House of Commons
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Oral Answers to Questions
(4 years, 5 months ago)
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Brendan O'Hara (Argyll and Bute) (SNP)
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
Patrick Grady (Glasgow North) (SNP)
The Secretary of State for Transport (Grant Shapps)
I have frequent conversations with the Chancellor about the vital role that transport plays in our economic recovery.
Brendan O'Hara
Yesterday, I met the Argyll and Bute climate change group, which is dismayed by the recent report showing that the UK Government have missed almost all their own climate change targets. Given that transport accounts for about a quarter of UK carbon emissions and that there are growing calls to link the economic recovery to meeting emissions targets, does the Secretary of State agree that only by enshrining annual targets in legislation will this Government be able to hope to meet their legally binding net zero emissions target by 2050?
Grant Shapps
I thank the hon. Gentleman for his question, but I take issue with his numbers: I think that transport accounts for about a third of greenhouse gases, rather than just a quarter, so he is right about the urgency of the situation. We absolutely believe in tackling this problem. That is why this country has legislated to be zero-carbon by 2050. When it comes to transport, he will be interested to hear that I am setting up the net zero board to push forward with all these important targets.
Allan Dorans
The Secretary of State will be aware that British Airways continues along its Dickensian path of threatening to fire staff and rehire them on substantially poorer pay and conditions, which affects many of my constituents in Ayr, Carrick and Cumnock. Does he accept that the conduct of British Airways executives such as Willie Walsh is bringing the industry into disrepute at a time when support for public transport is critical if we want an aviation industry in the future?
Grant Shapps
I am very concerned about the plight of aviation employees not just at British Airways but at other companies. I urge British Airways and the unions to sit down to talk this through, which I know is not happening—the British Airline Pilots Association has done that, but the other unions have not. Important support has been in place through the furlough scheme, and I want to ensure that people are treated fairly and properly throughout this crisis.
Patrick Grady
The constituents I met as part of The Time is Now climate lobby on Tuesday want Government at all levels to move further and faster to tackle the climate emergency and build back better from the covid pandemic. Will the Secretary of State join me in welcoming the decision in Glasgow to make the hire of nextbikes free for the coming months, so that people can reduce emissions, keep fit and get about in a safe and socially distant manner, and we can learn lessons across the United Kingdom for the future?
Grant Shapps
The hon. Gentleman will be familiar, I am sure, with the £2 billion announcement I made at a Downing Street press conference for cycling and walking, of which £250 million was made available immediately in England. Through the Barnett consequentials, that will allow for a massive expansion of cycling across the whole United Kingdom.
Huw Merriman (Bexhill and Battle) (Con)
Given the restrictions on public transport at the moment, it is vital that we look for alternative forms of transport to boost our economic activity. I welcome the news that e-scooters will be rolled out. The Transport Committee began its inquiry on that yesterday, so the timing is appreciated. There was some confusion as to whether driving licences will be required for e-scooters, which I believe may be due to a technicality. It would be a great shame if e-scooters were available only to those who drive a car.
Grant Shapps
My hon. Friend is right: the e-scooters brought forward due to the pandemic will be an excellent and eco-friendly way of getting around—I can see that many Members across the House are looking forward to getting on their e-scooters. They will, I am afraid, in the first place be available to those with driving or provisional licences. That is not through desire, but because of a quirk in the law—we are tackling a law from, I think, 1880, which, with great foresight, banned e-scooters long before they were invented. That was one way to allow trials to go ahead right now.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I pay tribute to our transport workers and reflect on those who have lost their lives to the coronavirus. Our economy is experiencing major shock. There is no doubt that the foundations were weakened after a lost decade of austerity and the failure to invest properly in our regions that make up the northern powerhouse. Had the north seen the same per-person investment as London over the past decade, it would have received £66 billion more. Even before the pandemic hit, estimates by the UK2070 Commission recommended investment of £15 billion each year for 20 years. Will the Secretary of State outline how much capital investment has been awarded to the north?
Grant Shapps
As the hon. Gentleman will know, I am the northern powerhouse Minister in the Cabinet, so I take this very seriously indeed. I do not want to disappoint him, but there are so many different elements of funding going into the northern powerhouse right now that it is difficult to provide an immediate figure for the total. I would be happy to undertake to write to him with those precise details, but I can tell them that it is billions.
Jim McMahon
I am not sure that my pre-prepared response quite expected the Secretary of State not to know the answer to the question about how much money has been allocated, but we can guess: it is a drop in the ocean. It will be a drop in the ocean when compared with the historic funding gap of £66 billion. It will be a drop in the ocean when compared with the £15 billion annual allocation, as recommended by the Commission.
We were promised a plan to level up Britain. We were told that we were at war with the virus, yet when it came to a Marshall fund, the nation was failed. The Government failed on ambition; they failed on scale; and in doing so they failed the hard-working people of the north. Let us be generous and accept that what has gone has gone. Today, will the Secretary of State commit, in future allocations, to the north receiving no less than the capital?
Grant Shapps
That is a lot of rhetoric, but, if the hon. Gentleman likes, I will go into some of the money that is being spent. For example, there is the trans-Pennine route, a multi-billion pound upgrade of the route from Manchester to Leeds. Then we have an extra £10 million initially to sort out the Manchester corridor, which was announced by the Prime Minister on Tuesday. There is the High Speed North project, which runs into multi-billions. I will write to him, and I hope that he will come back to the Dispatch Box surprised and perhaps withdraw his words when he sees the multi-billion pounds that are being spent in the north right now.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Swissport, 321; Rolls-Royce, 700; Menzies Aviation, 160; and hundreds and hundreds more between British Airways, NCP, easyJet, Ryanair, Jet2, Flybe, BA CityFlyer, TUI and SSP. These are not national statistics, but the aviation job losses in my constituency alone. Might this sector finally get some good news in the Chancellor’s statement next week? If the Secretary of State will not comment on specific aviation companies, will he tell us in general whether he personally thinks it fair that employees can be fired and rehired on slashed terms and conditions?
Grant Shapps
As I mentioned in my previous answer, I think the hon. Gentleman is right to be concerned. We need to ensure that there is fair play for employees. Everybody understands that it has been an incredibly tough time. Everyone knows the furlough scheme and many other measures—£330 billion-worth of measures—have been there to support the sector. There has also been an individual process that companies—whether ground handlers, airlines or airports—have been able to go through with the Treasury to access additional money. I would appreciate the hon. Gentleman’s help in ensuring that air bridges can get going as quickly as possible and be reported to the House. I am very keen to get the devolved Administrations, including the Scottish Government, on board so that we can get this thing announced.
Gavin Newlands
Alexander Dennis is a world-leading bus manufacturer, but that sector is also on its knees due to the coronavirus crisis. I welcome the Prime Minister’s re-announcement on bus investment, but it needs to be brought forward in full now. I ask the Secretary of State not to rule out investing in low-emission Euro 6 diesel buses to replace some of the older high-polluting models, helping to reduce carbon emissions more quickly and saving thousands of highly skilled jobs across the industry to boot.
Grant Shapps
Absolutely. The £3 billion, which is going into new buses, will help us to produce 4,000 additional buses. We want them to be low and zero-carbon electric buses, of course, but also hydrogen buses, so we will certainly be taking that forward. I will be saying more about that very shortly.
Chris Loder (West Dorset) (Con)
Sir Christopher Chope (Christchurch) (Con)
Anthony Mangnall (Totnes) (Con)
The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
The Government are providing significant funding for the bus industry at this time. Our covid-19 funding package for England’s buses totals £651 million. The Government provide £43 million annually to local authorities for supporting socially necessary services, plus £30 million of additional funding in 2021 to support, improve or restore services. Ministers and officials meet regularly with key stakeholders, including local transport authorities and operators to discuss a wide range of matters.
Chris Loder
The Government’s public messaging to discourage the non-essential use of buses, and of open-access trains for that matter, is deeply damaging commercial routes that rely on public fares to remain viable. Will the Minister commit to reviewing that message and to safeguarding those commercial routes, such as the rural bus routes in my constituency of West Dorset?
Rachel Maclean
My hon. Friend is right. We obviously keep all measures under review at all times, but our priority is always to keep the public safe. Thanks to the support that the Government have put into the bus industry, the vast majority of bus services in England are currently running.
Sir Christopher Chope
My hon. Friend failed to respond to the question about coach operators, which rather indicates that, as the coach industry feels, the Government regard them with contempt. Will she now tell us when there is going to be a meeting, and a response to the request first made by the coach industry more than two months ago and repeated in a letter signed by 550 coach operators to the Chancellor of the Exchequer? When are the Government going to do something to help our coach industry?
Rachel Maclean
I assure my hon. Friend that the Government take the concerns of the coach industry incredibly seriously, recognising the key part it plays in the tourism industry. That is why it has been able to access £330 billion of Government support, along with all parts of our economy. We are working extremely hard to get tourism up and running, and the coach industry will benefit from that.
Anthony Mangnall
A number of bus routes in my local towns, including Brixham and Dartmouth, have been cancelled or reduced in the past few weeks, which is, obviously, a massive disservice to the residents. The Government have announced a supreme package of support for our bus networks, with grants and the forthcoming review. I urge them to put a long-term strategy planning mechanism in place to allow bus companies to plan their future for many months to come.
Rachel Maclean
The Government absolutely recognise the crucial role bus services play in rural communities, such as those in my hon. Friend’s constituency, up and down the country. That is why we are providing a five-year, £5 billion funding package for buses and cycling. That will include a £20 million demand-responsive transport scheme. We are also bringing forward a national bus strategy to address exactly these concerns about rural services, which play a vital role.
Matt Rodda (Reading East) (Lab)
I wish to start by paying tribute to our bus workers for keeping a vital public service running, in rural areas and across the country, during the coronavirus crisis. Bus drivers and other transport workers have made a very significant contribution—indeed, a number of drivers have died in the epidemic. We owe all these key workers a huge debt of gratitude for their service at this difficult time. As a sign of the Government’s support for our bus services, will the Minister now commit to properly funding buses, both in the next few months and in the longer term? Will she also offer financial support to the families of the staff who have died, to bring this in line with financial support for NHS and care workers?
Rachel Maclean
I join the hon. Gentleman in the comments he has made, and Conservative Members, too, pay our tribute to those key workers—those bus workers—who have played a vital part in keeping goods, services and passengers moving around the country. We want to thank them from the bottom of our hearts for their service. We work closely with the Department of Health and Social Care to ensure that they are kept safe throughout the pandemic. As bus services start to recover, we are working closely on a bus recovery and restart package, as well as the £5 billion we have pledged to put in to keep bus services on a sustainable footing for the long term.
Sir Edward Leigh (Gainsborough) (Con)
The Minister of State, Department for Transport (Andrew Stephenson)
I recognise and pay tribute to my right hon. Friend’s campaign. He has raised this issue with me on a number of occasions. London North Eastern Railway and Network Rail continue to assess how the service could operate.
Sir Edward Leigh
I apologise to the Minister for banging on about this, and so do my hon. Friends the Members for Cleethorpes (Martin Vickers) and for Great Grimsby (Lia Nici), but we are talking about a catchment area of 100,000 people with no direct train to London. LNER, which we own, is prepared to give us our direct train for just £1 million, which compares with the £80 billion-plus we are spending on HS2. So we beg the Minister to do this for Lincolnshire, and we promise that if he gives us our train, we will make him an honorary yellowbelly.
Andrew Stephenson
That would indeed be a great honour. Before a final decision can be taken, we need to review a business case from LNER. Sadly, some of the surveys have been delayed because of coronavirus, but they will be taking place later this summer. I am happy to commit to writing to my right hon. Friend setting out the schedule for that work, and to keeping him and his colleagues updated.
Fleur Anderson (Putney) (Lab)
Simon Fell (Barrow and Furness) (Con)
James Daly (Bury North) (Con)
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The Secretary of State for Transport (Grant Shapps)
The Government have provided £250 million of funding to local authorities this financial year to increase levels of active transport.
Fleur Anderson
Will the Secretary of State join me in congratulating teachers, parents and volunteers who are opening school streets such as that for Albermarle Primary School in Putney, which are making streets cleaner, safer, greener and more cycle-friendly? On cycling, when will the Government publish their updated cycle infrastructure guidance for local authorities and the much promised cycling and walking plan or investment strategy, and will it be before recess?
Grant Shapps
I congratulate the initiative on the roads, which is fantastic. My hon. Friend will know that I have announced £2 billion, and nearly £50 million of that has been made available to local authorities straightaway. I can also inform the House that a further tranche of money will be made available over the summer as well, along with the plans that she refers to.
Simon Fell
I thank my right hon. Friend for his commitment to cycling and his investment in it. In my constituency of Barrow, we have the opportunity now to create a safe cycle route from Walney Island all the way up the A590 to Ulverston across some abandoned railway bridges. Making that work means getting Network Rail, Highways England and our county council to pull together. What advice and support can he give me to make that happen?
Grant Shapps
It sounds like a terrific scheme, and my advice to my hon. Friend is to have the local authority work with all those other bodies, including Network Rail, Highways England and the county council. I will join him in pushing from my end to ensure that can happen.
James Daly
Bury Council has outlined plans for 70 new or upgraded crossings and five miles of protected cycle routes on busy roads, which if completed, would allow 88% of the population to use the Greater Manchester Bee Network. Implementation of those plans, however, has stalled, despite funding being in place. Will the Secretary of State meet me to ensure Bury North residents have the benefit of those improvements at the earliest opportunity?
Grant Shapps
My hon. Friend is absolutely right. The Manchester Bee Network is extremely important. I can inform him that the Greater Manchester Combined Authority has already had £3.174 million to assist in projects such as this and, of course, either myself or the Minister with responsibility for cycling will be absolutely delighted to meet him.
Lloyd Russell-Moyle
I thank the Department for the support it has given Brighton and Hove Council to move forward on some of its street schemes, but the developing lungs of children are the most vulnerable, so air quality around schools is important as is, of course, the fitness that we want to encourage in children. As we have heard, London has already started taking action on school street schemes, so will the Secretary of State bring into effect part 6 of the Traffic Management Act 2004 to enable local authorities outside London to start to enable school street schemes to keep our children safe and reduce the 40,000 deaths because of poor air quality every year?
Kerry McCarthy (Bristol East) (Lab)
I thank the Secretary of State for that very direct answer. Around 40% of the lowest income households do not have access to a car, but we know from the Government’s own research that because they tend to live in more hazardous environments—so more traffic, more on-street parking, more pollution and little space for cycling and walking—they are deterred from active travel. Can we have a national strategy from the Government, not just money being sent down to local councils, to try to increase cycling and walking in our more deprived communities?
Grant Shapps
As the hon. Lady will know, the Government are very much in favour of people being able to take active transport, but we are not against the car. That is why we are investing £27 billion in roads, but I can tell her—I am sure she will welcome this—that we think the priority for walking and cycling is absolutely essential. I think she will be very pleased with what we have to say in forthcoming guidance on the subject.
Sir David Evennett (Bexleyheath and Crayford) (Con)
The Secretary of State for Transport (Grant Shapps)
We are working closely with transport operators and the police to monitor compliance. Initial reports from operators suggest very high compliance.
Sir David Evennett [V]
Wearing a face covering is an easy way to help protect us all from coronavirus, especially in more confined spaces such as public transport. Will my right hon. Friend join me in urging my constituents in Bexleyheath and Crayford to make that small change which can help us to control the virus and save lives?
Grant Shapps
My right hon. Friend is right about the importance of face coverings. We have seen very high levels of compliance. According to the Office for National Statistics, on the week of 26 June, it looks like 86% compliance was in existence. We did say that in the early days we would ensure compliance was enforced gently, but I inform the House that TfL, Network Rail and British Transport police will be tightening up on that. I have just signed the Health Protection (Coronavirus, Wearing of Face Coverings on Public Transport) (England) Regulations 2020, which under regulation 8 give powers to TfL to increase enforcement.
Henry Smith (Crawley) (Con)
Saqib Bhatti (Meriden) (Con)
The Secretary of State for Transport (Grant Shapps)
I recently announced the Jet Zero Council, which will provide UK leadership and strategic direction to cut emissions.
Henry Smith [V]
Britain has the potential to be world leading in sustainable aviation fuels, but for that we need to act fast. Will the Secretary of State therefore consider a request from the industry for £500 million of match funding to achieve that?
Grant Shapps
My hon. Friend is right in his question, and he will be interested to hear that we set up the Jet Zero Council specifically to take forward the objective of being the first country to develop a jet commercial airliner to fly at zero carbon across the Atlantic. That will involve not just investment in sustainable aviation fuels, in which money has already been invested and more was announced by me at one of the press conferences, but work on electric planes, hybrid planes and hydrogen planes. He can expect to hear a lot more as we join with industry to help deliver on that ambition.
Saqib Bhatti
I thank the Secretary of State for that answer. He will be aware that Birmingham airport in my constituency of Meriden will be key to the economic recovery of the region after the devastating impact of covid-19. Will he confirm that decarbonising the aviation sector is an economic opportunity as well as a green one? Will he join me in commending Birmingham airport on its commitment to achieving net zero carbon emissions by 2033?
Grant Shapps
My hon. Friend is right, and I absolutely join him on Birmingham’s commitment to that. It is joining other airports including, I think, Bristol, which has already achieved zero carbon, as well as Farnborough and some of the larger airports. What I have been most impressed with is the way in which the industry has embraced the Jet Zero Council and the idea of getting to zero carbon, signing its own pledges to get there. We are determined to meet this commitment, which we will hear a lot more about in the coming weeks and months.
Suzanne Webb (Stourbridge) (Con)
The Minister of State, Department for Transport (Chris Heaton-Harris)
The rail industry will deliver an uplift in services on Monday 6 July to respond to an increase in post-4 July demand. Service levels will be close to 85% of pre-covid levels.
Suzanne Webb
The Prime Minister is a big fan of buses, just as I am a big fan of trains—I do not make model trains yet, though—so I am proud to support a Government who are investing £48 billion into railways, giving them the biggest upgrade since Victorian times. Will my hon. Friend assure me that such funding will be used to ensure that communities across all parts of the country such as mine in Stourbridge, have access to reliable, punctual railways?
Chris Heaton-Harris
I had already noted that my hon. Friend has a passion for rail as she has sponsored a bid to reinstate a railways fund for the “Stourbridge Dasher,” which I look forward to examining shortly. Yes, the Government are investing £48 billion in our railways in the period 2019 to 2024—that figure does not include HS2—with the intention to use that money to deliver a reliable rail service that helps to level up our country.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I pay tribute to our wonderful rail workers, who have played a vital role in keeping our nation moving in the midst of a pandemic. As we come out of lockdown, I welcome the Government’s plans to increase the frequency of rail services as, indeed, I wholeheartedly welcomed the Government’s plans and efforts to effectively nationalise our rail services at the start of lockdown. It is disappointing to note, however, that other operators such as Hull Trains have been refused the exact same support from the Government, thereby risking hundreds of jobs.
There is no point in having lots of trains running if people are not using those services because they fear it is not safe to do so. Given the Government’s mixed messaging, with weakening social distancing requirements on the one hand and patchy compliance with the new face-covering law on the other, how does the Minister propose to protect passengers and rail workers while restoring public confidence in our network?
Chris Heaton-Harris
I welcome the hon. Gentleman to the Front Bench. We have had a conversation already and I look forward to working with him. Our railways are a very important part of bringing our nation’s economy back. It is quite straightforward: we will have a reliable train service that will be one of the cleanest on the planet. We want to get customers back when they are able to travel, given the appropriate guidance. Working together, I think we can do that.
Kate Osamor (Edmonton) (Lab/Co-op)
The Minister of State, Department for Transport (Chris Heaton-Harris)
The Government remain committed to delivering inclusive transport for all passengers. My officials and I meet regularly with transport providers and make it clear that they must consider the needs of all passengers as transport restarts. My most recent meeting involving a sight loss charity was last Friday.
Kate Osamor [V]
I thank the Minister for his answer. My constituent Janice, who is blind, is anxious about how to keep safe and stay socially distant on public transport, and she is not alone. The Royal National Institute of Blind People’s director of services, David Clarke, said:
“Social distancing is near-impossible for…blind and partially sighted people which makes it difficult to go out and get food…exercise or attend medical appointments”.
Will the Minister take this opportunity to reassure the RNIB and my constituent by acting early to ensure that all transport providers in England have the funds available for new accessible signage, so that social pressure to keep to the rules does not have an unfair impact on blind and partially sighted people?
Chris Heaton-Harris
I thank the hon. Lady for her excellent question. She is absolutely right in everything she says. I have been working with a whole range of accessibility groups and disability charities to try to make sure that we get our messaging right, because we want to welcome everyone back to our rail system eventually and we want it to be the most accessible in the world. We have a long way to go, but we are working with those groups to deliver that service as best we can.
Nick Smith (Blaenau Gwent) (Lab)
The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
The UK continues to work constructively towards a trade agreement with the EU. Whatever our trading relationship with the EU after 31 December, the UK logistics and haulage sector will play a critical part.
Nick Smith
The Dover port is used by 10,000 trucks every day. If we end up with no deal, the slightest delay means that just-in-time systems fall apart. The logistics sector says that it needs a credible plan to cover that high-risk situation. When will we see such a plan?
Rachel Maclean
The hon. Gentleman touches on an important point that I as a Minister and my Department as a whole are focusing on. We are working through detailed plans to ensure that traffic flows smoothly through Kent, so that goods and services can continue to flow to the EU and elsewhere, as they do at the moment.
Greg Smith (Buckingham) (Con)
George Freeman (Mid Norfolk) (Con)
The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
We are accelerating the use of hydrogen vehicles through demonstration and R&D projects to fulfil our ambitions for greener transport and to level up the country. Decarbonising transport requires the sector and users to embrace new technology and innovations such as hydrogen like never before.
Greg Smith
I welcome the Minister’s answer. Given that hydrogen technology presents such an enormous opportunity for clean UK-made transport of the future, will she ensure that hydrogen gets an equal billing in that R&D in future as we deliver the green revolution in transport?
Rachel Maclean
I entirely agree with my hon. Friend’s comments. We are totally well placed to be a leader in clean hydrogen and fuel cell technology, and that is down to our high-quality engineering and manufacturing capability. This Government, I as a Minister and the whole Department are working at pace to develop our green recovery plan, and hydrogen will form a key part of that.
George Freeman [V]
I thank the Minister and the Secretary of State for the work that they are doing, in particular, on the transport decarbonisation plan that he and I started together. Does the Minister agree that to make the post-covid recovery a real catalyst both for levelling up and sustainable growth, an industrial strategy for hydrogen fuel with four, five or six green hydrogen transport hubs, from Aberdeen to Teesside, Norfolk, Bristol and Northern Ireland, and a major procurement package for hydrogen buses would really help the UK to take a lead, drive down the cost, and lead in the science and R&D of hydrogen fuel?
Rachel Maclean
I will take this opportunity to thank my hon. Friend for his valuable contribution in driving forward this vital agenda. We are a world leader in technology, innovation and R&D and, as he will know, we have invested £121 million in UK hydrogen technology to make sure that it plays a key part in our green recovery and achieving net zero carbon emissions by 2050. He is also right that this has the potential to drive a fantastic flourishing and see levelling up across our whole country. We are working to include hydrogen and ensure that it plays a key part in the green recovery and our levelling-up ambitions.
Barbara Keeley (Worsley and Eccles South) (Lab)
James Murray (Ealing North) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Transport (Kelly Tolhurst)
The Government remain committed to an open dialogue with the sector as we work towards our shared ambition of getting aviation up and running again. We encourage the industry and unions to engage constructively with each other.
Barbara Keeley [V]
British Airways is proposing to lay off 12,000 staff and is using this pandemic as cover to put its remaining 30,000 staff on inferior contracts. Using a global health crisis to force through such changes is a national disgrace, yet British Airways still enjoys preferential treatment as our flag carrier, with a dominant position on slots at Heathrow. If it fails to treat its staff properly, surely it is time to review whether it is fit to be our national carrier and time to reallocate those slots.
Kelly Tolhurst
All redundancies or any threat to jobs in this unprecedented pandemic is incredibly worrying for all workers, and my sympathies are with all those affected at this time. I have spoken to Willie Walsh and encouraged BA and the unions to engage constructively with each other. Employees should be treated fairly and in the spirit of partnership and we are working with the aviation sector on a restart and recovery plan. Of course, we will be looking at all regulations at our disposal.
James Murray [V]
A constituent of mine who started working for British Airways more than 20 years ago faces losing their job or being rehired on worse pay and terms than when they started work. BA needs to halt its plans and the Government have still not brought forward an aviation sector deal, as promised three months ago. Will the Minister therefore confirm when an aviation deal will finally be announced and whether any deal will both extend the job retention scheme for aviation workers and include firm conditions to help to protect jobs, firms and pay?
Kelly Tolhurst
The Chancellor announced an unprecedented package of measures to support business and particularly the aviation sector. The Chancellor and my right hon. Friend the Secretary of State have been clear that we stand ready to talk to and hear from businesses that need further support. Of course, my absolute sympathies are with everybody affected with regards to redundancies or any kind of change within their terms and conditions. It is absolutely right that those employees should be treated fairly, and I hope that the unions and BA continue to work together to come to a proper resolution.
Marco Longhi (Dudley North) (Con)
The Secretary of State for Transport (Grant Shapps)
We are creating a transport decarbonisation plan, to be published by the end of the year, setting out a bold and ambitious pathway for the decarbonisation of transport.
Marco Longhi
Will the Secretary of State please do all he can to bring forward the very light rail scheme in Dudley so that we can benefit not just from the environmental impact that the scheme will bring, but from the economic benefits as we bounce back from covid-19?
Grant Shapps
I am aware of my hon. Friend’s enthusiasm and support for the very light rail scheme in Dudley, and we are keen to support it. It is important to get Dudley Council working with the West Midlands Combined Authority and the local enterprise partnership. We very much look forward to receiving the detailed business case.
Royston Smith (Southampton, Itchen) (Con)
The Minister of State, Department for Transport (Chris Heaton-Harris)
The Government have simplified their cycle to work scheme guidance to help employers to access e-bikes at a discount.
Royston Smith [V]
Southampton has received Government funding for additional cycle lanes, many of which lie unused for most of the day. My constituency is surrounded by hills, which is quite a deterrent for people on cycles. E-bikes and e-scooters could make a significant difference. I welcome the news that e-scooters will become legal this weekend, but without relaxing the regulations for privately owned e-scooters, a city centre hire scheme will make little or no difference in Southampton. Will my hon. Friend look again at privately owned e-scooters to encourage more of my constituents out of their cars?
Chris Heaton-Harris
My hon. Friend is right to say that we need to capitalise on the unprecedented growth in active travel that we have seen recently, especially on bicycles and e-bicycles. He is completely correct about e-scooters; these trials will only include rental scooters. This will allow them to take place in a controlled manner while we assess the safety and other impacts. A wide range of e-scooters are available, building to different standards. I would like to think that the trials will demonstrate how useful they are in the mix for active travel.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
Local areas have a key role to play in decarbonising transport and stimulating a green recovery. We welcome plans from local authorities, and have supported their shift to cycling and walking with a £250 million emergency active travel fund.
Mr Sheerman [V]
Will the Minister ratchet up the sense of urgency on this? We need sustainable towns right across the country, and sustainable transport is at the heart of that. We could already transform taxis to electric or hybrid, and change our buses. We can do so much now. Will she put more pressure on—and give more resources to—local authorities so that they lead the way, and will she support our new commission on road air quality?
Rachel Maclean
I assure the hon. Gentleman that I completely share his desire to do things faster than they have been done to date. We have brought forward the e-scooter trials, which will see e-scooters being rolled out in Tees Valley and across the country to immediately harness the benefits of the green air that we are seeing as a result of the pandemic lockdown situation. A whole host of other measures are coming onstream, all backed up by £2 billion of Government support for active travel including cycling and walking. We will continue to work on this through our transport decarbonisation plan.
Karl Turner (Kingston upon Hull East) (Lab)
The Parliamentary Under-Secretary of State for Transport (Kelly Tolhurst)
My officials and I engage extensively with the maritime sector on the support that it needs, including unprecedented financial assistance.
Karl Turner [V]
P&O Ferries, which is owned by the Government of Dubai, has pocketed millions from the British taxpayer during the covid crisis. It is now intending to make British seafarers redundant and replace them with low-paid, badly treated Filipino crews, because it says that the routes are not viable when using British seafarers. The Secretary of State told the Transport Committee that there is nothing he can do because his hands are tied by international agreement. It is not good enough. Will the Minister commit to levelling up employment conditions to prevent the likes of P&O from destroying seafarer jobs, and to unleash the potential of this brilliant maritime city of Hull?
Kelly Tolhurst
I note the hon. Gentleman’s particular interest in this policy area. We have had many discussions on this issue and he knows that I am committed to doing what I can as the Minister responsible for maritime to increase the ability of UK seafarers to work on our routes. We have supported the ferry sector with a with a freight support package to protect what we needed within the UK, but the hon. Gentleman is absolutely right: we want to make sure that we are able to create an environment in which we can increase the number of seafarers operating around our coastal shores.
Mohammad Yasin (Bedford) (Lab)
The Minister of State, Department for Transport (Chris Heaton-Harris)
The Government have provided guidance to transport operators and the public so that they can travel safely. We have made it mandatory for passengers to wear face coverings on public transport in England and, pleasingly, compliance is growing every day.
Mohammad Yasin [V]
Covid-19 has had a profound impact on the railways, but my constituents in Bedford and Kempston have been particularly hard hit. The Bedford-to-Corby electrification is now delayed; the long-awaited return of the East Midlands Railway service is delayed until May next year; the current Thameslink service is slow; and the Bedford-to-Bletchley trains have been stopped altogether. Does the Minister agree that this is a far cry from the transport revolution that his Government promised?
Chris Heaton-Harris
I thank the hon. Gentleman for his question, but I think he is mixing up the reaction to the obvious pressures we have had because of the pandemic with our plans for the future. Some of the plans that he outlined are delayed, yes, but that is because people were not able to work safely during the pandemic. The train line that he mentioned is no longer serving Bletchley because nobody was using it. These services will all return and they will be reliable and cleaner than ever before.
Andrew Jones (Harrogate and Knaresborough) (Con)
The Minister of State, Department for Transport (Andrew Stephenson)
In May, we announced £190 million-worth of investment in our road and rail networks to take advantage of lower demand.
Andrew Jones
My hon. Friend is aware of platform capacity issues at Leeds station; will he provide an update on the construction of platform 0, which will service rail connections from Harrogate and Knaresborough?
Andrew Stephenson
I pay tribute to the work that my hon. Friend did when he was a Department for Transport Minister. Work is now under way on platform 0 at Leeds and is expected to be completed by early next year. It will enable Northern to operate services more reliably.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Parliamentary Under-Secretary of State for Transport (Kelly Tolhurst)
We recognise our international obligations, our borders remain open to seafarers, and we are enforcing their rights under the maritime labour convention.
Mr Carmichael
Some 400,000 sailors around the world are stranded as a result of covid restrictions. That requires international action and our country needs to take a lead. Will the Minister do that?
Kelly Tolhurst
I very much thank the right hon. Gentleman for his question. I happen to be able to inform him that next week I will be holding an international summit with a particular focus on crew change and how we can do our best for seafarers internationally.
Jacob Young (Redcar) (Con)
The Secretary of State for Transport (Grant Shapps)
With your permission, Mr Speaker, I wish to say a word about how we would like to pay tribute to the transport workers who have, as Members have mentioned, lost their lives during this crisis. Many of them are providing the food on our tables and helping the key workers in the NHS and care workers to get to work to support us all. We would therefore like to set up a commemorative memorial for transport workers, and I can think of no better location than Victoria station, where Belly Mujinga was an employee who sadly lost her life.
Jacob Young
UK steel producers, including British Steel in Lackenby, are able to supply more than 90% of HS2’s phase 1 steel requirements. Does the Secretary of State agree that we should do all we can to support UK manufacturing in the construction of HS2? If we are going to build, build, build, let us make it British, British, British.
Grant Shapps
My hon. Friend has absolutely nailed it; he is spot on. That is of course what we must do. I can report to him that 98% of the purchasing for HS2 so far been from British suppliers. There is of course a supply chain involved, but I absolutely support my hon. Friend’s ambition and I know he will do what Network Rail does—it buys nearly all its steel British.
Mike Kane (Wythenshawe and Sale East) (Lab)
British, British, British Airways, easyJet, Airbus and Jet2—every day we get more news of staggering job losses across the aviation industry. Our world-class airports and their supply chains are at critical. The US, Spain, Germany and France have all agreed specific aviation deals so that their countries bounce back more strongly. If not now, when will the Government implement a comprehensive package for our aviation sector matching Labour’s commitment?
Grant Shapps
The hon. Gentleman is absolutely right about the critical importance of our aviation sector, which is the third biggest in the world. These are extremely worrying times. As the air bridges start to unlock, that will help, and we will hear more about those soon. It is not the case that there has not been a massive package. He forgets the £330 billion to support the economy, which has included a number of measures that the aviation sector has been able to take specific assistance from. It is okay to discount it, but that is money it has been using all the way along. In addition, the aviation sector has been able to access a process that other sectors have not necessarily been able to, putting it directly in talks between the Department for Transport and the Treasury. It has been accessing money and cash through that process, as well.
Chris Green (Bolton West) (Con)
The Minister of State, Department for Transport (Chris Heaton-Harris)
We have devolved significant power and funding to metro mayors, including to the metro mayor of Manchester, to ensure that he can deliver the transport schemes needed to unlock housing and growth, so that Greater Manchester’s economy can thrive as the heart of the northern powerhouse. The bypass is one scheme for the Mayor to consider prioritising and thereby, we hope, deliver. We will happily work with him to ensure that conversation continues at pace.
Stephanie Peacock (Barnsley East) (Lab)
Chris Heaton-Harris
I thank the hon. Lady for her question. Actually, £504,000 has been provided to Sheffield City Region Combined Authority to date through the covid-19 bus service support grant. In addition, we are spending a huge amount of money—£3 billion—on a bus strategy going forward. I would like to think we can work together to deliver the service that her constituents require.
Dame Cheryl Gillan (Chesham and Amersham) (Con) [V]
Grant Shapps
My right hon. Friend is absolutely right. It is important to ensure we can provide reassurance for passengers, but also do something useful with the screening, perhaps beyond what just asking people to take a temperature check provides. We are actively working with Heathrow and other airports to put exactly those types of schemes in place, and I will be saying more about those in time for the following review of air corridors.
Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]
Grant Shapps
The hon. Member will be interested to hear about the transport decarbonisation plan, which I think she will find goes way beyond even the ambitions that she has set out. She will not have to wait too much longer to see that in detail, but I have already mentioned the net zero board, which is driving exactly the change she seeks.
Felicity Buchan (Kensington) (Con)
Grant Shapps
My hon. Friend will be interested to hear that I am in touch with Swissport and I am following those proposals carefully. As I said in response to an earlier question, we believe that it is important to provide international standards, which may well include specific types of testing. So the answer is yes.
Bambos Charalambous (Enfield, Southgate) (Lab)
Grant Shapps
It is indeed very frustrating that so much revenue failed to be collected in the previous four years because prices were not changed to keep up with inflation. There were no changes in the congestion charge either. Effectively, £700 million of take was left on the table by the London Mayor, meaning that the Government have had to come in and bail out Transport for London for £1.6 billion. A large chunk of that is uncollected revenue, and changes are having to be made for youngsters’ travel. Members across the House must recognise that it is fair that people in other parts of the country do not unduly subsidise the Mayor, who failed to collect the funds.
Marco Longhi (Dudley North) (Con)
Chris Heaton-Harris
The Government recognise the impact on many local authorities that the hon. Gentleman has outlined. We have announced a vast package of support for local authorities, and we are consulting across government on the issues that he has raised today.
Richard Burgon (Leeds East) (Lab) [V]
Grant Shapps
The hon. Gentleman reflects a concern that we have heard expressed across the House today and previously, and the Transport Committee has done excellent work. The Government are concerned about this. We have put in a lot of money through the furlough scheme to support jobs. We now expect British Airways, other companies and the unions to sit down and sort this out properly.
Greg Clark (Tunbridge Wells) (Con)
Grant Shapps
I am aware that my right hon. Friend and other colleagues met the roads Minister recently on the important subject of the A21. I absolutely share his passion. I know that it is currently earmarked for RIS 3, but we are setting up the speed unit in DFT—the acceleration unit—to try to ensure that we can deliver this important infrastructure faster. We undertake to work with him to bring forward what I know is not an enormous scheme but would make a huge difference.
Dr Philippa Whitford (Central Ayrshire) (SNP) [V]
Grant Shapps
As I mentioned in an answer a few moments ago, we have already put billions of pounds into supporting this sector. The hon. Lady may be pleased to hear that there is something she can do, and that is to ask the Scottish Government to join with us to ensure that we can have air bridges in place nationwide as quickly as possible.
Bob Blackman (Harrow East) (Con) [V]
Grant Shapps
My hon. Friend is absolutely right. As I explained a few moments ago, after failing to collect £700 million of fares in various forms and then coming to Government with a request for £1.6 billion, it stands to reason that something has to give. He is absolutely right to mention that it is the Mayor’s decision to extend the remit and the time of the congestion charge, although I have to say that the Mayor left himself with precious few options, having failed to collect that money for all those years.
Joy Morrissey (Beaconsfield) (Con)
Chris Heaton-Harris
The Government have a massive agenda of levelling up this country and providing transport infrastructure that is fit for years to come. We are doing that, and we are investing in it. We look forward to supporting my hon. Friend in filling potholes in her constituency, too.
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, 5 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 6 July will include:
Monday 6 July—Remaining stages of the Domestic Abuse Bill.
Tuesday 7 July—Estimates day (1st allotted day). There will be debates on estimates relating to the Department for Education; Her Majesty’s Revenue and Customs; and the Department for Business, Energy and Industrial Strategy.
Wednesday 8 July—My right hon. Friend the Chancellor of the Exchequer will make a statement, followed by a general debate on the economy.
Thursday 9 July—Estimates day (2nd allotted day). There will be debates on estimates relating to the Department for International Development and the Foreign and Commonwealth Office; and the Ministry of Housing, Communities and Local Government. At 5 pm, the House will be asked to agree all outstanding estimates.
Friday 10 July—The House will not be sitting.
Valerie Vaz
I thank the Leader of the House for the business for next week. May I just say that the voting on Tuesday and Wednesday was absolutely appalling? I cannot think of anything less productive than Cabinet Ministers queueing up in the way that they had to—and all of us, for that matter; we have better things to do. Also, there is still the exclusion of hon. Members from taking part in debates on legislation. I plead with him again to return to hybrid proceedings for substantive business.
Silence—that is the sound of the Prime Minister coming to the Chamber to announce the £5 billion financial package. I had not realised that Parliament had moved to Dudley. And that is slightly less than they have announced in Germany, which is £50 billion. It would have been nice for hon. Members to be able to question the Prime Minister. Is this new money or old money? Is it money that has been previously been announced, or new money? I note that the Leader of the House has mentioned the financial statement on Wednesday. Can he tell us whether there will be a money resolution attached to that?
The Leader of the House will know that the Housing, Communities and Local Government Secretary said on 18 March:
“The government is clear—no renter who has lost income due to coronavirus will be forced out of their home…These are extraordinary times and…we are urgently introducing emergency legislation to protect tenants in social and private accommodation from an eviction process being started.”
Given the masses of job losses in every sector—retail, food services, aerospace, hospitality, arts and music—and with the emergency legislation coming to an end and the furlough scheme winding down, this is going to be a perfect storm and people are going to be caught up in it. The shadow Housing Secretary, my hon. Friend the Member for Bristol West (Thangam Debbonaire), wants to co-operate with the Government, so could the Leader of the House ensure that she and the Secretary of State talk about bringing back emergency legislation before it runs out in August? It cannot be in the renters’ rights Bill, because that is not coming to Parliament until the end of the year. We need to help people in this situation.
The shadow Public Health Minister, my hon. Friend the Member for Nottingham North (Alex Norris), has reminded me that the independent medicines and medical devices safety review led by the noble Baroness Cumberlege will report its findings next Wednesday. Those who have suffered from Primodos, sodium valproate and surgical mesh have campaigned for this. I pay tribute to those campaigners and to hon. and right hon. Members from across the House who have ensured that we have this review. Will the Leader of the House find time for an oral statement to allow colleagues to discuss the next steps?
The Prime Minister said yesterday that the information on testing is provided. What he did not say was that it is provided two weeks later, making it impossible for any local authority to react in time. Labour in Wales publishes both pillar 1 and pillar 2. The Leader of the House will know that pillar 2 is provided to officials only if they sign the Data Protection Act, and only within their area because it is collected commercially. What was in the contract about releasing the data immediately, and why are the Government sitting on this data? Apparently Walsall is on the list for lockdown, but officials say that they are not considering a lockdown. So can we have an urgent statement on exactly what information is available, when it is available, and to whom?
I know that the Leader of the House is comfortable in various different centuries, but I am not sure how he can sit back and watch the destruction of the civil service. They are a professional civil service, they understand the public interest, they abide by a code, they follow policy set by the Government, and they act within the law. Instead, Whitehall is threatened with a hard rain. Could the Leader of the House tell the special special adviser that Malcolm Tucker is actually a fictional character? I think he has already been done—and he is not Alastair Campbell, who is in fact a pussycat.
A national security adviser has been appointed with no proven experience. The Intelligence and Security Committee still has not been set up. As I asked last week, and as many other Members have also asked, why are the Leader of the House and the Government taking a risk with our national security?
I know the Leader of the House keeps saying to hon. Members, “Don’t forget to ask that at Question Time”, but at FCO questions on Tuesday there was nothing about Nazanin, Anousheh, Kylie, who is still a British citizen, or Luke Symons. Could we have an update, please?
I want to join the right hon. Member for Maidenhead (Mrs May), the former Prime Minister, in thanking Sir Mark Sedwill, and other civil servants who have been ousted from their jobs, for all their many, many years of public service.
After last week—I am sorry that hon. Members are having a difficult time—this week our thoughts and prayers are for the hon. Member for Hexham (Guy Opperman) and Flora.
I hope that all hon. Members will think about the NHS on Sunday and thank the NHS for 72 brilliant years and many more to come.
Mr Rees-Mogg
The right hon. Lady is always so difficult to follow because she so often ends with sad news. The news from my hon. Friend the Member for Hexham (Guy Opperman) was the saddest. There is so little one could say that could possibly give any comfort, other than for him to know that he has many friends in this place, and our hearts bleed for him. It is the saddest, the hardest, the most unbearable news, and we wish him and his wife every condolence and sympathy that we can.
To move on to politics, let me start with the right hon. Lady’s tribute to Mark Sedwill. She is obviously right to pay tribute to him—he is an enormously distinguished public servant—and to the civil service generally. The team that supports the Leader of the House is something that—dare I say?—the shadow Leader of the House should be enormously jealous of; I have a feeling she may be. I am brilliantly supported by extremely hard-working people who do a fantastic job. I have no idea of what their political opinions are at all, but they back the Government in what the Government are trying to do. The Northcote-Trevelyan approach to the civil service is one that has served us well for a very long time, but it sometimes needs a degree of updating. Even I am not so wedded to the 19th century that I feel nothing can be improved.
The appointment of David Frost as National Security Adviser is an utterly brilliant appointment. He is an enormously qualified man and a very distinguished diplomat, and many people are beginning to say that he is the Henry Kissinger of our time. He is a great and distinguished public servant, who will serve enormously well.
Mr Rees-Mogg
The hon. Gentleman is quite incapable of keeping quiet, even for a moment. His agitation and his degree of excitement may be slightly theatrical on this occasion.
On the ISC, as always, that will be set up in due course. It would be wrong to be “Russian” these things—[Laughter]—as I am sure the right hon. Member for Walsall South (Valerie Vaz) appreciates. [Interruption.] No, it was not, actually; it was quite deliberate.
On the Cumberlege review, I actually gave evidence to that review in relation to Primodos. This is an opportunity for me to pay the greatest tribute to the hon. Member for Bolton South East (Yasmin Qureshi), who has campaigned absolutely tirelessly. I first met the hon. Lady when we were both elected in 2010 and had offices opposite each other, and she took up this issue when nobody else was really interested. She has transformed people’s thinking about it, and I look forward with great interest to what Baroness Cumberlege has to say about Primodos. It is a very important issue.
Going back to some of the other questions, the right hon. Member for Walsall South is a kind and generous person, and her sympathy for Cabinet Ministers having to queue is much appreciated by my right hon. Friends, who have to take on these onerous things which are otherwise unknown across the country. Our constituents never have to queue for anything because life is so smooth and easy, but she appreciates that right hon. Ladies and Gentlemen having to queue is so burdensome and tough, and makes us realise that we are really earning our living as we stand in a queue. Remarkably, it takes almost exactly the same time to pass through the Division Lobbies as it does when we are using the Lobbies without social distancing. The speed with which we got through them earlier this week was pretty much the normal speed and therefore things are working: Government business is getting through and scrutiny is taking place. I am not as kindly or as soft-hearted as the right hon. Lady, and I think a Cabinet Minister queuing for a few minutes is no bad thing, and probably spiritually enlightening and uplifting.
The right hon. Lady referred to renters who have lost income. Emergency provisions were made: £1 billion has been made available to help people who are renting. The Government are very conscious of the need to protect people who are in the private rented sector.
The right hon. Lady also mentioned the Prime Minister not making a speech in the House, but making it outside the House. However, the Prime Minister came to the House just a week before and made a statement. We are having a statement on Wednesday next week from the Chancellor of the Exchequer. The Government have been assiduous in maintaining the ministerial code’s requirement to make major announcements to the House first, and this is part of the natural process of government.
Damian Hinds (East Hampshire) (Con)
I know the whole House will want to join the Leader of the House and the shadow Leader of the House in their thoughts and prayers for our hon. Friend the Member for Hexham (Guy Opperman).
A lot has changed since plans were first put forward for Parliament’s restoration and renewal, and it is appropriate for the newly formed sponsor body now to review those plans. May we have a debate on the plans before the recess as a means for all hon. and right hon Members to take part fully in that process?
Mr Rees-Mogg
I am very grateful to my right hon. Friend for taking responsibility by joining the board. He is right that this House ought to have an opportunity to have its say on the future of the Palace of Westminster, which it is right to protect and safeguard for future generations. When the last Parliament considered this matter, it did so on the basis of assumptions that are now five years old, and it is absolutely proper that the sponsor body and delivery authority are conducting a strategic review to reconsider their approach. I would urge Members to consider submitting evidence to the review, and to be mindful that the price tags widely reported are also now five years old. There are rumours that the potential costs now far exceed the £4 billion estimate made in 2015. We must be clear that when Parliament takes its final decision on how to proceed, there can be no blank cheque for this work. The Parliamentary Buildings (Restoration and Renewal) Act 2019 specifically requires the sponsor body to have regard to value for money.
Tommy Sheppard (Edinburgh East) (SNP) [V]
Will the Leader of the House ensure that the Chancellor understands that we are still in the middle of this pandemic, and that before considering recovery after covid, we should ensure the survival of as many companies and jobs as possible? The Government will reduce payroll support to firms from 1 August, but how does the right hon. Gentleman expect companies that remain closed to find the money for wages? Does he agree that support must continue for those sectors of the economy that are unable safely to open in the autumn? Will he press the Chancellor to be more ambitious than the Prime Minister, who underwhelmed us all earlier this week? The PM’s package, based on accelerating existing capital projects, involved no new money whatsoever. The sum involved totalled about one fifth of 1% of the UK’s annual production. Compare that with the German Government, whose stimulus package is fully 20 times that amount.
The Prime Minister’s package contains not a single penny extra for Scotland, so I must ask again when we can debate the necessary changes to the fiscal framework of devolution. When I asked about that before, the Leader of the House simply referred to the sums that the Scottish Government are spending under the Barnett formula. It is as if Scotland’s getting its share of UK spending is the result of Westminster generosity, rather than the return of taxes that people in Scotland pay to the United Kingdom. The question is not about amounts; it is about powers, and about changing the rules so that, for instance, the Scottish Government can do exactly what the PM is proposing for England, and bring forward future capital spending. Will the Leader of the House please answer that question about rules?
I appreciate that the Government are led by someone who thinks that the border does not exist, and who does not even recognise that the term “Scottish Government” was introduced in section 12(1) of the Scotland Act 2012. Grasping the subtleties of devolution may be difficult for him, but the problem of Scotland’s financial straitjacket will not go away, and we need to discuss it.
Mr Rees-Mogg
What a pleasure it is to see the hon. Gentleman looking as cheerful as ever. With his fine smile, he always manages to brighten up the whole House. He mentions borders, and I note that Nicola Sturgeon wishes to have a wall between England and Scotland—perhaps she is modelling herself on other leading political figures. As my right hon. Friend the Prime Minister said, there is no border between England and Scotland, and it was shameful to call for a border of that type to be erected to stop people travelling freely between the constituent parts of the United Kingdom. One never thought that Nicola Sturgeon would model herself on American political figures and want to build a wall—at least a metaphorical wall, if not actually like Hadrian, with bricks and mortar.
We will hear the Chancellor’s proposals for recovery on Wednesday, but the Government have already been enormously ambitious with the scale of the furlough scheme: 9.3 million people, as well as 2.6 million self-employed people, have benefited and are being kept in employment. That is crucial, but it has to be phased, and we must move into the recovery stage. The hon. Gentleman wants to stay unreconstructed, and not to take advantage of things changing and opening up so that we get an economic recovery. That is what the Chancellor is doing, and I refer to the enormous amount of money that goes to all parts of the United Kingdom, because we are a single United Kingdom. The £3.8 billion that has gone to Scotland is because the UK is better together.
Fay Jones (Brecon and Radnorshire) (Con)
My constituency seems to be largely ignored by the Welsh Government. We receive one of the lowest local government allocations in Wales, and we are bottom of the league table for things such as NHS dentistry and broadband speeds. That was before covid-19 hit. The UK Government have made an unprecedented amount of financial support available, but I am deeply worried about how rural areas such as mine will recover. Like me, the Leader of the House represents a rural constituency, so may we have a debate on rural recovery, and how rural areas such as mine will recover from covid-19?
Mr Rees-Mogg
My hon. Friend is absolutely right. She represents a particularly beautiful constituency, which, through its beauty, suffers from the difficulties that rural economies have. Many other Members with rural constituencies appreciate that and the great contribution that rural areas make to our national life. They are home to a quarter of the country’s businesses. The Government are committed to helping them get back on their feet as a matter of priority. Some of the measures already taken have benefited rural businesses, such as furloughing, the small business grant fund and the retail, hospitality and leisure grant fund. Some 244,000 grants, with a value of £2.8 billion, have been delivered to vulnerable rural businesses, and £5 billion of public funding has been announced to support the roll-out of gigabit broadband in the hardest-to-reach 20% of the country. That will be fundamental to rural economies, because it brings them into not just the national but the global economy.
Mr Speaker
Let us head to Gateshead and a very happy Chair of the Backbench Business Committee, following last night’s result.
Ian Mearns (Gateshead) (Lab) [V]
I am grateful, Mr Speaker. I thought we were not allowed to have parties in Bournemouth, but Newcastle United managed to do that last night.
On a much more serious note, I want to express my sincerest condolences and deepest sympathy to the hon. Member for Hexham (Guy Opperman) and his wife Flora for their devastating loss. It is so deeply sad. Guy is a near neighbour of mine in constituency terms, and we are all deeply sad for him.
We have a queue of over 20 Backbench Business debates that are currently untabled and unheard, with a number of widely supported debate applications on subjects such as support for the tourism industry after covid-19; the future of and redundancies in the aviation sector; the spending of the Department for Digital, Culture, Media and Sport, with a focus on the arts; and shorter, geographically focused debates on important subjects such as the west bank, Yemen, Sudan and the plight of the Rohingya—many of those debates might fit nicely into any end-of-day 90-minute slots that become available. Will the Leader of the House think about a way that he could shoehorn in time for Backbench debates?
I have raised the issue of information flow to public health bodies with the Leader of the House previously. It seems that the covid-19 testing contract with Deloitte does not require the company to report positive cases to Public Health England or relevant local authorities. Is the contract not therefore contrary to the Public Health (Control of Disease) Act 1984 and the Health Protection (Notification) Regulations 2010? That is not a partisan point, but a crucial point to the safety of the public we serve.
Mr Rees-Mogg
The hon. Gentleman is right that, in the current circumstances, there have not been as many Backbench Business debates as there would otherwise have been. Westminster Hall, where a number of the debates would normally be held, is not an operation, for good reason. [Hon. Members: “Why?”] The reason is to do with staffing of the House. It is not to do with the Government’s reluctance to be held to account. It is a question of ensuring that there are sufficient Committee Rooms with social distancing that can be used to make sure that Government business can make its progress in the normal way. Westminster Hall was removed before Easter and has not been back. Obviously, there is a desire to bring it back, which will provide more time for Backbench Business debates.
The Floor of the House is being used to catch up with the backlog of business, which is going well. I am glad to say that the supply days next week are being used to debate subjects recommended by the Backbench Business Committee, so that is effectively Backbench Business. We tried, before the Backbench Business Committee was established, to provide Government time for debates that were requested by the hon. Gentleman on behalf of his about-to-be-formed Committee. With regard to Deloitte and contracts, that is a detailed, technical question which I think is best referred to the Department of Health and Social Care.
Andy Carter (Warrington South) (Con)
I am sure that my right hon. Friend, like me, has heard from many constituents over the last few weeks about the need to preserve monuments and statutes around the country. I know that constituents also want us to protect the historical buildings we have across the United Kingdom. I was concerned to see on social media earlier this week that masonry was reported to be falling from this building. Can the Leader of the House update us on plans to ensure that this remains a safe workplace and that it is restored for future generations?
Mr Rees-Mogg
I completely endorse what my hon. Friend has just said. We should be enormously proud of the great figures of our history. I am tempted to run through some of them, but we will get more people in if I do not start—I would begin with Alfred the Great, as usual. I am grateful to my hon. Friend for raising the issue of the closure of the St Stephens and Cromwell Green entrances on 30 June, because of what is described as “light debris” falling off; it was not any structural part of the House. I believe it was some wood left behind by people who had been working there, which blew off in the high winds. So it was not falling masonry and, fortunately, nobody was injured. As always, it is worth paying tribute to the police, who stood there guarding the entrance in soft caps, rather than the traditional policeman’s helmet, which one thinks might have given slightly more protection against anything falling. This does emphasise the need for improving the condition of this building. There is no question but that works need to be done. The question is: how, and at what expense?
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Last week, we had a covid outbreak in Cleckheaton, in my constituency, and this week we have a covid outbreak in a bed manufacturer in Batley. We know from the Government that companies can now re-furlough staff, but my colleague the shadow Economic Secretary asked in yesterday’s Finance Bill debate whether companies that re-furlough staff are going to have to start paying contributions and, unfortunately, received no answer. So may we have a statement from the Government that will give us more clarity, so that we can encourage companies that have an outbreak to work with councils and not offset economic downturn for the business against health implications for our wider community?
Mr Rees-Mogg
I am grateful to the hon. Lady for raising this important question. The Government have given unprecedented support to businesses. Obviously, questions arise in relation to areas that have had localised shutdowns and what the considerations around that will be. The good news is that the Chancellor will be here to make a statement on Wednesday, which will be the right point at which to ask these detailed questions.
Dame Cheryl Gillan (Chesham and Amersham) (Con) [V]
May I echo the request for the Leader of the House to reconsider on shielded Members such as myself being able to participate in debates,? If he did so, I would be able to participate in a debate I would like to see on education, which would allow us to pay tribute to those teachers who have valiantly been providing lessons throughout the lockdown period, either remotely or where the schools have remained open. Perhaps that would also give us the opportunity to look at the exam timetable and get some certainty for parents and children, particularly in Buckinghamshire, as to whether the 11-plus exams will be held in October. Of course, I cannot take part in that debate unless he reconsiders the position of shielded Members such as myself.
Mr Rees-Mogg
My right hon. Friend has already managed to make the point that she might have made in the debate, so I am glad to say that our hybrid procedures facilitate the involvement of all Members. On debates more generally, I know that the Procedure Committee is looking at that question. The issue is: how do we allow debates to run properly and in a free-flowing way, with interventions and so on, with people who are not present? We await with interest what the Procedure Committee has to say. I know that there are tremendous grammar schools in her constituency, and this country has been very well served by grammar schools over the years, decades and centuries. The Government are working with the sector to provide guidance, and I hope she will join me in welcoming the Education Secretary’s statement later today on further measures on the autumn opening of education settings.
Liz Twist (Blaydon) (Lab)
Two weeks ago, I held a virtual meeting with constituents working in the creative sector, many of whom have fallen through the cracks of Government support systems. The cultural and creative sector is a huge part of our cultural identity, in the north-east and across the country, so may we have a debate in Government time on a strategy for supporting the cultural and creative industries, and on their future, both in the north-east and across the UK?
Mr Rees-Mogg
This is a very important point, and I know that many Members are concerned about it. The Government recognise the huge contribution the arts and culture sector makes, not only to the economy and the international reputation of the United Kingdom, but to the wellbeing and enrichment of the British people. The general package of support has been unprecedented, but in addition to that, the sector has drawn down £653 million from the job retention scheme, and Arts Council England announced a £160 million emergency response package. But that does not answer the reopening question, and the Government want to support our vital cultural sectors to reopen as soon as it is safe to do so. Sector-wide guidance for the performing arts to return to rehearsal and performance safely will be published in due course. These matters are worthy of debate during the general economic debate next week, but the Government are very much on the same side as the hon. Lady.
Caroline Nokes (Romsey and Southampton North) (Con)
Since the weekend, the parish of Nursling and Rownhams has seen acts of vandalism and revoltingly, as one of my constituents emailed me this morning, defecation in public places. That will cost the parish council thousands and thousands of pounds for the clean-up, which is absolutely essential not only to replace security fencing around the recreation ground, but to make sure it is safe for children and families to use in future. Will my right hon. Friend consider giving time for a debate on whether trespass should be a criminal rather than a civil offence?
Mr Rees-Mogg
I am very grateful to my right hon. Friend for raising this point—that type of trespass is absolutely revolting. The commitment to make trespass a criminal offence was in the 2019 manifesto, and the Government intend to deliver on that particular commitment. I understand the Home Office has recently concluded a consultation on this matter, and the Government will publish a response in due course. That will give Members the opportunity to discuss this issue in greater depth, but the Government are on the same side as my right hon. Friend.
Chris Elmore (Ogmore) (Lab)
Analysis by the Women’s Budget Group shows that women will be disproportionately affected by the ending of the furlough scheme later this year, and that the half-heated plan that the Prime Minister announced earlier this week did nothing to address the disproportionate impact on sectors that often employ more women. I am aware there will be a statement next week and a debate. Will the Leader find time for a specific debate on the need for more support from the Government for those sectors that will not be looked after and supported following the Prime Minister’s statement? It is not fair on the women of this country and it is time that Ministers stepped up to offer that support.
Mr Rees-Mogg
What we need is an overall economic recovery. The number of women in employment in this country has been at record levels as a percentage and as the actual number. If we both protect the economy, which the emergency package has done, and manage to achieve a recovery that comes sooner rather than later—which the chief economist, the very distinguished figure of Andy Haldane, has said now looks likely—it will help everybody in the economy and will protect the people that the hon. Gentleman is most concerned about.
Lee Anderson (Ashfield) (Con)
I notice that the Solicitor General has recently had some good results in court by increasing sentences in very serious cases. That is good news for my constituents in Ashfield who wholeheartedly approve of those increased sentences for some of the worst criminals in society. Will the Leader of the House allow a debate in this Chamber to highlight some of those cases and the increased sentences passed?
Mr Rees-Mogg
I am grateful to my hon. Friend for raising this issue and for the tribute he paid to the Attorney General and the Solicitor General, who work extremely hard to ensure that just sentences are passed. I seem to remember—others may correct me—that the law that allowed that to happen was introduced when Margaret Thatcher was Prime Minister, so it is another Conservative success. My hon. Friend is right to highlight it and raise it in the House: perhaps he should ask for an Adjournment debate to discuss specific cases where the punishment is fitting the crime.
Chris Bryant (Rhondda) (Lab)
It is very clear now that if the easing of the lockdown is to be effective in tackling coronavirus, it will happen at different paces in the different nations of the United Kingdom but also in different parts within those nations. We see the situation in Leicester, and there may be others—who knows—and we know that some sectors will be affected for longer than others. The Leader of the House rightly said that where the state says a business cannot operate, the state should step in to provide financial assistance. I heard what he said to my hon. Friend the Member for Batley and Spen (Tracy Brabin), but I do not understand whether the statement from the Chancellor next Wednesday will be just a 10-minute statement with questions for perhaps an hour—in that case, I urge him to make it more like three hours—or one with a proper series of debates so that we can get into the nitty-gritty. By the way, can I still have my £2.5 million for the tip in Tylorstown?
Mr Speaker
May I help a little? It will be a minimum 20 minutes from the Chancellor, and it will be run long, with many more questions than normal.
Mr Rees-Mogg
Mr Speaker, you have answered the hon. Gentleman’s question. I am not sure there is much I can add.
Theresa Villiers (Chipping Barnet) (Con)
Schools in the Borough of Barnet are among the best in the country, and I pay tribute to all the teachers who have been doing brilliant work in difficult circumstances during this emergency. Can we have a debate on the return of children to school in September to ensure that Ministers are engaging with teachers and unions such as the National Education Union so that we have a clear plan to bring children back to the classroom safely?
Mr Rees-Mogg
My right hon. Friend raises one of the crucial points of current political debate. It is important to emphasise that going back to school for children is safe. I think we are still waiting for the Opposition to make it clear that they agree it is safe, though perhaps they will eventually get to saying that clearly, boldly and loudly. The Government strongly encourage eligible children to attend their school, nursery or college unless they are self-isolating or clinically vulnerable. It is very disadvantageous for children to miss out on education, particularly for those who are most disadvantaged to start with, so getting children back to school is a matter of urgency. My right hon. Friend the Education Secretary will make a statement following this, where he will be able to provide more details on our plans for schools in September.
Sarah Owen (Luton North) (Lab) [V]
People in Luton are rightly proud to welcome leading businesses such as easyJet and Vauxhall, but 4,500 easyJet staff face losing their jobs and Vauxhall PSA needs reassurances now on recovery from the pandemic and on the threat of walking away with no deal. If the Government are serious about saving jobs in Luton and other airport towns, there should already be a plan in place. Does the Leader of the House know if the Government even have one? Will he make time for them to present detailed plans to save both aviation and manufacturing jobs?
Mr Rees-Mogg
The Government have made enormous steps to protect jobs with more than £124 billion of support from taxpayers’ money, which I will reiterate just in case the hon. Lady was not listening earlier. The job retention scheme is supporting 9.3 million jobs at a cost of £25.5 billion, and 2.6 million self-employed people are being supported at a cost of £7.7 billion. There have been 52,000 loans through the coronavirus business interruption loans scheme for small and medium-sized enterprises at a cost of £11 billion. There have been 359 loans for larger companies at a cost of £2.3 billion. There have been more than 960,000 bounce-back loans, worth over £29.5 billion, plus £10.57 billion for business grants for 861,000 firms. What the Government have done is to ensure that the economy lasts through the crisis so it may recover when the crisis ends. That has been the right thing to do.
Joy Morrissey (Beaconsfield) (Con)
Will my right hon. Friend join me in paying tribute to the courage and bravery of the staff who work within this House who, during covid-19, carried on the traditions of this House despite that risk? I pay special tribute to the Doorkeepers, the Serjeant at Arms and his team. Even when we did not know what the outcome would be, they were here, bravely carrying on. We would not have had the House of Commons and its traditions without them. I also pay tribute to your team, Mr Speaker, of Helen, Ian and Jim, to the catering, security and Estate managers, and to the Norman Shaw North team. I also pay tribute to you, Mr Speaker, for carrying on. Thank you. I say thank you on behalf of all Members.
Mr Rees-Mogg
My hon. Friend is so right, and it is a bit sorrowful, isn’t it, that the hon. Member for Rhondda (Chris Bryant) titters when we are thanking people who have done their duty? I agree with my hon. Friend that the commitment to this House and to Parliament of the Doorkeepers, the caterers, the cleaners and, Mr Speaker, your team, is quite remarkable. May I be indiscreet? I asked a senior member of your team yesterday—and this will give the game away—whether she was pleased to be back, and she said:
“How could you be away from doing something that is so important?”
Being in Parliament is fundamental to the governance of the nation and people have made sacrifices to be here, and, on behalf of Her Majesty’s Government, I am grateful.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The Environment Bill was delayed because we had an election and we need to restart it again. It has now been delayed because of covid, and has been put back until September or perhaps even later. I am sure that we would all agree that the world has changed in those six months, particularly around covid and the relation to air quality where we now know that a 1 microgram increase in air pollution increases covid deaths by 15%. Will the Leader of the House speak with his colleagues and see whether we can organise additional evidence sessions before the Committee starts its line-by-line scrutiny again, so that we can take the additional evidence about covid and air quality and other areas around the environment, so that we ensure that the law is right and that it reflects the world in which we now live?
Mr Rees-Mogg
The hon. Gentleman is right to say that there have been delays in the progress of legislation, though we are getting back on track, and we have lots of Bill Committees now up and running and that makes it possible to work through. The question he raises is an interesting one, because the longer a Committee takes evidence for, the more it is delayed. We have to balance the need to get legislation passed in a timely way with evidence. In some ways, Select Committees are better placed to take evidence over longer periods. If the Bill Committee were to take evidence it might merely delay the process further.
Jack Brereton (Stoke-on-Trent South) (Con)
I am delighted that Meir station in my constituency is one of the 10 successful projects moving forward as part of the Government’s Restoring Your Railway Fund. Does my right hon. Friend agree that we should have a debate in Government time about reopening rail stations and lines to help aid the recovery of our economy from coronavirus?
Mr Rees-Mogg
Yes. My hon. Friend makes a very good point. There is a wonderful Flanders and Swann song about the old railway stations that were closed by Beeching, and it includes, of course, Midsomer Norton in my own constituency. I am delighted to hear that my hon. Friend’s constituency—[Interruption.] The shadow Leader of the House says, “Sing it”. I think I had better not. Meir station is one of those that will benefit from the Government’s determination to improve infrastructure around the country. The Restoring Your Railways Fund idea is about levelling up and improving connections between communities. It is inspired by communities affected by the Beeching cuts, but not limited to Beeching line restoration. If we can improve a service and provide a solution to a transport problem that involves levelling up the economy, that is exactly the kind of proposal that the ideas fund is interested in.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
On 5 March, I started to feel unwell. A week later, I was in self-isolation with suspected covid-19. The reason I mention this, Mr Speaker, is that the virus passed, but the illness did not. It is now well known and well recorded that many end up with a debilitating chronic post-covid fatigue. I am on week 16 in a very large group of people now known as long covids. Can we have a statement or a debate on long covid to ascertain what research the Department of Health is carrying out into this new syndrome and the possible longer-term impact covid-19 may have on a growing number of the public’s health?
Mr Rees-Mogg
May I begin by wishing the hon. Gentleman a swift recovery, and I am sorry to hear that he is suffering from these debilitating after-effects of covid-19. The Health Secretary makes regular appearances at the House, and I am sure it would be suitable to raise this question with him, and I am sure it is among many other things that are being looked into as people learn more about this disease.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
Can we please have a debate about local government restructuring? In Somerset, the county council has unfortunately been far too busy looking for unitary instead of attacking covid-19. Believe it or not, it is now trying to persuade the Government to let it become a huge new unitary. Does my right hon. Friend agree that the timing of this bid is at least insensitive and that the future of our other two struggling unitary councils in Somerset must be included in any future reviews of Government restructuring in Somerset?
Mr Rees-Mogg
My hon. Friend tempts me when he asks for a debate on Somerset. Dare I say that I feel that all parliamentary time could well be devoted to discussing the virtues, joys and successes of our great county, which has been a county since antiquity. I think that the county of Somerset was formed in about the eighth century; it was certainly a very important county in the time of Alfred the Great, so debating it is something that is close to my heart. My hon. Friend raises an important point about local government reorganisation, of which the Secretary of State is well aware, as my hon. Friend and I both know.
Patrick Grady (Glasgow North) (SNP)
If the Prime Minister and the Leader of the Opposition believe that there is no border between England and Scotland, perhaps we can have a debate on the Scottish Adjacent Waters Boundaries Order 1999, which took 6,000 square miles of fisheries territory from Scottish jurisdiction and moved it to English jurisdiction just before devolution began. If there are no borders in the United Kingdom, I think that might be a surprise to the people of Leicester, who have discovered that they have to respect internal boundaries pretty strictly. I wonder whether the Leader of the House can tell us when the powers to deal with the financial implications of enforcing these measures are going to be provided to the relevant authorities throughout the United Kingdom. In particular, what would happen if there were a spike or an outbreak in the City of Westminster? What implications would a lockdown here have on the operation of this place?
Mr Rees-Mogg
I never realised that our separatist friends would model themselves on an Ealing comedy. It seems to have become “Passport to Pimlico”. There are no internal borders in the United Kingdom; it is one country, I am glad to say. [Interruption.] There is a difference between borders, and districts and areas. That is self-evident. A border is something that one may stop people crossing. Even I am not suggesting that we make people from Gloucestershire present their passports before coming into Somerset.
Mr Rees-Mogg
As the hon. Member for Rhondda will remember, in the film “Passport to Pimlico” Pimlico was thought to have belonged to the Duke of Burgundy or some such, and therefore had become an independent state within the United Kingdom. Our separatist friend wants to do the same by insisting on passports to Scotland, and Mrs Sturgeon wishes to build a wall. [Interruption.] Unfortunately Mrs Sturgeon’s policy is not fictional. Many of us wish that it were and that the separatists were a bit more fictional, but they are not. They are here and they bang on about it constantly, but we are still one country and Scotland benefits enormously from being part of the United Kingdom.
Sir Oliver Heald (North East Hertfordshire) (Con)
Has my right hon. Friend had a chance to see early-day motion 675, which is sponsored by me, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) and other hon. and right hon. Friends, and which is attracting all-party support? It calls for the Government to include in their general review of equality issues an assessment of whether to set up a national museum of black, Asian and minority ethnic history and culture, somewhat similar to the National Museum of African American History and Culture in Washington. Could we have a debate in Government time to set out the benefits of such a decision? [That this House recognises the important role played by the Smithsonian National Museum of African American History and Culture in Washington DC since it opened its doors to the public on 24 September 2016, documenting and enabling the study of the life, history and culture of African Americans; notes that it serves as a place of collaboration to work with many other museums and educational institutions that have explored and preserved this important history; asserts the national importance of the life, history and culture of Black, Asian and minority ethnic communities in the UK and their global influences; believes that there should be a DCMS-sponsored national UK museum for the study of Black, Asian and minority ethnic history and culture on a similar scale and model to the Washington Museum; and calls on the Government, whilst reviewing inequalities’ issues generally, to make an assessment of the potential merits of such a national museum.]
Mr Rees-Mogg
I am grateful to my right hon. and learned Friend for highlighting his early-day motion to me in advance. He raises an interesting and important subject that is worthy of fuller debate. I am afraid that I am going to have to refer him to the Backbench Business Committee, when that is back up and running. With so much cross-party support, as he indicates, that may well be a topic that the Committee will smile favourably on in terms of granting a debate when there is more time available to it.
Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]
May I first send my sincere condolences to the hon. Member for Hexham (Guy Opperman) and his wife? I can only imagine what they are going through.
Oldham Council has estimated an in-year deficit of over £19 million as a result of covid spending to support our communities and businesses, as well as a loss of income. Across Greater Manchester, this deficit is £368 million. Will the Leader of the House ensure that this issue is conveyed to the Chancellor, and that he does whatever it takes to address the needs of all local authorities and the communities they serve in next week’s financial statement?
Mr Rees-Mogg
The Government are well aware of the difficulties that councils have faced up and down the country, and each individual council has suffered in particular ways, depending on the structure of its financing. That is why £3.2 billion of extra funding has been made available to support councils, in addition to a £900 million fund for what are referred to as shovel-ready local infrastructure projects to ensure that they can take place, plus £600 million for infection control. There will be a debate on Wednesday where those issues can be raised and the Chancellor can be questioned on them to ensure that all that can be done, is being done. The Government’s record so far is very good.
Robert Halfon (Harlow) (Con) [V]
Can we have a statement on what the Government are doing to improve the treatment of domestic abuse victims through the court system in the UK and to end stalking? My constituent Charlotte Budd suffered unnecessary, unacceptable and avoidable trauma both as a victim of stalking and through her experience in the family court system. Will the Leader of the House ask the Home Office what steps are being taken to ensure that the correct guidance and education is in place for members of our judiciary when dealing with domestic abuse cases, such as that of my constituent?
Mr Rees-Mogg
I am grateful to my right hon. Friend for raising that deeply troubling matter in the House, particularly with reference to his constituent. The constituents of Harlow are lucky to have him as such a champion fighting their causes and taking up their grievances. Tackling domestic abuse is one of the Government’s highest priorities. I know that he will welcome the rapid progress of the Domestic Abuse Bill through Parliament in recent weeks.
As Ministers in the Ministry of Justice recently confirmed, the Government are making progress to support victims of domestic abuse in the courts. The Department is overhauling the family courts following an expert-led review into how they handle domestic abuse that raised concerns that victims and children were being put at unnecessary risk.
Furthermore, new stalking protection orders will allow courts in England and Wales to move faster to ban stalkers from contacting victims or visiting their homes or places of work or study. That will grant victims more time to recover from their ordeal. I am sure that my right hon. Friend will continue to campaign on the issue, but I hope he feels reassured that the Government are making every effort to support victims of those terrible crimes.
Cat Smith (Lancaster and Fleetwood) (Lab)
As chair of the all-party parliamentary group for valproate and other anti-epileptic drugs in pregnancy, I take a huge interest in the Cumberlege review, which will be published on Wednesday. Members on both sides of the House have campaigned on sodium valproate, surgical mesh and Primodos for many years. Can the Leader of the House reassure us that, on Wednesday, we will receive an oral statement on the Floor of the House? The outcome of the review will have huge implications for many victims who have suffered for far too long.
Mr Rees-Mogg
As I said earlier, the Cumberlege review will be extremely important. I already mentioned the efforts of the hon. Member for Bolton South East (Yasmin Qureshi) in that regard. I am looking forward to the review, because I actually gave evidence to the committee. Wednesday may not be the best day for a statement, because there will be the financial statement and debate afterwards, but I hear what the hon. Lady has said in regard to the interest in the House on the issue.
Robert Courts (Witney) (Con)
As the chairman of the all-party parliamentary group on small and micro businesses and in west Oxfordshire, I have seen the challenges that small businesses are facing and the extraordinary efforts and imagination that they are using to continue trading as we build from covid. Can we have a debate in Government time to share best practice and consider what they need, as we build back better and reignite the economy after this terrible crisis?
Mr Rees-Mogg
My hon. Friend is absolutely right that small businesses are the heart of the economy. They are the engine and the creators of new jobs. The Government have done a lot to support small businesses during the pandemic, beyond the furlough scheme, as I have outlined before. We do now need to think about how we move to the future and get the economy going again. The Prime Minister made an excellent speech on Tuesday and we will get more information from the Chancellor next week. My hon Friend is right to champion small businesses.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The BBC has been reporting all morning that it has been told by Government sources that there will be an announcement today or before the end of the week of the list of countries to which air bridges will be established. I hope that the Leader of the House will ensure that that announcement, when it is made, is made here first.
In fact, that announcement could be made by the Prime Minister, who could then explain his views on the fact that his father has apparently jetted off to Greece in defiance of the guidance. It may be—I do not know—that he needed an eye test or something like that, but we would all welcome an explanation.
Mr Rees-Mogg
I seem to remember that it says somewhere in the Bible that the sins of the fathers will be visited upon the sons, but I do not remember it ever being the other way around, so I think the right hon. Gentleman is fishing desperately to try to make any criticism of the Prime Minister in that regard. As regards the countries that we may or may not have on a list, information is given to Parliament when Parliament is sitting. Parliament will not be sitting tomorrow, so I cannot promise that there will be a statement if the information comes out at a time when the House is not sitting.
Neil O’Brien (Harborough) (Con) [V]
Slightly more than half my constituents live in Oadby and Wigston so are included in the Leicester lockdown area. I support the lockdown because it is essential to stop this killer virus in its tracks, but there are lots of things that we need to make it successful. For example, we need urgent publication of timely data for lower-tier local authorities, and while the extra money for our local authorities is very welcome, if the lockdown goes on for longer than the two weeks that are planned, more may be needed, so can we have an urgent debate on how we make local lockdowns work well?
Mr Rees-Mogg
My right hon. Friend the Secretary of State for Health and Social Care made a statement on Monday and was questioned at length on this, and my right hon. Friend the Prime Minister was questioned about it yesterday, so I think the Government are doing everything they can to provide information to keep people fully informed and are working very closely with local authorities to help them through this difficult period.
Alex Norris (Nottingham North) (Lab/Co-op)
One year and four days ago, the Government’s call for evidence about violence and abuse targeted at shop workers closed, and in that one year and four days we have heard absolutely nothing from the Government. However, during that time there have been 153,000 incidents of violence and abuse against our shop workers, who have done so much for us during this challenging period. Can I have a commitment from the Leader of the House that that call for evidence will be published immediately and that we will get an oral statement and have a debate in Government time on the matter?
Mr Rees-Mogg
Criminal activity is always wrong, and the police need to have the resources to enforce the law. Therefore, I can give the hon. Gentleman the good news that of the commitment to employ 20,000 more police officers we now have achieved 3,005 of them, so the numbers are going up. This is about enforcing the law as it exists and we could not have a more doughty champion of law and order than my right hon Friend the Home Secretary.
Sir Christopher Chope (Christchurch) (Con)
May I ask my right hon. Friend whether it is possible to have an early debate on the importance of regulatory impact assessments in public policy making? As he knows, social distancing rules have a different impact in different sectors of the economy and on different activities, and we would be able to get a lot more consistency in Government advice on this if we had regulatory impact assessments, which seem to have been ignored, not least in relation to social-distancing rules in this House.
Mr Rees-Mogg
The problem is that if we spend too long doing all this, by the time we have done it we have moved on to the next stage of the lockdown. We have to move at a pace to ensure that things happen in a timely manner, and I am a bit surprised that my hon. Friend is calling for bureaucratic folderol, rather than getting on with things—this is out of character for him. We need to do things properly and one sector or another will do it differently, but, as the opening up takes place, people must to some extent use their own wisdom to work out what they have to do.
Kevin Brennan (Cardiff West) (Lab)
I thank the shadow Leader of the House for mentioning Luke Symons’s case and I hope at some point to secure an Adjournment debate on that.
Following on from last week, I raised with the Leader of the House the need for a statement from the Culture Secretary about the reopening of venues, or support if they cannot be reopened, and today we have seen the launch of the “Let The Music Play” campaign by UK Music, the Music Venues Trust and so on in order to get more support from the Government. All we have had from the Culture Secretary is a road map, and I am afraid a road map will get you nowhere when you are running on empty. Next week, let us have that statement from the Chancellor and let us have substantial, not just minor, support to make sure that we do not lose this important part of our cultural landscape.
Mr Rees-Mogg
I refer the hon. Gentleman to the answer I gave earlier, because I gave some detail on this, but the Chancellor’s statement will be a further opportunity to raise this issue.
Kerry McCarthy (Bristol East) (Lab)
The Prime Minister’s comments about newt counting earlier this week suggest that he is prepared to let developers ride roughshod over environmental concerns, so can the Leader of the House offer me some reassurance that this is not the case? If the Environment Bill is not due to come back into Committee until September, which I understand is the case, how on earth is the Bill going to get through both Houses to enable the Office for Environmental Protection to be established in Bristol before we end the transition period? Will there not be a regulatory gap as far as environmental protections are concerned?
Mr Rees-Mogg
The two great newt fanciers were Gussie Fink-Nottle and Ken Livingstone. They were always interested in newts, and I am sure that they are—
Mr Rees-Mogg
The hon. Gentleman is really alert this evening. He has pointed out that Gussie Fink-Nottle is fictional—
Mr Rees-Mogg
Gussie Fink-Nottle is indeed fictional, and he was not really arrested in the fountains in Trafalgar Square when he thought that there were newts there after boat race night. It is important both that we protect the environment and ensure that building takes place. What my right hon. Friend the Prime Minister was saying was that it is a question of doing this in a timely manner and not allowing research on newts to be a delay to projects. That does not mean that research does not need to take place. It merely means that it must not be an excuse for delay and preventing things that ought to happen from happening.
James Daly (Bury North) (Con)
Will the Leader of the House find time for a debate on Gizmo’s Legacy, founded by my constituent Helena Abrahams? Gizmo’s Legacy has developed into a national campaign calling on local authorities to scan microchips in cats if they are found deceased, as they would do with dogs. This would allow much loved pets to be reunited with their owners.
Mr Rees-Mogg
I am grateful to my hon. Friend, and I commend the work of Gizmo’s Legacy and its national campaign. The Government have said that they will bring forward cat microchipping in England, and we will publish the summary of responses to our call for evidence on this subject in due course. This is a worthy subject for an Adjournment debate under the right concatenation of circumstances, and I hope he will avoid catastrophic issues occurring.
Sir Robert Syms (Poole) (Con)
May we have an urgent debate on the aviation sector? First, we need to discuss air bridges, and the sooner we get them the better. Secondly, we need to discuss BA’s treatment of its staff, which is a disgrace. Thirdly, we need to look at the whole sector and the support available, particularly for those in engineering who are going to suffer. I notice that the French Government have supported their sector.
Mr Rees-Mogg
In general terms, I would reiterate the points I have made about the support that the Government have provided for all industries. My hon. Friend is not alone in having constituents who have been poorly treated by British Airways; I have one myself. Treating people who have worked for a firm for very long time unfairly is not a way that reputable companies should behave, and bringing this to the attention of the House is therefore the proper thing to do. I would suggest that most of what he is asking for can be brought up in the economic debate next week.
Lilian Greenwood (Nottingham South) (Lab)
On Saturday, pubs and restaurants will reopen, and that is welcome, but if they are to remain safe, the number of customers will be far lower than usual and the need for Government support has simply not gone away. For other businesses that bring life and soul, and revenue and jobs, to Nottingham, including the Arena and numerous live music venues, nightclubs and theatres, the recovery stage that the Leader of the House referred to earlier is nowhere in sight. When will we hear from the Government on action to save our cultural sector, and when can we have a proper debate on this? Surely this is too important to be relegated to a footnote in a general economic debate.
Mr Rees-Mogg
I refer the hon. Lady to the answer that I gave earlier on the cultural sector, which is of great importance. I welcome her good cheer about the pubs opening on Saturday. Last week, I suggested that people use a yard of ale to measure their social distancing, and I am glad to say that I have had a yard glass delivered. I am looking forward to visiting the Crown in West Harptree on Saturday to see whether I can get in the two and a half pints that I believe a yard of ale contains. Whether I then drink the same is another question.
Anthony Mangnall (Totnes) (Con)
My right hon. Friend’s downing-in-one of a yard of ale is a very good idea, and I am happy to try to match him. Could he consider more time for Backbench debates, not least so that we can discuss the fine merits of Somerset and perhaps Devon as well, but also so that we can discuss the UK’s role in tackling gender-based violence and ending the silence that so many suffer?
Mr Rees-Mogg
It is important that we get back to having the more general debates that my hon. Friend calls for. We have in the Standing Orders the number of debates that we must provide in this Session, and we will work with the hon. Member for Gateshead (Ian Mearns) to ensure that the Backbench Business Committee can schedule its debates when things are more back to normal. I commend my hon. Friend for his campaign on gender-based violence, which is important for us to highlight and to try to eradicate.
Deidre Brock (Edinburgh North and Leith) (SNP)
Many people are rightly concerned about the implications of the Leicester lockdown and quarantine and how any future outbreaks might be handled. They are concerned about travel to, from and within that fine city, the health of individuals there and how the outbreak might affect others. Will the Leader of the House schedule a debate in Government time on what powers there are for travel and other restrictions to be imposed on specific areas and the people from those areas? In particular, we need to know what powers some parts of the UK have to protect themselves against the virus being imported.
Mr Rees-Mogg
The import of the virus is an issue that the Government have tackled with the quarantine, which has been an important step in trying to deal with that. Certain powers are available, but most of what is being done is relying on people to use their good sense. The British people should be very proud of the way they have coped with the crisis. They have not needed to be harried and arrested as they went about their business— they had the sense to decide to stay at home and follow guidance, which is a much better way to proceed in a free country.
Mr Speaker
We have the runway cleared for Bob Blackman to land his final question.
Bob Blackman (Harrow East) (Con) [V]
I warmly welcome the comments from the Prime Minister and the Foreign Secretary on offering support to the citizens of Hong Kong, but the existential threat from China still exists. It threatens Taiwan. It has military involvement in Sri Lanka. It attacked Indian soldiers in Ladakh—in Indian territory—and it is setting up atolls across the ocean and then claiming territorial waters. Can my right hon Friend arrange for a statement from the Foreign Secretary on what further work we will do to combat this threat from China and what we can do in the UK to ensure that the citizens of Hong Kong are protected?
Mr Rees-Mogg
The Foreign Secretary made a statement on that issue yesterday, but my hon. Friend is right: we must stand up for British citizens. As always, we should quote Palmerston, who said:
“as the Roman, in days of old, held himself free from indignity, when he could say Civis Romanus sum; so also a British subject, in whatever land he may be, shall feel confident that the watchful eye and the strong arm of England will protect him against injustice and wrong.”
British nationals overseas are British nationals. The Government are right to protect Her Majesty’s subjects wherever they happen to be, and not, in the Foreign Secretary’s words, to “kowtow” to foreign powers, however powerful they think they are.
Mr Speaker
In order to allow the safe exit of 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.
Education Settings: Autumn Opening
(4 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Education (Gavin Williamson)
With permission, Mr Speaker, I would like to make a statement regarding the full opening of our schools and colleges to all pupils in September.
I know that these past three months have been some of the most challenging that schools, parents and, most of all, children have faced. What schools have achieved to make sure that children and young people are kept safe and can continue to learn during this period is remarkable, and I think all of us in this House are deeply grateful for those efforts. But we all know the impact that lost time in education can have on our children’s outcomes.
Every child and young person in the country has experienced unprecedented disruption to their learning as a result of coronavirus, with those from the most vulnerable and disadvantaged backgrounds among the hardest hit. Education recovery is critical for this generation of schoolchildren. Returning to normal educational routines as quickly as possible is critical to our national recovery, too. That is why we have been working to ensure that all pupils will be able to go back to schools and colleges full time in September, with covid-secure measures in place, so that they have the opportunity to thrive and fulfil their full potential.
Today, the Government have published detailed plans for nurseries, schools and colleges that set out what is needed to plan for a full return, as well as reassuring parents and carers about what to expect for their children. The guidance has been developed with medical experts from Public Health England and follows regular engagement throughout the outbreak between the Government and the education sector.
We continue to work closely with the country’s best scientific and medical experts to ensure that both children and staff are always as safe as possible. Schools will continue minimising contact between children, including through grouping children together in bubbles and encouraging older children to distance. At a minimum, this will mean keeping whole year groups in schools and colleges separate. This is in addition to the other protective measures that we know are so important for infection control, such as regular cleaning and hand washing. We are also ensuring that testing is readily available, so that parents, teachers and students can return with confidence. All staff, pupils and their families will continue to have access to testing if they develop covid-19 symptoms.
By the start of the autumn term, we will provide all schools and colleges with a small number of home testing kits, which will be taken home by children or staff who develop symptoms while on site but who would struggle to access a testing centre. This is so that they can have a test quickly and get the results back quickly. All schools will have access to direct support and advice from their local Public Health England health protection team to deal with any cases that may occur. They will be advised on what steps need to be taken.
In these challenging times, we are committed to ensuring that the nation’s children have not only a safe education, but an excellent one. From September, we are asking schools and colleges to return to a broad and balanced curriculum, so that all pupils continue to be taught in a wide range of subjects, maintaining their choices for further study and employment. We expect exams to go ahead in the summer of 2021. We understand the additional pressures on teaching staff to deliver such high standards of education in this difficult period. As such, as Ofsted inspectors are preparing to visit schools in the autumn, it will be to discuss how they are managing the return to full education of all their pupils. The insight that inspectors gather will also be aggregated nationally to share learning with the whole sector, the Government and the wider public. It is our intention for full inspections to return from January.
We are also providing significant financial support to help pupils catch up on lost learning. As I announced in June, we will be providing a £1 billion covid catch-up package, including a £650 million catch-up premium for state-funded primary, secondary and special schools, and a £350 million national tutoring programme for the most disadvantaged pupils. Evidence shows that six to 12 weeks of tutoring for a disadvantaged pupil can result in five months of catch-up. Schools are held accountable for the outcomes they achieve with their funding, including through Ofsted inspections, and the covid catch-up funding will be no exception to this.
It is critical to ensure that no child loses more time in education and that, from September, all children who can be at school are at school. Schools and colleges will need to work with families to secure regular attendance from the start of the new academic year, with the reintroduction of mandatory attendance. Our intention is that those with education, health and care plans or special educational needs will also be back in school or college in September. Since May, as a result of the pandemic, it has been necessary to modify the duty on local authorities and health commissioners so that they could use their reasonable endeavours to secure or arrange the provision for those on EHC plans. I am committed to removing these flexibilities as soon as possible, so that children and young people can receive the support they need to return to school. As such, unless the evidence changes, I will not be issuing further national notices to modify the EHC duties. We will, however, consider whether any such flexibilities may be required locally, to respond to outbreaks in different parts of the country. In addition, I am pleased to announce that, as we continue on the road to recovery and infection rates continue to fall, from 20 July nurseries, childminders and other childcare providers will no longer be required to place limits on the group size of children who can play and learn together.
I would like to take this opportunity to thank those parts of the sector that have already opened their doors to more children and who are doing a phenomenal job to help our children and young people settle back into their usual routines. Since schools and nurseries began to open more widely on 1 June, we have seen the number of children attending school steadily rise, with over 1.6 million pupils already back in school. I am sure, Mr Speaker, that I will be joined by the House as I express my thanks to all childcare, school and further education staff who have gone above and beyond since March, and who will continue to do so as we prepare to welcome all of our children and young people back to school and college in September. I commend this statement to the House.
Mr Speaker
I welcome the new shadow Secretary of State for Education, Kate Green.
Kate Green (Stretford and Urmston) (Lab)
Thank you very much, Mr Speaker. I thank the Secretary of State for his statement and for an advance copy of it. I also thank him for his call last night. I very much look forward to working with him.
Mr Speaker, every child must be safely back in school in September. By then, many children will have experienced nearly six months’ gap in their education. Some have been able to maintain their learning during that period, but there has been a huge gap in learning for others, especially the most disadvantaged. A senior official in the Secretary of State’s own Department has warned that the attainment gap could widen by as much as 75% as a result of the crisis. Today’s announcement finally recognises the desperate pleas of heads, staff and governors for information and certainty about plans for the next academic year. For too long, the Government have been asleep at the wheel. The announcement today comes just three weeks before the end of term, and an immense amount needs to be done to prepare.
Staff have been working flat out since February half term and I, too, want to thank teachers, school leaders and everyone who works in our education settings for their exceptional efforts during these unprecedented times. Over the summer they will need a break, and as they prepare plans for return, they will also need the active support of the Department. It cannot be left to heads to struggle through on their own. So I have a number of questions for the right hon. Gentleman. What consultation has been undertaken in preparing this guidance with heads, teachers and school staff, governors and unions, who have made many sensible and practical suggestions for students’ return? The Government need to learn from their previous mistakes. That is why Labour suggested a taskforce of school leaders, which would have meant we could bring children back to school sooner.
Can the Secretary of State guarantee that every school will have full access to testing and tracing, and all the personal protective equipment and other resources that they need to open safely? The Government’s track record has not been impressive so far, and we cannot allow any further failure to supply the safety essentials to prevent children’s return. I support the Secretary of State in reintroducing compulsory attendance, but fining poor parents will not serve the best interests of their children. Parents need reassurance that their children will be safe, especially in communities, including ethnic minority communities, where the prevalence of covid is higher. Many children will have found the past few months unsettling, even traumatic. What is needed is a trauma-informed approach to school and to families.
Staggered starts may present difficult challenges for parents. Can the Secretary of State say more about wraparound care for families and about transport arrangements for children to travel to school? Can he confirm that all children are expected to be safe in school in September? Will there be a delay in incoming reception children starting school?
In relation to early years, what financial support will be available for parents or childcare providers to protect their viability if children cannot attend, or if settings are forced to close?
I welcome the recognition of the needs of children with special educational needs and disabilities, and the assurances on education, health and care plans. Will the Secretary of State guarantee to the House that the needs of those children will be met in full?
Does the Secretary of State agree that a broad curriculum, including arts and humanities, supports children’s attainment in the core subjects, too? What discussions have taken place with further education providers about how they will provide the “full education” envisaged?
Will the Secretary of State say a little more about plans for students who are due to sit exams? What about home-schooled children whom schools refuse to assess? A huge divide is opening up between children who have had a good study experience at home and those who have lacked the resources to learn. Ofqual must address that in its recommendations for arrangements for exams next year.
The announcement of the £1 billion of catch-up funding is welcome, but can the Secretary of State confirm that it is all new money and will not be funded by cuts elsewhere? What guarantee can he give of the availability of sufficient high-quality tutoring capacity with tutors expert in the subjects they will teach? Does he share my concern that requiring schools to contribute 25% of the cost of the national tutoring programme advantages the better-off schools? Why have post-16 students been excluded from catch-up funding support?
On Tuesday, it was reported that the 230,000 laptops that had been promised for children who lacked full digital access had not been delivered in full, as promised, by the end of June; when will they arrive?
Finally, the six-week-long summer holiday always widens the attainment gap, and this year that will be exacerbated by the time already spent out of school. What activities and support are being put in place for the summer break? The funding for pupils on free school meals is welcome, but what about children who become eligible for free school meals during the summer holiday? Will the Secretary of State guarantee that no eligible child will miss out?
Gavin Williamson
I congratulate the hon. Lady on her new role. I very much look forward to working with her on some of the great challenges that our nation faces over the coming months as we focus on the recovery for our education sector after this pandemic.
I assure the hon. Lady that it is important that the curriculum is full, broad and balanced and includes the arts and humanities, sports and so much else, because we recognise that to give children the best opportunity to succeed in life, they have to have that breadth of curriculum. We should not be seen to be dumbing down or reducing it. We have to give children choices; it is good for their future attainment and life chances, and for their mental health as well. They should have that breadth that is so vital for them to succeed.
The hon. Lady is absolutely right to highlight the importance of those children with special educational needs and how we need to support and help them. We have seen some brilliant examples, especially in some of our special schools, which have gone so far and above in terms of help not just for children but for parents at this most difficult and challenging time. As all schools return, it is vital that it has to be clear that education, health and care plans are properly adhered to by local authorities. That is why we have got to have the proper and full return of those obligations that local authorities have to be held to.
I assure the hon. Lady that there is new money for the covid catch-up fund. We are looking forward to sharing more details on that with schools and will be looking forward to working with schools, as we have been working with the Education Endowment Foundation, to make sure that that money is properly channelled into the areas that are going to make a real difference to children.
It is right that everyone in the House recognises the challenges and the significant loss that children have suffered as a result of not being in school. That is why we have to bring all children back into school at the earliest possible opportunity. Equally, it is about making sure that the £1 billion is properly spent. That is why £350 million of it is being specially ring-fenced to make sure that it is going to children from the most disadvantaged backgrounds. It will be focused on the evidence-based actions that we know will make a difference for those children.
In terms of consultation, we have and will continue to consult widely within the sector. We have established a school stakeholder group with the Trades Union Congress and other unions, but, more importantly, we have had a much wider dialogue with people, not just trade unions. We have consulted many other stakeholders and, most importantly, those who are delivering education on the ground. That is something we have continually been doing ever since the moment we had to close schools, and we will continue to do so as we move forward.
Robert Halfon (Harlow) (Con) [V]
I strongly welcome the statement today and the guidance to help schools open fully in September. The plans for children with special educational needs are very good news, as is the £1 billion catch-up fund. We need to get our children learning again. Given that University College London has said that 2 million children during the lockdown have done virtually no school work and that the National Foundation for Educational Research has reported that four in 10 pupils are not in regular contact with their teacher, will the Secretary of State examine why that has occurred and look to Ofsted and local authorities to work closely with schools and set clear guidance on online learning, homework and contact with teachers?
Gavin Williamson
My right hon. Friend is right to point to the importance of accountability measures that need to sit with schools at all stages. I will be asking Ofsted to look at the issue and examine closely what schools are doing in terms of actions in order to ensure that we have continuity of education at all stages. It will continue to be important to do that, because we will see situations in this country where we have local lockdowns, and we need to ensure that there is always continuity of education in those communities.
Matt Western (Warwick and Leamington) (Lab)
I add my voice to those who have congratulated my hon. Friend the Member for Stretford and Urmston (Kate Green) and welcomed her to her new position. I just want to pick up on a point that she raised, which is the issue of laptops. We are well aware that the most disadvantaged children in our schools are at such a disadvantage in the educational setting. We know, though, that all children have been impacted by the failure to provide laptops. In answer to my written question on 10 June, I was told that 230,000 laptops had been ordered on 19 April. Government documents as of this week show that the first order was in fact placed on 15 May. Which is correct?
Gavin Williamson
I will write to the hon. Gentleman with clarification on that matter.
Gareth Davies (Grantham and Stamford) (Con)
The new shadow Education Secretary used her first public statement to say that she looks forward to working with the unions. She talks about delays. Does my right hon. Friend know whether that means she agreed with the National Education Union’s orders to not engage with the Government’s plan to get children back to school?
Madam Deputy Speaker (Dame Rosie Winterton)
Order. These are questions that should be directed to the Secretary of State. Secretary of State, I am sure you will find a way of answering that appropriately.
Gavin Williamson
I know that my hon. Friend shares my passion to see every child back in school and every school right across the country getting their full curriculum in every class. I hope that those people who have occasionally been tempted to try to block the full return of schools and those who have tried to frustrate the best efforts of headteachers and so many other teachers in their desire to see every child back will recognise that it is important and absolutely vital that we do everything to see all children enjoying that first-class education that we all want them to have.
Helen Hayes (Dulwich and West Norwood) (Lab)
The coronavirus pandemic threatens to undo 20 years of hard work by teachers, parents and governors in my constituency in successfully narrowing the attainment gap. It is widening and deepening existing disadvantage and disproportionately impacting BAME communities. The number of laptops so far provided by the Government to enable online teaching barely scratches the surface of digital exclusion in Lambeth, Southwark and across the country. How will tutoring take place over the summer months when many of the most disadvantaged children still do not have access to home IT equipment?
Gavin Williamson
Conservative Members have always been clear that we want to see every child back in school at the earliest opportunity, because we know that the best way of delivering education is in the classroom with the teacher at the front. Not only have we had the incredibly ambitious plan to roll-out laptops— 202,000 of those laptops have already been provided—but we accept that we want to do more. That is why have the covid catch-up premium, and tutoring plans, and those are to be conducted within schools and with the support of teachers, all based on the Education Endowment Foundation’s clear evidence on how we can deliver change and improvement for those children.
Clive Efford (Eltham) (Lab)
I am delighted that the Secretary of State is now talking to teachers’ representatives and their trade unions, but for too long Ministers have denigrated teachers from the Dispatch Box, which has led to people not believing the Government when they talk about people being safe to return to schools. If the Secretary of State is now consulting with the wider school community, will he say whether he has spoken to headteachers about the practicalities of every child going back, which must happen in September, and about children being able to stay in bubbles and separate year groups? What is the practicality of that in our schools?
Gavin Williamson
I assure the hon. Gentleman that we have had extensive discussions with headteachers about those plans, and consulted widely. I also assure him that I have met unions every week all the way through this crisis, and made sure that we have had a regular dialogue to share our plans. This should not be about trade unions dictating what we are doing that is best for our children. We want to work with trade unions and the whole sector, including staff, to deliver the best education for all children. We will continue to have that dialogue. We have done that in the past, and we will in the future.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con) [V]
I welcome my right hon. Friend’s statement that all children will be back in school in September. Despite the valiant efforts of parents, pupils and teachers, the majority of children have fallen behind, at least to some extent, especially those with special educational needs or from disadvantaged backgrounds. Will my right hon. Friend outline how he intends to help those children to catch up, while ensuring that those who made more progress can continue to do so, so that every child can reach their full potential?
Gavin Williamson
That is why we took the decision to ensure that in our covid catch-up plans there was money specifically targeted at the most disadvantaged children and those who are the greatest challenge for schools. We are working closely with the sector to ensure targeted interventions for children with special educational needs, while equally recognising that all children, whatever their background and wherever they come from in the country, will face challenges in terms of the loss of education. That is why we have done such an extensive £1 billion package to support schools in doing that.
Layla Moran (Oxford West and Abingdon) (LD)
Will the Secretary of State guarantee that every child who needs a laptop will have one? Does he recognise that to create high-quality online lessons takes skill? What is he doing to ensure that best practice is spread among all schools before the summer holiday, so that as teachers make their plans, we know that in September high-quality learning will be available to all?
Gavin Williamson
I absolutely assure the hon. Lady of the work to endeavour to ensure that that high-quality online teaching is there. We have seen that through the creation of the Oak National Academy. She may have noticed the announcement a few days ago about the expansion of that academy, so that it can continue to provide a full and total curriculum across all year groups and every subject. That is a brilliant innovation, and I very much encourage the hon. Lady and her constituents to take advantage of it.
Virginia Crosbie (Ynys Môn) (Con)
Our teachers are critical if we are to look after the next generation and deliver our levelling up agenda. How is the Secretary of State supporting our hard-working supply teachers at this exceptional time, and how is he ensuring that our supply teachers are receiving appropriate remuneration?
Gavin Williamson
My hon. Friend has raised with me the concern that a number of supply teachers in her constituency of Anglesey have suffered as a result of not being able to access the furlough scheme. In England, many agencies have been working closely with the Treasury to access the furlough scheme. I encourage the Welsh Government to support agencies to help their supply staff to be able to access that as well.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
I agree that all who can be at school should be. St Anne’s Primary School in Denton was built in 1888. It is a small single-entry school. There are no spare classrooms, and its rooms all open on to the small school hall, which is also used as the dining area. It has a very small outside yard, and no playing fields where temporary classrooms can be located. It is one example of many similar across England. What assessment has the Secretary of State made of the number of schools that will physically struggle to accommodate all their pupils under the social distancing or educational bubble rules, and how does he plan to help them educate all children, and do so safely?
Gavin Williamson
When the hon. Gentleman has the opportunity to read the guidance, he will see the importance of having flexibilities for schools, such as the one he outlines, that are operating in a very different type of estate from that in which larger schools may be able to operate. We are trying to create a clear framework of how we can give schools good advice so that they can ensure the education of every single pupil, but if he has particular issues or is particularly concerned about any of his schools, I know that the Minister for School Standards would be happy to discuss them with him.
Andy Carter (Warrington South) (Con)
Schools in my constituency of Warrington South are some of the best in England, and I join my right hon. Friend in paying tribute to the work that heads, teachers and support staff have done over the lockdown period to care for and support children. I know that parents and children in my constituency, particularly the children, will really welcome the steps that are being announced today—children want to get back to school. However, can the Secretary of State confirm that his approach is in line with that of other countries around Europe that have begun to bring pre-school and younger children back first, in a phased way?
Gavin Williamson
My hon. Friend is absolutely right to pay tribute to the teachers and all the staff in schools, nurseries and colleges in Warrington South. They have been doing a fantastic job. The approach that we are taking is very much in line with that of other nations. We all understand that, within education settings, there are constraints and restrictions under which teachers and headteachers have to operate, and we have to find practical solutions for that. That is why we have taken a lot of time to look at how this is being done in other countries and copy the very best practice as a result.
Liz Twist (Blaydon) (Lab)
Primary headteachers in my constituency tell me that there are pinch points at the start and end of each school day as children and parents come together. Our school leaders are planning how to mitigate this problem, but it may require adaptation, so they are asking: will the Secretary of State set aside funding to ensure that schools can access money to avoid the problem of people coming together?
Gavin Williamson
The hon. Lady raises an important point about reducing the chances of people meeting and increasing the likelihood of transmission. That is why we have asked schools to look at the option of staggered starts for year groups to mitigate those chances.
Gary Sambrook (Birmingham, Northfield) (Con)
Birmingham, Northfield has the highest proportion of free school meals of any constituency across the country. That is why it is so important that young people are back in school and back in colleges learning again. Can I ask my right hon. Friend to ensure that as many young people as possible benefit from the covid-19 catch-up package to make sure that some of our most disadvantaged pupils are given the greatest gift of all, which is a quality education?
Gavin Williamson
My hon. Friend, in his many conversations with me, has been a great champion of his schools and what is happening in his constituency. He is right about the importance of making sure that this money is properly targeted at the children who most need it. That is why £350 million of it has been ring-fenced for the most disadvantaged, and his constituency will be one of the biggest beneficiaries of that.
Mary Kelly Foy (City of Durham) (Lab)
In my constituency, Durham University is a major player and it contributes massively to the local economy, the culture of our city and the community. So far during this crisis, the lack of Government support for universities has been scandalous, quite frankly. Universities, the staff who work for them and current and future students need to know that higher education is valued by this Government and will be protected by them. What financial aid will the Government be offering universities like Durham so that they can survive the coronavirus pandemic?
Gavin Williamson
We continue to work very closely with the higher education sector. We recognise the important role that it has in many communities, including the city of Durham. A number of weeks ago, we announced a stabilisation package. We have also set up a taskforce on research funding with the university sector, the Treasury, the devolved Administrations, the Department for Business, Energy and Industrial Strategy, and the Department for Education. We continue to work closely with the sector to make sure that there is stability within it but it also has the ability to recover and thrive in the future.
Bob Blackman (Harrow East) (Con) [V]
[Inaudible]—across Harrow have continued to remain open so that children of key workers and those with special educational needs can continue their education, but there are still large numbers of children whose education has slipped. Will the Secretary of State join me in congratulating and thanking the teachers and headteachers who have carried out and continued to provide education throughout this period? Will he set out what assessment is going to be made of those children who have fallen behind so that the catch-up package is used to their best possible advantage to get them back to where they should be?
Gavin Williamson
I apologise to my hon. Friend: I missed the very start of his question because he was on mute, but it was without doubt the best part of it, I am sure. I would very much like to join him in thanking all the teachers, teaching assistants and school support staff who, through the very height of this pandemic, went into school every single day, opened the doors and welcomed the children of critical workers and the most vulnerable children. He picks up on a really important point. This is why we are working so closely with headteachers and teachers on making sure that we identify the real needs of every single child so that the catch-up package and the tutoring is absolutely targeted at their needs and delivers what they need in order for them to be able to catch up. We need the class teachers to be able to make those assessments for children in order to make sure that there is the most effective delivery for them.
Richard Burgon (Leeds East) (Lab) [V]
We all want schools to reopen in September, but only if it is safe for pupils, teachers and the wider community. Only this week, the Health Secretary acknowledged that an unusually high rate of coronavirus infections among children in Leicester was part of the reason for reimposing restrictions there. In my constituency, there have been reports of coronavirus in three primary schools. School reopening must be safe and led by the science, so can the Secretary of State confirm that the measures he has announced today will be signed off as safe by the Government scientists?
Gavin Williamson
Sadly, the hon. Gentleman was not on mute. I can absolutely assure him that Public Health England has signed off all this advice. He might take the opportunity to read what Public Health England recently said about Leicester. It stated that while there had been
“good provision of primary school access for children”
since the beginning of June, researchers said they could find no “analytical link” between this and
“any real or apparent rise in new infections”
in Leicester. Conservative Members are all committed to opening all schools for all children of all year groups. I look forward to working with the hon. Gentleman and many Opposition Members who are equally committed to doing the same. We are only doing this because we know it is safe to do so.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
Recognising, as my right hon. Friend says, the evidence shows that the risks to and connected with children are very low, mums and dads around the country will have noticed the very stringent protective measures that are being put in place in education and childcare settings, supported by his Department and implemented by multi-academy trusts and local authorities. Could my right hon. Friend enlarge a little on his comments in his opening statement about further measures that he might have in mind to ensure that those risks are effectively managed when children return to their educational settings in September?
Gavin Williamson
Absolutely, I certainly can do. We have created a strict set of controls that we expect schools to follow as an absolute minimum, as children return. We have worked closely with Public Health England on those measures, which include making sure that schools have good hygiene and good cleaning, and reduce the amount of contact between pupils. The creation of bubbles has worked successfully and, as a result, as I have touched on, we have seen over 1.6 million children benefit from returning to school from 1 June. But we do accept that more needs to be done with every child coming back, and that is why we have produced such detailed guidance and will continue to support schools to bring every child back in a safe way—not just safe for the children, but safe for those who work in schools.
Alison McGovern (Wirral South) (Lab)
May I ask the Secretary of State about the broad and balanced curriculum, specifically the physical education and sport premium and whether this will be guaranteed for September? It is July. Decisions needed to be taken before now about sport and PE. If headteachers and parents find out that that financial commitment has been held up for purely political reasons—so that the Chancellor can announce it next week—I cannot imagine how cross they will be.
Gavin Williamson
Speaking for myself, one thing I know I certainly gained during the lockdown was, sadly, weight. I recognise that, as children get back into school, it is incredibly important to make sure that they have that broad and balanced curriculum and proper and full access to sporting activities. The hon. Lady will just have to pause a little, because we will be bringing absolute clarity for all schools on this issue exceptionally shortly.
Andrew Griffith (Arundel and South Downs) (Con)
Parents across West Sussex will welcome today’s announcement, particularly as it relates to children with special educational needs. Can I also congratulate the shadow Education Secretary on her recent appointment? Does the Secretary of State agree that no one wants to see children used as political pawns and that we may now see a more constructive approach from the Opposition?
Gavin Williamson
I very much hope that we have a broad and exceptionally constructive approach from all sectors of society. We are all united in the desire to see that every child gets the brilliant education that so many of us have benefited from, and we will always work together, and my door is always open to anyone, to ensure that we deliver the very best education for every child. That is what I will continue to do.
Munira Wilson (Twickenham) (LD)
I would like to pay tribute to the heroic teachers who have been working so hard across schools in my constituency of Twickenham, and to the September for Schools campaign, led by my constituent, Fiona Forbes, who has tried to make the voice of parents heard in this whole debate. Many of those parents are wondering what provision and plans will be made for wraparound care.
They are on their knees, juggling work and home schooling and wondering whether after-school clubs and other such provision will be available come the autumn.
Gavin Williamson
The hon. Lady raises an important point and, as part of the guidance that we have issued, we have set out clear guidance about schools being able to offer wraparound care, because we know how incredibly important that is for so many working parents and how it supports them in being able to do their work.
Tom Hunt (Ipswich) (Con)
As the Member of Parliament for Ipswich and an avid Newcastle United fan, I cannot think of a better name for a school than the Sir Bobby Robson School, which will open its doors in September. I have become an associate governor. It will specifically support children with complex emotional and mental needs. Its approach will be to have a transition period, almost a therapeutic approach, where it will try to re-socialise vulnerable young adults so that they can reintegrate and catch up. Will my right hon. Friend join me in wishing the Sir Bobby Robson School all the best for the future and provide it and other special schools with the support and external expertise they need to make sure that vulnerable young adults have the best chance to crack on and have a bright future?
Madam Deputy Speaker (Dame Rosie Winterton)
Order. If we are going to get everybody in, it is important that we have short punchy questions to the Secretary of State, and short answers too.
Gavin Williamson
I congratulate my hon. Friend on his work with the Sir Bobby Robson School although, as a Wolves fan, I am not sure if he was quite the right person to name it after. I look forward to working with him and the school to make sure that, as it brings children back, they have the best education, and assisting it and him in terms of delivering that for those children.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am sure that the Secretary of State agrees with the 15,000 parents in the Rock the Cotswolds group, who will be disappointed if any of their children cannot go back into school in September. Will he therefore consider doing two things? As well as issuing the comprehensive guidelines, he should ask every head to produce a back to school plan, preferably by the end of the summer term.
Gavin Williamson
My hon. Friend raises an important point. That is very much what heads will be doing to ensure that there is full education across all year groups in all classes for every child, including in his constituency.
Alex Norris (Nottingham North) (Lab/Co-op)
Further education institutions were already struggling prior to the crisis, and that will only have become worse in recent months. Those same institutions will have to make a Herculean effort if they are to get their learners ready for those vital qualifications in the next academic year. Can the Secretary of State explain to further education leaders in my community why they were excluded from the covid catch-up fund and what support will be available instead?
Gavin Williamson
We continue to work closely with the vital sector as we look towards the economic recovery that we are going to be building towards as we come out of the pandemic. We will work closely with it in terms of the actions and support it needs to help youngsters who need to catch up, but equally, to ensure that every further education college is fully open for September.
Jeremy Wright (Kenilworth and Southam) (Con)
My right hon. Friend has already made the point that our schools make a significant contribution to the general wellbeing of our children, as well as to their academic education. I ask him to recognise the sad likelihood, however, that as children return to school in September, more of them than usual will report to teachers and others in school the disturbing or abusive experiences, physical or virtual, that they have had during the lockdown period. Can he confirm that our schools will have the support they need to deal effectively with those reports?
Gavin Williamson
My right hon. and learned Friend touches on an incredibly sensitive and important issue. We have been working closely with not just schools but local authorities and the police to establish local partnerships to support schools as they deal with some of the consequences of children not having the protection that schools have often wrapped around them. We recognise the sensitivity of the issue. I pay tribute to the Home Office and the work that the police have done in terms of forging new partnerships with schools and local authorities, so that action can be taken much swifter where there are fears and concerns about the wellbeing of children.
Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]
As more children return to school, what extra support is being provided to disabled children, so that they can catch up following the covid-19 pandemic? Can the Secretary of State confirm whether assistive technology is being offered as part of the distribution of laptops and tablets to pupils working from home? If he is unaware, can he follow up and commit to writing to me with an answer?
Gavin Williamson
We have had a broad range of measures to assist all children, including children who have special needs. Many children in the sector have benefited from free laptops, and key elements of a covid catch-up will be about helping those children to catch up on what they have lost. I will happily write to the hon. Lady with further details, as she appears to be signalling to me to do.
Edward Timpson (Eddisbury) (Con)
Fully reopening schools in September is absolutely the right thing to do. For some children, the experience of lockdown will have been characterised by social isolation, lack of routine and, in some cases, trauma. What is my right hon. Friend doing, through the guidance published today and other measures, to help schools with an increase in poor behaviour from September? May I encourage him to bring forward recommendations in the Timpson review of school exclusion so we do not see children removed from school when they have only just returned?
Gavin Williamson
That review did have a very thoughtful author, and we will certainly move forward on that. Our guidance does recognise some of the real challenges that many children will face as they come back into school as they will not have had the same structures of behaviour and discipline built around them. It is vital that we re-establish proper behaviour and discipline practices for all children, and I know schools are working closely on how they build that around those children, but we must understand that where there are good behaviour and discipline policies, there are vastly reduced numbers of those children excluded from schools. We will work with schools to deliver that. I pay tribute to Tom Bennett and the behaviour hubs for the work they do to establish strong behaviour practices in some of the most challenging schools.
Sir David Evennett (Bexleyheath and Crayford) (Con) [V]
I welcome my right hon. Friend’s statement on the autumn opening of education settings. Going to university is an important milestone for many of our young people, but there are real worries about starting or restarting courses this autumn. What measures is he taking and what reassurance can he give to those students?
Gavin Williamson
I reassure both my right hon. Friend and students who are looking forward to the prospect of going to university in the next academic year about the importance we place on not just the educational offer of universities but the whole experience of going to university. We are working closely with Universities UK and the whole sector to ensure that we have a full and wide, proper opening of all universities so that they can welcome students through their gates. We are seeing a positive increase in the number of young people applying to go to university, and we will work with the sector to deliver on that. As a point of note, revised guidance for the HE sector will be issued later today.
Mrs Emma Lewell-Buck (South Shields) (Lab)
At the outset of the pandemic, the Government ignored the warnings from other countries about the seriousness of coronavirus. As a result, measures implemented were too late and cost lives. The World Health Organisation director for Europe has said that schools reopening has led to local flare-ups of cases right across member states, even with social distancing in place. Will the Secretary of State publish the scientific advice he is relying on that states that social distancing is not needed any more in our primary classes?
Gavin Williamson
As the hon. Lady will probably know, the Scientific Advisory Group for Emergencies regularly produces and publishes its advice and evidence, and we have been completely open on that. I am not quite sure what she is suggesting. Should we never open schools? Will we deprive our children forever more of an education and accept that, until there is a vaccine, children will not be able to go back to school? We recognise there are big challenges ahead, which is why we have worked closely with the sector, because we understand the consequences to children of not getting back into school are great. That is why we will continue to strain every sinew to ensure that every child is back in school.
Peter Aldous (Waveney) (Con)
I welcome the Secretary of State’s statement, but I would be grateful if he could set out the financial support that will be provided to further education and sixth-form colleges such as East Coast College in my constituency. That is vital, particularly to coastal towns, if we are not to let down a whole generation.
Gavin Williamson
As I am sure my hon. Friend will be aware, over the last year we have seen lots of additional support going into the college sector, including an increase of £450 million for this financial year in the basic level of money that every college gets, plus the £1.5 billion that is going into capital funding in the college sector, £200 million of which has been brought forward into this financial year. We will continue to work closely with the college sector—both further education colleges and sixth forms—on what additional support we can give it as we move into the next phase of dealing with this global pandemic and ensuring that every child is able to catch up.[Official Report, 9 July 2020, Vol. 678, c. 6MC.]
Barbara Keeley (Worsley and Eccles South) (Lab) [V]
I welcome my friend and neighbour the hon. Member for Stretford and Urmston (Kate Green) to her new role. For families who qualify, free school meal vouchers will be a crucial lifeline across the summer, but a school in my constituency faces having to pay for the cost themselves because they are using vouchers from the Co-op rather than the Edenred scheme. Will the Secretary of State guarantee that every school is reimbursed for the full cost of providing free school meal vouchers to their pupils this summer, wherever they get their vouchers from?
Gavin Williamson
We have set up a wide-ranging system of support for schools to access through the Edenred scheme. If there are exceptional circumstances where there are no local supermarkets included in the Edenred scheme that a school can access, we are able to look at how we can support the school and reimburse their costs if there are no alternatives.
Tim Loughton (East Worthing and Shoreham) (Con)
I reiterate the many calls from Members today and from our heads that they really need clear, unambiguous and timely guidance. Linked to that, is not one of the biggest scandals of recent months how few children on education, health and care plans have been accepted back into school, even when their parents want them to go? For that cohort, catch-up will be crucial, particularly to regularise being back in a school environment after six months out of it. The Secretary of State talked about tutors. Will he also consider the idea that I put forward—to use the cohort of students who are deferring going to university, so that they can come into schools to work alongside those children and give them intensive mentoring, not just academically but to get them back in the habit of being in school and learning again?
Gavin Williamson
As my hon. Friend is probably aware, in the first guidance that we issued on school closures, we highlighted that children with EHC plans would have continued access to schools all the way through this. I would be happy to organise a meeting between him and the Education Endowment Foundation, which is working with us to stand up our tutoring programme and looking at a whole range of options to mobilise that.
Kerry McCarthy (Bristol East) (Lab)
What extra support can the Secretary of State give to holiday schemes—not the free school meal side of things, but things such as Bristol’s healthy holidays scheme, which involves play schemes, forest school and physical activities? That would be an excellent way of children socialising again and becoming acclimatised to the idea that they are going back to school. Can he try to support some of those local initiatives?
Gavin Williamson
The hon. Lady raises a valuable point. We often talk about the learning loss, but there are other things that children have missed out on, such as the socialisation, physical activity and sports that they would have so often enjoyed. We have invested £9 million in a holiday activity plan, which we rolled out across a large number of local authority areas. We have also been working closely with the National Citizen Service to repurpose a lot of the activity it does through its traditional schemes for local schools. I would be happy to put her in touch with the National Citizen Service, to see whether it could work closely with some of her schools on that.
Christian Wakeford (Bury South) (Con)
I thank the Secretary of State for his statement. It is certainly very welcome news that schools will be reopening, especially for those with special educational needs and disability, and the most disadvantaged pupils. The National Education Union threatened to name and shame headteachers who were working to reopen their schools previously. Will my right hon. Friend join me in condemning this attitude, and ask Labour Members if they will condemn it too?
Gavin Williamson
As I am sure that my hon. Friend, who has a deep knowledge of the education sector, knows, this is the time for every person to come together and work together to ensure that every child is back. We have seen headteachers under incredibly great pressure from certain levels of activism. As we look forward to full opening in September, I hope that everyone comes together to work out how we can get every child—in every class and every year group—back in school. I have no doubt that every union will also be doing that and working with us.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I am glad that the Secretary of State has bothered to start engaging with frontline staff via their representatives in the unions. But Britain will face a huge economic downturn, and many parents may have lost their jobs or have reduced salaries. Will the Secretary of State follow the leadership of Brighton & Hove City Council, which has issued guidance on school uniforms and other costs so that no parent is forced into poverty and no child is excluded from school because they cannot afford the right equipment? Will the Secretary of State give guidance to all schools to ensure that those costs are capped?
Gavin Williamson
The hon. Gentleman obviously has not noticed that we have already issued guidance about keeping uniform costs low, but I would be happy to share it with him so that he can take the time to read it.
David Johnston (Wantage) (Con)
Does my right hon. Friend agree that getting all children back to school in September is particularly important for the poorest children, and that if people try to obstruct that return, they are standing in the way of both social mobility and social justice for our most disadvantaged?
Gavin Williamson
My hon. Friend is absolutely right. Those who stand in the way of children being able to return to school are standing in the way of the best interests of children from the most deprived backgrounds, who need the most help and support. That is why we will get every child back in the new term.
Gareth Johnson (Dartford) (Con)
Clearly it is vital to get children back into school now that the infection rates of this virus are falling, but will the Secretary of State inform the House of what preparations the Department for Education is carrying out in case there is a second wave of the virus? We all obviously hope and pray that that does not happen, but how is the Department preparing should that happen in the autumn or winter?
Gavin Williamson
The guidance that we have issued includes a heavy emphasis on continuity of education so that children would not suffer any form of disruption to learning patterns if we were in a position of having to put in place local lockdowns in different communities or areas that would mean schools were not able to remain open.
Madam Deputy Speaker (Dame Rosie Winterton)
I have to announce a correction to the Division result. I have received a report from the Tellers in the Aye Lobby informing me that there was an error in the result announced to the House of the Division held yesterday on new clause 1 to the Finance Bill. The number of Members who voted Aye was 252, not 232 as reported. The discrepancy was a result of human error by the Tellers. It was not related to the pass reader recording system. There is no change to the outcome of the Division. I will direct the Clerk of the House to ensure that the Journal is corrected accordingly.
I shall now suspend the House for three minutes to allow the safe exit of Members in this piece of business and the safety entry of those in the next.
Finance Bill
Thursday 2nd July 2020
(4 years, 5 months ago)
Commons ChamberRead Full debate Finance Act 2020 View all Finance Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 2 July 2020 - (2 Jul 2020)
Bridget Phillipson (Houghton and Sunderland South) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
New clause 2—Review of changes to entrepreneurs’ relief—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to entrepreneur’s relief by section 23 and Schedule 3 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment, and
(c) productivity.
(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 for National Statistics.”
This new clause would require a review of the impact on investment of the changes made to entrepreneurs’ relief.
New clause 4—Structures and buildings allowances: review—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by section 30 and Schedule 5 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity, and
(d) energy efficiency.
(3) 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 on investment of the changes made to structures and buildings allowances in Schedule 5.
New clause 17—Review of geographical effects of provisions of Sections 28 to 31—
“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 28 to 31 of this Act.”
This new clause would require a geographical impact assessment of the clauses of the Bill relating to reliefs for business.
Amendment 1, in clause 36, page 34, line 29, at end insert—
“(13) The Chancellor of the Exchequer must, no later than 5 April 2021, lay before the House of Commons a report—
(a) analysing the fiscal and economic effects of Government relief under the Enterprise Investment Scheme since the inception of the Scheme, and the changes in those effects which it estimates will occur as a result of the provisions of this Section, in respect of;
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland;
(b) assessing how the Enterprise Investment Scheme is furthering efforts to mitigate climate change, and any differences in the benefit of this funding in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland;
(c) evaluating the lessons that can be drawn from the effects of the Enterprise Investment Scheme with respect to the encouragement of both private and UK Government-backed venture capital funds in the devolved nations of the UK.”
This amendment would require the Chancellor of the Exchequer to analyse the impact of the existing EIS and the changes proposed in Clause 36 in terms of impact on the economy and geographical reach; to assess the EIS’s support for efforts to mitigate climate change; and to evaluate the Scheme’s lessons for the encouragement of UK Government-backed venture capital funds in the devolved nations.
Bridget Phillipson
New clause 27 calls on the Government to lay a review before Parliament considering all the tax reliefs within this Act, their effect on taxation revenue and the effectiveness of systems to evaluate these reliefs and to ensure value for money. We know that there are real problems with how the Government monitor tax reliefs. Thanks to the outstanding work of the National Audit Office and its report from February this year, we can see how unwieldy the system has become over the past decade and how much this is costing the public purse. It shows that there are currently 362 tax reliefs, which support Government economic and social objectives. This is a huge financial undertaking. The cost of tax reliefs for 2018-19 is estimated to be £155 billion.
The National Audit Office notes that this is not money that would simply be recouped in tax if these reliefs were abolished, but that is not the point that we are seeking to make. We on the Opposition Benches do not doubt that sometimes the outcomes from tax reliefs can be positive and that they can drive positive social and economic behaviour. The problem, as the NAO’s report makes plainly clear, is that we simply do not know enough about this, because the Government are failing to properly monitor and evaluate their effectiveness.
Of the 362 tax reliefs, only 111 have been costed by Her Majesty’s Revenue and Customs, and only 15 have had published evaluations since 2015. At the same time, on the Government’s watch, their cost has been rising since 2010. In normal times, such an enormous cost, without corresponding effective oversight, would be an area of real concern. As the Office for Budget Responsibility identified in July 2019, tax reliefs are considered to be a new fiscal risk to public finances, due to the Government’s not knowing their full cost and the lack of transparency built into the system. But of course we are not in normal times; we are living through an incredible economic crisis. The lack of effective monitoring and evaluation is hard to justify when our public services are under such enormous strain. The inattention shown by Ministers over the past decade must change and we need a much greater focus on ensuring value for money.
In Committee, we touched on one area where I ask the Minister to respond further today, namely the social investment tax relief, an area also pressed by my hon. Friend the Member for Ilford North (Wes Streeting) and my Front-Bench colleague my hon. Friend the Member for Liverpool, Walton (Dan Carden). What further consideration has the Minister given to extending this relief from April 2021 to April 2023? Will he update us on what further consideration the Treasury has given to this arising from discussions we held in Committee? This important aspect has been raised by many charities. I know that the Minister is sympathetic to the concerns they raise and I am sure they will be grateful for any further updates he might be able to provide in this area.
Our new clause paves the way for a greater focus on value for money, by establishing a more systematic and transparent way for the Government to evaluate the cost of tax reliefs and to empower Parliament to scrutinise this more effectively. The limiting scope for amendments to the Finance Bill set by the Government means that we have been able to opt only for a review of the tax reliefs contained in the Bill. Many changes to tax reliefs—for instance, on the entrepreneurs’ relief and the annual allowance—will potentially have a significant impact on tax revenues. In other areas, there are concerns about whether tax reliefs are being abused.
TaxWatch UK has highlighted particular concerns about the future of research and development tax credits, given the evidence of abuse in recent years. It is therefore right that there is greater transparency and that Parliament can properly scrutinise whether the measures proposed by Government are having their intended effect. The Minister attempted to address some of these concerns in Committee, saying that the Government kept all these reliefs under review and that he has proposed a more systematic evaluation programme for tax reliefs. We would welcome any progress towards such a system. However, if the picture was so rosy, I doubt whether the National Audit Office would have painted such a concerning picture in its report. I also look forward to the Public Accounts Committee’s report on this issue to find out whether it agrees with his assessment or what further insight it might be able to offer.
None the less, this amendment attempts to get to a wider point, which is that Parliament currently has few proper and meaningful opportunities to scrutinise tax reliefs on an ongoing basis. The Minister will know of the 2017 joint report by the Institute for Fiscal Studies, the Institute for Government and the Chartered Institute of Taxation entitled “Better Budgets: Making tax policy better”. It states that the information publicly available to Parliament on the costs and benefits of tax expenditure is not sufficient for it to assess their value for money, pointing out:
“Although taxes constitute almost 40% of national income, Parliament has little standing support to help look at tax legislation, support general inquiries on tax issues or help with post-implementation reviews.”
The report had a clear recommendation:
“Increase support to Parliament on tax issues”.
That means going beyond the support currently available and the opportunities that exist, in Finance Bill Committees, through the Treasury Committee, through Public Accounts Committee and through other work in this House, and instead embedding a proper system so we can assess the value for money of past tax measures. That is hardly controversial. As the Resolution Foundation points out, the Governments of Canada, Australia and New Zealand produce annual tax expenditure statements, which can be accompanied by parliamentary debate.
We want to see improved scrutiny of whether money is being well spent, to ensure that the system is fair and helps those who need it most. When all the benefits and tax reliefs are taken into consideration, the Government provide more support to the richest fifth of non-retired households than to the poorest fifth, and that gap has grown since 2010. This is in part due to the system of tax reliefs that has flourished under this Government and previous Conservative Governments and is clearly not based on any genuine notion of fairness.
Today, as we grapple with the looming jobs crisis, the question of fairness is paramount. We need to create a recovery from coronavirus that benefits everyone in our society, from young to old and right across every region and nation. The Opposition do not doubt the scale of the challenge. Our public finances are enormously stretched, our public services have been pushed to the brink by the pandemic, and there is a risk of unemployment on a scale not seen since the 1980s. We have yet to hear anything about the economic support package that we need: a back-to-work Budget to help those at the sharp end of the looming jobs crisis—a Budget that creates jobs, supports people back into work and properly invests in our young people so that they have the opportunities they deserve at this challenging time.
Kevin Hollinrake (Thirsk and Malton) (Con)
I am keen to talk briefly about the future fund, which is dealt with in new clause 22. The new clause covers those who have benefited from tax relief under the enterprise investment scheme and the seed enterprise investment scheme, to ensure that those tax reliefs are not withdrawn. These are important tax reliefs. I have set up a number of companies—I declare my interest, Madam Deputy Speaker—and some of the capital needed to invest in them was solicited through the EIS and the SEIS. Those schemes are very effective in encouraging high net worth individuals and angel investors to invest in small start-up and scale-up businesses.
The future fund is really for bigger, high-growth businesses wanting to attract capital. It is a very effective scheme, in that the Government match the funding that is attracted from individual investors—often venture capital investors. It is incredibly important, as we start to recover from this crisis and seize the opportunities ahead, that we encourage more equity investment. The UK is particularly reliant on debt financing in how our businesses start up and scale up, whereas other countries are much more effective at delivering equity finance solutions. This is important because at the moment the Government are investing a huge amount—about £35 billion—through guaranteed loans in the bounce back loan scheme and the coronavirus business interruption loan scheme, which businesses are making decisions on in terms of debt finance.
However, on equity finance, the Government do not always have the best record on deciding which businesses to support. That is why the future fund is a good scheme, in that it fund-matches private sector investment, which is much better at determining which businesses are the right ones to support. Individual investors are much better at picking winners than are Governments. As we move forward, there are going to be some huge corrections in the private sector. Lots of businesses have borrowed money to get through this crisis and it is fair to say that many of them will not be able to pay that money back. My all-party parliamentary group on fair business banking has contributed to a report by the Recapitalisation Group, a consortium headed by Ernst & Young and TheCityUK, which states that there will be about £100 billion of unsustainable debt—not all connected to the Government schemes—by this time next year because of borrowing by businesses hit by the recession caused by the covid crisis.
To get us through that period and the subsequent period, and to prevent business failures—there is no question but that some businesses will fail and jobs will be lost as a result—we need to understand that it cannot be all about debt financing. The Government cannot be expected simply to give grants to keep businesses going. We need to find a different route to encourage private sector investment, which is good at picking winners, to invest in small and medium-sized enterprises and scale-up businesses. Equity finance will be critical to that. We need something different from the future fund, which is there to help to scale-up, high-growth businesses. Instead of the growth capital that characterises the future fund, we need equity finance for the restructuring, rescue and turnaround of good businesses that could get through this, but that are not big scale-up businesses. In the past, equity finance has been used for high-growth businesses rather than for restructuring and turnaround, and most equity finance is focused on London rather than the regions. I know, Madam Deputy Speaker, you are as keen as I am to ensure that our regions are well served by equity finance and support.
We need a discussion about the schemes that we could introduce. I am a big fan of the seed enterprise investment scheme and the enterprise investment scheme, and I think the tax incentives around them should be enhanced for a time. Clearly, the temptation for high net worth individuals will be to keep their money in the bank for 12 months rather than investing, and wait to see what happens the other side of the crisis. We have to encourage them to put money into businesses today. A doubling of the incentive for EIS relief would be very welcome, and a loosening of the restrictions on EIS investment—such as by enabling relatives to invest in businesses—would be appropriate for the next 12 months.
We need to relax some of the restrictions on venture capital. There are annual and lifetime limits on venture capital in businesses, and they should be doubled, because lots of businesses need extra support at the moment and the venture capital companies that sit behind them did not expect to have to see them through this crisis. I am keen for the Treasury to relax some of the unreasonable restrictions on the amount of money that can be invested in those businesses.
We should perhaps consider loans that are based on a contingent tax liability—a kind of student loan system, whereby the loan is repaid through future profits. I know that Lord Bilimoria is keen to see a new 3i scheme, in which the Government put a significant amount of money—in his view, it should be £5 billion—into several different private equity organisations to sit behind UK businesses.
I will touch on something that is not directly related to tax reliefs, but that is very important in relation to finance. The Minister has been very good at engaging with me on clause 95, which I think unreasonably restricts the opportunity for businesses to get finance by putting HMRC up the ladder as a preferred creditor. That may mean that some lenders are less likely to lend, and I caution the Treasury to keep a close eye on that to make sure that debt finance is still made available to SMEs. I am very supportive of what the Government are doing with the future fund, but we need to go a bit further in certain other areas.
Stephen Flynn (Aberdeen South) (SNP)
I rise to speak in support of the amendments tabled in my name and in those of my SNP colleagues. It is important to state from the outset that we hear regularly from across the Chamber—albeit not today, given that it is quite empty for this discussion of tax—that the UK’s tax relief system is full of inefficiencies.
Our core aim with the proposed new clauses is to be constructive and get to the root of that problem in respect of entrepreneurs’ relief by asking the Government to undertake a review of the impact on investment of the changes to the relief. As I said in Committee, that can only be a positive thing. After all, there remain varying views on the effectiveness and efficacy of entrepreneurs’ relief, and whether it delivers the necessary economic objectives or whether that could be done by other means. Those varying views are clear for all to see. For example, the IFS has been quite critical of the relief, highlighting that it is poorly targeted. On the converse, the Federation of Small Businesses has emphasised the importance of the relief for the retirement of business owners.
I have no doubt that we will hear much from the Minister about the fact that a review has already been undertaken. It has, but that was an internal review, which is not good enough. That is of particular importance when we consider that there was much talk in the public domain of entrepreneurs’ relief being scrapped entirely at the Budget. A Back-Bench revolt ensued and that position swiftly changed, so instead of the relief being scrapped, it has gone from £10 million back to the £1 million introduced by the Labour party in 2008. I am sure that even the Minister would agree that the tail should not be wagging the dog on such important matters. What we need is clarity—clarity on effectiveness, clarity of efficacy and clarity on direction. Those points have perhaps never been as important as they are now. As we rebuild our economy following covid-19, it is more important than ever that tax incentives go to those entrepreneurs who we know will rebuild the economy.
That takes me on quite neatly to the further new clauses that we have tabled in respect of tax avoidance, for as we rebuild the economy, the very last thing that we need is individuals and organisations dodging what they are due. On the Scottish National party Benches, we have been clear and consistent in highlighting our profound concerns relating to Scottish limited partnerships, yet despite the obvious manner in which these can be abused, we are yet to see any real action. I sincerely hope that in his contribution, the Minister will make a commitment to end the avoidance practices of such partnerships, but I hope he can go further, too.
For decades, we have seen consecutive UK Governments talk the talk on ending tax avoidance, but in 2017-18, HMRC still put the tax gap at £35 billion. I have some sympathy for the Government in this regard, for just as they legislate to close one gap, another one is opened by those who wish to cheat both the system and the public, but there is scope for a comprehensive anti-avoidance rule to be introduced. The Government will point to the general anti-abuse rule introduced in 2013, but this has been heavily criticised, not least by the TUC. What we need is workable general anti-avoidance rules that tackle avoidance in all its forms, including international tax abuse, and more than ever, we need real action to combat Scottish limited partnerships.
I am conscious of the fact that you wish to finish before 2 o’clock, Madam Deputy Speaker, so I intend to keep my contribution brief. I will move on to my closing remarks, in which I wish to highlight that more can be done to incentivise energy efficiency through tax reliefs and, similarly, to meet the needs and demands of the Scottish economy.
In respect of structures and buildings, it is clear that the Government are making an attempt to amend the system to incentivise capital investment, but they can and should go further. At the risk of repeating myself once again, the easiest step they could take is to scrap VAT on building repairs. In my constituency of Aberdeen South, I have been struck by just how many homeowners, who often live in some of the most beautiful granite buildings, are unable to undertake the repairs and improvements that they either want or need due to the high costs involved. As we seek to improve energy efficiency in our homes, particularly in often old and cold buildings, surely the Government should be assessing every measure to incentivise progress, not just to help rid us of fuel poverty, but to protect both the environment and the future of our planet. Cumulative action to combat climate change is needed, and I would welcome a firm commitment from the Minister in this regard.
On the issue of tax reliefs, it would be remiss of me not to highlight to the Chamber the proposals put forward in recent days by my colleagues in the Scottish Government. I think that everyone—even the most ardent of UK Government supporters—was deeply underwhelmed by the plans announced by the Prime Minister to restart the economy, and that collective sigh from across the UK was entirely justifiable, because £5 billion will likely work out to be less than the cost of renovating the very building that we are in, and it is a far cry from the £80 billion of investment called for by the Scottish Government. Importantly, however, my colleagues called not just for capital investment, but for tax relief. Indeed, they were clear that reducing VAT must be an urgent act of this Government, both in terms of reducing the general rate of VAT from 20% to 15% for six months and, importantly, reducing tourism and hospitality VAT to just 5%. On top of that, a 2p cut in employers’ national insurance contributions to reduce the cost of hiring staff was also identified.
Unfortunately, as with all too many matters, the hands of the Scottish Government are tied on such issues. The power lies with the UK Government, a Government who Scotland neither supports nor votes for. I hope that the Minister is listening and the wider Government are listening too, because now is the time for them to introduce the tax incentives that the Scottish economy needs; to deliver the investment that the Scottish economy needs; and to provide the Scottish Parliament with the borrowing powers that it so desperately needs. If they do not, they should be ever mindful that they are only doing further damage to the very Union that they claim to support.
Ben Lake (Ceredigion) (PC)
Diolch, Madam Deputy Speaker, for calling me to contribute to this important debate, the importance of which is perhaps not reflected in the attendance in the Chamber today, but as the shadow Minister, the hon. Member for Houghton and Sunderland South (Bridget Phillipson) rightly said in her opening remarks, reviews of tax reliefs tend to be important not just for improving the transparency of their effectiveness but, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) said in relation to the enterprise investment scheme and the future fund, for their transformative impacts on policy. I agree with him that one of the key things that we need to consider as we move ahead is how we can encourage greater investment, especially equity investment, in regions other than London. I hope to dwell a little on that point later in my remarks.
It is a pleasure to follow my hon. Friend the Member for Aberdeen South (Stephen Flynn), who not only laid out effectively the inefficiencies of the tax reliefs system but raised the important question, which I would like to address, of whether reliefs achieve their economic objectives in the current climate and context, as we try to rebuild or at least begin to consider how we can rebuild after covid-19. Tax reliefs will have an important part to play, and it will be vital that they are channelled to those who will rebuild the economy.
I wish to speak at greater length to amendment 1 and new clause 17, both of which are tabled in my name. Both are probing amendments. I seek to probe the Government’s commitment to levelling up every nation and region of the UK by requiring them to report on the differential territorial impacts of the changes that the Bill introduces to certain reliefs and tax incentives.
Most hon. Members will welcome the Conservatives’ efforts to see balanced economic growth throughout the UK and in particular to move away from what I consider to be a hub-and-spoke approach to economic development. Over the past decade, the Government have mainly concentrated on improving connectivity between rural areas and smaller towns and the supposed economic engines of the larger cities, as opposed to incentivising and supporting economic growth in those areas themselves.
Such a centralised model has inevitably concentrated economic activity in London and the south-east. As a consequence, Wales’ potential and that of other regions and nations of the UK has been overlooked. That is perhaps most apparent when we consider the way in which public funding for certain development has been allocated. Between 2001 and 2017, London R&D funding per head totalled almost twice the UK average— £3,900 per head compared with a national average of £2,300. What is more, the trend worsened in that time. The share of the core research budget spend across the three cities of Oxford, Cambridge and London—also known as the golden triangle—rose from 42.1% in 2002-03 to 46% in 2017-18.
Perhaps just as relevant to this debate is how public spending on transport infrastructure is allocated. I note that per-head spending in London in the past decade has averaged nearly three times that spent in the rest of the UK. During the same period, the city has received five times the average per-head spend on culture. It is perhaps unsurprising, therefore, given that disparity, that the golden triangle of London, the south-east of England and the east of England also attracts the lion’s share of venture capital. Indeed, the region received 73% of all venture capital between 2016 and 2018, according to the British Private Equity and Venture Capital Association. When we reflect on this concentration of venture capital in one region of the UK, as with R&D, not only are the failings of past economic development policy laid bare, but it is difficult to deny a popular saying in Ceredigion, “I’r pant y rhed y dŵr”—or in English, “To the hollow the water runs”.
It is clear that as the world moves increasingly to a knowledge-driven economy, expenditure on R&D will be vital not only as a source of innovation that can be commercialised to form the basis of the next generation of business, but as a means of equipping people with the requisite skills for the new economy and, as my hon. Friend the Member for Aberdeen South said, the post-covid economy. It follows, therefore, that the economy of any nation or region that does not receive the right level of support will be hindered in its attempt to adjust to the challenges of tomorrow. Government support for R&D is essential for Wales in particular, to address problems that range from a low-wage economy to a looming demographic time bomb, while also building an economic platform to take advantage of trends, including automation, that could otherwise cause quite a serious long-term social risk.
New clause 17 would require the Chancellor to report on the geographical impact of changes to several tax rules, including R&D expenditure credit. It would ensure that the UK Government consider how different geographic areas benefit from taxpayer-funded reliefs so that the financial incentives can be better tailored to overcome the UK’s chronic regional inequalities. I have previously drawn attention to the concentration of R&D funding in the golden triangle, but assessments might also provoke a debate within Government about how public spending on other priorities is allocated.
In a similar vein, my amendment 1 would require the Government to consider the unsustainable concentration of private investment in one region of the UK at the expense of the devolved nations and other regions of England. As the UK Government narrow the applicability of the enterprise investment scheme, they need to consider how that will affect firms in different areas of the UK. The EIS benefits us in a great many ways—the hon. Member for Thirsk and Malton outlined them effectively in his remarks. The ways in which the UK Government can encourage the establishment in the devolved nations of venture capital funds, and therefore private investment, is so important. The geographic disparities to which I have already referred are reflected in the EIS. To pick just one example, between 2015 and 2018, only 210 Welsh firms benefited from EIS, receiving just 1.3% of the total investment. By contrast, to pick on the golden triangle again, that area received 67% of all investment. The average UK business angel investment per firm has been some 40% greater than that in Wales.
Modern advanced economies such as Germany, the Netherlands and even the USA have ensured a better geographic spread of economic prosperity, so the Government’s intention to address this policy failure is to be welcomed. However, we must make sure that the rhetoric is backed up by the reality and that the measures designed to realise such lofty ambitions are fit for purpose. My amendment and new clause would require the Government to report on the effectiveness of some tax relief schemes in this regard, and I hope that the Minister can give them some serious consideration.
The Financial Secretary to the Treasury (Jesse Norman)
I am grateful to everyone who has contributed to this short but interesting debate. As colleagues have noted, when we think about tax transparency, we are in what might these days be referred to as a niche area of taxation—technical, but no less important. In some respects, it is more important that we do not get lost in the detail but can come back and talk about the issues more widely. If I may, I will address the different clauses and then come to the specific points raised in the debate.
New clause 27 would require the Government to review all
“tax reliefs contained in this Act”.
It states that the review must contain
“the number of tax reliefs…the effect on taxation revenue of each of the tax reliefs…and…an assessment of the efficacy of systems for designing, monitoring and evaluating the effect of the tax reliefs.”
It asks the Government to publish the number of tax reliefs in the Bill and their effect on taxation revenue.
As the House may be aware, the Government already publish tax changes and estimates of the Exchequer impacts of policy changes in the Budget documents at each fiscal event. Moreover, Her Majesty’s Revenue and Customs monitors the effect on taxation revenue of tax reliefs after they are introduced and issues an annual tax relief statistics publication—I am sure that is closely scrutinised by all Members—which includes estimates of the costs of tax reliefs. Building on this, HMRC is also undertaking a project to expand its published costs information. I remind the House that in May HMRC published cost estimates for a further 47 previously uncosted reliefs.
New clause 27 also asks for an assessment of the efficacy of systems for designing, monitoring and evaluating the effect of a relief. As the House will know, the Government consult on new tax reliefs and proposed changes to tax reliefs, bringing in external expertise as part of the policy making cycle wherever possible. Officials are constantly working on ways to improve the policy on development, administration and continuing management of reliefs. As colleagues will know, the Government, and particularly the Treasury, keep all reliefs under review.
The Government also do evaluations of different forms. This work has included evaluations of a number of significant reliefs—some 15 since 2015. These include our R&D tax credits and entrepreneurs relief, on both of which I will say a few words later. In 2015, HMRC 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 the significant reduction of its lifetime at spring Budget 2020, which is legislated for in this Bill. The hon. Member for Aberdeen South (Stephen Flynn) picked up on the point about entrepreneurs relief, which he somehow regards as “the tail wagging the dog”. What he calls “the tail wagging the dog” other people would call consultation across Parliament and discussion with stakeholders. Since the measure resulted in a 90% reduction in the scope of the relief, I do not think he can claim that there is any lack of ambition in it.
HMRC will continue to monitor and evaluate reliefs and will bring forward a pipeline of further evaluations in due course. It will also consider a proposal to which I have already said I am quite sympathetic—I thank the hon. Member for Houghton and Sunderland South (Bridget Phillipson); we have discussed this before: a more systematic evaluation programme for reliefs. In the light of all this, the Government do not believe that the new clause is necessary.
New clause 2 would require the Chancellor of the Exchequer to review the impacts of the reduction in the lifetime of entrepreneurs relief that is being legislated for in this Bill within six months of Royal Assent, and specifically to review the impacts on business investment, employment and productivity in the constituent nations and English regions of the United Kingdom. I would first highlight to hon. Members that the Government have already conducted an internal review of this relief that built on the 2017 independent research commissioned by HMRC. That review considered the distributional effects and benefits of the relief against its cost in order to better understand the targeting of the relief. This, in turn, has been used to inform the reform that is being legislated for in this Bill. It ensures that the majority of entrepreneurs are unaffected. A lot of the concern about entrepreneurs relief historically has been that it is not well targeted, and this measure greatly improves the targeting. Unfortunately, the effects of the changes to the relief will not be visible in six months’ time, and for that reason I urge the House to reject new clause 2.
New clause 4 concerns the structures and buildings allowance. It would require the Chancellor to review the impacts of clause 30, which makes miscellaneous amendments to the SBA, within six months of the passing of the Finance Act. Specifically, it would require the Chancellor to review the impacts on business investment, employment, productivity and energy efficiency. Again, I reassure Members that both HMRC and the Treasury already monitor tax reliefs according to the level of risk that they are deemed to pose. It is in the nature of a structures and buildings allowance that it is configured to reflect the fact that it can take many years to erect new buildings. Claims under the SBA are ordinarily settled when businesses bring buildings into use and submit tax returns at year end. For that reason, it would be neither possible nor appropriate to try to draw conclusions on the productivity or energy efficiency impacts of these changes within such a short period.
New clause 17 would require the Government, within 12 months, to assess and report on the geographical effects of changes to business reliefs across a variety of areas. There is a concern, which I recognise, that there are geographical disparities that reflect the historical evolution of our economy in different areas. It is by no means a uniform picture, even outside London.
HMRC does not routinely require businesses to provide geographical information about where expenditure is incurred as part of claims for the R&D expenditure credit, structures and buildings allowance or intangible fixed assets. To do that, changes would be required that would create additional burdens on businesses. Those claiming the reliefs, of course, could only provide information after the year end. For that reason, it would not be possible for HMRC to have information within the 12 months stated in the amendment, even if the amendment were passed. It is not capable of being fulfilled.
Jesse Norman
With permission, Madam Deputy Speaker, I will give way to my hon. Friend.
Kevin Hollinrake
I declare an interest as somebody who has benefited from entrepreneurs’ relief in the past. Is the Minister considering extending the reduction in entrepreneurs’ relief, which I support, to investors’ relief, which currently stands at the same figure as entrepreneurs’ relief used to stand at—£10 million?
Jesse Norman
If my hon. Friend is asking questions, he ought to stay for the next debate, because he is abusing the privilege of this debate. I thank him for his suggestion of a revenue-raising possibility for the Government; we take all those in great heart.
Bridget Phillipson
Could the Minister say a little more about the social investment tax relief? I am not aware that he responded on that point.
Jesse Norman
The hon. Lady is absolutely right. Let me address that. As she knows, the relief remains in place until next year. Even its doughtiest supporters would agree that so far it has not been anything like as effective as anyone would have liked or as had been projected or anticipated. Only £11.2 million has been raised under it in the period 2014 to 2018-19.
We are looking at it closely. As I mentioned in Committee, I am in discussions with leading figures across the social investment world about whether we can get some more visibility on the sources of funds that would use such a relief and the sources of projects that those funds would support. If we do not get that and we cannot have that in a slightly more concrete form, it looks like quite an empty request, but there may be other things that we can do to support social investment. As the hon. Lady knows, I have written a book on the big society. It is an area that I care deeply about, so I am happy to respond and I am grateful for her question.
Bridget Phillipson
We do not intend to divide the House on the new clause, but I will make a few brief points in response to what the Minister has said. I am glad that he shares our assessment that the current situation and system are unwieldy, and therefore we look forward to seeing real progress in that area. Frankly, it is not good enough that of those 362 tax reliefs, only 15 have had published evaluations since 2015, at a time when costs have risen.
During these extraordinary times, we need to see much more from the Government, not just on tackling tax avoidance, as we discussed at some length yesterday. There needs to be a renewed focus on taxpayer value for money, with greater opportunities for scrutiny of tax reliefs in this place and from external experts. Although we are not seeking to divide the House, I hope that we will see progress in that area. It is an issue to which we intend to return. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Madam Deputy Speaker (Dame Rosie Winterton)
We will have a three-minute suspension.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Government new clause 20—Protected pension age of members re-employed as a result of coronavirus.
Government new clause 21—Modifications of the statutory residence test in connection with coronavirus.
Government new clause 22—Future Fund: EIS and SEIS relief. Government new clause 23—Interest on unpaid tax in case of disaster etc of national significance.
Government new clause 24—Exceptional circumstances preventing disposal of interest in three year period.
Government new clause 25—HGV road user levy. Government new clause 32—Enterprise management incentives: disqualifying events. Government new schedule 1—Taxation of coronavirus support payments.
New clause 29—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.
New clause 10—Impact of provisions of the Act on child poverty—
‘(1) The Chancellor of the Exchequer must review the impact of the provisions of this Act on child poverty and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the impact on—
(a) households at different levels of income,
(b) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,
(c) different parts of the United Kingdom and different regions of England, and
(d) levels of relative and absolute child poverty in the United Kingdom.
(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 for National Statistics.’
This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on child poverty.
New clause 3—Review of changes to capital allowances—
‘(1) The Chancellor of the Exchequer must review the effect of the changes to chargeable gains with respect to corporate capital losses in this Act in each part of the United Kingdom and each region of England and lay a report of that review before the House of Commons within two months of the passing of this Act.
(2) A review under this section must consider the effects of the changes on—
(a) business investment
(b) employment, and
(c) productivity.
(3) A review under this section must consider the effects in the current and each of the subsequent four financial years.
(4) The review must also estimate the effects on the changes in the event of each of the following—
(a) the UK leaves the EU withdrawal transition period without a negotiated comprehensive free trade agreement,
(b) the UK leaves the EU withdrawal transition period with a negotiated agreement, and remains in the single market and customs union, or
(c) the UK leaves the EU withdrawal transition period with a negotiated comprehensive free trade agreement, and does not remain in the single market and customs union.
(5) The review must also estimate the effects on the changes if the UK signs a free trade agreement with the United States.
(6) 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 requires a review of the impact on investment, employment and productivity of the changes to chargeable gains with respect to corporate capital losses over time; in the event of a free trade agreement with the USA; and in the event of leaving the EU without a trade agreement, with an agreement to retain single market and customs union membership, or with a trade agreement that does not include single market and customs union membership.
New clause 6—General anti-abuse rule: review of effect on tax revenues—
‘(1) The Chancellor of the Exchequer must review the effects on tax revenues of section 99 and Schedule 14 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) The review under sub-paragraph (1) must consider—
(a) the expected change in corporation and income tax paid attributable to the provisions in this Schedule; and
(b) an estimate of any change, attributable to the provisions in this Schedule, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.
(3) The review under subparagraph (2)(b) must consider 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 Clause 99 and Schedule 14, and in particular on the taxes payable by owners and employees of Scottish Limited Partnerships.
New clause 7—Call-off stock arrangements: sectoral review of impact—
‘(1) The Chancellor of the Exchequer must make an assessment of the impact of section 79 on the sectors listed in (2) below and lay a report of that assessment before the House of Commons within six months of the passing of this Act.
(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 Clause 79 on a number of business sectors.
New clause 8—Review of effects on measures in Act of certain changes in migration levels—
‘(1) The Chancellor of the Exchequer must review the effects on the provisions of this Act of migration 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 of—
(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 on the measures 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 on measures in the Bill of certain changes in migration levels.
New clause 9—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.
New clause 11—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.
New clause 15—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.
New clause 16—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.
New clause 30—Review of rates of air passenger duty—
‘(1) The provisions of section 88 shall not come into effect until the Treasury has carried out and published a review of the likely effect of changes to rates of air passenger duty on the aviation sector.
(2) The review must take into account the effects of Covid-19 on the sector.
(3) The review must be published no later than 1 October 2020.’
This new clause would require that the changes to APD in clause 88 not come into force until a review of the effect of changes to APD has been published by the Treasury.
Amendment 2, in clause 80, page 68, line 2, at end insert—
‘(3) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this Section and lay a report of that review before the House of Commons within one year of the passing of this Act.’
This amendment would require the Government to review the impact of the proposed changes to alcohol liquor duties on public health.
Amendment 3, in clause 81, page 68, line 21, at end insert—
‘(3) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the TPDA 1979 by this Section and lay a report of that review before the House of Commons within one year of the passing of this Act.’
This amendment would require the Government to review the expected impact of the revised rates of duty on tobacco products on public health.
Amendment 4, in clause 86, page 73, line 20, after “supplies” insert “, including human breastmilk”
This amendment would ensure that vehicles carrying human breastmilk would benefit from the exemption from Vehicle Excise Duty.
Amendment 5, page 77, line 10, leave out Clause 95
Amendment 6, in clause 95, page 77, line 14, at end insert—
‘(2) The Government must lay before the House of Commons by 9 September 2020 a statement of the conditions under which it would consider it appropriate to vary rates of import duty under this Section.’
This amendment would require the Government to state the conditions under which it would consider it appropriate to vary rates of import duty in an international trade dispute.
Amendment 7, page 77, line 14, at end insert—
‘(2) No regulations under this section may be made unless a draft has been laid before and approved by a resolution of the House of Commons.’
This amendment would require the Government to seek the approval of the House before making regulations varying rates of import duty in an international trade dispute.
Amendment 8, page 77, line 14, at end insert—
‘(2) The Chancellor of the Exchequer must, no later than a month before any exercise of the power in subsection (1), lay before the House of Commons a report containing the following—
(a) an assessment of the fiscal and economic effects of the exercise of the powers in subsection (1);
(b) a comparison of those fiscal and economic effects with the effects of the UK being within the EU Customs Union;
(c) an assessment any differences in the exercise of those powers in respect of—
(i) England,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland; and
(d) an assessment of any differential effects in relation to the matters specified in paragraphs (a) and (b) between—
(i) England,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland.’
This would require a review of the economic and fiscal impact of the use of the powers in clause 95 including comparing those effects with EU Customs Union membership.
Amendment 9, in clause 96, page 77, line 26, after “tax” insert
‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Amendment 10, page 77, line 27, after “deduction”, insert
‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Amendment 11, page 78, line 11, after “tax”, insert
‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Amendment 12, page 78, line 12, after “deduction”, insert
‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Amendment 13, page 78, line 35, after “tax”, insert
‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Amendment 14, page 78, line 36, after “deduction”, insert
‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Amendment 15, page 79, line 10, at end insert—
‘(8) The amendments made by this section do not apply to any debt secured by a floating charge in respect of monies were advanced to the debtor before 1 December 2020.’
This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).
Jesse Norman
The Government have tabled eight new clauses to the Bill, the majority of which are in response to the covid-19 pandemic. I would like to start by offering Members an explanation for why these new clauses are being brought forward on Report. The Government have been working very hard to combat the pandemic, as the House will know, and these measures are just a small part of a much more extensive and wide-ranging response. I am sure that colleagues across the House will appreciate that Ministers and civil servants have been working in extraordinary circumstances in the past three months. As I often do, I again pay great tribute to officials at the Treasury and Her Majesty’s Revenue and Customs. Without their work, it would not have been possible to deliver many, if any, of these aspects of this extremely comprehensive response, let alone in such a rapid timeframe as, for example, with the coronavirus job retention scheme.
We have brought forward these new clauses at the earliest possible opportunity, and for technical reasons, it is on Report. We have also been slightly limited by the fact that to table each new clause requires a new Ways and Means resolution to be agreed by the House. Report was the first amendable stage of the Bill to take place after the Government had been able to agree the necessary Ways and Means resolution on the Floor of the House. I hope the House will agree that there is a clear need for each of these new clauses to stand part of the Bill.
I will touch on each new clause briefly. New clause 19 seeks to do two things. First, it confirms that grants made under covid-related schemes—for example, the furlough scheme, the self-employment scheme, the small business grant fund, the retail, hospitality and leisure grant fund, the local authority discretionary grant fund and schemes corresponding to those grants within the devolved Administrations—are subject to tax. The new clause also includes a delegated power to add or remove further grant schemes through a statutory instrument, which provides sensible flexibility, so that the Government can continue to support the economy in their response to the pandemic.
The second part of the new clause ensures that HMRC has appropriate and proportionate compliance and enforcement powers in relation to the furlough scheme and the self-employment income support scheme. To ensure that taxpayer money is going only to those who are eligible, the new clause gives HMRC powers to recover overpayments and to impose penalties where there is deliberate non-compliance. HMRC has given a clear undertaking that these powers will not be used to penalise taxpayers who may be going through difficult times but make honest mistakes in their applications. As previously stated, the powers are designed to be proportionate, and they balance the fact that we are in unprecedented and uncertain times with the need to ensure that HMRC has sufficient powers to enforce the schemes according to eligibility criteria set out and to protect the Exchequer.
New clause 20 seeks to mitigate potential pensions impacts for those with a protected pension age returning to work to help in the battle against the pandemic. Its purpose is to provide certainty for those people by temporarily suspending rules that would otherwise see the pension income of recently retired people reduced if they were to return to work in crucial workforces at this important time. These retirees have been and will remain critical to the Government’s response to covid, and this new clause temporarily removes restrictions that might impede a flexible response.
New clause 21 temporarily relaxes the statutory residence test so that highly-skilled individuals from across the world are not discouraged from coming to the UK and helping this country to respond to the unprecedented health emergency. The actions and presence of normally non-resident individuals in the UK could have inadvertently affected their tax residence status. The measure is to be restricted, however, to ensure that it applies only between 1 March and 1 June 2020 for time spent in the UK by individuals who worked specifically on coronavirus disease-related activities in specified sectors. That time will not count towards the residence test.
Matt Rodda (Reading East) (Lab)
May I press the Minister on innovative companies getting a lack of support from HMRC? I have come across a case in my constituency where a very innovative British company appears to have had a lack of support from the agency. Would he look into that for me?
Jesse Norman
I am grateful to the hon. Gentleman for his question. As the House will be aware, HMRC is often responsive and generally extremely responsive to such issues. I will happily look at any correspondence he wants to send me, and I will ensure that there is a properly engaged response to the extent that my limited powers over HMRC permit me. I hope that will be effective.
New clause 23 enables the Treasury to specify in an order made under section 135 of the Finance Act 2008 which payments of tax and other liabilities will not attract late payment interest or surcharge as a result of being deferred by agreement during a period of national disaster or emergency. It also enables the Treasury to set specific relief periods for different deferred taxes or liabilities. As the House will know, the Government have announced an unprecedented package of economic support for businesses and individuals affected by covid. The new clause ensures that late payment interest that would normally accrue automatically where tax is paid late does not apply, supporting taxpayers further and in ways in which I am sure the whole House will support. The payment deferral for VAT that we have announced provides taxpayers with a much-needed cash flow boost. HMRC is using its existing powers as set out in the Commissioners for Revenue and Customs Act 2005 to defer those payments of tax.
New clause 24 allows a refund of the additional 3% higher rate of stamp duty where exceptional circumstances prevented the sale of the previous main residence in the three-year window within which a sale must ordinarily take place. The new clause applies to those whose refund window ended on or after 1 January 2020. It is to ensure that responsible actions taken by people do not lead to negative tax implications and that those who would otherwise have received a stamp duty land tax refund are still able to receive it, despite the pandemic.
New clause 25 suspends the heavy goods vehicle road user levy for a period of 12 months, cutting fixed operational costs to the logistics and haulage industries as the economy begins to recover from the pandemic. These industries support many other industries, and temporarily easing their financial burden will support the haulage sector, reducing fixed costs as the economy recovers over time.
I turn finally to new clause 32, which makes minor changes to the existing enterprise management incentives legislation, introducing a time-limited exception to the disqualifying event rule so that EMI option holders who can no longer meet the EMI working time requirement due only to the pandemic are not forced to forfeit their options or to exercise them earlier than planned. This has the effect of protecting employees furloughed under the coronavirus job retention scheme or who have taken unpaid leave and had their working hours reduced. The measure means that affected employees will not forfeit their options or be forced to exercise them within the statutory 90 days normally required.
Since the point of EMI schemes is to help high-growth small and medium-sized enterprises recruit and retain skilled employees by giving them tax-advantaged share options, I am sure the House will understand that the measure supports a very important sector that is also likely to be important to our recovery. The changes will be effective from 19 March to ensure that employees who were furloughed or had to reduce their hours do not lose out. I hope the House will accept the need for the new clauses in these highly uncertain and unusual times. I commend them to the House.
Wes Streeting (Ilford North) (Lab)
I thank the Financial Secretary for making the case for the Government’s new clauses this afternoon. Throughout the coronavirus pandemic, the Labour party has made clear as the official Opposition that we seek to work constructively with the Government in response to this unprecedented public health crisis which, as we have seen, has brought about an economic crisis to follow it. In that spirit, and to ensure the smooth passage of legislation, we have helped to expedite the progressive measures taken by the Government, and this afternoon will be no exception.
I wish to speak to new clause 29, which has been tabled in the name of my hon. Friend the Member for Oxford East (Anneliese Dodds), the shadow Chancellor, and other hon. and right hon. colleagues. Yesterday afternoon, I addressed the Government’s poverty of ambition on climate change. This afternoon, I want to address their poverty of ambition on tackling poverty itself.
The Conservative party has now been in government either alone or in coalition for a decade. Over the past 10 years, their record on poverty in this country and on tackling poverty in this country has been absolutely lamentable. According to the Government’s own Social Mobility Commission, 600,000 more children are now living in relative poverty than in 2012, and that is projected to increase further due to benefit changes and the obvious economic impact of covid-19. As of 20 February this year, some 14 million people were in poverty, according to the Joseph Rowntree Foundation, including 2 million pensioners and 4 million children. We know that the impacts of poverty are felt disproportion- ately among different communities. Children from black and minority ethnic groups, for example, are more likely to be in poverty, with 45% of BAME children living in poverty, as compared with 26% of children in white British families.
We believe that the Government are failing on something that should be the most basic of priorities for any Government. That is not just our view as the Opposition party; the Government’s own Social Mobility Commission has said:
“The government should be more proactive in addressing poverty overall.”
It is worth bearing in mind that behind every statistic is a child, and 30 years ago I was one of those children in the child poverty statistics, growing up on a council estate in London’s east end, sandwiched between the bright lights of the City of London and the glistening lights of what was then the blossoming London Docklands Development Corporation land, which has become Canary Wharf. Today, they are two global financial centres at the centre of our global city. In between is a vista of poverty that was bad then and remains bad now.
One of the things I find most frustrating about the experience I had growing up in a council flat in the east end in the 1980s is that I look back, and I think about the conditions of the council flat I lived in and the embarrassment of not wanting to bring friends home from school because the conditions were not ones that we were proud of. It was a source of shame and embarrassment. I think about the experience of relying on free school meals, and the stigma that arises from having to collect a dinner ticket while other children go and pay for their food quickly—and get the best food, I hasten to add, while handing over their cash. I think about the difficulties my mum had as a single mum, balancing the challenge of bringing up a child while relying on the benefits system, and having to make compromises in choosing how she spent the family budget: the choice between putting food in the fridge or some extra money in the electricity meter.
One of the things that makes me most angry is that, when I think about my experience, which I thought was bad in the 1980s, and compare it with that of children growing up in the same circumstances today, as seen in my own constituency casework, things have got worse for children in the decades following my childhood, when things ought to be getting better. Whereas I had the stability of a council flat—albeit not a nice one—and a roof over my head, children in my constituency today, and no doubt in those of so many others across the Chamber, are growing up in temporary bed-and-breakfast accommodation, being moved from pillar to post and living in substandard accommodation, with disruptive consequences for their education and their schooling, and the inability for them to form lasting friendships and for their families to build supportive networks and family relationships.
When I think about the enormous strides that were made, particularly by the last Labour Government, in tackling educational disadvantage, I think it is outrageous that, in this country in the 21st century, children still today arrive at school at the age of five with their life chances already limited and in many cases predetermined, because we failed to get early years right. Sure Start centres have closed, and the support for families is no longer there. As a result, children arrive at school, at five, less prepared than their peers from more affluent backgrounds. It makes me angry that, for all the difference made to my education through programmes under the last Labour Government and the impact they have had on children since—the London Challenge and Excellence in Cities—today children are leaving school at 16 at a time when the attainment gap between children from the most advantaged backgrounds and the least advantaged backgrounds is actually widening, and where the further education system in which many working-class young people go on to study has been described by the Government’s own Social Mobility Commission as “undervalued and underfunded”. This is at a time when the changing nature of our economy and the changing nature of the world of work make post-16 adult education delivered in further education settings more important, not less. We should be making progress, but we are in reverse gear.
Matt Rodda
My hon. Friend is making an extremely powerful speech, which focuses us, as we should be, on this vital issue. Does he agree with me that a central part of the problem many families face is that the costs of food and of rent have risen so dramatically, with the impossibility of being able to afford a home? In my constituency in Reading, it is very difficult for many people to get on to the housing ladder. Many young professionals and young families are crammed into flats, which are hugely expensive. They are also suffering huge problems with the high cost of food. Does he agree with me that this is a very significant part of the problem?
Wes Streeting
I strongly agree with my hon. Friend, and that brings me neatly on to the next point I was about to make about employment conditions in our country. For my mum, as a single mum, it was difficult to hold down a steady, stable job and often she was reliant on temporary, casual, low-paid work to help make ends meet. Looking at the picture in the labour market—and this was pre-pandemic—even in households where one or both parents are working, children are still growing up in poverty. As my hon. Friend said, over the last decade we have seen the bills going up, but the wages failing to follow.
We have also seen labour market conditions that mean that, even when people are doing the right thing, as the vast majority of people want to do—going out to work, often with two, three or even four jobs in a week, and working all the hours God sends to try to make ends meet—they are still unable to make ends meet. It should never be the case, especially in a country with the wealth and opportunity available here, that when someone goes to work and puts in a full week’s work, at the end of the day they still do not have enough to make ends meet. Things are likely to become even more challenging in the wake of the economic fallout from coronavirus. Unemployment statistics from recent months have been not only jaw dropping but unprecedented, and the pace at which our economy has collapsed as a result of the necessary shutdown has been astonishing. I welcome and recognise the steps that the Chancellor has taken to try to protect people’s incomes, but unless he goes further than he has already announced, many people will face greater poverty and hardship later this year.
Jesse Norman
the hon. Gentleman is making a powerful speech, but he did not say whether the Blair Government hit their target of halving child poverty by 2010. Did they or not?
Wes Streeting
I am delighted that the Minister asked that question, because I am about to lay out, in full, the record of the previous Labour Government. According to the London School of Economics and its Centre for Analysis of Social Exclusion, by the end of the new Labour Government’s period in office, child poverty and pensioner poverty had fallen considerably, in circumstances where child poverty would have risen without those reforms, and pensioner poverty would have fallen less far. In terms of absolute poverty, child poverty fell by more than 2 million from 1997-98 to 2009-10, and pensioner poverty fell by almost 3 million in the same period. In terms of relative poverty, child poverty fell by 800,000 between 1997-98 and 2009-10, and the number of pensioners in relative poverty fell by more than 1 million in the same period.
That Labour Government oversaw an £18 billion annual increase in spending on social security for families with children, as well as an £11 billion rise in payments for pensioners by 2010. Those rises were supported by other anti-poverty policies, including Sure Start, the national minimum wage, increased childcare support, and increases in education spending, which rose from £56 billion in 1996-97, to £103 billion in 2009-10—a real-terms increase of 83%. The last Labour Government pretty much eradicated homelessness and made ending insecure housing a priority, reducing the number of households in priority need of housing from 135,000 in 2003-04 to just 40,000 in 2009. They pursued the decent homes standard to boot, ensuring that children were growing up in far better conditions than I did. That is a record to be proud of—a record of a Government who got their priorities right.
It took a celebrity footballer to get this Government to do the right thing on something as basic as ensuring that children who would otherwise have gone hungry were fed this summer. It is not just that the Government do not have their head in the right place; they do not have their heart in the right place either. Unfortunately, we cannot rely on Marcus Rashford being on speed dial to get the Prime Minister to do the right thing on every occasion, and we cannot rely on the Chancellor to do the right thing on every occasion either. That is why it is important, as we have laid out in new clause 29, that we ensure that what counts is what is measured.
New clause 29 would require the Chancellor to conduct a review of the impact of this Bill—no doubt, very soon, this Act—on poverty in the United Kingdom. As with the Government’s environmental ambitions, I doubt that this Bill will move the dial on poverty much, if at all.
The Government’s own Social Mobility Commission has asked for the Office for Budget Responsibility to conduct assessments of all the fiscal statements that it usually does, but this time to look at child poverty and anti-poverty measures in particular. I urge Ministers to look carefully at this issue again. We raised it in Committee and were not successful in persuading the Minister of the case then, but I hope that we can persuade him of the case now. If Treasury Ministers and officials know that the OBR will be looking at those numbers in the same way that it does the other numbers in its assessments of Government fiscal events, perhaps it will concentrate the minds of people in the Treasury to get their priorities right.
Next week, the Chancellor will be coming before the House to deliver an economic update. After the Prime Minister’s statement this week, I think he needs to do a lot better than his apparent boss did when making a speech that was trailed as a new deal. It was not a new deal. Its ambitions were modest and much of the content was re-announcement. It certainly was not a green new deal. Perhaps when the Chancellor here next week, he can do the opposite of the Prime Minister. The Prime Minister over-promised and under-delivered. Given the way in which the economic update has been trailed, perhaps the Chancellor can under-promise and over-deliver next week, because he has a golden opportunity in the wake of this crisis to think seriously and substantially about the way in which our economy works and whose interests it serves.
I hope that when he comes forward next week, he does so with the full Budget that the shadow Chancellor has called for—a back-to-work Budget that is focused on jobs, jobs, jobs, that can actually tackle the gross inequalities and injustices of our society, and that puts us back on track to eradicate child poverty within a generation and to eradicate poverty for everyone because, for all the challenges of the last decade and all the challenges that we are living through now, this remains one of the wealthiest countries in the world.
This also happens to be a great country that is full of opportunities for so many people—in education, industry, arts, science and imagination—but those opportunities are not available to everyone. That should keep Ministers awake at night. It keeps me awake at night. But having listened to our Prime Minister only weeks ago in this Chamber, when it comes to tackling child poverty in this country, I do wonder whether his heart is really in it at all.
Sir Graham Brady (Altrincham and Sale West) (Con)
I am grateful for the opportunity to speak to new clause 30, which stands in my name, that of my right hon. Friend the Member for Maidenhead (Mrs May) and of a former aviation Minister, as well as of other Members who understand the crucial role of the aviation sector in bringing a very large amount of employment and prosperity to our constituents—in my case I represent an area immediately adjacent to Manchester airport, and my right hon. Friend has many constituents who work at Heathrow airport—and the wider impact of the aviation sector on the British economy and the way it drives growth and opportunity in our country.
The deficiencies of air passenger duty are well known, and this is an argument that has gone on for many years. It was introduced originally under the guise of being an environmental duty or tax. In fact, it has simply been a way of driving revenue. It is, by now, the highest tax of its sort anywhere in the world. In normal times, it is a drag on the development of new routes and connections around the world and a particular problem for regional airports, which find it harder to establish those new, especially long haul routes. Crucially, air passenger duty takes no account whatever of emissions or the environmental impact of an aircraft, a class of aircraft or a flight.
New clause 30 seeks to ensure that a review should be held—and held quickly, to be published within three months, by 1 October—of the likely effect of changes in air passenger duty rates on the aviation sector. The Bill as it stands only provides the capacity for Ministers to increase rates of air passenger duty, but it is critical that we look wider than that at the possible benefits that could come from reductions or a suspension. That is particularly important, of course, in the context of the covid-19 pandemic and the Government’s response to it.
The House will know that the aviation sector, along with hospitality and leisure, is among the hardest hit sectors of all. The effect on aviation has been exacerbated by Foreign Office guidance, which still advises against all but essential overseas travel, and in the past few weeks or so by the implementation of a blanket quarantine proposal, a policy which I hope will come to an end in the very near future with the announcement of a large list of so-called air bridges, which I think the industry expects might take place tomorrow.
The effect over the last few months of both the pandemic itself and policy in relation to the pandemic has been chilling for the aviation sector. The House is well aware of the very large number of jobs that have already been lost in the aviation sector in recent weeks and months, and there is little doubt it will take a long time for aviation to come back to the state of health that it previously enjoyed. While this is by way of a probing new clause, I say to the Minister on the Treasury Bench that the real purpose of it perhaps is simply to flag the importance of this issue prior to the fiscal event or the statement that will be made next week by the Chancellor. I am sure the Minister is well aware of the principle set out by Colbert, who said:
“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”
The danger at the moment is that far from being an easy source of revenue for Government, air passenger duty, if it remains unreformed in the coming weeks and months, risks killing the goose rather than allowing the Government to extract the feathers.
I hope that the Chancellor will, before his statement, look seriously at the case for a temporary reduction or suspension of air passenger duty to assist the aviation sector to get back to where it should be. This is an opportunity to see the wider economic benefits that could come by achieving greater connectivity for our aviation sector, and particularly for regional airports. It would also be an opportunity to look at whether at the end of such a period of suspension an improved regime might be introduced that seeks to reward more sustainable aviation rather than simply to extract revenue for each passenger who flies.
Alison Thewliss (Glasgow Central) (SNP)
The unprecedented support that the UK Government have given to business during this crisis has been welcomed, but we feel we need a bolder and more radical approach to ensure that the recovery helps to deliver a fairer, more resilient economy, with wellbeing at its core.
Across the parties and nations of the UK, everybody’s aim in this crisis was principally to save lives, but we now face the difficult task of rebuilding the economy after the unprecedented suspension of economic activity over the past few months. There is no doubt that we will have divergent ideas as to how to achieve this, but my colleagues in the Scottish Government and on the SNP Benches here have worked as constructively as we can to produce a clear strategy for the future of Scotland’s economy. That strategy is important, because it is not good enough just to lurch from crisis to crisis. I have now been in Parliament for five years, with two elections in between, three Prime Ministers, and now a pandemic and a likely no-deal exit from the EU at the end of year. We have seen a vacuum of economic strategy from successive Conservative Governments; it is time for this Government to recognise the unique circumstances in which we find ourselves.
We need to rebuild and grow our economy, and we need a vision for what we want that to look like. This crisis has clearly deepened existing inequalities. We have to seize the opportunity to build a new kind of economy that tackles poverty and inequality at its root. Research from the New Economics Foundation has found that only 6% of the public want a return to the pre-pandemic economy. The SNP’s new clause 10 would hold the Government to account on tackling child poverty and require the Chancellor to review the impact of the Bill, because we want to ensure that the inequalities that have widened as a result of this crisis do not continue to widen. We support Labour’s new clause 10, which complements our clause.
Unfortunately, we cannot trust the UK Government to deliver on tackling inequality on their own. In the past couple of weeks, we have seen an intention to return to the punitive regime of benefit sanctions that has caused so many families misery and hardship. How are people supposed to go out to work when they may be shielding, when they may have children at home and when they may put their families at risk by going out to work? It is really quite impossible. I do not know how the Government expect people to do that. They should definitely urgently rethink the proposals on benefit sanctions.
We have seen the Government providing free school meals for children in England only after being shamed into a U-turn Marcus Rashford, and we have seen a Prime Minister more concerned about a £900 million paint job on a plane than supporting families. That gives a real indication of this Government’s priorities. The Scottish Government have taken child poverty incredibly seriously. They have set in statute their commitment—[Interruption.] They are grumbling on the Government Benches; if they would like to tell me why spending £900 million on a plane is more important than—
Alison Thewliss
If Government Members want to tell me why spending £900,000 on a plane is more important than feeding children—[Interruption.] All of it is too much. All of it is unnecessary; when there are children in my constituency and constituencies throughout the country not having food to put on the table, money spent on redecorating a plane is a shame that should stain this Government.
As I was saying, the Scottish Government have taken child poverty incredibly seriously. They have set in statute the commitment to eradicate child poverty by 2030, with concrete action in the child poverty delivery plan backed by the £50 million tackling child poverty fund. Child poverty in Scotland had fallen, but it has been on the rise since the Conservatives took over in 2010. Research from the Joseph Rowntree Foundation directly attributes this rise to welfare policy. In addition, the policies outwith the control of the Scottish Government, such as no recourse to public funds, cause significant poverty among people who are working. Constituents come to my office who cannot put food on the table for their children and who are struggling to pay their bills. Some have come to my office several years in a row to apply for the Christmas presents fund that is run in Glasgow, because even though they are working, they are not entitled to the benefits that their neighbours get; two children may sit next to one another in the classroom but one will go without because one family has no recourse to public funds. The Government must rethink this, because we have seen through the coronavirus crisis that people with no recourse to public funds find it more difficult to support themselves through this time.
Wes Streeting
The hon. Lady is right to say that so much of the responsibility and blame for what is happening in Scotland rests on the shoulders of the decisions taken here by the Conservative Government in Westminster, but I cannot resist asking her: given that between 1999 and 2007 Labour was in government in Holyrood and Westminster, are the people of Scotland not better served when there is a Labour Government here and a Labour Government there?
Alison Thewliss
The hon. Gentleman seems to think that Scotland just hangs about and waits for a Labour Government, and everything is going to be fine. We would rather have Scotland’s powers in our hands than have one hand tied behind our back in this Union. So we are stuck with the policies that this Government and Parliament propose, which the people of Scotland, in many cases, have not voted for and do not want.
It is difficult to assess the impact that no recourse to public funds has on poverty in constituencies across the UK. I asked for a breakdown by constituency of the number of people with no recourse to public funds, but the Government said that that information could not be provided to me. So I cannot tell how many people in my constituency have no recourse to public funds and are struggling. It falls to the Scottish Government to try to fix some of these problems, because as soon as anything is proposed to get around no recourse to public funds, the UK Government shut it down and say it cannot happen. The Scottish Government therefore have an anti-destitution strategy for no recourse to public funds, to take a degree of responsibility for the serious situation many people face—these are our people and we want to try to help them. When that strategy comes forward, I call on the UK Government not to stand in the way of trying to support people in society who need help.
Academic research has shown that the single most effective policy to reduce child poverty in Scotland would be for universal credit payments to be increased, and the Scottish Government are using the powers we have to invest in the new Scottish child payment, which will lift 30,000 children out of poverty. With UC applications more than doubling since this time last year, we badly need sustained investment in the welfare system from the UK Government, and it is disappointing that the Prime Minister has failed to rule out a return to austerity. The UK Government’s welfare cuts are estimated to reduce social security spending in Scotland by up to £3.7 billion in 2020-21. The Scottish Government are spending more than £100 million a year to mitigate the worst of those, including by mitigating against the bedroom tax. However, as Professor Alston, the United Nations special rapporteur on extreme poverty and human rights, wrote in his report on poverty in the UK:
“Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue. Scotland and Northern Ireland each report spending some £125 million per year to protect people from the worst impacts of austerity and, unlike the United Kingdom Government, the three devolved administrations all provide welfare funds for emergencies and hardships.
But mitigation comes at a price, and is not sustainable. The Scottish Government said it had reached the limit of what it can afford to mitigate, because every pound spent on offsetting cuts means reducing vital services.”
Professor Alston was absolutely right in that assessment.
We cannot, in any circumstances, return to the austerity of the past. The welfare state and public services have been devasted in the past 10 years, leaving our economy vulnerable. Unfortunately, we still do not know if or when a second wave of covid-19 might happen, so we must use this opportunity to build resilience, if possible. We can allow a more flexible labour market response by increasing the generosity of universal credit, which will give people the financial headroom to gain new skills to meet the changing demands of the economy.
The Chancellor said that he would do whatever it takes to protect jobs, after a recent Treasury Committee report revealed that more than 1 million people have fallen through the gaps in support schemes. At this critical stage, it is vital that the Treasury strengthens and extends the schemes to ensure a strong economic recovery from the crisis. It is extremely concerning that the Government are pushing ahead with plans to wind down support schemes, and in particular that new clause 19 will designate grants to help businesses, employers, individuals and members of partnerships affected by the coronavirus crisis as taxable income.
It is also concerning that HMRC will be given new compliance powers to enforce those rules and that that has not been effectively communicated to businesses. Any new powers granted to HMRC must be proportionate and serve to aid recovery, rather than providing a further barrier for businesses to overcome. Those concerns have been backed by tax experts, such as the Chartered Institute of Taxation, which has said that it is vital that HMRC
“take a reasonable approach to enforcement in cases where recipients of CSPs were not entitled to the amount they received…there will be cases where people have made inadvertent errors in claims which may not come to light for some time. There will be cases where the person just did not know of the requirement to notify an overpayment. It is imperative that HMRC obtain a full understanding of the facts in every case and take a proportionate and targeted approach in their compliance activity in the months ahead.”
It is extremely important that HMRC and the Government get those details right. Many businesses are already on their knees and vulnerable to further shocks. Many businesses in my constituency are struggling to deal with HMRC, with errors in reporting systems meaning that they are not entitled to the payments that other businesses have received. It is difficult to address those problems.
If businesses are left to fail as support is withdrawn, the billions of pounds that have already been spent by the Government will be money wasted. As I did in Committee, I highlight the concerns raised by the Association of Business Recovery Professionals, R3, about the plans to grant preferential status to HMRC in insolvency procedures from December, covered by our amendments 9 to 15. It and UK Finance are concerned that that will undermine business lending and make it harder to rescue businesses from administration. Many companies across the UK in recent weeks have been struggling and going into administration, so the Treasury should carefully consider whether its plans will help businesses or hasten their demise.
Countries all over the world are facing the same choices and growing levels of public debt, but if we are to recover fully from the crisis, we need to prioritise growth and wellbeing over deficit reduction. This week, the Scottish Government laid out a plan for a fiscal stimulus package of £80 billion to stimulate growth for the whole of the UK. That would be used to accelerate major investment in low-carbon energy efficiency and digital infrastructure and deliver a green new deal for UK. The value of that investment can be recognised by assessing the Government’s fiscal sustainability in terms of its public sector net worth.
It is regrettable that the UK will, of course, miss out on the European Commission’s €750 billion stimulus. That makes it even more critical that the UK Government commit to their own stimulus—a proper stimulus, not the pretendy one that was announced by the Prime Minister this week—in the wake of covid-19, such as a reduction in VAT and job guarantees for young people.
Speaking of even younger people, I make a plug for my small and uncontentious amendment 4, which seeks to clarify that human breast milk is part of the vehicle excise duty exemption for vehicles carrying blood. It would be an important signal of support and recognition from the UK Government to those operating milk banks and to the mums donating their breast milk, which helps some of the most vulnerable babies in intensive care units across the UK. Among them is the extraordinary woman who, last week, donated an astonishing 32 litres to the milk bank that covers all of Scotland.
The Scottish Government and my colleagues in Westminster have put a considerable amount of work into formulating a meaningful strategy for Scotland’s recovery and future progress in delivering inclusive growth. I sincerely hope that those policies are taken seriously by the Treasury and that we can look back on this time as a pivotal one for making progress towards a fairer and more equitable society.
Mark Jenkinson (Workington) (Con)
It is an honour and a privilege to be addressing you from these green Benches, Mr Deputy Speaker, and most unexpected for a Wukkington lad like me. It would be fair to say that neither the timing nor circumstance of my maiden speech are as I imagined, with my original timing altered by the loss of one of Workington’s great artists—a much-loved former teacher and my wife’s grandmother—followed by lockdown, and the circumstance altered by a socially distanced Chamber and our new normal in the light of coronavirus.
On that subject, I must pay tribute to the huge sacrifices that each and every one of my constituents has made to stop the spread of the virus and to the huge effort from many individuals and businesses with their contributions to local community and national efforts. If I was to look for one positive in recent months, it would be the way that so many of my constituents have stepped up to the plate to support those around them.
The scale and speed of the Government’s response to coronavirus has been unprecedented. The measures that we have seen across the grant schemes, rate relief schemes, furlough schemes and bounce-back loans have been welcomed by my constituents in Workington. There is more to do and there are lessons to be learned, but I am incredibly proud to be here today to support the Government in their efforts.
Mary Kelly Foy (City of Durham) (Lab)
I congratulate the hon. Member for Workington (Mark Jenkinson) on his maiden speech, and I hope that he—a newbie like me—enjoys his time in this place and is a strong voice for the people of Workington. Yesterday, I spoke in the Finance Bill debate about job creation and the importance of creating not only jobs, but secure jobs that put the needs of workers at the heart of the economy, rather than profit. It seems rather appropriate that I have the opportunity to speak in the child poverty debate today, because as we all know, the Government’s shameful record on employment and workers’ rights is one of the main drivers behind child poverty.
To be honest, I have absolutely no faith that the Government understand the issue of child poverty in any meaningful way. In the space of a month, I had the Secretary of State for Health and Social Care telling me that this Government were committed to levelling up the north-east, yet I also witnessed an equalities Minister admitting from the Dispatch Box that they had not heard of the Marmot report—essential reading when looking to tackle health inequalities. As one popular actor said in response, it is like a vicar not having heard of the Bible.
Over the last decade, Conservative Governments have systematically dismantled the progress that the last Labour Government made on child poverty. Currently, 4 million children are living in poverty, with 3 million of those living in a household where at least one person is in work. In addition to that, the Government’s Social Mobility Commission reports that there are 600,000 more children living in relative poverty than in 2012. The commission referenced the Government’s welfare changes as a key cause of this and have predicted that those changes, along with the impact of covid-19, will only increase child poverty. While the Prime Minister might be confused as to whether the Government have caused more child poverty, I am not. It is there in black and white in those appalling figures and, quite frankly, it is an utter disgrace.
In recent weeks, we have also seen the Government being forced into a U-turn on free school meals after a campaign by a leading footballer—one of the people the Health Secretary was telling to do their bit at the start of the crisis. Is it not shameful that we have a Government who have to be embarrassed into feeding hungry children? To top it all off, the Government have reintroduced benefit sanctions in the midst of a global pandemic and economic disaster. Welfare support from the Government will be essential during the coming recession, yet the Government seem more concerned with taking support away than supporting people in dire financial straits. How on earth does this help child poverty? I wish that the Government were as quick to sanction Dominic Cummings or the Secretary of State for Housing as they are to sanction vulnerable people. What is clear from these decisions is that the Government either fundamentally misunderstand the issue of child poverty or simply do not care. I would ask the Minister which it is, but I suspect it is both.
Unfortunately, this country now faces one of the biggest crises in living memory. There is a combined threat to public health and the economy, which must be tackled together. However, the Government’s tendency to view poverty as an issue with individual causes, and their ignorance of health inequalities, show that they are poorly equipped to deal with this problem. When confronted with the rise in child poverty by my right hon. Friend the Leader of the Opposition, the Prime Minister denied the extent of the issue. To bluster and deflect would be one thing, but to deny that the issue exists is deeply worrying. How can the Government be trusted to tackle the issue if they refuse to confront it and deny its existence?
Successive Conservative Governments have made the problem worse; that is not my opinion but a fact. What they must do now is admit that they were wrong and change course. A starting point would be to accept the Social Mobility Commission’s recommendation that the Treasury give the Office for Budget Responsibility the role of assessing the impact of the Government’s fiscal policies on poverty. Sadly, I fear that under this Government, child poverty will continue to rise, as they simply do not recognise that the problem exists or know how to solve it. I can only hope that they prove me wrong.
Aaron Bell (Newcastle-under-Lyme) (Con)
It is a pleasure to follow the hon. Member for City of Durham (Mary Kelly Foy). It is also a pleasure to follow my hon. Friend the Member for Workington (Mark Jenkinson) and to congratulate him on a truly excellent maiden speech. It was warm, it was witty and it was thoughtful, and I know that he will serve the people of Workington very well in this place. He, like me, represents a red wall seat. The hon. Member for Ilford North (Wes Streeting), the Labour Front-Bench spokesman, spoke nostalgically and warmly about the Blair Government. Under the Blair Government, both his seat and mine had 10,000 Labour majorities or more, and perhaps the Opposition might reflect on why those voters have lost faith with Labour to solve their problems. There is poverty in my constituency; there is poverty in my hon. Friend’s constituency, but those people put their faith in the Conservative party to make their lives and their futures better.
I turn to the Bill and the amendments. It is clear that an ambitious and decisive response was demanded of the Government by the serious economic situation that we as a nation and the whole world face. The Budget debate in which I spoke back in March already feels a very long time ago for all of us, I am sure. In many ways, the world has changed a great deal since the day when my right hon. Friend the Chancellor of the Exchequer delivered his excellent first Budget to the House. I welcome these Government new clauses, which provide both relief and certainty in a number of affected areas, and I will speak a little more specifically about new clause 20 later.
In other ways, however, it is even clearer now than it was then that my right hon. Friend was ahead of the curve in the response to the challenges that we face. The Treasury has been at the forefront of the national response to the coronavirus and a leading example to the rest of the world, with its focus on protecting jobs and maintaining the capacity of our economy, while also looking after the most vulnerable in our society in all the measures taken to respond to the virus.
The extraordinary success of the coronavirus job retention schemes means that we have been paying the wages of more than 9 million people who would otherwise have been laid off or made redundant and therefore we have protected their jobs, their livelihoods and their families through this most difficult time. The Government have, in my view, risen to the challenge of protecting our economy thoughtfully, responsibly and with ambition. In my constituency of Newcastle-under-Lyme, that has meant 10,200 jobs supported through the furlough scheme and 2,600 self-employed workers supported with grants of more than £7 million. The local borough council has also supported our local businesses by distributing more than £21 million of business grants. I have received many emails from constituents asking me to pass on their thanks to the Government for the grants, the furlough scheme and all the other measures that have helped to keep them, their businesses and their families afloat through this period.
Claudia Webbe (Leicester East) (Lab)
It was Mahatma Gandhi, a hero to many Leicester residents, who famously said that the true measure of any society can be found in how it treats its most vulnerable members. When it comes to ensuring that vulnerable children are fed and looked after, our Government should be ashamed of themselves.
According to the Government’s own Social Mobility Commission, 600,000 more children are living in relative poverty now than in 2012. That is projected to increase further because of benefit changes and, of course, the coronavirus pandemic. In 2018, the number of children living in relative poverty rose by 100,000 to 4.2 million, or around 30% of all children. That appalling figure reflects the Government’s failure on the fundamental principle of governance: to provide for the most basic needs of our citizens.
As of February 2020, around 14 million people were in poverty in the UK. The virus may not discriminate, but our economic and social system certainly does. Children from African, Asian and minority ethnic families are nearly twice as likely to be in poverty than children in white British families. Leicester East is one of the most ethnically and culturally diverse places in the UK and has high levels of both child poverty and in-work poverty—we suffer from a perfect storm which enables the virus to have its impact.
Like many of our residents, I am deeply concerned about the recent increase in coronavirus cases in our city and the economic impact of the necessary lockdown extension. I am particularly worried about the impact that the pandemic will have on those Leicester children who are already living in conditions of unacceptable hardship. Over one in three children—42%—in Leicester East live in poverty. Nearly 6,000 households—around 14%—in Leicester East are in fuel poverty. As of April last year, the average weekly income for full-time employees in Leicester East was £420. That is £130 less than the east midlands average and £160 less than the UK average. The proportion of people claiming unemployment benefits in my constituency is also higher than the regional and national level. Do this Government believe that my constituents are somehow worth less than others? It is unacceptable that they have allowed such rank regional inequality to fester.
The worst thing about these shocking figures is that they reflect our local reality before the unprecedented coronavirus pandemic. We do not yet know the full impact of the unprecedented economic disruption caused by the virus. With widespread job losses, it is certain that it will have exacerbated hardship across Leicester and the UK. I have been helping countless local businesses and employees to stay afloat and access funding, despite the Government’s prohibitively strict guidelines. At a national and local level, we see companies such as British Airways take huge amounts of taxpayers’ money through the job retention scheme and then fire vast swathes of their workforce while imposing worse terms of employment. Too many Leicester residents have started to receive threats of redundancy at a time when the protection of workers must be prioritised. With Leicester required to maintain lockdown measures, it will be necessary for economic support to be extended and expanded. It is crucial that families in Leicester East have the material basis to stay safe and stay alive during the continued lockdown.
The Government’s callousness is demonstrated by the fact that benefit sanctions have been resumed at a time when we face an unprecedented period of economic hardship. For people forced to endure severe levels of hardship and such insecurity, it is impossible to comply, at times, with the Government’s guidance on self-isolation and social distancing. It is a moral imperative and in the public interest of everyone in our community that the basic needs of all residents are met. The cruelty of this Government over the last decade has transformed the Department for Work and Pensions into a symbol of fear. The coronavirus pandemic has further demonstrated the need for universal welfare support that will be there to help and support people, not punish and police them.
Even before the coronavirus hit, the Government had presided over a decade in which they cut essential services for the people of Leicester East while providing tax cuts for the wealthy, in which they allowed poverty and homelessness to rise in my constituency and across the country, and in which they sought to sow divisions as they facilitated the transfer of wealth from the poorest to the richest. The Government must act now to prevent the further impoverishment of working people and their families during the pandemic. They must start treating the widespread poverty of our children as the national scandal that it is. This virus has demonstrated that we have a moral duty to ensure that everyone in Leicester and across the country is protected. That means that, after the crisis, we can no longer live in a society that is defined by extreme inequality and in which it is commonplace for our children to go to bed hungry.
Andrew Griffith (Arundel and South Downs) (Con)
It is a pleasure to follow the passion of the hon. Member for Leicester East (Claudia Webbe). Our thoughts are with her and her constituents at this difficult time. It is a particular pleasure, if I may say so, to follow my hon. Friend the Member for Workington (Mark Jenkinson). He made us wait for his maiden contribution because of the difficult circumstances that we are in, but we are absolutely delighted that it was worth the wait. Workington has gained an important and well respected voice in this House.
I am speaking today in support of my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) and of new clause 30, which requests that the Treasury review the level of air passenger duty. I am doing so on behalf of the 645 individual constituents from Arundel and South Downs who have signed the parliamentary petition on support for the aviation industry. They work for firms such as British Airways, Virgin and TUI, and in the extended Gatwick supply chain in West Sussex. As we know, aviation has taken the full force of the economic impact of the covid-19 crisis; it has been devastated by border closures and the calamitous drop in passenger demand. Going into the pandemic, our aviation sector was world-leading in terms of growth, jobs and competitiveness, but that is now at real risk. Research from the International Air Transport Association shows that the UK will be the worst revenue-hit country in Europe, facing a £29 billion revenue loss and with more than 660,000 jobs at risk. There are many aspects of this crisis that my right hon. Friend the Minister cannot help with, and I shall raise those another day, but one practical thing that he could do is to remove or mitigate the headwind of air passenger duty and help hard-pressed families to return to the air.
I know that the Financial Secretary does not share this affliction, but some falsely believe that air passenger duty is an environmental measure. That is manifestly not the case. It is levied on passenger numbers, so that an inefficient empty plane pays less than an efficient full one. It bears no relation to how modern an aircraft is or to the fuel efficiency with which it is being flown. Also, it does not take into account the fact that, to the extent that it disincentivises flight, the alternative for many passengers may be a long and polluting car journey. This is particularly true of domestic aviation. In any case, aviation accounts for barely 2% of human-induced global emissions, and in February this year, UK aviation committed to being net carbon zero by 2050. That is the first national net zero aviation commitment anywhere in the world.
This is a sector on the verge of exciting and disruptive change. We are at the dawn of what is called the third era of aviation, which will bring quieter and cleaner transport to the skies. Electrification will have as profound an impact as the replacement of the piston engine by gas turbines. British businesses such as Rolls-Royce are leaders in this field, providing engines to the first generation of all-electric planes, which are being certified for use by the Federal Aviation Administration right now. Air passenger duty is not a large source of revenue for the Treasury. At the best of times, before this crisis, it was expected to account for just 0.5% of all receipts, but with our busiest airport, Heathrow, reporting flights at just 3% of their normal levels in April, the revenue from APD this year and next will in any case be paltry. I conclude by humbly putting the proposition to the Minister that he may never again have such an affordable opportunity to help a vital British industry, to enhance his own formidable reputation on the Government Benches, to strengthen the Union by supporting domestic flights and to simplify the tax system than he does in accepting new clause 30.
Matt Western (Warwick and Leamington) (Lab)
It is a pleasure to follow the hon. Member for Arundel and South Downs (Andrew Griffith). I spoke in the debate on the Budget delivered on 11 March, which for all of us seems like a lifetime ago, such has been the impact of covid-19 on us socially and on our health but also on our communities and, profoundly, on our economy. That is one reason why I wanted to speak, although perhaps some of my comments are more relevant to yesterday’s debate.
We were told that covid-19 would not discriminate and that all of us would be impacted equally, but, as we have seen, we are witnessing a further widening of inequality by virtue of this terrible crisis. We now know that its impacts are different according to the nature of someone’s employment, where they live and so on. It reminds me of what happened from 2010 onwards, post the financial crash, when we were told we were all in it together. Of course, that was never the case. Those who had wealth and capital prospered. Look at the wealth of the top 100 people in this country and how it grew exponentially in the past decade, and how inequality widened so considerably. That has to be our great fear: the mistakes of the period from 2010 onwards will be repeated now. The warm words are not enough. We have to address this. We must recognise the sacrifice and contributions made by everyone across our society, irrespective of what people do. It does not matter whether they work in finance in the City or whatever; it is not enough. We all make a contribution. We all have a part to play in our society and in our economy.
In my constituency, there are just under 2,000 children living in relative poverty. Many people think it is a wealthy, prosperous community, but that is one in nine of all children. When it comes to energy poverty, one in 11 households lives in such poverty. We have no quality social housing being built at scale: something like nine social rent council homes have been built since 2010, and an average of 90 social rent homes have been built a year for the past five years. That is inequality. The children of this next generation will not enjoy the same benefits as that those of us who grew up in the 70s and elsewhere. We had a right and an opportunity to quality housing, to an education and to good job prospects. We are now seeing the beginning of unemployment rocketing.
I want to cover what is missing from the Finance Bill, given the drastic change in the economic picture. With prosperity, we can address inequality, but it is a choice. In particular, the support we now need from the Treasury for the automotive industry, which is so important to my constituency, is to protect jobs and get the Warwick and Leamington economy back on its feet. Covid-19 has had a huge impact on my constituency, as it has everywhere else, but of course the effects vary.
I have spoken with a wide range of businesses that have required the financial support offered by Government, which has been broadly welcomed, albeit there have been some huge gaps in the support for directors of small limited companies and others. In Warwick district—that is not entirely the same as the constituency—16,900 people had been placed on furlough. Many of them will be in the sectors hardest hit, such as hospitality, retail, leisure and tourism, and many are the lowest paid workers in my constituency, who will be at the start of their working lives. I have great concerns about what will happen once employer contributions to the job retention scheme are phased out entirely. The claimant count in my constituency has already shot up by 129% since March to over 3,000 people, and the figure will only go higher as the JRS is wound down. I urge the Government to consider extending the scheme for those sectors that are being badly impacted by the virus, until we can remove social distancing measures. The Leader of the Opposition also asked for this at PMQs yesterday.
Even with furlough still in place, people in my constituency are already losing well paid, skilled jobs in our precious automotive industry. Just last month, Jaguar Land Rover announced that it will be cutting 1,000 jobs and Aston Martin announced 500 job losses. With UK sales down 97% in the past two months, the sector has effectively had to cease production for three months, yet companies have often found that they do not qualify for the Government-backed loans. Demand for vehicles has understandably fallen off a cliff, and those businesses are going to need a lot of support to get back on their feet.
Along with colleagues on the all-party parliamentary group on electric vehicles, I have written to the Chancellor and the Business Secretary in my role as chair of that group to ask them urgently to discuss a stimulus package for the sector. I hope they will respond to that letter soon. There is an opportunity not only to protect skilled manufacturing jobs—the kind that we are desperate to attract and retain in this country—but to drive the industry towards a greener future. I know that the industry is desperate for the Government to work with it in that regard.
We need Government intervention because it is vital to managing transition. I very much hope that we will hear some positive words from the Chancellor next week. I therefore welcome the reforms to vehicle excise duty in the Bill and the £500 million for electric vehicle charging infrastructure announced at the Budget, but we must be much bolder if we are to make electric vehicles and other alternative fuel vehicles a good choice for consumers as has been done in other markets. By way of example, Norway has been the most successful country in achieving EV market penetration. The support from the Government there provides reduced road tax, free municipal parking and VAT exemption. This approach makes the total cost of ownership less than for dirtier, more polluting vehicles. We need 30,000 charging points in the UK—three times the amount we have now—and the investment to make it happen.
When the Prime Minister talks about trying to get the economy back on its feet, the phrase “build, build, build” is wrong for me. We must make, make, make and invest, invest, invest in our infrastructure, including in EV charging points and getting more alternative energy sources into our grids in order to build a cleaner and better future. As it happens, I travel by electric bike and would encourage everyone to take shorter journeys using this mode of transport, but we must make it cheaper for consumers to do so. Such grants and benefits can really help to stimulate new sectors. I urge the Government to consider doing this next week.
I urge Treasury Ministers to look again at how the Government can use our taxation system to incentivise the purchase and uptake of new, cleaner internal combustion engine vehicles; to support our automotive industry to get firing on all cylinders again; to look at alternative fuels, electric vehicles and hydrogen vehicles; and to think about how we can really progress and drive the sector forward. The Government must have the sector at the front of their mind before any financial statement delivered next week that is designed to protect jobs. Without urgent action and action at scale, we risk losing this sector forever.
Sarah Olney (Richmond Park) (LD)
I congratulate the hon. Member for Workington (Mark Jenkinson) on his maiden speech and warmly welcome him to his place. I shall attempt to tune my Surrey ears to his Cumbrian dialect, and I very much look forward to hearing more from him.
I want to take this opportunity to ask the Government, in their response to the coronavirus and all the challenges that are still to come, to focus particularly on two priorities when making their decisions about how to allocate resources to meet this enormous challenge. The first is to focus on the interests of our children and young people. It would have been unthinkable at any other time for an entire generation of schoolchildren to have missed a whole term and a half of schooling. Among all the justifiable anxiety about infection rates, testing, PPE and reopening the economy, the needs of our children seem to have been somewhat sidelined.
I welcome the Secretary of State’s statement earlier today about reopening schools in September. Like the rest of the House, I fervently hope that infection rates continue to decline to facilitate this. I would like to see a wholesale commitment from this Government to overcoming the educational deficit that has resulted from the shutdown. We already know how much of an attainment gap opens up between different groups of children over the summer holidays, and we can only imagine how much more pronounced that this will have become after half a year’s worth of missed schooling. I urge the Government to allocate generous resources to schools so that they may invest in the additional staffing and resources that they need to meet the needs of all children who have been disadvantaged.
I would also like to see a commitment to more diverse forms of learning to help engage young people who have become alienated from traditional forms of learning over their time away. Music, drama, sport, and open-air learning can all help children to re-engage with their education and will also help to revive employment sectors that have been damaged by the shutdown.
Beyond education, we have a cohort of school leavers who are attempting to enter employment at the worst possible time. If we are not to doom this cohort to a lifetime of missed opportunities, we must act now to provide them with the employment opportunities where they can build real skills and lay the foundations for a meaningful working life. In that spirit, I welcome the aspiration in the Prime Minister’s speech to build, build, build, as I recognise that this will provide opportunities for high-skilled jobs and apprenticeships. However, I ask that the Government include a real commitment to retraining career changers to help people who have lost their jobs in this pandemic to find work among the new opportunities that these projects will provide.
I note that the sectors the Prime Minister promises to provide funding for are areas of employment that are typically masculine. I urge the Government to redouble their efforts to engage young women and female career changers in training for careers in construction and engineering if those are the sectors where employment is due most quickly to recover. We know that child poverty is most effectively overcome when women are in work and earning a good wage, supported by affordable childcare.
On that note, I draw the Government’s attention to the financial precariousness of both our pre-school providers and our universities. Every one of these institutions that is forced to close or scale back activity as a result of the pandemic is a narrowing of opportunities for our children and young people, and every effort should be made to support these sectors. While I am on this point, I should like to take the opportunity to raise the issue of travel in London for those under-18. For many years, it has been free for under-18s to travel on Transport for London services, and that has opened up to all of them a much wider range of opportunities—education, cultural, sporting and social. As part of the package that the Government put in place to bail out Transport for London earlier this summer, they specified that that travel offering for the under-18s had to be scrapped. In support of that decision, they cited the fact that young people use buses only for short journeys that they would otherwise walk. I have obtained from the Minister the evidence for that assertion, and it came from a report published some years ago that concluded that free travel for under-18s had an overwhelmingly positive impact on young people’s social and educational lives. I urge the Government to prioritise young people in this recovery and to make a start by scrapping this restriction on their travel.
The second area that I call on the Government to prioritise as we plan our future beyond this pandemic is the environment. I was really disappointed not to hear a greater emphasis on the progress towards our net-zero carbon targets in the Prime Minister’s speech. This is a fantastic opportunity to implement carbon-free and low-carbon standards into our construction of new homes and into our transport systems. We can also take this opportunity to specify new standards for biodiversity, water quality and air quality and to redouble our efforts to increase the proportion of our energy that comes from renewable sources. I particularly encourage the Government to think not just about new buildings, but about bringing existing buildings up to 21st-century standards. Committing to a programme of retrofitting insulation to our ageing homes, especially those belonging to low-income families, can provide skilled employment opportunities and help us to make substantial progress towards our net-zero carbon goals.
There are so many other challenges that this Government will need to face over the next few months and so many calls on taxpayers’ money, but I want to see the Government establish clear strategic priorities for their future spending, and I would like those priorities to be our children, our young people and our environment.
Rachel Hopkins (Luton South) (Lab)
After a decade of austerity, which has seen an assault on people’s living standards and our social security system, child poverty is at a disgracefully high level, and the Bill will not work towards tackling the root causes. I am speaking in support of Labour’s new clause 29, which would ensure that the Government review the impact of the Bill on poverty, and I commend my hon. Friend on the Front Bench for his opening remarks and others on this side of the House for the passion and understanding with which they have spoken.
Fleur Anderson (Putney) (Lab)
I congratulate the hon. Member for Workington (Mark Jenkinson) on his maiden speech and on taking his place in the House.
I am honoured to be able to give a speech today that will be arguing for the correct place of focusing on child poverty in all our legislation. If we do otherwise, we will fail the very people we should be serving. I stand here to represent a mother whom I met last year. I went to her house to support her children and she told me in passing about the one lightbulb they have in their house. I asked, “One lightbulb, why is that?”. They moved it around from room to room so that her children would not inadvertently be able to switch on and use more electricity, because they could not afford to light up more than one room at a time. That was a stark reminder to me about the child poverty levels we have in this country.
New clause 29 would mandate the Government to look at the effect of this Finance Bill on the basis of its impact on poverty and on inequalities—on relative poverty. To measure the success of the Bill, we need to carry out a review within six months and consider whether future studies should be carried out regularly by the OBR. I may be able to pre-empt the Minister’s response to this new clause. He may well say that it is unnecessary and that impact assessments will be carried out, but if those are not public and are not regularly carried out, the Government are marking their own homework on this. When it comes to measures that may make people poorer, that is not acceptable and we need a public report. The Government’s own Social Mobility Commission says in its “Monitoring social mobility” report, published this year:
“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 (OBR) 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.”
The Government must be more strategic in their recovery from coronavirus than they have been in handling the crisis. They cannot take a hands-off approach, as they have done in the past decade towards child poverty. The cost of inaction, in terms of supporting the economy and reversing growing poverty levels, will be far greater than the cost of action. This really matters in London, which has the highest rate of child poverty of any English region, with 700,000 children—37% of all children in London—living in relative poverty, after housing costs are taken into account. In my borough of Wandsworth, 36% of children live in poverty. Although poverty rates are higher for everyone in London than they are nationally, this gap is larger for children than for any other group. Two thirds of children living in poverty in the UK are in working households or where at least one adult is in work, and they will be very impacted by the measures in this Bill, so we should record it.
When the UN’s special rapporteur Philip Alston produced his report on extreme poverty and human rights in Britain in 2018, long before coronavirus came along, he found that the UK Government’s policies had led to
“the systematic immiseration of millions across Great Britain”.
He also saw the disproportionate impact on women, saying:
“If you got a group of misogynists in a room and said how can we make this system work for men and not for women they would not have come up with too many ideas that are not already in place”.
We cannot continue with this kind of policy making.
Following drastic changes in Government economic policy beginning in 2010, the two preceding decades of progress in tackling child and pensioner poverty have begun to unravel, and poverty is on the rise. This Bill must not add to that. Under the previous Labour Government, child poverty was going down, but the latest figures from the Child Poverty Action Group show that 4.1 million children live in poverty in the UK; 47% of children living in lone parent families are in poverty; and 70% of children growing up in poverty live in working families. This is going in the wrong direction, as 5.2 million children are expected to be in poverty by 2022. Under this Government, we are heading towards having half of our children being poor in 21st century Britain. That would be not only a disgrace but a social calamity and economic disaster rolled into one.
On Tuesday, the regional director of Public Health England, Professor Kevin Fenton, warned a meeting of the London health board that the coronavirus has worsened stark and pervasive inequalities in London. A growing bank of national evidence shows that the virus has hit older people, poorer communities, men, and black, Asian, and minority ethnic Londoners the hardest. Some of those groups are also likely to be impacted by the wider social and economic consequences of the outbreak. According to Professor Fenton:
“These inequalities are stark, they’re pervasive and they are a call to action for the system moving forward to ensure that we do not go back to where we were…but we redouble and enhance our efforts to address these widening inequalities.”
Given those shocking figures, the worrying direction of travel, and the limiting daily impact on so many people’s lives, any new Bill that does not bake in an assessment of its impact on the lives of the poorest people in our country is set up to fail, and it will fail all those people and children in this country who we should be serving the most.
Ruth Jones (Newport West) (Lab)
It is a pleasure to bring up the rear in this important debate—last, but hopefully not least—and I commend the hon. Member for Workington (Mark Jenkinson) for his maiden speech. Labour Members obviously mourn the loss of his predecessor, but we trust that the hon. Gentleman will speak up for Cumbria as strongly as she did.
I wish to touch on three important areas that I think the Government should keep in mind as we look to rebuild our economy, and as communities across the UK get used to our new normal. We must remember that this is a recovery from the first wave of covid-19, and events in Leicester and elsewhere in England show how sensitive the evolving situation continues to be. A key component of any recovery effort is public sector pay, and the way we treat those who go above and beyond for us. Our workers deserve to be paid properly, and we must pledge to do that now. Last week there was a debate in this House about how we can acknowledge and support those workers in the NHS who give their lives to keep us, our families and our constituents alive and healthy. The answer to how we show our appreciation, and when we do it, is simple: we should pay people what they deserve. I hope that the Chancellor’s statement next week will lay out the building blocks to enable that to happen.
Newport is one of the most diverse parts of Wales, and I am proud of our city and its diversity. It is, however, a matter of deep regret that our cherished diversity has seen us on the frontline in the fight against the devastating impact of covid-19 on black and minority ethnic communities. A report commissioned by the Welsh Labour Government under First Minister Mark Drakeford was published recently, and it rightly calls for action to tackle the structural and systematic racism that may have contributed to the higher than average death rate in BME communities. Addressing those structural inequalities must be integral to the economic recovery for which our city is crying out.
In a city such as Newport—it will be the same in many other cities across the UK—we know at first hand how vital BME communities are for our collective prosperity. It really is as simple as that. We know that BME workers are more likely to be in low-paid jobs with little of the protection needed to stay safe and secure, and so the funding and delivery of PPE, and other protection, must be a priority for this Conservative Government.
One real, tangible thing that Ministers could do is follow the lead of the Welsh Labour Government, who have made provision for a comprehensive risk assessment that supports people from BME backgrounds in the NHS and social care sector in Wales. That works for my constituents in Newport West, and it should be rolled out in England too. For our welfare system, there is a need for common sense and decency to be at the heart of our economic recovery. That is vital to ensure that we do what the Blair and Brown Labour Governments did, which was to take millions of children out of poverty.
A few weeks ago, we saw a Manchester United player shame this Tory Prime Minister and his Ministers into ensuring that free school meals would be provided throughout the summer in England. I say to new Tory Back Benchers, many of whom are auditioning for places on the Treasury Bench: we will not forget the tweets, the press releases and the speeches in this Chamber explaining why free school meals for children in England were not possible, and neither will the people who were affected. I am proud to say that, in Wales, we take our responsibility to our children seriously. We did not need to be shamed into action; the Welsh Labour Government know how crucial it is that we give our children nutritional and accessible meals. As such, we guaranteed that free school meals will be available to Welsh children throughout the summer, because it is the right thing to do.
Jesse Norman
As is customary at the conclusion of Report stage, I will speak to the issues that have been raised, rather than the full content of the Bill. Let me start by saying how much I enjoyed the splendidly generous and warm speech by my great and hon. Friend the Member for Workington (Mark Jenkinson). As Members across the House noted, Workington will have a fine voice in the Chamber for many years to come. I was impressed by his ability to smuggle some Cumbrian dialect into the Chamber—I do not know whether it counts as a foreign language, but it was certainly unintelligible to me, which may be true for other colleagues. I take my hat off not only to Mr Harris for identifying his prime ministerial potential but to my hon. Friend for his robust sense of self-confidence. Colleagues normally play down their prime ministerial potential early in their political careers, and I admire his chutzpah, to use a different piece of dialect, in bringing our attention to that. He also acknowledged his predecessor’s capacity to align himself with the Opposition rather than the Whip; I am grateful to him for that. He made some valuable points, and I congratulate him on his maiden speech.
Labour’s new clause 29 and the SNP’s new clause 10 would require the Chancellor to review the impact of provisions in the Bill on child poverty and total poverty and to lay a report before Parliament within six months of Royal Assent. We were treated to a moving and personal speech from the hon. Member for Ilford North (Wes Streeting). I congratulate him on his achievement in getting to Cambridge University on the back of that personal experience. Of course, he is right to focus on the importance of combating educational disadvantage—a cause that every Member of the House believes in. I found it surprising that he did not go on to acknowledge the achievement of this Government in raising the number of good or outstanding schools from 68% in 2010 to 86% today, or the fact that the proportion of 18-year-olds from disadvantaged backgrounds going to university went from only 13% in 2009-10 to 21% in 2019.
The hon. Member talked about pensioner poverty but neglected to mention that there are 100,000 fewer pensioners in poverty now than there were in 2010. He talked about jobs but without acknowledging that, at least until the pandemic, which has struck us all and will have had unfathomable effects, as we know, 3.9 million more people were in employment. Specifically, the employment of the poorest 20% was 9% higher under this Government than in 2009-10.
The hon. Member was right to say that the tragedy of an economic crisis is that it hits the least well off the hardest, and that is precisely the inheritance that this Government’s predecessors left to us in 2009-10. As I never cease to remind the House, the financial crisis of 2007-08 was brought about because bank leverage was allowed to rise from 20 times, where it had been for the previous 40 years, to 50 times in seven years under the Blair Government. If hon. Members do not believe me, they can look at the independent report on banking published under Professor Vickers.
I should, however, return to new clauses 29 and 10, some of which are not necessary because the information they seek is largely already in the public domain, including on the distributional effect of tax, welfare and spending policies, on the equalities impacts of tax measures and on poverty rates.
I thank my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) for his probing new clause 30. I admire his range of references. I thought he was going to reference Stephen Colbert, the American talk show host, but tragically it was Jean-Baptiste Colbert, who produced the line about plucking the feathers from the goose. He is absolutely right. No one would describe him as a hisser, but we do pay careful attention to the points he has made, and I am very grateful to him for raising them. I would also single out my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), who rightly pointed out that the configuration between APD and the environmental performance of flights is a very blunt relationship indeed, so I thank him for that.
Colleagues across the House will know that new clause 30 would ask the Treasury to review the effect of proposed rate changes on APD. We are working closely with the sector and are closely attuned to its concerns in the face of the pandemic, and of course we have paid close attention to the points my hon. Friend raised. I am sure colleagues will be aware that, even as it is, the current rate will only take effect in April 2021 and will rise by only £2 for a long-haul economy flight, which is the cost of a rather inexpensive coffee at airport prices. It may not be quite as urgent, but the point about the wider need to look at this is well made.
I turn quickly to amendment 4, which seeks to extend the exemption from vehicle excise duty for medical courier charities in clause 86 explicitly to include vehicles carrying human breast milk. The hon. Member for Glasgow Central (Alison Thewliss) will know that this amendment is not necessary because the clause already provides for the transportation of human breast milk. The purpose-built vehicles used by the medical courier charities, which are exempt from VED, do not merely transport blood; they transport a wide range of medical product, including X-rays, MRA scans, plasma and human breast milk.
There are many other things I could say in response to other comments, but I will leave it there.
Question put and agreed to.
New clause 19 accordingly read a Second time, and added to the Bill.
New Clause 20
Protected pension age of members re-employed as a result of coronavirus
“(1) In FA 2004, in Schedule 36 (pension schemes etc), paragraph 22 (rights to take benefit before normal minimum pension age) is amended as follows.
(2) In sub-paragraph (7F), at the end of paragraph (b) insert “, and
(c) that the member is or was employed as mentioned in sub-paragraph (7B)(a) where—
(i) the employment began at any time during the coronavirus period, and
(ii) the only or main reason that the member was taken into employment was to help the employer to respond to the public health, social, economic or other effects of coronavirus.”
(3) After sub-paragraph (7J) insert—
“(7K) In sub-paragraph (7F)(c)—
“coronavirus” has the same meaning as in the Coronavirus Act 2020 (see section 1(1) of that Act);
“the coronavirus period” means the period beginning with 1 March 2020 and ending with 1 November 2020.
(7L) The Treasury may by regulations amend the definition of “the coronavirus period” in sub-paragraph (7K) so as to replace the later of the dates specified in it with another date falling before 6 April 2021.
(7M) The power in sub-paragraph (7L) may be exercised on more than one occasion.”
(4) The amendments made by this section are treated as having come into force on 1 March 2020.”—(Jesse Norman.)
In certain circumstances, people who have a protected pension age under a pension scheme (i.e. a right to receive pension benefits at an age below the normal minimum pension age) can lose it on being re-employed. This new clause prevents that happening for people re-employed as part of the response to coronavirus.
Brought up, read the First and Second time, and added to the Bill.
New Clause 21
Modifications of the statutory residence test in connection with coronavirus
“(1) This section applies for the purposes of determining—
(a) whether an individual was or was not resident in the United Kingdom for the tax year 2019-20 for the purposes of relevant tax, and
(b) if an individual was not so resident in the United Kingdom for the tax year 2019-20 (including as a result of this section), whether the individual was or was not resident in the United Kingdom for the tax year 2020-21 for the purposes of relevant tax.
“Relevant tax” has the meaning given by paragraph 1(4) of Schedule 45 to FA 2013 (statutory residence test).
(2) That Schedule is modified in accordance with subsections (5) to (13).
(3) Paragraph 8 (second automatic UK test: days at overseas homes) has effect as if after sub-paragraph (5) there were inserted—
“(5A) For the purposes of sub-paragraphs (1)(b) and (4), a day does not count as a day when P is present at a home of P’s in the UK if it is a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it).”
(4) Paragraph 22 (key concepts: days spent) has effect as if—
(a) in sub-paragraph (2), for “two cases” there were substituted “three cases”;
(b) after sub-paragraph (6) there were inserted—
“(7) The third case is where—
(a) that day falls within the period beginning with 1 March 2020 and ending with 1 June 2020,
(b) on that day P is present in the UK for an applicable reason related to coronavirus disease, and
(c) in the tax year in question, P is resident in a territory outside the UK (“the overseas territory”).
(8) The following are applicable reasons related to coronavirus disease—
(a) that P is present in the UK as a medical or healthcare professional for purposes connected with the detection, treatment or prevention of coronavirus disease;
(b) that P is present in the UK for purposes connected with the development or production of medicinal products (including vaccines), devices, equipment or facilities related to the detection, treatment or prevention of coronavirus disease.
(9) For the purposes of paragraph (7)(c), P is resident in an overseas territory in the tax year in question if P is considered for tax purposes to be a resident of that territory in accordance with the laws of that territory.
(10) The Treasury may by regulations made by statutory instrument—
(a) amend sub-paragraph (7)(a) so as to replace the later of the dates specified in it with another date falling before 6 April 2021;
(b) amend this paragraph so as to add one or more applicable reasons related to coronavirus disease.
(11) The powers under sub-paragraph (10) may be exercised on more than one occasion.
(12) A statutory instrument containing regulations under sub-paragraph (10) is subject to annulment in pursuance of a resolution of the House of Commons.”
(5) Paragraph 23 (key concepts: days spent and the deeming rule) has effect as if after sub-paragraph (5) there were inserted—
“(5A) For the purposes of sub-paragraph (3)(b) and (4), a day does not count as a qualifying day if it is a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it).”
(6) Paragraph 28(2) (rules for calculating the reference period) has effect as if—
(a) in paragraph (b) the “and” at the end were omitted;
(b) after paragraph (b) there were inserted—
“(ba) absences from work at times during the period specified in an emergency volunteering certificate issued to P under Schedule 7 to the Coronavirus Act 2020 (emergency volunteering leave), and”;
(c) in paragraph (c), for “or (b)” there were substituted “, (b) or (ba)”.
(7) Paragraph 29 (significant breaks from UK or overseas work) has effect as if in sub-paragraphs (1)(b) and (2)(b), for “or parenting leave” there were substituted “, parenting leave or emergency volunteering leave under Schedule 7 to the Coronavirus Act 2020”.
(8) Paragraph 32 (family tie) has effect as if after sub-paragraph (4) there were inserted—
“(4A) But a day does not count as a day on which P sees the child if the day on which P sees the child would be a day falling within the third case in paragraph 22(7) (if P were present in the UK at the end of it).”
(9) Paragraph 34 (accommodation tie) has effect as if after sub-paragraph (1) there were inserted—
“(1A) For the purposes of sub-paragraph (1)—
(a) if the place is available to P on a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of that day), that day is to be disregarded for the purposes of sub-paragraph (b), and
(b) a night spent by P at the place immediately before or after a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of that day) is to be disregarded for the purposes of sub-paragraph (c).”
(10) Paragraph 35 (work tie) has effect as if after sub-paragraph (2) there were inserted—
“(3) But a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it) does not count as a day on which P works in the UK.”
(11) Paragraph 37 (90-day tie) has effect as if—
(a) the existing text were sub-paragraph (1);
(b) after that sub-paragraph, there were inserted—
“(2) For the purposes of sub-paragraph (1), a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it) does not count as a day P has spent in the UK in the year in question.”
(12) Paragraph 38 (country tie) has effect as if after sub-paragraph (3) there were inserted—
“(4) For the purposes of sub-paragraph (3), P is to be treated as not being present in the UK at the end of a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of that day).”
(13) Paragraph 145 (interpretation) has effect as if at the appropriate place there were inserted—
““coronavirus disease” has the same meaning as in the Coronavirus Act 2020 (see section 1(1) of that Act);”.”—(Jesse Norman.)
This new clause modifies the statutory residence test in Schedule 45 to the Finance Act 2013 so that the presence of certain individuals in the UK for purposes connected with coronavirus is discounted for the purposes of determining whether they are resident in the UK in the tax years 2019-20 and 2020-21.
Brought up, read the First and Second time, and added to the Bill.
New Clause 22
Future Fund: EIS and SEIS relief
“(1) This section applies if an individual to whom shares in a company have been issued—
(a) enters into a convertible loan agreement with the company under the Future Fund on or after 20 May 2020, and
(b) subsequently receives value from the company under the terms of the agreement.
(2) If, as a result of the receipt of value, any EIS relief attributable to shares issued before the relevant time would (apart from this subsection) be withdrawn or reduced under section 213 of ITA 2007, the value received is to be ignored for the purposes of that section.
(3) If, as a result of the receipt of value, any SEIS relief attributable to shares issued before the relevant time would (apart from this subsection) be withdrawn or reduced under section 257FE of ITA 2007, the value received is to be ignored for the purposes of that section.
(4) If, as a result of the receipt of value, shares issued before the relevant time would (apart from this subsection) cease to be eligible shares by reason of paragraph 13(1)(b) of Schedule 5B to TCGA 1992, the value received is to be ignored for the purposes of that paragraph.
(5) In this section—
“the Future Fund” means the scheme of that name operated from 20 May 2020 by the British Business Bank plc on behalf of the Secretary of State;
“the relevant time” means the time when the individual enters into the convertible loan agreement.”—(Jesse Norman.)
This new clause prevents EIS and SEIS relief from being withdrawn or reduced for the purposes of income tax and capital gains tax in cases where an individual enters into a convertible loan agreement under the Future Fund with a company and subsequently receives value from the company under the agreement.
Brought up, read the First and Second time, and added to the Bill.
New Clause 23
Interest on unpaid tax in case of disaster etc of national significance
“(1) Section 135 of FA 2008 (interest on unpaid tax in case of disaster etc of national significance) is amended as follows.
(2) In subsection (2), for the words from “arising” to the end substitute “that—
(d) arises under or by virtue of an enactment or a contract settlement, and
(e) is of a description (if any) specified in the order.”
(3) In subsection (4)—
(a) after “relief period” insert “, in relation to a deferred amount,”;
(b) in paragraph (b), after “revoked” insert “or amended so that it ceases to have effect in relation to the deferred amount”.
(4) In subsection (10)—
(a) at the end of paragraph (a), omit “and”;
(b) at the end of paragraph (b) insert “, and
(c) may specify different dates in relation to liabilities of different descriptions.”
(5) The amendments made by this section have effect from 20 March 2020.”—(Jesse Norman.)
This new clause amends section 135 of the Finance Act 2008 to enable the Treasury to specify in an order under that section which payments of tax and other liabilities that are deferred by agreement during a period of national disaster or emergency will not attract interest or surcharges.
Brought up, read the First and Second time, and added to the Bill.
New Clause 24
Exceptional circumstances preventing disposal of interest in three year period
“(1) In FA 2003, Schedule 4ZA (stamp duty land tax: higher rates for additional dwellings etc) is amended as follows.
(2) In paragraph 3 (single dwelling transactions)—
(a) in sub-paragraph (7)(b) for “the period of three years beginning with the day after the effective date of the transaction concerned” substitute “a permitted period”;
(b) after sub-paragraph (7) insert—
“(7A) For the purposes of sub-paragraph (7)(b), the permitted periods are—
(a) the period of three years beginning with the day after the effective date of the transaction concerned, or
(b) if HMRC are satisfied that the purchaser or the purchaser’s spouse or civil partner would have disposed of the major interest in the sold dwelling within that three year period but was prevented from doing so by exceptional circumstances that could not reasonably have been foreseen, such longer period as HMRC may allow in response to an application made in accordance with sub-paragraph (7B).
(7B) An application for the purposes of sub-paragraph (7A)(b) must—
(a) be made within the period of 12 months beginning with the effective date of the transaction disposing of the major interest in the sold dwelling, and
(b) be made in such form and manner, and contain such information, as may be specified by HMRC.
(7C) Schedule 11A (claims not included in returns) does not apply in relation to an application made in accordance with sub-paragraph (7B).”
(3) In paragraph 8 (further provision in connection with paragraph 3(6) and (7))—
(a) in sub-paragraph (3), after “paragraph 3(7)” insert “by virtue of paragraph 3(7A)(a)”;
(b) in sub-paragraph (4), after “paragraph 3(7)” insert “by virtue of paragraph 3(7A)(a)”;
(c) after sub-paragraph (4) insert—
“(5) Where HMRC grant an application made in accordance with paragraph 3(7B)—
(a) the land transaction return in respect of the transaction concerned is treated as having been amended to take account of the application of paragraph 3(7) by virtue of paragraph 3(7A)(b), and
(b) HMRC must notify the purchaser accordingly.”
(4) The amendments made by this section have effect in a case where the effective date of the transaction concerned is on or after 1 January 2017.”—(Jesse Norman.)
This new clause amends Schedule 4ZA to the Finance Act 2003 to provide that where a person purchases a dwelling intending it to be their only or main residence, the three-year period within which a major interest in the previous dwelling must be disposed of to be able to obtain a refund of the higher rate stamp duty land tax may be extended to a longer period if, because of exceptional circumstances, the interest was not disposed of in that three-year period.
Brought up, read the First and Second time, and added to the Bill.
New Clause 25
HGV road user levy
“(1) Section 5(2) of the HGV Road User Levy Act 2013 (HGV road user levy charged for all periods for which a UK heavy goods vehicle is charged to vehicle excise duty) does not apply where the period for which a UK heavy goods vehicle is charged to vehicle excise duty is a period that begins in the exempt period.
(2) Section 6(2) of the 2013 Act (HGV road user levy charged in respect of non-UK heavy goods vehicle for each day on which the vehicle is used or kept on a road to which the Act applies) does not apply in respect of any day in the exempt period.
(3) The exempt period is the period of 12 months beginning with 1 August 2020.
(4) Section 7 of the 2013 Act (rebate of levy) has effect as if, after subsection (2A), there were inserted—
“(2B) A rebate entitlement also arises where HGV road user levy has been paid in respect of a non-UK heavy goods vehicle in accordance with section 6(2) in respect of any part of the exempt period within the meaning of section (HGV road user levy)(3) of the Finance Act 2020.””—(Jesse Norman.)
This new clause provides that HGV road user levy is not chargeable in respect of the period of 12 months beginning with 1 August 2020. It provides that where the levy has been paid in respect of a non-UK heavy goods vehicle in respect of the exempt period a rebate can be claimed (no equivalent provision being required for UK heavy goods vehicles which will benefit from the exemption in respect of any period for which the levy would otherwise be paid that begins during the exempt period).
Brought up, read the First and Second time, and added to the Bill.
New Clause 32
Enterprise management incentives: disqualifying events
“(1) The modifications made by this section apply for the purposes of determining whether a disqualifying event occurs or is treated as occurring in relation to an employee in accordance with section 535 of ITEPA 2003 (enterprise management incentives: disqualifying events relating to employee).
(2) Paragraph 26 of Schedule 5 to ITEPA 2003 (requirement as to commitment of working time) has effect as if, in sub-paragraph (3)—
(a) the “or” at the end of paragraph (c) were omitted, and
(b) at the end of paragraph (d), there were inserted “, or
(e) not being required to work for reasons connected with coronavirus disease (within the meaning given by section 1(1) of the Coronavirus Act 2020).”
(3) Paragraph 27 of that Schedule (meaning of “working time”) has effect as if, in sub-paragraph (1)(b), for “(d)” there were substituted “(e)”.
(4) Section 535 of ITEPA 2003 has effect as if, in the closing words of subsection (3), for “(d)” there were substituted “(e)”.
(5) The modifications made by this section have effect in relation to the period—
(a) beginning with 19 March 2020, and
(b) ending with 5 April 2021.
(6) The Treasury may by regulations made in the tax year 2020-21 amend subsection (5)(b) by replacing “2021” with “2022”.”—(Jesse Norman.)
This new clause provides that a disqualifying event does not occur in relation to an individual as regards enterprise management incentives as a result of the individual taking leave, being furloughed or working reduced hours because of coronavirus disease.
Brought up, read the First and Second time, and added to the Bill.
New Schedule 1
Taxation of coronavirus support payments
Accounting for coronavirus support payments referable to a business
1 (1) This paragraph applies if a person carrying on, or who carried on, a business (whether alone or in partnership) receives a coronavirus support payment that is referable to the business.
(2) So much of the coronavirus support payment as is referable to the business is a receipt of a revenue nature for income tax or corporation tax purposes and is to be brought into account in calculating the profits of that business—
(a) under the applicable provisions of the Income Tax Acts, or
(b) under the applicable provisions of the Corporation Tax Acts.
(3) Subject to paragraph 2(5), sub-paragraph (2) does not apply to an amount of a coronavirus support payment if—
(a) the business to which the amount is referable is no longer carried on by the recipient of the amount, and
(b) the amount is not referable to activities of the business undertaken at a time when it was being carried on by the recipient of the amount.
(4) If an amount of the coronavirus support payment is referable to more than one business or business activity, the amount is to be allocated between those businesses or activities on a just and reasonable basis.
(5) Paragraph 3 contains provision about when, in certain cases, an amount of a coronavirus support payment is, or is not, referable to a business for the purposes of this paragraph and paragraph 2.
(6) In this Schedule “business” includes—
(a) a trade, profession or vocation;
(b) a UK property business or an overseas property business;
(c) a business consisting wholly or partly of making investments.
Amounts not referable to activities of a business which is being carried on
2 (1) This paragraph applies if a person who carried on a business (whether alone or in partnership) receives a coronavirus support payment that—
(a) is referable to the business, and
(b) is not wholly referable to activities of the business undertaken while the business was being carried on by the recipient of the payment.
(2) So much of the coronavirus support payment as is referable to the business but which is not referable to activities of the business undertaken while the business was being carried on by the recipient of the payment is to be treated as follows.
(3) An amount referable to a trade, profession or vocation is to be treated as a post-cessation receipt for the purposes of Chapter 18 of Part 2 of ITTOIA 2005 or Chapter 15 of Part 3 of CTA 2009 (trading income: post-cessation receipts), and—
(a) in the application of Chapter 18 of Part 2 of ITTOIA 2005 to that amount, section 243 (extent of charge to tax) is omitted, and
(b) in the application of Chapter 15 of Part 3 of CTA 2009 to that amount, section 189 (extent of charge to tax) is omitted.
(4) An amount referable to a UK property business or an overseas property business is to be treated (in either case) as a post-cessation receipt from a UK property business for the purposes of Chapter 10 of Part 3 of ITTOIA 2005 or Chapter 9 of Part 4 of CTA 2009 (property income: post- cessation receipts), and—
(a) in the application of Chapter 10 of Part 3 of ITTOIA 2005 to that amount, section 350 (extent of charge to tax) is omitted, and
(b) in the application of Chapter 9 of Part 4 of CTA 2009 to that amount, section 281 (extent of charge to tax) is omitted.
(5) In any other case, for the purposes of paragraph 1(3)—
(a) the recipient of the amount is to be treated as if carrying on the business to which the amount is referable to at the time of the receipt of the amount, and
(b) the amount is to be treated as if it were referable to activities undertaken by the business at that time.
(6) Where the recipient of the amount has incurred expenses that—
(a) are referable to the amount, and
(b) would be deductible in calculating the profits of the business if it were being carried on at the time of receipt of the amount,
the amount brought into account under paragraph 1(2) by virtue of sub-paragraph (5) is to be reduced by the amount of those expenses.
(7) But sub-paragraph (6) does not apply to expenses of a person that arise directly or indirectly from the person ceasing to carry on business.
Amounts referable to businesses in certain cases
3 (1) An amount of a coronavirus support payment made under an employment-related scheme—
(a) is referable to the business of the person entitled to the payment as an employer (even if the person is not for other purposes the employer of the employees to whom the payment relates), and
(b) is not referable to any other business (and no deduction for any expenses in respect of the same employment costs which are the subject of the payment is allowed in calculating the profits of any other business or in calculating the liability of any other person to tax charged under section 242 or 349 of ITTOIA 2005 or section 188 or 280 of CTA 2009 (post-cessation receipts)).
(2) A coronavirus support payment made under the self-employment income support scheme is referable to the business of the individual to whom the payment relates.
(3) Where an amount of a coronavirus support payment made under the self-employment income support scheme is brought into account under paragraph 1(2), the whole of the amount is to be treated as a receipt of a revenue nature of the tax year 2020-21 (irrespective of its treatment for accounting purposes).
(4) But sub-paragraph (3) does not apply to an amount of a coronavirus support payment made under the self-employment income support scheme in respect of a partner of a firm where the amount is distributed amongst the partners (rather than being retained by the partner).
(5) An amount of a coronavirus support payment made under the self-employment income support scheme in respect of a partner of a firm that is retained by the partner (rather than being distributed amongst the partners) is not to be treated as a receipt of the firm.
(6) Accordingly—
(a) the receipt is not to be included in the calculation of the firm’s profits for the purposes of determining the share of profits or losses for each partner of the firm (see sections 849 to 850E of ITTOIA 2005 and sections 1259 to 1265 of CTA 2009), and
(b) the receipt is then to be added to the partner’s share.
Exemptions, reliefs and deductions
4 (1) An amount of a coronavirus support payment that relates only to mutual activities of a business that carries on a mutual trade is to be treated as if it were income arising from those activities (and accordingly the amount is not taxable).
(2) A coronavirus support payment is to be ignored when carrying out the calculation—
(a) in section 528(1) of ITA 2007 (incoming resources limit for charitable exemptions);
(b) in section 482(1) of CTA 2010 (incoming resources limit for charitable companies);
(c) in section 661CA(1) of CTA 2010 (income condition for community amateur sports clubs).
(3) A coronavirus support payment made under an employment-related scheme is to be ignored when carrying out the calculation—
(a) in section 662(2) of CTA 2010 (exemption from corporation tax for UK trading income of community amateur sports clubs);
(b) in section 663(2) of that Act (exemption from corporation tax for UK property income community amateur sports clubs).
(4) No relief under Chapter 1 of Part 6A of ITTOIA 2005 (trading allowance) is given to an individual on an amount of a coronavirus support payment made under the self-employment income support scheme brought into account under paragraph 1(2) as profits of that tax year.
(5) For the purposes of that Part, such an amount is to be ignored when calculating the individual’s “relevant income” for that tax year under Chapter 1 of that Part.
(6) Neither section 57 of ITTOIA 2005 nor section 61 of CTA 2009 (deductions for pre-trading expenses) (including as they apply by virtue of sections 272 and 272ZA of ITTOIA 2005 and section 210 of CTA 2009) apply to employment costs where an amount of a coronavirus support payment made under an employment-related scheme relates to those costs.
Charge where employment costs deductible by another
5 (1) Income tax is charged on an amount of a coronavirus support payment made under an employment-related scheme if conditions A and B are met.
(2) Condition A is that the amount is neither brought into account under paragraph 1(2) in calculating the profits of a business carried on by the person entitled to the payment as an employer nor treated, by virtue of paragraph 2(3) or (4), as a post-cessation receipt arising from the carrying on of such a business.
(3) Condition B is that expenses incurred by another person in respect of the same employment costs which are the subject of the coronavirus support payment and to which the amount relates are deductible—
(a) in calculating the profits of a business carried on by that other person (for income or corporation tax purposes), or
(b) in calculating the liability of that other person to tax charged under section 242 or 349 of ITTOIA 2005 or section 188 or 280 of CTA 2009 (post-cessation receipts).
(4) Tax is charged under sub-paragraph (1) on the whole of the amount to which that sub-paragraph applies.
(5) The person liable for tax charged under sub-paragraph (1) is the person entitled to the coronavirus support payment as an employer.
(6) Section 3(1) of CTA 2009 (exclusion of charge to income tax) does not apply to an amount of a coronavirus support payment that is charged under this paragraph.
Charge where no business carried on
6 (1) Tax is charged on an amount of a coronavirus support payment, other than a payment made under an employment-related scheme or the self-employment income support scheme, if—
(a) the amount is neither brought into account under paragraph 1(2) in calculating the profits of a business nor treated as a post-cessation receipt by virtue of paragraph 2(3) or (4), and
(b) at the time the coronavirus support payment was received, the recipient did not carry on a business whose profits are charged to tax and to which the payment could be referable.
(2) In this paragraph “tax” means—
(a) corporation tax, in the case of a company that (apart from this paragraph) is chargeable to corporation tax, or to any amount chargeable as if it was corporation tax, or
(b) income tax, in any other case.
(3) Tax is charged under sub-paragraph (1) on the whole of the amount to which that sub-paragraph applies.
(4) The person liable for tax charged under sub-paragraph (1) is the recipient of that amount.
(5) Where income tax is charged under sub-paragraph (1), sections 527 and 528 of ITA 2007 (exemption and income condition for charitable trusts) have effect as if sub-paragraph (1) were a provision to which section 1016 of that Act applies.
(6) Where corporation tax is charged under sub-paragraph (1), sections 481 and 482 of CTA 2010 (exemption and income condition for charitable companies) have effect as if sub-paragraph (1) were a provision to which section 1173 of that Act applies.
Modification of the Tax Acts
7 The Treasury may by regulations modify the application of any provision of the Tax Acts that affects (or that otherwise would affect) the treatment of—
(a) receipts brought into account under paragraph 1(2),
(b) amounts treated as post-cessation receipts under paragraph 2(3) or (4), or
(c) amounts charged under paragraph 5(1) or 6(1).
Charge if person not entitled to coronavirus support payment
8 (1) A recipient of an amount of a coronavirus support payment is liable to income tax under this paragraph if the recipient is not entitled to the amount in accordance with the scheme under which the payment was made.
(2) But sub-paragraph (1) does not apply to an amount of a coronavirus support payment made under a coronavirus business support grant scheme or the coronavirus statutory sick pay rebate scheme.
(3) For the purposes of this Schedule, references to a person not being entitled to an amount include, in the case of an amount of a coronavirus support payment made under the coronavirus job retention scheme, a case where the person ceases to be entitled to retain the amount after it was received—
(a) because of a change in circumstances, or
(b) because the person has not, within a reasonable period, used the amount to pay the costs which it was intended to reimburse.
(4) Income tax becomes chargeable under this paragraph—
(a) in a case where the person was entitled to an amount of a coronavirus support payment paid under the coronavirus job retention scheme but subsequently ceases to be entitled to retain it, at the time the person ceases to be entitled to retain the amount, or
(b) in any other case, at the time the coronavirus support payment is received.
(5) The amount of income tax chargeable under this paragraph is the amount equal to so much of the coronavirus support payment—
(a) as the recipient is not entitled to, and
(b) as has not been repaid to the person who made the coronavirus support payment.
(6) Where income tax which is chargeable under this paragraph is the subject of an assessment (whether under paragraph 9 or otherwise)—
(a) paragraphs 1 to 6 do not apply to the amount of the coronavirus support payment that is the subject of the assessment,
(b) that amount is not, for the purposes of Step 1 of the calculation in section 23 of ITA 2007 (calculation of income tax liability), to be treated as an amount of income on which the taxpayer is charged to income tax (but see paragraph 10 which makes further provision about the application of that section), and
(c) that amount is not to be treated as income of a company for the purposes of section 3 of CTA 2009 (and accordingly the exclusion of the application of the provisions of the Income Tax Acts to the income of certain companies does not apply to the receipt of an amount charged under this paragraph).
(7) No loss, deficit, expense or allowance may be taken into account in calculating, or may be deducted from or set off against, any amount of income tax charged under this paragraph.
(8) In calculating profits or losses for the purposes of corporation tax, no deduction is allowed in respect of the payment of income tax charged under this paragraph.
(9) For the purposes of this paragraph and paragraphs 9(4) and 14, a firm is not to be regarded as receiving an amount of a coronavirus support payment made under the self-employment income support scheme in respect of a partner of that firm that is retained by the partner (rather than being distributed amongst the partners).
Assessments of income tax chargeable under paragraph 8
9 (1) If an officer of Revenue and Customs considers (whether on the basis of information or documents obtained by virtue of the exercise of powers under Schedule 36 to FA 2008 or otherwise) that a person has received an amount of a coronavirus support payment to which the person is not entitled, the officer may make an assessment in the amount which ought in the officer’s opinion to be charged under paragraph 8.
(2) An assessment under sub-paragraph (1) may be made at any time, but this is subject to sections 34 and 36 of TMA 1970.
(3) Parts 4 to 6 of TMA 1970 contain other provisions that are relevant to an assessment under sub-paragraph (1) (for example, section 31 makes provision about appeals and section 59B(6) makes provision about the time to pay income tax payable by virtue of an assessment).
(4) Where income tax is chargeable under paragraph 8 in relation to an amount of a coronavirus support payment received by a firm—
(a) an assessment (under sub-paragraph (1) or otherwise) may be made on any of the partners in respect of the total amount of tax that is chargeable,
(b) each of the partners is jointly and severally liable for the tax so assessed, and
(c) if the total amount of tax that is chargeable is included in a return under section 8 of TMA 1970 made by one of the partners, the other partners are not required to include the tax in returns made by them under that section.
Calculation of income tax liability
10 (1) Section 23 of ITA 2007 (calculation of income tax liability) applies in relation to a person liable to income tax charged under paragraph 8 as if that paragraph were included in the lists of provisions in subsections (1) and (2) of section 30 of that Act (amounts of tax added at step 7).
(2) For the purposes of paragraph 7(2) of Schedule 41 to FA 2008, a relevant obligation relating to income tax charged under paragraph 8 of this Schedule relates to a tax year if the income tax became chargeable in that tax year.
(3) But this paragraph does not apply to a company to which paragraph 11 (companies chargeable to corporation tax) applies.
Calculation of tax liability: companies chargeable to corporation tax
11 (1) This paragraph applies where a person liable to income tax charged under paragraph 8 is a company that is chargeable to corporation tax, or to any amount chargeable as if it was corporation tax, in relation to a period within which the income tax became chargeable.
(2) Part 5A of TMA 1970 (payment of tax) applies in relation to that company as if—
(a) the reference to “corporation tax” in subsection (1) of section 59D (general rule as to when corporation tax is due and payable) included income tax charged under paragraph 8 of this Schedule;
(b) an amount of income tax charged under paragraph 8 of this Schedule were an amount within subsection (6) of section 59F (arrangements for paying tax on behalf of group members);
(c) any reference in section 59G (managed payment plans) to “corporation tax” included income tax charged under paragraph 8 of this Schedule.
(3) Part 9 of that Act (interest on overdue tax) applies in relation to that company as if—
(a) the references in section 86 (interest on overdue income tax and capital gains tax) to “income tax” did not include income tax charged under paragraph 8 of this Schedule;
(b) in subsection (1) of section 87A (interest on overdue corporation tax) the reference to “corporation tax” included income tax charged under paragraph 8 of this Schedule.
(4) Schedule 18 to FA 1998 (company tax returns etc.) applies in relation to that company as if—
(a) any reference in that Schedule to “tax”, other than the references in paragraph 2 of that Schedule (duty to give notice of chargeability), included income tax charged under paragraph 8 of this Schedule, and
(b) in paragraph 8(1) of that Schedule (calculation of tax payable), at the end there were inserted—
“Sixth step
Add any amount of income tax chargeable under paragraph 8 of Schedule (Taxation of coronavirus support payments) to the Finance Act 2020.”
(5) But the modifications of that Schedule are to be ignored for the purposes of the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175).
(6) Schedule 41 to FA 2008 applies in relation to that company as if —
(a) the references to “income tax” in paragraph 7(2) did not include income tax charged under paragraph 8 of this Schedule;
(b) the reference to “corporation tax” in paragraph 7(3) included income tax charged under paragraph 8 of this Schedule;
(but see paragraph 13(5) of this Schedule which has the effect that paragraph 7 of that Schedule does not apply in certain circumstances).
(7) For the purposes of paragraph 7(3) of Schedule 41 to FA 2008 (as modified by sub-paragraph (6)), a relevant obligation relating to income tax charged under paragraph 8 of this Schedule relates to an accounting period if the income tax became chargeable in that period.
Notification of liability under paragraph 8
12 (1) Section 7 of TMA 1970 (notice of liability to income tax and capital gains tax) applies in relation to income tax chargeable under paragraph 8 as provided for in sub-paragraphs (2) to (5).
(2) Subsection (1) has effect as if paragraph (b) (and the “and” before it) were omitted.
(3) Subsection (1) has effect as if the reference to “the notification period” were to the period commencing on the day on which the income tax became chargeable and ending on the later of—
(a) the 90th day after the day on which this Act is passed, or
(b) the 90th day after the day on which the income tax became chargeable.
(4) Subsection (3)(c) has effect as if after “child benefit charge” there were inserted “or to income tax under paragraph 8 of Schedule (Taxation of coronavirus support payments) to the Finance Act 2020”.
(5) In relation to income tax chargeable under paragraph 8 in relation to an amount of a coronavirus support payment received by a firm, the duty in subsection (1) (as it has effect by virtue of sub-paragraphs (2) and (3)) is taken to have been complied with by each of the partners if one of the partners has complied with it.
(6) The reference in section 36(1A)(b) of TMA 1970 (20 year period for assessment in a case involving a loss of income tax) to a failure to comply with an obligation under section 7 of that Act is not to be taken as including a failure arising by virtue of the modification of that section by this paragraph, unless the failure is one to which paragraph 13 applies.
Penalty for failure to notify: knowledge of non-entitlement to payment
13 (1) This paragraph applies to a failure of a person to notify, under section 7 of TMA 1970 (as modified by paragraph 12), a liability to income tax chargeable under paragraph 8 where the person knew, at the time the income tax first became chargeable, that the person was not entitled to the amount of the coronavirus support payment in relation to which the tax is chargeable.
(2) Schedule 41 to FA 2008 (failure to notify) applies to a failure described in sub-paragraph (1) as follows.
(3) The failure is to be treated as deliberate and concealed.
(4) Accordingly, paragraph 6 of that Schedule has effect as if the references to a penalty for “a deliberate but not concealed failure” or for “any other case” were omitted.
(5) For the purposes of that Schedule (except in a case falling within paragraph 14 of this Schedule), the “potential lost revenue” is to be treated as being the amount of income tax which would have been assessable on the person at the end of the last day of the notification period (see paragraph 12(3)).
Penalties: partnerships
14 (1) This paragraph applies to a failure to notify, under section 7 of TMA 1970 (as modified by paragraph 12), a liability to income tax chargeable under paragraph 8 by a partner of a firm that received the amount of the coronavirus support payment in relation to which the tax is chargeable.
(2) For the purposes of paragraph 13(1) of this Schedule, each partner is taken to know anything that any of the other partners knows.
(3) Where a partner would be liable to a penalty under Schedule 41 to FA 2008 (whether in a case falling within paragraph 13 or otherwise), the partner is instead jointly and severally liable with the other partners to a single penalty under that Schedule for the failures by each of them to notify.
(4) In a case not falling within paragraph 13, if the failure of at least one of the partners—
(a) was deliberate and concealed, the single penalty is to be treated as a penalty for a deliberate and concealed failure;
(b) was deliberate but not concealed, the single penalty is to be treated as a penalty for a deliberate but not concealed failure.
(5) For the purposes of Schedule 41 to FA 2008, the “potential lost revenue” is to be treated as being the amount of income tax which would have been assessable on any one of the partners (see paragraph 9(4)(a))—
(a) in a case falling within paragraph 13, at the end of the last day of the notification period, or
(b) in any other case, at the end of 31 January following the tax year in which the amount of coronavirus support payment was received by the firm.
(6) Paragraph 22 of that Schedule (limited liability partnerships: members’ liability) does not apply.
Liability of officers of insolvent companies
15 (1) This paragraph—
(a) provides for an individual to be jointly and severally liable to the Commissioners for Her Majesty’s Revenue and Customs for a liability of a company to income tax charged under paragraph 8, where a notice under sub-paragraph (2) is given to the individual, and
(b) applies paragraphs 10 to 15 and 17 of Schedule 13 (joint liability notices: tax avoidance, tax evasion and repeated insolvency and non-payment) to such a notice.
(2) An officer of Revenue and Customs may give a notice under this sub-paragraph to an individual if it appears to the officer that conditions A to D are met.
(3) Condition A is that—
(a) the company is subject to an insolvency procedure, or
(b) there is a serious possibility of the company becoming subject to an insolvency procedure.
(4) Condition B is that the company is liable to income tax under paragraph 8.
(5) Condition C is that the individual was responsible for the management of the company at the time the income tax first became chargeable and the individual knew (at that time) that the company was not entitled to the amount of the coronavirus support payment in relation to which the tax is chargeable.
(6) Condition D is that there is a serious possibility that some or all of the income tax liability will not be paid.
(7) For the purposes of sub-paragraph (5) the individual is responsible for the management of a company if the individual—
(a) is a director or shadow director of the company, or
(b) is concerned (whether directly or indirectly) in, or takes part in, the management of the company.
(8) A notice under sub-paragraph (2) must—
(a) specify the company to which the notice relates;
(b) set out the reasons for which it appears to the officer that conditions A to D are met;
(c) specify the amount of the income tax liability;
(d) state the effect of the notice;
(e) offer the individual a review of the decision to give the notice and explain the effect of paragraph 11 of Schedule 13 (right of review);
(f) explain the effect of paragraph 13 of that Schedule (right of appeal).
(9) An individual who is given a notice under sub-paragraph (2) is jointly and severally liable with the company (and with any other individual who is given such a notice) to the amount of the income tax liability specified under sub-paragraph (8)(c).
For provision under which the amount so specified may be varied, see—
(a) paragraph 10 of Schedule 13 (modification etc),
(b) paragraphs 11 and 12 of that Schedule (review), and
(c) paragraphs 13 and 14 of that Schedule (appeal).
(10) Paragraphs 10 to 15 and 17 of Schedule 13 apply to a notice under sub-paragraph (2) as they apply to a joint liability notice (see paragraph 1(2) of that Schedule) as if—
(a) the references in those paragraphs to “relevant conditions” were to conditions A to D in this paragraph;
(b) sub-paragraphs (3) and (4) of paragraph 10 were omitted (and references to sub-paragraph (3) in that paragraph were omitted);
(c) in paragraph 10(6)(a), after “or (9)” there were inserted “or paragraph 15(8)(c) of Schedule (Taxation of coronavirus support payments)”;
(d) in paragraph 12(6)(b) after “5(9)” there were inserted “or paragraph 15(8)(c) of Schedule (Taxation of coronavirus support payments)”.
(11) Expressions used in this paragraph and in Schedule 13 have the same meaning in this paragraph as they have in that Schedule (subject to the modification made by sub-paragraph (10)(a)).”—(Jesse Norman.)
This new Schedule makes provision about the taxation of payments made under various coronavirus related business support schemes, including the coronavirus job retention scheme (“CJRS”) and the self-employment income support scheme (“SEISS”). Paragraphs 1 to 7 clarify how payments under those schemes are to be subject to tax, following (with some exceptions) the normal principles for taxing receipts of a business. Paragraph 8 provides that where a person receives an amount to which they were not entitled under CJRS or SEISS, or misapplies an amount paid under CJRS, the person will be liable to income tax at the rate of 100% in relation to so much of that amount as was not repaid to HMRC. Paragraphs 9 to 15 make provision in connection with that charge (for example in relation to assessments and penalties).
Brought up, read the First and Second time, and added to the Bill.
Third Reading
Jesse Norman
I beg to move, That the Bill be now read the Third time.
This Finance Bill stands in the shadow of a pandemic unprecedented in its scale and reach. We are keenly aware of the immense challenges and pressures that that has placed on us. These conditions—this situation—cannot and will not be ignored. The Government are working flat out to alleviate the impact of covid-19 on the economy, on the public finances, and, most importantly, on the health and wellbeing of every person and family in the United Kingdom.
My right hon. Friend the Chancellor has announced numerous measures over the past few months in response to the virus, including the job retention scheme, the business interruption loan scheme, and the self-employment income scheme. Together, this represents, contrary to many of the comments made in the previous debate, an economic intervention by Government on a scale hitherto unseen in peacetime, and necessarily so. At such a difficult time for millions of people around the United Kingdom, the Government have worked to protect businesses and are specifically focused on the wellbeing of the most vulnerable in society.
Of course we recognise, and the House must recognise, that this is a still a work in progress and there is a way to go. The crisis is not over. The pandemic continues. People around this country are still suffering and may do so for many months yet. The Government will continue to work to lessen the impact, but it remains the responsibility, the duty and the important role of businesses, families and individuals to play their part, too, in this colossal collective national effort. Together, we must work to bring ourselves through and out of this crisis.
The Bill supports the emergency services as they go about their vital duties and exempts from vehicle excise duty vehicles that have been purpose-built to transport NHS products. The Government have introduced new clauses that were considered today to ensure that workers who have returned to public sector jobs to help fight the effects of the pandemic will face no adverse pensions consequences from doing so. The Bill reforms the tapered annual allowance so that doctors can spend more time treating patients without facing precipitous tax bills. This pandemic has brought out, in many ways, the best in our society, and I am certain that the Britain that emerges from it will be stronger and fairer.
The Bill provides tax exemptions specifically for those who receive payments under the Windrush compensation scheme, the troubles permanent disablement payment scheme and the Kindertransport fund, as well as for care leavers who are starting apprenticeships, and rightly so.
The necessary focus on the here and now must not come at the expense of tomorrow. In the words of the Prime Minister, our great national hibernation is coming to an end, and we must and will now at last look to the future. Now is the time to start to rebuild the economy and to restore our public finances. Our police, our teachers, our armed forces and many other public sector workers have all played their part in combating this pandemic alongside the NHS. I would also single out, as I have said, our public servants in the civil service, particularly in my own area of HM Treasury and within HMRC.
This public sector support cannot be provided for if the public finances are not supported, in turn, with a fair and sustainable tax system. That is a key fact. We do that while seeking to remain competitive internationally, and maintaining the corporation tax rate at 19% is therefore the right approach. Even at that level, it is still the lowest headline rate in the G20, and it reminds the world of UK strength as a location for inward investment.
But we have also been clear about fairness. Everyone must pay their fair share of tax. That is one reason we have introduced the digital services tax, for which this Bill also legislates. A tax set at a rate of 2% on revenues from digital services will ensure that digital businesses pay a fairer share of UK tax that more accurately reflects the significant value that they derive from their UK users. As we look to recovery, we want business to receive the support that it needs. That is why we have delayed the extension of the off-payroll working reforms in the private sector to April 2021.
Businesses need time to prepare for the reforms, and it would have been burdensome to ask them to do so during the pandemic.
We focus on innovation in the Finance Bill. We wish to go further to support enterprise in this country, which will be desperately needed in the coming months. This country has a proud history of innovation, and increasing the research and development expenditure credit rate to 13% will allow that to continue. The structures and buildings allowance rate increase will also aid investment in new shops, factories and agricultural buildings, which will help to stimulate capital investment across the nation. As ever, we are committed to levelling up across the United Kingdom.
As has been pointed out, covid-19 is not the only crisis that we face. The Government have committed to reducing the United Kingdom’s carbon emissions to net zero by 2050. The Bill is another step towards that target. Not only does it pave the way for the forthcoming plastic packaging tax, but it removes the vehicle excise duty expensive car supplement for zero-emissions vehicles and ensures that, now we have left the European Union, a carbon price will remain in place. Those measures will help to ensure that our post-covid-19 economy is greener than before.
At the end of 10 hours of debate in the last two days, for which I thank all my colleagues and the Opposition Front-Bench team, we understand that the world during the passage of the Bill has changed. Its impact on this House, our daily lives and our economic outlook has radically altered. To some extent, we have made changes on the fly to shore up and support our public services and our response to the pandemic. As a result, the Bill is a firm foundation—indeed, firmer than it was originally framed—on which we can rebuild our economy and protect our public finances as we recover from this devastating virus. The Bill supports businesses, the vulnerable and our key workers, and I commend it to the House.
Bridget Phillipson
I begin by thanking my colleagues in the shadow Treasury team for their work throughout the journey of the Bill and the Minister and his colleagues for their responses to many of the questions and concerns that we have raised. I also put on record our thanks to the Clerks for all their work. They have helped us so much during the progress of the Bill in difficult and dangerous times for them. The House of Commons Library staff have, as ever, been incredibly helpful and professional and I record our thanks to them as well.
I am grateful to all hon. Members who have contributed to our discussions about the Bill. I am delighted that we have heard such a range of contributions, not least from hon. Members on the Opposition Benches. It is rather disappointing, however, that we have not heard from a single woman from the Government Benches today. I do not know whether it is men-only Thursday on the Tory side when it comes to the Finance Bill, but given that we know the impact of the coronavirus pandemic on women in particular will be profound, I hope that we might be able to set that straight when we continue our discussions of this nature on Wednesday. Women are more likely to have lost their jobs or to have been furloughed during the crisis and, sadly, despite many of the changes that we have seen in our society, they often shoulder the burden of childcare.
As I have repeated throughout the progress of the Bill, it does not recognise the scale of the challenge we face. I appreciate what the Minister said, but it is a Finance Bill for a different age. We have consistently warned of the looming threat of mass unemployment since the beginning of the pandemic. As the days go by, that is becoming a reality. This month, the OECD reported that the UK is set to face a slump in its GDP that will outstrip the falls of France, Italy, Germany and the US.
Young people are about to enter the worst jobs market in more than a decade. Those who entered the jobs market in 2008 will know what a challenge that is, but this will be worse still. The class of 2020 have no part-time retail and hospitality jobs to fall back on while they look for their first job. For young people, completing their education is supposed to be a step on the ladder, but for many this year, it will involve falling down a snake.
Airbus, TM Lewin, easyJet and SSP Group are all large employers that have announced that they will be making thousands of redundancies. At least 12,000 jobs have been lost in the last three days alone; the real number is doubtless higher still. In every case it is a tragedy for those affected, because it means thousands more jobseekers having to rely on meagre social security payments to provide for their families and thousands more jobseekers needing to sign on when demand at jobcentres will already be very high and when recruitment in many sectors has already frozen indefinitely. It is not just young people, however, who will be affected. I think especially of older workers who will need additional support to retrain and reskill during this time.
We recall the devastation of mass unemployment in the 1980s that scarred communities like mine for far too long. The pain was acute and the social and economic damage was lasting and real. I have long believed that Government can and must be a force for good, but this is a political choice. While the lockdown restrictions are slowly easing, the threat of coronavirus is far from gone. It will take much longer for businesses to operate at their usual capacity. We recognise that protecting our economy would be an immense challenge for any Government, but to meet the challenge, we will need ambitious, decisive and swift action.
When we hear that update from the Chancellor next Wednesday, we will need a full back-to-work Budget with a resolute focus on jobs. It is more important than ever that those with broadest shoulders pay their fair share, so that we can raise revenues to fund the schemes and the vital frontline workers we need to get us on the road to recovery and revive our public services.
The Finance Bill is a series of tweaks and corrections. Rather than raising revenue, it extends and expands tax reliefs and tinkers with, rather than ends the entrepreneurs’ relief. Netflix, Amazon Prime and other high-grossing streaming services will be unaffected by the digital services tax, for all we welcome its introduction in its limited scope. As it stands, the digital services tax will create up to £440 million in annual revenue, when the UK in fact loses £1.3 billion in corporation tax to five of the biggest UK tech firms each year. That is £1.3 billion that could go towards helping schools to enable children to return safely in September, towards more nurses and more doctors, towards creating new jobs, towards decarbonising our economy and towards funding more public health research, which this pandemic has shown we desperately need.
We have sought to improve the Bill in Committee and on Report, introducing amendments so that the Government could review their policies against their effects on job creation, on poverty, on a green recovery and on measuring the cost of tax reliefs. We have sought to entrench greater scrutiny of policies that may well need to be revised in what is becoming an unprecedented economic downturn. Again, the Government have defeated our amendments. We fear that their approach highlights that they have not yet recognised that they will need to go much further in protecting our economy. The Prime Minister’s plans for economic revival are mere repetitions of existing spending, announced wearing a different hard hat in a different tractor. They are a Government who run the economy by repetition, not innovation.
Labour has consistently approached this crisis constructively, and we will try to keep doing so. In this time of crisis, I urge the Government to rethink their approach and to show meaningful dedication to economic recovery next week. We know that the furlough scheme has provided a lifeline to thousands of workers, but that work is not yet done. There can be no room for a sense of pride or complacency. If the Government fail to provide a full stimulus package before October, the 1 million people who lost their jobs in March and April will have been unemployed for six months, and not enough will have been done to support demand and create new jobs.
We again call for a back-to-work Budget that is rigorous, takes into account the differing needs of sectors and regions and gives the right level of support to workers old and young, rather than taking a one-size-fits-all approach. We need a full Budget that supports viable businesses—a Budget that is future-facing in promoting green jobs, reskilling older workers and investing in our young people, because infrastructure is more than just bricks and mortar. We need a Budget that honours the sacrifices the British people have made during this crisis. The future success of our country depends on it.
Alison Thewliss
Like everybody, I acknowledge these extraordinary times. The world has changed since the Budget was announced in March. All the certainties that we used to rely upon are gone, and things that we thought that the Government would never do, never say or never spend money on are suddenly things that are no barrier whatever. That goes some way to show that the Government can do a lot more when they want to, and that should give us some hope that they may go back on things they have said before.
I wish to take this opportunity to thank everybody who has contributed to debates on the Bill. I thank the Clerks and the Bill team, who have been so incredibly helpful; I thank you, Madam Deputy Speaker, for your sage advice; and I thank my hon. Friend the Member for Aberdeen South (Stephen Flynn), whose first Finance Bill this is and who has done a fantastic job representing both his constituents and the party.
I also thank our researchers, Scott Taylor and Jonathan Kiehlmann, who have supported us so well throughout this process—with all the amendments that we tabled and having to learn about everybody else’s amendments, it has been a huge challenge to keep up but they have risen to it admirably—and Mhairi Love in my office, who has also done an incredible job while studying for her exams and completing a dissertation. She has provided support to me throughout all that and I thank her for it. I thank the people on Twitter who think I talk too quickly. I swear that I am making an effort to slow down; this is just how I speak.
I repeat the call for evidence that I made at the start of the Bill’s progress. A Finance Bill Committee should be able to take evidence. Other Bill Committees in this House have the practice—for example, the Domestic Abuse Bill Committee for England and Wales took evidence from experts. It seems absolutely ludicrous that Finance Bills, which affect so many different aspects of everybody’s lives, do not take evidence from experts at the start and instead rely on getting written evidence and us scrutinising that written evidence, rather than being able to ask questions about the Government’s policies and find the best way through. I also reiterate that some kind of standing committee on the Budget is very much required to keep an eye on what the Government are doing and how effective their policies and proposals are.
Many questions remain at the end of this Budget process, and I suppose the first of those is whether we will be back here for another Budget in the autumn. Issues such as the loan charge and IR35 are not going away, as much as the Government would like them to. We cannot predict the course of the coronavirus, but we do know that the UK Government’s handling of it has been far from impressive. As I said yesterday, I fear a return to mass unemployment. The Treasury has the toughest of decisions to make, but it ought to put wellbeing and people first, because if we do not have that, we will not have much else to go with afterwards.
Jesse Norman
The hon. Lady has raised the loan charge; we did not really get a sense of it yesterday, but is the SNP in favour of the loan charge as a substantive matter or against it?
Alison Thewliss
We believe that there are still many questions to be answered on the loan charge, not least the revelations in the press during the week over the FOI request that have raised more questions. We want to see further probing on the issue and further support for those people who have ended up losing not only their livelihoods but their homes—and some have lost their lives. It is no light-hearted matter to be considered in such a flippant way.
If the Financial Secretary to the Treasury wants to prevent scarring in the economy, he must encourage his colleague the Chancellor to be bolder next week. He must keep the job retention scheme and the self-employment support scheme going, and he must fill the gaps in those schemes when he makes his announcement next week, because too many people have lost out and too many sectors are not yet back to full strength. When that change comes—when people have to pay more of the wage costs themselves—we will see more and more employers doing what many employers have done this week and simply deciding to hand back the keys, fire their staff and wind up their companies. And the unemployment figures will soar.
Stephen Flynn
Does my hon. Friend share my particular concern about the oil and gas sector in which we have already seen vast swathes of employees made redundant because the furlough scheme had an end date? The fact that that end date is now coming closer and has not been extended will only compound the difficulties and lead to further unemployment.
Alison Thewliss
The oil and gas sector is a perfect example of a sector that needs additional support right now. These are people who have a great deal of uncertainty involving many different factors, not least the oil and gas price at the moment, the need to invest in green technologies in the future and the need to transition in a just way that makes sure that jobs and livelihoods are protected. The Government need to have an oil and gas sector deal to support those jobs and those people and to protect the economy of the north-east of Scotland.
Other sectors of concern include tourism, hospitality and the arts and theatre. There is a huge campaign today for the music sector as well. I fully support those concerns because if we cannot return to these venues, the people who work in them will not get a wage and they will struggle, with many companies perhaps not coming back. They will lose their Christmas season—they will lose everything and perhaps not even be able to come back to theatres and to those kinds of sectors until March. I do not know where the Government expect those people to earn a wage or how they expect them to live, but it is clear that support needs to be in place for the sectors that are affected.
There are stark figures out today from the Scottish Chambers of Commerce. Its president, Tim Allan, has said:
“It is critical that governments in Holyrood and Westminster continue to provide business support for companies during and beyond the easing of lockdown restrictions. A sudden end to these vital financial support measures would not be welcome by anyone and a tsunami of jobs would disappear overnight.”
Commenting on the results of the Scottish Chambers of Commerce survey, Professor Graeme Roy, director at the University of Strathclyde’s Fraser of Allander Institute, said:
“What is particularly worrying is the employment outlook. The survey shows a clear warning of what is to come, with a sharp rise in unemployment now inevitable as businesses adjust to a new normal.”
Inevitable—a tsunami of jobs lost. It is not surprising that 95% of the firms in that survey reported a fall in business confidence. To boost business confidence, the Government really need to make sure that the schemes continue. The findings paint a bleak picture of the deep economic hit to key sectors across Scotland, once again highlighting the need for strengthened financial support measures to help businesses and industries survive this crisis. Rather than looking to shut down the support schemes and putting increased financial pressure on firms that are already struggling to get by, it is critical that the Treasury extend and strengthen support to protect business and countless jobs.
This Government have all the levers. I only wish that the Scottish Government had at their disposal—as the Government of an independent country—the levers to make such choices. At the very least, the Chancellor should look at the fiscal framework and allow devolution of borrowing powers to the Scottish Government as soon as possible. The Scottish Government’s powers to borrow are incredibly limited, and we do not have the flexibility to meet the economic demands of this crisis. It could not have been envisaged when the fiscal framework was agreed; nobody would have seen this coming. The Government must react and listen to the demands of the Scottish Government.
This Government have a choice. They can invest in green infrastructure and recovery and they can decide to help people, or they can decide to turn off the taps and risk recession and devastation across many sectors of the economy. All I can hope is that they choose wisely.
Anthony Browne (South Cambridgeshire) (Con)
I have followed the Treasury’s Budgets professionally for a quarter of a century and contributed to many of them, but this is the first time I have helped to legislate for a Budget. As well as speaking in various stages of the Finance Bill, I served on the Bill Committee. I have been impressed by the thought, the hard work and the dedication that Treasury Ministers and officials have put into the Bill, taking on board many of the concerns that have been raised throughout the process. I particularly pay tribute to my right hon. Friend the Financial Secretary and my hon. Friend the Exchequer Secretary, who have steered the Bill through its various stages with patience and humour.
When I first sat on the Finance Bill Committee, I never expected that in our discussions I would learn about Burkean philosophy or why there are different rates of take-up of driving licences among different ethnic groups. I pay tribute to the work of the Clerks on the Bill, who made it work so smoothly, and to my own staff, who have supported me throughout the process.
This Budget is one of the most unusual in history. Announced just weeks before lockdown, it was legislated for during the deepest recession and the biggest economic support package in modern times. It is notable that, almost without exception, the measures have withstood these exceptional circumstances and they are as justified now as they were before.
I sat through the amendments that the Opposition tabled in the Bill Committee, and I observed that none of them had anything to do with promoting economic growth. I was reminded of a conversation that I had with a peer of the realm when I first came to this House. I had always thought that he was a Labour peer, but he told me that he was a Conservative. I asked him why he was Conservative rather than Labour, and he said, “The trouble is that they know only about spending it, not about making it, but you can’t spend it unless you have made it first.” That could not be more true.
There are some much-debated measures in the Bill, but I think that in the end it gets the balance right between tackling tax avoidance and encouraging entrepreneurialism. It is right that everyone pays their fair share. I am at heart an economic liberal who believes that if a Government are going to take a person’s hard-earned money, the burden of proof lies on the Government to justify doing so. In general, I get more joy from cutting or scrapping a tax than introducing a new one, but it is notable that the Bill introduces new taxes. The possible carbon tax is needed to tackle climate change by ensuring that companies pay what economists call the externality of emitting greenhouse gases. The plastics tax is a great nudge tax, pushing industry into recycling more plastic by imposing costs on not recycling. As economists say, we should tax bads, not goods.
Then there is the new digital tax, discussed broadly in this House, which ensures that global technology companies pay their fair share. These technology companies bring us all so many benefits, which is why many of them have grown rapidly into some of the most valuable firms in the world, but their global business model and the joys of internal transfer pricing, basically mean that they can decide how much corporation tax they pay in each different country where they operate. The ultimate solution to this is a global agreement on the taxation of technology companies, but these agreements can take forever to reach, not least if those countries that benefit from the lack of an international agreement drag their heels. So it is absolutely right that countries such as the UK take the lead in introducing interim national measures. With declared national profits at the discretion of finance directors, the only option for the digital tax is to be that unprecedented thing—a tax on turnover. So the carbon tax, the plastic tax and the digital services tax are three taxes that can all clearly be justified. I welcome them.
Finally, I want to look ahead at the biggest economic challenge of our time. Yesterday in the Treasury Select Committee, on which I sit, the chief economist of the IMF and the OECD both paid tribute to the Government’s economic support package. Economists rarely agree about anything, but they do agree that things would have been a lot worse without this unprecedented Government support. I welcome the news yesterday from the Bank of England that we are bouncing back quicker than many had feared, but we are still set to have one of the sharpest recessions in modern history. Thousands of jobs are already being lost across the private sector, and the risk is that we undo the hard work that we have done since the 1980s to become a country of high employment and low unemployment. We must do everything we can to prevent that. We must not go back to the 1980s.
We now need to have a laser-like focus on getting the economy going again. We need to stop jobs being lost in the first place and then ensure that the short-term unemployed do not become the long-term unemployed. That means getting them back to work as quickly as possible. We have rightly all been paying tribute to the NHS staff who have done so much to look after us during the pandemic, but we should also pay tribute to the dedication of private sector workers—from supermarket staff who have kept us fed to drug companies that have developed treatments and companies that have built ventilators. It is private enterprise that has taken the brunt of this recession, and it is private enterprise that will pull us out of it. Private enterprise is not the problem that some on the Opposition Benches see it as; it is the solution. Across the House, we need to focus in the coming months and years on helping businesses get going again, so that they can create the jobs and pay the taxes that pay for our public services and our welfare system. We need to build, build, build, and that leads to jobs, jobs, jobs. I commend the Bill to the House.
Felicity Buchan (Kensington) (Con)
I believe that the hon. Member for Houghton and Sunderland South (Bridget Phillipson) said that there were no female Members on the Conservative Benches, so I just want to reassure her that I am still a woman. I am also delighted to say that on the Treasury Select Committee we have five Conservative Back Benchers, of which three are women. So women are very much represented on the financial side on these Benches.
I promise to be brief, so I want to talk about only two areas in this Bill, which are really relevant to my constituents in Kensington. The first is the digital sales tax, which I commend to the House. We all want it to be superseded by a multilateral solution, but it is an important and bold interim measure. Kensington High Street, like high streets across the country, is suffering. That is partly due to the burden of business rates, but it is also due to changing shopping habits. The new tax will be an important source of revenue for the Exchequer, and it will also go some way towards levelling the playing field between online retail and high streets. I am also looking forward to the fundamental review of business rates that we shall see later in the year.
I also commend to the House the measures in this Bill that incentivise the greening of the economy. Over the last 10 years, we have shown that we can have economic growth while lowering emissions. The environment is critical to my residents in Kensington and, in particular, air quality, since we are in central London. I am glad that my area, Kensington and Chelsea, has seen the largest three-yearly decline in emissions in the whole of London, but we all know that there is an awful lot still to be done, so I welcome many of the measures in this Bill, such as the support for zero-emission vehicles, the changes to the vehicle excise duty regime and the preparations for the introduction of the plastic packaging tax. These will all be warmly welcomed in Kensington.
In the interests of brevity, I am going to conclude there and commend this Bill to the House.
Duncan Baker (North Norfolk) (Con)
Last but not least is the saying, I suppose, Madam Deputy Speaker. My hon. Friend the Member for Kensington (Felicity Buchan) gave a fantastic speech, putting it far more succinctly than I will probably be able to. I must also say that my hon. Friend the Member for South Cambridgeshire (Anthony Browne) does not look old enough to have been studying the Finance Bill for the last 25 years—that is quite something. The Treasury has made an incredible effort in preparing the Bill and in all the work that has been put together over the last few months to safeguard our economy through this pandemic, and it should be widely praised.
I shall talk about the digital services tax from two perspectives. Again, the Treasury should be roundly applauded for the tax’s hugely progressive nature. As we heard yesterday, it is a pioneering tax, but I wonder whether we can be even more pioneering. The two perspectives are these: first, by being more pioneering, we can go further and help to save the high street; and secondly, it is all very well saying that we need to do that, but we have to have a solution to be able to do that. This is nothing new—I have been talking about retailing and the high street since I became a Member of this House, and I like to think that given my previous career, I am able to talk a bit about that. However, given the pandemic, the digital services tax, in my view, cannot come quick enough, and I wonder now whether we can go even quicker. What we are seeing is a structural change to the high street, and it is of course incredibly worrying when we listen to the news in the morning and hear of bellwethers, such as John Lewis and Harrods beginning to struggle.
I have long believed that it is absolutely key that all our companies pay their fair share of tax, regardless of industry. If they create value in this country, they should be taxed in this country. That is not only bold and brave, but fit and proper. Taxing those companies is more pertinent than ever, because the incomes and profits that they generate are eating away into the more traditional businesses’ market share when they are the very ones that are paying their fair share of tax and suffering as a result of the digital platforms’ dominance. When Google is reported to have paid less than £50 million in UK tax last year and Facebook to have paid £30 million on sales of £1.5 billion, it is absolutely right that the Government are bringing this legislation in as quickly as they are. For me, this is not about taxing those with a competitive advantage, but a move in the correct direction of fairness and equality. As the Government have said, should we find a global solution to this problem, we will probably abolish this tax, making it to all intents and purposes temporary.
Of course, this is not just about taxing the Facebooks, Googles and Twitters of this world; it is more encompassing than that, and it will focus on intermediaries as well. For me, that is a really good thing, because I would like to think that the digital services tax is a bridge to where we should be going. That is the crux of my argument. I do not think at the moment the digital services tax does quite enough—I wonder whether we can go a bit further—and I will just bring out the reason for that. I would like to see some kind of online sales tax levied on online retail sales as a way to support the high street. This would enable the Treasury to take the step, which we know it wants to take, of abolishing retail business rates for good. That would level up an industry sector that is seeing technological shift erode it year after year. The DST is a stepping stone to where we want to be.
At the moment, online sales in retailing are approximately £80 billion, and their share of total retail sales has now grown from 5% when records first started to nearly 20% of all UK retail sales. That means that retailing through traditional bricks-and-mortar stores in towns and cities across the country, which employ millions of people, is being completely eroded by sales moving online, where cost bases are much smaller and profits can grow quickly. Just as we are getting a grip on online marketplaces, I wonder whether we can move on this issue as well.
What coronavirus has done is see a further step change in reduced footfall on the high street. People are doing two things: not only are they not going out, in order to avoid crowded areas, but those that have been inside have converted—we have seen evidence that they have converted, with 48% of all retail sales in supermarket shopping now being online.
If the Government would like to think about abolishing retail rates, they should consider some form of VAT-style levy on retail online sales. If we take £8 billion as the current total of UK retail rates, a VAT-style levy of a few percentage points on those total sales at the moment could pay immediately for half of the amount of abolishing those rates. Surely, that is something we would want to think about sooner rather than later to help.
I will finish by saying that I really welcome the boldness of this Bill, and I really welcome the boldness of the digital services tax. I think we are now turning to face the right direction for what I believe is a real institution in this country—shopping on our high streets—and it only leaves me to say to the Treasury Minister that I commend this Bill to the House. I wonder if we can go even further, but I think it is a fantastic step in the right direction.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business without Debate
Manchester Airport and the Local Economy
(4 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Navendu Mishra (Stockport) (Lab)
I refer hon. Members to my entry in the Register of Members’ Financial Interests in relation to Unite the union, of which I am a member. Unite represents thousands of workers in the aviation industry and has been campaigning for Government support for the sector throughout the covid-19 pandemic. I also pay tribute to my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), who has been a tireless campaigner for workers at Manchester airport.
Manchester airport is a core part of Greater Manchester’s economy. It employs 25,000 people directly on site and 76,000 indirectly, generating £4.5 billion for the local economy. It has links to 210 destinations—more than any other UK airport—and is an international gateway for trade and travel, acting as a major draw for investment and development in Greater Manchester, giving our region a huge competitive advantage. For example, in the past two years its direct route to China has helped to grow export values in the north by 41%, bringing with it £250 million to the visitor economy.
The whole supply chain relies on a successful Manchester airport. Catering companies such as Newrest and hotel chains such as Hilton have been affected by the lack of footfall during lockdown and have been forced to make cuts. Furthermore, an Independent Transport Commission report revealed that 55% of the workforce in the area surrounding Manchester airport are employed by aviation businesses. As a result, Manchester airport is central to everything we do in the north-west and will be a major catalyst for kick-starting the regional economy as we emerge from the first phase of the coronavirus crisis.
The fallout from covid-19 has been catastrophic, with passenger levels and revenue dropping to historic lows of between 1% and 4% of those seen in the same period last year. Thousands of workers face redundancy if the Government do not intervene to save the airport, its airlines and the businesses that rely on it as a key hub. More than 1,500 redundancies have been proposed to date, with well over half of them at Swissport. Widespread losses have already been reported for airlines including Virgin, Ryanair, Jet2, TUI and—just this week—easyJet, with more to follow in the coming weeks.
Manchester Airports group, which also operates London Stansted and East Midlands airports, faces a difficult restructuring programme with 25% of its leadership and management positions being cut and the remaining 75% subject to restructuring. All of that will take place before the end of the furlough scheme, when further redundancies are almost certain to follow. While the furlough scheme has been of some help, the money is little more than a drop in the ocean, accounting for just 5% of the airport’s fixed costs.
The situation will not simply end with a resumption in air travel. Even with an increased number of air bridges and an end to quarantine, the aviation industry has warned that it may not return to anything like normality until the second half of 2021, and even then the numbers are expected to be at only about 90% of pre-crisis levels. The Government must therefore consider a sectoral support package that ensures the industry has the backing and confidence it needs to recover as quickly as possible, mitigate job losses and protect skilled jobs.
Rachel Hopkins (Luton South) (Lab)
Thank you for giving way in this important debate. Would you agree that while airports in our regions provide many direct jobs, as you outlined, they also have an important role—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Would the hon. Lady mind saying that again, but, instead of saying “would you agree,” please say “would he agree”?
Madam Deputy Speaker
No, no. Everyone makes a mistake now and then. It is not terrible, but it is time that we managed to grasp this and get it right. I would be grateful if the hon. Lady would set an example, please.
Rachel Hopkins
Thank you, Madam Deputy Speaker. I appreciate that as a newer Member I am practising the ways, and I will get it right. Does my hon. Friend agree that regional airports have an important role to play, not only for all the direct jobs they provide in our areas, but for the wider jobs and services they can support, such as at Luton airport? It is in my constituency and it is the fifth largest airport in the UK. It provides £20 million a year in direct dividend to Luton Borough Council, which provides jobs and services, and £10 million a year direct to the voluntary and community charitable organisations. Does he agree on the importance of that role, too?
Navendu Mishra
Absolutely, I agree. In the past few years, especially in the past decade, councils have faced a lot of cuts as a result of the austerity regime, including my local Stockport Metropolitan Borough Council and the Greater Manchester Combined Authority. They depend on income generated by the airport, and I thank my hon. Friend for raising that issue.
If the Government do not step in, businesses will continue to collapse and tens of thousands of workers will lose their jobs. In the north-west, it is crucial that we do not see a repeat of what happened to Thomas Cook last year, which had a huge impact on the 3,000 employees who lived and worked across Greater Manchester, including those who worked at five branches across the borough of Stockport, including the one at Merseyway, in my constituency, as well as the 900 cabin crew who operated out of the airport.
In his Budget on 17 March, the Chancellor promised a financial support package for the aviation sector. That is almost four months ago, but we are still waiting. It is completely unacceptable, given how precarious the current situation is for the industry, that we are still waiting. The Government urgently need to consider sector-specific furlough support, such as an extension to the coronavirus job retention scheme, which is scheduled to end on 31 October. Such an extension should also come with a warning that no company is allowed to accept public funds from the scheme and use them to cover the cost of making staff redundant. The Government must also consider prioritising loans or taking a stake in companies, and ensure that when that happens businesses that agree to such support should be prohibited from paying dividends, from undertaking share buy-back or from capital contributions, with a cap on executive pay until 12 months after the loan is fully repaid.
Business rates make up a significant proportion of our airport’s fixed costs, at a time when the revenue is close to zero. In recognition of that, business rates relief has already been provided to airports in Scotland and Northern Ireland, and the UK Government should correct that anomaly for airports in England, too. They should also support local authorities so that they do not face further financial strain. Temporary measures should also be considered, such as a reduction in air passenger duty, which makes up a significant proportion of the cost of tickets and limits the profits that airlines can make. In addition, support is needed for the temporary funding of the Civil Aviation Authority.
Many businesses have rightly been praised for the efforts they have made during the crisis to support and retain their workers, utilising Government loans, where needed, to retain staff on full pay or opting to furlough staff rather than lay them off. Those that have gone down the route of Government support have done so in good faith, in the hope that this will be no more than a short-term measure. The flip side is companies that take advantage of the system, using taxpayers’ money to prioritise the protection of shareholder dividends ahead of the protection of their own workers.
One such company is British Airways, whose chief executive, Willie Walsh, was hauled before the Select Committee on Transport in May. It branded Mr Walsh’s company a “national disgrace”. Despite having a parent company, International Airlines Group, with total assets of £10.7 billion and profits last year alone of £2.6 billion, at the very first opportunity Mr Walsh furloughed 22,626 of his employees. In doing so, it was claimed that the measures were
“to protect jobs and ensure that BA comes out the other side of this crisis in the best possible shape”.
What is clear now, just weeks later, is that the protection of jobs was never his priority, beyond those of BA’s top executives.
Despite the fact that IAG was in a position to retain its entire workforce on full pay for more than a year, even without Government support, Mr Walsh announced that all 42,000 of British Airways’ workforce would be made redundant, with 30,000 fired and rehired on inferior contracts, with worse pay, terms and conditions. That means that 12,000 people were made redundant. Furthermore, failure by employees to sign the paperwork that contains a clause allowing the company to temporarily lay off workers will result in instant dismissal.
As part of its plans, British Airways’ contact centre in Didsbury, Manchester, is set to be affected, with 350 workers being faced with redundancies. That is completely unacceptable, and I urge the Minister to look at measures for holding British Airways to account, including reviewing the lucrative slot allocations that it is given as a legacy carrier, which, in the case of London Heathrow, in the constituency of my right hon. Friend the Member for Hayes and Harlington (John McDonnell), amounts to more than 50% of all spaces at the airport. The question must be, if BA is targeting the legacy staff, many of whom have spent decades of loyal service building BA’s brand, why should it be rewarded with legacy slots? It cannot pick and choose which legacies it keeps.
It is also incredibly important that our efforts to tackle climate change are not lost as we revive and rebuild our aviation sector. Indeed, this can and should be an opportunity to explore new technologies further and green the economy with well-paid, unionised jobs. That means inserting clauses into the financial support that the Government provide for businesses to set out a clear programme of transitioning to more efficient and environmentally friendly operations, including cleaner fuel options. There should also be consideration of publicly financing smaller airports and air traffic control as well as specific routes within the UK aviation network to retain much-needed connectivity.
There are many examples around the world of Governments backing the aviation sector. The US, for example, has injected $45 billion into the sector. Another good example, closer to home, is France, where Emmanuel Macron’s Government have unveiled a series of historic rescue packages, including one of almost £7 billion for Air France, which included £4 billion in bank loans guaranteed by the state and £3 billion in loans direct from the Government, all of which has helped to safeguard Air France’s 84,000 employees. As part of the rescue package, France’s Finance Minister was clear that airline bosses needed to bring forward a plan for reducing carbon dioxide emissions and transforming their fleet to be less polluting. Similar steps would be very welcome in Britain.
Ultimately, as lockdown measures are eased, people’s health must remain a priority ahead of profits. That means that companies must be compelled to take all possible steps to ensure that appropriate action is taken, such as providing proper PPE for all staff and enforcing the Government’s social distancing guidelines. That is why, last month, the Mayor of Greater Manchester, Andy Burnham, launched a “Safely Reopening Greater Manchester” campaign, which is an initiative to ensure that the region’s economy can reopen safely from the covid-19 lockdown.
The Greater Manchester Combined Authority, led by Mayor Burnham, is also looking at initiatives such as the regional brokering scheme, to match people at risk of being made redundant when the furlough scheme ends with parts of the economy where there are opportunities, as well as exploring initiatives such as the future jobs fund.
In conclusion, it is time for the Government to act. All 10 local authorities in Greater Manchester have already intervened to support Manchester Airport Group, providing a combined package of more than £250 million to protect long-term investments and safeguard tens of thousands of jobs that rely on the airport as a major engine of the local economy. I urge the Minister to consider all the measures that I have set out in this speech and ensure that our aviation sector can build back better and be the economic catalyst that our country desperately needs if it is to emerge stronger from this crisis.
Andy Carter (Warrington South) (Con)
Thank you, Madam Deputy Speaker, for calling me to speak in this important debate, and I thank the hon. Member for Stockport (Navendu Mishra) for securing it.
Although I do not live in the constituency in which Manchester Airport is based, I, like many other Cheshire residents, live on the flight path. During normal times, I can sit at my kitchen table and count the planes out in the morning and then count them back in in the afternoon. In fact, I have developed a bit of an unhealthy obsession. I open the app just to find out where those planes are going and, on many occasions, wish that I was going with them.
One thing that has really struck me over the past few weeks of the crisis is just how passionate people are about having a flagship northern airport on their doorstep. I do not just mean the plane spotters who we see queuing to get into the runway aviation park. People really do care about having on their doorstep somewhere from where they can reach out to the world. Manchester’s role as a northern hub airport, its position as the most used airport in the north, and the fact that it is the only airport outside London that has two full-length runways mean that it really does have a critical role for our northern economy, and we take real pride in that facility. It links us to 210 different destinations, more than any other UK gateway, and has direct links to 35 of our top 50 export markets. It really is fundamental to the northern powerhouse economy. No longer do we have to rely on the south to export and trade, and as somebody who worked with businesses across Europe and in Asia before coming to this place, I can say that there is nothing more frustrating than living next to Manchester airport and knowing that I have to drive to Stansted or Heathrow to get a flight just to jump across the channel.
Today, flights passing over my house have gone from hundreds to four or five a day, and most of those are domestic. That is at the heart of the issue for Manchester airport and the wider economy. Warrington’s close proximity means that families have moved there and have chosen to live there. The risk to our local economy and its recovery is significant because of that massive drop in passenger levels. The risk is to staff who work airside, crews, pilots, air traffic controllers, engineers and Border Force guards. All of them live in Warrington South, as well as other constituencies in the north-west of England. The supply chains, which feed and fuel the sector, are part of our local economy.
While this debate is not about British Airways, I share the hon. Gentleman’s views about the way that British Airways has handled many of the negotiations with its staff at an incredibly difficult time.
Restarting the aviation sector is a vital part of the UK’s economic recovery, for Warrington, for the northern powerhouse and for the UK, and I very much look forward to hearing from the Secretary of State for Transport when he announces plans to allow flights to resume shortly. Indeed, I was really pleased to hear him confirm this morning that he is looking at common health protocols to keep passengers safe. The Department for Transport, and in particular the Minister, deserves credit for the incredible efforts that they have taken to ensure that we can see a recovery in this sector. At the same time, during this health crisis it really is important that we ensure that countries where infection rates are high are regarded as high risk, and that people coming into this country from those locations self-isolate to make sure that we do not spread the disease further.
This is an industry that contributes billions of pounds to our local economy and supports thousands of jobs, and it is growing. The centrepiece of the £1 billion Manchester airport transformation programme, the extension of terminal 2, has been delayed—put on hold—because of what has happened over the past three months. It is an oven-ready project that has been privately funded, for world-class infrastructure that relies on a rapid and strong economy to enable it to deliver the economic benefits to the north and to level up. I am sure none of us in this House doubts that the economic situation facing the industry is anything less than critical, with passenger levels dropping to historic lows.
Restarting the aviation sector is a vital part of the UK’s economic recovery. Aviation, the facilities that it supports and the travel industry are crucial to the economic growth of the region, to the north, to the northern powerhouse and to Warrington, and I urge the Government to take full steps to ensure that we can grow our sector as much as possible.
The Parliamentary Under-Secretary of State for Transport (Kelly Tolhurst)
I congratulate the hon. Member for Stockport (Navendu Mishra) on securing this debate about Manchester airport and the local economy, and I thank my hon. Friend the Member for Warrington South (Andy Carter) for his contribution. I know that the hon. Member for Wythenshawe and Sale East (Mike Kane) has a keen interest in Manchester airport but is unable to speak in the debate. I have listened carefully to the points that the hon. Member for Stockport has made and will endeavour to address as many of them as I am able to.
As Members across the House will be well aware, these are incredibly challenging times for the aviation sector. Covid-19 has presented unprecedented difficulties for the industry, but we must not forget that the aviation and aerospace industry is a British success story. Before the impact of covid-19, the UK aviation sector contributed at least £22 billion to the UK economy each year and directly supported around 230,000 jobs spread across the UK. Around 12% of those jobs are in the north-west, so I am mindful of the impact that covid-19 is having on communities across the region.
Aviation is one of the sectors worst affected by covid-19, and areas such as Manchester, with its large airport and supply chain, are particularly affected. Having held regular discussions with the whole sector since the pandemic began, I met again with senior management from Manchester airport earlier this week. I want to thank them for their constructive engagement throughout this period, as we continue to work collaboratively with the sector to ensure its recovery. I was very encouraged, as I am sure the hon. Member for Stockport was, to hear this week that Manchester airport plans to reopen terminal 2 from 15 July, following the opening of terminal 3 this week. I know that we still have a long way to go, but this shows the beginning of the sector’s recovery, as flights once again take to the skies.
The restart comes on the back of the unprecedented package of measures that the Chancellor put in place to protect the economy and jobs. The hon. Member spoke about support for this particular sector, and I am afraid that this is where we disagree. The support provided was unprecedented and has enabled airlines, airports and ground handlers to benefit from a significant amount of taxpayer support during the most critical time. It did not end there. The Chancellor and the Secretary of State for Transport were incredibly clear that any business needing further support, having exhausted all the economic measures that were put in place, will have the ability to talk to us about further support. We stand ready to speak to any business that is in that situation and has used all that support.
Mr William Wragg (Hazel Grove) (Con)
I apologise to you, Madam Deputy Speaker, for arriving late, and I congratulate the hon. Member for Stockport (Navendu Mishra) on securing the debate. Have there been any approaches from the likes of Manchester airport to take the Minister up on the offer that she appears to be making?
Kelly Tolhurst
Obviously, commercial discussions are not for discussion in the Chamber, but I reassure my hon. Friend that I am in regular communication with all the airports in the United Kingdom, and officials in the Department are in weekly contact with them.
The measures put in place include the Bank of England’s covid corporate financing facility, which provides funding to businesses to pay wages and suppliers; the coronavirus job retention scheme, which helps firms to keep people in employment by allowing businesses to put workers on temporary leave; and the business interruption loan scheme. All those measures have been designed to ensure that companies of any size receive the help they need to get through this difficult time, including airports, airlines and the wider supply chain.
Beyond that package, many firms are getting support from established market mechanisms such as existing shareholders—the hon. Member for Stockport mentioned the support that has been provided by local authorities—and bank lending and commercial finance. We have been looking at other flexibilities to give the sector. The Civil Aviation Authority is working with airlines, airports and ground handlers to provide flexibility within the regulatory framework to help them manage the impacts of covid. We also welcome the response by the European Commission, which relaxed the 80:20 rule on slots, and we continue to engage with organisations across the sector on that issue. Nevertheless, I would not want to underestimate the challenges to the sector and to airports such as Manchester, because despite the measures that we have put in place to protect the economy, there remain serious challenges for the aviation sector.
I want to turn to the announcements of redundancies by a number of companies, which the hon. Gentleman has mentioned. As he said, these are distressing announcements for employees and their families. While they are commercial decisions, they are decisions that I profoundly regret as Aviation Minister. Redundancies are not something that should be considered lightly, and if organisations find themselves having to consider these measures, I hope that they will do so sensitively. I hope that they will take into account the dedication and professionalism that their employees have shown, and that they will act within and, where possible, beyond the requirements and the spirit of all relevant legislation.
The hon. Member for Stockport and my hon. Friend the Member for Warrington South mentioned British Airways in particular. I have spoken directly to BA and to the IAG chief executive, Willie Walsh, to discuss the organisation’s plans and its engagement with staff and union representations. I have offered to support these engagement efforts where possible, and where it is appropriate to do so. I am also in regular communication with the unions that are particularly affected by those redundancies. I encourage BA and the unions to engage constructively with each other, and to strive to provide employees with as much certainty as possible during this challenging time.
I would now like to turn to the sector’s restart and the next stage of our plan to help it to recover. We need aviation. It is vital to our future as a global trading nation and plays a critical role in local economies, whether in Manchester or elsewhere. We have established the restart and recovery team, with an expert steering group to ensure a truly collaborative approach between Government and industry. Last month, we published the aviation health guidance for operators, as well as the safer air travel guidance for passengers. This forms a vital first pillar as we seek to ensure that our aviation sector returns to its full strength as soon as possible.
Andy Carter
The Minister has mentioned the Manchester economy, but does she agree that Manchester airport affects not just the Manchester economy but the north-west economy—particularly Warrington, Cheshire and across to Merseyside? The size of Manchester airport means that it is a much bigger operation and affects much more than just the Manchester economy.
Kelly Tolhurst
My hon. Friend is correct. Major infrastructure such as airports always have a wider impact than the activity that they directly partake in. The success of Manchester airport has been a big contributor to the wider local economy and the supply chain, and that is something that we are very mindful of within the Department for Transport. We are working with our colleagues across Government to ensure that we understand the full impact of the difficulties within the aviation sector.
I would like to point out that the Manchester Airports Group—MAG—and Manchester airport were among the leading members of the expert steering group working with us to devise that health and passenger guidance, and I thank them very much for that. We have built on progress, and on Monday we announced that the Government would shortly begin to ease the health measures at UK borders, allowing passengers to be exempt from self-isolation requirements in certain circumstances on arrival in the UK. The joint biosecurity centre, in close consultation with public health and the chief medical officer, has developed a categorisation of countries and territories that present a lower risk, so that passengers entering the UK from those places will not require 14 days of self-isolation. This has been informed by factors including the level of covid within a country, the number of new cases and the expected trajectory in the coming weeks. Further details, including a full list of those countries from which arriving passengers will be exempt from self-isolation, will be announced shortly.
Throughout this process, public safety has been at the heart of our decision making. We have worked closely with health and policy experts from across Government to ensure that the steps we are taking are gradual and minimise the risk of new covid-19 cases, while helping to open up our travel and tourism sectors. We want the aviation sector to return to normal operations as soon as possible. However, even with this week’s announcements, there is a great deal of uncertainty around how long this will take, given the truly international nature of the sector. We want to ensure a safe customer journey in the UK and abroad. We also want aviation to be as sustainable and environmentally friendly as possible. The aviation sector must be a green one that creates high-quality, high-skilled jobs.
Navendu Mishra
Will the Minister commit to looking at the proposals put forward by the French Government to support the sector, and the conditions that they have introduced with regard to using cleaner fuel, reducing emissions and supporting the wider economy with a sectoral package?
Kelly Tolhurst
The hon. Gentleman will have heard, and maybe seen, the Secretary of State announce last week the formulation of the Jet Zero Council, which has been supported by the industry and will bring together the Government with aviation and environmental groups to make net-zero-emissions flights possible. I have spoken with Manchester airport and others across the industry this week, and there is a real determination from the sector to make this a vital pillar of the recovery. We have an industry that wants to deliver on this agenda and are working with the industry, with or without that bespoke support. It is important that we understand the profound impact that covid-19 will have on the way that people’s lives, work and travel will change. It is clearly sensible that our plans to reduce emissions understand that and take it into account.
I thank the hon. Gentleman for securing this debate. Manchester airport is the only British airport other than Heathrow to operate two full-length parallel runways. It handled its first scheduled flight in 1938—a KLM Douglas DC-2 to Amsterdam—and in 2010 it became the first airport of its size in the world to have a daily A380 service. As Aviation Minister, I have been given the opportunity by this debate to address concerns. I am mindful of and take on board the concerns he raised around slots, the green recovery and the particular strain that local authorities may feel as a result of supporting their local airports.
As I have highlighted to the hon. Gentleman, the Department for Transport is committed to staying close to our airports and working with them in the best way possible. We are all aware of the scale of the challenge facing the aviation sector and the economy as a result of covid. The efforts that we are making in partnership with the sector are intended to ensure that UK aviation can recover, and that airports such as Manchester and the communities they serve can recover and prosper in the future, just as they have done in the past.
Question put and agreed to.
Counter-Terrorism and Sentencing Bill (Fifth sitting)
Thursday 2nd July 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Counter-Terrorism and Sentencing Bill 2019-21 View all Counter-Terrorism and Sentencing Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 2 July 2020 - (2 Jul 2020)
The Chair
Members are free to remove their jackets, if they so wish, but must turn their electronic devices to silent. Mr Speaker does not allow tea or coffee to be consumed during sittings. Social distancing is still recommended here; we have been asked to suspend the sitting if there are any problems. Finally, will Members please give their speaking notes to the Hansard reporters? That would be very helpful. We will begin with clause 11.
Clause 11
Minimum term order for serious terrorism offenders: England and Wales
Alex Cunningham (Stockton North) (Lab)
I beg to move amendment 39, in clause 11, page 12, line 42, at end insert—
“(7) Before this section comes into force, the Government must publish an analysis of the impact of the introduction of minimum term orders for terrorism offenders on sentencing for other offences.
(8) A copy of the analysis must be laid before both Houses of Parliament.”
This amendment requires the Government to publish an analysis of the impact of the minimum terms on sentencing for related offences.
It is good to see you in the Chair again, Mr McCabe. The Labour party is not in principle against a minimum 14-year sentence for those convicted of serious terrorist offences. We are aware that it is a particularly small cohort who have been found guilty of some absolutely heinous crimes in order to find themselves in this category of offender. Indeed, the Ministry of Justice’s own impact assessment sets out that as few as 50 offenders could fall into this category, although, as I have said time and again, the Ministry of Justice can provide no evidence to back up that figure. None the less, as I have said throughout our discussions, the changes to legislation that this House makes must be underpinned by supporting evidence, and the amendment would do just that.
The amendment would require the Government to publish an analysis of the impact of the introduction of minimum term orders for terrorism offenders on sentencing for other offences, and to lay a copy of the analysis before Parliament prior to this section coming into force. The impact assessment estimates that the potential impact of measures increasing minimum terms for terrorist offenders given life sentences
“may result in fewer than 50 additional prisoners…annually”.
I am not entirely convinced by that assessment and ask that the Government conduct an analysis of the measures on wider sentencing practice.
In Tuesday’s sitting, the Minister was at pains to stress the figure of 50 additional prisoners caught up by his new proposals, with only a handful of them being under the age of 21, and said he would provide the rationale behind the numbers. Nothing arrived in my inbox yesterday, so I assume it is still a work in progress for the Minister. I would have thought it perfectly easy for him to support his numbers with evidence before now, but perhaps he will provide that full explanation in his response.
I have outlined in previous sittings my concern about the impact of the creation of new offences with a terrorist connection. We all need to be satisfied that the Government have got the numbers right, because if they have not the ramifications will be considerable.
As I have said throughout our discussions, the changes to legislation that this House makes must be underpinned by supporting evidence. We need to know whether minimum terms are working effectively. Have they made our country safer? Are they really a valuable tool in working with offenders? As I have spoken about at length, our justice system does not treat everyone fairly, even if it is our intention to do so. Given that it does not treat everyone fairly, we must consider the impact of our decisions on all groups, particularly those with protected characteristics. We as lawmakers need to obtain and understand evidence that increasing the length of time that individuals spend in custody leads to significant gains in public protection beyond delaying the possibility of an offence being committed.
In its written evidence, the Prison Reform Trust stated that increasing the length of the custodial period could undermine public protection by eroding protective factors. A key example is family contact associated with a reduced risk of reoffending on release. Perhaps the Minister can answer that challenge from the Prison Reform Trust. It is of course only right that the Minister talks about the number of offenders who will be caught up in his proposed new laws, because it is important to understand how many will be subject to additional impediments to their attempts to live anywhere near a normal life when they are released on a licence of up to 25 years.
The Government’s own impact assessment specifically sets out that the MOJ is aware that separating offenders, especially younger ones, from their families will negatively impact on their rehabilitation. We need answers from the Minister on that point. Yet we face a situation where the MOJ does not know the total number of offenders who will be caught up in this cohort. In addition, the MOJ does not know how many of those offenders will be young adults or under-18s, and it cannot provide any evidence-based reason for introducing the minimum sentence. The only thing that the MOJ seems sure of is that removing protective factors can impact on rehabilitation. It is important that the Minister gets those numbers right, because they have a major impact on how offenders are managed within the system and on whether or not the system will be properly equipped to deal with them.
I believe that the Government have said that the cost of these new measures will be around £60 million a year, but how has that figure been arrived at? The Minister holds tight to his figure of £50 million a year, but even if he is right, that is £50 million every single year and the number will build up to around 700 terrorist offenders in the prison system, all of them needing particular management in an already stretched service, which so many people tell us is under-resourced, lacks the expertise it needs and has rehabilitation programmes for terrorist offenders that, at best, need considerable improvement.
The need for analysis is probably even more important for us to understand the effects on young people and the potential impact of the determinate sentences. When he spoke on Tuesday against our amendment to have specific pre-sentencing reports that take age into consideration, the Minister made much of the fact that only a very small number of young people will be caught by his new measures. I do not want to repeat myself too often, but we still await an explanation as to where the Minister gets his estimates from, even if it is a very small number of people who will be affected.
For the sake of argument, let us say that the Minister is right, and for the sake of illustration, let us assume that it is eight young people a year who will be affected. Before a young person sentenced under the Minister’s new law is released, there are likely to be more than 100 people in the prison system who have been convicted of an offence with a terrorist connection. We really need to understand what that means for the offenders, for the Prison Service and for society.
Julie Marson (Hertford and Stortford) (Con)
Does the hon. Gentleman agree that we can be assured that the Bill will have a disproportionate impact on a certain sector of people—namely, those convicted of plotting or executing mass maiming and murder?
Alex Cunningham
The hon. Lady is right up to a point, but some of the people under discussion will not have been responsible for killing people. A lot of them are covered by the charge of plotting, and there is the new range of terrorist offences. The crimes to which she refers are already covered by legislation. People who commit such terrible crimes are already subject to a life sentence, so in this particular situation we are talking about a different category of people.
I was saying that we need to understand what these changes mean for offenders, the Prison Service and society. For example, does the necessary amount of specialist prison provision required to incarcerate these offenders actually exist? That is not just about the number of prison places; it is about having the expertise available to manage and engage these offenders. We heard a lot of evidence from Mark Fairhurst about the need for proper provision and the fact that, at the moment, we have only one centre to deal with these particular terrorists. We are supposed to have three such centres, but we do not yet know when the Government will come forward and tell us when the new centres will be up and running.
What are the Minister’s proposals for housing younger offenders? Again, we need the prison places, but we also need the support services. Do they already exist, or is he proposing to develop more of them? If he is going to develop more of them, when will they be available? Even in the next two or three years, based on the Minister’s numbers, perhaps 20 or 30 young people will need specialist accommodation. They need specialist support services. Where are those services coming from? They do not exist at the moment, as I hope that the Minister will acknowledge, so will he ensure that they will in future so that we can for and deal with these people appropriately? We must not have a situation in which younger offenders—albeit among the most serious ones, as described by the hon. Lady—end up in the adult prison system because there is nowhere else for them to go.
I would welcome a specific comment on the issue when the Minister responds. I know that he has some tidying-up amendments for later in the development of the Bill, but I want to understand specifically what will happen with younger offenders and whether it is possible that some of them will end up in the adult estate.
It should be clear to the Minister why he should not be shy about commissioning analysis better to understand the issues that we face. Everyone talks about the importance of data and making decisions based on evidence. The amendment provides the Minister with an opportunity to do just that, and the Opposition are pleased to offer the Minister our assistance.
Also, if the Minister had the analysis, it would be easy for him to demonstrate to the House that he had got his decisions right. When he faced challenges from the Opposition on the success or failure of his new measures, he would have the analysis at his fingertips. I know that, financially, the Justice Department is skint. It has suffered heavy cuts disproportionate to those for other Departments during the past 10 years or so, and we have seen the results of that. The latest figures show that the number of criminal cases yet to reach the courts has now exceeded half a million, with hundreds of thousands more tribunal cases also outstanding. Perhaps it is the lack of resources that has meant that the Lord Chancellor cannot crack on and plan Nightingale courts to go alongside the Nightingale hospitals—the money to do so simply is not available. He did write to me yesterday, telling me that some additional money will be available. But it is a very small amount of money compared with the challenge that the system faces. This Minister’s accepting the amendment might result in the use of some resources, but the right action in this respect could save considerable sums in the longer term, and as I have made clear, the Justice Department really needs the resources.
Our ask is simple. We believe that there are real benefits for the Government in carrying out the analysis described in the amendment. Let us have in Parliament the evidence suggesting that these measures are a necessity and actually keep the public safe. I hope that the Minister will take these points and accept that longer sentences do not necessarily reduce the risk of reoffending. Several of our witnesses made that clear and even suggested that minimum sentences may in fact be counterproductive. The Minister might be reluctant to adopt the amendment—I will be surprised if he is not—but I look to him to come up with answers to the real issues that it covers.
The Parliamentary Under-Secretary of State for Justice (Chris Philp)
Good morning. It is good to see you in the Chair again, Mr McCabe. Let me start by responding specifically to the amendment, and then I will try to pick up one or two of the more general points that the shadow Minister, the hon. Member for Stockton North, raised in his speech.
Amendment 39 does not propose any very wide form of analysis, aspects of which the hon. Gentleman referred to. It in fact proposes a very specific form of analysis, which is an impact assessment on the effect of these minimum term orders on other offences. It asks us to do an analysis that says, “If we introduce a minimum 14-year term to be served by those with life sentences, what effect will it have on unrelated offences? What effect will the minimum terms have on unrelated offences in relation to non-terrorist crimes?” If I may respectfully say so, given that the Bill is about terrorist offences and nothing in the Bill has any impact at all on non-terrorist offences, I do not think that the analysis proposed by amendment 39 is particularly germane. The Bill will not make any difference at all to any other, non-terrorist offences, so I do not think that analysis would have any results or effect.
Alex Cunningham
I appreciate the Minister giving way so early in his speech. The Bill creates a host of new offences, which will capture more people. It is important that he addresses the effect on other offences, which could all of a sudden become terrorism-related offences and therefore be subject to a very different sentencing decision by a judge in a court.
Chris Philp
My reading of the term “other offences” in line 3 the hon. Gentleman’s amendment is offences not caught by the scope of the Bill.
Let me turn to the questions that the hon. Gentleman asked and the numbers he raised. We have published an impact assessment and equalities assessment, as we discussed at some length in the previous sitting. He asked where I got the numbers of younger offenders from. I now have some information about the under-18 cohort, which he and other Members are concerned about. Currently, there are only three terrorist offenders in prison under the age of 18. I hope that illustrates the very small numbers involved.
On the question of whether we are unreasonably widening the scope of what constitutes a terrorist offence, my judgment is that most terrorist offences would be caught under the existing list of terrorist offences. It would be relatively unusual for a terrorist act to be committed outside the current list of offences, and for it to be necessary to make the terrorist connection. It could happen, and we are rightly legislating for that, but the existing list of terrorist offences is relatively comprehensive, so I do not think that the scope increase that the hon. Gentleman is referring to will have a dramatic impact on what are already small numbers. It is of course important that we give the judge the opportunity—the power—to make that connection where somebody commits an offence not on the current list; it is logically conceivable that that could happen.
Let me turn to the number—the 50. We can extrapolate how many of those 50 are aged between 18 and 21, as we discussed in the previous sitting. I do not think that number is the annual flow or the number of convictions per year. As I understand it, it is the impact on the total prison population. Given that these sentences are quite long, one would expect that the annual flow into the system affected by these serious terrorism sentence provisions would be somewhat lower than that.
Those numbers illustrate powerfully that we are talking about an extremely small number of people. As my hon. Friend the Member for Hertford and Stortford said in her well-pitched intervention, we are talking about people who have committed a serious terrorist offence and have been found to be dangerous—in other words, the judge thinks that they pose an ongoing, serious risk to the public. Their actions either caused or were likely to cause multiple deaths, and, in the context of clause 11, the judge views the offence as so serious that a life sentence is appropriate. I hope that gives the Committee a clear sense that these numbers are extremely small and, thankfully, particularly small in relation to young people. We should take this opportunity to pay tribute to the tremendous work that our counter-terror police and the security services do to keep those numbers so very small.
Other remarks were made about funding. That is probably outside the scope of the clause, but I will address it very briefly, if I may have your indulgence for one minute, Mr McCabe. I am sure that if I stretch the bounds of your indulgence, you will call me to order. Counter-terrorism funding rightly increased substantially earlier this year in response to the enhanced level of threat. Spending on Her Majesty's Prison and Probation Service of course includes work on rehabilitation, and that also received a significant funding increase in the spending review in September 2019. I am sure that everyone here would welcome that increase in expenditure.
The shadow Minister mentioned a number of outstanding cases in the legal system. I think the number he quoted relates to magistrates courts. Of course we are in the middle of—hopefully coming towards the end of—a serious pandemic, which inhibited the operation of the courts system. Prior to the coronavirus epidemic, waiting times in the magistrates court were about eight weeks. The outstanding case load in the Crown court was certainly a great deal lower than it was in 2010. Obviously, coronavirus has caused an increase in the outstanding case load. We are working hard to address that with the new Nightingale courts. There are, I believe, 10 sites working on extending sitting hours. By the end of July every court in the country will be back up and running, and we are rolling out the cloud video platform, so that hearings can take place by video. I commend to the Committee the court recovery plan that was published two or three days ago. I hope that that demonstrates the herculean national effort currently under way to reduce the outstanding case load that has built up during the coronavirus epidemic.
Alex Cunningham
I most certainly welcome the increased expenditure in the area in question. It is essential that the Government look to increasing it further, because there is no doubt, from the evidence the Committee received, that the system is not adequate to receive the people who will be caught up in the range of new laws. It was good to hear the Minister try to clarify some of the numbers. The figure of only three people aged under 18 is significant. However, according to the analysis, there would be up to 50 people a year, over a long period. Does the Minister want to correct me?
Chris Philp
I will double check that number, but my understanding, which I will check, is that as a consequence of the measures the total prison population will increase by 50, which is different from an extra 50 people extra flowing in each year. However, I will come back to the hon. Gentleman on that.
Alex Cunningham
I appreciate that, but I thought I read it was 50 per year. I may of course be mistaken, but I look forward to the Minister clarifying that.
If the vast majority of criminal offences are committed under existing legislation, I wonder why we are here, other than to increase the determinate sentence to 14 years. Perhaps in a later speech the Minister will return to the matter. We may well return to it in future, but for the moment, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 11, as we have been discussing, amends section 323 of the sentencing code, which makes provision for the setting of a minimum term—a tariff—for discretionary life sentences. It will make sure that, where a life sentence is handed down to an adult offender who is convicted of a serious terrorist offence—which can be considered as a serious terrorism case—for the purpose of setting a minimum term, the provisions of this clause will apply.
The minimum term in a discretionary life sentence is the period that must be served in custody before an offender can be considered for release by the Parole Board. Offenders who are subject to a discretionary life sentence are subject to a life licence following the release. Clause 11 adjusts section 323 of the code so that, where the court considers an offender who requires a life sentence for their offending and has committed a serious terrorism offence, as found in schedule 17A to the sentencing code, an equivalent consideration is made to that for the serious terrorism sentence by requiring the court to consider it as a serious terrorism case.
A serious terrorism case is one where an adult offender has committed a serious terrorism offence and meets the criteria that we discussed previously for a serious terrorism sentence—that is, the court considers them dangerous; they present a serious future risk of harm, which in this context means the prospect of death or serious personal injury resulting; and in the opinion of the court they meet the risk of multiple death condition, which we discussed earlier in connection with serious terrorism sentences. The clause therefore requires the courts to set a minimum term of 14 years, unless exceptional circumstances apply.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Minimum punishment part for serious terrorism offenders: Scotland
Question proposed, That the Clause stand part of the Bill.
Chris Philp
This clause has the same effect as the previous clause, which applied to England and Wales. This applies to Scotland, and will have effect by inserting a new section 205ZB into the Criminal Procedure (Scotland) Act 1995.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13
Minimum tariff for serious terrorism offenders given life sentences: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 13 has the same effect as the previous two clauses, except in relation to Northern Ireland. It will amend the Life Sentences (Northern Ireland) Order 2001.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clause 14
Minimum custodial period for serious terrorism offenders given indeterminate custodial sentences: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 14 also relates to Northern Ireland. In this case, it applies to Northern Irish offenders who receive an indeterminate custodial sentence, ensuring that the 14-year minimum custodial period applies to them as well. The clause will have effect by amending article 13 of the Criminal Justice (Northern Ireland) Order 2008.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Additional offences attracting extended sentence: England and Wales
Question proposed, That the clause stand part of the Bill.
Chris Philp
This clause sets out a number of offences that, from the commencement date of this provision, will be included in the list of offences eligible for receiving an extended determinate sentence in England and Wales. Adding these offences will ensure that the sentencing regime in England and Wales is consistent in the type of offences it considers serious enough to be eligible for an extended determinate sentence. To make this change, the clause adds the offences specified within the provisions to part 1 of schedule 18 of the sentencing code. These offences all carry a maximum penalty of life, and include the making of explosives, developing biological weapons, endangering the safety of aircraft, using nuclear materials and hijacking or destroying ships. As such, they are of comparable seriousness to other offences already in scope for the extended sentence. Adding these offences to the list will correct the anomaly created by their omission and will ensure that these serious offences and others are eligible for an extended sentence as well.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16
Increase in extension period for serious terrorism offenders aged under 18: England and Wales
Alex Cunningham
I beg to move amendment 40, in clause 16, page 16, line 29, at end insert—
“(4) Section 255 of the Sentencing Code is amended as follows.
(5) After subsection (2) insert—
“(3) The pre-sentence report must in the case of a serious terrorism offence under section 256(4)(b)(iii)—
(a) take account of the offender’s age;
(b) consider whether options other than an extension period of eight to ten years might be more effective at—
(i) reducing the risk of serious harm to members of the public, or
(ii) rehabilitating the offender.
(4) The court must take account of any points made by the pre-sentence report in relation to the matters in subsection (3).”
(6) The Secretary of State must at least once a year conduct and lay before Parliament a review of the effectiveness of the provisions of this section and their impact upon offenders.
(7) The report of the first review must be laid before Parliament within one year of this Act being passed.”.
The Chair
With this it will be convenient to discuss amendment 41, in clause 17, page 17, line 4, at end insert—
“(4) Section 267 of the Sentencing Code is amended as follows.
(5) After subsection (2) insert—
“(2A) The pre-sentence report must in the case of a serious terrorism offence under section 268(4)(b)(iii)—
(a) take account of the offender’s age;
(b) consider whether options other than an extension period of eight to ten years might be more effective at—
(i) reducing the risk of serious harm to members of the public, or
(ii) rehabilitating the offender.
(2B) The court must take account of any points made by the pre-sentence report in relation to the matters in subsection (2A).”
(6) The Secretary of State must at least once a year conduct and lay before Parliament a review of the effectiveness of the provisions of this section and their impact upon offenders.
(7) The report of the first review must be laid before Parliament within one year of this Act being passed.”.
Alex Cunningham
Amendments 40 and 41 serve a similar purpose to amendments 37, 45 and 46, which we debated earlier. Hon. Members will recollect that, such was our strength of feeling on the need for the age of young people to be taken into consideration in the pre-sentencing report, and then by the judge in deciding what type of sentence to impose, we put clause 37 to a vote. The decision to do so was strengthened by the Minister’s failure to justify his estimates of the numbers that would be caught by the new offences and, therefore, sentences. We talked about that earlier. He dismissed our earlier amendments by claiming that there would be only a handful of young people caught by the measures. However, as hon. Members will have heard, I addressed our concerns about the lack of evidence of the numbers when I spoke to amendment 39—though I think there is more evidence to come from the Minister on that topic.
Chris Philp
I must say, the shadow Minister has painted for me a truly horrifying picture, namely membership of the Liberal Democrats followed by crushing defeat at a general election. Let that be a lesson to anyone who, like my former hon. Friend the Member for East Surrey, considers anything so foolish as a move to the Liberal Democrats. Looking around this Committee, that is something we can all agree on.
The first question raised by these amendments is whether there is an option for an extension period other than eight to 10 years. I am looking at amendment 40 to clause 16(3)(b). The way the legislation is currently drafted allows the judge the discretion to choose the extension period—the licence period—of anything between one and 10 years. All that these clauses do is increase the maximum from eight years—as it is now—to 10 years, but that is not mandatory; the judge can choose to have an extension period as low as one year. The choice for judicial discretion that the shadow Minister is calling for already exists without the amendment. Instead of the choice being between one and eight years, as it is now, the choice will become between one and 10 years, as we propose, but judicial discretion will still exist.
The pre-sentence report that the amendment calls for will exist already. There is always a pre-sentence report for offences of this nature. In deciding what length of extension period is appropriate, the judge will already have due regard to that pre-sentence report. They will also have due regard to that pre-sentence report in making their finding, or otherwise, of dangerousness.
On the question of a review of how things are going, I certainly do not fear any sort of review after the event. We have a standing procedure that legislation should be reviewed after—I think, typically—three years, to see how it is functioning. I would expect this legislation, as other legislation, to be subject to that same scrutiny process. I am sure that no one in the House would be shy to propose changes if, in due course, anything appeared to be amiss.
On that basis, in particular the first two points—
Alex Cunningham
I realised that the Minister was getting to the point at which he would sit down, but I asked specifically for him to address the issue of how young people who have committed this type of offence will be accommodated on the estate. Can the fears expressed by many individuals be properly addressed?
Chris Philp
Such young people will not move on to the adult prison estate until they turn 21, so that immediately provides some reassurance, I hope. The more general point that the shadow Minister makes, and has made before—and our witnesses made—is on the importance of rehabilitation. They are points well made. We should not simply lock people up and throw away the key; even with such serious offenders, who will rightly spend a great deal of time in prison, we should work on rehabilitation.
Part of the additional resources announced in the September 2019 spending review and this year’s March Budget will go to Her Majesty’s Prison and Probation Service. I have spoken to the Prisons and Probation Minister about young people, an issue that my hon. Friend the Member for Aylesbury has also raised with me, and it is an area where effort, focus and attention are being paid, and will be further in future. That point about rehabilitation is well made, but it is being addressed. I am sure it is a topic that Members will return to. I have forgotten whether this is an intervention or a speech, but on that basis, I politely and respectfully ask the shadow Minister to withdraw the amendments.
Alex Cunningham
It is lovely to have a guarantee from the Minister that no young person will end up in the adult estate—
Alex Cunningham
The Minister qualifies that by saying “under the age of 21”. I appreciate that, and I assume that the word “guarantee” can be applied in this particular circumstance, despite the fact that some of our witnesses were concerned that we do not have sufficient facilities within the system to house 18 to 21-year-olds and some even younger than that.
In an earlier debate, I believe on Tuesday, the Minister appeared to accept that the pre-sentence report regime could be improved. In fact, he made a commitment to speak to his colleagues in the Home Office, to see whether they might find ways to ensure that the pre-sentence report covers some of the issues that I raised in Committee. We have not heard from the Minister about that, but perhaps in a later speech we will.
Rob Butler (Aylesbury) (Con)
On that point, does the hon. Gentleman accept that standard practice in all pre-sentence reports is for the judge to consider not only the physical, chronological age, but maturity, so some of those concerns should, as a matter of course, be addressed?
Alex Cunningham
The hon. Gentleman has greater experience of this area than I do, and I bow to his superior knowledge, but the important thing is that we look carefully at the reports, in particular in relation to that cohort of young people, to ensure that every single opportunity is presented to the judge so that the judge gets the right answer. With that, although we will return to the issue of young people at a later stage, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Chris Philp
As we have discussed, the clause extends the maximum possible licence period for serious terrorist offenders aged under 18 when given an extended sentence of detention. It gives the courts the option to increase the maximum—I say maximum—extended licence period from eight to 10 years.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17
Increase in extension period for adult serious terrorism offenders aged under 21: England and Wales
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 17 has the same effect as the previous clause, but applies to offenders up to the age of 21. It does that by amending section 268(4) of the sentencing code.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18
Increase in extension period for serious terrorism offenders aged 21 or over: England and Wales
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 18 has the same effect—raising the maximum licence period to 10 years. This time it applies to offenders aged over 21 in England and Wales, and it makes that change by amending section 281(4) of the sentencing code.
Question put and agreed to.
Clause 18 accordingly ordered to stand part of the Bill.
Clause 19
Additional terrorism offences attracting extended sentence: Scotland
Question proposed, That the clause stand part of the Bill.
Chris Philp
The clause sets out a number of offences that will be included in the list of offences that are eligible for receiving an extended determinate sentence in Scotland, from the date of commencement. The offences to be included are terrorist offences with a maximum penalty of more than two years, which is specified in part 1 of schedule 5ZC, and non-terrorist offences carrying a maximum penalty of life, as specified in part 2 of that schedule, in cases where a terrorist connection has been found by the court under section 31 of the Counter-Terrorism Act 2008. It also applies to under-18s convicted of terrorist and terrorism-related offences in Scotland. The clause makes that change by amending section 210A(10) of the Criminal Procedure (Scotland) Act 1995 and inserts a schedule into that Act.
Alex Cunningham
We have talked a lot about numbers in this Committee. Will the Minister enlighten us on how many people will be caught up in these provisions?
Chris Philp
These provisions relate to Scotland. In order to avoid providing the Committee with erroneous information, it would be safest if I write to the hon. Gentleman with that information.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Schedule 5
Terrorism offences attracting extended sentence: Scotland
Question proposed, That the schedule be the Fifth schedule to the Bill.
Chris Philp
The schedule is consequential to the previous clause.
Question put and agreed to.
Schedule 5 accordingly agreed to.
Clause 20
Extended custodial sentences for serious terrorism offenders: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
The clause does two things. First, it adds all serious terrorism offences to the scope of the extended sentencing regime. Secondly, it increases the maximum extended licence period for those who receive an extended sentence for serious terrorism offences. I should say that the clause applies to Northern Ireland, and the clause essentially does the same thing as the previous few clauses on extended sentence length and adding some additional offences. That will ensure that there is a consistent approach across the United Kingdom in terms of both offences that are tracked and extended sentences—in the case of Northern Ireland, extended custodial sentences—and that the courts may impose up to a 10-year licence period, should they find that appropriate.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Clause 21
Offences attracting special custodial sentence for offenders of particular concern: England and Wales
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 21 substitutes schedule 6 to the Bill for schedule 13 of the sentencing code. It is designed to ensure that, in all circumstances, specified terrorist offenders will spend at least 12 months on licence following their release, even when they are released at the very end of their custodial sentence. It does that by updating the offences that attract a custodial sentence for offenders of particular concern in England and Wales—the so-called SOPC sentence. The updated schedule includes all terrorist offences that carry a maximum penalty of over two years, and it replaces the specified non-terrorist offences that can attract a SOPC when committed in a terrorist capacity with a clause that includes any offence that is determined to have a terrorist connection under section 69 of the sentencing code in the SOPC regime. The changes made to the clause are applicable to those who are convicted of an offence on or after the day on which that provision comes into force, which is the day after the Bill gains Royal Assent.
Adding those offences to the SOPC regime will mean that the court will now be required to impose such a sentence where extended determinate sentences have been considered but not imposed. All such offenders will no longer be eligible for a standard determinate sentence. That is because the time spent on licence—the Bill introduces a minimum of one year—is very important for rehabilitating offenders, as the shadow Minister has said, as well as for protecting the public.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Schedule 6
Offences attracting special custodial sentence for offenders of particular concern: England and Wales
Question proposed, That the schedule be the Sixth schedule to the Bill.
Chris Philp
It is consequential to the previous clause.
Question put and agreed to.
Schedule 6 accordingly agreed to.
Clause 22
Special custodial sentence for certain terrorist offenders aged under 18 at time
of offence: England and Wales
Question proposed, That the clause stand part of the Bill.
Chris Philp
These are relatively technical amendments. The purpose of Government amendment 16 is to apply the same period of rehabilitation to the new sentence for terrorist offenders of particular concern as that currently applied to sentences in respect of grave crimes under section 91 of the Powers of Criminal Courts (Sentencing) Act 2000. The rehabilitation period is specified in section 5 of that Act and varies depending on the length of sentence given. It begins on the day the sentence is completed, including any time spent on licence.
Government amendment 29 amends the statutory instruments referred to above in order to align the new special sentence of detention for terrorist offenders of particular concern for under-18s with sentences imposed under section 91 of the Powers of Criminal Courts (Sentencing) Act 2000. Those are the central amendments.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Can I just be clear? For certain offences, under-18s will be treated in exactly the same way as adults when being sentenced. If I have got that wrong, can the Minister please explain?
Chris Philp
No. The rehabilitation periods are different and lower for children—quite rightly, for the reasons we debated earlier. All we are doing is creating consistency between the rehabilitation period for adults who commit the various offences and the rehabilitation period for children who commit various offences. We are not making the rehabilitation period the same for children as it is for adults.
The purpose of clause 22 is to address a gap in sentencing options for those under 18 who commit a terrorism offence where custodial sentencing options are limited to a maximum two-year detention and training order, due to the offender not meeting the criteria required to impose long-term detention for offences punishable by less than 14 years in custody.
The new sentence ensures that those convicted of a terrorist offence—we are talking about the serious terrorist offences—spend a substantial period of time on licence to enable that very important rehabilitative work to be undertaken in the community, and to limit the risk that they may pose to the public. That will also ensure greater consistency between the approaches towards sentence and release for under-18s and adults, although under-18s will of course be typically serving shorter prison sentences.
Under the current framework, some terrorist offences can attract only a detention and training order of up to two years, with only half that being served in detention, or an extended determinate sentence where the child is considered dangerous and the sentence is at least four years. That is a consequence of the fixed-term sentences under section 91 of the Powers of Criminal Courts (Sentencing) Act 2000, and they are available only for specified offences. Terrorist offences are not a specified category.
As some terrorist offences carry a maximum sentence of less than 14 years, the only custodial sentencing option is therefore the detention and training order. Essentially, the clause fills the gap between those two sentences by creating the SOPC-type offence for under-18s. Of course, the length of sentence will be entirely a matter for the discretion of the judge, and the judge will have the pre-sentence report available in making that determination. As my hon. Friend the Member for Aylesbury said in his intervention, that pre-sentence report will include considerations regarding not just the offender’s chronological age but their mental maturity. Judges will of course continue to have discretion to ensure that they are balancing the offender’s maturity with the appropriate kind of sentence.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23
Terrorism sentence with fixed licence period: Scotland
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 23 operates in Scotland, and essentially ensures that there is always a fixed licence period of at least one year when someone is released, so that people are not released without any licence supervision afterwards. We have talked about the reasons: both to facilitate rehabilitation and to protect the public. The clause is given effect by the insertion of new section 205ZC into the Criminal Procedure (Scotland) Act 1995.
The Chair
The question is that clause 23 stand part of the Bill. As many as are of that opinion, say aye.
The Chair
To the contrary, no. I think the ayes have it, the ayes have it.
Question put and agreed to.
Clause 23 accordingly ordered to stand part of the Bill.
Schedule 7
Offences attracting terrorism sentence with fixed licence period: Scotland
Question proposed, That the schedule be the Seventh schedule to the Bill.
Chris Philp
Very diplomatic, Mr McCabe. Schedule 7 is consequential to the previous clause. It sets out the terrorist offences within the scope of the new terrorism sentence in Scotland, and will be inserted as schedule 5ZB to the Criminal Procedure (Scotland) Act 1995.
The Chair
The question is that schedule 7 be the Seventh schedule to the Bill. As many as are of that opinion, say aye.
The Chair
That’s certainly better. To the contrary, no. I think the ayes have it, the ayes have it.
Question put and agreed to.
Schedule 7 accordingly agreed to.
Clause 24
Terrorism sentence with fixed licence period: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
I thank the Committee for its rousing endorsement of the previous schedule.
The purpose of clause 24 is to make amendments to provide for a new terrorism sentence with a fixed licence period. This is necessary to ensure an approach consistent with Northern Irish law. The Treatment of Offenders Act (Northern Ireland) 1968 is amended to ensure that any offender may have the length of their terrorism sentence reduced by any relevant period spent in police detention or custody. There are further amendments, with broadly similar objectives, made to the Rehabilitation of Offenders (Northern Ireland) Order 1978, the Criminal Justice (Northern Ireland) Order 1996, the Sexual Offences Act 2003 and the Counter-Terrorism Act 2008.
More generally, clause 24 seeks to make amendments to terrorism sentences in Northern Ireland in a way that is consistent with the measures we have discussed already. The structure of sentences is a little different in Northern Ireland, hence the slight differences in this clause, but the offer is in effect that the minimal one-year licence period is the same as those discussed already for England, Wales and Scotland.
Question put and agreed to.
Clause 24 accordingly ordered to stand part of the Bill.
Clause 25
Corresponding provision under service law
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 25 introduces schedule 8, which makes the equivalent provisions under service law to certain sentencing provisions made by this part. It covers an equivalent of the serious terrorism sentence, including relevant term reductions for a guilty plea and for assistance to the prosecution, as we have discussed, as well as minimum term orders and provisions equivalent to those in clauses 8 and 9, and changes to the special custodial sentence for offenders of particular concern, including the creation of an equivalent sentence for youth offenders.
The clause is necessary to ensure that the provisions in this Bill, which strengthen counter-terrorism sentencing, are applied to all jurisdictions in the UK, including the armed forces.
Question put and agreed to.
Clause 25 accordingly ordered to stand part of the Bill.
Schedule 8
Corresponding provision about sentencing under service law
Question proposed, That the schedule be the Eighth schedule to the Bill.
Chris Philp
Schedule 8 and the two Government amendments are technical changes that relate to the application of this law to the services, which I mentioned in the previous clause.
Question put and agreed to.
Schedule 8 accordingly agreed to.
Clause 26
Increase in maximum sentences for certain terrorist offences
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 26 increases the maximum penalty for three terrorism offences, to ensure that the punishment properly reflects the seriousness of the crime involved. The three offences are: membership of a proscribed organisation, under section 11 of the Terrorism Act 2000; supporting a proscribed organisation, under section 12 of that Act; and attending a place used for terrorist training, under section 8 of that Act. In all three cases the maximum penalty applicable will be increased from 10 to 14 years.
It will, of course, remain a matter for the sentencing judge to decide on the appropriate sentence, but given how serious the offences are we feel it appropriate to give the court the ability to issue a sentence of up to 14 years if, on the basis of the evidence and the pre-sentence report, the judge sees fit.
Question put and agreed to.
Clause 26 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Tom Pursglove.)
Counter-Terrorism and Sentencing Bill (Sixth sitting)
Thursday 2nd July 2020
(4 years, 5 months ago)
Public Bill CommitteesRead Full debate Counter-Terrorism and Sentencing Bill 2019-21 View all Counter-Terrorism and Sentencing Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 2 July 2020 - (2 Jul 2020)
The Chair
I will make a few preliminary points. As usual, please switch electronic devices to silent, and teas and coffees are not allowed in the room. I remind the Committee of social distancing rules. The Hansard reporters would be grateful if Members sent any copies of their speaking notes to hansardnotes@parliament.uk.
Clause 27
Removal of early release for dangerous terrorist prisoners: England and Wales
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Justice (Chris Philp)
It is a great pleasure to serve once again under your chairmanship, Mr Robertson. The clause is the first clause in part 2 of the Bill, and is one of the most important sections. It removes the prospect of early release for the most dangerous terrorist offenders in England and Wales. The provision is central to the core aims of the Bill—namely, ensuring that the most dangerous offenders serve their full sentence, to reflect the serious nature of their crimes and to protect the public from them. Some of the recent terrible terrorist atrocities have powerfully demonstrated the awful consequences that can follow the early release of a terrorist offender who goes on to reoffend, sometimes with tragic and fatal effect.
The clause amends section 247A of the Criminal Justice Act 2003, under which relevant terrorist offenders are currently referred to the Parole Board at the two-thirds point of their custodial term, to be considered for discretionary early release. The clause would exclude a particular class of the most dangerous offenders from discretionary early release if they receive an extended determinate sentence; if that sentence is for a terrorist or terrorist-related offence; and if that offence carries a maximum penalty of life imprisonment. Only if those three conditions apply is the prospect of discretionary early released removed, and those offenders instead serve their full custodial terms.
This is an important measure to protect the public. The only way to be certain that someone will not reoffend is if they are in prison. Of course, after release, offenders who have served their full custodial term under the provisions of the clause will then be subject to the extended licence period that we discussed this morning, which can now be as long as 10 years. During the extended licence period, work on rehabilitation can continue and public protection can be maintained. It is not as if offenders are simply let out and we forget about them; the licence conditions and monitoring will be extremely important. On that basis, I commend the clause to the Committee.
Ruth Cadbury (Brentford and Isleworth) (Lab)
As the Minister said, the Bill brings a new facet to criminal justice by creating the serious terrorism sentence in an earlier clause but removing early release for those who prove to the Parole Board that they have been rehabilitated to the extent that they could be released from a custodial sentence.
As my right hon. Friend the Member for Tottenham (Mr Lammy) and other hon. Friends said on Second Reading, we do not oppose the changes, because they apply to the most serious offenders who pose the greatest risk to the public. However, as we heard from a number witnesses, the changes carry risks of which we should be cognisant following the adoption and implementation of the Bill. We all have experience of judicial processes and policies that have changed because of various Bills, and there has been regret because the unintended consequences were not considered fully at the time. I also have concerns that the clause applies to under-18s. That raises further issues, which my hon. Friend the Member for Stockton North has already covered, about the vulnerability of young offenders and also their ability to reform.
I draw the Committee’s attention to the note on the Bill that was published by Jonathan Hall, the Independent Reviewer of Terrorism Legislation. He also referred to this in his evidence to the Committee last week. His note stated:
“Firstly, to the extent that the possibility of early release acted as a spur to good behaviour and reform for offenders who are going to spend the longest time in custody, that has now gone…Secondly, the opportunity to understand current and future risk at Parole Board hearings has also been removed.”
I am not clear what has replaced it, notwithstanding that early release has been removed. What is the full process to replace the Parole Board to understand current and future risk? Jonathan Hall was also concerned that
“child terrorist offenders, whose risk may be considered most susceptible to change as they mature into adults, have lost the opportunity for early release.”
Of course, they will be in their 30s by the time they are released from custody.
Peter Dawson of the Prison Reform Trust told us that the Parole Board could release early, and he pointed out that more often than not the Parole Board does not release people early. He confirmed that it is an important part of identifying terrorist risk.
Jonathan Hall also said:
“The role of the Parole Board is quite an important part of identifying terrorist risk, and if you don’t have that role then you lose that insight.”––[Official Report, Counter-Terrorism and Sentencing Public Bill Committee, 25 June 2020; c. 12, Q20.]
We have also had evidence from witnesses saying that the opportunity for someone to prove that they have reformed—this is particularly true for young offenders—is removed by the changes made by the Bill.
I do not know how many Members have had a chance to look at their emails in the past couple of hours, but two and a half hours ago we received evidence from the Bar Council, which says that this clause needs to be scrutinised with particular care. It does not address many clauses, but it says that clause 27 “stands out”. It says:
“We would question how Clause 27 fits with the obligation placed on the court to have regard to the reform and rehabilitation of offenders when sentencing (s.57(2) of the Sentencing Code). This provision would not appear to be the subject of an exception to the s.57(2) obligation, in contrast with the express carve out from s.57(2) relating to the imposition of life sentences for specific terrorist offences (Clause 11).”
I return to Peter Dawson of the Prison Reform Trust, who said:
“The problem with denying all hope of release on a conditional basis by a judgment about whether the person can be released safely or not is that it denies hope and affects the whole of the prison sentence…The possibility of parole is essential to the process that reduces risk.”––[Official Report, Counter-Terrorism and Sentencing Public Bill Committee, 25 June 2020; c. 32, Q72.]
In its evidence, the Prison Officers Association described graphically what the loss of hope means for prison management and for the risk of violence against prison officers.
Rob Butler (Aylesbury) (Con)
Does the hon. Lady accept what Mr Fairhurst from the Prison Officers Association said in response to a question from me about the rehabilitation and deradicalisation programmes for terrorist offenders? He said that there needs to be a full review of those programmes, and they are exactly what one would hope would turn people around if they were to be released early. The clear sign at the moment is that they are not good enough to enable early release, so prisoners need to serve the full term in custody.
Ruth Cadbury
What the hon. Gentleman says would be fine if we had that review of the Prevent programme and the programmes in prison. As several of my colleagues have said, the Bill does not provide for a review of those processes, so we have one side without the other, and that is a cause of concern for me and some of the witnesses.
Alex Cunningham (Stockton North) (Lab)
Further to the matter that the hon. Member for Aylesbury just raised, do we have a commitment from the Government to undertake a full review of the methods that he described?
Ruth Cadbury
That is what I was going to say. I think there needs to be a review of this, as and when it is implemented.
Robert Courts (Witney) (Con)
The hon. Lady is quoting from the Bar Council. I want to make the Committee aware, in reference to my entry in the Register of Members’ Financial Interests, that I am a member of the Bar and have practised at the Bar of England and Wales.
Ruth Cadbury
The Bar Council is a very authoritative body that needs to be listened to when we are introducing legislation that affects issues such as sentencing.
On the POA point, Peter Dawson pointed out clearly, in relation to violence against prison officers, that when hope is lost and the atmosphere and the management of prisoners gets much more difficult, we have nowhere to move terrorist prisoners who are already in specialist separation centres. He said that removing hope of early release increases that risk. I would like the Government to commit to a review if the proposal is implemented in this way. Obviously, we support the motivation behind it.
I have one more question for the Minister. Might the option for this sentence, with the loss of early release, lead to unintended consequences in charging and sentencing? Would sentencers avoid it and impose a lesser sentence? I am sure that the Government do not intend that.
Chris Philp
Let me briefly respond to one or two of the points that the hon. Member for Brentford and Isleworth made. She referred to the fact that if the sentence is served in full, there obviously will not be a Parole Board assessment prior to release. She asked about the risk assessment that would take place. I asked Mr Fairhurst from the Prison Officers Association about that in our evidence session on Tuesday morning. Even where there is no Parole Board involvement because release is automatic, there are a whole load of other review and evaluation mechanisms that can be used—for example, multi-agency public protection arrangements, careful monitoring by the prison staff and prison governor, and involvement by the National Probation Service in preparation for the release point. With the example of the Streatham offender, those kinds of risk-assessment measures led to a security services team monitoring him, which obviously had the result that it did. That is an example, as Mr Fairhurst said in evidence, of the risk assessment process working very effectively. That is what we would expect to happen in cases in which release is automatic.
The hon. Lady also asked: what happens when hope is lost? What if a prisoner is in prison and there is no prospect of early release? Does that not mean that it will be hard to get them to behave well? I want to make some points in response. First, the vast majority of prisoners, who have committed a range of offences, way beyond terrorist ones, are serving standard determinate sentences and are released automatically—typically at the halfway point—without any Parole Board intervention. The vast majority are subject to automatic release at a particular point. The second risk, particularly in relation to terrorist offenders, is that of false compliance, if they think that by pretending to comply with the deradicalisation programme, they might get released early. That is not necessarily an entirely healthy incentive and we should be mindful of that possibility.
Chris Philp
The operative provisions of clause 28 are very similar—in fact, they are identical—to those in clause 27, except that they apply to Scotland. Practically, that is given effect by amending section 1AB of the Prisoners and Criminal Proceedings (Scotland) Act 1993. The substantive effect of this provision is exactly the same as that for clause 27, which we have just debated.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
Schedule 10 agreed to.
Clause 29
Further provision about release of terrorist prisoners: Scotland
Question proposed, That the clause stand part of the Bill.
Chris Philp
This is another consequential provision, which makes sure that the measure in clause 28 that we have just approved operates consistently in relation to the administration of licence periods for serious terrorism sentences and terrorism sentences for fixed licence periods in Scotland.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clause 30
Restricted eligibility for early release of terrorist prisoners: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 30 and the amendments to it essentially apply to Northern Ireland. Some months ago in Parliament, we debated the provisions to end the automatic early release of terrorist prisoners. Committee members will recall that at the time we did not apply those provisions to Northern Ireland. But having carefully considered, in particular, the European convention on human rights and common law retrospectivity provisions, we are now comfortable that those principles are not infringed by applying the Terrorist Offenders (Restriction of Early Release) Act 2020 provisions to Northern Ireland, and this clause does so.
Amendments 33 and 34 are consequential on those changes. Amendment 33 ensures that terrorist prisoners who will serve longer in custody as a result of the Bill are not released early for the purposes of deportation under the early removal scheme in Northern Ireland. That is a consequential point. Amendment 34 ensures, for offenders who will be newly eligible for parole commissioner-considered release through the provisions of this Bill in Northern Ireland, that that is done in accordance with the parole commissioners’ existing rules. That brings Northern Ireland fully into conformity with the rest of the United Kingdom.
Conor McGinn (St Helens North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. The main focus of my contribution to the Committee as the shadow Security Minister will be on part 3 of the Bill, but for reasons obvious even to the untrained ear, I have been asked to speak on some of the Northern Ireland aspects of the Bill.
May I crave your indulgence for a moment, Mr Robertson? While the Committee has been sitting, it has been announced that the largest ever law enforcement operation in the UK took place today. Operation Venetic has seen 746 arrests, with £54 million of criminal cash seized, along with 77 firearms and 2 tonnes of drugs. The whole Committee will want to pay tribute to Lynne Owens and the National Crime Agency and all the police forces involved in that fantastic operation. [Hon. Members: “Hear, hear.”]
I am always concerned when I hear Ministers talk about Northern Ireland being brought into “conformity” with the rest of the United Kingdom, because although it is an integral part of the Union, and that is indisputable under the terms of the various agreements that have been reached, it is not the same as other parts of the United Kingdom, particularly when it comes to measures relating to tackling terrorism, because there is a long history there that has evolved over how to address that, particularly when it comes to sentencing, rehabilitation and the particular licensing arrangements that there are.
I have had, as I know the Minister has had, extensive discussions with the Justice Minister in the Northern Ireland Executive on this clause in particular. We have tabled a new clause to ask for all the provisions to be reviewed, so I do not intend to speak on all the Northern Ireland measures contained herein until that is debated, but I did think it important to draw attention to this matter, particularly after discussions with Naomi Long on behalf of the Northern Ireland Executive.
There is real concern about the retrospective removal of the automatic right to release. The Justice Minister in the Department is very clear that that will require amendments to sentence-calculation processes and, critically, the power of the Department to refer cases to the parole commissioners and the powers of the commissioner to direct early release for offenders subject to determinate custodial sentences. The concerns can be condensed down to some key points.
The first is about—I was interested to hear what the Minister said about this—attracting legal challenge on ECHR-compatibility grounds. There is a belief in the Department of Justice in Northern Ireland that these measures will attract that. In addition, there is concern that the Department of Justice in Northern Ireland will be a respondent to any challenge that is made in the Northern Ireland High Court or subsequent proceedings in the Northern Ireland Court of Appeal, which could be a significant drain on its resources.
There is concern about the risk of destabilising the separated regime. The Committee might not be aware that paramilitary prisoners or those convicted of terrorist offences in Northern Ireland are separated. They are held in specific circumstances and subjected to specific programmes, on the basis of their perceived paramilitary affiliation.
Another worrying element is the potential increased risk to the safety of prison staff as a result of the reaction to these measures. In recent years we have seen David Black and Adrian Ismay, two prison officers in Northern Ireland, murdered by dissident republicans. That is something that we need to be very cognisant of: in making laws here, we have a direct impact on the people who we are asking to carry them out. They have to live in the community in Northern Ireland and face the threat that they, along with our brave police officers and the Police Service of Northern Ireland, do every day.
There is also a concern—shared by colleagues from the Democratic Unionist party as well as by the Justice Minister—that this has the potential to lead to currently serving terrorist offenders being released without licence supervision. It undermines the public protection arrangements currently in place and goes against the ethos and principles of the Northern Ireland sentencing framework. In taking these measures to avoid a cliff edge in England and Wales, we may inadvertently introduce a cliff edge to Northern Ireland that is mitigated by arrangements that are already in place there.
There was a more general concern about the erosion of the principle of judicial discretion to set appropriate custodial and licence periods. I thought it important that the Committee heard those concerns, because we, as the official Opposition, share some of them and want to work, as we always have done, in a bipartisan manner—not just on issues of national security, but on matters pertaining to Northern Ireland. It was important from that perspective and because we do not have Northern Ireland Members here to make those arguments. We do have, after years of painstaking effort by Governments of all hues, the restoration of the Executive, so it was important that the Minister of Justice for Northern Ireland—in addition to the influence she is bringing to bear in discussions with the Minister—had those concerns publicly recorded with the Committee.
Chris Philp
Let me briefly reply. I echo the hon. Member’s comments about the operations today. Our police and security services do fantastic work, and the huge operation today is an example of that work at its very best, so I join him in thanking them and congratulating them on the tremendous work they have done.
On Northern Ireland, the hon. Member is quite right: we are currently having detailed conversations with Naomi Long, the Justice Minister in Northern Ireland. As he says, it is very good news that the functioning Executive has been restored—it is good for Northern Ireland and good for us in Westminster to have a body that we can have dialogue with. Let me assure him that the dialogue is ongoing; it touches on many of the issues that he raised.
On the risk of legal challenge, the hon. Member will know that there has already been a legal challenge to the TORER Act that we passed back in February, and that is subject to a judgment that we await; I will therefore not comment on that any further. What I will say—in fact, I have said this to Naomi Long—is that we will certainly support the Northern Ireland Department of Justice in any litigation that it gets involved in. We have obviously done a great deal of work in preparing for that case; we would be happy to make that available and to support the Department in every way. We would not want it to be, as the hon. Member has suggested, burdened by having to defend cases. We will certainly stand with it and help practically with preparing for those cases, so that they do not unduly drain what I know are quite limited resources. I can give him a direct assurance on that. More generally, we are involved in detailed discussions, which are continuing.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Removal of early release for dangerous terrorist prisoners: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 31 simply makes the same provisions that we discussed in clause 27 for England and in clause 28 for Scotland, applicable also to Northern Ireland. I do not propose to go over those provisions again; they are in substance the same.
Question put and agreed to.
Clause 31 accordingly ordered to stand part of the Bill.
Clause 32
Polygraph licence conditions for terrorist offenders:
England and Wales
Kenny MacAskill (East Lothian) (SNP)
I beg to move amendment 48, in clause 32, page 28, line 22, at the end insert—
“(b) In subsection (1) at the end insert—
( ) The regulations under section 35(1) of the Counter-Terrorism and Sentencing Act 2020 must include provision that the following must not be used in evidence against the released person in any proceedings for an offence—
(a) any statement made by the released person while participating in a polygraph session, or
(b) any physiological reaction of the released person while being questioned in the course of a polygraph examination.”
This amendment ensures that the results of any polygraph test must not be disclosed for use in a criminal prosecution.
The Chair
With this it will be convenient to discuss the following:
Amendment 49, in clause 33, page 29, line 41, leave out “may” and insert “must”
This amendment ensures that the results of any polygraph test must not be disclosed for use in a criminal prosecution.
Amendment 50, in clause 34, page 31, line 13, leave out “may” and insert “must”
This amendment ensures that the results of any polygraph test must not be disclosed for use in a criminal prosecution.
Kenny MacAskill
It is a pleasure to serve under your chairmanship, Mr Robertson. Amendments 48, 49 and 50 were tabled in the name of Scottish National party Members but were put forward by the Law Society of Scotland, trying to achieve the best interests. That is obviously the position of the Government, but there is a distinctive legal jurisdiction. I know that yesterday the Prime Minister referred to the fact that there was no border between Scotland and England, but administratively and legally there most certainly is—the Minister has commented on that both today and yesterday.
Indeed, there is also the issue of polygraphs, which these amendments relate to. They are something that is currently unknown within the Scottish legal jurisdiction. They are something that, to be fair, the Scottish Government are sceptical about, but so are the legal profession and the judiciary. However, it is accepted that this is a reserved issue. It is a Government policy, and they are entitled to bring in that policy and it will have effect. Therefore, I think we are required to ensure that Scotland is able to deal with it adequately and appropriately.
These amendments are put forward on the basis of seeking to improve the legislation or seeking assurances from the Minister that the issues causing concern are being or will be dealt with. To be fair, the amendments are not simply tautological in any way; they are, in fact, a point of principle. We know that legislation is significant, and that the interpretation of words matters. It will produce a significant difference in the outcome, and it is not a matter that we can simply leave to a future court. In bringing the amendments forward, we seek clarification on the matters of concern. “Must”, as I say, is not tautological, in our view, but gives a clear indication that it is mandatory. “May”, while it may very well end up being the likely situation, certainly leaves it much more discretionary, even if it is not entirely absent.
As I say, the amendments were tabled on the basis of seeking clarification that Scotland will be able to act within the separate structures that we have, accepting the requirement and will of the Government, but that we take into account various issues and, in particular, the ability to protect the rights of the accused or, indeed, the released person in future issues that may come before them, to ensure that it is not counterproductive for them, and indeed that the system that we are operating is able to operate as efficiently as possible.
Alex Cunningham
We welcome this amendment in the name of the hon. Members of the Scottish National party, and we agree that the results of any polygraph must not be disclosed for use in a criminal matter. Put simply, they are far too unreliable to be used as evidence or an indicator of a person having committed a crime. We do not determine a verdict by the toss of a coin and Members will recollect the oral evidence given by Professor Acheson, who, in answer to a question about our operating regime for polygraph tests from the hon. Member for East Lothian, said:
“I must say I am not a great fan of the polygraph solution. Polygraphs are a very good way to demonstrate a physiological response to nervousness. Most people who take polygraphs are going to be nervous, so it is a very inexact science. I think it is probably slightly better than tossing a coin.”––[Official Report, Counter-terrorism and Sentencing Public Bill Committee, 30 June 2020; c. 80.]
We should not be using a method as unreliable as a polygraph to determine whether a person has committed a crime. So I join the hon. Member for East Lothian in asking the Minister to give assurances here and now that the use of polygraph testing for offenders released on licence will not become a stepping-stone towards the introduction of polygraph testing across the justice system.
As colleagues may have noticed, I have submitted a new clause on the issue of polygraphs so I shall reserve most of my comments for the stand part debate later today, but we do need some clarification and assurance that we are not moving in the direction of an unreliable method of fact-finding like polygraphs.
What knowledge and evidence do the Government have on the reliability of polygraph tests, and why are they intent on their use in this context? As Professor Acheson said in his oral evidence,
“Polygraphs are a very good way to demonstrate a physiological response to nervousness”—
I am aware that I am repeating myself—and I, for one, would certainly be nervous undertaking a polygraph even if I knew I had not committed a crime, which makes me question whether polygraphs provide anywhere near the necessary level of assurance. We need a much more robust system if we are to start making decisions around a person’s future. We are not entirely dismissive of the place of polygraphs or the potential role that they can play, but we would not want to see the burden of proof rely heavily, or even moderately, on a polygraph result.
I plan to go into further detail in later examination of the Bill, once we reach the new clauses, on the impact of polygraph licence conditions on those with protected characteristics. In the meantime, it would help if the Minister were able to clarify the Government’s position on polygraph tests, including plans for future use.
Miss Sarah Dines (Derbyshire Dales) (Con)
On a point of order, Mr Robertson. There was an unintentional mistake earlier, about Professor Acheson saying that the polygraph was only “slightly better” than the toss of a coin. Those who were here last week listening to the professor will remember—it is in the Hansard record at column 83—that I called him out on that. He said that I was “quite right” to do so and that it was a “useful” test. It is tricky, I know, when looking back on evidence on a hot afternoon. It was a mistake, I think.
Chris Philp
As we discussed in evidence last week, the Government—and the Committee—fully recognise that polygraph testing does not provide definitive information that meets a burden of proof that a court of law would expect to be met.
We did hear, however, compelling evidence from Professor Grubin that polygraphs provide a great deal of utility in two areas—first, in causing offenders being questioned while a polygraph is being applied to disclose more information than they otherwise would. He gave some compelling statistics, showing that a high proportion—from memory, something like two thirds—of offenders questioned with a polygraph being applied made a disclosure of information, which is a far higher figure than would ordinarily be the case. It is helpful to get people on licence to disclose information that is useful in working out whether their licence conditions are being adhered to.
Secondly, if a negative polygraph result follows in answer to particular questions, the principal consequence is further investigation by the probation service or, if appropriate, the police. Only if those further investigations yielded new evidence or new facts would further action follow. Polygraph evidence would never be admissible in a court of law, and there is no intention of that, because we heard clearly that although it is helpful, it is not definitive in a way that we would wish evidence submitted to a court of law to be definitive.
That approach is already enshrined in section 30 of the Offender Management Act 2007, expressly disallowing the admissibility of polygraph evidence in court, but it is also covered in the equivalent provisions made for the devolved Administrations in this Bill, particularly clause 33 in relation to Scotland and clause 34 in relation to Northern Ireland. The Bill and the law in general are clear about how polygraph evidence should be used.
On amendments 49 and 50, and the use of “may not” as opposed to “must not”, I think that the phrases have the same meaning. “We may not do something” means the same as “we must not do something”—it is an express prohibition. I am sure it is helpful to put my view of that on the record, and I hope that the Committee concurs. It is categoric that something that may not be used cannot be used, and must not be used in any circumstances.
In support of clause 32 standing part, this is a useful additional tool in the hands of the probation service. It is used already with sex offenders in England and Wales. Professor Grubin provided very informative evidence—certainly the most entertaining evidence that we heard during our earlier proceedings. He made a powerful case for the way in which polygraphs, used properly, carefully, with the right training and with acknowledgment of their limitations, add something to the monitoring process. Therefore I think it is appropriate to include the measures.
Kenny MacAskill
I am grateful for the Minister’s response. I am not going to debate “may” or “must”, which seems to be becoming a tautological argument. I am happy to accept the Minister’s assurance, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 6—Reports on polygraph licence conditions for terrorist offenders—
“(1) Before section 32 comes into force the Secretary of State must lay before Parliament a report in accordance with subsection (4).
(2) Before section 33 comes into force the Scottish Ministers must lay before the Scottish Parliament a report in accordance with subsection (4).
(3) Before section 34 comes into force the Department of Justice must lay before the Northern Ireland Assembly a report in accordance with subsection (4).
(4) The form of the reports is an analysis of the expected impact of the appropriate section of this Act on people with protected characteristics, including but not limited to—
(a) the impact on people from minority faith groups, including the numbers received into prison and the length of the sentence served;
(b) the impact on people from BAME communities, including the numbers received into prison and the length of the sentence served;
(c) the consequences of any disproportionate impact on people with protected characteristics on efforts by the prison authorities to rehabilitate prisoners convicted of terrorism offences; and
(d) the impact on people with physical and mental disabilities.
(5) No later than the anniversary of the appropriate section coming into force in each subsequent year, the Secretary of State, Scottish Ministers and Department of Justice must each lay a further report updating the analysis under subsection (4).”
Alex Cunningham
I want to address new clause 6, and will be brief as I have covered much of what I wanted to say with reference to the SNP amendments. I will do the same on clause 35.
The new clause is simple enough. It would build in safeguards for people with protected characteristics, which includes people from minority faith groups and the BAME community, including on the numbers received into prison and the length of the sentence served, by ensuring that the Government commission reports on the impact of the relevant provisions on the distinct groups. The report would also cover the consequences of any disproportionate impact on people with protected characteristics on prison authorities’ efforts to rehabilitate prisoners convicted of terrorism offences, as well as the impact on people with physical and mental disabilities.
We can all accept—and the evidence given to the Committee bears it out—that polygraph tests are far from being the holy grail in general, never mind when they are applied to the people covered by the amendment. It is worth noting that some of the evidence contained more detail. Professor Silke—I hope I will quote him correctly this time—was clear in his evidence. He said that there could be a role for polygraph tests, but discouraged Ministers from going headlong into a full roll-out:
“There are potential benefits to using polygraphs within an enhanced framework, recognising that they do have their limits. I support the calls that are being made, if polygraphs are being introduced, for running a pilot programme first before implementing them across the estate.”––[Official Report, Counter-Terrorism and Sentencing Public Bill Committee, 30 June 2020; c. 86, Q182.]
Rather than going full steam ahead and introducing a regime of polygraph testing for everyone in the category in question, will the Minister launch the pilot that Professor Silke and other witnesses favour? That would help to address some of the issues that I have been concerned about, and that I raise in the new clause.
The Minister will be pleased to hear that I shall not rehearse again the injustices against certain groups that sadly remain very much part of the justice system, but I ask him to be mindful of the reality and to recognise that data is critical if we are to overcome those injustices.
Chris Philp
I would say two things about a pilot. First, as I said before, polygraph use has been running for a number of years now for sex offenders in England and Wales, and it has been found to be useful. It is used quite widely around the world, as Professor Grubin mentioned in his evidence.
In particular, the use of polygraphs for monitoring licence conditions is designed first to prompt the disclosure of information and secondly to provide information that might be followed up. Bearing that in mind, I do not think that the biting effect of the polygraph findings is of sufficient severity to require further pilot work, particularly as the technique is used already.
As to BAME communities, that is something we debated at some length a short time ago, as the hon. Gentleman said, but I would observe that the application of the technique applies to everyone equally, regardless of colour and creed.
In relation to the review, there is a standing convention that legislation is reviewed three years after coming into effect. I am sure that the effectiveness of the provision will form part of such a future review.
Alex Cunningham
That is very helpful. I will not press the new clause.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clause 33
Polygraph licence conditions for terrorist offenders: Scotland
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 56, in clause 52, page 43, line 4, after “32” leave out “to” and insert “, 34 and”.
Amendment 57, in clause 52, page 43, line 4, at end insert—
“(3A) Section 33 comes into force on such day as Scottish Ministers may by regulations appoint.”
This would have the effect that provision in the Bill that relate to polygraph testing would only become operational if the Scottish Government asked for those provisions to be implemented.
Kenny MacAskill
Amendment 56 is procedural, and may well have been superseded. Amendment 57 is to do with the situation in Scotland, where we do not have any current regime for polygraphs. It has been put forward to introduce a trigger, because the numbers in the cohort referred to by the Minister are clearly going to be limited. Even during my tenure in Scotland, we had only a handful, because most of our terrorists—all but a few—have been paramilitary and Northern Ireland-related. On that basis, it may be appropriate to have a trigger and that the provision should be implemented as and when necessary, as opposed to setting up a regime that is not going to be used perhaps ever, but certainly not for a short period of time. That would give Scottish Ministers, and indeed the Scottish legal system, an opportunity to prepare.
Chris Philp
We recognise that, as the hon. Gentleman has said, there is no operation of polygraph currently in Scotland. In considering the commencement provisions, it is the clear intention of the UK Government to work extremely closely with the Scottish Government to determine when they are operationally ready to introduce polygraph testing into the toolkit that probation services have. We would not want to trigger implementation too early.
Over the past week or so, we have heard evidence showing the benefits that polygraph testing can bring. However, we are aware that time is needed to prepare operationally for those benefits to come into effect. Although we recognise that some elements of the implementation of this are devolved—as I say, we are going to work extremely closely with the Scottish Government on those—ultimately, provision for dealing with terrorism matters remains a reserved power of the UK Government, so it is appropriate that the commencement provision remains one that is exercised by the UK Government. However, I repeat my assurance to the hon. Member for East Lothian that we will work extremely closely with his colleagues in the Scottish Government—in particular those in the Justice Directorate, his old Department—to make sure nothing is done prematurely, or without being ready for it.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Polygraph licence conditions for terrorist offenders: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 34 essentially has the same operative effect as the clauses we have already discussed in relation to polygraphs, except in relation to Northern Ireland. For the benefit of anyone listening in Northern Ireland and that of the hon. Member for St Helens North, we will work very closely with Naomi Long and the Northern Ireland Government on this, in the same way that we will work very closely with the Scottish Government. We recognise that they are not doing this already, and before we commence the provisions, we will need to make sure that the Northern Ireland Government are operationally able and ready to use them.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Clause 35
Polygraph licence conditions in terrorism cases: supplementary provision
Kenny MacAskill
I beg to move amendment 51, in clause 35, page 33, line 8, after “State” insert
“after consulting with Scottish Ministers and the Department of Justice”.
This amendment requires the Secretary of State to consult with the Scottish Ministers and Northern Ireland Department of Justice when making regulations under clause 35(1).
The Chair
With this it will be convenient to discuss the following:
Amendment 52, in clause 35, page 33, line 12, after “State” insert
“after consulting with Scottish Ministers and the Department of Justice”.
This amendment requires the Secretary of State to consult with the Scottish Ministers and Northern Ireland Department of Justice when making regulations under clause 35(2).
Amendment 53, in clause 35, page 33, line 17, after “qualifications” insert “training”.
This amendment adds “training” to the list of contents in regulations made under clause 35(2).
Amendment 54, in clause 35, page 33, line 19, after “keeping” insert “and confidentiality”.
This amendment ensures that regulations under clause 35(2) include provision for confidentiality of polygraph records.
Amendment 55, in clause 35, page 33, line 43, after “State” insert
“after consulting with Scottish Ministers and the Department of Justice”.
This amendment ensures that approval by the Secretary of State of polygraph equipment under clause 35(7) should take place after consultation with the Scottish Ministers and the Northern Ireland Department of Justice.
Kenny MacAskill
The Minister commented on amendments 51 and 52 in his previous remarks, and we accept the grace with which his assurances have been given. The remaining amendments—53, 54 and 55—again seek some assurances. I will speak from my own experiences in Scotland, not regarding polygraphs because we have never had them, but about something that is akin in some ways: fingerprint testing and the fingerprint service.
Unlike some elements of forensic science such as DNA, it seems to me that polygraphs—as with fingerprints—are not a science, but an art. They are subject to interpretation, and mistakes can be made. During my tenure as Cabinet Secretary for Justice and my service in the Scottish Parliament before that, Scottish justice was turned on its head by a manifest injustice that came about because of an error in fingerprint identification. That error shamed Scottish justice and harmed a former serving police officer. It required us to review our fingerprint service from top to bottom, bringing in an eminent judge from Northern Ireland to address it.
Polygraph is not like a DNA test, which comes back with odds of 3 million to one. People are required to look at it and consider it. It is something relatively new, although it is operating in other jurisdictions. Who trains them? Who regulates them? Who ensures that they are kept up to speed? How do we ensure that those carrying it out are properly qualified, rather than someone seeking a fast buck? Some of this is in the drill-down detail. It may be something that has to be addressed. It is coming in.
I ask the Minister to take on board what I say, in an attempt to be helpful: some things are an art, not a science. Forensic science caused us huge difficulties in Scotland. To ensure that injustices do not arise and the service is as good as possible, we require some check against delivery, a method of regulation, an understanding of who can do it and a way of holding them to account.
Chris Philp
I thank the hon. Member for East Lothian for his comments. I wholly concur with what he said about the importance of training and carefully managing who conducts these tests and how they conduct them. In evidence, we heard from Professor Grubin in some detail of the critical importance of training. Without the proper training, method and the right questions, the entire process is essentially worthless and could potentially lead to false results. I accept the spirit of the hon. Gentleman’s comments.
To reassure the hon. Gentleman, in clause 35(3)(a) there is a reference to “other matters”. I explicitly assure him that that includes things such as training. The Secretary of State will address those matters in detail in the regulations, as they are addressed in the current regulations made under the existing legislation that applies to sex offenders. Identical or similar measures relating to training will be included in those regulations.
In relation to the question of confidentiality, which I have previously touched on, disclosure of any information obtained by polygraph testing will be shared only with governmental partners, particularly law enforcement agencies. It will not be disseminated or disclosed any more widely. I hope that assures the hon. Gentleman about the detail that the regulations made under clause 35 will go into. They will most certainly address the issues that he is properly raising.
Kenny MacAskill
I am happy to accept the Minister’s reassurances. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Alex Cunningham
Again, I will be brief. I am aware that an amendment that I have tabled cannot be selected for debate, so I am content to address clause 35 stand part instead.
We accept that polygraphs have their uses, albeit very limited. Most notably, we recognise that polygraph examinations have been used with some success in the management of sexual offenders since 2013 by the National Probation Service. The Minister spoke about that and convinced us that, for that reason, we do not need a pilot for the Bill.
However, as has been said over and again in the evidence sessions and in debate, they are far from 100% accurate. While they give an indication, when used in the right conditions, that can detect traits associated with lying, they are far from infallible. The Bill allows the Secretary of State to impose mandatory polygraph examinations on high-risk offenders who have been convicted of terrorist offences or offences related to terrorism. Specifically, it allows for mandatory polygraphs to be taken three months post release and every six months thereafter unless the test is failed, after which the offender would have to take them more regularly.
However, the Government seem shy of spelling out the detail of how their proposed regime will work, leaving it to secondary legislation in the shape of regulations, which are mentioned in subsection (9). I, for one, am always a little wary of the Government when they opt for that route.
The Minister needs to provide a robust explanation of why he does not want that detail in the Bill. Is it a case of having insufficient detail at this stage to work out exactly what he wants to achieve with polygraph testing, or does he share everyone else’s reservations about the application of the test? I hope that he will explain why there has to be a delay. I am sure that if the Minister looked at the legislation relating to the application of polygraph tests to sex offenders, he could cut and paste the wording, and tidy it up to suit this legislation, so there is no excuse for it not being in the Bill.
The Ministry of Justice has committed to a review of the value of polygraphing terrorist offenders and those convicted of offences related to terrorism after two years, which we very much welcome. However, as I said earlier, we would welcome that kind of commitment in the Bill, and a clear statement that people with protected characteristics will be covered specifically. It would help the Committee were the Minister to spell out how he expects such a review to be conducted, what he expects out of it, and whether he would adopt the need to achieve the specific things that I have spelled out.
I reiterate that Labour does not object to the use of polygraphs as set out in the Bill, but we should see the detail from the Government on exactly what they want to do. They ought to spell it out in the Bill. I hope that the Minister will reflect on that, and perhaps accept that it would be an easy job to cut and paste from the other legislation and to table an amendment on Report that provides the clarification we seek.
Chris Philp
The shadow Minister asks why we do not specify in the Bill the full detail about how the polygraphs will be used, and why that will be done in secondary legislation. Of course, that is extremely common. It is usual for matters of great detail to be done via secondary rather than primary legislation, in order to avoid, in the first instance, filling the Bill with a great deal of operational matters.
There is also the possibility that operational best practice may change in due course. If scientific evidence develops, or as practice evolves, there may be things that we could do differently or better. Clearly, if it was set out in primary legislation, it would take a great deal of time to change the detail. We would have to wait for a Bill to come before Parliament with the matter in scope, which could take some years. There are quite a few things that the Government have been wanting to do for a while, and we have been waiting three or four years for the right Bill to come along, including some in the Ministry of Justice. Of course, such changes can be made more deftly and more quickly by secondary legislation.
If the shadow Minister wants to see the sort of detail that he can expect, the existing regulations made under the 2007 Act to implement polygraph testing for sex offenders will give him a great deal of information. Obviously, we will study those very carefully when making regulations under clause 35. If he wants further detail, he can certainly find it in the existing regulations.
Question put and agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Clause 36
Release on licence of terrorist prisoners repatriated to the United Kingdom
Question proposed, That the clause stand part of the Bill.
Chris Philp
Clause 36 covers the release on licence of terrorist prisoners repatriated to the United Kingdom. The clause refers to schedule 11, which, as we shall discuss in a moment, sets out arrangements for the release on licence of terrorist prisoners repatriated to the United Kingdom, so that their release provisions are consistent with those sentenced in the United Kingdom. In essence, it extends the provisions that we have debated already to ensure that people who are repatriated to the UK are affected by those provisions just as much as people who were here when convicted and when serving their sentence. I am sure that everybody would agree that that kind of consistency is extremely welcome and extremely important.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Schedule 11
Release on licence of repatriated terrorist prisoners
Question proposed, That the schedule be the Eleventh schedule to the Bill.
Chris Philp
Schedule 11 gives effect to the clause 36 in a number of technical ways, which I do not propose to go through in detail. It ensures that the clause has practical effect in law.
Question put and agreed to.
Schedule 11 accordingly agreed to.
Ordered, That further consideration be now adjourned. —(Tom Pursglove.)
Written Statements
(4 years, 5 months ago)
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Celsa Steel
(4 years, 5 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I would like to update the House on a commercial agreement that the Government has concluded with Celsa Steel (UK) Ltd.
Since the start of the covid-19 pandemic, the Government have set out a far-reaching package of support to protect jobs and the UK economy. However, in exceptional circumstances, where a viable company of strategic importance has exhausted all other options available to it, the Government has said that we will consider bespoke support on a “last resort” basis.
There is an extremely high bar for making use of taxpayers’ money in this way, and any companies seeking support from the Government should do so only as an absolute last resort.
Such circumstances applied to Celsa, which is a key supplier to the construction industry.
While commercial confidentiality prevents me from setting out detail, I can assure the House that the Government have agreed terms that will protect taxpayers’ money and ensure that the financial burden is shared with the company’s shareholders and lenders.
The Government have agreed legally binding contractual conditions with Celsa on employment, climate change and tax. We have also put in place legally binding conditions on corporate governance, including restraints on executive pay and bonuses. We would expect any company seeking such support from the taxpayer to play their role in our society’s shared endeavours and challenges in the same way.
More broadly, the Government have already taken wide-ranging actions to support the UK steel industry, including more than £300 million in relief for electricity costs since 2013. We have also created public procurement guidelines with annual reports on the proportion of public sector steel bought from British companies, and details of a steel pipeline on national infrastructure projects worth around £500 million over the next decade.
This agreement achieves a positive outcome and secures over 1,000 jobs, including more than 800 positions at the company’s main sites in South Wales.
We want to praise the commitment of Celsa’s workforce and management. Our focus is now on working with all parties to secure the company’s future success, as well as ensuring that the loan is repaid and Celsa continue to deliver employment, climate change, corporate governance and tax commitments.
[HCWS332]
Contingencies Fund Advance
(4 years, 5 months ago)
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The Secretary of State for Digital, Culture, Media and Sport (Oliver Dowden)
The Department for Digital, Culture, Media and Sport has sought in its main estimate 2020-21—Central Government Supply Estimates, 2020-21, Main Supply Estimates, HC 293 published 4 May 2020—the resources, capital and cash it requires to operate for this financial year.
The funds associated with this estimate will not be released until the Supply and Appropriation Bill achieves Royal Assent later in the summer. The Department has therefore sought a contingencies fund advance which will be repaid once Royal Assent has been obtained.
Parliamentary approval for resources of £550,327,000 and capital of £41,808,000 has been sought in a main estimate for the Department for Digital, Culture, Media and Sport. Pending that approval, urgent expenditure estimated at £592,135,000 will be met by repayable cash advances from the Contingencies Fund.
[HCWS331]
Biometrics Commissioner Annual Report
(4 years, 5 months ago)
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The Minister for Crime and Policing (Kit Malthouse)
My noble Friend the Minister of State, Home Office (Baroness Williams of Trafford) has today made the following written ministerial statement:
I am pleased to announce that my right hon. Friend the Home Secretary is today publishing the sixth annual report of the Biometrics Commissioner, together with the Government’s response.
The Commissioner, Paul Wiles, is appointed under Section 20 of the Protection of Freedoms Act 2012. His responsibilities are:
to decide applications by the police for extended retention of DNA profiles and fingerprints from persons arrested for serious offences but not charged or convicted;
to keep under review national security determinations made by chief officers under which DNA profiles and fingerprints may be retained for national security purposes;
to exercise general oversight of police use of DNA samples, DNA profiles and fingerprints.
His report is a statutory requirement of section 21 of the Protection of Freedoms Act 2012.
I am grateful to Mr Wiles for this report, which we have published in full.
Copies of the report will be available from the Vote Office. The Government’s response will be placed in the Libraries of both Houses.
[HCWS330]
Local Government Funding: Covid-19
(4 years, 5 months ago)
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The Secretary of State for Housing, Communities and Local Government (Robert Jenrick)
I wish to set out to the House the further measures this Government are putting in place so that local government can continue to fulfil its essential role in the national response to covid-19 and lead us through the next phase of recovery.
I said at the start of the pandemic that we would ensure local authorities have the resources they need. To do that, the Government have provided £27 billion to support local councils, businesses and communities; including £3.8 billion of support specifically for local authorities. This funding has allowed councils to deliver for their communities: including helping get rough sleepers off the streets, establishing our shielding programme, controlling infection in care homes and providing support for 800,000 small and medium-sized businesses.
The comprehensive plan I am announcing today demonstrates my commitment by ensuring that local councils have the certainty they need to manage their finances to the end of the financial year. The plan covers covid-related expenditure, income losses from sales, fees and charges, and irrecoverable tax losses.
Additional funding for spending pressures
We recognise the pressures on councils and our communities have not yet passed, and today I have announced a further £500 million to help ensure that councils have the money they need to meet costs in the coming months. I would like to thank councils for the financial information they have provided, and I will continue to work with my cabinet colleagues to monitor the pressures on the sector.
This award follows two previous rounds of grant allocations. The first was primarily focused on getting emergency support into adult social care. The second round addressed both expenditure pressures and income shortfalls. With the benefit of better data, we now plan to address income shortfalls separately to expenditure and so we have created a new formula for the additional £500 million. This formula will reflect the factors which the data returns have told us correlate most closely with expenditure, and will take account of population, deprivation and the way that service costs vary across the country. Details on allocations will be announced in due course.
Non-tax income
The pandemic has had an unprecedented impact on councils’ income from sales, fees and charges, for which they could not have planned. To help mitigate this, the Government are also introducing a co-payment scheme to compensate local authorities for relevant, irrecoverable losses in 2020-21. Under this scheme councils bear the first 5% of losses compared to their budgeted income—reflecting the fact these income sources are by their nature volatile from one year to the next—but the Government will support those worst affected by covering 75p in every pound of losses beyond this.
Irrecoverable tax losses
I am also committed to supporting the sector through an apportionment of irrecoverable council tax and business rates losses between central and local government, to be agreed at the spending review. I have announced today that the repayment of collection fund deficits arising in 2020-21, will be spread over the next three years rather than the usual period of a year, giving councils breathing space in setting budgets for next year.
Taken together, these measures will give local councils sufficient confidence to continue to deliver the services their communities rely on. Nevertheless, my Department will continue to work closely with councils to monitor the situation as it develops, and I will return to the House setting out any further measures necessary should a changing situation require it.
[HCWS333]
House of Lords
Arrangement of Business
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, 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.
Oral Questions will now commence. Please can those asking supplementary questions keep them short and confined to two points? I ask that Ministers’ answers are also brief.
Covid-19: Mental Health Services
(4 years, 5 months ago)
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Baroness Barker
To ask Her Majesty’s Government what steps they are taking to ensure that mental health services are available in (1) acute, and (2) community, care settings (a) during, and (b) after, the COVID-19 pandemic.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Bethell) (Con) [V]
My Lords, the mental health challenge of Covid is a serious matter, and I pay tribute to NHS mental health services in both acute and community care settings, which have remained opened for business throughout this time, including delivering support digitally, over the phone and, where possible, face to face. There are no plans to stand down that support after the peak of the pandemic and we remain committed to our NHS long-term plan ambitions for increasing mental health services in acute and community care settings.
Baroness Barker (LD) [V]
In July 2019, the Government committed £2.3 billion for services for 370,000 people with severe mental illness. Will the Minister give an undertaking that if, as expected, Covid-19 causes greater demand for mental health services, that money will be increased?
Lord Bethell [V]
My Lords, we are investigating the long-term implications on our services from Covid-19. We are engaging with counterparts across Whitehall and, if necessary, we will invest further money. However, the mental health impact of Covid is not clear yet, and we await the final implications of that.
The Lord Bishop of Coventry
My Lords, at least one of the churches in my diocese recently set up a mental well-being centre, providing support groups, a helpline and signposting to professional services. Has the Minister considered inviting churches and other faith communities, with their knowledge of, trust within and connections to the local community, including networks of young people, to participate in the response to the mental health needs caused by Covid-19?
Lord Bethell [V]
The right reverend Prelate makes a good point, and I thank very much indeed those from all faith groups who have provided important pastoral support during this difficult time. On a practical matter, the funding for the mental health projects from our £5 million fund has gone to 130 different charities through the coronavirus mental health response fund. We are assessing the impact of those and we look forward to the recommendations of the Mind and mental health consortia which are behind that fund.
Baroness Redfern (Con) [V]
Mental health community projects are supporting people during coronavirus, and the Government’s announcement in May of £5 million of additional funding marked the first round of funding to be allocated to the sector. When will the second wave of projects receive funding, and will that include extra training for staff and to recruit more to service the 24/7 helplines?
Lord Bethell [V]
I pay tribute to charities and other community projects which have contributed to a wide range of projects across mental health, learning disabilities, dementia, isolation, befriending, domestic abuse, women’s issues and BAME groups. As I mentioned earlier, the Mind and mental health consortia are making recommendations about the progress of the fund. I look forward to their recommendations and we will act on them wherever we can.
Baroness Greengross (CB) [V]
My Lords, one consequence of the pandemic has been increased rates of violence or harm against old, young and other vulnerable people. Increased pressure on people’s mental health during the lockdown will likely have contributed to that. Should the Government make it obligatory for threats of violence, which could be bravado but which could also be dangerous, to be reported to the police as well as to social services, and would such measures help reduce domestic and other forms of abuse and ensure early intervention when someone is having a serious mental health episode?
Lord Bethell [V]
My Lords, threats of violence under any circumstances are reprehensible, and those aimed at the old and the vulnerable are in a category of their own. It is up to the clinical judgment of those involved in social care to decide whether the involvement of the police is of benefit and worth. I would not want to apply a blanket ruling on that, but the noble Baroness makes an extremely important point, which we are constantly reviewing.
Baroness Blackstone (Ind Lab) [V]
My Lords, there is increasing evidence that the mental health of children and young people has been badly affected by the Covid-19 lockdown. Given that the provision of mental health services to this age group was already inadequate, why has progress in implementing plans in the Green Paper on child mental health been so poor, particularly in the rollout of child mental health teams? What steps will the Government now take to rectify that?
Lord Bethell [V]
The noble Baroness is likely correct that the epidemic has had a particular effect on children and young people. The evidence on this is not crystal clear, but that is the strong instinct of all those in the field. I personally welcome the reopening of schools, which will have a particularly beneficial effect on those children who at present are stuck at home and do not have the support of the school system. Mental health services for young people are part of our long-term plan, with the additional £2.3 billion of spending on mental health. Our ambitions in that area remain enormous.
Baroness Jolly (LD)
My Lords, the Mental Health Act is no longer fit for purpose. With outdated legislation, both children and adults are at risk while either at home or in a care setting. In the aftermath of the Covid epidemic, there is no time for delay. When should we expect a Bill here in Parliament? If that is not in the Minister’s brief today, would he write to me?
Lord Bethell [V]
My Lords, we remain committed to publishing a White Paper that will set out the Government’s response to Sir Simon Wessely’s independent review of the Mental Health Act 1983 and pave the way for reform of that Act. We will publish it as soon as possible. The Covid epidemic does nothing but incentivise us to move as quickly as possible on this.
The Earl of Sandwich (CB) [V]
My Lords, does the Minister share my concern that the data he kindly supplied in Written Answer HL5619 on 22 June shows an 11% increase in March in prescriptions for anti-depressants over the same month last year? Is he therefore considering urgent measures to increase the funding and availability of psychological therapies instead?
Lord Bethell [V]
My Lords, I am as concerned about the over-prescription of anti-depressants as the noble Earl and would much prefer people to take cognitive therapies than drugs wherever possible. As I mentioned earlier, we have invested in two major rounds of support for community groups to help those struggling with their mental health, and we are reviewing additional funding for those schemes. We will keep a careful eye on the prescription of anti-depressants, which we are all concerned about.
Baroness Thornton (Lab)
My Lords, health and social care workers battling through the coronavirus pandemic are paying a heavy mental and emotional toll and will continue to do so. Yet the current mental health support available is not adequate. Will the Government commit to appointing a new independent national well-being guardian to co-ordinate and oversee a proper mental health support package for all NHS and care staff?
Lord Bethell [V]
My Lords, the work on the NHS people plan continues during the epidemic and we look forward to making the first announcement on that shortly, which will cover many of the concerns of the noble Baroness. I also remind the House that, on 15 June, Public Health England unveiled its psychological first-aid training course, developed by PHE, which has proved extremely helpful, as has the confidential helpline that was unveiled on 8 April, which we continue to support.
Lord Rennard (LD) [V]
My Lords, people with diabetes are twice as likely to experience depression as those without, and a third of Covid-19 deaths in England are linked to people with diabetes. A survey by Diabetes UK shows that three-quarters of people with diabetes who have felt that they needed specialist mental health support cannot access it. How can the Government help to ensure that more people are tested for diabetes and that those with the condition receive comprehensive check-ups, including screening and support for mental health issues?
Lord Bethell [V]
My Lords, we are investing in new and additional diabetes testing arrangements. Testing is essential for the diagnosis and management of this affliction. The noble Lord is entirely right that the connection between Covid deaths and diabetes appears profound. It is a wake-up call for the whole country and puts a spotlight on the large amount of diabetes in the UK. We will unveil plans in the future for refocusing on this important public health issue.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, all supplementary questions have been asked, so we now move to the next Question.
Covid-19: High Street Retailers
(4 years, 5 months ago)
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Baroness Ritchie of Downpatrick
To ask Her Majesty’s Government what assessment they have made of the impact on high street retailers of the COVID-19 pandemic.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the global Covid-19 pandemic has resulted in unparalleled falls in retail sales and high-street footfall. We have provided unprecedented support to high-street businesses. Pubs, shops and hotels will pay no business rates for 12 months. Eligible retail, hospitality and leisure businesses have received cash grants of up to £25,000 and businesses that cannot pay their rent because of coronavirus will be protected from eviction.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, reports today suggest that more than 6,000 jobs were lost in one day in the retail sector. As we emerge from lockdown, we need a plan to regenerate and save retail jobs on our high streets. What further steps will the Government take, including a revamped city centre revitalisation programme and fiscal measures, to ensure that our high streets can thrive now and into the future?
Lord Callanan
The noble Baroness is right to highlight the extent of the challenge that we face. On 30 June, the Prime Minister announced a new deal which puts jobs and infrastructure at the centre of the Government’s economic growth strategy. This includes £900 million for a range of shovel-ready local growth projects in England, as well as £96 million to accelerate investment in town centres and high streets through the Towns Fund this year.
Lord Pickles (Con) [V]
My Lords, small avenues of shops close to town centres and in estates have always had a difficult trading environment, but the lockdown has demonstrated their importance to community cohesion. They offer the opportunity to shop locally, a bulwark against panic buying and a promise of normality. In view of these important community assets, what plans do the Government have to protect these assets and enhance them?
Lord Callanan
My noble friend is absolutely right to highlight the important role that many of these local shops play in our communities. As I said in the previous answer, we have announced £96 million to accelerate investment in town centres through the Towns Fund. This will provide all the towns selected with between £500,000 and £1 million that they can spend on local initiatives to help their areas.
Lord Kilclooney (CB)
My Lords, I declare an interest in a retail unit in the Royal Avenue, Belfast, and in 10 other town centres in Northern Ireland. The Government are to be congratulated on their furlough scheme, which has been of great assistance to retailers and, consistent with health advice, the reopening of hospitality and shops is welcomed. But can the Minister make it clear to us whether any consideration is being given to the reduction of VAT and, secondly, the return of staff to offices in our town centres in Northern Ireland and the United Kingdom, because that would certainly increase footfall in town centres?
Lord Callanan
I thank the noble Lord for his supportive comments. He will of course understand that I cannot make any commitments on what the Chancellor may or may not do in his next announcements.
Lord Allen of Kensington (Lab) [V]
My Lords, in a week that has seen the loss of tens of thousands of jobs, as the noble Baroness, Lady Ritchie, said, to the high street, the Government keep mentioning CBIL and CLBIL schemes, which are clearly welcome. However, a number of large retailers I speak to are being denied access to these funds because of the way that EU state aid rules are being applied. When will the Government get the European Commission to change the way it determines an undertaking of difficulty, so that we can ensure that we do not lose further retailers, employers and jobs on the high street?
Lord Callanan
The noble Lord raises an important point. The CBIL scheme has been unprecedented and extremely successful. We are aware of difficulties that some companies have in accessing it, for various reasons to do with either problems with the bank or the state aid rules. We are urgently looking at this problem.
Baroness Thornhill (LD)
High streets were in decline before Covid-19. In fact, the House of Commons report on high streets and town centres last year talked of significant reform in planning and taxation policy, including the options of an online sales tax and reforms to business rates. While the money the Minister has outlined is clearly welcomed and valued, can he assure us that this fundamental, significant work is still being carried on, because this is where the future success of the high street really lies?
Lord Callanan
The noble Baroness raises an important point. We announced a review of the business rates system, which is ongoing, and I am sure we will have more to say on that shortly.
Lord Naseby (Con) [V]
Retail is facing a complete revolution with the move to online, added to which there is a fear factor among consumers against spending at the moment. Should we not, first, ditch the “Stay at Home” message and get everybody back to work? To take one example, why cannot the beauty sector go back to work? It has 200,000 female employees, and what honestly is the difference between them and hairdressers? Indeed, while we are about it, why not allow physiotherapists to open, too? Does not the Minister think that it is time to trust all retailers, so that they can make the decision to open safely, within the boundaries that we have set?
Lord Callanan
My noble friend is right to highlight these issues. I can only tell him that we have studied the health advice very carefully: we are following the scientific advice from Public Health England and others. It is our wish to get every sector reopened as soon as possible, but he will understand that we need to do that as safely as possible.
Lord Eames (CB) [V]
My Lords, some of the hardest hit are small retailers in country and sparsely populated areas, and many of them are in Northern Ireland. What consideration have the Government given to such particular cases of hardship?
Lord Callanan
We recognise the vital role played by retailers operating in sparsely populated and isolated areas in the UK, including those in Northern Ireland. As I said, they have benefited from cash grants of up to £25,000, for rateable values of between £15,000 and £51,000. Many rural retailers have also benefited from the business rates holiday, and the doubling of the small business rate relief and changes to thresholds, but we keep these matters under constant review.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, does the Minister agree that we face a fundamental change in behaviour? The survey figures for future use of the high street make grim reading, with data pointing to a near halving of physical visits post pandemic. What plans do the Government have to anticipate this new normal?
Lord Callanan
The noble Lord is right to highlight the difficulties that many retailers are facing. There has been a big shift to online retailing as well—of course, many high street retailers do both—but we need to keep these matters under review. The high street is vital to many local communities, so we want to offer them as much support as possible.
Lord Shipley (LD) [V]
My Lords, does the Minister agree that a high street business rates system based on open market rental value is no longer fit for purpose? When will the new system be introduced? Will it be in the next financial year, because it is urgently needed?
Lord Callanan
The terms of reference for the review were published on 11 March in the Budget. On 28 April, the Treasury set out the timelines for the tax policy consultations in the light of the crisis, and the call for evidence for this fundamental review will be published in the coming months.
Lord Randall of Uxbridge (Con) [V]
Does my noble friend agree that shopping locally, not online, helps not just those struggling retail businesses but the environment, by reducing transport emissions and excess packaging?
Lord Callanan
I can happily say that I agree with my noble friend on that matter.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, all supplementary questions have been asked, and we now move on to the next Question.
Ultra-processed Foods
(4 years, 5 months ago)
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Baroness Bennett of Manor Castle
To ask Her Majesty’s Government what plans they have to reduce the amount of ultra-processed foods available for purchase in the United Kingdom.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Bethell) (Con) [V]
My Lords, to address the consumption of food and drinks high in fat, sugar and salt, Public Health England oversees the sugar reduction and wider reformulation programme on behalf of the Government, as set out in the three chapters of the child obesity plan and the 2019 prevention Green Paper Advancing our Health: Prevention in the 2020s. In addition, the Government provide healthy eating advice through the Eatwell Guide, social marketing campaigns and food procurement and catering guidance.
Baroness Bennett of Manor Castle (GP) [V]
I thank the Minister for his Answer, but I am disappointed that he did not use the term “ultra-processed foods” in it, which represent 57% of the calories in the British diet. In the past couple of years, we have seen three studies which I shall quote from briefly. The first is from the US, which said that
“Ultra-processed foods cause excess calorie intake and weight gain.”
A French study states
“a 10% increase in intake results in a 14% increase in death,”
and a UK study says that
“a 10% increase in intake results in an 18% risk of increase in obesity in men.”
This is a relatively new area of science, but do the Government not understand that we have to acknowledge that these ultra-palatable foods that are designed not to satisfy have to be part of what the Prime Minister has said is going to be a new focus on tackling obesity?
Lord Bethell [V]
My Lords, the noble Baroness has made her point well. When the pandemic began, the national food strategy team were investigating the health risks associated with a diet heavy in ultra-processed foods. The team is in the process of restarting its work and will return to the question of ultra-processed foods in its final report, which it currently plans to publish over the winter.
Baroness Young of Old Scone (Lab) [V]
My Lords, the noble Baroness, Lady Bennett, has demonstrated that there is a bigger killer on the block than Covid, and that is ultra-processed foods. Covid has increased the focus on the need to reduce obesity and diabetes and to promote healthy eating, but we have run out of road on the kind of voluntary approaches that the Minister has just described. Will the Government now regulate for the rapid reformulations of ultra-processed foods? The responsible supermarkets want a regulated level playing field so that they can get on with helping us all avoid what is now the biggest cause of premature deaths: the consumption of ultra-processed foods.
Lord Bethell [V]
The noble Baroness is entirely right to say that Covid has focused our minds on obesity and the role of diet. However, voluntary approaches are necessary. We have to take people, industry and government with us. That is the core of our approach and it will remain our approach.
Baroness Walmsley (LD) [V]
My Lords, will the Prime Minister’s proposed obesity strategy include the full range of obesity services up to tier 4 in all areas, plus ensuring prevention measures such as calorie labelling, portion size, reformulation and the restriction of price promotions of HFSS foods? Will there be independent evaluation of the measures to be proposed?
Lord Bethell [V]
My Lords, it is not my role to pre-empt the Prime Minister’s strategy formulation, but the noble Baroness has articulated a very reasonable list of the potential measures. We are closely focused on this area. We are measuring ourselves keenly and our objectives are clearly laid out. The focus is on getting movement on this important area.
The Earl of Caithness (Con) [V]
My Lords, I hope that my noble friend the Minister is as saddened as I am that, in this country, we eat more ultra-processed foods than any other country in Europe. That is a shameful position to be in and clearly the government policy is not working. Would he consider discussing with his noble friend in the Treasury the introduction of VAT on ultra-processed foods?
Lord Bethell [V]
My Lords, I completely agree with my noble friend that Britain’s record on obesity and the diet that we as a country eat is not one that we can celebrate or be proud of. The sugar tax has proved a successful measure. It shows the Government’s determination to make progress in this area and, if necessary, to use fiscal means to do so.
Baroness Boycott (CB) [V]
My Lords, there is no doubt that HFSS foods are unhealthy, particularly for young children, who are showing such alarming rates of obesity. We also know that advertising works. However, recent research by Cancer Research UK shows that over half of all food adverts on TV during children’s peak viewing hours, 6 to 9, are for processed foods that are high in sugar and fat, while fewer than one in 15 are for fruit and vegetables. The consultation on whether the Government would introduce a nine o’clock watershed for such adverts was completed and delivered in June 2019. Can the Minister update the House on the progress of that consultation and tell us when we are likely to have the Government’s response?
Lord Bethell [V]
The noble Baroness is right to say that the consultation is an important one and we take it very seriously. Covid has been disruptive, but I reassure her that we will respond to the consultation on extending advertising restrictions as soon as we can.
Baroness Wheeler (Lab) [V]
My Lords, I will focus on food labelling. Does the Minister share my concern that it can be difficult to recognise ultra-processed foods in the supermarket? Even a sugary multicoloured breakfast cereal can state that it is a good source of fibre and is made with wholegrains. What consideration have the Government made of improving the food labelling process by adding the NOVA system of food classification, which divides the foods we buy into four groups ranging from unprocessed to ultra-processed? Would this not help to foster consumers’ awareness of how much processed food they and their families eat?
Lord Bethell [V]
My Lords, I agree completely with the noble Baroness that labelling is absolutely critical in this area. We have made huge progress already and it is eye-opening to study the labels on some foods. I agree with her that while some supermarket products can look healthy, they are often anything but. We continue to expand and improve our labelling arrangements and we are looking at the responses to the consultation and considering them carefully.
Baroness Bakewell of Hardington Mandeville (LD) [V]
My Lords, we have seen research showing a direct link between the rise in the incidence of diabetes and the consumption of highly processed foods. In the past, when such evidence on health of certain products has been produced, the Government took action to ban television advertising of them. Cigarette smoking is a prime example. Following on from the Minister’s response to the noble Baroness, Lady Boycott, can he say whether the Government will consider banning all television advertising that features ultra-processed foods?
Lord Bethell [V]
My Lords, the noble Baroness has made the point on smoking well. However, we have an issue in that there is no generally recognised agreement on the definition of ultra-processed foods. We are also conscious of the fact that we have to take the British public with us and that regulation and advertising bans on their own do not have the impact that we need to make. None the less, as the sugar tax has demonstrated, we are prepared to use regulatory and fiscal means if progress cannot be made, and we will maintain a review of this area.
Lord Whitty (Lab) [V]
My Lords, does the Minister recognise that the key players in the food system are the large producers, the large supermarkets and the big caterers? Between them they set the prices and standards for small producers and farmers as well as spending huge amounts of money on advertising ultra-processed foods, as the noble Baronesses, Lady Boycott and Lady Bakewell, have just said—20 or 30 times as much as they spend on advertising fresh fruit and veg. Given that the Minister is reluctant to go for an advertising ban, how do the Government propose to get these large companies to help to deliver a more balanced, affordable and nutritious diet rather than, to facilitate the reverse, as they do now?
Lord Bethell [V]
My Lords, I take some issue with the noble Lord’s demonisation of big companies and his characterisation that our food industry is dominated by a small number of them. Actually, the food industry in the UK is extremely diffuse and, when we consider regulation and advertising, we have to bear in mind that it is often the small producers, the small farmers and the small businesses which are affected by those measures. They have an effect on business, an effect on jobs and an effect on tax, so this is not a simple matter. That does not mean that we are not serious about the subject, but we have to bear in mind the effects on the entire supply chain, which includes many important British companies.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, the time allowed for this Question has elapsed.
Environmental Projects
(4 years, 5 months ago)
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Lord Randall of Uxbridge
To ask Her Majesty’s Government, further to the announcement of a New Deal for Britain by the Prime Minister on 30 June, what plans they have to ensure that environmental projects will be given priority in their economic growth strategy.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, as we recover from Covid-19, the Government intend to deliver a UK economy that is stronger, cleaner, more sustainable and more resilient. As the Prime Minister set out in his speech on Tuesday, we intend to
“build back better, build back greener, build back faster and to do that at the pace that this moment requires.”
The UK has shown that growing our economy and cutting emissions can be achieved at the same time.
Lord Randall of Uxbridge (Con) [V]
I welcome the Government’s determination to get the economy moving again, but perhaps my noble friend the Minister could reconfirm their commitment not to let new developments override environmental protections for habitats and species, including the great crested newt.
Lord Callanan
My noble friend makes a good point: we want to tackle delays in the planning system to support economic recovery, but that does not mean weakening our environmental protections. We can speed up developments while still maintaining the strong protection for the species he highlights, such as the great crested newt.
Lord Snape (Lab) [V]
Does the Minister share the widespread disappointment that, despite the Prime Minister’s green rhetoric on Tuesday, there was no mention of the Conservative Party’s manifesto commitment to spend around £9 billion on a countrywide house insulation scheme? Instead we have promises to spend around £100 million on new road schemes. Does the Minister agree that such schemes inevitably cause more pollution and congestion, are in no way helpful to cutting emissions and certainly do not assist the Government in meeting their published target of being carbon-neutral by 2030?
Lord Callanan
No, I do not agree with the noble Lord. Local road schemes can contribute to reducing congestion in many areas. We are still committed to our manifesto commitment of home insulation. The noble Lord will want to watch this space for further announcements.
Lord Rogan (UUP) [V]
My Lords, taken at face value I welcome the Prime Minister’s speech, in particular his commitment to accelerate projects
“to drive economic growth in all parts of the country”,
including Northern Ireland. I note that Mr Johnson also set his Government the goal of producing the world’s first zero-emission long-haul passenger plane. Can the Minister tell the House the timescale for this and whether there may be a prominent role for Bombardier’s Belfast plant in its design and manufacture?
Lord Callanan
I cannot give the noble Lord specific commitments on Bombardier’s role in this, but it is a world-class aeroplane manufacturer. This is an extremely optimistic long-term goal that the Prime Minister has set out, but we are totally committed to making progress towards it. It will be a tremendous achievement by Britain’s scientists and engineers when we achieve it.
Lord Robathan (Con) [V]
My Lords, there is a great deal to welcome in this policy, but I am concerned that any large development inevitably impacts on trees, ancient woodland, wildlife and biodiversity in general. Like my noble friend Lord Randall, I am concerned about some of the measures mentioned. The statement says that the Government will
“set out further measures as part of its green agenda”.
Can the Minister perhaps give us any pointers as to what these further measures might be?
Lord Callanan
My noble friend will understand that I cannot go into too many details on this until those announcements are made, but we believe we can get the balance right between protecting our environment on the one hand and cutting out many of the unnecessary delays in our planning system on the other.
Baroness Kramer (LD) [V]
My Lords, Germany has just announced €7 billion to drive forward a green hydrogen economy and France has just announced €8 billion to promote its electric car industry. By contrast, Boris Johnson reannounced just £40 million to create 3,000 green jobs. Why did the Prime Minister fail to commit the resources necessary for a green recovery from Covid? Can the Minister now commit to major new resources for energy conservation, especially home insulation, electric vehicles and a new hydrogen economy?
Lord Callanan
We are committing resources to all those issues. We are already investing up to £121 million in hydrogen innovation, supporting a range of projects exploring the potential of low-carbon hydrogen for use in heating and transport and the production of low-carbon hydrogen with CCUS and electrolysis technologies.
Baroness Hooper (Con)
My Lords, it is good to be back in the Chamber. Does my noble friend agree that all stimulus packages would benefit from a green sheen and that all the capital investment projects referred to by the Prime Minister—from schools to prisons to roads—could now take advantage of this opportunity to build a greener future? In this context, can he assure us that the British Overseas Territories, which contribute so much to our consequence in biodiversity terms, should not be forgotten when they apply for funding for environmental projects, especially as much of their previous green funding came from the European Union? Of course, many of these overseas territories could also contribute to the development of green finance, in which the City of London is leading the field.
Lord Callanan
I welcome my noble friend back to the Chamber. I agree with her that we are committed to building back better and greener. I am sure the overseas territories will have an important role to play in that, and of course we will consider requests for funding from them.
Lord Ravensdale (CB) [V]
My Lords, while the establishment of a Cabinet committee on climate change is welcome, we need to do more to embed climate consideration in policy-making across government and consider the systems nature of net-zero delivery. Will the Government consider establishing a cross-departmental body to oversee the delivery of net zero and mitigate the siloed thinking inherent in individual departmental responsibilities?
Lord Callanan
The noble Lord is correct: the net-zero challenge is fundamentally cross-cutting. That is why in the run-up to the COP 26 summit we will bring forward ambitious plans across key sectors of the economy, including an energy White Paper, a transport decarbonisation plan and a heat and building strategy. We need to avoid siloed thinking in government across these endeavours.
Lord Stevenson of Balmacara (Lab) [V]
My noble friend Lord Snape drew attention to the fact that the Prime Minister’s recent speech made no mention of plans to insulate homes, although this was a £9.2 billion spending commitment in the Conservative manifesto. The Committee on Climate Change noted recently that retrofitting insulation would be the most effective measure in the race to get to zero carbon. Of course, as we have acknowledged in previous exchanges, this would be an excellent and inexpensive new job creator. Has the manifesto pledge been abandoned?
Lord Callanan
We remain completely committed to taking all the necessary action to improve the energy efficiency of the UK’s buildings, delivering a UK economy that is stronger, cleaner, more sustainable and more resilient after the crisis.
Lord Taylor of Goss Moor (LD) [V]
I draw attention to my interests in sustainable development and renewables, as in the register. The Minister is aware that it is vastly more expensive to retrofit old homes than to build new ones to the right standards in the first place, but the new standards for homes—the elimination of gas, for example—will not come in until 2025. As part of the programme to get people back to work, would it not make sense to make sure that the homes we build are built to the highest standards in the first place and that those standards are brought forward using proven technologies, as some councils are already doing?
Lord Callanan
That is an important issue. We keep things such as the building regulations under constant review, but we need to proceed at a pace that the building industry can cope with and that consumers will accept.
Lord Bilimoria (CB) [V]
My Lords, we welcome the Prime Minister’s emphasis on promoting a green recovery in his “Build, build, build” speech. Will the Minister inform us whether the formation of the Green Investment Bank, launched in 2012 with £3 billion, was key to backing the offshore wind industry? It was sold to Macquarie in 2017. Will the Government form a new green investment bank? What about collaborating with countries such as India, which has set a target of 100 gigawatts of solar power by 2022 to lead the world in solar power? Should we partner with countries such as India?
Lord Callanan
The role of green finance is particularly important; it is one we are working closely on. The former Governor of the Bank of England is leading our efforts on that. Of course, we must partner with many other countries around the world. This is a global challenge and has to be addressed on a global level. India will play a crucial role, as will many other countries.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, the time allowed for this Question has elapsed.
Arrangement of Business
The Deputy Speaker (Lord Russell of Liverpool) (CB)
We now come to the first Motion in the name of the Senior Deputy Speaker. The Procedure Committee agreed that this type of business should be conducted as physical proceedings only, with no opportunity to participate virtually, other than by the mover, in this case, the Senior Deputy Speaker. There is no speakers’ list, but Members present in the Chamber are entitled to participate. The Procedure Committee guidance requests any Member intending to speak on such motions to give notice in advance. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.
Procedure Committee
The Senior Deputy Speaker
That the Report from the Select Committee Parliamentary Works Estimate Commission (2nd Report, HL Paper 46) be agreed to.
The Senior Deputy Speaker (Lord McFall of Alcluith) [V]
My Lords, the report makes a single, simple recommendation, to which I will briefly set out the background for the benefit of the House.
The Parliamentary Buildings (Restoration and Renewal) Act 2019, which established the Parliamentary Works Sponsor Body as an independent body, also requires the establishment of a separate statutory body called the Estimates Commission. This body will consider the Sponsor Body’s annual estimate and lay it before the House of Commons for approval, and it will assess the Sponsor Body’s own expenditure. The Estimates Commission will consist of four members: two from the House of Commons and two from the House of Lords. The report recommends that nominations should be made by the House of Lords Commission and approved by a resolution of the House. The report anticipates that I will be appointed to the Estimates Commission in an ex-officio capacity, and that I may make Written Statements and answer Written Questions on behalf of the Estimates Commission. If this motion is agreed to, consequential changes will be made to the Companion to the Standing Orders. I beg to move.
Secondary Legislation Scrutiny Committee
The Senior Deputy Speaker
Arrangement of Business
The Deputy Speaker (Lord Russell of Liverpool) (CB)
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. Please ensure that questions and answers are short.
Lammy Review
(4 years, 5 months ago)
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Lord Ponsonby of Shulbrede (Lab) [V]
My Lords, the Minister in the other place spoke about the progress the Government had made in implementing the recommendations of the Lammy review. However, my right honourable friend David Lammy spoke of a lack of trust, which is exacerbated when the Government claim to have implemented some of his recommendations when in fact they have not been implemented. Does the Minister agree that the outcomes of the report matter more than the outputs of the recommendations, and that the outcomes are getting worse, with 51% of children imprisoned now from BAME backgrounds, which is an increase from when David Lammy completed his review? Also, the proportion of stop and searches on BAME young people has increased since the report was published. Does the Minister agree that if the Government aim to build trust in the criminal justice system by the BAME community they need to start by being honest and straightforward about the recommendations that they have implemented from the Lammy review?
The Advocate-General for Scotland (Lord Keen of Elie) (Con) [V]
My Lords, we responded to the Lammy review by publishing in December 2017 our undertakings at implementation. Where a recommendation could not be implemented in full or as set out in the review, alternative approaches have been sought to achieve the same aim. We were clear then as to how we intended to proceed with implementation and we have been consistent and open in reporting against the actions we committed to take in a report in 2018, and more recently in a report of February 2020. We keep under review the report’s aims and make progress on a wide range of areas—indeed, in some areas beyond the Lammy recommendations. But I accept that there is a great deal more to do.
Lord Paddick (LD) [V]
My Lords, the Minister in the other place suggested that police stop and search has increased from 25% to 40% BME over five years because the police are taking action against knife crime. However, 60% of all stop and searches carried out by the police are for drugs and only 13% for weapons. The Lammy report requires agencies to explain or change. The explanation given for you being almost nine times more likely to be stopped and searched by the police if you are black than if you are white does not hold water. When will the Government require the police to change?
Lord Keen of Elie [V]
Clearly, these issues are under continuous review, but we have a particular concern over knife crime and we are bringing forward legislation on serious violence that will oblige responsible bodies in local areas to create a comprehensive plan tailored to their area. Stop and search is just one approach and we expect plans to be drawn up on a wider crime reduction basis.
Lord Ramsbotham (CB) [V]
My Lords, in 2000, Zahid Mubarek was murdered by a known racist psychopath in HMYOI Feltham. The case was eventually judicially reviewed by Mr Justice Keith. If more of his 78 recommendations for improving the treatment of BAME prisoners had been implemented, the Lammy review might not have been necessary. Can the noble and learned Lord please tell the House why the Ministry of Justice has been so dilatory in tackling known BAME issues?
Lord Keen of Elie [V]
My Lords, I do not accept that the MoJ has been dilatory in this respect. As the noble Lord’s question implicitly acknowledges, the Lammy review was necessary. We are still taking forward the recommendation on prisons and prisoners, in particular the position of BAME prisoners. Indeed, that is also reflected in the steps we have taken in recruitment.
The Lord Bishop of St Albans [V]
My Lords, one of the important ideas found in the Lammy report is the use of relative rate index analysis, which provides important data on the way decisions at various points of the criminal justice system take place. This is the sort of tool we will need if we are to address this deeply embedded problem. Will the noble and learned Lord tell the House whether this relative rate index analysis has been a repeated and whether the lessons are being implemented?
Lord Keen of Elie [V]
My Lords, the CPS in particular is fully committed to ensuring that its decisions are free from racial bias. In that context, it is currently investigating a limited number of offences where review showed evidence of disproportionality in charging. It continues with such quality assurance decisions to check for racial bias. However, there are considerable practical difficulties in pursuing this and the CPS has to act on material passed to it by the police. This has to be undertaken across the entire criminal justice system.
Baroness Browning (Con) [V]
When David Lammy was preparing his review, I held a meeting with him because he had identified within the BAME prison population a significant number of prisoners on the autism spectrum. Can my noble and learned friend tell me, particularly in respect of the functioning and fairness of prisons, how this group of people is being supported?
Lord Keen of Elie [V]
My Lords, clearly, support is given to those suffering mental health issues. Unfortunately, that reflects a large proportion of the prison population. I cannot give identified observations or information about the BAME community, as distinct from the prison community as a whole, regarding mental health, but I am confident that its members receive similar and suitable treatment.
Lord Griffiths of Burry Port (Lab) [V]
My Lords, we have heard ample reference to the fact that a number of aspects of the way racial minorities are treated in the justice system has simply got worse since the Lammy report, which is difficult to square with the assurance given by the Minister that so much is being done. Let me quote someone from the Government Benches: Mr Sajid Javid argues that it is time to shine a light on injustice, but that that is not enough. He says:
“We need an action plan … The Racial Disparity Audit found the data. The commission must deliver the solutions.”
The Runnymede Trust added that the Government are “knee-deep in evidence”. Can the Minister give us the assurance that a sense of urgency is being injected into this whole process? We have heard the same allegations over and over again since Scarman in 1981.
Lord Keen of Elie [V]
My Lords, we are committed to improving the collection and publication of data, and to using the data to identify and tackle disparities across the criminal justice system. We have been working very closely with the Race Disparity Unit since its formation in 2016, and we continue to add and update metrics on the ethnicity facts and figures website as part of our commitment to transparency.
Lord Sheikh (Con) [V]
My Lords, 41% of children in prisons are from the BAME community, and a large number of them are Muslims. About 15% of prisoners are Muslims, and in London, the figure is 27%. Some of those Muslims have been victimised by the staff. The custodial sentences imposed on those from BAME communities can be up to 10 years longer than those applied to white people—several lawyers have said this to me. There is an appalling lack of diversity in our judiciary, from the magistrates’ courts to the Supreme Court. Only 7% of judges are from BAME communities, and the figure for magistrates is 12%. Stop and search in BAME communities has risen by 69% for the last five years. I have been stopped by police for allegedly using a phone, which was not so. A sergeant then turned up and said that if there was any difference of opinion between me and his officer, he would believe the officer. I was appalled by the closing of ranks. I believe that I was picked upon because I was driving a Bentley coupé with a personalised number plate. Can the Minister comment on my points?
Lord Keen of Elie [V]
My Lords, we are of course concerned about ensuring visible diversity across the entire justice system. That is particularly challenging in the judiciary and magistracy, and we have introduced an education programme for those from backgrounds not properly represented to undertake training in order that they can apply. Further across the criminal justice system, I note that we have made progress. For example, with the Parole Board, there was grave underrepresentation of BAME members, but we reported in February this year that 53 independent members would join the board, 48% of whom are from a BAME background.
Arrangement of Business
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, proceedings will now commence. Some Members are here in the Chamber, 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.
Public Service Vehicles (Open Data) (England) Regulations 2020
(4 years, 5 months ago)
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Baroness Vere of Norbiton
That the draft Regulations laid before the House on 14 May be approved.
Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con) [V]
My Lords, these draft regulations are being made to provide new legislation to require the operators of local bus services across England outside London, including cross-border services, to openly publish data electronically about their services, including timetables, fares and location data.
For the benefit of noble Lords who may not be aware, open data is data that is published electronically, standardised, publicly discoverable and can be used by those who wish to do so without restrictions on its use and disclosure. Open data has transformed other sectors; for example, rail, where open data is feeding into customer-facing apps such as Trainline and National Rail Enquiries, and is simplifying journey planning and ticket purchase.
Bus open data will allow app developers to create applications, products and services for passengers so that they can plan journeys, find best-value tickets and receive real-time service updates. This is absolutely essential if we are to encourage the travelling public to use their local bus services and make the switch to public transport, which is vital to reducing congestion and improving air quality.
Since 2007, Transport for London—TfL—has made all its bus and transport network data freely available through the London Datastore. Currently more than half—51%—of all bus journeys are in London, with the remaining 49% across the rest of the country. A 2017 study by Deloitte exploring the value of TfL’s data found that open data was being used by 8,200 application developers to power 600 apps used by 42% of Londoners. This includes apps such as Citymapper and Bus Times London, which together were found to be delivering economic benefits of between £90 million and £130 million a year. These benefits came from travel time savings, additional journeys taken, reduced congestion and business innovation. Transport for West Midlands has also invested heavily to improve its public transport data in recent years. It has provided a single source for apps and journey planners across the region and is one of the few areas to report year-on-year growth of 7.8 million bus journeys, against a backdrop of continuing decline in bus passenger journeys elsewhere.
The statistics show that we can change how buses are perceived and attract new customers. This will be particularly important as we continue to recover and rebuild our services after lockdown. We will need to get people back on the buses when it is safe to do so, and if people feel that buses are not for them, we need to change that perception. As franchising is not yet in place in any local transport authority in England, except London, we believe that it is a vital part of the levelling-up agenda that we, as central government, regulate to require bus operators across England to openly publish data. We need to enable the provision of travel apps and services up and down the country.
These regulations will mean that any operator of a local bus service in England must publish its timetable, fares and location data to the bus open data service—which I will call BODS—before the service comes into operation and that changes to the data must be provided as updates. Data must be provided using legally mandated data standards and within set time periods. The consequences of not providing the data from the commercial perspective of the bus operator is lost revenue, and for passengers, it can be the difference between waiting at a bus stop for two minutes or 20 minutes. These new rules will be enforced by the Driver & Vehicle Standards Agency—DVSA—which will conduct checks of the bus open data service to ensure that any operator of a registered local bus service has published the required datasets.
I turn to the content of the SI. Where a local bus service is being operated in England an operator will be legally required to make freely available information about that service, including timetables, fares and location data, to comply with the Public Service Vehicles (Open Data) (England) Regulations 2020. Punctuality data will also be legally required, and local transport authorities will be legally responsible for maintaining data about bus stops and stations. It will be a civil offence for any operator of a service to be in breach of the requirements in the regulations.
The regulations will be commenced in a phased manner, with timetables and stop data requirements being enforceable from 31 December 2020, basic fares and location data from 7 January 2021, and complex fares from 7 January 2023. Breaches of the requirements by operators can be enforced under existing provisions in Section 155(1)(c) of the Transport Act 2000.
This draft instrument ensures that those operators which breach the new requirements may face financial penalties or the removal of their licence. Operators in England may face a fine of up to £550, and this sum can be multiplied by the number of vehicles operating under all the different licences held by that operator.
The policy area of public service vehicles open data is devolved with respect to Scotland, Wales and Northern Ireland, and Scotland and Wales are currently preparing equivalent legislation.
In summary, these regulations are essential to ensure that operators of local bus services across England are compelled to make freely available information to help passengers plan their journeys. The new bus open data requirements can be enforced for local bus services across England from 31 December this year. These rules are at the heart of improving the public transport experience, digitally transforming the bus sector, and the levelling-up agenda. I am sure that noble Lords share my desire to ensure that they can be fully enforced as soon as possible. I commend these draft regulations to the House and I beg to move.
Lord Bradshaw (LD) [V]
My Lords, I believe that what the Minister has said will broadly be welcomed by the bus industry. There is one question. The responsibility for making the information available should rest with the operator, and I believe there is some confusion about whether local transport authorities should be responsible. I think that responsibility for the registration of the route and the details should lie with the traffic commissioner.
I take this opportunity to remind the Minister that bus use outside London is still very low and much encouragement needs to be given to people to get back on the buses. In some places there are applications to expand city-centre car parking to cater for the extra cars on the road. It would be a pity if the message sent out is that you should not use the bus. It should be “Please use the bus”, because many operators—I can instance three—have got apps that tell you which journeys carry spare seats if you wish to use the bus.
Lord Lucas (Con) [V]
The Government are to be congratulated on these regulations. As the Minister said, they open the possibility of people creating comprehensive apps to enable bus travel to become as plannable and easy as train travel is currently. This will be a considerable advance as we look towards a multimodal, well-integrated, low-carbon transport future.
I would be grateful if my noble friend the Minister could enlarge a bit on how these regulations will apply to demand-led bus systems—those designed to meet patchy demand, going to places only when they are required to, having variable routes to meet demand—as are being developed by TfL in some places on the outskirts of London, and contemplated in other places. For locations such as Eastbourne, where I live, where there are diffuse, tortuous estates of nice houses with lots of gardens around them, full of old people, it is really difficult to maintain an economical bus system on the standard model of a timetable and fixed stops. Something much more flexible is needed, and I very much hope that these regulations will not impede that.
I hope that the regulations will also not impede the use of frequency-based services, where you have services based on timetables, to which the operators tend to be held and penalised if they do not keep to them. But if you want to encourage multimodal transport, and therefore to be able to drop a bicycle or a mobility scooter on to the back of a bus when needed, you need something where the operator is held to frequency and not to timetable, and I hope that that will fit within these regulations.
I also very much hope that my noble friend will allow me to quote her when I write to Nick Gibb, saying that if the Government are heading in this direction it is high time that we look at schools admissions information and enable open data for that in the way that we have done here.
The Earl of Clancarty (CB) [V]
My Lords, I welcome these regulations. I want to say a few words about apps.
I first came across the multimodal transport app Moovit a few years ago when visiting the Rhine-Ruhr area of Germany. I was amazed that it could predict quite a complicated journey involving a bus, a train and a tram, timed down to the nearest minute. I do not know Citymapper so well. Pre-Covid, going up to London by train, most people would be checking the train company’s own app. Ultimately, one would want to use a single app that covers the whole of the UK, rural areas included, and abroad as well. Certainly, this would be true for tourists.
Of course, these apps are only as good as the detail and accuracy of the information fed to them, although presentation, including the map used, is clearly important. My questions to the Minister are as follows. Will these data for buses, including GPS data, be supplied alongside all other public transport data in a freely available format appropriate for use by any multimodal transport app? What recourse does an app user have if information is found to be deficient, particularly in regard to rectifying data? If equivalent legislation is happening in Scotland and Wales, can the Minister assure us that the data supplied will be easily connectible between countries? The question ultimately begged is: how much of an integrated national transport network exists that will then make sense for passengers?
These apps strongly emphasise the network aspect of our transportation system; in other words, this is about not just a national bus strategy but a whole public transport network, of which buses and coaches are a significant part. What is particularly interesting about these apps is that they do not recognise a hierarchy of modes of transport. Everything is equal. The question is just how you get from A to B, although the user might take other factors into account. Where the network is weak, that will weaken the network as a whole, such as it exists.
Last year’s report by the Campaign for Better Transport found that 3,000 bus routes had been lost or been significantly reduced in the past 10 years, which is bad news if we are fighting to protect the environment as well as combat social isolation in rural areas. Due to the Government’s austerity measures, local authority funding of bus services has fallen by 40%, while central government funding over the same period has reduced by 19%. This is relevant to the regulations because, without services, there will be no data.
Therefore, I ask the Government not just whether they will reverse these cuts—on top of the financial aid necessary to maintain services during the Covid crisis—but whether they will use these data, or encourage local authorities to do so, to help identify holes and unreliability in the network, in particular with regard to town-centre congestion, which bus companies, whose drivers have been doing such an important and dangerous job in recent months, have limited control over in terms of scheduling.
Baroness Jones of Moulsecoomb (GP) [V]
A happy moment is when I can say that the Government are moving in the right direction towards a cleaner, greener and much healthier future. It is true that Transport for London has led the way on a lot of this innovation. It has been able to make travelling in London much easier, and during this period of coronavirus it is again moving forward on that front in London.
We definitely want people to use public transport more, and we want to reduce car use, simply because it clogs up our towns and city centres. Therefore, this is a very good move. It is a little late, coming many years after Transport for London did it, but at least it is happening. However, I have two questions for the Minister.
First, when will the Government insist that bus crash data is also part of the information that potential passengers can look up? In places where this is freely and readily available—not just by digging into the STATS19 of police forces and so on—and people can see on which bus routes and with which bus companies there are regular crashes, brake failures or even driver failures, they can make decisions, and the companies become safer, because they become aware of the problem.
Secondly, going cash-free is another big move that has made Transport for London bus services much more regular and reliable. Therefore, I am curious about when the Government will help the rest of the country become cashless, as it would help people to make greater use of public transport. In these days of coronavirus, we have become used to not using cash, so this would be a sensible next step.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I congratulate my noble friend on introducing these regulations, which I warmly welcome in principle. My questions concern how they will work in practice—in particular, in rural areas. My information is that 51% of all bus journeys take place in London, where, as my noble friend said, you might have to wait between two and 20 minutes for a bus. In rural areas, you might have to wait two hours, which is unacceptable. Is one reason for the need for the regulations that currently fewer than 50% of the 87 local authorities in England provide real-time information for the bus system and there is no national database for fares information?
Will the Minister also respond to my concern that most passengers who use rural buses are on concessionary fares? Concessionary fares are most welcome but, when they were rolled out from a local/regional system to a national system, this left many local authorities, including North Yorkshire and others, cash-strapped as they had more people willing to use the service from outside than were contributing to it in the area.
The Transport Secretary is custodian of this digital service. Can the Minister explain the implications of that and where this service will be publicly available? Does one have to use the app? I agree with the noble Earl, Lord Clancarty, that Movia, in Copenhagen, works very well indeed and provides information on not just buses but train connections. If, for example, you are connecting through York to the outlying villages, it is extremely important to know if your train is delayed as that might impact on the time the bus leaves.
Although I welcome the emphasis on buses, I think it realistic to say that the Government’s announcement on e-scooters will not bring any benefits to North Yorkshire. What are the cost implications for bus operators? Will there be any implications for local authorities, which are extremely cash-strapped, with very few staffing or financial reserves at the moment? Can the Minister put my mind at rest that these regulations will work as well in rural areas, where buses are few and far between, as they are currently deemed to do in urban areas such as London?
Lord Holmes of Richmond (Non-Afl) [V]
My Lords, I welcome these regulations and congratulate my noble friend the Minister on the clear and comprehensive manner in which she introduced them.
I salute all our frontline workers who have kept the bus fleet moving during the Covid crisis, putting themselves in harm’s way; we owe them all an enduring debt of thanks. I also send sincere condolences to the families of those who lost their lives while working to ensure that other key workers could get to work to look after those of us who have fallen sick as a result of the Covid-19 pandemic.
I very much welcome these regulations. The provision of clear, coherent, consistent real-time data will not only drive passengers on to the buses in a really positive way; as other noble Lords have commented, it could bring tech and innovation into this sector. When this service was introduced in London, for example, it added some 14,000,700 jobs to the local economy. Anyone who has been on a London bus will realise the benefits of this service, and of audio-visual announcements on buses. I commend all the drivers on my local 65 bus route—for those who are interested, it runs from Ealing to Kingston very regularly.
I wrote to my noble friend the Minister last year with a question—WQ 15588—about the provision of accessibility data within this system. She said that it was not possible to include such data at that stage of the rollout. Does she think that, a year later, the time is now right to do so? Providing that information would enable those who may otherwise be uncertain about using, or unable to use, the buses to do so. There is a potential market to consider, as well as the obvious question of inclusion. It could also increase innovation in the form of apps and technology solutions to support, enable and empower disabled people.
Finally, on a separate but allied note, can the Minister tell us what is happening at Bank Junction in the City of London, where currently, only buses are allowed through? This is appropriate to a certain extent, but will she look into enabling London-licensed black taxis to go through the junction? They have never been involved in a crash. For some people, particularly those with accessibility needs, a black taxi is not a luxury but a necessity to get to appointments in that part of the City.
Lord Blencathra (Con) [V]
My Lords, I join my noble friend Lord Holmes in paying tribute to those unsung heroes: the bus drivers, taxi drivers, lorry drivers and shelf-fillers who have kept the country going during Covid-19.
I totally support these regulations—they seem like a jolly good idea, creating a sort of Trainline.com for buses. My interest today is in what the Government will do with the information they collect. It seems that they will put all the information on a website, but will they develop any apps for users? According to my understanding of the regulations, anyone else can take that information and invent an app, so long as they credit the Government as the source of the data. Is that correct? Are there any circumstances in which the department might wish to develop its own app, albeit that that seems a risky policy these days? When does my noble friend the Minister expect the Government’s website service to start? Will the Government wait until they have every bit of information from every operator, or will they kick off when they have, say, 50%?
One can buy train tickets from the train company or from Trainline. Would there be any bar to an app provider selling bus tickets? With regard to the Secretary of State’s liability, I know that the app developer has to state that he accepts that the Secretary of State cannot guarantee the integrity and quality of the information, but will that hold up in court? We know that lawyers are now piling in by their thousands to sue over Covid-19, and to sue for any excuse. Could an app developer sue by alleging that the department was, say, too slow in putting timetable changes on to the website? Suppose an app provider breaches some of the conditions in Clause 16: what can the department do to stop him or strike down his app? I cannot see any provisions for that.
The review period is every five years. I suggest that the first review should be after two years, with subsequent reviews at five-yearly intervals.
Finally, I have a couple of asides, prompted by what the Minister has said. She said that missing a bus may result in a delay of 20 minutes, or two hours in Yorkshire. Up here in Cumbria, if you miss the bus you wait another seven days until the next one comes along. I am not surprised that 51% of UK buses are in London. Every day when I was in London, I would see hundreds of empty, diesel-polluting buses clogging the streets. The boast that there is a London bus every 12 minutes reminds us just how mollycoddled Londoners are and how much the rest of the country needs to be levelled up. That said, from what I saw of the carnage in Paris the last time I was there, I suppose that diesel buses will kill fewer people than the e-scooters when they start this weekend.
Baroness Randerson (LD) [V]
My Lords, the Bus Services Act 2017 gave the Government powers to require operators and transport authorities throughout England and outside London to publish, free of charge, a comprehensive set of data including fares, timetables, bus-stop location and real-time data on bus location, hence allowing expected arrival time. For some mystifying reason, some operators seem to believe that this sort of information is commercially confidential. So, these regulations are greatly to be welcomed.
If you travel by train, you take this type of information for granted. As the Minister pointed out, if you travel in London, you take the availability of this kind of bus information via an app for granted. It is regarded as an essential part of the efficient use of public transport in the capital city. Yet, most of England lags badly behind. This is yet another example of the major damage done to bus services by deregulation in 1985. To put that into perspective, that legislation was passed when I was a very young councillor on my first council committee. It is therefore in great need of modernisation. Deregulation opened up a gulf between the quality of bus services in London and the rest of the country, and the decline of bus services almost everywhere else has had major social and environmental implications.
I hope that the regulations may start to address these problems because passenger surveys consistently show that a lack of information is a substantial barrier to getting new customers on the buses. The Explanatory Memorandum reveals the extent of the problem. Despite the bus industry and local authorities having had three years’ notice that they would be required to provide this information, only 40 out of 87 local authorities currently do so. The EM refers even now to a “phased implementation”. The Minister gave us some dates. Are those dates are set in stone? Does she regard them as being soon enough? Can she foresee anything that that might delay further the introduction of these regulations? I am getting pretty impatient for progress, and that is what we need as a result of the regulations.
The 2017 Act was very modest and in many ways it was a missed opportunity, but, as I said, we are now three years on, and it is two years since the DfT’s own consultation on the detailed requirements for this data finished. The Explanatory Memorandum’s reference number suggests that that was written in 2018 as well. Where has it been all this time? Is it yet another casualty of the long Brexit saga? Unfortunately, it has finally made its way here at a very difficult time for expanding bus usage. I spent some time in the last 48 hours using public transport in London, and it was obvious to me that things cannot carry on like this for very long. It is important that everything possible is done to get people back on to the buses and tubes as soon as it is safe to do so.
Paragraph 13.3 of the Explanatory Memorandum refers to user research that was due to conclude this spring. Can the Minister confirm that that actually happened and was not interrupted by the pandemic?
Given the disparate nature of the bus industry and the financial plight of local authorities, I am glad to see that the Government have decided to bear some of the costs of processing this data. I also welcome the additional assistance to small operators, which tend to serve rural areas, where information on when the next bus is due is crucial. Various noble Lords have given an estimate of how long you wait in rural areas. I am aware that in many cases you can wait until the next day if you miss the bus, and sometimes you can wait until the next summer season.
I have a couple of other questions. The regulations apply to England only, but bus services go across the Wales-England border. Were there any discussions with the Senedd or the Welsh Government about the provision of information?
This could be a small revolution but only if potential bus users know how easy it will be to find information on their local bus services. Existing passengers will find out pretty quickly because bus companies will tell them about apps and further information, but buses need new passengers. What resources do the Government intend to put into raising public awareness of these regulations?
Lord Rosser (Lab) [V]
I thank the Minister for her explanation of the content and purpose of this draft order. I add my support to the words of the noble Lords, Lord Holmes of Richmond and Lord Blencathra, about the important role and work of staff in the bus industry, particularly during Covid-19.
As the Minister said, the Bus Services Act 2017 amended the Transport Act 2000 to provide for the Secretary of State to make regulations requiring bus operators and local transport authorities to make data available regarding timetables, fares, stopping places, vehicle location and the time at which buses arrive or are expected to arrive. Information on historic punctuality data is also included. These regulations now make that provision, to allow for the development of bus information applications for use on mobile and other devices to help passengers in England to make informed decisions about their journeys, although I suppose that in the current situation it is a moot point whether it is less a case of passengers wanting to find out where the buses are than the buses wanting to find out where the passengers are.
The objective of the regulations is to be achieved by requiring operators of local bus services, and local authorities outside Greater London, to make their bus data available, including on timetables, fares and location, through the Secretary of State. The Secretary of State will in turn publish it on a website for developers of bus information apps to access so that they can create applications, products and services for passengers’ mobile and other devices. As has been said, that already happens in Greater London for buses, and across the rail industry, enabling passengers to plan journeys, find the cheapest fares and obtain real-time service updates and information.
The Minister has already answered in her opening contribution some of the questions that I was going to ask so I will try to avoid repeating them, at least in some cases. She said that the order was essential to encourage the travelling public to use their local bus services and to make the switch to public transport, in order to reduce congestion and improve air quality. I know the Minister will acknowledge that more than the provisions of this order will be needed to get people back on to buses. So, in addition to this order, do the Government intend to provide bus operators and local authorities, including Transport for London, sufficient long-term assistance, particularly financial funding, to ensure that their income from running buses is maintained at at least at pre-Covid-19 levels until passengers return in sufficient numbers to achieve this objective without financial support? If that is not the Government’s intention, the anticipated and hoped-for favourable impact of this order on buses, which we support, will be somewhat diminished.
Under the order, any operator of a local bus service across England must publish its timetable, fares and location data for the bus open data service before that service comes into operation. The new rules will be enforced by the Driver & Vehicle Standards Agency, which will be able to conduct checks to ensure that the operator is complying. How will those checks be conducted and what form will they take? Will that require additional resources for the DVSA?
Punctuality data will also be legally required, and local transport authorities will be legally responsible for maintaining data about bus stops and stations. As has been said, the regulations will be brought in in phases: timetables and stop data requirements from the end of this year; basic fares and location data from early January; and complex fares from January 2023. Why is such a timescale deemed necessary in respect of complex fares? What is the definition of a complex fare? As far as the two much earlier deadlines are concerned, are the Government satisfied that these much shorter timescales can still be delivered in light of the disruption resulting from Covid-19?
The order does not appear to cover the provision at bus stops, as opposed to via mobile devices, of information for waiting passengers on when the next bus or next few buses will actually be arriving, on which routes and to what destinations. Is that the case? If so, what is the reason for that? Such information, where already available at bus stops, can be very useful for passengers who may not have any other means of finding out how long they will have to wait for their bus to arrive.
What growth in bus use are the provisions of this order expected to generate? Paragraph 12.1 of the Explanatory Memorandum refers to it being “assumed” that this will
“lead to increased bus patronage.”
There is also a reference, I think in the same paragraph, to greater profits for bus operators of £0.8 million to £5 million per year. What percentage increase in profits does that represent? Would it also mean a reduction in the level of subsidy that local authorities pay to operators for running local authority-subsidised services?
As I have indicated, we support the provision of more comprehensive information, including real-time information, about bus services to passengers. We hope that the order achieves its stated objectives.
Baroness Vere of Norbiton [V]
My Lords, I thank all noble Lords who have taken part in today’s short debate for their generally warm welcome for these regulations, and for the bus open data service as a whole. I will respond to as many points as I possibly can in the allotted time, but I will of course write on the points which—[Connection lost.]
Baroness Vere of Norbiton [V]
My Lords, my sincere apologies to the House for my poor internet—and I am in London.
As I was saying, these regulations have been subject to extensive consultation with the industry and local authorities. The noble Lord, Lord Bradshaw, noted that they are broadly welcomed by the industry, which I believe recognises the important consequences of these regulations. The noble Baroness, Lady Randerson, noted that there has been a formal consultation on these proposals. The Government published their response in January 2019, and it was decided that 2020 would be the transitional year for operators to start publishing their timetable data, and for the bus open data service to come into its own. It was therefore launched in beta on 28 January this year, so we have already seen companies getting involved and publishing their data, and that is a very good sign.
However, to meet the requirements of the regulations, operators need access to appropriate software to generate the data files and to create digital and data capabilities within their organisations. We realise that that can be a challenge, but bus operators have had many years to think about this, budget for it and upskill their workforce. The costs of doing this will vary by operator: some operators do much of it already and use it with their own apps.
The noble Baroness, Lady Jones of Moulsecoomb, asked why we have not done this earlier. One of the reasons why this has taken a little while to come in is the small operators. The bus sector is hugely diverse, from the very largest operators to the smallest, and it is the small operators that need the most support. We have been helping the sector make its way through these proposals and are focusing our support on the small operators. For example, the team within the department has created a timetable data creation tool, which allows these operators to submit their data in a standardised and easy fashion—we have done exactly the same for fares as well. We have also offered to host data for the small bus operators if they cannot host it themselves.
Given the potential impact of coronavirus on the bus industry, as noted by the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, it is the case that we may need to give certain operators breathing space if absolutely necessary, and if there are mitigating reasons, as we move towards the deadlines in the regulations. We will work with the traffic commissioners to adopt a lenient approach, and of course we will work with the bus operators to ensure that they can make progress as quickly as possible.
My noble friend Lord Blencathra asked whether the review of the regulations should be after two years instead of five. I do not think that two years would provide the sufficient timeframe to evaluate the impact of these regulations, particularly the benefits and outcomes that we anticipate. The post-implementation review, which may happen every five years, is often started after three to four years, as these things can take quite a long time to deliver and report on.
We expect to see an uplift in bus usage as a result of these regulations, based on our experience with TfL and with Transport for West Midlands. This might mean that existing services become more sustainable and would therefore need less support from the local authority. That local authority would then be able to direct its own resources on to other routes that are perhaps particularly vulnerable. It could lead to a shift in resources, which would be a good thing.
We have had lots of round-table meetings with app developers all the way through developing these proposals, to make sure that they are happy with what is happening. Given that some data has already been published, some app developers are already accessing it and putting it to good use. I reassure my noble friend Lord Blencathra that it is not the intention of the Government to get involved in transport app development at the current time. But what we will do—I think this is only fair—is require developers to acknowledge on their app that the information has been taken from the bus open data internet site. My noble friend also asked what would happen if an app developer breaches the conditions of use for the data. If they do that, the Secretary of State can switch off the app provider’s API key and restrict access to their account or close it down completely. They would then not be able to access the data at all, which is clearly quite a significant sanction.
With regard to any liability on the Secretary of State and a potential challenge in court as to the accuracy of the data and so on, the Secretary of State has made the information available and the data consumer —the app developer—has chosen to use it in accordance with the restrictions in Regulation 16. There is no contractual relationship between the Secretary of State and the app developer, therefore there is no liability created to the state.
The noble Lord, Lord Rosser, noted the provision of real-time data at bus stops. I agree with him that it can be really useful for people to see when their next bus is coming. This falls under the remit of local transport authorities, and although the data on BODS—the bus open data service—would support its widespread rollout, the issue is that the purchase and maintenance of screens can be prohibitively expensive, particularly at less frequently used bus stops. We will look into this further; it may well be that screens become cheaper over time and easier to maintain. It is something that we believe would benefit passengers.
I was very interested in the broader issues raised by the noble Earl, Lord Clancarty, and I will write with my reflections on them. App developers are already very good at taking data from lots of different datasets, collating it and then publishing it. We are in conversations with the devolved nations—Scotland and Wales—to ensure that we have equivalent data standards and that the data will be interoperable.
As apps develop further and become more mobile as a service, a more high-quality solution could allow the integration of different transport modes, so that passengers can plan an entire journey and eventually make a payment for a single journey across all different modes, if they can get agreement with the travel operators. I hope that we will move in that direction. This regulation will enable that, but in many cases we are not quite there yet; I hope we will be in the future.
One of the issues is the difference between complex and simple fares. At the moment, bus operators have no obligation to provide information about fares, except at the point of boarding. Even publishing the simplest fares will be a step forward. Bus fares can be hugely complicated. They can vary depending on the route taken, the duration of the journey, the type and number of passengers, whether a discount or a cap is applied and all sorts of other things. Therefore, establishing a digital standard for these complex fares will take some time, and that is why we have given ourselves the deadline of very early 2023 to establish it.
Rural areas are very important, as noted by my noble friend Lady McIntosh, and of course they do not have the sort of services that we have in London. The bus open data service will help passengers enormously in rural areas, because they will have real-time information. It is about giving rural communities the access to the same information as passengers in London. They will know if their bus is delayed, whether it is yet to turn up and how long they will have to wait at the bus stop, and they will be able to check that without even leaving home. For rural app development, we have made sure that the data is available in very developer-friendly formats, GTFS and GTFSRT—real-time—because we hope this will mean that the maximum number of app developers can come in and develop solutions for rural as well as urban areas.
My noble friend Lord Lucas mentioned demand-responsive systems, which are incredibly important. Flexible services are within the scope of the legislation, and hail and ride sections on fixed routes can already be represented and published. For demand-responsive transport, we will need a different dataset, which will require further development, but it is our intention to release this functionality in due course.
I am well aware of the commitment on information on accessibility mentioned by my noble friend Lord Holmes, and I would like to reassure him that we are considering how to provide accessibility data for vehicles and bus stops. The bus open data service has been designed to allow operators to provide some accessibility data, particularly about vehicles, and we will be encouraging operators to provide this information to the service. The information will also be very good for talking buses—accessible information on buses.
If I may take just a few more seconds, on enforcement, the noble Lord, Lord Rosser, mentioned the DVSA and what it will be doing. It will be checking that the data on the system matches what is happening on the ground, to make sure that practical provision is being matched with the data provided. Any resources needed will be scooped up as part of the annual work-planning process, but we will continue to monitor resource levels as these regulations come into force.
This Government are hugely supportive of the bus industry. Currently, we are supporting the majority of bus services in this country directly from government funding, because we recognise the important contribution they make. We also recognise that we will have to look at some sort of medium-term financial—and other—solution to bring the bus industry out of this current phase, back into recovery and out the other end.
We have committed £3 billion to the sector. We are working on how best we can invest that, both in zero-carbon solutions and supporting services across the country. Allied to that will be the national bus strategy, which will also discuss many of the issues outlined by noble Lords today, including demand-responsive transport, rural services, integration with other transport modes and all of that. Finally, we will be working with the industry on a very robust communications strategy. I share your Lordships’ concern that we will not get people back on buses. We have to get people back on buses, and we are committed to working on that. I commend the regulations to the House.
Arrangement of Business
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
Good afternoon, my Lords, proceedings will now commence. Some Members are here in the Chamber, 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.
Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020
(4 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the draft Regulations laid before the House on 4 June be approved.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the aim of this draft instrument is to limit the negative short-term impact on electricity suppliers of an unexpected increase in the costs of the contracts for difference—CfD—scheme as a result of measures introduced to reduce the spread of the novel coronavirus. Before outlining the provisions, I will briefly provide some context for the benefit of your Lordships.
The CfD scheme is the Government’s main mechanism for supporting new renewable electricity generation projects in Great Britain. The CfD is a 15-year contract between a renewable generator and the Low Carbon Contracts Company—LCCC—a government-owned company that manages CfDs and is at arm’s length from the Government.
Contracts are awarded in a series of competitive auctions that determine the strike price in pounds per megawatt hour that the generator will be paid for the electricity produced. Generators receive revenue from selling their electricity into the market as usual. However, when the market reference price of electricity is below the strike price, generators receive a top-up payment for the additional amount. Similarly, at times when the reference price is above the strike price, the generator pays the LCCC.
The LCCC is the designated CfD counterparty under Section 7 of the Energy Act 2013, and as such it has a power to collect payments from licensed electricity suppliers through the CfD supplier obligation to enable it to make CfD top-up payments to generators. This obligation comprises a daily interim rate levy paid on each megawatt hour of electricity supplied, plus a total reserve amount paid in the form of a lump sum at the start of each quarter to cover uncertainty.
Both rates are set by the LCCC three months ahead of each quarter, based on the LCCC’s forecasts of CfD payments and electricity demand. At the end of each quarter, the LCCC carries out a reconciliation of the amount owed by suppliers, based on the actual payments made to generators and amounts received from suppliers. The LCCC advised BEIS that, because of measures introduced to reduce the spread of coronavirus, it was anticipating a shortfall in funds required to pay CfD generators in the second quarter of this year, from April to June.
The LCCC had observed a sharp fall in electricity demand across the quarter, of around 13%, as a result of the lockdown. This would have meant a significant reduction in the amount collected from suppliers under the interim rate levy. There was also a significant fall in the wholesale price of electricity, which would lead to increased payments to CfD generators of £18.6 million higher than forecast. The combined effect of these unanticipated changes is a forecast shortfall of £121 million between the amount owed to CfD generators and the amount collected from suppliers under the interim rate levy.
To address the shortfall, the LCCC was considering an increase of between 22% and 35% in the interim levy rate part-way through the second quarter of this year. This would have been the first time such action was needed. Electricity suppliers would have faced an unexpected increase in their obligations at short notice and at a time when they were facing significant other pressures. Therefore, in line with efforts to support the economy in the light of the Covid-19 national emergency, the Government agreed to provide a loan of up to £100 million to the LCCC so that it could continue to pay CfD generators during the current quarter without increasing the financial burden on suppliers. The loan is governed by a separate agreement between BEIS and the LCCC and is not covered in this instrument.
Following consultation, the Government also announced that they intended to make changes to regulations to enable the LCCC to defer collection of the additional obligations covered by the loan to the second quarter of 2021. If regulations were not changed, suppliers would face a higher lump-sum payment to the LCCC this month, following the quarterly reconciliation exercise. This draft instrument makes four technical changes to the existing Contracts for Difference (Electricity Supplier Obligations) Regulations 2014 to implement the deferral.
First, it reduces each electricity supplier’s obligation in a quarterly obligation period by the amount of the financial assistance provided by the Government to the LCCC for that purpose, multiplied by each supplier’s market share in that quarter. Secondly, it increases each electricity supplier’s obligation four quarters later by the amount of financial assistance previously provided to the LCCC, multiplied by the supplier’s market share in that later quarter. Thirdly, it enables the LCCC to take into account anticipated receipt or repayment of financial assistance provided by the Government when setting the obligation for a quarter. Finally, it enables the LCCC to repay any financial assistance provided by the Government using moneys collected from electricity suppliers after the reconciliation process following the relevant quarterly obligation period. This deferral will give suppliers more time to prepare for the increase in payments. It provides greater confidence over the level of additional costs that they will face in the second quarter of 2021, enabling suppliers to price future tariffs with minimum cost risk.
I stress that the Government are committed to upholding the self-financing nature of levies in the energy system. The loan to the LCCC and the arrangements for deferring repayment are therefore envisaged to be a one-off response to the current exceptional circumstances arising from Covid-19. However, the mechanism in this instrument is not time-limited and could be used again in the future, if required. This would enable the Government to intervene quickly to ensure that CfD generators can continue to be paid, and burdens on suppliers could be deferred, if a similar exceptional event arose in the future. These legislative changes need to be made ahead of the LCCC’s quarterly reconciliation process that determines suppliers’ obligations for quarter 2 of this year. This is expected to take place on 9 July. Therefore, subject to the will of Parliament, this instrument will enter into force the day after it is made, and I commend these regulations to the House.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I thank the Minister most sincerely for his very helpful and comprehensive introduction, which enables me to be briefer than I had intended. I thank him also for his courtesy in asking us all in advance whether we had any questions.
I should say first, as a Scottish Peer, that I am very proud of the progress that we in Scotland have made with renewable energy electricity generation. Indeed, it is now reported that an equivalent of 90% of Scotland’s electricity consumption comes from renewable sources, representing an increase of 14% year on year. Despite some policy uncertainty over recent years, which has limited deployment, our 100% target for renewable power generation in 2020 looks as if it remains on track. I am sure that the Minister will agree that success with renewables, including solar, onshore and offshore wind, and tidal and thermal energy, will all be critical in demonstrating that we in the United Kingdom have shown leadership when we come to COP 26, which we look forward to hosting in Glasgow next year.
I have a couple of questions for the Minister. The explanatory statement to the instrument notes that there is opportunity for these regulations to be used in “similar exceptional circumstances” without the need for further secondary legislation or debate. Can the Minister inform the House what “similar exceptional circumstances” would look like in the future? In this event, would the Government commit to providing further loans to support the Low Carbon Contract Company?
Finally, since these regulations are temporary, my main question is how the Government will reassess these payments in a year’s time. With the current uncertainty in the market, the composition of the players involved may have altered in a year’s time, so I would find it really helpful if the Minister would tell us and help us to understand how they will secure future payments and whether this will mean redistributing them among new market formations. I look forward to hearing the Minister’s answer to these two questions in his reply to this debate.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, the government loan and delayed payback mechanism in this statutory instrument gives the electricity suppliers time to work unexpected higher charges through to customers. By delaying four quarters rather than three, the extra cost can be fed into the retail price cap to ensure that higher prices do not hit in the winter months. It is all very logical but, in the retail price cap, will any account be taken of the fact that it is not domestic energy consumption that dropped due to lockdown? Working from home, having children at home, extra cooking, baking, computer use and other household activity has led to increased consumption, and putting these levy-related costs on to domestic supply later on is retail picking up the tab for disruption in industrial consumption.
For those on low income, where fuel poverty is a serious matter, any rises are dreaded. What planning is being done for how the levy cost blip will be reflected in the price cap? Will the retail share of the levy blip be limited to cover, say, 30%, or whatever the 2019 domestic percentage of household electricity consumption is, and not the higher percentage that will probably happen in 2020 due to lockdown? Will it be reversed out of the baseline in later cap updates?
My back-of-envelope calculation for the spring quarter, based on the £100 million cap, has a possible maximum levy of around £125 million, over 28 million households and using 30% of total electricity. That share would come out at only about £1.50 per household for the quarter. Will that be the kind of maximum increase allowed? To some, even that is significant. Further loans are presently ruled out, but is it not the case that an elevated levy is likely in later quarters, as overall consumption and market prices remain depressed?
The Government said in their consultation that suppliers should absorb some of the costs, that being the reason for not giving 100% cover, and the payback will then be mutualised among suppliers extant in a year’s time—not least in case some go bust. Once the price rise comes in, all levy costs will surely be clawed back, but what will be the effect on consumers if some suppliers go under, including where there are advanced payments? Are those lost as unsecured creditors? Finally, have the consultation responses been published? I looked for them on the BEIS website but did not find them, and it is not really a public consultation without seeing the responses.
Lord Naseby (Con) [V]
My Lords, I welcome this SI and say well done to the Government for anticipating this need. If they had not done that, there could have been problems with the continuity and reliability of supply, and it is absolutely crucial at this difficult time that we do not go through any of the old problems we had in the past. As an aside, I recently had no telephone, no wi-fi and indeed no water supply, but thankfully they are all back on again now.
I have a few questions. First, what consultation was there with the key renewable companies over this arrangement and were any problems raised by them? Secondly, following the speech by the noble Baroness, Lady Bowles, does Ofgem fit into this anywhere? She is right in the sense that we know that, domestically, demand has gone up because everyone has been locked down and stuck at home, and we have all been using our computers far more than we would normally do. Thirdly, some might say that this action is undermining efficiency and making it a little too easy for companies that ought to be able to handle the toing and froing of challenges. However, maybe looking at the detail of the SI, the Minister will tell me that paragraph 7.5 of the Explanatory Memorandum answers that question.
What exactly is the estimated cost to the Government through this transitional loan? Presumably it is a cost of lost interest, and is that somehow rolled up at the end of the process? Finally, as someone who was a very junior Minister in Northern Ireland, I am not sure why Northern Ireland is not involved. Is it because Stormont was not sitting and this came under Stormont, or is the infrastructure in Northern Ireland different from the rest of the United Kingdom?
Baroness Sheehan (LD) [V]
My Lords, the only good thing to come out of the coronavirus lockdowns worldwide has been the biggest fall in energy demand in 70 years. That has had the fortunate effect that global energy-related carbon dioxide emissions in 2020 are set to fall nearly 8% to their lowest level in a decade. However, that reduced demand for energy means that the LCCC has a cash-flow problem. However, here is a remarkable statistic: renewables generated 47% of the UK’s energy in the first three months of this year.
While I do not oppose the Government’s plan to step in temporarily to ease the situation for energy suppliers, I wonder what discussions are taking place about other ways to smooth out the demand-and-supply mismatch that can sometimes occur with renewable sources of energy, given that we cannot control when the wind will blow. For example, the climate change committee’s progress report, published last week, stated that battery storage facilities need greater investment and development. If we had the ability to store power when it was produced in excess, the LCCC would be much less likely to be in a situation where the price of electricity went negative. Is investing in battery technology—a technology that is moving apace—under consideration?
Another way to smooth out supply and demand is to move energy around more efficiently—for example, through interconnectors. Can the Minister update the House as to when the Denmark-Britain cable will become operational?
Given the Prime Minister’s intention to lift restrictions on people’s movements to get the economy moving again, which will have the effect of gradually increasing demand for energy, was a more phased approach to clawing back the deferred payment considered?
Lastly, this is a Treasury intervention that will support energy suppliers, with the effect that consumers should be protected from energy price rises. Can the Minister confirm that that is indeed the case and that no supplier benefiting from deferred payments will increase energy prices for consumers?
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, these regulations seem to suggest a fundamental flaw in the way the Government are thinking about funding new energy generation. It looks as though the Government intend to tie us into tens of billions of pounds of these contracts over the coming years, for everything from new nuclear power stations to solar and wind energy. Contained in these contracts is a guarantee that energy payers will pay high energy prices whether or not the wholesale price is much, much lower, and whether or not we use much less energy. Surely the Government can see that that is a bad business practice. Why would a Conservative Government do something like this?
We have used less energy while in lockdown, and that has essentially bankrupted the Government’s whole energy-generation scheme; I understand that. As we embark on the rapid reduction in energy consumption that is necessary if we are to meet a net-zero carbon future, we will see the same thing happen again and again. However, for me this is a stealth tax. It will be deeply regressive, pushing the burden of costs on to the fuel-poor and disadvantaged while the wealthy will barely notice the difference.
For these very reasons, the Government should abandon this bankrupt contract system and instead bring their energy-generation and energy-efficiency schemes into normal government capital investment, to be funded by progressive taxation. Will the Minister comment on those ideas?
Baroness McIntosh of Pickering (Con) [V]
My Lords, I congratulate my noble friend the Minister on bringing forward these regulations for our consideration this afternoon. My first question is not dissimilar to that asked by the noble Baroness, Lady Bowles, and I am grateful to her for the research she has clearly put into that. Paragraph 7.1 of the Explanatory Memorandum states this fairly complicated payments procedure and says at the end:
“We expect that suppliers pass on the costs of these payments to their customers.”
As we know, while retail shops and business customers generally closed down, as they were told to do because of the Covid-19 virus—and it was absolutely right that they did so—that meant that everybody was working from home and the consumption of electricity and water went up incrementally. I am therefore concerned that this will be passed on to the domestic customer in what is a very grey area as regards transparency of payments.
Successive Governments have introduced renewable energy, and we as domestic customers pay handsomely for the privilege. However, the transparency of how we pay is indeed very opaque. Can my noble friend put my mind at rest as to how this increase will appear, and what role Ofcom will have in agreeing to this? Presumably Ofcom was consulted, and as the regulator it will have a view when it comes to sorting this out at the end of the next quarter or at the end of the financial year.
Finally, I do not quite understand the thinking behind why the agreement that the Government have entered into—between BEIS and the LCCC—is not part of our proceedings this afternoon. That would have been very helpful. I hope that my noble friend will agree to publish all the responses on the website, in the normal way.
Lord Holmes of Richmond (Non-Afl) [V]
My Lords, I congratulate my noble friend the Minister for the clarity and thoroughness of his introduction to these regulations. I also sincerely thank all those key workers in energy and power production, not least everyone at National Grid, who have kept the lights and the heat on through this Covid crisis, often putting themselves in harm’s way to ensure that everybody across the country has power.
I welcome the regs in the sense that they are necessary, given the current construction of the sector, but as other noble Lords have commented, there is an extraordinarily high level of complexity and opacity in the whole energy sector. Does my noble friend the Minister agree that it would be helpful to produce a clear chart showing the real price per kilowatt hour of energy, including everything, from whatever source that energy came?
I appreciate that this is somewhat off-piste, but perhaps my noble friend will indulge me: in this new future that we are embarking upon, does Hinkley C in any sense seem like something we should be doing? A technology unproven and unbuilt, a deal done at a strike price three times the strike price at the time—it was a bad deal then and it looks disastrous now. If he were offered that today, would he say “deal” or “no deal”?
Finally, what are the Government doing to address one of the most pernicious energy issues? Those on meters or pre-paid cards—those in our society who have the least—often find themselves paying the most. Does he agree with me that we still need to do so much to address this inequity?
Lord German (LD) [V]
My Lords, it is worth reminding ourselves that the purpose of the CfD is to incentivise investment in low-carbon electricity generation in the UK. I support the measures taken in this set of regulations, in so far as they avoid a large increase in suppliers’ payment obligations at this stage, thereby temporarily avoiding the inevitable passing on of those extra costs to the consumer or a reduction in the effectiveness and economic sustainability of those suppliers. However, we must see these regulations through the perspective of whether they will incentivise investment in low-carbon electricity generation.
As many noble Lords have said, these regulations imply a loan, which will have to be repaid. At present, that is envisaged for next year, although I note, as the Minister said, that it is not time limited. I suspect that he is not in a position to tell whether, if it is to be repeated, there will be an equivalent investment by the UK Government, putting money into the pot to make sure the books balance.
I want to consider the impacts on the generators’ side of the CfD, which are current as well. Can the Minister explain the impact of the changes that have arisen from the targeted charging review? The changes proposed will have an impact on the revenue stream of most low-carbon energy generators. Larger generators will miss out on transmission generation residual payments, which are currently equivalent to about £2.30 per megawatt hour. Once these TGR payments are reduced to zero, a wind farm bidding for a CfD will have to increase its bid by £2 per megawatt hour to ensure the same internal rate of return. This, in turn, will have an impact on new generation projects coming forward. Ofgem acknowledges the impact of the TGR on generators, stating:
“There is a risk that these changes could lead to the cancellation of some projects, including renewable generators which have been awarded CfD contracts”.
Can the Minister tell us whether these changes have been postponed? They would certainly affect the quarterly reconciliation process under the CfD, which determines obligations. In turn, that would mean a shortage of low-carbon generation to meet the Government’s targets. The regulations we are considering today acknowledge the urgency of ensuring that additional costs arising from the response to Covid-19 will not fall upon suppliers. But if the whole purpose of the CfD is to incentivise low-carbon electricity generation, these regulations must provide a temporary fix not just to one side of the equation; they must pay attention to the generation incentive as well.
Lord Kirkhope of Harrogate (Con) [V]
My Lords, the title of this statutory instrument is long and complex, but the issues are, I think, relatively simple. In order to encourage alternative or green suppliers of electricity, the levy on energy suppliers provides resources to support Contracts for Difference—or CfD—generators. So far so good. However, a combination of seasonal or weather-related issues plus Covid-19 issues has resulted in overall demand for electricity dipping substantially, creating a serious financial position for suppliers. Effectively, therefore, what is proposed is a loan of up to £100 million for the Low Carbon Contracts Company—the LCCC—so that the CfD generators can continue to receive the sums due under their respective contracts.
I therefore have several questions for my noble friend. First, I understand these government moneys are just loans that will be clawed back within a year. How are these loans to be secured and enforced, especially if the suppliers continue to have financial pressures? Secondly, to what extent should general energy prices have any effect in the next year? Are the contracts from the so-called difference auctions flexible in this regard? Does my noble friend understand that low energy prices give rise to the concern that the prices paid for the alternative suppliers are fixed at a much higher rate, especially if these low prices in the market continue, with a depressed economy, the Covid aftermath and resultant low demand?
Thirdly, the reference to “similar exceptional circumstances”, allowing these measures to continue without any further parliamentary scrutiny by even secondary legislation, concerns me. Definitions such as this are imprecise; we need to be sure that they are not used in respect of only slight changes in energy prices, usage or climate variations. Can my noble friend describe what “exceptional circumstances” means? As this measure postpones the levy payments only for a year, and as the costs are ultimately borne by the consumer, can he advise us of the likelihood of a fresh price cap following a new Ofgem determination?
As noble Lords know, as the dispenser of the levy, the LCCC is established as an independent body. I hope, therefore, that this intervention by the Treasury with these loan moneys—for no doubt very merit-worthy reasons—will not affect that longer-term independence which I believe is so vital in these overall energy relationships.
Lord Oates (LD)
My Lords, I thank the Minister for introducing the regulations so clearly. As my noble friends have indicated, on these Benches we recognise the need to bring forward these regulations in order to tackle the exceptional circumstances that coronavirus has given rise to. It is a reminder of how the pandemic has affected almost every aspect of life. I join the noble Lord, Lord Holmes of Richmond, in paying tribute to the front-line workers in the electricity industry who have worked so hard on our behalf to keep the lights on.
As my noble friend Lady Bowles highlighted, the issue here is not so much the need for these regulations, but how their consequences will work through the system —and indeed out of the system. I note that the impact statement at the end of the Explanatory Memorandum states that there
“is no, or no significant, impact on charities or voluntary bodies”
and that:
“The impact on business is expected to be positive and welcomed.”
The impact assessment also states:
“There is no or no significant impact on the public sector.”
It does not, however, address the potential impact on domestic consumers. Indeed, the only reference to consumers is in the section relating to the positive impact on business, in which the Explanatory Memorandum states:
“It will give electricity suppliers a high level of confidence over the additional costs they will incur for each unit of electricity”
and:
“This will enable suppliers to price the additional costs into consumer energy bills in advance with minimal cost risk.”
I am sure that will be encouraging and reassuring to suppliers, but what about consumers? Will the Minister tell the House what assessment the Government have made of the impact of these regulations on consumer prices in the second quarter of 2021? My noble friend Lady Bowles had a go at suggesting a figure, but it will be useful to know from the Minister whether the Government accord with that. Have they assessed what, if any, impact this will have on fuel poverty, bearing in mind that the impact of even a small rise may be significant on the fuel-poor?
The Government have stated that they regard the loan to the Low Carbon Contracts Company as a one-off response to the current crisis. None the less, they have taken powers in these regulations that are not time-limited. I admit that I would normally be extremely suspicious of Ministers seeking unending powers to tackle what they claim is an exceptional situation. However, given that the reduction in demand has been principally driven by industry, it is unclear how long energy prices in the wholesale market are likely to remain below the strike price, and, as a consequence, whether the Government will need to intervene again. What assessment have the Government made of the trajectory of prices in the wholesale market and how that will impact on the system?
As the Government seek to put the country on the right track to meet our 2050 net-zero target, it is important to bear in mind the points made by my noble friend Lord German. The purpose of the CfD system is to expand investment in renewable and non-carbon sources of energy. It is very important that we bear that in mind as we go forward. Have the Government considered how we may need to adjust market mechanisms in the longer term to support the move away from a carbon economy towards a net-zero figure? What impact does the Minister think the crisis may have on investments in renewables, which have expanded so rapidly and encouragingly in recent years, not least because of the visionary decisions taken by the then Climate Secretary, Ed Davey, during the coalition Government? What steps will the Government take to ensure that the positive picture that has arisen is built on over the coming years?
My noble friend Lady Sheehan raised the important issue of the need for the Government to invest in energy infrastructure through battery storage and other means to help smooth the use of renewables in the supply system. That will be a critical part of building an energy system fit for the future and, in particular, fit to meet the Government’s commitment to net zero by 2050.
I hope that the Minister will be able to answer the questions that my noble friends and I have asked and other noble Lords have raised, but, with that said, we recognise the need for these regulations. We thank the Minister for the clarity with which he introduced them, and we support them.
Lord Grantchester (Lab)
I thank the Minister for his introduction to the regulations, but I admit to being slightly thrown by how I understood them to work through to consumers. Let us hope that there are easy explanations.
As the Minister said, the aim is to limit the negative short-term impact on electricity suppliers of an unexpected increase in costs of the contracts for difference scheme due to the pandemic. The CfD scheme is the main mechanism for supporting new renewable electricity generation projects in the UK and, in outline, the government-owned Low Carbon Contracts Company, or LCCC, manages those generating contracts, collecting payments for generation from electricity suppliers, which pass on those costs to customers in their bills. As the Minister explained, there has been a shortfall in funds required to pay the generators in the second quarter of 2020 following a sharp fall in the demand for electricity ensuring a low wholesale price of electricity, leading to higher payments to generators as they have to be paid the difference between the wholesale price and the strike price agreed necessary to bring forward renewable generation. The Government have brought forward these regulations to assist with the consequences —for example, by extending a one-off loan to the LCCC to enable payments to generators without increasing the financial burden on suppliers and therefore consumers. I understand the time-sensitive nature of the regulations being approved so that they can come into force before the quarter reconciliation date of 9 July. I also understand that they will not impose burdens any more onerous than before or require different behaviours without sufficient time for reorganisations.
Regarding the consultations on the regulations, due to the urgency, I understand that a longer period than the one-month consultation undertaken was not practicable, yet the engagement seems to have been widespread and productive, resulting in the payback period being put back a full 12 months to avoid spikes in consumer prices during winter, and the sensible determination of the split between suppliers in accordance with their share of the market at that time, rather than at the time of the loan, which is to be made to the total cost of the LCCC irrespective of present market shares.
All that is clear and sensible. However, I have one or two anxieties on which it would be useful to have clarity from the Minister. The regulations are made for quarter two, from April to June. These measures may well need to be used again without recourse to more regulations if there are “similar exceptional circumstances”. Will the Minister confirm that the regulations will not be used for circumstances other than those due to the coronavirus pandemic? What similar exceptional circumstances might he envisage in the future? Temporary volatility of prices or seasonal demand fluctuations should be excluded, I would have thought, but would he care to determine any specific margin?
Furthermore, this pandemic may well continue and we are now into July. Will the Minister explain to the House how the effects of the pandemic are continuing to affect the market? What is the size of the loan that the Government are giving to the LCCC and therefore the size of the overhang in the market that will need to be reconciled in 12 months’ time? I believe the Minister mentioned the sum of £121 million in his introduction. We also need to consider the implications of the price cap legislation passed last year under the stewardship of Claire Perry, who appreciated the effects of energy prices on consumers. Has the Minister’s department had discussions with Ofgem regarding how these increased costs will be reflected in its future determination of whether the prices cap will continue into next year or not? It is important to get a general understanding of the expected effects and outcomes at this stage.
Under the Energy Act 2013, which governs this instrument, the Government sought to distance the Treasury from the implications of a support system for renewable generation. It is now back in the spotlight. What are the terms of the loan to the LCCC and how do this Government view this breach? The Minister may well reply that it is a temporary measure, but, as I have just said, it may not be a one-off for only one quarter. It would be helpful to understand the full circumstances of the instrument in that respect. Has the Treasury published any guidelines and made them publicly available?
No understanding of the impact has been undertaken, in the expectation that it will be positive and welcomed, at present. But it may not turn out that way in the long run, when the time comes for the sums to be passed back to consumers. On the assumption that it is only a one-off, one-quarter situation, can the Minister say what added rise in consumer bills due to this pandemic easement will come about in 2021? That the answer will be known now means that suppliers might begin to pass the cost on to consumers well in advance of these provisions, and thereby negate the main object of the loan to the LCCC. Perhaps the Minister can require Ofgem to report on this situation, so that the full fall in wholesale prices is not passed back to consumers, which is extremely worrying for many people.
Lord Callanan
I thank noble Lords for their valuable contributions to this debate. As so often, they have strayed far and wide on the general subject of renewable energy and government support, as well as addressing the individual points made in this particular instrument. Nevertheless, in an effort to be as helpful to the House as possible, I will address most, if not all, of the points that noble Lords have raised.
Coronavirus is the biggest challenge that the UK has faced in decades. During this turbulent time, the Prime Minister has said that we will take every step that we can to ensure businesses are protected and the economy remains strong. The Government have introduced an exceptional package of financial support for households and businesses to help them through these difficult times. This includes £330 billion-worth of loans and guarantees, tax deferrals, and a package of temporary welfare measures worth over £6.5 billion, including increases to universal credit, working tax credits and local housing allowances.
It was therefore important that the Government took action when the LCCC advised BEIS that, as a result of measures introduced to reduce the spread of coronavirus, suppliers would face a significant unexpected increase in their obligations for the second quarter of 2020. By providing the loan to the LCCC to cover the majority of these unanticipated and exceptional additional costs, and by deferring repayments by 12 months, the Government are ensuring that the impact on suppliers is minimised. It also provides them with greater confidence in the additional costs that they will face in quarter 2 of 2021, enabling them to price future tariffs with minimal cost risk. In addition to protecting suppliers at this time, it is essential that we maintain investor and generator confidence in the CfD scheme by ensuring that payments can be made to renewable generators. This will allow us to continue to deliver on our commitment to provide clean, affordable electricity for consumers.
I can tell the noble Baroness, Lady Jones, that the UK is a world leader in clean growth, with more than £94 billion having been invested in clean energy in the UK since 2010. In the first quarter of this year, the renewables share of total electricity generation was 47%, the highest quarterly value on record and exceeding the share of generation from gas. I am sure that she, as a Green, will welcome these figures. The success of the CfD scheme will be pivotal as we emerge from Covid-19 into a phase of renewed green recovery and economic growth on the path to net zero.
In response to the noble Lord, Lord Oates, I can say that, so far, the CfD scheme has awarded contracts for 16 gigawatts of new renewable energy capacity, including 13 gigawatts from offshore wind. It is also driving down the costs of renewable technologies: for example, offshore wind clearing prices have reduced by 65% since the first CfD allocation round, with projects now being delivered for as little as £39.65 per megawatt-hour of electricity generated. The Government have committed to providing up to £557 million for additional CfDs, giving the industry the certainty that it needs to invest in bringing forward new projects. On 2 March this year, the Government announced their intention to allow pot 1 technologies, including onshore wind and solar, to compete in the next CfD allocation round of 2021. This could provide even more jobs in the solar and onshore wind industries, in addition to the 12,100 already supported, and power millions more homes with clean energy by the end of the decade.
I will move on to some of the specific points raised in the debate. The noble Baroness, Lady Bowles, asked whether Ofgem would take the increased obligation into account when settling the price cap in August. Ofgem has the powers, timing and information necessary to ensure that the impacts of the changes to the supplier obligation provided for in this SI can be reflected in the price cap.
The noble Lords, Lord Grantchester and Lord Oates, and the noble Baronesses, Lady Bowles and Lady Jones, raised the impact on bills. The increase in suppliers’ obligations will be very small; we estimate that it will correspond to approximately 0.1% of a typical domestic annual bill. The precise amount will vary, depending on how much of the loan is used by the LCCC and on the evolution of bills over time.
The noble Baroness, Lady Jones, also renewed our long-standing debate about where we should fund the various schemes from: should it be from general taxation or from levies on bills? She knows my position on this, and I am sure we will continue to have that debate going forward.
The noble Baroness, Lady Bowles, and my noble friend Lord Naseby asked about the responses to the consultation. These have not been published, but the organisations that responded are listed in the Government’s response, and individual responses can be viewed on request. I can tell the House that the measures were broadly welcomed by both electricity suppliers and trade associations.
The noble Lords, Lord Foulkes, Lord German, Lord Kirkhope and Lord Grantchester, asked what similar exceptional circumstances would require these regulations to be used again. Obviously, by the very nature of exceptional circumstances, it is difficult for me to be precise—nobody could have predicted coronavirus —but this intervention can be used again in future if the effects of Covid-19 last longer than anticipated, or in the event of a similar national emergency, whatever that may be, and this will be decided by the Secretary of State on a case-by-case basis. I hesitate to say it, but perhaps it is a case of the noble Lords having to trust the Government on this one. But I can make the general point that we are committed to upholding the self-financing nature of levies in the energy system, and we will not intervene to alleviate normal fluctuations and variances in the LCCC’s forecasts.
My noble friend Lady McIntosh asked how the loan is being financed. It is being financed in a loan agreement between the LCCC and the Secretary of State, and it has been drawn in accordance with government accounting rules and is non-budget. However, as I said at the start, that is not actually the subject of this instrument.
The noble Lords, Lord Kirkhope and Lord Grantchester, asked whether we could be confident that it would be repaid in full by quarter 2 of 2021. We are confident that it will be repaid in full. If suppliers do not pay their obligations, the LCCC has enforcement powers to ensure that they pay. If suppliers go out of business and do not have the collateral available to pay the obligation, the LCCC can mutualise losses across remaining suppliers to repay the loan in full to my department.
I want to just correct slightly the figures quoted by the noble Lord, Lord Grantchester. I think we said that the shortfall in the LCCC was up to £121 million, but the loan provided by BEIS to alleviate that is up to £100 million; the LCCC will be financing the rest of the amount itself.
My noble friend Lord Naseby asked me about Northern Ireland, which is not currently covered by the CfD scheme. That was the choice it made; it is open for Northern Ireland to join the scheme in future if it wishes.
The noble Lord, Lord German, talked about Ofgem’s targeted charging review. Network charging is for Ofgem itself to determine as an independent regulator.
The noble Baroness, Lady Sheehan, asked about the Committee on Climate Change report. We will formally respond to that later this year, but the PM has set up a Cabinet committee focusing on climate change.
My noble friend Lord Holmes talked about Hinkley Point C, which is totally unrelated to this debate. Nevertheless, we remain committed to Hinkley Point C as the first new nuclear power station in a generation. We believe that we negotiated a competitive deal which ensures that we will pay for any construction overruns until the station starts generating.
I am running quickly out of time. The noble Lord, Lord Oates, talked about the potential impact on consumers. We said that it would probably be 0.1%, but of course it will depend on aggregate demand.
The noble Lord, Lord Grantchester, talked about the size of the loan; I have dealt with that. I have also dealt with the issue about exceptional circumstances.
In conclusion, the technical amendments to the supplier obligation mechanism in this SI, combined with the provision by government of a one-off loan, are intended to ease the burden on licensed electricity suppliers at a time of great financial stress due to Covid-19. I commend these draft regulations to the House and apologise if I have not dealt with any individual questions from noble Lords.
Arrangement of Business
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
My Lords, proceedings will now commence. Some Members are here in the Chamber and others are participating virtually, but all Members will be treated equally. I ask noble Lords to be patient if there are short delays as we switch between physical and remote participants. The usual rules and courtesies in debate apply. The time limit for the following Motion in the name of the noble Lord, Lord Callanan, will be one hour.
Electricity Capacity (Amendment etc.) (Coronavirus) Regulations 2020
(4 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the draft Regulations laid before the House on 4 June be approved.
Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, before outlining the provisions made by this draft instrument, I will briefly provide some context for the benefit of noble Lords.
The capacity market is at the heart of the Government’s strategy for maintaining security of electricity supplies in Great Britain. It secures the capacity needed to meet future peak electricity demand under a range of scenarios through competitive, technology-neutral auctions normally held four years and one year ahead of the relevant delivery year. Those who win capacity agreements —known as capacity providers—commit to providing capacity during periods of system stress in exchange for receiving capacity payments. Capacity payments are funded by electricity suppliers, which recover this cost from consumers.
This draft instrument, together with capacity market rule changes, which have recently been laid, will ensure that the capacity market remains compliant with its state aid approval by giving effect to government commitments recorded in the state aid approval decision. It will also make temporary modifications to support capacity providers in the light of the effects of coronavirus.
I will now briefly outline the context of the capacity market’s state aid approval, before detailing the changes proposed in this SI. The Commission’s state aid approval of the capacity market in 2014 was annulled in November 2018 by a judgment of the General Court of the Court of Justice of the European Union. This introduced a standstill of normal operations of the capacity market until October 2019, when the European Commission completed its reinvestigation of the capacity market and granted state aid approval.
The Commission’s state aid approval in October 2019 recorded government commitments to make technical changes to the capacity market’s design to reflect recent market and regulatory developments, including reforms that my department had already identified through the statutory five-year review of the capacity market conducted in July 2019. Specifically, these draft regulations will reduce the minimum size of capacity which is permitted to compete in the capacity market from 2 megawatts to 1 megawatt. This aligns the capacity market with other domestic energy markets, making it easier for smaller providers, such as demand side response operators, to participate.
This draft instrument will also introduce the arrangements necessary to enable demand side response—DSR— operators, which provide capacity by reducing the import of electricity from the electricity grid, to compete for multiyear agreements if they can meet the relevant capital expenditure thresholds. This will bring arrangements for demand side response operators in line with generation and might encourage greater DSR participation in the capacity market.
The regulations seek to provide a legislative underpinning of the UK’s long-standing commitment to procure at least half of the capacity set aside for the one year ahead of delivery year auction. This is set aside when the target capacity for the auction four years ahead of delivery is set. This change will help provide some certainty around auction volumes and will assist market participants, particularly DSR operators.
Finally, the draft instrument seeks to revoke an exclusion in place since 2014 that prevents a small number of holders of long-term contracts for the provision of an electricity market balancing service—the short-term operating reserve, or STOR—competing in the capacity market. In 2014, STOR contracts were expected to pay out very high revenues, and, to prevent windfall profits, holders of these contracts were therefore excluded. However, since then the energy landscape has changed significantly and revenues from STOR contracts have been much lower than originally anticipated. Therefore, it is no longer appropriate to maintain this exclusion.
I turn to the temporary modifications that this draft instrument seeks to make in recognition of the fact that coronavirus has impacted the ability of capacity providers to meet some of their obligations under the capacity market. The approach that we are taking of making temporary easements is similar to that adopted to support capacity providers during the capacity market’s standstill period last year. This draft SI will support modifications to the capacity market rules to allow a capacity provider which is late in demonstrating that it is ready to deliver capacity in this current capacity market delivery year to access capacity payments that have been suspended if the requirements are met by a later, specified date.
As the disruptive effects of coronavirus might lead to more capacity providers facing termination of their agreements, the regulations will increase the time for capacity providers to issue appeal notices to terminate their agreements to the Secretary of State. It also seeks to provide the Secretary of State with greater discretion when considering appeals: either extending the time for capacity providers to comply with requirements to avoid termination or directing that agreements should be terminated, without a fee, on the grounds that non-compliance was due to exceptional circumstances arising from the effects of coronavirus. That will reduce the risk of terminating capacity agreements where this would have an overall detrimental impact on security of supply.
In conclusion, this draft instrument will ensure continued security of electricity supply by ensuring that the capacity market continues to comply with its state aid approval. It will also reduce the burdens on capacity providers during the coronavirus pandemic. Finally, these changes will maintain confidence in the market. I commend these draft regulations to the House.
Lord Campbell-Savours (Lab) [V]
My Lords, this is a very complex issue. I have listened very carefully to the Minister’s comments. As I understand it, the capacity market is there as a sort of back-up. As the pandemic has distorted the market with collapsed demand, wind and solar on occasion generate electricity to meet our needs, with wider excesses being dumped, in effect, at silly prices on the market.
I cannot understand why, in these extreme conditions, at a cost of potentially billions, we have to buy in through the interconnector. I have a simple question. Is all this to be renegotiated in the new Europe or is it all to remain in a spirit of compromise? With the pandemic testing the resilience of the system, we are told that capacity providers need time to either comply with EU requirements or appeal. Will this all be sorted by exit day?
With worldwide volatility in energy markets, if we are to be locked into the EU regimes, will that mean linkage to slow-lane EU emission targets, over which we will have no influence? Conversely, if not, how do we intend to respond to opportunities from pumped storage? That would help flush out fluctuations between high and low demand, particularly if combined with small modular nuclear reactors.
Finally, I have a simple question. We were told that our EU departure would lead to new trading patterns and greater self-sufficiency in steel, fisheries, farming and energy. With that in mind, why will we increase interconnector use from 4% to 9%, effectively doubling power imports? Also, how can the Government honestly claim a net-zero commitment if we buy in from countries which still generate from coal sources? I am thinking of Maasvlakte in Holland, or even Russian gas. Are we not then left in the absurd position where we end up switching our renewables on and off in favour of imported fossil-fuel-generated power supplies? In a nutshell, why should we end up paying capacity support costs to support their excess fossil production costs? How can we, whether it be for the short term or the long term, argue that the interconnector needs to be part of the mix when our objective must be decarbonisation throughout Europe? If we were not leaving Europe, at least we would have some influence on events in future.
Lord Purvis of Tweed (LD)
In introducing this measure, the Minister said that it is necessary for the UK to remain compliant with the EU regulations. Is it the Government’s intention that we will continue to stay compliant with state aid regulations? If so, and the Minister is bringing this measure forward now to remain compliant, what is the timeframe for that compliance? Is it for the duration of this temporary measure only, or do the Government’s intend that we will remain compliant and able to continue operating seamlessly with the European market? Given that the Government have not carried out an impact assessment, what is the likelihood of this supporting smaller operators? What is the impact on bigger operators? There are many references to these powers possibly enabling operators, but what is the assessment of the likelihood of that? If it is an EU-based energy supplier, will it be able to benefit from this measure?
I want to quote to the Minister some remarks made in the House of Commons during the debate on this measure:
“I am very concerned about the regulation, its provenance and whether it will limit our freedom of manoeuvre in ways we do not wish from the beginning of next year … I therefore find it extremely worrying that we have responded to a state aid challenge upon us in the dying days of our membership of the single market, or its rules, when we are no longer a member of the European Union which sponsors it.”—[Official Report, Commons, 15/6/20; col. 566.]
That was Sir John Redwood. I have never doubted the Minister’s credentials as a Brexiteer. He has reminded us of that on far too many occasions over the past of couple of years. So, can he explain why Sir John Redwood is so wrong and why we need this measure urgently in order to continue to be compliant with EU state aid regulations?
The Minister said that the measure will end on a specified date. What is the process for deciding that specified date? As we know, the impact of coronavirus, and potentially other waves, is an unknown situation. I think there is common ground across the House about the benefits of reforming the electricity market and the capacity market, and of paying for reliable sources of capacity alongside electricity revenue. I do not think there is any doubt about that. Sir John Redwood also said,
“we are talking about whether this country is now going to have its own energy policy, or whether we are hastily legislating so that we can, for the foreseeable future, still be effectively under EU state aid rules, edging ever closer to integration with EU energy policy”—[Official Report, Commons, 15/6/20; col. 568.]
Will the Minister say why Sir John may be wrong on that point? Bearing in mind that we are likely to get up to 10% of our energy from the European market, given the way the state aid rules operate, for how long will we be compliant with those rules?
Baroness McIntosh of Pickering (Con) [V]
My Lords, I thank the Minister for introducing these regulations and entirely endorse the reasons for them. He very kindly gave us the detailed background, particularly about the judgment by the European Court of Justice and the decision of the European Commission. I spent six very happy months as a stagiaire in DG4, which is now called DG Competition, becoming familiar with the anti-trust rules and regulations of European law, although I am less familiar with state aid, so I will put a question of principle to my noble friend. It is not dissimilar to that of the noble Lord, Lord Purvis. As we are leaving the European Union and will exit at the end of the transition phase on 31 December this year, that begs the question, what will be the future arrangements for such support being meted out under the regulations before us this afternoon? Which body will replace the European Commission as the regulator of these subsidies—as we are apparently going to call them in future—or state aid, going forward? Can he give the House an assurance this afternoon that his department and others will indeed be subject to overview and scrutiny in all these decisions? Can he confirm that it will be the Competition and Markets Authority?
I have a separate question that relates entirely to the regulations before us this afternoon. Can the Minister confirm that long-term STOR contract holders will be able to compete in the capacity market as a result of these regulations? Is he convinced that it is absolutely a good idea that they be included?
Lord Mann (Non-Afl) [V]
My Lords, we did not vote to leave the European Union, only to have the European Commission telling us what our state aid rules should be, particularly in the energy sector, where the European Union has had the most incoherent, disjointed approach for decades. That is summarised by, in recent years, the French going nuclear while the Germans went back to coal. Can the Minister clarify the implications for the remaining coal-powered generators in this country, for which the economics of the capacity market are critical? Several have closed in the past year, including Cottam, which I can see from my window today, leaving, I believe, three, including West Burton A, which has a capacity of 2,000 megawatts a year. West Burton is due to close in 2021. Will that closure be brought forward, will the date remain the same or will it be delayed? In other words, will we remain reliant on coal for longer than 2021, or will these regulations have nil effect in extinguishing what remains of our coal-fired energy generation power station system?
Baroness Sheehan (LD) [V]
My Lords, I shall not oppose this SI, which temporarily loosens regulations for providers and ensures the security of the electricity supply. It is important that we maintain a certain level of electricity capacity, in which renewables play an increasing part. I have two short questions for the Minister. The first goes back to the subject of interconnectors, which I raised in the previous debate on the regulation of contracts for difference. Any country that wants to reach its net-zero commitment will necessarily be reliant on interconnector capacity. Will this continue to be an important part of the UK’s energy mix once we have left the EU? Will this feature large in the infrastructure investment through which the Government plan to stimulate the economy and create jobs?
My second question relates to the Prime Minister’s plan to build tens of thousands of new homes. If they are built to today’s poor efficiency standards instead of being designed for net zero carbon, they will lock us into high carbon emissions for decades to come. Does the Minister agree that reducing our consumption of energy is the most efficient way to reach net zero and keep our energy use to a minimum?
The Deputy Speaker
My Lords, the noble Lords, Lord Wei and Lord Bhatia, have scratched and the next speaker is the noble Lord, Lord Moynihan.
Lord Moynihan (Con)
My Lords, I fully appreciate that these regulations are narrow in purpose and I welcome them in addressing market providers who are facing current difficulties such as the termination of contracts for non-performance, timing extended to where the performance of the contract begins and how we can protect the continuity of the capacity market. However, as noble Lords have already pointed out, it is impossible to detach them from the past and present pressures on the capacity market, which secures our electricity supplies.
I hope that the Minister can address one specific question. I accept that these regulations provide the opportunity to meet some of the commitments that were given at the time of the EU annulment in 2018 to comply with state aid approval—there is very little mention of state aid approval in the documentation that accompanies the regulations. Were any commitments made at the time of that judgment which have not been included in these regulations and, if so, can we expect them to come back to this House or, indeed, are the Government looking towards the end of the year for a complete exit from that requirement?
In his introductory speech, my noble friend the Minister touched briefly on the broader context, and indeed in another place the Secretary of State went into greater detail. Indeed, a great deal has changed since I was a Minister for energy, and the White Paper will no doubt provide an opportunity for Members of this House to consider the consequences of technology-neutral auctions, decarbonisation, flexible pricing and the escalating cost and uncertainty of an essential nuclear programme.
However, I hope that the Minister can confirm today that natural gas-fired power generation should be a key part of the UK mix. In a living with Covid future, the re-stimulus of the global economy will have to be based on strong green roots, albeit that energy affordability will be a much stronger part of the post-crisis global policy debate than was the case before the coronavirus began to stalk the globe. Gas is an obvious partner for a global renewable industry which needs to prove to a post-crisis world that firm—which can never be the case for sun and wind—but affordable and reliable power can be delivered to the UK economy, which cannot afford the huge hidden costs of an ever-expanding renewable system: back-up costs, system balancing costs, curtailment costs, new grid costs and nascent battery storage scheme costs. It is gas which must and will continue to improve its environmental performance and should, I hope the Minister will agree, be an essential part of our energy balance.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, I should like to thank other noble Lords who have spoken in this debate because they have touched on issues that I was going to ask about. I refer in particular to the noble Baroness, Lady Sheehan, who talked about the Government’s promise to increase the number of houses that are to be built. The chances are that they will not be constructed to anywhere near the sort of standards that we need if we are serious about our net zero carbon budget over the next few years.
I also thank the Minister for answering my other queries earlier, but I would like to point out that when he talks about Britain being a world leader in green energy, that is of course in spite of all the government cuts to solar capacity and solar subsidy as well as, of course, closing the wind turbine factory on the Isle of Wight. So well done to those who have taken this particular form of energy seriously, and not at all to the Government.
Lord Oates (LD)
My Lords, I am grateful to the noble Lord for introducing these regulations and, as my noble friends have indicated, we recognise the need for them in addressing the unique issues that have arisen as a result of the coronavirus pandemic. However, this is a slightly curious statutory instrument in that it combines the urgent measures needed for the electricity capacity market arising from coronavirus with measures to address issues arising from a judgment by the Court of Justice of the European Union and the later decisions of the European Commission. These are two related matters, but they are definitely different. It is hoped that one will be temporary in terms of the adverse impact of coronavirus on capacity providers to meet their obligations, while the other is, if I understand it correctly, a permanent change to the way in which the market works.
With respect to the former, while we recognise that these measures are urgent and necessary, the Explanatory Memorandum tells us that the relaxation and removal of obligations and deadlines on providers will be temporary. Given that the pandemic is likely to continue to impose constraints on those providers, albeit in a less dramatic way than during the initial phase of the crisis, can the Minister set out how the Government will approach what may well be an ongoing problem and not simply a short-term blip?
The second part of the regulations tackles the commitments made to the European Commission to adjust the mechanism in light of the adverse judgment of the Court of Justice of the European Union on state aid rules. This has caused me a little puzzlement. I am unsure about why that judgment has caused the UK to enter into these commitments, given that my understanding is that the CJEU judgment was against the Commission for the way in which it had investigated whether we were in breach of state aid rules, and that the reinvestigation by the Commission found that we were not. So can the Minister explain to the House how that has led to us entering into further commitments?
The changes that the instrument proposes to the current system to implement those commitments are significant. My noble friend Lord Purvis raised the important question of whether it is the Government’s intention that those changes and their decision to ensure that the market is in compliance with the European Commission’s desires on state aid rules is going to continue after transition. Does the Minister not recognise that the integration of our capacity mechanism via the interconnectors with the European energy market really underlines the hollowness of those who believe that we can somehow separate ourselves entirely from European Union markets or indeed from the EU’s regulatory systems?
I hope that the Minister will be able to give us a little more detail about the impact of some of these changes. In particular, can he explain the exclusion of stand-alone batteries from the mechanism? How will that impact on the expansion of storage within our electricity system which, as my noble friend Lady Sheehan pointed out in the previous debate, is critical if we are to restructure our energy infrastructure so that we can underpin the increased use of renewables within the system?
My noble friend also made the important point that the best way to maintain adequate capacity is to reduce consumption. She raised in particular the issue of new homes, which was also raised by the noble Baroness, Lady Jones. In that context, will the Minister answer the question that I put to him yesterday, but which I fear he chose to sidestep, and tell the House definitively, one way or the other, whether the new homes that were announced this week by the Prime Minister under the new homes programmes, will be built to net zero standards? It is a simple question and I hope that on this occasion he can give me a simple answer.
Finally, I welcome the reduction in the minimum capacity threshold that is set out in these regulations. As the Minister suggested, it is hoped that this will allow more providers to compete in the market, and in particular that it will allow smaller and more innovative providers to take part. With that, as I have said, we recognise the need for these regulations, but we would be grateful if the Minister could answer the questions that I have put to him.
Lord Grantchester (Lab)
I thank the Minister for his considered explanation of the instrument before the House. As he explained, it has two purposes: to support market participants during the pandemic by removing or relaxing temporarily certain obligations or deadlines that they are contracted to adhere to during the current delivery year of 1 October 2019 to 30 September 2020; and to make permanent other changes to the capacity market as a consequence of the judgments made by the Court of Justice of the EU in October 2019 over the state aid provisions that the capacity market entailed. These regulations are also under the Energy Act 2013 to provide capacity in the electricity market to meet consumer demand.
On the easements in response to the effects of the pandemic, the measures are sensible, temporary, proportionate and flexible. Once there was full clarity, the consultation did not seem to expose strong disagreements or objections, albeit that it lasted for only one week at the end of April. It is recognised that where capacity market contractors have problems with construction deadlines, supply chain supply issues or financing arrangements there should be leeway and discretion to help them through any present difficulties.
The necessary changes following the Government’s agreements to alterations to the capacity market operations after the EU’s state aid judgments need further critical appraisal. At the time of the EU court’s annulment, there was anxiety that the capacity market was not fit for purpose and did not operate fairly, especially regarding demand-side response—DSR—measures, which had made complaints once the market came into being after the EU initially had passed the state aid provisions. The two changes made to the demand-side response measures are welcome, and arguably the disruption could have been avoided if they had been enacted at the outset. The other three measures are also, in many regards, helpful to DSR, are welcomed and seem to allow for a more flexible, more competitive market through the T-1 capacity auction, reduction on minimum capacity thresholds and interconnectors.
That is as far as the regulations go. Can the Minister set out any further commitments given at the time of the judgments that are not included in these measures? Does that mean that further amendments will be brought forward at a later date, or will they be held up in further negotiations until December and may never come forward? I understand that these commitments are regarding interconnectors and deal with the prequalification of foreign capacity to the system, because they are not in the UK to be able to bid into the capacity market, and are not to do with either the actual size of the interconnection or whether more interconnectors will be built. Could the Minister explain the implications of this and what the current position is?
Could the Minister also explain what changes there might need to be regarding generation emission ceilings on capacity? When traditional technologies such as gas-fired generation bids into the capacity market they must quite rightly comply with legislative plans to limit emissions. There has been a consultation on whether to limit emissions by both kilowatt-hour of electricity and the average per year. Has the Minister’s department come to any conclusions on these matters, especially since, as I understand it, commitments to bring forward changes were made at the time of the court’s judgment?
I am content to approve the regulations, but seek reassurances from the Minister regarding the capacity market’s possible further developments. Perhaps he might finish by clarifying how much further delayed the energy White Paper, which would so helpfully shed light on all these matters, might be?
Lord Callanan
I thank noble Lords once again for their valuable contributions to this debate. The capacity market has played, and continues to play, a key role in maintaining secure electricity supplies for consumers and businesses in Great Britain. The market is tried and tested, and it is working. It has secured the capacity we need to cope with unexpected peaks in demand until 2024 at prices far lower than expected.
As older, dirtier generating capacity has retired—we are now down to our last coal plant in the capacity market—over 10 gigawatts of new-build capacity has come forward to replace it, including renewables and smart technologies, in response to the noble Lord, Lord Oates, such as battery storage and demand-side response. I will take this opportunity to reply to the question from the noble Lord, Lord Mann, on coal. We remain committed to switching away from coal. It is our ambition to bring forward the date by which unabated coal must be phased out, which is currently 1 October 2024. The closure date for specific stations is a commercial matter, but we hope that they might even close ahead of 2024. We are committed to this switch. We have made changes to the capacity market rules to apply carbon emission limits to existing plant, which should prevent coal securing capacity agreements from 1 October 2024, in line with our ambition. As I said, we hope that they will close earlier.
It is essential that the design of the capacity market adapts to an ever-changing world if it is to continue delivering on its objectives of ensuring security of supply at least cost and supporting our decarbonisation plans. Recent changes include the introduction of carbon emission limits into the scheme, which will prevent the most carbon-intensive capacity competing in future auctions. The list of renewable technologies that can compete in the capacity market has also been expanded to include onshore and offshore wind and solar photovoltaic. These changes will directly support our wider efforts to decarbonise the energy sector.
The proposed changes contained in the instrument continue this trend of continual evolution and improvement of the capacity market. By ensuring that the capacity market continues to comply with its state aid approval, the instrument will ensure the continued operation of the scheme and engender confidence among market participants. Many of the changes contained in the instrument, such as the reduction in the minimum capacity threshold from two megawatts to one megawatt and enabling demand-side response to access multiyear capacity agreements, are in line with the reforms identified in my department’s five-year review of the capacity market, published in July 2019, and aimed at better facilitating the participation of demand-side responses in future auctions.
That brings me to the various questions asked by noble Lords, in particular the Liberal Democrats, who never fail to disappoint in these matters. Actually, though, they posed exactly the question I asked when these regulations were first put in front of me: why are we complying with these commitments if the UK is leaving the European Union? It is indeed a very good question. The noble Lords, Lord Purvis, Lord Oates and Lord Mann, and my noble friends Lady McIntosh and Lord Moynihan all raised similar points.
These commitments are consistent with the domestic policy for the capacity market set out in our five-year review, which my department published in July 2019—in other words, we would have moved to implement them anyway, regardless of our obligations as a member state. We are currently in the transition period as set out in the withdrawal agreement, with which we are all so familiar, so European law continues to apply to the UK until the end of the year. We will then be able to implement our own state aid regime. We are working at pace to develop this policy and will share more details on domestic subsidy control with key stakeholders in due course.
We believe strongly that we must retain our sovereign right when deciding how and when to spend taxpayers’ money to intervene in markets to support business, workers and consumers. The UK’s subsidy control regime will not involve any alignment with EU rules. I realise that is a challenge for the Liberal Democrats, but they will be able to continue to contribute to these debates. We will have our own debates in our own Parliament about what our domestic state aid regime should be, which I think is a good thing.
The noble Lord, Lord Campbell-Savours, and the noble Baroness, Lady Sheehan, talked about interconnectors. We continue to believe that interconnectors make a valuable contribution to the UK’s security of supply, while increasing competition and diversifying our electricity mix. Many of our interconnected markets have a high penetration of renewables and low-carbon electricity; much of the electricity imported into the UK through interconnectors from France is zero-carbon nuclear-generated electricity.
My noble friend Lord Moynihan asked why the state aid commitments are not in the regulations. We have laid out the capacity market rules, which complete the implementation of the majority of the commitments, including the introduction of carbon emissions limits. The final commitment on enabling foreign participation does not need to be introduced now. We will consider further arrangements and consult in due course.
The noble Lords, Lord Purvis and Lord Oates, continue their obsession with the European Union—I am joking, obviously—and ask about participation in the internal energy market. We will not be seeking alignment with EU law. The UK will make independent decisions on our energy policies, and will be leaving the internal energy markets. I am sure they are thrilled to hear that.
The noble Lord, Lord Campbell-Savours, asked why we are not doing more to support pumped hydro. In 2019 we published our five-year review of the capacity market, which noted that some new-build pumped hydropower storage projects have very long construction times that may make participation in the capacity market difficult. Therefore, we are exploring options for addressing this issue. I agree with my noble friend Lord Moynihan that natural gas should continue to play a part in the overall energy mix.
Many noble Lords raised important points about the energy policy in general; they will be aware that we are currently working on an energy White Paper, which will be the best forum for considering the range of challenges faced by the electricity sector as we move towards delivering net zero. This White Paper remains a priority for the Government and will be published soon.
My noble friend Lady McIntosh asked about long-term store contract holders who might not being able to compete. We believe that there is no longer a risk of windfall profits for providers holding both capacity markets agreements and long-term store contracts, and therefore no reason to continue excluding them from the market. Allowing them to be included could increase competition.
The noble Baroness, Lady Sheehan, and the noble Lord, Lord Oates, asked about energy efficiency and supporting continued energy efficiency in homes. We are publishing a home heat review later this year. We are committed to our clean growth strategy aspiration that as many homes be upgraded to energy performance certificate band C by 2035 as is practical, cost-effective and affordable. Furthermore, this draft instrument ensures that the capacity market adapts quickly to address the effects of coronavirus on existing capacity providers by proposing targeted and temporary measures where coronavirus has impacted the ability of capacity providers to meet some of their obligations under the capacity market.
In summary, this draft instrument is necessary to ensure the continued security of electricity supply, by ensuring that the capacity market continues to comply with state aid approval, and by supporting capacity providers during the coronavirus pandemic. I commend it to the House.
Arrangement of Business
The Deputy Speaker (Lord Alderdice) (LD)
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.
Higher Education (Fee Limits and Student Support) (England) (Coronavirus) Regulations 2020
Lord Parkinson of Whitley Bay
That the draft Regulations laid before the House on 4 June be approved.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee
Lord Parkinson of Whitley Bay (Con)
My Lords, we have all seen the devastating impact of Covid-19 around the world. Recovering from this will take time and Her Majesty’s Government are already providing an unprecedented set of measures to support the people of this country along the way. One such beneficiary of the support is our world-renowned higher education sector. My right honourable friend the Secretary of State for Education announced a stabilisation package for the sector on 4 May. This included the introduction of temporary student number controls, which relate to the regulations that we are debating today. I thank the Secondary Legislation Scrutiny Committee of your Lordships’ House for considering the draft regulations. I am pleased to see that one of its members, the noble Lord, Lord Liddle, is taking part in our proceedings.
To understand why these regulations are necessary, we must look at the potential financial consequences of the pandemic on higher education providers, their staff and, of course, their students. For instance, in the 2018-19 academic year, tuition fees from international students accounted for around £7 billion of the sector’s income. Realising the risk that a sharp decline in international students might pose, many providers have already responded by attempting to recruit more domestic students than normally they would. Some issued a record number of unconditional offers to encourage students to study with them. While seeking to ensure their own financial stability is only natural, this strategy, if replicated widely, could have unfortunate consequences for the sector as a whole—providers and students alike.
I shall first spell out the consequences for providers. There is already a finite pool of prospective students, made smaller by a 1.5% decrease in the number of 18 year-olds this year compared with last. In these exceptional circumstances, an unusually high number of offers made by a provider may attract more students than normal to that provider, but, therefore, away from others which would normally have recruited them, and which could not absorb the associated loss of income. Repeated across the whole sector, this could place some providers at risk of collapse. That would destabilise the sector, threaten staff livelihoods and, of course, leave many students without a provider in the middle of their education.
That leads me to the consequences for the students themselves. Different providers, rightly, have different entry standards. Every student is unique, with different academic abilities and needs. A positive student experiences is a vital and fundamental part of university life. It is to everyone’s benefit that there should be a range of providers, offering a range of different learning environments catering to different academic needs. The long-term consequences of the potential instability in the sector which we saw emerging earlier this year could far outweigh the short-term benefits to individual providers. It is for this reason, together with the need to avoid an unfair imbalance in public expenditure, that temporary number controls have been introduced, and that the associated regulations have been laid before your Lordships’ House to consider.
I turn to the regulations themselves, which, so far as higher education providers in England are concerned, will reduce the maximum amount of tuition fees that providers can charge in the next academic year but one—the academic year 2021-22—if they recruit more students than their allocated number in the coming academic year, 2020-21. As far as higher education institutions in the devolved nations are concerned, the numbers apply to England-domiciled students who start a course in Scotland, Wales or Northern Ireland. If an institution exceeds its number in the academic year 2020-21, the maximum tuition fee loan amounts available to such students—and ultimately to the institutions—starting courses in the academic year 2021-22 are reduced to the same extent as fee limits in England.
These short-term measures are necessary: should a provider recruit a higher number of students, it will receive a greater share of taxpayer funding. This will create an imbalance in the system between providers. By taking students, and therefore funding, away from other providers, they increase the risks that those providers will fail and give rise to a potential call on public funds. That is an exposure for which the Government must account, so it is right that the Government, and the taxpayers that we serve, should be able to redress that funding imbalance in the following academic year.
Therefore, this is about the Government using the mechanism of the taxpayer-funded student loan system to ensure the stability of the sector. The regulations do this by reducing the sums available to a provider which chooses to exceed its number through the student finance system in the subsequent academic year. I recognise the concerns that a reduction in the fees available to providers may itself place them under strain, but the scale of the reductions has been calculated in proportion to the extent by which a provider exceeds its number. Accordingly, there is a proportionate correlation between the amount of reduction and the additional income secured by the provider by recruiting in excess of its numbers.
I consider these regulations to be a crucial part of the steps that we need to take to ensure the stability of our much-valued higher education sector, and I commend them to the House. I beg to move.
Lord Bassam of Brighton
At end, insert “but that this House regrets that the draft Regulations reduce the funding available to English students studying at higher education institutions in Scotland, Wales or Northern Ireland; and calls on Her Majesty’s Government to provide emergency support for higher and further education institutions in order to help them respond to the COVID-19 pandemic”.
Lord Bassam of Brighton (Lab) [V]
My Lords, first, I thank all the noble Lords who intend to take part in the debate. The seriousness of it is undoubtedly underlined by the stellar cast list joining us virtually today. I shall listen with care and interest to all comments made, not least because of the precarious financial position that the HE sector finds itself in during this crisis.
As noble Lords will no doubt note, as the Minister did, higher education institutions generate more than £95 billion a year for the UK economy and support more than 940,000 full-time jobs. They develop highly skilled people, drive business productivity, fuel economic growth, provide essential workers and conduct high-impact research to address global challenges—including, of course, Covid-19.
Ultimately, they create opportunities at home and strengthen the UK’s standing abroad. But as the Explanatory Memorandum states, coronavirus has placed significant financial strain on the higher education sector and poses a significant risk to those benefits. It is right that the Government take steps to mitigate this, but they need to be carefully thought through, consulted on and explained, and include a longer-term vision to help higher education institutions survive the next few months and thrive in the years to come.
As we have heard, this instrument is meant to include two measures. First, where an English provider has recruited more students than number controls allow, it reduces tuition fee limits for undergraduate courses in the following academic year. Universities UK has proposed a similar stability measure. However, the second measure is regrettable. It reduces the maximum tuition fee loan amount available to English students at institutions in Scotland, Wales and Northern Ireland for 2021-22 when number controls are not stuck to. So far, the Government have failed to provide a meaningful justification for the extension beyond England. We fear that any cap on English students attending non-English institutions will only add to the difficulty that universities face, as well as straining the devolution settlement in the UK. Therefore, our opposition is reflected in my amendment.
A significant number of English students choose to study across the UK. It strengthens the bonds between our four nations, and HE institutions rely on this funding. In the last academic year, 40,000 English students went to study at Welsh providers, 27,000 at Scottish and 3,000 at Northern Irish institutions. At St Andrews and the University of Edinburgh, 45% of students were English; over 50% at Cardiff University came from across the border.
The Explanatory Memorandum states that the Government’s rationale for their actions is about the fair use of public funds, but can the Minister explain how it can be fair that English students will not be able to study at university in the current way and that this cap falls on students through the amount of tuition loan available? It also deprives them of the university of their choice, of course.
As HE is devolved, I am glad to see that the Explanatory Memorandum notes
“discussions with the devolved administrations”,
but the Welsh Education Minister, Kirsty Williams, said she was “deeply concerned” that the Government
“have chosen to place a control on Welsh institutions rather than work with the Welsh Government to achieve a solution that is compatible with devolution.”
However, the Explanatory Memorandum does not say that there have been similar discussions with non-English providers. The vice-chancellor of St Andrews stated:
“There’s been no consultation about this with Scottish universities at all.”
Can the Minister confirm how many Welsh, Scottish and Northern Ireland institutions the Government consulted before this instrument was published? Does the Minister value such discussions?
The Explanatory Memorandum also states that the financial impact of exceeding number controls
“will be proportionately greater for … teaching-intensive … and smaller providers”.
How many providers does this relate to? Could jobs be lost as a result of this financial impact? Will smaller providers end up having to close courses and institutions? I greatly wonder whether the Government have properly pondered the law of unintended consequences.
The amendment also calls on the Government
“to provide emergency support for higher and further education institutions”.
In May the Government brought forward £100 million for research and £2.6 billion of tuition fee payments, but no additional support. The University and College Union has found that the sector could lose about £2.5 billion next year in tuition fees alone, along with 30,000 university jobs. It is ironic that the University of Oxford and Imperial are leading the way in developing a vaccine to bring the pandemic to an end for the long term, while the Government’s short-term support means that institutions such as Cardiff and Loughborough are actively planning job cuts to offset big budget shortfalls. In the Chancellor’s Statement next week, will the Government announce extra quality-related research funding, government grants and extra innovation funding, as Universities UK has called for?
I was concerned by the comments of the Universities Minister yesterday. Instead of making the case for higher education, she appeared to say that it is expensive and substandard, as well as questioning its role in social mobility. Will these views be strongly represented in the Government’s Green Paper, due to be published this month?
What higher education needs now is emergency support from the Government to protect student interests, maintain research capacity, prevent institutions failing and ensure that universities are able to play a central role in the economic and social recovery following the crisis across all four nations in the UK. It does not need sideswipes at the sector, financial instability and measures that undermine student security. I beg to move.
Lord Addington (LD)
My Lords, this is one of those interesting documents that seems to have come out of the middle of nowhere, because four months ago nobody would have assumed we would be in this situation. The idea that you should stop universities that have better academic relations—based on either academic achievement or straightforward snob value—from hoovering up extra students seems quite reasonable. You should not be able to increase your numbers to the detriment of the rest of the sector.
There are one or two side issues here, and the noble Lord, Lord Bassam, has raised a few of them. I should declare an interest—albeit one that is decreasing as time goes on—in that I went to a Scottish university, Aberdeen. Aberdeen proudly boasted that it had two universities when England had two universities. The question is: if we are starting to affect these institutions in the north, how are we going to compensate them? They are still part of the United Kingdom, and the interchange of students between the two nations does not do any harm to the relationship between the two states in most cases, although I can think of one or two people in my past where I suggest that was not the case. We need some clarity from the Government about what they are doing on this issue.
The issue of unconditional offers is coming up here. They do not enjoy a tremendously good reputation. Some sort of minimum standard has often been considered in education, and this might be a good time to bring it in. Unconditional offers stop people working and sometimes mean that they are not prepared for going forward. If we are prepared to do something to address that issue, it might be one small crumb of good to come out of this very unpleasant situation.
Lord Cormack (Con) [V]
My Lords, with two grandchildren completing courses at English universities but living in Scotland, I take a particularly personal interest in this issue. We have to look very carefully at the regulations, which give considerable power to the Government. I understand why they are being introduced; we are living, as so many people have said so often, in unprecedented times. In my 50 years in Parliament there has been no situation remotely like the present one. However, disasters can also bring opportunities, and I hope that over the next year there will be a complete determination to sustain our universities, which include some of the finest in the world. Some of them are quite new, such as Lincoln, where I sit on the court.
At the same time, the present situation should give us an opportunity to re-evaluate, reshape and define. We must get away from the mindset that says that young people who go to university are a success and those who do not have somehow failed. With vocational courses, apprenticeships and institutions such as the former polytechnics, we have to look at what we can do to try to ensure that each and every one of our young people leaving school goes to the right institution and studies the right course for him or her, so that afterwards that young person can play a full part in our society, a part that is underlined by the very concept of vocation, whether someone is studying a higher academic subject at university or is practising one of the crafts. There are great challenges before us and we must be very careful that we rise to them.
Lord Singh of Wimbledon (CB) [V]
My Lords, investment in education is essential for the future of our country. I fully understand the economic impact of Covid-19 on the national purse and the rationale of limiting the amount spent on student loans by limiting student numbers. However, the over-rigid application of the proposed caps could adversely affect those from deprived backgrounds trying to get a foot on the ladder to economic and social advancement. I believe that those in this category should be excluded from calculations on the proposed caps.
I am inclined to accept that the funding of English-domiciled students is not strictly a devolved matter. However, not having seen any figures on projected savings, I wonder whether it is really worth the upset, and the financial upset, caused.
There is a line in an English hymn that states:
“New occasions teach new duties; Time makes ancient good uncouth;
They must upward still, and onward, who would keep abreast with Truth.”
The Covid pandemic is an opportunity to look again at our national priorities. While I would put health and social care near the top, should we really be cutting and cropping vital services such as education, while spending billions on battleships and the like to fight 19th and 20th-century wars?
Lord Blunkett (Lab) [V]
I draw attention to my declaration of interest. I support entirely the points made by my noble friend Lord Bassam, but want to put on record that I am sick and tired of hearing those who have benefited from higher education, and whose children have gone through or wish to go through higher education, denigrating it and suggesting that other people’s children should not.
It is time that the Government understood the catastrophic hit being perpetrated on the higher education sector. Yes, Universities UK was concerned about the smaller and more vulnerable institutions—I get that—but we need a major marketing programme supported by the Government, both nationally and internationally, and to recognise that mass unemployment among young people in the coming year will require us to open up those opportunities still further, not as an alternative to apprenticeships or the opportunity to take in-service training in jobs when they are available, but realising that those opportunities will be limited. Foundation and access courses encouraging young people who are capable of doing so to go to university therefore make social, cultural and economic sense. And of course, for international students who are absolutely crucial to the cross-subsidy of research, it is important to turn fine words into reality.
As the noble Lord, Lord Parkinson, said, there has been an unprecedented response by the Government to our economic and health challenge but that has not been true of the investment in and help to higher education. If we do not get this right, we will face a dual disbenefit—first, the impact of the geopolitical events and uncertainties of the moment, and secondly, a lack of recruitment at home, which would be bad for young people and disastrous for the university sector.
Baroness Benjamin (LD) [V]
My Lords, I want to draw attention to the difficulty that some children of migrant families brought up in the UK are facing, which has the potential to become another Windrush-style scandal. It is only when these children are planning to go into higher education and start to fill out their UCAS forms that they realise that they do not have the right documentation. Those over the age of 18 could face the threat of deportation. This is because they came to the UK as young children on their parents’ passport, and grew up and went to school here, but when they try to fulfil their dream of going to university, they realise they do not have the necessary papers.
They are not British citizens or refugees and do not have indefinite leave to remain, so before filling out their UCAS forms, they have to apply for limited leave to remain—an immigration status that allows them to legally stay in the UK for a period. However, this could mean a wait of up to three years to process. To make matters worse, applicants for student finance need to have had lawful status in the UK for at least three years before the start of the academic year when their course begins.
It is an impossible situation. They can apply for limited leave to remain, if they have lived in the UK for seven years before their 18th birthday, but even if this legal status application is successful, they cannot work, yet they need money to reapply for legal status every two and a half years for 10 years paying around £2,000 each time until they eventually become eligible to apply for indefinite leave to remain.
This Windrush-style scandal is causing much heartache, depression and anxiety. What are the Government doing to avoid this catastrophe unfolding and help these intelligent young people fulfil their dreams, which will benefit society in the long term?
Lord Wei (Con) [V]
My Lords, I refer to my interests, as in the register. I totally understand why the Government feel that these measures are important and necessary during this crisis, though I have a number of questions. Making a decision of this nature, based on the finances available, is one way of looking at it but, equally, another question is: what we can do to enable the university sector to survive? I suppose the most fundamental question is: what will be best for these students? Many of them—both those going to university and those who cannot—will be scarred during this period by the lack of employment and other opportunities.
Perhaps more thought needs to be given in the coming months, as these measures filter through, to how to distinguish and accelerate the trends that we were already starting to see in previous years, in online and an expansion of vocational, and pivot the sector towards them. For example, fees and loans could be set both to reflect the realities of online learning and to incentivise the higher education institutions to expand their offerings, to international and local students, and partner with third parties to provide vocational courses—particularly given the large numbers of people in many of our worst-affected sectors and industries who may need retraining to move into future industries that will be less susceptible to Covid and other such structural disruption.
Essentially, my question to the Minister is: what thought has been put into creating incentives for universities to divert away just from foreign students and the local student pot into new areas? As many will now have gap years or not go to university full-time, is there a way to reflect the changing structure of courses that will evolve in the coming years?
Baroness Warwick of Undercliffe (Lab) [V]
My Lords, this is a time of great uncertainty for universities. The main proposal in this SI, to introduce temporary student number controls, will add an important element of stability, and I support it.
My first point, however, is that whatever stability this produces will be completely undermined if students lose confidence in the quality of the experience they are likely to receive in the autumn term and decide to defer to 2021. Yes, the Government have talked about the benefits of current applicants enrolling at universities in September but, at the same time, the Prime Minister, Secretary of State and, this week, the Minister for Education, have made public statements critical of universities that will serve only to undermine this confidence—in particular, I fear, for students from deprived backgrounds. Of course universities have issues that they must deal with, but I hope the Minister will acknowledge that now is not the time for public lambasting of the sector.
My second point is on franchised courses between a university and an FE college or private provider, on which additional guidance has recently been issued. Franchised students count towards a university’s student number count, even if they are not taught there and undertake most of their direct learning elsewhere. Both partners have to decide how to stay within their SNCs. This could potentially jeopardise valuable local partnerships that are in the national interest and deliver the skills that local employers need, as well as improving student choice. I understand that it has also had an impact on student transfers. There seems to be a worrying trend that this change, mid-cycle, has had a disproportionate effect on widening participation of students. I hope that there will be some room for flexibility. Will the Minister agree to look at this with those most concerned?
Finally, I add my voice to those questioning the proposals for the devolved nations. They really do need to be thought about again.
Lord Campbell of Pittenweem (LD) [V]
My Lords, I declare an interest as the chancellor of St Andrews University, and I welcome the observations of the noble Lord, Lord Bassam, as he introduced his Motion.
These proposals essentially amount to the imposition of a penalty upon the devolved Administrations. We have heard that there was no consultation. Higher education is a devolved subject. Why were the devolved Administrations not consulted? Essentially, what is happening here is that Scottish institutions are being punished by having a penalty imposed upon them due to problems caused by the virus in England.
There is no evidence that Scottish universities have been making predatory offers. The majority of offers made by Scottish universities were in early April this year, and, as some noble Lords will understand, offers made constitute a contract between the university making the offer and the applicant accepting it; subject always, of course, to the applicant achieving the necessary qualifications. That, in particular, makes the proposals unfair to those students who have accepted offers after the cut-off date of 2 June.
Finally, on a more general point, it is the strongly held conviction among the universities in Scotland that using student loans to impose policy on the devolved Administrations in this form undermines necessary efforts to widen access.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, first, I offer the Green group’s support for the Motion in the name of the noble Lord, Lord Bassam, and I also wish to associate myself with the words of the noble Baroness, Lady Benjamin. “The next Windrush” is a phrase we sadly hear all too often, but the situation of young people who, through no fault of their own, suddenly find themselves unable to study, to progress, and to contribute to society in the way they wish to, is a tragedy. I hope we might get an answer today from the Government on some means to fix that.
On 7 January, I got a Written Answer from the noble Baroness, Lady Blackwood, to a Question about nursing, midwifery and associated health professional students, many of whom finished their courses early this year and went out into the NHS workforce to deal with the Covid situation. They are a year of students uniquely penalised by the lack of bursaries and fees: are the Government going to do something to help them? On 4 May, I received a Written Answer from the noble Lord, Lord Bethell, about students in that cohort who are unable to go out into the workforce, for whatever reason. What is happening so that they can finish their courses, because, often, practical training has not been available to them?
Finally, when we are talking about student fees, surely this is the time to rethink the whole approach. Education is a public good and it should be paid for from general progressive taxation—taxation that is far more progressive than it is now. Think about the current circumstances, with Covid-19. As the Government have acknowledged, we are going to see significant economic disruption and job disruption. Many people will be looking to retrain and perhaps to do another course, or a second or a third course. If the weight of debt stops them doing that, that will be damaging to our society and damaging to them. We really need to reconsider the whole issue of student fees.
Lord Blencathra (Con) [V]
My Lords, I am content with the draft regulations, which seem to me to be a sensible response in these Covid times, but I want to press my noble friend on a related fee issue and two other university topics.
First, I am appalled that many universities are ripping off students by refusing to refund part of their fees for non-existent teaching. Over the last six months, university lecturers were on strike for five weeks—more than 1 million students got no teaching whatever. Now, there is no teaching because of Covid-19, and still universities are running the equivalent of Ponzi schemes, like Bernard Madoff racketeers, taking money for a non-existent product while paying themselves huge dividends. I am sorry, but they deserve to be lambasted. Any commercial company which failed to deliver on a contracted service would have to pay compensation. I hope my noble friend can compel our universities to behave honourably.
Secondly, I see that the department is considering changing to post-results applications and university courses starting in January. This change is long overdue, and I commend it. It is nonsense to offer conditional places based on predicted results. I hope that the Government will push on with that excellent initiative as soon as possible.
Finally, I know my noble friend will not say so, but we have about 30 useless universities at the bottom end of the quality tables. They are taking fees from students for worthless courses which will not get them jobs, and the fees will never be repaid. We desperately need more technical colleges and more skills training, as the Prime Minister said on Tuesday. Will my noble friend look to convert these back to good polytechnics which could do good for the country and real good for young people, rather than them playing at being poor-quality universities?
Lord Reid of Cardowan (Lab) [V]
My Lords, Regulation 4 reduces the loan amounts available to English students taking courses at institutions in Scotland, Northern Ireland and Wales. Of course, English students at Scottish universities have to pay fees, while Scottish students and EU students do not. I quite understand the frustration in England at that situation, but I urge caution. As the public spending watchdog reported last year:
“Scotland’s universities face rising costs and funding cuts, and there is a growing gap in how well different institutions can cope”.
That report came before Covid and Brexit, so any move to reduce support for English students intending to study at Scottish universities, however understandable, would be a terrible mistake, especially at this time.
It is not just the financial consequences that I worry about. I also believe that there will be indirect political consequences. Anything that tends to undermine the unity of the United Kingdom, especially among our young people, would ultimately be a self-defeating exercise. I urge the Minister to have regard to the long-term political consequences of such a move before proceeding and to rethink Regulation 4.
Lord Wallace of Tankerness (LD) [V]
My Lords, I endorse the remarks of the noble Lord, Lord Bassam, and my noble friend Lord Campbell of Pittenweem with regard to the devolution aspect of this matter.
I was somewhat nonplussed when I read the draft Explanatory Memorandum, which states:
“This entire instrument applies to England only … The instrument does not have any minor or consequential effects outside England.”
One needs only to read the letters to the UK Universities Minister from her counterparts in Scotland and Wales to realise that the implications for Scotland and Wales, and no doubt Northern Ireland, are far from minor. How does the Minister justify what is in the Explanatory Memorandum?
I have a series of questions. Do the Government believe that, post pandemic, the UK Government, in co-operation with the devolved Administrations, should develop policies that sustain the principle of student mobility across the UK? The number controls announced on 4 May by the UK Government included no reference to Scottish institutions, nor were they expected by Universities UK or Universities Scotland. What happened between 4 May and the publication of these regulations? What specific allegations, if any, were made of predatory offer-making by Scottish institutions, and what specific discussions were held with individual Scottish HEIs and Universities Scotland? Is it the case that no sanctions will apply to students being funded privately rather than through the Student Loans Company? Is that what is meant by “levelling up”?
Does the Minister accept that Scottish universities will be disproportionately disadvantaged because the number to which the percentage is applied to control numbers is being applied to much lower actual numbers? Why are institutions in the devolved countries able to bid for only 50% of the additional places, with a more limited range of subjects? Given the concerns expressed by the noble Lord, Lord Reid of Cardowan, about the implications for the union, did the Minister for the Union express any view on these proposals and their formulation from the standpoint of wishing to strengthen the United Kingdom, or was Boris Johnson also duped into believing that the regulations applied to England only?
The Deputy Speaker (Lord Alderdice) (LD)
We do not seem to have the noble Lord, Lord McColl, so I call the noble Baroness, Lady Quin.
Baroness Quin (Lab) [V]
My Lords, earlier in my working life, I had responsibility for admissions to one of the colleges of Durham University. I well remember the stress involved in trying to ensure that we reached our student target but did not exceed it. That experience makes me feel for those in our universities today dealing with admissions on a much larger scale and in the unprecedented circumstances of Covid-19.
I have been in touch with universities in my part of the country about these regulations. While there is understanding of why they have been introduced, and understanding that these are temporary arrangements, there are some aspects of concern where clarification and reassurance are necessary.
For example, universities such as Newcastle have inadvertently—in such a volatile year for student recruitment—exceeded the student number controls before this measure was announced. Understandably, they do not wish to rescind offers to applicants who have faced a difficult time, with exams being cancelled, but have been judged to be qualified for the courses for which they have been accepted. I hope that the Government will avoid a punitive approach in such situations, where institutions have clearly acted in good faith and in the interest of students.
I support what has been said about concern about the effect on students from underrepresented backgrounds. My experience of some of our local universities, such as Sunderland, is not that they have offered useless courses but that they have provided life-changing opportunities for many people from BAME communities and from disadvantaged socioeconomic backgrounds.
Finally, I agree strongly with those who talked about the inadequate consultation, particularly with the devolved authorities. Those issues have been explored but I urge the Government to continue dialogue with the higher education sector in the implementation of these proposals, and to do a much better job on consultation than they have done so far.
Lord Chidgey (LD) [V]
My Lords, in the context of this higher education SI on fee limits and student support, Michelle Donelan MP, the Universities Minister, said yesterday:
“For decades we have been recruiting too many young people on to courses that do nothing to improve their life chances or help with their career goals.”
Speaking yesterday at the NEON summit on widening access and mobility, she outlined a new approach to social mobility.
My interest in this is threefold. While I was the MP for Eastleigh, I served for a decade as a governor on the board of its further education college. At that time, when FE colleges were becoming incorporated bodies, almost by chance Eastleigh’s further education college shared a large site and abundant sports fields with a secondary school and a sixth-form college. We found that the colleges were duplicating some A-level courses, which they sensibly streamlined. The secondary school opted to refocus on engineering studies, Eastleigh being an industrial town. The three establishments worked closely, almost seamlessly, together to provide the students the education and training opportunities that best met their aspirations.
My second and third interests are in the value of bringing flexibility into the provision of further and higher education and training. As a director in a leading consulting engineering practice, I learned that while first-class honours degree graduates might dazzle with their brilliance, it would take a little while for them to appreciate that they also had to contribute to justify their salary. HND graduates were generally older and would more often hit the ground running from the start. That is why I note the Minister’s statement yesterday that
“higher education should be open to all … who are qualified by ability and attainment.”
True social mobility would put students, their needs and career ambitions first—be that in HE, FE or apprenticeships—and must be funded accordingly.
Baroness Altmann (Con) [V]
I declare my interests as in the register, and welcome the Government’s attempts to protect higher education institutions and students. However, I have concerns about the unintended side-effects of these regulations on two issues.
First, there is the process of bids for the 10,000 additional places in excess of the SNC. Who is assessing condition B1 about course design, or condition B4 about qualifications holding value over time, given the radical changes to the economy and teaching methods that may result from the coronavirus? Can my noble friend say whether there is an appeals process for institutions which feel unfairly treated to raise timely concerns? Also, how do the Government assess the impact of using student loan data, which obviously leaves out those who apply late?
This leads me to my second concern. The Independent Higher Education organisation has brought an important issue to my attention today. A one-size-fits-all policy on student numbers may endanger the survival of smaller, specialist providers. In light of my noble friend’s introductory words, with which I agree, saying that we need a range of providers catering for individual needs and to ensure the stability of the sector, I fear that this SI could have a deleterious impact—particularly on students from widening participation categories, who tend to apply late and more often to the smaller higher education establishments.
The effect of introducing the SNC has apparently led larger university partners of smaller specialist colleges to reduce previously agreed numbers of subcontracted places by 20%, so many mature and BAME applicants, who are most likely not to have accepted offers promptly, have had offers withdrawn. Can my noble friend say whether the Government might consider exempting the smallest specialist higher education institutions from these controls: for example, only those with fewer than 1,500 students? They represent under 1% of the higher education sector but that would help stability and wider access.
Lord Desai (Lab) [V]
My Lords, I find this regulation a little strange. We have faced a surprising pandemic, and some universities have tried to defend themselves against possible losses by recruiting more people than they are supposed to. As far as I can understand these complex things, the universities which have offered more places than they are supposed to will be punished, not this year but next year. That is the kind of Stalinist rationing I do not understand.
If universities are taking the initiative to defend themselves against the adverse effects of the virus, they should be rewarded, because they are looking ahead. At least next year, if you are going to punish them for this, please punish them mildly, spread the punishment over more than one year and, if possible, do not punish them at all, because they are doing good work and we need good-quality higher education. Therefore, this is the time not to be harsh on universities but to be kind to higher education, just as the Government are very kind to companies that are going bust and banks which are failing, and so on. If you are being kind to everyone, why not be kind to higher education as well?
Baroness Falkner of Margravine (Non-Afl) [V]
My Lords, I welcome these regulations, because I well appreciate the difficulty that the higher education sector is in, as the noble Lord, Lord Desai, referred to a moment ago. I draw attention to my interests in the register.
I have a couple of concrete questions and concerns for the Minister. One is about the devolved Administrations and those universities we have heard several noble Lords talk about. I note that the Government are giving rescue funding for research and innovation; will the Minister be able to tell us whether that funding, which is dispersed through UKRI, will be available to all the universities in the devolved Administrations? That would ensure that while Scottish and Welsh universities may lose out from English student attendance, they will not go short on research funding. Will the Minister also be able to tell us whether they will be eligible for the long-term, low-interest loans that the Government are offering?
My second point is about students who are being assessed at the moment through the new assessment process due to Covid, and who are hoping to enter university. Will the numerical caps that the Government are putting into place exempt students from disadvantaged backgrounds and allow those students who have the credentials in terms of marks to be allowed to exceed the numbers if they are part of the widening participation plans—APPs—that universities offer? Those students, more than any others, need all the support they can get at this time of economic stress.
Lord Wood of Anfield (Lab) [V]
My Lords, I shall focus on the specific issue of justice for individual student applicants under these rules. I totally understand the need that the Government see to avoid beggar-my-neighbour admissions activities by individual universities that may harm the financial stability of other institutions, but I want to ask about two worrying issues that arise from these regulations.
First, as other noble Lords have pointed out, these rules will disproportionately affect widening participation of students. Why? Because these students, from poorer and more disadvantaged backgrounds, are considerably more likely—up to five times—to accept their offers between May and August or apply directly to higher education institutions during that time. As a result, almost all students still in the application process who have not yet accepted an offer are from these widening participation backgrounds.
As a result, where providers have had their student numbers set by the department, and where, as my noble friend Lady Quin observed, that control figure is less than existing acceptances and offers, a significant number of universities will need to recalibrate or withdraw existing offers from these particularly needy students to stay within the control limits. How do the Government propose to avert this highly undesirable and highly unjust outcome for some of our most needy students?
Secondly, how will these regulations interact with the provision announced a few days ago that students can choose to take A-level examinations in the autumn if they are unhappy with their assessed A-level grades obtained in the summer? If an A-level student intending to go to university in September decides on receipt of their assessed grades to take the autumn exam, they will presumably defer their entry into HE, but the number of students who do that is unknown and may be quite large. What happens to the student caps then? Are they revisited and adjusted to provide stability again? The combination of significant flexibility in the exam process and significant control in the university student numbers submission process do not fit together coherently.
Lord Goddard of Stockport (LD) [V]
My Lords, I have no need to draw noble Lords’ attention to my entry in the register of interests as I was not lucky enough to go to university in 1968. Fortunately, my father managed to get me an apprenticeship and that has served me well over the years. University is sometimes not the automatic answer.
The noble Lord, Lord Bassam, has clearly articulated the problem. He has given the facts and the figures regarding the implementation of these proposed measures. However, I will talk about the fairness of this—the unintended consequences of these measures. Is it fair to give the Government these sweeping powers over the next two or three years? Is it fair to limit student numbers when, as other speakers have said today, the unintended consequence will be that the poorest and the least qualified, with the fewest marks, will have least chance to get on that university ladder to get a better standard of education and improve their life chances.
The noble Lord, Lord Cormack, is completely correct: young people need to get the best opportunities. University is not for everybody and sometimes apprenticeships, as I can vouch for, work just as well. But we should not cut off the legs of the poorest and least educated who have the chance to get to university. That is what worries me. The Government are set to reduce many students’ once-in-a-lifetime chance. The Government should look back. As other noble Lords have said, we spend billions of pounds looking after other sectors. Surely the most important sector that we should look after is the education of our children. That is where the money should go, because the children, young people and students of all races and religions are the future of this country.
Lord Holmes of Richmond (Non-Afl) [V]
My Lords, I thank my noble friend for introducing these regulations in the manner that he did, and I draw noble Lords’ attention to my interests as set out in the register.
The United Kingdom has such phenomenal soft power. Undoubtedly, our higher education system is the brightest star in that soft power constellation. For obvious reasons, international student numbers will be decimated as a result of Covid-19, but they will come back at some stage. That is a great thing in terms of those who come over here and have a higher education experience in the UK. They stay, work, study further and contribute to this country, or go back to their own countries and are superb ambassadors for the United Kingdom.
These regulations make sense in the short term, but I want to ask my noble friend the Minister a number of questions. First, what consideration was given to the devolved nature of higher education and the impact that these regulations would have in that regard? Secondly, does the Minister agree that more could be done to better position apprenticeships in both a parallel and series way with higher education—so potentially, for some routes, apprenticeship and then into university, not just seeing an apprenticeship or a degree apprenticeship as a better route through? Thirdly, what impact does he believe these regulations will have on social mobility?
Finally, if he will indulge me, I have a question that goes slightly beyond the regulations. With the base rate currently at 10 basis points, what is the current interest rate being paid on student loans? Does the Minister believe that that rate is in any sense equitable, and what impact does he believe it will have on social mobility, widening participation and widening access to our fine higher education establishments in the United Kingdom?
Lord Norton of Louth (Con) [V]
My Lords, I declare my interest as professor of government at the University of Hull.
I want to make three quick points. First, it is vital to stress the value of higher education to the United Kingdom, not just in delivering world-class research and teaching, but in its crucial economic benefits, both nationally in the export of higher education and locally with respect to jobs and bringing students into the local community. I welcome the packages so far announced by the Government, but they do not yet fully deliver in enabling HE to do what is needed, especially in response to the present crisis.
Secondly, the regulations reinforce other packages so far announced and, indeed, existing features of our HE system, in favouring certain big institutions. This is conceded, in effect, in the impact section of the Explanatory Memorandum with regard to teaching-intensive and smaller providers. The cap, as both the noble Baroness, Lady Altmann, and the noble Lord, Lord Wood, have stressed, is likely to have an adverse effect, especially on students from widening participation backgrounds who tend to apply late in the cycle. There is a case for excluding them from the limit.
Thirdly, the regulations need to be complemented by greater support for universities to deliver more flexible learning opportunities to enable people of all ages to upskill and retrain, which will be crucial for economic recovery in the months and years ahead. Addressing fees needs to be part of a wider comprehensive and immediate package, designed to enable the HE sector to deliver what we expect of it and adapt to the fundamental challenges we now face. Perhaps my noble friend the Minister can explain what plans the Government have to assist those HE providers and students likely to be disadvantaged by these regulations, as well as what more will be done to enable HE to meet these challenges.
Lord McConnell of Glenscorrodale (Lab)
My Lords, my entry in the register includes a number of education and young people-related interests, in particular as chancellor of the University of Stirling. I recall back in 1981-82 when the then university principal, Sir Kenneth Alexander, and I, as student president, launched a controversial proposal to lift the cap on student numbers —which at that time was imposed by the University Grants Committee on every department of every university in the country—allowing universities to attract students based on the attractiveness of their courses and the qualifications that they could then achieve.
While I recognise the need for stability at the moment, in this particular year, I would be grateful if the Minister would make clear that this is a temporary measure, that it will last for only one year, and that universities and students will again have that relationship in the future. I want to associate myself with the remarks of the noble Lord, Lord Addington, on the scandalous level of unconditional offers, of the noble Lord, Lord Wei, on innovation, and of my noble friend Lord Wood on access—which were particularly relevant in relation to individual students. I am also grateful to my noble friend Lord Bassam, for raising this issue.
University funding in Scotland is indeed devolved and the debate on it should take place in another place, but universities in Scotland are part of the UK system. Therefore, it is important that those universities are taken into consideration when the Government put in place a forward plan on research and on international students that will help the university sector to come out of this lockdown period.
Finally, I am very aware of the fact that, across the country, 17 and 18 year-olds have been very badly affected by this lockdown period in terms of their motivation, ambitions for the future and fears about the situation. Will the Government take into account the mental state of our teenagers at this time, following such a long period of lockdown in schools, and build it into the proposals they then put in place to try to reinvigorate not just our university sector, but our education system as a whole?
Lord Bhatia (Non-Afl) [V]
My Lords, Covid-19 has impacted all sectors of the nation. Education is not an exception. There is a clear sense that fewer students will decide to opt for higher education this year and possibly next year. This could put severe strain on providers’ finances.
To mitigate this, providers have changed their admission practices with mass use of unconditional offers, thereby increasing their recruitment of new students in 2020 and 2021. This could end up lowering education standards. While the providers will have a bigger intake of students, the question arises whether these students will suffer educationally. Choices will inevitably have to be made between good education and providers’ finances. In my opinion, good education must trump finance. The Government therefore have to provide additional finances to universities and colleges. Unconditional offers could attract more students, but ruin their future.
There is also the question of overseas students, who pay higher fees to come to United Kingdom universities. These higher student fees form a big proportion of providers’ overall finances. There has been considerable debate about visas for students who come from overseas. The Home Office must open up its visa system so that it is easier for overseas students to come to the UK for degree programmes. If the Government do not relax the visa system, overseas students will end up going to other countries, such as Canada, the USA and Australia. Since the Government have provided extra funding for businesses and for those who have lost their jobs, the education sector must also be given resources during the pandemic, above all to ensure that UK universities’ education standards are not compromised.
Baroness Kennedy of Cradley (Non-Afl) [V]
My Lords, as for many sectors, Covid-19 has created significant challenges for the higher education sector. It has taken an immediate reduction of income due to empty campuses and now faces the possibility of dramatic decreases in income in the next academic year, as student numbers, domestic and especially international, are expected to drop.
Therefore, it is right that the Government should put a plan in place to stabilise student numbers at English universities. In principle, the cap should be supported. However, the plans enacted by the statutory instrument have garnered some criticism, as highlighted by many noble Lords and comprehensively set out by my noble friend Lord Bassam of Brighton. I ask the Minister: how is this cap fair to universities in Scotland, Wales and Northern Ireland? For example, last year just under 3,000 students from England enrolled at a Scottish higher education institution, accounting for 10% of total enrolment. Students may, because of this, now be discouraged from studying at universities outside England. Can he therefore outline what consultation has taken place with the devolved Administrations on this issue?
There have also been criticisms from some higher education experts that the cap is too loose and will still allow more prestigious institutions to hoover up students from less prominent institutions. How will the Government ensure that this does not happen?
Finally, the criteria that the Government are using to allow institutions to apply for the additional places seem very restrictive. An institution would need to have a continuation rate of 90% or higher, or high-skilled employment, or a further study rate of at least 75% to access the places. This, coupled with the speech yesterday from the Universities Minister, leads me to my final question: have the Government considered the impact of student number controls on disadvantaged young people, especially during Covid-19?
Lord Liddle (Lab)
My Lords, I understand the logic of this instrument as a temporary, short-term measure; the noble Lord, Lord Parkinson, explained its logic with great clarity. I also share the concerns about devolution set out in the amendment of the noble Lord, Lord Bassam.
I speak as chair of Lancaster University and have that as one of my interests on the register. For Lancaster, the last decade has been a very good one. We have seen a 25% growth in student numbers, and we have expanded in areas that are the national priorities: engineering, the medical school, science—all have grown. This has, in part, been financed by our success in recruiting Chinese students. Clearly, there is a short-term issue with Covid-19, and longer-term issues with our relations with China, particularly now over Hong Kong.
We are devising our strategy for recovery from Covid-19. What are the planning assumptions we should make? Will the Minister give us an assurance that this is temporary, that we will be able to continue to recruit students in the years ahead? When will the Government clarify what the domestic fee level will be in those years ahead?
One of the reasons I like Lancaster a lot is that it combines excellence with equity, and I have great sympathy with what noble Lords, starting with the noble Lord, Lord Blunkett, have said, about the impact of this measure of control at a time that is going to see a crisis in unemployment, particularly youth unemployment. I know the Government want to increase apprenticeships, but there is a huge challenge there; the numbers are actually down. It is a tremendous shame that we are imposing an artificial limit on the recruitment of students from deprived backgrounds in this measure, and it must not continue.
Baroness Uddin (Non-Afl) [V]
I declare my interest as an officer of the APPG on International Students, and I support the amendment of the noble Lord, Lord Bassam.
While I appreciate the underlying economic rationale for capping numbers and stopping EU students accessing student loan fees, as mentioned by my noble friend Lady Benjamin, it is regrettable and will have a profound effect on our higher education and specialist providers. I fear that higher education will become the reserve of the elite, including international students who can afford high fees for elite institutions. Therefore, the proposals of student number control may detrimentally impact widening participation, as has been said by noble Lords, and may further damage our reputation.
Given that students received information only during lockdown, they and education institutions were unprepared for the last-minute surge in demand, which could not have been predicted. It took some universities over the threshold and made some students fearful they would face substantially larger fees with loan guarantees, should they wish to study in the UK. In the light of Covid-19 restrictions, and our own students not being expected to return to universities until next year, will the Government afford some flexibilities, allowing universities, including higher education specialist providers, to revise their numbers to accommodate the application surge, and allowing students to be accepted for January 2021, and not September 2020, so that they feel safer to return to the UK?
I hope that the Minister will accept that these measures might increase class divisions and reduce social mobility in our higher education institutions. I hope, too, that he will heed the wisdom of many noble Lords who have spoken and who are as concerned as I am about further exacerbating social and racial inequalities. I wholeheartedly echo the question from the noble Lord, Holmes, about the excessive interest charged on loans to home students.
Baroness Garden of Frognal (LD)
My Lords, these are slightly curious regulations, in that the arrangements are temporary and apply only to the academic year 2021-22 from 1 August 2020 onwards. Therefore, whatever is decided should not have long-term effects, unless of course it causes the financial collapse of any higher education institution. As the Minister has indicated, the financial failure of any university would have a severe impact on the students, staff, local community and regional economy.
Noble Lords have pretty well done this small instrument to death, so I shall try not to be repetitive, but I want to support the amendment moved by the noble Lord, Lord Bassam. It appears that these changes have been introduced without any consultation with universities in the devolved nations. It would seem only right to call upon the Government to make time for a proper consultation process with the devolved Governments and higher education institutions in Scotland, Wales and Northern Ireland. They have many English students who will be impacted by this legislation.
Picking up comments from the noble Baroness, Lady Altmann, I also draw attention to the importance of providing adequate support for small and specialist institutions, which not only would be disproportionately affected if they were to exceed their student number controls but are often more reliant on international students. Some of these institutions specialise in the creative arts, music, drama, art and other aspects of education, which provide enormous benefit to the country in quality of life, and indeed to the economy, given that the creative industries are a great financial contributor. It would be a great loss to the country if they were to be financially disadvantaged.
There is also concern for EU students, as other noble Lords have indicated. They were informed last week that they cannot defer their study to next year and still keep access to student loan funding or capped fees. They need places this year, and we expect a surge in numbers, which the student number controls could not have predicted. The EU fees and funding announcement came after student number controls were established.
Penalising universities in this way could lead to worsening regional skills gaps and widening economic disparities. It could lead to damage to research capacity, innovation and research impact. There could also be an increase in cold spots in higher education, as access to higher education could be reduced. As we have already heard from other noble Lords, disadvantaged students could find themselves worse off and less able to select a university that best suits their learning needs. The points put forward by my noble friend Lady Benjamin about immigrant children deserve urgent attention. There is also concern that artificially managing student choice could lead to significant damage to the UK’s global position as a world leader in research and education.
We note that the Government will have the discretion to allocate an additional 10,000 places, with 5,000 ring- fenced for nursing, midwifery or allied health courses to support the country’s vital public services. Will those places be targeted at institutions having difficulty in filling their places or will they be in universities already fully subscribed?
I have a question that I would have asked the Minister the other day had I been able to get in. It is slightly off beam from the instrument but it is relevant to nursing, so I will ask it anyway. It picks up points from the noble Lord, Lord Cormack, my noble friends Lord Chidgey and Lord Goddard and the noble Lord, Lord Holmes. Nursing is less about academic achievement and more about practical, professional and personal skills. What consideration have the Government given to promoting nursing apprenticeships and other vocational routes into the profession? These used to provide many excellent and high-achieving nurses before degrees became the great god of qualifications. I declare an interest as a vice-president of City & Guilds. That might leave more ring-fenced places for those who genuinely need cerebral academic achievement for their work.
We note that any institution that exceeds the sum of its forecast for UK and EU-domiciled numbers must explain the reasons to the OfS in England or the HEFCW in Wales. We do not know what sorts of reasons would be acceptable to justify those admissions. Is there any guidance on this yet?
It seems reasonable to assert that universities should not exert undue pressure with “golden hellos” or gifts, nor with the use of unconditional offers, where students might end up on a degree course which is really not suitable for them.
We can do nothing with statutory instruments apart from debate them, but I hope that the Minister is able to offer us some reassurances on the issues that have been raised around the House in this short but packed debate.
Lord Parkinson of Whitley Bay
My Lords, as befits the higher education sector that it concerns, this debate has been a diverse but uniformly intelligent one. I thank all noble Lords who have taken part.
The noble Lord, Lord Bassam of Brighton, asked about consultation with institutions throughout the United Kingdom. I have very happy to confirm that my right honourable friend the Secretary of State and my honourable friend the Universities Minister have had a number of meetings with their counterparts, as have officials at the Department for Education with theirs, and have been consulting representatives of the sector, including Universities UK, which, as the name suggests, is UK-wide. He asked about the Chancellor’s Statement next week. I am afraid that he will have to wait with baited breath for that, but regarding research, I draw his attention again to the research package that was announced at the weekend by the Government, and which was noted by the noble Baroness, Lady Falkner of Margravine, who asked whether that is UK-wide. I am happy to confirm that yes, institutions in all four nations can apply to it.
Many noble Lords asked questions concerning devolution, so it makes sense to start there. These included concerns that the number controls and fee loan reductions do not respect the devolved nature of higher education, that the risk to the sector is particularly acute in England—and that therefore there should be an English solution to an English problem—and that to apply these conditions to English-domiciled students at institutions elsewhere in the UK is to place the sector in those parts of the United Kingdom under unfair strain. It is not the purpose of these regulations to disregard or interfere in the important principle of devolution, but to ensure the stability, financial and otherwise, of higher education in England. Central government’s mechanism for that is the student loans and tuition fees system. Student number controls for institutions in Scotland, Wales and Northern Ireland only apply to the number of English-domiciled entrants who will be supported with their tuition fees through Student Finance England.
The funding of English-domiciled students is not a devolved matter. It is right and fair that this policy should apply as consistently as possible wherever they are studying in the UK. I certainly agree with the noble Lord, Lord Bassam of Brighton, about the value of people studying throughout the United Kingdom in strengthening the bonds between our four nations. I note the amendment that he has tabled and acknowledge some of his concerns, but I must note for example that currently, Scottish providers can charge any amount they choose to an English student without the fee loan matching it—and choose not to. These eminent and, as the noble Lord, Lord Addington, pointed out, in many cases ancient institutions, place the welfare of their students and the attractiveness of studying in Scotland at the forefront of their recruitment practices. I do not expect that these regulations will cause them to change those practices to the detriment of students who might otherwise choose to apply elsewhere. Institutions in the devolved nations will continue to be free to set their own fees, as they do now.
On the question raised by the noble and learned Lord, Lord Wallace of Tankerness, the UK Government determine the level of student finance available to English-domiciled students. This is not a case of encroaching on devolution but an example of respecting it, while taking the necessary steps to ensure the stability of the higher education sector and value for money for the taxpayer and, above all, to maintain freedom of choice and a positive experience for students.
A second area which a number of noble Lords touched on was the impact on disadvantaged students. This was mentioned by the noble Lords, Lord Singh of Wimbledon, Lord Liddle and Lord Wood of Anfield, and the noble Baronesses, Lady Garden of Frognal, Lady Kennedy of Cradley, Lady Uddin, and others. The Government want to ensure that university places are available to everyone who is qualified by ability and attainment to pursue them and who wish to do so. We expect that higher education providers will continue to support students from disadvantaged backgrounds to take their part in higher education, and officials at the Department for Education are working with the sector to identify what steps may be necessary to help them do so. I draw particular attention to the £23 million per month funding currently available to help people with hardship, including, as the noble Lord, Lord McConnell, rightly points out, mental health needs which might arise from the current circumstances.
Regarding other matters raised by noble Lords, my noble friends Lord Blencathra and Lord Cormack spoke about the quality of higher education that the Government expect. It is a condition of registration with the Office for Students that providers must deliver well-designed courses which provide a high-quality academic experience for all students. I draw their attention to my honourable friend the Universities Minister’s speech yesterday, which the noble Lord, Lord Chidgey, mentioned, which sets out a bit further the Government’s thinking on this.
I am very happy to confirm to the noble Baroness, Lady Quin, who asked about universities in our native north-east, that offers accepted before the notification date of 1 June 2020 will not be counted against a provider’s or institution’s number control. I think the noble Lord, Lord Wood of Anfield, asked about that as well.
My noble friend Lady Altmann asked a number of technical questions, and it might be better if I follow up on them in writing. She asked about appeals. Officials at the Department for Education will consider appeals on a case-by-case basis. She mentioned international students and their importance to the higher education sector, as did the noble Lord, Lord Bhatia, and many others. That is why we are simplifying the current requirements and the application processes for international students studying in the UK, significantly improving our global offering. The new graduate route which is due to open next summer is just one example of this. Students contribute to net migration and will therefore continue to be counted within the net migration figures, just as the independent Migration Advisory Committee suggests they should be.
The noble Lord, Lord Chidgey, asked about further education. The Government have an ambitious programme to reform and level up the FE sector. That will be set out in our White Paper, but I can certainly point to the plans which were announced in the Budget to invest £1.5 billion in England from 2021-22 to upgrade the FE college estate.
My noble friend Lord Holmes of Richmond, the noble Lord, Lord Goddard of Stockport, and others asked about apprenticeships. I can confirm that apprenticeships will be excluded from student number controls.
The noble Baroness, Lady Warwick of Undercliffe, asked about franchising. I am aware that some providers have raised concerns about franchising arrangements, but student number controls allow providers to recruit more students than they did in the 2019-20 academic year. Every student who meets the entry requirements for their course should be able access higher education, including those from disadvantaged backgrounds.
The noble Baroness, Lady Benjamin, mentioned a particular group of students and the important issue of those who do not hold settled status. The long residency eligibility category ensures that people who do not hold settled status but who have spent a substantial period in the United Kingdom are able to access support in line with most other students. To qualify for support, these people must have been in the UK lawfully for at least three years. We consider that this strikes a fair balance, but we will certainly continue to keep a close eye on the very important issue that she raised.
In concluding, as I fear I must, I return to the challenges that the sector currently faces. We must all work together as we seek to recover and rebuild after Covid-19. These regulations will help us to do that and to achieve that important goal. It is our hope and expectation that they will play a crucial role in stabilising the sector. The Government recognise that the pandemic will have an unparalleled impact on all elements of the UK and, indeed, global economy and that the higher education sector is no exception.
We have been working closely with the sector to monitor the impact of Covid on international student numbers, including restrictions on travel, but we understand that it poses significant challenges. That is why the Government have committed to ensuring that existing rules and regulations, including visa regulations, are as flexible as possible for international students in the current circumstances. Higher education providers have also confirmed that they will be flexible in accommodating applicants’ circumstances wherever possible—for instance, if people are unable to travel to the UK in time for the start of the academic year.
I hope that noble Lords will be encouraged by what the regulations signify: that the Government care about the HE sector and the range of opportunities available for all who use it; that we care not just about larger, more profitable providers but about smaller and specialist institutions that, as my noble friend Lord Norton of Louth rightly pointed out, so creatively cater to the needs of their students, and wish to see those providers survive; and that we care above all about students. Students are the lifeblood of our higher education sector, and that they should have a positive experience of higher education is of the highest importance, now as much as ever. The Government must play a part in that by maintaining a stable higher education sector for the benefit of providers, students and taxpayers alike. I am happy to confirm that student number controls are a temporary measure in place for one year only, and the regulations before your Lordships today are the mechanism by which we can do this. I therefore recommend them to the House.
Lord Bassam of Brighton [V]
My Lords, I shall not detain the House for very much longer. I make it clear from the outset that is not my intention to press my amendment to a Division; I think that would be unfortunate and send the wrong sort of message.
The regulations have received something of a withering attack from across the breadth of the House—and deservedly so. I suspect that the Government will have to come back and think again about their package, certainly in part. We on the Labour Benches want to see a secure higher education sector, and we are somewhat alarmed by the comments made yesterday by the Universities Minister, Michelle Donelan. I am grateful that the noble Lord, Lord Parkinson, describes our universities as world-renowned because that is exactly what they are, and we should do nothing that disturbs that or undermines their power and economic value, particularly as we begin to recover from the impact of the Covid epidemic.
This has been a very useful debate that has set out some important benchmarks and lines for us to consider in future. My principal concern is to ensure that we do not imperil the wider participation of students from a whole range of backgrounds, not least those from poorer backgrounds. I suspect that the higher education sector will have to respond in greater numbers to the demands that are made, and that we will have to have a further debate on this subject in the near future. That said, I beg leave to withdraw the amendment.
Arrangement of Business
The Deputy Speaker (Lord Alderdice) (LD)
My Lords, 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 between physical and remote participants. The usual rules and courtesies in debate apply. Please ensure that questions and answers are short.
We now come to questions on the Statement on the Hong Kong national security legislation. 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.
Hong Kong National Security Legislation
(4 years, 5 months ago)
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Lord Collins of Highbury (Lab)
My Lords, we support the Foreign Secretary’s view that a constructive relationship with China remains essential. From climate change to post-pandemic economic recovery, not a single global challenge can be tackled without such engagement.
However, we also need a hard-headed realism and to use targeted measures, in close partnership with our allies, to deter further aggression. If China is able to act with impunity in Hong Kong or the South China Sea, Taiwan could be next. The commitments made by Beijing in the joint declaration in 1984 have been ripped apart by the Chinese Government, and the international community must now step up to hold them to account.
I welcome the Statement. The Government have taken a step forward with the announcement of new rights for BNO passport holders and a statement at the United Nations, but this is no substitute for ongoing and sustained international leadership.
The Government must ensure that the offer to BNO passport holders does not discriminate and is not limited to the wealthiest residents. Will salary thresholds apply as part of the scheme for BNO passport holders? Has the FCO made any formal assessment of the numbers involved?
The oppressive crackdown on Hong Kong protesters expressing their human rights and freedoms requires an immediate response. Unfortunately, with the Magnitsky legislation still waiting in the wings, the Government are unable to target individuals most culpable for the situation we are witnessing. I ask the Minister again: do we have a date before Recess when the regulations will be laid? Will any of the initial designations relate to the situation in Hong Kong?
The UK must work with our allies at the UN and elsewhere to pressure China and the Hong Kong Administration to end their encroachment on Hong Kong’s freedoms. The Foreign Secretary told the Commons yesterday that he is
“open to the idea of a UN … envoy”—[Official Report, Commons, 1/7/20; col. 345]
on Hong Kong. We have enormous influence at the UN and a historical allegiance to the people of Hong Kong. We cannot simply wait for another member state to step up to the plate, so can the Minister confirm whether the Foreign Secretary has given any further consideration to spearheading a campaign for a UN envoy?
The G7 must also stand together as an unequivocal voice for democracy and universal suffrage. Australia and others in the group have made their voices heard but some members have remained almost silent. Can the Minister confirm whether there are any plans for further joint action by the G7 following the statement published in June?
The application of the national security law was expected. The brutal response to objecting protesters was, sadly, predictable too. The situation may escalate, and it is crucial that the Foreign Office is fully equipped to respond. To this end, what assessment has the Minister made of the suggestion by seven former Foreign Secretaries for the UK to lead the formation of an international contact group to monitor the situation on the ground and co-ordinate action?
Finally, in recognition of the large number of UK citizens in Hong Kong, I hope that the Minister will offer a few reassurances about their safety; for example, will the FCO update its travel advice following the Canadian Government’s new warning? What channels of communication in the pandemic situation—we have raised this before—will the FCO utilise with UK citizens in Hong Kong and should that advice be updated? Are the Government in communication with any UK journalists on the ground in relation to their safety, considering the use of force against members of the press that we have seen. For too long we have no strategy in relation to China at home or abroad. I hope the Minister will give us a commitment today that this marks the start of a very different era.
Baroness Northover (LD) [V]
My Lords, I thank the Minister for presenting this Statement. Hong Kong is in a terrible situation. The Government are right that the new security law constitutes a clear and serious breach of the joint declaration. We have obligations to assist, as a cosignatory to the joint declaration—a treaty lodged at the UN. Already, there have been arrests in Hong Kong, and we see peaceful activists withdrawing from political comment, in fear.
In 1997, Hong Kong represented about one-third of China’s GDP. Now that is only 3%. We may see a thriving territory—the gateway to China—but China’s rise, and therefore the relative decline in Hong Kong’s significance, shows loss of leverage. I therefore commend the Government for their actions, given China’s economic and political dominance. But that makes it even more essential that international law is respected.
I welcome the proposals to grant BNOs and their dependants the right to live here, and to work or study, with a path to citizenship. However, this still leaves behind many young people who have been at the heart of protests and are therefore particularly at risk. Will the Government extend their offer to all Hong Kongers? What steps will the Government take to ensure that BNOs can leave Hong Kong to take up the Government’s offer if they feel the need to do so? Will the UK provide them consular protection? What liaison has there been with Carrie Lam’s office to ensure that those arrested will be immediately released, given that she emphasises that the new law does not crack down on freedom of expression? What steps are the Government taking to ensure that Hong Kongers in the UK or British citizens and British-based businesses will not be targeted? What is happening in relation to the proposed UN special envoy for Hong Kong to monitor human rights there? Are we looking at the Magnitsky sanctions in relation to human rights abuses there?
Does the Minister know if British judges on the Hong Kong Court of Final Appeal feel that they can continue, and what might be the future for Taiwan? I am very glad to hear in the Statement of the report of the UN Council on Human Rights about the situation both in Hong Kong and Zhenjiang. Reports of the treatment of the Uighurs are horrifying. Can he say whether full consideration has yet been given to the China tribunal’s conclusions about forced organ harvesting? I note that the countries which supported us in that statement to the Human Rights Council are largely European, but notably not all EU countries, together with Australia, New Zealand and Canada. There are no Asian, African or Latin American countries, unless you count Belize in Central America and one Micronesian island. There is no widespread support from the Commonwealth, which clearly is not going to replace the EU as a supportive bloc for us and the rules-based order. Does he worry about those omissions, bearing in mind the heavy Chinese engagement in many regions of the world?
This is a dangerous time for Hong Kong and I am very glad that we are offering the refuge that we are, although that loss to the territory further damages Hong Kong itself. But wider than that, China’s actions are immensely worrying for future global relations and the rules-based order. There are indeed so many issues that must be faced together, including, of course, climate change.
The Minister of State, Foreign and Commonwealth Office and Department for International Development (Lord Ahmad of Wimbledon) (Con)
My Lords, I thank the noble Lord, Lord Collins, and the noble Baroness, Lady Northover, for their support for my right honourable friend the Foreign Secretary’s Statement. As my right honourable friend has said previously, we delivered on what we hoped we would not have to deliver, as a consequence of the decision taken to impose this new law on the people of Hong Kong. As both the noble Lord and the noble Baroness acknowledged, this is a breach, and my right honourable friend the Prime Minister and the Foreign Secretary have both been clear, during Prime Minister’s Questions and the Statement yesterday in the other place, that this does represent a breach of the “one country, two systems” agreement, which has been signed. As the noble Baroness, Lady Northover, reminded us, it has status because it has been deposited within the context and the confines of the United Nations. Moreover, it is also a breach of China’s own Basic Law for Hong Kong, as it contravenes the scope of Article 23.
I turn now to some of the specific questions, points and observations made by the noble Lord and the noble Baroness. I say first to the noble Lord, Lord Collins —I know that the noble Baroness, Lady Northover, agrees with this, as do we all—that China has an important role to play in our current international system and in the context of the United Nations. Further, as I have acknowledged from this Dispatch Box, it is also playing an important role in meeting the challenge of the Covid-19 pandemic. It has assisted many countries in procuring, for example, ventilators and PPE equipment. We acknowledge that, and I know that that view is shared by the noble Lord and the noble Baroness.
The noble Lord, Lord Collins, alluded to the importance of addressing climate change. China will be hosting an important conference next year, as will we at COP 26. It is important that we work together, because while the focus of the world has rightly been on the Covid-19 pandemic, one should not forget for a moment the challenges posed by climate change. Addressing these issues without China’s direct engagement will not result in the success from a global perspective that we all seek. However, I repeat what I have said previously: we are clear-eyed in our Statement, and regarding our relationship with China. China is a key partner for us in many areas. However, as this issue, on which we disagree very strongly, has illustrated, we carry a special responsibility when it comes to Hong Kong, as yesterday’s announcement again confirmed.
The noble Lord, Lord Collins, asked who will be eligible under the announcement that has been made. As I mentioned in your Lordships’ House a few days ago, we estimate that some 2.9 million people will be eligible. That includes those who currently have BNO status, those who would qualify for BNO status if they applied for it and, of course, their dependants. That will be applied universally.
The noble Baroness, Lady Northover, asked about other young people. Looking at the media reports and current reporting, it was deeply concerning that only yesterday, as soon as the law came into effect, a number of individuals were detained under its provisions. We have already relayed these concerns: yesterday the Chinese ambassador to the UK was summoned to the Foreign Office and met the PUS, and we asked specifically about China’s intent in terms of the implementation of the new law, particularly under certain key sections. We will continue to keep that very closely monitored and under review. Of course, if people seek to apply for asylum in the United Kingdom, their applications will continue to be looked at on their merits.
I speak as a Minister but also in a role which both noble Lords know that I take very seriously—that of a human rights Minister. In our country’s history we have long been supportive of those who have spoken out against oppression around the world. That should be the case today—and I am proud to say that it is—and it should be the case in the future as well.
The noble Lord, Lord Collins, and the noble Baroness, Lady Northover, both touched on the important issue of the Magnitsky global human rights regime and sanctions regime. I wish I could provide a specific answer to the noble Lord, Lord Collins, but I reassure him once again that we are looking to introduce the new regime very shortly. There are procedures and timings to go through but, as I have said to the House, it will certainly be before the Summer Recess and, as a sanctions Minister, I have been closely involved in progress in this respect. I pay tribute to my right honourable friend the Foreign Secretary, who I know has taken a very personal interest in this particular issue and is seeking to bring it forward at the earliest opportunity.
The noble Baroness and the noble Lord asked about work within the UN. As a human rights Minister, I was directly involved in working with the 27 countries, including the United Kingdom, which signed and supported the statement that our ambassador delivered at the UN Human Rights Council. It covered—as the noble Baroness rightly acknowledged—not only the situation in Hong Kong but the appalling situation suffered in particular by the Uighurs in Xinjiang. We will continue to raise that issue with partners.
The noble Baroness asked about key partners. I have just come from a virtual meeting of the UN Security Council, which looked specifically at the importance of peace and securing peace in the context of the Covid crisis. The meeting was chaired by our German partners, and I was pleased to attend on behalf of the United Kingdom. We continue to work with our European partners, as well as others, in support of human rights, the rule of law, standing up for obligations and media freedom—again, a point mentioned by noble Lords.
The noble Baroness rightly mentioned her concerns about working through the context of the Commonwealth and other alliances. We continue to do so and need to do more; I fully acknowledge that. We need to make a very strong case on the premise of human rights and continue to make the case for upholding and strengthening the international rules-based system.
Coming back to my original point about the relationship with China today, China has, and is playing, an important role on the world stage. It also has international obligations on the world stage. We will continue to remind China of those obligations and to work together where our interests are aligned positively, in areas such as Covid-19 and climate change. However, this will not prevent us raising our deep concerns about the human rights situation in mainland China and, of course, the recent announcement made by the Chinese authorities on the new law for Hong Kong.
We therefore again appeal to the Chinese authorities to reconsider their approach, but in the interim we have now embarked on a particular route, and my right honourable friend the Home Secretary will be coming forward with further details of the announcements and operation of the new scheme. I am sure both noble Lords have seen the details of what we have announced thus far, and that will ultimately lead to a pathway to citizenship.
The noble Baroness, Lady Northover, also asked about British judges. That is an important point because, under this law, the appointment of those judges has switched. It has gone from the Chief Justice to the Chief Executive. We believe that that upholds neither the principles of China’s basic Hong Kong law nor the spirit and details of the agreements that we have signed, including the joint declaration. That is therefore a worrying development; we will look at it closely because other announcements have been made as part of it, including on setting up local committees to look at the enforcement of the law. Again, we believe that that goes directly against both elements of the joint agreement and China’s basic law for Hong Kong.
I assure the noble Baroness and the noble Lord that we will continue to work actively on the world stage. They asked about the UN rapporteur. In that regard, let me assure them that my right honourable friend has very much led from the front on this issue. I pay tribute to his efforts, particularly at the G7. As I said, we have worked closely on securing support with 26 other countries that, like us, are on the Human Rights Council. As my right honourable friend the Foreign Secretary said, if we need to explore further diplomatic routes, we will continue to do so.
The Deputy Speaker (Lord Alderdice) (LD)
We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.
Baroness Anelay of St Johns (Con) [V]
My Lords, what analysis have the Government made of the implications of Article 38 of the new law for all of us in the UK? It appears to imply that if a non-Hong Kong resident travels to Hong Kong, either as a tourist or on business, they could face prosecution there for things that they had said or done legally in the UK.
Lord Ahmad of Wimbledon
My Lords, my noble friend is right to raise this issue, which was part of the Permanent Under-Secretary’s discussions with the Chinese ambassador. Does this apply just to those with non-resident status in Hong Kong, or does it apply not just to those people who have travelled elsewhere in the world but to everyone? That has not been made clear and we will continue to seek that clarification. We outlined those concerns in our meeting with the Chinese ambassador yesterday.
Lord Carrington (CB) [V]
My Lords, in announcing the decision on BNO passports, what consideration has been given to the likely Chinese reaction? I believe that there is a provision in an annexe to the joint declaration stating that BNOs will not have the right of abode in the UK. What happens if China retaliates by removing some of the Hong Kong rights of BNOs on the basis that they can no longer be considered citizens of Hong Kong? This is scarcely a comfort to those who wish to continue to work and live in Hong Kong.
Lord Ahmad of Wimbledon
My Lords, what has happened through the announcement by the Chinese is a breach of the joint declaration.
The noble Lord is correct to say that the BNO status made provisions specifically for those who would stay resident in Hong Kong. Within that, special provisions were granted that would allow them to visit the UK without visa access, but the joint declaration has been breached. We have always retained that we have an obligation to those with BNO status and those who are eligible for that status. We are now carrying out measures and have made announcements to that effect to support them. For those who wish to come to the UK, there is a pathway to citizenship. They must go through due process, meaning that, after their arrival, they will be given leave to remain. Importantly, they will have the right to remain and work in the United Kingdom. After the five-year period, they will be allowed to embark on a route to citizenship. That is the right thing to do; it is within our obligations to the people of Hong Kong.
As to what the Chinese reaction will be to that, we implore them to recognise that Hong Kong has a special status. It has served the Chinese and the global community well. We should seek to retain the freedoms and liberties that it has enjoyed since the signing of that agreement.
Baroness Goudie (Lab) [V]
My Lords, I thank the Foreign Secretary for his Statement yesterday. There have been two deeply disturbing and related developments in Hong Kong in the past few days. One has been the police brutality against pro-democracy protesters. The United Kingdom must lead an international inquiry into that police brutality, as the pepper spray and the arrests have a chilling effect on democracy. The second adverse development is the adoption of the so-called national security legislation under which the arrests were made. This is a breach of the joint declaration. It is an assault on peaceful protest and human rights. There is to be a sinister national security office, run from the mainland; the independence of the judiciary is undermined; and the chief executive is not the chief justice but will select the judges for the cases alleged to concern national security. This is deeply worrying.
Lord Ahmad of Wimbledon
My Lords, I agree with the noble Baroness. I have covered many of the points she has raised, and it will be suffice to say for the record that I agree with many of her concerns. Let me assure her that we are raising this with partners, looking at how we can collaborate and concentrate support, and bilaterally with the Chinese Administration directly.
Lord Jones of Cheltenham (LD) [V]
My Lords, I was in Hong Kong in 1989 when the Tiananmen Square massacre happened, and I saw panic everywhere. Why do we not, with our international partners, offer residency to all Hong Kongers?
Lord Ahmad of Wimbledon
My Lords, as part of the agreement we signed, special status was granted through the BNO route. We have made an offer respecting, regarding and upholding our obligation to them. However, there are many people who love Hong Kong and will want to remain there. That is why it is important that we continue, in parallel, to implore the Chinese authorities to create the conditions so that all Hong Kongers who wish to, irrespective of whether they qualify for BNO, can remain and prosper in Hong Kong.
Baroness Helic (Con) [V]
My Lords, I thank my noble friend for his answers so far. History teaches us that when you have two autocratic regimes, as we now have in China and Russia, the only way for there to be some balance in the world is for western democratic nations to join together. Will my noble friend tell the House what concrete steps his department has taken to bring this kind of coalition about?
Lord Ahmad of Wimbledon
My noble friend is quite right to raise this issue. We continue to work through the UN Security Council, where, as she may know, this issue was specifically discussed in May. As I have already alluded to, we have discussed and agreed a statement this week in the context of the UN, through its Human Rights Council. There is also the statement and support that we have received from the G7. It is important that democracies come together. We will continue to work in this regard to ensure that the UK fulfils its obligations to those in Hong Kong, while respecting that we still believe that the agreement signed should remain in force for the period intended, which was 50 years.
Lord Craig of Radley (CB) [V]
My Lords, does this welcome BNO announcement include the 64 Hong Kong Military Service Corps veterans who applied for right of abode in March, and who, with other corps veterans, have had applications under active consideration in the Home Office for over five and a half years, without a decision? Does the Minister agree that these loyal veterans who served in Her Majesty’s Armed Forces deserve priority approval now, and that their wish for a full British citizen’s passport, which other corps veterans received before 1997, should be met?
Lord Ahmad of Wimbledon
My Lords, I agree with the noble and gallant Lord about the importance of this. I am sure I speak for all noble Lords in paying tribute to those who have served our country and fought for it so bravely. Since the last time we discussed this matter, I have asked for a specific update from the Home Office; I will write to him specifically on the 64 corps members he has mentioned. On the wider issue of prioritisation, as I said earlier, BNO status is granted to all those who qualify, which is 2.9 million, irrespective of their status—the issue of salaries was raised previously—or what they may do. This is open to everyone, and that process will be announced in detail by my right honourable friend the Home Secretary.
Baroness Warwick of Undercliffe (Lab) [V]
My Lords, the Statement is clear that it will not be possible for the UK alone to persuade the Chinese Government to respect their international commitments—a much broader coalition is needed. The Minister said something about the next steps for the work being done with the UN, the EU and other partners to achieve co-ordinated pressure on China: will he say something more about the timeframe? The Statement emphasises that a constructive relationship with China remains essential. China is the UK’s third most important collaborative research partner; it ranks ninth as a destination for UK students studying full degrees abroad; and a quarter of our international students are from China. Does the Minister agree that in standing up, as we are and we must, for the freedoms of Hong Kong, we must take care also that we do not stoke Sinophobia in the UK?
Lord Ahmad of Wimbledon
I totally agree with the noble Baroness’s concern. It is important that we value the incredible contribution of all our communities to the United Kingdom’s progress and prosperity, and the British Chinese community is reflective of that ambition and contribution. On the issue of further work within the international arena, as I already alluded to, we are exploring what more can be done. We have achieved a great deal in the time. The noble Lord, Lord Collins, talked about a strategy. I believe, having looked at this brief very closely, that, domestically and internationally, we have had a strategy in place, and we will continue to apply that pressure. The diplomatic channel remains open with China and we will continue to work with China bilaterally to raise these issues as well.
Baroness Smith of Newnham (LD) [V]
My Lords, the offer to BNO passport holders and citizens is welcome, but for those who do not have passports—about nine in 10 of those who are eligible—what mechanism is in place for the Government to recognise them if they come and seek to take up residence in the United Kingdom?
Lord Ahmad of Wimbledon
My Lords, I believe I have already addressed this issue. The route, or the programme which has been announced, is specifically for those who currently hold or qualify for BNO status and their family dependents. As to others, each case will be looked at on its merits. If someone comes to the United Kingdom, from wherever they may be in the world, and seeks sanctuary or asylum in the United Kingdom, that case will be looked at on its merits.
Lord Balfe (Con) [V]
My Lords, I notice that the terms for people from Hong Kong are considerably better than those we are affording to EU citizens, many of whom have lived here for years. Will there be any salary threshold applied to new migrants who wish to come here, and will we treat them more favourably than EU citizens who are already here?
Lord Ahmad of Wimbledon
My Lords, I am sure my noble friend will recognise that the situation faced by those who are eligible for BNO status or have BNO status—or, indeed, Hong Kongers more generally—is markedly different from the situation faced by EU citizens, and therefore it is right that we have a specific scheme, as we said we would, for BNOs specifically.
Lord Truscott (Ind Lab) [V]
My Lords, will the Minister convey to the Chinese authorities that, while they may unilaterally repudiate the Sino-British joint declaration, which has the force of an international treaty, the result will be that no one will ever take the Chinese at their word again, whether over Huawei or anything else?
Lord Ahmad of Wimbledon
My Lords, I assure the noble Lord that we have reminded China of that obligation. As I said, China has an important role on the world stage and needs to recognise that, if it breaks its word, it may not have the trust of the international community in future treaties, obligations and agreements that have been signed. That is a matter for China to consider very carefully.
Lord West of Spithead (Lab) [V]
My Lords, I welcome the Government’s Statement but we must tread very carefully. There is no doubt that events have seriously damaged the current economy of Hong Kong and its future prospects. China is building up and strengthening other financial centres to outshine Hong Kong and, although the PRC had hoped that making the Hong Kong system a success would attract Taiwan, it now does not seem to care about that. China needs to be confronted by a united and cohesive group of nations if there is to be any hope of persuading her to be a respectable member of the world community and possibly even to listen on matters concerning civil rights.
China’s recent behaviour on the international stage is a cause for concern; indeed, Australia is so concerned that it has just increased defence spending dramatically. Urgent action is needed. Does the Minister agree that we should, for example, encourage the largest possible number of nations to recognise Taiwan; set up a new south-east Asia treaty organisation on the sort of scale that we did with NATO in 1949 to confront the Soviet Union; and work with our allies, possibly through UN auspices, to review all trading links with China, ensuring that she acts legally in terms of market access, compliance with UNCLOS, the use of cyberspace and so on?
Lord Ahmad of Wimbledon
My Lords, there were several proposals there. Specifically on Taiwan, our position has not changed. We believe that the autonomy Taiwan enjoys needs to be protected, but equally it is for those on both sides of the Taiwan Strait to reach an agreement. On the noble Lord’s wider issues, we recognise, as I said at the start, that China has an important role to play on the world stage. Now is the time for China to show that it wishes to do so, but we will always make the case on human rights internally in China as well as standing up for those in Hong Kong.
Baroness Ludford (LD) [V]
My Lords, I too want to ask about Taiwan. It is anticipated that many Hong Kong residents, including those with BNO status, might wish to go to Taiwan. What further support and indeed recognition are the Government contemplating offering to the state and Government of Taiwan, whether to support them specifically in accommodating Hong Kong residents or more generally?
Lord Ahmad of Wimbledon
I believe I have answered what the Government’s position is. I add that when it comes to important issues such as Covid-19 we therefore support Taiwan’s participation in international organisations where it can contribute to the global good. Nationhood is not a prerequisite for that, and a good example is its participation in the World Health Organization.
Lord Robathan (Con) [V]
My Lords, I commend the Minister in particular and the Government in general for their resolute stand and action on this hugely difficult issue. The message needs to get to the people of China, beyond the Government, that the Chinese Government are breaking international agreements and behaving badly; there is nothing Sinophobic in saying that. I suggest to my noble friend that we look at either restricting or ending visas for the tourists, students and businesspeople who come here. That may cost our universities and tourism some money but it is necessary to send a message to the Chinese people, particularly the growing middle class in China, that their Government are behaving incredibly badly.
Lord Ahmad of Wimbledon
China, Chinese culture, Chinese people and Chinese business have played an important role globally and will continue to do so. Our challenge is not with the Chinese people but with the Administration in Beijing, and we will continue to make that case very forcefully. China continues to make important contributions. We have always welcomed Chinese students to the UK, and I believe that that has been a positive thing for both countries.
Lord Mackenzie of Framwellgate (Non-Afl) [V]
My Lords, I thank the Minister for presenting the Statement. As the Chinese Communist Party breaches international law by putting an end to freedom and democracy in Hong Kong, together with its harvesting of human organs from political prisoners and the sterilising of Uighur Muslim women in China, will the Minister give a further assurance to the House of serious consequences for the leaders of the Chinese Communist Party, perhaps eventually by using the Magnitsky legislation? Does this not put the final seal on the involvement of Huawei in the development of 5G mobile technology in the UK?
Lord Ahmad of Wimbledon
My Lords, I assure the noble Lord that we will continue on all fronts to look at the human rights situation in China with respect to the points that he has raised. I have seen directly through diplomatic engagement that China does take notice of the international statements that we make through the UN system and the concerns that we raise bilaterally, and we will continue to do so. On the Huawei issue specifically, I know that colleagues in the digital department will respond in due course, but our position has always been clear: we want to protect our networks, and appropriate security measures are in place to do just that.
Lord Hain (Lab) [V]
My Lords, given that the Minister has confirmed that its oppressive actions over Hong Kong are in direct breach of international law, will the Government now join our European Union allies in bringing China before the International Court of Justice?
Lord Ahmad of Wimbledon
We are working with international partners but, as the noble Lord will be aware, the ICJ requires the agreement of both parties, and in this case I am not sure that the Chinese authorities would agree to an ICJ intervention.
Lord Cormack (Con) [V]
Will Her Majesty’s Government urgently convene an international conference of democracies to seek to persuade the Chinese that they will never be part of the civilised community of nations if they treat their own people abominably and abrogate international treaties into which they willingly entered?
Lord Ahmad of Wimbledon
My Lords, in my view, we already have the vehicles for that kind of direct engagement with China, not just through democracies but through the UN system. We will pursue those avenues. On the wider issue of human rights and the obligations of any Government, wherever they are in the world, how you treat your own citizens is an important test to determine how you behave internationally. The concerns we have had with the Uighur community in particular, as well as with other minority communities in China, are well documented. We will continue to raise those concerns through international for a, including the Human Rights Council.
Finance Bill
Thursday 2nd July 2020
(4 years, 5 months ago)
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