed, those individuals were all of a sudden told by the British consulate that they were not British nationals. Why are they not British nationals? It is because they were given indefinite leave to remain. It was quite ridiculous. Even when the permanent secretary at the Foreign Office told the Foreign Affairs Committee that, yes, they would bring people back home on the basis of their address and where they were resident, consulates were saying that people were not British nationals. That is something that we really need to address. I have been working on the matter with the hon. Member for Slough (Mr Dhesi).
I will not revisit my 23-minute address that I made last night on how asylum seekers are treated, but to bundle them into vans and place them in hotels, under what is now known as hotel detention, with culturally inappropriate food and no social distancing is, quite frankly, a disgrace.
We also need to deal with the level of asylum support. A 26p increase in asylum support has been announced by the Government. That is the equivalent of being given a Freddo bar. That is what asylum seekers are being asked to live on in a week. It is an absolute disgrace. What they are being paid is 42% of what someone would expect on social security. I completely echo the comments of my friend the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Stephen Timms), on the issue of no recourse to public funds. He has done a great job on that. He embarrassed the Prime Minister, who did not seem to have a clue about that.
I want to touch on how public services are dealing with risk assessments and with BAME employees in particular. We have seen industrial disputes fairly recently, including here in London, in the Foreign Office, with BAME workers going on strike for not being paid the London living wage. It is an absolute disgrace that a Government Department has allowed a contractor to deal with that, and we really need to deal with equality impact assessments properly. It is no use for Governments to say that they have carried out an equality impact assessment and have come to the conclusion that everybody is being hammered equally, so there is therefore equality in the system. That really is not good enough. Frankly, at times I think the Government ignore their duties on equality impact assessments and the public sector equality duty.
I hope that Members will sign early-day motion 596, on the “Dying for sick pay” campaign, led by the right hon. Member for Hayes and Harlington (John McDonnell), which particularly relates to how BAME employees—predominantly female BAME employees—are being dealt with in the workforce. I also hope Members will sign early-day motion 599 on the Scottish Trades Union Congress’s “Break the race ceiling” campaign.
In closing, we need positive action in this country. As secretary of Show Racism the Red Card, I say that we need to use our education system to eliminate racism in this country. I was delighted to see the National Football League having to do a U-turn, forced by NFL players and NFL black players. That shows that action can work.
Helen Hayes (Dulwich and West Norwood) (Lab)
I start by congratulating my hon. Friend the Member for Brent Central (Dawn Butler) on securing this very important debate this afternoon.
Coronavirus has laid bare many inequalities in the UK that have been growing and deepening during 10 years of austerity. Racial inequality is central among them. That was clear from the earliest announcements of coronavirus deaths among NHS staff, all of whom were BAME. It was clear from the deaths of comparatively younger people, such as the rapper Ty Chijioke, aged 47, who touched so many lives in Brixton in my constituency and across the music world, that coronavirus was having disproportionate impacts. It is also the case that there are existing long-standing racial inequalities in physical and mental health and high numbers of BAME staff working in frontline occupations in the NHS, social care and transport in particular, where exposure to coronavirus is increased.
That this pandemic would have disproportionate impacts on BAME communities could therefore have been anticipated, yet the Government undertook no equalities-based risk assessments at all to enable increased risk to be mitigated, and it took three months for a Public Health England report to be published. It simply confirmed what so many people already knew, but offered no recommendations or actions to address it.
When tragic deaths have been reported, including that of Belly Mujinga, who died after she was spat at while working at Victoria station, the response has been completely tone-deaf. British Transport police initially chose to close the investigation into Belly Mujinga’s death after the suspect tested negative for coronavirus, ignoring the fact that infected or not, spitting is assault, ignoring evidence that Belly had told her employer about underlying health conditions and had asked for mitigation measures, and ignoring evidence that she had not been provided with adequate PPE.
There was an opportunity to highlight increased risks, to show empathy and understanding of the fear and anxiety that so many BAME workers are suffering, to remind employers of their duty of care and to specify steps that should have been taken, but that was entirely missed. In responding to the Public Health England report, the Government have shown absolutely no urgency. There have been many, many reports, commissions and studies into the health inequalities suffered by BAME communities, and many, many reports on racial inequalities more widely, from Lord Macpherson to Wendy Williams to the Lammy review. We do not need more analysis and prevarication, nor do we need another report that will sit on a shelf. Still less do we need a report written by someone who does not acknowledge the existence of institutional racism.
We need urgent action to protect BAME workers from exposure to coronavirus now. Where are the Government’s instructions to hospitals, social care providers or transport providers on the steps they need to take to keep their BAME frontline staff safe? Where is the guidance on risk assessments, PPE and working protocols for employers? Where are the sanctions for employers who fail to act?
The racial inequalities of coronavirus do not stop at health. As many schools have reopened in recent weeks, headteachers in my constituency tell me that their BAME students are disproportionately staying at home, often because their parents are very fearful of the increased risks they face from coronavirus and are anxious to avoid infection—yet there is no recognition of that increased risk in the resources provided to schools. That risks a health inequality resulting in educational inequality.
For far too long, racial inequality and racism in the UK has been ignored and, in some cases, perpetuated by the Government, including very directly by this Prime Minister. It is evident in education, where our children are still taught a partial, incomplete and dishonest version of British history which bypasses the contribution that people from all over the world have made to our country’s story. It is evident in an immigration system that was unable to recognise as British thousands of Windrush citizens who had built their lives here for decades. It is evident in the over-representation of black men in the criminal justice system and in the disproportionality of stop and search. It is evident in low pay, insecure work and poor housing. It is evident in the pitiful proportion of BAME people in senior leadership roles in so many settings.
The consequences of this Government’s complacency and negligence on racial inequality and racism have ultimately proved to be deadly. I hope that the Minister, in responding to the debate, will announce details of the urgent, immediate actions that will be taken to stop preventable BAME coronavirus deaths. Black lives matter because each life is a loved one with hopes, dreams and aspirations. Put simply, race should never be a factor for increased risk of death. That this is the case at all should be a source of national shame.
Anne McLaughlin (Glasgow North East) (SNP)
I encourage anybody here or watching at home who missed the opening speech by the hon. Member for Brent Central (Dawn Butler) to catch up on it, because that would be very worthwhile. It was a really interesting and informative speech.
I have been self-certifying. The fact that I am here is an indication of how strongly I feel about this subject matter. I speak as the SNP’s women and equalities spokes- person in Westminster, as the MP for Glasgow North East—one of the most ethnically diverse constituencies in Scotland—and as an ally. I have no illusion: I will not and should not be leading a campaign against racism; I should be supporting those who experience racism. That is not me, and it is never going to be me.
This report has brought into sharp focus the institutional racism that exists on these islands, so race and racism are what I want to look at. I will focus on three main things. First, I will say something about Scotland, the SNP and race. Secondly, I want to look back in time and cover a bit of history. The third and final thing I will talk about is what I am going to do about it, how I am going to be an ally and how I am going to support BAME leaders in the fight against racism.
Starting with Scotland and the SNP, here are the good bits. The SNP Government and Parliament clearly stood last week in solidarity with the Black Lives Matter movement. The SNP Government have put equality and human rights at the heart of their response to coronavirus, and Nicola Sturgeon today announced further analysis of the impact on people from BAME communities in Scotland. The hon. Member for Edinburgh West (Christine Jardine) is not in her place, but she mentioned the National Records of Scotland figures. So far, the Scottish Government have looked at figures for those who are very sick with covid-19 and in hospital, and an expansion of that was announced today.
The SNP provided the first Muslim Member of the Scottish Parliament, the late, great Bashir Ahmad; I cannot look at my colleagues here, because we will all get emotional. Political leaders in Scotland have long spoken positively and often about migrant communities in Scotland, and that has an impact on the population. They did it when it was not popular to do it, but it does rub off on the population, and this Government might want to take note of that.
I turn now to the not-so-good bits. As a party, we have not built on Bashir Ahmad’s legacy. We have one BAME Member of the Scottish Parliament: Humza Yousaf. He is the Justice Secretary, and he is doing a brilliant job. But even he, speaking in the Black Lives Matter debate in the Scottish Parliament last week, checked his own privilege and noted that there are no BAME women in the Scottish Parliament. That is odd, because I know so many who would do a fantastic job in that Parliament. He did that in a very honest speech, in which he also listed all the areas of public life where white people are at the top—I am struggling to think of one where they were not—and I was absolutely horrified.
Humza Yousaf also recently ordered a public inquiry into the death of Sheku Bayoh, whose family have waited five years to know how he died in police custody, and he instructed the inquiry to look at whether race played a part. Sheku’s family should not have had to wait five years for that inquiry to be announced, so we do have things that we have to face up to in Scotland.
Looking to the future, I feel a little more positive than I once did. A week ago last Monday, the SNP’s black, Asian and minority ethnic convenor organised a Zoom meeting. At two days’ notice, 127 BAME people signed up for it, 22 SNP MPs—we only invited SNP MPs, so do not worry; we are not competing—12 SNP MSPs and 12 councillors. That was at two days’ notice, and our job was to listen. We were not allowed to speak other than to say our names. Our job was to listen to everybody and hear what they had to say, and we will be building on that—or they will be building on that, and we will be supporting.
I wish to look a little at the history, which I talked about. There are a number of petitions and campaigns about teaching black history in schools. I have long supported that—in fact, I have spoken about it in this place—and I will explain why. I am confident that this is one very significant way to eradicate racism. Children are not born racist, and when they first become aware of it they find it very difficult to understand. It is not their instinct to be racist, and then they are taught it. If they go through nursery and school with positive role models from all ethnicities, and if their school books reflect those positive role models, they are far less likely to be able to be taught to be racist.
I have spoken to teachers who care deeply about this matter who told me that schools already teach about racism, as they should, but it others people and it portrays those classmates as victims. That is not to say that people are not victims of racism, but there is so much more that we could be doing to stop it in the first place. One of those things is looking at a positive role models in history and demonstrating that the ethnicity of the people who built these islands and this world is many and varied. One of them, whom I talk about a lot and who now has a statue across the road, is Mary Seacole.
The third and final thing that I want to cover— Oh, I have more time than I thought, so actually I will talk about positive images.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Lady has about a minute left.
Anne McLaughlin
A minute? I was told I had seven minutes. Right, I had better come on to: what am I going to do about it?
First, I have applied to have my constituency office registered and trained as a third-party hate crime reporting centre. I will very briefly say that the first of my colleagues to come back to me and say, “I want to do that too,” was the hon. Member for East Dunbartonshire (Amy Callaghan). I think all Members will join me in wishing her well as she recovers from what happened last week.
Secondly, I have set up the all-party parliamentary group on unconscious bias. Our inaugural meeting will be on 29 June. Members will decide what happens, but my intention is to have a number of distinct investigations. They could be into a number of things, but the first must be into race. I want the group to take evidence from people not necessarily about overt racism but about undercover racism, where even the person doing it does not know that they are doing it.
It is not just about hearing evidence. I want to make recommendations on what we can do to enable people to recognise their own thinking and to undo it—who should be doing that, and how they should be doing it. I want a UK-wide campaign of awareness, but I should not get carried away and pre-empt the findings. I thank the hon. Member for Brent Central for agreeing to be part of that APPG.
The third thing that I will do is keep listening, and listening more to people who experience racism, which, as I said, is not me. I will end on three very brief messages for the Minister and the Government. The first is that Black Lives Matter is not just about saving those lives, but the lives that people are leading when they are here. Secondly, please stop using the Lammy review as a cover. I am sick of hearing the Government answer every question about what they are doing with: “We’ve got the Lammy review.” They should act upon it, and speak about it only when they have actually done something about it. Finally, we can breathe and until we cannot we should fight racism and call it out wherever we see it, and whoever it is from—and that includes Prime Ministers.
Dr Rosena Allin-Khan (Tooting) (Lab)
I thank my hon. Friend the Member for Brent Central (Dawn Butler) for bringing this important debate to the House.
I also thank my colleagues who have made such vital contributions today: my hon. Friends the Members for Slough (Mr Dhesi) and for Bethnal Green and Bow (Rushanara Ali) spoke so movingly about the heartbreaking loss of loved ones; and my hon. Friends the Members for Nottingham South (Lilian Greenwood), for Poplar and Limehouse (Apsana Begum), for Bristol East (Kerry McCarthy) and for Mitcham and Morden (Siobhain McDonagh) rightly raised the important issue of poor-quality housing.
The need for actions, not words, and an end to pointless reports was raised eloquently by my hon. Friends the Member for Bradford West (Naz Shah), for West Ham (Ms Brown), for Newcastle upon Tyne Central (Chi Onwurah), for Vauxhall (Florence Eshalomi) and for Liverpool, Riverside (Kim Johnson); and the importance of acknowledging the negative effects of covid-19 and discrimination on the mental health of BAME people was raised by my hon. Friend the Member for Batley and Spen (Tracy Brabin), my right hon. Friend the Member for Islington North (Jeremy Corbyn) and my hon. Friend the Member for Ilford South (Sam Tarry).
The poverty experienced by our BAME communities due to Government policies was perfectly highlighted by my right hon. Friend the Member for East Ham (Stephen Timms) and my hon. Friends the Members for Hackney South and Shoreditch (Meg Hillier) and for Coventry South (Zarah Sultana); and my hon. Friends the Members for Enfield, Southgate (Bambos Charalambous) and for Dulwich and West Norwood (Helen Hayes) reminded us of our reliance on those from our BAME communities in our NHS.
The resounding message is clear: our BAME communities are grieving. The priority from the outset of this pandemic should have been to save lives—all lives—but it pains me to have to stand here and state the most obvious point, which has, regrettably, been missed: that no one life is more important than any other.
The Government have liked to describe the fight against coronavirus as a war; to use their analogy, our BAME communities would have been the cannon fodder. These people’s lives are not, and should not have been, dispensable. It truly amazes me that in 2020 lives are not valued equally here in the UK, and the covid-19 crisis has shone a much needed spotlight on this stark and most harsh of realities.
It is simply an outrage that people of Bangladeshi and Pakistani heritage have a 100% greater risk of dying from covid-19 than white British people. The stats are no better for those of Afro-Caribbean descent. The first 10 doctors to die in the UK from coronavirus were all from BAME backgrounds.
If I may, I wish to take some time to honour just a few of the victims of this virus: Ismail Mohamed Abdulwahab, a child aged 13; Sudhir Sharma and his daughter Pooja Sharma; Nadir Nur, a London bus driver; Belly Mujinga, a station worker at Victoria station, just down the road; Esther Akinsanya, a nurse who died in the intensive care unit at the Queen Elizabeth Hospital, where she had worked for more than 20 years; and Dr Fayez Ayache, who aged 76 was still working as a GP—yesterday I had the true honour of talking to his daughter, Layla, who described how her father loved working for the NHS so much because it brought people together, gave a freedom that some have never experienced before and gave hope and light to those who were wandering a darkened path.
Bell Ribeiro-Addy (Streatham) (Lab)
When we found out that elderly people needed support because of covid-19, we shielded them; when we found that people with co-morbidities needed support, we shielded them; but when it came to black communities, all of a sudden we found there had to be a review and a long conversation, and still no measures have been taken to shield them. Does my hon. Friend agree that that amounts to institutional racism and something should be done about it?
Dr Allin-Khan
I thank my hon. Friend for her articulate and eloquent intervention. I agree that our BAME communities must never be an afterthought and deserve to have everything in place to keep them safe, just as we prioritised other members of our community.
I am proud to stand shoulder to shoulder on the frontline of our NHS, where I proudly work alongside doctors, nurses, cleaners, porters and carers from all backgrounds.
Those on the frontline have made huge sacrifices during this pandemic, but far too many have made the ultimate sacrifice and paid for their service with their lives. The health and care workforce in England are significantly over-represented by people from BAME groups. These are jobs that cannot be done from home, and they have been front and centre of the response to covid-19. Can the Minister please outline whether risk assessments will be developed for BAME key workers exposed to a large section of the general public?
It is not just those on the frontline of our NHS paying the price; it is our bus drivers, our posties, our station attendants, our shop workers, our refuse collectors—the very people who have kept our supermarket shelves stocked and cleaned our streets so that we can safely socially distance. They must not be forgotten. We need action from the Government, not simply words. The issue of flagrant inequality cannot be kicked into the long grass by the Government any longer. It would dishonour the memory of those who have sadly lost their lives. Unfortunately, the reality for many of these frontline workers is that they were doing the jobs that nobody else wants to do.
Let us be perfectly clear: there was no option to work from home for these staff and they could not afford not to go to work; they could not risk losing their jobs, for how would they feed their families? So many BAME people are in insecure work and have to carry on with unsafe practices for fear of the repercussions, afraid to speak out—and it has cost them their lives. The bullying of BAME people in the workforce is rife and concerns were so often dismissed that staff felt that they could not raise the issue of inadequate provision of PPE. The BMA has even stated that BAME doctors are twice as likely not to raise concerns for fear of recrimination. Does the Minister agree that it is simply unacceptable that cleaners were being sent to clean the rooms of people who had died of covid-19 without adequate PPE?
When we discuss the disproportionately high number of BAME deaths, it is vital that the discourse does not fall into pseudoscience and biological difference. I am a doctor with a public health master’s degree. To be clear: it is not simply about people from a BAME background having different receptors in their lungs. People from BAME backgrounds are not a homogenous group of people. We are talking about people with vastly different heritage and racial backgrounds. Other countries have got this virus in check. The risk faced by BAME communities here in the UK is down to structural racism and the precarious work that people are placed in as a result.
The UK has been a warm and welcoming country for so many, but for others—for too many—it has not. We cannot ignore the vast number of deaths in our communities and sweep the memories of our loved ones under the rug. In the early days of the crisis, when communication was crucial, why did the Government not reach out to BAME communities? Can the Minister explain that? Why were vital documents not translated so that public health advice could be easily disseminated into some of our most vulnerable communities? How will that change going forward?
The Government’s overlooking of our BAME communities has categorically and catastrophically cost lives. The hurt and pain brought to the fore during the crisis cannot be forgotten. I will never forget standing at the bedside of patients, holding a phone to their ear, as they said their last goodbyes to their loved ones. Those tears, that sound—it never leaves you. It must not be forgotten. We are proudly here today standing shoulder to shoulder with our friends, our families, our communities who have been deeply affected by this pandemic, and it is a scandal that the Government blocked a review that included recommendations that could have helped to save BAME lives during this crisis. What message does that send about how the Government value them?
If, as a country, we truly want to learn from this crisis and treat everyone as equal, we must tackle racism wherever we come across it, and it is everyone’s responsibility, regardless of skin colour, ethnicity or socio-economic status—it is everyone’s problem. Our BAME communities have been failed and need to be able to trust that we here in this Chamber, in Parliament, truly represent them. It is our duty to rebuild the trust that has been lost. The pandemic has so brutally stripped humanity of its ability to breathe. It is time for the Government to inject humanity and true equality into all their policies. The time to act is now.
The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
I, too, congratulate the hon. Member for Brent Central (Dawn Butler) on securing this debate, and I thank the Backbench Business Committee for granting it. I thank all hon. Members for their contributions. To those listed by the hon. Member for Tooting (Dr Allin-Khan) I want to add my right hon. Friend the Member for Basingstoke (Mrs Miller), my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer), my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) and my hon. Friend the Member for Dudley North (Marco Longhi), to name but a few more.
I think everybody would agree that this debate has been thoughtful and considered, and the topics and challenges that hon. Members have discussed have certainly been broad. The contributions have highlighted to me, as I have sat here for the past three hours, the sheer complexity of the issue. Health inequalities sit in my portfolio. Before covid, they presented enormous challenges; with covid, they have become even more challenging.
Members have passionately articulated the findings, and I concur that they are deeply concerning. There can be no doubt that covid-19 has upended all our lives. As the hon. Member for Tooting said, everybody knows somebody who has been touched. One of the challenges that the hon. Member for Slough (Mr Dhesi) and my hon. Friend the Member for Wealden (Ms Ghani), whom I failed to mention, articulated is that everybody is somebody’s uncle, brother, wife or mother. Everybody has been touched by the challenge of not being able to say goodbye, to carry a coffin, to say those last goodbyes. That is the human face of this dreadful disease, which has changed the way we live and work.
Throughout it all, many frontline organisations have been no less than heroic for turning up on the frontline—not only the doctors who have turned up every day, but everybody in the team. The one thing I have noticed is how people have become teams. People have referenced the fact that those who help around the hospital, cleaning, portering and so on, are just as integral. It has become to feel like those are words of truth and not just expressions. If anything comes out of this appalling situation, it is that we will carry some of those brighter spots forward.
The hon. Member for Tooting said that the BAME community is not a homogenous group: I agree. That highlights one of the challenges. Early in this crisis, it became very clear that some groups of people were more vulnerable to coronavirus, which is why PHE was commissioned to undertake work on who was most at risk and why.
To hon. Members who raised the PHE report, I want to say that it was not censored or delayed. Professor Kevin Fenton has been engaging with significant numbers of individuals and stakeholders to collect views and ideas. Nothing has been removed from the report that was released on Tuesday. It is still in the process of being thought about, because it raised the challenge of additional areas that were not looked at, such as occupation, co-morbidities and so on. Duncan Selbie, the head of PHE, has clarified the matter in writing, and a written ministerial statement was laid to clarify the point to the House. The research was done at pace and I thank those involved for pulling it together so quickly.
Far from being a great leveller, covid-19 cruelly discriminates, but it discriminates more broadly than we have probably touched on today. People who are old, people who—as was mentioned by several Members—live in cities, people who work in public-facing jobs and people from BAME backgrounds are at a heightened risk.
This early research also revealed gaps in our knowledge. As we have clearly heard, the situation is complex. My right hon. Friend the Member for Basingstoke highlighted the importance of how we address the situation. Crucially, we do not know how different risk factors overlap and interact. I know that the calls for action now are heartfelt, but we need to understand different risk factors, including co-morbidities and occupation, so that we can ensure that there is a standardisation in the data and recommendations actually do what we need them to do. For example, we need to understand how much of the increased risk for those from BAME communities is driven by co-morbidities and occupation. This challenge was highlighted by the hon. Member for Poplar and Limehouse and my right hon. Friend the Member for Romsey and Southampton North.
We do not have all the answers, as the Welsh Health Minister acknowledged recently. People from BME backgrounds have made enormous contributions to the healthcare system and other key areas including transport, public services and the care sector, as my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) articulated. We must address the injustice of these ethnic disparities right across the board; so many hon. and right hon. Members have pointed out the breadth. That is precisely why the Prime Minister announced on the weekend the establishment of a commission to examine ethnic disparities in this country. It will have an independent chair, will report by the end of this year—within a very short timeframe—and will play an important role in driving the agenda forward. It will be overseen by the Minister for Equalities, my hon. Friend the Member for Saffron Walden (Kemi Badenoch).
Helen Hayes
Let me simply ask the Minister this: how many more preventable BAME deaths will we have seen by the end of the year?
Jo Churchill
The articulation of the challenge is not simple, and to frame it as if it is does an injustice to all those people who are living with all the various challenges. We have worked to shield people, irrespective. It is important that we act on the evidence. I am really sorry. I am so aware that I have sat and listened, and I will think. Inequalities are stubborn, persistent and difficult to change, but that is no reason to accept them. As hon. Members have said, this is a shared problem and the response must be a shared one too. That is our goal.
Jo Churchill
I am so sorry but there has been so little time at the end of the debate, and I want to leave the hon. Member for Brent Central some time to speak.
Dawn Butler
In the words of my hon. Friend the Member for Vauxhall (Florence Eshalomi), I am disappointed but not surprised. The Minister may not have all the answers, but she has some of the answers, which span back to 2010. All the Government need to do is start implementing those answers. If they want to run a review in parallel—fine, do that. But they should implement the nearly 200 recommendations that already exist. There is no excuse for the Government not to act.
We have been in agreement across the House in this debate. I am sure that if this motion were put to a vote, we would win against the Government. The motion states that this House
“calls on the Government to set out in detail the scope and timeframe of the Government’s review”,
which the Minister has not done, and
“urgently to put a plan in place to prevent avoidable deaths.”
The Minister has not done that. The Government will be responsible, because they know what is happening and they have failed to act. The Minister should be ashamed of her Government.
Question put and agreed to.
Resolved,
That this House is concerned about the level of deaths from covid-19 among Black, Asian and minority ethnic communities; notes that structural inequalities and worse health outcomes for Black, Asian and minority ethnic people go hand in hand; calls on the Government to review the data published by the Office for National Statistics on 11 May 2020 on Coronavirus (COVID-19) related deaths by occupation, England and Wales: deaths registered up to and including 20 April 2020, the Report published by the Institute for Fiscal Studies in May 2020 entitled, Are some ethnic groups more vulnerable to COVID-19 than others? and the full report by Public Health England on Disparities in the risk and outcomes of covid-19; and further calls on the Government to set out in detail the scope and timeframe of the Government’s review and urgently to put a plan in place to prevent avoidable deaths.
Establishment of a Food Standards Commission
Alan Brown (Kilmarnock and Loudoun) (SNP)
I rise on behalf of the constituents of the constituency of Kilmarnock and Loudoun who have sent this petition in the consideration of a food standards commission. They are rightly concerned about food quality in the UK post Brexit. They understand that, despite assurances of the UK Government about keeping out the likes of chlorinated chicken and hormone-injected beef, proof of the UK’s intent was evidenced by the refusal to accept a cross-party amendment to the Agriculture Bill. They know that all bets are off when it comes to a trade deal with the US. They understand that trading under WTO rules in a no-deal Brexit crash-out means that these products cannot be banned; that is the position under most-favoured nation rules. They know that, with the number of free marketeers within the Tory Cabinet, there needs to be an independent food standards commission to protect the standards of food and drink on our shelves and to protect the Scottish farmers, who produce such high-quality goods.
The petition states:
The Petition of residents of the United Kingdom,
Declares that the UK Government has not put proper safeguards in place to protect food standards post the United Kingdom’s exit from the European Union; notes that the Government has rejected cross party amendments to the Agricultural Bill that aimed to protect standards of imports and ensure that any imports would not be able to undercut UK producers; further notes that leaving the European Union without a deal on 31 December 2020 will mean trading on World Trade Organisation (WTO) terms, and that the most favoured nation status will mean that the UK cannot prevent the import of hormone injected beef or chlorinated chicken from the US; further notes that the consumer group Which? has stated that a US trade deal poses the biggest risk to food standards since the BSE crisis and notes that the current deals struck by the EU provide the necessary protections; further declares that an extension to the transition period would create a short term protection against low standard imports, and that a Food Standards Commission with the remit of ensuring quality and welfare standards of food and drink imports in any trade deals could provide longer term protections for our farmers and growers in Scotland and the wider UK.
The petitioners therefore request that the House of Commons urges the Government to consider the establishment of a Food Standards Commission to monitor any trade deals involving food and drink products and to protect UK welfare standards and value our farmers and growers who produce in Scotland and the wider UK.
And the petitioners remain, etc.
[P002581]
Education Standards: Stoke-on-Trent
(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jack Brereton (Stoke-on-Trent South) (Con)
We live in challenging times. Coronavirus has disrupted many of our plans and dreams and many have lost loved ones. My sympathies go to all those who have lost friends and family. The virus has had a devastating impact across the globe, testing human ingenuity and resilience. Not least, it has disrupted education and in a city like Stoke-on-Trent, where education outcomes, despite significant progress, still are not where we want them to be, the disruption has been the last thing that we needed. The immediate challenge is to get more pupils back to school.
I have been engaging with local headteachers, and wish to place on the record my admiration for them and the work they are doing to facilitate reopening with new distancing measures. I have certainly been feeding back to the Secretary of State and the Department for Education the thoughts of our heads and any issues of concern. Almost every school in Stoke-on-Trent has stayed open throughout the lockdown for vulnerable and key worker children, and all of them have opened to more children now, with varying degrees of attendance.
For example, between 1 and 16 June, the recorded percentage of available sessions attended by nursery pupils across the city has ranged from just 2% to 100%—the 100% being recorded at the Clarice Cliff Primary School in my constituency. But even though 100% of sessions were attended, just 10% of nursery children enrolled at Clarice Cliff attended at least one of those sessions. I think the reporting of that attendance does not seem especially robust—indeed, teachers have told me off the record that they find the daily reporting forms over-onerous—but there does seem to be a link between disadvantage and non-attendance, with schools with high percentages of pupil premium children recording lower percentages of educational sessions attended.
Jonathan Gullis (Stoke-on-Trent North) (Con)
I am extremely grateful to my hon. Friend and co-city Member of Parliament. Before covid, 27 of our schools had 4% persistent absence or higher. Does he see that as an ongoing issue that we need to tackle now, and have needed to tackle since before the crisis?
Jack Brereton
I absolutely agree with my hon. Friend. We have seen from some schools excellent examples of the work that has been put in place to address attendance. We need to see that mirrored across all our schools throughout the city, so that we can get attendance rates up.
Clearly, getting children back into school will take further effort, but I should like to thank all our teachers, who have been working incredibly hard to get schools ready and accommodating the necessary changes. They have made huge efforts to ensure that it is safe for those pupils to return. All children who are allowed to return should now do so. Parents need to be assured that it is safe, but I like to think that I am preaching by example, given that my son William is returning to nursery—he returned at the start of the month.
It is vital that we get pupils back to school as soon as possible, because the sad truth is that the children from the far less affluent communities that I represent in Fenton, Blurton, Longton and Meir will now have to go even further to catch up with the more typical middle-class communities elsewhere in England. It is time to start getting many more schools open again and, when they are open, to ensure that they are delivering even better outcomes and standards of education.
Stoke-on-Trent is on the up, and all credit must go to the work that has seen youth unemployment more than halve across the city over the past decade. I applaud the schools and the incredible efforts already made by the teachers in my constituency who have grasped the nettle and ensured that their pupils had the skills needed to find work. Before covid-19 hit, we were realising even more of the potential that will be the basis for our success in decades to come, but after this health crisis, we need to be more ambitious in the city and more ambitious about what our young people can achieve. I want to see a sharpening of the upward trajectory that we have been seeing. Nowhere is this more important than for our children and young people. Every person in our city should have the ability to achieve their full potential and be their best.
The concept of a job for life, which was so common in the past and which naturally suited honest, hard-working Stokies, is disappearing all around the world. People now change careers on average five to seven times in their working life, and they need the transferable skills to take the greatest advantage of that. If the security of a job for life is gone, the reassurance of meaningful multiple career options really needs to be there.
Jonathan Gullis
There is no finer advocate than my hon. Friend for the city that I am also proud to serve. Does he agree that we need to turbocharge apprenticeships in our city in order to create much better opportunities, rather than just the same old A-level and going-on-to-university option?
Jack Brereton
I thank my hon. Friend for his comments; I fear he is slightly too kind. Absolutely; with apprenticeships and with all types of education, we need to focus on ensuring that more of our young people take those steps into higher education and into furthering their careers.
It is difficult to keep up with the pace of change when you are already behind, and although we have made great strides from where we were, we are, sadly, still behind in many areas. The problems that we are having to reverse in Stoke-on-Trent are deep-seated. As recently as December 2016, nearly half of all learners in secondary education were in schools judged by Ofsted to be less than good, and at key stage 2, Stoke-on-Trent’s children are behind the national average in reading, writing, maths and science. At key stage 4, the city’s outcomes are also too low. It pains me to say that little more than half of Stoke-on-Trent’s pupils achieve grades 9 to 4 in English and maths GCSE, compared with nearly two thirds of pupils nationally. Also, 33% of Stoke-on-Trent’s schools are categorised by Ofsted as requiring improvement.
Educational outcomes remain below the national average, and significantly below for disadvantaged children. The city sits in the lowest quartile banding for the number of pupils achieving a level 3 qualification by the age of 19, and poor pupil attainment and progress are prevalent in a significant number of schools. The likelihood of a young person from Stoke-on-Trent progressing to higher education is significantly lower than the national average. It is 28% locally, compared with 38% nationally. The rates of exclusion from school are high. A concerted effort, backed up with innovation and transferable good practice, is needed across the schools in the city, and I certainly support enhancing the active role of Ofsted in driving standards up. Ofsted’s promise to offer non-judgmental support to schools that have stubborn difficulty in improving standards is welcome news. Schools and teachers should be receiving the support they need to properly tackle the challenges that they face. I know that many schools in the RI category would welcome that additional support. A number of them have been keen to make the huge efforts that are likely to see them move up to the good category at inspection.
We also need to see more outstanding practice, especially in secondary schools. We have seen some fantastic examples of outstanding practice across the city, and it is certainly on the rise, but we need to see more of it spreading across all our schools. There are currently no outstanding non-selective secondary schools in Stoke-on-Trent, although I slightly dispute this, as I think that the Ormiston Sir Stanley Matthews Academy in my constituency is outstanding. Although it is currently rated good, the fantastic leadership of the head, Mark Stanyer, and the work of teachers and pupils have resulted in it moving up to performing above average in its Progress 8, which is an incredible achievement of which it should be very proud.
Jonathan Gullis
My hon. Friend has some amazing schools in the south of the city. I could not miss the opportunity to plug Whitfield Valley Primary Academy, which has 84% of students meeting the expected standard and 25% meeting the higher expected standard. Does he agree that we need to ensure these schools, these beacons of light in Stoke-on-Trent, are given the opportunity? Perhaps they can meet the Minister who is present today to demonstrate the very best that we have in Stoke-on-Trent.
Jack Brereton
I thank my hon. Friend for those comments. I absolutely agree with him. At Whitfield Valley and all the schools we see outstanding levels of progress; it is very high at Whitfield Valley. We need to support that and for that good practice to flow out and be shared across all schools. Going back to the Sir Stanley Matthews Academy, it was recently the only school that was nominated in my constituency for one of my unsung hero awards for the amazing work it has been doing to support the local community in Blurton during the coronavirus outbreak.
Ambition and a lack of opportunity have been key issues locally. Stoke-on-Trent very much relates to the Government’s levelling-up agenda. We desperately need to increase the ambition of our children and get them fully engaged in purposeful, high-quality education.
In the 2016 social mobility index, Stoke-on-Trent was ranked 298th out of 324 districts. That is mirrored across a number of indicators of multiple deprivation. Levels of pay and the number of people with higher level qualifications in Stoke-on-Trent are much lower than in other parts of the country. On average, you can be expected to be paid nearly £100 less a week in Stoke- on-Trent than nationally, which is totally unacceptable. Improving opportunities and instilling in pupils the confidence that they can achieve is vital. That goes hand-in-hand with improving educational outcomes. Careers advice is crucial to tackling that. Whether for more vocational or academic pathways, we need to keep engaging with universities to address the city’s low application rates for further education.
Levelling up is needed. I say to the Government: please do work with us on the levelling-up agenda. They will find no city more eager to engage or more relevant to this agenda. It is certainly welcome that the Careers & Enterprise Company is working to ensure that every secondary school and post-16 provider in Stoke-on-Trent will have access to an enterprise adviser, someone senior from business volunteering their time and a share of a £2 million investment, so that every secondary school pupil has access to at least four high-quality business encounters.
I am also very supportive of the education employers’ Primary Futures programme, which is designed to link up schools with role models from different career backgrounds to help pupils to think more from an early age about the ambitions they might have for the future. This is about broadening horizons for our children, the myriad opportunities out there, breaking down some of the perceived stereotypical boundaries, and the big ambitions that start at an early age. I encourage more people from different walks of life and in senior careers to volunteer their time for this fantastic initiative.
I am also delighted to say that recent efforts to increase applications to Oxford and Cambridge from A-level students in Stoke-on-Trent seem to be working, but there is much more to do. We must open up new educational options for children from deprived backgrounds across the city. The industry is full of exciting new prospects calling Stoke-on-Trent their home. Ensuring our children and young people have the best possible education is vital for the future prosperity of our city. Stoke-on-Trent is a key cluster of advanced manufacturing, with absolutely top-end, world-leading manufacturing. These industries can offer amazing careers for local people.
An undeniable problem in achieving that, however, particularly in secondary education, is the real lack of school places. In Staffordshire last year, not including Stoke-on-Trent, 92% of pupils moving from primary school to secondary school got into their first choice of school and 90% did in neighbouring Cheshire. However, in Stoke-on-Trent first choice places were secured by only 82%. In fact, dozens of local parents contacted me to say that not only did their children not secure their first preference, but they did not secure a place at any of their chosen three. That means more than twice as many children are missing out in Stoke-on-Trent than in the rest of Staffordshire. Every one of the city’s 14 secondary schools is full and 11 are over-subscribed. Some pupils have been left facing a commute across the entire city into Newcastle-under-Lyme and back again every morning and evening, with no bus services that would realistically ever get them to school on time. Such a situation does not create the best conditions for pupils to learn or for teachers to teach. We must change that by creating more high-quality school places that will push up standards and increase local opportunities. That is no less than our young people in Stoke-on-Trent deserve.
That is why I am delighted to support plans for a new free school, the Florence MacWilliams Academy run by the Educo Trust, on part of the former Longton High School site. If permission is granted, the school will alleviate the challenges around admissions policy at a time of a projected increase in pupil numbers in what is now a rather youthful city. Sadly, that demographic shift was not planned for, and in addition we now see further significant growth from new residential development, which has not been factored into secondary places.
Jonathan Gullis
I wholeheartedly support my hon. Friend in his efforts to bring about progress on a free school in the south of the city. Does he firmly believe that Stoke-on-Trent should be the beating heart of a free school revolution, and that we should have one to drive up standards in the north of the city too?
Jack Brereton
Of course, my top priority is one for the south of the city, but we do need good and outstanding places across the whole of our city.
As recently as 2008, Stoke-on-Trent City Council, under Building Schools for the Future, pursued a policy of school closures and mergers due to falling student numbers. Thank goodness that Trentham Academy, which was also threatened with closure, was saved thanks to a hard-fought campaign led by the community in Hanford and Trentham. If we had lost that school too, the situation would now be a whole lot worse, so it is fantastic that instead, Trentham Academy’s results have been turned around and it is now performing very well. However, it is much in need of investment, given that it did not benefit from the BSF programme. Trentham Academy has probably had the least spent on it of any secondary school in the city in recent times. Serious consideration should be given to such investment, especially for improving sports and wider facilities in schools.
One of the schools to go altogether was Longton High School. Other than the section that is now used by Abbey Hill special school, much of the brownfield site remains empty. The motto of Longton High School was “Renascor”, or “I am born again”. Indeed, Longton High School was born again on the site in the 1950s, but its roots went right back to 1760, when the endowment founded what was called none other than the Longton Free School.
Much has changed since the closure programme of 2008, not least the political leadership and representation of the city of Stoke-on-Trent, and I am pleased to say that today’s Conservative-led city council has supported the application by Educo to take the Florence MacWilliams Academy forward. I am also pleased that the school has attracted support from a number of key partners of both local and national significance, with a number of influential figures making up the governing body.
Florence MacWilliams herself was an exceptional mathematician. She is renowned for contributing the MacWilliams identities to coding theory. I am afraid that my coding theory is a little rusty, but I do know my local history, and I can tell the House that Florence MacWilliams was born in Stoke-on-Trent during the first world war and was commonly known by her middle name, Jessie. At a time when it was still extremely rare for women to get the opportunity to go to university, she embarked on an education that culminated in a Cambridge MA and a Harvard PhD. She is a superb local role model in a city where life chances and social mobility continue to need close attention and where ambition and aspiration need to be pursued higher.
I particularly welcome Educo’s promise that there will be an intense programme of study for those pupils who fall behind and struggle, to help them master a strong core of knowledge and skills. A mathematics excellence partnership will be developed to support a maths hub, and literacy, including the spoken word, will be the key focus. It is expected that some 22% of pupils will come from households where English is not the first language.
As the Secretary of State for Education knows from the number of letters I have sent him and times I have spoken to him about this, the new school is for both improving standards and helping to address pressures on secondary places. The Minister will know that I recently went to see the Secretary of State with other local MPs, including my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), and the leader of Stoke-on-Trent City Council to ensure that officials in Whitehall understand exactly why we need this new school and how it will improve outcomes in the opportunity area.
It is certainly important that we realise every bit of value possible from the opportunity area work. There have already been successes. Our opportunity area is focusing on four areas identified as key priorities locally: early years education; English, maths and science outcomes; pupil engagement; and the choices young people make from 16. The opportunity area does much to leverage partnership funding, volunteering and expertise from both national organisations and local stakeholders. It embeds national policy in particular local contexts or, seen the other way, it embeds particular local priorities into contexts of national policy.
The opportunity area enables workstreams locally that will be of national benefit by further raising the skills and productivity of a city on the up, with a ceramics industry and a wider creative and advanced manufacturing economy undergoing a real resurgence. Like many towns and cities outside London, we need not only to improve our rates of educational attainment, but to retain educated graduates and skilled workers who are too often lured to the metropolitan honey pots and the wider south-east.
We need to see more of our young people undertaking higher education, including university. As a graduate of one of our local universities, Keele, I would strongly advocate that our young people give this their consideration. Perhaps by studying locally, people would be more likely to embed their roots and be retained locally in Stoke-on-Trent, as I have been.
Of course, educational pathways to advancement need to be broad and to lead to sectors, not particular specialisms. Alongside academic excellence, the Government are right about the need to make a success of sectoral T-levels and apprenticeships, including for lifelong learning and retraining, by investing in their success and by ensuring their prestige. Nothing promotes ambition like a clear route to employment and advancement, with a tangible career path that is not covered in doubts and the roadblocks that disadvantage can bring. I am delighted that Stoke on Trent College is one of the very first colleges to offer T-level qualifications.
Staffordshire University will be massively expanding the provision of degree apprenticeship education in the city, in partnership with local industries and employers. Sadly, my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon) cannot be here tonight due to self-isolation, but she is a key champion of apprenticeships in the city, including at Staffordshire University’s £40 million Catalyst centre, which has been developed in her constituency.
Local partnerships between academia and industry have an undoubted role in economic success. Despite the sheer hard work of my constituents to improve local levels of productivity—and productivity locally is indeed up—gross value added in Stoke-on-Trent is still comparatively low against the rest of the country. Part of the effort to level up the productivity gap between the UK and our international competitors must be to close the gap between sub-regions such as Stoke-on-Trent and the rest of the country. GVA per head is about a fifth lower in Stoke-on-Trent than the national average.
It can be tempting to say that this is all a function of trends in economic geography, yet we have shown in recent years that we can indeed increase our local rates of productivity through advanced manufacturing. Prior to the coronavirus outbreak, Stoke-on-Trent benefited from one of the fastest growing economies of any city nationally. It has been rated as one of the best places to start a new business and for business retention. Fortunes are changing for the better after decades of decline, and our huge untapped potential in the Potteries is starting to be unlocked.
Just as there is an internationally important Cheshire life sciences corridor to the north of Stoke-on-Trent, with schools and colleges in the area gearing themselves towards skilling pupils for the science industry, so there can be an advanced design and manufacturing cluster in Stoke-on-Trent itself. The UK ceramics industry is hugely ambitious. It is seeking to secure significantly increased year-on-year growth and to increase our international market share. We are getting clay back into the classroom, and there is a plan for an advanced ceramics campus in an international centre for research excellence to provide the highly skilled jobs for our young people to progress to in the future. My colleagues and I from the Potteries constituencies are lobbying to get the research centre in place as soon as possible.
The teachers at all our local schools do a fantastic job not only in teaching our children the curriculum, but in inspiring them to work hard for their futures. Our headteachers are working hard to overcome the immediate crisis and get our schools open again. We have seen improving standards across the board, and we must now go further so that every child in the city is learning in a good or outstanding school. Our longer-term challenge is to continue to continue to push up standards, especially at 16. Although we have historical challenges locally, stemming from the sorry decline of the mass-manufacturing ceramics industry, these can no longer be used as excuses for poor standards, nor should they be a barrier to unlocking our potential.
There are many fantastic examples of excellent schools defying the odds throughout the city. In fact, the resurgence in local industries, especially with the advanced manufacturing-based ceramics industry, means that it is imperative that we raise local school standards so that we can keep that industry in the Potteries, the world capital of ceramics, as a key employer offering high-skilled, high-reward and high-satisfaction jobs to local people.
As it says in the Department for Education’s delivery plans for the Stoke-on-Trent opportunity area:
“Stoke-on-Trent is leading the way in innovative practice”.
It is
“a city with so much to offer, but too many children and young people leave school on the back foot, and do not have the skills and tools required to access the opportunities on their doorstep.”
This needs to change, and I will not rest until every child in our city is able to benefit from the best possible start in life. We need more choice, more places, greater rigour and purposeful opportunities. In that way, we can deliver higher standards of education in Stoke-on-Trent.
The Minister for School Standards (Nick Gibb)
I congratulate my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) on securing this important debate. I know that he is particularly passionate about schools in his constituency, and he continues to feed back his views and the views of his constituents about various local education issues. The Stoke-on-Trent area is one of huge potential, as he said, and an area targeted by the Government for additional support through the opportunity area policy, which I will talk about in a moment. He also shares the Government’s ambition that every state school is a good school, providing a world-class education that helps every child and young person to reach his or her potential, regardless of background.
Since 2010, the Government have worked hard to drive up academic standards in all our schools, and we continue to provide support to the schools that require it most. Nevertheless, it is important to recognise that some schools are still on a journey of improvement, and those schools continue to benefit from the Government’s commitment of support.
An example of that support was the introduction of opportunity areas in October 2016, when the then Education Secretary announced that six social mobility coldspots would become opportunity areas. These opportunity areas were expanded further in January 2017, with six additional areas, including Stoke-on-Trent. As part of this announcement, £72 million of funding was made available to those areas to support education and communities. Stoke-on-Trent and those 11 other areas are benefiting from a range of additional support, which I think will have a huge impact in the long run in Stoke-on-Trent.
I join my hon. Friend in recognising the tremendous work of headteachers and teachers in Stoke-on-Trent, which has resulted in 80% of schools being judged good or better by Ofsted. Part of the support that the Government offer to all schools nationally is through the academies programme, which my hon. Friend talked about. This programme builds on our ongoing vision to develop a world-class, school-led system, giving school leaders the freedom to run their schools as they see fit. We now have more than 9,000 open academies. This system is working. My hon. Friend will have seen improvements in Whitfield Valley Primary School, which my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) also mentioned, reflecting the strength of the academies programme. The school joined the Inspirational Learning Academies Trust as a sponsored academy, and following its sponsorship, performance improved rapidly. The school was judged good in January last year, and its 2019 academic performance places it well above the national average. The trust also includes Newstead Primary Academy, located in the constituency of my hon. Friend the Member for Stoke-on-Trent South.
In a bid to support academy trusts in Stoke-on-Trent and nationally, we have launched a trust capacity fund, which will help trusts to expand. As my hon. Friend knows, the statutory duty to provide sufficient school places sits with local authorities. We provide capital funding for every place that is needed, based on local authorities’ own data on pupil forecasts. They can use that funding to build new schools or expand existing schools. Stoke-on-Trent has been allocated £32.7 million to provide new schools and new school places between 2011 and 2022.
Building on the need for more school places nationally, the Government have delivered a hugely ambitious free schools programme, through which we have funded thousands of good school places and opened hundreds of new schools across the country. That happens in waves, and we are now on wave 14. My hon. Friend mentioned Florence MacWilliams Academy. There have been 89 applications received for wave 14 of free schools, two of which came from Stoke-on-Trent. One application has been withdrawn. Florence MacWilliams Academy is a free school proposal submitted by the newly formed trust, Educo Academies. The application seeks to establish a co-educational 11-to-16 school in the south of the city of Stoke-on-Trent. We will make an announcement on the successful bidders to that scheme in due course.
In the final seconds left, I again pay tribute to my hon. Friend for his commitment to education in general and to the schools in his constituency in particular.
Madam Deputy Speaker (Dame Eleanor Laing)
What a race! The Minister managed to get it all in with hardly any time.
Question put and agreed to.
Finance Bill (Ninth sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Finance Act 2020 View all Finance Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Financial Secretary to the Treasury (Jesse Norman)
It is a delight to see you in the Chair, Ms McDonagh. Welcome to day six of our deliberations—or is it day five? It feels like many more. At the start of the Committee, I said that we were like pilgrims in “The Pilgrim’s Progress”, and that hopefully we would get through the slough of despond. I venture to say that we have made it over the hill of difficulty, but perhaps not quite reached Calvary or the place of deliverance.
Clause 99 and schedule 14 exempt payments made under the Windrush compensation scheme and the troubles permanent disablement payment scheme from income tax, capital gains tax and inheritance tax. The Government deeply regret what happened to many members of the Windrush generation. The Windrush compensation scheme was launched in April 2019 and is a key part of the Government’s righting those wrongs. It compensates individuals who have suffered loss by being unable to demonstrate their lawful status in the United Kingdom. The compensation covers a number of areas, including loss of income, denial of access to social security benefits and incorrect detention. Similarly, the troubles permanent disablement payment scheme makes payments in acknowledgment that, during the troubles, many individuals suffered permanent injury through no fault of their own. It also aims to address the adverse financial impact that troubles-related disablement can have on individuals and families.
Payments made under schemes such as these are often made entirely free of income tax without the need for legislation, but there are circumstances where income tax may apply. Payments could be taxable if they were made to reinstate taxable social security benefits or in respect of a terminated employment. All types of payments could be subject to inheritance tax or capital gains tax if they exceed the relevant thresholds. Clause 99 and schedule 14 will ensure that payments made under the Windrush compensation scheme and the troubles permanent disablement payment scheme are exempt from income tax, capital gains tax and inheritance tax.
The changes reaffirm the Government’s commitment to the Windrush generation and to those who suffered as a result of the troubles, and give certainty about compensation to claimants. The clause also introduces a new power to allow the Government to extend the definition of “qualifying payment” to other compensation schemes, allowing the Government to act more quickly to clarify the tax treatment of any necessary future compensation schemes, including those set up by foreign Governments. As we have seen, payments from such schemes can begin before it is possible to pass legislation in a Finance Act to exempt them from those taxes. Exempting such payments from tax in the past has not been controversial, and I hope it will not be so today and in the future.
The clause provides tax exemptions and gives clarity to those eligible for payments under the Windrush compensation scheme and the troubles permanent disablement payment scheme. I therefore commend the clause and the schedule to the Committee.
Wes Streeting (Ilford North) (Lab)
It is a pleasure to be here for what is likely to be our final day of line-by-line scrutiny of the Bill. It is important to remember that the reason why we are discussing clause 99 is in no small part, as the Minister alluded to, due to the Windrush compensation scheme, which is the culmination and inevitable consequence of the appalling circumstances of the aggressive and deeply destructive hostile environment pursued by the Government over the course of the past 10 years. As Wendy Williams said in her review, the Windrush scandal, which saw so many people’s lives completely disrupted, and in many cases ruined, was the result of “foreseeable and avoidable” systematic operational failings, so it is right that the Windrush compensation scheme was established. The House has considered those issues many times.
It is a source of deep regret, to put it mildly, that fewer than one in 20 people who have made claims under the Windrush compensation scheme have been paid so far. I want to take the opportunity, as we are discussing clause 99, to restate again our view that the Government must act much more quickly. People are owed that compensation, although the financial compensation will never fully compensate for the emotional and mental trauma that British citizens suffered as a result of the Windrush scandal.
It is appalling that we have added insult to injury by moving so slowly on compensation claims, even where they have been made. Of course, as the Minister outlined, the clause improves conditions for people accessing such schemes, whether the Windrush compensation scheme or the troubles permanent disablement payment scheme, so we have no objection to the clause.
Alison Thewliss (Glasgow Central) (SNP)
It is regrettable that so many people are still waiting for their money through the Windrush compensation scheme. I urge the Minister to do everything he can to make sure that the money gets out the door.
It is useful that the clause allows for future schemes so that there will, hopefully, be fewer delays and less confusion for people in future about the impact of those schemes. We want to make sure that, where wrongs have been done, people can get the money that they are entitled to in compensation as swiftly as possible.
Jesse Norman
I thank both hon. Members for their comments. To pick up on the last point, the hon. Lady is absolutely right about the value of building in capacity to respond more quickly in future. It is noticeable that the Chartered Institute of Taxation, which is well respected across the Committee, commented that,
“This is a sensible move from the government to help… It is also encouraging to see that the bill…will make it easier in the future for payments…to be made tax-free, without the need for fresh legislation.”
That very much remakes the point she made, and I thank her for that.
On the point about the numbers paid out, I completely understand the concern and I know that other Ministers do as well. There is a balance between due process and speed. Of course, the compensation claims have to be agreed on both sides—the offers have to be accepted—for them to be payable. It is important that the hon. Members have put their concerns on the record, and I fully share them.
Question put and agreed to.
Clause 99 accordingly ordered to stand part of the Bill.
Schedule 14 agreed to.
Clause 100
HMRC: exercise of officer functions
Question proposed, That the clause stand part of the Bill.
Jesse Norman
Clause 100 is a technical measure that makes changes to put it beyond doubt that tasks that are being done by an individual officer of Her Majesty’s Revenue and Customs may be carried out by HMRC using a computer or other means. It ensures that the intention of Parliament is appropriately reflected in the legislation and confirms that the rules work as they have been widely understood and applied over many years. No new charges or obligations for taxpayers will result. The changes merely clarify legislation.
If I may explain the context for the introduction of the clause, the Government announced by written ministerial statement on 31 October 2019 that it would legislate retrospectively and prospectively to confirm notices to file tax returns and penalty notices issued by HMRC through automated processes as valid. That long-standing practice has been challenged in the courts on the basis that the legislation states that some tasks are to be carried out by
“an officer of the Board.”
The relevant legislation in the Taxes Management Act 1970 is 50 years old and was designed to support a paper-based manual tax system.
The way in which HMRC administers the tax system has evolved over time, in line with taxpayers’ expectations for a modern and digital system. Decisions made by HMRC officers are often given effect by computer-driven processes, so that HMRC can assess and collect taxes in the most efficient and cost-effective way.
Harriett Baldwin (West Worcestershire) (Con)
As he expatiates on the value of digital technology to tax collection, will my right hon. Friend share with the Committee his thoughts on making tax digital and how the recent opportunity to make furlough payments has shown the value of a digital tax system?
Jesse Norman
My hon. Friend makes an acute comment. The response to covid has undoubtedly highlighted the need for greater investment in digitisation within the tax system, and specifically put a greater emphasis on the ability to reach taxpayers quickly to respond to a national emergency and to improve resilience.
As my hon. Friend will be aware, we are introducing making tax digital for VAT, but it is widely thought that there is a case for taking it further. We have it under close consideration. As her question highlights, taxpayers—and people more generally—expect nothing less than to have a tax system that is digital, effective and integrated, and not one where the lack of digitisation can be exploited for the purposes of legal suit.
To avoid any doubt, the clause clarifies the legal basis for the existing policy, which has been in place for many years, allowing for the use of automated processes. It puts beyond doubt that the law operates in the way Parliament intend it to and as it has been widely understood to work to date. It does not introduce new or additional obligations, and will help to ensure the tax system applies fairly to all, while preventing loopholes opening up in tax law that could be exploited by people who do not wish to pay their proper share of taxes.
The changes made by the clause will clarify that tasks being done by an individual officer of HMRC may be carried out by HMRC using a computer or other means. The legislation is treated as always having been in force. The effect of that is to protect over £100 billion in tax revenue, already collected. Failure to legislate would result in enormous disruption and uncertainty for taxpayers and HMRC alike. For these reasons, I commend the clause to the Committee.
Wes Streeting
The Government have brought forward clause 100 for obvious reasons. As we have heard from the Minister, it is patently absurd that we would be in position where HMRC was dragged through legal processes simply because section 8 notices were issued used automated processes, for example.
There is obviously a good case to be made for applying ever-changing technology to improve the efficiency of processes within HMRC’s systems, to try to improve the customer experience of HMRC customers, which, as we know as constituency MPs, can sometimes be very good and sometimes be absolutely abysmal. Where HMRC can automate processes to free up people time, the focus should be on redeploying those people to try to give people and the state overall a better service. There is nothing to quibble about there.
It is important to lay down a cautionary note about how automated processes and algorithms are used, particularly when it comes to decision making that can have substantial impact on citizens, organisations and businesses. Writing in Tax Journal, Catherine Robins and Steven Porter of Pinsent Masons were critical of the Government’s announcements, arguing that:
“Some of HMRC’s powers can have very serious consequences for taxpayers and the fact that a human being has to decide to exercise them is an important safeguard, which should not be eroded.”
I share their concern, up to a point. I think it is important that there are safeguards, checks and balances and, ultimately, opportunities for people to appeal to human judgment, to account for technical error and to appeal technical error. As the capacity and scope of technological change continues to widen, it is even more important that Ministers and civil servants think very carefully about the application of technology and whether it is indeed right and proper for a decision to be made by an automated process rather than a human being.
Those are much bigger, wider principled and ethical considerations. For the reasons that the Minister has outlined, clause 100 is a perfectly reasonable and sensible provision, and it is one that we are happy to support.
Alison Thewliss
I want to raise some of the concerns expressed to us by the Institute for Fiscal Studies’ Tax Law Review Committee, which sent an extensive note earlier in the week. It is looking for ministerial reassurance that the powers will not be used without proper consultation and discussion of safeguards to replace the discretionary decisions, especially about penalties, currently made by human officers. It is the discretionary point that I am most worried about. We must not get to a situation where computer says no and that is the end of the story, because sometimes it can be quite difficult for businesses to get the decision pulled back and unpicked, and reconsidered.
I will highlight the case of uploading real-time information, because businesses in my constituency had serious issues with the technology for uploading RTI prior to coronavirus and now find themselves unable to claim under the job retention scheme, for example. That has been an issue with technology, and it has been very difficult to resolve it. Meanwhile, those businesses are on the brink, on the point of going bust, with employees whom they are struggling to pay. That is because in an emergency it is difficult to unwind a technical, computer-based decision, made months ago.
I ask for reassurance about the automating of discretionary decisions. What safeguards will be put in place to ensure sure that no businesses find themselves in a situation where they cannot unpick a decision made by a computer, and to ensure that they will be able to speak to a human who has discretion and is able to exercise it effectively?
Jesse Norman
Again, I thank Opposition colleagues. Let me pick up a couple of the points raised. The hon. Member for Glasgow Central asks for safeguards, and of course she makes a very important wider point. In a rule of law society we want as little discretion as possible to be exercised—and, in particular, personal discretion—so it is important that within HMRC there is baked in a culture of accountability for decisions. From that point of view, nothing is changing. This measure is ratifying an existing set of arrangements by putting them on a legal basis. However, I can reassure her that the issue of safeguards and the balance of powers between HMRC and taxpayers is taken very seriously, and I have specifically commissioned work within HMRC to ensure that that balance is appropriately maintained, not just at customer level but more generally.
The hon. Lady and the hon. Member for Ilford North raised the question of decision making more generally. I think I have, in a way, spoken to that, but I recognise that there is a distinction between the automated exercise of a decision and the capacity to make a decision itself. Of course, HMRC does increasingly rely on computerised systems, and it is absolutely right for our purposes as a nation that it should do so. It is, for example, inconceivable that we could have responded to coronavirus with either the self-employed scheme or the furlough scheme without heavy reliance on computing. It is to HMRC’s enormous credit that it was able to commission and bring into effect a platform and an approach to those schemes in a matter of weeks, using that computing expertise. I also agree with the hon. Gentleman when he points out that there are benefits not merely in terms of customer service, but in freeing up people and, we hope, improving the quality of work by taking HMRC staff away from the more routine operations and more towards higher quality work that can give more professional satisfaction.
Question put and agreed to.
Clause 100 accordingly ordered to stand part of the Bill.
Clause 101
Returns relating to LLP not carrying on business etc with view to profit
Question proposed, That the clause stand part of the Bill.
Jesse Norman
Again, this is a technical measure. Clause 101 makes changes to put beyond doubt that where an LLP is found not to trade for profit, HMRC can continue to amend LLP members’ tax returns using income tax rules as it has always done, in the same way that it does for general partnerships. It ensures that, as with the previous clause, the intention of Parliament is appropriately reflected in the legislation, and it confirms that the rules work in the way they are widely understood to work, and as they have been applied since they were introduced in 2001. To ensure that this is plainly and unequivocally understood, the measure is introduced with prospective and retrospective effect back to that date—2001—with the result that the changes simply clarify and support the legislation and continue to meet taxpayers’ expectations. Again, they do not result in any new charges or obligations for taxpayers.
By way of context, limited liability partnerships are a legitimate means of structuring business activity. They are used successfully by the vast majority of partnerships: for example, by many large law and accountancy firms that operate for profit. Since the LLP rules were introduced in 2001, HMRC has always treated LLPs and their members’ tax returns under income tax rules on the same basis as any other partnership. That is widely understood and accepted by the vast majority of taxpayers, but it has been challenged in the courts on the basis that where an LLP is found not to trade for profit in line with its partnership tax return, the law does not support its treatment under income tax rules. The upper tax tribunal recently confirmed that HMRC’s long-held tax treatment of LLPs is correct. This decision overturned an earlier decision of the first-tier tribunal that had judged it incorrect. However, as the matter is still in litigation, putting the matter beyond doubt in legislation will provide certainty for LLP taxpayers.
Such legal challenges come from a small minority who are intent on avoiding paying their tax and looking for technical loopholes to do so. They seek to use limited liability partnerships to create losses and to share and then offset them unfairly against their members’ personal income in their own tax returns. That is not fair either to the Exchequer or to the vast majority of honest limited liability partnerships. The Government are legislating to prevent such practice.
The measure introduces three conditions that clarify the position and apply where an LLP delivers a partnership return; where the basis of that return is trading with a view to profit; and where it is found that the LLP was not trading with a view to profit. This clarifies the legal basis relating to LLPs that submit partnership returns where they are subsequently found not to be trading for profit, allowing HMRC to amend LLP members’ tax returns in such circumstances, as it has always done, to remove any unfair tax advantage. The clarification does not introduce any new or additional obligations or liabilities for taxpayers and it prevents loopholes from opening up in tax law that could be exploited in future by those seeking to avoid paying their fair share.
The changes made by the clause clarify the treatment of LLP partnership returns where the LLP is found to be operating without a view to profit. It permits HMRC to amend such returns using income tax rules, as it has always done. The legislation is introduced with retrospective effect, treating it as always having been in force. This is necessary in order to maintain the status quo, provide certainty for taxpayers, and protect about £2 billion of tax revenue that has already been collected. It also ensures that people seeking to avoid tax do not secure unfair and advantageous treatment due to the exploitation of perceived loopholes in legislation.
The policy is not new and nothing will change for taxpayers. No new or additional liabilities will be created and HMRC’s policy and processes will continue to operate in the way that they have for many years. It provides clarity for taxpayers and ensures that there is a fair and level playing field for all. I therefore commend the clause to the Committee.
Wes Streeting
Limited liability partnerships are a legitimate way of structuring business activity that is used successfully by the vast majority of LLPs that operate for profit. There is no doubt about any of that, but as we heard from the Minister this morning, there have been too many examples of LLPs being used for the purposes of minimising people’s tax liabilities, effectively to avoid tax. Of course, Opposition Members take a very dim view of that.
Clause 101 seems to be a sensible provision, intended to help HMRC to close down tax-avoiding structures that use LLPs to generate and spread losses that the partners use to offset against their other personal income. Let the message go out that people ought to act within not just the letter but the spirit of the law, and if they cannot find in themselves the moral scruples to do that, this House will have no hesitation whatsoever in changing the letter of the law to make sure that people do the right thing and pay their fair share.
Jesse Norman
The hon. Gentleman has made the point extremely well, and with his support I hope the Committee will agree to the clause.
Question put and agreed to.
Clause 101 accordingly ordered to stand part of the Bill.
Clause 102
Preparing for a new tax in respect of certain plastic packaging
Question proposed, That the clause stand part of the Bill.
Jesse Norman
Clause 102 ensures that Her Majesty’s Revenue and Customs can make preparations to introduce a new tax in respect of certain plastic packaging. The new tax will apply to plastic packaging that is manufactured in or imported into the UK and that contains less than 30% recycled plastic.
Plastic waste is a very serious global issue. Often, it does not decompose. Indeed, it can last for centuries in landfill, or it ends up littering the streets or polluting the natural environment. More than 2.2 million tonnes of plastic packaging are produced in the UK each year. The vast majority is made from new plastic, rather than recycled material, because recycled plastic is often more expensive to use than new plastic.
To tackle this problem, the Conservative manifesto reaffirmed the commitment to introduce, from April 2022, a world-leading new tax on the manufacture and import of plastic packaging that does not contain at least 30% recycled plastic. The tax will provide a clear economic incentive for businesses to use recycled material in the production of plastic packaging, which will create greater demand for this material, and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.
This follows an initial announcement of the tax at Budget 2018 and consultation on the high-level design in 2019. In its response to the consultation framework, the Chartered Institute of Taxation welcomed the Government’s measured approach to the implementation of the tax. Many respondents agreed with the initial proposals on the tax design, although there were areas where some respondents disagreed.
The Government took this feedback into consideration, announcing in response that we would extend the scope of the tax to include imported filled plastic packaging that contains less than 30% recycled plastic, given concerns about the impact on UK competitiveness without that adjustment. The Government are currently holding a further consultation on the detailed design and implementation of this tax, to ensure that it works as intended and so that businesses have time to prepare for it.
Clause 102 is a technical provision to ensure that HMRC can make preparations for the introduction of the new tax, such as incurring expenditure on the development of an IT system. Alongside this, HMRC is developing the detailed legislation to introduce the tax. We expect that this will be published in draft for technical consultation later this year, before being implemented in a future finance Bill.
In conclusion, the clause forms the first part of the legislation needed to introduce the plastic packaging tax. I therefore commend it to the Committee.
Wes Streeting
For very obvious reasons, it is quite right to move ahead and use the tax system to incentivise good behaviour, to reduce our reliance on plastics, particularly products using new plastics, and to improve the take-up and use of recycled plastics.
That is why this proposal received such widespread support in response to the Government’s consultation, and I recognise and welcome the fact that the Government responded favourably when the majority of respondents made representations about wanting the tax to be extended to imported filled plastic packaging.
In his remarks, the Minister addressed some of the questions I had about the timetable for introducing draft legislation, and when we can expect it to be implemented. Next year’s finance Bill feels a long way away, and, because of the events we are living through, finance legislation and a finance Bill might be introduced sooner. On the basis of the merits of this policy and the impact it is likely to have on the use of plastics in our country—we certainly hope it will have such an impact—we would support the Government if they were presented with the opportunity to move further and faster. I urge the Minister to consider doing so.
Jesse Norman
I thank the hon. Gentleman for his comments. As he will know, the introduction of any new text requires great care and attention, which is why, as he rightly highlighted, we have taken such a deliberate approach to consultation. However, I thank him for his support and note his suggestion. With that, I commend clause 102 to the Committee.
Question put and agreed to.
Clause 102 accordingly ordered to stand part of the Bill.
Clause 103
Limits on local loans
Question proposed, That the clause stand part of the Bill.
Jesse Norman
This is another small, technical measure. Clause 103 makes changes to ensure that Public Works Loan Board lending is available to local authorities in order to support worthy capital endeavours that benefit their residents. There is a statutory limit on the total amount that may be lent to local government through the PWLB, a limit that is governed by section 4 of the National Loans Act 1968. That Act allows for two future levels of that limit to be specified in advance through primary legislation and activated through secondary legislation.
The legislation would be exercised through HM Treasury. A date to exercise these powers has not been, and would not usually be, set in advance. The Treasury considers this clause to be a high priority because of the central role the PWLB plays in the capital finance system, supporting local authorities to deliver public services and, still more urgently, supporting communities through the pandemic as the need may arise.
The changes made by clause 103 will amend the predetermined legislated figures in the 1968 Act. The limit is currently £95 billion, and the clause resets the two future amounts to £115 billion and £135 billion. Clause 103 thus ensures the continuity of PWLB lending, which is a key stream of funding for local authorities across the country.
Harriett Baldwin
I know that Worcestershire County Council finds the Public Works Loan Board very useful. Can the Minister update the Committee on the interest rate charged on that facility?
Jesse Norman
That is a very helpful question. I cannot update the Committee at the moment, because, as my hon. Friend will know, that is a matter for consideration within the Treasury. However, she has usefully put the issue on the record, and I thank her for doing so.
Wes Streeting
Clause 103 gives me an opportunity to speak to some of the challenges facing local authorities and the role that the Public Works Loan Board can play. I also want to knock on the head some of the assertions that have been made about local government finances and the sensible use of borrowing by local authorities across the country to invest in local infrastructure and works that benefit their residents. I speak not just as my party’s shadow Treasury spokesperson, but as a former deputy leader of the London Borough of Redbridge and a current vice-president of the Local Government Association.
Local authorities have done a remarkable job managing their finances sensibly and effectively during a very difficult decade. Not only was the public sector broadly hit by cuts, but local authorities felt the brunt because those cuts were both deep and front-loaded. The local authority response to those challenges over the course of the past decade has, to be frank, been remarkable. The same can be said for the ingenuity of many local authorities in making sensible and wise investments that not only improve the lives of their residents but generate income that can then be ploughed back into frontline services and mitigate the impact of central Government cuts. I think I speak for people right across the Local Government Association, regardless of their party, in saying that, as well as devolving power without resources, the Government have too often devolved blame. I hope that Ministers will consider that. I will address the issue this afternoon, when debate the new clauses.
There have been some rather unhelpful and misleading headlines about local authorities borrowing to invest in local projects. Of course, as with central Government, we will always be able to point to decisions that, though made with the best of intentions, do not work and incur a liability for the public purse. If public funds are not used widely, it is absolutely right that there should be scrutiny, lessons learned and accountability. It is fair to say, however, that in the vast majority of cases where local authorities have drawn on the Public Works Loan Board, their approach has been sensible, effective and well deployed. It is important that the facility continues to be made available to local authorities in the same way.
When Ministers consider not just this Bill but impending decisions by the Treasury, I urge them to recognise the awful impact of covid-19 on local authorities. In responding to the Secretary of State’s plea to do whatever it takes to get their communities through the crisis, not only have their costs risen; their income has also fallen significantly. I urge Ministers to think carefully about the demands they place on local authorities, particularly in terms of loan repayments during this period, and to consider whether more could be done.
Stephen Flynn (Aberdeen South) (SNP)
I have had a look at the figures. Scottish local authorities are due to repay £793 million of PWLB interest and principal debt over the financial year 2020-21. Given the extreme challenges facing local authorities, does the hon. Gentleman agree that it would be sensible if the Treasury considered mitigating those debt repayments?
Wes Streeting
I am grateful to the hon. Gentleman for his intervention. The Government have to look very carefully at the liabilities facing local authorities and how they are having to balance them against other demands and challenges. As I have said, in addition to creating cost pressures, the pandemic has had an impact on local authority income, too. In that respect, local authorities really are all in this together, whether they are Labour, Conservative or SNP. There are challenges for local authorities right across the United Kingdom. As we will discuss when we come to the new clauses, some communities have been affected more than others. None the less, the challenges are universal.
I hope that Ministers will take that on board and that they will listen very carefully to the representations from the Local Government Association, which is cross-party but Conservative controlled. We will do our best to remedy that in next May’s local elections. I hope that the representations Ministers receive from Conservative LGA leaders—and not just Opposition party representatives —will help them understand the challenges that local authorities are facing, particularly as they have been unable to collect around £1 billion in combined business rates and council tax income during the crisis so far.
I also impress upon Ministers the importance of Government keeping their word to local government. When local authorities were asked to do whatever it takes—and whatever it took—to get communities through the covid-19 pandemic, they took the Secretary of State for Housing, Communities and Local Government at his word and they delivered. Now, they expect to be reimbursed, as was promised. The Government have given some additional funding to local authorities, but it is a drop in the ocean when compared with the cost pressures they face and the fall in income.
With that, I am content to support the clause, and I hope that the wider points that it has enabled me to make have been heard and well understood by the Treasury, and not just the Ministry of Housing, Communities and Local Government.
Jesse Norman
I will just move the clause, if I may.
Question put and agreed to.
Clause 103 accordingly ordered to stand part of the Bill.
Clauses 104 and 105 ordered to stand part of the Bill.
New Clause 1
Workers’ services provided through intermediaries
“Schedule (Workers’ services provided through intermediaries) makes provision about workers’ services provided through intermediaries.”—(Jesse Norman.)
This new clause introduces the new Schedule inserted by NS1.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss Government new schedule 1—Workers’ services provided through intermediaries.
Jesse Norman
The new clause and new schedule 1 make changes to ensure that the off-payroll working reform is extended to medium and large-sized organisations in all sectors outside the public sector from April 2021.
The reform moves the responsibility for determining whether the off-payroll working rules apply from an individual’s personal service company to the client engaging them. It also requires the client, or the party paying the individual’s personal service company to account for and deduct employment taxes where they are due, rather than that responsibility resting with the individual’s personal service company. The change is not the imposition of a new tax, but is focussed on improving compliance with the already existing off-payroll working rules.
The off-payroll working rules have been in place for nearly two decades. They are designed to ensure that individuals who work like employees but through their own personal service company pay broadly the same income tax and national insurance contributions as those who are directly employed. Without those rules, nothing prevents individuals from being engaged off-payroll simply to reduce the tax and national insurance contributions rightfully due.
Personal service companies have traditionally had to self-assess whether the rules apply. Unfortunately, non-compliance with the off-payroll working rules outside the public sector is widespread. The public sector reform has demonstrated that organisations engaging individuals are better placed to assess the employment status for tax of that individual.
There have been several attempts to tackle non-compliance with the rules in recent years. In November 2015, the Government carried out a consultation on how to improve the effectiveness of the off-payroll working rules. Since then, the Government have carried out three further consultations on reforming the rules. During this period, several alternatives to the original off-payroll working rules were suggested. The Government fully considered alternative proposals as part of the extensive consultation process on the reform.
In general, the approaches suggested would create a group of people who are exempt from the employment status tests and subject to a separate and advantageous tax regime, which the Government did not consider to be fair to the majority of working individuals who are subject to the existing boundary between employment and self-employment. Options such as administrative changes and strengthening HMRC’s compliance response were also discussed, but the consultation found that those would not be sufficient to tackle the problem.
The off-payroll working rules were reformed in the public sector in April 2017, shifting the responsibility for determining whether the off-payroll working rules apply from an individual’s personal service company to the public sector client engaging them. That was because organisations are better equipped to make the correct employment status for tax assessments than are individual contractors, and HMRC is better able to monitor their compliance. This reform is effective in reducing non-compliance with rules: it raised an estimated £250 million in additional revenue in the first 12 months, with independent research showing that it did not damage the flexibility of the labour market.
Jesse Norman
I am winding up, so perhaps I could let the hon. Lady introduce her point in her speech.
When their engagement meets the tests of an employment relationship, contractors should not pay less tax than those who are directly employed. I therefore move that new clause 1 and new schedule 1 stand part of the Bill.
Wes Streeting
Our position on IR35 has been well rehearsed in previous and recent debates on the Floor of the House, but let me revisit some of those points, because this debate is closely followed outside Parliament and matters to people across the country. Self-employment is a vital part of the UK economy. People who are genuinely self-employed deserve to be properly supported while also ensuring that everyone pays the right amount of tax. Historically, the tax arrangements for self-employed people have differed from those for people on payroll, reflecting the fact that self-employed people have lower levels of protection in areas such as holiday pay, sick pay and other rights and benefits that people would enjoy if they were employed on payroll. Clearly the system has also been subject to abuse, and it is right that we tackle that abuse.
Some of the anxiety arises from concerns that the Treasury, and the Government more broadly, sometimes have a tendency to think of the self-employed as if they fell into only two categories of people. The first is the very wealthy, who use self-employment status to avoid paying their fair share of tax, which should obviously be clamped down on. The second is the very low paid, who work in parts of the economy that are deemed unproductive—even to the extent that some people would think it desirable that such workers were not engaged in those forms of employment, as if that were the best way to tackle the UK’s poor productivity statistics. The true picture of self-employment in the country is a lot more complicated than that, and huge numbers of self-employed people make an enormous contribution to the economy and who provide a whole range of services that benefit citizens across the country and businesses more generally.
It is right that the Government have taken the decision to delay the implementation of the roll-out until April 2021 due to coronavirus. The Opposition would again impress on the Government the need to use the additional time ahead of implementation to provide an additional review and to learn from the mistakes of the public sector roll-out and the continuing anxieties about the planned private sector roll-out. Those concerns were expressed in the House of Lords report entitled, “Off-payroll working: treating people fairly”, which concluded that the Government must address IR35’s inherent flaws and unfairness, a point that was supported by the ICAEW.
The Opposition urge the Government to use this time wisely. We believe it is necessary for the Government to take a broader approach in order to modernise the law on employment status and to look at how it interrelates with tax status, so that we have a genuinely joined-up approach that brings together the issues of tax and employment law. Notwithstanding the planned roll-out of IR35, the Chancellor made it very clear, when he announced the self-employment income support scheme, that there will be consequences for future Treasury policy and future tax arrangements for Britain’s self-employed. That message was heard loud and clear by the self-employed, but if we are asking them to pay a greater contribution, we also have to address the inherent challenge and, in many cases, the injustice around their employment protections and the levels of social protection and social insurance that people enjoy if they are employed, as opposed to self-employed.
As the shadow Chancellor has said, having addressed this issue many times both in her current role and in her previous role:
“We really need a joined-up approach to the issues that brings together the consideration of tax and employment law and levels up protections for the self-employed, as well as dealing with the current implications of the tax system that boost bogus self-employment.”—[Official Report, 4 April 2019; Vol. 657, c. 489WH.]
She made those remarks back in April 2019; it is now June 2020. I am not sure that, in the year that has passed since she made those comments, the situation has changed particularly and that things have improved. The delayed roll-out is something that has been widely welcomed, but it is crucial that the Government use this time wisely. It is not clear from the year that has just passed that the Government will use the next year any better.
Stephen Flynn
Before I get into the substantive detail of this issue, I want to touch on the process and where we find ourselves at this moment in time with the new clause that has been tabled by the Minister. It is simply not acceptable that such a contentious tax matter was first introduced through a 45-minute money resolution debate in the House, instead of being subject to the full scrutiny of the Budget process.
The money resolution debate took place after the Finance Bill was published, meaning that the Government were able to introduce the detailed IR35 tax law as a Finance Bill amendment. The result of what can only be described as a procedural whizz is that Opposition parties cannot do what they were elected to do and amend the proposals as the Bill goes through its line-by-line scrutiny. Frankly, that is not good enough. I certainly thought better—perhaps wrongly—of the Government in that regard. Of course, that entire process missed out those MPs who have been disenfranchised from taking part in the House as a result of the Government’s shocking processes in recent weeks.
On the substantive issue at the heart of this, let us be clear that IR35 is creating a new group of zero-hours employees paying full taxation but without receiving the associated employment rights. What is just and fair about that? Speaking as a Member with a constituency that is dominated by the oil and gas sector, I have been inundated—inundated—with correspondence from contractors outraged by the decisions that the Government are seeking to take, particularly so given that we are in the middle of a global pandemic. I hope that the huge concern that I and others have about the long and, frankly, short-term sustainability of the oil and gas sector, and the impact that that has on employees, has not escaped the Government’s notice. To then add a further layer of complexity into their employment status is simply unforgivable.
In the north-east of Scotland, we are witnessing job losses hand over fist. Barely a day goes by when companies are not shedding staff. That is applicable to most sectors at the moment, be it hospitality, tourism or aviation, but it is very rare for a sector of such scale to be so dominant in one city, as is the case in Aberdeen. What the Government are seeking to do in relation to IR35 is a slap in the face to those workers who are having to deal with the most difficult of challenges.
Not only are the Government hitting those contractors—many of whom went down that path in good faith—with IR35, but they are failing to deliver any sectoral support to the oil and gas industry. Not a single penny of sector-specific support has been provided by the UK Government for the oil and gas sector, irrespective of the fact that the Treasury has lined its pockets with North sea oil and gas revenue for decades. It is time to give back, not time to double down on the damage, so I urge the Government to reconsider what they are putting forward.
Alison Thewliss
My hon. Friend makes an excellent point about contractors in the north-east of Scotland. In my constituency of Glasgow Central, it is IT contractors, many of whom came to live in Glasgow from India. They work in the IT sector and have found that their contracts have not been renewed with companies that they have been working for, and they are now really struggling to find employment, causing them a huge deal of uncertainty at this time, particularly with the coronavirus crisis.
Stephen Flynn
I welcome the intervention from my hon. Friend, which goes to the nub of the issue that we are discussing. The Government’s policy is, frankly, to turn their back on those people who need support at this time.
If the Minister is not willing to take my word for that, perhaps they will listen to the salient words of one of their own. The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) said late last year in a letter to the then Chancellor:
If the proposed changes—making every medium and large sector private business responsible for setting the tax status of any contractor they use—were to come into effect, I would worry for the industry”—
the oil and gas industry—
“and its ability to attract the highly skilled workers they need. It is also predicted that changes could see a worker’s income reduced by up to 25 per cent. Many of these workers are my constituents.”
Many of those workers are also my constituents, and it is simply not good enough. I am glad that there is cross-party support in north-east Scotland for opposing what the Government are seeking to do, and I sincerely hope that that cross-party ethos will be found in this room today, before the Government do more damage.
I just want to pick up on one final point. I think the Minister said in his opening remarks that he listened carefully—that the Government have listened carefully. They have not listened to the House of Lords—I do not say that with any joy, being a member of the Scottish National party—which has been clear that they need to pause this policy and go back to the drawing board. I urge them to do just that.
Andrew Jones (Harrogate and Knaresborough) (Con)
The issue of off-payroll working has attracted much attention in the House and beyond. Clearly, there are some problems to solve, but they are not easy problems to solve.
In some cases, the issue is straightforward. People work for one employer for prolonged periods up to several years and they really are employees, because they do similar jobs to colleagues and use company equipment, but they do so on different terms. It may be that they are better paid in terms of headline salary than their immediate work neighbours, but the situation is more complex, because they are not paid for holidays or potential pension contributions and so on.
Some workers may have been put under pressure to become self-employed by less scrupulous employers who have sought to save money on things such as NI payments. I have read of cases—I am sure we all have—where the imbalance of power that can exist between an employer and an employee has seen pressure on people to choose a particular route. That is not satisfactory for those employees or taxpayers generally as revenue for public services is missed.
While some may have been pressured into becoming self-employed, vast legions in our economy have chosen the self-employed route because they enjoy the challenge of that type of work or they want to be more in control of their own destiny, which being your own boss can achieve, or many other personal reasons.
That is to be really encouraged, because the flexibility that self-employed workers, often on contracts, provide has been a great boost to our economy. It is one of the ingredients that has contributed to the recent economic progress that we have enjoyed. Being swift of foot in response to commercial opportunities gives a competitive advantage. It has allowed companies to bring in extra resource where they need to boost operational capacity. It has allowed extra skills to be brought into a company when needed. Many people I have met or corresponded with in my Harrogate and Knaresborough constituency have highlighted to me that they have built careers adding real value to their clients.
There are some sectors where the use of contractors is more prevalent than others. We have just been hearing about the oil and gas sector, but that includes IT and technology more broadly, as well as marketing and the creative industries, sectors where the UK is strong, and where I worked before coming into this place. This is about bringing skills and capacity into a company when needed but when there is not enough work for long-term permanent employment. There is also the issue of the growing sector of interim managers.
I see a balance to be struck here in the way the issue is taken forward by Ministers between protecting some employees and recognising that the vast majority have chosen self-employment and are providing real value. We need to balance employment rights and protections between the employed and self-employed, while ensuring that the rules do not have a sclerotic effect on our economy. Flexible, nimble companies responding to customers, adding value, creating wealth and grabbing opportunities is how economies grow and jobs are created. Ensuring that is preserved is critical to the operation of these rules. That is something the Minister must consider as he takes this forward.
Miriam Cates (Penistone and Stocksbridge) (Con)
I refer hon. Members to my entry in the register of Members’ interests. This is clearly a contentious issue, but the majority of employers and contractors I have spoken to agree that some kind of reform is necessary.
Our tax system must be fair, but it should also support those who take risks to grow businesses and innovate in a way that benefits our whole economy. It should not offer advantages to those who are using PSCs to create wealth only for themselves. I am certainly not saying that it is wrong to create personal wealth, just that our tax system should not offer particular advantages in doing so and tax should not be avoided as a result. We must balance flexibility with fairness and it is not fair that two people doing the same job in broadly the same conditions pay different rates of tax. We must recognise that those who are genuine contractors do not have the same benefits as employees—they do not have the same job security—but where someone is to all intents and purposes an employee, they and their employer should pay their fair share of tax and national insurance.
I have personal experience of running a small business in the tech sector and I believe that current practices discourage people from becoming employees in some sectors. For example, in the tech industry, people with certain programming skills can command such high day rates as contractors that there is very little incentive to become an employee in a small company. That is a particular issue in a sector where there is a shortage of talent and a great demand for skills.
While there is and always will be a role for contractors, contracting costs can be prohibitively high for start-ups and scale-ups, and those businesses find it difficult to recruit employees with the right skills. Start-ups and scale-ups need employees—people who are committed to the company, who can help shape its culture and, importantly, who can pass on their knowledge and skills to new employees as the company grows. Labour market flexibility has to work for employers and employees. At the moment, the very businesses that we most need to grow and innovate are struggling to recruit skilled employees, especially in areas outside London and the south-east, such as Sheffield and Barnsley, which I represent.
I believe that the reforms will make employment and the benefit that it brings more attractive. As I said, we should be using the tax system to support those who create wealth not only for themselves, but for our whole economy. In that way, any tax saving to an individual or company is an investment for the taxpayer, not just lost revenue. A great example of that is the research and development tax reliefs, which I am delighted have been increased in the Bill and will encourage the kind of innovation that the UK really needs to boost growth and productivity. They are incentives that help to create wealth for us all.
In contrast, using a personal service company to reduce an individual’s tax burden does not benefit the taxpayer. The individual’s income tax and national insurance savings are not used to create other jobs or to invest in technology or create products, and so the taxpayer does not receive any return on the lost revenue. Where a worker is genuinely self-employed, facing additional risks, with none of the benefits of employment, there should be no change, but where someone is to all intents and purposes an employee, improving compliance should make sure the taxpayer does not lose out.
I understand that any changes bring risks and uncertainty and I am pleased that the changes to IR35 have been delayed for a year to give our economy some chance to stabilise after covid-19, but fairness should be the foundation of our tax system and properly applied, the regulations will help to achieve that aim.
Jesse Norman
I will respond to the many important points raised by hon. Members, who I thank for raising them.
My hon. Friend the Member for Penistone and Stocksbridge is absolutely right to highlight the importance of making employment attractive. It is vital that best practice be spread throughout the economy as rapidly as possible and if the effect of that is to create a more level playing field between two sides of a particular divide, that would be a very valuable thing. The Government’s concern is that there is an unfairness in that someone can be, as it were, latently employed, although working for a personal service company, and that is the concern that the Government seek to address.
My hon. Friend the Member for Harrogate and Knaresborough is absolutely right to emphasise the importance of having a flexible and nimble economy. He is right, and the hon. Member for Ilford North is right, to focus on the effect of the self-employment and self-employed contractors in making this happen. For reasons I will come on to, this reform does not tax the self-employed. It does not tax anyone. What it does is to change the determination for people who are not self-employed but who are in fact employed, and to determine whether they are or not.
The hon. Member for Aberdeen South made a series of comments that I am afraid are simply not true. He was very rude about the Government’s decision to introduce this via a separate resolution, but the details of the change were announced as part of the Budget resolutions. They were not moved. They could and may well have been discussed—I do not recall the details—during the Budget debates. Therefore, it was perfectly open to the House to scrutinise those details, although the resolution was not itself moved. If the resolution had been moved, it would not have been possible for us to legislate with anything like the same straightforwardness for the move to an April 2021 deadline. That was the purpose of delaying moving the resolution. The effect was that the resolution was debated on the Floor of the House of Commons in and of itself—given a separate debate to that resolution in order to discuss that. Therefore, the idea that there has been any short-circuiting of due process is entirely wrong.
Of course amendments can still be tabled on Report, and the hon. Gentleman may seek to do that. He was very rude about the reform, saying it would lead to zero-hours contractors, and calling it shocking, but is he planning to support it? Will he vote in favour of it or against it? That will be the true measure of his and the SNP’s position on this important reform.
Finally, the hon. Gentleman talks about the Lords Economic Affairs Committee, but of course he is entirely wrong about that. We have yet to respond to the Lords Committee—we will do so in due course—but we have engaged very closely with it on a whole variety of different areas. If he speaks to Lord Forsyth, he will know that I approached Lord Forsyth personally, having just become Financial Secretary, to reopen the relationship and make it flourish. Indeed, I volunteered to appear in front of the Lords Economic Affairs Committee last year precisely to hold myself and the Treasury accountable in this area.
Stephen Flynn
The Minister has gone through a number of the points I made, but one that he did not touch upon was the impact that the proposal will have upon contractors working in the oil and gas sector, given the huge challenges facing those workers at the moment. What message would he give those contractors, whose future is uncertain in any case, but who are facing this change on top of an already devastating situation?
Jesse Norman
We are obviously very concerned about the effects of coronavirus, which is precisely why we have delayed the implementation of the reform by a year. The message I would give is that we absolutely respect and support the work that those individuals are doing and understand the position they are in. The Government have rapidly made available very important sources of support for the economy across a whole range of different areas and sectors of work and, indeed, in the benefits system, both for businesses and families and the sustaining of jobs. Therefore, there is no absence of respect or support for the people the hon. Gentleman describes.
The hon. Member for Ilford North mentioned the diverse nature of these different forms of employment. He referred to the self-employed, but actually the self-employed are not taxed by this. The genuinely self-employed are not affected by the reform. The reform is designed merely to change the way in which the status of someone who is latently employed—actually employed, but perhaps unaware of it or not behaving on that basis—is determined. The hon. Member asks us to use the additional time appropriately. We have got before April 2021. I have said already, but let me say again that we are in the process of commissioning external research into the effect of the public sector reform. As he will be aware, the early research immediately after the public sector reform did not bear out the dire predictions regarding flexibility or reduction of income, but we will make sure that external research into the longer-term effects of the public sector reform is completed and placed in front of the House before April next year.
Alison Thewliss
Can I ask the Minister about the impact assessments that will be done? What monitoring is his Department doing of the chilling effect that this is having on contracts right now? What I am hearing from contractors in my constituency is that those contracts are not being renewed now and it is already having a chilling effect, regardless of when the measure is coming in. What monitoring is he doing of the situation?
Jesse Norman
As I have said, in relation to public sector reform, the external research did not detect any great chilling effect. We will be looking at the longer-term effects of public sector reform. On this reform, it is undoubtedly true that the measure is nudging some companies to consider whether people they had thought of as contractors are not, in fact, employees. In some cases, they are having to review the structure of their workforces. I do not think that is a chilling effect on the status of those contracts, because those people were always latently employed. It is then for the contractor and the company to work out what future arrangement they wish to have.
Alison Thewliss
The IT contractors from India who I mentioned earlier can choose to go anywhere in the world. They have chosen to locate in Glasgow because the work is there, the skills are there and they have a good community in my constituency. If the contracts are not there, they will take their skills and their money and go somewhere else. What is the Minister doing to mitigate against that?
Jesse Norman
That is a claim that the hon. Lady makes and we will be able to test it over time through external research. It is not a view that has been validated so far in the roll-out to the public sector. It is a diverse and vibrant area of our life and it may well have more resilience overall than she is giving it credit for, but we will not know until we have seen the effects of the reform.
The final point, raised by the hon. Member for Ilford North, is to do with rights. Of course, the measure is to do with the determination of tax due, but the Government have put in the Queen’s Speech a substantial commitment to bring forward a Bill in that area following the Taylor review. I know that my colleagues in the Department for Business, Energy and Industrial Strategy take that very seriously.
Question put and agreed to.
New clause 1 accordingly read a Second time, and added to the Bill.
New Clause 2
Review of geographical effects of provisions of Sections 27 to 30
‘The Chancellor of the Exchequer must within twelve months of the passing of this Act lay before both Houses of Parliament a report assessing the differential geographical effects, broken down by nation and NUTS 1 statistical region, of the changes made by sections 27 to 30 of this Act.’—(Alison Thewliss.)
This new clause would require a geographical impact assessment of the clauses of the Bill relating to reliefs for business.
Brought up, and read the First time.
Alison Thewliss
I beg to move, That the clause be read a Second time.
My understanding was that we were breaking after the previous clause, so I will scramble to find my notes. We think it is important to look at the geographical impact of the Bill. I support the new clause tabled by Plaid Cymru, which has suggested that we have a report assessing the
“differential geographical effects, broken down by nation and NUTS 1 statistical region, of the changes made by sections…of this Act.”
What is lacking in this House—I have said this before and I have no hesitation in returning to it—are real mechanisms to explore how effective the measures in the Finance Bill are in reality. My colleagues and I have supported work on a Budget Committee, which has been before the Procedure Committee to look at it as well. We do not understand the effectiveness of the policies and the ideas that the Government have, so we end up with things being proposed in Bills that turn out to be completely ineffective or we find out that they have differential effects from what the Government expected, so they have to come back later to amend things and try to fix their mistakes.
We feel that requiring the Government to consider the geographical effects of the changes to the reliefs, including research and development expenditure credit, would give a better understanding of how effective they are across the different regions and nations and of whether those incentives actually contribute to the continuing inequalities that we see across the UK. We think this is an issue of real importance to Scotland and to Wales for the measures where we do not necessarily have particular control ourselves and where the devolved nations do not have competence. It is important to understand what the Government are about with the legislation they are proposing as well as its impact, and whether the measures are truly seen to be effective.
Wes Streeting
The hon. Member for Glasgow Central makes a reasonable case—that will be a running theme throughout a number of new clauses, not least when we turn to new clause 3 in the afternoon session. I will make the points I want to make about the importance of reviewing the geographical impact of measures in the Finance Bill at that point, but I concur with her remarks.
Jesse Norman
I thank colleagues who have spoken. New clause 2 would require the Government to assess and report on the geographical effects of changes to business tax reliefs made by clauses 27 to 30 within 12 months. That relates specifically to the research and development expenditure credit, the structures and buildings allowance, and the treatment of intangible fixed assets.
Her Majesty’s Revenue and Customs does not routinely require businesses to provide geographical information about where expenditure is incurred as part of their claims for RDEC, SBA or intangible fixed assets treatment. In order to do so, changes would need to be made to the CT600 form, which would create a burden for businesses. In addition, those claiming the reliefs would only provide information after the year-end. For that reason, it does not make sense. It is not possible for Her Majesty’s Revenue and Customs to have that information within the 12 months stipulated in the amendment. HMRC does in fact already publish annual statistics on many tax reliefs, including a detailed breakdown of R&D tax relief claims, which analyses, by region and sector, the number of claims and the amount of relief received. However, the regional analysis is based on the company’s registered office, not necessarily where expenditure is incurred.
Although the next set of annual R&D tax relief statistics will be published by HMRC in the autumn, companies can claim R&D tax relief up to two years after the end of their accounting period. For that reason, the 2020 statistical release will include claims only until 2018-19, and will therefore not include claims for the increased 13% RDEC rate. The Government do, of course, remain committed to levelling up every region and nation of the UK to spread opportunity and to ensure that everyone benefits from growth. For example, the spring Budget provided a £1.14 billion increase to block grants for devolved Administrations to spend on their own priorities. That is in addition to the £2.7 billion that the Government are investing in city deals across Scotland, Wales and Northern Ireland, with £800 million of funding being provided to support four deals in Wales alone, and a further £1.4 billion being provided across 10 deals in Scotland.
As we look to our economic recovery from the impact of covid-19, that levelling-up agenda will be more important than ever. Given that the Government already publish detailed analyses and that regional information is collected and held as part of HMRC’s tax returns, asking business to record further information would represent a significant additional business burden. I ask the Committee to reject the new clause.
Alison Thewliss
The Treasury Select Committee is also looking at regional imbalances. Part of the Committee’s work has identified that the data collected by the Government on a range of areas is not sufficient. It is not good enough for the Minister to say, “Oh, it’s difficult to do that.” I accept that money is not necessarily spent where an office is based, but it is a start in understanding where that money is going. If lots of organisations based in London are taking in the money and perhaps it is going somewhere else, the Government ought to be aware of that and ought to be looking at it to make sure that if somebody based in London is taking in the money but it is being spent somewhere else, then perhaps they should be based where the money is being spent. Perhaps they should be moving their offices to where the money is being spent. That puts it back on to those businesses, to add to that consideration, so I do not buy the Minister’s argument that it is awfully difficult and that we should not do it. It is a first step into looking at how it might be done, so I would like to press clause 2.
Question put, That the clause be read a Second time.
Trade Bill (Third sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 View all Trade Bill 2019-21 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
Thursday 18 June | Until no later than 12.10pm | Client Earth The Trade Justice Movement |
Thursday 18 June | Until no later than 12.35pm | Sam Lowe, Senior Research Fellow, Centre for European Reform and member of the Strategic Trade Advisory Group |
Thursday 18 June | Until no later than 1.00pm | Nick Ashton-Hart, Geneva Representative, Digital Trade Network |
Fleur Anderson (Putney) (Lab)
I have a declaration of interest. In my former role as head of campaigns for CAFOD—the Catholic Agency for Overseas Development —I was a co-founder of the Trade Justice Movement.
The Chair
Thank you. That will be noted on the record.
We will now hear oral evidence from ClientEarth and the Trade Justice Movement. Do we have them online?
David Lawrence: I am here; I can hear you.
The Chair
Hello. I am Judith Cummins, the Member responsible for chairing proceedings. I will not be asking you any questions, but I will be calling Members and witnesses to speak.
David Lawrence: That sounds good.
The Chair
Q
Welcome, and thank you very much for coming. Thank you, Tom—lovely to see you—and thank you, David. Could you start by introducing yourselves? Let us start with Tom.
Tom West: Thank you for inviting me. It is really good to be here, if slightly surreal; it is my first time out of the house for a while.
My name is Tom West. I work for an environmental law non-governmental organisation called ClientEarth. We are interested in the implications of the Bill and trade policy in general on the environment. The way we see it, there are a number of ways in which trade policy can affect the environment, directly and indirectly, in terms of the quality of goods we are trading, but also in terms of how our trade rules affect how able we are to meet our important environmental commitments.
At the moment, the UK has this great opportunity. It has this great chance to redefine and refresh how trade policy is designed. A lot of trade policy is quite old—years and decades old—and was not written in a time when the global environmental challenges, like climate change and biodiversity loss, were understood to the same extent. It is very well established now that there is a real urgent need to take action here. We think there is a chance for the UK to refresh the approach to reflect that and to move us forwards as global leaders in that area.
The Chair
Q
David Lawrence: Good morning, everyone. My name is David Lawrence and I am the senior political advisor at the Trade Justice Movement. We represent 60 NGOs, faith groups and trade unions that have an interest in trade issues. Our group has done a lot of work on international development and the relationship between that and trade agreements, but obviously our focus recently has been on post-Brexit trade agreements and the UK’s new independent trade policy. We have previously given a lot of evidence on parliamentary scrutiny of trade agreements, which I would like to talk about today, if possible. I also very much share Tom’s concerns about upholding environmental standards and using trade in an environmentally sustainable way, so I will touch on that as well.
Bill Esterson (Sefton Central) (Lab)
Q
Tom West: Sure. I will focus on the continuity trade agreements and what is being done there. It is worth saying at the outset that it is sensible to try to roll over and maintain where we are, as a starting point. It is also important to see that as a starting point as to where we are and where we want to go. The process gone through there demonstrates the need for, first, a better approach to scrutiny and oversight for how we conduct and design our trade policy. Secondly, there is the point about saying, “Let’s review and refresh.” With the continuity agreements in particular, there is a need to put in place mechanisms to review those in due course and to check up on them and say, “Are these delivering the economic things we need from the trade agreements but also, importantly, the environmental issues that we need to deliver on?” If we want to become a global leader in environmental issues, we need to think about what that means for all areas of policy. We cannot simply rely on directly environmental ways to deliver those. Let’s look at those and see: are these the sorts of trade agreements that are working from an environmental point of view? Are they encouraging the right sort of trade and the right sorts of goods and services? And are they allowing us to take the actions we will need to take to fight climate change and reverse biodiversity decline?
Bill Esterson
Q
David Lawrence: Could very quickly remind me what the question was?
Bill Esterson
What is your view of the Trade Bill as it is? Do you have concerns about it, and are there any additions you would like to see made to it?
David Lawrence: As I said earlier, parliamentary scrutiny is a big concern for us. When the Trade Bill was first introduced, which was a while ago now, it was billed as an open conversation on scrutiny and a new framework for how trade could be done, but in fact we see nothing new on parliamentary scrutiny, and so far the Government have not seemed to be very open to having that conversation or to listening to proposals for how scrutiny should operate. That is not just our concern; it is shared by a lot of other NGOs and businesses, and indeed by many MPs. The UK currently uses a pretty archaic form of treaty scrutiny that dates back to the first world war. It was designed to deal with secret defence treaties between European powers. Today’s trade agreements are a million miles from that. They cover a huge range of policy areas—from food standards and environmental regulations, to NHS prices and digital services. We think it is completely inappropriate to expect that MPs should have no say in how those deals are made.
It is also worth noting that that is an issue that many members of the general public are concerned about. If you think back to the Transatlantic Trade and Investment Partnership, or TTIP—the proposed EU-US trade deal—you will see that one of the reasons it collapsed was that people were not happy about the idea that these important talks were happening behind closed doors and that their own elected representatives did not have much of a say over them. In Westminster, MPs have less of a say over trade deals than MEPs in Brussels or, indeed, Members of Congress in Washington DC.
If I am honest, I think lots of people would be quite surprised and shocked to learn that their own elected MPs do not have a say over these trade agreements, the new deals we are doing with the EU, the US, Australia and Japan, or the new ones announced yesterday. It is not clear who people are meant to write to or who represents them and their interests when they are concerned about how these deals might affect their livelihoods, the food they buy or, as Tom mentioned, environmental standards and principles.
For us, scrutiny is an absolute priority. We also want to use trade to maintain high standards. We have concerns about the GPA and the way that public procurement works, but scrutiny is absolutely the priority. If we do not have that, there is no way Parliament can make sure that trade in the future meets with those high standards, and there is no democratic representation or transparency.
Bill Esterson
Q
David Lawrence: There is a scrutiny concern that is specific to public procurement as well—making sure that Parliament has a role, that there are democratic processes involved—and there is a standards concern to ensure that procurement can be used in a way that maintains standards. The Government have this levelling up agenda and the idea that post-Brexit Britain will support parts of the country that are not doing so well economically. Procurement is an opportunity to support those areas as well. As we have seen with covid, all sorts of big questions are raised around global supply chains. One of the immediate effects of covid was countries putting in place things like export controls and wanting to localise their supply chains. Procurement is one of the many tools that Governments can use to support local industries in that way and to maintain standards. The more that Parliament has a say over that process, the better.
Bill Esterson
Q
David Lawrence: From our perspective, there are four elements to an ideal scrutiny procedure. First, before negotiations begin, we think there ought to be a full debate, with a vote on the negotiation objectives, and that ought to be written into law. At the moment, the Government can grant a debate, if they want to—and they have done so, at very short notice, as some of you will remember, I am sure, on the US objectives and the EU objectives—but we want a guaranteed debate and vote on the objectives. Secondly, during negotiations, there should be regular reports back to Parliament on the progress of those negotiations, and, ideally, publication of texts from each negotiation round. That is a practice that is done elsewhere: the EU has updates during negotiations. As I am sure all of you are aware, MPs are very much left in the dark. At the moment, US and EU negotiations are going on, but we rely on leaks, essentially, and reports from Brussels or from DC because there is no formal process for reporting back.
Thirdly, after negotiations there should be a debate and a vote on the final deal to approve it. Again, that is something that happens in the US Congress and in the European Parliament. We do not have that guaranteed. The only way we can get a debate and a vote on a trade agreement is if the Opposition force a debate on it during an Opposition day within a 21-day sitting period. As you all know, it is not guaranteed that there will be an Opposition day that falls in that period, and if there is, the Opposition may decide to use it for other things. The Government are proposing a lot of new trade agreements, so the current system is not reliable in terms of ensuring that debate and vote on the deal.
Fourthly, throughout this whole process we would like to see public consultation and independent impact assessment. There have been some half-hearted attempts at that. I sit on one of the expert trade advisory groups at the Department for International Trade, but there is not a well-established, formal process of consultation with actual trade agreements where businesses and NGOs are brought in to comment on and critique the trade agreements themselves. We have not seen that happen yet. Again, that is something that happens in other countries, but the UK is very much behind on this.
Bill Esterson
Q
David Lawrence: It is about public trust. We saw in the TTIP negotiations a lot of distrust that ultimately led to the deal falling apart. If you wanted TTIP to happen—if you want these trade agreements to work—you need the public behind you. If there is not transparency, there will be conspiracy, leaks, theories about what is being discussed, accusations and a lot of uncertainty. That is why it is something that businesses and NGOs are united on: regardless of your view on whether the specific trade deals are good or bad for the economy or society, at least if you have transparency, you know what is being discussed and what is on the table. That is why we are pushing for it, and we have joined the British Chambers of Commerce, the International Chamber of Commerce and the CBI in pushing for that level of transparency. It has been a source of frustration, not just among civil society but also among businesses, that these important deals are supposedly on the way but we do not know what is being discussed at the moment.
Bill Esterson
Q
Tom West: We are supportive of the asks and processes David outlined. Greener UK, which is a coalition of environmental organisations, is also a signatory to the document David mentioned. I will just add some extra things around the side.
First, once a trade deal is in place and up and running, there is a need for ongoing scrutiny and involvement of civil society in making sure it is being implemented in the right way. That is crucial looking forward. Secondly, to give a bit more clarity as to the value of this, within the environmental sphere, the value—in fact, the necessity —of public participation is long recognised. The Aarhus convention 1998 enshrines in law that the public must be engaged in the design of policies related to the environment. It is true here as much as in other areas: by involving the people affected by the policies, you get better policies and better buy in.
There is another interesting point on the value of this. Last year the US negotiators said, “Look, we can’t refer to climate in our negotiations”. They were able to point to an Act of Congress and say, “Our hands are bound here. It’s impossible for us to do this”. In that way, a steer and an instruction from Parliament can strengthen our negotiating arm. As I have said, our vision is that the UK uses its blank sheet of paper on trade policy to align its trade policy with its global environmental ambition. Let us get that clear and written down so that our negotiators can point to it and say, “The conversation that we want to have—and, in fact, that we need to have—is around robust implementation of the Paris agreement, meeting our environmental goals”.
Lastly, David mentioned the need for public support: this matters to the public and they care. For me, this goes to the question—and annunciating—what are we going to get from these trade deals? What is the benefit and value to people? That is very much part of the question and review of what our trade policy is for. We have seen various estimates of what a US trade deal might get us, for example, from an economic point of view. The figures sometimes are relatively small. I have seen some say that the benefit in reduction in tariffs might amount to £8 per household per year. If that is the case, we need to understand what that will do for us and what other benefits we might be able to get from a trade policy that is more closely aligned with our environmental ambitions.
David Johnston (Wantage) (Con)
Q
First, given that this is about continuing agreements that we already have, if we sought to change them, they would not really be continuity agreements anymore. Secondly, could you both talk about the counterfactual? If we did not have this Bill or the continuity agreements, what would be the consequences for this country and for those countries in the developing world with which we are seeking these agreements?
Tom West: I think it is right to say that the Bill itself is focused on those continuation agreements, but in some ways that is symptomatic of the wider problem I am talking about in terms of the lack of an approach that says, “Let’s review and revisit what our trade policy is for and how it should be designed,” with an eye, in particular from our perspective, on what that means in terms of delivering our climate and environmental goals. As a first step, yes, we need to take those sorts of measures and it is sensible to do so, but that is just a first step. That, in and of itself, cannot be the full range of what we should be seeking to achieve when it comes to our approach to trade. However, taking that more ambitious approach requires putting in place certain mechanisms and frameworks. We are talking about scrutiny processes as a key part of that and, in addition, frameworks that seek to guarantee that, through our trade deals, we will be protecting and supporting our delivery of environmental goals by making sure that we retain our right to regulate in environmental matters and doing that thoroughly; that we have non-regression in environmental standards and a meaningful and enforceable commitment to non-regression; and that our import standards match up to our environmental goals.
David Johnston
Q
Tom West: I think that the EU’s approach to trade needs improvement, yes. This is not just about trying to replicate what the EU is doing in any of these areas. There is scope to do things better, to use this new power to conduct our trade policy in new ways where we can be a world leader and use our seat at the WTO to say, “There is a better way to do these things,” and that is a great opportunity.
David Lawrence: Can I just add to that? There are issues around the substance of the agreement, but you can improve the scrutiny processes without necessarily changing the substance of the roll-over agreements, while recognising the importance that those deals are rolled over the before the transition period ends. We work closely with Fairtrade and Traidcraft, which are two of our members. They have direct links to lots of the countries that have the EPA trade agreements—economic partnership agreements—with the EU that are being rolled over. There is a tension because a lot of countries want to change those EPAs—they see Brexit as an opportunity to renegotiate those deals—but there is also a desire for those to be done in time. Our hope is that those things are not completely incompatible and that you can have a new Bill, like the Trade Bill, that implements these agreements while also having a process of scrutiny and an opportunity for countries to reform EPAs where necessary.
In terms of the scope of the Bill, the Bill is about roll-over agreements. It is also about the creation of a Trade Remedies Authority and acceding to the government procurement agreement. Both of those latter two things are about future trade policy. They are not just backward looking—"We need to make sure those things are rolled over”. They are also about the UK’s new trade policy. That is why, for the previous version of the Bill, a number of amendments that were ruled in scope, both in the Commons and in the Lords, were about why the scrutiny process is not just for roll-over agreements but for new agreements as well. Indeed, some of those amendments were successful in the Lords. There is an element of, “If not us, then who, and if not now, then when?” about it as well, because the Government are not proposing any alternative trade legislation at the moment.
This is the only legislative opportunity, as far as we know, to put in place these scrutiny provisions. If the Government want to bring forward a trade framework Bill, or something else where there is an opportunity to have a proper conservation about scrutiny, then fine, but in the absence of that, this Bill should be used to put in place those scrutiny procedures, as with the previous Trade Bill.
Tom West: If I may add to that quickly, this lacuna that David and I are both describing, in terms of where is this bigger picture of trade policy, comes through in the conversations on the Agriculture Bill as well, where the issue of food import standards is, quite rightly, an important topic for debate. We are saying that what we do around our import standards is going to matter. It will matter for British farmers, but for our environmental impact and overseas footprint too.
Our view is that the Government clearly need to act to put in place those manifesto commitments to not compromise on environmental, animal welfare and food standards. We have seen statements in the media in the past around the Trade Bill being the right place to do this, but at the moment there is nothing in the Bill about it. The Agriculture Bill provides that opportunity as well. Clearly, there is a need to do something on import standards. That is true of food import standards, but it is true more widely as well. It is not just food that we are looking to import, and we need to make sure that that approach is compatible with our domestic environmental ambition and our global environmental ambition too.
David Johnston
Q
The Chair
Q
Tom West: We have not run the counterfactual of saying what would happen if these had not gone in there. Overall, the idea of continuing those agreements for now, and then looking at them in the round later on, is an approach that makes sense.
David Lawrence: Yes, I agree with that. The Bills both need to pass before the end of the transition period in order for the deals to be rolled over. We are in agreement on that. The question is whether you can do that, while also having better scrutiny and setting in stone better standards for the future.
Gareth Thomas (Harrow West) (Lab/Co-op)
Q
Tom West: Starting with the US deal, we are concerned about the attempts and the approach from US negotiators, particularly around agriculture and food standards, to change the way the UK currently regulates and legislates in that area. It is clearly set out in the US negotiating objectives that they want to open up UK markets to US agricultural products. Our view is that in many areas those are produced to lower standards than is currently allowed here in the UK.
That also raises the indirect effect that trade deals can have on environmental standards, which is incredibly important. Trade rules can place restrictions on what it is that countries can do to meet their environmental goals. Our view is that achieving environmental goals is a good thing do—it is of value in and of itself—and that trade rules should work within that framework. Limiting what we can do, in order to achieve certain trade goals, is a restriction that we should not have in place.
To go back to the specifics of the US deal, another area of concern is chemicals. Currently in the UK, there are more than 1,300 chemicals for use in cosmetics that are not allowed; in the US, that is around 11. I think that demonstrates the stark difference between the regulatory approach in the US and the current approach we have here. While the UK now has the chance to do things differently—I am not saying we must stick to EU ways; that is not necessarily the approach we need to be taking—we do want to make sure that our standards get better and not worse.
David Lawrence: In terms of the scope of the Bill, I do not think what we want is for the Trade Bill to become a big debate about the US trade agreement, but we do want it to be a debate about scrutiny. If you have those scrutiny practices in place, when the US deal comes round, Parliament can actually debate that properly, rather than relying on the occasional parliamentary question or a Backbench Business debate, which is what currently happens, even though it is on the Government’s own terms for really important big trade agreements.
I completely agree with what Tom said about standards. The key thing here is that there are two dominant regulatory regimes in the world—the EU’s and the US’s. In many ways, Brexit will force the decision about which of those regimes we align with. Something that we have called for—I believe Tom and ClientEarth have called for it as well—is sequencing, whereby the EU deal comes first. We sort out our relationship with our largest trading partner, with whom we are already aligned on so many things and have been for so long, before we negotiate with the US, because the US really do want us to align with their regulatory regime, as Tom said.
You mentioned Canada. Canada and Japan have both asked not to renegotiate their existing terms, but essentially want to seek new free trade agreements with the UK. They have also both emphasised that they want the UK to sort out its relationship with the EU first, because historically the UK has been a springboard, particularly for Japanese investment in the European Union. For a lot of our trading partners, sorting out our relationship with the EU is an absolute priority. We have said let us do that first and then we can think about new trade agreements, such as one with the US.
There are a number of other concerns with the US deal. I will not go into huge detail on that unless you want me to, but we have concerns around public services provision, digital services and regulations in a number of areas, not just the environment, but also health regulations and food standards; we are also concerned about investor protection provisions, because we have seen that those have been used in really damaging ways in other US trade agreements, such as NAFTA. Those are some other concerns we have about the US deal. As I have said already, the real priority is scrutiny, because then we can have that debate properly in Parliament.
Gareth Thomas
Q
Tom West: So, as David was talking about, there is this point about the two big regulatory spheres of influence. Canada is very much close to that US sphere and so, while there might be less of the direct issues, we see that stepping-stone effect.
One extra thing to add is that there are approaches that the US takes in its trade agreements and trade deals that are clearly better than what the EU is doing. Around enforcement, for example, some of the approaches that the US will often take include better enforcement mechanisms for environmental provisions in trade deals. Looking at the different approaches is certainly worth considering.
Fleur Anderson
Q
For Tom, a recent High Court decision about Heathrow airport ruled that we could not have Heathrow airport because it was counter to the Paris climate agreement. Are there risks if we do not put extra environmental standards in the Bill that future trade agreements will be brought into question, as that national policy statement was?
David Lawrence: In terms of downsides to scrutiny, we are very much calling for scrutiny and I do not think there are any really obvious downsides. As I said, it is an area where, perhaps unusually, we are very much aligned with the private sector. A lot of businesses are also calling for similar things.
In terms of developing countries, as you will know very well, Fleur, there are a lot of organisations in the UK representing the interests of developing countries and a lot of foreign aid organisations who would like to be able to see what is going on in trade negotiations and be able to represent those interests to MPs, but at the moment there simply are not those scrutiny proceedings in place. Obviously, the process of scrutiny takes time, so maybe it would slow things down a bit, but on the long-run game of improving public trust in what the Government are doing and public understanding of how trade deals work—where they are beneficial and where they are potentially harmful—it is absolutely worth having those additional scrutiny proceedings in place.
Tom West: The Heathrow decision is a really good example of how important it is to make sure that all of our policies are compatible with our environmental goals. While we might not get a direct read-across in this case here, what it does demonstrate is that we need to make sure that what we are doing in all areas is compatible with meeting Paris and our other environmental goals, too. We have got net zero and an Environment Bill that could provide a framework for some ambitious targets, and we need to make sure that that is compatible. Making sure that we have got that clear framework in legislation will necessarily help with that.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Q
David Lawrence: We have very similar concerns in relation to devolved nations. It is obviously tricky because you do not want to necessarily end up in a gridlock situation where an entire UK-wide trade agreement is blocked because one of the nations has a veto, but at the same time there will be parts of trade agreements that primarily or only affect the industries in the devolved areas and that cut across regulations that are normally devolved competencies. In those areas, we would like that to be the decision of the devolved authorities. Obviously, there is a role for consultation throughout that, as there has been through the Brexit process. I know it has not been handled perfectly in the Brexit process.
More generally, it is about applying the normal standards of democratic scrutiny that we would expect for other areas of domestic legislation to trade agreements, in recognition that trade agreements have a large and wide-reaching domestic effect. If the Government want to build a new railway like HS2, they have to put it in a Bill that has all of its Commons stages, layers of scrutiny and Committees like this one, and then it goes to the Lords and it comes back again. It goes back and forth, the media get involved and people write to their MPs about it. That is just for a railway and this is for a trade agreement that, if the Government are to be believed, is central to the UK’s post-Brexit industrial strategy, and MPs do not have anywhere near that level of say over it. So what we are calling for is similar to the way in which other regulations and big projects and proposals are treated with the level of democratic scrutiny that they receive.
Tom West: Yes, I agree. With environment, agriculture and fisheries all being devolved, this is obviously really important to our concerns, too. Clearly, there is a need for better mechanisms to be in place to make sure that the four Governments of the United Kingdom can work together to have the appropriate conversations about how we are going to work these things out. It is not straightforward exactly how it will work, but clearly it needs to be done so that the devolution settlements can be respected, and, as David says, so that the proper democratic input into trade agreements can be had.
The Chair
If there are no further questions from Members, I will thank the witnesses for their evidence and we will move on to the next panel. Thank you, David and Tom.
David Lawrence: Thank you.
Tom West: Thank you.
Examination of Witness
Sam Lowe gave evidence.
The Chair
Q
Sam Lowe: Thank you for inviting me. My name is Sam Lowe and I am a senior research fellow at the Centre for European Reform, a think-tank. I am also a member of the Strategic Trade Advisory Group.
Bill Esterson
Q
Sam Lowe: The first thing that I should say is that I think the Bill is necessary; there is a need for continuity when it comes to the UK’s trade relationships with third countries. Looking at the provisions for the government procurement agreement, I can see why there might be some concerns about the powers given to the Executive to alter things in future, but I also understand why the provisions are there, in that the government procurement agreement will evolve over time, new members will accede to it and there will be a need to update it.
Specifically on the continuity agreements, there are a few points that I would like to make. First, I am not sure that the scope is fully understood, in that it maybe covers more agreements than people think. As well as the ones that we all know about, for example Chile, Jordan and the like, it also covers Singapore and, to my reading, Vietnam, which was signed by the EU in June 2019. That is something that should be considered.
When it comes to the broad categorisation of continuity, I have a few questions. I would probably recategorise the agreements. I would start with category 1, which is the pure continuity agreements where there are just minor changes to be made. I am thinking of Chile, Israel, Jordan, Lebanon, Faroe Islands and the like. I would also include South Korea stage 1 in that box.
My second box would be the agreements that are continuity agreements but will be substantially different from what exists within the EU. Those are the agreements with Norway, Iceland, Switzerland and Turkey, and I would probably add Ukraine to that box as well. Because the existing relationship is so contingent on our EU membership, there is no doubt that the future agreement we have with them will be substantially different from today.
The third category are just new agreements, because we have decided that they cannot be rolled over and we are set to renegotiate them. That would be Japan and Canada. I would also put South Korea stage 2 in that box, in that the South Korean roll-over agreement contains a commitment to consider renegotiating after three years, but it also contains a poison pill that means that we will inevitably have to, because the rules of origin provisions that allow for EU inputs into UK goods to continue to qualify for the agreement’s local content provisions expire after three years. In that case, it will be a renegotiated new agreement.
As to whether I think the Bill is appropriate in its coverage, I think for box 1—pure continuity with minor changes—it is fine. For box 2—continuity but with big changes—I would say that it is probably still fine. There are obviously some concerns that they will change substantially, but those agreements are ones where we probably need to prioritise continuity over all else. In box 3, to my mind, they are new agreements, so I am not sure why they will be covered by a Bill that is focused on continuity—particularly in the case of Japan, where we have seen new objectives and even statements that we want to go beyond the EU’s existing agreement.
I would conclude with the need to consider the counter- factual. What we are discussing here is not necessarily the whole trade agreement; we are discussing how we deal with the implementing legislation accompanying the trade agreement. If we think about what that covers in practice, we are largely just talking about procurement and perhaps some issues on technical barriers to trade—that is it. In practice, we are probably talking about fairly minor changes in this space.
In the grand scheme of things, I suppose the question we are asking ourselves is: would slowing this down for everyone in order to do this via primary legislation add sufficiently extra scrutiny on the whole? I am not convinced it would, considering that it is ultimately still a yes/no decision either way. Parliament is not going to change; it just has to decide whether it wants it. Here is where I think it speaks to the bigger issue, which the Bill does not address but is hard to ignore. I listened to some of the first panel, and they touched on it. Parliament’s role vis-à-vis trade policy is incredibly limited; it is largely an Executive competence. Parliament has very little influence over what trade agreements look like, and very little ability to object to them if it comes to it.
Bill Esterson
Q
Sam Lowe: The question of whether it is needed is a very good one. I am not sure I can actually answer it. You have just acknowledged that some of the agreements have passed. I suppose it is required, in that there might be a need to get some legislation through very quickly at the last minute if some of these negotiations drag on, so there is an issue there. Your first point was about what is in the agreements.
Bill Esterson
Q
Sam Lowe: I cannot confess to have looked at the text of every single one, but one of the concerns that had been raised was that there was an issue about whether the tariff rate quotas will have been changed in a specific agreement. When I looked at Chile in this case, the changes that had been made did, to my mind, make sense. For me, the most interesting point about some of the continuity agreements is the approach to rules of origin, which I mentioned earlier. It is the process by which a product qualifies for tariff-free trade under a trade agreement, dependent on the amount of local value added. As the UK has an issue, which is that in many sectors we do not create enough local value added to qualify for free trade agreements under normal rules of origin-type provisions, we have inserted conditions that allow for EU inputs to continue to be accounted for—either indefinitely in the case with Chile, or temporarily with South Korea. That is not necessarily a concern, but it is interesting. It is actually quite a new approach to rules of origin, and the jury is out on whether it is WTO-compliant. I probably lean towards it being compliant, but I have certainly heard counterarguments.
Antony Higginbotham (Burnley) (Con)
Q
Sam Lowe: Sorry, you cut out at the end.
Antony Higginbotham
It was just about what the impact of our not having a TRA might be. Have you given any thought to that?
Sam Lowe: We do need a Trade Remedies Authority. As it stands, this is dealt with at EU level, and when it comes to disputes over trade—be it because we are worried about unfair subsidies abroad, or worried about products being dumped on our markets or being sold at an artificially low price—we need a means to investigate and remedy them. In the interim, I believe the approach is that following our exit from the transition, we are just going to continue with the EU trade defence measures. However, those measures might not be justifiable if we are only taking into account the UK context, so they are all going to need to be reviewed.
I do have some concerns about the practicalities of the Trade Remedies Authority. First, I believe it has lost two provisional chief executives already, and it is still looking for a new one. Secondly, speaking as someone who comes from south Wales, from Llanelli—I am not an “everything needs to happen in London” person—I am not convinced that it was a sensible decision to put it in Reading and offer the salaries it does when it is trying to attract trade lawyers with vast amounts of experience. My fear is that it will create a false economy: we will end up paying law firms to do it all for us for a while as we build up the internal capacity, and then because of the pay constraints, the people who have learned how to do the job will be able to leap into these law firms to get paid a lot more. That may point to a broader problem with retention in the civil service.
Gareth Thomas
Q
Sam Lowe: Canada is a long story, in that it links back to the previous iteration of the Government’s no-deal tariff schedule and its publication. When we put forward a tariff schedule that was very liberal and offered a lot of access to everyone, the Canadians looked at it and said, “We do not want to roll over any more, because you are giving the whole world for free what we had to pay for via our trade agreement”—remember, they also had to open up their market in that context. I believe that the more recent update to the new global tariffs has changed that calculation slightly on the Canadian side, and will lead to a renegotiation.
The reason that the Japanese were not able to roll it over from a domestic point of view was that from their perspective, they had liberalised their agriculture sector to a great extent over previous years—through their agreement with the EU, through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and also through their more recent agreement with the US. If they were to roll the agreement over to the UK, they would be giving extra agriculture access to their market on top of all that, but for free. That was just not politically doable within the Japanese context, so it led to the need for this renegotiation.
Turning to the contentious issues, I suppose that with Canada we could return to some of the TTIP issues around investment all over again. That is also the case with Japan. I think both those deals are probably doable by the end of the year under certain circumstances, but you will notice that the UK has had difficulty replicating agreements with the bigger countries. It has not been so difficult with some of the smaller countries, but if you think about the ones that have not been done yet—Japan and Canada, but also Mexico and Ukraine—many of those countries want to be certain of what the future UK-EU relationship looks like, and what concessions the UK offers the EU, before finalising anything with the UK.
The Chair
We have until 12.35 pm for this session, and three other Members want to ask questions, so it would be good if we could keep questions and answers quite concise.
David Johnston
Q
Sam Lowe: Yes. In terms of countries that require continuity, Turkey is quite a good example: we currently have supply chains that run out of the UK into Turkey and back. I think particularly the automobile industry has some exposure here. This is a really tricky one, in that we are currently in a customs union with Turkey via our membership of the EU and, unless we are in a customs union with the EU, which is obviously not Government policy, we are going to be unable to replicate that relationship with Turkey. When it comes to the future trade agreement with Turkey, at least on the tariffs level, the most we can expect is for it to match what we have agreed with the EU. That, of course, would be better than not having a trade agreement; but the benefit of being in a customs union is you do not need to worry about rules of origin. So all of a sudden this becomes a slight issue with Turkey, and it is why I put it in my second box earlier, of being a continuity agreement but with big changes.
Of course the other ones that really do, probably, matter are Switzerland and the EEA countries—Norway, Iceland—in that we have quite deep trade relations with them now, as we are part of the single market. That will obviously, again, change quite substantially because of our decisions over our relationship with the EU.
Another country that does matter, and I believe it has been resolved—I do not want to say certainly, because I do not have a list up in front of me—is South Africa, in that we actually have automobile supply chains that run through South Africa. There we have a different problem, in that it does not achieve the same for the companies as now; we currently export products to South Africa—inputs to South Africa under the EU-South Africa agreement— that are put into, say, a car there and then sold back into the EU under the preferences of the agreement, because the UK-based inputs can qualify as local to South Africa under something called bilateral cumulation. That will cease to exist under the new agreement.
The point I would make is that all the agreements are going to change. I have just, in my head, got three different categories.
Matt Western (Warwick and Leamington) (Lab)
Q
Sam Lowe: Having read the Trade Bill, I think the approach seems broadly sensible. I do not have it in front of me at the moment, but I believe the Secretary of State approves the chair; and then the chair makes a recommendation on the chief executive, subject to sign-off of the Secretary of State, unless the chair is not there, in which case the Secretary of State does it. I understand it is an independent body to the Government, but it obviously needs to have close ties with the Department for International Trade.
Fleur Anderson
Q
Sam Lowe: Taking into account the current scope of the Bill, which is to achieve continuity, it is slightly unique in that sense. However, I agree with a comment by an earlier witness: if there is not going to be further legislation to lay down the scope for Parliament’s engagement in future trade agreements, it seems to me that it would be possible to expand the remit of the Bill to cover that. I think that is right, in that the Trade Remedies Authority and GPA provisions are forward-looking, so there is no reason why you could not do that as well.
The UK’s general approach to scrutiny is very poor. I think parliamentary scrutiny is very poor. Parliament has very little ability to influence trade negotiations or set the agenda of trade negotiations. To my mind, it has—[Inaudible]—yes/no vote. Just from a democratic point of view that seems slightly out of order to me, in that, when we compare it with the US or the EU, Parliament at the crudest level has a yes/no option on whether to approve a trade agreement or not. As a result it is much more involved with the process. That is something I should like changed. Of course that is not currently in the scope of the Bill, but if the Government are not going to introduce further legislation, I would understand if the scope of the Bill was expanded.
The Chair
Q
Sam Lowe: The point I am making is that this Bill is not really comparable to other systems, in that it is sort of unique. To score the UK approach more generally to treaty scrutiny out of 10, it would be below five.
The Chair
Thank you very much for giving evidence. If there are no further questions from hon. Members, I ask that we move on to the next panel. We are just waiting to get the technicalities sorted out, so we will suspend for a few minutes.
The Chair
We will now hear oral evidence from Nick Ashton-Hart from the Digital Trade Network. Nick, can you hear us?
Nick Ashton-Hart: I can indeed.
The Chair
Q
Nick Ashton-Hart: Thank you. I will try to be brief, because it is important for you to have time to ask me things. I am Nick Ashton-Hart, the Geneva representative of the Digital Trade Network, which is a coalition of industry groups throughout the world. I am the focal point for industry on digital economic policy in Geneva. I have been involved in the trade community for more than a decade and participated for about 20 years in multilateral telecommunications and trade policy as it relates to use of the internet.
I am frequently on national delegations and an adviser to countries or groups of countries that are negotiating economic policy. I am also the special adviser on international internet policy for the International Chamber of Commerce in the United Kingdom, although I am speaking to you today in my personal capacity as a trade expert in the field.
Bill Esterson
Q
Nick Ashton-Hart: Thank you very much for the question. Thank you all for asking me here. It is a great privilege and honour, as an immigrant who arrived here in 1986 with £900 in my pocket, to be heard by Parliament.
With respect to the Bill, many of the comments I made about the Bill in the last Parliament remain true. There are some changes in this Bill, but the core of the issue is the road it sets out in terms of consultation on trade policy with not only Parliament, but industry as a whole. In my work, I see how Trade Ministries worldwide relate to stakeholders and how they choose to involve stakeholders in trade policy-making and negotiating.
I understand the argument that the continuity agreements are intended to be as close as possible to and a simple replication of the provisions of the agreements that you benefited from via membership of the EU, and that consultation is not necessary because of that fact. As I said in 2018—and this remains true—these are not the same agreements. At that time, we did not have any of the agreements rolled over, if you will, so we assumed that they would not be the same agreements. Based on my experience in trade policy, nobody makes exactly the same deal with a smaller party that they did with the larger party, because it is not in their interest to do that. In this case, we have even more reasons.
As an example of how these agreements are not the same, I offer up the Swiss agreement. There are 20 mutual recognition chapters of the Swiss-EU agreement. The UK-Swiss agreement has only three, because Switzerland cannot agree that our regime is equivalent unless we continue to apply the EU regime, as the Swiss-EU agreement requires that. So, 24% of the UK’s exports and 16% of imports in that deal are not covered currently. That is also true in the agreement on customs, so UK goods will not be expedited through the Swiss border in many cases as a result.
Therefore, these are fundamentally not the same agreements, yet they are treated, in terms of consultation with industry and Parliament, as if they are, when they are materially different. It is like anything else—if you start out on a road, you want to make sure that the destination you are heading towards is the destination you want to reach. I think that, as a country, the destination we should want to reach is that the country as a whole buys into the arrangements for trade policy that the country proposes to make.
While I accept that in February 2019 the Government’s roadmap for consultation with Parliament and with civil society and the like began to approach what we would consider a more standard relationship, I offer this comment to Committee members to consider. If you are negotiating with another party about economic affairs, the reason why you want industry to have a close relationship with you when you are doing that is because industry has relationships with industry on the other side—in the country that you are negotiating with. Industry can then help you to gain support from industry in your negotiating partner for the provisions that you are recommending, which are also in the interests of industry in that other country, or negotiating partner. If industry is not a close collaborator with you throughout the negotiating process—not just in setting up the terms that you are looking for before you negotiate, but throughout the negotiation and ratification process—you are robbing yourself of a key element that will help you to negotiate a successful outcome.
That is just as true when you are dealing with issues such as the GPA as it is when you are dealing with regular free trade agreements, or regulatory co-operation agreements, which are not really discussed that often but are fundamentally important—financial technology bridges, or FinTech bridges, and the like.
That is the key thing that I have heard from industry, and the key thing that I have seen is that the continuity agreements are taking longer to reach than had been thought. I wish I had been wrong about some of my predictions back in 2018; unfortunately, pretty much all of them have turned out to be taking place. These agreements have been more difficult, they have been more different and there are gaps in coverage. Of course, all of that is not terribly surprising, but despite the knowledge that industry and other stakeholders were right when they said that more consultation was needed, the Bill still does not provide for that consultation to take place, which is a real lack, and an opportunity that should be seized.
The consultation should not be seen as a negative; it should be seen as a positive. These agreements will last longer than they are expected to, and the successor agreements to them will take longer to negotiate than is estimated, because there is one thing that you can guarantee about a trade agreement negotiation process and it is that the target date for finishing it is not the date you will finish. You will definitely finish at some later point than you predict. That has proven true for us with these continuity agreements, which is not a surprise to anyone in the trade community.
Hopefully, that is not too long an answer.
Bill Esterson
Q
Nick Ashton-Hart: First, I should say that you will have testimony from other witnesses who will have more knowledge of all the continuity agreements than I do. As you know from our conversations, I am a services guy, so I tend to focus on services and digital services.
As is the case in the Norwegian agreement, we will find that in any third-country agreement we try to make, the EU will quite naturally have made conditions on that country’s negotiations with additional third countries—the regulatory choices that the third country has with other parties with which they negotiate, other than the EU, are constrained by the agreement with the EU.
When it comes to regulatory chapters in trade agreements, there are really three major powers: the US, the EU and China. We do not have the regulatory freedom to determine, on our own sovereign nature, exactly what we do. Ultimately, we will adopt one of these three—we are smaller, and that is how it works. Big blocs carry the weight and tend to get more of what they want than do smaller parties. That is true of negotiating for anything in life. Anyone who has bought a car or a house will realise that those things stay the same. We will find that the choices that other countries are allowed to make in terms of their agreements with us are constrained by their deals with the great powers.
David Johnston
Q
Nick Ashton-Hart: The GPA is its own special animal. You will already have had descriptions of it, so I will not describe it. The GPA is a pretty loose agreement, and you can decide what you want to include within it and what you want to exclude. In theory—actually, in reality—it offers access to large amounts of potential supplies to Governments around the world, because Governments are major purchasers of everything. There are many conditionalities on that, and we will get less out of it than is suggested by the headline numbers, because of the flexibility of the arrangements and the scheduling. Countries, naturally, often like to sound more open than they are in this area.
I know of a certain European example: a major trading partner of ours in the EU that speaks a language that is not in the world’s top 50 most spoken languages has the same commitments on government procurement as does the EU, in terms of market access to third countries. What is not stated, however, is that you must do all of your bidding, contractual work and work with that party in that language that is not in the world’s top 50 languages, which quite naturally rules out the vast majority of people and companies in the UK, especially small companies. I am sure that a vanishingly small number of people in the UK speak that language.
So yes, the GPA is important, and yes, it does allow our firms access to many other markets but, looking at the fine print, access is not as simple and straightforward as is suggested. The GPA allows you to say to another country, “You—service provider X—can bid on services with my country.” It does not say, “And we will treat you as if you are one of us for regulatory issues.” You still need to be able to meet the regulatory requirements as a service provider that a domestic service provider has to meet. That is understandable and reasonable, but if your regulatory system in the UK is not seen as equivalent by that country, you will have to go through the additional step—if it is a regulated service, and many of them are—of being found to be regulatorily compliant with the regime of the country you are selling into. As we know, services are all heavily sensitive to regulation and to regulatory compatibility in third countries that you are selling into. That is why the single market is such a massive enabler of services trade throughout the European Union and its member states.
David Johnston
Q
Nick Ashton-Hart: Certainly.
Matt Western
Q
Nick Ashton-Hart: We are, as you know, one of the world’s powerhouses in services. Part of the reason we are a powerhouse in services is because, in the digital realm, we are also a great power in terms of innovation and firms that have had a lot of international success. Something like 60-plus per cent. of UK trade is underpinned in one way or another by digitalisation, so we are highly sensitive to any barriers to services through regulation, as well as through things such as the free flow of data and data protection.
We know that the agreements will not be duplications, because they are already not exactly the same. To the extent that we can, we should try to ensure that there are liberalising measures associated with at least the fundamentals of digital trade—some arrangements on data protection and on mutual recognition. Of course, that would also require us to stay quite close to the EU regime on data protection, which I and the industry have strongly argued in favour of. It is difficult, because if you are a negotiator and say, “I want to replicate this agreement, but I want to change one thing,” the other side is quite naturally incentivised to say, “Okay, then I want to change another thing.” The reality is that everyone will come to this with some changes, because—for many reasons, only one of which I covered—you cannot just copy and paste.
To the extent that we can put in digital measures, we should. It should be a part of the negotiating mandate for those agreements. It may be; I speak to DIT people quite frequently and have not heard whether it is, so I would not like to say whether it is, one way or the other.
Charlotte Nichols (Warrington North) (Lab)
Q
Nick Ashton-Hart: I would say that, at the level of principle, it probably should be. This is an example of an area of regulation that is not only economically consequential, but social and politically consequential. It is also not understood very well. The issues around platforms relate to business-to-consumer platforms, and particularly to social media. Those platforms are a tiny minority of the actual economic value of platforms as a whole. Business-to-consumer traffic represents about 10% of a platform’s value vis-à-vis the 90%, which is business-to-business traffic.
It is important at a level of principle to recognise that there are sensitivities, but it is also important to recognise that economic policy does not solve social problems and that the hooks need to be there to allow for exceptions, so that social problems can be anticipated and dealt with by the competent authorities that are responsible for them. In economic policy, however, the default is that platforms are a public good in the same way that markets are a public good. We want to facilitate innovation in the platform space, and our economy is a huge beneficiary of that.
The Chair
If there are no further questions from Members, on behalf of the Committee I thank you, Nick, for your evidence.
Ordered, That further consideration be now adjourned. —(Maria Caulfield.)
Parliamentary Constituencies bill (First sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Parliamentary Constituencies Act 2020 View all Parliamentary Constituencies Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Notices of Amendments as at 16 June 2020 - (17 Jun 2020)
The Chair
Before we begin, I have a few announcements. Please ensure your mobile devices are on silent. I allow you to bring in tea and coffee. I am not as strict as some other Chairs. You are welcome to keep refreshed during the proceedings. I call the Minister to move the programme motion in her name.
The Minister of State, Cabinet Office (Chloe Smith)
I beg to move, Date Time Witness Thursday 18 June Until no later than 12.20pm Boundary Commission for England Boundary Commission for Scotland Thursday 18 June Until no later than 12.40pm Boundary Commission for Wales Thursday 18 June Until no later than 1pm Boundary Commission for Northern Ireland Thursday 18 June Until no later than 2.30pm The Conservative Party Thursday 18 June Until no later than 3pm The Labour Party Thursday 18 June Until no later than 3.30pm The Liberal Democrats Thursday 18 June Until no later than 4pm The Scottish National Party Thursday 18 June Until no later than 4.30pm Plaid Cymru Thursday 18 June Until no later than 5pm Professor Richard Wyn Jones, Wales Governance Centre, Cardiff University Tuesday 23 June Until no later than 9.50 am Dr Alan Renwick, The Constitution Unit, University College London Tuesday 23 June Until no later than 10.10 am The Green Party Tuesday 23 June Until no later than 10.40 am Professor Roger Awan-Scully, School of Law and Politics, Cardiff University Tuesday 23 June Until no later than 11.25 am Professor Iain McLean, Department of Politics and International Relations, University of Oxford Professor Sir John Curtice, Department of Politics, University of Strathclyde Tuesday 23 June Until no later than 2.30 pm The Association of Electoral Administrators Tuesday 23 June Until no later than 3pm The Local Government Boundary Commission for England Tuesday 23 June Until no later than 3.30 pm The Electoral Reform Society Tuesday 23 June Until no later than 3.50 pm The Democratic Unionist Party Tuesday 23 June Until no later than 4.10 pm Dr Jac Larner, Wales Governance Centre, Cardiff University Tuesday 23 June Until no later than 5 pm Professor Charles Pattie, Department of Politics, University of Sheffield Dr David Rossiter
That—
(1) the Committee shall (in addition to its first meeting at 11.30am on Thursday 18 June) meet—
(a) at 2.00pm on Thursday 18 June;
(b) at 9.25am and 2.00pm on Tuesday 23 June;
(c) at 11.30am and 2.00pm on Thursday 25 June;
(d) at 9.25am and 2.00pm on Tuesday 30 June;
(e) at 11.30am and 2.00pm on Thursday 2 July;
(2) the Committee shall hear oral evidence in accordance with the following Table:
TABLE
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 11, the Schedule, Clause 12, New Clauses, New Schedules, remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00pm on Thursday 2 July. Chloe Smith has given notice of her intention to move a motion in the terms of the Resolution of the Programming Sub-Committee [Standing Order No. 83C].
Thank you for your chairmanship, Mr Paisley. We all look forward to serving with you. I welcome the shadow Minister and all members of the Committee. I am grateful to everybody for their time and to the witnesses.
It is important that we have a motion here that provides for four oral evidence sessions and six sessions of line-by-line scrutiny, with the option, should we need it, for afternoon sessions to run longer, but I am sure none of us wants any midnight finishes, so we will stick to the work in hand. This gives a good amount of time for the Bill to be properly scrutinised. I really welcome the fact that we have a wide range of witnesses.
I draw the Committee’s attention to the letter that everybody ought to have received from me already, outlining a Government amendment we are making with respect to the data to be used by reviews, which I hope is welcome in the light of the impact of coronavirus.
The Chair
The Minister is referring to a letter of 15 June. I assume everyone has received that.
Question put and agreed to.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Chloe Smith.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee room. I believe they are at the back of the room.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Chloe Smith.)
The Chair
Mr Bellringer, you are very welcome before us, physically, and Isabel Drummond-Murray, can you hear me? Hello.
Isabel Drummond-Murray: Hello. I can, yes.
The Chair
You are very welcome with us virtually. Thank you both for taking the time to join us and for allowing the panel to proceed.
We are now in public session to hear evidence from Tony Bellringer, secretary to the Boundary Commission for England, and Isabel Drummond-Murray, secretary to the Boundary Commission for Scotland.
Before I call the first Member to ask a question, I remind the Committee that questions should be limited to matters within the scope of the Bill. We will stick to the timings in the programme order. The Committee has agreed that for this panel we will have until 12.20 pm or thereabouts.
I ask any members of the Committee who wish to declare any relevant interests in connection with the Bill to make those declarations now.
The Chair
I call the first witnesses. Will you please introduce yourselves? We will start with you, Isabel.
Isabel Drummond-Murray: I am Isabel Drummond-Murray, secretary to the Boundary Commission for Scotland.
Tony Bellringer: I am Tony Bellringer. I am the acting secretary to the Boundary Commission for England.
The Minister of State, Cabinet Office (Chloe Smith)
Q
Could you talk us through what it consists of to conduct a review? Also, given that this legislation focuses on having equal and updated boundaries, perhaps you would be able to give us some insight into the importance of updating your work, including the fact that we have a slightly shortened review for the first of the series of actions that is outlined in the Bill.
Tony Bellringer: How a review operates is set out in the current legislation. Prior to this review, the legislation was most recently and substantively amended in 2011, when the rules by which we work were changed. Essentially, we gather the parliamentary electorate from across the United Kingdom. There is a statutory formula set out, which calculates the distribution of the House of Commons seats across the different parts of the UK.
There are four commissions—one for each part of the UK. Effectively, each of us then works independently. At the end of the day, we have to come up with a report that recommends to Parliament the prescribed number of seats for that part of the UK. Currently, they must be within plus or minus 5% of essentially a mean average electorate figure for the constituencies, the official term for which is the electoral quota.
We go through a process of iterative public consultation; that process is also prescribed in the legislation. We have an initial proposal stage. We work slightly differently to the local government commissions, in that we start off by coming up with a scheme with proposals, and then we publish those and consult on them, whereas the local government commissions tend to consult first and then come up with some ideas.
The initial consultation then produces a raft of responses; we receive very many responses. We then work through all of those responses; we do genuinely consider every single response that we get. And we look at what we may need to change from our initial proposals.
Currently, we are required to do something called secondary consultation, which is publication of all the responses to the first consultation that we receive. So, there are no new proposals in there; it is simply giving people an opportunity to comment on what other people have said.
We then look at all the responses to that secondary consultation as well and come up with a set of revised proposals, which we again publish and consult on for a period of time. We then look at those again, decide whether any final changes need to be made, and then we write up our final report and recommendations. Currently, those are submitted to the Government, who are then required both to lay that report before Parliament and translate it into a draft statutory instrument, which must be actively debated by both Houses. If it is approved, those constituencies will be used at the next general election.
As for the second question about the importance of conducting a review now, the constituencies that we currently have were the result, in England, of a review that concluded in late 2006; the order was made in 2007. Those constituencies were first used in the general election of 2010. However, the process that led to that report began in 2000. Therefore, the electorate data that your current constituencies are based on dates from 2000.
A review was commenced under the new legislation, to report in 2013, and as we know from the Bill, there was also one that was held in 2018 and reported in the same year. To date, neither of those reviews have resulted in a new set of constituencies, so your existing constituencies are very out of date. So the Government have come forward with this proposal to set aside the recommendations of the 2018 review and proceed very quickly to another review, largely working to the same rules established in 2011, but with a slightly truncated timetable that I believe would see us report in July 2023, with—I guess—the idea being that you would then have about 12 months before the expected next date of a general election.
The Chair
Q
Isabel Drummond-Murray: I think that Tony has covered the legislative framework pretty well, so, no, there is nothing I would add to that.
Cat Smith (Lancaster and Fleetwood) (Lab)
Q
“One of the most testing issues in the context of the revised statutory framework has been the requirement to reconcile the need to adhere to a fixed electorate tolerance (i.e. within 5% of the electoral quota) with the need to respect local ties and/or existing constituency boundaries.”
Do those concerns still stand and, if so, is there any way of alleviating the difficulties that the commission will face?
Tony Bellringer: Yes, the problem still exists. It is essentially a pragmatic problem. The smaller the tolerance level you allow, the closer you get to the pure principle of electorate equality between constituencies, and that is all to the good. The problem is that that makes it very much harder to have regard to the other factors that you specify in the legislation, such as the importance of not breaking local ties, and having regard to local authority boundaries and features of natural geography. Basically, the smaller you make the tolerance, the fewer options we have. That is what it boils down to.
How could you mitigate the problem? The only real way to mitigate it is to make the tolerance figure slightly larger. The larger you make it, the more options we have and the more flexibility we have to have regard to the other factors—but obviously, the further away you are moving from the pure principle of electorate equality. You do need to strike the balance somewhere.
The commission itself does not have a view on what the correct figure should be—before anybody tries to ask me that question. However, we would highlight the fact that some academic work has been done on this. I believe that you are due to interview Charles Pattie, who was one of the authors of a report in 2014 that looked specifically at the issue. He is more qualified to say than I am.
Cat Smith
Q
Tony Bellringer: Yes is the short answer. As you say, particularly in England we work or we have traditionally worked on the basis of using wards as our building blocks—I am sure there will be some discussion about that in due course. But as you say, a number of wards, particularly in urban authorities in England, are larger than the entire possible range that you are permitted—the difference, I should say—so by moving one ward, you will move from being too big as a constituency to being too small, with nothing in between, so you then have to start looking at splitting the wards, which becomes more problematic for us, for reasons that I am sure we will get on to.
David Linden (Glasgow East) (SNP)
Q
Isabel Drummond-Murray: It is not possible to give an answer to that until we have the electorate data that the review will be based on. I think, informally, we did look at the December ’19 register, and if that were the one being used, it did suggest a reduction in seats in Scotland. Clearly, the Bill as drafted suggests the December ’20 register. Until we get those figures published, from whichever data is finally proposed by the Bill, we cannot tell you exactly how many seats there would be. We would have to run the formula that Tony referred to, and that would allocate between the four countries.
David Linden
Q
Isabel Drummond-Murray: It was problematic in the last review, because the public hearings were held during the initial consultation and that meant that you were trying to guess in advance where there was likely to be particular interest. You were trying to cover the geography and population of Scotland with five hearings, so if you held one in Edinburgh and one in Glasgow, you then had a large area to cover with the three remaining ones. The Bill proposes holding public hearings and a secondary consultation, which will help, because we will then have an idea of whether to hold the ones outwith the central belt in, for example, Inverness or Hawick. You just cannot tell. There is still an element of guessing, from the responses received, as to where people really want to come along and discuss in public what we propose, but yes, that will help. I think six also helps, geographically.
David Linden
Q
Isabel Drummond-Murray: We start the review by allocating loose groupings—they are not set out in legislation, but they enable us to divide up the country. As a preliminary step, we always look at the highlands first, because of the rule that an area bigger than 12,000 sq km can go below the minus 5% threshold. However, because of the way the legislation is worded, you would only need to go below that 5% if you could not reasonably construct a constituency otherwise, but we could. We found in the 2018 review that it was possible to stick within that plus or minus 5%, despite its being a very large constituency. I think Highlands North was the only constituency proposed in the 2018 review that was above 12,000 sq km, which is obviously geographically very large.
David Linden
Q
Isabel Drummond-Murray: We do not use polling districts, in part because there has not been an available Scotland-wide, up-to-date dataset that we could access. We create our own postcode datasets, so when we come down to split below ward level, if necessary, we do it on the basis of postcodes. We have always been able to split wards in Scotland, if necessary.
Christian Matheson (City of Chester) (Lab)
Q
Tony Bellringer: In essence, there are two categories. One is mandatory—the plus or minus 5%—which we have to stick to and is obviously our primary factor. About half a dozen other statutory factors are set out in schedule 2 of the Parliamentary Constituencies Act 1986. We do not prioritise any of them formally. I guess we would look first at the rule about having regard to existing constituencies. So far as possible, we actually start off by asking how many constituencies that are currently there already fit the plus or minus 5% and whether we can start by not changing those. We then look at those that are not within the plus or minus 5% and think, “Okay; that is going to have to change, and that is going to have to change”. That is why you often find, unfortunately, that you may be sitting as an MP in a constituency that perfectly meets the plus or minus 5%, but your constituency changes because some of the neighbouring ones have to change and have to take in some of yours, or vice versa.
As I say, we do not have a firm ranking, but we then probably look at local ties. To a certain extent, you would expect existing constituencies to have already respected local ties, which is why it is not higher, because local ties are generally what people feel most strongly about—in fact, probably more than the numbers, to be honest. They accept the principle of electorate parity, but if you ask most people on the ground, they are more concerned about their local communities being split off from each other in the drawing of the lines. That is what the vast majority of responses to our consultation are about, so we do look at whether we are breaking local ties.
There is also the obvious map factor of physical geography and what are termed significant geographical features. River estuaries, mountain ranges and motorways are fairly obvious bits of physical geography that can have quite a significant impact on how you would want to look at drawing a constituency. Is that enough for you?
Christian Matheson
It is, yes, thank you. Ms Drummond-Murray wanted to answer as well from the Scottish point of view.
Isabel Drummond-Murray: It is a broadly similar process. As Tony said, you weigh up the factors and go through the process of the various consultation rounds. That is an important part as well: whatever we have weighted or not at the beginning, by the time we go through the consultation, it is all open to change. In the 2018 review, by the end, only 10 of our mainland constituencies were unchanged from the initial proposals. Whatever we do at the start is open to public views on things such as local ties, names and so on.
Christian Matheson
Q
Tony Bellringer: Er, yes. [Laughter.]
Isabel Drummond-Murray: I was going to say that we never get it wrong—we have a technically correct proposal—but as I say, in consultation, we listen to people’s responses. Certainly, in our initial proposals, we set out constituencies that were very unpopular and we listened and changed them where we could. You are then constrained by how much you can change within the legislation and all the knock-on consequences of the change that you also have to throw into the mix.
Tony Bellringer: To clarify my initial flippant response, it is largely as Isabel says. You could almost say that we deliberately put some proposals out there at the initial consultation stage that are quite radical and, yes, get quite a lot of negative responses—Mersey Banks is a classic case. The other one that I have had to talk about quite a lot is moving the city of Gloucester out of Gloucester in the 2013 review.
We do that in the full knowledge that it is only the first round of consultation and people will tell us if they genuinely think it is a really bad thing to do. There are actually reasons for doing those things, but as I mentioned earlier, you are somewhat constrained by what is happening around that constituency. It might not be an ideal solution for that constituency, but it might have allowed us to solve a number of issues in neighbouring constituencies. It is not ideal, but we put it out there and test the water, because it is the first stage of consultation and we know full well that if we get a huge pushback on it, we will change it to something better.
Christian Matheson
Q
Tony Bellringer: Yes. We would like to get it right first, but we are cognisant of the fact that if we do not get it exactly right first time, we have a process whereby we can correct it.
We genuinely do not know. We feel that it is probably going to be unpopular in that particular constituency, but, as I say, we have had to do it there. We think that, as a whole in the wider area, it provides a better solution. It is not a good solution for that constituency, but any alternative we have been able to come up with creates problems in those other constituencies. As an overall balance, we think that is probably best, but we recognise that you are not going to like it if you live in that particular constituency, so let us test the water and see what the general public opinion is in that area. Everybody in the area could come back and say, “No, there’s a better option.”
Christian Matheson
I will not push it to a fourth. Do you have any consideration of constituencies that have multiple local authority areas? Some Members represent two local authorities and others represent three. Do you have any rules or guidance on minimising that?
Tony Bellringer: Yes. One of the statutory roles is having regard to local authority boundaries and local government boundaries. As far as possible, we try to limit the number of local authorities that the prospective MP of the proposed constituency will have to deal with. That is very much in our mind.
The Chair
Isabel, did you want to add something?
Isabel Drummond-Murray: No, I was just agreeing. That would be the approach we would take, too.
Mrs Maria Miller (Basingstoke) (Con)
Q
Can I follow up on one of the responses to David Linden’s questions, about splitting wards to do what this Bill is trying to do, which is to create equal and updated boundaries across the whole of the United Kingdom? I speak as one who represents a constituency of 83,000 people—well in excess of what I am sure will be the eventual quota. Isabel was talking about the importance in Scotland of using postcodes to try to get some sense of equalisation. Could Mr Bellringer outline for the Committee what the approach is to splitting wards in England, and whether any experts have looked at this to give us advice on what is a good process to follow, particularly when it comes to polling districts?
Tony Bellringer: As I mentioned earlier, we have traditionally had a general policy of using wards as our building blocks. However, as you will know from the previous couple of reviews, there have been instances in which we have been prepared to split a ward to solve a problem in that area.
As Isabel alluded to, the difficulty in England is that we do not have access to a comprehensive dataset below ward level that contains the parliamentary electorates and associates them with the boundaries of whatever that unit is—a dataset that we can then manipulate in the software and quickly move those units around to recalculate the figures, because that is how it works. When we split a ward in England at the moment, we have to go back to the local authority and get the detailed breakdown, usually on a polling district basis, and manually calculate those figures, which really slows the process. If we were to move to a much more open process of using sub-ward-level units as our building blocks, we would have to source that data from somewhere.
Mrs Miller
Q
Tony Bellringer: At the moment, we do not have the postcode areas in England. We would have to create them; they could be created, but it would take an awfully long time to do.
Between the 2013 and 2018 reviews, one of the things with which we kept ourselves occupied was constructing a polling district-level dataset with the help of Ordnance Survey, in order to map those figures against the actual polling district boundaries. That is almost the most difficult part of the process. We sort of have the figures already because we have access to the actual registers, which are usually subdivided by polling district. However, the polling districts are not mapped in a consistent way and we have to be able to associate the electorate figure with the actual boundary of the unit you are working with, so that when you move the unit, the numbers change accordingly. You need to have mapped those polling district boundaries electronically. We did that process, and it took us and Ordnance Survey about two years to map every polling district in England.
Mrs Miller
Q
Tony Bellringer: As I say, we went through the process between 2013 and 2018, so at one point in time we had a polling district dataset that we could use. However, as you know, polling district reviews happen all the time across the entirety of England, so that single, comprehensive polling district dataset goes out of date almost instantly. There has to be a way of keeping it up to date. At the moment, that requires us to know who is doing the polling district review and when, so we can go and find out what they have changed it to. Do they have it mapped? No—then we need to get somebody to map it into the system. At the moment, there is no process by which the results of a polling district review are notified either to us or to Ordnance Survey so that it can be incorporated and the dataset can be kept up to date.
Mrs Miller
Q
The Chair
You are being asked to write a wish list on this issue. Could you do that for us?
Tony Bellringer: Yes. We did actually approach the Government at the time. We have kind of done the work to build that and issue one. There is a requirement for a local authority that does a polling district review to publish the findings, but they just do that by publishing it on a website, and it is also not necessarily in a mapped format. All it actually requires is a bit of something tacked on to that legal requirement to publish, which says, “You also need to send it to Ordnance Survey and the Boundary Commission.”
Mrs Miller
Q
Can I ask one other question—will you indulge me, Mr Paisley? I noticed that the commissions try to minimise the disruption to existing boundaries in its proposals, which is obviously a sensible thing to do. I also noted that it has said in the past that the commissions are not obliged to shut their eyes to likely future growth. That is particularly noted in section 40 of the guidance that was produced at the last review. Will both commissions outline their approach to the next review and whether it will be the same sort of approach? I declare an interest in that I represent a part of the country that is building a lot of houses. To propose boundaries that will inevitably be changed radically in the future would seem to be a waste of the commission’s time.
Tony Bellringer: Immediately before we start a review, the commission meets representatives of political parties to talk about how it plans to operate its internal policies within the framework of the statutory requirements, and that is an example of the kind of thing that we would be talking about with them.
It is unlikely that it would change significantly. The fundamental principle in doing this work is that you have to at some point draw a line and say, “That is the data that we are working with.” You cannot build a house on constantly shifting foundations and so you have to say, “That is the data and we are going to work with that data.”
At the same time, where we are looking at competing options in an area, if one is obviously more suited to an area that is clearly growing in population—maybe we know that from strategic planning approvals that have gone through in the area—that will veer us towards that option as the preferred option. That is really what it means.
What we cannot do is say, “Well, okay, the electorate that we are supposed to be working with is this and the electorate is now this, so let’s use that instead.” We still have to stick to the original electorate figure, but be alive to the fact that it is clearly growing and can be demonstrated to be growing. That is quite key as well—we draw a distinction between proven growth in an area and projected or speculative growth in an area.
Mrs Miller
Q
Tony Bellringer: Yes and no. The distinction I am trying to draw here is that if you have had a strategic planning development approved and it has been built and people have started to move in, you can say that those figures have changed—it is clearly growing. Even though those figures have derived from a point in time after the electorate data that we are supposed to be using, there is a clear indication that the area is growing. If you have had a strategic planning development approved, but it has not been built yet at the time we are doing our review, we might go, “Well, it is not as convincing.”
Mrs Miller
Q
Isabel Drummond-Murray: I do not think there is much to add to that. We have to work with the electorate as set out in the legislation. On the local government side—I am also secretary to the Local Government Boundary Commission for Scotland—the legislation sets out that we take account of the forecast for five years.
That all points to the need for regular review. We draw a line when we know there is going to be growth and there is capacity to absorb it through the existing 5% tolerance. I guess we could take account of it, but it is not something that has featured particularly on the parliamentary side, simply because of the way in which the legislation is drafted. We use the electorate at the start of the review; we do not guess what the electorate will be at a point in the future.
The Chair
We have four more questions and about 11 minutes on the clock, though I will push it on to get all the questions asked, because the evidence we are getting is very good for the inquiry.
Alec Shelbrooke
Q
Thank you for your evidence, Mr Bellringer. It has been really informative. I want to explore the building blocks further. To pick up on the polling district, you said that you had done a piece of work and commented that it was difficult to stay on top of the reviews that came through—to be able to understand them—but, as you have also just outlined, you cannot build on shifting sands. At some point, you have to draw a line. In terms of using polling districts to build in this review, do you have a set of data sat there that you could use?
Tony Bellringer: Not this time round—because it was so expensive last time, in time and money, in the resource that had to be put in to develop it, and yet it was so instantly out of date. In the actuality, when we came to it, because in the last review we were still using wards as our building blocks—it is still our general policy to use the wards as the basic building blocks—we only split half a dozen in the final recommendations. So the times that that would need to be used under our existing policy are few compared with the amount of time and effort that needs to go into producing it, and given how quickly it goes out of date, we just felt that it was not worth doing this time around.
Alec Shelbrooke
Q
It is important that we get some steer on how you could get away from using wards, which is a tradition—it is not legislated that it must be wards—because it negates having to go outside the 5%, which is another Organisation for Security and Co-operation in Europe recommendation, that for free and fair elections seats should not vary by more than 10%, and would allow the objective of keeping communities together, of keeping county constituencies together and away from borough constituencies. In my city of Leeds, my seat is a county constituency; the other seven seats are borough constituencies. That would be giving regard to keeping those existing seats together.
I am asking both commissions about the practicalities of what recommendations you would make to the Committee before we finalise these laws—how to get to a situation in which you can use the smallest building blocks to cause the minimum disruption, which is what you are really after when looking at constituencies. I am seeking some comment on that. Mrs Miller explored it well, but just outlining—
The Chair
I think he has got the question, Alec. We are really appreciative.
Tony Bellringer: The policy of using wards is fairly long standing, and it has always been discussed with the representatives of the political parties in the meetings before each review commences. In the past, they have generally been supportive of that. It goes to the statutory factor of having regard to local authority boundaries, because a ward is a local authority boundary. We view a ward as almost a representation of a local tie; generally speaking, when the Local Government Commission does its work it should try to bring people of the same communities into one ward. We use that almost as a substitute.
Alec Shelbrooke
Q
Isabel Drummond-Murray: We certainly had a number of complaints about large constituencies bringing together communities that did not feel that they had anything in common with each other. Where possible, we made changes to reflect that. The tight tolerance of 5% meant that, initially, we had to come up with some ideas to put out for consultation. For example, we had a constituency in our initial proposal that stretched from rural south Perthshire down to urban Fife. There was very much a feeling that, “We do not have anything in common with that part of the constituency.” So yes, I think people take account of more than just whether their local community is kept together; some people have concerns about other communities that they are associated with.
Clive Efford (Eltham) (Lab)
Q
My question is about electoral registration. Do you find that it fluctuates between general elections? Do we get a higher registration level at the time of a general election, and should that be the point at which we count the population for future reviews?
Tony Bellringer: One of the few things that we do in between reviews is collect the electorates and see how they change from year to year, but we get only an annual snapshot. If it is around the time of a general election, the electorate numbers tend to go up. Unsurprisingly, people are encouraged to join the register and are motivated more to do so. I know there are arguments about the accuracy of the register at any given point in time. I do not feel qualified to comment on that, but it is certainly true that the numbers go up around the time of elections.
Clive Efford
Q
Tony Bellringer: If you are sure about the accuracy at that high point.
Clive Efford
Q
Tony Bellringer: I am very pleased to say that we hold ourselves up as a model of independence in the process. During the substance of a review, we do not share with the Government, Government officials or Ministers any information about the substance of what we are working on that is not communicated to the public at large.
Clive Efford
Q
Tony Bellringer: They did communicate and trial some of the proposals in the Bill with us in advance. They sought our views, specifically on administrative points and on deliverability.
Clive Efford
Q
Tony Bellringer: Those are not published, generally.
Clive Efford
Q
Tony Bellringer: We have been very clear in the past that we do recognise strength of local feeling. If there are lots of people locally saying a particular thing, that carries a lot of weight with us. However, it will not be an instant knockout if somebody comes up with what we feel is a very well argued solution that might not have been proposed by anybody else previously that in our view respects more of the different factors and across a wider area and provides a better solution overall—maybe not for an individual constituency, but overall.
Clive Efford
Q
Tony Bellringer: It is something that we always used to be able to do in the past and did do on occasion. Prior to 2011, there was not this hard maximum and minimum, but we would still be aiming to keep constituencies within a broad range. Occasionally we would breach that if we needed to, to provide a better holistic solution.
Chris Clarkson (Heywood and Middleton) (Con)
Q
My question is about how to deal with county boundaries or sub-units within a region. It is specifically an English problem, obviously. I will take the north-west as an example because there are five discrete units. If we take Greater Manchester’s current electorate—I am using the December 2019 figures—we can neatly subdivide it into 27 seats that are just on the edge of quota. However, there are basically 49,000 extra voters that you could take in from Lancashire, so at what stage do you make a determination on whether to start splitting wards and have a neat compact unit within one county? Or do you start looking across county boundaries?
Tony Bellringer: As Isabel suggested, we have our nine regions in England, so we work within the regions. We start off by subdividing that as well, and we largely try and work with county units. As far as possible, we start off by trying to keep within county boundaries, but we might need to put a couple of counties together because we know that if you just do that initial mathematical calculation distribution, they end up with halves of constituencies in both counties, for example, and that will not work mathematically. You cannot have the smaller number or the higher number in either because they would be either too small or too big.
Chris Clarkson
Q
Tony Bellringer: We use the same distribution formula that is used to allocate the seats across the UK initially. We do that for the regions, and within the region we work out what we call a theoretical entitlement: if you use this agglomeration of a couple of counties, it would be allocated this many seats on the face of it.
Cat Smith
Q
Tony Bellringer: I do not think that it makes a huge difference to us if they do not have a legal standing. They are a recognised administrative unit, as you say, that is used by electoral administrators in the delivery of an election. That is another reason why at the moment we use wards, because, although they have more of a legal status in law, they are used as a unit by the electoral administrators to deliver elections. One thing that we do have a mind to is that somebody has to use this constituency in delivering the election, and we want to make that process as smooth as possible for the people actually running the election as well.
The Chair
I am afraid that that brings us to the end of this session. As usual, it got more interesting as time went along. We probably could have had much more time, although I am sure that our two witnesses are very pleased that there is no additional time. However, it shows that there is considerable interest in this issue. More expert witnesses will come along now, so we will be able to continue some of these lines of questioning. I thank our two witnesses for coming today—you have been brilliant, informative and very helpful to the Committee. I thank you for your efforts.
Examination of Witnesses
Shereen Williams MBE gave evidence.
The Chair
We will now hear from Shereen Williams, who is on the line. Shereen, can you hear us?
Shereen Williams: Hi. I can hear you.
The Chair
You are very welcome. We are sorry for keeping you for a couple of minutes. I was only allowed to run over because we had a technical issue with bells ringing, and I felt that we lost a couple of minutes. We will not let that little technical difficulty deny you that time at the end of this either. Introduce yourself, and then we will move on to the Minister.
Shereen Williams: I am Shereen Williams, secretary of the Boundary Commission for Wales. I took up the role in January 2019, and I also head up the joint secretariat for Local Democracy and Boundary Commission for Wales, which is responsible for local government boundaries.
Chloe Smith
Q
Shereen, may I ask about how you hold public hearings? We have gone through some more general discussion with your two predecessor witnesses, so perhaps we might turn to this angle with you. As you will be aware, the legislation proposes moving the timing of one of the public hearings but maintains very firmly that there should be ample public consultation, which we think is really important for public accountability and public involvement. Perhaps you might give us some insight into how you manage that for Wales.
Shereen Williams: The challenge we have had in the past is that we have to pick the five areas in which to hold the public hearings quite early on, so we have to guess which areas might have the most challenge, in terms of proposed constituencies. It is hit and miss. Sometimes you could be there for two days, and you would have one full day of people turning up for the public hearings, and the next day there will be a much smaller number. It also uses up a lot of staff resources and the time of the commissioners.
The Bill proposes that that is done as part of the second round of consultation, which would give us a bit more flexibility on where we should physically choose to have these public hearings, based on the feedback and representations we get in the first round of consultation. For Wales, it is very important that we have an appropriate spread across the whole country, to make sure that people can get to a public hearing if they need to.
Chloe Smith
Thank you, Shereen. I will pause there and let other colleagues take over.
Cat Smith
Q
Shereen Williams: The challenge that we have in Wales is that whether we go with 600 seats or 650, Wales will take the biggest hit in terms of loss of constituencies. It would mean, I think, a massive change: across the whole country, I cannot guarantee that even seats that fit within the current limits will be able to remain intact. That is the challenge we have in Wales; the 5% does give a very tight range for us to work around.
I think the valleys will present a unique challenge for us, because you do not really want to split a valley and have half in one seat and the other half in another seat. It will require us to look at our building blocks and how we work on that, getting input from local communities and from local authorities—from our stakeholders—and asking, “If we had to go down the route of splitting a valley, what is the best combination to work?” I am aware that we had the exact same problem at the last review.
Cat Smith
Q
Shereen Williams: It would give us more flexibility, yes, to put communities together, but again, I think it is very clear that, as an independent body, we do not have a view as such on the electoral quota; that is something for our MPs to make.
Ben Lake (Ceredigion) (PC)
Q
Shereen Williams: From the commission’s perspective, it is about communities that are together. We look at your electoral wards and communities that are linked through joint programmes and projects. Also, quite uniquely, in Wales, as you are very aware, is the Welsh language. We take it into account that you have constituencies where there are lots of links to the Welsh language. That is something we would like to keep together. That, for us as a commission, is what we would consider a community tie as well.
Ben Lake
Q
Shereen Williams: I think it will be just as complex as the previous reviews, because we are losing quite a lot of seats. If you lost one or two seats, it might be easier to amend existing constituencies by adjusting, making small boundary changes, but the fact that the number is a bit bigger—if you lose eight rather than 11, that three will help slightly, but the complexity will remain the same.
Jane Hunt (Loughborough) (Con)
Q
Shereen Williams: I do not think that is something I can possibly comment on. As a commission, we are given the rules to work with, so it would not be up to the commission to comment on something like that.
Jane Hunt
Q
Shereen Williams: In the past, we have made full use of that plus or minus 5% to make sure that communities are kept together. If the variance is changed, we would still use the same practice where possible. A constituency could have exactly 0% variance or minus 5%, minus 4%, minus 3% or minus 2%. We would work within those parameters in helping communities stay together. That would be our limit.
Jane Hunt
Q
Shereen Williams: Like our colleagues in England, Scotland and Northern Ireland, we use electoral wards as our building blocks. However, if there was great difficulty, we would use community wards within the electoral ward. In the past, we have put forward proposals where one or two parliamentary constituencies had a split ward in them. It is a route that we would rather not take because it creates confusion for voters when you have a different local authority and a different parliamentary constituency compared with somebody who is in the same electoral ward as you.
Mrs Miller
Q
Shereen Williams: The four Boundary Commissions are in regular contact. We rely on each other and we share good practice on a regular basis. In terms of those changes that have taken place in Scotland, I cannot imagine why we would not be able to invite Scottish colleagues to present to commissioners and to inform our thinking on how we deliver this report for Wales.
Mrs Miller
Q
Going back to the question that my hon. Friend the Member for Loughborough raised about splitting wards, it is interesting that that seems to be something that can happen in Wales and Scotland, although the procedures are not as easy as they might be. We heard that from the commission in England. Would you be able to advise the Committee about working with Mr Bellringer on what would need to be put in place to ensure that, if it was helpful, sub-ward-level splits could take place? Would you be able to provide some more information for the Committee on that?
Shereen Williams: Scotland and Wales’s challenge is significantly different from England’s because of the number of electorates. Tony has to co-ordinate in terms of trying to get all the parliamentary constituencies set up for England. In Wales, we are used to splitting wards because we tend to do that for our local government boundary reviews, so we are quite comfortable with the practice of breaking up electoral wards and splitting up communities into sub-wards in order to create electoral wards—this is going back to community wards. In terms of sharing that practice with Mr Bellringer, that would not be an issue, but I have to acknowledge that he has a far more difficult job in hand compared with us in Wales and Scotland.
Mrs Miller
Q
Mrs Miller
I wondered whether, as somebody who was brought up in Wales and understands the importance of cultural identity within the Welsh nation and the psyche, you have thought further about how that constituency should be treated. I am a Hampshire MP, and the Isle of Wight gets particular protection because of that.
Shereen Williams: That would be something for Parliament to decide as to whether Ynys Môn becomes a protected constituency, as they have in Scotland and the Isle of Wight. It would not be for the commission to comment on that.
The Chair
Shereen, thank you very much for your wonderful evidence and, more importantly, for getting us back on time. You have made my chairmanship so much easier. Thank you for giving us your time this morning.
Shereen Williams: Thank you for having me.
Examination of Witness
Eamonn McConville gave evidence.
The Chair
Q
Eamonn McConville: My name is Eamonn McConville. I am the Boundary Commission secretary for the Northern Ireland commission.
The Chair
Could you speak up a little for us? It is not a problem I have, but it is one that some other people have.
Eamonn McConville: Sure, no problem.
The Chair
We will move to the Minister first, then to the main party spokespeople, and then Shaun Bailey is the first on my list for this section.
Chloe Smith
Q
Eamonn McConville: Yes, Minister. Northern Ireland is obviously geographically the smallest part of the United Kingdom, so we literally have less room for manoeuvre when it comes to creating our modelling of the constituencies. That can be compounded by the effects of rounding during the calculations under rule 8, when it comes to allocating constituencies to each part of the UK.
That can leave us restricted in our ability to create the correct number of constituencies under rule 2. The legislation does currently, and I think the new legislation does prospectively, include a small degree of flexibility that allows us to fall beneath or outside of the plus or minus 5% tolerance from the electoral quota, but as I say, that is there because it recognises the mathematical conundrum that can sometimes present itself in Northern Ireland.
Chloe Smith
Q
Eamonn McConville: The parliamentary constituencies create the boundary under which the Northern Ireland Assembly constituency areas are formed. They are further subdivided into five areas for the Northern Ireland Assembly elections. There is that coterminosity that does not exist, for example, in Scotland.
The Chair
For clarity, Eamonn, you said five areas, but do you not mean five seats in each constituency?
Eamonn McConville: Five seats, yes. Sorry, Chairman, that is exactly what I meant.
Cat Smith
Q
Eamonn McConville: The most pressing impact of covid-19 for ourselves in Northern Ireland is in relation to the recruitment and training of staff ahead of the commencement of the next review. There are obviously practical implications of being face to face while still maintaining social distancing, but there is the added difficulty that commission staff are seconded from other Departments. That is our normal practice. Those Departments are under pressure to resource their response to covid-19 and to Brexit, which is coming down the line. There is a real difficulty facing us at the moment in terms of getting staff in and trained in time for the next review, but we are working with Departments on that.
Cat Smith
Q
Eamonn McConville: We had hoped to recruit the first of the staff by September. We are a small team, so we plan to get the remaining two staff in by December of this year. We are still within a reasonable window, but time marches on fairly quickly when dealing with recruitment processes and getting staff released, so we are keen to get that work under way.
Cat Smith
Q
Eamonn McConville: During our public consultations, people are free to put forward whatever local issues or local ties pertain to themselves and their local areas. The one thing that we cannot take into account—this applies across the UK, to all of the commissions—is anything that would affect or is influenced by electoral trends, electoral outcomes and things like that. Anything that would fall under a local tie is valid, in terms of what we would consider.
The second part of your question was on the electoral quota range. Again, as my colleagues have told you, the 5% presents issues in terms of accommodating local ties more roundly across Northern Ireland. As I said earlier to the Minister, we have the flexibility in rule 7 in terms of geographical limitations, because of the particular circumstances in Northern Ireland. It is interesting to note that the flexibility in the 2018 review would actually have come within the plus or minus 7.5% that has been discussed previously by other people. It is not a huge degree of flexibility, but it does allow us—when we are restricted in circumstances under rule 2—to have a certain degree of flexibility.
Shaun Bailey (West Bromwich West) (Con)
Q
Eamonn McConville: You are absolutely right that we now have the 11 local government areas, but we are working with different factors. In the last review, the 2018 review, we had 17 constituencies. While our considerations would have included trying to fit as many whole parts of local government areas into the 17 constituencies, the mathematics just do not allow for that, so we then take on board the other factors, which include local ties.
In Northern Ireland—it is similar across the UK—we have more major towns with satellite towns and villages around them. That is one thing that came to the fore in our consultation process, and we tried to accommodate that in our proposals as they went through the various consultation stages. There are similarities, but clear differences, simply because of the rules that we operate under.
Shaun Bailey
Q
Eamonn McConville: Do you mean for our initial proposals, or as the process progressed?
Shaun Bailey
Yes, for the initial proposals, but perhaps you could say if you were diverted as the process developed.
Eamonn McConville: We operate with exactly—or very close to—the same operational methods as the other commissions. We all operate under the same legislation, with the requirement to carry out the three public consultations. As my colleague Tony said, the initial proposals are our best estimate as to what would be a good starting point. From there, we seek public views and, if required, we amend to accommodate those within the factors that my colleagues mentioned previously—local ties, geographical features, existing constituency boundaries. It is a very similar process to that outlined by my colleagues.
Chris Clarkson
Q
Eamonn McConville: Our building block is set out in the legislation as the local government ward that exists. In Northern Ireland, our electorate in each of those wards is smaller than, for example, in England. Tony spoke earlier of wards with 10,000. Ours typically have 2,000 to 3,000.
We still face the issue of how small we are geographically, plus having Lough Neagh right in the middle of Northern Ireland, so there are times when we are balancing all the factors. Consideration of splitting a ward does arise, but, like my colleague, there is no ready-made data set through which we could split a ward. We have to take that into account, whether by looking at geographical features or through another method. For the last review, we decided not to split any wards.
Christian Matheson
Q
Eamonn McConville: It is really a matter of mathematics. We have 11 local government areas and in the last review we had to create 17 constituencies. It is one of the methods that we try to take into account, initially and as the process proceeds.
Simply from a mathematics point of view, it will require splitting off the larger local government areas into the various constituencies. As I said, as well as the local government areas, we will take account of responses that come in from the public to inform the proposals and the creation of the constituencies as the process proceeds through the review.
The Chair
Eamonn, may I take this opportunity to thank you for presenting us with this evidence and for giving us your time this morning? Right on cue, like a Swiss clock, you have managed to get us to the end of this session on time. I appreciate that. That brings us to the end of this morning’s session. The Committee will meet again at 2 pm in the same room to take further evidence.
Ordered, That further consideration be now adjourned. —(Eddie Hughes.)
Parliamentary Constituencies bill (Second sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Parliamentary Constituencies Act 2020 View all Parliamentary Constituencies Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Notices of Amendments as at 16 June 2020 - (17 Jun 2020)
The Chair
You are all very welcome back to the Committee. We have six witnesses over this afternoon’s session. Three witnesses will be physical and three will be down the line using digital technology.
If people want to remove their jackets and bring in refreshments, that is fine by me. I emphasise that those who do not have a microphone in front of them but wish to ask a question should make their way to the microphone in the corner of the room, for Hansard’s sake.
Examination of witness
Roger Pratt CBE gave evidence.
The Chair
We will now hear from our first witness this afternoon, Mr Roger Pratt. Roger, you are very welcome.
Roger Pratt: Thank you.
The Chair
I hope that you enjoy today’s session, rather than endure it. If you introduce yourself for the record, we will then move on to questions, starting with Chloe Smith.
Roger Pratt: Thank you, Mr Chairman. I am Roger Pratt, the boundary review director for the Conservative party.
The Minister of State, Cabinet Office (Chloe Smith)
Q
Roger Pratt: Thank you very much. I fully support the use of electoral registers as the basis. They are likely to be the most up-to-date information that one has—they are conducted on an annual basis and electorates have always been the basis for parliamentary boundary reviews. In fact, it was the Labour Government in 1948 who brought forward the use of electorates, following a unanimous recommendation from the Speaker’s conference of 1944 that the electorate be used, and it has been used ever since—I think that is absolutely right.
On the data that might be used, I think it absolutely right, under the very strange circumstances that we have, that the 2 March 2020 data be used rather than the December 2020 electorates, which clearly would normally be used. I thought that might be worthwhile to look at. I know there have been suggestions that one should look at either the general election figures or the December ’19 figures, but I do not think that those are robust because the December ’19 figures—the figures published recently on the Boundary Commission website and by the Office for National Statistics—and the general election electorate data, which are publicly available, differ very markedly. The difference is about half a million electors between those two figures—that is a dramatic difference, but it is not all one way.
Three hundred and eighty-eight seats were actually larger at the general election than on 1 December, but 261 seats were smaller at the general election, so it went both ways. I do not think that either the general election or December ’19 figures are robust, and I am sure that the March figures, when they can be properly checked and cross-checked by the Boundary Commission, will be much more robust and that, in my view, will be the right data to use.
Chloe Smith
Q
Roger Pratt: Absolutely. Completeness and accuracy are absolutely the right words, and the best opportunity of that is to get it normally at the annual canvass and, in those special circumstances, on 2 March.
Chloe Smith
I have a final question to round off that set. Obviously, we all want to see as many people who are eligible to be registered as possible—and that, I trust, would be the view of the Conservative party.
Roger Pratt: Absolutely. Every effort to drive up registration, to make sure everyone is registered, is a goal we all support.
The Chair
We will now make our way around the group leaders, unless I signal otherwise. If anyone else wishes to speak, just catch my eye.
Cat Smith (Lancaster and Fleetwood) (Lab)
Thank you, Roger, for coming to give evidence. Are there any specific circumstances in which electoral quota could be relaxed in order to avoid splitting an electoral ward? For example, even though the vast majority of seats were within the 5%, if in one or two very localised examples a 6% variance would prevent a ward splitting, would you find that preferable?
Roger Pratt: No, I would not: I think we have to stick to the quota. There are already exceptions in the Bill—four constituencies are clearly protected, Northern Ireland has special rules for the quota and there are rules about the area of a constituency, which in effect affects only northern Scotland. Those exceptions are in the Bill. Otherwise, it is right to have the 5% tolerance and, within the 5% tolerance, we can get constituencies that meet quota but also respect communities.
The best opportunity, as was said in the report by Mr Pattie and others, is split wards, which make a considerable difference. Splitting wards is the opportunity to make sure that constituencies are in the right place in terms of communities. I know you are to speak to Mr Pattie later—very sadly, Ron Johnston died recently—but, just so you know, in their report, they said:
“The Boundary Commissions for Northern Ireland, Scotland and Wales were prepared to split wards where they considered that sensible; the Boundary Commission for England was extremely reluctant to do so, and many of the problems that emerged in its recommendations resulted from this.”
They went on:
“With ward-splitting, it is possible to have substantially more unchanged constituencies—and, as a corollary, substantially fewer undergoing major change—especially with the tighter tolerances. The advantages are particularly pronounced at lower tolerances with 650 seats but, as the tolerance is relaxed, ward-splitting is needed in fewer areas”.
So I believe in ward splitting, rather than in relaxing the tolerance.
The 5% tolerance—10%, either way—is right. Otherwise, we could have one constituency that is 67,000 next to another that is 78,000, so ward splitting is right. There are those few exceptions in the Bill, as is correct.
Cat Smith
One of those exceptions would be the Isle of Wight, which looks set to get two MPs under the Bill. On current figures, that would come in at about 55,000 electors in each, which is about the size of many Welsh constituencies, in particular if we look at the Welsh valleys and their geography, where mountains divide communities. How do you explain the difference between those geographical features that make the Isle of Wight the exception but not necessarily the Welsh valleys?
Roger Pratt: The Welsh valleys—I actually live in one, so I have some experience of this—are totally different from the Isle of Wight. You suggested that the Isle of Wight had similarities with the Welsh valleys, but the Isle of Wight is an island without any direct link to the mainland; all the Welsh valleys have links to the rest of Wales, and so on. It is not sensible to link the Welsh valleys with the Isle of Wight.
The treatment of the Welsh valleys is absolutely right. Unfortunately, Wales will take a hit—one has to say that—but the position is that just before 2005, Scotland was required to reduce the number of seats to the English quota. They were required to use the English quota prior to 2005 with the Scottish Parliament. That was not required in Wales with the Welsh Assembly—Wales now has a Welsh Parliament—but unfortunately that means that Wales will take a hit.
However, I think it is right that my vote in Monmouthshire should equal a vote in another part of the country. Monmouthshire is one of the largest, but my doctor’s surgery is in Blaenau Gwent, one of the Welsh valleys to which you refer. Is it right that Blaenau Gwent has 50,736 electors whereas just over the Severn bridge in Bristol West, they have 99,253? I do not think that is right, and Wales will take a hit—there is no doubt about that. However, it is right that you have a standard quota throughout the United Kingdom. That is fair and that is equal.
Cat Smith
My final question. We have the representative of the Conservative and Unionist party before us, and you have acknowledged that Wales looks set to take a hit. It looks to be the most badly affected of all the nations of the United Kingdom in the review. What assessment do you make about the integrity of the Union in terms of the consequences of this boundary review and Welsh voices in this place?
Roger Pratt: I think the Union is intact. The whole of the Union will have the same quota. It is absolutely right that everywhere in the United Kingdom has a quota and so every person in the United Kingdom has the same representation. The difference in Scotland and Wales is that they have a Scottish Parliament and a Welsh Parliament. They still have equal representation in the UK Parliament, which I think is absolutely right, but clearly the Members for Glasgow East and Ceredigion do not have responsibility in this place for health and education, whereas all the other Members on the Committee do.
Scotland has a slight advantage over the rest of the United Kingdom, quite rightly in terms of the Western Isles and Orkney and Shetland. I fully support that. However, it means that—slightly—Scotland has an advantage over the rest of the United Kingdom because those are very small seats. I do not object to that in any way. The Union is intact because everybody’s vote counts equally whatever part of the United Kingdom they come from.
David Linden (Glasgow East) (SNP)
Q
Roger Pratt: Correct, yes. I am fully supportive of 650.
David Linden
Q
Roger Pratt: I cannot say how many seats Scotland will lose because we do not yet have the figures from 2 March. When we have those figures, we will know, but on certain calculations they lose two and on others they lose three. I expect it to be either two or three seats. Wales is likely to lose eight, but we will have to see.
I think it is right that Scotland and Wales do that. Scotland’s electorate has not gone up as fast as England’s. It had to use the English quota previously and now that has not caught up because England’s electorate has gone up more. In terms of Scotland, your own seat is one of the larger seats in Glasgow, but there are four smaller seats in Glasgow, one of which is 57,000. I do not believe it is right that a seat in Glasgow should have only 57,000 and two other members of this Committee in the south-east of England both have well over 80,000. It is right there is an equal quota throughout the United Kingdom.
David Linden
Q
I want to ask you specifically about the idea of the size of constituencies. You have hit the nail on the head in terms of some island communities, which are protected; Na h-Eileanan an Iar is a good example of that. There is also what was proposed as the Highland North constituency, which is probably the size of a country like Belgium or Luxembourg. Do you have a view on the limit of 12,000 to 13,000 sq km being the provision for a constituency? Is it the Conservative party’s view that that is a manageable size of constituency for a Member to deal with?
Roger Pratt: Of course, your parliamentary leader represents a constituency that currently is the largest in the United Kingdom, and that is 12,000 sq km. I could not find a more accurate figure than 12,000, but it is 12,000, so I think that was why that figure was brought into the Bill as the constituency that was of that size. That is right in terms of 12,000. It cannot go beyond 13,000, but above 12,000 gives the Boundary Commission in Scotland discretion if it so wishes between 12,000 and 13,000.
There is discretion if the commission wishes to use it if a constituency is over 12,000. It is up to the Scottish commission, but that is the right balance. It is currently the largest constituency in the UK Parliament, and the Boundary Commission has discretion up to 13,000.
David Linden
Okay, can I finish off with one question going back to the equality of the United Kingdom? You said yourself that Scotland stands to lose two or three seats. How would you, as a representative of the Conservative and Unionist party, reconcile that with what people in Scotland were told in 2014—how we were better together and we should be a United Kingdom?
Roger Pratt: I still think you are better together, obviously. I do not think the fact that you will lose two or three seats affects that in any way. You will still have the same equal representation; actually, slightly larger because of the Western Isles—I apologise, but I cannot pronounce it in the way you did—and Orkney and Shetland, so there is a slight advantage there for Scotland. But I think it is right that it should have the same equal quota as the rest of the United Kingdom.
It is just right that Scotland should have the same quota. I do not think it means that the whole of the UK is an equal and fair place. I noticed that in the Bill brought before the House by the Member for Manchester, Gorton, there was no change in either Scotland or Wales; they would have been exactly the same. There was a change in the Bill to Northern Ireland, but no change as far as Scotland and Wales are concerned. That is absolutely right and I support that part—not others—of the Khan Bill.
Christian Matheson (City of Chester) (Lab)
If it helps, Mr Pratt, I believe the correct pronunciation is Na h-Eileanan an Iar.
Roger Pratt: I am not going to try!
Christian Matheson
I thought I would get that one in.
I have just one question. Moving away from the numbers, what is your experience of being able to influence local proposals once they are already out? How flexible have you found the Boundary Commission and the assistant commissioners to be? What are the most useful arguments to deploy when considering the ones that perhaps resonate most with the boundary commissioners when you consider local proposals?
Roger Pratt: Thank you very much indeed. Absolutely, the Boundary Commission and the assistant commissioners do listen. That is very important.
The whole point of this process is that it is consultative. It is a three-stage process and I think the changes to that process are right. You have got the initial proposals coming out and then you have got the secondary consultation stage, including the public hearings when people can discuss not only the Boundary Commission proposals but any alternatives that have been put forward, which I think is absolutely right for that secondary stage, and then you have got the revised proposals.
The commissioners do listen and they change their minds. I have found them to be very accommodating to what should be changed if people make a good argument. The arguments have to be based around the factors in rule 5: existing constituencies, local government boundaries, local ties and geography. Those four factors are the way in which you persuade them to change. Indeed, we changed them a number of times: in the last review, the Boundary Commission for England changed the composition of more than 50% of the constituencies. That showed they were prepared to listen.
During the Second Reading debate, you referred to the notorious Mersey Banks constituency, which illustrates the issue very well. I entirely agree with you: it was one of the strangest proposals I have ever seen from a boundary commission, but like the Labour party, the Conservative party opposed it. We all opposed it at the initial stage, and the boundary commission came out with revised proposals. They never came out with final proposals because the review was effectively suspended, but they changed Mersey Banks so there was no detached constituency. That is the whole point of the process: you have a proper consultation, then they come out with the proposals that best meet the factors within the quota tolerance level.
John Spellar (Warley) (Lab)
Q
Roger Pratt: I always support whatever is the Conservative party line. I am a Conservative party employee.
John Spellar
Q
Roger Pratt: I think I am right in saying that the decision about the Isle of Wight followed discussion in the House of Lords about the previous Bill. The Lords decided that it was wrong for the Isle of Wight to link with part of the mainland. There is quite a large chunk of water. Those two constituencies would be made up of about 55,000 people, as you rightly say, but it is difficult: you have to get a ferry and so on. I appreciate that there is a Skye bridge, but you could not do Skye on its own. I cannot remember what the Skye electorate is, but it is not very large.
John Spellar
There are lots of ferries between Portsmouth and the Isle of Wight, though. I was recently on a Defence Committee visit there, prior to covid-19, and the ferries are quite regular and quite quick.
Roger Pratt: There are ferries, but if we are talking about communities, I think the Isle of Wight would feel very let down if it were linked with part of the mainland. I remember a boundary commission where it was suggested that there should be a seat crossing the Mersey between Liverpool and the Wirral, and that suggestion was very unpopular and rightly changed as a result of the consultation. With the 12,000 people from Skye, the current electorate of Ross, Skye and Lochaber is almost exactly the same as the seats in the Isle of Wight would be. The Isle of Wight seats would be very slightly larger.
John Spellar
Q
Roger Pratt: You are right that Wales was not required to use the English Parliament. At that time, there was a Welsh Assembly; it is now called the Welsh Parliament. That Parliament has a lot of responsibility, particularly for health and education, but for a lot of other matters as well. Members of Parliament from England have to deal with health and education, whereas those from Wales do not, so I think it is right that Wales should be on a fair and equal basis with England, Scotland and Northern Ireland.
John Spellar
Q
Roger Pratt: Certainly it needs to be as accurate and complete as it possibly can be. Some of those matters are beyond the scope of the Bill, but I would support all the measures that the Government are taking, as are the Scottish Government and the Welsh Government, and all the local authorities, to ensure the most accurate and complete register we can possibly get.
John Spellar
Q
Roger Pratt: There were some perfectly legitimate causes of local complaint, but one of the things they had to do was make sure that the knock-on effects were affected. Certainly, the Labour party and ourselves and others always put in an overall plan, so you could look at the overall plan. That is what you must do to try to get it right sometimes.
The Labour party and ourselves and other parties agreed in Dorset. All three of us came up independently with the same alternative plan for the Boundary Commission, so I do believe that it is right. I do not believe that a 7.5% quota is right.
It is a question of balance, isn’t it? It is a question of the balance you strike between getting a quota right and community ties. I think the quota at a 10% variance, rather than at 15%, which you would have under seven and a half, is the right balance to strike.
In the past, the Boundary Commission, in the rules under which you were all elected, stated quite clearly that it needs to get as near as possible to the electoral quota—that is in the Act—but it has been conflicted as to how it uses those rules. Under the new rules, it is not; it knows it has to get everything within 10%, that is 5% either side, but, in addition to that, it uses the rules to make sure that it uses the other factors. It does not need to get as near the quota as possible. Mr Bellringer made that clear this morning.
If I may, Mr Chairman, I have one other point on the 10%. The right hon. Member for Elmet and Rothwell referred to the Organisation for Security and Co-operation in Europe. The OSCE Office for Democratic Institutions and Human Rights publishes an election observation handbook, which says that,
“all votes should carry the same weight to ensure equal representation. This means that each elected representative represents a similar number of registered electors. For example, in a majority voting system, the size of the electorate should not vary by more than approximately ten percent from constituency to constituency.”
I think that is the right balance to strike.
Jane Hunt (Loughborough) (Con)
Q
Roger Pratt: Yes. I think that is absolutely right. When there was an original five-year term, it was linked to the Fixed-term Parliaments Act 2011. Since then, we have had two general elections not based on the Fixed-term Parliaments Act, and I think it is the Government’s intention to change that Act. So I think eight years is the right balance to strike, so that normally you would have two Parliaments between each review.
Jane Hunt
Q
Roger Pratt: I fully support the changes. I think it is right that the initial proposals should be out there for eight weeks, and you should not be having public hearings during that period. It was very difficult to have public hearings during the initial period; I think that caused problems for parties and people. It is much better that, during the secondary consultation stage, which is six weeks, you have those public hearings, and you can discuss not only what the Boundary Commission has brought forward but any other alternatives that are brought forward in the first stage. So I think it is absolutely right.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions of you, Roger. Thank you very much for your time and your expertise today; they have been much appreciated.
Roger Pratt: Thank you very much, Mr Chairman.
Examination of Witness
Tom Adams gave evidence.
2.31 pm
The Chair
We now move to our second witness this afternoon. We will hear from Tom Adams. Tom is the acting director of data and targeting for the Labour party. And we will have until 3 am for—[Hon. Members: “Three am?”] Sorry, I knew there was something wrong there.
Tom, we have until 3 pm with you today. I will go round the Front-Bench spokespeople first and then other Members, as they signal, will ask you questions.
Chloe Smith
Q
Tom, may I invite you to talk about the automaticity provisions in the Bill? By that, I mean the measure that we are proposing whereby the review’s recommendations should come into effect automatically, without the possibility of political influence either from the Government or from Parliament. What is your view on those provisions?
Tom Adams: Broadly, I think there should still be some parliamentary scrutiny of the review’s recommendations at the end. Fundamentally, while the commissions are obviously independent, the advice and instructions given to them by the Government are obviously given by the Government of the day. And given that there is still some scope for whoever is in Government at that time to influence the process in some way, I think it is right that the review’s recommendations come back to Parliament.
Fundamentally, the Government have obviously now decided, rightly in my view, that there should be 650 seats and not 600, but obviously the previous reviews—two of them on 600 seats—would have been implemented automatically if these new rules had been in place at that time, which Parliament might later have come to regret if it has since changed its mind. And obviously at those times, there was no parliamentary majority for implementing the change to 600 seats, but Parliament would not have been able to do anything about it at the time.
So I think that Parliament offers a last stop-gap, and it is right that Parliament gets the final say on these matters, just as an important principle of parliamentary sovereignty on this material.
Chloe Smith
Q
Tom Adams: Sorry—what I mean is that obviously the Government, by proposing the Bill and passing it, will be able to set things such as the 5% threshold. That is obviously something that the Government have decided upon and Labour has taken a different position on that. That is what I mean—the Government are deciding that that is the threshold to be used. Therefore, given that the Government have some ability to influence this process—it is not completely and utterly independent, because fundamentally the commissions have to work within the guidelines that the Government have given them—I think it is right that the proposals that come back should be agreed by Parliament at the end of the process.
Chloe Smith
Q
Tom Adams: That is true, but if a Labour Government were proposing this Bill, there might be slightly different thresholds, for example, so clearly the Government still have quite a lot of influence over what is put in the Bill in terms of these boundaries, which obviously will persist for at least—possibly—two general elections. That is why I think it is right that it does come back to Parliament at the end.
Cat Smith
Q
Tom Adams: Broadly, yes, having a constituency that varies by 5.5% from the quota makes more sense than having a split ward or, indeed, an orphan ward added to a constituency, where you have one ward from a different local authority. I think that makes more sense from the perspective of maintaining community ties and having constituencies that the public understand and have trust in. It is a question of having some flexibility in specific areas. Obviously, some wards in the country are very, very large in terms of electors, particularly in the west midlands, where some wards in Birmingham have 20,000. That obviously makes it very hard, in those areas, to come up with arrangements, so having additional flexibility on the 5% figure would make that easier. The same applies to some bits of Wales, for example, where the geography obviously makes it much more challenging.
Cat Smith
Q
Tom Adams: Yes, I think wards should be the building blocks for this. Obviously, where a decision is taken to split a ward, if that is absolutely necessary, it should be along the existing polling district lines, but as you say, polling districts do not have a clear legal status. Councils can amend them, basically, as and when they want. There is not a clear process for how that happens in the same way as there is for how wards are done by the Local Government Boundary Commission. Polling districts are at the discretion of the councils, and although in some areas they are based on parishes, in many others they change quite frequently.
We saw, for example, in the general election some councils that created polling districts just for the purposes of helping them to administer the general election, and then they got rid of them afterwards again. Things like that make it very hard to have a consistent process that is based on using polling district boundaries. Using wards would be much preferable, and avoiding splitting where possible; and where that is necessary, that is when you can use the polling district boundaries to do that. I do not think polling districts should be the primary building block for this process.
Cat Smith
Q
Tom Adams: I very much welcome the move from December 2020 to March 2020. Obviously, the Minister will be aware that we have raised significant concerns about this, in the earlier engagement with political parties. We still have some concerns about the impact of people dropping off the register even between 12 December 2019 and March. Obviously that will be less significant compared with December 2020, but just in our rough estimations looking at it now, it does look likely that a few hundred thousand people will have dropped off the register in that time, because obviously there are areas where people move a lot and there is high turnover of population.
On 12 December there was a general election, so that register will be the most complete a register is going to be. To my mind, it makes sense to use that one, although obviously I strongly welcome the use of 2 March as compared with December 2020, when I think the impact on the annual canvass of coronavirus will have been quite significant. I think the 12 December one would be better: it will be more complete and a better representation of the actual electorates in these places. But 2 March is certainly preferred to December 2020.
David Linden
Q
Tom Adams: Obviously, the commissions did publish the numbers on this, but broadly, there is likely to be a loss of three seats for Scotland and a loss of eight seats for Wales. Obviously, that might change slightly, depending on exactly which register you use, but it is going to be in that region of change.
Ben Lake (Ceredigion) (PC)
Q
Tom Adams: That raises an important question, particularly when it comes to Wales, because Wales is due to lose such a significant number of seats; it is quite a drastic overhaul of the number of Wales’s constituencies. While there clearly needs to be some decrease to equalise the electorate sizes in constituencies, it seems slightly odd that Wales has no protected constituencies at all, yet there will be two constituencies on the Isle of Wight, the electorates of which will be roughly the size of an average Welsh constituency. The introduction of protected constituencies in certain places in Wales is one possible way of achieving that, and Ynys Môn would be a good example.
This big drop of eight in one go is quite significant, and we should be mindful of the impact that it will have on representation in Wales. Having additional protected constituencies—Scotland obviously has several and the Isle of Wight has two guaranteed, whereas Wales does not have any—is perhaps something to look at.
Christian Matheson
Q
Tom Adams: The first thing to say is that I am relatively new to this responsibility in the party. However, generally, they are quite flexible and accommodating. Particular MPs clearly have quite a large role in that, and their submissions are often taken quite seriously. The commissioners clearly do an excellent job of trying to balance all the competing priorities, but they are sometimes potentially constrained by things such as the 5% threshold. However, within the guidelines that they have, I think they do a good job of taking everything into account and coming up with proposals that are genuinely reasonable for everyone.
Alec Shelbrooke (Elmet and Rothwell) (Con)
Q
Tom Adams: Whether we would vote it down is probably a question for the politicians in my party, rather than for me; I work in a technical role at head office. Obviously, it is likely that if the Government supported the proposals, they would still pass Parliament, even if Labour voted against them. I think there is a role for Parliament in finally approving those proposals when they come back, as has been the case for previous reviews.
Alec Shelbrooke
Q
Tom Adams: In the last review, not that many wards were split in the end. I think you are hearing evidence later from academics who have done some research on the difference between 5% and 7.5%, and the better outcomes that 7.5% produces. It is not quite an arbitrary number. Their research found that even the difference between 5% and 7.5% has quite an impact on the outcomes. While there are obviously likely to be occasions when you still need to split wards, clearly any increase in the threshold will improve your ability to maintain community ties and to not have to split wards or create constituencies that seem slightly odd.
Alec Shelbrooke
I just add that the last time, we were able to form much bigger constituency numbers.
Tom Adams: Yes, that change will have an impact.
Laura Farris (Newbury) (Con)
Q
Tom Adams: It certainly creates challenges from the perspective of political parties and others who are reliant on electoral geography boundaries. Given that wards are created by local Boundary Commissions to have some sense of community ties, and they are created for a reason, if you split them you are further cutting community ties, and potentially creating more challenges, in the sense that people are cut off from people who they would see as firmly part of their community by cutting across a ward. Obviously, you cannot always come up with a perfect arrangement.
Laura Farris
Q
Tom Adams: Local Boundary Commissions will certainly try to make that the case. They will come up with those wards for a reason, which is why I think they are sensible building blocks for the whole process. If you abandon that principle and say, “Does it really matter?”, we might as well just ignore them entirely. I do not think that is practical for the purposes of political parties or electoral administrators, who certainly find it much easier to think of wards as sensible building blocks for constituencies, rather than having entirely separate arrangements that do not bear any relation to the existing wards. Using those wards and keeping them as far as possible is sensible.
Clearly the Government recognise that to an extent, because there is the very sensible provision in the Bill of allowing the provisional wards to be taken into account. That is a fantastic reform that will help to keep some of that, so wards will continue to be in line with parliamentary constituencies. We had the problem in the past, even where we were using whole wards, that if those wards were then amended or changed only a year later, the new wards would bear no relation to the constituencies. The new provision enables you to make sure that you have wards and constituencies that are coterminous as far as possible. That does improve people’s experience of the democratic process.
Laura Farris
Q
Tom Adams: In terms of which ones we particularly—
Laura Farris
In the 2018 exercise—sorry, I am not familiar with it myself—do you know what proportion there was broad agreement over and what proportion there was not?
Tom Adams: Not off the top of my head. I do not know exactly; I have not studied that in detail recently. As I said, that was carried out by someone else at Labour head office, so I do not know exactly on which constituencies we agreed and which we did not.
Laura Farris
Q
Tom Adams: Presumably, they are not the only two submissions that will have been put in. The Labour and Tory submissions are not the only ones that will be put in.
Laura Farris
Q
Tom Adams: I am not completely sure off the top of my head, but I am not entirely sure that that is within the scope of the Bill either, to be honest. That is a matter for the commissions really, rather than a matter of law.
The Chair
I don’t think he could answer that, Laura. I think that is more for the Boundary Commissions.
Jane Hunt
Q
Tom Adams: Or equally what happened in the last few reviews. I think I have covered my views on that already, and what I think Parliament should do in terms of approving the proposals once they are put to Parliament. I do not have anything further to add.
Jane Hunt
Q
Tom Adams: Well, the fact that they would go straight to the Speaker is welcome, because that would mean that the Secretary of State could no longer make amendments to them, but I still think they should be subject to parliamentary approval, as I said earlier.
John Spellar
Q
Tom Adams: That gets at one reason why Parliament should ultimately have to approve boundary reviews: if you cannot even get half the House to agree to them, clearly there is not sufficient MP backing for them—not enough MPs agree that it is a sensible process. Last time, the proposed reduction to 600 seats clearly had a big impact on that backing. Keeping the number at 650 will mitigate that somewhat. I agree that that is one reason why it is important that Parliament has that oversight. If it struggles to get half of MPs to vote in favour of the proposal, that implies that people do not broadly think it would be a good outcome.
John Spellar
Q
The Chair
John, I do not think you are entitled to have fun with the witness.
Tom Adams: I would not want to comment too much on that, but clearly there are still community ties in large urban wards, yes.
The Chair
As no one else is signalling to ask a question, I thank Tom for taking the trouble to give us his evidence. It is much appreciated. I thank Members for asking their questions.
The witness on our third panel this afternoon, Mr Dave McCobb, is not here yet. I will suspend the Committee until 3 o’clock.
The Chair
We will now hear from Dave McCobb, the deputy director of campaigns and elections for the Liberal Democrats, with whom we have until 3.30 pm. Dave, I believe that you are joining us from down the line—can you hear us loud and clear?
Dave McCobb: Yes, I can hear you very well, thank you.
The Chair
Excellent; we can hear you too, which is great. Dave, you are very welcome. Could you introduce yourself for the record? I will then call Chloe Smith to ask the first series of questions.
Dave McCobb: Thanks very much. My name is Dave McCobb. I am the deputy director of campaigns and elections—covering the whole of the UK—for the Liberal Democrats.
Chloe Smith
Q
Dave McCobb: Yes, we support the retention of 650 constituencies in this iteration of the proposals. We certainly do not believe that there should be a reduction in the number of MPs unless there is a corresponding increased level of devolution across the UK that would enable us to reduce the number of Ministers. So while there is not further devolution across the UK, we support the retention of 650 constituencies.
Chloe Smith
Thank you very much. I am happy to leave that line of questioning there and allow other colleagues to come in.
Cat Smith
Q
Dave McCobb: Thanks very much. Our primary concern is about the restrictiveness of the 5% threshold in terms of equalising the electorates in constituencies. There have been widespread reports of the degree of under-registration of electors in many parts of the country and of the number of people who are not correctly registered. Setting a very restrictive threshold at 5% reduces the commission’s flexibility to recognise that significant under-registration is likely in some parts of the country.
It also means that constituencies could be constructed incredibly arbitrarily. In the previous round of the review —the proposals that were ultimately never implemented— many constituencies were constructed that really bore no reference to identifiable communities with which people who lived there would identify. That impacted cities in England particularly, where, due to the size of local government wards, the number of wards that needed to be added together could not be done within local authority boundaries. So very arbitrary constituencies were constructed including chunks of some local authorities, and they really bore no reference to communities that people would identify with. That could be eliminated by having a higher threshold of 10%, for example. That would be the No. 1 concern about the proposals as they are currently outlined.
David Linden
Q
Dave McCobb: I have not personally, no. That would be done by a colleague who is not currently in work. In terms of the overall distribution of seats between the four nations, that is something that I would not want to comment on until we actually see the registered totals that will be published for the electoral register that will be used for this.
I would like to bring it back to the 5% threshold. When I have been involved in cross-party talks on this, colleagues from the SNP have rightly raised concerns that the 5% threshold would require the creation of some geographically enormous constituencies in the highlands of Scotland and potentially in other parts of rural England and Wales.
Anyone who knows otherwise may correct me if I am wrong, but someone once told me that the constituency of Brecon and Radnorshire is larger than Luxembourg. It would require a constituency that is already that geographically large—the same applies to parts of the highlands of Scotland, too—to be 25-30% bigger to meet the 5% threshold. That is likely to make it very difficult to represent or campaign in a constituency on that scale.
David Linden
Q
Dave McCobb: As I say, I reserve judgment on the balance of seats between the four nations until we have seen the exact numbers on the proposed electoral rolls.
Mrs Maria Miller (Basingstoke) (Con)
Q
Dave McCobb: We support the principle that the proposals that come from the Boundary Commission should be subject to minimal potential political interference, or a majority party could use its majority to impose boundaries on other people. The critical issue is how far the whole process is as divorced from partisan political control as possible.
Mrs Miller
Q
Dave McCobb: I think that depends on the criteria that are set for the Boundary Commission’s review. Provided that the criteria are set for the Boundary Commission’s work in as non-partisan a way as possible, then not having a political vote at the end of it might be acceptable. Again, it comes back to the provisions that the Boundary Commission is required to work to also being free of party political influence to the largest degree possible.
Mrs Miller
Q
Dave McCobb: I would like to come back to the 5% variation threshold. The Organisation for Security and Co-operation in Europe specifically recommends a variation of up to 10% when doing [Inaudible] necessary. Having that greater degree of flexibility around the way the Commission is able to be flexible, to recognise natural communities where they exist, would enable it to be more free of political direction than as the Bill is currently set out.
The Chair
And the issue of what constitutes pressure on a commissioner.
Dave McCobb: I am afraid I could not hear that.
The Chair
I think the question was, what do you think constituted pressure on a commissioner? You were going to come back to that point.
Dave McCobb: Sorry, I think I have said what I wanted to on that point.
Mrs Miller
Q
Dave McCobb: You make an important point, which is specific to the way in which the commission in England worked on the last review, in that it was very clear that, apart from one or two examples in its final proposals, it was adamantly against ward splitting.
The combination of the English commission’s reluctance to split council wards and the tight 5% threshold contributed to some quite perverse constituencies being proposed in some cases, in particular in some urban areas. In parts of the country, a council ward is 2,000 or 3,000 electors, so a number of them can be added or subtracted around the threshold, but in Leeds, for example, there are 17,000 electors in a council ward and, if you are not willing to split one, in one case a lot of people had to have a random ward that really had no community links with Leeds tacked to the top of a Leeds constituency.
If the commission is given clearer direction on preferring ward splitting if that helps them to retain constituencies that relate to natural communities, that is obviously helpful. We support the principle that each MP should represent a roughly equal number of residents, but we highlight the fact that the Electoral Commission last September estimated that up 9 million potential electors are not on the register and that, while there is evidence that some particular groups might be heavily disadvantaged by under-registration, giving the commission a bit more flexibility to enable it to recognise the parts of the country where there might be major issues with electoral under-registration is the right thing to do.
Mrs Miller
It is interesting: in Wales and Scotland, there is an ability to split wards, even to go down to postcode level. It can be done, so I suppose the question is why it is not done more in England.
Dave McCobb: It is that combination of the two factors: the English commission’s reluctance to split wards, which contributed; and the 5% threshold, which, if that were 10%, would allow it the flexibility better to match natural communities and to recognise that there will be parts of the country with much greater problems of under-registration of people resident there than others.
Ben Lake
Q
Dave McCobb: That is not something that I am in a position to comment on at this time, but I am happy to take that question back to colleagues and to give you a written follow-up, if that would be helpful.
Ben Lake
I was interested to hear your comment about the overall number of MPs at Westminster, that there should not be a reduction without further devolution. I completely agree with you. Do you have a view that you can offer us—or come back to us—on whether the differential devolution statuses across both regions and nations of the UK need to be considered when it comes to the allocation of seats?
Dave McCobb: Again, if it is all right, I will happily get back to you about that, having consulted colleagues.
The Chair
If there are no other questions, I thank you, Dave, for taking the trouble and time to come to us today and to present your evidence before us. We look forward to receiving that written evidence over the next two weeks, if that is possible.
Dave McCobb: Thank you very much and yes, no problem.
The Chair
We will now hear from Scott Martin, the solicitor for the Scottish National party. We have until 4 pm for this evidence. Scott, will you please introduce yourself, for the record?
Scott Martin: I am Scott Martin, and I am the solicitor to the Scottish National party.
The Chair
Thank you, Scott. It is nice of you to join us. We will start with the Minister, Chloe Smith.
Chloe Smith
Q
Scott Martin: I think that the considerations in Scotland are the same rules that are applied elsewhere in the UK, as far as local ties. Obviously it will be perhaps a slightly easier exercise this time round, in so far as there may be fewer constituencies that need to be changed, but certainly a reduction of either two or three will mean some changes that are significant—rather less than the last time round; but clearly the Highland North constituency, or whatever it may be called after the next review, is one that any parliamentarian would clearly find it difficult to represent, given its vast area.
Chloe Smith
Q
Scott Martin: Clearly the two protected constituencies are there for fairly obvious geographical reasons. Highland North, or whatever you want to call it, is not as it were a protected constituency. It is just a constituency that comes up to the 12,000 sq km and 13,000 sq km rule.
Chloe Smith
Q
Scott Martin: I think there is a logic that says if one is reverting from a model of 600 to a model of 650, the existing distribution of constituencies between the nations of the United Kingdom should be retained. Of course, the position of the Scottish National party is that there should be zero Westminster constituencies in Scotland.
Chloe Smith
Thank you, Scott. I am looking forward to talking much more about that with David Linden, as the Committee goes on.
The Chair
Talk about getting your retaliation in last, there, Scott.
Scott Martin: I am sure Mr Linden will be invited to the celebration of his unemployment.
Cat Smith
Q
Scott Martin: I suppose our view on the integrity of the Union may be different from that of other political parties that are represented there. I suspect that it may be two rather than three seats that will be lost, with the current formulas. It rather depends, I think. The numbers we have so far do not include attainers. By my calculation, the percentage of attainers in Scotland is roughly 0.957%, whereas in England it is 0.644%. When the attainers are added in, it may be that Scotland will only lose two seats, rather than three. However, as people have identified, we will not know that until all the final figures are collated after March. I suspect the reason why there are more attainers in Scotland will be questions of life expectancy. Also, because we have voting at 16 in Scotland, it is likely that we manage to get more people on as attainers than other parts of the UK.
Cat Smith
Q
Scott Martin: I certainly think that work could be done on changing the variance, which is effectively half the gains I talked about as a permissible departure in relation to the Venice Commission “Code of Good Practice in Electoral Matters”. The question of wards is rather different in Scotland than in England. Parliamentary constituencies in Scotland are based on wards, with no ward splitting. Of course, before the 2007 Scottish Parliament and local government elections in Scotland, we moved to three or four-member wards. The consequence is that you cannot get sensible constituencies without splitting wards, particularly with the hard limit put in place as a result of the Fixed-term Parliaments Act 2011. It is a rather different situation in Scotland, for practical reasons, as a consequence of the size of wards we have.
David Linden
Q
I want to ask about parliamentary approval. You will note that in the Bill, Parliament’s approval role is being removed. Can you share your view on that?
Scott Martin: That is, in a sense, a highly political question. Do you want politicised districting—everyone has difficulty with that word—or independent districting? Do you want the model they have in the United States, where the word “gerrymander” comes from? The logic is that if you have an independent commission model, which we have had here since the commissions were put on a permanent footing, the ability for political interference is minimised. Automaticity, as it has been described, is a sensible approach to take on that—although clearly, as we have seen from a variety of reviews, including the last two, ultimately, if Parliament wants to stop a review, or wants to proceed or another basis, that can happen, but unless we move to having a written constitution, which I would obviously support, that is not something that we can legislate for.
David Linden
Q
Scott Martin: Yes. In Scotland, there is the Improvement Service, and if you go to www.spatialhub.scot, you will find a polling district map of Scotland. Not all of it is up to date—some of it was updated just before the general election, and some of it is a little bit older—but there is now a complete polling district map of Scotland. Where that data is available, polling districts are a sensible way of drawing boundaries.
The reason why the Boundary Commission for Scotland has had to take a postcode approach is because it cannot use wards, and it did not have the polling districts. I appreciate that there is a bit of a chicken-and-egg situation here, in that polling districts are supposed to be divisions of parliamentary constituencies, rather than being used the other way round, but thinking back to the first Scottish Parliament boundary review, I recall that the Boundary Commission, after its first review, was prepared to take representations from Edinburgh on realigning everything with existing polling districts. Electoral administrators and campaigners in Scotland have practical issues as a result of there being non-coterminous boundaries—it means they have some very strange polling districts—but those issues would certainly be removed if everything was built from one set of polling districts.
David Linden
Q
Scott Martin: There is obviously the 12,000 and 13,000 number there, and certainly some thought could be given to reducing it. My understanding was that that number was effectively taken from the size of Ross, Skye and Lochaber. Clearly we could look at reducing that.
The Chair
I do not see anyone else indicating that they wish to ask a question. Scott, you got off scot-free today. Thank you for your evidence and your time.
Scott Martin: Thank you.
Examination of Witness
Geraint Day gave evidence.
The Chair
We will now hear from Geraint Day. We come to this panel early—we are moving swiftly—so we can give it as much time as required. Geraint, could you please introduce yourself for the record?
Geraint Day: Sure. Hello! My name is Geraint Day. I am the deputy chief executive of Plaid Cyrmu, and head of its campaigns unit.
Chloe Smith
Q
Can we talk a little about how political parties, large and small—I hope you do not mind my acknowledging that Plaid Cymru is one of the smaller ones in terms of parliamentary representation—respond to the boundary commissions? Will you talk a little about how easy parties find it to interact with the boundary commissions, and how we can encourage members of the public to interact with the boundary commissions through the consultation stages?
Geraint Day: The boundary commissions should be praised for the way they approach their interaction with political parties and the public. On the whole, they are very open—they are available online and by phone, as well as through the more formal public hearings. I would reiterate something that one of the previous contributors said: the commissions are very open to alternative suggestions—I certainly agree with that.
Political parties start from the size of the electorate—the snapshot of the electorate. In Wales, which is the only area I feel competent to talk about, we have to start by looking at Ynys Môn. There is only one way you can go from Ynys Môn apart from the Irish sea, and that is across into Gwynedd. All boundary changes therefore start there and expand out. That has a knock-on effect—somebody referred to a domino effect earlier, and that is very true. If we decide to go one way on a proposal, it has a knock-on effect in a subsequent constituency. In the case of Wales, which is bordered on three sides by sea, with the English border on the other side, that leads to certain pressures, especially in mid-Wales, where the population is more sparse, vis-à-vis the more populous north and southern Wales.
Chloe Smith
Q
Geraint Day: Ynys Môn has been mentioned a number of times already today—I have been following the Committee online. It is a unique constituency. In Plaid Cymru’s view, it should be a protected constituency. It first got its franchise during the Acts of Union in 1536, and its representation has continued ever since, except during the Barebones Parliament in the English civil war. We certainly support and call for the protection of that constituency.
In previous reviews where that has not been the case and you start in the south, if you are limited by the percentage variance, you end up getting to Ynys Môn and suddenly realising that you cannot fit the remainder of the constituency within the variance that is left over, as you cross the Menai. Then you have to start again. Realistically, the only place to start when doing a boundary review in Wales is Ynys Môn. You then work your way east and south from there. You cannot go anywhere else; there is no alternative constituency. Only one constituency borders it, and that is Arfon.
Cat Smith
Q
Geraint Day: We do not believe that Wales should lose any MPs. The previous review, which would have reduced the number to 600, has in effect been scrapped, and the number has gone back to 650, yet Wales is losing Members of Parliament and England is gaining Members of Parliament. That seems like a strange place to be. It will appear very strange to the Welsh electorate when they look at this and say, “Where is the UK headed? Is it becoming more and more England-dominant?” We believe that would be incorrect, and that Wales should keep the same level of representation.
Cat Smith
Q
Geraint Day: Absolutely. The figure of 7.5% that has been suggested would help. I think it would still leave challenges, but it would certainly reduce the negative impact of the suggestion.
This is not just about the south Wales valleys, although it is interesting that in the last review, the first proposal from the Boundary Commission about the Rhondda constituency was to include part of Cynon Valley in it. To get there, you have to cross over the Rhigos mountain, which features heavily on winter travel reports on Radio Wales when the mountain road is closed because of bad weather. That is a common occurrence in Wales, due to its geography, and not just south Wales; it happens even more in the north, where you have the mountain ranges of Snowdonia and the Clwydian hills. They are big barriers to building constituencies, and taking a ward on the other side of a mountain away from its natural community has a big impact and is very unpopular with the local electorate.
A larger variance—7.5%, or something akin to it—would allow greater flexibility for the Boundary Commission. It must be said that the commission generally does a good job and is very open to other suggestions, but has its hands tied by the 5% rule. Giving it extra freedom to determine the best fit is a very sensible suggestion.
Ben Lake
Q
Geraint Day: The biggest difference in local ties between Wales and England is the Welsh language. A large percentage of Welsh language speakers are down the west coast, but they are also in some of the upland areas in north and south Wales. Local ties do not necessarily go down the same route as that. The Boundary Commission is looking at geographical ties—shopping centres, travel-to-work areas and those types of things—whereas at times the Welsh language communities do not fit into that local-tie element.
In the past, the Boundary Commission has made attempts to address this; where it has originally proposed splitting Welsh language communities, it has made efforts to put them back together. However, I suggest that it would be better to specifically state that in the Bill, rather than just lump it in with “local ties”. If you look at the Welsh Government’s planning process and the advice it gives to local government about local development plans, those plans are required to have a language impact assessment, a requirement that originates from the Welsh Language (Wales) Measure 2011. The way the Boundary Commission operates is perfectly bilingual and it deserves great praise for the way it operates. However, it is not required under the current local ties rule to specifically consider the impact on the Welsh language. I think that should be included as a specific item in the Bill.
Mrs Miller
Q
Geraint Day: In one regard, it is a very simple statement to make. However, the removal of parliamentary authority and moving that decision away from Parliament to straight implementation is a big step to make. If that rule had been in place in the last two reviews, we would now have a Parliament of 600 MPs and we would not be having this conversation.
Parliament provides a track to final proposals. If we cannot get a majority in the House of Commons, that raises questions about whether it should be implemented. I understand the trouble that the previous two reviews caused, and as one of the people who contributed and spent a lot of time putting submissions to that, it is quite frustrating. There should be some way of keeping some form of parliamentary overview of the proposals without necessarily enabling it to become a party political football in the House of Commons.
Mrs Miller
Q
Geraint Day: In terms of how the Boundary Commission operates, it has been doing its job; the issue has been with Members of Parliament in the House of Commons. The way in which that is solved is something that I think Parliament needs to come to an answer about, rather than the non-elected people in society, including myself. It is really a matter for Members of Parliament, but I understand where you are coming from and I have a certain amount of sympathy. I refer back to my previous point—if this rule had been in place in the past, we would already have a Parliament of 600 MPs and not 650. I think that 650 is by far a better fit and that seems to be the general opinion of the majority of the population, so I think the check has worked, to a certain degree, despite how frustrating it has been.
Mrs Miller
Q
Geraint Day: Island communities are unique and you see that not just throughout the UK, but throughout the world, not least in the fact that they even have the Island games, where various islands of the world get together and put on a semi-Olympic games just for the islands. You see it in the identity. That is something that is quite precious and unique and that we as a society need to foster and take care of.
In terms of their numbers, if the Isle of Wight has two MPs, each one will have an electorate the current size of Ynys Môn’s. If it is good enough for the people of the Isle of Wight, why is it not good enough for the people of Ynys Môn?
Mrs Miller
Speaking as a Hampshire MP, I am sure that the people who live on the Isle of Wight would understand exactly what you are talking about. Thank you.
Alec Shelbrooke
Q
Geraint Day: This is coming down to the constituencies of the United Kingdom vis-à-vis the nations of the United Kingdom. This is one of the consequences of our current constitutional set-up, without a parliament for England, which Plaid Cymru is quite supportive of. The other option if you have equal levels of constituencies in the UK is a reduction in the representation of the Celtic countries of the United Kingdom. Certainly, we do not support the reduction in the number of MPs.
Shaun Bailey (West Bromwich West) (Con)
Q
Geraint Day: Under the rules the Boundary Commission operates with, I can give an exact example from the last review. The Boundary Commission originally proposed putting Llandrindod in with Ceredigion. Llandrindod is in Powys on the other side of the Cambrian mountains from Ceredigion. That was a very strange decision. The argument on local links was that the main trunk road to Ceredigion goes right by Llandrindod. The subsequent argument that we put together, which I think was supported by every other contributor to the response, was that that should not be the case because the linguistic links and levels of Welsh speaking in Llandrindod are much different to those in Ceredigion. Instead, we proposed to look north into Machynlleth and the Dyffryn Dyfi area and take that into the proposed constituency of Ceredigion, which was subsequently adopted by the Boundary Commission.
That worked because there was unanimity of view among those giving comments to the Boundary Commission. Where you would find difficulty is where the different parties and individuals who give evidence differ in their approach. If one or two of the parties had said, “No, we want Llandrindod to go in,” we could have ended up with a very different end result from the Boundary Commission. If it had been required to consider the impact on the Welsh language right from the start, it would not even have made the initial proposal. That is the main reasoning behind it and that is where we come from.
Shaun Bailey
Q
Geraint Day: Absolutely. I pay credit to the Boundary Commission in the first instance; every time I have given evidence without simultaneous translation, it has been able to provide written evidence in Welsh or English. It works entirely bilingually, and it deserves credit for that.
Where it engages with the Welsh-speaking communities is around where it holds public hearings, which can be slightly awkward because of the number that it is restricted to. Having the ability to arrange more public hearings, without a cap, is one way around that. For example, in some of the constituencies along the north Wales coast, there are large population centres on the coast, but the Welsh-speaking communities tend to be in the island areas and the mountains. The public hearings, naturally enough, are held where the large population centres are. Getting rid of that cap and allowing people to interact with communities in more dispersed rural areas should be encouraged, whether it is done through public hearings or through more promotion of online submissions, which might be a way forward.
The Chair
There are no further questions from Members, so thank you very much, Geraint, for your evidence and for your time. We will move on to the next witness, whom I see waiting in the wings.
Examination of Witness
Professor Richard Wyn Jones gave evidence.
The Chair
We will now hear from Professor Richard Wyn Jones of the Wales Governance Centre. Professor Wyn Jones, you are very welcome. We will go round the table, starting with the Minister.
Chloe Smith
Thank you very much indeed, Richard, for joining us this afternoon. It is really valuable to have your insights.
Professor Wyn Jones: It’s a pleasure.
Chloe Smith
Q
Professor Wyn Jones: I have to say that I have had cause to make myself unpopular with Welsh MPs when appearing in front of various Committees over the past few years, because I have argued consistently that there is no real justification for the level of Welsh over-representation in particular.
I think that there is a real issue with the boundaries being so out of date. For those who are interested in such things, there is a historical precedent going back to the first world war, when boundaries were very much out of date. That finally changed, which unleashed a period of Labour domination of Welsh politics that continued, but that was basically what people in Wales wanted and still want, to a very large extent. That is fine, but I do think that there is a real problem with rumbling on with boundaries that are clearly outdated.
There is also a real problem because there is no in-principle argument in favour of Welsh over-representation. It was never anybody’s intention, as far as I can make out; it is an unintended consequence of the rules that were put in place for the other Boundary Commission. We have ended up with a situation that was never justified beforehand, as far as I can see, and for which it is very hard to retrofit a justification now. Even though I love having lots of Welsh MPs, because it makes my life more interesting, it is hard—in fact, in my view it is impossible—to justify the current position, the current stasis and the apparent inability to move forward.
Chloe Smith
Q
Professor Wyn Jones: These kinds of things are always a difficult balance. My general view is that equality of constituency sizes makes sense. I cannot see any particular reason for ensuring that the different constituent territories of the UK are over-represented here. There are different arrangements in place for Wales, Scotland and Northern Ireland. Frankly, the fact that Wales has 6% rather than 5% of MPs—I think that is right—does not make a blind bit of difference.
In terms of general principle, I think equality, with a relatively small margin of difference, is fine. I also support in principle the decision that the changes should be enacted without a further vote. It is probably better that MPs set the terms of the exercise for the Boundary Commission behind a veil of ignorance, if you like, without knowing exactly what the particular outcomes would be for them as individual MPs. It is probably preferable—I think definitely preferable—that they vote behind the veil of ignorance and set the parameters of the exercise, and then allow the exercise to play out in the way we are now used to.
Chloe Smith
Q
Professor Wyn Jones: You choose a particular way of phrasing it that I might not choose. It is human nature that MPs will look at any list of redrawn constituency boundaries and think, “Hang on, where do I fit in in this particular structure?” That may well colour how they then vote or agitate before the thing gets voted on, which I know happened quite a lot with the last review.
We need democratic involvement that is appropriate, in terms of setting the terms of the exercise, such as deciding how many seats there should be in the House of Commons, if you want rough and ready equality or if you want to be very precise in terms of equal constituency sizes. Those are all appropriate decisions for Members of Parliament to be involved in, and I think they should be involved in those.
However, there are in-principle advantages of allowing the Boundary Commission to get on with it, with all the safeguards that remain in place around process. The appointment of commissioners is then incredibly important, but, assuming all those things are done properly, it is better that MPs are not given the final opportunity to undermine the whole thing if they do not like the results.
Chloe Smith
Q
Professor Wyn Jones: I was not implying that that was not the case. I am saying that those safeguards become even more important in a context in which that final vote is removed. That was my sole point. You are absolutely right that the commissions have a very high reputation, deservedly so at present.
Chloe Smith
Q
Professor Wyn Jones: I have no particularly strong view as to 600 versus 625 versus 650, so I do not have a particularly strong view about that, but a reasonably narrow tolerance is absolutely fine. If you are going to will the ends of relatively equal constituency sizes, you have to will the means. If I am going to be consistent in saying that that seems to be the appropriate, fair thing to do in a modern democracy, so be it. We have to will the means to allow that to happen.
Chloe Smith
I salute the crystal clarity of your thinking and the way you have put it to us. Thank you.
Cat Smith
My question is about devolution, which looks very different in different parts of the United Kingdom. It looks a certain way in Wales and, even within England, there are huge variations. To what extent do you think that the Senedd boundaries should be taken into consideration, as opposed to ward boundaries? What do you think makes the best building blocks for Welsh constituencies that truly represent the communities and keep the communities together, while obviously striving to have constituencies as equal as practically possible?
Professor Wyn Jones: Thank you for the question. One of the things we tend to focus on, especially in these kinds of conversations, is the relative number of MPs from each of the constituent nations, but I think it is important to point out that within Wales, the boundaries are now so out of date that we have very large differences in constituency sizes in Wales.
If you take Arfon at one end of the spectrum and Cardiff South and Penarth at the other, there are very large differences in terms of size. To the extent that the boundaries of the Senedd, or parts of the Senedd electoral system, remain tied to those of Westminster, having relatively equal constituency sizes for Westminster will probably make the Senedd electoral system a little bit fairer, too. We miss the fact that the differences within Wales are now very substantial indeed.
If you will permit me to widen the optic a bit, you are right to say that we have distinct dispensations for Scotland, Wales and Northern Ireland. They now look more alike than they did in 1999, but they are still different. England has an incredibly complex—I would say pathologically complex—internal devolution system. My view is that that should be separated out from the issue of representation in Westminster.
There is room, I think, for variation within the state, but in terms of representation in the House of Commons, it seems to make sense to have a kind of equality, not least because I have never heard a good justification for the level of variation that we have. As I said earlier, why should Wales have 6% of MPs when we have 5% of the population? Why not 8% or 10%? There is no obvious logic to the current system. Equality makes more sense.
Cat Smith
Q
Professor Wyn Jones: I think we all recognise that commissioners always have a terribly difficult job to do, because there will be particular communities that feel a sense of association with some communities and less so with others.
Assuming this legislation reaches the statute book, the challenge for the Welsh commissioners is particularly daunting, because Wales would see the biggest level of change. That will be an enormous challenge, and there will be communities in Wales that feel that the changes being imposed are unwelcome; there is no doubt about that. I am an Anglesey boy, an Ynys Môn boy—I can well foresee that people at home will be extremely unhappy. I am sure that there will be different valleys and different communities thinking, “Well, we don’t really have much in common with the people over the other side of the ridge”, and so on and so forth.
So the challenge will be substantial. I think that my predecessor on this call, Geraint Day, pointed to a recent example around Ceredigion, where people felt that the commissioners had got it wrong, and fair play to the commissioners—they went back and changed things in a way that was regarded as being more acceptable. And I have no doubt that there will be lots of that.
David Linden
Q
Professor Wyn Jones: I do not really have that level of insight into the minds of the people involved. All I would say is that I spoke to Conservative MPs in Wales about this—I spoke to many of them because, as you probably have guessed, my views about this issue are not always particularly popular among Welsh MPs, and several of them were very keen to put me right. But it was very clear from a very early point that the reduction from 650 was not politically viable and that the Conservatives would have real issues, in terms of whipping their own MPs to support it.
It was certainly made clear to me very early on that, in all likelihood, the last attempt at reform would fail and that we would be coming back to this issue, and that we would be coming back to it with 650 MPs as the aim. And the people who I spoke to at that time were correct.
David Linden
Q
Professor Wyn Jones: I would not describe it as “particularly courageous”. The issue is that we have boundaries that are terribly out of date; I do not think that there is any argument about that. And we have a real issue, in terms of some constituencies being, by orders of magnitude, larger than others. Wales is a particularly egregious example of that, because we are over-represented to an extent that no other constituent nation is.
So the issue is that if you are going to try and redo the boundaries, on what basis do you do that? As I have said, and I apologise for repeating myself, I have never heard a good in-principle argument for Wales having, for example, 6% of MPs when it has 5% of the electorate. I have never heard an argument that makes any sense of that.
Equality seems to be a reasonable principle, and that means that the biggest impact of any change is felt in Wales. What precisely it means for continuing Conservative representation in Wales in four-and-a-half years’ time, if that is when the next election is held—you are a better man than I am if you can guess that, not least because we do not know what the new boundaries will look like—I do not know. However, that will have an impact on all the political parties; which one it impacts worst, I genuinely do not know.
David Linden
Q
Professor Wyn Jones: I agree that there are very serious tensions across the states, but I genuinely doubt that the relative numbers of MPs from the different constituent units will make much of a difference there. I would concentrate on trying to improve intergovernmental relations between Edinburgh, Cardiff, London and Belfast. That is much more likely to make a difference than having 31 Welsh MPs as opposed to 40. I am afraid that there are fundamental issues around constitutional design and the attitude of the UK Government to the devolved Governments. That is where the action needs to be. Whether we have 31 Welsh MPs or 32 as opposed to the current 40 will not make any difference in terms of dealing with the big issues.
Ben Lake
Q
This is a very interesting debate about representation and what we actually mean by it. You asked, Professor, what sort of logic could be applied and I suppose, if I were a Conservative and Unionist MP, I would have a particular logic of maintaining the voice of the constituent parts of the United Kingdom.
If you will indulge me for a moment, on that line of logic, Wales’s population is set to peak in 2023 and in the next 20 years, England’s population alone is estimated to increase by about 8 million. If we are to continue with the logic about seats, in 20 years’ time, Wales might have even fewer seats and the relative voice at Westminster would be significantly diminished. In the light of the fact that we are no longer members of the European Union, and so more decisions are now taken at Westminster that have a direct effect on Wales, do you think that we might be embarking here on a set of developments that could—down the line, if not immediately—cause quite considerable tension for the Union?
Professor Wyn Jones: Diolch yn fawr iawn am y cwestiwn. Diddorol iawn. [Translation: Thank you very much for the question. Very interesting.]
You make an interesting point. The difficulty with thinking through the logic is what is the pay-off, in terms of an alternative arrangement? In many multinational internally differentiated states, the second Chamber is often used as a way of trying to balance territorial representation and, as I know you are very well aware, there are proposals for changing the House of Lords and making it more territorially representative in terms of its membership and in enhancing that role of its activities too. That would potentially be one way forward. There, you could follow an American Senate-style logic of giving each of the constituent territories equal representation—an idea that was promoted by Carwyn Jones, the former First Minister in Wales. That was an idea that he put forward.
However, in terms of the House of Commons, I really struggle to see the logic of how that plays out in terms of the relative numbers of MPs for each territory. Equality at the UK level—dealing with those issues that are reserved or that are not captured by English votes for English laws—seems to be a relatively straightforward way of proceeding, if you are going to maintain the Union, but then, of course, you would have potentially differentiated devolution settlements for different territories, reflecting the differences of those devolved territories, and perhaps doing something with a second Chamber. Those are probably better ways of dealing with the problem you highlight than coming up with arbitrary numbers for the different representation of the different constituent units of the UK in the House of Commons. Sorry, that was a slightly long-winded response.
Ben Lake
Q
One final question: we have had quite a bit of discussion this afternoon—indeed, this morning as well—on the status of Ynys Môn and the proposal for it to be a protected constituency, given its island status. I know that you are a native of Anglesey. Do you have any particular views or comments in that regard?
Professor Wyn Jones: I am not sure that I will have any additional insight. As you are aware, and—I was listening in to the conversation earlier—as I know many other members of the Committee are aware, those of us who come from Ynys Môn view ourselves very much as “mocha Môn”, as we say in Welsh. That’s a strong identity. People from over the Menai Strait will say, “Well, it’s only a few hundred metres. What makes you so special?” You can go back and forward, as we do in the pubs of that area on a regular basis. The issue is: where do you draw the line in making special cases? At that moment, I am quite pleased that I am not an MP and that I am a mere academic. I can hand that decision back to you.
Christian Matheson
Q
Professor Wyn Jones: This is, as you know, a knotty, difficult issue. A century ago, we ended up with a system that was horribly weighted against more built-up areas and in favour of rural areas, because we had seen a lack of boundary reform. That was deeply unsatisfactory. There are, no doubt, more challenges in terms of MPs moving around in rural constituencies. On the other hand, urban areas often have different kinds of problems that may take up more time. I guess the point I am making is that you could make an argument for Powys being particularly rural. Then again, if you compare it with the north of Scotland or the isles, it looks relatively compact.
There is often a tendency for those of us who live in and who have been brought up in Wales to view ourselves as being particularly rural. Actually, in comparative terms, even Arfon is relatively built up. I really wouldn’t want to exaggerate the differences there. I am afraid I am not really answering your question directly, because I don’t think there is a “gotcha” answer to that. I still think that equality is the place to start from. Then you can say that the very northernmost parts of Scotland, or Shetland and Orkney, have rurality issues that are so obvious and pronounced that they trump the equality argument, but I struggle to make that argument in the Welsh context.
Christian Matheson
Q
Professor Wyn Jones: It certainly did not have the support of elected Members—that is why. Obviously, there was a manifesto commitment, and an election was won on the basis of that manifesto. The usual practice is that that is a mandate and should be enacted, but it was clear from talking to, for example, Welsh Conservative MPs that they were absolutely not keen. They did not view themselves as tied down by that mandate.
Christian Matheson
Q
Professor Wyn Jones: As I think I indicated in response to one of your colleagues, I do not really have a very strong opinion. I know that academics are meant to have strong opinions on everything, but is it 600, is it 625, is it 650? From a Welsh perspective, it is not a massive difference, because we are so over-represented at the moment. Equality is the key thing—if it is 600 or 650, it is not a massive difference in terms of the number of Welsh MPs. I have no strong feelings about that.
Christian Matheson
Q
Professor Wyn Jones: I think I have been very clear in saying that Parliament does have a legitimate role in scrutinising and, in fact, in setting up the basic policy—forgive me if I was not clear in saying that. Parliament should very much be involved in establishing the parameters within which the boundary commissioners work. That is absolutely what Parliament should be doing.
I was saying that there is a very strong in-principle argument for removing Parliament from the final approval. In effect, I advocate a system in which MPs, in particular, are voting from behind the veil of ignorance—they do not know what the particular parameters that they are voting to approve would mean for them as individuals. They should be involved at the start of the process, but then the boundary commissioners carry out Parliament’s will.
I am absolutely not saying that Parliament should not have a role; I am saying that it should be a specific role at the start of the process. The human temptation for MPs to look at whatever the commissioners come up with through the lens of their own self-interest is too strong.
Christian Matheson
Q
Professor Wyn Jones: All the time, yes.
Christian Matheson
Q
Professor Wyn Jones: For example, you will guide a PhD student, but you do not mark their homework; you get external examiners in who decide if the standard is good enough.
Christian Matheson
Q
Professor Wyn Jones: But with respect, we are all human, and I think that asking MPs to look at the results of a Boundary Commission review in the abstract, without considering what it means for them as individuals, is asking for an inhuman level of self-denial. The experience of the last two reviews suggests that there is every likelihood that, if we continue with the current system, these boundaries are going to become so out of date that they actually endanger the legitimacy of the democratic process.
Christian Matheson
Q
Professor Wyn Jones: I do not think that the pressure valve was in any way related to an in-principle view that 650 was better than 600. There was a democratic mandate for reducing the size of the House of Commons. The reason why it did not happen, at least from what I understand after talking largely to Conservative MPs, is that too many people were unhappy about what it meant for them personally. It was not a great defence of principle that won out but—forgive me for saying so—pretty naked self-interest.
The Chair
Professor Wyn Jones, I thank you on behalf of the Committee for giving us your time and for the evidence you presented. That is very much appreciated.
Professor Wyn Jones: My pleasure. I thank all the Members.
The Chair
That brings us to the end of this marathon oral evidence session, in which we have taken evidence from nine witnesses. The Committee will meet again on Tuesday at 9.25 am in this room to take further evidence. Sir David Amess will be in the Chair for that session. I thank Members for their self-restraint—I think only two of you mentioned your own constituencies, which is incredible. I even got to mention Rathlin Island in my constituency, for some reason.
Ordered, That further consideration be now adjourned. —(Eddie Hughes.)
Immigration and Social Security Co-ordination (EU Withdrawal) Bill (Seventh sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 View all Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Chair
Today we continue line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. I remind Members that the Hansard reporters would be grateful if a copy of any speaking notes could be sent to hansardnotes@parliament.uk. We are all beautifully socially distanced.
New Clause 24
Annual review: Impact on the agricultural sector
‘(1) The Secretary of State must commission an annual report from the Migration Advisory Committee on the impact of the provisions of this Act on the number of seasonal agricultural workers in the UK.
(2) In undertaking the evaluation, the Secretary of State must consult—
(a) the relevant Scottish Ministers;
(b) the relevant Welsh Ministers; and
(c) the relevant Northern Ireland Ministers.
(3) The report must be laid before each House of Parliament as soon as possible after it has been completed.
(4) A Minister of the Crown must, not later than three months after the report has been laid before Parliament, make a motion in the House of Commons in relation to the report.’—(Holly Lynch.)
Brought up, and read the First time.
Holly Lynch (Halifax) (Lab)
I beg to move, That the clause be read a Second time.
Good morning, Sir Edward. It is a pleasure to serve under your chairmanship once again. New clause 24 is in very much the same spirit as new clause 21, which would require the Government to commission a report on the Bill’s impact on the health and social care sectors. New clause 24 would require them to take the same approach to the agriculture sector and food security.
Significant numbers of EEA nationals are employed on a permanent and seasonal basis, making them an instrumental consideration for the agriculture sector. As things stand, it would not function without them. The coronavirus pandemic has shone a light on certain sectors that we have often taken for granted but are absolutely essential. Food security has been a focus for people as never before. It is another area that brings recognition that food production is essential to life. Its workers have been classed as key workers for the purposes of the pandemic, yet so many of those who have worked incredibly hard to keep fruit and veg, in particular, on our tables throughout the pandemic are paid less than £25,600.
The Government’s February policy statement on their future points-based immigration system simply states:
“We will end free movement and not implement a route for lower-skilled workers.”
Members who served on the Committee that considered the Bill presented during the 2017-19 Parliament may remember that James Porter of the National Farmers Union of Scotland gave evidence. I spoke to Mr Porter about the Bill and about the issue of “low-skilled” workers. He was keen to stress that, although some of his workers may not have qualifications or letters after their names, being an agricultural worker and picker of soft fruits and vegetables is their profession. It requires skill and they take great pride in it.
Mr Porter said that most of his seasonal workers have been coming back to his farm for 10 or 15 years. He went on to explain that the exceptional circumstances of this year meant that attempts to redirect people traditionally from different lines of work and professions into agriculture from the local labour pool had brought out the likes of lawyers, electricians and teachers to pick fruit on his farm. That was welcome, but he made the point that although they were educated and highly skilled in their own field, they were not skilled fruit pickers. They took longer and their yield was not comparable with that of people who specialise in that line of work.
The Government’s February policy paper goes on to say:
“UK businesses will need to adapt and adjust to the end of free movement, and we will not seek to recreate the outcomes from free movement within the points-based system. As such, it is important that employers move away from a reliance on the UK’s immigration system as an alternative to investment in staff retention, productivity, and wider investment in technology and automation.”
I sought to make a point about this matter on Tuesday, during the discussion on the social care new clause. I completely accept the Minister’s point that social care and agriculture are very different sectors. He will look to the unemployment figures and say that we will fill labour shortages from the domestic workforce, but I gave the example of how attempts to channel those who are out of work into other sectors over the course of the pandemic had not exactly been an easy or straightforward process.
I cited the Pick for Britain scheme as an example. The Minister may have more up-to-date figures but, after overcoming some initial teething problems with the website, one of the organisations managing the scheme, Concordia, reported that it had 35,000 applications after the initial appeal for domestic workers. However, only 30% of applicants had farming experience—as was probably predictable—and only 16% of people opted to interview after their initial application, with even fewer actually making it on to a farm.
Some of the pressures have been alleviated thanks to specially chartered flights from EU countries such as Romania, which have provided us with the skilled workers we need, but they have been a warning of what is to come. When we have problems in the sector, we will say with absolute certainty that the writing was on the wall.
The seasonal agriculture workers pilot scheme needs to be much improved if it is to sustain the levels of migrant work needed after the end of the transition period. The pilot allows for 10,000 visas, when actually 70,000 would be much closer to the agreed number of people required. The cost of permits is too high and farms simply do not have the administrative capacity needed to process the bureaucracy that accompanies each individual application.
FLEX, the Focus on Labour Exploitation group, has also repeatedly raised concerns about the potential for worker exploitation in the scheme, citing the issue of tied visas, where the worker is tied to one specific employer and prohibited from changing employer while in the UK under that visa. Debt bondage, where the worker’s wages go towards paying off costs of entering the scheme, such as visa charges and flight costs, alongside recruitment fees paid to labour brokers, is another worrying trend that will need to be addressed in any future scheme.
Right across the sector there are problems. The Select Committee on Environment, Food and Rural Affairs took evidence on this in May, with Ian Wright, the chief executive of the Food and Drink Federation, telling the Committee that the crisis had shown how vital the food industry was. He said:
“If you can’t feed a country, you don’t have a country. That has been borne out in this crisis in massive order.”
He went on to explicitly say:
“We don’t think the current Immigration Bill addresses the sort of country we want to be. I think it is surprising that, given the lessons of the last eight or nine weeks, the Immigration Bill is back in parliament unchanged, given what we have learned about the people working in food and drink, in distribution centres and the care sectors.”
Mr Robert Goodwill (Scarborough and Whitby) (Con)
The hon. Lady is right to identify some of the exploitation that can occur. Does she agree that the Gangmasters (Licensing) Act 2004 addressed many of those problems and that the situation is much better than it was because of legislation passed by the Conservative-led Government?
Holly Lynch
I am grateful for that intervention and I welcome the point made by the right hon. Member for Scarborough and Whitby—
Holly Lynch
Further to my hon. Friend’s correction, James Porter was keen to stress that that has been a helpful intervention to improve standards for workers. I hope that the hon. Gentleman agrees that there is still much more to do to ensure that we are looking after these workers.
Mr Goodwill
May I correct the record? It was because of legislation passed by the last Labour Government, which I do not recall that we opposed.
Holly Lynch
That is one of the best interventions I have taken during the course of this Committee, and it was a welcome addition.
The Royal Association of British Dairy Farmers has estimated that in the UK, 56% of dairy farmers have employed workers from the EU; 60%––around 22,800 EU migrants––make up the workforce in poultry farming. According to the NFU, the UK’s horticulture sector is completely reliant upon seasonal migrant workers to collect crop yields: 99% of all harvesters in the UK come from Europe. All these working relationships have been forged over time due largely to the flexibility granted by freedom of movement.
The British Poultry Council has warned that the new immigration plans are likely to have a crippling impact on UK food businesses. A report of the kind outlined in new clause 24 is therefore necessary to safeguard the UK’s agriculture industry, during a time of much upheaval. As both the National Farmers Union and National Farmers Union of Scotland have stressed, fruit and vegetable picking requires a high level of manual skills, and farms can only operate efficiently when they recruit workers with this skillset.
This is the one sector where we can say that we have just been through a trial for the ending of free movement, brought about by lockdown. Migrant labour dried up due to lockdown and the Government tried to recruit from the domestic labour force. Nowhere near the required numbers joined up, fruit and veg started to rot in the fields and we were forced to very quickly get migrant labour from Europe back in on chartered flights. It is vital that the Government learn from our experiences during the crisis and develop a proactive and pragmatic agricultural policy for implementation after the transition period. New clause 24 would give us the information required to do this.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is a pleasure to serve under your chairmanship again, Sir Edward. I can be relatively brief because the shadow Minister has spoken to the National Farmers Union of Scotland and represented its interests pretty well. There is real concern about shortages in the labour market for agriculture, particularly in relation to seasonal workers. Research on seasonal migrant labour from 2018 showed that in Scotland alone the number of seasonal agricultural workers required in any year is not far short of 10,000.
More recently, the NFUS and the UK farming unions have given evidence to the UK Government, demonstrating that for the whole UK around 70,000 seasonal staff are required in the horticultural sector and 13,000 seasonal staff are required in the poultry sector every year. That is obviously many times more than the number of places in the current pilot.
Challenges in recruiting seasonal workers have already been seen in recent years. In 2018, the NFUS conducted a survey of its horticultural membership in which every single respondent reported being “concerned” or “very concerned” about the impact worker shortages would have on their businesses in 2018 and beyond. Almost 60% of respondents said they were “likely” or “very likely” to downsize their business and the remaining 42% said they would have to cease current activity.
The NFUS was opposed to the end of free movement but, even while free movement was retained, farmers increasingly needed to look beyond the EU to fill such posts, with countries such as Ukraine, Russia, Belarus and Moldova already supplying a significant proportion of the workers required. The seasonal agricultural workers scheme pilot has been described as a step in the right direction, but it does not provide nearly enough permits if shortages such as those experienced in recent years are going to continue.
The NFUS is calling for a seasonal scheme that is open to both EU and non-EU workers, with capacity to provide farmers with access to returnee employers. It also calls for the scheme to be open to a wide number of labour providers and direct recruiters. Some concerns have been expressed about the expense and the somewhat laborious processes that are involved in taking advantage of the scheme.
The NFUS has also expressed concerns that the future immigration system proposed by the Government is not based on realistic expectations of the ability of the UK to fill the jobs currently carried out by migrant workers. It says that
“to maintain the productivity of the agricultural sector, immigration policy must allow recruitment on a seasonal basis for workers from both the EU and non-EU, at a non-restricted level.”
I echo what the shadow Minister, the hon. Member for Halifax, said about the SAWS scheme and how we always have to be cautious about the need to carefully protect workers against exploitation. She was right to highlight concerns raised by Focus on Labour Exploitation during the passage of the Bill last year.
To come to the rescue of the right hon. Member for Scarborough and Whitby, the gangmasters legislation was very welcome, but so too was the introduction of the director of labour market enforcement in 2016, under the Conservative Government, which may have been what he was thinking about. Those are both welcome moves, but we have a long way to go to build on the creation of those posts in ensuring that migrant workers—and workers generally—are properly protected.
One criticism of the new clause is that it is not just on seasonal workers that we need to have a report; we need a broader report on the impact on access to labour in the agricultural industry. The concerns of organisations such as the NFUS go further than seasonal work, and include the cost of sponsorship under tier 2, which it has described as
“prohibitively expensive in terms of both financial and administrative burden.”
It is fair to say that the NFUS has welcomed some of the recent developments, for example the decrease to the salary threshold that has been introduced by the Government, but it asks how non-salaried roles will fit into the points-based system; how the revised shortage occupation list will generally take account of the range of occupations that exist in agriculture; whether the Government will consider targeted routes for remote and rural areas—unfortunately, from what the Minister said the other day, it sounds as if it will be disappointed in that regard—and how the expense and bureaucracy of the system can be improved. It simply calls for close engagement as we move towards the implementation of the new system.
The new clause is sensible and will contribute to our understanding of what is going on in a future debate about labour in the agricultural sector.
The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)
It is a pleasure to serve under your chairmanship, Sir Edward. I welcome the general tone of the debate that we have had so far.
As the Migration Advisory Committee—or MAC—has already made clear in its report of September 2018, agriculture is an exceptional case, as we believe the labour market is totally distinct from the labour market for resident workers. For this reason, although the MAC recommended against a dedicated route for recruiting workers based on paying at or near the legal minimum—advice that this Government accept—it did consider that the position was different in respect of the UK’s world-leading agricultural sector.
Accordingly, on 6 March last year the Government announced the implementation of a nationwide pilot to enable non-EU migrant workers to undertake seasonal work on UK farms. The seasonal worker pilot admits temporary workers from outside the European Union to work in edible horticulture for up to six months. The pilot scheme ran last year on the basis of 2,500 places, and on 19 February, in line with the commitment made in our election manifesto, we increased the annual quota for the second year of the pilot from 2,500 places to 10,000 places.
Stuart C. McDonald
Can the Minister give us a rough outline of when a review of the pilot scheme will take place and when any sort of decision can be expected on how it will look in the future?
Kevin Foster
We expect to undertake that evaluation later this year and then announce the results as part of confirming the final details of the future migration scheme. If the hon. Gentleman’s next question is about whether we will take into account the unique circumstances this year, the obvious answer is yes, given the restrictions on travel. We have found that the net is going wider in trying to recruit. Just creating migration opportunity does not automatically bring workers to the United Kingdom, as we have seen with free movement—for example, it used to be common for people from parts of western Europe to come here to do this work, but now it is not. Again, migration cannot be seen as an alternative to providing attractive terms and conditions that will encourage people to wish to do the work. Our intention is to make that announcement later this year and then confirm our intentions, in good time for next year’s season.
The Department for Environment, Food and Rural Affairs already conducts quarterly seasonal labour in horticulture surveys, explicitly looking at the questions of supply and demand of seasonal labour in horticulture. I am therefore not persuaded that a further annual MAC report would significantly add to our knowledge on this matter, especially when the MAC will in future have more ability to work on matters of its own choosing, including an annual report on the migration system, in which it can choose to cover the areas suggested in the new clause. If we are giving the MAC the ability to choose what it sees as the priorities in its annual report, with debate in the House on that report, it seems strange to give it that freedom and then compel it to do a number of reports by primary legislation. With those reassurances, I hope that the hon. Member for Halifax will feel able to withdraw her new clause.
Holly Lynch
I am grateful to the Minister for those assurances. We welcome the increased flexibility that the MAC will have. I wonder whether there will be an opportunity for Opposition parties and MPs to cast a particular spotlight on an area, so that MPs can feed into that process with the MAC.
It is in everyone’s interest that we continue to see the wide availability of fresh fruit and veg for families. I accept the point made by my friend the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East that we would like to see any assessment of this sector be broader than seasonal agricultural workers and take into account the requirements of the workforce right across the food sector.
Having said that, I do not intend to push the new clause to a vote. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 25
Report on status of EEA and Swiss nationals after the transition
“(1) This Act shall not come into effect until a Minister of the Crown has laid a report before each House of Parliament setting out the impact of the Act on EEA and Swiss nationals in the UK.
(2) A report under subsection (1) must clarify the position of EEA and Swiss nationals in the UK during the period between the end of the transition period and the deadline for applying to the EU Settlement Scheme.
(3) A report under subsection (1) must include, but not be limited to, what rights EEA and Swiss nationals resident in the UK on 31 December 2020 have to—
(a) work in the UK;
(b) use the NHS for free;
(c) enrol in education or continue studying;
(d) access public funds such as benefits and pensions; and
(e) travel in and out of the UK.”—(Holly Lynch.)
This new clause would require Government to provide clarity on the rights of EU nationals in the EU in the grace period between the end of the transition period, and the closure of the EU Settlement Scheme.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Holly Lynch
I beg to move, That the clause be read a Second time.
We have been through a great deal of this subject matter earlier in the debate on clause 2. I was grateful to the Minister for some of the clarity he was able to provide at that stage. New clause 27, however, goes that little bit further and asks the Government to produce a report on the associated rights given to citizens in the common travel area.
The aim of this proposed change is to ensure that Ministers set out in detail the scope of what has been officially referred to as the reciprocal rights of the common travel area, and to compare and contrast them with the rights that can be retained under part two of the withdrawal agreement, as provided for domestically under the EU settlement scheme. The Minister’s predecessor stated that Irish citizens do not need to apply to the EU settlement scheme because of the CTA, but since then the Government have instead suggested that individuals whose immigration status is covered by the CTA may wish to register under the EU settlement scheme. Inevitably, this has caused a degree of confusion about possible gaps between where free movement rights finish and CTA rights start.
As highlighted by the Northern Ireland Human Rights Commission, the EU SS is enshrined in law through the withdrawal agreement. Comparatively, however, the CTA is upheld essentially by a gentlemen’s agreement, the non-legally binding memorandum of understanding between the UK and Ireland on the CTA of May 2019. A report on the associated rights of the CTA would therefore be incredibly helpful to ensure that Irish citizens can receive equal rights to EEA and Swiss nationals.
We also believe that the report on the associated rights granted through the CTA would provide scope to begin to answer the pertinent questions about clause 2 raised during the evidence given by our expert witnesses. As previously discussed, while we welcome the provisions set out in clause 2 for Irish citizens, there is still outstanding ambiguity regarding the status and legality of the associated rights that are prescribed by the common travel area.
We believe that it would be incredibly welcome if the Government were to take this opportunity to clarify any ambiguity before the Bill takes effect. A report would provide unequivocal guidance on the status of Northern Irish citizens who identify solely as Irish. It would hopefully guarantee the same provisions for deportation and exclusion as those for Northern Irish citizens who identify as British. It would also clarify issues raised by the Committee on the Administration of Justice on questions relating to cross-border provisions and the right to vote in referendums. More must also be done to tackle the current problematic loophole whereby someone with an Irish passport is not granted protections on arriving in the UK, because they have travelled from a country outside the common travel area. Professor Ryan illustrated the opacity surrounding the status of acquisition of British nationality for British-born children, children born to Irish parents and Irish citizens wanting to naturalise. He stressed that this is currently an unanswered question in British citizenship law.
Finally, the report could also lead to a more sustained debate on Alison Harvey’s proposal on the right to abode, which was raised during evidence. The right to abode would grant citizens a plethora of citizenship rights, while simultaneously safeguarding people’s right to identify solely as Irish. We hope the new clause will catalyse discussions on this issue that will lead to a definitive conclusion.
Stuart C. McDonald
I can be very brief. I echo and support what the shadow Minister has said. I am not going to repeat what I said on clause 2; that is a welcome clause, although we have one or two concerns about the detail. What this whole debate has shown us is that, even though we are told that the common travel area pre-existed the European Union and everything is fine, in actual fact it is hard to discern what precisely is involved in the CTA and precisely what rights it confers on individuals.
My understanding from the debate we had last week is essentially that the Government propose to progress this in a rather piecemeal way, changing bits and bobs of the legislation on different subjects to ensure that Irish citizens will continue to enjoy equivalent rights in this country. Okay, that will get us to where we want to be, but it does prohibit us from having a comprehensive overview of what progress has been made and what exactly we are trying to achieve by restoring the common travel area and making sure that there is not a loss of rights because of the loss of free movement.
The new clause would be genuinely be helpful for MPs to understand what the CTA is all about, what exactly the Government are trying to achieve and what progress they are making towards that. It is a genuinely helpful suggestion.
Kevin Foster
I thank the hon. Member for Halifax for tabling new clause 27 because it gives me a chance briefly to outline the Government’s commitments to maintaining the common travel area arrangements, including the associated rights of British and Irish citizens in each other’s states, and the status of Irish citizens under the EU settlement scheme arrangements.
For brief background, the common travel area is an arrangement between the UK and the Republic of Ireland, as well as the Isle of Man, Guernsey and Jersey. It allows British and Irish citizens to travel freely between the UK and Ireland, and to reside in either jurisdiction. It also facilitates the enjoyment of several associated rights and privileges—in effect, by forming one area for immigration entry purposes.
As mentioned when we debated clause 2, both the UK Government and the Irish Government have committed to maintaining the CTA. The CTA is underpinned by deep-rooted historical ties, and maintaining it has been and continues to be a shared objective of both nations. Crucially, it predates the UK’s and Ireland’s membership of the European Union. It has been agreed with the EU that the UK and Ireland can continue to make arrangements between ourselves when it comes to the CTA.
Irish citizens in the UK and British citizens in Ireland will continue to have access to their CTA associated rights. Both Governments confirmed that position on 8 May 2019, when we signed a common travel area memorandum of understanding, which I have mentioned previously to the Committee. It is worth noting that that also builds on our commitments in the Belfast agreement that are part of international law.
The Government continue to work closely with the Irish Government to ensure that our citizens can access their rights as set out in the memorandum of understanding. This has been and will continue to be taken forward through bilateral instruments, and we have committed to updating domestic legislation. This is why we are proposing clause 2 of this Bill, which will ensure that Irish citizens can enter and remain in the UK without requiring permission, regardless of where they have travelled from, except in a very limited number of circumstances, which we debated under clause 2.
New clause 27 would also require the Government to publish details of the rights and benefits provided by the EU settlement scheme. The European Union (Withdrawal Agreement) Act 2020 protects the residence rights of European economic area citizens who are resident in the UK by the end of the transition period and eligible family members seeking to join a relevant EEA citizen in the UK after that time. EEA citizens and their family members can apply under the EU settlement scheme for UK immigration status, so that they can continue to work, study, and, where eligible, access benefits and services such as free NHS treatment. We continue to make every effort to ensure that people are aware of the benefits of applying to the EU settlement scheme.
Stuart C. McDonald
Given what the Minister says, people will have to decide whether they want to apply for the EU settlement scheme, or whether they want to continue to rely on their CTA rights. They could make that decision much more easily if they knew precisely what their CTA rights would be. Can he say anything about when the Government will take forward a programme of work to ensure that Irish citizens continue to enjoy the rights that they have now? When can people can see this on the statute book, rather than just hear it being spoken about? People are describing these as rights written in the sand.
Kevin Foster
Clause 2 explicitly puts Irish citizens’ rights on the statute book and removes the anomaly by which an Irish citizen is treated differently depending on how they enter the country—whether they arrive on a flight from Dublin or a flight from Brussels, whether under EEA free movement or CTA rights. That difference is removed completely by clause 2; it makes it clear that the same position applies, however an Irish citizen arrives in the United Kingdom.
I am very much a supporter of the provisions of the Belfast agreement, under which a person can identify as British, Irish or both. Effectively, in the United Kingdom, the person will be treated as if they were a British citizen, in terms of their rights, including their right to live here, and the services they can access. There is a very tiny number of exceptions. On this Committee, we have all struggled, as have the witnesses, to find in recent times and under modern legislation an example of an Irish citizen being deported from the United Kingdom. The position outlined in a written statement in 2007—and yes, I know who was in government in 2007—still stands, and we have not had any representations from the Irish Government on changing that. I suspect that if we looked to behave in an unreasonable way towards an Irish citizen, the Irish Government would be very clear in their response.
Stuart C. McDonald
The Minister is obviously doing his bit by putting clause 2 into the Bill, but what I am really asking—I suspect that he does not have the answer today—is what other work is under way across Government to make sure that Irish citizens have rights on housing, health and everything else on exactly the same basis as before, and to make sure that the loss of free movement rights does not mean that they will be in a worse position. Some sort of timetable on what is going on, and how the change is being processed, would be useful for lots of citizens.
Kevin Foster
I thank the hon. Member for quite a constructive intervention. He obviously will appreciate that those arriving after the transition period would not have free movement rights, but those arriving before are covered by the withdrawal agreement. I am more than happy to get a letter to him setting out how we will make sure of the position that he mentions. I suspect that his concern is that when an Irish citizen is in the United Kingdom, talking to a person at a Department for Work and Pensions office, or a landlord, and presents them with an Irish passport, it should be understood inherently that it has exactly the same status in terms of renting, or accessing a service or employment, as a British passport, particularly given the different commentary. I am more than happy to set out in writing to the Committee the work that will be done on that point.
In summary, the Government have already made clear the rights available to individuals under the common travel area and the EU settlement scheme following the end of free movement, and we will continue to do so. I therefore respectfully ask the hon. Member for Halifax not to press the new clause for the reasons I have outlined.
Holly Lynch
I welcome the fairly constructive way in which the Minister has engaged on this point. The points made in intervention by my friend from the SNP, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, do still stand. I reinforce that there will continue to be a desire and unanswered questions in this area. There are certainly merits to committing more of what we have discussed to primary legislation, but I will not press the new clause at this point. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 28
Annual review: Higher education
(1) The Secretary of State must commission an annual report from the Migration Advisory Committee on the impact of the provisions of this Act on the number of overseas students in the UK from the EEA and Switzerland.
(2) The report must be laid before each House of Parliament as soon as possible after it has been completed.
(3) A Minister of the Crown must, not later than three months after the report has been laid before Parliament, make a motion in the House of Commons in relation to the report.—(Kate Green.)
Brought up, and read the First time.
Kate Green (Stretford and Urmston) (Lab)
I beg to move, That the clause be read a Second time.
It is a pleasure to see you in the Chair again this morning, Sir Edward. The new clause would require the Government to commission an annual report from the Migration Advisory Committee on the impact of the Bill’s provisions on the higher education sector.
As the Committee will know, the UK higher education sector has a world-leading reputation, which helps it to attract international students. The proportion of international students is a measure in most global university rankings, meaning that by choosing to study here, international students contribute directly to the sector’s world standing. Today, 18 of the UK’s universities rank in the world’s top 100, and 76% of UK research is ranked as excellent or world-leading. International staff and students are crucial to the UK’s economic success, and it is important that the UK continues to attract both EU and non-EU students and staff in the future.
International students deliver more than £26 billion to the UK economy. They bring more than £6.9 billion in income to universities in tuition fees. They generated £13 billion of export revenue in 2016, an increase of 41% since 2010. Universities UK estimates that universities supported more than 200,000 jobs and were worth £3.3 billion in tax revenues.
Aside from the direct economic benefits, international students and staff are crucial to the provision of skills, the conducting of research and the culture of the UK’s universities. In 2017-18, UK higher education institutions reported a £4.3 billion deficit between research income received and the costs of delivering research activity. Much of that gap was covered by international tuition fees, so international students are key to the UK’s research capacity.
In 2018-19, there were 485,645 international students enrolled at UK universities, an increase from 436,600 international students in 2014-15. Some 342,620 of those international students—that is 70%—were from outside the European Union. The remaining 143,025 students were from EU countries, but the UK’s market share has dropped in 17 of the world’s top 21 sending countries. The Office for Budget Responsibility has identified higher education as the sector likely to take the hardest hit from the covid crisis.
Given the pressures, it will be vital to understand the impact of immigration policy on future student numbers. The impact assessment attached to the Bill is optimistic, suggesting that a potential reduction in the number of EEA students attending UK universities of 25,000 after the first five years of the new points-based system will be offset by a corresponding increase in non-EEA students.
However, some of the assumptions in the impact assessment are highly speculative—as, indeed, the Government themselves acknowledge. Paragraph 160 of the impact assessment states that
“measures such as proof of funds and employment rights might have an additional deterrent impact—but there is little evidence on which to base an estimate. The impact of any administration cost or visa fee or change to student funding will also impact student choices. Therefore, the estimates presented here will only reflect the potential impacts from changes in immigration policy and not the overall impacts on EU student numbers.”
Paragraphs 163 and 164 state:
“The restrictions on the rights to bring dependants, which will apply to EU students from 2021, may also have an impact on inflows under the future system, as only those who are studying a full-time course which is a least nine months long at a postgraduate level of study are allowed to bring family members to the UK…Applying these potential deterrents, the reduction in EU student inflows are estimated to be around 15,000 per annum in the first five years of the policy.”
In paragraph 165, expected-length-of-study data is applied to the change in inflows, pointing to:
“an estimate of up to 25,000 fewer EU higher education students in the UK by academic year 2024/25 relative to the baseline.”
The paragraph also argues that
“any places not taken by EU students may be occupied by non-EU students, so the overall impact on foreign student numbers is not clear.”
In paragraph 166, the Government estimate that
“non-EU enrolments might increase by up to 10 per cent, depending on the level of study”,
but the paragraph also notes:
“This assumption is very uncertain, not least because other drivers could have affected non-EU inflows over the period of the last post-study work visa.”
None the less, paragraph 167 states:
“The assumption of around 10 per cent increase in enrolments is estimated to lead to an average annual increase in non-EU enrolments by around 25,000 over the first five years of the policy.”
That is a strikingly convenient conclusion in the light of the assessment of 25,000 fewer EU students at the end of the same period.
Paragraph 172 notes:
“Changes in the numbers of students enrolling will affect tuition fee income for universities. Overall, projected tuition fee income is estimated to increase under the future immigration system. This is primarily driven by the”—
assumed—
“increase in tuition fee income from additional non-EEA students which is expected to more than offset the decline in EEA student tuition fee income. The increase is estimated to be between £1 billion and £2 billion over the first five years of the policy.”
However, paragraph 172 goes on to state:
“Estimates do not take any account of behavioural impacts, nor any changes in universities expenditure.”
Paragraph 173 expands on that, stating:
“EU students are currently classified as ‘home’ students, and therefore benefit from accessing student loans and paying domestic tuition fees which are currently capped at £9,250 for undergraduates. Estimates above assume home fee status and access to student loans will remain the same as the current system. However, any changes to this will have an impact on both EU student enrolments and the projected tuition fee income of universities.”
Paragraph 175 concludes:
“As a result of changes to net student enrolments modelled above, a cumulative net fiscal benefit is estimated of under £1 billion over the first five years of the forecast period.”
That is a bold statement that will be true only if the assumptions in the impact assessment are correct and the reductions in EU students are indeed replaced by non-EU students.
We can already identify a number of policy choices that could affect those assumptions. The current situation for EEA students coming to the UK is that for academic year 2020-21, they retain the same status as domestic students. However, delays in start dates and term times as a result of the covid crisis may mean that there will be students who enrol on to academic year 2020-21, but do not enter the UK until 2021. Which immigration system will apply in such circumstances is uncertain.
Stuart C. McDonald
Again, I fully support and echo much of what the hon. Member for Stretford and Urmston has said. If anything, I would argue that the review requested in the new clause should be slightly broader and encompass not only student recruitment but staff recruitment, because that is an important issue for our universities. I also suggest that the report needs an urgent timeframe, because the clock is ticking down to a new academic year and a new recruitment period, but she made all sorts of valuable points.
Some changes made to the Government’s original White Paper have improved matters, such as the reduction in the salary and skills thresholds, but there remain lots of challenges, and of course just now universities are under immense pressure in dealing with the coronavirus pandemic and its fallout. I have spoken with Universities Scotland about the review suggested in the new clause, and what follow are some of the issues it raised. What steps are the Minister and the Government taking to get the visa system working again—lots of visa processing centres remain closed—and how can alternative measures be put in place to ensure we can recruit students at the moment?
What steps will the Government take to ensure that students can start courses online with confidence—for example, by extending the window from three months to six months so that people can have extra time to arrive in the UK from when their visa becomes valid? What steps are being taken to ensure that online study does not disqualify students from the graduate route, and will the Minister consider increasing the graduate route length to three or four years and promoting it intensively, because as we he heard awareness rates are still very low?
Finally, the report should also look at whether consideration has been given to waiving tier-4 visa fees for one year only? In the longer run, what steps are being taken to ensure that our visa fees are competitive and allow us to compete with countries such as Canada and Australia, which have such strong offers in terms of fees and post-study work. These are all things the Government should think about as part of the report, and we think the new clause would be a welcome addition to the Bill.
Kevin Foster
The new clause provides the Committee with a useful opportunity to consider the important issue of international students in the UK, and I am grateful to hon. Members for tabling it.
I want to start by picking up on the point made about Erasmus by the hon. Member for Stretford and Urmston. My constituency sees a large number of Erasmus students, and we very much welcome it. At the moment, the scope and content of EU programmes post 2020, including Erasmus, is being negotiated within the EU institutions and has not been finalised. The Government have made it clear that the UK is ready to consider participation in certain EU programmes, in particular Erasmus+, once the EU has agreed the baseline in its 2021-27 multiannual financial framework. Given that that has not yet been agreed, we are preparing for every eventuality and considering a wide range of options with regard to the future of international exchange and collaboration in education and training if it is not possible to secure a deal on Erasmus+. I want to give reassurance that the will is there. Once the EU has agreed its baseline, we will look to continue to be part of that valuable programme.
The Government strongly welcome international students, as I know Members across the Committee do. We see the academic and creative energy they bring to communities across our Union, including Belfast, Glasgow, Cardiff, Birmingham and Exeter. The Committee will be pleased to hear that the UK is one of the world’s leading destinations for international education, and hundreds of thousands of talented students choose to come to the UK’s world-leading institutions.
The Higher Education Statistics Agency has found that the total number of international students in higher education in the UK increased by 10% between 2014-15 and 2018-19, with the latest data suggesting that around 140,000 EU domiciled and 340,000 non-EU domiciled students enrolled in higher education institutions in the UK. The most recent set of immigration statistics show some very welcome growth in the number of people studying at our institutions from China and India in particular.
I want to reiterate that the Government place no limit on the number of international students who can come to study in the UK and have no intention ever to introduce any such limit in future under the new migration system. Indeed, as set out in the “International Education Strategy”, published last year, it is the Government’s ambition to increase the number of international higher education students studying in the UK to 600,000 by 2030. However, I recognise that we must not stand still if we are to continue to be a leading destination for international students. The Minister of State for Universities recently announced a new international education champion, Sir Steve Smith, to spearhead the UK’s efforts in the international student market. The Minister and I liaise regularly about the role that the migration system can play in facilitating that.
In summer 2021, we will launch a new graduate route, which will enable international students who have successfully completed their degree to remain in the UK for two years post study to work or look for work at any level, in order to kick-start their career. That will ensure that the UK continues to attract the brightest and the best and that our offer to prospective international students remains competitive internationally. I know that this policy change has significant cross-party support. It was even one of the first requests made by an SNP MP in a recent Opposition day debate on migration, in which my hon. Friend the Member for Moray and I took part, and I am pleased that it has been welcomed by the education sector.
I want to respond to the points made about eligibility for this route. We have published guidance, which confirms that those having to study overseas by distance learning due to the current circumstances will still be eligible for the graduate route. I do not blame Opposition Members for not having seen it, because it came out this morning, so I do not make that point to have a go at them. That followed discussions that the Minister of State for Universities and I had.
We will not penalise people for circumstances that are beyond their control, and we are working to finalise some of the details. Particularly for those on a one-year course—who will predominantly be postgraduate students, where we probably have a record of compliance and they have a very high skill level—we will be working to find that they have spent some time in the United Kingdom. For those starting three-year courses, we will not hold against them an absence from the United Kingdom caused by having to do distance learning, as a general principle.
We are looking at a range of other measures we can take to facilitate applications for tier 4, particularly from those who are applying to a new course having already been in the United Kingdom, many of whom are postgraduates or have done foundation courses. We have had strong representations on the extension to six months. It is clear that that will not be a huge advantage to someone looking to start a course in late September or October, given that it is now mid-June, but we are looking at where we can make some appropriate changes to the migration rules to reflect the unique situation. We will of course continue to work with Universities UK to ensure that those changes are appropriate. As I say, we have today published some guidance, which I am sure Committee members will find interesting. I will make sure that a link to it, or perhaps a copy of it, is sent round, to make one or two of these points clear.
Kate Green
I welcome much of what the Minister has said. I welcome his and the Government’s ambition to be and to continue to be a leading player in the international student market. I very much welcome what he said about the commitment either to continue our association with Erasmus+, if that is possible, or to find other ways to continue to offer international exchange opportunities to students. He gave useful assurances in relation to the guidance published this morning—which I apologise for not having read—on greater flexibilities in respect of the covid-19 crisis. I am sure that the MAC will have heard what the Minister said about encouraging its continued active review of the international student market. Given the Minister’s comments, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 29
Report on arrangements for temporary entry and stay for business purposes for EEA and Swiss nationals
“(1) A Minister of the Crown must, within 12 months of this Act coming into force, lay before Parliament a report evaluating the effects of this Act on the arrangements for temporary entry and stay for business purposes for EEA and Swiss nationals.
(2) That report must include—
(a) the qualification requirements for a short-term business visitor
(b) the activities that can be undertaken by a short-term business visitor;
(c) consider the reciprocal arrangements for UK nationals travelling to the EEA and Switzerland.”—(Holly Lynch.)
This new clause would require the Government to consider the requirements of short-term business visitors.
Brought up, and read the First time.
Holly Lynch
I beg to move, That the clause be read a Second time.
The new clause is not unlike some of the other proposals we have made in this sitting to ask the Government to go away and develop an evidence base, shining a spotlight on certain sectors, which we hope would then inform more concrete proposals. This proposal has a particular focus on the creative industries, temporary migration and visa requirements for working arrangements.
We understand that the Government are currently negotiating a reciprocal agreement with the EU that would allow UK citizens to undertake some paid business activities in the EU without a work permit on a short-term basis. However, the precise details, including the range of activities, the documentation needed and the time limit, are all still to be negotiated; certainly the details are still to be put into the public domain.
One sector directly affected is culture, music and the performing arts. The creative sector contributes over £100 billion a year to the UK economy and employs over 3 million people, according to the Confederation of British Industry. There are growing concerns in this sector about the lack of progress on a reciprocal agreement being reached before the end of the transition period, and whether it would guarantee short-term work and visits for EU nationals, all of which is critical for the survival of the music profession.
Britain’s music industry has long attracted world-class artists, entertainers and musicians to perform in the UK, but this is all very precarious if visa issues are not resolved by the end of the year. This is also one of the sectors hardest hit by the coronavirus, as events and performances will no doubt be one of the last elements across society to return to normal.
Working in the European Union, whether that involves performing, recording, teaching or collaborating, is an essential part of the music professional’s ability to earn. The music industry is very transient and often there is not enough work available in the UK for musicians to sustain livelihoods, but going abroad has often provided a solution. We are not talking about performers earning megabucks, although of course we want the UK to be an attractive stage for them and for our international talent in the rest of Europe—for example, UK performers who may go to work in a holiday resort for two months of the year, or may tour venues in a number of European countries.
If the UK leaves without a comprehensive arrangement in place, musicians could very quickly find themselves trying to navigate the entry requirements for each of the 27 EU member states, which risks causing major disruption to the UK’s music industry. Without effective reciprocal arrangements, the UK may see a decline in skilled culture sector workers entering the country from the EU. If the music industry is to survive and we are to continue attracting the best talent from across the world, musicians and performers must be able to continue travelling abroad to work with ease after the transition period. It is the same for many other businesses and industries.
The Home Office previously pledged that it would allow EU bands to enter the country freely for gigs post Brexit, and that it would continue to include special arrangements for creative workers. A potential solution might be a multi-entry touring visa valid for about two years and EU-wide, covering all 27 member states, which I know is the preference of the Incorporated Society of Musicians.
I hope the Minister agrees that the UK must continue to attract musicians and performers from all over the world with an immigration system that is fit for purpose. Providing the best possible situation to do that would be achieved by commissioning the report set out in new clause 29.
Kevin Foster
It might help if I briefly outline how the current system for those visiting the UK for business purposes operates. I note the shadow Minister has focused on creative purposes, but the wording in the new clause is “business visitor”.
The Government welcome genuine visitors to the UK, and this is not going to change once free movement has ended. We want to ensure legitimate travellers who support our economy and enrich our culture can continue to come to the UK smoothly in future. The UK’s current immigration rules for visitors are already fairly generous. Visitors can, in most cases, come to the UK for up to six months, and take part in a wide range of activities beyond simply tourism, or visiting family and friends.
Visitors can attend conferences, carry out independent research, undertake work-related training and maintain and install equipment where there is a contract with a UK company. We also allow audit activity and knowledge transfer where these take place in an intra-company setting. Visitors can undertake creative and sporting activities, and there are also some exceptional instances in the visitor rules whereby we allow payment by a UK source for certain activities, including performing at a permit-free festival, such as the Edinburgh festival. There are also provisions for paid performance engagement—or PPE, as we call it—whereby an individual who has been invited by a creative organisation can be paid for a short period for performing in the UK.
Those are already available to non-visa nationals, such as Canadian, Australian, Japanese and New Zealand citizens, and we have made it clear that EEA and Swiss citizens will not need a visa to undertake these activities, and will be able to travel and enter the UK on that basis. The EU has already legislated so that UK nationals will not need a visa when travelling to the Schengen area for short stays of up to 90 days in any 180-day period, as opposed to our slightly more generous provisions for visitors.
The Government recognise that it is desirable for UK nationals to have greater certainty about what they can do when travelling to the EU on a temporary or short-term basis, hence future arrangements on entry and temporary stay in the EU are subject to ongoing negotiations. Further, we look forward to reaching agreement on the future entry and temporary stay of natural persons with Switzerland and the EEA-European Free Trade Association states. For obvious reasons, we cannot legislate that the 27 member states of the EU offer a deal to the UK, but we hope we can come to a mutually beneficial agreement.
The UK’s visitor rules are kept under regular review. In our points-based system policy statement from February, we committed to
“continue our generous visitor provisions, but with simplified rules and guidance”.
We have engaged with stakeholders to understand how the rules can be simplified and improved and will continue to do so once free movement ends. For these reasons, there is no requirement for an additional report, and the new clause would be an odd addition to the Bill, for reasons I have set out in response to previous new clauses. I would therefore ask the hon. Member for Halifax to consider withdrawing the new clause.
Holly Lynch
I am grateful to the Minister for that response. At this stage, we will continue to follow the negotiations on the additional reciprocal arrangements, and on that note I beg to ask leave to withdraw new clause 29.
Clause, by leave, withdrawn.
New Clause 30
Procedures for amending Immigration Rules
“(1) The Immigration Act 1971 is amended in accordance with subsection 2.
(2) After section 3(2) insert—
“(2A) Any statement of the rules, or of any changes to the rules, which affect the rights and obligations of persons who will lose their right of freedom of movement under the provisions of the Immigration and Social Security Co-Ordination (EU Withdrawal) Act may not be made or have effect unless the Secretary of State has complied with subsections (2B) to (2F) below.
(2B) If the Secretary of State proposes to make changes to the rules under subsection (2A) above, the Secretary of State must lay before Parliament a document that—
(a) explains the proposal; and
(b) sets it out in the form of a draft order.
(2C) During the period of 60 days beginning with the day on which the document was laid under subsection (2B) (the “60-day period”), the Secretary of State may not lay before Parliament a draft order to give effect to the proposal (with or without modification).
(2D) In preparing a draft order under section (2A) above, the Secretary of State must have regard to any of the following that are made with regard to the draft order during the 60-day period—
(a) any representations; and
(b) any recommendations of a committee of either House of Parliament charged with reporting on the draft order.
(2E) When laying before Parliament a draft order to give effect to the proposal (with or without modifications), the Secretary of State must also lay a document that explains any changes made to the proposal contained in the document under subsection (2B).
(2F) In calculating the 60-day period, no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is not adjourned for more than 4 days.”—(Stuart C. McDonald.)
This new clause would amend the Immigration Act 1971 to ensure that any changes to the UK’s Immigration Rules which affect EEA or Swiss nationals must be made under the super affirmative procedure.
Question put, That the clause be read a Second time.
Question negatived.
New Clause 32
Annual report on labour market
“Within 12 months of this Act coming into force, and every 12 months thereafter, the Secretary of State must lay a report before Parliament setting out how any changes made to the Immigration Rules for EEA and Swiss nationals have affected the extent to which UK employers have adequate access to labour.”—(Stuart C. McDonald.)
This new clause would mean the Secretary of State must lay a report before Parliament on how changes to Immigration Rules for EEA and Swiss nationals are affecting access to labour.
Brought up, and read the First time.
Stuart C. McDonald
I beg to move, that the clause be read a Second time.
I can be relatively brief, since we covered much of this territory in earlier discussions, but it is a useful opportunity to push the Minister on a few issues. What progress can he report on raising awareness of the new tier-2 procedures in which so many small and medium-sized enterprises will have to participate, and what support is being rolled out for those businesses to help them to navigate the new system? What change has he noticed in the number of applications for tier-2 sponsorship licences, and what work is under way to streamline the system, which we have spoken about at length previously?
I suspect the Minister’s answer to the new clause will be that there is to be an annual MAC report. If so, can we ask that it is laid before Parliament and then have a debate on it? The Home Affairs Committee spoke about an annual debate on migration in a repot two or three years ago in trying to build a consensus on migration. It looked at how other countries developed immigration policy, and one issue that featured heavily in other jurisdictions was, at the very least, an annual debate on immigration policy generally.
We are talking about seismic changes to the way in which many businesses will go about recruiting and accessing the labour market, and the number of industry bodies that have come to me to express concerns is unbelievable—industry bodies I did not even know existed until they got in touch—across food and drink, agriculture, tourism and hospitality, fishing, manufacturing, engineering, logistics, financial services, social care, education, and many more. There is significant apprehension, and it is not because any of these industries want to exploit low wages; it is their realistic assessment that they are struggling already to access the labour they need in the UK at a price they can afford and which keeps them competitive. Now they are going to struggle to access labour from abroad, because of immigration rules.
Holly Lynch
I lend our support to the new clause. I anticipate that the Minister will reflect on the developments with the MAC, in that plans are afoot for an annual assessment of labour requirements across the UK, which will influence our immigration approach. However, I echo what my friend from the SNP, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, has said. We would very much welcome that report being placed before both Houses, so that there can be further debate across this place.
We have called for reports on the sectors we are most concerned about, which we have debated and discussed this morning, but there will be so many others. As with any change like this, there will be unintended consequences. We want the opportunity to mitigate the impact of the end of free movement, and to debate that in Parliament. That would, we hope, lead to much more dynamic decision making on changes to mitigate the impact of the ending of free movement on further sectors. We welcome the new clause.
Kevin Foster
I thank the shadow spokespeople for their comments and the constructive way in which they have put forward the new clause, which hits on an important point. Certainly neither I nor anyone else in government wants businesses to fail due to an unavailability of labour, although, sadly, as many outside this room would note, the impact of covid-19 on our economy means that not many people would see that as a likely issue over the coming period, for all too obvious reasons.
It is precisely for that reason that the Government are bringing forward the new points-based immigration system. It will be a single global system that will treat everyone alike and will allow people to come to the UK on the basis of their skills and the contribution they can make, not their nationality or where their passport is from. It will be a fair system, and we are introducing a number of important elements, such as reducing the skills and salary threshold below those in the tier 2 system, and abolishing the cap and resident labour market test, which will remove a lot of bureaucracy for employers engaging with the system.
The system will also be flexible. We are making it points-based, precisely so that we can facilitate the entry of those with the greatest skills or those who are coming to fill jobs where there is the greatest need. The system will be kept under careful review.
I do not think anyone would disagree that it is profoundly important to look at the effect that immigration is having on the labour market. That means looking at the situation for employers and the impact on UK workers seeking employment. The new clause, focusing as it does solely on employers, would give only one side of the story, leaving workers’ interests at a disadvantage. I also do not believe that the Government are best placed to look at this issue; this type of request is why the independent Migration Advisory Committee exists and is commissioned to produce expert, independent reports on the interplay between immigration and the labour market. I do not believe that what it produces could be further improved by another report from the Government. As part of its work, the MAC already looks at which occupations in the UK are currently experiencing a shortage of workers and, crucially, where it thinks it would be beneficial to fill vacancies through immigration. We maintain shortage occupation lists to recognise that.
The work of the MAC and the reports it produces go beyond the narrow scope of the work proposed by the new clause. The MAC looks at the whole immigration system, rather than just changes to the immigration rules. The MAC also looks at the impact of all migration, rather than limiting itself to EEA and Swiss migration, as the new clause seeks to do, although I accept that the wording is probably because of the scope of the Bill. The future immigration system will be a global one, where an EEA citizen has the same basic rights to migrate to the UK as someone, for example, from the Commonwealth.
The new clause would simply result in duplication of work already being undertaken by the pre-eminent labour market economists and migration specialists of the MAC. Parliament regularly debates the MAC’s reports. I hope that the MAC’s annual reports will help to inform regular, structured debates on migration—something to which Opposition Members alluded—allowing us to take a more considered view, rather than simply reacting to particular proposals or events. I have outlined the role that the MAC will play. I hope that the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East will feel able to withdraw his new clause.
Stuart C. McDonald
I am grateful to the Minister, and I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 41
Children in care and children entitled to care leaving support: Entitlement to remain
‘(1) Any child who has their right of free movement removed by the provisions contained in this Act, and who are in the care of a local authority, or entitled to care leaving support, shall, by virtue of this provision, be deemed to have and be granted automatic Indefinite Leave to Remain within the United Kingdom under the EU Settlement Scheme.
(2) The Secretary of State must, for purposes of subsection (1), issue guidance to local authorities in England, Scotland, Wales and Norther Ireland setting out their duty to identify the children of EEA and Swiss nationals in their care or entitled to care leaving support.
(3) Before issuing guidance under this section the Secretary of State must consult—
(a) the relevant Scottish Minister;
(b) the relevant Welsh Minister; and
(c) the relevant Northern Ireland Minister
(4) The Secretary of State must make arrangements to ensure that personal data relating to nationality processed by local authorities for purposes of identification under subsection (1) is used solely for this purpose and no further immigration control purpose.
(5) Any child subject to subsection (1) who is identified and granted status after the deadline of EU Settlement Scheme (“the Scheme”) will be deemed to have had such status and all rights associated with the status from the time of the Scheme deadline.
(6) This section comes into force upon the commencement of this Act and remains in effect for 5 years after the deadline of the EU Settlement Scheme.
(7) For purposes of this section, “children in the care of the local authority” are defined as children receiving care under any of the following—
(a) section 20 of the Children Act 1989 (Provision of accommodation for children: general);
(b) section 31 of the Children Act 1989 (Care and Supervision);
(c) section 75 Social Services and Well-being (Wales) Act 2014 (General duty of local authority to secure sufficient accommodation for looked after children);
(d) section 25 of the Children (Scotland) Act 1995 (Provision of accommodation for children);
(e) Article 25 of the Children (Northern Ireland) Order 1995 (Interpretation); and
(f) Article 50 Children of the (Northern Ireland) Order 1995 (Care orders and supervision orders).
(8) For the purposes of this section, “children entitled to care leaving support” means a child receiving support under any of the following—
(a) paragraph 19B of Schedule 2 Children Act 1989 (Preparation for ceasing to be looked after);
(b) s.23A(2) Children Act 1989 (The responsible authority and relevant children);
(c) s.23C(1) Children Act 1989 (Continuing functions in respect of former relevant children);
(d) section 104 of the Social Services and Well-being (Wales) Act 2014 (Young people entitled to support under sections 105 to 115);
(e) sections 29-30 Children (Scotland) Act 1995 (Advice and assistance for young persons formerly looked after by local authorities) as amended by s.66 Children and Young People (Scotland) Act 2014 (Provision of aftercare to young people); and
(f) Article 35(2) Children (Northern Ireland) Order 1995 (Persons qualifying for advice and assistance.).’—(Dame Diana Johnson.)
This new clause aims to ensure that the children of EEA and Swiss nationals who are in care, and those who are entitled to care leaving support, are granted automatic Indefinite Leave to Remain under the EU Settlement Scheme to ensure they do not become undocumented.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 58—Settled status: children in care—
‘(1) Any child who has their right of free movement removed by the provisions contained in this Act has the right of settled status in the United Kingdom if that child is in care, is subject to the public law outline process via a declaratory system, undertaken on the child’s behalf by the Local Authority whose care they are under, or is entitled to care leaving support.
(2) For the purposes of this section, “a child in care” means a child who is under 18 and is—
(a) living with foster parents;
(b) living in a residential children’s home; or
(c) living in a residential setting like a school or secure unit.”
(3) For the purposes of this section, “public law outline process” is as set out under Family Court practice direction 12A of 2004.
(4) For the purposes of this section, “children entitled to care leaving support” means a child receiving support under any of the following—
(a) paragraph 19B of Schedule 2 Children Act 1989 (Preparation for ceasing to be looked after);
(b) s.23A(2) Children Act 1989 (The responsible authority and relevant children);
(c) s.23C(1) Children Act 1989 (Continuing functions in respect of former relevant children);
(d) section 104 of the Social Services and Well-being (Wales) Act 2014 (Young people entitled to support under sections 105 to 115);
(e) sections 29-30 Children (Scotland) Act 1995 (Advice and assistance for young persons formerly looked after by local authorities) as amended by s.66 Children and Young People (Scotland) Act 2014 (Provision of aftercare to young people); and
(f) Article 35(2) Children (Northern Ireland) Order 1995 (Persons qualifying for advice and assistance).’
This new clause would seek to provide automatic settled status for all looked after children in the care of local authorities and for children entitled to care leaving support, removing the requirement on the local authority to make an application to the EU Settlement Scheme on that child’s behalf.
Dame Diana Johnson
It is a pleasure to serve under your chairmanship, Sir Edward. New clause 41 is a cross-party amendment tabled by the hon. Member for East Worthing and Shoreham (Tim Loughton), who is respected particularly for his knowledge and expertise on children in care, having formerly been the Minister for Children. The Chair of the Home Affairs Committee has also added her name to the new clause, so I am sure the Minister will want to give it his usual careful consideration. I also support new clause 58, tabled by my hon. Friends on the Opposition Front Bench.
This Bill focuses on bringing an end to freedom of movement, but the system for dealing with those who arrive before 31 December 2020 is far from problem-free. New clause 41 deals with looked-after children and care leavers. The Minister is well aware of the concerns about that group. I want to stress at the outset that every Member of this House, as an elected representative, has a role as corporate parent to those children, and it is our duty to ensure that every single one is able to secure permanent immigration status.
The Home Office has estimated that there are 5,000 looked-after children and 4,000 care leavers in the United Kingdom who would need to apply to regularise their immigration status before the end of the transition period. That figure is likely to have increased, as more children entered care this year, and it is just an estimate, because local authorities do not ordinarily collect the nationality data of children in their care. A recent analysis by the Children’s Society found that, as of January 2020, 153 out of 211 local authorities across the United Kingdom had identified just 3,612 EU, EEA or Swiss looked-after children and care leavers. Only 404—11%—of those young people have settled their status. It is unlikely that many more applications have been made in the past few months; owing to coronavirus, it is not a priority for busy local authorities. We also know that helplines to assist with applications have been closed or are operating a reduced service.
I know the Government are concerned about that issue and have conducted their own survey to get a better understanding of the number of looked-after children who need to apply to the scheme, but that information has never been published. It would be interesting if the Minister agreed to publish the Home Office’s data. We have yet to receive reassurance from the Minister that sufficient work is under way to regularise the immigration status of those children before the EU settlement scheme deadline. Why is the application rate so much lower for those vulnerable children? Like any children, looked-after children and care leavers need the help of their parents, and it is the local authority that is responsible for their care and for making the application to the EU settlement scheme.
Local authorities first need to identify which children in their care have an EU nationality. That can be problematic, as many children who have entered care at a young age do not know their or their parents’ nationalities. They may have no passport or birth certificate, and the local authority’s engagement can be difficult or non-existent. The children see themselves as British, as they have often not known any other home. The responsibility of identification and application has fallen on social workers, many of whom have stretched caseloads and do not have the expertise or legal knowledge to deal with these issues, particularly if they begin to encounter problems in the process.
It is worth reflecting on the fact that, outside this scheme, it is prohibited for social workers to give immigration advice. During the pilot phase of the EUSS, every application that the Coram Children’s Legal Centre made on behalf of a child in care or care leaver included detailed nationality advice, which requires expert legal knowledge and understanding. Social workers had to be supported at every stage of the process.
I am aware that the Government produced non-statutory guidance to local authorities on the EUSS, regarding their roles and responsibilities. As recently as April, they reminded local authorities of that responsibility. However, many local authorities still seem to be unaware of the existence of that guidance or their responsibilities under it. Even before we come to the issue of rates of application and status received, there is an issue of oversight. How many children are we talking about, and who is making the applications for them?
I have already briefly referred to the problems with applying. There is difficulty acquiring nationality documents and evidencing the length of residence in the UK. Social workers have to spend their time chasing various European embassies to acquire the appropriate paperwork. Right now, when so many embassies and services are shut, that is proving difficult. The previous Immigration Minister stated that the group could apply with alternative documentation, but operating a system of discretion can be very dangerous, and often has the opposite effect. It requires children to receive a significant amount of additional extra support.
Of course, local authorities are very stretched. They have limited resources and do not have the legal immigration expertise to handle complex cases that arise for children in their care and care leavers. The risk is compounded by the covid-19 pandemic. The Home Office has stated that children who do not apply because their parent or guardian did not submit an application on their behalf can submit a late application. That includes children in care and care leavers. However, there has not been a formal policy statement to that effect. In any case, I am sure the Government would rather act to prevent a child in their care becoming undocumented than rectify mistakes after they were made.
Tom Pursglove (Corby) (Con)
I beg to move, That the debate be now adjourned.
The Chair
I thank the Whip for that. Mr Stringer is chairing the Committee this afternoon, and I understand that the Committee intends to report then, so I will not see Committee members again. I thank you all for your courtesy. Even the Government Whip has been well behaved.
Immigration and Social Security Co-ordination (EU Withdrawal) Bill (Eighth sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 View all Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Chair
I remind the Committee that with this we are considering new clause 58—Settled status: children in care—
‘(1) Any child who has their right of free movement removed by the provisions contained in this Act has the right of settled status in the United Kingdom if that child is in care, is subject to the public law outline process via a declaratory system, undertaken on the child’s behalf by the Local Authority whose care they are under, or is entitled to care leaving support.
(2) For the purposes of this section, “a child in care” means a child who is under 18 and is—
(a) living with foster parents;
(b) living in a residential children’s home; or
(c) living in a residential setting like a school or secure unit.”
(3) For the purposes of this section, “public law outline process” is as set out under Family Court practice direction 12A of 2004.
(4) For the purposes of this section, “children entitled to care leaving support” means a child receiving support under any of the following—
(a) paragraph 19B of Schedule 2 Children Act 1989 (Preparation for ceasing to be looked after);
(b) s.23A(2) Children Act 1989 (The responsible authority and relevant children);
(c) s.23C(1) Children Act 1989 (Continuing functions in respect of former relevant children);
(d) section 104 of the Social Services and Well-being (Wales) Act 2014 (Young people entitled to support under sections 105 to 115);
(e) sections 29-30 Children (Scotland) Act 1995 (Advice and assistance for young persons formerly looked after by local authorities) as amended by s.66 Children and Young People (Scotland) Act 2014 (Provision of aftercare to young people); and
(f) Article 35(2) Children (Northern Ireland) Order 1995 (Persons qualifying for advice and assistance).’
This new clause would seek to provide automatic settled status for all looked after children in the care of local authorities and for children entitled to care leaving support, removing the requirement on the local authority to make an application to the EU Settlement Scheme on that child’s behalf.
Holly Lynch (Halifax) (Lab)
Thank you very much and welcome back, Mr Stringer; it is a pleasure to serve under your chairmanship once again. It is a pleasure to follow my hon. Friend the Member for Kingston upon Hull North, who made a powerful and persuasive contribution earlier to reinforce the merits of new clause 41.
I rise to speak in favour of new clause 58, about which we feel strongly and which is not dissimilar to new clause 41. As things stand, it is currently the responsibility of local authorities to make an application to the European Union settlement scheme for children under 18 who will be eligible to apply but who are currently in the care of the local authority. The Committee heard evidence on that from the Children’s Society, and I noted the Minister’s scepticism about aspects of that approach. I will seek, with genuine sincerity, to persuade him of the merits of taking an alternative approach.
Children are taken into care only if they have had the worst possible start in life. The cohort of children who would be affected by the new clause have the fateful combination of absent parents and precarious migration status. If we do any good with the Bill, it should be by giving those kids some stability on just one those fronts, in the hope that they can go on to a much brighter future.
In answer to a written parliamentary question, the Home Office said that it estimates—as we have already heard—that around 5,000 looked-after children and 4,000 care leavers in the UK would need to apply to the EU settlement scheme, but the exact numbers are unknown. Any further investigations undertaken by the Home Office to better understand those numbers have not been published, so, like my hon. Friend the Member for Kingston upon Hull North, I wonder whether the Minister is in a position to update the Committee on those estimates.
My hon. Friend referred to the incredibly informative survey work of the Children’s Society on this matter, in the absence of any further official data. It conducted its own research, sending freedom of information requests to every local authority or children’s services provider in the UK. That totalled 211 providers, 153 of which responded to the FOI requests by January this year. Those local authorities identified just 3,612 European economic area or Swiss looked-after children and care leavers, which is only 40% of Home Office estimates. Of those 3,612 children and young people, only 730 had so far applied to the EU settlement scheme. Of those, only 404 were in receipt of status—282 had settled status and 122 had pre-settled status—meaning that, of those identified by local authorities, only 20% have applied and only 11% have been granted status. Although the data represents 73% of local authorities or service providers, and as such is not fully representative, it offers a strong indication that there are serious and urgent concerns about identifying and settling the migration status of vulnerable children whose status and future will be significantly affected by the Bill.
The Minister might argue that as those figures relate to data gathered in January of this year, progress may since have been made. However, considering that we started to enter lockdown in mid-March, I suspect that not a great deal of progress has been made in the intervening weeks. The Minister might argue that because only 153 local authorities responded and 58 councils did not contribute data, the stats might actually be better than that sample suggests, but a number of those councils said they did not have that information and could not provide it to the Children’s Society. In fact, 32 local authorities said that they were unable to provide the data or that they did not hold the information in a reportable format.
Whether through the Government’s proposed approach, which means going through the full application, or through the streamlined alternative proposed in the new clause 58, for those children the local authority has responsibility for securing their status either way. If those very councils are saying that they do not know how many children in their care are eligible, we all ought to be incredibly concerned.
The Government have produced non-statutory guidance to local authorities on the EUSS regarding their roles and responsibilities in making or supporting applications for looked-after children and care leavers. However, in its oral evidence last week, the Children’s Society said that it had engaged with several councils that were still unaware of the existence of the guidance or their responsibilities as set out within it. Although the Children’s Society has attempted to address that by providing councillors with resources aimed at helping them in their accountability, overview and scrutiny roles, we clearly still have a number of barriers to overcome.
Even where local authorities are aware of their responsibilities, the young people in their care often have extremely complex cases that require considerable support and legal advice. Many require nationality advice, others have complex family arrangements, and most simply do not have the required documentation. Social workers are consequently spending months navigating advice and acquiring the necessary documents from European embassies. Social workers are by no means specialists in that area of work, and do we really want them to be acting as immigration caseworkers when we know the incredible case loads that they face?
All those factors were in play before they were compounded by the coronavirus. Local authorities are in the fight of their lives to keep communities going. The resources are, and will continue to be, spread incredibly thinly, diverting efforts to the frontline of fighting the virus for the foreseeable future. We have vulnerable children at home without day-to-day interaction with services. Although those children can still attend school we know that, disappointingly and worryingly, numbers are still low.
The challenges presented for children’s services are enormous. Identifying and assisting children in care to apply for an immigration status that is seemingly non-urgent has inevitably been de-prioritised. The most recent EUSS statistics show that applications fell by 46% in April this year, and anecdotal evidence from practitioners indicates that the number of applications and referrals of EU children in care or care leavers has been low, as we would expect during this time.
Even when applications have been made, the Children’s Society research found that in its sample only 404 EU national children in care or care leavers were in receipt of status through the EUSS, out of an estimated 9,000. In just over a nine-month period, only 11% of the vulnerable children identified through the survey, which is just 4% of the Home Office estimate of 9,000, were able to settle their status, compared with 79% of the overall official estimate of 3.4 million EEA citizens over the same nine-month period.
If those trends continue, thousands of European children either currently in the care system or who have recently left care will fall through the gaps, becoming undocumented and left without immigration status—rubbing salt into the wounds of what has already been a troubled start in life. The Home Office previously stated in answer to a written question that children who
“do not apply because their parent or guardian did not submit an application on their behalf can submit a late application. This includes children in care and care leavers.”
That is welcome, but both local and national Government must work to ensure that no child in the care of the state becomes undocumented, and we can do that with the new clause.
Having discussed some of the practicalities on the matter at length with my local director of children’s services, Julie Jenkins, for whose assistance I put my gratitude on the record, we propose that local authorities, on a declaratory basis, provide a list of names to the Home Office of the children and young people who would be eligible. In responding to reservations raised by the Minister at last week’s evidence session, the Home Office would then grant those young people settled status, as they would for a person who had made an application.
The Minister asked the Children’s Society how these young people prove their status. To answer his question: in the same way any other person with settled status would. We have been unable, sadly, to convince the Minister of the merits of physical proof, so they would have confirmation through an e-visa. On the issue of pre-settled and settled status, of the 404 children in the sample that we are talking about who are in receipt of status, 282 were granted settled status and 122 were granted pre-settled status.
Given everything that those kids have been through, why are we giving them pre-settled status? Let us just give them settled status. Let us not simply sign them up for yet more years of paperwork and burdens of proof; let us just take all that uncertainty off the table for them in this instance by giving them both settled status and proof of it.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
On burden of proof, is it not the case that the Government have made it clear that alternative types of documentation might be available for children who cannot get access to birth certificates or other documents because they are estranged from their parents?
Holly Lynch
I would welcome that in the event that there is no alternative and that some of the more regular items of documentation are not available. In taking that route, however, we are still asking children to go away and gather a potentially enormous amount of information and documentation. When we know that such children are eligible, why can we not just deal with this issue in a streamlined way through local authorities and the Home Office?
I hope I have satisfied the Minister’s reservations about this approach. We are talking about a cohort of children and young people who are our responsibility; we the state are acting as their legal guardians. Let us do the best we can for them and at least give them confidence in their immigration status, in the hope that they can go on to overcome all their challenges and build happy lives here in the UK.
The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)
It is a pleasure to serve under your chairmanship, Mr Stringer. I will speak to the two new clauses that have been moved. I appreciate the intentions behind them, and the concerns and genuine points that have been raised. That is why, from the outset, there have been arrangements in place to ensure that the EU settlement scheme is accessible to all, including looked-after children and care leavers. Prior to the full launch of the scheme in March 2019, agreements were reached and plans put in place with local authorities to ensure that relevant children and care leavers receive the support they need in securing their UK immigration status under the scheme.
Local authorities in Great Britain, and health and social care trusts in Northern Ireland, are responsible for making an application under the EU settlement scheme on behalf of an eligible looked-after child for whom they have parental responsibility by way of a court order. Their responsibilities to signpost the scheme and support applications in other cases have also been agreed. They concern children for whom there is no court order but where the local authority has a clear interest in supporting the best interests of the child—for example, children accommodated by the local authority, children in need and care leavers.
The Home Office has implemented a range of support services to ensure that local authorities and health and social care trusts can access help and advice when they need to. We have engaged extensively with relevant stakeholders, such as the Department for Education, the Local Government Association, the Ministry of Justice, the Association of Directors of Children’s Services and equivalents in the devolved Administrations, to understand and address the needs of looked-after children and care leavers, and to ensure they are all supported. Guidance has also been issued to all local authorities on their role and responsibilities for making or supporting applications under the EU settlement scheme for looked-after children and care leavers. The Home Office is holding regular teleconferences specifically for local authority staff who are responsible for making relevant applications, in order to support them and provide a direct point of contact for them within the Home Office.
A new burdens assessment has been conducted, and funding has been issued to local authorities that have responsibilities for carrying out specific duties in relation to looked-after children and care leavers, to ensure they are adequately funded to do such work. Along with the Minister for Children and Families in the Department for Education, I have written to lead council members to underline the importance of the work that their local authorities are undertaking to ensure that eligible looked-after children and care leavers make applications to the EU settlement scheme, and to highlight the support available. Home Office caseworkers are directly working with local authority staff who are responsible for making applications, as well as with organisations that specialise in working with children, such as the Children’s Society and Coram.
Additionally, the Home Office has provided £9 million of grant funding to 57 voluntary organisations across the UK in order to support vulnerable citizens in applying to the EU settlement scheme. They include several organisations specialising in support for vulnerable children and young people. We have now committed a further £8 million for such work, allowing charities and local authorities to bid for grant funding to provide support to vulnerable people and help ensure that no one is left behind. To reassure the Committee, we are continuing the existing arrangements until new arrangements and a new bidding process are completed.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I am listening carefully to all the steps that the Home Office is taking, but is the Minister now in a position to publish the information about the number of children affected by needing to apply for the EU settlement scheme? I understand that his Department has already undertaken that work.
Kevin Foster
It is probably worth saying that, as of today, we cannot publish a final list of all who will be eligible under the EU settlement scheme because the transition period extends to 31 December this year. Therefore, people may yet arrive in the country who would be eligible to apply under the scheme. As part of the quarterly statistics publication—not the monthly one—we publish the number of applications from children. A large amount of work is going on, but it would be impossible today to have a definitive number of all who will finally be eligible, because eligibility, along with freedom-of-movement rights, runs up to 31 December.
Mr Goodwill
Is it not also the case that there may be children claiming to be EEA citizens who may turn out to be, for example, from Albania, so publishing a figure based on what people claim would not be the true figure?
Kevin Foster
I thank my right hon. Friend for that intervention. Yes, there is always that possibility. For example, one of the reasons why we will not look to accept EEA identity cards in the long term at the border and internally for certain right-to-work checks is that some EEA identity cards are very prone to abuse, unlike secure passports. There are always going to be such claims, but certainly there is strong work going on. However, as we touched on, the core reason is that we cannot produce today a final list of who will be eligible, but we are working closely with local councils. Of course, each day children come into care, sadly, so again, snapshots do not reflect the work that needs to be done.
Kate Green (Stretford and Urmston) (Lab)
I do think that a running total—albeit one that would be changing from quarter to quarter—would give us a sense of the scale of the challenge, especially as we are now within six months of the end of the transition period and a year from the end of the extended period in which applications can be made. This point was raised, I think, a year ago in a debate in Westminster Hall when the Government first gave the undertaking to collect the data, and to do so through local authorities, which ought to give us a bit more confidence about its validity than if children or their families were simply providing it themselves. I say to the Minister that it would reassure Parliament if such information as is available were made public as soon as possible, although we understand that it is a bit of a moving feast.
Kevin Foster
I have outlined the work that we are doing with local authorities to identify who is eligible. As the hon. Lady said, it is a moving feast, and we particularly want to make sure that those responsible for making these applications are aware of how to apply and who qualifies, and that they then proceed to do so.
I understand the concerns expressed by hon. Members about looked-after children and care leavers, and we must ensure that their corporate parents secure the best possible outcomes for them.
Dehenna Davison (Bishop Auckland) (Con)
Does the Minister agree that the best way that we can support looked-after children is by ensuring that they can take full advantage of the EU settlement scheme through local authorities, rather than having a two-tier system?
Kevin Foster
Absolutely. Once someone has their status under the European settlement scheme, they join another—why, we have had over 3 million decisions taken on granting status. That will be part of how our border system will operate in future. One of the lessons learned from the past is this—status was granted under an Act of Parliament, but then in several decades’ time it has to be explained to someone how their status was under a different approach from how status is granted to those who are in the same cohort, in terms of nationality and citizenship. That is not helpful to anyone. That is one of the lessons learned, of course, from the experience of the Windrush generation. That Act of Parliament was in 1971. The status was granted on 1 January 1973 and the issues then started to be encountered 30 years later, and not just since 2010— the first case mentioned on the front of Windrush lessons learned review is from 2009. Again, it is about how those issues are created.
A declaratory scheme as proposed in new clauses 41 and 58, under which those covered automatically acquire UK immigration status, would cause confusion and potential difficulties for these vulnerable young people in future years, with their having no solid evidence of their lawful status here. They will need evidence of their status when they come to seek employment, or access to benefits and services to which they are entitled. A declaratory system would leave them without that evidence, struggling to prove their rights and entitlements over decades to come.
I listened carefully to the comments made by the hon. Member for Kingston upon Hull North, in which she outlined the process local authorities could go through to list the children and send those lists to the Home Office. I thought, “If local authorities are going to go through all this, then the logical thing for them to do is make the applications that are required under the EU settlement scheme, and ensure the children they are listing have the status they need.” It is hard to see what the benefit to councils would be if we introduced a different process that did not produce a better outcome. If that is what we are going to ask people to do—arrange a working identifier—the next stage is to ask them to make quite a simple application to the European settlement scheme to get the status that child deserves.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Minister must accept that a declaratory system does not leave people without a means of proving their status. They have every incentive to apply to the settlement scheme to get the document they need to access the services the Minister has referred to, and would have the facility to do so.
Kevin Foster
Again—here we go—this would mean that someone who had a status could not be distinguished from someone who did not have a status, and would then have to make an application. We have been clear that we cannot allow people to have a status without going through the process, but that we have some generous provisions in place. Similarly, physical documents that are decades old, that date from when someone is a child, are unlikely to be particularly convincing proof in many instances. That is why we need to move towards a digital system that is a permanent record, and if the children are being identified—as Opposition Members are suggesting—the next stage is to make that application, make it simple, and get their status secured. That means the children are then secure for the rest of their life, which is a better outcome.
Fundamentally, changing a system that is working well overall would have the exact opposite effect to that which the new clauses appear intended to achieve, leading to confusion and uncertainty. We have also made it clear that where a person eligible for status under the scheme has reasonable grounds for missing the deadline—for example, if their council did not apply to the EU settlement scheme on their behalf—they will be given a further opportunity to apply. We will ensure that individuals who have missed the deadline through no fault of their own can still obtain lawful status in the UK, which I suggest is a far better response to the concerns expressed by Opposition Members than the new clauses they are proposing. That is why the Government will not accept them.
Dame Diana Johnson
I am disappointed by the Minister’s response to new clause 41. It is also disappointing that the Minister is not able to update the Committee with some information, recognising that that information about numbers may be changing over time. This is a matter that will not go away, and rather than test the opinion of the Committee today, I may wish to return to it on Report. I therefore beg leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 45
Immigration: no recourse to public funds
“Section 3(1)(c)(i) and (ii) of the Immigration Act 1971 cannot be applied to persons who have lost rights because of section (1) and Schedule 1 of this Act, until such time as may be specified in a resolution passed by each House of Parliament.”—(Stuart C. McDonald.)
This new clause seeks to delay application of No Recourse to Public Funds rules during the current pandemic and until such time as Parliament decides.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 56—Recourse to public funds—
“(1) For the purpose of this section, a person (“P”) is defined as any person who, immediately before the commencement of Schedule 1, was—
(a) residing in the United Kingdom in accordance with the Immigration (European Economic Area) Regulations 2016;
(b) residing in the United Kingdom in accordance with a right conferred by or under any of the other instruments which is repealed by Schedule 1; or
(c) otherwise residing in the United Kingdom in accordance with any right derived from European Union law which continues, by virtue of section 4 of the EU Withdrawal Act 2018, to be recognised and available in domestic law after exit day.
(2) Regulations under section 4(1) may not be made until the Government has brought forward legislative measures to ensure that P can access social security benefits, where P is habitually resident, including repealing or amending the following provisions insofar as they relate to P—
(a) section 3(1)(c)(ii) of the Immigration Act 1971;
(b) section 115 of the Immigration and Asylum Act 1999;
(c) any provision in subordinate legislation, which imposes a “no recourse to public funds” condition on grants of limited leave to enter or remain; and
(d) any other enactment or power exercised under any other enactment, which makes immigration status a condition to access social security benefits.”
This new clause seeks to restrict measures prohibiting recourse to public funds.
New clause 59—Analysis of exemption from no recourse to public funds condition—
“(1) The Secretary State must produce a report on the impact of no recourse to public funds conditions for those who meet the criteria in subsection (2).
(2) The report under subsection (1) must include the impact on EEA and Swiss nationals—
(a) with children;
(b) with pre-settled status; and
(c) who are victims of domestic abuse.
(3) For the purposes of this section, a public fund is defined as any of the following:
(a) attendance allowance;
(b) carer’s allowance;
(c) child benefit;
(d) child tax credit;
(e) council tax benefit;
(f) council tax reduction;
(g) disability living allowance;
(h) discretionary support payments by local authorities or the devolved administrations in Scotland and Northern Ireland which replace the discretionary social fund;
(i) housing and homelessness assistance;
(j) housing benefit;
(k) income-based jobseeker’s allowance;
(l) income related employment and support allowance (ESA);
(m) income support;
(n) personal independence payment;
(o) severe disablement allowance;
(p) social fund payment;
(q) state pension credit;
(r) universal credit;
(s) working tax credit; and
(t) Immigration Health Surcharge (IHS).
(4) For the purposes of this section—
“domestic abuse” has the same meaning as in section 1 of the Domestic Abuse Act 2020;
“victim” includes the dependent child of a person who is a victim of domestic abuse.”
This new clause will require the Government to consider the impact of no recourse to public funds exemption.
New clause 62—Recourse to public funds: EEA and Swiss nationals with dependants—
“(1) EEA and Swiss nationals with dependants under the age of 18 must be exempt from any no recourse to public funds condition that would otherwise be placed on them under Immigration Rules.
(2) For the purposes of this section, a public fund is defined as any of the following—
(a) attendance allowance;
(b) carer’s allowance;
(c) child benefit;
(d) child tax credit;
(e) council tax benefit;
(f) council tax reduction;
(g) disability living allowance;
(h) discretionary support payments by local authorities or the devolved administrations in Scotland and Northern Ireland which replace the discretionary social fund;
(i) housing and homelessness assistance;
(j) housing benefit;
(k) income-based jobseeker’s allowance;
(l) income related employment and support allowance (ESA);
(m) income support;
(n) personal independence payment;
(o) severe disablement allowance;
(p) social fund payment;
(q) state pension credit;
(r) universal credit;
(s) working tax credit; or
(t) Immigration Health Surcharge (IHS).”
This new clause would allow EEA nationals and Swiss nationals with children under the age of 18 to access public funds.
Stuart C. McDonald
It is a pleasure to serve under your chairmanship, Mr Stringer. In tabling new clauses 45 and 56, my party wants to set out our opposition to how the no recourse to public funds regime is working, both in general and specifically during the current covid crisis. We think it is having some drastic effects, and therefore refuse to extend it to EEA nationals during the current public health crisis, or indeed more generally. Of course, we urge the Government to go further by also disapplying NRPF rules in relation to other migrants.
Because of this Bill, any EEA migrants coming to the UK under the new system will face the same problems as those coming from outside the EEA. They will be prohibited from accessing public funds until they are granted permanent residence, something that will take five years for some migrants and 10 for others, if it is granted at all. No recourse to public funds conditions will be applied to the family members of UK citizens and settled persons, as well as those to whom we have extended an invitation to come on a work visa. That means that individuals, families and children are prevented from accessing most in-work and out-of-work benefits, including child benefit, tax credits, universal credit, income-related employment support allowance, income support, local welfare assistance schemes, housing benefit and social security.
Mr Goodwill
Does the hon. Gentleman agree that the term “no recourse to public funds” is slightly misleading, because there are a number of benefits that people are entitled to, including the furlough scheme, should they be entitled to that?
Stuart C. McDonald
It is welcome that the furlough scheme is extended to these individuals, but it is nowhere near enough. I will come to specific problems in relation to covid later in my short speech.
In short, if these new clauses are not agreed, many thousands more people who are here because they are family members or because they are wanted for their work will be put at risk of poverty and insecurity.
Those who come here with limited leave visas certainly do not expect to have to rely on public funds, but as we have seen all too well in recent months, unforeseeable events that are completely beyond their control can have a dramatic impact on their capacity to sustain themselves and their family. I am talking about coronavirus, but the ability of individuals to support themselves can be affected for reasons that are many and varied. It could be economics, illness within the family, relationship breakdown, accidents or the death of a loved one.
We have allowed and welcomed people who come to work here or to join their families. There is no reason or justification for denying them the safety net and security that we regard as essential for everybody else.
Included in those impacted by the NRPF rules are parents who are working hard in roles that are absolutely crucial at this time, including care workers, NHS staff, cleaners and people involved in food preparation. Some are working extraordinarily long hours but still cannot access even limited top-up benefits to help them meet the needs of their children.
Thanks to the Children’s Society, we know that many of the families detrimentally impacted by the rules are headed by single mothers, often from black, Asian and minority ethnic backgrounds. There are also significant numbers of families that include children with special educational needs who require additional help from supporting agencies.
It is also important to note that many of the children who will be victims of the NRPF rules will have been born and brought up here. I link back to my amendment on fees for registering British citizens; some of these children would be entitled to British citizenship, but cannot access it, either because they are not aware of it or because they are priced out of it. There will even be British citizens among those children, who are being punished because their parents’ immigration status prevents them from accessing support.
The disastrous impacts of all the rules are well established. People who are prohibited from accessing public funds are clearly at risk of destitution, with no access to the social safety net. The impact on children can be particularly devastating, in so far as deprivation is clearly detrimental to their long-term growth and development. As the Children’s Society points out, living in poverty even for short periods of time has significant detrimental effects on children’s outcomes, both in childhood and in later life, affecting their school attainment, cognitive and behavioural development, and physical and mental health.
Recently, the High Court found no recourse to public funds policies to be unlawful, holding that the relevant immigration rules and casework instructions did not adequately account for human rights obligations. That case was brought by an eight-year-old boy whose mother was subject to NRPF conditions and on the 10-year route to settlement. She was a carer for mentally disabled clients, before the imposition of the NRPF conditions led her and her son to experience periods of destitution. They moved house repeatedly, with the boy having been moved five times before the age of eight, and at one point they were street homeless. The court found that the Home Secretary must not impose or should lift NRPF conditions when it is clear that a person is at risk of imminent destitution in the absence of public funds, rather than waiting for that destitution to take place. As legislators, we should be doing better than that; we should avoid families being at risk of destitution at all. We invite families and individuals to come to undertake vital work here, and we should extend the safety net that we enjoy ourselves.
As in other areas, the Home Office sometimes attempts to pass the buck to local authorities and argues that support under legislation relating to children should mean a safety net of sorts is provided, but the number able to access such support is extremely limited, and the support is also incredibly restricted—sometimes as little as £3 per day per child. As I understand it, children are not even allowed to access free school meals.
The Home Office will also point out that, on application, NRPF conditions can be lifted, but those on the frontline say that such applications are incredibly difficult to have success with and have to be repeated multiple times. Those who apply who are currently on five-year routes to settlement will instead be placed on a 10-year route to settlement, with none of their residence to date being counted towards that target. The price of access to that safety net is insecurity.
Mr Goodwill
Does the hon. Gentleman not accept that benefits that people are entitled to by virtue of their paying national insurance contributions are able to be paid, including important ones such as contribution-based jobseeker’s allowance, incapacity benefit and, of course, retirement pension?
Stuart C. McDonald
I do not think I have denied that certain benefits are still available to people, but none of that explains or resolves all the challenges that I outlined. For all these reasons, we believe that the no recourse to public funds rule should be got rid of altogether.
That is all the more urgent in relation to the covid-19 crisis, for which the implications of these policies are absolutely counterproductive. People who are prohibited from accessing public funds will feel compelled to continue to work, even when doing so is not safe for them or their families. As I said, their inclusion in the furlough scheme is welcome, but someone who is subject to NRPF and is dismissed from their job will obviously not have access to the furlough scheme, and nor can they claim universal credit. They are at real risk of destitution.
We all watched the Prime Minister at the Liaison Committee recently. He was questioned, quite memorably, by the Chair of the Work and Pensions Committee, who provided an example to the Prime Minister of parents who had lived in the UK for at least 15 years and who had two children, aged 11 and 13. They found themselves facing destitution for reasons entirely beyond their control. It was telling that the Prime Minister could not explain why the family was not able to access support. Of course, they should be able to access support, and these new clauses would allow that to happen.
Kate Green
It is a pleasure to serve under your chairmanship, Mr Stringer. I rise to speak to new clause 59, tabled in my name and those of my hon. Friends. The new clause would require the Secretary of State to produce an analysis of the impact of the no recourse to public funds condition on EEA and Swiss nationals, including those with children, those with pre-settled status and those who are victims of domestic abuse.
As we heard from the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, no recourse to public funds conditions can prevent access to some welfare benefits, to free school meals and to other support for working families who may have been paying tax. That may include families with children, including British-born children, and other vulnerable people. As we heard, application can be made to lift the condition, but it is necessary to reapply at each visa renewal, and the condition can be reinstated.
The impact of no recourse to public funds conditions on the poorest households has been magnified, as the hon. Gentleman said, by the covid crisis. The Greater Manchester Immigration Aid Unit reports that applications to lift the condition are subject to considerable delay; that the process for applying is overcomplicated, and that is exacerbated for those who struggle to make digital applications; that the evidential requirements are high and unnecessarily onerous; and, as a result, that decisions are still awaited weeks after applications have been submitted.
This makes it harder for those subject to the condition to achieve social distancing or to self-isolate if they need to. They are more likely to be living in overcrowded accommodation, with many building up rent arrears. Even though they may, as the Minister rightly says, be eligible for the Government’s furlough scheme, they are under considerable pressure to keep working in many cases. Often, their children are not in school and they cannot access free childcare, forcing them to rely on friends and family to provide that care, meaning that children are moving between households, further increasing the covid risk.
Meanwhile, Safety4Sisters tells me that local authority housing services in Greater Manchester have been turning women subject to no recourse to public funds conditions away from the emergency homeless accommodation set up during the crisis, even though that should not happen. This has resulted in at least one vulnerable woman becoming street homeless in Manchester in recent weeks, until she was found by the police and taken to safety.
Given these shocking circumstances, Labour has called for the no recourse to public funds condition to be suspended during the covid emergency. As we heard, new clause 45, proposed by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, would give effect to such a suspension, while ensuring that, if Parliament wishes to reinstate the regime as soon as the crisis ends, it can do so. Suspension of the condition now would not only provide vital relief to families who have had their livelihoods catastrophically affected by covid, but would give the Government the opportunity to give full consideration to the impact of the no recourse to public funds condition more broadly and to future policy.
As we know, and as we have just heard, the Prime Minister was apparently surprised to hear about the effects of the condition during his recent session with the Liaison Committee, and he was right to say that
“people who have worked hard for this country, who live and work here, should have support”.
Sadly, just a week later, on 3 June, in his response in Prime Minister’s questions to my hon. Friend the Member for Sheffield Central (Paul Blomfield), he appeared to backtrack on his commitment to see what could be done to help them.
It is, of course, welcome that the Government have now issued guidance to give effect to the judgment in the case described by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, but this still leaves many potentially vulnerable people at risk of being subject to the condition. That includes those EU nationals who are here now but are able to secure only pre-settled status. They will not meet the habitual residence test and will be ineligible for non-contributory benefits; that includes disabled people, who will not be able to claim universal credit. I am sure my hon. Friend the Member for Kingston upon Hull North will speak to her new clause 62 and the damaging effect the condition could have on EEA and Swiss national families with children.
Given the potential impact on vulnerable groups, I hope the Minister will accept the suggestion of an analysis of the impact of the no recourse to public funds condition in the constructive spirit in which it is offered. If the Prime Minister’s commitment to review the application still holds, and if, as is reported, the Government intend to bring forward a further immigration Bill in the near future, they could take that opportunity to legislate to make any changes Parliament then deems necessary. The evidence base that such a review could supply would also be a useful prerequisite for a decision on the broader proposals set out in new clause 56 by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, were the Government minded to consider them. I commend our new clause to the Committee.
Dame Diana Johnson
It is a pleasure to serve under you this afternoon, Mr Stringer. I wish to speak to new clause 62, on the no recourse to public funds policy and to support new clause 59, tabled by my hon. Friends.
New clause 62 would exempt EU, EEA and Swiss nationals with dependants under the age of 18 from being subject to any NRPF condition that would otherwise be placed on them under the immigration rules. Many believe that these protections should apply to all families, regardless of their nationality, but for the purposes of the Government’s tightly drawn Bill, the new clause is limited in the way I have described.
Many find it astonishing that this condition is applied to children at all. Having NRPF means that the life chances of thousands of children are dictated by their parents’ inability to access support from the social security system because of their immigration status, even though the children themselves might be British.
I know that the Minister will use his concluding remarks to say that limiting access to public funds for these children and families is in the public interest and that they should be paying in to the system before they benefit from it. He will know that many of the families affected are those of key workers, who are at the frontline at this very moment in the fight against coronavirus. We are talking about NHS hospital cleaners, and about people who work in food preparation or social care, but they are being denied the same access to the safety net that they are working within. These families are paying income tax, council tax, immigration application fees and the health surcharge. It is calculated that if a family started their 10-year settlement journey in 2012, assuming they were not successful in getting fee waivers, and fees did not increase again, a single mum with two children would be expected to pay more than £23,000 for the family to settle in 10 years. A family of five—a couple with three children—would be expected to pay more than £39,000 to settle in the UK.
The NRPF does the opposite of making work pay, because families may end up forced into destitution if parents try to work but cannot access benefits. Working parents, single mums, mothers fleeing domestic violence, parents who have children born in the UK and children with British citizenship currently cannot access benefits to which they should be entitled. For children and families, that includes not being able to access benefits to support children’s upbringing and families’ wellbeing, to ensure that children have the same life chances as their peers.
As we have already heard, in May 2020, the Unity Project and Project 17 supported an eight-year-old British boy in taking the Government to court over the policy. The court ruled that the NRPF policy breached article 3 of the European convention on human rights, which prohibits inhumane and degrading treatment.
Applicants can apply to have their NRPF condition removed if they are likely to become destitute, but the process is time-consuming and requires specialist advice, which is difficult to obtain, especially during the current pandemic. NRPF families may be able to access support under section 17 of the Children Act 1989, which is often the only safety net available. That is payable, as we all know, through local authorities, but the pressure of austerity and cuts to local council budgets have left councils largely unable to offer much support.
Section 17 is often referred to by the Government as the basic safety net for migrant families with NRPF, but there is little support—sometimes as little as £3 per child per day—which makes it nearly impossible to meet the basic needs of a child, let alone support them to have a healthy, happy childhood. We have to acknowledge that that, again, puts an unnecessary strain on stretched local authority budgets.
Most, if not all, services that support migrant families with NRPF state that having no recourse to public funds increases the risk of families becoming trapped in a cycle of extreme poverty, vulnerability and abuse. Many children in NRPF families go without things that other children get to enjoy and that are important for their development, including, for example, days out as a family or school trips. One example that the Children’s Society gave me was of Hamid, who said that if his son’s classmates were going on a school trip, he would not take his son to school that day, because he did not want him to see his friends going while he stayed behind because they just could not afford it.
Other Government Departments are beginning to recognise the consequences of NRPF. The Department for Education has temporarily allowed children with NRPF to access free school meals, and the Ministry of Housing, Communities and Local Government has instructed local authorities to house homeless people with NRPF. In the longer term, the solution lies with the Home Office, so I ask the Minister to give an assurance to the Committee that safeguards will be put in place to ensure that more families will not be forced into destitution as a result of a condition placed on their leave to remain.
The Government have made it clear that they want to wrap their arms around everyone during this time of crisis. Vulnerable children are at the heart of the Government’s agenda, so the new clause will ensure that that can happen. I commend it to the Committee.
Kevin Foster
After the end of the transition period, EEA citizens coming to the UK will be subject to the same requirements as non-EEA citizens and the same conditions restricting access to public funds under our new global immigration system. The new clauses would maintain a system in which EEA citizens, including those arriving in future, continued to enjoy preferential treatment over non-EEA citizens in relation to their access to benefits. That is not the Government’s intention, nor would it be fair, and it is not something that the British people would support, given the mandate that they have given to the Government.
New clause 45 would delay the introduction of the no recourse to public funds condition to EEA citizens until Parliament had decided on the matter in the light of the current pandemic. However, as has been touched on by some Opposition Members, to their credit, the Government have already made provision to support people through the pandemic, including those subject to no recourse to public funds, and are keeping the situation under review.
It should also be noted that the no recourse to public funds condition does not bar access to all benefits, as pointed out by my right hon. Friend the Member for Scarborough and Whitby. People covered by it may still, for example, access contribution-based benefits and statutory sick pay. Exceptions are also made for vulnerable migrants, such as refugees and those granted humanitarian protection. Those granted leave on the basis of their family life under article 8 of the European convention on human rights can apply to have the conditions lifted if they would otherwise be destitute.
Mr Goodwill
Does my hon. Friend know whether any other EU countries have extended to UK citizens living in the European Union the type of benefits proposed by the new clauses?
Kevin Foster
It is probably worth saying that many European welfare schemes are based on slightly different premises—for example, social insurance schemes. As we reflected on when we talked about healthcare costs, people accessing healthcare services in other European countries may be required to pay for things that the NHS provides free at the point of need to UK nationals. It is hard to give different examples, but there are protections in the withdrawal agreement for UK citizens living in the EU before the end of the transition period. To be fair, many countries have been good in wanting proactively to support UK citizens living in their nation. I cannot give a list of each countries’ individual migration system off the top of my head, but it is probably safe to say that it is relatively common around the world for those who have newly arrived in a country to be unlikely to be able to access and qualify for a range of welfare provisions.
EEA citizens who apply under the EU settlement scheme secure their rights in UK law, so they can access benefits and services on at least the same basis as before they were granted that status. The Government have provided guidance for local authorities to enable them to support vulnerable EEA citizens in making an application under the scheme. The Government have also made available to local authorities and charities a further £8 million, in addition to the £9 million announced last year, to help them to assist vulnerable EEA citizens in making applications.
New clause 56 would risk impacting the Government’s ability to make regulations under the power in clause 4, the importance of which I have set out previously in Committee: to ensure that our laws operate coherently once free movement ends; to align the immigration treatment of newly arriving EEA citizens and non-EEA citizens from 1 January 2021; and to make relevant savings and transitional provisions for resident EEA citizens that cannot be made under powers in the 2020 Act.
New clause 59 would require the Government to publish a report on the impact of the no recourse to public funds condition on certain groups of EEA nationals. This is not necessary; the Government are already required to consider the impact of policies on all those to whom they apply, not just certain groups.
On new clause 62, I share the interest of the hon. Member for Kingston upon Hull North in ensuring the wellbeing of children, but I do not believe the new clause is necessary. Immigration law already provides that local authorities may intervene where required, regardless of the immigration status or nationality of the child or parent. The safeguards in place for the vulnerable will be retained, but it is only right that the future immigration system continues to play a part in ensuring that taxpayers’ funds are protected for the residents of the UK, whose money it is, and in assuring them that immigration continues to benefit the country as a whole and is not based on creating new costs and burdens for public resources.
I understand and appreciate the intentions behind new clause 62, but it would provide EEA citizens with greater access to benefits in the UK than they currently have under UK law. Generally speaking, under EU free movement law, EEA citizens may currently access benefits when they exercise a qualifying EU treaty right—for example, through employment or self-employment, or when they have become permanent residents. The new clause would remove that qualification and provide that any EEA citizen in this country with a child, for whatever period and in whatever capacity, may qualify for welfare benefits.
We believe that a general qualifying threshold of five years for access to benefits in immigration procedures is the right one, as it reflects the strength of a person’s connection to the United Kingdom and the principle that people should come to the UK to contribute, rather than to take advantage of, and place pressures on, taxpayer-funded services and welfare payments. Non-EEA migrants who come to live in the UK are currently expected to provide for any children they have without recourse to public funds. There can be no reasonable justification for adopting a different principle for EEA citizens arriving in the UK when the new immigration system is introduced, given that we have now left the European Union.
Finally, new clauses 59 and 62 incorrectly reference the immigration health surcharge. The immigration health surcharge is not a public fund. It is a contribution made by temporary migrants towards the costs of the NHS services they can access from day one. These new clauses would undermine the intention to establish a unified immigration system that builds public confidence in its operation, and therefore the Government cannot accept them.
Stuart C. McDonald
People do not come to this country to take advantage of the social security system; they come here to work or because they are family members of British citizens or settled persons. Having asked them to come to work or join family members here, I regard it as unfair that we do not extend the same social safety net to them. We are not arguing for a discriminatory system.
As the Minister knows, we are limited by the scope of the Bill. I feel that we have not got to the fundamental principle of why we can ask people to contribute on the one hand and yet not provide them with the same safety net. This is particularly urgent in relation to the coronavirus, and we need fast action. The Minister referred to this matter being under review, but we are several months into the crisis and we will have to revisit this issue on Report. In the meantime, I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 46
Family reunion and resettlement
“(1) The Secretary of State must make provision to ensure that an unaccompanied child, spouse or vulnerable or dependant adult who has a family member who is legally present in the United Kingdom has the same rights to be reunited in the United Kingdom with that family member as they would have had under Commission Regulation (EU) No. 604/2013.
(2) The Secretary of State must, within a period of six months beginning with the day on which this Act is passed—
(a) make regulations amending the Immigration Rules in order to preserve the effect in the United Kingdom of Commission Regulation (EU) No. 604/2013 for the family reunion of unaccompanied minors, spouses and vulnerable or dependant adults; and
(b) lay before both Houses of Parliament a strategy for ensuring the continued opportunity for relocation to the UK of unaccompanied children present in the territory of the EEA, if it is in the child’s best interests.
(3) For the purposes of this section, “family member”—
(a) has the same meaning as in Article 2(g) of Commission Regulation (EU) No. 604/2013;
(b) also has the same meaning as “relative” as defined in Article 2(h) of Commission Regulation (EU) No. 604/2013;
(c) also includes the family members referred to in Article 16 (1) and 16 (2) of Commission Regulation (EU) No. 604/2013.
(4) Until such time as Regulations in subsection (2) come into force, the effect of Commission Regulation (EU) No 604/2013 for the family reunion of unaccompanied minors, spouses and vulnerable or dependent adults with their family members in the UK shall be preserved.”—(Stuart C. McDonald.)
This new clause would have the effect of continuing existing arrangements for unaccompanied asylum-seeking children, spouses and vulnerable adults to have access to family reunion with close relatives in the UK.
Brought up, and read the First time.
Stuart C. McDonald
I beg to move, That the clause be read a Second time.
It is a pleasure to address new clause 46, this time with a cross-party hat on, rather than my usual SNP hat. I am grateful to the Chair of the Home Affairs Committee, the hon. Member for Kingston upon Hull North and others for co-ordinating on this new clause.
As Members will know, the European Union has in place a fairly mature—it is certainly not perfect, but it is long standing—system of deciding which member state should appropriately consider a claim for asylum. For example, if an unaccompanied child is found on one of the Greek islands seeking asylum and it is known that they have family members in another EU country, few of us here would argue against the notion that the child should be reunited with their family and the claim considered in that member state.
In January this year, Parliament passed section 37 of the European Union (Withdrawal Agreement) Act 2020, which regrettably abolished the previous requirement on the Government to seek to negotiate an alternative to replace the family reunion provisions in the EU’s Dublin regulation. At the time, the Government were full of assurances that this did not represent a downgrading of their ambitions and said that they would protect family reunion for unaccompanied children in the Brexit negotiations, but in its current form, the UK’s proposal to the EU rows back on those assurances and would leave hundreds of children stranded.
There are numerous problems with what the Government propose. Most fundamentally, the proposed text removes all mandatory requirements on the Government to facilitate family reunions and would make a child’s right to join their relatives entirely discretionary. The text also intentionally avoids providing rights to children. It does not provide for appeals and attempts to put these issues beyond the reach of UK courts. Other categories of vulnerable refugees, including accompanied children and adults, would lose access to family reunion altogether. A series of other key safeguards are removed, including strict deadlines for responses and the responsibility for gathering information being on the state rather than the child.
This issue is hugely important. Between 2009 and 2014, before mandatory provisions were introduced by Dublin III, family reunions to the UK were carried out at an average rate of 11 people annually. Between 2016 and 2018, after the mandatory provisions were introduced by Dublin III, family reunions to the UK were carried out at an average rate of 547 people annually. The Government were not straight with Parliament when they proposed clause 37 of the withdrawal Bill earlier this year, and I think they have behaved in a rather upsetting manner, if I can put it like that.
We now have a situation where there are unaccompanied child refugees and refugees more generally living in appalling conditions in Greece and France. Of course those countries are under an obligation to do more to support and assist them, but many of those kids have family here, and I cannot see how any reasonable person can argue against the logic, the sense and the simple compassionate idea that that child should be reunited with their family in this country and have their asylum claim decided here.
The Government should stop messing about, stop trying to water down their previous commitments and revert to the obligation that Parliament previously placed upon it, which is to negotiate a full and proper replacement of the Dublin regulations, including an obligation to allow children to be reunited with their families in the United Kingdom.
Holly Lynch
It is a pleasure to follow the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, the SNP spokesperson, who used his experience to make a very convincing contribution.
Labour will support new clause 46, which was tabled by the Chair of the Home Affairs Committee with the support of a number of its members, as well as the Chairs of the Joint Committee on Human Rights and the Housing, Communities and Local Government Committee.
As we have heard, as a member of the EU, the UK has participated in the Dublin III regulation, which has allowed people seeking asylum in Europe to be transferred to the UK on the basis of family unity and to have their asylum claims considered in the UK. The Dublin III mechanism generally affects a small number of children, but it has a transformative effect on their lives. It has become an increasingly important family reunion route, with more than 1,600 people having been reunited through it since the start of 2018.
However, this route will end once the transition period comes to an end on 31 December 2020. While the Government have committed to seeking an arrangement through the UK-EU negotiations that would maintain a family reunion element of the Dublin system for separated children, we would very much like assurances that the Government are firmly committed to this.
We are concerned that, unlike Dublin III, the current proposals would not be mandatory and would take us back to the days when child refugees were reunited with family only at the discretion of the national Government. That would require the transferred person to make an asylum claim and only secure family unity pending a decision on that claim. Labour, along with the Families Together coalition, supports new clause 46. We want to see a system that retains the family reunion route under the Dublin III regulation for all families.
This is Refugee Week, and family reunion has been a long-standing feature of the UK’s immigration system. The United Nations High Commissioner for Refugees has said that
“there is a direct link between family reunification, mental health and successful integration.”
By diminishing children’s chances of reaching their relatives legally, restrictive rules sadly only drive people to take more and more perilous alternatives, putting lives at risk and empowering people smugglers.
Labour joins Safe Passage, Amnesty International, the British Red Cross, Oxfam, the Refugee Council, the UNHCR and so many others who make up the Families Together coalition to urge the Government to prioritise family reunion, so that children, spouses and vulnerable adults can reunite with their family and close relatives, by maintaining safe and legal routes for people to come to the UK.
At a time when we are all feeling the effects of separation from our families due to the pandemic, the Government must recognise the need to protect all child refugees adequately and provide a legal and safe means for the reunification of families.
Dame Diana Johnson
In speaking to new clause 46, I want to be clear that this is not about placing additional burdens on the Home Office or Government; it is about asking the Government not to water down their obligations to child refugees, but instead to carry on doing what they already do.
As we have heard, new clause 46 is intended to ensure that the safe and legal routes to the UK for refugees with relatives here and for unaccompanied children without family are protected in domestic legislation. I gently say to the Minister that he may well talk about the Dubs scheme—I know that all the places on the Dubs scheme have been filled—but I do not think that that discharges us of our moral duty to help children on the continent.
Indeed, Lord Dubs says that some of the conditions that he has seen in camps in Europe are worse than those in the region, because of the utter lack of hope of those living in those camps. We can give them hope by adopting the new clause and showing that we are not turning our back on child refugees just a few hundred miles away. In all his campaigning on these issues, Lord Dubs has always maintained that he believes that public opinion is behind him when it comes to child refugees. It is heartening to know that recent Ipsos MORI polling suggests Lord Dubs is entirely right in his assessment of British feeling on this. Some 79% of people polled said that children should be able to reunite with parents, and over half said children should be able to reunite with siblings, grandparents, aunts and uncles. The British public supports refugee family reunion and I hope the Minister will do the same.
Kevin Foster
The Government are committed to the principle of family reunion and supporting vulnerable children. We recognise that families can become separated because of the nature of conflicts and persecution, and the speed and manner in which people are often forced to flee their country.
We will continue to provide safe and legal routes for families to reunite in the UK. We have a proud record of providing protection to those who need it, including children, and of reuniting families under the existing immigration rules. The new clause fails to take into account our negotiations with the EU, which I will come to later.
The UK continues to be one of the world’s leading refugee resettlement states. We resettle more refugees than any other country in Europe and are in the top five countries worldwide. Since September 2015, we have resettled more than 25,000 vulnerable refugees in need of protection through our refugee resettlement schemes, with around half being children. We can be proud as a country of our ambitious commitments and achievements. The Government are delighted that their overall approach was endorsed in the general election in December by the British public.
Furthermore, the UK already has a wide range of provisions in existing immigration rules that allow UK-based family members to sponsor children and other relatives to enter the UK for family reunion purposes. Those rules apply to a sponsor who is a refugee, a settled person or a British citizen. All those rules are unaffected by the UK leaving the EU and they will continue to be available after the transition period ends.
Our refugee family reunion policy is intended to allow those granted refugee status or humanitarian protection in the UK to sponsor pre-flight, immediate family members to join them here. Where appropriate, our policy includes scope to allow other family members to reunite with refugees in the UK. This may be on an exceptional basis or simply under a different route.
The new clause fails to distinguish between the very different circumstances of sponsors who are refugees and those who are asylum seekers—those seeking refugee status. It is important that the sponsor already has refugee or humanitarian leave in the UK before they are able to sponsor family members to join them. Allowing individuals to sponsor family members to join them in the UK before a decision on their asylum claim is made creates greater uncertainty for families, who may be unable to remain in the UK.
Very careful consideration is required before we extend family reunion provisions, to guard against significantly increasing the number of people who could qualify for family reunion, but who do not necessarily need protection themselves and who may be making unfounded claims of our protection systems for economic migration purposes. That could reduce our capacity to assist the most vulnerable refugees.
In the year ending March 2020, over 7,400 refugee family reunion visas were issued to partners and children of those previously granted asylum or humanitarian protection in the UK, which—hon. Members may be interested to know—is 37% more than in the previous year. There are further provisions in the immigration rules that allow those with refugee leave or humanitarian protection to sponsor adult dependant relatives living overseas to join them. This is where, as a result of age, illness or disability, a person requires long-term personal care, which can only be provided by their relative in the UK, without recourse to public funds. The same approach is applied to British citizens who wish to sponsor such relatives.
Furthermore, under part 8 of the immigration rules, children with relatives in the UK with refugee status or humanitarian protection are able to apply to join them in the UK, where there are serious and compelling family or other considerations that make exclusion of the child undesirable and where suitable arrangements have been made for the child’s care. In addition, appendix FM of the immigration rules already provides routes for British and settled sponsors, and those with protection-based leave, to sponsor family members to join them in the UK. We are aware that financial and other requirements are in place in those rules, which have been upheld as lawful by the Supreme Court. It is appropriate that all those who seek to sponsor a family member under these routes can meet a consistent set of requirements.
The new clause proposed by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East is based on the Dublin regulation, which is an EU provision. The UK is no longer an EU member state. As a sovereign country, we already have our own routes for adults and families to be reunited in the UK, which are substantial, as I have just set out. As a sovereign state, it is important that we do not seek to recreate EU laws unilaterally, without considering what we want the UK’s migration and humanitarian protection system to look like. Importantly, we have been very clear that, while we are no longer in the EU, the UK and the EU have a long history of working together and we have recognised that it is in our best interests to continue to do so. That is why we are pursuing, through formal negotiations, new reciprocal arrangements with the EU for the family reunion of unaccompanied asylum-seeking children in either the UK or the EU with specified family members in the EU or the UK, where it is in the child’s best interests.
We published our draft legal text as a constructive contribution to the negotiations. A negotiated agreement for a state-to-state referral and transfer system would provide clear and consistent processes between the UK and EU member states, ensuring appropriate support for the child and guaranteeing reciprocity, yet these guarantees cannot be provided for in domestic UK provisions alone because they are inherently reciprocal. In addition, subsection (2)(a) of the new clause would require immigration rules to be made by regulations. That is not how immigration rules are made; they are made under the procedures set out in the Immigration Act 1971.
Finally, the new clause would require the Government to lay before Parliament a strategy on the relocation of unaccompanied children. The scope of this strategy is ambiguous. It is unclear whether it relates only to family reunion or whether it covers asylum-seeking children. The explanatory note accompanying the new clause suggests that it is solely about family reunion, but that is not reflected in the drafting. Therefore, for the reasons that I have outlined, the Government are not able to accept the new clause.
Stuart C. McDonald
I am grateful to the Minister for his response. I welcome the fact that the Government are committed to the principle of family unity. Indeed, the Minister was right to point out some of the good work that has been done in recent years, particularly in terms of resettlement. Currently, some of that tends to be forced upon the Home Office, rather than being designed and promoted within it, but nevertheless it is welcome and that has been a success.
In other senses, I fundamentally disagree with the Minister. He cited some rules that had been deemed lawful by the Supreme Court. That is not exactly a ringing endorsement, but, nevertheless, it is clear that some of the rules he was referring to and the financial requirements are absolutely impossible—so impossible that the rules are almost worthless.
The SNP wants the UK to go further on family unity. My hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) had the endorsement of Parliament to expand the family reunion rules and, of course, the Government managed to use the system to ignore that vote. Given what we have heard today and in previous weeks, including the publication of that text, I fear that we are in danger of going backwards, and not just in terms of Dublin. We urgently need to hear what the future of resettlement will be, so we will be watching carefully.
In the meantime, Mr Stringer, we will revisit this matter on Report. Meanwhile, I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 51
Immigration Detention: Removal from Association
“(1) Section 153 of the Immigration and Asylum Act 1999 is amended as follows.
(2) After subsection (2) insert—
‘(3) Rules made under this section must prohibit the involuntary removal from association of any affected person detained in a removal centre save for where that is—
(i) reasonably necessary to protect that person or another person from immediate harm; and
(ii) for no longer than is necessary for this purpose and for no longer than maximum 24 hours.
(4) For the purposes of this section—
“affected person” means any person whose rights are affected by repeal of legislation by or under Schedule 1 of the Immigration and Social Security Co-ordination Act 2020 or by regulations made under section 4 of that Act.
“removal from association” means any restriction on a person associating with others that is not common to all persons then detained at the same removal centre.’” .—(Stuart C. McDonald.)
This new clause seeks to prohibit removal from association with others in detention save for removal where that is necessary.
Brought up, and read the First time.
Stuart C. McDonald
I beg to move, That the clause be read a Second time.
I had originally anticipated that this would be part of a much wider debate on immigration detention, but it looks like we will be having that on Report instead of in Committee. I am grateful to Medical Justice for flagging up the continued use of segregation in immigration removal centres, which we believe risks causing severe and permanent damage to detainees. In the past decade, at least two deaths in IRCs have been directly linked to the use of segregation. Segregation has played a role in four High Court cases in which a detainee’s detention or conditions of detention were found to amount to inhuman and degrading treatment in breach of article 3 of the European convention on human rights. Countless more detainees have suffered the negative impacts of segregation on their mental and physical health.
What we are really talking about is the practice of keeping a detainee separate from the rest of the IRC population. It is usually done by placing the detainee in a special unit at the centre, either alone or with other detainees being held under similar conditions. Segregated detainees can be locked in their cells for up to 23 hours a day, with severe restrictions placed on their activities and interactions with others.
In short, segregation is one of the most severe and draconian measures used in any detainment setting. Detainees can be held for an initial period of 24 hours, but that can be extended to seven days and 14 days with the authorisation of the Secretary of State. It can then be subsequently renewed, if required.
The effects of segregation on physical and mental health can be devastating. It has been found to lead to increased rates of anxiety, social withdrawal, hallucinations and suicidal thoughts. Even after relatively short periods of time, the damage done to a person’s health can be long-lasting and in some cases permanent. Research has shown that segregation can have a negative effect on the health of anyone who experiences it, and the risk for those with pre-existing mental health conditions or other vulnerabilities is particularly high. People who have been held in similar conditions in the past as part of torture, for example, may find the experience extremely re-traumatising.
The stated justification for the use of segregation in IRCs is the interests of safety and security or for refractory or violent detainees. However, a report from Medical Justice in 2015 showed that segregation is being used as a form of punishment and to house individuals with mental health issues that cannot be adequately managed in detention, including to manage detainees at risk of self-harm.
Inspection reports from independent monitoring boards and Her Majesty’s inspectorate of prisons continue to raise concerns about the use of segregation in IRCs. Examples of such practices include detainees inappropriately segregated for months and years, with one detainee being segregated more or less continuously for 22 months. Another detainee was only transferred to psychiatric hospital following 80 days in segregation, and yet another was segregated more than eight times during her 800 days in detention. The issues are ongoing. Segregation is not helping people, but is, on the contrary, making things much worse.
The key point is the availability of segregation, which perpetuates the inappropriate detention of those who often end up subject to it. It allows for problem individuals or vulnerable individuals who cannot be managed in detention to nevertheless still be detained. Despite their detention being inappropriate, the Home Office knows that there is always a possibility of placing them in segregation, should their condition deteriorate or their behaviour grow increasingly difficult to manage. Once these vulnerable detainees end up being segregated, they are housed in an environment that is totally unsuited to their needs. They are placed in forced isolation, removing them from the support of their peers, as well as limiting their visibility and access to organisations that could provide help.
If the use of segregation was not an option, proper attention would need to be paid to whether it was appropriate for the individual to be in detention at all, whether they can be managed safely in an IRC or whether an alternative approach should be sought with more appropriate support in the community. That is why the safeguards and protections in place under rule 40 and rule 42 can never be adequate. We need to abolish the practice altogether.
The new clause would still allow and make provision for crisis intervention where there is an imminent risk of harm to the individual or other individuals in the IRC, but that should be the purpose of those interventions, and that should be it. Too often, that intervention is being used and abused by the Home Office. People who belong either in police custody if they have breached the criminal law, or in a mental health institution should not be detained in IRCs in inappropriate conditions for days on end. I hope the Minister will address those points and seriously look at the issue I have flagged up, because the situation cannot be allowed to continue.
Kevin Foster
I thank the hon. Member for the opportunity to debate this topic. As he will be aware, in recent years the numbers in detention overall, excluding the current period, have been declining, but a process obviously still needs to be in place to manage the detentions, the detention centres and the detention estate, as we still have it.
Stuart C. McDonald
I am grateful to the Minister for his explanation of what should happen, but I suspect that the theory of the rules does not match the practice. The view of Medical Justice is that what the Minister has just described does not reflect what is actually happening in detention centres. I am sure this is something that we will revisit, but in the meantime I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 53
Private life
‘(1) This section applies when a court or tribunal is required to determine whether a decision made under the Immigration Acts in respect of a relevant person—
(a) breaches a person’s right to respect for private and family life under Article 8; and
(b) as a result would be unlawful under section 6 of the Human Rights Act 1998.
(2) In subsection (1) a “relevant person” is any person who, immediately before the commencement of Schedule 1, was—
(a) residing in the United Kingdom in accordance with the Immigration (European Economic Area) Regulations 2016;
(b) residing in the United Kingdom in accordance with a right conferred by or under any of the other amendments which is repealed by Schedule 1; or
(a) otherwise residing in the United Kingdom in accordance with any right derived from European Union law which continues, or immediately before the commencement of Schedule 1 continued, by virtue of section 4 of the European Union (Withdrawal) Act 2018 to be recognised and available in the United Kingdom.
(3) In a case to which this section applies, section 117C of the Nationality, Immigration and Asylum Act 2002 shall be read subject to the following modifications.
(4) Section 117C(5) shall be read as if the words “and the effect of C’s deportation on the partner or child would be unduly harsh” were replaced with “and either
(a) the effect of C’s deportation on the partner would be unduly harsh; or
(b) it would be unreasonable for the child to leave the UK or to remain in the UK without C.”
(5) Section 117C(6) shall be read as if—
(a) the word “(“C”)” were inserted after “foreign criminal”; and
(b) the words “there are very compelling circumstances, over and above those described in Exceptions 1 and 2” were replaced with “either
(c) C has a genuine and subsisting parental relationship with a qualifying child and it would be unreasonable for the child to leave the UK or to remain in the UK without C; or there are very compelling circumstances, over and above those described in Exceptions 1 and 2.’—(Stuart C. McDonald.)
This new clause modifies the threshold for deportation of EEA nationals and family members who are parents of “qualifying children” – children who are British or have lived in the UK for 7 years or more.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss
New clause 54—Family life—
‘(1) This section applies when a court or tribunal is required to determine whether a decision made under the Immigration Acts in respect of a relevant person—
(a) breaches a person’s right to respect for private and family life under Article 8, and
(b) as a result would be unlawful under section 6 of the Human Rights Act 1998.
(2) In subsection (1) a “relevant person” is any person who, immediately before the commencement of Schedule 1, was—
(a) residing in the United Kingdom in accordance with the Immigration (European Economic Area) Regulations 2016;
(b) residing in the United Kingdom in accordance with a right conferred by or under any of the other amendments which is repealed by Schedule 1; or
(c) otherwise residing in the United Kingdom in accordance with any right derived from European Union law which continues, or immediately before the commencement of Schedule 1 continued, by virtue of section 4 of the European Union (Withdrawal) Act 2018 to be recognised and available in the United Kingdom.
(3) In a case to which this section applies, section 117C of the Nationality, Immigration and Asylum Act 2002 shall be read subject to the following modifications.
(4) Subsection (4)(a) shall be read as if the words “C has been lawfully resident in the United Kingdom for most of C’s life” were omitted and replaced with “one of criteria (a) to (c) in subsection (4A) is satisfied”.
(5) Section 117C shall be read as if after subsection (4) there were inserted the following words—
“(4A) The criteria in this subsection are—
(a) that C has been lawfully resident in the United Kingdom for most of C’s life,
(b) that C was born in the UK, or
(c) that C arrived in the UK aged under 18 and has lived in the United Kingdom for a continuous period of seven years or more.
(4B) If the criterion in subsection (4A)(b) or the criterion in subsection (4A)(c) is satisfied, it shall be presumed that C is socially and culturally integrated in the UK for the purposes of subsection (4)(b).
(4C) A presumption under subsection (4B) is rebuttable.’
This new clause modifies the criteria for the deportation of third country nationals with very significant connections to the UK who are impacted by this Act.
Stuart C. McDonald
I am optimistically—and perhaps naively—attempting to spark a sensible, measured and constructive debate on laws relating to deportation, and the balance and interaction with family and private life. It is my fault, but I think the headings on the new clauses should probably be the other way around. The one relating to family is more closely linked to private life and vice versa.
Of course, there are people who commit serious crimes and have no connection with the UK, and they must be deported without any real hesitation. However, there are also many other cases where the impact of any such decision has such serious consequences—not just for the individual, but for the family member—that deportation is not appropriate in the minds of most reasonable people. Once a person has completed the punishment provided for by our criminal laws, they resume their life in this country.
There is also a second category of case, where to all intents and purposes the Home Office is not deporting foreign national offenders. In reality, it is deporting British people—people who have lived pretty much all their lives here and have no connection with the place to which they are being deported, other than the passports that they have never used or used only once when they were toddlers. From time to time, we need to be brave enough to confront the question of where we draw the line. I make the case that the line has been drawn in the wrong place, and that powers of deportation are now used too often and in inappropriate circumstances. That is a challenge to MPs on both sides of the House, because much of our deportation legislation has been in place under Labour Administrations as well as Conservative Administrations.
I turn first to new clause 53, where other family members are affected. As hon. Members will be aware, those from EEA countries and Swiss nationals and their family members cannot generally be deported, except on grounds of public policy, public security and public health, and where their conduct poses a genuine, present and sufficiently serious threat to one of the fundamental interests of our society—a forward-looking assessment that allows for consideration of competing family life considerations. By contrast, people from outside the EEA are subject to automatic deportation if sentenced to imprisonment of 12 months or more. No consideration is given to whether a person continues to pose a risk, and those sentenced to less than 12 months can also be deported if the Secretary of State believes it to be conducive to the public good.
Consideration of matters relating to family has been seriously restricted. There are only two very narrow circumstances in which issues of family will trump deportation. A person must show that they have either a genuine and subsisting relationship with a qualifying partner, or a genuine and subsisting parental relationship with a qualifying child, and they must show that the experience of deportation for the partner or child would be unduly harsh. The test is even higher where there has been a sentence of four years or more, but where very compelling circumstances must be shown.
The new clause concerns children, and we argue that the test set out just now is unduly restrictive and not in the best interests of children. Instead of requiring unduly harsh circumstances, the new clause would stop deportation where it would be unreasonable for a child to leave the UK or to remain in the UK without the parent. It is important to appreciate just how demanding the current test is. Home Office policy states that the words “unduly harsh” must be given their ordinary meanings. It notes that the Oxford English Dictionary defines “unduly” as “excessively”, and “harsh” as “severe” or “cruel”. In short, Parliament has put in place a regime that allows for child cruelty; only where that child cruelty becomes excessive do we think again.
It is little wonder that judges have sometimes expressed great sympathy with appellants and surprise at the effect of the legislation that this place has enacted, but their hands are tied. As Lord Justice Baker remarked in the case of KF Nigeria:
“For those lawyers, like my Lord and myself, who have spent many years practising in the family jurisdiction, this is not a comfortable interpretation to apply. But that is what Parliament has decided.”
Two tribunals had found that KF should not be deported because of the significant impact it would have on his son, despite a three-year sentence for burglary and robbery. Being a parent does not exempt someone from facing the criminal justice system if they break the law, but deportation goes further; it can effectively and summarily end a child’s family life for at least the duration of their childhood. There are well-documented long-term negative impacts on a child’s upbringing, education and social behaviour, with repercussions for their communities. There are also, of course, implications for a partner left behind in the United Kingdom, who is now responsible for bringing up the child alone.
I am not submitting that parents can never be deported; I am submitting that we need to be much more careful and sensitive about the circumstances in which it happens. This is not about people escaping justice, because they will still face the criminal justice system; it is about protecting innocent children. Deportations would still be possible, even where a child was involved, but only where a court assesses that it would be reasonable for the child to leave the UK along with the parent, or for the child to remain in the UK without the parent.
I turn to new clause 54, which challenges the Government on the criteria used to decide on the deportation of people who have significant connections with the United Kingdom. The issue was summarised by the former prisons and probation ombudsman, Stephen Shaw, in his 2018 review of treatment of vulnerable adults in immigration detention, which was commissioned by the then Home Secretary, the right hon. Member for Maidenhead (Mrs May). He reported that, time and again, those he met who were being held under immigration powers after serving custodial sentences were long-term British residents who had often been brought to the UK as young children and who were, to all intents and purposes, British.
To quote Stephen Shaw’s review:
“I find the policy of removing individuals brought up here from infancy to be deeply troubling. For low-risk offenders, it seems entirely disproportionate to tear them away from their lives, families and friends in the UK, and send them to countries where they may not speak the language or have any ties. For those who have committed serious crimes, there is also a further question of whether it is right to send high-risk offenders to another country when their offending follows an upbringing in the UK.”
It bears remembering that some of those individuals would have been entitled to British citizenship had they been aware, or not been priced out of it by the Home Office, to reference my earlier amendment on that subject.
I agree absolutely with Stephen Shaw, and I have personal experience of representing, very occasionally, clients who faced deportation. I remember in particular one Glaswegian lad—and he was Glaswegian—who was 18 years old and had been in this country since the age of four. He had been essentially abandoned, and passed from pillar to post around the care system. Persistent fairly low-level offending resulted in custody. In those circumstances, it was outrageous to deport him.
Some of the people on the charter flights to Jamaica in February 2020 were in that cohort, including young men whose offending involved belonging to county lines operations, which we all know are closely associated with coercion and modern-day slavery. Some were deported for offences committed a long time ago, with no account taken of rehabilitation.
A terrible example of that type of case is the ongoing saga of Osime Brown, a 21- year-old who is severely autistic. He arrived in the UK at the age of four from a country to which the Home Office now wants to deport him. I urge Members to have a look online at the facts and circumstances of the case and to say, hand on heart, that they have no problem with what the Home Office is up to.
The new clause changes the exceptions so that greater consideration is given to people established here at a young age and the reality that they are usually, to all intents and purposes, British, even if they do not hold that passport. It adds exceptions for people who were born in the UK, or who arrived in the UK under the age of 18 and have lived here for seven years or more. It also establishes a presumption that if a person was born in the UK, or arrived in the UK aged under 18 and has lived in the UK for a continuous period of seven years or more, they are considered socially and culturally integrated into the UK—albeit that that presumption would be rebuttable. The person would still have to show that there are very significant obstacles to reintegration.
The 33rd recommendation of Stephen Shaw’s review was:
“The Home Office should no longer routinely seek to remove those who were born in the UK or have been brought up here from an early age.”
Instead of commissioning reviews, it is time for the Government to start implementing the reviews that they have already heard from. For those reasons, I urge the Committee to look favourably on the new clauses.
Kevin Foster
The new clauses concern the principles that a court or tribunal is required to take into account when assessing what is in the public interest for the purposes of determining whether a foreign national offender’s deportation breaches article 8 of the European convention on human rights. The article 8 ECHR right to respect for private and family life is a qualified right, which can be circumcised—[Interruption.] I will have to ensure I write that one out again next time. It can be circumscribed where lawful, necessary and proportionate, in the interest of a number of factors including national security, public safety, the prevention of disorder or crime, and the protection of the rights and freedoms of others.
Section 117C of the Nationality, Immigration and Asylum Act 2002 provides that, when assessing whether deportation breaches article 8 of the ECHR, the deportation of a foreign national offender is in the public interest unless certain exceptions apply. The new clauses seek to alter those exceptions and therefore undermine Parliament’s clear position on what the public interest requires in such cases.
New clause 53 would amend the exception at section 117C regarding foreign national offenders who have been sentenced to less than four years’ imprisonment, and who have a genuine and subsisting relationship with a qualifying partner or child, meaning that deportation would not be in the public interest if it would be unreasonable for the child to leave the UK, or to remain in the UK without the foreign national offender. That would be in addition to the existing exception that applies when the effect of the deportation on the partner or child would be unduly harsh.
Stuart C. McDonald
I am grateful to the Minister for his response. We need to look at this issue much more closely, as we have only skimmed over the issues today. The Government must start collating data on the number of kids who end up being separated from a parent because of deportation, including a number of British citizens. We will ask questions and revisit the issue, but for now I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Stuart C. McDonald
I would like to speak to new clause 55, Mr Stringer. I did not speak to it because new clause 47, with which it is grouped, was not moved.
The Chair
Sorry. My script is completely wrong. I call the hon. Member to move new clause 55.
New Clause 55
Hostile environment
“(1) For the purpose of this section, a person (“P”) is defined as any person who, immediately before the commencement of Schedule 1, was—
(a) residing in the United Kingdom in accordance with the Immigration (European Economic Area) Regulations 2016;
(b) residing in the United Kingdom in accordance with a right conferred by or under any of the other instruments which is repealed by Schedule 1; or
(c) otherwise residing in the United Kingdom in accordance with any right derived from European Union law which continues, by virtue of section 4 of the EU Withdrawal Act 2018, to be recognised and available in domestic law after exit day.
(2) Regulations under section 4(1) may not be made until the Government has brought forward legislative measures to ensure that hostile environment measures do not apply to P, specifically—
(a) sections 20-43 and 46-47 of the Immigration Act 2014;
(b) sections 34-45 of the Immigration Act 2016; and
(c) schedule 2, paragraph 4 of the Data Protection Act 2018.” —(Stuart C. McDonald.)
This new clause seeks to limit the application of the hostile environment.
Brought up, and read the First time.
Stuart C. McDonald
I beg to move, That the clause be read a Second time.
It used to be that the Home Office enforced immigration rules by good old-fashioned intelligence-led investigation and action, but under political pressure and the influence of austerity, increasingly the Home Office has decided to rely on essentially outsourced immigration control, hoping that if they made life tougher for unauthorised migrants, they would leave of their own accord. This is of course the hostile environment, and it has been ramped extensively in the last two Immigration Acts, such that little landladies and landlords, as well as bank staff and Driver and Vehicle Licensing Agency workers, all have to work as immigration officers now. All sorts of Government Departments are tasked with helping the Home Office with its work by sharing information, which makes people wary of accessing public services.
When these measures were introduced, Opposition MPs warned that there would be all sorts of negative consequences and that errors would be made, meaning that people would be denied housing or would have their bank accounts closed when they should not have been. We warned that there was little to suggest that attempts at enforcing destitution and desperation would persuade people to leave, that its impact would lead to all sorts of injustices, and that it could actually make immigration enforcement harder, not easier, as undocumented migrants are forced into the hands of unscrupulous landlords and employers and made ever more difficult to trace.
Four and six years on from the relevant Immigration Acts, the Bill would see that same hostile environment impacting on many more people. We should not allow that to happen without first assessing whether the Government have achieved what they set out to achieve with the hostile environment measures, or whether the warnings from Opposition MPs have been proven correct. Has the hostile environment achieved anything, or has it caused relentless problems, as was forecast?
It appears that the Home Office cannot tell us what the impact of the hostile environment has been in contributing to its policy goals. As the National Audit Office said only yesterday, it is currently unable to assess whether these measures have had any meaningful impact on the likelihood that an individual will leave the UK voluntarily. In fact, the number of voluntary departures has reduced significantly since 2015—in 2015 there were an average of 1,200 such voluntary departures each month, and by 2019 that was down to 460.
That echoes previous findings by the chief inspector of borders and immigration in relation to the right to rent, which is probably the most dangerous of the hostile measures, in that it leaves private citizens with the job of doing immigration checks. He concluded that the scheme had yet to demonstrate its worth as a tool for encouraging immigration compliance, with the Home Office failing to co-ordinate, maximise or even measure effectively its use, while doing little to address stakeholder concerns.
I want to emphasise those concerns. Time and again, the Home Office has been warned about the discrimination in the housing market caused by the right to rent scheme. These warnings came from the Joint Council for the Welfare of Immigrants and from the Residential Landlords Association. It is not difficult to understand how this comes about. Let us imagine a close relative who happens to let properties. How easy would it be for them to assess immigration status? How easy would it be for them not to be influenced by the fact that if they made a mistake in that assessment they would face criminal prosecution, a fine and even imprisonment? It is blindingly obvious that there is a huge danger of discrimination. Repeated surveys and assessment by organisations such as JCWI and the Residential Landlords Association have shown that to be the case.
We now have a court case proceeding to the Supreme Court. Both in the High Court and in the Court of Appeal, the finding of fact was made that this scheme has in fact resulted in discrimination. The Home Office had success at the Court of Appeal stage, on the basis that on paper and in theory the scheme could be operated in a way that did not lead to discrimination, but that is not anything to celebrate. The scheme has been ruled lawful, but it has been found to operate in a discriminatory way.
This is a time when we really must have a thoughtful and comprehensive analysis of what has happened to immigration policy and the functioning of the hostile environment. That is exactly what Wendy Williams suggested in her Windrush lessons learned review, yet today we have been asked to extend the scope of that hostile environment without such a review taking place, and without any evidence being provided by the Home Office that the scheme is having an impact or contributing towards any of its policy goals.
Right to rent is the most scandalous of these problems, but it is causing all sorts of problems in other areas as well. For example, the independent chief inspector of borders and immigration found that something like 10% of the bank accounts that have been closed as part of the scheme related to people who had every right to be here. That is a huge number of people who have been caused problems by this way of doing things, and they are not only migrants; of course, several million UK citizens do not have a passport and therefore struggle sometimes to prove their right to access services and housing, and to go about their lawful business.
We need to know from the Minister what work is being done to assess the impact of the hostile environment. Rather than celebrating the finding that, in theory, the right to rent scheme could operate without discrimination, what work has been done to make sure that it operates without discrimination? If no such work has been done, or if it cannot be guaranteed that the scheme will operate without discrimination, when will it be repealed?
Holly Lynch
I support new clause 55 and I would have supported new clause 47 had it been moved. Both new clauses seek to safeguard EEA and Swiss nationals from the reality of the Home Office’s hostile environment policy.
We have cited examples of potential problems relating to the hostile environment throughout the sittings of this Bill Committee, but the Windrush lessons learned review highlighted the structural flaws that permeate the hostile environment approach. Instead of increasing the effectiveness of the Home Office machine, that approach has instead led to the hounding of those unable to prove their status, while simultaneously disregarding the legitimacy of independent cases.
Throughout the sittings of this Committee, we have been at pains to articulate our concerns that unless the European Union settlement scheme is 100% successful, we will never be in a position to know whether it has been or not. People will suddenly find themselves subject to the hostile environment.
Of the Windrush generation, it has been said:
“Paulette Wilson was detained in an immigration removal centre and warned that she faced removal after living in the UK for 50 years. She spent decades contributing to the UK—working for a time in this very House—yet she was treated like a second-class citizen.
Junior Green had been in the UK for more than 60 years, raising children and grandchildren here, but after a holiday to Jamaica he was refused re-entry despite holding a passport confirming his right to be in the UK. The injustice he suffered was compounded when, because of this action, he missed his mother’s funeral.
Lives were ruined and families were torn apart.”—[Official Report, 19 March 2020; Vol. 673, c. 1154.]
Those words, setting out those examples, are an extract from the Home Secretary’s statement to the House on presenting the Williams review in March. Yet we are still waiting for the necessary structural reforms to be made at the Home Office to give us any confidence that those who missed the EUSS deadline, because of reasons that should be looked upon favourably, will not be refused by one of the same decision makers who made misguided judgment calls on Windrush cases in the pursuit of Home Office targets.
In trying to mitigate the impact of the Windrush scandal, the Government launched a number of initiatives to go into communities and undertake almost a tidying-up exercise, to ensure that people had the paperwork they needed to protect them from such encounters with the Home Office in future. The Commonwealth citizens taskforce and the vulnerable persons team have delivered that work in communities, but we know that comparable preventive initiatives seeking to support those most at risk of not applying to the EUSS on time have had to stop work, due to the coronavirus. I hope the Minister might be able to update us on how those activities will be super-charged to make up for lost time, once it is safe for them to continue.
Kevin Foster
I would like to start by reassuring Opposition Members. We are making plans for what will be a major restart of engagement and promotion of the European settlement scheme in a face-to-face way. Work is still being done online. The latest statistics have been published and we always use those as an opportunity to promote the scheme and make it clear to people what their entitlement is. We still have a good flow of applications coming in even during the lockdown, which partly reflects the fact that the vast majority of people are applying by using an app on their phones. So strong work is being done there.
On the list of reasons for late applications being accepted, as I said on Tuesday it will be a non-exhaustive list because, as the hon. Member for Halifax rightly says, we cannot predict every single circumstance that would be a reasonable reason for being late. A common reason would be a child in care where the council did not apply, but the list will be non-exhaustive because no one could write all the reasons that we as individuals might find reasonable. So far, the scheme has operated by being flexible and pragmatic in working with those applying. That is why the grants of status are in the millions and the refusals in the hundreds.
I am grateful to hon. Members for their contributions. I share their desire to ensure that EEA citizens and their family members who are currently in the UK lawfully are not denied access to work, healthcare or anything to which they are currently entitled.
Gary Sambrook (Birmingham, Northfield) (Con)
Does the Minister share my frustration when Opposition Members talk about the hostile environment? It was in fact a former Labour Immigration Minister, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), who, in May 2007, introduced the new immigration regulations that created a hostile environment in this country.
Kevin Foster
I thank my hon. Friend for highlighting that point. Many of the enforcement mechanisms that we use originate from before 2010. There is a little amnesia among some of the people who were here and voted for them. It is right that there are protections in place around public welfare benefits and suchlike. That has not been particularly controversial for parties of all colours over the past 10 to 20 years. We need to consider carefully the lessons learned review. In the Wendy Williams report there is a 2009 case of someone who was unable to return to the United Kingdom, even though they had a status granted under the Immigration Act 1971 as someone who had been settled in the UK before 1 January 1973.
As with many of the amendments that we have debated, the new clause is at odds with our commitment to the British people to introduce a single global migration system. New clause 55 is unnecessary, unworkable, and risks being detrimental to the cohort in question. As we have been clear before, free movement is ending, and from 1 January 2021 EEA and non-EEA citizens will be treated equally. Under the new system, everyone will be required to obtain the correct immigration status, and we will clearly distinguish between those who are here lawfully and those who are not, regardless of their nationality. Allowing EEA citizens to rent accommodation or exempting them from other measures, even if they do not have lawful immigration status, would contradict the Government’s stated position. It would in practice result in different rules applying, depending on a person’s nationality. This would be inherently discriminatory, given that there would be no justifiable reason for them after the end of the transition period.
New clause 55 would also weaken the UK’s new points-based immigration system. The measures in question are designed to encourage individuals to comply with UK laws and rules, and they have all been approved by Parliament. In the future, once free movement has ended, it is right that these measures will apply on the basis of whether or not someone has lawful status, rather than on the basis of their nationality, although I appreciate that the wording would probably be done to bring this within the scope of the Bill.
EEA citizens are already subject to the universal eligibility checks carried out by employers, landlords and the NHS, as these checks apply to everyone regardless of nationality, including British citizens. I had to show my own passport recently, when renting a flat. Disapplying the measures for a certain group would increase the scope for illegal migration and place taxpayer-funded services at risk of abuse.
It is not clear how new clause 55 would actually work. To exempt an EEA citizen from an eligibility check, it would first be necessary to establish that they are part of the exempt cohort. It would not be possible for those carrying out the checks, including employers and landlords, to do this without checking everyone, as they do now, to establish eligibility. Alternatively, they would have to second-guess who was in a particular cohort, which brings the obvious risks of leading to potential discrimination and unfair treatment.
I recognise that the hon. Members for Cumbernauld, Kilsyth and Kirkintilloch East and for Halifax wish to ensure that EEA citizens and their family members who are currently resident in the UK are not adversely impacted by such measures. This is why we have set up the EU settlement scheme, making it free and easy to get UK immigration status and to enjoy the same rights as now. That is why I believe it would be unhelpful to accept the new clause, and the Government will not do so.
Stuart C. McDonald
I am grateful to the Minister for his response, but I feel he rather skirted around getting to the heart of the issue, and he knows full well that the new clause is as it is because of issues of scope. When he talked about how this would not work because there would have to be checks on whether an EU national was seeking to take advantage of this new clause, he spoke about the dangers of guessing whether an individual may or may not be an EU national. That is exactly the problem with the right to rent scheme at the moment, in that some landlords and landladies are guessing people’s nationality when they are approached with inquiries about accommodation. I am glad that he has recognised that there are dangers in the scheme that causes such judgments to be made. Yes, there are problems with the wording of the new clause because of scope, but I shall drop it for now and think about this again in advance of Report. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 57
Data protection
“(1) For the purpose of this section, a person (“P”) is defined as any person who, immediately before the commencement of Schedule 1, was—
(a) residing in the United Kingdom in accordance with the Immigration (European Economic Area) Regulations 2016;
(b) residing in the United Kingdom in accordance with a right conferred by or under any of the other instruments which is repealed by Schedule 1; or
(c) otherwise residing in the United Kingdom in accordance with any right derived from European Union law which continues, by virtue of section 4 of the EU Withdrawal Act 2018, to be recognised and available in domestic law after exit day.
(2) Regulations under section 4(1) may not be made until the Government has made provision to ensure that P has safe and confidential access to essential public services by ensuring the Secretary of State, or any other individual or body on his behalf, must not process personal data, by any means, for the purposes of immigration control or enforcement, where that personal data has been collected in the course of the data subject accessing or attempting to access the public services identified in subsection (3).
(3) For the purposes of subsection (2), the relevant public services are—
(a) primary and secondary healthcare services;
(b) primary and secondary education; and
(c) the reporting of a crime by P, where P is a witness to, or the victim of, the crime, any investigation or prosecution of it.
(4) The prohibitions contained in subsections (2) and (3) do not apply where the data subject has given his or her explicit and informed consent to the disclosure of the personal data, for the purposes of immigration enforcement.”—(Stuart C. McDonald.)
This new clause seeks to limit use of data gathered by key public services for immigration enforcement control or enforcement.
Brought up, and read the First time.
Stuart C. McDonald
I beg to move, That the clause be read a Second time.
I am pleased to speak to new clause 57, which brings us to another discrete example of the broader hostile environment and the ever-expanding powers of the Home Office to gather information and require information to be shared with it. The new clause requires that the Government take measures to prevent the sharing of data for immigration purposes where that data has been collected or provided in the course of a person accessing healthcare and education or reporting a crime.
The fear of information being shared with the Home Office can have a pernicious effect on people’s willingness to seek help or to access vital public services, and of course it can also lead to injustice, as we saw in the Windrush fiasco. This is about supporting the survivors of serious crimes—such as domestic abuse, human trafficking and other forms of exploitation—to report them to the police, seek healthcare and escape to safety.
Essentially, the new clause challenges us about our priorities. Is our priority to ensure that people can feel safe when reporting crimes, and that they do not have to be anxious when sending their children for education and do not have to be in two minds about seeking healthcare when that is required, or is our priority to provide the Home Office with endless additional powers to snoop and gather information on the off-chance that it might be able to detain and remove another few individuals, even if that comes at an incredibly hefty price, including injustices such as Windrush? I say absolutely clearly that my priority is protecting safe access to vital public services, and that is why I am moving new clause 57.
Kevin Foster
I thank the hon. Gentleman for his contribution. I do understand his concern that those who come to this country should have safe and confidential access to essential public services. However, new clause 57 would restrict the ability of the immigration authorities to use data that has been collected in particular circumstances for immigration enforcement purposes, as far as those who now benefit from freedom of movement are concerned. In so doing, it would maintain the status quo for those cohorts as far as the use of such data collection is concerned. However, the crucial difference is that they would now be subject to the same measures of immigration control as people from the rest of the world subject to the same restrictions.
The new clause would severely restrict the ability of the immigration authorities to take enforcement action against that cohort. It would thereby result in differential treatment in respect of a migrant whose data would be collected in the same way, but which would continue to be used for immigration enforcement purposes when deemed appropriate, as it is now. It would also weaken the effect of the immigration system, as we are concerned to encourage compliance with immigration laws as approved by Parliament. We welcome the contribution made to the United Kingdom by those who are lawfully present, but it must be in accordance with the laws and rules that have been set out and agreed. No cohort should be exempt from measures that are put in place to ensure compliance with those laws and rules.
On the prohibition on sharing data collected by the police in respect of witnesses or victims of crime, we believe that could lead to unintended consequences. It could prevent those with unresolved immigration status, particularly those who are vulnerable, from being brought into the immigration system, regularising their status and receiving necessary support. In some cases, such as where someone has been the victim of domestic abuse, it could prevent the Home Office from providing information to the police on known vulnerabilities or safeguarding concerns, thereby reducing a perpetrator’s ability to control or coerce their victim. Engagement with immigration enforcement could, for example, reveal previously undisclosed evidence of domestic abuse, which the Home Office could then pass on to the police, leading to the provision of support from a specialist domestic abuse team and potential access to a refuge. Data sharing in those circumstances would be proportionate and necessary, and in the best interests of the victim. Data sharing also enables the Home Office to trace missing families and protect children who may be at risk, working collaboratively with social services, the police and local authorities to ensure safeguarding actions are taken. We will always have due regard for the safety and best interests of any children.
The Home Office has robust safeguards and controls in place to ensure data are handled securely, lawfully, ethically and in accordance with relevant data protection regulations. It must have a legal basis for processing data, and comply with the General Data Protection Regulation and the Data Protection Act 2018 when doing so. Individuals’ rights are protected by the role of the Information Commissioner’s Office, the UK’s independent body which upholds information rights. I remind the Committee of the comments I made at one of the last Home Office oral questions that were held physically in the Chamber before the current arrangements. When asked, for example, about whether the details of those approaching the NHS for treatment for covid-19 would be passed on to immigration enforcement, we were clear that, purely for the purposes of immigration enforcement, that would not be something we would be doing. Our approach is proportionate.
Stuart C. McDonald
The purpose of the new clause, and what it says expressly, is that information cannot be shared with the Home Office for the purposes of immigration control or enforcement. To my mind, that does not mean, for example, stopping the police making inquiries with the Home Office about whether somebody has been the victim of domestic abuse. I therefore think that is a rather unfair interpretation of what we are proposing.
Kevin Foster
Part of how we respond to victims and others is sometimes to look to resolve their immigration status as well. I would say it is quite proportionate that two parts of the Home Office work together on the enforcement of the UK’s laws, subject to it being proportionate and appropriate to do so. I think people would find it strange if that did not occur.
For the reasons we have outlined, with the robust safeguards in place, and the proportionate and legitimate aim of ensuring our immigration laws are not completely undermined, the Government will not accept the new clause.
Stuart C. McDonald
I am grateful to the Minister for his response. I am not sure I agree with his reasoning on what the new clause would or would not allow, but I will take that away and give it further thought. In the meantime, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 60
Report on the status and social security entitlements of UK nationals in the EU member states
“(1) The Secretary of State must prepare and publish quarterly reports on the progress being made by EU member states on the migration status and social security entitlements of UK nationals in their countries.
(2) A Minister of the Crown must, not later than a month after the report has been laid before Parliament, make a motion in the House of Commons in relation to the report.”—(Kate Green.)
This new clause would require the Government to update the House of Commons on the progress being made by the EU27 countries on the implementation of protections for UK nationals in their countries on a quarterly basis.
Brought up, and read the First time.
Kate Green
I beg to move, That the clause be read a Second time.
The new clause would require the Government to report quarterly on the status and social security entitlements of UK nationals in EU member states. I am grateful to British in Europe for its comprehensive briefing in preparation for this debate.
Implementation in the EU of the citizens’ rights part of the withdrawal agreement is still in its early stages, with few countries having final or even draft legislation in place. Application processes have begun in only a handful of countries. The situation has understandably been exacerbated by delays caused by the covid crisis. However, that creates uncertainty for thousands of UK families and individuals in the EU, who are awaiting the outcome of applications to be allowed to stay in countries in which they have made their home that have opted for an application or constitutive system.
The European Commission’s promised guidance note, which was eventually published on 12 May, is helpful in clarifying some of the uncertainties, but outstanding issues include how dual UK-EU nationals and other citizens who do not rely on the withdrawal agreement for residence rights can evidence their rights; how the withdrawal agreement applies to UK citizens who are eligible for protection under the withdrawal agreement in their own right and for protection under EU law as family members of EU citizens; and whether UK citizens eligible for protection under the withdrawal agreement, which of course confers no right of free movement to third EU countries, can obtain the rights at least to some mobility enjoyed by other third-country nationals, either in addition to their withdrawal agreement rights or by waiving that protection and opting to register as non-withdrawal agreement third-country nationals.
In addition, the common format of the card evidencing withdrawal agreement rights, mandated by the Commission for UK nationals in the EU, fails to distinguish between permanent residence and ordinary residence. The conditions for lawful residence under EU law, which applies during the transition period, and under the withdrawal agreement for those who have not yet acquired permanent residence or had permanent residence confirmed, include requirements to be employed or self-employed, or economically self-sufficient with comprehensive health insurance.
Those conditions are applied strictly in many EU countries. The lockdown restrictions of the covid crisis, however, have caused people to lose their jobs or much of their income, and some will be unable to obtain comprehensive health insurance because of exclusions—students studying abroad and recent graduates are at particular risk.
We know the Government do not intend to extend the transition period. Will the Minister tell us whether the Government intend to ask EU member states to grant extensions to time limits for securing rights under the withdrawal agreement, which people have been unable to comply with because of covid restrictions on travel or the closure of administrative offices? That applies not only to residence rights across the EU, but to citizenship applications where 31 December this year is a cut-off date, such as is the case in Germany or Italy.
With much still unresolved, British in Europe and the3million have suggested that they should attend the specialised committee on citizens’ rights of the joint committee on implementation of the withdrawal agreement established—
The Chair
Order. The new clause is about the Government reporting to the House of Commons. I understand the points that the hon. Lady is making, but if she would relate her comments to the reporting, I would be grateful.
Kate Green
Of course, Mr Stringer; that is very helpful guidance. These are matters on which I hope the Minister may be able to give some immediate answers about the Government’s current actions, but obviously the report to the House would be able to demonstrate the effect on UK nationals in the EU of our withdrawal from the European Union, which I think the public as a whole will be concerned about. As I go through further remarks about possible effects, I will naturally seek to come back to the point that I seek the approval of the Committee on regular reports on these matters being made to the House, including on the suggestion by British in Europe and the3million that they should be able to attend the specialist committee on citizens’ rights of the Withdrawal Agreement Joint Committee.
There are other uncertainties for UK nationals who are not covered by the withdrawal agreement. Jeremy Morgan of British in Europe agreed in our oral evidence session last week that UK nationals resident in the UK but who own second properties in the European Union will potentially now be caught by the 90 out of 180 days rule under the Schengen arrangements. It is not clear whether the UK Government have given up on negotiating up to 180-day stays for UK citizens visiting the European Union, so it would be useful to have regular reports to the House on whether negotiations are continuing, or on the impact if they are not.
The concerns I have outlined so far affect UK nationals who already live, work or own property in the European Union, but there will also be concerns about UK nationals moving to the EU in the future after the end of the transition period. In our evidence session on 9 June, Jeremy Morgan of British in Europe drew attention to whether UK nationals will be able to buy property in certain EU countries after the transition, which again I think would be of interest to the House and the wider public, and future reports on that would be welcome.
On Tuesday, we debated the implications of clause 5 and the draft social security arrangements published by the UK and the EU. I am grateful to the Minister for the letter he sent me late yesterday evening, which I think has been copied to all Committee members, in response to a number of issues I raised in that debate. The analogy drawn in the letter with other treaties between the UK and third countries simply exposes the more limited protection that those treaties provide, and that such treaties seem to be the model for our future arrangements with the European Union—for example, on aggregating contributions, sharing information or healthcare. If those are to be a model for future coverage for UK nationals in the EU, again I think that is something that should be drawn regularly to the attention of the House.
The draft social security agreement attached to the free trade agreement published in February makes it clear that the Government envisage that short-term visitors would be covered, but what of those who go to work or make their home in the EU in future? The Minister’s letter says that contributory employment and support allowance will be available for four weeks. I note in passing that a decreasing number of people get contributory ESA anyway, and that that four-week grace period will be of no use to disabled people moving abroad, or even visiting for five, six or seven weeks. I think the House would like to be aware of the implications of new arrangements for disabled people.
Similarly, on healthcare, the Minister’s letter may try to gloss over this, but for those who are not going to be covered by the withdrawal agreement, the S2 will be scrapped, so they cannot in future go abroad and have treatment paid for in the EU, even if the NHS cannot provide that treatment. Importantly, we will lose the mutual recognition of prescriptions, which could have quite significant consequences for some UK nationals.
My assessment is that, for those UK nationals moving to the European Union after the transition, the unspoken thrust of the letter sent by the Minister last night is a levelling down of protections and rights, which I feel the House should want to track on a regular basis. I recognise that a number of bilateral reciprocal arrangements—some going back many years—between the UK and certain member states may fill in some of the gaps in social security co-ordination arrangements in the future, but it is unclear whether either country will regard them as remaining effective. In any event, many of the arrangements offer only very limited protection. Again, I think it would be useful for the House to be updated on the standing of, and application of, these bilateral agreements.
If no agreement is secured with the European Union and the Minister hopes that instead a series of new bilateral arrangements might be negotiated between the UK and each individual member state, there may be a fear in those member states that that could impinge on the co-ordination arrangements that apply in relation to other member states, and that fall within the scope of European Union co-ordination regulations. It would be useful for the House to have regular updates on that.
The picture that I have painted suggests at best confusion, and at worst the prospect of less favourable protections for UK citizens in the European Union—those already there, and those who move to European Union countries in future. The UK Government have an obligation to look after the welfare of their citizens wherever they are located. Quarterly reporting to Parliament will make it possible to conduct scrutiny of the way in which the Government meet the obligation.
Kevin Foster
I thank the hon. Member for Stretford and Urmston for moving new clause 60, which is well intentioned but ultimately unnecessary. The Government are monitoring closely the implementation of the withdrawal agreement for UK nationals in the EU and information on citizens’ rights in each EU member state is already provided by the Government on our “Living in” guides on gov.uk.
Having ratified the withdrawal agreement and legislated for it domestically in the EU (Withdrawal Agreement) Act 2020 in January, the Government are now closely monitoring the progress of member state implementation during the transition period, via our network of embassies, high commissions and consulates across Europe. We are committed to providing UK nationals overseas with clear and appropriate information and are working with member states to ensure that any introduction of, or changes to, administrative procedures that are in line with the withdrawal agreement will be communicated to resident UK nationals.
The EU’s social security co-ordination rules will continue to apply in full to individuals in full scope of the withdrawal agreement, including UK nationals living and/or working in the EU, and EEA citizens living and/or working in the UK by the end of the transition period. Those rights are protected for as long as they remain in full scope of the withdrawal agreement.
Information is available via our “Living in” guides on gov.uk, and UK nationals should sign up for the latest information on the actions they need to take. The “Living in Europe” guide, which is also on gov.uk, provides further information on citizens’ rights to UK nationals in the EU.
Beyond that, we also have a governance structure established by the withdrawal agreement to monitor the correct implementation and application of the withdrawal agreement. The Withdrawal Agreement Joint Committee, chaired by my right hon. Friend the Chancellor of the Duchy of Lancaster, has already met twice, on 30 March and 12 June.
The Specialised Committee on Citizens’ Rights, co-chaired by UK and EU officials, met on 20 May. As set out in the joint statement following the meeting, both the UK and the EU exchanged updates on the implementation of the citizens’ rights part of the withdrawal agreement and discussed preparatory work for future meetings. The Government and European Commission share the objective of ensuring the correct and timely implementation of the withdrawal agreement to provide certainty to UK nationals in the EU and EU citizens in the UK. The Committee will therefore meet regularly during the transition period and thereafter.
Finally, I reassure the Committee that we are calling on the European Commission and all member states to ensure timely implementation and clear communications to UK nationals in the EU, in line with what has been agreed in the withdrawal agreement.
I will briefly cover some of the points that the hon. Member for Stretford and Urmston made. The Government are continuing their negotiations with a view to a future partnership. We have already looked to extend our generous visitor visa provisions to EEA nationals from 1 January, on the same basis as we have to many of our traditional international friends and allies, such as Canada, the United States and Japan. We continue in discussions to seek a productive partnership. However, I am sure that the hon. Lady will appreciate that it is not possible for us, in domestic UK immigration measures, to legislate for what other nations should offer the United Kingdom.
On that basis, I ask the hon. Lady to withdraw her new clause.
Kate Green
I feel that the Minister’s response has rather missed some of the points that I was trying to make. In seeking a report to Parliament, I am asking for something a little bit different from information to UK nationals about what they should be doing at any given time, whether or not they moved to the EU before or after the end of transition. Intergovernmental discussions—or discussions between the UK Government and the European Union—taking place in the joint committee are very important, but they are not a parliamentary event that ensures full public information and scrutiny of those discussions. My point on the bilateral treaties was also about thinking of protections for UK nationals, which, if I may say so, are in the gift of the UK Government. The signs are worrying when looking at the Government’s draft agreement, published earlier this year.
I will not press the new clause to a vote, but I gently suggest to the Minister that keeping the House updated on such matters is not only important to hon. Members, but of considerable importance to our constituents. We have found at times that Ministers are quite tardy in coming to the House to inform us about the progress of negotiations with the European Union, at least in relation to these important matters. I hope that the Minister will use his good offices to encourage his colleagues to keep us as well informed as possible. I beg to ask leave to withdraw the motion.
New clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill to the House.
Kevin Foster
On a point of order, Mr Stringer. I thought it appropriate to thank you and Sir Edward for your very effective chairmanships and for keeping us all in order—even me, with the interesting slip that I managed to make earlier today. I hope that it did not cause too much hilarity in the Committee.
Kevin Foster
I am sure it did. I should also thank the shadow Minister and the SNP spokesperson for the spirit in which we have debated the Bill, put on the record a number of important points and explored a number of issues of concern to a range of constituents. I am sure that hon. Members would want me to express gratitude to the Clerk, who has ensured that the Committee was conducted professionally and well. I also thank my officials at the Home Office and those at the Department for Work and Pensions who have supported me both by preparing for the Committee and by preparing briefings on a range of amendments.
I can imagine how you will rule on this point of order, Mr Stringer—probably in line with every other point of order that has ever been raised in the five years that I have been here—but I wanted to put those few comments on the record as we come to our conclusion.
Holly Lynch
On a point of order, Mr Stinger. I echo the Minister’s sentiments—I am grateful for the points that he just made. I thank my Committee colleagues, not least the hon. Member for Stretford and Urmston—I am eternally grateful for her support on a personal basis; her experience in this subject area is second to none—the hon. Members for Kingston upon Hull North and Coventry North West, and our Whip, the hon. Member for Ogmore, for their support. I also thank you, Mr Stringer.
I echo the Minister’s sentiments: the Clerk has been incredibly helpful to Members across the Committee and her efforts have been nothing short of herculean, often responding to emails in the early hours of the morning. We are eternally grateful to her for that. I also put on the record my thanks to my staff members, Jamie Welham and Charlotte Butterick, as well as to Heather Staff in the office of my hon. Friend the Member for Stretford and Urmston.
Putting politics and the subject matter to one side, we can always collectively breathe a sigh of relief when the intensity and pace of any Bill Committee comes to an end. I very much look forward to returning to some of these issues on Report and Third Reading.
The Chair
That was outrageously out of order. Thank you for the kind comments.
Bill accordingly to be reported, without amendment.
Trade Bill (Fourth sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2019-21 View all Trade Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Chair
We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It may be helpful if I note that, because no one is present to pass the Hansard reporters notes, there is an email address, which is hansardnotes@parliament.uk. To keep any great orations in their most accurate form in the record, you should email your speaking notes to that address.
Clause 1
Implementation of the Agreement on Government Procurement
Stewart Hosie (Dundee East) (SNP)
I beg to move amendment 29, in clause 1, page 1, line 4, leave out “may” and insert “must”.
It is a pleasure to serve under your chairmanship on this important Bill, Sir Graham. If I may, I will crave your indulgence for a few minutes to make some introductory remarks about the Bill before I move on to amendment 29. First, I recognise the difficulty the Minister has in the absence of officials. A number of the amendments I have tabled are technical, so it is not my intention—I hope this is helpful to you, Sir Graham—to press to a Division any amendments or new clauses until we hear detailed responses from the Government, probably towards the end of these Committee proceedings next week. Of course, I reserve the right to come back to these themes on Report, if and when we reach that stage.
Right now, there are three main threats to trade, as I have said before. The first is self-evidently the covid crisis. The World Trade Organisation has suggested there will be a fall in global trade of between 13% and 32%, which is larger than the collapse in trade during the financial crisis. The second threat is the impact of Brexit. We have all seen many of the assessments, which suggest a significant fall in UK global trade. The third threat is a more systemic problem, from the continued implementation of new, and the continuation of existing, trade restriction measures, mainly tariffs—about $1.5 trillion or $1.6 trillion-worth around the world. I am not confident that any of those problems will be resolved any time soon, not least because there is no cure or vaccine for covid; because of the well-publicised difficulties with the Brexit negotiations; and because of the failure to appoint a functioning appellate body in the WTO.
However, the Bill does address a number of other matters. It implements procurement obligations arising from membership of the GPA—the agreement on government procurement, it creates the Trade Remedies Authority and it gives Her Majesty’s Revenue and Customs and others powers to collect and share data. It also allows the Government to modify retained direct principal EU legislation, and it appears to me that, other than a few minor restrictions, those modifications are almost without limit.
The Bill also includes descriptions of what an international trade agreement is and says that it may be
“an international agreement that mainly relates to trade, other than a free trade agreement”.
But, as we know, modern agreements are little to do with quotas and tariffs, and as much to do with standards, conformity, dispute resolution and food safety, for example. Many people are therefore uncomfortable that the Government may be able to modify existing legislation, even in roll-over agreements, in the way proposed. I am sure we will come to all those matters over the next few days.
Amendment 29 does not appear to be particularly important, but it is, because it would require the relevant authority to make the regulations referred to. The reason is as follows. The UK is already party to the GPA, and requiring the relevant authority to make regulations to implement the GPA would ensure continuity upon withdrawal from the EU. Under clause 1(1), the Bill grants an appropriate authority the power to make regulations that it “considers appropriate” to implement the GPA. If the intention is to ensure implementation of the GPA 1994, the authority should be required to make such provisions. While it could be helpful to allow the relevant authority discretion—that is facilitated by the current wording—to make regulations that it considers appropriate to implement the GPA to ensure continued alignment with EU requirements, if the intention is actually to implement the GPA in order to ensure continued alignment, the relevant authority must make the necessary regulations. I commend the amendment to the Committee.
Bill Esterson (Sefton Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. The hon. Member for Dundee East has made some important observations about our proceedings, which I agree with. We may take a slightly different view on pressing our amendments, and we will come to that in due course. I make no promise; it will depend on the nature of the Minister’s answers, his ability to garner information and what he says.
The hon. Member rightly drew attention to the impact of the covid-19 crisis on trade. He also drew attention to the importance of discussing trade, and indeed legislating for international trade, at this time in recovering our economy and the prosperity of our people. He referred to the estimated fall in the economy of between 13% and 32%. He is right that that fall is far larger than in the global financial crisis—it is the largest in history, over all the time in which such figures have been recorded. It is therefore essential that, where we can, we get what we are doing as accurate as possible.
Following the hon. Member’s speech, I now have a much better understanding of the intention behind the amendment. I am confident that he is trying to do what he has set out. The Labour party, as we made clear on Second Reading, fully support the accession to the GPA. If that is the Government’s intention, it seems entirely right that they should make sure they do so, and it is odd that they have not already committed to that in the Bill.
Gareth Thomas (Harrow West) (Lab/Co-op)
Might one of the other potential benefits of the amendment be that it helps to create a voluntary pressure on the implementing authority to support businesses to take advantage of the procurement opportunities that Ministers have said the GPA offers? If there is a slightly more lackadaisical approach, as the hon. Member for Dundee East appears to suggest, the incentive for Ministers to actually find ways to support businesses to take advantage of those opportunities may not be there in quite the same form.
Bill Esterson
My hon. Friend makes a good point. We want businesses to take advantage of the opportunities available in procurement. Having the Government make the strength of that case through how they legislate is an important way of achieving that goal. It should be clearly set out that the procurement obligations that we currently have through our EU membership have passed into UK law via EU retained legislation, and the Government should make clear commitments to their implementation. The hon. Member for Dundee East said that, if the Government intend to implement the GPA, they should say so, to ensure the continuity that my hon. Friend the Member for Harrow West rightly referred to and to make sure that alignment in the regulations is in place straightaway.
Gareth Thomas
Perhaps I can be a little clearer. My concern is that, under successive Governments the opportunity, the opportunity for local organisations to take advantage of public procurement opportunities has not been given as much assistance or priority as it might have been by both central Government and—on occasion, sadly—local government. Perhaps the amendment might help to create the pressure for central Government, in particular, to take a bit more seriously their responsibility to make that happen.
Bill Esterson
My hon. Friend is quite right: we need to make more of the opportunities available in procurement, and this kind of amendment is a way of delivering on that agenda.
I am pleased that the hon. Member for Dundee East has tabled the amendment. I note his comments about waiting, to ensure that the Minister is able to respond in full and in the event that he needs additional advice. I am happy to support the hon. Member in principle, on the basis of waiting to hear what the Minister’s reply might be.
The Minister for Trade Policy (Greg Hands)
Sir Graham, first of all, it is a pleasure to serve under your chairmanship, and I welcome everyone to the Committee. I think the previous Bill Committee I served on was for the previous gestation of this Bill, in early 2018, so I know from past experience that we have interesting discussions ahead in the coming days on this important legislation.
As the Secretary of State and I made clear on Second Reading, the Bill is about ensuring continuity and providing certainty for businesses and consumers as the UK strikes out once more as an independent trading nation. We will use the freedom that we have gained through our departure from the EU to negotiate trade agreements with new partners, but we also remain committed to seeking continuity in our trade relationships.
I will turn to the amendment in just a moment, but let me be absolutely clear. I have not spoken about the Bill since Second Reading, and I was genuinely surprised that the Opposition parties opposed the principle of it. The Bill consists entirely of wholly sensible proposals to secure the continuity of more than 40 trade agreements and our continued membership of the World Trade Organisation’s government procurement agreement, and to allow UK trade defences.
I hope that the Opposition parties will reconsider their principled opposition to the Bill after all the scrutiny that we are about to have and on Report, and will consider voting for it on Third Reading.
Gareth Thomas
I am sure we would be happy to reconsider if the Minister committed at this point to being sympathetic to some of the amendments we have tabled—for example, on extending scrutiny opportunities and extending the Bill to cover future free trade agreements. I will look sympathetically at his request if he will look sympathetically at ours.
Greg Hands
I thank the hon. Gentleman. He is an old sparring partner of mine over different years and different Sessions. It would be impossible for me to commit to that today, because there is still the opportunity, as I understand it, for further amendments to be tabled, so it would be impossible for me to either rule in or out opposing all future amendments.
I want to say a quick word on the practicalities for Members who are on their first Bill Committee. Due to the social distancing requirements, as you mentioned, Sir Graham, there is no one to pass notes to the Hansard reporter. Normally, the Minister also has with him or her a small group of officials, but they are unable to be with us today, also due to social distancing. On occasion, therefore, if a Member has an extremely technical question—I am just trying to think of a good example; perhaps it would be something about diagonal accumulation rules in the EU-Faroes agreement—it may be necessary for me to write to them. However, I commit that if I do write to a Member, I will of course copy the information to all members of the Committee.
Gareth Thomas
That may be one of the issues on which the Minister needs to write to the Committee. He will know that there have been long-standing concerns about British companies’ ability to get access to public procurement markets in an honest way, in, for example, China and Russia, given the levels of support that the Governments there often give to their own companies. The market is not necessarily an honest and level playing field. I understand that China and Russia are in the process of acceding to the GPA, but it might be helpful at some stage for the Committee to understand how far along the journey to accession those two countries are. They are potentially critical for British companies that want to get into the procurement markets there.
Greg Hands
I thank the hon. Gentleman for that very good question. I do not have current information about how far down that process China and Russia may be. Of course, both those countries are members of the WTO. It would, ordinarily, not be unnatural for them to seek membership of the GPA, but, of course, the GPA does not include all members of the WTO—it has 20 members, and they are typically western liberal democracies. Australia is the most recent to join. I imagine that China and Russia joining would become a significant issue on the international stage, and at the WTO.
If the UK were not an independent member of the GPA in its own right—or if it were to fall out—our ability to influence accessions would be very much diminished. That is another good reason to be a member of the GPA—so that we can exert UK influence on the global stage to make sure that accessions are in the interests of the wider world community, as well as UK businesses and taxpayers.
The reciprocal nature of the agreement supports the public sector to get the best value for every taxpayer pound that it spends. Those benefits will increase each time another party joins. Each new party that joins increases the procurement opportunities available to UK businesses and public sector bodies.
Turning to amendment 29, the powers in clause 1 will enable us to give effect to our international obligations on joining the GPA as an independent party, and to make changes as necessary in response to specific circumstances that may arise from time to time after our accession. Examples might be changes to reflect, and arrange for, the accession of other parties to the GPA—the hon. Member for Harrow West mentioned a couple of possible future members—or to make the necessary adjustments where parties leave the agreement. The ability to make these changes is essential to allow us to keep in line, and up to date, with our international obligations.
Gareth Thomas
The Minister will understand that there have been concerns about acceding to the GPA and doing so at a time when we have exited the European Union. One concern relates to how low the threshold is for other GPA members to potentially get access to central Government contracts, thereby potentially putting at a disadvantage British companies wanting to win those contracts. What reassurance can he offer British companies that are potentially beginning to seek out opportunities to win central Government contracts that they will not lose out against other countries’ companies?
Greg Hands
It is a good question, but the assurance I would give is that our intention is to join the GPA with substantially the same arrangements as we currently have as members of the EU. That will give the assurance of continuity as we move forward.
The power in the clause is appropriately drafted to ensure that our international obligations will be fully complied with, including by making changes to national law, where appropriate, using the power in this clause. The use of the power is expressed in the usual way. I say to the hon. Member for Dundee East that we have expressed these powers using quite a usual formulation, allowing authorities to make regulations in the circumstances set out. If the wording were to be changed from “may” to “must”, as proposed in the amendment and as he suggests, changes would need to be made in all circumstances covered by clause 1. There would, however, be certain circumstances where it would not be appropriate or necessary for regulations to be made. For example, a dispute with another party might be resolved without the need to make any changes at all to domestic regulations. Likewise, not all modifications of another party’s appendix I will require changes to domestic law. On that basis, I ask the him to withdraw the amendment.
Stewart Hosie
I make a number of observations. The Minister said that the Bill was about continuity. If I take that at face value, as I do, it strengthens the case for the relevant authority being required to make the necessary regulatory changes. He also said that the flexibility allows the relevant authority to respond to specific circumstances, but if those change, there are lots of reasons why it should—absolutely must—make the necessary regulations to respond to those changes. The final argument the Minister made does not hold water:
“An appropriate authority”—
must—
“by regulations make such provision as the authority considers appropriate”.
So if a circumstance stands changed where the relevant authority did not deem it appropriate to make a change, it would not be required to do so.
The hon. Member for Harrow West said that the amendment might encourage more businesses to take advantage of procurement opportunity. It would not do so directly, but, certainly, if the relevant authorities were required to do something, it might act as a nudge measure to encourage businesses to look at those procurement opportunities.
I will do what I said at the beginning: I will not seek to press these matters to a Division now, but I will ponder on the Minister’s answer. I am sure he will consult others and ponder further, and we may have a similar debate on Third Reading. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill Esterson
I beg to move amendment 24, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of enabling greater labour market interventions and compliance with ILO standards in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
The Chair
With this it will be convenient to discuss the following:
Amendment 25, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater environmental exceptions and carbon considerations in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Amendment 26, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing greater scope for UK small and medium-sized enterprises in any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Amendment 27, in clause 1, page 1, line 16, at end insert—
“(1A) No regulations under subsection (1) may be made until the Secretary of State has entered into negotiations with other parties to the GPA with the objective of securing improvements to public health as a consequence of any UK procurement contract to which the GPA applies, and
(a) the Secretary of State has made a statement to the House of Commons that the objective has been achieved either in full or in part, or
(b) the Secretary of State has made a statement to the House of Commons that the objective has not been achieved.”
Bill Esterson
In the debate we have just concluded, the Minister referred to matters that fall under the set of amendments we are now considering and the reciprocal nature of the benefits of the GPA. These amendments relate to the impacts on those companies tendering for UK procurement contracts and the way they might be addressed through the annexes to the GPA that we might seek once we have acceded to that body. The amendments relate to the desire for procurement to look beyond short-term pricing—a problem that has bedevilled procurement—and I will give some examples a little later. All four amendments pick up elements of the points made to us by Rosa Crawford in her oral evidence on Tuesday about the desirability of price value or life cycle costing in procurement.
In his remarks just now, the Minister said that we should have the same arrangement we have with the EU, and we agree with the accession to the GPA for that reason. But if we are to have the same arrangement that we have as members of the EU, there is also the significant matter of retained EU law, which needs to continue if that statement is to hold. In this case, it is the Public Contracts Regulations 2015, which will run out on 31 December 2020. As my hon. Friend the Member for Harrow West has said, it is extremely important that we maintain the strongest possible procurement system for companies in this country, and there are other reasons referred to here to do with international and domestic labour rights.
Gareth Thomas
The House of Commons Library brief is very helpful in this regard, because it makes clear that
“the GPA will limit the ability of UK public sector buyers to choose to buy only from”
British or local companies, for example. It is surely an extraordinary situation for Ministers not to want to do more to help British companies or, indeed, to help local councils support local businesses to get access to procurement contracts.
Bill Esterson
Yes, and that is why it is important that we maintain as a minimum not just the GPA regulations but the Public Contract Regulations 2015, that they are renewed and that we look to build on them, which is the reason for the amendments. Ministers—including, on occasion, the Minister present—have indicated their support for British business, and the Prime Minister on numerous occasions has encouraged us to buy British. I imagine that the logical extension of that statement is that he wants Government procurement departments to buy British as well, and I will come to other examples of what Ministers have said.
This is about having the strongest possible procurement system. That is why our amendments call for the Government to pursue with GPA partners the potential for the inclusion of labour standards, environmental standards, support for small and medium-sized businesses and consideration of public health consequences in our annexes to the GPA. I will define what we mean by that.
In amendment 24, we refer to
“labour market interventions and compliance with ILO standards”.
That means we want to ensure that companies that fulfil their obligations to their workers, treat workers well and meet their commitments to working with trade unions in a productive manner are not undercut by companies that do not. This is about rewarding responsible businesses, as well as supporting workers.
Labour market interventions in procurement allow for minimum wages and living wages. They also allow for maximum wages, although that is rarely used. They allow for legislation to prevent discrimination on the grounds of age, sex and religion; legislation to support or regulate trade unions; a maximum working week; legislation on health and safety; behavioural nudges, which are making an appearance for a second time in our deliberations, to encourage workers to take up pensions, for example; and Government provision of education and training schemes to enhance skills and encourage the recruitment of apprentices.
Charlotte Nichols (Warrington North) (Lab)
I just want to come in on the point about labour market interventions. Local government procurement is a good example of where there is a need for something sectoral and robust. For example, there is a national agreement for the engineering construction industry, known as NAECI, for which the minimum rate of pay is £18.63 an hour. If a local council was to procure even on a real living wage, rather than the Government’s living wage, the minimum rate of pay would be about 60% of that. In local government and central Government procurement, companies that are trying to do the right thing and are abiding by sectoral agreements are being undercut. That is why it is very important that we get that right in this legislation.
Bill Esterson
I thank my hon. Friend for that excellent example of why ILO obligations matter. She is absolutely right that it is about paying decent wages, but of course one of the consequences of having such provisions in public procurement is that not only the workers and their families, but communities benefit due to greater spending power in local economics. This is an economic measure as well as a social measure. That is why it is right that progressive procurement considers it.
Gareth Thomas
I do not think my hon. Friend has the great benefit of being supported by the Co-op party. One of the ways in which I am unique is that I am from the co-operative tradition in the Labour movement, and therefore have had a lot of contact with social enterprises and co-operatives. A social enterprise that stands out is Hackney Community Transport, which has won contracts from a central Government organisation—in this case, Transport for London. It has done so while providing employment for offenders who are seeking to get back into the work environment, and offering discounted minibus hire to local community groups. The risk is that, if there is not proper support and flexibility in the procurement regulations, such initiatives will be stifled. Hackney Community Transport is a big social enterprise, but there are many similar community transport organisations that do not have its size and depth, and if this amendment is not passed, they risk not being able to access public procurement opportunities.
Bill Esterson
I am grateful to my hon. Friend. He said that smaller organisations find it difficult to win contracts, and that is why the Government have to use their authority and make sure the regulations are in place. Amendment 26 is about small and medium-sized enterprises, and it should absolutely cover social enterprises too, many of which are SMEs. It is essential that such things are in regulations to support the sorts of enterprises that my hon. Friend describes, and to pursue socially valuable activities. I will come to the Public Services (Social Value) Act 2012 a bit later, which was initiated by a former Conservative MP, Chris White, and passed with the support of the coalition Government. It gives more detail in this area.
Similar descriptions are applied in amendment 25, which mentions,
“environmental exceptions and carbon considerations”.
The current UK minimum standards take into account energy and water use, carbon footprint, resource efficiency, and life-cycle costs in order to set minimum standards of sustainability for Government purchases. Our standards need to be protected, both in terms of maintaining these procurement standards and of ensuring that our schedules at the GPA remain up to date with the action needed to address the climate crisis. If we allow the public procurement regulations to lapse, we will not include such provisions as those I have just described, which are picked up in amendment 25. I know that Ministers take this seriously because the point was made in oral questions just this morning. I cannot remember whether it was the Minister of State or the Secretary of State who quoted the Government’s attitude towards the climate crisis and the achievement of net zero, but it certainly was quoted by Ministers this morning.
Bill Esterson
It was you. I knew you wouldn’t sit there quietly.
I am glad that the Minister did mention it, because he is absolutely right, but without the support of the regulations, it is that much harder. The climate crisis will not be addressed unless there is intervention—and substantial intervention. Public procurement policy through the GPA is one very important tool in the toolbox in achieving those objectives.
Gareth Thomas
On the climate crisis, I wonder whether I can pray in aid the example of Baywind Energy, which is a comparatively famous wind energy co-operative in Cumbria. For a long period of time, the energy that it supplied and could have supplied to local authorities would have been more expensive than that from its nearby neighbour, the great Sellafield nuclear plant. Had the local authority wanted to source its energy needs from Baywind without the type of measure that my hon. Friend is suggesting be locked into law, Cumbria Council might be at risk, in a modern situation, of not feeling able to take advantage of the Baywind offer, and would, perhaps, have had to accept the lowest supplier of energy costs. That would have meant that a substantial local business helping to tackle the climate emergency did not benefit.
Bill Esterson
I thank my hon. Friend for providing an excellent example in the renewable energy sector of just how important it is that we do as we say and that we are strongly committed through Government action—at national, local and devolved level—to tackling the climate crisis.
Charlotte Nichols
Just to pick up on that point, it is important to consider employment multipliers in public procurement around renewables. I am concerned that as the balance of renewables in our energy mix has increased substantially over the past 10 years, which is fantastic news for the UK’s commitment to decarbonisation, the number of green jobs has actually significantly reduced. The Office for National Statistics estimates that about 40,000 green jobs have been lost during a period in which the renewable output in our energy mix trebled. A big part of that is procurement, because as we are investing more in wind technology, a lot of this is coming in from Korea, Denmark and Holland. Meanwhile, companies such as Appledore and BiFab, whose shipyards manufacture things such as jackets for wind turbines, are lying empty because the Government are not procuring them from these places. I just really want to pick up on my hon. Friend’s point about the need to lock in this legislation going forward to ensure that, as we meet our climate change objectives, we are also meeting our economic and jobs objectives, too.
Bill Esterson
I thank my hon. Friend. That is absolutely right, and there are a number of good examples. Unfortunately, the evidence is there that we did not adopt a life cycle-costing approach or a price-value ratio for procurement decisions, instead basing them on narrow, short-term pricing. My hon. Friend the Member for Harrow West made a similar point but, fortunately, life-cycle costing was chosen in his example from Cumbria. This is one of the changes. Yes, the amendments are about ensuring the continuity of existing arrangements, but in the end they are about improving our procurement and improving the social, environmental and labour outcomes of these matters, to the benefit of society as a whole.
Gareth Thomas
The Soil Association gives another example that perhaps supports my hon. Friend’s point. It notes the considerable amount of processed food that we eat in the UK, and how that has contributed to our obesity crisis. It says that one way to tackle that obesity crisis is to try to stimulate demand for British, locally produced fresh fruit and vegetables, particularly by trying to get public bodies such as hospitals and schools to source more of the fruit and veg that they need from domestic producers. Would that not be at risk if our amendments were not to succeed?
Bill Esterson
Again, I am grateful. We should take my hon. Friend’s question seriously, because if we have a procurement system that encourages a greater carbon footprint in our food supplies, the consequences will be damaging to our attempts to meet our climate obligations and to tackle the climate crisis. He also mentions the public health elements of this; in fact, he picked up on at least two of the amendments just in that example.
In the end, we want to address the problems of obesity, which has been one of the most serious public health challenges in our society for some time, but we also want to address the carbon footprint. There are some wider questions, which may well be raised as we discuss the next set of amendments, about where we source food from and the need to consider not only the carbon footprint and transport, but some of the impact of intensive farming more widely and the way that our society eats a lot of meat, which is a real concern not only for health, but for the climate, because of the natural resources used up in feeding animals. We have so far addressed the descriptions of ILO standards, environmental exceptions and carbon considerations in the amendments—
Matt Western
It is a pleasure to serve under your chairmanship, Sir Graham. On the environmental amendment, so many authorities have shown leadership in recent months on adopting a zero carbon objective. At a simplistic level, it is perhaps easy perhaps to look at what that might translate to, but it is actually a proper audit of every facet of the services they provide to the community, and is about how they show leadership to the public, but also to businesses, on how far-reaching that should be. We in this place said that we want to be zero carbon and carbon-neutral by whatever date it was, and likewise our county and district councils—Warwick District Council is in my constituency—have really sought to show leadership, but are they actually going to be able to without the amendment?
Bill Esterson
That is a good question: what is possible if restrictions are in place because of international obligations in this area? I imagine the Minister will pick up on that in his response, but there are a number of important points in my hon. Friend’s comments. Yes, we must show leadership, but we should do that at a local and national level for businesses in this country. We should also show leadership elsewhere in the world, by setting our sights high regarding our obligations on the environment, labour, public health and support for SMEs. Through our procurement policy there are other areas of regulation and law where such things also apply.
Gareth Thomas
Another reason to endorse my hon. Friend’s suggestion is the productivity challenge our country faces. As I understand it, we are the worst country in the G7 for productivity performance. We have even fallen behind France. We know from the evidence of business analysts that the response of medium-sized businesses and co-operatives often is often more productive because of the closeness of management to staff. Moreover, co-operatives have joint collective management and a sense that everyone benefits from the collective endeavours of the business. My hon. Friend’s suggestion of including a carve-out in the UK’s GPA arrangements would be an eminently sensible way to tackle the productivity crisis that the Government have not even begun to get to grips with.
Bill Esterson
I am pleased that my hon. Friend has mentioned the innovation and entrepreneurial ability of our SMEs. The Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart), said this morning that small businesses are the “backbone of the economy”—I think I have remembered that correctly—and he is right. However, we need to encourage them more. They are innovators and entrepreneurs. That entrepreneurial spirit is often where the best ideas come from, and my hon. Friend is right that that drives productivity.
Businesses running start-ups and scale-ups with new ideas and often enthusiastic members of staff are in a stronger position to deliver the kinds of new ideas, changes and technological advances that make such a difference. Indeed, that is generally where effective research and development in technology is derived from. Lately, large firms without their own research and development departments have simply taken over small firms that do. That is because of the kind of the situation under discussion.
If we want to succeed, it is essential that we put our investment, including public investment through procurement, into those small businesses. I intended to speak later about some of the procurement problems, but I will mention one or two now. I am about to move on to public health improvements, which is the subject of the fourth amendment in this group, and in which context contracts have been awarded.
SMEs that have come to me since the start of the crisis have expressed concerns about their inability to contract directly through the Department for Business, Energy and Industrial Strategy or the Cabinet Office, or to get support for exports—this point is often made—through the Department for International Trade. They have been unable get such support because everything goes to the big firms. The big firms have their own procurement departments and they win all the contracts.
That has happened yet again with Serco, which only a few months ago was fined for failing to complete a contract successfully. Serco was the cause of so much of the problem in the failed probation privatisation. Thankfully, last week’s statement by the Justice Secretary put a final nail in its coffin. However, Serco has now won the contract for the test and trace system. It has no experience whatever in test and trace. There are companies and small firms out there that have the expertise and have been saying for months that they can do it. They have been trying to help, but they have hit a brick wall.
Once we join the GPA, I do not see why we could not negotiate along those line with our partners. Ideally, that would be part of our procurement regulations. That is possible. In the interim we need to retain the best possible arrangements and then build on them. The danger is that the public contracts regulations will expire at the end of December and we will go backwards when we need to go forwards. The Government spend nearly £6.5 billion—a very large figure—on procuring with UK SMEs. That is great, but it is not always going to the SMEs that it should.
There are other examples from the public health crisis. Companies in my own constituency have come to me wanting to either import or manufacture personal protective equipment, but they have been completely unable to do so because of the barriers to entry in our procurement system.
Stewart Hosie
May I seek some clarity? When it comes to general SME bidding for Government contracts, the proportion of Scottish Government contracts that go to SMEs is substantially higher than the UK Government figure. It is all done through the public procurement quota. Likewise, the manufacture and supply of PPE has been done through a specific portal, but I know there was a dedicated Minister—a Trade Minister was actually involved directly in this—and the situation in Scotland is not the same as that in the UK, as described by the hon. Gentleman. I just want to make sure that, if the regulations are changed in the way he describes, we do not end up throwing out good bits of local SME procurement from around the country—the nations and regions—and lumping it all into a Westminster system that he is right to say has not so far covered itself in glory.
Bill Esterson
I am grateful to the hon. Gentleman for raising that issue. I have seen from the figures that Scottish procurement has been significantly better, by an order of magnitude. I do not know the balance between direct and indirect procurement, but if indirect procurement is handled appropriately and margins are still maintained and the quality and innovation is still available in the contracts, then that works.
The hon. Gentleman asked me a question. My intention is to make things easier to do, not harder. Our request is to improve the regulations, negotiate with our partners in the GPA, and to retain and enhance what is in retained EU law. This applies not only to Scotland but to local government, Northern Ireland and Wales. There are different systems and they do a much better job. For example, Manchester City Council—I want to ensure a good political balance in the examples given by Labour Members—has delivered according to an environmentally sustainable local agenda. It has delivered support for workers—the agenda set out by my hon. Friend the Member for Warrington North—and it has delivered on public health agendas, too.
Charlotte Nichols
The Government’s professed commitment to levelling up is really important and relates to points made by other hon. Members. My constituency of Warrington North is considered to be the second-best place in the country for start-ups and the best place in the north-west. It is important to get public procurement right. As my hon. Friend the Member for Sefton Central has said, there have been examples during this public health crisis of it going disastrously wrong. In my own constituency, a certified medical devices manufacturer put itself forward to make ventilators, which it was already in a position to do. I was told that the Government turned down the contract because of its geographic distance from London. Given that this is a national public health crisis, it is alarming that a north-west manufacturer with experience in the sector was told, basically, that it was too northern to be procured by the Government. It is very important to underline even further the point that we must get this right for all the regions and nations of the UK.
Bill Esterson
That is an excellent local example. As I said, constituents have made similar points to me. I have a constituent who can manufacture 40,000 reusable medical robes a month. They are reusable up to 100 times. In comparison, the winner of the contract—whichever very large conglomerate it is that keeps winning them—is delivering medical gowns from overseas. We saw the fiasco with the Turkish consignment, where most, if not all, were unusable. There have been earlier examples of where what was taken out of the packaging fell apart. Yet here was somebody in my constituency making that offer, but they were completely unable to make progress or to win the contract. They had demonstrated their capability, having gone through all the accreditations. Yes, of course, there are questions about ensuring that quality standards are in place—I understand that and they understand that—but they had done all that work because they have a long-established business. Yet they were unable to break through the procurement system.
I will give another example of a company that contacted me. It was set up by a British man in California, so it operates in America. He has the scientific specialism to design tests that identify whether people have the virus. He worked out how to do it with a saliva-only test. He had proven to the Food and Drug Administration, the US accrediting organisation, that he could do it and won a sizeable contract, including with the US military. He then approached the UK. This was at a time when we had a real problem with a shortage of tests. I will not go into how many tests we are doing, whether they are actually being done, how much double-counting is going on or any of that. He had a solution, which was better because it did not involve the invasiveness of nasal swabbing—it was saliva only. I have raised this with the Minister’s colleagues and tried to break through. I am not just using these as examples; I have done my best to get through to Government procurement, because they can really make a difference in this crisis. To this day, he still has not managed to get UK approval for those tests, which are easier to administer and easier to analyse. He could have set all that up and we could have been here two months ago, given when he first developed the technology to do it. I think that is a real shame. That is a piece of international trade we could have benefited from, which should add to the value of the story. I am afraid that we have not done this well.
Gareth Thomas
My hon. Friend the Member for Warrington North gave a great example, sadly, of bias by the Government against northern firms.
Gareth Thomas
One of the more encouraging stories of northern procurement in recent times comes from Preston, where the council has sought to use its limited procurement tools to try to counteract the gradual moving away of businesses and good jobs out of Preston to other areas. If our amendment were to be passed, and the carve-out for small and medium-sized enterprises in the US, as described by my hon. Friend the Member for Sefton Central, were adopted by the UK, would that not provide additional tools to councils such as Preston to counteract that northern bias in Government procurement?
Bill Esterson
That is my understanding. I heard a reaction from one Member on the Government Benches that suggested that they did not agree with the assertion that there was a bias against the north. I represent a constituency very near to that of my hon. Friend the Member for Warrington North. I am glad that our mutual hon. Friend the Member for Harrow West raised that point, because one of the reasons given to firms in my constituency was that they were too far from London. I am afraid that that is what has been said by procurement officials in Government, and that cannot be right. My hon. Friend is right to raise the matter, and he is right that it has to be one of the answers. It covers the environmental aspects of amendment 25 and the small business and economic requirements of amendment 26, as well as those under amendment 27.
Lee Rowley (North East Derbyshire) (Con)
I hate to break up the party, but as a fellow northern MP I do not recognise anything that has been stated with regard to this issue, which is slightly broader than the scope of the discussion. However, given that we are on it, I would be very interested in getting more details from the hon. Members for Sefton Central and for Warrington North about why they think that their companies are being affected in that way. The companies in my constituency have not had the same experience.
Bill Esterson
I am very glad that the hon. Gentleman’s constituents’ companies have been successful in contracting with the Government, but the fact remains that in the experience of my hon. Friend for Warrington North, and in mine, that is what has happened.
Lee Rowley
May we have the documents? I would be very grateful to receive them separately, so that I can see the issues. I am sure that we are all extremely concerned about the things that are being asserted with regard to northern constituents and northern firms being unable to access those kinds of contracts. I would be very keen to see the written information.
Bill Esterson
The hon. Gentleman will know that commercial confidentiality would mean that I would have to ask first.
Bill Esterson
No, not yet, because I have not finished answering the hon. Gentleman’s first question. He really needs to wait, rather than intervene. We can certainly discuss the point further. I have raised it at length with officials and with the Ministers’ colleagues, and it needs to be addressed. It may well be that officials were speaking out of turn. I am prepared to believe that, and I have not made a big issue out of it previously. The bigger point is that we are losing out on expertise, and we have lost out on the potential during this crisis for better procurement and supply of PPE and, in the case of the firm in America, of testing capacity and capability. That is not sensible and it is not where we need to be. I am happy to discuss the matter with the hon. Gentleman later, but I suggest that we move on.
Greg Hands
I would not usually intervene on the shadow Minister, but perhaps I could bring this to a satisfactory resolution by inviting him and the hon. Member for Warrington North, who raised a similar issue, to write to me with the details of what has happened. I will get the Government to investigate what is alleged to have taken place, and will copy in members of the Committee. That is probably a reasonable way of seeking resolution. We would all be very concerned about companies in any part of the UK being discriminated against because of their geography.
Bill Esterson
I am grateful for that offer. It is something that we have already done with Ministers, but I am happy to revisit it. It may be that revisiting it would be helpful now that some time has elapsed since the response to my case—I do not know about that of my hon. Friend the Member for Warrington North—was received. It is important to recognise that we are trying to improve the situation so that we do not have such problems, whether they are authorised by Ministers or not. I am not going to stand here and say that the Minister and his friends authorised that kind of comment, but I am afraid that it happened, and I think the Minister’s offer is a good one. We need to find out why and ensure that it does not happen again, so I will take him up on that.
Matt Western
There is a broader point here. The geography may be one thing, but there may also be a cultural issue. I am not talking about the Government, but the machinery of government and the Departments. We recently found, through the crisis—this was a real revelation to me—that many businesses in my constituency and the region of the west midlands were being bypassed. They could have provided face masks, plastic visors and so much kit. Those were established manufacturing engineering businesses that had the capacity, the skills and the agility to do it, but for whatever reason—this is not a party political comment—cultural or otherwise, they were not looked at. It is almost as if we do not recognise the capacity of manufacturing in this country, but perhaps we should in the sense of procurement.
Maria Caulfield (Lewes) (Con)
On a point of order, Sir Graham. The debate is fascinating, but I ask your advice as to whether we are truly sticking to the scope of the Bill. I am aware that more than an hour has passed and we are on only the second group of amendments. Of course it is an important issue, but I would hate to reach a point next week where Opposition Members felt that we had not given proper scrutiny to the rest of the Bill.
The Chair
I am grateful for the point of order. I have listened carefully to the exchanges. I thought that they were being used to illustrate a point about the amendment, so, in my view, they were entirely in order, but the point has been made.
Bill Esterson
Thank you, Sir Graham. Am I allowed to respond to the intervention before the point of order?
Bill Esterson
Thank you. There is a wider point about making sure that we get these things right.
On amendment 27, we have heard examples of why the annexes to the GPA need to improve the way in which public procurement operates. They should address, or attempt to address, public health. The timing, because of the covid crisis, makes that all the more important. What I mean by “addressing public health” is that the public health value of a provider should be considered in addition to the price, rather than simply going for the cheapest provider. Some of the examples demonstrate where there have been problems in that regard.
In a public health sense, that includes, but is not limited to, ensuring that air quality is protected as part of projects; that the UK diet is not harmed, as we have discussed; that the cost of healthy diets does not increase; and that projects do not adversely affect UK mental health. In terms of UK procurement, when we talk about public health, we mean the health of the public in a wider sense as a result of the way in which public and private organisations operate.
Public health medicine is part of the greater enterprise of preserving and improving the public’s health. That is why procurement matters in that respect. We took evidence about the social impact—I mentioned the Public Services (Social Value) Act, which I will come to later—which includes, but is not limited to, wages, including the gender pay gap and workers’ rights. It covers the climate impact of emissions, deforestation and biodiversity and the economic impact of the government procurement agreement on UK businesses, including on job creation and skills, and, as I have described, on public health. That is what the amendments seek to address.
I turn to some of the challenges and the evidence that we took mostly from the TUC and Rosa Crawford. In the TUC’s written evidence, it described the threats of the government procurement agreement.
The evidence says:
“Currently the UK is part of the World Trade Organisation’s Government Procurement Agreement (GPA) through the EU’s membership. The UK government plans to accede to the GPA as an independent country once the transition period ends at the end of December 2020.
The GPA aims to liberalise and increase access to member states’ public procurement markets.
The TUC has concerns that provisions in the GPA are more limited than current measures included within the EU Procurement Directive 2014, which was transposed into the UK domestic law through the Public Contract Regulations 2015. These limitations centre on two areas:
The definition of most advantageous tender set out in Article X paragraph 9 of the GPA does not include reference to a price/quality ratio that includes qualitative, environmental and/or social aspects as currently set out in Section 67(1) to (3) of the Public Contract Regulations 2015—this should be a minimum requirement.”
I think the debate we have just had makes that point, with many examples.
Gareth Thomas
One cross-party concern in recent years has rightly been how to tackle the horrendous problem of modern slavery. Using public procurement to lock in the best possible defence against examples of modern slavery in procurement supply chains is surely a sensible thing for any Government to want to achieve. Is it not the case that the amendments my hon. Friend has tabled will make it easier to make the carve-outs that enable central Government, local government, the NHS and so on to put in place appropriate measures against modern slavery?
The Chair
Before I ask Mr Esterson to respond, I hope he is going to be very specific about which of the amendments relate to modern slavery, and not simply move on to that further aspect of policy.
Bill Esterson
Thank you, Sir Graham. My hon. Friend is right to raise this issue, because it is absolutely relevant to amendment 24, which deals with
“labour market interventions and compliance with ILO standards”.
The way that workers are treated in supply chains is an extremely important aspect of procurement, and a great deal can be learned from the Modern Slavery Act 2015, which was passed by this Government’s predecessor. The way that those at the top of supply chains are required to police those supply chains for evidence of modern slavery and exploitation more widely gives us a valuable lesson about how procurement might be used to achieve the goals set out in all these amendments, not least amendment 24, which deals with labour.
I mentioned defence security. Security is a carve-out of its own: Governments are allowed to procure domestically on the basis of security. However, we are all aware of the saga of the fleet solid support ship. Happily, it appears that the Government, having delayed taking decisions or making announcements, are heading to the point where there may be a domestic award of that or a similar contract. It is remarkable, and really quite scandalous, that we got to the point where there was a question mark over whether that contract would be awarded domestically. Security, and the way security contracts are let, gives us examples—in the same way my hon. Friend the Member for Harrow West did with modern slavery—of how the amendments might be applied by Government if we can negotiate them with our GPA partners.
Too many UK companies are not winning UK contracts—a point that was made by Nick Ashton-Hart earlier—and it would be a challenge for them to compete on price in other GPA markets with lower regulatory and labour standards, such as China, which I think my hon. Friend touched on earlier, other parts of south-east Asia, and even the United States. There is a massive question mark about whether that is desirable, which is one of the reasons I tabled amendment 24, which addresses labour market interventions and compliance with ILO standards.
I know that the Government are very keen on non-regression when it comes to labour rights and standards. That is one reason why amendment 24 matters—it gives the Government an opportunity to demonstrate, in the area of procurement, that they do what they say they believe in. Indeed, all these amendments give the Government an opportunity to support policies that were proposed in the manifesto that Conservative Members fought the December election on, or to support things like “buy British”. I am not advocating a similarity to Buy American, but that is the way the United States applies its GPA provisions and there is much we can learn from that, as I said earlier about support for smaller firms. Domestic procurement spending is an essential part of how we will recover from the economic crisis that has come alongside the covid crisis, and I hope the Government will act on that basis.
[Interruption.] It is always a good idea to come to a Bill Committee very well prepared. I could not help but enjoy the Minister’s description in this morning’s evidence session that he had not enjoyed a filibuster for a long time. I assure you that I have no intention of filibustering and I will not be reading out the entirety of what I have available, but in bringing my remarks to a close, I want to say this: the four amendments are tabled in the hope that we are supporting Government policy, as stated by the Prime Minister and Ministers and in the Conservative manifesto.
The four amendments are designed to support our domestic economy, and to balance the needs of our domestic economy with supporting the rules-based approach to international trade. They are designed to support the levelling-up agenda that the Government say they are keen to promote. I hope that the Minister and Conservative Members will take them in that context and consider the long-term economic, social, environmental and labour value to be had from this kind of approach to procurement. Unless we are prepared to use this moment to deliver the continuity that the Bill is about, it is hard to see how we will maintain the standards of procurement that we have at the moment, let alone enhance them.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairmanship, Sir Graham. This is my first opportunity to speak in a Bill Committee as a new MP, and what an honour it is to speak in such an important debate—an important debate for not only my constituents in Putney, who are very interested in this Committee, having been told all about it, but people across the country and across the world.
In bringing forward the Trade Bill, there is an opportunity to take back control. It is as if we were all in a car and we decided we would like to start driving, so we said to the driver, “Can we start?”. There were a couple of years of intense negotiations about who would drive the car, and we have taken back control of the car, but instead of doing something with that—driving better, maybe moving from the middle to the fast lane of the motorway, having a better car, or going further and faster—we have decided to chunter along in the same way and to just decide journey by journey. The Bill could give us a better journey every single time. This is an opportunity to have a much more modern and ambitious Trade Bill, and the amendments we have tabled seek to do that. Standards and scrutiny will improve the Bill enormously.
Turning first to the International Labour Organisation and amendment 24, the UK was a founder member of the ILO in 1919 and has been an active member ever since. It has ratified 87 conventions, including the eight core fundamental ILO conventions contained in the 1998 declaration on fundamental principles and rights at work, as well as two protocols. Amendment 24 absolutely aligns with that.
The ILO makes it clear in no uncertain terms that member states must treat the conventions with the utmost seriousness, and agreeing the amendment would do just that. The declaration states:
“all Members, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions”.
Since the 1998 declaration, it has become commonplace for the ILO conventions and instruments to be implemented in free trade agreements, so the amendment is absolutely within the remit of the Bill. For example, only recently, the free trade agreement between the European Union and Vietnam has been praised by the ILO for its commitment to labour standards. We could endorse that approach and lock it into the continuity and future agreements by passing the amendment.
Gareth Thomas
My hon. Friend is quite rightly setting out some of the reasons why the ILO standards are so important. In the context of how ILO standards benefit British workers, is there not a significant fear that by not including amendment 24 in the Bill, we might inadvertently encourage a race to the bottom? It might allow other countries with lower standards and pay arrangements to win procurement contracts that British firms could have won. In turn, that would encourage British firms to lower wages and standards to try to win those contracts in future.
Fleur Anderson
I thank my hon. Friend for that apposite remark. That is what we risk if we do not include the amendment. If it is not explicit in the Bill, it will have to be negotiated in every single agreement, so we might miss out on some.
The dangers have already been manifested through the continuity trade agreements that have been agreed. Trade deals have already been struck with countries where labour and human rights abuses pervade, such as Colombia and South Korea. In South Korea, trade union leaders have been thrown in prison for peaceful protest for workers to claim their rights, while Colombia remains the most dangerous country in the world for trade unionists, as around two-thirds of murders of trade unionists take place there. The risks are very real. The UK has also rolled over an agreement with Lebanon, which was criticised last year by Amnesty International for allowing the exploitation and abuse of many of the country’s 250,000 migrant domestic workers, most of whom are women.
None of those continuity agreements contains mechanisms to sanction Governments who fail to respect fundamental labour and human rights, yet every member of the Committee would agree that that is what we would want to do. All trade deals must contain mechanisms to enforce labour rights and decent work, so as to prevent trade deals from being used as a way to pressure labour standards to be lowered, causing a race to the bottom. To ensure that those mechanisms are effective, trade unions must be given a role to trigger investigations into abuses of workers’ rights. The Bill must therefore affirm that all UK trade deals will contain a mechanism to enforce International Labour Organisation conventions, so that trade unions are able to trigger investigations into suspected abuses. Amendment 24 will achieve that and assure that the UK upholds its responsibilities to the International Labour Organisation.
Amendment 25, on climate and carbon considerations, would put us firmly in line with sustainable development goal 13 on taking climate action, to which we have signed up. On 1 May last year, we in this place declared a climate emergency and, as has been mentioned, that was echoed by councils and devolved Governments. Wandsworth, in my own constituency, declared a climate emergency, and we want to see that reflected in the Bill. While our attention has rightly been on responding to the coronavirus crisis, we would all agree that the climate crisis has not gone away. That is why we feel it was important to table the amendment.
The rush to fill the gap created by leaving the customs union cannot be used as an excuse to undermine and circumvent our legally binding climate change commitments, made under the Paris agreement, or the Government’s own target of achieving net zero by 2050. That is why that issue is listed in new clause 2, along with a whole list of important issues, such as waste, water, quality and biodiversity.
In February, I was in the Court of Appeal when it ruled in a landmark judgment that the national policy statement underpinning a third runway at Heathrow airport was unlawful, as it was incompatible with the Paris agreement. The decision not to take the Paris agreement into account in that policy statement was deemed by the judges to be legally fatal to the national policy statement. If we do not accept this amendment, we risk having a contradiction between our environmental agreements and our trade deals.
To date, trade deals have been negotiated separately to climate agreements, but a joined-up policy would be far more effective for both. Not having a joined-up policy is a mistake, as current trade rules place trade promotion and liberalisation ahead of climate goals. The Trade Justice Movement, which we heard from this morning, has identified three ways in which current trade rules can do that. First, investment chapters in trade and investment deals allow companies to sue Governments for measures taken to support climate goals, such as the denial of a permit to construct an oil pipeline, and thus to undermine those goals. Secondly, WTO rules have been used regularly by states to challenge each other’s subsidies to renewable energy industries, and yet not one case has been brought against fossil fuel subsidies. Thirdly, no trade deal that is currently in force contains any binding commitments to ensure that international trade supports climate targets.
Trade agreements also impede Government implementation of climate commitments. For example, they prohibit the use of local content requirements, which can be crucial in producing domestic support for renewable energy. If trade agreements do not have an explicit commitment towards honouring climate commitments, they can hinder the sharing of green technology, for example by implementing far-reaching intellectual property provisions that threaten to hinder the sharing of green tech.
Trade rules can also threaten to increase fossil fuel use, which we explicitly decided not to do in declaring a climate emergency. Current trade and investment agreements foster a global culture of fossil fuel dependency, for instance by prohibiting export and import restrictions on fossil fuels, thereby depriving Governments of a tool to limit production of those fuels.
Unless it is properly regulated, trade can present a huge barrier to alleviating the climate emergency and achieving carbon reduction targets. Indeed, when trade agreements are done badly, they can accelerate a race to the bottom on environmental standards. Therefore, I echo the call of Greener UK in its evidence to the Committee, including its written evidence, that the Bill must include a lock and a legal commitment on carbon reduction targets.
The Bill is silent on climate issues and carbon reduction issues, and so misses a huge opportunity to enshrine our climate commitments and the SDGs in UK law. We have an opportunity to be world leaders in enshrining climate commitments in our trade legislation, but we are missing that opportunity.
Our new clauses and amendments would ensure that all trade agreements that the UK negotiates are climate-aware. The UK should use trade deals to show the world how trade and trade agreements can be made compatible with net zero ambitions, including by prioritising goods and services that are low carbon and environmentally sustainable.
We can push on from what already exists in the continuity agreements and show the rest of the EU what can be done. We could ensure that the UK’s trade negotiations and agreements are underpinned by high environmental standards. That would act as a safeguard against regression in standards, and not just those linked purely to economic advantages.
The Government have already shown that they are willing to backtrack on global environmental standards. For example, the Environment Bill fails to include a legally binding commitment to meet World Health Organisation guidelines for fine particulate matter. That is a very big issue for people in Putney, because Putney High Street has one of the highest levels of air pollution in the country, and we look to the EU to set that standard. My constituents would not be encouraged by trade deals that do not include an assessment of the impact on air quality, for example. Amendment 25 would also prevent trade agreements from impeding the UK’s ability to ratify and properly implement international treaties such as the Paris agreement, which would send a message to the world that compliance with international climate agreements are the norm—this is how we can do it.
Amendment 26 is about small and medium-sized enterprises. As has been said, SMEs have been hit incredibly hard by the coronavirus crisis. Since March, more than 60 businesses in my constituency have written to me in desperate need of help, and I am sure the same is true for other Members. The future of 39% of businesses in my constituency, the majority of which are SMEs, rests on the trade deals contained in this Bill. Many have fallen through the cracks of the Government’s economic support package. They are unable to secure grants, loans or even business rate support for different technical reasons, and they are staring down the barrel of liquidation.
SMEs are the lifeblood of the UK economy—the backbone, as was said earlier. Future trade agreements must be tailored to support the sector and give it the hand-up it needs, over and above the interests of large multinationals, which otherwise disproportionately win out. In particular, the Bill must establish a level playing field—we all love a level playing field—for procurement, and procurement rules must be simplified to encourage and enable bids from SMEs. The Bill must make it easier for SMEs to export. It currently offers very little for small businesses. Surely everyone on this Committee wants to support the SMEs in our constituencies and across the country. Our amendments would ensure that the needs of SMEs are met.
Amendment 27 is about public health. The covid-19 crisis has taught us some valuable lessons about the importance of our national health service. Through the PPE scandal and the EU ventilator scheme farce, the Government have learned the hard way about the importance of procurement and trade to public health. At the peak of the crisis, I called every major social care provider in my patch, and they were all experiencing shortages of PPE. We discussed earlier companies whose offers were not taken up. In Putney, local voluntary groups had to resort to 3D printing their own visors. There are 100 volunteers right now at their sewing machines making up packs of scrubs for local health providers. The Turkish shipment of 400,000 gowns that failed UK safety standards showed us the importance of high procurement standards in trade Bills for public health services. We learned the hard way, across the country, how important that is.
As the NHS Confederation noted,
“Health issues are often not high on the agenda (or on the agenda at all) in trade negotiations.”
Trade agreements often risk a trade-off between lowering standards and increasing the financial burden for patients and the health and social care system. Impact assessments must be carried out to ensure that trade deals do not prioritise commercial advantage over and above health.
Operating on World Trade Organisation terms will not force the NHS to open services to foreign providers. If the NHS is sold off bit by bit to foreign providers in trade deals, that will be a political decision made by the Government. Yesterday in the House, I asked the Secretary of State for International Trade about the trans-Pacific partnership and the risks to the NHS. She said that there is no risk that the NHS is on the table. However, if that is not explicitly written into the Bill, we run the risk of it being missed out and changed through negative ways of doing trade deals.
Gareth Thomas
It is a pleasure to serve under your chairmanship, Mr Brady. I cannot do as much justice to these four amendments as my hon. Friend the Member for Sefton Central did from the Front Bench or my hon. Friend the Member for Putney did from the Back Benches, but I want to raise one or two slightly different points to try to underline some of the interventions I made. There is an understandable fear that at some future point the Government will roll back existing legislation that allows public authorities, the Government, devolved Administrations and local authorities to go beyond having to accept all the time the lowest price and instead to be able to think much more seriously about accepting quality concerns within contract offers. I am sure the Minister will have his most benevolent face on when he winds up and will say that the concerns that we have articulated, as have organisations such the TUC and good trade unions such as the GMB and Unison, are without any foundation. None the less, these concerns exist, because once we leave the protection of EU regulations, we will find that the provisions in the GPA are much more limited than those currently supplementing that under the EU procurement directive from 2014, which was transposed into UK domestic law under the Public Contracts Regulations 2015.
What these organisations understandably want to achieve is that little bit of extra protection against such an event happening, through the amendments that my hon. Friend the Member for Sefton Central has tabled. Indeed, they are seeking more ambition from the Government in terms of public procurement, and to move beyond the era in which big multinationals always win the big contracts. One thinks of the Sercos, the Carillions and the G4Ss, of which a little more anon.
I come back to the example that I gave in one of my earliest interventions on my hon. Friend: Hackney Community Transport, a local organisation that has managed to become much bigger in terms of the community transport offer that it makes. It depends on winning contracts from Transport for London to provide bus services, but has also been able to win contracts in many other local areas to provide transport services.
Hackney Community Transport provides a comparatively low offer because it has managed to get to a decent size where it can compete and, as my hon. Friend alluded to, it has a number of staff who are not just providing the service but thinking about how they win contracts. However, it has never lost its community roots. For the people of Hackney, it provides very cheap minibus hire and helps to train those from the local community who want to learn to drive a minibus. It employs ex-offenders and goes the extra mile, in a way that perhaps one of the corporate giants might not.
By comparison, Harrow Community Transport, which is a much smaller organisation but much valued by many of the most vulnerable people in my constituency—it uses its services to go to local day centres—struggles to survive. It has only one employee, and cannot imagine being able to win contracts from Transport for London given its present situation. There appears to be no sustained offer from central Government to change the situation for not only Harrow Community Transport but all those other community transport associations, or all those other local organisations, be they small and medium-sized businesses or small and medium-sized charities and co-operatives, that nevertheless provide commercial services that could be used effectively by public contracting organisations.
It is important that we build in that additional protection, so that procurement under the GPA does not inhibit local organisations that are determined to do something to provide good jobs with fair pay—not the kind of jobs that some individuals in my constituency have to do. Some of them have to work three jobs in order to make ends meet because the amount they are paid is so low. Businesses that want to help those who are disadvantaged in some way to get into employment must not be excluded as a result of our accession to the GPA. Amendments 24 to 27 help, very effectively, to give a little more protection against such exclusion.
I mentioned the Modern Slavery Act, which is a remarkable piece of legislation. The campaign for it was led by the Co-operative Group, to which I pay tribute for its work through its supply chain, and for the cross-party campaign that led to the Government passing that groundbreaking piece of legislation. Surely the last thing that we would want is not to build on it, and to inadvertently stop organisations that are committed to preventing modern slavery from getting into their supply chains winning the public contracts for which they bid.
My hon. Friend’s amendments seem to be about helping to prevent that from happening.
I served for a long time as chair of the Co-operative party. As a result, I have always wanted more co-ops growing and trading in the economy, and able to win government contracts, whether in local government, the NHS or central Government. I suspect that those of us of a certain generation remember Margaret Thatcher promising a world where owning shares would be as common as having a car. That grand promise of a share-owning democracy has long since disappeared, leaving economic power—according to some, certainly—concentrated in a few hands. That is why there are, I am pleased to say, organisations that champion the building of wealth in communities.
That brings me to the powerful demonstration that is taking place in Preston, where an inspirational council leader is seeking to use the public procurement tools that he and the local authority have available to them, working in partnership with other public bodies to try to contract locally. If we can reinforce those efforts that will surely help to tackle the anti-northern bias that we discussed earlier and allow imaginative council leaders to put extra support behind community organisations that want to do the right thing.
As to the failures of the Sercos, it is not only on test and trace that Serco’s performance has begun to be criticised. I remember it being accused and, so to speak, convicted, of false accounting and of breaching its responsibilities in handling radioactive waste. Carillion is another horror story, and the Public Administration and Constitutional Affairs Committee blamed the Government for outsourcing contracts based on the lowest price, and went on to say that that had caused public services to deteriorate. Surely, then, measures that would not stop us acceding to the GPA but would help us to get the best from our membership are sensible.
Matt Western
My hon. Friend makes some powerful points, but perhaps I may add some emphasis on public health and broaden that aspect of the argument. The emphasis on lowest price is mistaken. Perhaps we saw that with small and medium-sized enterprises—or more of a medium-sized to larger business in the case of De La Rue. However, on the public health side there has over the years been public anger, resentment and frustration at pressure for very low-cost meals to be provided in local authority schools, through companies such as Compass and others that source poor quality foods when they should think about the best value for public health and the health of children. That should be part of what we are talking about on this clause.
Gareth Thomas
My hon. Friend makes a good point. Part of the problem is that schools are not properly resourced. I am sure that he agrees about that. Other examples that we might point to are the difficulties that local authorities, whether Conservative or Labour-led, have had with refuse contracts. A number have had to bring contracts back in-house, or retender. Having gone for the lowest price, as my hon. Friend said, they have not got the value for money that local people rightly demand, and that councils expect from contracts.
Andrew Griffith (Arundel and South Downs) (Con)
I, too, would like to see a greater diversity of types of enterprise and we should do anything that we can in that regard. Co-operative, owner-managed and small businesses are all worthy of our support. I did not want to let the comments that are being made and the amendments that are being spoken to conclude without recording the fact that, if we look merely at the thrust of the amendments, one would conclude that the hon. Gentleman does not fully understand the benefits of free trade, or the substance of what we are trying to achieve in terms of creating wealth, prosperity and opportunities for people, lifting people out of poverty, making sure that our economy is competitive, and creating the tax and the wealth that will produce our public services and make us thrive. I just wanted, by means of an intervention, to give him the opportunity to place on record all those positive benefits of trade, as well as the opportunities that he is seeking to create through the amendments.
Gareth Thomas
I am very grateful to the hon. Gentleman. I will send him the Co-op party membership application form as a result of this exchange. It is very nice to find a new convert from the Conservative Benches to the need for a more diverse economy. I had thought that the hon. Member for Wycombe (Mr Baker) was the only such enlightened Member of Parliament on those Benches, but I am glad that the hon. Member for Arundel and South Downs is first up of the new intake to catch my eye.
Katherine Fletcher
The hon. Gentleman may have to get a larger book to tally up those of us who are interested in the Co-operative movement. I have worked with both the credit union movement and the co-operative movement, and my grandad was a Co-op milkman. The hon. Gentleman is right that the movement has a huge role to play in productivity. Co-ops should look forward to the opportunities to export to a greater range of markets within a free trade deal, such as the framework here.
Gareth Thomas
I am in danger of leaving tonight in a good mood, Sir Graham. I am delighted that a second convert to co-ops has emerged. I will have to send another membership form for the Co-op party to the hon. Lady.
Lee Rowley
Given that we are discussing this, I would just like to declare an interest as a former employee of the Co-op, so I look forward to more such discussions.
Gareth Thomas
There was once a Conservative Co-op movement, which in practice had only one member. Richard Balfe left our ranks, in a very misguided move, and set up the Conservative Co-op group. We appear to have three potential new members of such an organisation, which would be fantastic. Membership of the all-party parliamentary group for mutuals is definitely on offer to the three hon. Members who have intervened.
Matt Western
I tried to intervene a little earlier, and I thank my hon. Friend for giving way yet again. This serious, honest, and important point will probably be echoed across the room: the contract to provide food vouchers to schools over the Easter period and Whitsun was given to Edenred, which happens to be a French company, and an unproven business. I have had a huge number of issues with constituents who did not get vouchers on time, and those vouchers could have been provided by the Midcounties Co-operative, for example, which makes them—they are available. That could have been done locally, and I am sure it would have been done very cost-effectively.
Gareth Thomas
As ever, my hon. Friend makes a serious and important point about the contribution that co-operatives can make. If I may, I will return to the intervention from the hon. Member for Arundel and South Downs, who asked me to extol the benefits of trade. I will certainly do that, but I do not think our country should sell itself short, which is why we have tabled these amendments. In a former life, in happier times, I served as Minister for Trade Policy. As a result, I am an enthusiast for the benefits of trade, but there are caveats to that enthusiasm. If the hon. Gentleman stays awake and enthused, he will listen to examples of our enthusiasm for trade, as well as some of our concerns about the Bill.
I will conclude my remarks by noting the significant potential for co-ops to help deal with some of the issues arising from our ageing society. By 2030, the number of people who need help to wash, feed, or clothe themselves in this country will have doubled to some 2 million. That will place heavy burdens on local authorities and national Governments who seek to procure the support to help those vulnerable people. With a bit of imagination from procurement managers, co-operatives could help to meet those needs, and I suggest that they would also provide a good service. That will require imagination and proper Government support and thinking about procurement, so that co-operatives, and small and medium-sized businesses—they are mentioned in amendment 26 —can benefit from those procurement opportunities. That is another reason why the amendments tabled by my hon. Friend the Member for Sefton Central are spot on.
Greg Hands
We have had a far-ranging debate, but I will speak to amendments 24 to 27. The amendments seek to place a statutory obligation on the Secretary of State to enter into negotiations with GPA parties, with the aim of advancing policy objectives across labour standards, environmental protections, SME participation, and public health in UK procurement opportunities covered by the GPA, and—crucially—before making regulations under clause 1(1).
Let me remind Committee members of our approach to the UK’s GPA succession as a whole. As I have said, we intend to join the GPA as an independent party on substantially the same terms that we had as an EU member. That approach will support a swift accession at the end of the transition period, and preserve the access of UK businesses to procurement opportunities covered by the GPA, which are estimated to be worth £1.3 trillion annually.
Ensuring continuity in the terms of the UK’s participation will not prevent public procurers from taking into account a range of factors when conducting procurement. Social, labour and environmental considerations can continue to be taken into account, as they are today, so long as they are consistent with the UK’s international obligations, including, importantly, under the GPA, non-discrimination obligations. Those obligations already apply to the UK under our current GPA membership.
Indeed, the UK has an active procurement policy agenda on SME participation, sustainable procurement, social value, and labour considerations. As an independent party with our own voice, we will have the opportunity to engage other GPA parties on those issues—for example, via the GPA work programmes, other multilateral forums or bilateral channels. Unless we succeed in securing the UK’s independent accession, the UK will not be party to those discussions within the GPA. Parliament will be updated on developments across those areas through the Department for International Trade annual report, which will be published each year from 2021.
On amendment 27 on health, let me reassure the Committee that the UK’s GPA coverage does not cover healthcare services. It does cover goods and certain services above a specific value threshold procured by the NHS, such as medical equipment, cleaning and building management services, which keeps those types of opportunities open to overseas competition. That helps to ensure that the NHS can access vital resources at competitive prices. Contracting out such non-healthcare services—it is important to stress that—has been a long-standing practice within the NHS across successive Governments that frees up money to be spent on frontline delivery.
Greg Hands
I will take the intervention from a member of the last Labour Government, which played an active role in this aspect of the GPA when he was in office.
Gareth Thomas
I remind the Minister that we are not opposing accession to the GPA. We are merely seeking to make sure that our country benefits properly from GPA membership. He gave the example of cleaning, but I gently remind him that cleaners in the NHS and more generally are often very low paid, so anything that we can do, as amendment 24 sets out, to help to raise the quality of jobs in cleaning services must be sensible. Surely the Minister recognises that, given the covid emergency that we are all experiencing.
Greg Hands
The hon. Gentleman makes a good point about raising the quality of opportunities available, but that will not be done through the GPA.
Let me explain that. Overall, the effect of the amendments would be to place on the Secretary of State a statutory requirement to have entered into negotiations with the 20 parties to the GPA on each of the four areas before creating the ability to make the regulations, and then to report on the outcome of those negotiations to Parliament. It would be an unusual approach for the Secretary of State to enter into negotiations with each of the 20 before implementing the general regulations that could implement any changes to obligations that would result from acceding to the GPA.
I will deal with a few of the individual points raised. I was surprised when the hon. Member for Sefton Central mentioned something about a filibuster. He certainly made a comprehensive speech. When I was in opposition, I remember doing an actual filibuster; I spoke for one hour 49 minutes on beer duty.
Greg Hands
I certainly will not do that now, but I recall making an unlikely entry in the Manchester Evening News the next day. At the time—I think it was the Finance Act 2008 or 2009—the paper had something called the lads index; I am not sure that it would have that these days. As I recall, it took Hansard for the day and gave something like five points for every Member of Parliament who mentioned “Coronation Street”, three points for “Manchester United” and one point for “beer”. The next day, it reported a shock brand-new entry at No. 1 in the lads index, the Member for then Hammersmith and Fulham, Greg Hands, who with in excess of 300 mentions of the word “beer” had catapulted himself to the top of the lads index for that year.
Gareth Thomas
On a point of order, Sir Graham. Surely that is not within the scope of the Bill. I ask the Government Whip to intervene, and encourage you to restore order as well.
The Chair
I think that in the spirit of the latitude that was given to the Opposition, I should offer the same now.
Greg Hands
I thought, Sir Graham, that as a Manchester MP, you would enjoy that story.
The hon. Member for Sefton Central made an impressive oration, and had an impressive memory of our oral evidence earlier. He made some good general points on procurement. Alas, not all were relevant to the government procurement agreement, but let me try to deal with a few of them. First, he mentioned the EU public contracts regulations expiring in 2020; they date from 2015. To be clear, they will not expire in the UK; they are preserved in preserved EU law under the EU withdrawal agreement.
Secondly, the hon. Gentleman made comments about small business, and it is important to emphasise that the Federation of Small Businesses is absolutely right behind our GPA accession. It says that it is essential for the UK to become an independent member of the GPA; it will allow small businesses to have continued access to Government contracts and procurement opportunities.
Let me deal with the specific comments on procurement by the hon. Members for Warrington North, for Harrow West, for Warwick and Leamington and others. I was interested—in fact, I was shocked—to hear what they had to say about alleged discrimination faced by companies that they had reported. I was also shocked at the slight implication that the Opposition had some kind of monopoly on this Committee over northern voices. I looked around and counted more midlands and northern MPs on the Government Benches than on the Opposition Benches, so I thought that that was a bit unwarranted. On a serious note, I would be very interested in seeing significant evidence of discrimination. I will certainly get the Government to investigate those reports and I will copy the response to the whole Committee.
Overall, these amendments would be unhelpful. Each time there was a change to the UK schedule, we would have to produce the four reports. Let me give an example. The current schedule is through our membership of the EU. The EU schedule, which was last updated before 2010, includes names of Government Departments that no longer exist. I think the old BERR—Department for Business, Enterprise and Regulatory Reform—is on the list. DCMS is obviously the Department for Culture, Media and Sport. Every time we made one of those changes—if, for example, we changed DCMS back to its previous name—we would have to produce, as I understand it, the four reports and enter into negotiations, which would simply be an unrealistic and wasteful use of the Government’s time.
The hon. Member for Sefton Central talked a bit about a lowering of standards. To be absolutely clear, we are joining the GPA on the same terms as our current membership, so we are not reducing standards. The EU withdrawal Act preserves existing standards, and of course we already exceed or greatly exceed many EU standards in these spaces. The fact that we have rolled over continuity agreements demonstrates exactly that there has been no lowering of standards.
The hon. Member for Putney made a comprehensive maiden speech for a Bill Committee. As a constituency neighbour, I was delighted to hear her praise for Wandsworth Council. That is a fantastic thing. It is a very, very well-run local authority. She complained about the poor air quality on Putney High Street. If only the Labour council on the other side of the river, in Hammersmith and Fulham, could even monitor its air quality in the first place. Of course, one cause of the deterioration in air quality is Hammersmith and Fulham Council’s closure of Hammersmith bridge, so perhaps if she could join the lobby to reopen Hammersmith bridge, she would then realise that there is better air quality to be delivered on Putney High Street.
Fleur Anderson
Just to clarify, the air quality in Putney High Street was dreadful before the unfortunate closure of the beautiful Hammersmith bridge, due to years of neglect under previous administrations, so that is not the reason; it has been a long-term issue.
Greg Hands
I accept that, but the additional 4,000 cars a day going over Putney bridge into the hon. Lady’s constituency as a result of the closure of Hammersmith bridge has certainly not improved air quality—shall we put it that way?
The hon. Lady raised concerns and, I think, quoted the TUC in relation to continuity agreements with South Korea and Colombia. It is worth pointing out that both those agreements have been rolled over with largely identical wording on labour provision and workers’ rights, so those concerns are not valid. The UK takes labour rights extremely seriously, of course, and UK legislation already provides for robust measures to tackle such issues as human trafficking. Continued GPA membership will not affect that.
In September 2019, the Government announced new measures designed to ensure that Government supply chains are free from offences of slavery, servitude, forced or compulsory labour and human trafficking. The hon. Member for Harrow West, in what I think was an impromptu speech, made some good points on co-operatives. I am delighted to see that on this side of the aisle, we immediately trounced him with the commitment to co-operatives from my hon. Friends the Members for South Ribble, for Arundel and South Downs and for North East Derbyshire.
Gareth Thomas
I heard applications to join the Co-operative party and the all-party parliamentary group for mutuals; I did not hear any new commitments towards co-operatives. None the less, I do not wish to indicate in any way that I was not encouraged by the contributions of the three Conservative Members, but it would have been nice to hear from the Minister an offer of additional support for co-operatives.
Greg Hands
I accept that intervention, but I would say that my three hon. Friends have been here, I think, for six months, six months and about three years so far, and the commitment that they have shown in that time matches quite favourably with the commitment that the hon. Gentleman has shown over his 23 years of membership of this House.
I think the take-away was the hon. Gentleman’s praise for Margaret Thatcher’s share-owning democracy. I remember him as a Minister in the new Labour years, which he referred to; maybe he thinks it is now safe to return to those new Labour years and his view of those years before the right hon. Member for Islington North (Jeremy Corbyn) took over the party. We live in hope.
I hope I have persuaded the Committee that opening negotiations within the GPA will undermine our independent accession to the GPA and thus our ability to advance UK public procurement objectives. I therefore ask the hon. Member for Sefton Central to withdraw his amendments.
Bill Esterson
That was quite some debate. I was very impressed by the speech of my hon. Friend the Member for Putney, who made some formidable comments and demonstrated her knowledge of the subject matter in relation to environmental matters and the ILO. I certainly appreciated her reminding us all about the importance of ensuring that we follow the sustainable development goals in everything we do in this country. I look forward to more of her contributions in the remaining time this afternoon and in next week’s sittings.
My hon. Friend the Member for Harrow West spelled out in more detail some of what he said in interventions. He made a reference to my relationship with the co-op; I should tell him that, like him, I am a member of the Co-operative party—I think he knew that, but had temporarily forgotten—and come from a very proud family of co-operators. My mum, having been a director of the co-op for very many years, taught me well on that subject. I agree with everything he said in that respect, and he quite rightly referred to the sensible nature of our amendments.
I will give the Minister credit for one thing. Unlike some of his parliamentary colleagues, he did not try to name any footballers at Manchester United and get them wrong, so I suppose that is in his favour. However, I think he might have got confused between this set of amendments and the next set. Having double-checked what he said, I should tell him that the reviews that we are requesting are in the next set of amendments.
The amendments in this set call for negotiations with our partners, so there is no suggestion that we would require the Government to look at Government Departments that no longer exist. We can assure the Minister that that is not a concern that he needs to consider. He mentioned what, I think, all hon. Members on this side referred to regarding the public procurement regulations. The issue here is that under UK retained law they were implemented in 2015 for a five-year period and therefore expire at the end of December this year. If the Minister will tell us that they will be reinstated when they expire, that would be undoubtedly helpful, but that is not what he said in his response to the debate, so I am still concerned.
We entirely support our accession to the GPA; we made that clear in the reasoned amendment, and we make it clear again this afternoon. The amendments are about trying to ensure that we retain the provisions in the GPA to ensure continuity, but we also ensure continuity initially by ensuring that there is continuity of what is in the public contracts regulations. That is the issue, because without the public contracts regulations continuing alongside our annexes in the GPA, procurement policy in this country will be significantly weakened. A big part of why we tabled the amendments in the first place was to ensure continuity.
The amendments attempt to ensure that we do not see that as a standstill situation, and that we are pushing the Government to enhance the regulations as much as possible in order to achieve the sorts of policy objectives that Ministers have set out, and that the Opposition have referred to in our contributions this afternoon. I do not think the Minister addressed the points made in the debate we have had on these amendments; some of what he said was about the next group. He made decent points about the difficulties of those reviews, but that comes next. I ask the Committee to support these amendments, and we will push them to a vote.
Question put, That the amendment be made.
The Chair
The shadow Minister has indicated that he does not wish to press the other amendments to votes.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 1—Regulations: review of social impact—
“(1) The Secretary of State must conduct reviews of the social impact of any regulations made under section 1(1).
(2) ‘Social impact’ shall include but not be limited to the impact upon—
(a) the exercise of any right for workers under the Employment Rights Act 1996,
(b) the exercise of any right for consumers under the Consumer Rights Act 2015,
(c) the exercise of any right under the Trade Union Act 2016, and
(d) the fulfilment of any obligation held by the United Kingdom by virtue of its membership of the International Labour Organisation.
(3) A review under subsection (1) must be laid before both Houses of Parliament.
(4) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 2—Regulations: review of climate and environmental impact—
“(1) The Secretary of State must conduct reviews of the environmental impact of any regulations made under section 1(1).
(2) ‘Environmental impact’ shall mean the impact upon—
(a) progress toward meeting the UK’s Net Zero targets,
(b) global emissions,
(c) producer responsibility,
(d) resource efficiency,
(e) management of waste,
(f) regulation and enforcement of waste management,
(g) air quality,
(h) the recall of motor vehicles for the purpose of protecting the environment,
(i) regulation of water and sewerage undertakers,
(j) water abstraction,
(k) water quality,
(l) land drainage,
(m) biodiversity gain in planning,
(n) biodiversity objectives and reporting,
(o) local nature recovery strategies,
(p) tree felling and planting,
(q) creation of conservation covenants, and
(r) the effect of conservation covenants.
(3) A review under subsection (1) must be laid before both Houses of Parliament.
(4) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 3—Regulations: review of impact on public health—
“(1) The Secretary of State must conduct reviews of the impact in England of any regulations made under section 1(1) upon—
(a) food safety,
(b) standards in food production, including the treatment of animals and impact on consumer choice, and
(c) any public health outcome within the definition used by Public Health England.
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 4—Regulations: review of economic impact—
“(1) The Secretary of State must conduct reviews of the economic impact of any regulations made under section 1(1).
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 10—Regulations: review of impact on SMEs—
“(1) The Secretary of State must conduct reviews of the impact upon small and medium-sized enterprises of any regulations made under section 1(1).
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
New clause 14—Regulations: review of impact on equalities—
“(1) The Secretary of State must conduct reviews of the impact of any regulations under section 1(1) upon persons with a protected characteristic, as defined in Chapter 1 of Part 2 of the Equalities Act 2010.
(2) A review under subsection (1) must be laid before both Houses of Parliament.
(3) The first review under subsection (1) shall be laid by 31 December 2021, and subsequent reviews shall be laid at least once in each calendar year.”
It has already been noted that I was generous in allowing latitude in the debate on the previous group of amendments. I gently say that there is a bit of trade-off here in the usual way; we should not have repetition of all the same arguments on clause stand part.
Bill Esterson
As it is a clause stand part, I had thought the Minister was going to propose this group of new clauses.
Bill Esterson
You will be pleased to learn, Sir Graham, that I have no intention of repeating exactly the same debate. I will just repeat what I said in response to the Minister—I think he was referring to this group when he mentioned the reviews. I take his point, and these are probing amendments partly for that reason.
Greg Hands
I have already set out for the Committee the benefits of GPA membership. It is an agreement that mutually opens government procurement markets between its parties. Preserving the UK’s membership of the GPA will keep these markets open to UK businesses, ensuring that they continue to have guaranteed access to approximately £1.3 trillion per year in procurement opportunities, as well as delivering value for money to the UK taxpayer. I am slightly perturbed by the Opposition’s approach to the GPA, given that they voted against the provisions during proceedings on the 2017-19 Trade Bill. I do not believe that it is appropriate or sensible for UK businesses from across the country to be denied access to the procurement opportunities provided for by the GPA.
New clauses 1, 2, 3, 4, 10 and 14 would place a legal duty on the Government to carry out reviews of the social, environmental, public health, SME, equalities and economic impacts of any regulations made under clause 1(1). First, let me assure the Committee that a detailed impact assessment of these powers relating to the UK’s independent accession to the GPA has already been carried out and published prior to the introduction of the Bill. The Delegated Powers and Regulatory Reform Committee agreed with the assessment that the implementation of our independent accession to the GPA would have no direct impacts, since it simply ensures the continuation of existing arrangements after the transition period.
As I have set out, clause 1 will allow the Government to implement the UK’s independent GPA membership in domestic law, and therefore to respond appropriately to a limited set of circumstances within the GPA. The circumstances in which the powers could be used after accession are set out in the Bill and largely concern technical or administrative modifications—for example, to reflect changes in the names of Government entities as a result of machinery of government reorganisation, which all Governments engage in. The shadow Minister is right that my arguments have inadvertently drifted from being about this group of new clauses to being about the previous group, but it is an excellent argument, and no harm has been caused by making it twice. Such modifications will have no significant—if any—social, environmental, public health, SME, equalities or other economic impacts.
Aside from regulations relating to technical changes, the powers in clause 1 will also allow the Government to make the necessary amendments to domestic law to reflect new parties joining or withdrawing from the GPA. Without the power, we would be unable to meet our obligations in relation to those acceding to the GPA. As well as being unable to give rights of access to public contracts to bidders from joining members, we would also be unable to remove rights of access to bidders from those members who had left. I am sure the Committee will agree that that cannot be a situation we find ourselves in. Recognising concerns that regulations made to reflect new accessions could have material impacts, however, we will engage the International Trade Committee and the House of Lords treaties Sub-Committee in advance of any new party acceding to the GPA. This will provide ample opportunity to explore potential impacts before any regulations are made.
Stewart Hosie
May I ask a brief question? Is the Chair of the International Trade Committee aware of the obligation that he will have to consider this in advance?
Greg Hands
I thank the hon. Gentleman for that intervention. I do not know whether the Chair of the Committee was aware of that, but he is now and I think he will welcome the change. He is always somebody who likes to be consulted, as we well know, so I think he would agree with me that this is a welcome move for additional consultation.
I have set out that the powers in clause 1 can be useful, but I want to be clear with the Committee about what they cannot be used for. The clause 1 powers cannot be used to implement any wholesale renegotiation of the GPA, or of the UK’s market access offer. Any such changes would require further primary legislation.
I hope I have persuaded the Committee that there would be no benefit in carrying out extensive reviews after regulations under clause 1(1) have been made. I ask that hon. Members do not press their new clauses to a Division, and I commend clause 1 to the Committee.
Bill Esterson
I think this is the first time in the Minister’s parliamentary career that he has ever admitted he was wrong—[Laughter.] I give him credit for being gracious enough to do so. We may have seen history in the making.
The Minister does this a lot. He claims we are against something when we are not. We spelled out in our reasoned amendment last time, and we spelled it out in our reasoned amendment this time, that we support the accession of the GPA. We voted against the Bill as a whole because we oppose the Bill as a whole. That does not mean that we oppose everything in the Bill. He knows that, but he keeps saying it. I know he likes to have some fun.
I do not object to the suggestion of asking the International Trade Committee and the Lords treaties Sub-Committee to take on additional roles, although I share the slight surprise of the hon. Member for Dundee East about the fact that the Chair of the International Trade Committee was not consulted before the announcement was made. That is not the real issue, however. The issue is that the new clauses request a review of the regulations. They do not request a review of the membership or proposed new members, so that is a rather different point. I hope that the International Trade Committee would be asked to review any proposed changes to the regulations in discussions and negotiations with our partners. I do not object to the same thing for potential accessions, but that is a rather different point from the one we were making. Having said that, and as I said in my opening remarks, they are probing provisions and we will not be pressing them to a Division.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Implementation of international trade agreements
Stewart Hosie
I beg to move amendment 30, in clause 2, page 2, line 9, leave out “appropriate” and insert “necessary”.
I will be mercifully brief on amendment 30. The effect of the amendment would be to limit the scope of the powers to be delegated to an appropriate authority to what is actually necessary to achieve the implementation of international trade agreements. Clause 2(1) provides that:
“An appropriate authority may…make such provision as the authority considers appropriate”—
to implement a future agreement. However, the word “appropriate” is vague and subjective. A necessity test—I am sure I have heard the Minister make this argument in the past—is clearer and more objective. The power should be limited to making the regulations that are necessary to implement the agreement.
Gareth Thomas
I hope to be equally brief. I have some sympathy with the amendment. I recognise the appetite of the hon. Member for Dundee East to prevent overreach by the Government in adding to legislation via secondary legislation anything that they think is a “nice to have” rather than a fundamental and necessary consequence of a trade agreement. Our biggest concern is that the Bill will not deliver the effective meaningful scrutiny of either so-called roll-over agreements or the larger agreements to come, such as the US trade deal and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, on which the Government have begun negotiations.
Taken as a package with the Command Paper from February last year on parliamentary scrutiny of future FTAs, the Government’s failure to include in this Bill several amendments that were tabled on Report in the Commons in February 2018, and in the Lords, raises concerns about Government overreach. We hope to tackle those issues with further amendments that we have tabled to clause 2. I recognise that devolved Administrations will worry that the devolution settlements might be further undermined by Government overreach because of the use of the word “appropriate” instead of “necessary”. We have some sympathy with that concern, as indicated by one of our amendments further down the line.
The witness from the CBI made a striking intervention on Tuesday morning when he said that business was desperate for certainty. To get certainty, Parliament needs to have more say and involvement in future trade agreements, otherwise we risk the development of a situation of considerable mistrust, undermining the appetite of business to take up the opportunities offered by new trade agreements. Our amendments seek to prevent that from happening by locking in more opportunities for parliamentary scrutiny. I suspect the hon. Member for Dundee East does not intend to press this amendment to a vote. In that spirit, I have flagged up some of our concerns about the Bill, which we will address in the group that begins with amendment 4.
Greg Hands
Speaking to amendment 30, which was tabled by the hon. Member for Dundee East, I can assure him that all regulations made under the clause 2 power to implement international trade agreements will be both necessary and appropriate. The power is needed to implement obligations arising from continuity trade agreements into domestic law over time and in all circumstances. Our expectation is that the power will be mainly used for obligations relating to procurement or mutual recognition of product conformity assessments. To be clear, it cannot be used to implement tariff-related provisions. Without such an ability to make changes, the UK would be at risk of being in breach of our international obligations. It is the Government’s responsibility to ensure that that does not happen. The proposed amendment would prevent that by constraining the vires or scope of the regulations that can be made under clause 2, particularly when using the concurrent powers to legislate in areas of devolved competence.
I can assure colleagues that the powers in the Bill will be used in a proportionate way and that consultation with colleagues in the devolved Governments and elsewhere is a fundamental part of our approach. The Government view “appropriate” and “necessary” as synonymous, and our intent is only to make use of the regulation power where it is needed to fulfil obligations under agreements. I therefore ask the hon. Member for Dundee East to withdraw his amendment.
Stewart Hosie
I thank the Minister for his response and I will take his assurances at face value. I just say to him that the objective not to use this to change tariffs is not one of the exclusions in clause 2 in relation to the implementation of trade agreements. The Government might want to look again later in our proceedings at how exclusions to the use of this power are documented in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stewart Hosie
I beg to move amendment 31, in clause 2, page 2, leave out lines 13 and 14 and insert—
“(b) an agreement between two or more countries aimed at reducing the barriers to trade in goods or services between them”.
The Chair
With this it will be convenient to discuss amendment 15, in clause 4, page 3, line 26, at end insert—
“‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.
Stewart Hosie
The effect of this amendment is clear: to provide a more precise definition of an international agreement and achieve greater clarity in the Bill. The amended wording would provide a clearer definition of an international trade agreement than is currently provided for in the Bill. That is in line with the Government’s own intention, as set out in the explanatory notes. Paragraph 31 states:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
The principle of certainty is central to good law making. In clause 2(2), an international trade agreement means “a free trade agreement”, but that is further defined in paragraph (7). Subsection (2)(b), as it currently stands, refers to
“an international agreement that mainly relates to trade, other than a free trade agreement.”
We had a discussion on Second Reading about that. These modern trade agreements have little to do with quotas and tariffs and far more to do with other things, as I said in my introductory remarks earlier this afternoon. The phrase “mainly relates to trade” does not grant sufficient certainty in terms of interpretation.
As I have said, the explanatory notes give the following definition:
“International trade agreements are agreements between two or more countries aimed at reducing the barriers to trade in goods or services between them.”
I consider that definition to be clearer than the multi-part definition currently in the Bill. This amendment does not reduce the scope of what might be deemed to be in a trade agreement, but it provides it with a purpose: to reduce the barriers to trade in services and goods. In that sense, I think it a helpful amendment, which I am sure the Government will want to look at positively as we proceed with our deliberations.
Gareth Thomas
I rise in sympathy with the spirit of the amendment moved by the hon. Member for Dundee East, but I wish to speak specifically to amendment 15, which seeks to insert at clause 4, page 3, line 26:
“‘international agreement that mainly relates to trade, other than a free trade agreement’ means a strategic partnership agreement or mutual recognition agreement that is ancillary to a free trade agreement, or an investment agreement”.
I join the hon. Gentleman in wanting to see good law making and, therefore, proper definitions of what constitutes a trade agreement that would be covered under the Bill. The hon. Gentleman’s amendment refers just to an agreement on trade in goods and services. Our amendment includes the Government’s definition, but expands it to make it crystal clear that it includes a range of other trade related agreements, including investment agreements.
My hon. Friend the Member for Brent North (Barry Gardiner), speaking on an amendment similar to this one at the Committee stage of the Bill in January 2018, noted the lack of detail about what constitutes an international trade agreement and worried about whether trade agreements, or agreements that had substantial trade elements, would be brought to the House for even the limited scrutiny that the Minister proposes.
Mutual recognition agreements are crucial in terms of scrutiny; many of them help to minimise unnecessary regulatory non-tariff barriers. However, they potentially have implications for phytosanitary standards, food standards and environmental obligations. Strategic partnership agreements can add social and political conditionalities to accompany the more commercial aspects of trade agreements. For example, one wonders whether there might be strategic partnership agreements with some developing countries, perhaps to provide aid for trade support as they seek to implement new trade agreements with us.
Investment treaties are returning to being a UK competence, having left our responsibility in 2009. One of the most significant investment treaties that the European Union has been negotiating—the negotiations on it have not yet concluded—is with China, where there have been 28 rounds of negotiations. I suspect that there would be considerable interest in the UK, including within this House, if the Government sought an investment treaty with China. Surely, it is right to make sure that such an agreement would fall within scope, and it would also need to receive proper scrutiny.
Bill Esterson
I am glad that my hon. Friend has mentioned investment treaties; they absolutely should be part of the description given in clause 4. Does he agree that that is not least because of the fact that the 180 bilateral investment agreements that this country is party to have investor-state dispute settlement clauses, some of which are being used right now to prepare legal cases against our own Government?
Such clauses are a particular concern in areas such as construction. I suggest to my hon. Friend that in this crisis, given that they are being used along with construction contracts and procurement, we need to be very careful to ensure full scrutiny of everything of an international trade and investment nature.
Gareth Thomas
I was moving on to say where there might be concerns about an investment treaty that warranted the type of scrutiny that the Bill allows, and the Bill could allow even more of that type of scrutiny if the Government accepted later amendments. There are absolutely major concerns around the ISDS provisions in some investment treaties; I am sure that we will come to discuss those concerns when we debate other amendments.
The International Trade Committee has highlighted other aspects of investment treaties about which there are concerns, such as the question of sustainable development provisions in investment treaties so that developing countries can postpone investment liberalisation if they need to for various developmental reasons.
There have also been concerns in the past about performance requirements in investment treaties: conditions attached to foreign investors by host states, such as stipulating that a certain quantity of domestic inputs into goods that are being produced have to come from the host country.
For those reasons, therefore, we want to make sure that the Bill allows proper scrutiny in relation to any of those concerns that might or might not be raised by a future investment treaty. I look forward to hearing the Minister’s response.
Greg Hands
Amendment 31, which has been tabled by the hon. Member for Dundee East, seeks, as he pointed out, to modify the definition of an international trade agreement. Our definition of an international trade agreement is drafted so that it will sufficiently capture the range of agreements that we currently access through the European Union. That includes free trade agreements but also stand-alone mutual recognition agreements, or MRAs. By changing the definition, the amendment would limit important elements of trade that businesses and consumers rely on.
As Members know, provisions under free trade agreements are wider than simply goods and services; the point was made by the hon. Member for Dundee East. That is an essential fact of modern trade agreements that the hon. Gentleman’s amendment overlooks. The amendment would create an unnecessary risk that important agreements became out of scope of the powers, leaving us unable to ensure continuity of trading relationships for UK businesses and consumers. He drew attention to tariffs but, legally, we cannot use clause 2 for tariffs, as he knows, because that has to come under the Taxation (Cross-border Trade) Act 2018.
Amendment 15 seeks to limit the range of agreements that the UK will be able to sign outside FTAs. Specifically, again, that would have an impact on our stand-alone mutual recognition agreements. As Members will be aware, the UK has signed agreements that replicate the effects of existing EU arrangements for mutual recognition of conformity assessment. Those arrangements ensure continuity for UK manufacturers and businesses, meaning that they are able to continue having UK testing bodies certify that their products meet the regulations of other countries. The alternative would be to send our products for testing in other countries, significantly increasing costs and making many exports unviable.
The international trade agreement power enables continuity agreements to come into effect. That includes continuity MRAs. Amendment 15 therefore risks the UK being unable to fulfil obligations arising from continuity MRAs. If stand-alone mutual recognition agreements were taken out of the scope of the power, the UK would not be able to amend product-specific UK legislation to ensure that we were able to implement fully our obligations stemming from the continuity MRAs. Not only would that harm the UK’s standing on the international stage but, more importantly, it would materially impact on UK businesses and their employees at a time when they need to be able to maintain and grow their trading relations. No member of the Committee would want to see that.
An example of that power are the Electromagnetic Compatibility Regulations 2016 as covered by the mutual recognition agreement that the EU has with the United States, which reduces regulatory barriers to trade for goods such as microwave ovens. We seek to replicate the effects of that MRA, allowing businesses and consumers to continue to benefit.
I hope that I have been able to reassure the Committee about the reasoning behind the Government’s approach. I ask hon. Members to withdraw their amendments.
Stewart Hosie
May I make an observation? Clearly, my amendment was driven by the lack of clarity on the face of the Bill, compared with the more elegant phraseology in the explanatory notes. The hon. Member for Harrow West spoke about investment treaties and the Minister himself about MRAs, but the fact that investment treaties and MRAs are not included in the definition—although the Minister says that it is wide enough to capture everything—probably tells us that there is an issue of public understanding of the definition of a trade agreement in the Bill.
It might be that better can be done, however it is done, and more clarity provided as to what precisely the Bill intends to cover by way of treaties in the future. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
Again, that will come at a later stage in the Bill, so it cannot be moved at this point.
Ordered, That further consideration be now adjourned. —(Maria Caulfield.)
5.4 pm
Adjourned till Tuesday 23 June at twenty-five minutes past Nine o’clock.
Written evidence reported to the House
TB12 British Veterinary Association (BVA)
Finance Bill (Tenth sitting)
Thursday 18th June 2020
(4 years, 6 months ago)
Public Bill CommitteesRead Full debate Finance Act 2020 View all Finance Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 June 2020 - (18 Jun 2020)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
Good afternoon. As Members are aware, social distancing guidelines are in place, so I remind them to sit only in marked seats. Tea and coffee are not permitted in Committee Rooms. Please will all Members ensure that mobile phones are turned off or switched to silent mode during the sitting? As Members are also aware, the Hansard reporters would be most grateful if speaking notes were sent to hansardnotes@parliament.uk.
New Clause 3
Review of impact of Act on nations and regions of the UK
“(1) The Chancellor of the Exchequer must conduct an impact assessment of this Act on the different parts of the United Kingdom and regions of England, and lay this before the House of Commons within six months of Royal Assent.
(2) This assessment must consider the impact on:
(a) Household incomes in each part of the United Kingdom and region of England; and
(b) GDP in each part of the United Kingdom and region of England;
(3) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and ‘regions of England’ has the same meaning as that used by the Office of National Statistics.”—(Wes Streeting.)
This new clause would require the Chancellor of the Exchequer to review the impact of this Bill on the nations and regions of the UK.
Brought up, and read the First time.
Wes Streeting (Ilford North) (Lab)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss the following:
New clause 18—Assessment of impact of provisions of this Act—
“(1) The Chancellor of the Exchequer must review in parts of the United Kingdom and regions of England the impact of the provisions of this Act and lay a report of that review before the House of Commons within one month of the passing of this Act
(2) A review under this section must consider the effects of the provisions on—
(a) GDP
(b) business investment,
(c) employment,
(d) productivity,
(e) company solvency,
(f) public revenues
(g) poverty, and
(h) public health.
(3) A review under this section must consider the following scenarios:
(a) the Job Retention Scheme, Coronavirus Business Interruption Loan Scheme, Bounceback Loan Scheme and Self-employed Income Support Scheme are continued for the next year; and
(b) the Job Retention Scheme, Coronavirus Business Interruption Loan Scheme, Bounceback Loan Scheme and Self-employed Income Support Scheme are ended or changed in any ways by a Minister of the Crown.
(4) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
‘regions of England’ has the same meaning as that used by the Office for National Statistics.”
This new clause would require a review of the impact of the Bill in different possible scenarios with respect to the continuation of the coronavirus support schemes.
New clause 21—Sectoral review of impact of Act—
“(1) The Chancellor of the Exchequer must make an assessment of the impact of this Act on the sectors listed in (2) below and lay a report of that assessment before the House of Commons within six months of Royal Assent.
(2) The sectors to be assessed under (1) are—
(a) leisure,
(b) retail,
(c) hospitality,
(d) tourism,
(e) financial services,
(f) business services,
(g) health/life/medical services,
(h) haulage/logistics,
(i) aviation,
(j) transport,
(k) professional sport,
(l) oil and gas,
(m) universities, and
(n) fairs.”
This new clause would require the Government to report on the effect of the Bill on a number of business sectors.
Wes Streeting
It is a pleasure to move new clause 3, in my name and those of my hon. Friends, and to speak to new clauses 18 and 21, which will be put forward by the hon. Member for Glasgow Central.
As this is likely to be the last sitting for line-by-line scrutiny, I would like to take the opportunity to thank you, Mr Rosindell, and Ms McDonagh for so effectively chairing our proceedings in the course of that scrutiny. I thank the staff in the Public Bill Office for all their assistance in putting together various amendments and new clauses. I thank my own team in Westminster—in fact, not in Westminster but working from home—for the efforts that they have made in supporting me and other hon. Members throughout this process, and I thank staff working in the offices, or not in the offices, of other members of the shadow Treasury team. They have done a sterling job—it should be borne in mind that we do not have the resources of the civil service to support us through all this—and it is much appreciated.
Ours is a great country, full of promise and opportunity. One of the richest countries in the world, we are home to world-class universities, entrepreneurs, captains of industry, groundbreaking scientists and inventors, globally renowned artists and a vibrant civil society. However, as we will consider across a number of our debates this afternoon, this is also a country of staggering inequality, intolerable poverty and wasted potential—and that is before we consider the impact of coronavirus on our country’s economic prospects.
I am starting with new clause 3. The economic divisions in our country are not merely reflected through class inequality, but reflected and represented in our geography. Britain is home to nine of the 10 poorest regions in western Europe, but also the richest, in inner London. A child on free school meals in Hackney is still three times more likely to attend university than an equally poor child in Hartlepool. The gap in productivity between English regions is worth about £40 billion a year, with productivity in London and the south-east standing at 50% above the national average.
The past 40 years have seen a significant decline in our country’s manufacturing base, with serious social consequences in former industrial towns and profound consequences for people’s lives and livelihoods—and our politics. People have seen their jobs disappear as a result of one of the largest deindustrialisations of any major nation, with production exported to countries with cheaper labour costs through outsourcing, or being lost altogether to labour-saving technology.
That is why the so-called levelling-up agenda is so important, and it is made all the more pressing by the covid-19 pandemic. We know from the evidence emerging all the time that without an effective regional response from the Government, the economic crisis brought about by covid-19 risks entrenching existing inequalities in our country and creating new ones that, unchecked, might persist for decades.
According to the RSA, the Royal Society for the encouragement of Arts, Manufactures and Commerce, rural areas and coastal towns in the north and south-west of England are most at risk of covid-19’s impact on unemployment. This involves many coastal towns, national parks and tourist hotspots, with economies dependent on hospitality, retail and tourism. The RSA identified the district council of Richmondshire in North Yorkshire, which forms part of the Chancellor’s constituency, as the most at-risk area.
Meanwhile, KPMG’s chief economist in the UK believes that the west midlands could face the biggest impact. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) has been banging the drum for the west midlands economy, highlighting in particular the risks to manufacturing in the region. The weighting of the average sectoral impact, measured by the Office for Budget Responsibility against the distribution of each local authority’s gross value added by sector, concluded that the decline in economic output in parts of the midlands and the north-west could be as much as 50% and that nine out of the 10 worst affected local authorities will be located in those regions.
That is not to say that we should not be concerned about our major cities either. Edinburgh, in particular, has the highest level of exposure to the reduction in international tourist spending, with consequences for the city and surrounding regions. Indeed, I hope we can move away from the narrative of London versus the rest of the country. Our capital city is a truly global city, and its success is inseparable from our national success, but London’s political leaders and our business leaders recognise the need for a more balanced regional economic settlement and the benefits that that would bring to all of us, wherever we live and work.
As we think about the crisis that we are living through and the recovery that we hope will follow, let us take heed of the warning from the New Local Government Network and so many others that recovery cannot be a synonym for the resurrection of business as usual. It cannot be a coincidence that our country has one of the most imbalanced economies in the developed world and also one of the most centralised systems of government.
As TheCityUK has argued,
“the crisis should prompt policymakers to consider anew some long-standing potential solutions to the problem of regional inequality, such as devolution of political and potentially fiscal powers.”
It is important that, at every Budget, Finance Bill and fiscal event, the Treasury looks carefully at whether we are moving the dial in the right direction when it comes to tackling the gross regional inequality in our country. I think it is fair to say that, under successive Governments, the Treasury has had a much more centralising tendency and cultural mindset than other Departments. Of course, it is easy to understand why that is and the appeal of being able to make big decisions and pull big policy levers that have an impact across Government and the country. But the way in which decisions are taken in Whitehall has a direct effect on not just town halls but communities right across our country.
Stephen Flynn (Aberdeen South) (SNP)
The hon. Member is making a number of excellent points. He could perhaps go further, because what he is referring to could also be an emboldened and more powerful Scottish Parliament with further devolution to Scotland.
Wes Streeting
I am grateful for that intervention. I was very encouraged by the recent policy position published by the leader of the Scottish Labour party and excitedly relayed to the rest of us by the shadow Secretary of State for Scotland, my hon. Friend the Member for Edinburgh South (Ian Murray). Scottish Labour has come out with some really bold proposals for how devolution could go even further, extending to home rule in Scotland. I know that that is not a position shared by the separatists in the Scottish National party. We could spend the rest of the afternoon discussing the merits or otherwise of Scottish independence, but, to allow SNP Committee members to get back home at the end of the day, perhaps we should not dwell on that this afternoon.
The Financial Secretary to the Treasury (Jesse Norman)
It is too tempting for me not to ask the hon. Member to share a few of his views on Unionism in Scotland and whether he thinks that is a good idea.
Wes Streeting
I think that the economic benefits of the Union are so obvious and well rehearsed from the debate on Scottish independence and the referendum campaign, but for me this is not just a question of economics or a statistical debate about the merits of Unionism; it is also about the shared history, shared benefits, shared prosperity and shared identity of the United Kingdom.
I have a great affection for Scotland as a country, and indeed for its history, its separate identity and its separate strength where policy there is different. For example, thinking back to my experience before entering this House, I have always greatly admired the Scottish higher education system, and the way in which issues such as quality enhancement are approached in Scotland. I just think that we are stronger together.
I will now pick some wounds in the other direction, because just as I have never understood how the SNP can be pro-union at a European level but hostile to it at a UK level, so too have I never understood the Conservative party’s anti-unionism in relation to the EU and its pro-Unionism in a UK context. In fact, returning to the economic matters addressed by the Bill, I have as much belief in the merits of the single market of the United Kingdom as I have in the merits of the single market of the European Union. Unfortunately, these questions have already been settled—in one case favourably; and in the other unfavourably, in my opinion. But I shall dry my remainer tears and return to our consideration of new clause 3—[Hon. Members: “Hear, hear!”] Government Members are cheering in all the wrong places.
Finance Bills, Budgets and other fiscal events are not simply number-crunching exercises, or processes of bureaucratic tidying up, as much of the Bill is concerned with, important though those often are; they also reflect the political priorities of the Government of the day and send a message to the country about the things that the Government value and want to achieve. Every one of them should move the dial on the big challenges facing our country in the right direction. That is why new clauses 18 and 21, tabled by the hon. Member for Glasgow Central, are also so important.
The economic impact of covid-19 has been felt right across our economy but, as the ONS figures show, some sectors have been hit harder than others, and we know that some sectors will be hit harder for longer. If we take the gross value added figures and look at the percentage change from March to April, we see a fall of 5% in the financial sector, for example, or 6% in agriculture, forestry and fishing. Compare that with a fall of 88% in hospitality, 40% in construction, 40% in arts, entertainment and recreation, and 24% in manufacturing. Those figures are extraordinary.
What makes the country’s experience of this crisis so different from that of 10 years ago, in the aftermath of the global financial crisis, is that we are seeing that really significant variation. If we look at the GVA figures for the impact of the financial crisis sector by sector, and then we look at the OBR’s projected output figures, as the Resolution Foundation has done, we see such a stark contrast, sector by sector, between the standard deviation 10 years ago and the one projected now.
That is why a one-size-fits-all approach to our economic response to coronavirus simply will not cut it. We of course recognise the steps that the Chancellor has already taken, and my hon. Friend the shadow Chancellor has been keen to work constructively with the Government on the economic response, as indeed have we all, but we are concerned about what lies ahead and about how the Chancellor is proposing to handle the economic response and the long-tail effects. That is why this week we have called on the Chancellor to come forward with a full Budget in March—a back-to-work Budget focused on jobs.
What gets measured is what counts. The Treasury will make better decisions and Parliament will be able to scrutinise more effectively if we look more closely at the impact of Treasury decisions on the issues that matter most to our country. That is why is it so important to consider the impact of the Bill on regional inequality, so I commend to the Committee new clause 3. I also indicate the official Opposition’s support for new clauses 18 and 21, which would look at the impact sector by sector and across a range of other important economic factors.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to see you in the Chair, Mr Rosindell.
I will reflect on some of the issues raised by the hon. Member for Ilford North. The Government down in Westminster are doing such a cracking job of selling the Union that a new Panelbase poll at the start of the month put support for independence at 52%; it had 20% of no voters in 2014 now having swapped to be in favour of independence; and most people wanting to see a vote in the next five years. A great commendation of the UK Government on the job that they are doing is that people in Scotland are regretting at a greater rate than ever before how they voted in 2014.
Wes Streeting
Perhaps when the hon. Lady returns to her constituency, she might reassure her constituents who worry about policy making at a UK Government level that, hopefully, we will have a Labour Government again before too long.
Alison Thewliss
People can promise things in the never-never—perhaps that will happen, but we do not quite know. But how Scotland ends up getting governed should not be down to whether votes in England sway one way or the other. We would do a far better job of governing ourselves, as many small independent countries around the world do. Many small independent countries are also making a much better fist of dealing with the coronavirus crisis than the UK is—in fact, most countries in the world are, never mind small ones. Look at how well New Zealand has managed the crisis, and how well it has been able to come out of it, under the brilliant leadership of Jacinda Ardern. We have a lot to learn from other countries about how to do things better in so many ways.
We are very supportive of Labour’s new clause 3 and of the complementary new clauses 18 and 21, which I tabled. New clause 18 seeks assessments of the impact of the Bill within a month on various economic variables, comparing situations in which the Treasury ceases or continues its covid-19 support schemes for the next year.
The likely reality is that when the schemes are discontinued, as planned, the economy and people’s living standards will be sent reeling. We know that from the many studies that have been done of people who have taken up the coronavirus job retention scheme—the majority of uptake of the scheme in the hospitality and tourism industries is significant. YouGov polling out yesterday suggested that a huge number of people would lay off their staff if the schemes were withdrawn. The Government need to listen carefully to the experience of people in those sectors on the impact of withdrawing too early.
We feel it is important that that is looked at in the context of the Finance Bill. As everyone has seen, as the Finance Bill progressed from the Budget to where we are now, the world in which we are living changed—changed dramatically—for so many people and their living standards. For the Government to have such a review seems wise.
The schemes covered by new clause 18 are the job retention scheme, the business interruption loan scheme, the bounce-back loan scheme and the self-employed support scheme. We know that the Chancellor has said that he will do “whatever it takes” to protect jobs, but we also know—I am a member of the Treasury Committee, and we have found that from the evidence received from many—that more than 1 million people have fallen through the gaps in the schemes. We need to understand what impact that and the measures in the Finance Bill will have on those groups.
Earlier, the Office for National Statistics revealed that in April the UK’s economy suffered its biggest monthly slump in GDP on record—20.4%—due to the pandemic. We therefore think that it would be wise for the Government to expand the support schemes, rather than winding them down. That is also critical for the devolved nations, which are moving at a slightly different pace, due to the circumstances in which we find ourselves, hence why we want to look at the different nations as well.
In new clause 21, we ask the Government to report on the effects of the Bill in a number of different business sectors. Different sectors will be differently affected. The sectors mentioned in the new clause include leisure, retail, hospitality and tourism, all of which we know from our constituency experiences have been severely hit, with retailers having real problems and many in the leisure sector perhaps falling outwith some of the schemes and finding it very difficult to get started up again. As I mentioned earlier, some businesses in my constituency were unable to access the support for various technical reasons. Financial services, business services, health life/medical services, haulage and logistics and aviation have also been severely impacted. Many bus firms and tour firms are struggling to keep going, which will impact on schools as they return. Many are rural schools and so rely on the transport sector to move pupils around. Those factors need to be considered as well.
My hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) has spoken a great deal about the impact on the aviation sector, which, in turn, will have a huge impact on the behaviour of BA. The way it is currently treating its staff is absolutely appalling.
We also want to talk about professional sport and oil and gas, which my hon. Friend the Member for Aberdeen South covered so well earlier. Universities will be hugely impacted by the number and ability of foreign students to come here to work, study and live. Those universities have been in contact with me—indeed, several are based in my constituency and several neighbour my constituency —saying that they are very concerned about their future, which the Government have not really talked about to any great extent. Fairs, too, face problems. I have many show people based in my constituency, and they are also very concerned about the loss of their season and their ability to continue trading, because they do rely on that public-facing role—opening up the funfair to people, taking money and exchanging cash. Without that, they have no income at all. They have very few alternatives. Many may operate things such as snack bar vans, which, again, have not been operating to the same extent as previously.
We are keen to press the Government on these things and to understand the impact of what has been proposed here and to see what schemes are running. I am very happy to move these new clauses in my name and the names of my hon. Friends.
Jesse Norman
I rise to urge the Committee to reject these new clauses. Let me say a few things about them and then I will turn to the comments that have been made.
New clause 1 would require the Chancellor to conduct an impact assessment on the effect of household incomes on GDP in each part of the United Kingdom and in each region of England. New clause 18 would require the Government to conduct a review within one month of Royal Assent, of the effect of the Bill on the nations and regions of the United Kingdom if the Government’s main coronavirus support schemes continue for the next year—a hypothetical case if that be so—or if they were ended or changed in any way by a Minister of the Crown. The SNP’s new clause 21 would require the Chancellor to make an assessment of the impact of the legislation on a large number of different sectors and to lay a report of that assessment before the House of Commons within six months of Royal Assent.
We do not think that any of those clauses are necessary. I should remind the Committee that, apart from the provisions relating to the main rates of income tax, provisions in this Bill will apply across the whole of the United Kingdom and will directly benefit households and businesses in every part of the country. They have been developed with careful consideration of their impact on all regions and sectors of the United Kingdom. It is worth just saying that Ministers assess individual measures as well as the package as a whole for the differential impacts that they may have on each part of the UK throughout the policy development process, and they are under a statutory duty to assess the equalities impact of the provisions contained in the Bill, and those have been analysed and published.
In addition, the Treasury publishes extensive distributional analysis of the impacts of this Bill, together with the impact of the Government’s decisions on welfare and public services. What that amounts to is a rigorous and detailed record of the impact of the Government’s policies on households. The Office for National Statistics also publishes monthly estimates of GDP, and analysis of the impact of Government decisions on GDP is also carried out by the Office for Budget Responsibility, which is itself independent.
Therefore, between those checks and balances and that degree of inbuilt institutional consideration and the packages of support that we have offered, I think that it should be fairly plain that these new clauses are not required. We continue to monitor the impact of the coronavirus crisis closely as well as the response to the schemes that have been put in place. It is right that we should do so alongside the general continuous review of tax and the economy in relation to policy.
Let me remind the Committee that the Government have a commitment to consult—and they do consult—regularly on new tax policy and tax legislation in order to make sure that as wide a range of views and impacts as possible are captured during the tax policy-making process. We have touched on that matter in a previous discussion.
Let me come quickly to the points raised by the hon. Members opposite. The hon. Member for Ilford North rightly highlighted the levelling-up agenda, and he was fully justified in doing so. He said that London was a global city and should be understood as such, but that the Government’s attention should properly be on all the regions and nations of the country, and of course I share that view.
The hon. Gentleman talked about centralisation within the Treasury. I have been a trenchant critic of centralisation in the Treasury historically and on the public record, and I think it reached a bit of an apogee under the last Labour Government—I would say that, wouldn’t I? But I still think it is true—there was a tendency to view every problem as potentially soluble by tweaking the marginal costs and benefits of a system. In some respects, we have had to counteract that tendency in order to give us more of an inclusive view of what ultimately are a set of devolved settlements as well as a UK picture.
The hon. Member for Glasgow Central said something that I thought was quite bold: that the Scottish Government would do a far better job of governing Scotland than the UK Government do within a UK national framework. Of course, the UK does not govern Scotland; it has areas that are reserved and areas that are devolved, and many areas, including higher education, are devolved in Scotland.
I must say that I share the high regard that the hon. Member for Ilford North has for the history of higher education in Scotland. He will know that for many hundreds of years there were two universities in England and five in Scotland, which represented and reflected a high-quality orientation and a commitment to higher education. Unfortunately, it is in the record that Scottish higher education has not made the same kind of progress under the Scottish National party Government, particularly in relation to minorities and equalities, which is a terrible, terrible shame. I wish it were otherwise. So I would not accept the suggestion made by the hon. Member for Glasgow Central, but I will invite the Committee to reject these clauses.
Wes Streeting
Yes, Mr Rosindell.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss the following:
New clause 19—Review of impact of Act on UK meeting UN Sustainable Development Goals—
“The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on the UK meeting the UN Sustainable Development Goals, and lay this before the House of Commons within six months of Royal Assent.”
New clause 20—Review of impact of Act on UK meeting Paris climate change commitments—
“The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on the UK meeting its Paris climate change commitments, and lay this before the House of Commons within six months of Royal Assent.”
Wes Streeting
It is a pleasure to rise to move new clause 4, which asks that the Government review the impact of this Bill on the environment. As I said earlier in our discussions on the Bill, this is where the Government’s stated ambitions on tackling climate change are not yet matched by action.
Stephen Flynn
New clause 4 closely aligns with what the SNP seeks to promote in new clauses 19 and 20, and I will address each of them in turn. First, new clause 19 would require a review of the Bill’s impact on the UK meeting the UN sustainable development goals. The obvious thing that must be said to start with is, why would we not want to do that? Why would we not want to know whether our actions are complementing the UN sustainable development goals? We heard from the hon. Member for Ilford North, who helpfully stole some of my lines, about how important the UN sustainable development goals are. That perhaps suggests why the Government may be reluctant to agree to this new clause, although I hold out hope that the Financial Secretary to the Treasury will rise and show that my doubts are misplaced.
The first sustainable development goal is on ending poverty. Quite frankly, it is absurd that poverty exists in these isles. Unfortunately, the UK Government have been in charge for much of my lifetime, and during that period, poverty has been prevalent because of the actions and decisions that they have taken—we cannot escape that fact. Whether in more recent times through universal credit and the two-child cap, or regarding their inability even to provide free school meals to children in England, the consequences of their actions are great. We have heard that Marcus Rashford achieved more in a matter of days than the Government managed to achieve in a number of years, but that is not something the Government should be proud of. It should not take a footballer to change their direction; that is not how politics should work at the best of times.
The last UN sustainable development goal is on partnerships to achieve the goals. We heard from the hon. Member for Ilford North that the Department for International Development has been completely disbanded and is getting moved into the Foreign and Commonwealth Office. That is an absurd move by the Government, and it flies in the face of sustainable development goal 17, on partnerships to achieve the goals. DFID has done so much to foster good relations across the world, which has allowed us to play a leading role in trying to improve the lives of those whose life chances, quite frankly, are worse than anything we can possibly imagine.
The simple question is, why would the Government not wish to support the new clause? The answer is perhaps that their own record shames them from doing so. If they were to support it, they would be following the path of the Scottish Government, who embedded the sustainable development goals in our national performance framework—Scotland’s vision for national wellbeing—following consultation with the public, trade unions, business organisations, local government, voluntary organisations and wider civic society. It can be done, and in a positive and proactive way, with community groups from across the spectrum. Where Scotland leads, the UK Government have the opportunity to follow
The Exchequer Secretary to the Treasury (Kemi Badenoch)
New clauses 4, 19 and 20 would require the Chancellor to review the environmental impact of the Finance Bill and its impact on the UK’s meeting the UN sustainable development goals and UN Paris climate change commitments. The new clauses are not necessary and should not stand part of the Bill. Tackling climate change is a top priority for the Government, as demonstrated by the UK becoming the first major economy to pass legislation committing to reach net-zero emissions by 2050. The Bill builds on the UK’s existing strong environmental record and commitments by delivering new policies to reduce carbon emissions and enhance the environment, and it provides significant incentives to support the continued decarbonisation of transport.
Clause 83 establishes tax support for zero-emissions vehicles, exempting them from the vehicle excise duty expensive car supplement. From April 2020, vehicle excise duty and company car tax will also be based on a new, improved laboratory test known as the worldwide harmonised light vehicle test procedure, or WLTP, which aims to help reduce the 40% gap between the previous lab tests and real-world carbon dioxide emissions.
The Bill will ensure that HMRC can make preparations for the introduction of the plastic packaging tax, which will incentivise businesses to use 30% recycled plastic instead of new material in plastic packaging from April 2022, stimulating increased recycling. The Government are also reopening and extending the climate change agreement scheme to support energy-intensive businesses to operate in a more environmentally friendly way.
Clause 93, which establishes a UK emissions trading system, and clause 92, which updates legislation relating to the carbon emissions tax, ensure that polluters will continue to pay a price for their emissions once our membership of the EU and the emissions trading system ends following the transition period.
New clause 4 would require an impact assessment of the Bill on the environment to be laid before Parliament within six months of Royal Assent. Where tax policies have a particular environmental impact, the Government will take that into account during the tax policy making process and, where appropriate, publish a summary of the impact in the relevant tax information and impact note, or TIIN, as it is otherwise known. The Bill’s clauses demonstrate our progress towards tackling climate change as well as towards international deals and agreements, without the need for an additional environmental impact review.
The hon. Member for Ilford North made several comments about our spending more money on coronavirus than on climate change and about our not being on track to meet our net zero targets. All I can say to him is that many of the actions that we need to take to deliver our climate targets also help the UK’s economy to recover from the impacts of covid-19. We do not look at those issues separately. He must remember that between 1990 and 2017 the UK reduced its emissions by 42% while growing the economy by more than two thirds. It is simply wrong to say that we are not doing enough on climate change.
Building on our ambitious announcements in the Budget, such as the £800 million fund for carbon capture and storage, we are developing ideas for how we can go further using clean, sustainable and resilient growth as a guiding principle for our strategy to recover from the impact of the virus.
New clauses 19 and 20 would require a review of the impact of the Bill on the UK’s meeting the UN sustainable development goals and Paris climate change agreements. The UK published a voluntary national review setting out in detail our progress towards the sustainable development goals and identifying areas of further work in June 2019. We remain committed to supporting implementation of the sustainable development goals, including to help us build back better from the covid-19 crisis. By working to achieve the sustainable development goals, we will also be better placed to withstand future crises.
Under the Paris agreement, the Government must maintain and report on their emissions reduction commitments in the form of a nationally determined contribution. The UK’s legally binding commitment to reduce emissions to net zero by 2050 is among the most stringent in the world, and the system of governance implementing the commitment under the Climate Change Act 2008 is world leading.
The Committee on Climate Change, established under the CCA 2008, provides independent evidence-based advice to the UK Government on how to achieve the targets. It reports to Parliament annually on progress made in reducing greenhouse gas emissions and on preparing for and adapting to the impacts of climate change. The Government are committed to tackling climate change. The measures in the Bill already demonstrate that, as well as highlighting our progress towards achieving net zero emissions by 2050, which is one of the most ambitious climate change commitments in the world. In this context, a separate review of the environmental impact of the Bill and how it meets international agreement is unnecessary. I therefore ask the Committee to reject the amendments.
Wes Streeting
I am concerned by the complacency of the speech that we have just heard from the Exchequer Secretary. I do not think it is sufficient to say that the UK is doing enough to tackle climate change and to meet our net zero ambition when all of the evidence suggests that that is not the case. That reinforces even further the case to run a proper impact assessment on the Bill.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss:
New clause 17—Assessment of equality impact of measures in Act—
(1) The Chancellor of the Exchequer must lay before the House of Commons a report assessing the effects on equalities of the provisions of this Act within 12 months of the passing of this Act.
(2) The review must make a separate assessment with respect to each of the protected characteristics set out in section 4 of the Equality Act 2010.
(3) Each assessment under (2) must report separately on the effects in in each part of the United Kingdom and each region of England.
(4) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
‘regions of England’
has the same meaning as that used by the Office for National Statistics.”
This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on equalities.
Wes Streeting
New clause 5 requires the Chancellor of the Exchequer to review the impact of the Bill on individuals or groups with protected characteristics defined under the Equality Act 2010. The Equality Act, passed by the last Labour Government, was one of the most important pieces of legislation that we passed. It aimed to accelerate the advance this country has made over successive decades in trying to eliminate the discrimination, prejudices and inequalities experienced by people on the grounds of race, ethnicity, gender, sexual orientation, gender identity, religious beliefs and so on.
Throughout my life, I have felt an almost certain sense of inevitability that Martin Luther King was right when he said that
“the arc of the moral universe is long but it bends towards justice.”
It implies the onward march of social progress. We have seen that in this country. On discrimination against people based on their race, the indicators have improved. Action has been taken to tackle gender equality and the role of women in our society. The Labour Government delivered historic changes in terms of the treatment of LGBT people and established such a consensus that the coalition Government built on that record with legislation on equal marriage. The Disability Discrimination Act 2005 improved the treatment of disabled people.
However, inequality is still present in our society and injustice is still too frequent. I am not sure we can say with the same sense of certainty I used to feel that the onward march of social progress is inevitable. Progress has to be defended otherwise it gets rolled back. Unless there is a relentless and genuine commitment to tackling inequalities, they continue to persist. It is not just that people are victims of deliberate and conscious bias and discrimination. Often they are victims of unconscious bias and discrimination, and that is why the evidence and the data are so important. It is not enough just to reassure ourselves that we are nice people and we like treating one another fairly. We have to look at, and be guided by, the evidence. Even those of us with deep personal convictions when it comes to tackling inequality and injustice can make mistakes. We are all affected by biases and preconceptions, and we have to remain constantly alive to them.
I do not think the picture painted in our country today is one we ought to be satisfied with. Women make up 69% of low-paid earners and the majority of people living in poverty, including 90% of lone parents, almost half of whom are living in poverty. Many of those women are disabled or face racial inequality, a reminder that although we understandably and rightly set out in legislation those protected characteristics one by one, the discrimination, prejudices and biases that people are subjected to are often intersectional. Sometimes people face discrimination, whether deliberate or otherwise, twofold, threefold or fourfold. Women are disproportion- ately likely to work in sectors that have been hardest hit by the lockdown we are experiencing as a result of coronavirus. Figures from the Institute for Fiscal Studies show that 36% of young women work in sectors that have been closed down, including restaurants, tourism and retail.
Almost half of people living in poverty today in the UK are disabled or live with someone who is. The Runnymede Trust has found that black African and Bangladeshi households have 10 times less wealth than white British households, and black Caribbean households have about 20p of wealth for every £1 of white British wealth. Around 18% of Bangladeshi workers are paid below the minimum wage, compared with 3% of their white counterparts. That is a reminder and recognition of the fact that although we use the term “black and minority ethnic” as a catch-all, there are many different experiences among people of different races and ethnicities. We have to pay attention to the different variables and factors that have an impact on people.
Alison Thewliss
I rise to speak to new clause 17 and associate myself with the remarks of the hon. Member for Ilford North, with which I broadly agree and support. We certainly support new clause 5, which chimes with our new clause. We live in a society where it is clear and evident that able-bodied older white men do better than almost everybody else, so what we want to see from the Finance Bill is who benefits from the measures within it and how we know that. We do not know that from how the Government have acted, as they have conducted a very light-touch equality impact assessment on the Budget.
The Women’s Budget Group has produced an excellent briefing, and it calls the Treasury out on failing to publish comprehensive equality impact assessments:
“The only impact assessment relating to protected characteristics in the Budget documents are the Tax Information and Impact Notes (TIINS) produced by HMRC. Only a few measures were recognised to have any equalities impact at all and even here the analysis is cursory, based on limited evidence and with a poor understanding of equality impact…In the absence of a meaningful cumulative equality impact assessment of the budget as a whole it is impossible to judge whether the Treasury has met its obligation under the Public Sector Equality Duty to have ‘due regard’ to equality.”
That is pretty damning on the equality impact assessments that Ministers say they have carried out.
Under the measures assessed as having an equalities impact in the equality impact assessment, the Women’s Budget Group notes that for the lifetime limit for capital gains tax entrepreneurs’ relief, the assessment recognises that
“claimants tend to be older, men, of above-average means, and include individuals who are selling their business or their company’s shares on retirement”,
and does not anticipate an impact on any other groups sharing a protected characteristic, but there is no working to show how the Government arrived at that. There is no further analysis as to why they think that no other groups will be affected. It is one thing to assert that, but the Government have to show their working, and they have not done that.
The Women’s Budget Group also notes that the equality impact assessment states that the measure on pensions tax income thresholds for calculating the tapered annual allowance will impact more on men than on women. The assessment states that it is
“not anticipated that there will be impacts on any other groups sharing protected characteristics”.
However, the Women’s Budget Group points out that the family resources survey could have been used to assess the impact by age, ethnicity, disability and various other characteristics, but that was not done. Again, it is not a full equality impact assessment; it is very light touch.
The WBG also mentions the changes to the disguised remuneration loan charge as referenced in the equality impact assessment. The analysis states that,
“broadly the measure is expected to affect more males than females”,
but that it is
“not anticipated that this measure will have a significant, or disproportionate, impact on groups with protected characteristics”.
However, there is no explanation for that. It might well be true, but we cannot tell because the Government have not shown their working.
The Women’s Budget Group analysis also discusses measures where no equalities impact is identified at all, when it really should have been. I do not want to go into all of these things, because they are multiple, and we would be here all afternoon, but I will touch on the changes to the van benefit charge and fuel benefit charges for cars and vans and the taxable benefits regime for measuring CO2 emissions, which primarily impact on
“individuals who use a company van or car which is available for their private use and/or who are provided with fuel for their private use by their employer”.
Those people are far more likely to be men. We might guess that, or we might anticipate that. The Government’s statistics on driving licences show that in 2018, 81% of men had a driving licence, compared with 70% of women. There are also issues of race, because 62% of people designated as Asian, 52% who are black, and 76% of people who are white have driving licences. That is a clear discrepancy and will have a clear differential effect as to who will or will not benefit from the measures. The Government already have those statistics but have not chosen to do an equalities impact assessment on them. There will be a differential impact because not everyone has a driving licence and those who do have one are predominantly white men.
The Government might want to look at the sectors that would benefit. There may be differences in the types of people who would do jobs with a company car or van. The Government might want to look at those sectors and say, “Actually, there is a disproportionate number of people of a particular background in there.” That has not been done. If we do not count those things we do not know what the impact is. We do not know who benefits and why, or what we can do to make sure that everyone benefits from the measures that the Government propose.
That, I suppose, is just a small example of why the impact assessment is needed. There are clear disparities across society and clear inequalities. If we do not count in the Finance Bill who benefits, why, and what can be done to redress the imbalances that we see in society in front of us, by taxation or other measures, we will never be able to address those inequalities and go to a more equal society.
Kemi Badenoch
New clause 5 would require the Chancellor to conduct and lay before the House an equality impact assessment of the Act within six months of Royal Assent. New clause 17 would require him to lay a similar report within 12 months. Those additional reporting requirements are not necessary. The Treasury considers carefully the equality impacts of the individual measures mentioned and announced at fiscal events on those sharing protected characteristics, including gender, race and disability, in line with its legal obligations and its strong commitment to equality issues.
The outcome of all fiscal events is published, and is subject to much parliamentary and public scrutiny. The Treasury also takes care to pay due regard to the equality impact of its policy decisions relating to the covid-19 outbreak, in line with all legal requirements and the Government’s commitment to promoting equality. There are internal procedural requirements and support in place, to ensure that such considerations inform decisions taken by Ministers.
In the interest of transparency the Treasury and HMRC publish tax information and impact notes for individual tax measures that include in summary form assessments of their expected equalities impacts. The system of accompanying tax legislation with TIINs was introduced under this Government, and the notes include headline summaries of equality impacts, as well as other important information that reflects internal assessments carried out as an integral part of decision making.
In addition, the Treasury already publishes analyses of the impacts of the Government’s measures on households at different levels of income, in the “Impact on households” report, which is published separately alongside each Budget, along with trends in living standards and the labour market, by region and income level. That is the most comprehensive analysis of its type available, and it shows that as a result of decisions taking in Spending Round 2019 and Budget 2020 the poorest households have gained the most as a percentage of net income.
That brings me to the comments of the hon. Member for Ilford North and the hon. Member for Glasgow Central. They keep talking about the Government not doing enough on inequalities. Actually the Government have done quite a lot, but the hon. Members refuse to acknowledge it. When we have commissions and recommendations the hon. Member for Ilford North complains about a new commission. We have carried out recommendations, and the hon. Members pretend that nothing has happened. The hon. Gentleman mentioned the shadow Justice Secretary. Did he ask him about the progress that we have made on the Lammy report? We have carried out many of those recommendations, but hon. Members stand up in Parliament and pretend that nothing has happened. They continue to use incendiary and inflammatory rhetoric. Is it any wonder that there are people out there who feel that the Government are doing nothing, when so many MPs in this House stand up and say so? It is a shame, and as Equalities Minister I think it is a disgrace.
Kemi Badenoch
No, I am not giving way; Opposition Members have had their time. I ask the hon. Lady, instead of trying to give me lectures, to take some time to learn a little more about what is going on. Even the phrase she talks about—“people with protected characteristics”—is wrong; we all have protected characteristics. The Equality Act is for everybody and not for specific groups of people.
On that note, neither of the new clauses would be useful in finding out more about the impact on equality, because the Government regularly publish in summary form the equality impact assessments for the legislation that we introduce. The reports required by the new clauses would not add any genuine value, so I ask the Committee to reject them.
Wes Streeting
That speech was really quite extraordinary and incendiary itself in response to what has been said. We are giving voice to the statistics and the data. Speaking for myself—I imagine this is also true for the SNP spokesperson—I am particularly giving voice to the concerns of my constituents. I represent one of the most ethnically and religiously diverse constituencies in the country. People who have written to me in recent weeks have not done so simply out of anger or emotion, and certainly not because they have read something that I have said in Hansard—that would be a novelty—but because of their own lived experiences. That is the frustration for me.
It would be one thing had the Government said this afternoon, “This is what we have done, but we recognise that there are big challenges, so this is what we still plan to do,” but their response to the protests of recent weeks has been tone deaf, for the most part, and actively irresponsible in other respects. It is regrettable that we do not seem to be seizing the moment, either in Government or as a Parliament, to reassure people throughout the country that we will leap on this moment. If we look throughout history, we see that sometimes events occur and there are big moments that can positively shift the dial in the most remarkable way. That is what we should be seeking to do here. I have actually seen a better response in that respect from the private sector than from our own Government. The private sector does not have a democratic accountability to the people—it has a commercial one and a profit motive; if companies are doing these things out of a sense of corporate social responsibility, that is good for them—but the Government have democratic accountability.
The Government’s efforts on equalities do not match the rhetoric we heard from the Minister. The Treasury has a particular leadership role to play, particularly on tackling economic inequalities that have an impact on people from a range of characteristics, for a range of reasons, and in different ways. With that in mind, I want to press new clause 5 to a vote.
Question put, That the clause be read a Second time.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 22—Review of effect of Act on tax revenues—
“(1) The Chancellor of the Exchequer must review the effects on tax revenues of the Act and lay a report of that review before the House of Commons within six months of Royal Assent.
(2) The review under (1) must contain an estimate of any change attributable to the provisions in this Act in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.
(3) The estimate under (2) must report separately on taxes payable by the owners and employees of Scottish Limited Partnerships.”
This new clause would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of the Bill; and in particular on the taxes payable by owners and employees of Scottish Limited Partnerships.
Bridget Phillipson
It is a pleasure to take over from my hon. Friend the Member for Ilford North, and to see you back in the Chair this afternoon, Mr Rosindell.
Throughout proceedings in Committee we have repeatedly touched on the changes that the Government wish to make to tax reliefs. The regularity with which we have discussed such matters is not surprising when we consider that the UK had 1,190 tax reliefs as of October 2019, including 362 so-called tax expenditures—in other words, reliefs that support specific Government objectives.
HMRC has identified that the cost of policy-motivated tax expenditures is large both in absolute terms—approaching 8% of GDP—and by international standards. That is the reason behind this new clause. As I argued earlier in Committee, we on the Opposition Benches would like to see a broad review of tax reliefs, to determine exactly who is benefiting from the hundreds that exist, whether they are fair, whether they represent good value for money and whether they are securing the policy outcomes originally intended.
We believe the Government could start improving the scrutiny of tax reliefs by supporting the new clause to ensure that those contained in the Bill are monitored properly and transparently and that Parliament can debate whether they are having the desired effect and represent value for money for the taxpayer. Points raised earlier in our debates demonstrate the merits of embedding such a practice.
On clause 21, we highlighted how changes to pensions tax relief around the tapered annual allowance will affect all pensions, not just those of the senior clinicians and other public sector workers who have been adversely affected by recent changes. We should therefore be reviewing the impact of that measure, not only to ensure that it reverses the worrying trend we have seen in the retention of senior medical staff, but to consider the overall impact on taxation revenue.
On clause 22, relating to entrepreneurs’ relief, I raised concerns that the measure had benefited a small number of wealthier claimants and had a negligible effect as an incentive for investment decision making. The Minister responded that the Government had conducted an internal review that had influenced the reform and that he would review and monitor the effects of the change as standard.
It is reassuring to know that there are reviews of some of these reliefs, but as the Minister will know from the National Audit Office’s report, the Government’s monitoring of tax reliefs is just not what it could be. Indeed, the Government are not reporting costs on more than two thirds of tax reliefs, and HMRC does not know whether most tax reliefs offer value for money. Furthermore, internal reviews, where they occur, do not go far enough and do not lead to an adequate level of debate or scrutiny.
I know that we have all enjoyed delving into the finer details of Government tax policy in recent weeks. Although we might return to this soon, we should accept that such opportunities are fleeting, and little is done to facilitate ongoing scrutiny of tax reliefs. Other countries do this much more regularly, and I will return to that point. No doubt the intention behind tax reliefs is often positive—namely, to incentivise a certain type of social or economic behaviour that is of some benefit to the country—yet the lack of adequate monitoring and oversight makes determining whether they are having the desired effect more difficult. In many instances, we have seen costs spiral out of control, differing substantially from initial projections.
Of course, cost is not the only metric by which we might want to measure the success or otherwise of a tax relief. There are other—particularly behavioural—impacts that we may want to consider. That is why proper parliamentary scrutiny of these policies, which takes into account the full picture, is so important. This new clause would enable that to happen. In addition, it would help to embed the processes being undertaken by HMRC and the Treasury, which have been noted by the National Audit Office.
Our concerns about the adequate scrutiny of tax reliefs go beyond those included in the Bill, and I would like to draw the Minister’s attention to the concerns raised in the NAO report. It notes that the estimated cost of tax expenditures was £155 billion in 2018-19. Some of that will obviously go to achieve worthwhile social or economic objectives, but the NAO says that
“it does not reflect the amount of tax that would be generated if tax expenditures were removed”
due to any corresponding behavioural change and the economic impact that would result.
There remains a concern that, for something that is such a cost to the Government, there is little in the way of evaluation to ensure value for money. Of the 362 tax expenditures that exist, 111 have been costed by HMRC, 63 have been assessed by the Treasury, and only 15 have had published evaluations since 2015. That is despite their cost having grown in recent years. In July 2019, the OBR reported that the known cost of tax expenditures had risen in the past decade. That is a 5% real increase in the summed estimated cost of tax expenditures from 2014-15 to 2018-19.
The mounting number and cost of tax reliefs adds complexity to our tax system and to evaluating fairness and value for money. Despite warnings, we have not seen enough progress on this front. The NAO stated in 2014 that there was little in the way of “a framework or principles” to guide the administration of tax reliefs. In 2018, the Public Accounts Committee concluded that HMRC did not know whether a large number of tax reliefs were delivering value for money. It should be acknowledged that both HMRC and the Treasury have since taken steps to increase their oversight of tax expenditures and actively consider their value for money, but that has not allayed concerns. In July 2019, the OBR identified the costs of tax reliefs as one of four new fiscal risks to the public finances. It stated:
“The Government does not seem to have a systematic way of evaluating the effectiveness of those tax reliefs and expenditures with a stated policy objective.”
The International Monetary Fund has also stated that tax expenditures require the same amount of Government oversight as public spending.
Despite those warnings and recommendations, we have simply not seen the necessary progress from Government in implementing the measures that would allow for the proper scrutiny of tax reliefs. This new clause would help us to turn a page on this, by establishing the principle that Parliament should play an ongoing role in this process. As I mentioned earlier, in relation to the annual allowance and entrepreneurs’ relief, we should be able to assess whether these reforms are having the right effect and debate this in Parliament.
Other measures in the Bill demand similar levels of ongoing scrutiny. As we heard in the debate on clause 27, many businesses are set to benefit from increases to the rate of relief for investing in research and development. In that debate, my hon. Friend the Member for Ilford North noted:
“We have to ensure that any uplift in innovation investment also ensures value for money, and that we are more ruthless about returns for the taxpayer and our economy.”––[Official Report, Finance Public Bill Committee, 9 June 2020; c. 90.]
Such a warning is pertinent, given the NAO’s observation that R&D tax credits have been subject to increased levels of abuse, including by companies with a limited UK tax presence. As the OBR states, when a tax credit becomes more generous,
“it increases incentives to re-badge existing expenditure as qualifying R&D or to engage in fraudulent claims.”
It is welcome that the NAO has found that HMRC has been working to better understand factors affecting the cost of R&D reliefs and others, including entrepreneurs’ relief. Rigorous parliamentary oversight would ensure that any abuse of tax relief measures is properly investigated.
The wider point about the potential abuse of tax reliefs is worth exploring further. I am grateful to the research of TaxWatch UK, which highlights the troubling extent of these practices. For example, it points out, in relation to the video games tax relief, that some companies claiming significant amounts in tax credits were not even paying corporation tax. The relief was initially estimated by the Government to cost £35 million a year. Ministers committed to reviewing the relief after three years of operation to determine whether it had been effective. However, it is not clear whether a review has taken place, and in the meanwhile the cost of the relief has substantially exceeded what was forecast, reaching £108 million in 2017-18.
Alison Thewliss
I agree wholeheartedly with the hon. Member for Houghton and Sunderland South. She has gone into extensive detail, and I am sure everybody will be glad to know that I do not aim to repeat what she said, but the notion of the tax gap, and the fact that money is not coming in that our public services desperately need, particularly at this time, is very serious. The UK Government should be seized of the significance of this, and should do everything they can to eliminate the tax gap.
In many cases, the tax gap arises because of the complexity of our tax system. Those who are looking for loopholes—who are looking not to pay their taxes, and to divert and dodge—find ample opportunity to do so. It is not acceptable that this and successive Governments have played whack-a-mole with all these tax schemes as they have appeared. As soon as one appears, the Government shut it down, and then another one, or several more, emerge. A whole lot more needs to be done on anti-avoidance, rather than our being reactive to all this. A comprehensive anti-avoidance rule, and measures to make sure that the tax that is supposed to come in does so, ought to be a priority for the Government.
Our new clause—it is similar to Labour’s new clause, which we fully support—states:
“The Chancellor…must review the effects on tax revenues”
of the measures in the Act and bring that review before the House of Commons. It asks that
“any change attributable to the provisions in this Act in the difference between the amount of tax required to be paid…and the amount paid”
be reported on.
However, I want to touch more on Scottish limited partnerships, because this issue is not going away. The Government have failed to deal with it comprehensively. There is a continuing problem, both in respect of Companies House and in respect of how the partnerships are dealt with; that includes fines not being enforced and collected. Again, that money should be in the Government’s bank account, but if they are not going to enforce the rules, they will not get the fines. The fines would have been quite substantial had they been enforced since the measures came into place a couple of years ago.
The system allows those with an intent to conceal or deceive to do so easily by registering in secret as an SLP. These vehicles have a legal personality that makes them quite different from English limited liability partnerships. It means that individuals can make agreements in the name of the financial product without ever having to name the person or the people who control it. They have been used for years to funnel millions of pounds of dirty money created by illicit business activities, and this is still ongoing.
I can quote headlines to the Committee. There is, “How a Scots council house was secret base for criminals busting Putin sanctions”. There is one about Scotland’s firms and bribes to Argentina and Uzbekistan. There is, “Russian gang leader jailed for faking metal exports to Scotland”, and “Ukrainian mercenaries are using Scottish ‘tax haven’ firm as front”. There are headlines about money coming through Baltic banks, the effect on issues in Peru and a private war in Libya funded by Scottish funds. These are all current or previous issues in which Scottish limited partnerships have been involved. As I said in a previous debate, this is having an impact on Scotland’s reputation in the world. Most recently, just last month, David Leask and Richard Smith, who have been brilliant campaigners on this issue, revealed that more than 700 British firms have been blacklisted in Ukraine for suspicious activity related to money laundering across the former Soviet Union, and all involve Scottish limited partnerships.
That is why we in the SNP keep pushing on this issue; that is why it is so important to us. There is dirty money going around the world, fuelled in part by SLPs and the way in which they work. Also, the Government are not collecting tax on any of this money, and that contributes to the tax gap—the money that is not going to the Exchequer—as well as to global criminality.
If the Minister will not accept the new clause—given all the new clauses that the Government have not accepted, I suspect that they will not accept this one either—I urge him, at the very least, to listen to my concerns and those of campaigners about SLPs, and to take action to close the loopholes, including by fining the companies that are still flouting the rules, which the Government are not doing, and making sure that the money collected goes to the Exchequer, where it can be spent for the benefit of all our constituents.
Jesse Norman
I thank the hon. Members for Houghton and Sunderland South, and for Glasgow Central, for their comments, which I will respond to in due course.
New clause 6 would require the Government to review all tax reliefs in the Bill within a year, while new clause 22 would require the Government to review the effect on tax revenue of the Bill within six months of it being passed into law. These amendments are not necessary. Let me deal first with new clause 6 and then turn to new clause 22.
As Members will know, the Government keep all tax reliefs under review, to ensure that they strike the right balance between simplicity, effective targeting and overall yield. When a new tax relief is announced at a fiscal event, the Government publish estimates of the Exchequer impacts of the policy change in the Budget document.
The Government also consult on new tax reliefs and proposed changes to tax reliefs, bringing in external expertise as part of the policy-making cycle. Officials are constantly working on ways to improve policy development and administration, and management of reliefs.
The Government also conduct evaluations, including of a number of quite significant reliefs, such as research and development expenditure credit, or R&D tax credits, and entrepreneurs’ relief. In 2015, Her Majesty’s Revenue and Customs published an evaluation of R&D tax credits. In 2017, it commissioned an evaluation of entrepreneurs’ relief that led to a series of reforms—most recently, in Budget 2020, a significant reduction in the lifetime limit. HMRC will continue to monitor and evaluate reliefs, and it will bring forward a pipeline of further evaluations in due course.
HMRC is also considering—very much at my insistence—a proposal for a more systematic evaluation programme for tax reliefs, which would respond to the concern raised by the hon. Member for Houghton and Sunderland South, and it already monitors the effect of tax reliefs on taxation revenue.
HMRC issues an annual tax reliefs statistics publication, which includes estimates of the costs of tax reliefs. It is also undertaking a project to expand its published cost information, and I am pleased to remind the Committee that in May HMRC published cost estimates for a further 47 previously uncosted tax reliefs.
New clause 22 would require the Government to review the impact of the Bill on tax revenues within six months of it receiving Royal Assent. As I have said, the Government keep all taxes under review, and will continue to measure and publish annual statistics on the tax gap.
HMRC’s annual “Measuring tax gaps” report estimates the difference between the amount of tax due to be paid to HMRC and what is actually paid. It provides a breakdown of different kinds of behaviour, taxpayer groups and changes over time. However, the tax gap report is retrospective, with some time lag, due to the dates on which data become available. For example, estimates for 2018-19 are due for publication in July 2020, with some components projected in this year.
In addition, data limitations mean the tax gap is not suitable for evaluation at a granular level. For this reason, it would not be possible to disaggregate the impact of the compliance, for example, of SLPs. Furthermore, the tax gap may rise or fall due to a number of external factors that are unrelated to the actions of the Government.
HMRC also publishes annual reports and accounts, which include detailed information on revenue collection and on additional yield from compliance activity. It is committed to providing transparency to taxpayers about its activities, and these publications are important in demonstrating that commitment.
I now come to some of the points made by the hon. Members for Houghton and Sunderland South, and for Glasgow Central. The hon. Member for Houghton and Sunderland South, who I welcome back to the Committee after her period of absence, is absolutely right that tax reliefs can play a valuable role. However, she is also right that there are reliefs that can and should be reduced. That is, as I have said, a matter on which the Government are closely focused.
Bridget Phillipson
I welcome the Minister’s suggestion that the Government will look more systematically at the whole range of tax reliefs that are available, but it is not clear to me that, without the sterling work of the National Audit Office, we would have seen much progress at all in this area. The Government must seek to do a lot more. We believe that there is a strong case for additional parliamentary scrutiny in this area, so I would like to test the will of the Committee on new clause 6.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss
New clause 15—Review of effects on migration of measures in Act—
“(1) The Chancellor of the Exchequer must review the effects on migration of the provisions of this Act in each of the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.
(2) Those scenarios are that—
(a) the UK leaves the EU withdrawal transition period without a negotiated future trade agreement
(b) the UK leaves the EU withdrawal transition period following a negotiated future trade agreement, and remains in the single market and customs union, and
(c) the UK leaves the EU withdrawal transition period following a negotiated trade agreement, and does not remain in the single market and customs union.
(3) In respect of each of those scenarios the review must consider separately the effects on—
(a) migration by EU nationals, and
(b) migration by non-EU nationals.
(4) In respect of each of those scenarios the review must consider separately the effects in each part of the United Kingdom and each region of England.
(5) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and ‘regions of England’ has the same meaning as that used by the Office for National Statistics.”
This new clause would require a Government review of the effects of the measures in the Bill on migration levels.
Stephen Flynn
New clauses 14 and 15 together provide for a review of the effects of measures in the Bill on migration. Has there ever been a more apt time to assess the impact of the Finance Bill on migration, as the UK steams ahead with dragging Scotland out of the European Union against its will and, in doing so, removes the ability for us to move freely across the continent of Europe and for Europeans to move freely into Scotland to take on the jobs that we so desperately need them to take, as well as providing the cultural and economic support that our society needs and deserves?
The debate about migration has been had on many occasions in the Chamber and in many Committees in Parliament, but it is particularly important in relation to the Finance Bill, given the fact that migration is unequivocally a positive thing for our economy, in particular in Scotland. I will reflect briefly on an example from my constituency. A company called John Ross Jr makes smoked salmon so good—the kilns are good—that even the Queen enjoys it. It is a world-renowned company. When the company had sight of the UK Government’s plans for immigration, it wrote to me describing as “catastrophic” the impact of removing free movement of people into Scotland.
That company’s labour force has been heavily dominated by people from fellow European nations. They have driven that organisation forward, which is a positive thing that we should welcome and encourage. It is good for Scottish business, it is good for the Scottish economy and therefore it is good for the wider UK economy.
However, for some reason, the UK Government seem intent on dragging Scotland away from that situation, which is deeply disappointing, because Scotland faces a wider demographic challenge—a demographic time bomb, so to speak. Our working-age population continues to decrease and migration is one of the easiest solutions to that problem.
The Scottish Government have sought to be pragmatic in that regard. They came forward to the UK Government in good faith, with proposals for a Scottish visa that would not be different from what is being put in place by the UK Government, but with an additional element that which would allow us to attract the workforce that we need. It would perhaps replicate what is in place in Canada and Australia, but it was rejected out of hand— in fact, I think that it was rejected out of hand within 20 minutes—despite the fact that it is in Scotland’s best interests.
Earlier, we heard—I think it was from the Minister—how the UK Government do not have control over all aspects of life in Scotland. However, where they do have control on immigration, they are doing severe damage, which will not be forgotten by Scottish business nor by the Scottish people, and when the time comes for us to make our own decisions once again and we go to that vote on whether Scotland should be an independent nation, it is the likes of the UK Government’s immigration policies that will weigh heavily on the minds of Scottish voters.
I will just conclude, because I am conscious of time, given the desire for everyone to be able to get home, by saying that the reality—the big question, as I have said before—is: why not? Why would someone not support this proposal? Why would they not want to know what the impact of the Bill will be, because ultimately we will have a situation where UK tax policies fail to boost immigration and falling immigration hits the Treasury. This proposal is a sensible one, which would hopefully protect the interests of Scotland.
Wes Streeting
Based on how the pattern of voting is going this afternoon, we can guess how the discussion of this proposal will turn out, unless the Government Members have a Damascene conversion and decide to swing behind it.
I am conscious of the clock, but we have had plenty of opportunity recently to debate Government immigration policy; I think the Opposition’s views are very well known. The economic debate about immigration is an important one, and it is important to remind people not just in the House but across the country that it remains a positively good thing for this country that the UK remains a destination to attract talent from around the world to come and work and study on these shores. That is a national strength. Of course, it is also important that we have immigration rules that are widely understood and fairly applied, and enforced where necessary.
Jesse Norman
I will keep my remarks brief, in keeping with the spirit of Opposition Members’ comments. These clauses would require the Chancellor to review the effect of measures in the Finance Bill relating to changes in migration under several different EU exit scenarios.
I must emphasise that those scenarios are entirely hypothetical; that in itself is a highly questionable aspect of these new clauses. However, in any case, these new clauses are not necessary. I agree entirely with the hon. Member for Ilford North that immigration policy should be fair and seen to be fair. It is absolutely right that the Government have committed to ending free movement by January 2021; that will not change. The Immigration Bill delivers on that commitment but, in the spirit that the hon. Gentleman identified, it also lays the foundations for a firmer and fairer immigration system that welcomes people—the best and the brightest, to use the phrase in vogue—wherever they come from, and that is a good thing.
The Government commissioned the independent Migration Advisory Committee to advise on the role of the future immigration system and the appropriate salary thresholds for the policy, and the Migration Advisory Committee recommended against regional variation across the UK. As I have said, and given that recommendation, it would be disproportionately burdensome to create additional reporting requirements focused specifically on the migration impacts of policies in the Bill.
The Chair
With this it will be convenient to discuss new clause 23—
Review of impact of Act on poverty—
“(1) The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on poverty and lay this before the House of Commons within six months of Royal Assent.
(2) This assessment must consider—
(a) the impact on absolute poverty;
(b) the impact on relative poverty; and
(c) whether such a study should in future be a regular duty of the Office for Budget Responsibility.”
This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on poverty and consider whether the OBR should conduct such assessments as a regular duty.
Alison Thewliss
We had the debate on child poverty earlier in this debate, and it is important that the Government are held to account for the measures in the Bill and their impact on child poverty. They affect many of my constituents and, as others have said, it should not take a footballer to tell the Government that their child poverty measures are inadequate. Public sector reporting duties on sustainable development goals and the importance of action to tackle poverty were mentioned earlier, and the Government have an obligation to deal with that. They are failing so many of our constituents all the time when it comes to child poverty, so it is important that we use all the measures that we can possibly can. I appreciate that the measures to amend the Finance Bill are limited by the way in which the Bill is put through the House, but it is incredibly important that the Government are held to account. They could match the Scottish Government’s tackling child poverty delivery plan 2018-22, which has at its heart the Scottish child payment for low-income families for children under six. We are prioritising child poverty in Scotland because we know how important it is for the life chances of every young person in Scotland.
Without the measures to hold the UK Government to account on child poverty, we fail in the measures that we do not have control of in Scotland. The vast majority of the social security budget and measures are controlled from Westminster, as is the vast majority of tax and spend. We will do everything that we can within our power to mitigate that. The UK Government deserve to be held to account for their record, which is in many respects appalling.
Wes Streeting
I rise to speak to new clause 23 that I tabled with my hon. Friends and to support new clause 16. I do not want to disrupt the cross-party consensus among Opposition parties on this particular issue, but I will point out that almost one in four—230,000—of Scotland’s children are officially recognised as living in poverty. That figure is from the Child Poverty Action Group, who used Scottish Government data. It observed:
“In the absence of significant policy change, this figure is likely to increase in the coming years, with Scottish Government forecasts indicating that it will reach 38% by 2030/31. Analysis by the Resolution Foundation suggests the Scottish child poverty rate will be 29% by 2023-24—the highest rate in over twenty years.”
Let us hope that the Scottish Government’s child poverty strategy is a success—children are counting on it. Of course, the Scottish Government—here represented by the Scottish National party—are right to point to some of the impacts of UK Government policy on poverty in Scotland, and we would support them in that, but we also urge them to use their powers under the existing devolution settlement, taking responsibility for the fact that significant numbers of children in Scotland live in poverty. That is on the watch of an SNP Government who have been in power for a significant period now. I hope that next years’ Scottish parliamentary elections shake out some of the complacency that we see in Nicola Sturgeon’s Government.
Alison Thewliss
I disagree with what the hon. Gentleman has said. Also, bodies such as Sheffield Hallam University have pointed to the fact that Scotland mitigated the bedroom tax. Child poverty in Scotland has been mitigated because of such actions—where we can take action, we have taken action—while children in his constituency still have to face the bedroom tax.
Wes Streeting
Children in my constituency suffer under a Conservative Government—the hon. Lady will get no disagreement from me on that. Of course, where the Scottish Government take steps to mitigate the impact of Westminster Government decisions, I have no doubt at all that they will receive cross-party support from my Scottish Labour colleagues, but the point about the Scottish Government accepting responsibility for what happens to people in Scotland has to be a feature of the debate. One of the reasons why I admire Nicola Sturgeon as a politician and political leader is the skilful way in which she always manages so eloquently to pass the buck down to London.
Stephen Flynn
Does the hon. Gentleman not agree that that money, rather than having to be spent by the Scottish Government to mitigate the actions of the Conservatives, would be better spent on addressing some of his concerns? Is that not the way a Parliament should function? It should not be for a Scottish Parliament or Government to mitigate these things.
Wes Streeting
I am grateful for that intervention because, having had our knockabout between the Labour party and the SNP, we can now unite in common cause against this terrible Tory Government in Westminster.
Turning briefly to the facts, we know that wealth and income inequalities in the UK are stark: the richest 10% of households own 45% of the nation’s wealth, while the poorest 50% own less than 10%. The average FTSE 100 chief executive is paid 145 times more than the average worker, and Britain’s top 1% have seen their share of household income triple in the past four years, while ordinary people have struggled. Over the past decade, when Governments have been led by the Conservatives, we have seen the slowest growth in living standards since the second world war.
Shockingly, hard work does not necessarily guarantee even a basic standard of living. Wages have failed to keep up with living costs, and 14 million people live on incomes below the poverty line, including 4 million children. It should never be the case that where people are going out to work, doing the right thing and earning money for themselves and their families, they should still find themselves living in conditions of poverty, and yet that is the situation we find in our country today.
Inequality and the poverty it creates have led to an increasing number of what economist Sir Angus Deaton called “Deaths of Despair”, caused by drug and alcohol abuse due to financial hardship and hopelessness. The rate of such deaths among men has more than doubled since the early 1990s, so the human consequences of economic inequality are clear in Government statistics. People are dying needlessly as a result of the inequality that blights our nation.
Earlier this week, I was struck by the exchange at Prime Minister’s Question Time between my right hon. and learned Friend the Leader of the Opposition and the man who tries to the give the impression that he is our Prime Minister. Extraordinarily, the Prime Minister did not seem to recognise the description offered to him of child poverty in our country. I do not expect the Prime Minister of the country to have instant recall of every piece of data held by his Government, but on something as fundamental as the number of children living in poverty—or the trends of those numbers, at least—I would have expected that the Prime Minister might have some understanding of what is going on.
When my right hon. and learned Friend described poverty in Britain, he was not talking about forecasts or future expectations of growth in child poverty; he was talking about the situation today, and he was citing the Government’s own Social Mobility Commission. On page 17 of its June 2020 report “Monitoring social mobility 2013 to 2020: Is the government delivering on our recommendations?”— a question that lends itself to quoting the title of John Rentoul’s book, “Questions to which the answer is ‘No!”—it says very clearly:
“In the UK today, 8.4 million working age adults live in relative poverty; an increase of 500,000 since 2011/12. Things are no better for children. Whilst relative child poverty rates have remained stable over recent years, there are now 4.2 million children living in poverty—600,000 more than in 2011/12. Child poverty rates are projected to increase to 5.2 million by 2022. This anticipated rise is not driven by
forces beyond our control”.
That is the significant point: this is not about population changes or even, until very recently, the conditions in the economy, but is a direct result of Government policy. The commission notes on page 8 of the report:
“There is now mounting evidence that welfare changes over the past ten years have put many more children into poverty.”
Of the many great achievements of the last Labour Government, the thing I am most proud of is the number of children they lifted out of poverty. That was the result of a deliberate political choice—of public policy pulling in the right direction—and it is a stain on the conscience and character of this Government that their own Social Mobility Commission says:
“There is now mounting evidence that welfare changes over the past ten years have put many more children into poverty.”
On the same page, the commission says:
“Too often also there is little transparency concerning the impact spending decisions have on poverty. The Treasury has made some efforts in this direction, but has so far declined to give the Office for Budget Responsibility…a proper role to monitor this. There should be more independent scrutiny to help ensure policy interventions across Whitehall genuinely support the most disadvantaged groups.”
Because of the limitations on what we are able to do to amend the Finance Bill, new clause 23 does not go so far as to give the OBR formal responsibility for measuring the impact of fiscal events and policies on poverty and child poverty across the board, but at least it makes a start by asking the OBR to look at the impact of the Finance Bill. Regrettably, that is wholly necessary. When the Government’s own independent Social Mobility Commission point to the need for this, Government Members should take that seriously. When their own Prime Minister does not seem to have a clue about what is going on in terms of child poverty, it might be good to produce at least a fresh and independent set of numbers to wake him up.
Just in case Government Members are not alive to the challenges of child poverty in our country, let us look at the latest statistics from HMRC and DWP, via Stat-Xplore. In Saffron Walden, the number of children aged from zero to 15 who are in poverty is 2,261, which means the child poverty rate is 10%; in West Worcestershire, the figure is 2,176, which means a child poverty rate of 14%; in South Cambridgeshire, the figure is 2,051, which means a child poverty rate of 9%; in Kensington, the figure is 1,731, which means a child poverty rate of 9%—those children are not going to Harrods. In Penistone and Stocksbridge, 2,010 children live in poverty, which means a child poverty rate of 13%. In Harrogate and Knaresborough, 1,699 children live in poverty, which means a child poverty rate of 9%.
Jesse Norman
Could the hon. Gentleman tell the Committee what the rate is in Ilford, North?
Wes Streeting
The Minister asks a very good question; I do not have instant recall of that—[Laughter.] I will hold my hands up and say that he has got me there. However, I will tell him that in Aberconwy, the figure is 1,469, which means a child poverty rate of 16%. In Hereford and South Herefordshire, the figure is 3,054, which means a child poverty rate of 17%. In Macclesfield, it is 1,749, which means a child poverty rate of 11%. And in Montgomeryshire, it is 2,046, which means a child poverty rate of 20%.
I do not really need persuading of the need to act on child poverty in my constituency. It has been a campaigning issue that I have taken up since I was first elected to this House. However, it is a deep source of regret that, even when the Government’s own Social Mobility Commission highlights the impact of Government policies on child poverty, the Government still refuse to act.
Jesse Norman
I thank Opposition Members for their comments. This Government will always be committed to reducing poverty and child poverty. There is no difference in our view and the Opposition’s view of the importance of these issues: they are very, very important.
The hon. Member for Ilford North has been free with statistics. Let me give him a couple that he might find of interest regarding households with a below average income. The Department for Work and Pensions has shown that 200,000 fewer people were living in absolute poverty in 2018-19 than in 2009-10, including 100,000 children. The record also shows that Government policies continue to be highly redistributive. Distribution analysis of the most recent Budget shows that the poorest 60% of households receive more in public spending than they contribute in tax. In 2021, households in the lowest income decile will receive more than £4 in public spending for every £1 that they pay in tax, on average.
No one thinks that the present situation is such that a Government of any stamp could rest easy. We need to continue to press for lower poverty and greater equality in our society. That is an important theme for this Government. I remind the Committee that, in the past few months, the Government have been focusing on supporting lower income families through the pandemic outbreak—through the schemes that we have discussed and through increases to universal credit and working tax credit. Much of the information that the new clauses ask for is already in the public domain, including with regard to the distributional effects of tax, welfare and spending policy, and data on poverty rates, as the hon. Member for Ilford North highlighted.
I hope that the Committee enjoyed, as I did—how sharper than a serpent’s tooth—the moment when the hon. Member for Ilford North turned on his erstwhile partner and highlighted some of the weaknesses in the Scottish National party Government’s own activity. The hon. Member for Glasgow Central said that the Scottish Government will do everything they can to take action in this area. They now have a significant amount of devolved power, through the tax system and other means, and we will look at what impact they make on the issue. How they exercise that responsibility will be a very interesting matter for further scrutiny.
Stephen Flynn
The Scottish Government announced a £10 per week child benefit supplement for the poorest families in Scotland, which is expected to lift 30,000 children out of poverty by 2023-2024. Will the Minister’s Government do the same?
Jesse Norman
We will look at the effects of that and at whether it will be adequate to meet the challenge the Scottish Government have laid down for themselves.
We have now reached the end of this process. I have found it very exciting, and I thank all colleagues for the work that they have done. With that in mind, I reject the new clauses.
Alison Thewliss
I wish to press the new clause to a vote.
Question put, That the clause be read a Second time.
Jesse Norman
On a point of order, Mr Rosindell. On behalf of the Exchequer Secretary and myself, I thank you and your co-Chair, the excellent folks at Hansard, our Whips, our Parliamentary Private Secretaries and the officials who have supported us throughout the Committee. Of course, they wrote this note, so I hope they will be aware of the generous terms in which I single out, in particular, Edward Ferguson and Charlie Grainger; our Bill team at the Treasury, consisting of Kate O’Donoghue, the Bill manager, as well as Helena Forrest, Nye Williams-Renouf and Samuel Fenn; and a host of other people. The Opposition do not have access to the same level of resources; it would be astonishing if they could replicate the expertise to which we have access, and I am profoundly grateful for that expertise.
I thank all the members of Committees, on both sides of the Chamber, for making this such an energised and productive Committee, especially considering the great difficulties under which it has had to operate.
Bridget Phillipson
Further to that point of order, Mr Rosindell. I would also like to put on record my thanks to you and Ms McDonagh for being so fair and generous in allowing us to speak at some length about our concerns on the Finance Bill. You were exceptionally generous—at times, and arguably today, a little too generous—when it came to some of the wider conversations we had around interesting and irrelevant matters around Scottish separatism. Doubtless we will return to that at a later stage.
I put on record our thanks to the Clerks for all the help that they have offered us, particularly around amendments and the order of proceedings—their expertise at this time is particularly appreciated by us—and to the Hansard reporters.
This is the first opportunity I have had to lead on the Finance Bill in Committee. It has been made much easier thanks to the wonderful support of Members on the Opposition side, not least our wonderful Whip, my hon. Friend the Member for Manchester, Withington.
I thank all members of the Committee for their contributions. I am sure the Financial Secretary has enjoyed talking to more technical aspects of the Bill, although he did particularly relish opportunities to elucidate on Adam Smith and Edmund Burke, and on the transcendental nature of what might be regarded as temporary, or otherwise, when pressed by my hon. Friend the Member for Streatham.
I also thank those individuals and stakeholders who have been very generous in providing advice and information to the Opposition, and, of course, the House of Commons Library, whose staff are, as ever, very prompt and professional in their response to all research requests.
Although this is a small Finance Bill, compared with some recent efforts, I thank my staff and those in the office of my hon. Friend the Member for Ilford North for their dedication and hard work, and for allowing us to hold the Government to account. We have had a wide-ranging debate, and I look forward to returning to some of these issues on Report.
Alison Thewliss
Further to that point of order, Mr Rosindell. I echo others in thanking you and Ms McDonagh for your excellent chairing; the Clerks for all they have done to keep things moving smoothly; my hon. Friend the Member for Aberdeen South for signing up to come and do the Finance Bill with me, which was much appreciated; and our small research team, Scott Taylor and Jonathan Kiehlmann, who have worked incredibly hard to bring a range of amendments and new clauses to the Committee, and who have had even more pressure than the other parties and the Government have had. I am incredibly grateful to them.
Finally, on independence, as long as we are here in this House—hopefully it will not be too much longer—we will press our cause if we can. I am sure all hon. Members will miss us once we have independence.
The Chair
Does the hon. Member for Glasgow Central wish to move any of her remaining clauses?
The Chair
Does the hon. Member for Houghton and Sunderland South wish to move new clause 23?
Bridget Phillipson
No, Mr Rosindell.
New Schedule 1
“Workers’ services provided through intermediaries
Part 1
Amendments to Chapter 8 of Part 2 of ITEPA 2003
1 Chapter 8 of Part 2 of ITEPA 2003 (application of provisions to workers under arrangements made by intermediaries) is amended as follows.
2 For the heading of the Chapter substitute “Workers’ services provided through intermediaries to small clients”.
3 (1) Section 48 (scope of Chapter) is amended as follows.
(2) In subsection (1) for the words from “, but” to the end substitute “in a case where the services are provided to a person who is not a public authority and who either—
(a) qualifies as small for a tax year, or
(b) does not have a UK connection for a tax year.”
(3) After subsection (3) insert—
(4) For provisions determining when a person qualifies as small for a tax year, see sections 60A to 60G.
(5) For provision determining when a person has a UK connection for a tax year, see section 60I.”
4 (1) Section 50 (worker treated as receiving earnings from employment) is amended as follows.
(2) In subsection (1) before paragraph (a) insert—
“(za) the client qualifies as small or does not have a UK connection,”.
(3) After subsection (4) insert—
(5) The condition in paragraph (za) of subsection (1) is to be ignored if—
(a) the client concerned is an individual, and
(b) the services concerned are performed otherwise than for the purposes of the client’s business.
(6) For the purposes of paragraph (za) of subsection (1) the client is to be treated as not qualifying as small for the tax year concerned if the client is treated as medium or large for that tax year by reason of section 61TA(3)(a).”
5 After section 60 insert—
“When a person qualifies as small for a tax year
60A When a company qualifies as small for a tax year
(1) For the purposes of this Chapter, a company qualifies as small for a tax year if one of the following conditions is met (but this is subject to section 60C).
(2) The first condition is that the company’s first financial year is not relevant to the tax year.
(3) The second condition is that the small companies regime applies to the company for its last financial year that is relevant to the tax year.
(4) For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company’s accounts and reports for the financial year ends before the beginning of the tax year.
(5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
60B When a company qualifies as small for a tax year: joint ventures
(1) This section applies when determining for the purposes of section 60A(3) whether the small companies regime applies to a company for a financial year in a case where—
(a) at the end of the financial year the company is jointly controlled by two or more other persons, and
(b) one or more of those other persons are undertakings (“the joint venturer undertakings”).
(2) If the company is a parent company, the joint venturer undertakings are to be treated as members of the group headed by the company.
(3) If the company is not a parent company, the company and the joint venturer undertakings are to be treated as constituting a group of which the company is the parent company.
(4) In this section the expression “jointly controlled” is to be read in accordance with those provisions of international accounting standards which relate to joint ventures.
(5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
60C When a company qualifies as small for a tax year: subsidiaries
(1) A company does not qualify as small for a tax year by reason of the condition in section 60A(3) being met if—
(a) the company is a member of a group at the end of its last financial year that is relevant to the tax year,
(b) the company is not the parent undertaking of that group at the end of that financial year, and
(c) the undertaking that is the parent undertaking of that group at that time does not qualify as small in relation to its last financial year that is relevant to the tax year.
(2) Where the parent undertaking mentioned in subsection (1)(c) is not a company, sections 382 and 383 of the Companies Act 2006 have effect for determining whether the parent undertaking qualifies as small in relation to its last financial year that is relevant to the tax year as if references in those sections to a company and a parent company included references to an undertaking and a parent undertaking.
(3) For the purposes of subsections (1)(c) and (2) a financial year of an undertaking that is not a company is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year.
(4) For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company’s accounts and reports for the financial year ends before the beginning of the tax year.
(5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
60D When a relevant undertaking qualifies as small for a tax year
(1) Sections 60A to 60C apply in relation to a relevant undertaking as they apply in relation to a company, subject to any necessary modifications.
(2) In this section “relevant undertaking” means an undertaking in respect of which regulations have effect under—
(a) section 15(a) of the Limited Liability Partnerships Act 2000,
(b) section 1043 of the Companies Act 2006 (unregistered companies), or
(c) section 1049 of the Companies Act 2006 (overseas companies).
(3) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
60E When other undertakings qualify as small for a tax year
(1) An undertaking that is not a company or a relevant undertaking qualifies as small for a tax year if one of the following conditions is met.
(2) The first condition is that the undertaking’s first financial year is not relevant to the tax year.
(3) The second condition is that the undertaking’s turnover for its last financial year that is relevant to the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006.
(4) For the purposes of this section a financial year of an undertaking is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year.
(5) In this section—
“relevant undertaking” has the meaning given by section 60D, and
“turnover”, in relation to an undertaking, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived.
(6) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
60F When other persons qualify as small for a tax year
(1) For the purposes of this Chapter, a person who is not a company, relevant undertaking or other undertaking qualifies as small for a tax year if the person’s turnover for the last calendar year before the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006.
(2) In this section—
“company” and “undertaking” have the same meaning as in the Companies Act 2006,
“relevant undertaking” has the meaning given by section 60D, and
“turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived.
60G Sections 60A to 60F: connected persons
(1) This section applies where—
(a) it is necessary for the purposes of determining whether a person qualifies as small for a tax year (“the tax year concerned”) to first determine the person’s turnover for a financial year or calendar year (“the assessment year”), and
(b) at the end of the assessment year the person is connected with one or more other persons (“the connected persons”).
(2) For the purposes of determining whether the person qualifies as small for the tax year concerned the person’s turnover for the assessment year is to be taken to be the sum of—
(a) the person’s turnover for the assessment year, and
(b) the relevant turnover of each of the connected persons.
(3) In subsection (2)(b) “the relevant turnover” of a connected person means—
(a) in a case where the connected person is a company, relevant undertaking or other undertaking, its turnover for its last financial year that is relevant to the tax year concerned, and
(b) in a case where the connected person is not a company, relevant undertaking or other undertaking, the turnover of the connected person for the last calendar year ending before the tax year concerned.
(4) For the purposes of subsection (3)(a)—
(a) a financial year of a company or relevant undertaking is relevant to the tax year concerned if the period for filing accounts and reports for the financial year ends before the beginning of the tax year concerned, and
(b) a financial year of any other undertaking is relevant to the tax year concerned if it ends more than 9 months before the beginning of the tax year concerned.
(5) In a case where—
(a) the person mentioned in subsection (1)(a) is a company or relevant undertaking, and
(b) at the end of the assessment period the person is a member of a group,
the person is to be treated for the purposes of this section as not being connected with any person that is a member of that group.
(6) In this section—
“turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived, and
“relevant undertaking” has the meaning given by section 60D.
(7) For provision determining whether one person is connected with another, see section 718 (connected persons).
(8) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
60H Duty on client to state whether it qualifies as small for a tax year
(1) This section applies if, in the case of an engagement that meets conditions (a) to (b) in section 49(1), the client receives from the client’s agent or the worker a request to state whether in the client’s opinion the client qualifies as small for a tax year specified in the request.
(2) The client must provide to the person who made the request a statement as to whether in the client’s opinion the client qualifies as small for the tax year specified in the request.
(3) If the client fails to provide the statement by the time mentioned in subsection (4) the duty to do so is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
(4) The time is whichever is the later of—
(a) the end of the period of 45 days beginning with the date the client receives the request, and
(b) the beginning of the period of 45 days ending with the start of the tax year specified in the request.
(5) In this section “the client’s agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in paragraph (b) of section 49(1).
When a person has a UK connection
60I When a person has a UK connection for a tax year
(1) For the purposes of this Chapter, a person has a UK connection for a tax year if (and only if) immediately before the beginning of that tax year the person—
(a) is resident in the United Kingdom, or
(b) has a permanent establishment in the United Kingdom.
(2) In this section “permanent establishment”—
(a) in relation to a company, is to be read (by virtue of section 1007A of ITA 2007) in accordance with Chapter 2 of Part 24 of CTA 2010, and
(b) in relation to any other person, is to be read in accordance with that Chapter but as if references in that Chapter to a company were references to that person.
Interpretation
6 In section 61(1) (interpretation), in the definition of company, before “means” insert “(except in sections 60A to 60G)”.
Part 2
Amendments to Chapter 10 of Part 2 of ITEPA 2003
7 Chapter 10 of Part 2 of ITEPA 2003 (workers’ services provided to public sector through intermediaries) is amended as follows.
8 For the heading of the Chapter substitute “Workers’ services provided through intermediaries to public authorities or medium or large clients”.
9 (1) Section 61K (scope of Chapter) is amended as follows.
(2) In subsection (1) for the words “to a public authority through an intermediary” substitute “through an intermediary in a case where the services are provided to a person who—
(a) is a public authority, or
(b) qualifies as medium or large and has a UK connection for a tax year”.
(3) After subsection (2) insert—
(3) For the purposes of this Chapter a person qualifies as medium or large for a tax year if the person does not qualify as small for the tax year for the purposes of Chapter 8 of this Part (see sections 60A to 60G).
(4) Section 60I (when a person has a UK connection for a tax year) applies for the purposes of this Chapter.”
10 In section 61L (meaning of “public authority”) in subsection (1)—
(a) after paragraph (a) insert—
“(aa) a body specified in section 23(3) of the Freedom of Information Act 2000,”,
(b) omit the “or” at the end of paragraph (e), and
(c) after paragraph (f) insert “, or
(g) a company connected with any person mentioned in paragraphs (a) to (f)”.
11 (1) Section 61M (engagements to which the Chapter applies) is amended as follows.
(2) In subsection (1)—
(a) omit paragraph (b),
(b) omit the “and” at the end of paragraph (c), and
(c) after paragraph (c) insert—
“(ca) the client—
(i) is a public authority, or
(ii) is a person who qualifies as medium or large and has a UK connection for one or more tax years during which the arrangements mentioned in paragraph (c) have effect, and”.
(3) After subsection (1) insert—
(1A) But sections 61N to 61R do not apply if —
(a) the client is an individual, and
(b) the services are provided otherwise than for the purposes of the client’s trade or business.”
12 (1) Section 61N (worker treated as receiving earnings from employment) is amended as follows.
(2) In subsection (3)—
(a) after “subsections (5) to (7)” insert “and (8A)”, and
(b) after “61T” insert “, 61TA”.
(3) For subsection (5) substitute—
(5) Unless and until the client gives a status determination statement to the worker (see section 61NA), subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to section 61V.
(5A) Subsections (6) and (7) apply, subject to sections 61T, 61TA and 61V, if—
(a) the client has given a status determination statement to the worker,
(b) the client is not the fee-payer, and
(c) the fee-payer is not a qualifying person.”
(4) In subsection (8) (meaning of “qualifying person”) before paragraph (a) insert—
“(za) has been given by the person immediately above them in the chain the status determination statement given by the client to the worker,”.
(5) After subsection (8) insert—
(8A) If the client is not a public authority, a person is to be treated by subsection (3) as making a deemed direct payment to the worker only if the chain payment made by the person is made in a tax year for which the client qualifies as medium or large and has a UK connection.”
13 After section 61N insert—
“61NA Meaning of status determination statement
(1) For the purposes of section 61N “status determination statement” means a statement by the client that—
(a) states that the client has concluded that the condition in section 61M(1)(d) is met in the case of the engagement and explains the reasons for that conclusion, or
(b) states (albeit incorrectly) that the client has concluded that the condition in section 61M(1)(d) is not met in the case of the engagement and explains the reasons for that conclusion.
(2) But a statement is not a status determination statement if the client fails to take reasonable care in coming to the conclusion mentioned in it.
(3) For further provisions concerning status determination statements, see section 61T (client-led status disagreement process) and section 61TA (duty for client to withdraw status determination statement if it ceases to be medium or large).”
14 In section 61O(1) (conditions where intermediary is a company) for paragraph (b) substitute—
“(b) it is the case that—
(i) the worker has a material interest in the intermediary,
(ii) the worker has received a chain payment from the intermediary, or
(iii) the worker has rights which entitle, or which in any circumstances would entitle, the worker to receive a chain payment from the intermediary.”
15 In section 61R (application of Income Tax Acts in relation to deemed employment) omit subsection (7).
16 For section 61T substitute—
“61T Client-led status disagreement process
(1) This section applies if, before the final chain payment is made in the case of an engagement to which this Chapter applies, the worker or the deemed employer makes representations to the client that the conclusion contained in a status determination statement is incorrect.
(2) The client must either—
(a) give a statement to the worker or (as the case may be) the deemed employer that—
(i) states that the client has considered the representations and has decided that the conclusion contained in the status determination statement is correct, and
(ii) states the reasons for that decision, or
(b) give a new status determination statement to the worker and the deemed employer that—
(i) contains a different conclusion from the conclusion contained in the previous status determination statement,
(ii) states the date from which the client considers that the conclusion contained in the new status determination statement became correct, and
(iii) states that the previous status determination statement is withdrawn.
(3) If the client fails to comply with the duty in subsection (2) before the end of the period of 45 days beginning with the date the client receives the representations, section 61N(3) and (4) has effect from the end of that period until the duty is complied with as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to section 61V.
(4) A new status determination statement given to the deemed employer under subsection (2)(b) is to be treated for the purposes of section 61N(8)(za) as having been given to the deemed employer by the person immediately above the deemed employer in the chain.
(5) In this section—
“the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment;
“status determination statement” has the meaning given by section 61NA.
61TA Duty for client to withdraw status determination statement if it ceases to be medium or large
(1) This section applies if in the case of an engagement to which this Chapter applies—
(a) the client is not a public authority,
(b) the client gives a status determination statement to the worker, the client’s agent or both, and
(c) the client does not (but for this section) qualify as medium or large for a tax year beginning after the status determination statement is given.
(2) Before the beginning of the tax year the client must give a statement to the relevant person, or (as the case may be) to both of the relevant persons, stating—
(a) that the client does not qualify as medium or large for the tax year, and
(b) that the status determination statement is withdrawn with effect from the beginning of the tax year.
(3) If the client fails to comply with that duty the following rules apply in relation to the engagement for the tax year—
(a) the client is to be treated as medium or large for the tax year, and
(b) section 61N(3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.
(4) For the purposes of subsection (2)—
(a) the worker is a relevant person if the status determination statement was given to the worker, and
(b) the deemed employer is a relevant person if the status determination statement was given to the client’s agent.
(5) In this section—
“client’s agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in section 61M(1)(c);
“the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment;
“status determination statement” has the meaning given by section 61NA.”
17 (1) Section 61W (prevention of double charge to tax and allowance of certain deductions) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (b) for “a public authority” substitute “another person (“the client”)”, and
(b) in paragraph (d) for “that public authority” substitute “the client”.
(3) In subsection (2)(b) for “public authority” substitute “client”.
Part 3
Consequential and miscellaneous amendments
18 In section 61D of ITEPA 2003 (managed service companies: worker treated as receiving earnings from employment) for subsection (4A) substitute—
(4A) This section does not apply where the provision of the relevant services gives rise (directly or indirectly) to an engagement to which Chapter 10 applies and either—
(a) the client for the purposes of section 61M(1) is a public authority, or
(b) the client for the purposes of section 61M(1)—
(i) qualifies as medium or large for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received, and
(ii) has a UK connection for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received.
(4B) Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) apply for the purposes of subsection (4A).
(4C) It does not matter for the purposes of subsection (4A) whether the client for the purposes of this Chapter is also “the client” for the purposes of section 61M(1).”
19 After section 688A of ITEPA 2003 insert—
“688AA Workers’ services provided through intermediaries: recovery of PAYE
(1) PAYE Regulations may make provision for, or in connection with, the recovery of a deemed employer PAYE debt from a relevant person.
(2) “A deemed employer PAYE debt” means an amount—
(a) that a person (“the deemed employer”) is liable to pay under PAYE regulations in consequence of being treated under section 61N(3) as having made a deemed direct payment to a worker, and
(b) that an officer of Revenue and Customs considers there is no realistic prospect of recovering from the deemed employer within a reasonable period.
(3) “Relevant person”, in relation to a deemed employer PAYE debt, means a person who is not the deemed employer and who—
(a) is the highest person in the chain identified under section 61N(1) in determining that the deemed employer is to be treated as having made the deemed direct payment, or
(b) is the second highest person in that chain and is a qualifying person (within the meaning given by section 61N(8)) at the time the deemed employer is treated as having made that deemed direct payment.”
20 In section 60 of FA 2004 (construction industry scheme: meaning of contract payments) after subsection (3) insert—
(3A) This exception applies in so far as—
(a) the payment can reasonably be taken to be for the services of an individual, and
(b) the provision of those services gives rise to an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies (workers’ services provided through intermediaries to public authorities or medium or large clients).
(3B) But the exception in subsection (3A) does not apply if, in the case of the engagement mentioned in paragraph (b) of that subsection, the client for the purposes of section 61M(1) of ITEPA 2003—
(a) is not a public authority, and
(b) either—
(i) does not qualify as medium or large for the tax year in which the payment concerned is made, or
(ii) does not have a UK connection for the tax year in which the payment concerned is made.
(3C) Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) of ITEPA 2003 apply for the purposes of subsection (3B).”
21 For the italic heading before section 141A of CTA 2009 substitute “Worker’s services provided through intermediary to public authority or medium or large client”.
22 In the heading of section 141A of CTA 2009 for “public sector” substitute “public authority or medium or large client”.
23 (1) Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.
(2) In section 1129 (qualifying expenditure on externally provided workers: connected persons) after subsection (4) insert—
(4A) In subsection (2) the reference to the staff provision payment is to that payment before any deduction is made from the payment under—
(a) section 61S of ITEPA 2003,
(b) regulation 19 of the Social Security Contributions (Intermediaries) Regulations 2000, or
(c) regulation 19 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.”
(3) In section 1131 (qualifying expenditure on externally provided workers: other cases) after subsection (2) insert—
(3) In subsection (2) the reference to the staff provision payment is to that payment before any deduction is made from the payment under—
(a) section 61S of ITEPA 2003,
(b) regulation 19 of the Social Security Contributions (Intermediaries) Regulations 2000, or
(c) regulation 19 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.”
(4) After section 1131 insert—
“1131A Sections 1129 and 1131: secondary Class 1 NICS paid by company
(1) This section applies if—
(a) a company makes a staff provision payment,
(b) the company is treated as making a payment of deemed direct earnings the amount of which is calculated by reference to the amount of the staff provision payment, and
(c) the company pays a secondary Class 1 national insurance contribution in respect of the payment of deemed direct earnings.
(2) In determining the company’s qualifying expenditure on externally provided workers in accordance with section 1129(2) or section 1131(2) the amount of the staff payment provision is to be treated as increased by the amount of the contribution.
(3) In determining the company’s qualifying expenditure on externally provided workers in accordance with section 1129(2) the aggregate of the relevant expenditure of each staff controller is to be treated as increased by the amount of the contribution.
(4) But subsection (2) does not apply to the extent that the expenditure incurred by the company in paying the contribution is met directly or indirectly by a staff controller.
(5) “A payment of deemed direct earning” means a payment the company is treated as making by reason of regulation 14 of the Social Security Contributions (Intermediaries) Regulations 2000 or regulation 14 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.”
Part 4
Commencement and transitional provisions
Commencement
24 The amendments made by Part 1 of this Schedule have effect for the tax year 2021-22 and subsequent tax years.
25 The amendments made by Part 2 of this Schedule have effect in relation to deemed direct payments treated as made on or after 6 April 2021.
26 The amendment made by paragraph 18 of this Schedule has effect for the purposes of determining whether section 61D of ITEPA 2003 applies in a case where the payment or benefit mentioned in subsection (1)(b) of that section is received on or after 6 April 2021.
27 The amendment made by paragraph 20 of this Schedule has effect in relation to payments made under a construction contract on or after 6 April 2021.
28 The amendments made by paragraph 23 of this Schedule have effect in relation to expenditure incurred on or after 6 April 2021.
29 Sections 101 to 103 of FA 2009 (interest) come into force on 6 April 2021 in relation to amounts payable or paid to Her Majesty’s Revenue and Customs under regulations made by virtue of section 688AA of ITEPA 2003 (as inserted by paragraph 19 of this Schedule).
Transitional provisions
30 (1) This paragraph applies where—
(a) the client in the case of an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies is not a public authority within the meaning given by section 61L of ITEPA 2003 (as that section had effect before the amendments made by paragraph 10 of this Schedule), and
(b) a chain payment is made on or after 6 April 2021 that can reasonably be taken to be for services performed by the worker before 6 April 2021.
(2) The chain payment is to be disregarded for the purposes of Chapter 10 of Part 2 of ITEPA 2003.
31 (1) This paragraph applies where—
(a) the client in the case of an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies is not a public authority within the meaning given by section 61L of ITEPA 2003 (as that section had effect before the amendments made by paragraph 10 of this Schedule), and
(b) one or more qualifying chain payments are made in the tax year 2021-22 or a subsequent tax year (“the tax year concerned”) to the intermediary.
(2) A chain payment made to the intermediary is a qualifying chain payment if it can reasonably be taken to be for services performed by the worker before 6 April 2021.
(3) A chain payment made to the intermediary is also a qualifying chain payment if—
(a) another chain payment (“the earlier payment”) was made before 6 April 2021 to a person other than the intermediary,
(b) the earlier payment can reasonably be taken to be for the same services as the chain payment made to the intermediary, and
(c) the person who made the earlier payment would, but for paragraph 25 of this Schedule, have been treated by section 61N(3) and (4) of ITEPA 2003 as making a deemed direct payment to the worker at the same time as they made the earlier payment.
(4) Chapter 8 of Part 2 of ITEPA 2003 applies in relation to the engagement for the tax year concerned (in addition to Chapter 10 of Part 2 of ITEPA 2003), but as if—
(a) the amendments made by Part 1 of this Schedule had not been made, and
(b) the qualifying chain payments received by the intermediary in the tax year concerned are the only payments and benefits received by the intermediary in that year in respect of the engagement.
32 (1) This paragraph applies for the purposes of paragraphs 30 and 31 where a chain payment (“the actual payment”) is made that can reasonably be taken to be for services of the worker performed during a period that begins before and ends on or after 6 April 2021.
(2) The actual payment is to be treated as two separate chain payments—
(a) one consisting of so much of the amount or value of the actual payment as can on a just and reasonable apportionment be taken to be for services performed before 6 April 2021, and
(b) another consisting of so much of the amount or value of the actual payment as can on a just and reasonable apportionment be taken to be for services performed on or after 6 April 2021.
33 For the purposes of section 61N(5), (5A)(a) and (8)(za) of ITEPA 2003 it does not matter whether the status determination statement concerned is given before 6 April 2021 or on or after that date.
34 For the purposes of section 61T of ITEPA 2003—
(a) it does not matter whether the representations to the client mentioned in subsection (1) of that section were made before 6 April 2021 or on or after that date, but
(b) in a case where the representations were made before 6 April 2021 that section has effect as if the reference in subsection (3) to the date the client receives the representations were to 6 April 2021.”—(Jesse Norman.)
This new schedule alters the tax treatment of certain engagements under which a worker provides services to a client through an intermediary.
Brought up, read the First and Second time, and added to the Bill.
Bill, as amended, to be reported.
Written Statements
(4 years, 6 months ago)
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Contingencies Fund Advance
(4 years, 6 months ago)
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The Secretary of State for Health and Social Care (Matt Hancock)
The Department of Health and Social Care’s vote on account cash limit has been used in full between April 2020 and June 2020 to support the running costs of the department, NHS and arm’s length bodies, including expenditure on the covid-19 pandemic. This application from the contingencies fund is to access the budgetary cover already included in the 2020-21 Main Supply Estimate, as set out below.
Parliamentary approval for additional resources of £24,250,000,000 and additional capital of £750,000,000 will be sought in a main estimate for Department of Health and Social Care. Pending that approval, urgent expenditure estimated at £25,000,000,000 will be met by repayable cash advances from the contingencies fund.
[HCWS300]
Youth Custody
(4 years, 6 months ago)
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The Lord Chancellor and Secretary of State for Justice (Robert Buckland)
Youth offending has fallen—to 38.4% in the latest youth justice statistics —thanks to successive Governments’ efforts to improve education, social care and mental health support. Clear guidance to the judiciary that custody should be an absolute last resort for children has also seen numbers fall by 78% between 2008 and 2019. There are now fewer than 700 children currently held in young offender institutions, secure training centres and secure children’s homes. This is an unprecedented low, and down from a peak of 3,200 in October 2002.
This is a success that as a society we should be incredibly proud of. These early interventions have meant that thousands of children each year avoid heading into adulthood as criminals, into a life of crime that is much harder to break once ingrained. This Government’s efforts to support children and upgrade their life chances continue at pace—whether that be the additional funding being put into our schools or the extra support now available to children’s mental health services.
But we know there is far more still to do, particularly for those who still enter custody—a much more concentrated mix of children with complex issues, over 50% of whom have convictions for serious violence. We are spending £5 million putting each prison officer who works in the youth custody estate through a specialist degree programme, giving them a greater understanding of child and adolescent development. We have also increased the number of staff in young offender institutions by a third in the last four years.
We are investing in the development of enhanced support units (ESUs) to provide specialist psychological support and services for children with the most complex needs, with ESUs now at Feltham and Wetherby YOIs. We are also working with NHS England on a new integrated approach to strengthen the provision of health care and support (“SECURE STAIRS”) which is rolling out across the youth secure estate.
But there are elements of practice in youth custody which, frankly, have not been good enough. Today I have published two reports on the use of restraint and separation in the secure youth justice estate.
Staff in the youth estate are trained to use behaviour management and de-escalation techniques and only resort to physical restraint when there is no alternative and either their safety or that of children is at further risk.
However, keen to ensure those prison officers working with children were receiving adequate training and were using such techniques appropriately, the Government commissioned Charlie Taylor, then the chair of the Youth Justice Board, to carry out an independent review into the use of pain-inducing restraint.
In his report, Charlie Taylor references a number of incidents in which he believes the use of a pain-inducing restraint potentially saved a child’s life. He is therefore clear that staff must retain the ability to intervene safely when there is a clear and imminent risk of serious harm to a child, themselves or another member of staff. However, he also found instances where it was used inappropriately and, now, I want to ensure the use of such restraint is proportionate and reasonable and only used when there is no other alternative.
That is why the Government have accepted all 15 recommendations in Charlie Taylor’s report, and the youth custody service has developed a programme of work which will implement them. Techniques that cause pain, albeit in order to prevent further serious harm, will no longer be taught alongside other methods to manage behaviour, to make it even clearer that these are a last resort designed only to protect children or staff from further injury. This will ensure that such techniques are only used when there is no alternative in order to prevent serious harm and therefore protect children and staff from trauma wherever possible. A panel will also be established to carefully scrutinise incidents in which a pain-inducing restraint has been used to ensure they are being used appropriately and that the welfare of children and staff is a key consideration.
The second report I have published today builds on our initial response to the thematic report on separation in young offender institutions, which HM Inspectorate of Prisons (HMIP) published in January.
The findings in the report made for some challenging reading at the time and I was pleased with the exceptional effort from the youth custody service in acting so swiftly to address the regime provided for separated children.
It is extremely unfortunate that at the point at which we were starting to see improvements for separated children we went into a period, that because of coronavirus, has forced us into a situation where all children in custody have unfortunately had to spend more time behind their doors than we would wish.
I accepted the overarching recommendation for a new system of separation to be implemented, which was called for by HMIP in their thematic report. As we look to restart aspects of daily life for children in custody I am determined that we do not return to the practices of old. This new, child-centred policy will draw on best practice from other establishments to ensure consistency across the youth estate.
Inappropriate use of these techniques must not happen again. Our response to these findings will help to ensure all children in custody have all the support they need to turn their lives around.
I will place a copy of both reports in the Libraries of both Houses.
[HCWS302]
Contingencies Fund
(4 years, 6 months ago)
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The Secretary of State for Transport (Grant Shapps)
I hereby give notice of the Department for Transport having drawn advances from the contingencies fund totalling £7,000,000,000 to enable expenditure on covid-19 support packages for transport to be spent ahead of the passage of the Supply and Appropriation Act. The schemes include:
Emergency measures agreements with the train operating companies; the covid-19 bus services support grant; safeguarding critical ferry freight routes; and supporting regional transport networks such as Transport for London and light rail networks. Furthermore, the Department brought-forward the payment of local authority road maintenance grants announced in the Budget. Barnett consequentials have already been applied in the usual way to any funding on top of the Department for Transport’s current budgets.
Parliamentary approval for additional resources of £5,253,000,000 and additional capital of £603,000,000 and £1,144,000,000 of cash will be sought in a Main Estimate for the Department for Transport. Pending that approval, urgent expenditure estimated at £7,000,000,000 will be met by repayable cash advances from the contingencies fund.
The cash advance will be repaid upon receiving Royal assent of the Supply and Appropriation Bill.
[HCWS299]
Pensions: Interim Guidance for Superfunds
(4 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The pensions regulator has today published an interim regulatory regime for defined benefit pension “superfunds”.
A superfund is a privately funded “for profit” consolidation vehicle, which takes over responsibility for defined benefit pension schemes liabilities from the sponsoring employer. To enter a superfund, sponsoring employers are required to pay a significant, upfront sum to improve the funding level of their scheme, in exchange for discharging their pensions liabilities.
This is an interim regime. The Government will continue to develop the permanent regime before legislating, with full and proper parliamentary scrutiny in the usual way.
Operation of the interim regime will be kept under review by the Government to ensure that it is properly protecting and advancing the interests of pension scheme members and the pension protection fund.
The Government will continue to develop a permanent regime for superfunds. This is an innovative area and market participants should not assume that the permanent regime will automatically replicate the interim regime. Alongside responses to the defined benefit pension scheme consolidation consultation, the Government will be informed by experience gained during the interim regime when considering the features of the permanent regime, including those relating to capital adequacy. The permanent regime may include an alternative set of requirements, including more prudent requirements, compared to the interim regime, but we cannot pre-empt the parliamentary process.
The permanent regime will be designed to protect pension scheme members and the pension protection fund, including by ensuring that superfunds have the necessary flexibility to continue contributing to a strong pensions ecosystem in which sponsoring companies and scheme trustees have a range of options open to them.
The Government believe that superfunds have the potential to improve the likelihood of members getting their benefits in full whilst providing employers with a new, affordable option to manage their legacy pension liabilities. However, if at any point it appears that changes to the interim regime are required in order to protect and advance the interests of scheme members, the Government and the pensions regulator will take prompt, robust action.
Today’s publication will mean that the pensions regulator will have a much firmer basis to take action against a superfund should they deem it a necessary and proportionate step.
The guidance can be accessed at the following address:
https://www.thepensionsregulator.gov.uk/en/document-librarv/regulatorv-guidance/db-superfunds
[HCWS301]
House of Lords
Arrangement of Business
The Lord Speaker (Lord Fowler)
My Lords, the Hybrid Sitting of the House will now begin. A limited number of Members are here in the Chamber, respecting social distancing. Other Members will participate remotely, but all Members will be treated equally wherever they are. For Members participating remotely, microphones will unmute shortly before they are to speak—please accept any on-screen prompt to unmute. Microphones will be muted after each speech. I ask noble Lords to be patient if there are any short delays as we switch between physical and remote participants.
If the House will indulge me for a moment, this is the 50th anniversary to the day of a number of Peers being elected in the general election of 18 June 1970 who have served continually in the House of Commons and the House of Lords ever since. They are Lord Prescott, Lord Pendry, Lord Cormack, Lord Cunningham of Felling and Baroness Fookes—and, indeed, me. I congratulate them—my colleagues, that is—on having survived 50 years of continual service. We might not always have agreed, but one thing I can say with absolute certainty and without doubt is that we have never had a stranger Parliament than this in the last half-century. Let us get on with the business of the hybrid House.
Covid-19: Track and Trace System
(4 years, 6 months ago)
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Baroness Anelay of St Johns
To ask Her Majesty’s Government what progress they have made with the implementation of the COVID-19 track and trace system.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Bethell) (Con) [V]
My Lords, this country has gone from 2,000 tests a day to 200,000 tests a day, with capacity to trace 10,000 indexes a day. We took 39,000 antibody tests yesterday and we are dramatically reducing turnaround times. The “test and trace” programme is a remarkable national asset that protects us from this virus through diagnosis, research and surveillance. I am very proud of the remarkable collaboration of the NHS, PHE, universities, the private sector, the military, local government and many other inspiring colleagues.
Baroness Anelay of St Johns (Con) [V]
What impact do the current lack of a nationwide NHS Covid-19 app and the statement by the director-general of the biosecurity centre that they do not expect to reach full operating capability until the end of the summer have on the Government’s decision about when and how to ease lockdown conditions?
Lord Bethell [V]
My Lords, the current low level of prevalence of the virus means that the pressure on automated tracing devices such as the app is less heavy than it would be under other circumstances. The biosecurity centre is already making a massive difference to co-ordinating our local response to the disease. We have made terrific progress so far and our management of lockdown measures will reflect that fact.
Baroness Young of Old Scone (Lab) [V]
Statistics on the first full week of operation show that less than 58% of the contacts of confirmed symptomatic cases are traced and say that they will self-isolate—it is difficult to know whether they do so. “Test and trace” tracks only contacts of symptomatic cases, and the ONS infection study shows that only one-third of total new infections are symptomatic. Will the Minister admit that “test and trace” is resulting in the isolation of an ineffectively small proportion of the contacts of all new cases and will not prevent a second wave of the disease?
Lord Bethell [V]
My Lords, last week’s figures suggest that 67% of people who tested positive for coronavirus were reached by our contact tracers. This figure is rising every week. The epidemiological logic is that a system such as “test and trace” will never be 100% ubiquitous or track everyone who carries the disease—asymptomatic infection is a part of this terrible disease. However, it can have a profound effect on its spread and break the chain of transmission. That is why we have invested in this infrastructure and why we appealed to the British people to comply with the isolation protocols.
Baroness Jones of Moulsecoomb (GP) [V]
When will the people of the Isle of Wight be allowed to stand down in terms of the app that they have been guinea pigs for, and to concentrate on a wider “test and trace” and their own recovery?
Lord Bethell [V]
My Lords, we are enormously grateful to the people of the Isle of Wight for their collaboration on the pilot. There is no question of them needing to stand down. Other measures for “test and trace” are working extremely well on the Isle of Wight, and both the pilot app and the manual “test and trace” have helped break the chain of transmission. We remain extremely grateful for their support.
Lord Ribeiro (Con) [V]
My Lords, six weeks ago, the contact tracing app was launched on the Isle of Wight, since when, the emphasis has shifted from the app to the use of 25,000 call centre workers to identify the contacts of people testing positive for Covid-19. What lessons have we learned from countries such as Australia, Singapore, Italy and Switzerland, which all launched contact tracing apps, and is the purpose of the “test and trace” app to help end this pandemic or to protect us from the next?
Lord Bethell [V]
My Lords, we are in regular contact with many of the countries that are working with apps. Two things are crystal clear. The opportunity of using automated technologies to create extra tracing contacts is enormous, and we are working extremely hard to chase down that opportunity, but the technical challenges are also enormous. We are working very closely with our tech partners and with other countries to develop the best possible app, particularly for a moment when the prevalence in society might increase, for that is when the mass automation delivers its unique advantage.
Baroness Walmsley (LD) [V]
My Lords, can I press the Minister on his answer to the noble Baroness, Lady Young? In the first week of “test and trace”, over 8,000 cases were referred, but the ONS said that there were 33,000 cases. If only a quarter of cases are being referred, how does the Minister think that we will ever stamp out this virus? When will we get more widespread asymptomatic testing and tracing?
Lord Bethell [V]
My Lords, the epidemiological maths is as the noble Baroness describes, but our focus on symptomatic cases does not mean that the system does not work. Taking out more than a quarter of infected cases is a massively important and impactful event. Asymptomatic testing has started in healthcare and social care workers. It is making a big difference in both those forums, where prevalence is higher than the community prevalence, and we will be learning lessons from those schemes.
Baroness Blackwood of North Oxford (Con) [V]
My Lords, a key priority of “track and trace” is to monitor the emergence of localised hotspots and intervene before wider community transmission can occur. Local authorities and public health officials have expressed concerns that they do not have the powers to deliver swift local interventions and that a top-down approach might be too slow. Can the Minister say what process is in place to prevent community transmission when “track and trace” finds evidence of such localised hotspots?
Lord Bethell [V]
My noble friend is entirely right that local action is central to an effective response to Covid-19. We are working extremely hard through the JCVI to take the intelligence from our testing programme to identify hotspots when they occur and to move resources to those areas to support local directors of public health and local infection officials with the resources they need, whether in terms of testing or surge control of the disease.
Baroness Coussins (CB) [V]
My Lords, the Government have translated Covid-19 advice and information into a number of languages, but can the Minister assure me that proper mechanisms and a budget have also been built into the “track and trace” system for the use of interpreters where needed—by that I mean professionally qualified human beings, not a down-the-line Google Translate service—so that no one from any minority group experiences delayed or inadequate instructions about contacts or isolation, which could be damaging at best and fatal at worst?
Lord Bethell [V]
I pay tribute to the perseverance of the noble Baroness on the issue of interpreters. She is entirely right that marginal communities are incredibly important in this process and can be like rockpools when the tide recedes—left as areas of infection if we do not focus on them effectively. That is why we are working extremely hard to identify those communities that might be left behind and to use resources such as interpreters to ensure that the message gets through.
Baroness Wheeler (Lab) [V]
My Lords, the ambition of the Minister, reported yesterday, to get a national “track and trace” system going before the winter is in marked contrast to the hype and promises of the test trial launched in May, when Matt Hancock promised that where the Isle of Wight leads, Britain follows—though obviously now not until Christmas. Does the Minister acknowledge that the failure to have an effective system up and running this summer will have a huge impact across vital services, including residential and nursing care homes? Do the Government expect care homes not to open for regular and routine visits from family, friends and others until the end of the year?
Lord Bethell [V]
I do not agree with that analysis. I am afraid that areas such as care homes are where the app is least effective, because the residents are static and therefore the app is not really the facility for identifying infections. This is where the manual “test and trace” process is the most effective. That is why we are super-focused on getting it right. We are working very closely with the social care community to ensure that the “test and trace” systems are working well. We are flooding social care with tests and ensuring that our tracing agents are well trained to handle local outbreaks in care homes and to deal with care home staff.
The Lord Speaker (Lord Fowler)
My Lords, I regret that the time allowed for this Question has elapsed, so we come to the second Oral Question. I call Lord Clark of Windermere.
Nurses: Recruitment
(4 years, 6 months ago)
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Lord Clark of Windermere
To ask Her Majesty’s Government what plans they have to facilitate the recruitment of nurses onto degree courses beginning in September 2020.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Bethell) (Con) [V]
My Lords, the health and education sectors are working jointly to increase applications and places. The Government announced 5,000 more healthcare places from September. In England, nursing students can access more funding worth at least £5,000 per academic year. During July in clearing, there will be marketing campaigns aimed at students considering nursing.
Lord Clark of Windermere (Lab) [V]
My Lords, one reason why we were so ill prepared for Covid-19 was that the NHS was short of over 40,000 nurses. Will the Government ensure that the number of nursing places available at universities this coming September will significantly begin to reduce that dire shortage of nurses?
Lord Bethell [V]
I reassure the noble Lord, Lord Clark, that from September 2020 eligible pre-registration students in English universities studying nursing, midwifery or one of the many allied health professional courses will benefit from additional funding of £5,000 per academic year. The correct number of places will be made available to hit our objective of 50,000 more nurses by 2025.
Baroness Verma (Con)
Can my noble friend say what the take-up is of nursing apprenticeships, and will his department consider a combined apprenticeship that includes social care workers to ensure a route to career progression?
Lord Bethell [V]
My noble friend makes an incredibly interesting suggestion on a combined course. I am prepared to look into that and write to her about whether work has been done on such a measure.
Baroness Watkins of Tavistock (CB)
My Lords, I declare my interests as outlined in the register. Not only do we need to recruit new students this year, but we must retain those entering their second and third years of study and ensure that those in their final year, who are currently helping the NHS in a working capacity, complete their training. It is vital that we introduce universal cost of living maintenance grants that reflect students’ needs. I understand that the Prime Minister said that he will look into that further following a meeting of the Education Select Committee. Will the Minister confirm that in addition to the £5,000 maintenance grants there will be an additional £1,000 for mental health and learning disability nurses this year? Is he willing to meet me and other interested Peers to look at the long-term support for nursing students?
Lord Bethell [V]
The noble Baroness is entirely right about retention: we are battling the leakage of skills and experience from the NHS. In September 2019, the Government announced a £210 million boost for front-line NHS staff, which includes, as she referred to, funding for a £1,000 personal development budget for every nurse, midwife and allied health professional working in the NHS. I would be glad to meet her and her colleagues to discuss what more can be done.
Baroness Pitkeathley (Lab) [V]
Among the extra 4 million people who have become carers during the pandemic, 72,000 left the NHS to take on caring responsibilities. Many will eventually want to return to work or training. How will the Government support those who will need to combine caring with employment or training? Are there plans to enable career progression, as the noble Baroness, Lady Verma, suggested, so that skills learned in caring can be translated into professional qualifications?
Lord Bethell [V]
My Lords, the Covid epidemic has thrown a spotlight on the essential role of carers, who have clearly played an enormous role in looking after those who are vulnerable. I completely support the sentiments of the noble Baroness that we should do more to help carers in their professional development so that they can convert to different secondary careers. I would be happy to look at any suggestions she has for ways in which we can do that better.
Baroness Jolly (LD) [V]
Not for a long time have nurses had such a high national profile. The career options are many and now many more men are nurses too. Will the Minister explain to the House what careers material is available to schools, what opportunities there are for potential nurses to see what the role entails, and what efforts are being made to encourage young men?
Lord Bethell [V]
My Lords, we have backed an enormous marketing campaign called “We are the NHS”, which throws a huge spotlight on the role of nurses of all genders, backgrounds and professional focus. That campaign includes a strong schools element. It seeks to attract a broad range of backgrounds of people who might think of applying to the nursing profession.
The Lord Bishop of Winchester [V]
My Lords, support for key public service staff and maintaining quality training for those professions will be strategic in the successful rebuilding of our post-Covid society. In the Royal College of Nursing 2019 employment survey, 37% of qualified nurses said that they were seeking a new job outside the profession. Does the Minister agree that the retention of qualified nurses, midwifery and allied health professional staff is just as important as the recruitment of trainees? Will he therefore say more about how the Government will review the support packages available to both students and new post-qualification nurses and allied health professionals, in order that more of those newly qualified are encouraged to remain in the profession?
Lord Bethell [V]
I entirely support the observations of the right reverend Prelate. I have already said that retention is incredibly important. The culture in which nurses work is vital to achieving the kind of retention objectives we have in mind. That is why we are working on a people plan for the NHS. One thing we have learned from Covid is that when you give professionals the scope to deliver their best professional results, you get the best out of them. That is something we want to apply in the NHS people plan.
Lord Randall of Uxbridge (Con) [V]
I was pleased to hear my noble friend announce the additional funding for nursing students, but will he give serious consideration to reviewing funding considerations for all nursing students in England, perhaps with a view for the Government to cover tuition fees for future students as long as they stay in the NHS for a period of years?
Lord Bethell [V]
We have made a clear, well-defined and thoughtful new funding package for nurses. We would like to see how that is applied and what the response is. Once we have done our review, we will look at alternatives or potential supplements.
Lord Singh of Wimbledon (CB) [V]
My Lords, the Covid pandemic has underlined the vital role of nurses in the health system. Bearing in mind that nursing students do unpaid work while learning, does the Minister agree that the £5,000 bursary is not enough to meet the fees and living costs of those whom the Government are trying to attract?
Lord Bethell [V]
The noble Lord is entirely right that the role of nurses in the healthcare system has been extremely well exemplified by the response to Covid. The £5,000 bursary was agreed in collaboration with, and with the input of, the Royal College of Nursing. There is of course other support that students can already access through the student loans system and the existing learning support fund, and that goes a long way towards paying for childcare, travel and other costs in cases of exceptional hardship.
Baroness Thornton (Lab)
My Lords, does the Minister agree with the Chief Nurse, Professor Mark Radford, that student nurses who volunteered to be redeployed on the front line during the pandemic are now feeling cast aside due to the uncertainty about their future, with some finding themselves out of a job but still with debts of up to £30,000 from having done a degree? If he does agree, can he say what the Government intend to do about making them feel less abandoned?
Lord Bethell [V]
The noble Baroness raises a very concerning point. I take the Chief Nurse’s advice and observations at face level. I express my profound thanks to all those nurses who have been redeployed to the front line and have performed an important task but who are now feeling a sense of either anti-climax or uncertainty. I reassure them that there is an enormous number of job opportunities in the NHS, that there is a role for them in the NHS of the future, and that we will be investing massively in the role of nurses in the years ahead, as exemplified by our commitment to recruit.
The Lord Speaker (Lord Fowler)
My Lords, I regret that the time allowed for this Question has elapsed. It would be very helpful if colleagues would keep their supplementary questions short so that we can get everyone on the list to ask their question. The third Oral Question is from the noble Lord, Lord Arbuthnot of Edrom.
Post Office: Horizon Accounting System
(4 years, 6 months ago)
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Lord Arbuthnot of Edrom
To ask Her Majesty’s Government, further to the answer by the Prime Minister on 26 February (HC Deb, col 315), what steps they have taken in relation to the establishment of an independent inquiry into the Post Office’s Horizon accounting system.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, last week the Government announced an independent review to consider whether the Post Office has learned the necessary lessons from the Horizon trial judgments and to provide an independent and external assessment of its work to rebuild its relationship with its postmasters. The Government are keen to see this review launched as soon as possible, and we are in the process of identifying a chairman to lead its work.
Lord Arbuthnot of Edrom (Con)
My Lords, perhaps I may explain why this review is so inadequate. The terms of reference have been designed to exclude all possibility of blame falling on the Government. However, last week my noble friend told me that the Government became aware only in early 2019 that transactions entered remotely might be invisible to sub-postmasters. That was unconvincing, since the Post Office had said in open court in January 2017 that that could happen. That verified what Second Sight had said in its interim report of July 2013—but then of course it was quickly sacked. Nor do the terms of reference say anything about the likelihood of the Post Office improperly making a profit from the sub-postmasters, or about the suspense accounts or the critical role that Fujitsu played in all this. Without asking those questions, you cannot get to the bottom of this, as the Prime Minister wants. Does my noble friend appreciate that the Government appointing one of their own rather than a judge as the chairman of this review does not fill us with confidence that it will be independent of the Government?
Lord Callanan
I pay tribute yet again to the work that my noble friend has done in both Houses on this important issue, along with other noble Lords and MPs. The findings outlined throughout the Horizon judgment already provided an extensive insight into what went wrong at the Post Office, including an independent judicial view of all the facts that all sides were looking for. However, the Government now accept that more needs to be done. We want to be fully assured that, through the independent review, there is a public summary of the failings that occurred at the Post Office, drawing on the judgments from the Horizon case and listening to those who have been most affected without repeating the extensive findings already entered into by Mr Justice Fraser. The Post Office has committed to co-operating fully with the review and we, as Ministers, will hold it to that. The review will have sufficient strength and breadth to deliver in a timely manner, and I assure my noble friend that the chair of the review will be fully independent of both the Post Office and the Government.
Baroness Falkner of Margravine (Non-Afl) [V]
My Lords, I, too, pay tribute to the noble Lord, Lord Arbuthnot, but I think that the Minister is playing with semantics to the extent that he talks about how the review will be independent. Does he recognise that people want responsibility to fall where it should, whether on this Government, the previous Government, the Post Office, Fujitsu or anyone else? Does he not think that 20 years is long enough for the victims to have waited for this review? Will he please get on with it and deliver a proper, independent review to address these issues?
Lord Callanan
I can say only that I agree completely with the noble Baroness. We need to get on with it and get to the bottom of these things as quickly as possible, and that is what we are endeavouring to do.
Lord Cormack (Con) [V]
My Lords, as one of those kindly mentioned by the Lord Speaker at the beginning of today’s session, on Waterloo Day in 1970 I could never have imagined being part of a hybrid House of Lords 50 years later. I pay tribute to my noble friend Lord Arbuthnot and endorse all that he said. Does my noble friend the Minister agree that in the last half-century no well-regarded public institution has behaved with more apparent malevolent incompetence than the Post Office? Will he do his best to ensure that we do indeed have a thoroughly independent review and that those who have suffered so much are publicly exonerated and generously compensated—and can we have this done within this calendar year?
Lord Callanan
First, I offer my congratulations to my noble friend on his 50 years of exemplary service, as indeed I do to the Lord Speaker. I can only agree with my noble friend. We need to get to the bottom of this quickly. We need to get on with it, and the best way of doing that is through an independent review.
The Earl of Erroll (CB) [V]
Why has this taken five years since these miscarriages of justice were revealed to Parliament in an Adjournment debate in the Commons? What happened to the later independent report by Second Sight, which was due to be published in March 2015? Horizon was already in trouble with developments at ICL, and was nearly scrapped in the mid-1990s on the merger with Fujitsu. Perhaps it is a pity that it was not.
Lord Callanan
Of course, the Horizon court case occupied a lot of time and effort in both government and the Post Office, and it provided an extensive and, indeed, damning indictment of what went on at the time. However, we think that there is more to be done and that an independent review is the best way of proceeding with that.
Lord Browne of Ladyton (Lab) [V]
My Lords, will this review be able to be held up pending the determination of the criminal investigations that are ongoing, as well as perhaps criminal appeals? The priority should be that those damaged by the scandal are exonerated and compensated. The Government are the owner of the Post Office. Will they exercise their muscle to ensure full compensation? Indeed, Parliament, in a two-clause Bill, could legislate for exoneration of all those convicted. Surely the Government do not want to prolong the agony. What more evidence is needed before these steps can be taken to achieve the inevitable?
Lord Callanan
It is extremely important that we do not interfere with the proper consideration of these cases through the Criminal Cases Review Commission. I obviously cannot pre-empt what might happen, but I think that noble Lords will realise what I hope will happen as a result of this process. It is also important to get on with the review and to make sure that we learn the lessons from what went wrong. We also need to make sure that these things never ever happen again, because this is a terrible, terrible scandal.
Baroness Burt of Solihull (LD) [V]
The Minister seems keen to move on from this debate, but there are many faithful ex-servants of the Post Office who cannot move on, whose lives have been ruined. Does he agree that they deserve proper justice—yes or no? The noble Lord, Lord Arbuthnot, has shown that the proposed review is inadequate. If the Minister does believe in justice, will he now finally sanction an independent, judge-led inquiry?
Lord Callanan
I do agree with the noble Baroness that they deserve justice. Nothing that we can do will be able to put back together some of the lives that have been shattered and broken by this terrible scandal but I honestly believe that the best way of securing justice is through the judicial process, which is ongoing and which I cannot pre-empt. That process will run its course but then there is additional work to do; we think the best, swiftest and fastest way of doing that is through an independent review.
Lord Polak (Con)
Following on from the noble Baroness, Lady Burt, earlier this week I spoke to the lovely Rita Threlfall, who was a sub-postmistress in Liverpool from 1998 to 2010. One of six children, Rita told me how she was brought up with three guiding principles: education, hard work and honesty. Can your Lordships imagine the devastation following the Horizon-created £35,000 shortfall, when Rita was suspended and charged with theft and false accounting? She was left a mental and physical wreck. She said, “Since my dismissal, my health declined. I depend on a wheelchair, seldom leave the home, suffer with extreme anxiety. I lost my income, my health, my sanity and I am now bankrupt.” I plead with my noble friend the Minister, for the sake of Rita and so many others, to ensure that the Government set up a judge-led inquiry and remove the previous chief executive from her position as chairman of Imperial College Healthcare NHS Trust.
Lord Callanan
I thank my noble friend for drawing attention to one of the many tragic cases that have resulted from this; there are many others like it and I too have heard some terrible tales. We believe that an independent review is the best way of getting to the bottom of it. This will have essentially similar terms of reference to a judge-led public inquiry. With regard to the former chief executive, it would be very helpful if she would account much more fully in public for what she knew and for the actions that she took at the time. I have written to the Department of Health to make clear our position on her future. The Care Quality Commission is, I believe, looking at whether she is a fit and proper person for the role that she holds. I hope that it will conduct that review swiftly. Obviously, I cannot predict that, and it is not a matter directly for me, but I have written to the Department of Health to make my views clear.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed. I repeat what I said previously: if noble Lords could keep their supplementary questions reasonably short, we could get more people into the list.
Schools: Online Support for Pupils
(4 years, 6 months ago)
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Lord Addington
To ask Her Majesty’s Government, further to the paper by Professor Francis Green Schoolwork in lockdown: new evidence on the epidemic of educational poverty, published on 15 June, and the finding that 20 per cent of pupils have done either no schoolwork at home, or less than one hour a day, during the COVID-19 pandemic, what steps they are taking to publish guidance on what is an acceptable level of online support for pupils.
The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con) [V]
My Lords, we are committed to supporting schools to ensure that all pupils, particularly disadvantaged pupils, are supported for lost education since lockdown. The Government have provided a £100 million package of support to enable remote teaching, including delivering devices to vulnerable children and working with the Oak National Academy, the BBC and others to ensure strong national availability of remote education. Expectations for the next academic year will be published before the end of term.
Lord Addington (LD)
My Lords, I thank the Minister for that reply. However, will the Government take on board that the report states that different types of teaching are required—that there should be direct contact with the pupil by the teacher and a conversation about different ways of learning? Virtual environment learning, is, I think, what it was called in the report. This is seen to have very much better results for vulnerable pupils. When were the Government aware that this was getting good results? When will they have a universal application system, or advice on this, for teachers?
Baroness Berridge [V]
My Lords, we expect teachers and schools to use their professional judgment and to make available the best possible education, bearing in mind the home-learning circumstances of pupils. We have made guidance—case studies—available to assist schools with this, as well as, of course, making more devices available to vulnerable children.
Lord Knight of Weymouth (Lab) [V]
I remind your Lordships of my entry in the register. Grandparents are losing their lives, parents their livelihoods, and now children are losing their life chances. The absence of a credible plan for schools opening in September is a disgrace. By then, we need to end the digital divide in education, deliver training and teaching using technology through an additional inset day, map a coherent set of teaching content, and know how we will flexibly use people and vacant premises to offer a full-time universal schooling service. We urgently need a plan. Ministers must publish a plan for September that we can all stick to—more urgently than before the end of term. When will we get it?
Baroness Berridge [V]
My Lords, as I have outlined, there will be a plan before the end of term in relation to curriculum expectations going forward. The Government have made available free expert help and have had over 2,000 applications offering free expert help to make Google Classroom or Microsoft Education available to schools. The department has brokered deals with internet providers and has a specific arrangement with BT such that 10,000 children can have access to BT wi-fi hotspots. The department is incredibly concerned and we are working as best as we can within the scientific advice. We want to see all children back in school in September, subject to that scientific advice.
Baroness Tyler of Enfield (LD) [V]
It has been exposed that at least 700,000 disadvantaged children do not have proper access to computers or the internet access needed to study online at home. While it is good news that BT is offering free internet access for six months, the scheme will reach only about 10,000 families and, crucially, will not help those without devices. Does the Minister agree that we have a moral obligation to ensure that all these disadvantaged children have access to the internet at home, including devices? What further steps will the Government take to tackle this growing social inequity?
Baroness Berridge [V]
My Lords, the Government have also made available school-to-school support through the EdTech innovation programme to help schools that are not necessarily on those platforms. As of 14 June, more than 114,000 devices have been delivered to local authorities and trusts to be distributed to vulnerable children, including care leavers. The Government are concerned, particularly about disadvantaged children, and we are looking at, potentially, a targeted online national tutoring service.
Lord Baker of Dorking (Con) [V]
I declare my interest as chairman of the Baker Dearing Educational Trust, which promotes university technical colleges. Is the Minister aware that, this morning, 47 of the 48 university technical colleges have teachers and students in them engaged in the learning process? If we can do it, any secondary school in the country can do it. They should not wait until September, which is 75 days away, with all the schools empty, locked up and padlocked. That is a disgrace. Will the Government encourage secondary schools to open on 1 July with as many students as they can accommodate? If they do not do that, they should be named and shamed.
Baroness Berridge [V]
My Lords, students, teachers and parents are working hard during this period, and 92% of settings are now open. There has been clear guidance about bringing in different year groups, particularly year 10 and year 12, who are approaching exams. We have also issued guidance on flexibility where schools have not had the take-up and could accommodate more pupils within the guidelines of social distancing and class size. We have also specifically encouraged those secondary schools which have capacity to make this available to primary schools that could use that capacity. I pay tribute to the statistics that the noble Lord outlined in relation to UTCs.
Lord Carrington (CB) [V]
My Lords, I declare my educational interests as set out in the register. In severely disadvantaged areas, online teaching can be extremely limited by the lack not just of promised laptops but of study space, particularly if several children are at the same home. Please can the Minister explain how the guidance, and then Ofsted, take this into account when looking at the performance of schools facing these challenges?
Baroness Berridge [V]
My Lords, Ofsted has currently suspended its routine inspections but is able to go into schools for safeguarding reasons. When Ofsted’s inspections begin again, it will inspect on the offer of recovery that schools are giving to children, including of course blended learning, but there will not be retrospective inspections of schools’ provision during this time.
Lord Watson of Invergowrie (Lab) [V]
My Lords, I declare an interest as the parent of a year 4 child at a state school in London. It has provided excellent online resources for home-schooling but has been unable to offer face-to-face online teaching, as not all pupils have access to the necessary technology. Fortunately—in my case—it is not necessary to master year 4 maths to understand that the figures in the UCL report foretell long-term damage to life chances. Careers can be furloughed, but childhood and education cannot. In April, the Government promised to provide 200,000 devices to disadvantaged families. Very few have been delivered yet and, as the noble Baroness, Lady Tyler, said, four times that number are now required. When will the Government show the urgency needed to end the postcode lottery of the digital divide?
Baroness Berridge [V]
My Lords, the Government realise that, while we urgently wish all children to be back in school, it is subject to the scientific evidence at the moment. But it is good news that during the lockdown we have offered school places to all vulnerable children and those of critical workers. Those numbers are increasing dramatically: 47,000 children who are in contact with a social worker are now back in school, which is up from 37,000. However, we are looking at all the evidence base to help those children catch up and drawing on a specific pilot project that the Education Endowment Foundation ran with Sutton, NESTA and Impetus in relation to access to high-quality external tutoring. We will pilot that over the summer with 1,500 disadvantaged students. We take very seriously the need to assist schools to help these students catch up.
Baroness Bakewell of Hardington Mandeville (LD) [V]
My Lords, the Government have committed to seeing more children from disadvantaged families go to university. The experience of lockdown has made these aspirations disappear over the horizon. Since lockdown, around one in five pupils have done no schoolwork at home, or less than an hour a day of it. The UCL survey found that 97% of private school children had access to a computer at home, while one in five of those on free school meals had none. Can the Minister tell the House exactly what the pupil premium is currently being spent on?
Baroness Berridge [V]
My Lords, the pupil premium is around £2.4 billion a year and the Education Endowment Foundation gives schools information and evidence on the best use of that pupil premium. However, the Government have entrusted school leaders and school professionals to determine the best use of that pupil premium, because they best know the students in their classrooms.
Baroness Blackstone (Ind Lab) [V]
We now know that there is a huge and growing inequality in access to learning, with dire effects on children’s mental health. Given the ineffectiveness of remote learning, why have we seen such a pathetic failure in providing a can-do approach to getting all children back to some schooling, not just in September but before the end of this term? Why, for example, have separate morning and afternoon sessions not been introduced, which could double the numbers returning, and why has the Department for Education had so little success in getting a dispensation on social distancing rules in schools, given that the Minister told the House last week that it would be very pleased to move away from the two-metre rule? Is the Secretary of State for Education as invisible in government discussions as he is in the media?
Baroness Berridge [V]
My Lords, throughout this pandemic the Government have made it clear that we would be guided by the scientific evidence. The evidence we have at the moment means that there is the two-metre social distancing rule, but I must pay tribute to the teachers who are working hard out there. They have carried on running their schools throughout this pandemic and are now opening them up to reception and years 1 and 6, along with face-to-face time with years 10 and 12. Education is happening but, of course, along with all noble Lords, we want to see all children back at school in September.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed and that concludes the Hybrid Proceedings on Oral Questions. I thank all colleagues for their contributions.
Arrangement of Business
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, proceedings will now commence. Some Members are here in the Chamber, others participating virtually, but all Members are treated equally. For Members participating remotely, microphones will unmute shortly before they are to speak—please accept any on-screen prompt to unmute. Microphones will be muted after each speech. If the capacity of the Chamber is exceeded, I will immediately adjourn the House. I ask noble Lords to be patient if there are any short delays as we switch between physical and remote participants. The usual rules and courtesies in debate apply.
Economic Outlook and Furlough Scheme Changes
Lord Livermore (Lab) [V]
My Lords, as well as the UK recording the highest excess death rate from Covid-19 of any country, it is now forecast by the OECD to suffer the worst recession in the G7, with a projected fall in GDP of 11.5% this year. Why is the UK likely to experience over this year the worst economic impact from the coronavirus crisis of all industrialised countries?
Baroness Penn (Con)
My Lords, the noble Lord is correct that we have a severe outlook for this year, but that OECD report also forecasts us to have one of the strongest recoveries of the large countries it looked at. If two years are put together, we emerge close to the top of the table.
The noble Lord asked for some of the reasons why we will be particularly badly affected. I can point to two: one is the services nature of our economy, which has been particularly affected by the lockdown; the second is the relative openness of our economy, which means that we are more affected by changes in global demand.
Baroness Kramer (LD) [V]
My Lords, numerous whistleblowers are now reporting that quite a number of SMEs are struggling to get people back to work safely. Will the Minister support proposals by my colleague Ed Davey MP and some significant business names to scale up the Health and Safety Executive so that, free of charge, it can assist SMEs with risk planning and mitigation, and will the Government fund the HSE quickly to recruit retired professionals to meet the urgent need?
Baroness Penn
My Lords, the Government are providing more support to businesses to reopen safely. A specific fund is available for getting high streets open safely. We are also putting additional funding into the Health and Safety Executive to ensure that any enforcement action necessary can be taken.
Lord Dobbs (Con) [V]
The furlough system is delaying rather than solving the epidemic of unemployment about to hit us, particularly among our young. A prime cause of this disastrous loss of jobs is the two-metre rule, which is increasingly ignored by many and in any event is based on science that is widely questioned. May I beg the Government to take their courage in their hands, balance one risk against another, scrap the two-metre rule and in its place issue guidelines that rely primarily on the great common sense that the vast majority of people always show?
Baroness Penn
My noble friend will be aware that the PM has commissioned a comprehensive review of the two-metre guidance. It will take advice from a range of experts, including the CMO, the CSA, behavioural scientists and economists. That work will be completed in the coming weeks.
Lord Wood of Anfield (Lab) [V]
My Lords, a YouGov survey this week showed that more than half of UK businesses will lay off more than a quarter of their staff within three months of the end of the furlough scheme. That scheme was bold and necessary, and I applaud the Chancellor for it, but it is vital that it is an employment subsidy scheme and not an unemployment benefit scheme. Can the Minister commit to making further wage support for employers, especially large firms, conditional on their providing commitments to retain their workers and/or to invest in their retraining in the months ahead?
Baroness Penn
The noble Lord is right that the design of the scheme is about keeping a connection between an employee and an employer during lockdown so that they can return to that job afterwards. That is why we have set out a careful process for unwinding the scheme so that, from August, employers will need to begin to contribute costs, scaling up from national insurance and pension contributions to 10% and then 20% of the wages covered.
Lord Holmes of Richmond (Non-Afl) [V]
The Government’s investment in the furlough scheme has benefited millions across the country. Does the Minister agree that the way to ensure that we get maximum benefit from that investment is to reduce the two-metre rule to one metre, to stop the ridiculous quarantine rule currently in place, and urgently to consider establishing a sovereign wealth fund to invest in businesses that need it, with the Government taking a share, which would benefit both government finances and the long-term security of those businesses?
Baroness Penn
The noble Lord will be aware of my previous answer on the two-metre rule. In our road map for reopening the economy, we have been able to take important steps forward—for example, the reopening of non-essential retail this Monday. We encourage people across the country to be aware that, when we take such steps to reopen, it is then safe to go out and support their local high street and their local economy.
Baroness Neville-Rolfe (Con) [V]
Building on what my noble friend the Minister just said, does she concur with the view that we have now reached the stage—admittedly, slowly and fitfully—for normal economic life to restart? Does she agree that we should be wary of extending special schemes such as furlough for too long because of their huge cost and the inevitable disincentive and perverse effects?
Baroness Penn
My noble friend is right that there is a balance to be struck with such schemes. The pathway that we have set out for the gradual contribution of businesses to the costs of furloughed employees, and the ability to bring them back to work flexibly and for as many hours as they need, strikes the right balance in that scheme.
Lord Bird (CB) [V]
I suggest that one of the big issues today is not simply removing the homeless from the streets—as this Government valiantly did, and we should back them for that—but preventing homelessness. That is the real big issue. I call on the Government to have a moratorium on evictions, provide work through jobs training and invest in businesses to keep people in work. Importantly, if people slip into the treacle of homelessness, they will be there for decades, children will be hurt and there will be a knock-on effect on the NHS and the well-being of our whole society. We have to concentrate on preventing people falling into homelessness.
Baroness Penn
I completely agree with the noble Lord that we need to take preventive action on homelessness as well as dealing with the problem where it arises. The Government have put in place a three-month moratorium on evictions, which can be extended. We have also increased the generosity of the local housing allowance to help those who are renting but may have lost their job or income due to coronavirus. A couple of noble Lords have now raised the question of investing in businesses; most of our support is of course given through loans to businesses, but the Future Fund makes equity investments in early start-ups that have been unable to access other finance.
Baroness Altmann (Con) [V]
My Lords, I congratulate the Government on their speedy furlough scheme, protecting the jobs of people who were at risk from this sudden economic shock. But does my noble friend agree that, given the likelihood of huge numbers on furlough ending up being made redundant, it is enormously important to beef up apprenticeships and training opportunities across the country as we try to recover from this pandemic?
Baroness Penn
I absolutely agree with my noble friend about the importance of apprenticeships and other schemes that will help people who have unfortunately lost their jobs during this pandemic to re-enter the labour market and recover as our economy opens up.
Lord Mann (Non-Afl) [V]
Academic research from New Orleans after its flooding disaster shows that entrepreneurs were the key to regenerating a very damaged economy. What support are the Government giving now to incentivise entrepreneurs to take risks and employ people so that new ideas, new products and new services can re-boost our economy?
Baroness Penn
One important change that the Government committed to in their manifesto and have implemented is increasing the employment allowance in national insurance contributions. This means that new businesses can employ more people without paying those national insurance costs, and it incentivises them to take on their first one or two members of staff as they grow their businesses.
Arrangement of Business
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, proceedings will now commence. Some Members are here in the Chamber, others participating virtually, but all Members are treated equally. For Members participating remotely, microphones will unmute shortly before they are to speak—please accept any on-screen prompt to unmute. Microphones will be muted after each speech. If the capacity of the Chamber is exceeded, I will immediately adjourn the House. I ask noble Lords to be patient if there are any short delays as we switch between physical and remote participants. The usual rules and courtesies in debate apply. I understand that the Whip would like to make a short intervention at this point.
Baroness Sanderson of Welton (Con)
My Lords, the timing for this debate is very tight, so I urge noble Lords to keep their speeches to time.
Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2020
(4 years, 6 months ago)
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Baroness Vere of Norbiton
That the draft Regulations laid before the House on 5 March be approved.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con) [V]
My Lords, these draft regulations will—[Inaudible.]
Baroness Sanderson of Welton (Con)
I am afraid that we cannot hear the Minister well due to the bad connection. Could she turn off her visuals to see whether the connection is any better?
Baroness Sanderson of Welton
Apologies, but due to the bad signal, we will adjourn for five minutes.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
Now, where were we? Let us begin. The Motion is in the name of the noble Baroness, Lady Vere of Norbiton. I remind noble Lords that the time limit for this debate is one and a half hours.
Baroness Vere of Norbiton [V]
My Lords, I apologise for the technical issues. I blame them on the weather.
These draft regulations will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed at the end of the transition period. As noble Lords are aware, the Government are committed to ensuring that the UK has a functioning statute book at the end of the transition period while we continue to work to achieve a positive future relationship with the EU. We have therefore conducted particularly intensive work to ensure that there continues to be a well-functioning legislative and regulatory regime for aviation, including for insurance.
These regulations are the second in a series to address deficiencies in a recent EU regulation relating to minimum insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties. I will give noble Lords some background. EU Regulation 785/2004 requires air carriers and aircraft operators to be insured in respect of passengers, baggage, cargo and third parties and against other risks such as acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. The amounts for which carriers and operators are required to be insured are measured in special drawing rights, an international reserve asset created by the International Monetary Fund. The EU regulation also requires air carriers and aircraft operators to demonstrate their compliance with the minimum insurance requirements set out in the regulation.
The withdrawal Act will retain Regulation 785/2004 in UK law in its entirety at the end of the transition period. In practical terms, the same minimum insurance requirements for air carriers and aircraft operators that apply today will continue to apply after the transition period.
The first SI relating to this area, the Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018—I will call them “the 2018 regulations”—was made in October 2018. It made changes to the retained regulation so that it continues to function correctly after EU exit. The need for today’s SI has arisen after the EU adopted Regulation 2019/1243, which amended Regulation 785/2004 after the 2018 regulations were made. The purpose of this SI is to fix further deficiencies introduced by those amendments.
The amendments made by this SI are minor and technical in nature. This instrument makes no changes to the policy intent. Regulation 785/2004 includes powers for the Commission to adjust minimum required levels of insurance where international treaties make this necessary. The 2018 regulations converted these into powers for the Secretary of State to do the same via regulations. However, since the 2018 regulations were made, the EU’s amendments to Regulation 785/2004 have replaced the Commission powers with new versions more closely aligned to the legal framework established by the treaty of Lisbon. These regulations take the same approach used in the 2018 regulations for the previous versions of the Commission powers. They replace them with powers for the Secretary of State to amend the minimum insurance requirements by regulations. That is all that this SI does.
In summary, no change in policy is made by these regulations. They make only minor technical and consequential changes to ensure that UK legislation on aviation insurance continues to function effectively after the end of the transition period.
I commend these regulations to the House.
Lord Blunkett (Lab) [V]
My Lords, I am grateful to the Minister. I, too, had problems with my technology.
In the brief time available, I want to acknowledge that this is a narrow and technical statutory instrument—I appreciate that—but it would be remiss of me, in declaring a non-pecuniary interest in the register, if I did not raise issues that are pertinent to the moment. I know that other noble Lords will probably want to contribute on the current difficulties that our people have in relation to insurance arising from the pandemic. It is one of those twists of fate that we are debating regulations relating to insurance covering war, terrorism, sabotage and the like when we are in the middle of a crisis that is affecting the whole of the aviation industry and, catastrophically, airlines and airports.
I ask the Minister, who knows of my interest in this, to write to me if she cannot respond at the end of the debate to my comments about those who are described as “passengers with restricted mobility”. Most people are not aware of the problems that these passengers have with insurance cover for baggage; nor are they aware of the difficulties for those with wheelchairs carrying either dry or wet batteries and those who find that their equipment is severely damaged, whether in catastrophic occurrences as outlined in these regulations or on a day-to-day basis. These difficulties make travelling a virtual nightmare for many people. They involve the interface between the airport and the airline and the contractors for baggage recovery. People often have great difficulty in getting compensation as well as immediate action to facilitate their continuation in travelling. I hope therefore that, although this is technically out of scope, the Minister will recognise—as I know she does—the importance of this issue for literally hundreds of thousands of travellers each year.
Lord Bradshaw (LD) [V]
My Lords, when we debated the other set of civil aviation regulations yesterday, the Minister assured us that the Civil Aviation Authority was extremely happy with the regulations. Having worked for a public body, I know very well that it is extremely difficult to disagree with whatever the Government want; in fact, if you do so, you run the risk of losing your job.
I am concerned about the effects on the insurance industry, which is a big earner. I want the Minister to assure us that the British insurance industry, which obviously has a considerable interest in this matter, has been properly consulted and has not—as in so many cases—had a change waved in front of it, with the assumption made by government that it agrees.
I realise that these sets of regulations have to be rushed through because of the Government’s timetable, but I want to be assured that the best interests of British industries are being considered in the rush towards a legislative framework. Perhaps the Minister could answer that.
Lord Blencathra (Con) [V]
My Lords, I thank my noble friend the Minister for setting out the scope of these regulations, which, if I understand correctly, are a technicality to ensure that the UK rather than the EU is now the legislator. My concerns go wider than that and relate to the compensation levels for disabled passengers and wheelchairs. I endorse absolutely everything the noble Lord, Lord Blunkett, has just said.
Can my noble friend confirm that the EU regs and these UK regs exactly replicate the 1999 Montreal Convention latest compensation levels of 113,100 SDRs, about £90,000, for death and 1,131 SDRs, about £900, for loss of baggage? The EU regs go further and compensate for delay.
However, my noble friend will have been briefed on the scandal in 2016, championed by our noble friend Lord Holmes of Richmond, when Athena Stevens had her £25,000 wheelchair irreparably damaged on a BA flight from London to Glasgow and was offered compensation based on its weight. The Montreal Convention deems wheelchairs to be hold baggage, where the compensation is payable on the weight of the articles, not their value.
I have my battery-operated wheelchairs insured for everything, but the one thing you cannot insure for is air travel, so when the delightful Miami baggage handlers dropped my lightweight aluminium wheelchair costing £2,500, the most I would get—after enormous hassle—would be $300. Air carriers are hiding behind an international convention to avoid paying for damaged mobility equipment vital for disabled people to live their lives independently. As our noble friend Lord Holmes of Richmond said in the Athena Stevens case:
“This unfair policy is trapping disabled people in a cycle of disadvantage, and British air carriers have the moral responsibility to stop applying it to disabled customers’ mobility equipment, as it’s clearly unfit for purpose.”
The United States has passed the Air Carrier Access Act, applying to all internal flights, which states:
“The basis for calculating the compensation for a lost, damaged, or destroyed wheelchair or other assistive device shall be the original purchase price of the device.”
Canada has said that the levels in the Montreal Convention will not apply, and in Europe only Lufthansa has said the same thing. I wish I knew that when I watched my late departed previous wheelchair dropped six feet from a baggage elevator at Frankfurt.
I ask my noble friend the Minister ideally to introduce US-style legislation for all flights departing or landing in the UK, in which damage to wheelchairs will be compensated at the full replacement cost. There is nothing to stop us from 1 January next year; we will be out of the bureaucratic dead embrace of the EU empire. This country was always ahead of every other country in the EU on disabled rights, so let us be in the forefront once again.
There is no downside to bringing in this legislation; the cost to airlines will be minimal. To be fair, my current electric wheelchair has been to Belarus, Azerbaijan, Ankara, Istanbul, Athens, Strasbourg, Paris, Basle, St Petersburg, Bosnia, Georgia and even Aberdeen, and has not been damaged by airlines or airports—not yet, at any rate, but I am tempting fate by boasting about it. The airlines would have to pay for a small number of cases, but cases absolutely crucial to the disabled passengers affected.
If legislation cannot be brought forward in the short term, which I understand, will my noble friend make it clear to all UK-operating airlines that the Government expect them to implement this voluntarily, the same way that Lufthansa has? Of course, we know that there are nasty little operators—we could all name them, but I will not do so—but if the more reputable carriers make this undertaking, wheelchair users will know who to trust and who to travel with.
Lord Berkeley (Lab) [V]
My Lords, I am grateful to the Minister for introducing these regulations. Previous speakers have identified that there is an awful lot wrong with the whole aviation insurance sector at the moment.
The Minister has said it will not change just because we are leaving the EU, but how does this affect the insurance of airlines, airports and other sectors? Does it depend on where companies are registered or located? It is quite clear that there are very different policies coming out of different member states, as well as other parts of the world. This covers safety standards, baggage, compensation and delays—we have seen a lot of these in the last few months. It does not seem to make much difference where the airline is registered; they can have very different policies.
In addition to asking the Minister for some clarification on this, one has to ask what will happen after the end of this year. These regulations give the Government powers to diverge from the European regulations, and maybe the international ones in the future. It is worth pointing out that in the future the only three main groups in the airline business will be the US, the EU and probably China. I do not think the UK will have much of a look-in, so we will have to follow one of them. If we are to produce yet another set of insurance regulations just to make sure that we are seen to be separate, and insist obdurately on not staying in EASA, there will be a very serious and long-term set of consequences for passengers and the insurance industry, as well as airlines.
Like the noble Lord, Lord Bradshaw, I too do not believe a word when the CAA says it supports this. As he says, if it does not support it, it will be out of a job. We have to hope that the Minister can explain in her response what ability the Government will have to change these regulations in future without any consultation with the industry just because they feel it is a good thing.
Lord Chidgey (LD) [V]
My Lords, I confirm my entry in the register of interests as a companion of the Royal Aeronautical Society. I am pleased that the Minister was able to get through to us in the end. It was quite concerning; for those with long memories, she sounded a little like Rowan Atkinson’s famous sketch from outer space. Anyway, she got through.
The Minister mentioned that the EU regulations require a wide range of insurances—obviously so—but can she tell us who oversees the need to demonstrate compliance with these regulations? What is the mechanism for doing this, and who is responsible for doing it? I thought that the contribution from the noble Lord, Lord Blunkett, was particularly pertinent in this regard, and I hope the Minister is able to respond to that. My noble friend Lord Bradshaw’s call for assurances that the British insurance industry has been fully consulted is equally pertinent.
Civil aviation insurance is clearly a critical component of the regulatory process, controlling airlines, civil aircraft design and production and operating procedures around the world—and never more so, I suggest, as we stand on the threshold of a new era of civil aviation technology and reduce our reliance on fossil fuels, turning instead to electricity. I recognise that this is a slight diversion from the main essence of the SI, but I hope I might emphasise these points for the general good.
There is an emerging market for green, electric-powered aircraft in the UK and neighbouring Europe. Cranfield Aerospace Solutions, an offshoot of Cranfield University, has aircraft-designing capability and DOA approval, as noble Lords will know. There are reports in the aerospace journal of the Royal Aeronautical Society saying that with this DOA for complex modifications to existing aircraft, Cranfield can also design and create new concept aircraft. It also has production organisation approval, POA, from the UK Civil Aviation Authority and the European Union’s aviation safety authority, EASA—all key requirements in civil aviation insurance for complex design and production changes. The company recently announced its plans to restart the manufacture of complete aircraft in the UK—I pick up the point of the noble Lord, Lord Berkeley. It believes that it can credibly compete in the small, sub-regional nine to 19 aircraft market, where it is not economical to operate aircraft with conventional fuels. It is now looking at converting the Britten-Norman Islander aircraft to a hybrid aircraft, with Rolls-Royce electric engines, as part of a consortium of UK firms.
Over the past 12 months, a lot of attention has been paid to green aviation, and the potential market for these smaller, sub-regional electric aircraft, with electric propulsion in a neglected sector, now makes a lot of sense. What becomes critical, however, is that the UK Brexit legislation must not deny the UK a potential leadership role in this engineering. It is a sustainable, cutting-edge market. Can the Minister give noble Lords an assurance that this no-deal legislation for civil aviation insurance regulations does not do just that, keeping us out of a market that we have a lead in?
Lord Naseby (Con) [V]
My Lords, I first thank the Minister for introducing this SI. She may know that I am a former RAF pilot and civil pilot, and have done some work for airlines in the past. I am going to ask a series of questions and quote the paragraph number. I do not necessarily expect firm answers this morning. Perhaps she would be kind enough to write to me afterwards on those aspects not covered in her wind-up. I will start by saying how very much I support my two colleagues, the noble Lord, Lord Blunkett, and my noble friend Lord Blencathra. They made a good case that I do not need to re-emphasise, other than to say that I hope the Minister will take it seriously on board.
First, my understanding of the net result of paragraph 2.3 is that, as matters stand, there will be no difference between the EU and the UK in terms of the regulations. Secondly, I will ask about the extent and territorial application. We are to some degree responsible for our overseas territories, and aviation in particular is key to almost all of them—whether it be the Falklands, the Cayman Islands or wherever. Has there been any consultation with them? I know that they have their own devolved Governments, but it would be sensible for a check to be made on whether there is any adverse effect and whether they have any views on the matter. That relates to paragraph 4.
Paragraph 7.1 has partially been covered by my colleagues. Some families have been through horrendous experiences with insurance claims, baggage claims and so on. I was amazed to read last week that there are still 10,000 British citizens wanting to get back to the UK. I do not understand from Her Majesty’s Foreign and Commonwealth Office why on earth, after two months or more, arrangements have not been made to get them back. I hope that the Minister will have a look at these problems as we come out of lockdown and begin to make plans for the future.
Paragraph 10.1 on the consultation outcome states that the CAA has been consulted. Well, one would hope that it has been. I should like to know what the reactions of the CAA and the aviation industry were. The paragraph does not give us any clue on that. Did they just sort of say, “Oh, okay, they’re all right”, or did they have some reservations as yet to be resolved? That is an important dimension.
Paragraph 12.3 talks about correction of deficiencies. What were the deficiencies? It says not only that there are specific deficiencies but that they are minor. Who decides what is a minor deficiency as opposed to a major one? That would help us.
As regards paragraph 14.2, once again, there should be a review clause. I said this yesterday. Governments learn. I sat on the Public Accounts Committee for 12 years and, time after time, problems arose because no one had the nouse to review a situation. It does not matter what the length of time is, but officials should do that.
Finally, as the Minster knows, I take a specific interest in drones and would be grateful to hear of any instance in which they should be treated separately.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I too thank the Minister for her helpful introduction, in spite of technical difficulties. However, those difficulties underline the importance of getting a Minister to come into the House in person, wherever possible. I hope that the Government Chief Whip will take this on board.
As I have mentioned in relation to previous orders, this order is part of huge swathes of SIs currently being rushed and trotted through Parliament to deal with what even the Government call the deficiencies arising from our withdrawal from the European Union.
I do not want to oppose this regulation, because it is important and I support it. We need minimum insurance requirements for air carriers and aircraft operators in respect of passengers’ baggage, cargo and third parties, as we heard from the noble Lord, Lord Blencathra, who I travel with regularly around Europe. My concern is about the sheer volume of legislation we need to get through and our ability to properly scrutinise and review it, given the fast-approaching, fixed transition deadline and now, on top of that, the impact of Covid-19, which has altered the workings of our House.
However, I do have a couple of specific points to raise in relation to this instrument. First, it mentions that insurance covers specific risks from acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. I know that it is somewhat different from those risks, but are Government looking to extend the number of risks to include events such as the current pandemic. I think my noble friend Lord Blunkett referred to that.
I am also keen to understand why there has been a change in phrasing, from the Commission being “empowered to”, to the Secretary of State “may” in both paragraphs 2(2) and 2(3). Can the Minister confirm whether this changes the effect of the powers under this order?
On a positive note, the order shows that we are getting some elements of our house in order to support the aviation sector during this turbulent period. However, looking to address the elephant in the room, while all these regulation changes are necessary and important, I remain concerned about the bigger picture and our progress on negotiations with the EU. Particularly relevant to this debate is the need for a new aviation agreement between the UK and the EU, like the existing open skies agreement, which was mentioned yesterday. In spite of the Government’s rhetoric, it is increasingly likely that the reality for aviation, as well as for other areas, of a no-deal exit from the EU at the end of the year will be very damaging.
While Brexit continues to create a huge element of uncertainty for the aviation sector, the economic upheaval and operational challenges posed by Covid have put the industry under even more significant pressure, as it tries to adapt and survive. Ironically, as we discuss the aviation industry today, and as we did yesterday, our skies are all but empty. The industry is under increasing threat from the pandemic. We can all see that the empty skies have improved our environment, and so the industry will be obliged to take further steps to reduce its impact on the environment as we move out of the current crisis.
I hope that the Minister will find some time, probably not today but at some point in the future, to update the House on all these issues: dealing with the EU, financial support for the industry, how to enforce the quarantine measures and how air bridges might work, along with a number of other areas which are now so important to the aviation industry’s survival.
Lord Goddard of Stockport (LD) [V]
I fully agree with the comments made by the noble Lord, Lord Foulkes, about Ministers. It would be really helpful if they were in the Chamber. We are sympathetic if a Minister is trying to speak remotely and they sound like Donald Duck, but that does not help me, the Minister, or indeed Parliament. Perhaps the powers that be could look at Ministers’ attendance in the House, so that they can stand up in front of the Members who are in their places.
I turn now to these minor amendments. As a member of the Delegated Powers and Regulatory Reform Committee, I know that we get very nervous about, and debate for hours and hours, the specific meaning of the words in SIs. As a previous speaker said, when something turns on the phrase, “the Minister may”, that smacks of Henry VIII powers coming in through the back door.
The insurance industry is crucial to all of this. It must understand the importance of these regulations and stand foursquare behind them. The Minister said that the regulations deal with some further technical deficiencies, although she did not explain what they are, and that there will be no change to the policy. But some 19 speakers are down to speak today on an SI that should probably attract only two or three people who have specific problems, such as the issue of wheelchairs, like the noble Lord, Lord Blunkett. Will the Minister answer a few of the questions that they have put?
People need to understand that people like myself, and others on the Delegated Powers Committee, spend hours looking at these SIs. When they are suddenly amended and brought back without full scrutiny, where is the forensic examination of the real meaning of the changes? It is not enough to say that there will be no change in policy and that these are tidying-up amendments. We are making laws and regulations that will affect millions of people travelling right across the world. The regulations need to be right and they need to be watertight.
Look at all the people who booked and paid for tickets with Ryanair. The boss of Ryanair has said on TV that it will take six to eight months to repay all those bookings, because the situation is very complicated. It is not complicated. He could hit one button and everyone who should have flown with Ryanair could get their money back. This is what we are dealing with: airlines and insurance companies that are very quick to take our money and very loath to hand it back. Insurance is critical to protecting people, whatever their circumstances, when they travel far and wide.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I thank my noble friend for introducing this instrument and for giving us the opportunity to scrutinise it in some detail. Perhaps I may put a number of questions to her. In her introduction, my noble friend said that a key feature of the regulations is the transference of responsibility from the European Commission to the Department for Transport on exiting the European Union. Will there be regular reviews of this, as there were in 2018 and 2019, and now in 2020? Will my noble friend commit to a regular review of the cover under the regulation? Will parliamentary scrutiny of such a review be allowed?
My noble friend will be only too aware of the particular challenges that the current Covid-19 pandemic has presented to the whole of the civil aviation sector, in particular to airlines and airports. In just three short months, we have seen an unprecedented challenge being dumped on to them. Along with other noble Lords, in particular the noble Lords, Lord Foulkes and Lord Blunkett, I would like to ask my noble friend if she can confirm that the Covid-19 pandemic will be added to the categories that are specifically included in the provisions of this instrument.
I have another question in response to my noble friend’s invitation to comment on these regulations. Can she confirm that the refunds, which will come to a huge amount, to reimburse passengers for flights that have been cancelled—I must declare an interest in this regard—will also fall within the remit and the provisions of these regulations?
The greatest challenge to airlines is their cash-flow problem. Most of their funds are tied up in planes and the payment of staff. While we have seen a review of the furlough provisions, we have also had announcements about the very sad redundancies in most of the airlines that fly from the UK. There has been a double hit, in the sense that airlines are being asked to make substantial refunds at speed, but at the same time, surely no future bookings will be made until we know that they can operate as normal again. Will my noble friend take this opportunity to confirm that refunds for those cancelled flights will be covered by the statutory instrument before us?
I have two other brief questions. First, is my noble friend able to confirm the status of the vouchers being issued by most airlines in place of refunds? Will she also confirm that, while having the same validity, these vouchers are not as easily accessible as immediate refunds? Secondly, can she confirm that the provisions for checking in luggage, as part of the new ways in which airlines will operate, are advisory, or are they indeed mandatory?
Baroness Kennedy of Cradley (Lab) [V]
My Lords, this statutory instrument is technical. It makes sure that the Government can ensure that the correct insurance requirements are in place for air carriers and aircraft operators at the end of the transition period. However, as has been noted by my noble friend Lord Foulkes, the deadline for the end of the transition process is fast approaching. With aviation being one of the most heavily regulated industries, there will be a number of SIs in this policy area for Parliament to agree by the end of the year. They must all be done in time for the CAA to prepare and to give airlines the certainty they need after this period of significant upheaval.
Given the understandable delays due to Covid-19, and the limits on Parliament due to social distancing, is the Minister confident that there will be time for proper parliamentary scrutiny, and agreement, of all of the SIs that will be needed to ensure the smooth running of our aviation industry?
I turn now to the issue of aviation insurance. Covid-19 has hit the aviation industry very hard. Hundreds of aeroplanes have been left grounded. Social distancing measures and quarantines, along with low consumer confidence, are creating considerable uncertainty about what air travel there will be in the coming months. Yet I understand that commercial aviation operators have not typically purchased business interruption coverage, nor has it been widely available in the industry. That is why, as we have heard in the debate, discussions about insurance, and in particular business interruption insurance against pandemics, is now a hot topic.
There is interest in exploring insurance solutions to manage the potential impact of future pandemics and other costly disruptions, such as volcanic eruptions and extreme weather. The insurance sector has the capacity to create solutions for these risks. That will take time and will require a high level of commitment and collaboration between airlines, consumer groups, risk advisers and insurance representatives. However, as the world becomes increasingly interconnected, and risk becomes more global and complex, surely now is the time to address this issue by finding a creative solution that can protect passengers and airlines alike. Do the Government have plans to facilitate discussions in order to secure a system that protects airlines and passengers as regards insurance? If so, what conversations have they had with airlines and insurers about a new pandemic-based co-insurance agreement?
Finally, as we begin to look forward to air travel once more, what plans do the Government have to review protections for consumers following the experience of passengers during this pandemic regarding both refund policies and being able to fly safely?
Lord Bourne of Aberystwyth (Con) [V]
My Lords, I extend my sympathies to my noble friend the Minister. It must be very difficult when the connection goes: I think we have all been there.
My basic question on the regulations is whether there is any intention ever to move away from the EU limits. That needs to be clarified by the Minister. I would also like to pick up the point made by my noble friend Lord Naseby about UK citizens overseas. If the Minister is unable to give specific details, I am sure that she could write to all those participating in the debate to let us know what the position is in respect of any UK citizens overseas who are currently unable to get back into the country.
I have given advance notice to my noble friend the Minister about my intention to raise something that is somewhat off-piste but very relevant to the continued viability of air carriers and airlines, which is, of course, in some doubt at the moment; that is, the issue of quarantine and the related issue of testing at airports. It seems to me that quarantine has difficulties, particularly with the dangers related to the unsupervised journey from the airport to home. There is testing, for example, at Iceland’s international airport for people flying in. They are tested there and contacted later if the test is positive, and that gives some assurance to people. There is also testing in Hong Kong on a slightly different basis, but it is obviously a much larger airport with much greater throughput. Is this something that the Minister could say something about? Are the Government giving consideration to this? The context of these regulations means that it is really only if we are able to instil some confidence in the airline sector and provide proper testing facilities for people coming into the country that we will be able to ensure that these regulations have any real lasting relevance. I would be grateful if my noble friend the Minister could deal with that in her reply.
Lord McConnell of Glenscorrodale (Lab)
My Lords, I am very happy to support these regulations and to see their passage through Parliament but will take this opportunity to raise a couple of issues. I strongly support the points made by my noble friend Lord Blunkett and others in relation to the difficulties faced by particular travellers. I hope that the Minister will respond positively on that issue, with an indication not just of understanding but of what action might be taken. The point made by my noble friend Lord Foulkes about adding other situations such as the current pandemic to the list of issues that might be covered is a valid and topical one, and I hope there is a response to that too.
My remarks will mainly follow on from the points made by the noble Lord, Lord Goddard, about the conduct of airlines. Having read the debate on these regulations in the House of Commons and listened to the Minister today and Ministers generally over recent weeks, I sense that there is sympathy for the aviation industry. There is a desire to see it functioning again properly and to see that those who work in the aviation industry have some job security in very difficult times.
However, we cannot ignore the fact that the conduct particularly of airlines—but also airports in this country and beyond—is absolutely appalling at times. There have been comments this week in the other place about the way in which British Airways has been treating its staff over recent weeks. It has been treating its customers in that way for a very long time, and it has been at it again during this pandemic. It is not alone: it is not the worst, but it is certainly far from being the best. It carries our national flag, but it discredits it every time it treats customers badly when they are making complaints, looking for refunds or trying to ensure that their plane actually turns up on time. This is particularly acute in the domestic sector, where British Airways dominates the routes between Scotland and London. It treats customers as almost irrelevant in the way it conducts its business, because it has such domination that it is able to do that when people have no other choice.
Therefore, I hope that the Government will take this on board in all their current negotiations with the aviation industry. Yes, they should be positive and do what they can to help protect the industry and the jobs of those who work in it, and get international routes functioning again, but they should also demand change in the culture of the industry, which takes customers for granted and treats them like dirt far too often.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I welcome the opportunity to participate in this debate. I thank the Minister for her contribution and for setting the statutory instrument in context. The principal context of the aviation industry at the moment is that of the pandemic, which has already been referred to by previous speakers, including my noble friends Lord Blunkett, Lord Foulkes and Lord McConnell and the noble Baroness, Lady McIntosh. There are very clear issues there. What discussions has the Minister or her colleagues in the Department for Transport had with those in the Treasury concerning these insurance issues to ensure that they are uplifted and that they reflect a pandemic situation? Will this area of the pandemic be included in those other areas that she outlined and which are currently applicable in these regulations?
I have a couple of other questions, because all of this is set in the context of Brexit and coronavirus. Will these insurance measures be the same as EU rules on insurance or will they be different? How much will they vary and what will be the cost—above all, to the traveller? Will it be additional and what will be the impact of Covid? As I explained yesterday, there is absolutely no doubt that the aviation industry, particularly in Northern Ireland—which is regionally world-leading in aircraft manufacture, and in the manufacture of aircraft seats and furnishing—is being hit and undermined at the moment, so it needs assistance. What further discussions have been held with the Treasury in relation to the relaxation of air passenger duty for UK regional airports? Will reciprocal EU cover take place and what will be the relationship with the European Aviation Safety Agency?
Flights from London and other regional airports to the Republic of Ireland, which will remain in the EU, are the principal way of travel between London and Dublin for cargo and passengers, and traffic is very heavy. You have only to go to Heathrow to see that. What will be the impact of these insurance arrangements on the east-west relationship between Britain and Ireland, and on air traffic? We do not want to further undermine the aviation industry. Will there be more protected routes to the EU and will the quarantine rules be relaxed? These are perhaps outside the remit of this statutory instrument, but we need answers to these questions, particularly if we face a no-deal Brexit because that will have far-reaching implications on not only the aviation industry but other sectors of manufacturing and business avenues. I thank the Minister but look forward to answers to these questions.
Lord Kennedy of Southwark (Lab Co-op) [V]
My Lords, I agree with the call by my noble friend Lord Foulkes of Cumnock and the noble Lord, Lord Goddard of Stockport, for the Government to make every effort to get the Minister standing at the Dispatch Box on all occasions. I hope the Government Whip in the Chamber will take that point back to her noble friends the Leader of the House and the Government Chief Whip.
The noble Baroness, Lady McIntosh of Pickering, and my noble friend Lady Kennedy of Cradley raised important points regarding consumer rights with respect to refunds and vouchers. I look forward to the Minister’s response to these points, and to those raised by the noble Lord, Lord Goddard of Stockport, regarding the conduct of airlines and how they treat their staff and customers, echoed by my noble friends Lord McConnell of Glenscorrodale and Lady Ritchie of Downpatrick.
As we heard, these regulations are, on the face of it, fairly minor. We are using this transition period to make long-term changes and adjustments but, as we read at paragraph 2.4 of the Explanatory Memorandum, the policy context remains unchanged. Powers that were exercised by the European Commission are to be excised by the Secretary of State. It would be helpful to the House if the Minister could answer the point about what will happen in the future. The Government have taken these powers. Do they always intend to follow without question the European Commission’s decisions? “Take back control” does not appear to fit very well there. Or is the Government’s intention to take different decisions over time? If the latter is the case, could the Minister set out the process for doing so? How will that happen?
Aviation is global, by its very nature, and being global Britain it seems that we have to be part of international agreements to ensure that the UK aviation industry can compete in this new world we all find ourselves in. On that point, could the Minister set out any work done by the department to see what the cost will be of deciding to differ from the European Commission’s decisions, and what the process is for ensuring that any decisions made will not put us in breach of any further international agreements beyond the European Commission and cause our aviation industry further difficulties?
Paragraph 10.1 of the Explanatory Memorandum says that
“The Civil Aviation Authority has been consulted”,
but a subsequent sentence says:
“The devolved administrations and the aviation industry have been informed”.
Could the Minister please set out for the record what, in the Government’s view, is the difference and why the different approaches were taken? Who took the decision only to “inform” the devolved Administrations and the aviation industry, not “consult” them?
Finally, what discussions have taken place with the insurance industry? A number of noble Lords raised this point and I cannot find any reference to it in the Explanatory Memorandum.
Lord Balfe (Con) [V]
My Lords, I declare my interest as president of BALPA, the airline pilots’ union. I endorse what has been said about attendance in the House, not only by Ministers. The Chamber is empty. We need the Whips to get together to find a way to get far more people into the Chamber. At the moment it is very difficult.
I turn to the points made so ably by the noble Lord, Lord Blunkett, and my noble friend Lord Blencathra. I serve on an international pensions committee. It had a disabled member on it for a few years. I became all too aware of the catalogue of errors that my noble friend outlined—the number of times things went wrong and airlines just looked the other way or their compensation was inadequate. Mention has been made of Lufthansa. I like to think that the Minister will introduce a disabled rights in aviation SI or law, or something. As noble Lords all know, I did not support leaving the European Union but, now that the British people have pronounced quite decisively that we are going to leave, for goodness’ sake let us get something useful out of it. This is certainly one thing.
The noble Lord, Lord Kennedy, took part of my speech away, I am afraid. I will mention paragraph 7.1 of the Explanatory Memorandum on the article that confers powers on the Commission to adjust minimum levels. Is it intended that the UK will follow this? How will it monitor what is happening and what the EU intends to do? The EU will obviously have its own internal processes before making changes. How do we propose to be linked into them? What notification arrangements are we expecting to get? I note also that there will be powers for the Secretary of State to amend the minimum insurance requirements by regulation. Are there any plans to do this at the moment?
The next paragraph talks about how an article inserted by the regulations
“includes provision for the European Parliament or the Council to object to continuation of the delegated powers at five-year intervals … these provisions have no practical application in relation to the UK”.
That is because we have a deficient democratic system, frankly. We should also have some system, now that we are leaving the European Union, to look at the continuation of delegated powers and decide whether they should be revoked. I would like the Minister to agree to look into this.
I endorse the points made by my noble friend Lady McIntosh. I have now had three months struggling with BA to get a refund on a ticket. I have very little sympathy for it. It is very good at asking for money, but very bad at giving it back. I would like the Government to add some weight to those customers who are still waiting for refunds after months and a deliberate attempt by airlines, particularly BA, to avoid paying out. I could paper a wall with the number of times that I have been offered a voucher.
Finally, I take the point that the noble Lord, Lord Kennedy, made about the aviation industry having been informed of the department’s intention. Specifically, with what information and in which way were the trade unions informed of the department’s intention and what response did the Government receive from them?
Baroness Randerson (LD) [V]
My Lords, there could not be a more appropriate time to discuss aviation insurance. When we eventually could hear the Minister I was pleased that she set out very clearly the SI’s intention. The EU regulations establish minimum insurance requirements in respect of passengers, baggage, cargo and third parties, but they also require carriers to have insurance that covers acts of war, terrorism, sabotage, unlawful seizure and civil commotion. As other noble Lords mentioned, I am sure that many people wish that that list covered pandemics as well. As the Minister said, this SI replaces the European Commission’s powers regarding this with those of the Secretary of State. Like others, I regret that the SI has to be brought and the causes of it, but I will take the opportunity to discuss some of the specific issues within it.
We have discussed insurance and consumers’ rights several times here in the last few years, but always in the context of the financial failure of an airline, and questions have been put on consumers’ rights in relation to payment methods. This SI puts the spotlight instead on the basic obligations of the airline operators.
The pandemic has placed huge stresses on the aviation industry in general and, as other noble Lords have said, some airlines have resorted to extreme delaying tactics to avoid repaying their customers for cancelled flights. Many consumers are waiting very long periods to receive refunds—the noble Lord, Lord Balfe, being one. Airlines are resorting to devious tactics to make it very difficult even to claim a refund; for example, by removing the refund request option from their website, so customers have to phone to request a refund but then find that the number is continuously busy. There is pressure to accept vouchers instead, but in the current uncertain situation is not surprising that customers consider that a risky option, and they may not wish to travel anyway. There are adverts tempting the public to purchase cheap flights in the near future, when it is highly unlikely that that flight will actually operate. The suspicion here is that this is a device to bolster short-term income for the airline. While all this is understandable at this difficult time, it is certainly not acceptable. Therefore, the level of guarantees and consumer rights provided by the EU regulations have proved valuable and the public will expect them to continue. They will expect Brexit to provide improvements to their rights—that is what those who supported Brexit thought would come. Certainly, they will not expect the EU to provide any improvements that are not immediately adopted in the UK.
Consumers who book linked travel arrangements, such as connecting flights, are often not fully aware of the national registration status of the airlines they choose to use. They might well start off with a UK airline but change planes midway on to an airline from another country. The official national status of airlines is often not obvious. Despite its appalling behaviour towards its employees, BA, for example, trades on its status as the British flag carrier, but it is Spanish-owned. Sometimes, one books with airline A and ends up flying with airline B, its so-called agent. All these uncertainties emphasise the value of a co-ordinated system of insurance and consumer rights, so my question to the Minister is: will the system guarantee the same level of co-ordination and ease of use for consumers in future?
Paragraphs 14.1 and 14.2 of the EM cover monitoring and review and make it clear that no systematic review process is planned. However, paragraph 7.2 shows that the EU regulations have a five-year mechanism for review built in, so there is surely the danger that our regulations will become outdated by default. I would be grateful for the Minister’s comments on this. Finally, on the issue of consultation raised by others, paragraph 10.1 states that the CAA “has been consulted” and was happy with the changes proposed. It does not refer at all to the insurance industry. It goes on to say:
“The devolved administrations and the aviation industry have been informed”
of the Government’s intention. That is a new choice of words to me. It sounds very high-handed. It is against all the usual courtesies of the devolution settlements and it puts us back at least 30 years in the way that, by convention, government works with business. I ask the Minister to address this specific point: is this just a one-off or is it the way the Government intend to do business in future? A very long time ago it was accepted that good government relies to a great extent on partnership and consultation with those within each sector, which leads to a more effective way of doing things. I hope that that will not be abandoned.
Lord Rosser (Lab) [V]
I thank the Minister and her officials for the virtual meeting on these regulations on Tuesday, and the Minister specifically for her explanation of the content and purpose of this draft SI, to which we are not opposed.
EU regulation 785/2004 establishes minimum insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties. It also requires that air carriers and aircraft operators have insurance which covers specific risks, including acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft, and civil commotion. The regulation will be retained in our law at the end of the transition period and the Minister has already been asked more than once about insurance cover for Covid-19 type pandemics—I am sure she will respond to that point.
As a result of recent amendments made to EU regulation 785/2004, these further draft regulations are needed to ensure that the terms of that regulation, as amended, continue to operate effectively in our domestic law after the end of the transition period. This is achieved by replacing Commission powers with powers for Secretary of State for Transport to amend the minimum insurance requirements by regulations which will be subject to the affirmative resolution procedure. As I understand it, the 1999 Montreal Convention provided for airlines to be responsible for compensation in the case of death and injury to passengers, and to be adequately insured to cover any liabilities, and the EU minimum insurance requirements stemmed from that. First, I ask the Government to confirm, as I believe the Minister said, that these regulations make no changes in the present minimum insurance requirements that apply in the UK on the day after the end of the transition period, apart from replacing Commission powers with powers for the Secretary of State.
I wish to raise a couple of other points. Will UK air carriers and aircraft operators have to have, at all times in the future, minimum insurance levels that are not below EU minimum requirements in order to be able to fly to EU countries? If we wanted to, could we have minimum insurance requirements that are below EU minimum requirements and not put in jeopardy the ability of our air carriers and aircraft operators to fly to EU countries? The Government’s mantra is that at the end of the transition period we will have taken back control and be able to do what we want to do and not, as a member of the EU, be a party to EU legislation. What does this draft regulation enable us to take back control of, in practice and not just in theory? What have we been wanting to do but have been unable to do on minimum insurance requirements for air carriers and aircraft operators because we have been a member of the European Union?
The insurance requirements covered by these draft regulations are about providing cover for airline operators rather than consumers, including passengers. Can the Government say whether the minimum insurance requirements provided for in these draft regulations cover airline operators against legal proceedings for failing to reimburse fares for flights that were cancelled? On the face of it, these regulations offer no good news for passengers, of whom I am one, waiting far too long for such refunds. Nevertheless, I hope that the Government, in their response to this debate, will also take the opportunity to say what actual progress they have made in ensuring that airlines make the necessary arrangements to refund these fares promptly and not leave it for several months.
I will listen with interest to the Government’s response to the points made in the debate, including the issues raised by my noble friend Lord Blunkett and the noble Lord, Lord Blencathra.
Baroness Vere of Norbiton [V]
My Lords, I thank all noble Lords who took part in the debate today, and once again I apologise for my technology. It is the first time that that has happened to me and it is a Minister’s worst nightmare. I will certainly be in the Chamber next week and possibly in the future. Some of the debate has reached far beyond the scope of the statutory instrument. I will do my best to respond today but if not, of course I will write. It might help if I start by outlining the underpinning of the EU regulations in the Montreal convention 1999.
The convention was brought in to update and bring together existing international conventions on air carriers’ liability. The main change was to set maximum standards of strict liability in claims against airlines for loss of life or injury and damage to or loss of baggage in cargo. The limits are refreshed every five years, most recently in December 2019. I can tell my noble friend Lord Blencathra that the liability amounts for passengers and baggage will remain in place.
Prior to the Montreal convention, passengers were required to prove that an airline had been wilfully negligent for all claims. Nowadays, passengers are still able to claim above the strict liability limits set out in the Montreal convention, but need to prove negligence on the part of the airline. The convention provides that air operators should have adequate insurance to cover any claims but it does not set out insurance requirements beyond that, so the EU regulations—and in consequence the UK regulations in the future—build on the convention but do not replace it. Instead, the regulations will set out the requirements for minimum insurance levels for air operators flying to, from, within or over a particular state. This sets the definition of minimum insurance standards, rather than the convention’s requirement for adequate insurance.
The regulations’ minimum insurance levels are broadly based on the convention’s strict liability limits, but in general the EU requires insurance levels—and therefore we will require insurance levels—significantly above, in some cases, the strict liability limits set out in the convention. For example, for a liability in respect of passengers, the minimum insurance cover in the EU is 250,000 Special Drawing Rights, which is about £275,000 per passenger. That is about twice as much as the strict liability limit in international law. While strict liability limits are set by the international treaty, if the country is party to it, minimum levels of insurance are set by country, or pan-EU in this case. Minimum levels of insurance for different countries can of course change, and any operator flying into, over or within a country must have such minimum levels of insurance in place.
Part of this is about demonstrating compliance, which is where the Civil Aviation Authority comes in. In the case of the EU, EEA, EFTA and the UK, an air carrier has to be able to demonstrate its compliance with the insurance requirements by providing evidence of valid insurance to the member state that granted its operating licence, or if it flew into that country. In the UK, operating licences are granted by the CAA, which already performs that role. The noble Lord, Lord Chidgey, asked about compliance. The CAA monitors compliance by carrying out spot-checks on aircraft. Non-compliance is a criminal offence. Therefore, we do not anticipate that this SI will have a financial or practical impact on the CAA as it already performs all of those functions and is content with the proposals. I am a little disappointed that the noble Lord, Lord Berkeley, said that he did not believe me when I said that. His words were perhaps a little strong.
A number of noble Lords mentioned the scope of the insurance, which is an important issue as it applies to all carriers and operators flying into or out of various countries. The noble Lord, Lord Foulkes, asked whether insurance could be extended to cover pandemics and the noble Baroness, Lady Kennedy, mentioned business interruption insurance. Of course, carriers are free to make their own insurance arrangements. The insurance under consideration today specifically refers to loss of life or injury to a passenger, and loss of or damage to property, but given how few flights there are, it is not immediately clear how a pandemic could cause these outcomes; the implications are not clear. But I believe that the relationship between the aviation industry and protections for passengers will receive an enormous amount of scrutiny as we come out of this crisis. The Government had already announced an aviation insolvency Bill in the Queen’s Speech and when this crisis is over and done with and planes are starting to fly again, we will be able to look at this in more detail.
My noble friend Lady McIntosh asked whether an insurance policy includes the refunds of payments made by passengers for services not received. Again, that would be a contractual matter if the aviation supplier wanted to get that insurance from an insurer. I know that noble Lords are aware of this, but refunds to passengers where they have been denied boarding or suffered a cancellation are covered by EC regulation 261/2004, which requires compensation within seven days. It will continue to apply. I recognise that in the current circumstances, some passengers are not receiving their refunds within the specified time. The Government are absolutely clear: where a passenger is due a refund, it must be paid.
The noble Lord, Lord Blunkett, and my noble friend Lord Blencathra raised the incredibly important issue of protections for wheelchair users and other passengers with reduced mobility when their wheelchairs and other belongings are damaged. The EU regulations we are discussing today give the minimum insurance cover of 1,131 SDRs for baggage per passenger. I am aware of the case of Ms Stevens’ damaged wheelchair and I sympathise with her situation. Wheelchairs that cost thousands of pounds are subject to the same damaged baggage legislation that limits compensation to around £1,000. A number of UK airlines already voluntarily waive that limit, and the Government will call on all airlines to adopt that practice. We will certainly return to this issue very soon. It is a complex one, given the wide variety of wheelchairs available and their values, and the fact that there are no standardised tether points for safe stowage in the holds of aircraft. We have discussed this with the industry in great detail and we continue to do so. We are looking at testing different storage solutions and improving training. We will continue to work on this.
The noble Lords, Lord Berkeley and Lord Kennedy, asked about divergence in the future. The UK cannot diverge from the requirements of the Montreal Convention. We are obliged to follow it, given that we are a party to the convention. The Government have no plans to diverge from the minimum insurance levels which currently exist in the UK and the EU. However, as with all these things, changes may be required in the future as a result of inflation. Any changes made by domestic legislation, rather than by EU legislation as now, would require an affirmative resolution by your Lordships’ House and the other place, and we will of course be consulting the industry.
The Government discuss matters relating to EU exit with the aviation industry, the travel industry and with consumer representatives. The last round-table meeting was on 16 March. No issues were raised in relation to this instrument, because it keeps all elements of the current system in place. Regarding the insurance industry, there is no change to the insurance requirements, so there will be no practical impact on the industry, but we will have ongoing discussions with the industry on EU exit and other matters.
The Government maintain a close and ongoing relationship with the devolved Administrations. Perhaps the word “inform” is not right, because we rightly discuss matters relating to EU exit, even where they are reserved matters. No concerns have been raised in relation to this instrument.
As for the changes made by this instrument, the noble Lord, Lord Foulkes, mentioned the change from “empower to” to “may”. I assure the noble Lord that there is no difference in this regard. Both confer a discretionary power as opposed to a duty, and “may” is simply more often used in UK legislation. The changes in the SI are very minor, as I said in my opening remarks. They relate to a change in the power of the Commission to do with the legal framework of the treaty of Lisbon. We transferred that power to the Secretary of State in the first SI, which was approved by your Lordships’ House.
Finally, the noble Baroness, Lady Randerson, raised the European Commission’s power to object to the continuation of these powers on a five-year basis. We looked at this and considered it already inherent in our system, as Parliament may, at any time, legislate to remove a relevant power—or powers—from the Secretary of State.
I am aware that this was rushed, that I have not covered everything and that I must write, but this instrument ensures that legislation on aviation insurance requirements—an important part of the regulatory framework for civil aviation—continues to work effectively. I commend the regulations to the House.
Arrangement of Business
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
My Lords, proceedings will now commence. Some Members are here in the Chamber, others participating virtually, but all Members are treated equally. For Members participating remotely, microphones will unmute shortly before they are to speak—please accept any on-screen prompt to unmute. Microphones will be muted after each speech. If the capacity of the Chamber is exceeded, I will immediately adjourn the House. I ask noble Lords to be patient if there are any short delays as we switch between physical and remote participants. The usual rules and courtesies in debate apply.
Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2020
Baroness Penn
That the draft Regulations laid before the House on 24 March be approved.
Baroness Penn (Con)
My Lords, your Lordships will be aware that, since July 2018, HM Treasury has put in place legislation, using powers under the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal) Act 2020, to ensure that the UK has an independent and coherent financial services regulatory regime at the end of this year when the UK leaves the transition period. This SI is part of that programme of work, and the approach aligns with the general approach established by the EU (Withdrawal) Act 2018, providing continuity by retaining existing legislation at the end of the transition period, but amending where necessary to ensure that it continues to function and is effective in a UK-only context.
The SI makes deficiency fixes to a new piece of EU legislation that has recently become applicable relating to the European market infrastructure regulation, hereafter referred to as EMIR. EMIR implemented the G20 Pittsburgh commitments, agreed in the aftermath of the financial crisis in 2009, regulating over-the-counter derivative markets and, in particular, requiring some derivatives to be cleared in a central counterparty, known as a CCP, to manage risk between users of derivative products. EMIR has been effective in increasing the safety and transparency of derivatives markets, thereby reducing the associated risks users may face. UK CCPs play an essential role in reducing systemic risk and ensuring the efficient functioning of global financial markets. Parliament has previously approved several EU exit instruments to ensure that EMIR continues to function at the point of the UK’s withdrawal from the EU.
EMIR was updated by a regulation known as EMIR 2.2 on 1 January this year. This regulation modifies the third-country, or non-EU, CCP supervision framework so that EU authorities have greater oversight over third-country CCPs that are systemically important to the EU. Most of these changes are made to the recognition framework for CCPs outside the EU. Each CCP has to be individually recognised by the European Securities and Markets Authority, known as ESMA.
The Bank of England has already been given the power to recognise non-UK CCPs wishing to operate in the UK via an earlier SI under the EUWA. Because this recognition framework has now been updated, this SI transfers ESMA’s new powers to the Bank of England. That means that the Bank of England will have the power to tier non-UK CCPs according to their systemic importance to the UK. Under the tiering system, tier 1 CCPs will continue to be supervised by their home regulator alone, while systemic CCPs will be recognised as tier 2 and expected to comply with certain requirements in UK EMIR. The power to supervise tier 2 CCPs has also been transferred from ESMA to the Bank. Where a CCP is subject to the supervision of the Bank of England, this SI extends parts of the current supervisory framework for UK CCPs to non-UK CCPs. This is appropriate as this supervisory framework is working effectively in the UK already, and largely mirrors the powers that ESMA will have. For example, both ESMA and the Bank will have the power to issue fines.
EMIR 2.2 also empowers the Commission to adopt delegated acts to specify how the framework will function in practice. This includes tiering, but also how the UK supervisor’s deference to the rules of the non-UK CCPs’ home authorities, referred to as “comparable compliance”, will function. This SI transfers the power to establish those frameworks to the Bank of England. The Bank has existing responsibilities for safeguarding financial stability in general, and managing systemic risk in CCPs in particular. It is therefore appropriate that the Bank can establish the details of the framework to manage the systemic risk posed by some non-UK CCPs in a way appropriate for the UK.
The remaining functions of the Commission are transferred to Her Majesty’s Treasury through this SI. This includes the so-called location policy. Under EMIR 2.2, ESMA can recommend to the Commission that a third-country CCP that is felt to be “substantially systemically important” cannot offer some services to EU clearing members unless those services are offered from inside the EU. The UK did not support the inclusion of this location policy during the negotiation of EMIR 2.2, due to concerns that it could lead to market fragmentation and reduce the benefits provided by the global nature of clearing. However, the powers in the EUWA, under which we are making this SI, extend only to addressing deficiencies arising from withdrawal, and commitments were made during the passage of the Bill that the power would not be used to make significant policy changes.
Therefore, this instrument transfers the power to use the location policy to Her Majesty’s Treasury via a negative regulation, subject to advice from the Bank of England, and appropriate procedural safeguards and transitional provisions. However, I can assure the House that it is hard to foresee a circumstance in which using the location policy would be effective in supporting financial stability in the UK. The UK clearing market sees a large proportion of clearing occur in UK CCPs; it is therefore unlikely to be appropriate ever to use this tool in practice.
EMIR 2.2 also makes changes to the internal EU supervisory and co-operation mechanisms, including creating a CCP supervisory committee inside ESMA and increasing responsibility for EU supervisory colleges. As the UK is no longer part of the EU, these provisions are removed by this instrument.
Finally, the instrument updates the recognition powers set out in the temporary recognition regime. This regime was established by a previous SI to enable non-UK CCPs to continue their activities in the UK while their recognition applications are assessed. This SI updates the recognition requirements in line with the new EMIR 2.2 provisions, helping to provide certainty for non-UK CCPs regarding their recognition within the UK market during the transition period.
The Treasury has worked closely with the Bank of England to prepare this instrument and has engaged with the financial services industry. The draft legislation has been publicly available on the legislation.gov.uk website since 24 February to maximise transparency to Parliament and industry, and the instrument was laid before Parliament on 25 March.
In summary, this instrument will ensure that the UK’s regulatory framework will continue to function effectively in the UK at the end of the transition period. Without an operable regime, the UK’s ability to regulate the financial sector effectively, and manage the financial stability risks posed by some of the largest non-UK CCPs, will be compromised. I hope noble Lords will join me in supporting these regulations. I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
I declare my interests as in the register as a director of the London Stock Exchange plc.
I have forgotten how many of these Treasury statutory instruments I have done, but it must be around a half-century innings so far. With each one my past flashes before my eyes and, although EMIR 2.2 was done after my time in the European Parliament, the content is familiar.
I support the UK taking an open stance on location policy, at least for now. I successfully negotiated away attempts at its introduction in the original EMIR because it was then intended to be used in a protectionist way to undermine the financial single market, and the European Court agreed. Brexit changes that protection for the UK. Now that we are on the outside, it comes down to balancing fear and retaliation—fear that massive moving of contracts is itself a systemic risk, fear of extra costs to industry, and perpetual EU pressure on decisions and location of key personnel. Maybe, in the end, it will be the attractiveness of London and London business that wins out—as it has done for the Unilever listing—but no one should underestimate the effort that involves.
Do I object to one of the Commission powers being given to the Bank of England rather than the Treasury? No, that is where the skill lies—although anyone following exchanges between me and Mark Carney on the Economic Affairs Committee will know that I think it has been overoptimistic about how its regulatory relationships will win over EU demands. I do not dispute the good relationships or technical correctness, but this issue has political overtones.
I hugely regret that there is no way that this Parliament gets a say anything like that which the European Parliament has, particularly at primary level. Everything is delegated away from accountable objectivity or the ability for Parliament to steer or understand our largest industry.
Finally on this instrument, look at the mess of it: if it were the olden days, when we had long exchanges in the Moses Room, I might have challenged the Minister to a game of hunt the provisions. It can pass now, but it is a travesty of democracy to have such an entanglement of legislation that no person—not even the Treasury—knows where everything is.
Lord Wei (Con) [V]
My Lords, I declare my interests as in the register. I broadly welcome this instrument; it comes in extraordinary times, and we do not really have enough time to debate it, but we are at a critical point in our negotiations with the EU during the transition period. This is an incredibly technical instrument, and I am glad to be among the notable Peers who have far more expertise than I do on this matter.
In the limited time, I will focus on questions of sovereignty, because a lot of this has been picked off by our exiting the EU. I have had some contact with both the financial services industry and this area of derivatives, which, though often castigated in public, is crucial to our future as a financial hub. It is a growth sector and, as the world becomes riskier, we need to cement our position in this kind of trading globally to help reduce risk for businesses, organisations and markets around the world.
I have a couple of concerns for my noble friend the Minister to address. She may not have time to fully answer them all, so I would be happy to have a letter placed in the Library in response. My concerns are about sovereignty and how governance may shift over time, particularly in the course of our negotiations—and if they perhaps break down—and post this transition period. As mentioned, we are giving quite a bit of leeway to the Bank of England. What provision has been made, or what guidelines exist, to ensure that the Bank of England does not give away any powers during this period, given the freedoms it has around regulating and bringing in third parties to that regulation?
My second question is on human rights. We are obviously in a period when financial services are being pulled into discussions about past slavery and practices within supply chains. I would be interested to know how the sovereignty in this instrument works with third parties and the question of who decides about human rights. This could very much complicate these markets, which are huge.
Finally, and this is perhaps more of a speculation, but what thought has been given to the provisions in this instrument and decisions that might be made in the Bank of England? Should our relationship with the EU turn sour—I hope it will not—and the EU choose to impose further protectionist measures against us, this could somehow undermine our position in discussions. I look forward to hearing the rest of the debate, but I would welcome some answers from the Minister.
Lord German (LD) [V]
My Lords, at one level these regulations could be seen as a technical set to see us through to the end of the year in order to be compliant during transition. However, they raise some very substantive issues which set a pathway with much greater significance.
What we are legislating for here is derived precisely from the legislation which the EU will use in dealing with the United Kingdom from 1 January next, onwards. Unless there is some major shift in governing policy, the EU form of these regulations will be the rules which govern the activities of UK entities within the 27 member states of the European Union. All of the tightened EMIR 2.2 regime rules on the over-the-counter derivatives market will be applied to us a third country. In the context of the Government’s aim not to be within the single market, a primary concern must be whether our regulatory regime will be regarded as equivalent by the 27 member states of the EU next year.
It is through this lens that we must assess the adequacy of these regulations. I am afraid that all the signs of what will happen next year to our relationship with the EU look increasingly gloomy. As written, the Explanatory Memorandum is either very misleading or incredible in its paragraph 7.1, depending on your view of its literal meaning. Its opening words state:
“The UK has left the EU with a deal”,
yet the EU, as we know, has said that we are not even negotiating effectively on the agreement—the political declaration which the UK reached at the end of last year. What was achieved was leaving with an agreed declaration on the future issues to be negotiated. I suspect that the terms of this bald statement in paragraph 7.1 of the EM refer to a much narrower arrangement than the one currently cited by all sides and the media, including our own Prime Minister, as leaving with a deal. Can the Minister tell the House what deal the Government are referring to in this statement, and which terms of that deal are relevant to these regulations?
According to the political declaration, the UK is required to conclude its equivalence assessments in 12 days’ time. These regulations are part of that exercise. How much more needs to be concluded in these coming days, or will we require an extension of some weeks or months to finish the exercise?
Turning to the regulations themselves there is a considerable increase, as noble Lords have said, in the powers and role of the Treasury and the Bank of England. What level of scrutiny do the Government envisage over the use of these powers? The only reference to Parliament is in relation to Regulation 21 of this instrument. As the Minister said, it uses the most limited form of parliamentary scrutiny, the negative procedure; additionally, this regulation is the one most likely never to be used. As we seek to provide regulatory equivalence and, I hope, avoid a cliff edge at the end of the year, I am bound to reflect that none of this can replace the market access we currently enjoy.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
We can see you, Lord Mann, but we cannot hear you.
Lord Mann (Non-Afl) [V]
My Lords, you should be able to see me. I thank the Minister for and congratulate her on the clear way in which she introduced this statutory instrument. I have three questions. First, have the FCA and the Bank of England identified to Treasury Ministers any specific systemic risks that the House should be aware of? Secondly, are there any ongoing concerns within the FCA and the Bank of England over inter-trade repository reconciliations? Thirdly, does the power remain to suspend reporting obligations for 12 months and, if so, what criteria will the Treasury use to enact it? Can this power be rolled over for a further 12 months, beyond the initial 12?
Baroness Altmann (Con) [V]
My Lords, I support this statutory instrument. I welcome it and congratulate my noble friend on her introduction. It is of course important that derivatives are increasingly cleared through CCPs since the lessons that we learned in 2009. The security of global derivatives markets is vital to the functioning of the financial system and the stability of institutions such as pension funds and insurers, which use derivatives widely nowadays in their risk management processes.
Extending the Bank of England’s supervision of domestic CCPs to global CCPs is necessary as we depart the EU; likewise, ensuring that it can continue to maintain its responsibilities for safeguarding financial stability and systemic risk is important. However, does my noble friend feel that the Bank of England has sufficient resources to deal with these wide-ranging new responsibilities and technical standards, especially if we leave the EU without any formal agreement or continuation of the transition, should that be necessary at the end of this year?
I also welcome the fact that the Treasury will take responsibility for location policy, because that is where such responsibility should rightly lie in the post-Brexit environment. I do not believe that the Bank of England would be the appropriate place, especially given all its other extra duties. Has consideration been given to the concerns expressed that this may become a political issue, with a trade-off of competing interests? Finally, what scrutiny will Parliament have over this broad extension of powers to the Treasury and the Bank of England? It seems of concern, as other noble Lords have suggested, that this is to be subject to the negative procedure should changes be made. I did hope that Parliament would have more of a say.
Lord Holmes of Richmond (Non-Afl) [V]
My Lords, it is a pleasure to speak on these regulations and I join other noble Lords in congratulating my noble friend on the way in which she introduced them. Making the complex clear is no mean feat, given the number of acronyms in them. I am sure she would agree that we have a world-leading financial services sector in the City of London, given its ecosystem, geography and regulator.
I note—other noble Lords have commented on this—the shift in responsibility for CCPs to the Bank of England. Does my noble friend believe that the Bank has the breadth of experience to make decisions on CCPs? I am sure that it has the specific, narrow understanding but, in wanting the decisions to be made in line with broad government policy, what discussions have the Government had with the Bank of England on this issue? Can she also say something about discussions with the Bank over the level of resourcing that she believes it currently has to exercise this task?
As has already been said by other noble Lords, the regulations are required for compliance at the end of this year. Post that, does my noble friend believe that these regulations will enable not only compliance but optimisation? Does she believe that, post-Brexit, more could be done to ensure that we have an optimised OTC derivatives market in the UK?
Finally, on the role of the Bank of England—which, again, is wider than these regulations—I ask the Minister to update the House, in writing if necessary, on the current progress on a central bank digital currency. She talked, quite rightly, about financial stability. If a social media platform launched a cryptocurrency that took hold in any nation state, that could have a significantly detrimental effect on financial stability. Can she update noble Lords on the Bank’s current discussions and consultation on CBDC?
Baroness McIntosh of Pickering (Con) [V]
My Lords, I congratulate my noble friend on introducing the regulations and thank her for the opportunity to consider them. I have a number of queries.
I share the concern of the noble Baroness, Lady Bowles. If it is difficult for the Treasury to know where all the instruments are, how on earth are industry and investors expected to keep on top of all the changes as a result of our exiting the European Union? I make particular reference to paragraph 2.15 of the Explanatory Memorandum. Can my noble friend explain why the functions previously held by the European Commission have been split between the Treasury and the Bank of England? It would be helpful to know the thinking behind that.
Derivatives are perhaps the most complex area of financial services. We have moved a great deal away from passporting or equivalence. In this regard, what will the status of industry and investors be going forward? Will we enjoy the same protections in the UK under the statutory instrument set out today as if we were still a member of the European Union? Also, what will be the impact of the location policy described by my noble friend on the City of London and its ability to compete on equal terms and on a level playing field with its erstwhile partners and competitors in the European Union?
Finally, can my noble friend put my mind at rest that, while it might suit the industry to have a weaker overview and oversight of the regulations, the protections for consumers and investors in these instruments will be safeguarded? I would like an assurance on that.
Baroness Kramer (LD) [V]
My Lords, I recognise that adopting this SI is sensible and technical. The underlying questions, however, are totally political.
Can the Minister tell us where we stand on equivalence negotiations with the EU on clearance? As the noble Lord, Lord German, reminded us, we are 12 days away from the deadline. The EU, on quite legitimate grounds of financial stability, may well decide to take back into the EU 27 a significant portion of the clearing of euro-denominated derivatives—something it would likely do slice by slice as the 27 build their capabilities. As the Minister pointed out, these regulations in their EU form enhance the power over changing that location. If the EU does so, we lose not only that business but many other wholesale financial market activities that typically collocate. That would be a devastating blow to financial services here in the UK, with knock-on effects on our tax take and public spending.
However, keeping a dominant role in derivatives clearance, with over $30 trillion in exposure in the form of open contracts, is a high risk, frankly—a risk that the EU 27 could legitimately argue that it need not share with us in future. The risk has always been scarily high, but it has increased exponentially with Covid because of the deterioration in the quality of the collateral that stands behind those contracts and is the primary protection against that risk. In her reply, will the Minister address collateral quality and how the deterioration over the past few months as a result of the global economic crisis will be addressed so that we will still be in a reasonable position to manage the exposure created by the major CCPs in London?
Lord Tunnicliffe (Lab) [V]
My Lords, I am grateful to the Minister for her introduction of this measure, which is the latest in a long line of statutory instruments to amend EU-derived legislation so that it continues to function correctly following the conclusion of the transition period at the end of December. With the events of the past few months, I had forgotten just how many Treasury SIs we dealt with as part of the Brexit process. Indeed, paragraph 6.2 of the Explanatory Memorandum lists a dozen relating to this area alone.
As the Minister outlined, this SI expands the UK’s existing supervisory framework for central counterparties to cover third-country CCPs, to ensure that the Bank of England is able to undertake the necessary supervisory responsibilities required under the EMIR 2.2 framework. It transfers a number of functions currently carried out by the European Commission to domestic bodies, including the Treasury and the Bank, and makes minor amendments to deficiencies in other Brexit financial services SIs.
My right honourable friend Pat McFadden MP asked the Commons Minister a number of questions during the debate there on this measure, including whether the Government think that they can achieve an equivalence decision in the timeframe envisaged in the political declaration. Mr Glen simply said that the Government were “working through” the process. I hope that the noble Baroness the Minister can go into slightly more detail today.
We remain deeply concerned about the future impact of our changing relationship with the EU on the success of this country’s financial services sector. Financial services contribute significantly to Britain’s exports. In 2016, they were worth about £61 billion, with a surplus of £51 billion over imports. More than 300 firms in Britain have opened EU hubs to ensure single-market access, while £1 trillion of City assets and 7,000 banking jobs have been transferred to the eurozone. London has been supplanted by New York as the world’s leading financial centre in the Global Financial Centres Index and is close to being overtaken by Hong Kong. EU officials have insisted that at the end of the transition period the UK, as a third country, must abide by equivalence—a guarantee that its financial regulations meet European standards—and there are additional risks to access, as equivalence status can be revoked at any time.
While we cannot and must not rely on financial services to bring home the bacon, they will have an important role to play in returning the economy to growth once the coronavirus pandemic has been brought under control. We on this side accept that negotiations with the EU are ongoing. I hope that the Minister will note that our concerns have been heard and are shared.
Finally, can the Minister indicate how many further SIs are expected before the end of the transition period? This may be dependent on the number of open legislative files in Brussels but, as I have said on previous occasions, financial services regulation is complicated enough without multiple measures being brought forward to correct deficiencies in instruments that themselves amend other regulations. I trust officials at the Treasury, the Bank of England and the Financial Conduct Authority to ensure that we have a functioning statute book on exit day. However, given the challenging times we find ourselves operating in, I hope that Ministers will do their best to make officials’ lives and the work of your Lordships’ Secondary Legislation Scrutiny Committee as straightforward as possible.
Baroness Penn
As noble Lords have noted, this is quite a technical debate, and I will do my best to address the points that they have raised. I defer to their greater experience in previous roles, potentially having made some of these regulations as Members of the European Parliament and, as Members of this House, having taken through a large proportion of the regulations in the process of onboarding our financial services regulations in preparation for leaving the EU.
Several noble Lords raised the question of the new responsibilities that this SI gives the Bank of England as the regulator versus the powers that will, for example, come back to Her Majesty’s Treasury. The Bank’s new responsibilities are consistent with its existing responsibility for safeguarding financial stability in general and for managing systemic risks in CCPs in particular. Responsibility for recognising non-UK CCPs was transferred from ESMA to the Bank of England in a previous SI, and EMIR 2.2, which this SI translates into UK law ready for Brexit, transfers the responsibilities for tiering non-UK CCPs in the recognition process.
The Bank has been given two new supervisory powers over tier 2 non-UK CCPs through the extension of the existing supervisory framework and tools that apply in the UK. To ensure that the Bank can fulfil its supervisory obligations, it will be able to sign a memorandum of understanding with non-UK competent authorities of a recognised CCP. The Bank will also have the power to set further technical standards to specify the tiering criteria and establish a framework that allows for comparable compliance where the framework that a non-UK CCP operates under is recognised as comparable to the one that we have in the UK and is therefore satisfactory for regulatory purposes. These powers are going to the Bank rather than to the Treasury because of the Bank’s existing responsibilities for safeguarding financial stability and managing systemic risk in CCPs.
The question of the resources for the Bank to fulfil its obligations was raised by several noble Lords. We are confident that the Bank has made adequate preparations and is effectively allocating resources in order to manage its new responsibilities. Furthermore, it has already been assigned the ability to levy fees to fund the responsibilities arising from its role in relation to non-UK CCPs.
My noble friend Lord Wei asked about the Bank giving away the powers that it will receive under this statutory instrument. It will not be able to give away these powers; it will only be able to enter into supervisory co-operation agreements to manage how it uses those powers in practice.
Several noble Lords asked how we are progressing with the assessment of equivalence. As they noted, there was a commitment in the political declaration to undertake equivalence assessments by the end of June. We are working hard and are focused on fulfilling our obligations and commitment to conclude those assessments. I am afraid that I cannot expand further than that.
As I said, this is a very technical SI to move regulation from the EU to the UK in preparation for the end of the transition period, but several noble Lords asked what the prospects of the further politicisation of this process might be—in particular, with regard to the use of the location policy, about which concerns have been expressed. The UK regards the politicisation of financial services as being in no one’s interests. The financial stability that underpins our and the EU’s economies depends on trust and predictability in regulatory matters. What is more, the potential use of the location policy could result in the fragmentation of the clearing market, which, again, would undermine financial stability and increase costs for those involved.
The noble Lord, Lord German, asked what deal the Government are referring to in their Explanatory Memorandum. The deal is the withdrawal agreement, which this House and the House of Commons have spent a significant amount of time debating and agreeing, and which of course was endorsed by Parliament in January this year.
Several noble Lords asked about parliamentary scrutiny of the powers transferred under this SI. Of course, Parliament has several ways in which to scrutinise both the Government and the Bank of England—through Ministers appearing in this Chamber and through Select Committees.
The noble Baroness, Lady Kramer, asked about the use of the location policy, which I believe I have covered. We have brought in the power to use the location policy but have no intention of doing so.
That brings me to a question asked by several noble Lords—whether, through this SI or the broader process, we would lower our standards. This SI is intended simply to transfer EU powers into UK legislation and to amend any deficiencies that might arise through that process. Therefore, it does not diminish any regulation of the sector, and in fact it provides further protection for consumers by bringing into UK law protections that have been provided for through EU regulation.
The noble Lord, Lord Tunnicliffe, asked how many further SIs we might expect under this process. As he noted, the number is partly dependent on files that might come from the EU Commission during the rest of this year while we remain in the transition period. Therefore, I cannot give him a specific number but I hope I can reassure him that it will be much lower than the number we have seen so far during this process of bringing EU regulation into the UK system.
I do not believe that I have covered all the points raised by noble Lords and I hope that they will forgive me if I write to them on the outstanding matters. To conclude, this instrument is necessary to ensure that existing EMIR legislation continues to function effectively in the UK from the end of the transition period following the updates made by EMIR 2.2. In particular, it will ensure that the UK has an enhanced recognition regime, with the tools necessary to manage the financial stability risks posed by some of the largest non-UK CCPs. I hope that the House has found this afternoon’s debate informative and that it will join me in supporting these regulations.
Arrangement of Business
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, proceedings will now commence. Some Members are here in the Chamber and others are participating virtually, but all Members are treated equally. For Members participating remotely, microphones will unmute shortly before they are to speak—please accept any on-screen prompt to unmute. Microphones will be muted after each speech. If the capacity of the Chamber is exceeded, I will immediately adjourn the House. I ask noble Lords to be patient if there are any short delays as we switch between physical and remote participants. The usual rules and courtesies in debate apply. The time limit for the Motion in the name of the noble Baroness, Lady Penn, will be one hour.
Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020
Baroness Penn
That the draft Regulations laid before the House on 6 May be approved.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee
Baroness Penn (Con)
My Lords, noble Lords will be aware that since July 2018 Her Majesty’s Treasury has put in place legislation using powers under the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020, to ensure that the UK has an independent and coherent financial services regulatory regime at the end of this year, when the UK leaves the transition period.
This SI is part of that programme of work, and the approach aligns with the general approach established by the EU withdrawal Act 2018: providing continuity by retaining existing legislation at the end of the transition period, but amending where necessary to ensure that it continues to function and is effective in a UK-only context. This SI makes deficiency fixes to a new piece of EU legislation that has recently become—
My Lords, I apologise; I am speaking to the wrong SI. I will have to briefly get the correct SI, so I will defer to the Whip.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, on this occasion I will not read out the usual preamble but will go straight to the point. Motion in the name of the noble Baroness, Lady Penn, to approve the Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2020. The time limit is one hour.
Baroness Penn
My Lords, I apologise for the previous confusion. I believe I have already set out the programme of work that this SI—in addition to the previous SI—is part of, so I turn to the specific content of this SI.
The approach taken in this SI aligns with the general approach established by the EU withdrawal Act 2018: providing continuity by retaining existing legislation at the end of the transition period, but amending where necessary to ensure effectiveness in a UK-only context. While this SI makes amendments to approximately 20 pieces of legislation, the number and nature of these amendments are modest and minor. They act to preserve the effect of recent changes to EU legislation in the UK, and in doing so limit any impact on business that would otherwise arise at the end of the transition period.
Primarily, this SI fixes deficiencies in recently applicable EU legislation. For example, the fifth money laundering directive was transposed in the UK in January this year through amendments to the Money Laundering Regulations. This SI fixes minor deficiencies in the Money Laundering Regulations resulting from the recent transposition of this directive. These minor amendments remove references to EU institutions and regulatory distinctions between EEA and other third countries, and change a requirement for co-operation with overseas authorities into an ability to co-operate. This will ensure that the UK has an independent and coherent anti-money laundering regulatory regime at the end of the transition period.
As a further example, the EU has recently amended the benchmarks regulation to include two new categories of low-carbon benchmarks—the “Climate Transition Benchmarks” and “Paris-aligned Benchmarks”. The EU also extended existing transparency rules to reflect environmental, social and governance, or ESG, factors. This SI fixes deficiencies that will arise in retained EU law as a result of these EU amendments. It inserts definitions for a “UK Climate Transition Benchmark” and a “UK Paris-aligned Benchmark” into the retained EU law version of the benchmarks regulation. It also specifies disclosure requirements in relation to ESG factors. This will ensure that the UK continues to have an effective regime to enhance the transparency and comparability of low-carbon benchmarks, enabling investors to make informed decisions.
At the end of the transition period, there will be elements of retained EU law and domestic law that would not be appropriate to keep on the statute book. This SI therefore revokes certain pieces of retained EU law and UK domestic law—for example, elements of the European system of financial supervision regulations—that will not be relevant in a UK-only context.
This SI also makes a small number of minor clarifications and corrections to previous financial services EU exit instruments. Noble Lords will be aware of the unprecedented scale of the legislative programme that the Treasury has undertaken, and this has been carried out with rigorous checking procedures. However, it is unfortunately the case that errors are made on occasion, and when they arise it is important that they are corrected as soon as possible.
I note that this SI also includes provisions initially included in the Cross-Border Distribution of Funds, Proxy Advisors, Prospectus and Gibraltar (Amendment) (EU Exit) Regulations 2019. This instrument was laid using the “made affirmative” procedure in October 2019, when it was necessary to ensure that the SI was in force prior to the previous exit date of 31 October. The SI subsequently ceased to have effect, but it is important that those provisions, which include amendments to the UK’s prospectus regime to ensure it remains operational in a wholly domestic context, are in force before the end of the transition period. These provisions have therefore been included in this SI. Noble Lords will be aware that this information was also identified by the Secondary Legislation Scrutiny Committee in its report published on 7 May.
Finally, I turn to the amendments this SI makes to a previous EU exit instrument: the Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019, which I will refer to as the equivalence SI. The equivalence SI enables the Treasury to make equivalence directions for EEA states, for specified provisions, during the transition period. Today’s SI adds additional equivalence regimes to the scope of the power for the Treasury to make equivalence directions for EEA states during the transition period—through the inclusion of provisions relating to central securities depositories, which are entities that hold financial instruments, and trade repositories, which collect and maintain records of derivatives trades.
This SI also amends the existing drafting on the length of the direction power to tie it to the end of the transition period. This will enable Ministers to make directions during the transition period to come into force at the end of the transition period, granting equivalence to those EEA regimes. Finally, it clarifies that Her Majesty’s Treasury can impose limitations on the application of state-level equivalence decisions when granting equivalence to the EEA; for example, in response to EU conditions placed on the UK.
The Treasury has been working closely with the financial services regulators in the drafting of this instrument. The Treasury is also engaged with the financial services industry on this SI, as it has been extensively over the course of its financial services EU exit legislation programme. In summary, the Government believe that this instrument is necessary to ensure that the UK has a coherent and functioning financial services regulatory regime at the end of the transition period. I hope noble Lords will join me in supporting these regulations. I beg to move.
Lord Hain (Lab) [V]
My Lords, I thank the Minister for her agility in so seamlessly and cogently speaking to the correct regulations. She says that they are minor, but the real importance of these regulations is that they illustrate what is at risk if we fail to reach an adequate trade deal, as seems very possible. Surely the regulations cannot in themselves begin to replace the unfettered access to the single market for our financial services sector which EU membership provided.
As the Minister will know, this sector employs 2.2 million of our workforce and is estimated to account for 6.5% of the UK’s economic output, generating more than £70 billion in tax revenues in 2017, making up 11% of the national total. Until the financial crisis of 2008, the City of London was seen as the country’s greatest economic asset, as well as being by far the most important financial centre in the European Union. Financial firms in London have benefited hugely from EU membership, most obviously through passporting rights which enable firms to trade in any other member state, under the supervision of British regulators, without having to seek further authorisation from each country. Around 5,500 firms based in the UK currently benefit from passporting, with financial exports worth £26 billion, while 8,000 companies in the European Economic Area use this mechanism to offer services in Britain. After the post-Brexit transition period, UK financial services will lose their EU passport rights and be forced to rely on equivalence for their market access to Europe. Under that scheme, the European Commission decides whether a country’s regulations are deemed robust enough for it to operate within the single market, and can later withdraw the decision with as little as 30 days’ notice—so much for taking back control.
In the run-up to the last election, many financiers seemed to assume that a Conservative victory would ensure business as usual for the City. However, as these regulations show, Britain’s status as Europe’s leading hub for financial and legal services is at real risk after Brexit. Already, more than 300 firms in Britain have opened EU hubs in order to ensure single market access, while £1 trillion of City assets and 7,000 banking jobs have been transferred to the eurozone. London has been supplanted by New York as the world’s leading financial centre in the Global Financial Centres Index and is close to being overtaken by Hong Kong. Again, so much for the Brexit promise of taking back control, even with these regulations.
Baroness Northover (LD) [V]
My Lords, I thank the Minister for her introduction, and her team for the clarity of their Explanatory Notes. Can the Minister confirm that the Gibraltarian authorities are happy with these provisions? In relation to the United Kingdom, we need to stay aligned during the transition period, but it also seems clear and welcome that we intend to stay aligned after that. Can the Minister confirm this?
The EU has amended its regime to include new categories of low-carbon benchmarks and extended rules on transparency in relation to environmental, social and governance factors. I note that
“As far as possible, HM Treasury’s approach ensures that the same laws and rules would continue to apply at the end of the Transition Period, to provide continuity and certainty to firms and their customers.”
That is excellent. Also, as new EU legislation becomes applicable during the transition period, the Treasury will introduce further SIs to ensure that this continues to operate effectively in the UK
“at the end of the Transition Period.”
The emphasis here is mine.
Despite this apparent commitment, however, the duty to co-operate with supervisors has been substituted with a power to co-operate after the transition period—why the difference? At the end of transition, the UK will be outside the EU’s single market for financial services, including the passport regime. This is hugely to be regretted, as the noble Lord, Lord Hain, has just said. There is the possibility of equivalence. How do we make sure that we secure this, and secure it long-term? My noble friend Lady Kramer, in the previous SI discussion, expressed her enormous concern about this. I did not feel that the Minister grasped the overarching point she made.
Given the potential impact of this, how optimistic is the Minister about securing equivalence in the long term? To what extent do the Government consider diverging from the EU in financial services, and what would be the effect on equivalence? Significant resources will need to be put into our close monitoring of any changes governing the EU financial services market, ensuring that we follow suit. Of course, this does indeed make us a rule-taker rather than a rule-maker. Can the Minister spell out how the Government intend to do this? I look forward to her reply.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I thank my noble friend the Minister for introducing this regulation and giving us the opportunity to debate it this afternoon. I commend her for her speedy recovery in a very difficult opening. She has certainly worked extremely hard this afternoon for the House and, indeed, the public.
I notice that, at the end of the transition period, the passporting provisions will no longer apply. I join other noble Lords who have spoken in expressing my deep regret and recording the massive contribution that financial services have made to facilitating investment not just in this country but across the European Union. Obviously, the loss of passporting equivalence will be a very poor second; again, I join other speakers in wanting to make sure that this will work as well as it possibly can.
I welcome the fact that the regulations, as set out by my noble friend the Minister, will ensure that low-carbon benchmarks enable investors to have the knowledge and choices to make their investment—in particular, recognising the environmental, social and governance factors that this covers. They are extremely important; I am pleased that environmental and social policies feature as strongly as they do in the instrument before us.
I have a specific question for my noble friend. The statutory instrument clearly sets out the exemption that investment funds do not have to produce a key information document detailing potential investment risks and how the funds will operate; that exemption is extended for a further period of two years. Is she minded to extend it beyond this period, and will Parliament be consulted at that time?
What is the significance of replacing a “duty” on the UK supervisory authorities to co-operate with other supervisory bodies with only a “power” to do so? Surely it is in the best interests of the industry and investors to seek to co-operate wherever it is appropriate, particularly in sharing best practice.
Lord Holmes of Richmond (Non-Afl) [V]
My Lords, I am pleased to speak to these regulations. In doing so, I thank all those across financial services, in the City of London and beyond, who helped to get the regulations into the condition they are in. We have one of the finest financial services centres on the planet, and potentially the best is yet to come—but that is “potentially” rather than “inevitably”. Does my noble friend agree that a large part of the success to date of financial services, not least in London, is due to the fact that London is one of the most diverse cities on the planet? Like cities, financial services organisations benefit from such diversity, and we have seen that benefit throughout the UK and across the world.
Echoing the question asked by the noble Baroness, Lady Northover, will my noble friend the Minister set out the position of Gibraltar as regards the regulations? Secondly, will she clarify whether equivalence is still the target and, if not, why not? Come our exit, does she believe from her perspective that financial services in the UK will be in a better position going forward than they are today?
The Deputy Speaker
Lord Wood of Anfield. No? I think that we will come back to him, so we move on to our next speaker, the noble Baroness, Lady Jones of Moulsecoomb.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, I find these regulations very hard to scrutinise on their own, without knowledge of what the future of financial services will look like. There are two huge moving parts here: what, if anything, will come out of the EU negotiations, and what plans the Government have to diverge from EU regulations. I am curious about whether the Government have identified any blockages caused by EU law that they believe can now be overcome now we have left the EU, or will finance be yet another area where we are apparently free from the shackles of the EU but choosing to stay exactly where we are?
The Queen’s Speech contained the most incredible green stuff:
“My Government will continue to take steps to meet the world-leading target of net zero greenhouse gas emissions by 2050. It will continue to lead the way in tackling global climate change.”
Somehow, I do not find this world-beating ambition in any legislation coming through at the moment. Moving money out of dirty investments and into the clean, green revolution is absolutely essential for solving the ecological and climate emergency. The Government should lead global ambition on this and use our international negotiations as a route to turn the global finance system into a delivery arm of the Paris climate agreement. To what extent do the Government see green finance as a priority in their future plans, and how much work are they doing to make the UK the centre of global green finance?
I agree that the Minister recovered very quickly earlier; it was very impressive.
Lord Purvis of Tweed (LD)
My Lords, the Minister in outlining these measures said that it is important that we are coherent and in good order. By “coherent”, I think she meant that we should be in good functioning order, but there is no coherence as in good policy regarding the Government’s direction of travel. The changes may be modest and minor, as she indicated, but they speak to a wider and major impact on our economy.
Two things this week summarised neatly this Government’s philosophical approach to the future of our economy. The first was the great fanfare about the opening of trade talks with New Zealand and Australia; the second is the rather mouse-like way that these changes, which may be technical in nature but will have a significant impact, are being handled. The first of those, the new trade talks, came with an assessment of what the impact would be on UK GDP. The Financial Times put it today at a homeopathic 0.01% over 15 years, though some estimates suggest that it could actually cost the economy 0.01%. The FT went on:
“If you’re in the UK, nip out and buy a bag of crisps after reading this and you might well have done more for the British economy than a New Zealand trade deal.”
These regulations, with—rightly—no government promotion, show piece by piece a dismantling of the UK’s relationship with the most well-developed and successful financial services single market ever devised in the world, whether it be combined funds, the ability to market across country to our biggest market or having a common view on how funds are invested sustainably, on how we continuously drive up ethics in investment and on how services and products within the UK can be easily passported to the most well-developed market in the world. It is clear that the approach of this Government is a real and present danger to our economy.
I am sure that the Minister will not take my word for it, and I know that the Government like listening to Americans, so let me use what the Chamber of Commerce of the United States said of the UK in its report about the Atlantic economy published earlier this year:
“In terms of FDI trends, UK-based EU institutions are decamping for other parts of Europe. According to Reuters, financial firms in the UK have opened over 300 subsidiaries in the EU with an estimated 7,000 workers to staff these operations, in order to avoid any disruptions to financial market access after the transition period. According to preliminary data from the UN, total world FDI flows to the UK declined 6% in 2019 due to a lack of large M&A deals targeting the country.”
Another indicator—just one of many—is that the £3.5 billion German digital bank, N26, pulled out of the UK because of losing passporting rights to operate here using a German banking licence.
It seems a long time ago, on 27 February, that Chancellor Sunak wrote to the EU saying that he saw no reason why equivalence assessments could not be completed by the end of June. Can the Minister confirm that we have carried out what we could consider to be equivalence assessments, and will the Government make them public? Clearly, if the Government said that they saw no reason why they could not be carried out, we should have sight of them.
The EU was rightly sceptical about this, because, only a week earlier, Sajid Javid, the Chancellor’s predecessor, told the EU that it was the Government’s policy to seek “comprehensive, permanent equivalence decisions”. Can the Minister confirm that that is still the position?
On Regulation 21, on the ending of marketing passports, which had been considered vital by another previous Conservative Chancellor, what assessment has been done of the economic impact of losing those marketing passports? And what economic impact assessment has been carried out for the changes to combined fund management and delegated funds?
Let me give one real example of this, because it is not simply academic. I was contacted to raise in this debate an issue relating to the 40,000 combined funds across the UK which are used for diaspora disbursement by people who work within the UK and the EU but send money to some of the poorest areas of the world. They are extremely concerned that there will be major disruption to those diaspora funds, so can the Government guarantee that some of the changes down the line for the operation of the combined funds will not see any disruption to those that are focused on social aims?
On sustainability, as mentioned by the Minister, Regulation 22 creates elements of confusion as to what sustainability-related disclosures there will have to be in the UK. These are set out clearly in the EU, but we will no longer be compelled to operate under a straightforward and common system, and we will have to set our own. What will they be? If we are no longer participating in a joint committee on standards, how will we operate?
On equivalence, combined funds and others, and integrated markets, we are leaving an integrated market that we currently lead. We are replacing duties to co-operate with simple options. We are creating uncertainty over sustainability, ethics and standards, and there is a great lack of clarity as to what the Government’s intentions are for this fundamentally important market for the United Kingdom.
Lord Livermore (Lab) [V]
My Lords, I am very grateful to the Minister for introducing the statutory instrument, which touches on many aspects of financial services-related retained EU law. Overall, it seeks to replicate at a national level the regulatory regime for financial services to which we currently subscribe at an EU level. Until the end of the transition period we will of course continue to follow the EU’s regulatory rulebook. This is about what will happen in January, if, as the Government confirmed last week, the end of this year marks the end of the transition.
As the Minister outlined, the regulations cover areas such as equalising the regulatory requirements of enhanced due diligence measures; replacing references to the European Securities and Markets Authority with references to the Financial Conduct Authority or the Bank of England; tidying up a number of previous EU exit instruments to ensure that they function correctly following the transition period; and revoking certain EU-derived measures that will no longer be applicable beyond the end of December. We welcome the changes in this instrument that will help maintain the pre-Brexit relationship between the UK and Gibraltar, and we have no fundamental objections to the other specific measures, although I have a number of questions.
On the anti-money laundering provisions, why is the current duty to co-operate with supervisors in other countries being removed and replaced with the weaker power to co-operate if we so choose? It is unclear why we would ever not want to co-operate to tackle money laundering, which can fund everything from international terrorism to the drugs trade. I was perplexed by an answer given by the Minister in another place on Tuesday, when MPs were told that there is no need to maintain a duty to co-operate with other countries’ supervisory bodies because there remains a political desire to talk. But if there is no duty, what happens if a future Minister takes a different view?
On the cross-border distribution of funds, can the Minister confirm that this statutory instrument enshrines the loss of passporting rights for our financial services that will result from the Government’s decision to withdraw from the single market, as well as from the EU itself? As a side note, on this issue of cross-border co-operation, while in the past we have not been critical of the Government’s approach to the “lift and shift” exercise, it is concerning that policy change is now starting to creep in.
Finally, on equivalence determinations, can the Minister confirm that, as yet, we have no guarantee that our regulatory regime will be regarded as equivalent by the rest of the EU? It is of course true that negotiations are ongoing and that we may in time gain an equivalence decision from the Commission. However, the loss of passporting rights will require a fundamental change in how UK institutions do business. We have already seen the restructuring of companies and the redeployment of staff. This will no doubt continue.
As my noble friend Lord Hain observed, while these regulations are intended to ensure continuity for UK financial services at the end of the transition period, the Government’s stated intention is to erect new trade barriers between our financial services and the rest of the EU, so even as we replicate EU regulations at the UK level, we are pursuing a course that will be incapable of replicating the market access we currently enjoy. We are taking the area that makes up 80% of our economy and, in the case of the financial services sector—a sector in which we trade at a substantial surplus with other countries—inserting new barriers between us and our nearest customers. The fact that the sector is resigned to that, and has established alternative bases in Dublin, Luxembourg, Frankfurt or Paris, does not change that reality.
We will start January 2021 largely at a point of regulatory equivalence. That is welcome. However, regardless of the outcome of negotiations, no amount of duplication can avoid the basic fact that although we can replicate the rules, we cannot replicate the market access to which they apply, and for which they were designed in the first place. As a result, UK businesses will start next year with significantly diminished market access, and at a significant disadvantage as a result.
Baroness Penn
I thank all noble Lords for their contribution to this debate and for their forbearance with my confusion at the beginning of it.
I will first address three points which many noble Lords raised. The first is about the coherence of the UK strategy in the process for leaving the EU and setting up a system of financial services regulation after the end of the transition period. There is a clear, coherent and consistent strategy when it comes to this: a simple—that is the wrong word; I should say “clear”—process for onboarding existing EU regulation, without policy changes, into UK law, so that there are no changes on the day at the end of the transition period, apart from where it may be to correct inconsistencies that may arise from the fact that we are no longer part of the EU and therefore no longer part of EU bodies. That is the strategy and that is what we are pursuing. This SI is part of that, as so many others have been.
The next question is on what we do after day one, when we have left. Many noble Lords also raised the question of divergence. I will say three things on that point. In taking the decision to leave the EU and the single market, we have had feedback from the financial services sector that it is important for it to have regulatory autonomy and control and not be a rule-taker from the EU. We are therefore committed to regulatory autonomy, and this process reflects that. However, the freedom to change rules does not mean pursuing divergence for the sake of it. The UK is committed to high standards of regulation and appropriate levels of supervisory oversight, and, in many areas, we go beyond that which the EU rules require. Where we make any changes, they will be for good reasons, and our starting point will be what is right for the UK, to protect our economy and our financial stability.
That brings me to the point about the equivalence procedures and the process for securing an equivalence agreement with the EU, which remains our aim. I reassure the noble Baronesses, Lady Northover and—if she is still listening—Lady Kramer, that we take that very seriously. We are committed to meeting the June deadline for those assessments to be made. As part of that process, we have received questionnaires from the EU, as part of its assessment process. The Treasury is working closely with the Bank of England, the Prudential Regulation Authority, the Financial Conduct Authority and others on this process.
The noble Baroness, Lady Northover, my noble friend Lord Holmes of Richmond and others raised the question of Gibraltar. We have liaised closely with Gibraltar during this process, and this SI is consistent with government policy to preserve the pre-withdrawal relationship between the UK and Gibraltar on financial services.
A number of noble Lords, including the noble Baroness, Lady Northover, and the noble Lords, Lord Livermore and Lord Purvis, raised the question of the duty to co-operate on anti-money laundering versus a power to co-operate. I reassure noble Lords that this is not an intention to dilute that commitment. It is merely that a duty to co-operate requires both sides to be under that duty, so the power reflects that the other side is not under the same duty. However, there is no intention to reduce the commitment to seek and use that co-operation in this area.
On prospectus exemptions, raised by my noble friend Lady McIntosh, we will keep the time period and that measure under review as regards going beyond two years.
The noble Baroness, Lady Jones, talked about the priority that the UK gives to green finance. The UK wants to become a global hub for green finance. She will know that, as part of our hosting of COP 26, we appointed the former Governor of the Bank of England, Mark Carney, to lead on work in the area of green finance. As regards to the environmental standards that this SI brings into UK law, the intention is to maintain the same, if not better, standards than those which the EU has on this.
The noble Lord, Lord Purvis, raised a number of issues to do with trade. They go slightly beyond the scope of this SI, the purpose of which is to bring in existing EU regulations so that we have certainty, in the context of having or not having a deal with the EU at the end of the year.
The importance of having a regulatory regime in place was raised by the noble Lord, Lord Hain, at the outset. Of course, this SI is part of the process of getting us ready for the end of the transition period, but I assure noble Lords that we are working hard to reach a deal with the EU. The Prime Minister met the Presidents of the EU Commission and the EU Council this week. The result of that meeting was an agreement to intensify efforts to reach an agreement during July, which we hope to do.
I hope I have covered most of the points raised during this debate and I commend the regulations to the House.
Arrangement of Business
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, we now come to questions on the Statement on global Britain. For Members participating remotely, microphones will unmute shortly before they are to speak; please accept any on-screen prompt to unmute. I remind Members that our normal courtesies in debate still apply in this new hybrid way of working.
It has been agreed in the usual channels to dispense with the reading of the Statement itself, and we will proceed immediately to questions from the Opposition Front Bench.
Global Britain
(4 years, 6 months ago)
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Baroness Smith of Basildon (Lab)
My Lords, I take this opportunity to pay tribute to the life of Dame Vera Lynn, who has died today aged 103—I can see the shock on the face of the noble Baroness the Deputy Speaker at that. In the most difficult of times for this country, she symbolised enormous resilience, optimism and hope. We send our condolences to all her family, friends and fans throughout the country and across the world; she was genuinely a national icon.
Turning to the Statement, the noble Baroness will be aware of the wide distress and anger in response to the Prime Minister’s announcement that DfID is to be merged with the FCO. It is largely because of comments from Mr Johnson and others that this feels more like a hostile takeover then a genuine merger.
I want to deal with the implications but also comment on the timing of this announcement. Looking at the hugely important issues on the Prime Minister’s desk, we see the response to Covid-19, particularly the serious problems with track and trace and how our outcomes compare poorly with so many other countries; the massive rise in unemployment and increased poverty, which has led to a screeching and humiliating, if very welcome, U-turn on free school meals; and the urgency of our trade deal negotiations with the European Union. I therefore find it quite remarkable—not in a good way —that Mr Johnson considers it a priority, now of all times, to reorganise Whitehall departments. I suspect that I am not alone in thinking that this rush to announce is an attempt to distract attention from government failures.
Even when this is viewed as a stand-alone decision, it fails the test of good governance and good policy. To understand the concerns about the change, the Government need to understand why DfID was set up with the status of an independent Whitehall department with a Cabinet-ranking Minister and why, after years of political hokey-cokey, with upgrades and downgrades for the department depending on the colour of the Government, it became widely accepted and built on as the best way to address the issues by all subsequent Governments and Prime Ministers—until now.
Mr Johnson talks about value for public money. That is why DfID was set up in first place, in the wake of the Pergau Dam scandal, when the Secretary of State was found to have acted illegally in funding an excessively expensive energy project, financed by British taxpayers, to secure a major arms deal. That had a significant impact on the commitment to ensure that trade and aid should not be linked.
Yet on Monday 11 February last year, the Prime Minister said on the BBC’s “Today” programme in relation to the aid budget:
“We could make sure that 0.7% is spent more in line with Britain’s political, commercial”—
and then he added “diplomatic” interests. He even cited Japan as a model, in how it had used the aid budget to promote Japanese railways.
While I am on the issue of value, the transparency index—an independent assessment of the effectiveness of aid spending across the world—praises DfID as being “very good” and in the top three, while the FCO languishes near the bottom of the league with a poor rating. The Foreign Secretary announced in a radio interview this morning that we would get “more bang for the buck”—an embarrassing approach to aid policy. It is why we are concerned and why this proposal has been criticised, including by three former Prime Ministers.
The great benefit of DfID is that it has earned a reputation for integrity and has built up trust that it will provide help and support in the areas of greatest need. We should always confront head on the suffering in our world—whether it is poverty, disease, famine or conflict—not just for sound ethical reasons but because it is in our national, as well as the global, interest to do so. We ignore such suffering at our peril: the dire consequences and greater instability that can follow can pose threats to all across the world. For aid and development to be downgraded in this way when the world is facing a global health crisis shows a deep arrogance about how best to promote British values and interests.
The Government appear to ignore the incalculable diplomatic influence of soft power and our reputation across the world. Have they given any consideration at all to the ramifications for the UK’s diplomatic programmes, as well as our developmental work? The FCO’s core diplomatic funding is already at its lowest level in 20 years, and Professor Malcolm Chalmers of RUSI has observed that consular activity and diplomacy could become increasingly underfunded sidelines. The UK’s diplomatic influence was once the envy of the international community. At a time in history when we most need to build allies, support and credibility across the world, the Government have created uncertainty about their commitment to do so.
I have a few questions on this for the noble Baroness. First, can she give a commitment that the Government will maintain diplomatic and consulate funding at at least present levels after the takeover? Secondly, is it true that the Secretary of State for International Development was not involved in the decision-making process and was told of the announcement only on the day it was made? Thirdly, will the Cabinet retain a Minister with overall responsibility for international aid? Fourthly, what reassurance can she give the staff at DfID? Can she confirm that the Permanent Secretary has told staff that he cannot guarantee the jobs of the 200 EU nationals currently employed? Fifthly, can she guarantee that the Government will not seek to change OECD rules on what is classified as aid, nor amend the 2002 legislation in a way contrary to those rules? Finally, DfID has a well-established global network and core development expertise. The dilution of these stakeholder-focused skills within the FCO will be a cause for concern. Therefore, what guarantees can the noble Baroness give that that essential work will continue at the same high standard that we see now?
We have had many debates in this House about Britain’s place in the world. We take enormous pride in wanting the UK to take an international lead as a force for good. With this decision, and the explanation of the rationale behind it, the Prime Minister has just made achieving that ambition so much harder.
Lord Newby (LD)
My Lords, I am grateful to the noble Baroness the Leader of the House for answering questions on the Statement. To me, the Statement raises three principal questions. First, why is this change happening at all? Secondly, why is it happening now? Thirdly, is it a good idea?
On the first point, the Statement and the Prime Minister’s comments on Tuesday make it very clear why this move is being made. First, he and many in the Conservative Party believe that DfID has simply too much money, or, as the Prime Minister disparagingly put it, that it acts like a “giant cashpoint in the sky”. He also believes that it spends it badly, as the disgraceful and wilfully inaccurate anti-DfID briefings put out by the Government and faithfully repeated in some of yesterday’s newspapers made clear.
Secondly, the Prime Minister wants to use the money for something other than DfID’s core aims of extreme poverty reduction and the fight against disease. He says in the Statement:
“We give ten times as much aid to Tanzania as we do to the six countries of the Western Balkans, who are acutely vulnerable to Russian meddling”,
with the clear implication that this was the wrong set of priorities. Yet income per head in Tanzania is under $4,000 while that in Montenegro, one of the six west Balkan countries, is $22,000—over five times as much. Even the poorest western Balkan country, Kosovo, is more than three times as prosperous as Tanzania.
If you are worried about poverty, the current priorities make absolute sense, but they make no sense at all if you want the money to gain diplomatic leverage against Russia. This may well be desirable, but it is not what DfID was established for and it is not what development aid should be used for. From now on, poverty and disease are not to be the hallmarks of our development policy. The priorities are to be—I quote from the Prime Minister’s letter to parliamentarians on Tuesday—“driven by the overarching strategy set by the National Security Council.” What expertise does the National Security Council have in poverty reduction and combating disease, and will it now be strengthened to include people who do have such expertise?
Why is this move being made now? As Justine Greening pointed out, the Government should be concentrating their efforts on fighting coronavirus rather than tinkering with departmental boundaries. It is not as though the Government are making such a good fist of dealing with coronavirus that they have extra capacity on their hands and are looking for other things to do. There are other big problems as well, not least Brexit, where things are not exactly going swimmingly. Indeed, cynics have argued that the only reason the decision has been announced now is to throw some red meat to the Government’s critics on their own Back Benches regarding their handling of the coronavirus crisis. If that is not the reason, what is it? Perhaps the noble Baroness can tell us.
Finally, is the abolition of DfID and the refocusing of its priorities a good thing? Outside one wing of the Tory party, the move has no supporters. Three Prime Ministers, including David Cameron, have condemned it, and so too have at least three former Conservative International Development Secretaries. The Prime Minister’s claim that the decision reflects
“a massive consultation over a long period of time”
is simply belied by the fact that of the 400-plus NGOs working with DfID, none was consulted at all.
All those with experience in this field are concerned that the focus of development aid will shift away from the reduction of extreme poverty and disease. All are concerned that the transparency and accountability of the development programme will be reduced. And all are concerned that as a result, far from enhancing the concept of global Britain, this will diminish it.
The Prime Minister makes a habit of claiming that his policies and initiatives are world class when they are anything but. However, in the case of DfID, he has done the opposite. Here, we do have a world-class institution and set of policies—and he has disparaged it. But this Prime Minister has long wanted to get his hands on DfID funds to promote other foreign policy goals. He will now indeed have his hands on the money, but he is devoid of any articulated foreign policy on which to spend it. “Global Britain” seems to mean “anywhere but Europe”, but beyond that phrase, the policy is completely vacuous. The decision is, as Andrew Mitchell has said, an “extraordinary mistake” by a Prime Minister for whom extraordinary mistakes are becoming a hallmark of his tenure. The poorest will suffer most, but the Prime Minister simply does not care.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
I thank the noble Baroness and the noble Lord for their questions and comments. First, I fully endorse the tribute paid by the noble Baroness to the remarkable life of Dame Vera Lynn. I thank her for making those statements at the Dispatch Box.
Both the noble Baroness and the noble Lord asked about the timing of this announcement. While the arrangements for two separate departments were right in their time, things have changed. In particular, the coronavirus has imposed a fundamental change in the way that we operate. It has shown that a whole-of-government effort is as important abroad as it is at home. That is why we believe that the time is right to integrate diplomacy and overseas development. The merger of DfID and the FCO will unite development and diplomacy in one department, which will bring together Britain’s international effort. It is about bringing together the best of both and putting the ambition, vision and expertise of our world-leading development experts at the heart of our international policy.
The noble Baroness asked about discussions. The Prime Minister did of course discuss this merger with both Secretaries of State affected. Both the noble Baroness and the noble Lord are right that programmes funded by UK aid are consistently rated as some of the most transparent and effective in the world. It is that very expertise that will now be at the heart of the new department. I assure the noble Lord that our commitment to the world’s poorest remains as strong as ever. Tackling extreme poverty around the world remains a government priority and we believe that bringing these two departments together will enable us to use all our levers in a comprehensive approach to achieve that goal. Reducing poverty remains central to the new department’s mission.
The noble Baroness and the noble Lord talked about the broader context of foreign and international policy; I refer to the review that is being undertaken of our foreign, defence and development policy. This merger of the two departments—and it is a merger—is within the context of that review, which will define the Government’s ambition for the UK’s role within the world, and its outcomes, which will shape the objectives of the new department. The review will establish the strategic aims for our national security and foreign policy, determining the capabilities and structural reforms needed and how we will work with international partners and organisations to promote the UK’s interests around the world. Both this review and the merger are evidence of the Prime Minister’s commitment to a unified British foreign policy as we go forward.
The noble Baroness rightly asked about staff. There will be no compulsory redundancies, although some roles and responsibilities will change. Staff will be worked with very closely throughout this process and full details, including the structure of the department, will be set out in due course. As I have repeatedly stressed, we want this merger to bring out the best of what we do in aid and diplomacy, and we believe it will also create new work and travel opportunities for staff. The majority of DfID and FCO staff working overseas are already collocated and work together very closely. This will build on work that is ongoing. I can confirm to the noble Baroness that we will continue to spend ODA money according to legal requirements and continue to abide by the OECD and DAC rules for aid.
Lord Jay of Ewelme (CB) [V]
My Lords, I am glad that the Prime Minister paid tribute to the staff of DfID in his Statement; that was well deserved. Of course, foreign policy and aid, and FCO and DfID staff at home and abroad, need to be closely aligned, but a merger between the FCO and DfID is somewhere between a distraction and a mistake. Does the Leader of the House agree that Britain’s influence in the world is greatly enhanced by an aid programme focused on the world’s poorest countries and the poorest people within them? Will she confirm that the long-term focus of aid on those countries, and on the people who really need help, will continue?
Baroness Evans of Bowes Park
I hope that my answer to the question of the noble Lord, Lord Newby, provided that reassurance. As I said, our commitment to helping the world’s poorest remains as strong as ever, and we believe that by merging these two departments, and using the fantastic expertise that the noble Lord, Lord Jay, rightly pointed out, we will enhance our ability to do that, not diminish it.
The Lord Bishop of Peterborough [V]
My Lords, I thank the Leader of the House for answering questions on this matter. On these Benches, we affirm the Government’s right to organise themselves as they think best for the common good. We look forward to greater integration between foreign and development policy and values, and we warmly commend the continued 0.7% commitment. I am grateful to have heard the noble Baroness’s assurance that the Government will remain committed to the OECD DAC rules—it would be lovely to have that repeated. Can we have another assurance that the Government will preserve the primary focus of UK aid as poverty reduction?
Baroness Evans of Bowes Park
My Lords, I am happy to confirm that we will continue to abide by the OECD DAC rules for aid, and I have said a couple of times now that tackling poverty remains as important to us as ever. We also believe that the bringing together of the expertise in both departments will mean that we can achieve more. Having quality staff from DfID and the FCO come together, with a coherent vision of a global Britain, and joined-up approaches to countries and issues, will mean that we will be able to play our leading role—as, for instance, the Gavi summit that took place only a week or so ago showed. We can bring these aims together and make a real difference.
Lord Boateng (Lab) [V]
My Lords, disease and instability on a global scale are the greatest threat to our country’s security. Can the noble Baroness confirm that in this relocation of roles and responsibilities, as she put it, there will be no reduction in the overall headcount of development-related staff deployed overseas, or those in crucial functions in London and Scotland, who are focused on reducing poverty and global disease, and on promoting safety and security, rather than instability? That has been the focus of so much of DfID’s work. It is different and distinct from diplomacy. Will that distinction be maintained and respected, and will the headcount be kept up?
Baroness Evans of Bowes Park
I said in answer to the noble Baroness that there will be no compulsory redundancies, although some roles and responsibilities will change. There are certainly no plans to close the DfID office in Scotland, where staff play a vital role in ensuring that UK aid delivers results for the world’s poorest. The opportunity to work at Abercrombie House in East Kilbride will be open to staff from across the reconfigured department. We will be working closely with staff as the programme goes ahead and the two departments merge, to ensure that we get the best out of the fantastic people who work in both departments.
Baroness Sheehan (LD) [V]
My Lords, DfID is held in high regard, in large part due to its openness and accountability—the result of a carefully constructed governance structure, at the heart of which sits the International Development Committee and ICAI. Will the Leader, in Cabinet, argue to retain that crucial oversight of how 0.7% of taxpayers’ money is spent, especially when it comes to the prioritisation process currently under way? Otherwise, this is nothing more than a cynical move by a man who knows the price of everything and the value of nothing.
Baroness Evans of Bowes Park
As I said in a previous answer, I am very happy to say on the record, again, that we absolutely recognise that programmes funded by UK aid are consistently rated as some of the most transparent and effective in the world, and we want to bring that expertise to the heart of the new department. We remain of course absolutely committed to full transparency in our aid spending, and there will continue to be independent and parliamentary scrutiny of the aid budget.
Baroness Jenkin of Kennington (Con) [V]
My Lords, the British taxpayer is less likely to be concerned with which department spends their hard-earned money on humanitarian work and alleviating poverty than they are with ensuring that the money is spent wisely. To that end, with the planned abolition of the Select Committee and its important oversight role, the scrutinising work of the Independent Commission for Aid Impact, ICAI, will be more crucial than ever. Can my noble friend confirm that ICAI’s work ensuring that aid is spent effectively and delivers value will continue, or possibly even be enhanced?
Baroness Evans of Bowes Park
As I said in response to the noble Baroness, Lady Sheehan, we remain committed to transparency and we will continue parliamentary and independent scrutiny of the aid budget. The form that this takes following the merger will be set out in due course.
Lord Kerr of Kinlochard (CB) [V]
I worked for Judith Hart and with Clare Short, and I admired the work of Andrew Mitchell. What made them great Development Secretaries was not just the independence of the ministries, but their passion for development and the support they got from No 10. I am not reassured by the Prime Minister’s continuing to parrot the false dichotomy of national interest versus helping the poorest. It is poverty abroad that breeds disease, disorder, migration and terrorism. The noble Baroness assures us that the fact that the Statement made no reference to the primacy of the poverty criterion is not sinister. I hope she is right. Will she please disassociate herself from the totally unworthy slur on a professional department of calling it a great cashpoint in the sky?
Baroness Evans of Bowes Park
I have very happily talked on record several times already during this Statement about the fantastic work of the department and the fact that we want this to be at the centre of the new Foreign, Commonwealth and Development Office. Foreign and development policy will be fully integrated in Ministers’ portfolios in the new department, and we want to bring the best of overseas development and diplomacy together, to make sure that we have a coherent and strong international strategy that means we can play our part in the world in the way that we want to, and show leadership, as we have done in so many areas already.
Baroness Goudie (Lab) [V]
My Lords, I very much regret the subordination of international aid to the United Kingdom’s foreign policy considerations, for all the reasons that have been given by former Prime Ministers and many others. I would like an undertaking from the Leader on poverty, girls’ education and dealing with peacekeeping on the ground, which was done by DfID previously. Why was this done ahead of the full review? We had an earlier undertaking that the reviews of the Ministry of Defence, the Foreign Office and DfID would be done together. Why, in particular, was this done early, with no contact with the staff? Staff did not know until some of us knew.
Baroness Evans of Bowes Park
I set out in my opening comments why this is happening now. I talked about the challenges of the pandemic and the way that that has shaped our view that these things need to be brought together internationally. I can certainly reassure the noble Baroness that girls’ education will remain a priority. I also point out that we are currently one of the few OECD donors that still has a separate development ministry. Other countries, such as Canada, Australia and New Zealand, have merged their functions effectively, and we will look to learn from them. We are extremely lucky to have a very high-quality Foreign Office and Department for International Development, which we can bring together to ensure that our expertise remains unparalleled in all areas.
Baroness Ludford (LD)
My Lords, I will follow up the comments from my noble friend Lord Newby. Why do the Government seem to regard support to countries such as Ukraine and those in the western Balkans as an alternative to support for the poorest countries in Africa? The UK currently supports those EU-aspirant countries through its own funding programmes, so all the UK will be doing is spending some of the much-vaunted so-called savings on EU contributions in a less efficient way. There is no need to deprive Zambia and Tanzania to do it. If we are to continue to operate under the OECD DAC rules, as the Government pledge, can the Minister explain what we are prevented from doing at the moment that this move will allow the UK Government to do?
Baroness Evans of Bowes Park
My Lords, as I have said repeatedly, our view is that bringing diplomacy and international development together makes sense in our new complex global world. For instance, to protect ourselves against another pandemic, the UK will have to work alongside our friends to strengthen international bodies like the WHO, and help vulnerable countries come together to improve their health systems and achieve greater resilience. Therefore, it does not make sense to have a dichotomy and say that the two should be separate in our complex international world, with the challenges that we face.
Baroness Falkner of Margravine (Non-Afl) [V]
My Lords, we are entering a period of much harsher international relations. That is what Sir John Sawers told us on the “Today” programme this morning, and I agree. I can see the argument for a more strategic approach to our international relations in the round—although I am slightly sceptical about the timing of this announcement—but since the noble Baroness has mentioned Australia, Canada, New Zealand and other allies, all of which have their international trade departments as well as international development within the ambit of their foreign services, I ask why we are not doing that. Can she say a little more about the part of the Prime Minister’s Statement where he says that the Government will align international trade with the Foreign Office?
Baroness Evans of Bowes Park
The decision that has been made in this announcement is obviously about those two departments, but we believe that we need single cross-government strategies on the ground in each country headed up by the ambassador or high commissioner. Trade envoys will work within that, so there will be very close working between DIT and the new department. We feel that this is the right move at this point.
Baroness Pidding (Con) [V]
My Lords, I welcome the Government’s decision. Can my noble friend the Leader of the House reassure us that this will enhance not only our ability to drive the UK’s interests globally but also our ability to help protect the most vulnerable around the world? Next year, Britain takes the presidency of the G7 and hosts the UN Climate Change Conference. Does she agree that this is an opportunity to play a leading role in international bodies such as the World Health Organization and the World Trade Organization?
Baroness Evans of Bowes Park
I entirely agree with my noble friend. She is absolutely right that next year we take on the presidency of the G7; we also have the delayed COP 26. This is an ideal time for us to lead the world in so many ways, building on the great work that we do already. We believe that this merger—this bringing together of the two departments—will help us to continue to be the world leaders that we all want to be.
Lord Alton of Liverpool (CB) [V]
My Lords, there is a case to be made for a better alignment of diplomacy and development and the empowerment of UK ambassadors. However, would not good governance suggest that we should have heard that case put to the Government’s own major integrated review of foreign policy, defence and development that people have mentioned, rather than pre-empting the review and its conclusions? Given that the size of the ODA cake will inevitably shrink as GNI shrinks, what new measures will be put in place to at least ensure that fraudulent and corrupt misuse of ODA is combated more effectively in the future?
Baroness Evans of Bowes Park
The noble Lord is absolutely right. We need to focus on corruption and will continue to do that. As I said, for a variety of reasons we believe that the time is now right for this merger of the departments to take place. He is also right to point out that it needs to be seen in the context of our ongoing broader integrated review, which will help to shape the priorities and focus of the department and our overall international policy.
Lord Liddle (Lab)
Does not the very fact that the Prime Minister made such a point of mentioning Ukraine and the western Balkans in his Statement demonstrate that the Government intend to deprioritise poverty relief as one of their overseas aid objectives? Does not the noble Baroness feel a sense of regret, perhaps even a sense of shame, that this Government are tearing up a political consensus that has lasted for 23 years and has seen the level of overseas aid spent on poverty rise from 0.23% of GDP in 1997 to 0.7% today? Does she not accept that this measure tears up that consensus? Finally, is this not just a demonstration of how the Conservative Party is rapidly becoming the party of populist English nationalism?
Baroness Evans of Bowes Park
I am afraid that I disagree completely with the noble Lord. I am happy to put on record once again that the work of UK aid to reduce poverty will remain central in the new department’s mission. We are incredibly proud of the work we have done. Since 2015 we have supported more than 51.8 million people in accessing clean water or better sanitation; we have supported 14.3 million children, including nearly 6 million girls, in gaining a decent education; we have committed £3.1 billion in response to the Syrian crisis; and we have committed £970 million to the humanitarian crisis. In June, we hosted the extremely successful Gavi summit, raising $8.8 billion for Gavi to immunise 300 million more children. This is work that we are all incredibly proud of. This is work that the UK is a leader on. This is work that we will continue and which we believe can be enhanced by taking this action.
Lord Bowness (Con) [V]
The Statement says that the current crisis
“offers vivid proof of the seminal importance of international engagement and exactly why our country must perform its global role.”
Yet in the other place on Tuesday, in a debate on UK-EU negotiations, my right honourable friend Mr Gove stated that any settlement with the EU must reflect our “regained sovereignty” and “independence”. Since all engagements or agreements involve some sharing of sovereignty, does my noble friend see any contradictions in those aspirations?
The departmental changes are due to come into effect on 1 September. Is it wise to have a major change at a time when the EU negotiations remain unresolved and before the crack unit of Taskforce Europe, which is drawn from across our resources in government, returns to its respective departments? Are we not in danger of getting a brand-new, glitzy front door while at the same time leaving the back door unattended, giving short-cut access to our close friends and neighbours?
Baroness Evans of Bowes Park
I am afraid that I disagree with my noble friend. He is absolutely right that the merger will take place in September. The work to implement it is being led by a team in the Cabinet Office, working closely with teams from the FCO and DfID. That work is being overseen by the Cabinet Secretary, who reports to the Prime Minister, so it can go on at this time. We believe that it will enhance our ability to play a leading role in the global world.
Lord Campbell-Savours (Lab) [V]
As part of the shadow ministerial team in the 1990s behind the policy of ODA/Foreign Office separation, and having heard the questions up to now, I say to the Minister, in summary, that this decision will kill DfID morale; it will distort DfID’s current poverty alleviation priorities; it will leak resources from development into other Foreign Office activities; and it will downgrade the roles played and positions held by DfID officials. It was precisely to deal with those problems that Labour set up DfID under Clare Short as a separate department in the 1990s. Is this not the third time that the Conservatives have wound up the department? They did so in 1970 under Ted Heath, in 1979 under Thatcher and now in 2020 under Johnson. It is madness, and it is the work of development aid bigots.
Baroness Evans of Bowes Park
Obviously, I fully respect the work that the noble Lord has done and he is, as ever, entitled to his views. I am afraid that I cannot agree with him and certainly do not accept being called a development bigot. As I have said, we believe that this is the right move at the right time. We want to take the best of the departments, both of which are a credit to our Civil Service, and bring them together to enhance the work that they do. We believe that this will be a positive, strong move. We will be involving staff in this decision and making sure that this department is at the vanguard of our international policy efforts.
Arrangement of Business
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
My Lords, we now come to questions on the Statement on the United Kingdom and European Union negotiations. For Members participating remotely, microphones will unmute shortly before they are to speak—please accept any on-screen prompt to unmute. Our normal courtesies in debate still apply in this new hybrid way of working.
UK-EU Negotiations
(4 years, 6 months ago)
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Baroness Hayter of Kentish Town (Lab) [V]
My Lords, we should welcome this rare ministerial Statement —indeed, the first since negotiations began—but while I am delighted, of course, to see the Minister, I am surprised that following the PM’s first direct talks with EU leaders since we left the EU, he did not report to the Commons on these, instead choosing to announce the merger of two Whitehall departments.
The Statement before us rehearses old arguments while being shamefully lacking in detail, with more on process than on content. The Statement quotes the WTO director-general as saying that a deal can be reached in a timely way
“if the political will is there”.
It is a shame that it does not give the full quote, in which the director-general suggests that a no-deal Brexit risks extra trouble for the UK during a recession that could be as deep as the great depression. What Roberto Azevêdo actually said was:
“In these circumstances, the less disruption the better, the less turbulence the better. The less turbulence is the closest to where you were before … if you can maintain the degree of integration and relationship that you had before Brexit, it is a less traumatic situation, of course, than if you have to go to WTO terms”,
which would require adjustments that “can be painful”. He said that
“in my view the less changes the better.”
Can the Minister confirm whether Mr Gove had actually read the whole quote before selecting a small part to repeat? Can he also confirm, for all the bluster about not accepting any ECJ role, that trading on WTO terms means answering to its appellate body?
Our concern is with what deal will emerge from the talks. We want the Government to achieve their manifesto promise: no tariffs, fees, charges or quantitative restrictions, across all sectors. Can the Minister indicate whether that is still the aim and whether he judges it to be achievable? Even a free trade agreement means that we will move from a highly integrated relationship with the EU to one in which trading becomes significantly more difficult. More worrying is the Government’s assertion that they would be content with an Australia-type deal, completely ignoring the fact that Australia does not have a deal with Brussels, so that must be code for no deal.
Tony Barber suggests in the FT that Ministers are trying to disguise the seriousness of no deal by playing on some positive image of Australia as a prosperous, easy-going country, while an FT editorial opines that even
“a bad … trade deal is better than no deal”
—although any deal struck before December will be so modest as to fall short of the comprehensive accord for which the Government had originally aimed.
Some things are urgent whatever is agreed, such as in manufacturing or food, where the trade associations call for special rules to maximise commerce between the UK and the EU. Similarly, mutual recognition of professional qualifications and rules of origin needs sorting urgently.
It is no good relying on advertising. We have just learned of a £4.5 million “shock and awe” advertising campaign to spur businesses to prepare for the end of the transition. Businesses cannot prepare for the unknown. An advertising blitz without substance is yet more money down the drain—perhaps even worse than on the side of a plane. Until they know what tariffs, rules of origin declarations, certificates and checks are needed, how the new borders will work or even where they will be, businesses simply cannot prepare. The reality is that a hard border for physical goods, involving customs duties and checks, probably cannot be introduced by the end of December—hence the six-month leeway the Government have announced, but without any sense of clarity.
Nowhere is this uncertainty more harmful than over Northern Ireland. Can the Minister tell the House what talks are taking place with Northern Ireland businesses and others trading across the Irish Sea?
Finally, the Department for International Trade established a Strategic Trade Advisory Group with trade unions, consumer bodies and trade organisations for other trade negotiations. Even at this late stage, could the Government involve these groups now as we enter the new, intense round of EU negotiations?
Baroness Ludford (LD)
My Lords, I thank the Minister for this opportunity to question him on the Statement. The Prime Minister wants a “tiger in the tank” Brexit, which is no doubt better than a no-deal dog’s dinner Brexit, but was described by European Council President Charles Michel as a “pig in a poke”. Given farmers’ fears that they are going to be sold down the Swanee, the use of so many animal metaphors is interesting.
The alarm in the farming community and among consumers ought to cause retreat from the gung-ho, “let them eat chlorinated chicken” approach to the prospect of a US trade deal, which requires the sacrifice of our current EU standards of food safety, environmental protection and animal welfare. Worryingly, however, the Government are reported to want to enforce this by undermining the EU system of protection of specialist local foods—Cornish pasties, Melton Mowbray pork pies and so on—known as geographical indications, presumably to keep the US happy. There is obviously a tussle going on in government about food standards and protections. Can the Minister tell us the exact current state of play?
It is worth noting that Mr Gove used the term “comprehensive” about the deal sought. That, at least, is part-way to the notion in the political declaration, which was “ambitious” and “comprehensive”, and seems to improve on the stance adopted since February of minimalist objectives for a skinny deal. Is there a dawning recognition, even in No. 10, that unless it makes more of an effort there could be no deal, which in a reverse of previous insouciance it now wants to avoid? Also, perhaps it realises that a comprehensive deal is actually easier to negotiate, because it gives room for mutually acceptable trade-offs.
The EU is preoccupied with Covid and its proposed recovery plan. The UK economy shrunk by 20% in April and will be in no condition whatever to cope with a no-deal shock to business and jobs at the end of the year. It finally seems to have begun to scare No. 10 that the potential disruption—to manufacturing supply chains in areas such as cars and aerospace, to produce supply chains in medicines and food, or to Northern Ireland in particular—might make it somewhat unpopular, on top of its bad ratings, not least from Tory MPs and voters, for its handling of the Covid pandemic.
I think it has begun belatedly to realise that the public is unnerved by buccaneering in government, which is why we have seen in the last few days—coinciding intriguingly with the Brexit summit—a series of dead cat distractions such as the abolition of DfID, a new royal yacht and a union jack plane. I love cats, so I somewhat regret that popular phrase. It seems to be trying to disguise a preparedness to make concessions and compromises in the talks with the EU to maintain suitable British access to its market and programmes. Can the Minister comfort me and confirm that this is the case?
All things are relative in Brexit, since nothing can be as good as EU membership—but with that caveat I welcome what I perceive as a shift. Maybe the Government will even realise that if the “sunlit uplands” of Brexit are so great, the fact that a shock and awe media campaign is needed to prepare for it will strike British citizens as pretty odd.
David Frost told our EU Committee:
“As a policy decision, the Government’s view is that the benefits of having regulatory control … outweigh the cost”.
Has this Government’s obsession with sovereignty led them to forget Mrs Thatcher’s understanding, which she enunciated 45 years ago, of the necessity
“to pool significant areas of sovereignty so as to create more effective political units”?
This insight is also true of effectiveness in fighting crime. It would be bizarre if a Government from a party that lauds itself for upholding law and order refused to guarantee continuity in upholding European values of data protection and human rights in order to ensure access to EU crime-fighting databases and effective extradition.
In conclusion, I hope the Minister can give me some hope that developments this week mean that the Government recognise the need to ditch the symbolism of an empty kind of independence in favour of meaningful access to EU markets for British businesses, including farmers, and solidarity with the EU in upholding European values.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I thank both noble Baronesses for their remarks. I was very grateful for the positive tone from the noble Baroness, Lady Ludford. I will start with that first. I do not think that it is correct to characterise what is happening as a change. The British Government have been consistent in their policy and in the statement of that policy that we wish to achieve a free trade agreement and the other things in the suite of agreements we are looking at. That is the desirable goal.
As the Prime Minister said in his statement at the high-level meeting, a preferential trade agreement is desirable and achievable, but it is not essential for either side. We would like to have a deal, but we are prepared for any eventuality. Our position is, as the noble Baroness will know, that the United Kingdom Government are asking for very little—indeed, virtually nothing—that is not precedented in agreements that the European Union has struck with others. Everyone in the Government wishes to go forward with good relations with our partners in the European Union in every way. It is symbolic to have the President of France here in London today, attesting to the deep affection and friendship between our two countries, which will continue irrespective of institutional outcomes.
Both noble Baronesses were a little bit critical of the Prime Minister making a Statement on the reform of Whitehall to improve Britain’s capability to assist people abroad—our friends abroad and those in need. It is perfectly apposite for the Prime Minister to make a Statement on such an important reorganisation—indeed, it must be for the Prime Minister to make such a Statement.
The noble Baroness, Lady Hayter, spoke about there being a lot in the Statement about process, not explicit content. I understand that it is sometimes testing to noble Lords’ patience—indeed, sometimes it is testing to the patience of those of us inside government—that the very fact that this is a negotiation means that one cannot track every tick and comma of a delicate arrangement. Indeed, it is important that the confidentiality and integrity of the process be protected to secure the positive outcome that we want.
Yes, the Statement is more about process than specific content, but process is important. The Statement refers to an acceleration of the process, which I would think would be welcomed by noble Lords opposite me and those on this side of the House. An earnest commitment to try to reach agreement in five successive rounds has been announced; that change of pace is important and should be welcomed. If we cannot reach agreement, it is better that we know that early on, rather than have a prolonged, and potentially bad-tempered, negotiation into the autumn. I welcome the fact that both sides have agreed to this new process; that is important.
The noble Baroness, Lady Hayter, talked about no deal, and was scathing about the Government’s reference to an Australia-style deal. Australia has a range of arrangements with the European Union. I repeat that no deal is not really on the agenda now. We are out of the European Union, and we are negotiating the best possible outcome for trading and other arrangements, for us both. But whatever happens at the end, we will subsist outside the European Union, on the basis of the treaty passed by this Parliament.
Both noble Baronesses rightly referred to the importance of agriculture and agricultural products. I can certainly reassure them that, as has been made clear, the interests and the position of the agricultural industry and the treatment of agri-foods are constantly being considered.
There was criticism of the advertising programme proposed by the Government. This is one of those cases at the Dispatch Box where one feels damned if you do and damned if you do not. Most of the time, I come here to try to assist your Lordships, and am criticised about people being left in the dark about what is proposed. Then, when the Government say that they wish to set up an intensive process of information for industry, relevant to the proposed border arrangements—the programme which will be going forward over the next few months—I am told that this is ridiculous and that we cannot spend taxpayers’ money on an advertising programme.
The parties opposite need to decide whether they wish business and people to be informed, or to complain that they are left perpetually in the dark. We want to treat all interests in this nation as partners in this exercise. That includes business, those dealing with the transit of goods and the border, and the devolved Administrations. In the judgment of the Government, it is important that we keep people informed.
The noble Baroness, Lady Hayter, also referred to the border phasing arrangements. In the light of the Covid-19 situation, it was generally agreed, and welcomed as a sensible proposal, that the system should be phased in during the first six months of next year.
Both noble Baronesses referred to Northern Ireland. Of course, it remains our position that there will be unfettered access for Northern Ireland goods to the United Kingdom. The noble Baroness, Lady Hayter, rightly said it was particularly important that Northern Ireland business be engaged and consulted. There is a specific business engagement forum dealing with that process, and there is internal and external dialogue—never in this life does one suffer from lack of dialogue.
The noble Baroness, Lady Ludford, asked about data protection. There are of course negotiations in that specific area, and I recently wrote to her noble friend Lord Wallace of Saltaire about the nature of those negotiations. We hope that there is some evidence of a convergence of opinion between the UK and the EU. I refer her to the letter which I sent, but I cannot go into the specifics of negotiations.
Security of course is important, but it does not have to be part of an overall specific architecture. I refer again to the very welcome visit of the President of France today, which recalled the intensely moving relationship between our countries during some of the gravest days of this great continent in the last century. No one who witnessed the evocation of the events of the past that the events of today referred to could have any doubt that we will always be good partners in good faith to our close allies and friends. So there are issues, as noble Lords know, but I hope very much that we will be able to have a good relationship, whatever form that takes in the future.
I hope that I have answered most of the questions. I do not think that I have to deny being a buccaneer—I am a bit too corpulent to be a very good buccaneer. The Government are not approaching the matter in a buccaneering fashion. This is an extremely important process, but it is also, above all things, a process of delivering the undertaking that we have given to the British people to deliver a United Kingdom that is an independent state at the end of this year. That remains our fundamental position, and it does not change—whatever the noble Baroness, Lady Ludford, may seek to divine.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
My Lords, we now come to the 20 minutes allotted for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.
Viscount Waverley (CB) [V]
I wish the Government well in delivering a far-ranging, successful set of negotiations that will serve all sides in the long term. It is to be hoped that an eye is being kept in parallel during these complex negotiations on the central necessity of broad relationship-building with civil society, the Commission and the capitals of the 27. If that is the case, will the Minister offer the House specific examples of programmes that are being and will be implemented to ensure that a deep and special relationship will be the outcome, whereby both sides are mutually satisfied?
Lord True
My Lords, I will preface my answer by saying that some noble Lords will have seen the name of my noble friend Lord Forsyth on the speakers’ list. It is not that he has not turned up; he suffered a close family bereavement, and I know that all noble Lords who may be asking themselves why he is not here will understand that.
The noble Viscount’s question was framed in a manner about the cultural, social and instinctive links that the United Kingdom has with other European nations. Some of those have been institutional links of different sorts, while others have been links that are not in any sense political. I am personally committed, as are the Government, to maintaining the closest possible cultural and societal links between the nations of Europe. The question is what institutions are required to secure that. I submit that the European Union is not one of them; other institutions and arrangements are currently still under consideration.
The Earl of Kinnoull (Non-Afl) [V]
My Lords, Michel Barnier, in his remarks following the fourth round of negotiations, said that the full legal text of the future relationship was needed by 31 October for planning and ratification reasons. There is no mention of these constraints in the Statement. Does the Minister agree with Monsieur Barnier’s analysis? If not, what is the date by which a full legal text is needed?
Lord True
My Lords, I shall not go into specific dates regarding the text. We have published texts at appropriate stages of the negotiations. We have said—and the Prime Minister said again at the high-level meeting—that October is too late for us to get serious. If I remember, those were his words. I think that the intensification in the negotiations will help us to answer the noble Earl’s question and others.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
The noble Lord, Lord Young of Norwood Green, is not with us, so I now call the noble Lord, Lord Wallace of Saltaire.
Lord Wallace of Saltaire (LD) [V]
My Lords, Ministers have frequently referred to the Canadian or Australian models as “oven-ready” recipes for a deal. Can the Minister therefore confirm that our negotiators are including arrangements for the provisional application of such a mixed-competence agreement while we wait for national ratification? The Canadian FTA was signed in 2016 but ratification is not yet complete. Does he understand what the Prime Minister means by the Australian model? The Australian Government website tells me that the seventh round of negotiations on a potential agreement took place last month.
Lord True
My Lords, I am not good at figures but I think that the Australian Government have about 29 different arrangements with the European Union. With regard to the phrase “oven ready”, I am afraid that I like cooking—something that I have enjoyed particularly during the lockdown. Turning to the central core of the noble Lord’s question, the Government are preparing for every eventuality. There is an intense amount of planning on a wide range of fronts, and I assure him that that process is continuing.
Lord Howard of Rising (Con) [V]
My Lords, I am glad to see that my right honourable friend the Chancellor of the Duchy of Lancaster in the other place said in his Statement that our new relationship with the EU
“must fully reflect our regained sovereignty, independence and autonomy”.—[Official Report, Commons, 16/6/20; col. 685.]
Will the Minister confirm that unnecessary compromises will not be made by Her Majesty’s Government and that they will not be deluded into thinking that, because the EU has moved from a totally unreasonable position to a half-unreasonable position, it is a fair compromise? Going half way is no sensible compromise if you start from a completely idiotic position.
Lord True
My Lords, I can give my noble friend some assurance. The EU has begun to show some recognition, including of some of the United Kingdom’s positions. The Prime Minister stated at the high-level meeting—I believe that I have his words this time—“I have to be clear that I will never agree to a treaty in which we accept new constraints from the EU on our ability to set our own rules in our own way. The British Parliament and people are the best and strongest guarantees of our standards.” I can also assure my noble friend that the Prime Minister again made it clear that there can be no role for the Court of Justice in any part of any agreement between us.
Baroness Coussins (CB) [V]
My Lords, has there yet been any agreement in the negotiations on the UK’s access to the various multilingual European databases? They are used many millions of times a year by our police to tackle transnational crime coming into the UK, such as the trafficking of arms, drugs and people. If there is no agreement, what specific contingency plans exist so that tackling this type of crime will not be undermined at the end of the transition period?
Lord True
My Lords, consideration on security matters is obviously ongoing. The safety and security of our citizens is the Government’s top priority. We obviously hope for a negotiated outcome in every area and have had constructive exchanges with the EU on future co-operation in this area. I do not believe that there is a reason to think that such an agreement should be beyond us.
Lord Howarth of Newport (Lab) [V]
My Lords, does the Minister agree that the fact that we are negotiating free trade agreements in parallel with the USA and Japan is serving to concentrate the minds of EU negotiators, who are beginning to show more pragmatism. Will not this process of parallel negotiations strengthen our ability to achieve satisfactory environmental and animal welfare standards in all our free trade agreements?
Lord True
My Lords, as he often does, the noble Lord has made a cogent and powerful point. The United Kingdom Government are obviously negotiating in good faith for a free trade agreement across the board on merit because we believe that free trade is of the greatest possible benefit in improving conditions for people across the world. Of course, if the different parties with whom we are negotiating wish to make cross-calculations, that is entirely a matter for them. However, I can certainly assure the noble Lord—the Prime Minister has been absolutely explicit on this—that our commitment to environmental standards and to standards generally will not be weakened by any of the negotiations that we are undertaking.
Baroness Smith of Newnham (LD) [V]
My Lords, in his Statement, the Chancellor of the Duchy of Lancaster indicated that we all need to be both clear-eyed and constructive in our negotiations on the future relationship. He also indicated that the Government would manage the adjustment after the transition period in a flexible way. Could the Minister give the House one example of how the Government propose to be constructive and where he envisages that they may be flexible?
Lord True
On implementation, the announcement we have made about the phasing in of import controls and border arrangements is, I would say, profoundly pragmatic. The very fact that we are intensifying the pace of the negotiation, which has faced serious obstacles so far—and those obstacles remain—is an indication of our good intentions. As to how the negotiations might proceed, it is above my pay grade to be a prophet on those matters.
Baroness Hooper (Con) [V]
My Lords, my question is very specific. Gibraltar is the only one of our overseas territories in Europe, and with a border in Europe. Can my noble friend reassure us that in the current negotiations, the people of Gibraltar have not been forgotten and are being safeguarded? We all know that a hard Brexit would be a disaster for them. Gibraltar is already suffering, undeservedly, from the Government’s quarantine restrictions, in spite of having been very successful in controlling the spread of the virus, with no recorded deaths—so it is really low-risk. Since the Statement mentions the Government’s welcome support and concern for United Kingdom nationals living in the European Union, where does that leave the people of Gibraltar? I declare my interests as vice-chairman of the All-Party Parliamentary Group for Gibraltar and as honorary president of the Friends of Gibraltar.
Baroness Andrews (Lab) [V]
My Lords, my noble friend Lady Hayter has laid out the risks facing this country from no deal. Despite all the Prime Minister’s clichés, it is clear from the Statement’s tone and lack of substance that we are nowhere near resolving the fundamental issues necessary for a good deal, and it was clear in the Minister’s tone that he has suggested that he would accept that. The Prime Minister is still arguing that an extension is not in the national interest, so can the Minister explain how the national interest would be better served by a no-deal exit, because that is increasingly the most likely and the most dangerous outcome for the country?
Lord True
My Lords, I simply do not agree with the characterisation of no deal—in any case, we left the European Union with a deal on 31 January 2020; we are now in a transition period. I greatly respect the noble Baroness and understand the point that she is trying to make, but uncertainty is the worst enemy of business. I point to what was said last week by Dame Carolyn Fairbairn of the CBI, who was not exactly canvassing shoulder to shoulder with me in the Brexit campaign:
“Business does not have any interest in delaying that”—
that is, the transition—
“because that is uncertainty magnified … we have supported the Government’s timetable and most businesses—not all, but most—still recognise the value of getting to a conclusion.”
That is the voice of business, from someone who was very much on the other side of the argument before the referendum.
Lord Oates (LD)
Did the Minister have a chance to listen to Stephen Kelly of Manufacturing Northern Ireland when he said on the BBC this morning:
“Our firms do not have the money; they have very little time, and they don’t have any of the information required in order to prepare for what happens next year”?
Will the Government heed what Northern Ireland businesses are saying and start working with them now on the technical detail, which the Business Engagement Forum is not covering and which businesses urgently need if they are to be ready for an end to transition?
Lord True
I did not hear the comments to which the noble Lord refers—that is not because I am under some ban on listening to the “Today” programme; I gave up listening to that when I worked in No. 10 many years ago—but I agree with him that Northern Ireland business is hugely important. It is made up of many small businesses, which makes the task of keeping them informed and supporting them particularly germane. I assure him that we will step up and sustain a process of engagement there. I am sorry that the gentleman concerned felt that it had not started enough. He is not necessarily wrong now, but we will hope to prove him wrong in the weeks and months ahead. I understand the important point that the noble Lord makes.
Lord Wigley (PC) [V]
I hope that the Government succeed in coming rapidly to some conclusion, because planning for every eventuality is something that Governments can do but business, such as the aerospace industry and the motor industry in Wales and the Welsh agricultural sector in particular, cannot plan unless it has the information. Whereas getting some reasonable deal is certainly what all businesses want, leaving without one would be a total disaster. Will the Minister convey to the Prime Minister the wish of the Welsh Government and the First Minister of Wales that a meeting take place to clarify these urgent matters as soon as possible?
Lord True
My Lords, we regard the relationship with the devolved Administrations as being of great importance and we have appreciated close contact with them in the work going on. We have different views on the way forward, although, as the noble Lord will know, the Welsh people voted to leave the European Union. We are grateful for thoughtful and considered contributions from the Welsh Government and Welsh business. There have been many opportunities to discuss arrangements, both in public and in private, but I assure the noble Lord that the interests of Welsh business and particular sectors of it continue to be well understood and well addressed and are of central concern to the Government.
Lord West of Spithead (Lab) [V]
My Lords, on this auspicious day, with President Macron visiting our Prime Minister, we are forced to focus on the past impact of war and, hence, unusually, defence. What is clear is that defence links with France, a country which pulls its weight militarily, remain close; as do our bilateral defence links with countries such as Holland and Norway, plus many other European nations. Overarching all this is our commitment to NATO, the organisation which has ensured European security since 1949. Will the Minister confirm that there have been no discussions or tacit agreements to be involved in some form of EU military force, and that the UK is not being excluded from involvement in broad, pan-European defence-industrial programmes? I quite understand if he is not up to speed on these issues, and would be very happy with a briefing on Privy Council terms.
Lord True
My Lords, with all the firepower that I see behind the noble Lord, it is hard for me to deny him anything. However, I am not in a position to give him specific answers. The points that he makes about security co-operation and vital defence, which run far outside the European continent in the present, changing world, are of great importance. I will write to him on the specific issue that he raised on defence matters.
Lord Robathan (Con) [V]
Is my noble friend the Minister aware that the People’s Vote campaign has apparently resurrected itself as something called “Democracy Unleashed”? It gives away the fact that the people who now whinge about our negotiations, which I believe are going quite well, and about wanting an extension to the transition period, are the same people who did not want Brexit and who then tried to get the democratic decision of the British people reversed. Can my noble friend confirm absolutely that there will be no extension of the transition period and that we will leave, as we have said we will do, promptly?
Lord True
My Lords, I will not follow my noble friend too closely in tracing congruities between the members of various movements, although I had noticed the odd one. On a more serious response, the Government will neither accept nor seek any extension of the transition period. Parliament, including this House, has legislated for the conclusion of the transition period on 31 December 2020. The Government have no intention of presenting or supporting any legislation to change that. The transition period will end on the date suggested, and all our efforts should be bent, first, to securing good, lasting arrangements in the intervening period, and, secondly, to ensuring that everything is prepared for things to go smoothly in any eventuality that occurs on 31 December. I can give my noble friend that guarantee: 31 December is in law and it will stay in law.
Divorce, Dissolution and Separation Bill [HL]
Thursday 18th June 2020
(4 years, 6 months ago)
Lords ChamberRead Full debate Divorce, Dissolution and Separation Act 2020 View all Divorce, Dissolution and Separation Act 2020 Debates Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 17 June 2020 - large font accessible version - (17 Jun 2020)