Grand Committee
(3 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Financial Services Bill
Monday 22nd February 2021
(3 years, 9 months ago)
Grand CommitteeRead Full debate Financial Services Bill 2019-21 View all Financial Services Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 162-II(Rev) Revised second marshalled list for Grand Committee - (22 Feb 2021)
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, respecting social distancing, and others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded, or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
I will call Members to speak in the order listed. During the debate on each group, I invite Members, including Members in the Grand Committee Room, to email the clerk if they wish to speak after the Minister, using the Grand Committee address. I will call Members to speak in order of request. The groupings are binding. Leave should be given to withdraw amendments. When putting the Question, I will collect voices in the Grand Committee Room only.
I remind Members that Divisions cannot take place in Grand Committee. It takes unanimity to amend the Bill, so if a single voice says “Not Content”, an amendment is negatived; if a single voice says “Content”, a clause stands part. If a Member taking part remotely wants their voice accounted for if the Question is put, they must make this clear when speaking on the group. We will now begin. I call the noble Lord, Lord Sharkey.
We cannot hear the noble Lord, Lord Sharkey, so I will have to adjourn the Committee for a few minutes while we sort this out technically.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
I call the noble Lord, Lord Sharkey, again.
Amendment 1
Lord Sharkey
“Duty of the FCA to make rules introducing a duty of care
(1) The Financial Services and Markets Act 2000 is amended as follows.(2) After section 137C, insert the following new section—137CA FCA general rules: duty of care (1) The power of the FCA to make general rules includes the power to introduce a duty of care owed by authorised persons to consumers in carrying out regulated activities under this Act. (2) “Duty of care” means an obligation to exercise reasonable care and skill when providing a product or service.(3) “Consumer” has the meaning given in section 2(3) of the Consumer Rights Act 2015.”(3) The FCA must make rules in accordance with section 137CA (FCA general rules: duty of care) of the Financial Services and Markets Act 2000 which come into force no later than six months after the day on which this Act is passed.”Member’s explanatory statement
This amendment would impose on financial services providers a general duty of care to their clients.
Lord Sharkey (LD) [V]
Amendment 1 would require the FCA to
“make rules introducing a duty of care … owed by authorised persons to consumers in carrying out regulated activities”
under FSMA 2000. The Government understand the value of a duty of care; they are about to introduce exactly that in the forthcoming online harms Bill. They understand the immense harm that can be done to consumers without this duty, especially in complex and asymmetric environments.
We have already seen too many examples of the immense harm inflicted by our financial services industry on ordinary consumers—I am thinking here of PPI, which was a product sold to consumers at an 87% commission rate. The scandal ended up costing £53.8 billion in redress and administration costs. I am also thinking of mis-sold interest-rate hedging products and the general and widespread unfair treatment of small businesses in financial difficulty. There was also the long-running saga of overcharging for overdrafts and of leaving loyal customers languishing in poor-value products.
The existing rules did not prevent any of these things, which is not a surprise. There is no explicit requirement in FSMA or in the FCA’s principles for business for firms to prevent harms to customers. The FCA’s “treating customers fairly” business principle is substantially weakened by the legal principle in FSMA that consumers should
“take responsibility for their decisions”.
This fails to take into account the imbalance in power and information between firms and their customers.
Things are not getting any better. Recent examples of misbehaviour include the banks’ response to the authorised push payment fraud, inadequate assessment of affordability by payday lenders, the scandal in Woodford Investment Management, sales of risky investment products on the boundary of the FCA’s perimeter and the outrageous behaviour of some insurers during the pandemic trying to welsh on their business interruption policies.
The Minister will be aware of the Banking Standards Board’s annual survey of 29 member banks’ behaviour and competence. There was some welcome improvement in these areas between 2016 and 2017 but none since. In 2019, 13% of employees of these banks said that they had seen instances of unethical behaviour being rewarded and 14% felt that it was difficult to make career progression without flexing their ethical standards.
The FCA knows all this, of course, and has occasionally acted. However, within the existing legal framework it often takes many years for the FCA to respond to firms’ harmful practices. An example of this is the treatment of loyal general insurance customers, which the FCA is only just beginning to tackle.
Then there is the question of the high-cost short-term credit sector. Wonga may have gone, thanks largely to pressure from this House, and after intense pressure from Parliament there is now a price cap on rent to own. But problems persist with, for example, doorstep lending, guarantor loans and new, automated overdraft products.
The FCA tackles unacceptable practices slowly and piecemeal, allowing harm to persist for many years. It was particularly late in spotting the rapid growth of buy now pay later and its potential for harm. I believe that the Government have said that they intend to address this problem and I hope that they will use this Bill as an opportunity to do that. I would be pleased if that were to be the case, but the slow and cumbersome engine of primary legislation would not have been necessary had a duty of care extended over the sector.
The FCA has published eight papers in the last five years dealing wholly or in part with the question of duty of care, but it still has not developed a clear view or a recommendation. In its consultation feedback paper of April 2019, the FCA noted:
“Most respondents consider that levels of harm to consumers are high and there needs to be change to better protect them.”
It then sat on the fence about what this change should be, reporting that none of the financial service providers favoured a duty of care. Mandy Rice-Davies would have known what to say to that.
In any case, as the FCA’s consumer panel noted,
“Much of the debate on a duty of care has centred on legalistic arguments about whether there is a ‘gap’ in protection. What matters is whether consumers get the treatment they want and expect from their financial services providers.”
The consumer panel commissioned Populus to ask individual and small business customers about their experiences. The research showed that the customer is not at the heart of business decisions and that 92% of respondents were in favour of a duty of care in financial services.
While sitting on the fence, the FCA has also managed to hit the ball into the long grass. It promised to initiate yet another consultation on the issue, initially due last year but now postponed. In the meantime, levels of financial vulnerability grow. The FCA’s latest Financial Lives survey, published 11 days ago, makes grim reading. It notes that Covid-19 has reversed the previous positive trend in vulnerability. Between March and October last year, the number of adults with characteristics of vulnerability increased by 3.7 million to 27.7 million. That means that over half of all adults are financially vulnerable—a truly alarming figure.
The same survey also notes that unsolicited approaches have increased during the pandemic, increasing the risk of fraud and scams. Over a third of adults say that they have received at least one such approach and 1.4 million say that they have paid out money as a result of a possible Covid scam. Unsurprisingly but regrettably, people with characteristics of vulnerability have been the more susceptible: 12% paid out money, compared with 1% of the non-vulnerable. None of this will get any better when the furlough and business support arrangements come to an end. Financial pressures and desperation will inevitably increase; vulnerable people will be disadvantaged, treated unfairly and scammed.
Dealing with all this would be made significantly easier if the FCA were to impose a duty of care on service providers. The idea has widespread support. In May 2019, the Treasury Select Committee published its report on the inquiry into consumers’ access to financial services. Paragraph 210 of the report says:
“All retail financial services, no matter which sector of the industry they operate in, should be acting in their customers’ best interests at all times. If the FCA is unable to enforce such behaviour in firms under its current rule book and principles, the Committee would support a legal duty of care, analogous to that in the legal industry, creating a legal obligation for firms to act in their customers’ best interests.”
The FCA’s own financial services consumer panel, responding to the FCA’s discussion paper, said:
“A new duty is required to improve the position of all consumers … including those who need more support.”
The Money and Pensions Service said:
“MaPS remains convinced that a formal ‘duty of care’ on financial firms could provide a better balance between firm and consumer responsibilities and help deliver extra protection and better treatment to vulnerable consumers.”
StepChange is in favour, as is Fair by Design, and so are many organisations with direct and in-depth experience of the financial catastrophes that can be visited on the poor and the vulnerable. I am grateful for the explicit support and encouragement in pressing for a duty of care from Age UK and the Alzheimer’s Society and I am especially grateful to Macmillan Cancer Support for its unfailing help and advice. I am also indebted to the former chair of the FCA’s consumer panel, Sue Lewis, for her support.
Despite all this support, the Government will no doubt resist the idea of introducing a formal duty of care. When this issue was raised at Report in the Commons, John Glen addressed it by saying simply:
“As the FCA is already taking steps to ensure that financial services firms exercise due care and regard when offering products, services and advice, a statutory duty of care, as proposed by new clause 21, is not necessary.”—[Official Report, Commons, 13/1/21; col. 366.]
He did not say what these steps were or make any assessment of their actual or likely effectiveness. Today the Government may add to John Glen’s reasons for rejecting a duty of care and may advance the argument that they need to wait to give the SMCR time to work. Surely five years is long enough—five years in which there has been just one successful conviction. The FCA’s consumer panel points out that this is essentially a category error and notes:
“The SMCR is primarily a supervision tool—it will be a valuable mechanism to ensure that firms are complying with a new duty.”
The Minister may also pray in aid the reinforced, better-resourced and more active FOS. It is true that FOS dealt with around 250,000 cases in 2019-20. In these cases overall, one-third of judgments were in the consumers’ favour. This is evidence enough of large-scale misbehaviour, but the figures are much worse for products aimed at the financially vulnerable: 89% for guarantor loans, 84% for doorstep loans and 78% for logbook loans.
This is not—absolutely not—evidence of successful regulation. Every one of these judgments is evidence of a failure to sell the right product to the right individual or small business, to explain it clearly or to handle a complaint properly. The FCA’s current rules and principles are failing to stop this tidal wave of mis-selling, malfeasance and malpractice. We need a new approach that focuses on prevention of harm and delivers extra protection and better treatment for vulnerable customers. We need a duty of care and I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I declare my interests as in the register. I support all the amendments in this group and what has already been expertly said by my noble friend Lord Sharkey. I will comment on the duty of care later, but first I will introduce my Amendment 72, which calls for warnings relating to non-regulated activity.
The issue here is one where firms that are authorised in respect of regulated activity also conduct unregulated activity, and customers are misled by the fact that the firm is authorised for some activity into thinking that the authorisation is some kind of guarantee of quality. It is what Dame Elizabeth Gloster called in her report “the halo effect”, and about which she said again to the Treasury Select Committee a couple of weeks ago that something should be done.
One thing that is done by the Bill is enabling unused authorisations to be more easily cancelled, but that does not solve the problem when there are still used authorisations. This is a problem that has long been known about and does not affect only unscrupulous businesses. Therefore, the amendment aims to make it quite clear to consumers what the situation is in three ways.
First, authorisation must not be referenced in any communication, including on letterheads or websites, as a reputational guarantee regarding non-regulated activity. In practice that should mean the ending of straplines. Secondly, when non-regulated activity is being conducted, that must be made clear, together with an explanation that it means that access to the Financial Ombudsman Service and/or Financial Services Compensation Scheme is not available. Thirdly, it would be an offence to imply that a non-regulated activity is covered by an authorisation.
The first two provisions relate to authorised firms aiming to stop the halo effect in as far as that is possible. I do not expect firms to write to clients saying, “This is the rogue side of our business”, but I hope that clients will be more aware that that might be so. The third point is a general point and would apply beyond regulated firms, but my aim is to catch passive implications, so that active steps to inform have to be taken.
The amendment has been drafted to make the point clear, rather than as a perfect draft to weave in among other regulatory provisions, and I hope that the Minister will take up the idea and recognise that reducing a problem by eliminating surplus authorisations does not reduce the problem to its smallest possibilities.
Turning now to the duty of care, I want to add that a duty of care should apply to the regulators as well. Of course, they say that they act in the public interest, but they are every bit as aggressive about protecting themselves—of all things from the public and from liability—as the firms that they supervise. My view of this is simple: “If you don’t live by it, you don’t really understand it”.
If one examines the responses to the FCA’s discussion paper in July 2019, the majority were in favour, two of the main reasons being that it was critical to triggering a fundamental culture change away from asking “Is this within the regulations?” and into “Is this right?” Secondly, it would give a duty to avoid harm that would incentivise firms to evaluate consumer risk at every stage.
What is not to like in that? It seems that just a handful of respondents did not want any more than was already in those principles about treating customers fairly. But they were very much in the minority and, sadly, it seems that some of those in favour of a duty of care are not in favour of it being actionable. I am in favour of a duty of care, I am in favour of it being actionable and I am in favour of it applying to regulators as well, because something is going wrong all round and, frankly, I find the FCA’s hesitancy a matter of serious concern.
Lord Holmes of Richmond (Con) [V]
My Lords, it is a pleasure to take part in this first group of amendments, and I congratulate the noble Lord, Lord Sharkey, on the way he introduced it. There could barely be a better amendment to start Committee.
In 2017, during the passage of the Financial Guidance and Claims Bill, now enacted, there was much discussion of, and amendments tabled around, a duty of care, with support from all sides of the House. The response then was that the time was not right: we had to get through Brexit and then look at financial rules and regulators in the round. Four years on, with Brexit done, I think the time is more than now to consider duty of care in all its manifestations, as the noble Baroness, Lady Bowles of Berkhamsted, set out.
In saying that, like other noble Lords I am extremely grateful for the briefings and unstinting hard work undertaken by many organisations in this area. It is invidious to single out two, but I will, not least the Money Advice Trust and Macmillan Cancer Support. Duty of care was an issue in 2017; it was an issue way before that. The Covid crisis has not brought about the need for a duty of care; it has merely shone the brightest and starkest of spotlights on the issues right across the financial services sector.
It is difficult to put it any clearer than this, from a client of Macmillan Cancer Support in one of her darkest moments: “It felt like I was fighting my bank as well as fighting cancer”. Fighting my bank as well as fighting cancer—that is a more than good enough reason to think extremely carefully about how to bring about a duty of care. That one individual speaks for hundreds of thousands.
My Amendment 129 in this group seeks to introduce rights of action for SMEs for breaches of the FCA handbook. I believe the amendment would bring clarity and consistency to how the handbook operates. These rights of action are currently available only to private persons but, when we consider this in the round, not least in the world of FS when we think of fintech founders, are the “Ss” of SMEs—micro-businesses—essentially that different from private persons? Of course I understand the concept of the corporate veil and limitation in all its forms but, in essence, when it comes to operating in a regulatory framework, as we currently have, are micro-businesses that different from private individuals, who currently have this right of action?
Imagine this: currently, a micro-business has only the letter of the contract to take action against the bank. This seems wholly unsatisfactory and more than a little asymmetric. The nature of the relationship between a small business and a bank should be much more effectively reflected in the rulebook. Need I suggest some of the ways this may have helped in the past, with Libor, forex, the GRG, and Lloyds/HBOS activities in Reading? In particular, RBS’s global restructuring group was one of the most shameful episodes in this country’s banking history.
Fundamentally, the amendment can be summed up in a simple line: in reality, how can an SME or micro-business take a bank to court? Amendment 129 offers the appropriate level of support and clarity to our SMEs, and consistency in the operation of the rulebook. Our SMEs are the beating heart of our economy. I suggest we use the amendment to put some head alongside that heart.
Lord McNicol of West Kilbride (Lab) [V]
My Lords, at this stage I have not put my name to any amendments, but I will speak in support of Amendment 4, tabled by my noble friend Lord Tunnicliffe, and make a few relevant points. Before I start, I make the Grand Committee aware of my financial interests as set out in the Lords’ register and echo the point from the noble Lord, Lord Sharkey, about the imbalance of power between the lender and the individual—a critical point that I am sure we will come back to in Committee.
Low financial resilience and overindebtedness are huge problems for individuals and the country. UK households have nearly £250 billion of outstanding consumer credit debt and more than 42.5 million people have used consumer credit. Those are the figures for 2019, pre Covid. In 2020 and into 2021 the problem has only worsened. The FCA recently found that the number of people suffering from low financial resilience increased by one-third to 14.2 million people in October 2021. That is nearly one-quarter of the UK adult population.
We know that low financial resilience is not just about overindebtedness. It can be caused by a combination of low savings and erratic family income. Erratic income and low levels of savings are not issues that the FCA can solve—government intervention and education are required to tackle those. However, overindebtedness is an issue that the FCA can help to address. Amendment 4 and a number of the other amendments in this group, as well as the later Amendment 8, would give the FCA some of the tools to do so.
As set out by the Government, the FCA has three key functions: protecting consumers, keeping the industry stable and promoting healthy competition between financial service providers. Of those three critical functions, I would like to concentrate on the first, of protecting consumers. Amendment 4 takes that current responsibility and would add to the Bill a clause which would give the Financial Conduct Authority a duty of care and, later, under Amendment 8,
“rules … to promote financial wellbeing”.
These would enhance the FCA’s powers to protect consumers—something which I am sure we all agree is necessary.
Christopher Woolard, chair of the recent Woolard review, said:
“Most of us will use credit at some point in our lives. So, it’s vital that we have a fair market that works for everyone. New ways of borrowing and the impact of the pandemic are changing the market, with billions of pounds now in unregulated transactions and millions of consumers at greater risk of financial difficulty”.
The Woolard report sets out 26 recommendations to the FCA, some on working with government and other bodies to make unsecured credit markets fit for the future. I hope that the Minister and Her Majesty’s Government will look at the amendments tabled and, where those issues and recommendations raised by Woolard align with them, we will see some government amendments or an acceptance of the amendments laid to the Bill.
This is specifically pertinent in relation to “buy now, pay later” products. On 13 January in the other place, Stella Creasy moved an amendment that would have required the BNPL industry to be regulated by the FCA. The proposal was defeated by the Government, by 355 votes to 265. The Woolard review makes the point, on the regulation of the unregulated “buy now, pay later” sector:
“BNPL products which are currently exempt from regulation should be brought within the regulatory perimeter as a matter of urgency. The use of BNPL products nearly quadrupled in 2020 and is now at £2.7 billion, with 5 million people using these products since the beginning of the coronavirus pandemic”.
The report continues by stating that
“more than one in ten customers of a major bank using BNPL were already in arrears. Regulation would protect people who use BNPL products and make the market sustainable.”
Seeing the light, the Minister, John Glen, agreed that Her Majesty’s Government need to act and bring BNPL into the scope of FCA regulation. I was hoping to see a government amendment to this effect, as the noble Lord, Lord Sharkey, said earlier, but I am sure it will be forthcoming at later stages of the Bill.
I also bring to the Committee’s attention an article in the Observer yesterday, Sunday 21 February, entitled “High-cost lenders ‘exploit NHS workers on pandemic frontline’”. The article highlighted a number of individual cases, as well as the alarming and eye-watering interest rates of over 1,300% being charged by some high-cost credit providers.
The article is based on a University of Edinburgh Business School research report, which makes it evident that the signs of financial vulnerability within the NHS workforce are being ignored by high-cost lenders on an industry-wide basis. Overindebted NHS workers are now struggling with unaffordable loans. They did not receive them from unlicensed backstreet lenders: more often than not, they got them through FCA-licensed and regulated high-cost lenders. This is why Amendment 4 is so important in stating
“the general principle that firms should not profit from exploiting a consumer’s vulnerability, behavioural biases or constrained choices”.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to follow the noble Lord. I would like to support the case for introducing a duty of care and look forward to hearing from my noble friend as to why in the Government’s view it may not be needed.
I will focus my remarks on Amendment 72, so ably moved by the noble Baroness, Lady Bowles, and in particular on subsection (2) of the proposed new clause. It concerns me greatly that there is still a huge area of unregulated provision of financial services here, in particular in the case of young people who, after they have graduated and are looking to pay off their student loans, will be relying on their banking facilities. It does seem that we need either a duty of care or, as the noble Baroness, Lady Bowles, set out in subsection (2) of the proposed new clause, some means by which we indicate to potential consumers and customers exactly what the situation is. I find that this area is compellingly in need of greater regulation—or, if not that, then the pointing of actual customers or potential future customers towards acting in this regard.
I find it extraordinary what information is provided to any of us, and in particular to young people. The noble Lord, Lord Sharkey, did a great service in setting out not just PPI but a number of other irregularities—at the very least—that have come to light in the last five or 10 years that need some form of redress in order to close this particular loophole.
We are in an extraordinary situation where there are a number of non-regulated financial services. In particular, Amendment 72 would seek to redress this. But also, Amendments 1 and 4 imposing a duty of care have many strengths to commend them. I look forward to my noble friend in summing up giving the reaction of the Government to the proposal for such a duty of care in the circumstances set out therein.
Lord Blunkett (Lab) [V]
I am very pleased indeed to join in this important debate. The noble Lord, Lord Sharkey, set out the situation in the macro field extremely well and I am pleased to support the speeches that have already been made by a number of noble Lords.
I will concentrate on two things. The first is the issue of protection from exploitation with the development of cybercrime. I hope we will be able to come back to this in Committee and on Report with respect to the risks that people are put into because of the lack of care within the whole of the financial services sector. Secondly, very small businesses and partnerships are excluded from redress, as the noble Baroness, Lady Bowles, mentioned. This is also is relevant to Amendment 129, moved by the noble Lord, Lord Holmes of Richmond.
On the first issue, in relation to cybersecurity, there is a growing trend that those who are affected keep quiet rather than reveal what has happened. This is a real danger. If, as I hope, we come out of the present dip in relation to financial services globally because of Brexit, we will be able to present to the world a marketplace which is both effective and forward looking—and is also secure. A duty of care to both individual customers and to small and medium-sized enterprises is a critical element in taking this Bill forward and strengthening the measures that exist there. I will not egg the measures that I think are necessary this afternoon, because there will an opportunity to come back to them. But I will just say that this is a growing area of real concern. An improved mandate for those operating in the financial services sector from the FCA would be very welcome indeed.
On the issue of small and medium-sized businesses and small partnerships, and the relationship between them and individual consumer, it is little known that access to the Financial Ombudsman is confined to individuals rather than small businesses and partnerships. What was said by the noble Lord, Lord Holmes, and also the noble Baroness, Lady Bowles, was highly relevant here. It backs up the need for clarity in terms of how we deal not only with prevention but with redress.
I give one small example, which I took up the with the noble Lord, Lord O’Shaughnessy, when he was at the Department of Health. To his credit, he saw the wisdom of trying to bring about change. As the noble Lord, Lord Holmes, has described, it was not received well at the time because of the struggle that was going on post the Brexit referendum and because of the difficulties the Government were facing. We have dealt with banks and financial services, but we need to concern ourselves with insurance as well. Perhaps now is an opportune moment to deal with the situation where an insurance company is taken over and the new provider offers a slightly revised agreement which is sent out without highlighting the key changes that have been made.
For instance, in cover for physical ailments and physical damage because of accident, there is no change, but in terms of absence from work and insurance by a partnership with more than 10 partners insuring together, the mental health clauses are changed to make any payment dependent on having to gain, within 12 weeks, the sign-off of a psychiatrist and a clinical psychologist. Anyone with any knowledge of this area will know that that is an impossible ask. Had it been highlighted to the partnership, it would have been able to look elsewhere for an insurer that was not going to exploit the market as this company did.
The partnership could not go to the ombudsman. It would have been entitled to if each individual partner had insured themselves, but because there were more than 10 of them signed up to the insurance contract, that was not possible. We need to put right nonsense of this kind and ensure that those making enormous amounts of money, which they will continue to do, do not do so at the expense of individuals or small and medium-sized enterprises.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Blunkett. I very much support his call for a financial sector that is secure, that does not threaten the security of all of us and that does not exploit people who are forced to use its services.
I speak chiefly to Amendment 1 in the name of the noble Lord, Lord Sharkey, also signed by the noble Baroness, Lady Kramer, and me. It was ably introduced by the noble Lord. I speak to this amendment because it is a subject close to my heart and one that I referred to at length in my speech at Second Reading. This group fits together nicely when we look also at Amendments 72 and 129, which I also support. We are talking about a huge imbalance of power in the interactions between the financial sector and its customers. As the noble Lord, Lord Sharkey, said in his introduction, when talking about this we often focus on banks, but we have seen some truly outrageous behaviour from insurance companies during the Covid-19 pandemic, something that I have referred to previously in the House.
When thinking about this amendment I reflected on being a 19 year-old in Australia, many years ago, buying a studio flat. It was cheaper then to have a mortgage than to pay rent. My father stood as guarantor and met the local bank manager—they knew each other personally. This was before the financial deregulation that allowed the massive boosting of prices, as the excellent 2016 New Economics Foundation report The Financialisaton of UK Homes laid out. That was what made it possible.
However, the banking sector then was no ideal model. It was undoubtedly paternalistic, patriarchal and discriminatory, against people from BAME and certain socioeconomic backgrounds and on the basis of gender. I am not sure whether my father was forced to be guarantor because I was a single female and a strange type of person to be taking out a loan, or just because of my youth, but there was in the local bank manager an individual knowledge and understanding, and the hope that if something went wrong, an individual would know your circumstances and do their best to help you.
That is not the situation that we have now. We have a “computer says no” approach. Anyone with a problem can expect to encounter an endlessly changing rota of call centre staff reading from scripts. We could hope for a locally based institution serving the needs of local communities, something that other parts of the world, such as Germany, still expect from their financial sector. That would be a financial sector that served as a utility, not as a generator of maximum profit. Care would then be built in and we might not need an amendment such as the duty of care amendment, but we have to start from where we are.
Lord Blackwell (Con) [V]
My Lords, I understand the motives of these amendments and sympathise with a lot of what has been said. However, I will be a dissenting voice on whether the form of the amendments is proportionate and practical in meeting the objectives set out.
As we all recognise, financial services have a social purpose. They play a critical role in society and in people’s lives and they have to recognise that in their responsibilities. There are clearly still failures in the way the industry operates, some unintended and some still involving bad behaviour, and, as many noble Lords have pointed out, there is a problem in the unregulated sector. However, most of the major institutions now exercise their responsibilities carefully, trying to do so in the best interests of their customers. I do not recognise in some of the comments made the tens of thousands—in fact, over 100,000—ordinary bank workers who go into their branches or call centres every day and try desperately to do their best for customers, motivated by the most genuine service obligations. In the way that the banks have operated in providing basic bank accounts and the responsibilities that they have shown in their lending practices, the industry is by and large showing how it can evolve and act responsibly.
There are, of course, failures, as there will always be in any industry, but these can be dealt with under the existing FCA principles, reinforced as they are now by the SMCR regime. There has to be a boundary on what is reasonable to expect of the duty of care. We cannot expect financial services to take on the duties of the state as a social service for those who need extended financial support. Yes, it has obligations, but there is a limit to what the financial services sector can do for those in financial need.
My issue with the general duty of care is that it has no clear boundaries setting out when a financial service company has reached the limits of what it is reasonable to do under that duty of care. We have to recognise the reality that any intervention to increase customer support or protection has a cost. The direct costs of subsidising support to customers in financial need are now covered, as in utilities, through cross-subsidies—higher charges on other customers to pay for the extended credit or basic bank accounts for those customers in need. It is accepted within the industry and within society that a measure of cross-subsidy within the financial services sector is part of being a universal provider.
However, the indirect costs of compliance are more damaging; they may disadvantage those that they are meant to help. The more questions you need to ask your customers, the more detailed information you have to ensure they have understood and the more you have to penetrate into their lives, the more banks and insurance companies are forced to rely on formulaic compliance bureaucracy that erects barriers to simply understanding and addressing customers’ issues. People spend more time ticking the boxes than they do just listening and trying to provide a genuine real-world answer to the issues in front of the customer.
The danger is that, despite the best intentions of helping to ensure that people get good advice, there is an increase in costs and risks to compliance to the point where, as happened with the retail distribution review that took place some years ago, financial services companies simply withdraw from offering any services to those customers because they cannot take the risks and costs and the compliance burden pushes customers out of access to financial services.
Not having boundaries around what that duty of care comprises opens up the risks to financial services companies of court judgments and CMC claims that continually push the obligations and costs of compliance far beyond what is reasonable for a financial services company to do—one doing its best to offer financial products and serve its customers—and what is reasonable for the customer to take on, in terms of their responsibilities in setting out their needs.
I believe that, despite the motives behind this, it is much better to be prescriptive about what obligations there are for reasonable behaviour, as set out in the current FCA principles, which include the obligation to treat customers fairly and fairly communicate the information they require. These considerations require a high level of care and compliance, not always correctly done—but there are penalties when they are not done correctly. The SMCR regime is reinforcing that. As such, despite my sympathy for the motives behind these amendments, I believe that the intent behind them, however good, would not result in a proportionate or practical improvement in regulation and carries many dangers and risks both to financial services companies and, more importantly, to the customers whom we seek to protect.
Lord Davies of Brixton (Lab) [V]
My Lords, I agree with much of what has been said and it is not necessary to repeat it. I support the objective of the amendments—in particular, I support my noble friend’s Amendment 4—and I look forward to the Minister’s reply. It is difficult to see how the principle of these amendments can be refused.
However, it is necessary to make an overarching point, which I base on my experience over 50 years as a close observer of the financial services industry. The truth is that the industry has a systemic tendency to malfeasance. This is not an attack on the great many good people who work within the industry, as the last contribution mentioned, in banks and insurance companies, who only wish to do a good day’s work. However, the unremitting succession of scandals involving finance is not just a series of unfortunate one-offs; it is built into its very nature. This is a big issue, but I emphasise two simple reasons. First, there is an inevitable asymmetry of information. As Amendment 4 highlights, there are
“a consumer’s vulnerability, behavioural biases or constrained choices”.
This situation is bound to create the sort of problem that we have seen. The second, even simpler, reason, using the classic but apocryphal words of Willie Sutton, is because it is “where the money is”. People seek to gain money from where there is lots of it and there is lots of it in the finance industry.
There is much to be done to solve this problem. It is systemic but it still needs to be addressed because people need help. However, what is in these amendments seems to me simply a minimum of what might be done to address the problems that the industry so clearly incorporates.
Baroness Kramer (LD)
My Lords, I simply do not understand the resistance we find from the Government and the FCA to the duty of care amendment moved by my noble friend Lord Sharkey, and supported by my noble friend Lady Bowles and the noble Baroness, Lady Bennett, and to the almost identical Amendment 4 proposed by the noble Lord, Lord Tunnicliffe, and supported by the noble Lord, Lord Eatwell, and again by my noble friend Lady Bowles. I am not going to repeat the saga of abuse that many noble Lords have described. That has been done incredibly well and is exceedingly powerful. I will say though that this issue keeps happening. I notice the headline in today’s Times:
“City regulator ‘slow to act’ against car leasing firm”.
Every time we think that we are perhaps past a period of abuse, another one comes along. To me, it is utterly unacceptable, as I hope it is to everyone in this House.
What makes me particularly angry is that the regulator has largely known, very early on thanks to whistleblowers, when the financial institutions that it regulates are treating customers badly. However, again and again, the regulator takes years to react, reacts minimally at first, initiates a lengthy review—often several—asks the organisation to review itself and then does too little, too late. I want to pick up one issue in illustration: the treatment of payday lenders.
Many people in this House will remember the experience of trying to pass legislation to get a cap on the interest rates that payday lenders could levy. I bring up this issue because it deals with the difference between treating customers fairly and a duty of care. The FCA took a very strong position that customers were being treated fairly so long as they knew the terms of the contract. There were, perhaps, some constraints such as a limited number of rollovers. The FCA did not look at the far deeper issue of the way that people were being abused by payday lenders and the extraordinary level of interest rates. That is why the duty of care is very much more powerful. As my noble friend Lord Sharkey said, treating customers fairly is undermined in the FiSMA legislation by the caveat emptor parts of the FCA’s rules.
I am not a bit surprised that the noble Lord, Lord Blackwell, objects to these duty of care amendments. When I sat for nearly two years on the Parliamentary Commission on Banking Standards, the industry objected to almost every measure that would have constrained the abuse which created the crisis in 2008, such as the Libor crisis and PPI. The saga was endless. I say to the noble Lord, Lord Blackwell, that in a later group of amendments I will be referring to the HBOS Reading case, another example of fraud perpetrated between 2003 and 2007. A number of bankers went to prison but today, in 2021, victims of that fraud still have not received fair compensation.
Dame Elizabeth Gloster’s damning report of last November on the FCA’s regulation of London Capital & Finance Plc said:
“The root causes of the FCA’s failure to regulate LCF appropriately were significant gaps and weaknesses in the policies and practices”.
That is simply true across the board. It is piecemeal, as my noble friend Lord Sharkey described.
Misbehaviour keeps happening and delayed redress is the normal pattern. To quote Einstein:
“The definition of insanity is doing the same thing over and over again and expecting different results.”
It is time to make a step change to protect consumers, and I hope very much that the Government do so in this Bill.
Lord Eatwell (Lab)
My Lords, in considering this Bill, we are all placed in a somewhat odd position. The Treasury is, right now, conducting a financial services future regulatory framework review. Indeed, phase 2 of consultation on that review concluded just last Friday. While I fully understand that some parts of the Bill before us are associated directly with the UK having left the European Union, other parts are not associated in that way. It is quite likely that we will be back here in a few months’ time debating the same issues all over again when the Treasury decides on its response to the consultation and brings forward legislation to implement the future regulatory framework.
It would be comforting if the Minister could assure us that we are not wasting our time but, of course, she cannot do that, because none of us knows what the final outcome of the regulatory framework review will be. None the less it would be helpful if, when she sums up, the Minister could assure the Grand Committee that the Treasury will treat debates on this Bill as, at the very least, an enhanced consultation to which the Treasury will have full regard when reaching its final conclusions.
Let us get down to business on the amendments in the names of my noble friend Lord Tunnicliffe, the noble Baroness, Lady Bowles, and myself. Every first-year student of financial markets knows that markets in retail products—financial products sold to individuals, households and small businesses—are seriously inefficient. One important reason why they are inefficient is due to asymmetric information, as the noble Lord, Lord Davies, said just now. To put it simply, the seller of the product typically knows much more about the risks involved in making a particular investment or other financial transaction than does the hapless investor. An extreme example of this is to be found when the chief economist of the Bank of England, Andy Haldane, confessed that he did not understand the pension that had been sold to him.
As the Committee will be aware, if it is the FCA’s strategic objective to ensure that the relevant markets function well, to do so in the presence of asymmetric information it has two broad operational options. Either it should regulate each individual financial product to ensure that the investor is properly informed or it could adopt the principle of Amendment 4—and, indeed, Amendment 1—and make general rules, including the power to introduce a duty of care owed by the authorised persons to consumers. Up to now, the FCA has adopted the former option and dealt with each issue as it arises. By its own admission, this has not gone very well. From its consultation entitled Our Future Approach to Consumers in 2017 through to the feedback statement published in April 2019, the FCA has wrestled with the issue of duty of care, and is still wrestling today. Yet it still persists with its failing approach of regulating each product, and that simply cannot go on.
Action is really imperative, for two main reasons: first, because of the persistent appearance of new products, such as the buy-now, pay-later schemes, which we will discuss later—persistent innovation, which the FCA meets with persistent delay. It is always playing catch-up to introduce the new rules, after taking time for appropriate consultation and so on, to deal with the new threats to the consumer.
The second reason is the now-ubiquitous sale of financial products via the internet, as referred to by my noble friend Lord Blunkett. How many of the Committee have ticked the box verifying that they have read the terms and conditions of internet sales, without a thought of ever doing so? It is the dense and incomprehensible text of those terms and conditions that is so often the electronic embodiment of asymmetric information: the very factors ensuring that the relevant markets do not function well and that the FCA does not perform its strategic objective.
Amendment 4 provides the FCA with the means to end this failure to meet the strategic objective. The enactment of the power to introduce a duty of care would place the responsibility of ensuring that markets function well firmly on the shoulders of those who have the information required to attain that goal. As my right honourable friend Pat McFadden put it when discussing the Bill in another place, with the enactment of a duty of care, financial services providers would necessarily ask themselves the question, “Is this right?” rather than what they ask themselves today, which is, “Is this legal?” That would create a real shift in how business is done. I say to the noble Lord, Lord Blackwell, that this has nothing to do with subsidies and subsidising. It is doing what is right. If the FCA had the power to introduce a duty of care, it could begin to live up to its strategic objective.
I am quite prepared to believe that our drafting of Amendment 4 contains petty infelicities. So what? What is important is the principle that the amendment embodies. I am confident that Treasury officials can always find the appropriate wording. But we are all aware that too many consumers are being treated inappropriately, whether by the mis-selling of products, denial of rights or obstructionist responses to complaints and so on. I am certain that Her Majesty’s Government wish to improve on the consumer protections previously enshrined in EU legislation. The introduction of a duty of care is a safe and sure way forward: a way to ensure that markets function well.
I regret that I cannot agree with the noble Baroness, Lady Bowles, that the duty of care should be extended to the regulator itself. That is unreasonable because it suggests that the regulator should be looking over the shoulder of the participants in every single transaction. That would require regulatory omniscience, and I think it is truly unreasonable. But I would like to say a few words in hearty support of the noble Baroness’s Amendment 72 in this group. Anyone who has laboured as a financial services regulator, as I have, will be well aware of the abuse addressed by this amendment: an abuse that has disfigured the promotion of financial products for far too long.
The failure to deal with this abuse was an important component of Dame Elizabeth Gloster’s investigation into the FCA’s regulation of London Capital & Finance plc. The abuse of promoting non-regulated activities while identifying the promoter—albeit correctly—as a regulated entity must also be addressed by the holistic evaluation of regulated entities, taking into account both regulated and unregulated activities, because, typically, the culture of a firm is not divisible. So, while I support Amendment 72 from the noble Baroness, Lady Bowles, I note that there is more to be done to implement Dame Elizabeth’s recommendations.
Baroness Penn (Con)
My Lords, I will start with a word of reassurance to the noble Lord, Lord Eatwell, and others that the Government will consider all the contributions to the debates on the Bill carefully, and in terms of the work they are doing on the future regulatory framework review and the broader regulation of financial services. That is an important point when we discuss these amendments. As the noble Lord just set out, the amendment to introduce a duty of care could be interpreted as quite a different fundamental approach to financial services regulation, which, with that scale of change, might be better considered as part of the future regulatory framework review. However, much work has been done on this subject and I turn to it now.
I will speak first to Amendments 1 and 4, which seek to introduce a statutory requirement for the FCA to make rules requiring authorised persons to adhere to a duty of care when providing a product or service. Amendment 4 would also require the FCA to have explicit regard for vulnerable consumers when discharging its consumer protection objective.
I am grateful to the noble Lords who put forward these amendments, which give the Committee the opportunity to discuss this important issue. I know that it was also discussed during the passage of the Financial Guidance and Claims Act, and the Government pay tribute to the work undertaken by Macmillan, whose “Banking on Change” campaign includes the proposal for a statutory duty of care. I agree with the charity that
“Money worries should be the last thing”
on a person’s mind when they are dealing with cancer, but I emphasise that the FCA is already taking steps to ensure that financial services firms exercise due care and regard when offering products, services and advice to consumers. A statutory duty of care does not add to the FCA’s existing powers in this area, and there are likely to be difficulties in applying a single duty consistently and proportionately to the wide variety of products and relationships in financial services. The Government do not believe that an additional statutory duty of care, as proposed by these amendments, is necessary.
Financial services firms’ treatment of their customers is governed by the FCA through its principles for business, as well as specific requirements in the handbook. The principles for business require firms to conduct their business with due skill, care and diligence, and to pay due regard to the interests of their customers and treat them fairly. The FCA has recourse to disciplinary action against firms that breach these principles.
The FCA has also announced that it will undertake work to address any potential deficiencies in consumer protection, in particular by reviewing its principles for business. The coronavirus pandemic has caused the FCA to delay the next formal stage of this work to allow firms to focus on supporting their customers during this difficult period. However, it remains committed to progressing this work and has announced that it aims to consult in the first quarter of this year.
I reassure the Committee that the Government believe that the FCA already has the necessary powers to ensure that sufficient protections are in place for consumers, and has the will to act, without the need for a statutory duty of care or expansion of the consumer protection objective. The Government will continue to work closely with the FCA to keep the issue under review.
Before I turn to Amendment 72, I reiterate the Government’s sympathy for London Capital & Finance bondholders. In May 2019, the Government directed the FCA to launch an independent investigation into the events relating to the FCA’s regulation and supervision of LCF. Dame Elizabeth Gloster’s investigation was provided to the FCA on 23 November 2020. It concludes that the FCA did not effectively supervise and regulate LCF during the period. She makes nine recommendations for the FCA, focusing on how it should improve its internal authorisation and supervision processes. The Government laid the report, along with the FCA’s response, before Parliament on 17 December. In that Written Ministerial Statement, the Government welcomed the FCA’s apology to LCF bondholders and its commitment to implement all of Dame Elizabeth’s recommendations. Dame Elizabeth also made four recommendations for the Treasury, which the Government have accepted in full.
Turning to the specifics of the amendment, through its rules and guidance the FCA already requires financial promotions to be clear, fair and not misleading. As part of those rules, authorised firms are specifically required to ensure that if they refer to their authorised status in the context of any communications relating to unregulated activities, they make it clear that those specific activities are not regulated. Misleading statements by a firm may involve a breach of the FCA’s existing rules and the FCA has broad powers to enforce against such breaches. Depending on the severity of the breach, it may also be an offence under Part 7 of the Financial Services Act 2012.
The Treasury has committed to keeping the legislative framework underpinning the regulation of financial promotions under review. As part of this, the Treasury is actively working with the FCA to consider whether paid-for advertising on online platforms should be brought into the scope of the financial promotions regime.
The Deputy Speaker (Baroness Henig) (Lab)
I have received a request to speak after the Minister from the noble Viscount, Lord Trenchard.
Viscount Trenchard (Con) [V]
My Lords, I declare my interests as stated in the register. I apologise to the Minister and the Committee for failing to get my name on the speakers’ list for this group on time and appreciate been given a chance to speak after the Minister. In the circumstances, I will confine my remarks to Amendment 1, introduced by the noble Lord, Lord Sharkey, with whom I often agree. However, on this occasion I strongly agree with what my noble friend Lord Blackwell said.
On the duty of care, the FCA has itself, as other noble Lords said, consulted on this question and provided feedback in November 2019. Many respondents thought that, rather than further complicating the FCA’s responsibilities, with the commensurate risk of increased litigation, it would be better to let the newly introduced senior managers and certification regime settle down.
I suggest that there is already evidence of cultural change in many regulated companies as a result of this, and that those who think we should not at this time bring in changes likely to make the FCA more cautious in the exercise of its functions are correct. It surprised me that while many respondents thought that the FCA should be given a duty of care, most of them thought that the duty should not be enshrined in law because it would lead, inter alia, to duplication of existing obligations, the loss of regulatory agility, and costs, delay and the stress of litigation for consumers. Even the adoption of a non-statutory duty of care would have many of the same effects. Surely the thing we most want to avoid, to ensure that the City retains its position as one of the two leading global financial centres, is a loss of regulatory agility.
Baroness Penn (Con)
My Lords, I believe that contribution has put another side of the argument. It is the balance between these two perspectives that the Government seek to strike. We also think the FCA is in the right position to strike it, with its obligations to protect consumers and its detailed understanding of the markets that it regulates.
Lord Sharkey (LD) [V]
My Lords, I thank all noble Lords who have spoken on this group and I note a largely positive view of a duty of care. I thank the Minister for her response. Her counterpart in the Commons took 58 words to respond to a similar proposition; the noble Baroness took more than that, but notwithstanding the length of her response I was not convinced by any of her arguments. Many of them seemed much like medium to long grass.
The case for a duty of care still seems clear and urgent. Essentially there are, as we said, five key reasons for adopting the duty. The first is that FSMA does not protect consumers adequately; the second is that the FCA is always playing catch-up. The third reason is that poor behaviour by firms continues, as I set out in my opening remarks. The fourth is that getting redress after the event is time-consuming and very stressful, and the fifth is the incentive for real and lasting cultural change in our financial services industry. All these seem to be conclusive arguments in favour of a duty of care.
The Minister’s arguments against seem to have a strange Alice in Wonderland quality to them. They amount to saying that it is not in the consumer’s best interests that financial services firms should be obliged to act in the consumer’s best interests. That simply cannot be right. We will return to this issue on Report but, in the meantime, I beg leave to withdraw the amendment.
Lord Blackwell
“Competitiveness as an FCA and PRA objective
(1) The Financial Services and Markets Act 2000 is amended as follows.(2) In section 1B (the FCA’s general duties), after subsection (1)(b) insert “and—(c) supports the standing and competitiveness of the United Kingdom as a leading global financial centre with high market standards.”(3) In section 2B (the PRA’s general objective), in subsection (1) at end insert “, while supporting the standing and competitiveness of the United Kingdom as a leading global financial centre with high market standards.”(4) In section 2C (insurance objective), after subsection (1)(b) insert—“(c) which supports the standing and competitiveness of the United Kingdom as a leading global financial centre with high market standards.””
Lord Blackwell (Con) [V]
My Lords, Amendment 2 is in the name of my noble friend Lord Bridges, who gives his apologies that he is unable to be present this afternoon and has asked me to move the amendment in his place. It seeks to introduce the international competitiveness of financial services as part of the general duties of the PRA and FCA. I would have thought that the amendment is unexceptional and uncontroversial, in the sense that it is difficult to imagine how one could sustain the opposite view: that it is not desirable for the UK to maintain its standing and competitiveness as a global financial centre, or for the regulators not to have regard to that. I am sure that this is already implicit in the approach to regulation taken by the Bank of England, as in that taken by Her Majesty’s Treasury, but it is not formalised in the remit of the PRA and the FCA. This amendment would remedy that deficiency.
I do not need to labour the Committee with facts and figures about the huge importance of financial services to the UK economy and the wealth created by its global trading activities. If this were any other industry of major economic importance, for example the automotive industry or telecommunications, the need for international competitiveness would be taken as given. For financial services, the nature of the industry means that the regulators have, of course, been tasked to oversee other important objectives: the maintenance of prudential standards to avoid financial collapse and, as we have just been talking about, the protection of consumers in complex and life-changing financial transactions.
The amendment does not seek to override those. It would simply add to the general duties of the PRA and the FCA the need to have regard to the aim of supporting the standing and competitiveness of the United Kingdom as a global financial centre in the way those regulators carry out their specific objectives. To avoid any suggestion that this would mandate a drive to lower standards as a way of becoming more competitive, the amendment is clear that the mandate is for a global financial centre with high market standards. I believe it is widely accepted in this House, and in the industry at large, that our standing and competitiveness as a global financial centre can be maintained in the long run only by maintaining confidence in the soundness and integrity of the UK’s financial markets.
In practice, the amendment would mean that the regulators, in considering the design and implementation of regulations and rules, would consciously have regard to ways of achieving the desired outcomes with minimum unnecessary overhead costs and market restrictions. For example, in implementing the measures in this Bill for the regulation of investment firms under the investment firms prudential regime, the implementation of remaining Basel III banking standards and, more generally, reviewing the imported EU MiFID regulations, the regulators would have an explicit concern to pursue the simplification and streamlining of those regulations, moving to the UK’s preferred model of regulating through principles and outcomes to achieve the required standards for a more efficient regulatory approach that improves our international competitiveness.
The Bill in fact goes part way there already in new Section 143G, as introduced by Schedule 2, in which the FCA is required, in applying regulations to investment firms, to have regard to the likely impact of the rules
“on the relative standing of the United Kingdom as a place for internationally active investment firms to be based”.
However, this is applied only to this one limited area of regulation, rather than as a general duty.
If there were seen to be a conflict between international competitiveness and other objectives on some specific measure, it is surely right that this should be identified and an explicit trade-off decision made on the most appropriate priority, which may of course override the competitiveness concern. However, in most cases, efficient regulation, high standards and international competitiveness go hand in hand, rather than conflict.
Take, for example, the current consultation on the Bank of England’s proposal to remove the capitalisation of software from the calculation of banks’ regulatory capital. This is contrary to the practice adopted in the EU and in the US. At first sight that could look like it would put UK banks at a competitive disadvantage. However, not only is that change a sensible way to maintain the integrity of the prudential standard, but doing so would reinforce the UK as a leading global financial centre with high market standards, and, therefore, its competitiveness. The notion that these would often lead to conflict is mistaken: competitiveness can complement high standards.
In proposing the amendment, alongside my noble friend Lord Bridges, I believe that the arguments, including support for international competitiveness in the regulators’ general duties, are important and incontrovertible. I hope my noble friend the Minister will find some way to accommodate this in the remaining stages of the Bill or, if not, give a clear indication of how it will be addressed in other measures that the Government intend to bring forward. I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, Amendment 3 in my name and that of my noble friend Lord Sharkey is an amendment to Amendment 2 and probes what is meant by “high market standards”. Could these mean, “no lower than current standards”, and what are they measured by? Are they just rules, which we hear a lot about, or do they also include enforcement? Regrettably, we also hear about that when it has all gone wrong, with the Gloster and Connaught reports being the latest examples of that. Like a taster menu, our amendment then leads on to the connection between standards and oversight of regulatory performance with respect to both rule-making and enforcement, and suggests that there should be regular independent reviews every three years. For clarification, that would not be instead of whatever Parliament decides it wants to do; it would be additional.
I will put my cards on the table and say that I am nervous about any introduction of competitiveness as a general duty, even with the qualification, or as a bidding, to consider ranking. If one thing was learned from the FSA’s demise and the financial crisis it is that giving a financial services regulator a competition duty can lead to disaster through creating incentives to balance industry profit against safety and consumer protection. It can potentially lead the regulator astray from its essential objective of safety and soundness. If there is such a remit it will inevitably lead to calls from parts of industry that do not want fetters, or even from shareholders that want profits. If competition appears as a duty there will be pressures to go just a little bit lighter touch, then just a little bit more, with arguments that this is all okay because it is among experienced market participants.
Unfortunately, light touch in one part of a market that may seem remote from retail consumers does not prevent contagion. Let us not forget the investment bank “slice and dice” of subprime mortgages, which fuelled the financial crisis by stimulating yet more subprime lending—what gets made gets sold and invested in. Later amendments deal with what happens nowadays with regulated mortgages that are sold on to unregulated entities, so let us not kid ourselves that different parts of the market are in self-isolation or lockdown.
However phrased, a competition mandate is different from a proportionality mandate, which the regulators already have. I am all for regulators making it much clearer how they categorise activity as part of proportionality and transparency. I wish they would do more of it—it can aid competitiveness too—but put in an additional competitiveness mandate and what does that mean, other than to go lighter than proportionality requires?
On the other hand, it is necessary to recognise that regulation is a good way to end up with a closed shop, preventing new entrants and new products, and there can be incentives on regulators to seek the stability of the graveyard. I can think of areas where I would lay that charge, such as fixation on gilts and sluggishness around approving new banking models. However, I do not see a primary competitiveness mandate solving that, even alongside a “high market standards” statement.
This takes us back to what is meant by high market standards. Who sets those? Whatever they are, I am sure they will be lauded as “world beating” even before the rest of the world has been looked at. However, I think that a regular, expert independent assessment can check and report on all aspects—the standard of rules, whether they are gold plated, how good enforcement and operational systems are and, yes, what can be learned by comparison with elsewhere. However, I do not think it is for the regulators to advise on whether they are better at doing things than elsewhere. I already know their answer.
The final part of my amendment suggests that the regulators pay for the reviews—so it is rather like a Section 77 review. Then it says that the review must be published without modification, because there was a certain amount of photoshopping of the Promontory report about GRG and it was made public only via the Treasury Select Committee publishing a leaked copy.
However, there are other ways that regular independent reviews could be done—more like an independent person FiSMA Section 1S review that the Treasury can require—or through an oversight body led by a handful of skilled individuals, as the Australians are now doing. It seems to me that, if you want assurance on high standards, which I do, that is the way to do it, in line with what looks like becoming the new best practice, and that is where the UK should be.
Baroness Neville-Rolfe (Con) [V]
My Lords, I will speak to Amendments 6 and 7 in my name and that of my noble friend Lord Trenchard, who has a lifetime of experience in the financial services sector and understands the whole issue of competitiveness and UK influence from banking for many years in Japan. I am so sorry that because of procedural changes he is now unable to speak to these amendments.
I refer to my interests in the register, particularly as a non-executive director of Secure Trust Bank plc in Solihull and of Capita plc and as a member of this House’s EU Financial Affairs Sub-Committee. I was especially sorry to miss Second Reading of this very important Bill.
These amendments—like the one moved by my noble friend Lord Blackwell and those in the name of my noble friend Lord Bridges—introduce a competitiveness objective for the FCA and PRA. My Amendment 7 also applies to the Bank of England itself. My amendments differ because they spell out aspects of competitiveness that I know are important from a lifetime in business and from nearly three years as UK Minister attending the Competitiveness Council in Brussels.
Of course, consumer protection, stability and standards are important, but they are very well looked after in the structure of financial services regulation, even if the regulators do not always deliver or enforce properly, as we have heard from the noble Baroness, Lady Bowles. I come from a different perspective. Those of us with an understanding of economics know that needless red tape, inefficiency and lack of care for UK interests end up hurting UK consumers with prices that are higher than they need to be, delays that frustrate, and a failure to get things right first time. These also hamper innovation and productivity growth, two of the best ways to both benefit consumers—and I come from a consumer background—and stay ahead internationally.
This matters today even more than in the past. Financial services are the leading sector in the British economy, not only in London but in many other areas of the UK: Edinburgh, Cardiff, Newcastle and Birmingham, to name but a few. In the wake of coronavirus, Brexit and international competition, we need to treasure and enhance our leading position. France, the Netherlands, Germany, Ireland and Luxembourg are trying to steal our lead—but ineffectively, as this hurts their business and consumers and encourages investors and services to move to New York or Singapore. As Mr Barney Reynolds has argued, we must look again at the legacy of EU law, and I know my noble friend Lord Trenchard will have more to say on his ideas on another day.
We must not forget one point: small and entrepreneurial businesses are the backbone of this country. Everyone should remember that the big, powerful multinationals find it relatively easy to adapt to new regulations, rules and requirements, and to lobby for arrangements that suit their interests.
We must also create a benign climate for innovation, which is a vital part of improving efficiency. There is one great example: the Financial Conduct Authority’s so-called “sandbox”—clear, simple and easy regulation for fintech. Thanks for this are due to the current Governor of the Bank of England, but Mr Bailey and I were promoting this as good practice in India four years ago. It is dispiriting that there are not more such initiatives.
As my amendment states, we need “efficiency” and “competitiveness” in the interests of UK plc to feature in the purview of our regulators. A competition objective is not enough; indeed, it can sometimes harm smaller players, driving them bankrupt and causing problems for their customers, as bigger institutions mop up and take over their client base. Competitiveness is sometimes wrongly associated with bad aspects of globalisation. That is wrong: UK competitiveness is what this country now needs to strive for to support the UK base, rather than encouraging the sale of wonderful companies such as Arm to overseas interests. Alex Brummer has argued this forcefully in a series of books, and I agree with him.
While we come at the issue from different angles, I really do want my noble friend the Deputy Leader to listen to those of us who are seeking a change to the Bill to bring in considerations of “competitiveness”. So I will finish with the word’s dictionary definition:
“1. Possession of a strong desire to be more successful than others … 2. The quality of being as good as or better than others of a comparable nature.”
What could be better than that?
Lord Sharkey (LD) [V]
My Lords, Amendment 2, in the names of the noble Lords, Lord Bridges and Lord Blackwell, and the noble Viscount, Lord Trenchard, provides an opportunity to reopen an issue that was settled in 2012 by Parliament deciding against adopting a version of what their Lordships now propose.
Their amendment does not come as a surprise, not just because this Bill provides an obvious vehicle for its proposals but because it fits into the usual timescale of loss of institutional memory. Prior to 2012, we had a “have regard” on competitiveness built into FiSMA 2000; it required the FSA to have regard to
“the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom”.
This “have regard” was widely seen as contributing to the financial crash of 2007-08, which is why FiSMA was amended in 2012 to remove it.
During the discussion around and preceding its removal, there were some very forceful observations; three deserve particular attention. The first was from the Treasury, which, in its 2010 report, A New Approach to Financial Regulation: Judgement, Focus and Stability, said that there was strong evidence that
“one of the reasons for regulatory failure leading up to the crisis was excessive concern for competitiveness leading to a generalised acceptance of a ‘light-touch’ orthodoxy, and that lack of sufficient consideration or understanding of … complex new financial transactions and products was facilitated by the view that financial innovation should be supported at all costs.”
Lord Hodgson of Astley Abbotts (Con)
My Lords, this is the first time I have spoken in Committee, so I draw the Committee’s attention to my entry in the register. I will speak to my two amendments in this group. Amendment 87 is broadly drafted and follows on from the line of discussion and approach taken by my noble friend Lord Blackwell. By contrast, Amendment 106 is a highly specific focused proposal for improving the UK’s regulatory regime, on which I seek the Government’s response.
To take these in order, the purpose of Amendment 87 is to require the FCA and the PRA to take into account the impact on the UK’s competitiveness of any regulatory measures they seek to impose, and in particular, under proposed new subsection (2)(b), to assess the overall cost-benefit ratio of the UK’s compliance regime.
I know that even raising this issue risks one being labelled the money launderer’s or financial criminal’s friend. I plead not guilty to that, but I seek to ensure that our compliance regime is and remains cost effective. As evidence that I am not soft on financial crime, I draw the Committee’s attention to the fact that I have put my name to Amendment 84 in the name of the noble Baroness, Lady Bowles, which seeks to make failure to prevent financial crime a criminal offence, which we will discuss at a later date.
First, I want to consider culture. For too long it has tended to be argued that any money spent on compliance is money well spent. As business practices evolve so to, and quite rightly, should compliance practices, but no one has the responsibility to step back and consider whether some of the requirements of an earlier age remain effective and are still needed—so one has ever-increasing layers of regulation. Regulators are, by their very nature, risk averse. But somehow we have to create a climate in which we can find the right balance between a financial services industry which on the one hand might be seen as a system like the wild west, driving business away, and, on the other hand, a system so muscle-bound by regulation that the consequent time, expense and administrative hassle have an equally deterrent effect. It is to establish a formal mechanism to address this challenge that I have tabled Amendment 87.
We may well be told by my noble friend when he replies to this debate that the regulators are now well aware of this challenge. Of course, that is to be welcomed, but I question how far down that organisation this new mood or culture or approach has spread—and, no less importantly, how far it has spread into the compliance departments of the regulated firms. Too often, waving the regulatory stick has come to be seen as some sort of virility symbol.
The professional body, the Office for Professional Body Anti-Money Laundering Supervision, or OPBAS, in its latest annual report in March last year pointed out, in terms of disapproval, that 41% of professional bodies being supervised did not take any kind of enforcement action. No attempt was made to suggest what target figure was the right one; there was just the impression that not enough was being done and efforts and money spent must be increased. However, if you look at the list of professional bodies being supervised, it is not clear why many of them would need to take enforcement action except on the rarest of occasions. For example, one body being supervised is the Faculty Office of the Archbishop of Canterbury. I doubt that enforcement by the most reverend Primate the Archbishop of Canterbury needs to be a frequent event.
The second general point is that, too often, the attitude among regulators is, “What I have, I hold.” The House will have heard me before on several occasions speak about the poor cost-benefit ratio of the present suspicious activity report regimes, or SARs. Every year the number of SARs rises; in 2019, it reached 573,085, about 2,300 per working day. What use is made of these? The cost of all this to the regulated entities and so to consumers and clients is huge. Let us suggest that each SAR costs £250; that would create a total cost of £143 million for the sector, its customers and clients. Interestingly enough, that is almost exactly the same figure as the total money recovered by the National Crime Agency, cited in the same report, which was £150 million. Therefore, there is equality of cost, and there really seems little benefit at present.
However, to suggest that the system needs an overhaul and pandemonium breaks out. As the NCA report says,
“SARs intelligence has been instrumental”—
note the word “instrumental”—
“in locating sex offenders, tracing murder suspects, identifying subjects suspected of being involved in watching indecent images of children online and showing the movement of young women being trafficked into the UK to work in the sex industry.”
There is no mention at all of financial crime, but the clear inference is that if you wish to challenge the SARs regime, you are abetting these appalling crimes. No wonder that people are nervous about challenging the status quo.
Finally, all this feeds into the compliance departments of regulated firms. For the past 14 years, I have been the treasurer of the All-Party Group on Extraordinary Rendition. I remain extremely supportive of the group, but I would ask for a change, and I am pleased to say that the noble Baroness, Lady Kramer, has kindly agreed to take over. Accordingly, she will take over the bank account of the group and will assume signing authority. The fact that we are both politically exposed persons—PEPs—is causing enormous difficulty. It could be argued that the noble Baroness and I could use the APPG’s bank account for money laundering and financial crime generally, but the fact that we have fewer than 20 transactions per annum would suggest a limited scale for what we are going to do. However, it is clear that the noble Baroness and I will be faced with a paper trail of considerable proportions. It is this sort of mindless form filling and box ticking that is being repeated millions of times over and somebody, somewhere, needs to be charged with addressing this problem.
I turn finally to Amendment 106. It has the specific purpose of trying to improve London’s competitive position by removing, wherever possible, the obvious inequities, unfairnesses and inappropriateness of a one-size-fits-all approach by the regulators and creating in its place a regulative framework that is appropriate and effective as regards those to be regulated.
This amendment concerns the insurance sector, which is a key part of the UK’s financial services industry, and I have been helped with the wording of this amendment by the London Market Group. The group brokers in the main deals of sophisticated corporate clients, who have professional advisers at their disposal. As the FCA’s own wholesale insurance broker market study in 2019 demonstrated, these clients seek the services of a London market broker not because they are want to manage issues caused by information asymmetry—something that we have heard about already this afternoon—but because they recognise that the advanced expertise housed within broking firms can assist them in reaching the optimal outcome for their risk-management programmes. They are not consumers, but they need protection in the way that individual or less sophisticated corporate customers may do.
However, the FCA makes almost no distinction between the way it supervises the London market broker, active in the specialty markets in London, and the way it supervises a retail insurance broker dealing with an individual’s domestic and motor insurance requirements. Amendment 106 is drafted to ensure that that there are no regulatory loopholes that the mal-intentioned can exploit by those with malefic intentions. Proposed new subsection (2)(c) makes clear the distinction between retail and professional clients, while subsection (2)(d) asks whether the client has professional advisers and whether they are PRA or SCR regulated; and importantly, subsection (2)(e) covers any potential impact on the UK’s financial stability.
This amendment does not break new ground because the concept of the experienced investor is already well established. Those who qualify in this category can be offered opportunities to participate in new issues and refinancings with the minimum of fuss. Such a minimalist approach would never be appropriate for the general public. That is the approach the amendment adopts as regards the insurance industry. It makes a clear distinction between the different requirements of the professional and the general client. I hope that my noble friend will be able to give this amendment a fair wind.
Lord Holmes of Richmond (Con) [V]
My Lords, in participating with pleasure in this group of amendments, I declare my interests as set out in the register. I congratulate my noble friend Lord Blackwell on how he introduced the group and I agree with everything that he said—and indeed what is contained in the amendment tabled by my noble friend Lord Bridges.
I also endorse what my noble friend Lord Blackwell said on our view of the Basel framework, not least in terms of the issue of software. This is an excellent example of our move towards standards which really deliver, rather than standards which are perceived to be but are not necessarily higher or greater than other regulatory frameworks.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, Amendments 2, 6, 7 and 87 seek variously to urge the FCA, the PRA and the Bank of England to take into account the competitiveness of the United Kingdom. This is a dangerous concept that can only harm Britain and our collective national security and well-being. Competition implies people winning and losing, trying to beat down others to push ahead of them, taking risks and cutting corners. We all know where that ended up in 2008.
Instead, we should aim for a more secure financial sector that provides more useful, effective and safe services to individuals and the real economy. That would have a global benefit. If we have a decent financial sector with good standards across the globe, everyone wins. If we treat this as a zero-sum game, we lose and the world loses.
The noble Lord, Lord Hodgson of Astley Abbotts, spoke—complained, it would be fair to say—about regulators being, by their nature, risk-averse. Well, I, like many other Britons seeking to avoid a replay of 2008, applaud that existing risk aversion and seek to strengthen, not weaken, it. Competitiveness has been, and continues to be in the calls of many, exactly comparable to downgrading. That includes relaxing capital requirements for financial institutions; reducing enforcement of criminal behaviour by financial actors, creating tax loopholes for billionaires or multinational corporations; and having weak competition policy that allows a small number of firms to dominate markets and exploit British consumers, workers and taxpayers. This all reflects the model of free ports that the Government seem so keen on.
The winners in this race are plutocrats and giant multinationals. This kind of competitiveness is fundamentally anti-democratic and profoundly destabilising in its contributions to inequality. Trickle-down economics have long been discredited; financial services that concentrate money in the hands of the few only harm the rest of us. I note that Amendment 3 in the name of the noble Baroness, Lady Bowles, tries to provide a form of insurance, as she outlined, but the best answer, as the noble Lord, Lord Sharkey, said, is not to insert “competitive” into the Bill at all.
The last global financial crisis was substantially the fruit of competitive financial deregulation in Britain and elsewhere, as Britain and other countries increasingly relaxed rules to attract capital, thus allowing financial actors to take highly profitable risks at the great expense of the rest of us. Separately, Britain has abjectly failed to prosecute money laundering via the City of London. Non-enforcement is a deliberate competitive strategy used by many tax havens. This corrupts our institutions and gives potentially hostile secret actors leverage over our economy and politics.
In short, we need an upgraded financial system, with tighter controls and a demand that it meets the needs of individuals and the real economy, as our debate on the first group of amendments focused on. This would support the financial integrity of our systems and benefit the UK economy, particularly our security and ability to meet everyone’s basic needs. A system driven by competitiveness benefits a few at society’s expense—that is, at the expense of small and medium-sized enterprises, even larger enterprises, and the vast majority of individuals.
There is also an important regional aspect to this inequality. A competitive financial system will benefit wealthy parts of London while harming Britain’s struggling regions. A better, upgraded financial system, spread out around the country, with local banks meeting local needs securely and safely, would be a significant improvement indeed.
The idea of competitiveness ensures that costs are spread across the majority of the UK population, with lost tax revenues and financial crises, while the benefits are realised in corporate headquarters mostly in the wealthy parts of London, overseas and, very often, offshore. No strategy that seeks to level up the regions based on a “competitiveness of the financial sector” agenda can possibly succeed.
We will come later to my Amendment 123, which starts from an extensive analysis of the “finance curse” and calls for an impact report on the costs of the financial sector—something I do not believe the Government have any kind of handle on, despite the hard work of a small number of underfunded campaigners and academics. A large body of cross-country evidence from such radical organisations as the IMF and the Bank for International Settlements shows that there is an optimal size for a country’s financial sector, where it provides the services that an economy and population need. Expansion beyond this size causes damage, increases inequality, boosts criminal behaviour and creates many other ills. We need a safe, balanced financial sector that does not suck in skills, resources and capital, taking them away from the businesses that need our essential—and currently often badly served—needs, whether food security or construction, public transport or care.
We are not Tudor buccaneers, whatever some members of our governing party might think. We live in an unstable, insecure world buffeted by environmental, economic and social shocks. We are seeking a new place in the world—we have much talk of global Britain —so it is worth thinking for a second about what the world sees when it looks at the UK financial sector. I looked through a report from the Tax Justice Network in 2019, which noted:
“The UK with its ‘corporate tax haven network’ is by far the world’s greatest enabler of corporate tax avoidance”.
I note figures out just overnight from the Jubilee Debt Campaign, which show that of the debt owed by 73 countries eligible for debt relief under the G20 initiative, 30% is owed to private lenders in the UK. If we want a respected, admired place in the world—something that could be only to our benefit—then an outsized financial sector, one “competing hard”, will cost us dear.
I will speak briefly to Amendment 102 in the name of the noble Lord, Lord Tunnicliffe, which importantly promotes transparency about how the Government seek to direct our international oversight and financial governance. I also express very strong support for Amendment 121 in the name of the noble Baroness, Lady Bowles of Berkhamsted, which refers to country-by-country reporting. We know that giant multinational companies shuffle money around like a fast-moving, shady casino dealer, making their profits in one place but seeking to shift them to places competing—we are back to that word again—on the basis of minimal regulation and taxation. Who then pays for the schools and hospitals their customers need? Who pays for the maintenance of roads, the police, the courts? They take their profits and run, and the rest of us pay.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
The noble Baroness, Lady McIntosh of Pickering, has scratched from this group so I now call the next speaker, the noble Lord, Lord Mountevans.
Lord Mountevans (CB) [V]
My Lords, I support Amendment 2. The strength and robustness of the UK’s regulatory regime is vital to the health of our financial services sector. High-quality regulation is part of the attractiveness of the UK for inward investment and is crucial for enabling access to other markets; it is a competitive strength. It would be helpful for the Bill to signal an ambition in line with the Chancellor’s Statement in the other place on 9 November 2020 for the UK to become more globally competitive and have a long-term, ambitious strategy for financial services. The Chancellor’s Statement was a welcome signal of the kind of direction the industry is seeking.
The Bill should not be considered in isolation. The UK is undergoing broad developments in regulation: the Treasury’s future regulatory framework review, for example, will shape the UK regulatory framework for financial services and indicate how the sector needs to adapt to the UK’s new position outside the EU. This review is an important stage in the redesign of the UK’s regulatory regime and will play a key part in making the UK more globally competitive and attractive to international firms.
Lord Hunt of Wirral (Con)
My Lords, I draw attention to my interests as set out in the register. I recognise that these are probing amendments, but I exhort my noble friend the Minister not to underestimate either the strength of feeling on the question of international competitiveness or its importance to a sector vital to our economic recovery, as my noble friend Lady Neville-Rolfe stressed in her impressive speech earlier in this debate. The foundation stone for the regulation of financial services is still FiSMA—the Financial Services and Markets Act 2000—albeit in a form substantially amended by subsequent legislation. As the noble Lord, Lord Eatwell, reminded us, the regulatory structure is currently subject to a fundamental review.
The financial services future regulatory framework review and phase 2 consultation closed at the end of last week. The early indications of a general direction of travel are welcome. The original version of FSMA set out those four clear objectives for the new Financial Services Authority, the FSA: market confidence; public awareness; the protection of consumers; and the reduction of financial crime. In addition, the FSA was required to have regard to a number of other considerations, which included such obvious factors as efficiency, proportionality and innovation. They also included, as the noble Lord, Lord Sharkey, reminded us—and I quote verbatim
“the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom”
and
“the need to minimise the adverse effects on competition that may arise from anything done in the discharge of those functions”.
As other speakers have reminded us, after the crash of 2008, the incoming coalition Government inherited a severe recession and an unstable and untenable financial situation. They therefore undertook a deep consideration of regulation. In the debates in another place on what became the Financial Services Act 2012, concerns were repeatedly expressed to the effect that regulation under the FSMA had been not so much light touch as soft touch. Since 2012, the entire financial services sector, broad and diverse as it is, has effectively been punished—put into the naughty corner, as it were —almost entirely because of the alleged failures of the banks. The regulatory brush used was simply too broad and therefore not fit for purpose. The requirement to take account of international competitiveness was jettisoned because, it was argued, it might dilute the robustness of regulation.
I have also taken a close look at the Second Reading debate on the then Financial Services Bill, on 11 June 2012, in which one colleague after another raised this question of competitiveness, including my noble friends Lord Trenchard, Lord Hodgson and Lady Noakes. So this is a “Groundhog Day” debate, but I hope no less persuasive for that. My noble friend Lord Trenchard certainly wins a prize for consistency and constancy, because he eloquently argued that day:
“Some of us believed that competition and the competitiveness of our financial markets should have been made an objective of the FSA rather than merely one of the principles to which it had to have regard. I welcome the fact that the FCA is given a competition objective in the Bill, but it is inadequate in that it falls short of a responsibility to maintain or enhance the competitiveness of the UK’s financial markets”.—[Official Report, 11/6/12; col. 1245.]
As both the Association of British Insurers and the London Market Group have rightly pointed out, promoting the international competitiveness of the UK financial services sector to nurture its contribution to our economic strength must now be restored to the objectives of the regulators. This would bring our regulators into line with other, competitor jurisdictions, such as Hong Kong, the United States, Singapore and Australia. In its phase 2 consultation paper, the Government explicitly acknowledge:
“A gap in the original FSMA model is that, while it set high-level general objectives and principles, it did not provide for government and Parliament to set the policy approach for specific areas of financial services regulation.”
A move towards increasingly activity-specific regulatory principles is helpfully adumbrated, as my noble friend Lord Blackwell pointed out, ahead of the outcome of the FRF consultation, in Schedule 3 to the Bill. This would require the PRA, when considering capital requirements regulation, to have regard to
“the likely effect of the rules on the relative standing of the United Kingdom as a place for internationally active credit institutions and investment firms to be based or to carry on activities.”
This seems a welcome step back towards an old principle and, quite possibly, a Rubicon of significance crossed—or, more accurately, re-crossed. On that basis the Bill, while welcome in its own terms, is merely the beginning of a vital process which will determine the character of the post-Brexit UK financial services sector, potentially for a generation or more.
Once the results of the consultation have been digested, I hope to see far more acknowledgement in regulation of the great differences that exist between different elements of financial services, along with an explicit recognition that our international competitiveness matters. It is entirely spurious to claim that a regulator mindful of international competitiveness is likely to be a weak regulator. It could and should be a very effective one indeed.
As the noble Lord, Lord Mountevans, has just pointed out, our competitiveness relies on our strength. Our greatest strength is surely our reputation for providing the best advice and the best products at the best price, something no regulatory race to the bottom could ever deliver. If we really have the ambition to become the global centre for insurance and financial services—a realistic ambition, I argue, if we work together to deliver upon it—then we simply must get this right. I very much hope that the Bill does not go down as a missed opportunity.
Baroness Kramer (LD)
My Lords, inevitably with so many amendments to one Bill, this group is something of an omnibus collection. I have some sympathy with some of them—for example, the country-by-country reporting amendment tabled by the noble Lord, Lord Tunnicliffe. While I disagree very much with the noble Lords, Lord Hodgson and Lord Holmes, on their overall support for an international competitiveness objective in other areas, they are pointing out a need for the regulator to look again at issues such as proportionality and how to adapt to the new digital world. However, that does not seem to need to be put into law. This is really advice to the regulator, and I hope that they will take a great deal of that good advice on board.
I want to reply to the noble Lord, Lord Hunt, because he echoed an opinion raised by the noble Lord, Lord Blackwell, but very effectively countered by my noble friend Lady Bowles. He talked about activity-specific regulation creating the opportunity for some significant divergence in the regulatory environment. The lesson of 2008 was that the financial services sector is linked systemically. As my noble friend Lady Bowles pointed out, the crash in 2008 started with largely fake and junk mortgages in the United States. It worked its way into various securities instruments that were sold to people in the UK who did not understand them, but should have.
The underpinning consequences of risk were also completely misunderstood. The way that derivatives were traded and structured created a potential risk of losing liquidity overnight. This is exactly what happened with the high street banks in the UK. They became competitive with others in the financial sector to develop the kinds of profits that they saw being made by rival companies, pushed their credit standards to the point where, frankly, they were no longer standards, and chose methods of funding themselves that made them vulnerable to any volatility in the overnight markets. This is not an industry in which we can separate the different pieces into silos. They are all interlinked and that must underpin any form of regulation that we have.
Lord Eatwell (Lab)
My Lords, I will begin by speaking to Amendment 102 in my name and that of my noble friend Lord Tunnicliffe. It is a probing amendment and seeks to persuade Her Majesty’s Government to spell out their priorities as a participant in international discussions on the direction and detail of financial services regulation. After all, at the very heart of the Bill is legislation covering a wide range of aspects of international financial regulation.
Her Majesty’s Government being clear about their priorities would greatly assist the Committee. After all, the Bill is about incorporating the conclusions of the Basel Committee on Banking Supervision into UK legislation. What could be more international than that: submitting British law to the decisions of a committee of which Her Majesty’s Government are not a member? That is a rather exotic interpretation of taking back control. It is also about the travails of equivalence and, as amendments in the group testify, the relationship between financial regulation and international competitiveness.
Yet we lack a clear statement of Her Majesty’s Government’s approach to international financial regulation, particularly on its future now that the UK has left the European Union. What are the Government’s regulatory priorities? What are their future plans? In the documents associated with the regulatory framework review, we are given some insights into the Government’s goal for the institutional responsibilities for regulation, but what is the policy framework, not the institutional structure, that will guide their proposed reforms? This probing amendment provides Her Majesty’s Government with the opportunity to clear some of the fog. If noble Lords are to scrutinise satisfactorily the Bill and the outcome of the regulatory framework review when it comes before the House, they need this comprehensive insight into the Government’s thinking.
If we look for the core of Her Majesty’s Government’s international regulatory policy, it is obvious from the Bill that much is to be found in the analysis developed by the Basel Committee. Yet, as is well known, it is European Union directives that most closely follow Basel proposals—exactly those directives from which the Government declare independence and their desire to diverge. However, divergence from EU directives will inevitably involve divergence from Basel. So what is it to be: acceptance or divergence? It would be hugely helpful if the Minister, in summing up, could clarify the position.
Then there is the role of the G7. Ever since the G7 Halifax summit in 1995, following the Mexican financial crisis of the winter of 1994, financial regulation has been an ever-present item on the agendas of G7 meetings. By the way, it is Halifax, Nova Scotia, just in case the people of Yorkshire think they missed something. Given that the UK is to chair the G7 this year, how will Her Majesty’s Government approach questions of post-pandemic regulatory reform now that the UK has an independent voice in these matters? What lead will Her Majesty’s Government provide as chair to our G7 partners on financial regulation?
The issue of country-by-country reporting referred to in the amendment is primarily a question of the taxation of large multinational entities, but there is an important echo of the country-by-country issue in the section of this Bill that deals with insider dealing and money laundering. At the heart of the problem of financial crime is the question of beneficial ownership: an area of regulatory policy within which, as the noble Lord, Lord Callanan—the Minister for Climate Change and Corporate Responsibility—admitted, our framework is “attractive to exploitation”. He is right. Knowledge of beneficial ownership is as fundamental to the prevention of money laundering as it is to the prevention of tax avoidance and evasion. I will return to this issue later in our deliberations. The important point that arises at this time is that this is but one more example among many of the lack of clear policy perspective on behalf of Her Majesty’s Government. I hope that the Minister will be able to respond to the probing amendment and outline that policy perspective.
I now turn to Amendments 2, 3, 6, 7 and 8, all of which deal with the relationship between regulation and international competitiveness. I find myself somewhat out of sympathy with these amendments, primarily because the manner in which the issue of international competitiveness is addressed in the current version of FSMA is about right. In it, competitiveness is already an operational objective of the PRA and the FCA. Given the performance of the City of London over the past 20 years, this objective would seem to have been comprehensively achieved. It may be that the proposers of these amendments fear that the competitive position of our financial services industry will be undermined by the UK having left the European Union, and they are now desperately trying to repair the damage. Let us all hope that they are mistaken. Of course, the key point in FSMA is that competitiveness is subordinate to ensuring that markets function well, as in the case of the FCA, and subordinate to the promotion of the safety and soundness of PRA-authorised persons, as in the case of the PRA. That is surely right.
Similarly, with respect to the attempt by the noble Baroness, Lady Neville-Rolfe, to insert by means of Amendment 7 a competitiveness objective into the Bank of England Act, I cannot agree that Her Majesty’s Government should be ready to rank competitiveness equally with the bank’s statutory objective: to protect and enhance the stability of the financial system of the United Kingdom. Should they be happy to pursue international competitiveness while putting family finances at risk? Should they be happy to pursue international competitiveness by putting the soundness of our financial institutions at risk? I believe not. The current hierarchy of regulatory objectives signals clearly where this country’s regulatory priorities lie.
Let us remember that one of the most overpowering advantages that can accrue to any international financial centre is the reputation that it is well and securely regulated. That is an accolade not to be sacrificed. As has been said already, the danger in these amendments is that of the lowest common denominator. For all the reference to high standards, it is international competitiveness that will be a primary statutory objective, equal to or even above the stable operations of the money markets or the financial risks to which the British people are exposed. That would be unwise.
Earl Howe (Con)
My Lords, I am grateful to all noble Lords who spoke in this debate, which has opened up an extremely important set of issues relating to the competitiveness of our financial services sector. I am sure we all recognise that the UK has long been a global leader in financial services; I am the first to agree that, as we adapt to our new position outside the EU and the opportunities that it brings, it is essential that we continue to provide the right environment to support a stable, innovative and world-leading financial services sector. That is why I embrace this opportunity to speak about this vital industry’s place in the world.
First, I remind the Committee of my right honourable friend the Chancellor’s speech last November. He was clear about the Government’s commitment to ensuring that the UK continues to be the most open, competitive and innovative place to conduct financial services anywhere in the world. I say in response to the noble Baroness, Lady Bennett, that the Chancellor could not have been clearer about the huge value of our financial services sector to the entire UK economy, including nearly £76 billion in tax receipts in the last financial year and more than 1 million jobs. At the very heart of this vision are the UK’s world-leading regulators: the Financial Conduct Authority, or FCA, and the Prudential Regulation Authority, or PRA. They are respected across the world for their expertise and thought leadership on the regulation of financial services.
I will now address the proposals that the amendments invite us to consider. Amendments 2 and 6 would introduce a statutory objective for the FCA and PRA to support the standing and competitiveness of the UK as a global financial centre. Amendment 7 would introduce a similar competitiveness objective for the Bank of England relating to financial conduct and prudential regulation. Amendment 87 has a similar purpose and would require the regulators to take international competitiveness issues into account when making rules, as well as reporting to Parliament on this and benchmarking the UK against other international financial hubs. The supplementary Amendment 3 seeks to explore what is meant by “high market standards” and to instigate a formal review of regulator activity every three years.
I listened with interest to the many good arguments from noble Lords in favour of including competitiveness as an element of the regulators’ statutory objectives. I have also listened to other contributions, including those from the noble Baronesses, Lady Kramer, Lady Bowles and Lady Bennett, and the noble Lord, Lord Sharkey, which reminded us of the need to be cautious. They also reminded us of the paramount importance of protecting the safety and soundness of our financial system, the integrity of financial markets, and of protecting consumers, as reflected in the regulators’ existing objectives.
Those two facets of the debate point up the critical balance that needs to be struck and the arguments that are necessary to build a consensus on the right approach for the UK’s financial services sector. This is a delicate calibration that needs a great deal of thought, which is why I say to the Committee that these are not arguments for today. The Government’s future regulatory framework review is considering how the UK’s financial services regulatory framework must adapt to reflect our future outside of the EU. That has to be the right place to consider issues such as the regulators’ objectives.
The noble Lord, Lord Eatwell, asked me for a few further details on the Government’s approach to an overall policy framework. Their proposed approach will involve putting new policy framework legislation in place for key areas of regulation and moving regulatory requirements from the UK statute book to regulator rulebooks. Parliament will have the final say on the approach adopted and how it is applied through legislation. The Government will bring forward further detail on our approach to implementation, and invite stakeholder views on this, in due course. We expect that applying the FRF approach to the full body of onshored EU legislation will take several years to deliver.
We are committed to full, timely and consistent implementation of the Basel regime. I refer the noble Lord to the Governor of the Bank of England’s recent speech, which I am sure that he has already read, which sets out examples of some departures from the EU approach that we are contemplating, one of which is to exclude the value of software assets in the valuation of bank capital.
In saying that, it is worth recognising that a competitiveness objective for the regulators would not be a silver bullet to maintain and enhance the UK’s competitiveness; it is also not necessary in order to develop it. A range of factors determine the attractiveness of our financial ecosystem and make the UK a leading financial hub. This includes access to highly skilled talent, access to a broad international investor base, and dynamism and innovation to give us a leading position in the markets of the future, including fintech and green finance.
In fact, I reassure the Committee that the Government are already taking action now to ensure that competitiveness is a core consideration in our approach to financial services, and a consideration of the regulators. In the prudential measures in this Bill, for example, the UK’s competitiveness is one of the issues that the regulators must have regard to when making rules in these areas. We really are not standing still in this space.
The Government have also kicked off a wide range of activity seeking to seize the opportunities presented by having left the EU. This includes the review of the noble Lord, Lord Hill, into listings to make the UK a more attractive location for companies to list and trade in, and the UK funds regime review, which is considering tax and regulatory opportunities to make the UK more attractive for funds. The long-term asset fund will encourage investment in long-term investment opportunities. The Solvency II review is seeking views on how to tailor the prudential regulatory regime to support the UK’s insurance sector. Ron Kalifa OBE is leading an independent strategic review to identify opportunities to support further growth in the UK fintech sector. The payments landscape review is seeking to ensure that the UK maintains its status as a country at the cutting edge of payments technology. The consultation on cryptoassets and stablecoins seeks to understand how the UK can harness the benefits of new technology and support innovation while mitigating risks to consumers and stability. The call for evidence on the current overseas framework seeks to ensure that our regime is coherent, fair and easy to navigate. I should also mention the independent ring-fencing review, which will consider the rules separating retail and investment banking activities and any impact that they may have on banking competition and competitiveness. I hope that this long list assures noble Lords that the Government are absolutely committed to protecting and promoting the competitiveness of our financial services sector as we seek to ensure that the UK continues to be the most open, competitive and innovative place to do financial services anywhere in the world.
Amendment 33 looks at this question from the other side of the debate. It seeks to probe the legal effect of the obligation placed on the PRA to “have regard” to the UK’s international competitiveness when making its CRR rules. I have already spoken about the UK’s status as a global financial services hub and the work that we are doing to maintain it. The Government want to ensure that the PRA has specific regard to those ambitions when implementing its Basel rules because, while the Government and the regulators remain committed to the full and timely implementation of Basel, now that we are outside the EU, we have the opportunity to implement these standards in a way that takes account of the specificities of the UK market.
That does not mean a regulatory race to the bottom. This requirement is entirely subordinate to the PRA’s existing primary and secondary objectives of promoting safety and soundness, and effective competition, respectively. Amendment 106 in the name of my noble friend Lord Hodgson would require the PRA and the FCA to consider when developing new rules the nature of a product or service being provided, the level of risk this entails for UK consumers and the level of sophistication of a client. This is a sentiment with which it is hard to disagree, but I do not agree that an amendment to this effect is necessary or would significantly alter our current approach to regulation.
When exercising their functions, both the FCA and the PRA are currently obliged to consider proportionality under their regulatory principles. For instance, one of the core measures in the Bill enables the introduction of a tailored prudential regime for investment firms. This regime—the IFPR—will account for differences in the size and business models of investment firms at its very heart. Only non-systemic investment firms will be put on this new FCA-regulated regime, while those that are of systemic importance will remain regulated by the PRA.
Given the size, complexity and global nature of our financial system, we must of course make sure that customers understand the risks of the financial services products that they use. Having left the EU, the Government believe that there may be opportunities for responsibly applying more proportionate regulation in some areas. For example, Sam Woods, CEO of the PRA, made the case last year for a “strong and simple” approach to the regulation of small banks.
I hope that noble Lords will take from these remarks that the Government are committed to exploring and embracing the opportunities we now have to enhance the UK’s competitiveness while remaining committed to the highest international standards of regulation.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I have received requests to speak after the Minister from the noble Viscount, Lord Trenchard, and the noble Baroness, Lady Neville-Rolfe. I call first the noble Viscount, Lord Trenchard.
Viscount Trenchard (Con) [V]
My Lords, I am grateful to the Committee for once again permitting me to speak after the Minister. Even though I have my name to two amendments in this group, I had not realised that the procedural change that the House is about to approve at 8 o’clock this evening—which I think is rather strange—now prevents one from doing so unless one takes an additional step, in a narrow window, of specifically putting one’s name down to individual groups as well.
I had wanted to speak in support of Amendment 2 in the name of my noble friend Lord Bridges of Headley, as moved so ably by my noble friend Lord Blackwell, and to Amendment 6, ably moved by my noble friend Lady Neville-Rolfe. I thank my noble friend Lord Holmes of Richmond for his kind words, and most heartily thank my noble friend Lord Hunt of Wirral both for what he said and for quoting from my 2012 speech on this subject.
Your Lordships may wonder why I have added my name to two different amendments which seek to achieve approximately the same result. This is because there are many ways to raise the importance of competition and the competitiveness of markets, and I have in my mind some further variations of the theme. In any case, I strongly believe that we must move quickly to maximise the attractiveness of London’s markets to be sure that the City, including our wider financial services industry, will remain one of the truly leading global financial centres, with all that that means for our prosperity as a nation.
I had wanted to speak properly and fully within this debate but am now hesitant to do so, as I am sure my noble friend the Minister will appreciate. I had wanted to make several points, and wished to explain why I think the noble Lord, Lord Sharkey, the noble Baroness, Lady Bennett of Manor Castle, and, indeed, the noble Baroness, Lady Kramer, are so wrong in believing that the FSA’s having regard to competitiveness was a cause of the financial crisis, or that competitiveness, of itself, heightens inequality. Either Amendment 2 or Amendment 6 would be an improvement to this Bill. I would like to ask my noble friend the Minister which of the two he prefers, because they are not precisely the same. In any case, as my noble friends Lord Mountevans and Lord Hunt have said, there is strong expectation and hope that the Government will do more to secure the City’s future in relation to improving the competitiveness of the markets.
Earl Howe (Con)
My Lords, I am grateful to my noble friend Lord Trenchard, and sorry that he was not able to enter the main list of speakers for the reasons that he stated. I hope that we will hear more from him in later debates but I also hope that he will take some encouragement from the actions that the Government are already taking to promote the competitiveness of our financial services independently of any conclusions reached from the FRF review. Those are proof of the Government’s commitment and intent to put actions where our words have been. I very much look forward to debating his ideas further in the course of these Committee proceedings.
Baroness Neville-Rolfe (Con)
I thank my noble friend the Deputy Leader for his full and courteous responses, which I shall read very carefully before returning to the issue at Report, as I think that there may be something missing in the Bill and that it would not be wise to defer the whole matter of the next set of financial services reforms. What in my noble friend’s long and helpful list assists smaller financial services businesses, which do not necessarily want to list on the stock exchange yet suffer the full cost and burden of FCA and PRA regulation as they struggle to do a good job for consumers and their clients?
Earl Howe (Con)
My Lords, I can probably expand this answer to advantage in writing. The Government fully understand the disproportionate effect of some of our regulation on small firms, which is why we are looking critically at whether a more proportionate approach is available to us. It is probably best if I spell out our thoughts in a letter, which I would be happy to copy to all Peers in this debate.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I have received one additional request to speak after the Minister, and I call the noble Baroness, Lady Bennett of Manor Castle.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I thank the noble Lord the Deputy Leader for his full response in our previous discussion, but there was one figure that he raised in that response that I wanted to ask him about the source of and justification for. That was the claim that the financial sector contributed £76 billion in tax receipts. I am basing this question on work done by a fellow Member of your Lordships’ House, the noble Lord, Lord Sikka, who may not be joining us until later—so I wanted to raise this point now. I understand from his work that this figure comes from a report prepared by PricewaterhouseCoopers and includes £42 billion borne by customers in the form of VAT and paid by employees in the form of income tax and national insurance contributions. The remaining £33 billion is an estimate, and the report says that PwC
“has not verified, validated or audited the data and cannot therefore give any undertaking as to the accuracy”.
Could the Minister tell us what further justification the Government have for that figure?
Earl Howe (Con)
My Lords, this is clearly a detailed and analytical question, which is probably not appropriate for Grand Committee. I would be happy to write to the noble Baroness, giving her chapter and verse as far as I am able to do.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I thank all who have spoken in this debate, and the Minister for the extensive replies. As he said, we have heard a lot of views, a lot of which I felt coincided with one another, at least in terms of what was said, more perhaps than appears in the amendments. Ultimately, a lot of the things that were complained against could be dealt with through proportionality. Yes, it is not competitive if the actions of the regulator are not proportionate—be that in rules or supervision. Therefore, I think there is less need to give a specific competitiveness mandate, because that confuses whether you are seeking something else on top. I refer to what the noble Lord, Lord Blackwell, said in introducing his amendment, when he said that these things were probably taken into account but not formally, or they would be taken as given in any other industry.
Lord Blackwell (Con) [V]
My Lords, I thank my noble friend the Minister for his very fulsome responses and other noble Lords for their contributions. In many of the contributions there was agreement that competitiveness was important for the financial services industry. I cannot agree with the noble Lord, Lord Sharkey, that because the House reached one view 10 years ago, we cannot learn the lessons and think again about this issue. Neither can I agree with the noble Baroness, Lady Bennett, that a smaller financial services industry that created less wealth would be beneficial for the UK.
However, I was very struck by the contributions from my noble friend Lord Holmes and others about the importance of innovation in the area of payments, among others. I am reminded that you cannot have innovation without some element of risk. This is an example of where, if there were no consideration of international competitiveness, there might be no reason for the regulators to allow any risk into the system. They would play completely safe, whereas a measured management of risk to allow innovation is important. You cannot innovate without risk. Financial services is not about eliminating risk but about managing risk. If it were about eliminating risk, no bank would ever grant any loan and no insurance company would ever issue any insurance policy. I think that is a good example of how innovation is an important part of competitiveness.
I was grateful to the noble Baroness, Lady Bowles, for her amendment on the definition of “standards”, on which we had a constructive debate. This is not about the lowest common denominator; it is about high standards, and she challenged how we define that. It cannot be about keeping every rule exactly as it is now; it has to be about outcomes, and I think everyone would agree that high standards must mean maintaining or improving standards of outcomes.
However, if you take the example that was given on the impact of SARs regimes or, indeed, the way MiFID is implemented, there will be many opportunities to improve the effectiveness of regulation to produce better outcomes. This will not necessarily involve keeping exactly the same rules and regulations; it will involve improving them. This comes back to the point made by my noble friends Lady Neville-Rolfe and Lord Hodgson: this is about the efficiency of regulation and doing it better, which is, and should be, the driving force for a more competitive regulatory regime.
I was grateful for the Minister’s acknowledgement that the Government support promoting the competitiveness of financial services. I note his comments that this needs to be balanced against other objectives; I simply say that it is not balanced if the objective is completely missing—it has to be there so that it can be balanced. He made the point that, rather than introducing this measure now, he would like time to consider it in the policy framework. I and other noble Lords will need to reflect on that and what words of assurance he can give us, as the Bill passes, that there will be a commitment to do something about competitiveness as an objective. However, in the meantime, I beg leave to withdraw Amendment 2.
Baroness Penn (Con)
My Lords, I suggest that we adjourn these proceedings for 10 minutes for a short break.
“Non-exploitation of consumers or small businesses
(1) The Financial Services and Markets Act 2000 is amended as follows.(2) In section 1C (the consumer protection objective), after subsection (2)(e) insert—“(ea) the general principle that firms should not exploit a consumer’s or small business’s vulnerability, behavioural biases or constrained choices;”.(3) After subsection (2) insert—“(3) Exploitation under subsection (2)(e) includes, but is not limited to, situations where—(a) there is a system of conduct, or pattern of behaviour, that relies upon unequal power between the parties to impose disadvantage on consumers or small businesses or gain advantage for the larger party;(b) notice or other compliance terms are imposed which make it impractical for consumers or small businesses to comply;(c) there is use of notice terms to coerce consumers or small businesses into unfavourable contracts;(d) conduct by a supplier causes a consumer or small business to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; or(e) there are risks that the supplier should have foreseen would not be apparent to the customer or small business.In this section, “small business” is as defined in Part 15 of the Companies Act 2006 (accounts and reports).””Member’s explanatory statement
This amendment is to protect consumers and small businesses from exploitation.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, Amendment 5 builds upon Amendment 4, tabled by the noble Lord, Lord Tunnicliffe, which was discussed within the first group and in turn built upon Amendment 1, moved by my noble friend Lord Sharkey. I will not revisit the “duty of care” part of the amendment, as it has already been well discussed, but the point about Amendment 5 and the similar Amendment 73 is to bring small businesses within the non-exploitation principle—defined by the noble Lord, Lord Tunnicliffe, in his amendment—and to highlight some things that regularly happen in contractual terms and which can be exploitative. Amendment 73 is more explicit and would allow the FCA to intervene where there is “Unconscionable conduct”, even if a consumer or small business has entered into a contract.
The issues that are highlighted as wrong behaviour, although within an exemplary list, are: patterns of conduct that rely “upon unequal power”; terms of notice
“or other compliance … which make it impractical … to comply”;
the use
“of notice terms to coerce … unfavourable contracts”;
compliance terms that are “not reasonably necessary”; and risks that the larger supplier should have realised would not have been
“apparent to the customer or small business”.
This is not a random list of points—there are rather more in my Private Member’s Bill on the same subject—but a key list of matters that were used by GRG in the exploitation of small businesses, and which the FCA said it could do nothing about because they were outside the regulatory perimeter.
Once more I must look to other countries to see how we compare, and once more I find that Australia has tried harder. It has a general law of unconscionable conduct in commerce that deals with all these issues and more, and which extends to not only consumers but business to business. I do not know how many noble Lords read the various detailed contracts that one is forced to sign as an individual or small business to access almost anything nowadays. In the earlier group, these were similarly referred to by the noble Lord, Lord Eatwell. I have seen barely one that is reasonable. It is only getting worse as everything becomes a leased service rather than a product.
With these amendments I make the point for small businesses as well as individuals, and in the context of financial services, which are among the most fundamental of services, that bullying contracts must stop. They must be within the regulatory perimeter and the FCA must be prepared to intervene. Excuses about GRG and what the FCA did not do there hold no power. We saw what happened; we need strong measures that mean it must not happen again and that imitations of it must not be tolerated in day-to-day operations. I beg to move.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I find myself in some sympathy with the noble Baroness, Lady Bowles, on Amendment 5 because this is a grey area where small businesses are perhaps not well served. My noble friend Lord Howe claimed, in his full and comprehensive response to the last debate, that this was not the right time or place to look at the regulatory objectives, as this would better take place under the Government’s future regulatory framework review. I would argue, in support of the noble Baroness, Lady Bowles, that small businesses are not well served by the current provisions. If you look at some of the work of the Financial Ombudsman Service, which the Committee has referred to, I would not hold out much hope for a small business claiming redress and a decision under that agreement. I would be delighted if my noble friend were to prove me wrong in summing up this debate.
Amendment 5, in particular, has strengths to commend it and I would very much like to lend it my support. I look forward very much indeed to hearing what my noble friend will say and whether the Government might look favourably on it, a lacuna having been identified in the regulatory framework.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I call the next speaker, the noble Baroness, Lady Bennett of Manor Castle. Baroness Bennett? We appear to have lost the noble Baroness, so if—
Baroness Bennett of Manor Castle (GP) [V]
Apologies, my Lords, but I have sorted the problem out now. I speak briefly in support of Amendments 5, 73 and 95, in the names of the noble Baronesses, Lady Bowles, Lady Altmann and Lady Kramer. Although not a generalisation that is 100% true, the gender division of the people on various sides speaking on the Bill is interesting. It made me reflect back to the financial crash of 2007-08 and the role that the extreme gender imbalance in the financial sector was seen to have played within it.
When I thought to look at these issues about exploitation, unconscionable conduct, and legal protection against mis-selling, I went to the website moneysavingexpert.com. In a previous contribution, I referred to the role of such commentators who, using the power of public opinion, often seem to be a stronger check on the behaviour of the financial sector than the Government. But, of course, they are able to work only after the fact. Just looking down the list, we are talking about payment protection insurance, mis-sold ID fraud insurance, the mis-selling of package bank accounts and excessive charges on bank accounts—and that is just talking about individual consumers. A similar list would come up for small business. It is a long tale of woe that has caused a great deal of suffering and harm to individuals and small businesses, the operators of which have often put their whole heart and soul into the business.
What we seem to have now is a strategy of shutting the stable door sometime after the horse has bolted, and after a long delay for debate and inquiry. All three of these amendments are a very strong bolt that we should be sliding home now to protect consumers and small businesses from the overweening, immense power of the financial sector.
Baroness Kramer (LD) [V]
My goodness, this has moved fast. My Lords, let me start by addressing Amendment 95, because it is in my name. It would give SMEs the right to sue in respect of all regulated financial services, not just banking. It would—and this is an important example—entitle them to sue for breaches of the rules relating to insurance, otherwise known as COBS, in respect of business interruption insurance policies.
Another big practical implication relates to the cross-selling of regulated products or services as part of the add-ons to a loan. In the swaps mis-selling scandal—I believe my noble friend Lord Sharkey mentioned this in his earlier list, when talking about a duty of care—over 40,000 swaps were sold to SMEs. The banks had broken the regulatory requirements in over 90% of cases. It is almost impossible to imagine that having happened if the banks’ legal departments knew that the banks would be sued by their customers as a result.
None of the SMEs that have taken swaps cases all the way to court have won. Judges have repeatedly said that, had the customer been able to sue for breach of the COBS rules, that would have made all the difference. The evidence is there in Green & Rowley v RBS, Crestsign Ltd v NatWest, London Executive Aviation Ltd v RBS, and Fine Care Homes Ltd v NatWest. Those cases and the other swap cases that failed at trial show that—even where a judge is convinced that the customer did not understand the product they were buying and even where the bank salesperson knew that the customer was relying on them to explain the product—the common law fails to provide the customer with a remedy. I realise that the swaps scandal is, hopefully, in the past but, without the amendment proposed, there is nothing to stop banks from perpetrating similar behaviour in future.
My amendment addresses only part of the issue of the limitations of the regulatory perimeter, which both my noble friend Lady Bowles and the noble Baroness, Lady Bennett, have discussed, and it is why I support Amendments 5 and 73 in the name of my noble friend. I find it ridiculous that the regulatory perimeter treats small businesses as, in effect, akin to multinationals in their capacity to understand financial products and fight on an equal footing with big institutions.
My noble friend Lady Bowles has cited the case of RBS GRG. For those not familiar with this case, GRG was the turnaround unit of RBS. A number of firms were persuaded to allow themselves to go into the turnaround unit even though they were both viable and paying their loans on time; but RBS believed that under the terms of their loan agreement they were at risk because the value of their assets had declined, which created a covenant default. In a remarkable number of cases, those companies that were viable and paying on time were made bankrupt, their assets were stripped after having been assessed at very low market values and—surprise, surprise—the bank was able some time later to sell those assets for a much higher value, thereby generating profits. It was indeed not just a turnaround unit but a profit centre.
After great pressure from Vince Cable, the FCA initiated an investigation. It asked a group called Promontory to produce a two-stage report: one to look at the case and the other to make recommendations. However, after the first phase of the report was complete, the FCA explained that it could not publish it as it contained commercially sensitive information, and it therefore produced a summary. Miraculously, the original report made its way into the hands of the Treasury Select Committee. This, to me, is almost the worst part of the story: the summary that had been provided by the FCA and the report itself did not match. There was essentially a whitewash of the conclusions of Promontory. The FCA may have disagreed with the report that it received, but that would have been a very different declaration.
We have talked before about the senior management and certification regime; the FCA could have used that regime to try to deal with senior management who had been involved in this entire process, but it chose not to. That, I am afraid, is the history of the use of the senior management and certification regime. However, my noble friend Lady Bowles could equally well have cited the HBOS Reading fraud perpetrated between 2003 and 2007, which I mentioned earlier. Six bankers ended up in jail for that fraud, but we are now in 2021 and fair compensation has not yet been paid to the victims. This is now a Lloyds problem and has been for some time.
We have been through multiple reviews and are now awaiting the work of yet another review of compensation, the Foskett panel, which hopefully will make sure the compensation is appropriate—but, as I said, it is 2021. There have been issues; for example, a whistleblower who examined who knew what and when has been compensated twice by Lloyds for retaliation against her. There is currently a review by Dame Linda Dobbs into who in senior management knew or ought to have known what was going on.
Lord Tunnicliffe (Lab) [V]
My Lords, faced with speaking on this group, I looked at the Bill as a whole and, to a surprising extent, there is little reference to consumers or people who depend on the banking sector. The failure to contain these areas was brought out by the first group of amendments, where there was a very strong thrust to require the sector to exercise a duty of care.
This group, which I support, seeks to isolate a singular problem and address it directly. It is a problem that is not just unfair but evil, and one we find across many sectors—the problem of bullying. In many sectors, size is an advantage, and because of that, a small number of firms grow to a large size. The problem with size is that it enables bullying; you find it in many sectors, including airlines and supermarkets and with Amazon and Facebook. The problem with bullying is that, used skilfully and ruthlessly, it enhances profit and, because it enables profit, it is pursued, often covertly. It is the classic example of why benign regulation is so important in our economic and financial landscape.
These amendments are a bold move to add to that benign regulation by directly addressing the evil of bullying. This will be good for individuals but also—and this is a very important point—for SMEs. I was at the large end of the scale, and we were able to see off any attempt at bullying because we were big enough and ugly enough to be able to fight the problem with an equality of arms. The problem with an SME—and often we are talking about individuals—is that the concept of equality of arms in the courts is almost impossible; they can easily use up their revenue for a whole year on one court case. These amendments address the issue together.
I know the Government are likely to say, “Not now. We will do it later. We are looking at another area.” That just cannot go on, and I urge the Government to think about these ideas and work out some way to introduce this. The banking industry, in particular, has an appalling reputation. The evil things it has done over the years are frightening. It is difficult to believe, in a sense, that those evils were done by malice; but it is very easy to understand how the opportunities present themselves to behave in this way and generate more profit, more praise and more reward.
Baroness Penn (Con)
My Lords, Amendments 5, 73 and 95 relate to the protection of consumers and small businesses against misconduct. The Government are committed to ensuring that consumers and businesses can use financial services and products with confidence and that there are appropriate protections in place.
Before I comment on the specific amendments, I want to take a moment to set out the wider context. The Government have given the FCA a strong mandate to prevent and take action against inappropriate behaviour in financial services, and it has a wide range of enforcement powers to protect consumers and small business. Noble Lords will appreciate that the majority of business lending is unregulated—that is what the amendments test and probe—but the Government are committed to providing appropriate safeguards for SMEs in accessing financial services, while seeking to avoid driving up the costs of lending and unnecessarily reducing affordable credit options.
In the UK, loans of less than £25,000 to small businesses are treated as regulated consumer credit agreements for the purposes of the Financial Services and Markets Act 2000. This means that most small businesses already receive regulatory protection. In addition, in April 2019, the remit of the Financial Ombudsman Service was expanded to allow more SMEs to put forward a complaint. This covers 99% of small businesses in the UK. If a complaint is upheld, the FOS could make an award of up to £350,000 in relation to acts or omissions that took place on or after 1 April 2019, when its remit was expanded.
Small and medium-sized businesses also now have access to the Business Banking Resolution Service, an independent, non-governmental body which will provide dispute resolution for businesses which meet the eligibility criteria. The BBRS will address historic cases from 2000 which would now be eligible for FOS but were not at the time, and which have not been through another independent redress scheme. It will address future complaints from businesses with a turnover between £6.5 million and £10 million.
It is with that context in mind that I turn to the specific amendments. Amendment 5 seeks to protect consumers and small businesses from certain types of exploitation by financial services firms providing services to those groups. It proposes imposing new obligations on the FCA when it exercises its general functions. However, it risks putting up the cost of borrowing and limiting the availability of products and services. For example, it could require the FCA to make rules creating additional safeguards designed to ensure that exploitation, as defined by the amendment, does not occur. Given the different levels of financial sophistication of different small businesses, the rules may need to be designed to protect those with minimal levels of sophistication. Given the potential complexity of such new rules, financial institutions may be more reluctant to lend to small businesses.
Amendment 73 would duplicate similar existing protections that I have previously outlined, in a way that could be confusing to consumers, SMEs and lenders. On the issue of unconscionable conduct, in response to the banking crisis and significant conduct failings, Parliament passed legislation leading to the FCA and PRA applying the senior managers and certification regime. The regime aims to reduce harm to consumers and govern market integrity by making individuals more accountable for their actions.
Amendment 95 would broaden the scope of those parties who can seek action for damages related to mis-selling of financial services. However, I argue that these changes are unnecessary, as businesses already have robust avenues for pursuing financial services complaints, which I have already set out.
The Government are committed to regulating only where there is a clear case for doing so. This is to avoid putting additional costs on lenders that could ultimately lead to higher cost for businesses; these would likely be passed on to consumers and could restrict access to affordable finance—a key Government priority.
The Government’s view is that each of these amendments risks duplicating the existing protections that I have set out, while also making lending to SMEs more complex, which could make it harder for them to access affordable credit. Our view is that the existing protections get the balance right between protecting consumers and small businesses and not unduly restricting access to affordable credit options. For these reasons, I ask that these amendments be withdrawn.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I have received one request to speak after the Minister from the noble Viscount, Lord Trenchard, who I now call.
Viscount Trenchard (Con) [V]
My Lords, again, I am grateful to the Committee for allowing me to speak after the Minister. I will speak only to Amendment 73 because it introduces another subjective concept: “unconscionable conduct”.
I searched for instances of “unconscionable” on the FCA’s website and found only one: John Griffith-Jones, the former chairman of the FCA, for whom I have the highest regard, said in a 2014 speech:
“In 1951 in the Money Lenders Act we described a 48% interest rate as ‘unconscionable’.”
It occurs to me that, as recently as 2018, the main banks were charging 1p per £7 borrowed per day for arranged overdrafts. This was about 50% per annum, but it was not disclosed; indeed, when the banks stopped telling people what their APR was and instead started telling them what the fee per £7 borrowed per day was, this was welcomed by the FSA, which thought that requiring to tell consumers the real interest rate was unhelpful because they would not understand it.
Now that the banks have reverted to informing customers of real annual interest rates, albeit in very small print, the cost of an arranged overdraft has gone down from around 50% to around 40%, which is possibly still unconscionable in today’s world of negative interest rates. As such, I certainly do not think that we should rely on the FCA to decide what is and is not unconscionable. Does the Minister agree that the banks should make clearer what real interest rates on overdrafts are?
Baroness Penn (Con)
My Lords, clarity around all terms and conditions is, of course, to be welcomed. I agree with my noble friend that one challenge with these amendments is potentially introducing new concepts, which might need to be defined through regulation, where we think that there are existing protections in place and the effect could be duplicative.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I thank all those who have taken part in this debate; it has been short but interesting, and I thank those who have supported the concept that I am trying to elaborate. What the noble Viscount, Lord Trenchard, has just said is probably true to some extent—why should we rely upon the FCA for this? It is true that this probably should be more of a general legal offence of unconscionable conduct, which is what they have in Australia. So there is no point trying to argue that, in a common law country with a similar kind of legal system, you cannot work out how it happens and whether it is effective: I can tell you that it is.
As the Minister elaborated, the problem with having a subjective measure—as the noble Viscount, Lord Trenchard, called it—is that you then have to put a whole load of rules around it. That is exactly the problem with the FCA. It has done it with the senior managers regime, something that I always understood Parliament wanted to be a subjective measure—that is, if you behaved badly and something happened on your watch, you were responsible. That has now been tied up with contracts approved between the regulator and the employees in the businesses. Instead of capturing the people at the top, it has pushed responsibility down the chain. The same has happened with “fit and proper”. The FCA has chosen to redefine what that means so it will catch only very extreme cases rather than bad behaviour.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
We now come to the group beginning with Amendment 8. I call the noble Lord, Lord Stevenson of Balmacara.
Amendment 8
“Duty of the FCA to make rules promoting financial wellbeing
(1) The Financial Services and Markets Act 2000 is amended as follows.(2) After section 137C, insert—“137CA FCA general rules: financial wellbeing(1) The power of the FCA to make general rules includes the power to require authorised persons to promote financial wellbeing of consumers in carrying out regulated activities under this Act.(2) The FCA must make rules in accordance with this power which come into force no later than 6 April 2022.””Member’s explanatory statement
This new Clause would introduce a duty to promote financial wellbeing for the FCA which would strengthen the FCA’s consumer protection objective and empower the FCA to introduce rules for financial services firms informed by that duty.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, with this amendment, we come to the end of the group of amendments that precede the Bill. This is another slightly detached issue that I hope will get a response from the Government. Amendment 8 is supported by the noble Lord, Lord Holmes of Richmond; I am very grateful to him for his support. His amendments on financial inclusion, which are also in this group, raise many similar issues. I look forward to hearing his comments and to the subsequent debate.
I declare my interest as a former chair of StepChange, the debt charity. Amendment 8 would place on the FCA
“a duty to promote financial wellbeing”—
a new term—
“which would strengthen the FCA’s consumer protection objective and empower the FCA to introduce rules for financial services firms informed by that duty.”
As I have already said, this is a probing amendment, seeking at this stage what I would describe as a high-level response from the Government. I am not looking for detail at this stage; it is really a question of whether there is merit in further work being done on this concept. If there is, I am looking for some pointers about how the Government would like it to go forward.
The background to this amendment is a suggestion from the Money and Pensions Service that there is a case for giving the FCA the power to nudge—its term, not mine—financial services firms to underpin their activities with regard to the financial well-being of their customers and to go beyond current considerations of consumer protection or vulnerability, which I think they have already adopted to some extent. The intention is to remove any asymmetry of knowledge, expertise and capacity between the service providers and their clients. It is a very ambitious goal and would take a lot of work across many sectors not normally involved in the consideration of financial competence.
During my time as the chair of StepChange, we used the term “financial inclusion” to cover the need to have a society where everyone felt that they were knowledgeable enough to be secure and in control of their financial affairs; indeed, we have used the term since then. However, if we change that to “financial well-being”, we go much further. We could say that the aim would be to have the knowledge, confidence and resilience for all in society to pay bills as they fall due, cope with unexpected shocks and plan across our assets and income over time for a healthy financial future right through to well after retirement.
It is a very ambitious and much wider term than “financial inclusion” or any amount of financial education. The importance of the term is that it better captures a life cycle approach to the modern needs for economic health, generating confidence and empowerment within the population at scale coupled with a financial services industry that goes well beyond just designing and delivering good products and excellent services—which we accept they do, of course. It all should be backed by a regulatory system with a holistic overview and the powers to match.
Is this just smoke and mirrors, or is it a realistic vision of the way that things might be? Whatever the case, it is a good time to ask the question. As we discussed earlier today, the FCA’s 2020 Financial Lives survey found that just over half of UK adults—24.1 million people, in its figures—display one or more of the characteristics of vulnerability to their financial situation: a health condition, negative life events, low financial capability or low resilience. Other surveys have already been mentioned. The Salad Projects’ report was mentioned by my noble friend Lord McNicol, and hopefully will be again when he comes to speak on this group. It shows the reality of coping with low incomes and why a shortage of low-cost credit is such a major issue for so many citizens who, even when in regular employment and often with blameless credit references, cannot find appropriate ways to cope with even the basic costs of living, let alone saving for a rainy day and retirement.
The Government are currently consulting on a phase 2 review that includes financial inclusion on the levelling-up agenda, but we also have some other material. As has been mentioned already, The Woolard Review: A Review of Change and Innovation in the Unsecured Credit Market is a major contribution to the understanding of this area; it will come up again in later amendments. There is a lot going on. With this probing amendment, I seek a sense from the Government of whether they accept the case for a broader approach to financial well-being being championed by the Money and Pensions Service and by some firms such as NatWest and Nationwide. In particular, do they accept that, whether or not a formal duty of care is placed on financial service firms—I would support this—the forms of regulation in this area need to be expanded to deliver what the FCA calls
“fairer outcomes for consumers, including support for customers with poor financial well-being that might extend well beyond simple commercial transactions”?
Thirdly, would they consider taking this one step further and seeing what would be required from other partners and agencies?
If we really want a system capable of helping consumers to develop the skills and confidence to interact with financial service providers, people must be secure in the expectation that, if they need help in managing their decisions on their finances, they will not be ripped off and that there will be quality support for them. We must also ensure that education, advice, debt counselling services and other things focus on helping all citizens to develop the skills and confidence to interact effectively with financial service providers—not only providing the products that they need over the life cycle but developing their skills and confidence about their financial well-being and empowering them to take control and plan what they want to maximise their resources.
This is a big agenda that probably also needs action on many other issues such as low-cost credit sources. However, at this stage, we need a clear signal from the Government about how far this issue can go and on what terms they would like to see further work done.
I beg to move.
Lord Holmes of Richmond (Con) [V]
My Lords, it is a pleasure to speak on this group of amendments. I congratulate the noble Lord, Lord Stevenson of Balmacara, on the excellent way in which he introduced the group. The concept of financial well-being is a growing area and there is a lot for us all to reflect on. I thank him for all that he has done in this whole area of financial well-being, not least during his excellent time at the helm of StepChange.
We should thank all the organisations involved in financial inclusion, not least Macmillan Cancer Support and the Money Advice Trust. They go to people who are at the sharpest end of financial exclusion, and their commitment and the briefings that they provide to parliamentarians are a credit to everybody involved in that space.
I turn to my Amendment 9 in this group, which would place a duty on the Financial Conduct Authority to work toward the objective of financial inclusion. In doing this, I seek to raise the whole level of financial inclusion across our regulators. The context has moved on significantly during the Covid crisis. People who, fortunately, have never had to think about financial inclusion or have never been at a loss as to where the next bill payment will come from find themselves very much at the sharp end of financial difficulty. Fortunately, in many of those instances, the Government have stepped in through the furlough scheme and the self-employed and business loan schemes.
The reality is that, in a broad sense, these are enablers of continued financial inclusion. I would argue that, in this new world, it is difficult to consider the concept of financial stability while we still have such issues around financial inclusion. Financial exclusion has dogged our society for decades. It ruins lives, paralyses potential and corrodes communities. This amendment would give the FCA the objective of considering the barriers, blockers and bias that continue to mean that people are shamefully excluded from mainstream financial products.
Similarly, in the second point in my amendment, I want to place a requirement on organisations
“to report on their use of financial technology to increase financial inclusion.”
Not for one minute do I believe that fintech is the silver bullet—I am well aware of the issues around financial and digital exclusion—but fintech must be part of the solution and must be turbocharged at all levels of financial services. It must be understood much better by HMT, as well as the role it can play in varying degrees across financial services. This was proven at the beginning of the Covid crisis when, in a matter of hours, various fintechs came up with innovative solutions to address some of the issues that then rolled out as the crisis developed.
Having a financially inclusive nation makes sense. Having a financial inclusion objective within the scope of the FCA makes complete sense. I hope that this amendment will add to all the extraordinarily good work that everybody involved in financial inclusion is currently undertaking.
Baroness Neville-Rolfe (Con)
My Lords, I thank the noble Lord, Lord Stevenson, and my noble friend Lord Holmes of Richmond for tabling these amendments and for the important debate that they have initiated this evening. Both have considerable expertise in the field; I am only sorry that we are not all here together physically and able to debate the issues in our Pugin corridors.
I accept that financial inclusion is important, given the difficulties that a failure to understand finances can cause anyone, and indeed everyone. However, to my mind, this ought not to be a matter for the FCA, which should focus its efforts on providing a good, strong, unbureaucratic regulatory regime that allows those providing financial services to flourish and serves consumers well. Rather, a basic understanding of financial matters should, in my view, be inculcated first in school. We all need to understand the basics of loans, interest, probability and risk, how to manage budgets and pay our bills, the risk of fraud, what to watch out for, the value of a pension and many other things.
Lord McNicol of West Kilbride (Lab) [V]
My Lords, I will be brief, as I set out many of my concerns and issues when speaking earlier on the first group.
I support Amendment 8, proposed by my noble friend Lord Stevenson of Balmacara. Before I start, I would like to make the Grand Committee aware of my financial interests, as set out in the Lords register.
As touched on in Amendment 4 earlier, low financial resilience and overindebtedness are a huge problem for both individuals and the country at large. We should all do all that we can, especially under the current circumstances, to push back against those issues.
Either we are saying that there is a problem and we need to do something about it, or we are saying that there is not a problem and we just carry on as before. With the figures and the personal stories of overindebtedness and unaffordable, unsustainable financial predicaments, I believe that there is a problem that does need resolving.
The FCA recently found that the number of people suffering from low financial resilience had increased by one-third to 14.2 million people. That is one-quarter of the UK adult population. |In earlier amendments, we heard a number of noble Lords, and a little from the noble Baroness, Lady Neville-Rolfe, saying that any increase in regulations, bringing in a duty of care or a duty to promote financial well-being, was either not the responsibility of the FCA or, in some earlier comments, would put more costs on individuals in increased fees and on businesses with increased administration. I do not believe that that is the case with the amendment as laid out by the noble Lord, Lord Stevenson. If you look at the text of it—and I understand it is a probing amendment—you see that the power of the FCA to make general rules includes a power to require authorised persons to promote the financial well-being of consumers in carrying out regulated activities under this Act.
I am very new to this sector and I may be a little naive, but I believe that one of the most significant drivers of costs to the industry is from non-repayment or defaulting on loans. We need financial well-being and literacy to be increased. The noble Baroness, Lady Neville-Rolfe, is right that it needs to start in schools and carry on through employment and employers, but that should not preclude the Financial Conduct Authority being able to step in and help. There is a benefit to businesses as well. If financial well-being can be increased, the number of defaults from people falling into indebtedness or failing to pay reduces, thus increasing profitability of a product, then in turn reducing the cost of that product to individuals and businesses. There is a lot in where the amendment proposed by my noble friend Lord Stevenson is trying to take us.
We touched a little on the Woolard review and its 26 proposals, and I hope that we will see a bit more of those. The noble Lord, Lord Holmes, touched on fintech. With the increase in open banking and the ability to look at individuals’ accounts, better and more detailed decisions can be made on how a product or a business moves on. My noble friend Lord Stevenson referred to the University of Edinburgh Business School report, which it carried out for Salad Projects, looking at the health and well-being of NHS workers who had applied for a loan. The report provides a unique insight into their financial lives, based on millions of individual transactions. What came out of that was information about their low financial resilience—the ability of those working in the NHS to deal with a financial shock to their lives. Often it was just a small shock, but they were unable to tap into the bank loans that many of us can take; they were forced into the high-cost credit loans market.
If we have the development and promotion of financial well-being, I hope we will see a reduction in those who are driven into that sector. This amendment will help to deliver that, but it does not preclude delivering that in schools or the workplace. The FCA is a powerful body that can help push it even further.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to support this group of amendments. I take this opportunity to pay tribute to the noble Lord, Lord Stevenson, and my noble friend Lord Holmes for their huge contribution to this field of financial inclusion. I single out the noble Lord, Lord Stevenson, not just for his role on the Front Bench but previously in chairing StepChange. He will be greatly missed from his Front-Bench responsibilities, and I am sure it will not be long before we see him return.
I also congratulate my noble friend Lord Holmes on being indefatigable in his campaigning for financial inclusion and bringing our attention to fintech. I join the authors of these amendments in identifying a need to address this issue, and I hope that my noble friend, in summing up, will answer this point. The noble Lord, Lord Stevenson, has asked for a high-level response, and I shall use that expression later—I like it. Perhaps we might get something more from my noble friend.
No less of an authority than “You and Yours”, of which I am an avid listener—I think there are two compulsory programmes we should listen to, one is that and the other, I have momentarily forgotten what it is, is the one that gives us all the figures and responses—spent the best part of a programme looking at credit ratings. What struck me is that often it is through no fault of an individual that they find that their credit rating has been so badly affected that they can no longer qualify for any credit. It can take months, if not years, to redress this.
I am concerned that if my understanding is correct Expedia is no longer acting for the Government in this regard. Can my noble friend confirm that we are down to two credit rating agencies? Do the Government share my concern that we should address this area of financial inclusion, financial awareness and each of us being aware of what our credit worthiness and credit ratings are? Amendments 8, 9 and 134 have identified issues that are worthy of attention in this Bill and I look forward to the response from the Minister.
Lord Blackwell (Con) [V]
My Lords, I have a lot of sympathy for the importance of inclusion. Financial services are clearly important to everyone, and I endorse the comments from my noble friend Lady Neville-Rolfe about the critical importance of financial education in achieving that. However, I have some difficulties with Amendment 8 on the definition of and requirement to consider financial well-being. Those reservations are similar to the ones that I expressed on Amendment 1 on the general duty of care.
Of course, the objective of well-run financial services companies is, and should be, to promote financial well-being. That is what their business is. That is the purpose of financial products. Financial services firms lend in order to allow people to buy houses and cars and to spread the purchases out over time. They help people to save in order to cover emergencies and to provide pensions in old age. They support businesses to help them create wealth. Financial well-being is the business of financial services companies. However, to impose a regulatory requirement to promote financial well-being runs the risk of extending the boundaries of what a regulated individual might be expected to do beyond what is reasonable to expect.
Despite the comments from the noble Lord, Lord McNicol, I am afraid that the amendment would create huge compliance costs and complexity. Of course, we need rules and regulations that protect consumers from unscrupulous firms that seek to exploit customers, but we should do that—as we do—through penalties for improper behaviour rather than by extending a general obligation on financial well-being. Having said that, I understand the motive behind it and I certainly support the objective of improving financial well-being through the financial services industry.
Baroness Kramer (LD)
My Lords, I find the thrust of all three amendments in this group really interesting and worthy of thought. I would particularly have added my name, had I been fast enough, to Amendment 9 in the name of the noble Lord, Lord Holmes. I think that is a strong and very positive amendment. Parliament, financial institutions, regulators and civic society have been discussing financial inclusion for years, and all of us recognise that there has been some progress. The Government’s financial inclusion report of 2019 identified 1.23 million people without even a basic bank account. That is half of what it was about 15 years earlier, but I think we all know that it is still unacceptably high. I will say more about basic bank accounts in an amendment in my name in a later group, as I think there are some real issues there.
Debt management advice has significantly improved and much of our thanks is owed there to the noble Lord, Lord Stevenson, as other noble Lords have said. We will discuss amendments that would strengthen that in another group. The FCA has made changes to the high-cost credit market. Many of those changes both in the debt advice arena and the high-cost credit arena were not actually initiated by the regulator. They were driven by this House, and I think that this House deserves to take credit for recognising that need and for driving through what has been real and effective action.
Lord Tunnicliffe (Lab) [V]
My Lords, the noble Baroness, Lady McIntosh, mentioned that my noble friend Lord Stevenson has retired from the Front Bench, much to my personal disgust—because we are short of talent and he has a great deal of it. However, it is my duty to point out that the amendment he has proposed has the full support of the Labour Front Bench, although it touches on a subject that has terrified me for most of my life, although for no good reason.
The idea of poverty is very remote to most of us. When you think of the number of people who live in poverty, particularly in this crisis, in the areas where the support schemes have not worked properly, it is terrifying and difficult to understand how people survive. The problem with poverty is that the individuals involved lose their equity in society—they get to a point of having nothing to lose, and then we worry about the fact that they do not behave in the way we would like them to.
I was brought up in—how can I put it?—a low-income household, where we had probably the equivalent of the living wage, but it was not nearly as bad as today. First, I believe there is more financial inequality today. Secondly, employment among the working class in my youth and that of my parents was much more secure. Finally, it was a cash society. Whatever else you might say about cash, it is very easy to understand. In the non-cash society that we are drifting into—indeed, we are largely already in it—you can barely survive without a bank account. Creating basic bank accounts is very important but, whether we like it or not, many people will not understand the mechanisms. The situation of not working in cash means that it so much easier to spend money and to lose control of what your liabilities and payments are. Much as we may deride the jam-jar approach to running a domestic budget, it was easy to understand and, therefore, easy to manage.
Anyway, what can we do about inequality and security? That, of course, is the big issue in society; it has been in the past, it is particularly bad now, and it is something that we will probably be working on for the rest of our lives. However, we can do something about understanding society. I agree with the noble Baroness, Lady Neville-Rolfe, that this should start in school. I am a great believer that the curriculum on what one might loosely call citizenship should be much wider in many ways, and there is no question but that financial literacy and understanding should be part of it. This curriculum cannot be completed in school because you only really learn when you come across real-life challenges; so, after school, a concept of financial well-being is needed that will be part of the future world. I believe that these amendments could lead us strongly towards that better future.
Baroness Penn (Con)
My Lords, I welcome the opportunity presented by this group of amendments to discuss the importance of financial well-being and inclusion. The Government are proud of our strong record, and I know that making progress on these issues is a personal priority for both the Economic Secretary to the Treasury and the Minister for Pensions and Financial Inclusion. However, I recognise, of course, that there will be people who are struggling with their finances and need further support, particularly at this challenging time.
Given that these are probing amendments and given the invitation, at least from some, for a high-level response, I thought it would be helpful to set out briefly the Government’s approach, working closely with the FCA as well as a wide range of stakeholders, to promote financial inclusion and financial well-being in the UK. The Government produce an annual financial inclusion report; the most recent of these was published in November 2020, outlining our response to the Covid-19 pandemic as well as the progress we have made on issues such as access to affordable credit, support for credit unions and enhancing the use of financial technology. Since 2018, the Government have convened the biannual Financial Inclusion Policy Forum, bringing together key leaders from industry, charities, consumer groups and the FCA, as well as government Ministers, including the Economic Secretary to the Treasury, who was responsible for the passage of this Bill through the other place.
The Government also work with a number of stakeholders to promote people’s financial well-being. This includes engaging closely with the Money and Pensions Service, an arm’s-length body of government, which published its national financial well-being strategy in January last year. The strategy sets out its five agendas for change to improve the UK’s financial well-being over the next 10 years. This includes goals to increase the number of children and young people receiving financial education, to encourage saving, to reduce the use of credit to pay for essentials, to enhance access to affordable credit, to increase the number of people receiving debt advice and to support people to plan for later in life. Delivery plans will be published by the Money and Pensions Service later in the spring and the Government are supportive of this work.
The Government also work with Fair4All Finance, an independent organisation funded by £96 million from the government-backed dormant assets scheme, which was founded to improve the financial well-being of vulnerable consumers through increased access to fair and affordable financial products. To date, Fair4All Finance has focused on affordable credit and developed an affordable credit scale-up programme to help the sector develop a sustainable model for serving people in vulnerable circumstances.
The Government also work closely with the FCA, and I reassure the noble Lord, Lord McNicol, that the FCA is committed to improving the way that regulated firms treat vulnerable consumers. It is one of the FCA’s key areas of focus in its current business plan. Its rules ensure that the fair treatment of vulnerable consumers is required by firms and embedded into its policies and processes. I will give a couple of practical examples, as mentioned in previous groups. First, the FCA’s consultation on the fair treatment of vulnerable consumers closed in September 2020 and the FCA intends to publish further guidance on this matter imminently. Secondly, as discussed in the context of the amendments on a proposed duty of care, the FCA has announced that it will undertake further work to address any potential deficiencies in consumer protection, particularly by reviewing its principles for business. While the FCA delayed this work because of the pandemic, it aims to consult in the first quarter of 2021. I also assure the noble Lord that a number of other matters that he raised, such as the issue of buy now, pay later, will be discussed in subsequent groups of amendments.
I understand that these are probing amendments. I hope that noble Lords will take reassurance, from the measures that I have set out so far, of the Government’s commitment to this area and the commitment by the FCA from the work under way. However, as my noble friend Lady Neville-Rolfe has argued, the Government do not believe that further statutory duties on the FCA in this area is the right approach.
On the challenge of the noble Lord, Lord Stevenson, the Government see the value of considering the broader concept of financial well-being to include access to affordable credit and consumer protection, as well as financial education, as an important area for future work by the Government, the FCA and associated stakeholders.
I hope that the Government have demonstrated their commitment to taking this work forward, working closely with the FCA and a wide range of stakeholders, and that this provides sufficient reassurance to noble Lords of the Government’s commitment on this topic for them to withdraw their amendments.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I have received no requests to speak after the Minister, so I call the noble Lord, Lord Stevenson of Balmacara.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank all noble Lords who have contributed to this debate. I am deeply embarrassed by all the personal comments and blushed to my roots, which I hope was not too obvious on screen. The noble Lord, Lord Holmes, rightly pointed out the excellent work being carried out by many other agencies and bodies in this area as well as StepChange. I completely endorse his comments; there is a lot of good work going on.
I normally find myself aligned very closely with the noble Baroness, Lady Neville-Rolfe—sometimes rather embarrassingly, given our respective party positions—but this time I seem to have completely confused her, for which I apologise. The noble Lord, Lord Blackwell, was right that there are two quite separate tracks here, as my noble friend Lord McNicol picked up on. One is setting up a regulatory environment within which more good behaviour and activity by firms enhances the overall capacity of the system to work well in terms of financial capability and well-being. The other is hoping for the wider context that is necessary for all this to happen—particularly starting with education, which is always a hard nut to crack. As the noble Lord rightly said, this could be picked up by employers, trade unions, wider agencies, anybody with an interest in seeing a holistic society using the non-cash elements that my noble friend Lord Tunnicliffe was so scared of but yet so sprightly embraced in his unique style.
We all must learn how to operate with new technologies and new operations. My children do not use cash; they have not used cash for 10 years. They are all flashing out ridiculously brightly coloured cards and seem to have a much better track on what they are spending and how well they are doing than I ever did. I completely admit that. However, that is no excuse for me—I must get up there and be part of that process. But there is a role for Government, there is definitely a role for the FCA and the regulator; there is a role for companies that want to go down that track and have the capacity to do so, but there is no fixed agenda for that yet.
I wanted to hear a high-level endorsement by the Minister that this was something worth exploring and working for. She has given that, and I am very grateful. We can see this as a burgeoning programme of work which might well surprise us all in terms of where it might reach and what it might do. We are all rightly trying to support it in a way that will be most appropriate. With that, I beg leave to withdraw the amendment.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
I remind Members to sanitise their desks and chairs before leaving the room.
House of Lords
Retirements of Members
The Lord Speaker (Lord Fowler)
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, others are participating remotely, but all Members will be treated equally.
I should like to notify the House of the retirements, with effect from 12 February, of the noble Lord, Lord Wilson of Tillyorn, and, with effect from 19 February, of the noble Baroness, Lady Tonge, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I should like to thank the noble Lord and noble Baroness for their very much-valued service to this House.
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.
Education: Supply Teachers
(3 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Viscount Hanworth
To ask Her Majesty’s Government what estimate they have made of the proportion of teaching posts in (1) London, and (2) elsewhere in England, which are currently being filled by supply teacher agencies.
The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con) [V]
[Inaudible]—perform a valuable role and make an important contribution to the running of schools by covering temporary staff absences. The department does not hold data on the proportion of teaching posts provided by supply teacher agencies. School leaders have autonomy over workforce planning, including how they manage absences. The department has provided guidance to schools on ways to manage absences, including the use of supply staff.
Viscount Hanworth (Lab)
I thank the Minister for that Answer. Teaching is becoming part of the gig economy. Head teachers and school governors faced with limited budgets are unwilling to employ new teachers on a permanent basis. By recruiting teachers from agencies, they can avoid paying pension contributions and sickness benefits and they can more easily dismiss the teachers when faced with financial difficulties. The agencies typically take fees of at least £100 per week from teachers’ pay. These circumstances are making teaching an unattractive career choice and threaten to undermine the standards of teaching. What, if anything, are the Government doing to address them?
Baroness Berridge (Con) [V]
My Lords, the Government are investing £2.6 billion in school budgets this year. In relation to supply teachers, the Government have entered into an arrangement, involving the Crown Commercial Service, to help schools to use teacher agencies and to make the fees transparent. It is clear that any teacher from an agency regulated by BEIS who is employed for 12 weeks becomes a permanent member of staff with all the entitlements that that gives them.
Lord Lucas (Con) [V]
My Lords, I am grateful that my noble friend acknowledges the role that the flexible workforce has played during the pandemic, but I echo the request from the noble Viscount, Lord Hanworth, that we set out to make sure that these people are well treated, that their rights are protected and that, in offering an efficient and value-for-money service, we build for them a good career structure.
Baroness Berridge (Con) [V]
My Lords, indeed, this is a regulated sector. Employers—namely, schools—and agency workers make use of this arrangement, and many teaching staff who are coming to the end of their career and who want to work in this flexible way take advantage of it. It is an advantage to the agency staff that they can choose to work one day or one week out of three and, as I said, it is particularly attractive to those ending their career, but of course there are protections to balance the advantages for the employee and those for the employer.
The Earl of Clancarty (CB)
My Lords, the noble Baroness will be aware of what Matt Hancock said yesterday about vaccinating teachers. If the Government reconsider, will they ensure that supply teachers are not overlooked? Moving around, they are in a particularly vulnerable position, which is one very good reason why teachers should be vaccinated before any full return.
Baroness Berridge (Con) [V]
My Lords, the Joint Committee on Vaccination and Immunisation asked for a cross-governmental response on occupational vaccination and the department responded to that. I can assure the noble Earl that that was for the entire education workforce and that representation included all people, temporary and permanent, including those in early years.
Baroness Blower (Lab) [V]
My Lords, the school workforce census for the 2016 cohort shows that more than a quarter of teachers left teaching in the early years of their career. The loss of one in four teachers within three years speaks volumes about the difficulty and problems involved in retaining teachers. What plans do the Government have to address this workforce recruitment problem—looking at workload, among other things—to ensure that we have enough teachers to fill all the posts in schools on a permanent basis rather than relying on supply teachers, who already have an important role to play providing short-term cover?
Baroness Berridge (Con) [V]
The noble Baroness is correct that we want to retain the talented teachers whom we recruit each year. We are delighted that there has been an increase in recruitment this year of 23%. The early career framework should address the issues that she outlined: a one-year initial teacher training followed by two years of professional development support. That begins in September this year. Schools will be required to deliver that to put teaching on a par with the professional development that is offered by professions such as law and medicine. It will enable new teachers to have mentoring and time out of the classroom and to be introduced in a gradual way and supported into the workforce.
Baroness Garden of Frognal (LD)
My Lords, the substantial increase in teacher workload means that many schools have to have recourse to supply teachers. Unlike the old local authority system, under which I had some of my most taxing supply teaching experiences, private supply agencies are creaming off teachers and scarce school funds. What plans do the Government have to rectify this, to ensure better pay and conditions for supply teachers while making sure that schools retain money for essential use?
Baroness Berridge (Con) [V]
My Lords, we trust school leaders to make workforce arrangements. Some schools, particularly multi-academy trusts, choose to employ supply teachers and some local authorities still run a pool supply service. As I have outlined, the agency supply deal means that there is transparency of fees and the arrangements are clear to schools, particularly when a teacher goes from a 12-week period of being temporary to being entitled to be permanent. So there is transparency—113 agencies have signed up to this deal, which we have made available to schools to help them to buy well and ensure the necessary transparency.
Lord Watson of Invergowrie (Lab) [V]
My Lords, the DfE has issued advice to schools not to lay off supply staff and to ensure that safety arrangements allow them to continue to be employed where needed. This has not prevented some schools from dispensing with supply teachers, placing additional pressure on permanent staff to cover for absent colleagues. The DfE advice is aimed equally at schools that engage staff directly and those that engage via agencies. The principle is the same—they should continue to employ and continue to pay—but there is no means of enforcement. Will the DfE now re-emphasise its advice to schools not to lay off supply staff?
Baroness Berridge (Con) [V]
The noble Lord is correct that the school budgets that have been paid regardless of the opening or closing of schools mean that those supply staff who are direct employees should continue to be employed during this period. However, for those who are employed by agencies, the guidance is for schools to try to continue to use those supply teachers, but of course the employer is the agency. If those supply teachers are not used, there is the possibility of furlough, but that is obviously a decision for the employers. We have made a wide range of support available for agency supply teachers, but the arrangements obviously depend on whether they are a direct employee of the school or from an agency. The guidance helps schools to treat their workforce fairly.
Lord Randall of Uxbridge (Con) [V]
My Lords, does my noble friend agree that the teacher shortages in London are in large part due to the cost of housing in the capital? Does she consider that the pandemic will be a factor in making the situation worse?
Baroness Berridge (Con) [V]
My Lords, certain areas of the country have shortages of teachers, particularly in some subjects. If those shortages relate to maths, chemistry, physics or computing, substantial bursaries of £24,000 are available to meet that shortfall. We are aware of population movement due to the pandemic and I assure the noble Lord that we are working as quickly as we can to see where this has taken place to ensure adequate school places.
Baroness Coussins (CB)
My Lords, given the finding of the Migration Advisory Committee that modern foreign language teaching is a shortage occupation, will the Government commission research and data collection to show whether there is a disproportionate recourse to supply teachers for MFL, what level of difficulty is experienced by agencies in providing them and what impact this has on the take-up of teaching and learning languages?
Baroness Berridge (Con) [V]
My Lords, the noble Baroness is correct. A shortage has been identified in modern foreign languages, but we are seeking to address it by recruiting more permanent modern foreign language teachers. There are 1,687 new modern foreign language teachers in the new cohort. A bursary of £10,000 is available in shortage areas, as well as other arrangements. We have identified 25 local authority areas where modern foreign language teachers can reclaim student loan repayments as part of a way of encouraging them to work in those areas.
Baroness Blackstone (Ind Lab)
My Lords, given their commitment to a recovery programme to try to reduce the number of children who may never catch up following the school closures, will the Government ensure that supply teachers are available to contribute, given the pressures that there will be on permanent teaching staff? Will the Minister tell the House whether the necessary online training will be provided for supply teachers taking part in this programme and how such training might be resourced?
Baroness Berridge (Con) [V]
My Lords, the guidance to schools helps them in this time of fluctuating staff absences to address their workforce issues. In particular, it draws attention to the use of supply teachers. Many resources are available, including teacher resources on the Oak National Academy, the remote platform with video lessons for all teaching staff. We are encouraging school leaders to make use of agency staff as and when they are needed to ensure the appropriate level of workforce in their schools.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed. We now come to the second Oral Question.
Questions for Written Answers
(3 years, 9 months ago)
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Baroness Doocey
To ask the Leader of the House what steps she is taking to ensure that Her Majesty’s Government provide timely answers to questions for written answer.
Earl Howe (Con)
My Lords, Ministers take their obligations to Parliament seriously. In the past 12 months, the Government have answered more Questions for Written Answer than in any equivalent period going back to at least 2015. Since the onset of the pandemic, some departments—not least the Department of Health and Social Care—have quite understandably been asked significantly more Written Questions than usual. All departments are working hard to answer Written Questions as quickly as possible.
Baroness Doocey (LD)
My Lords, Written Questions should be a critical tool for us, but responses, when they eventually arrive—one of mine took four months— just give information that is available elsewhere and do not answer the questions. Peers get just 30 seconds to ask an Oral Question and do not have the right of reply even when Ministers give incorrect information. This is no way to hold the Government to account. Does the Minister agree that this situation is just not fit for purpose and needs radical reform?
Earl Howe (Con)
My Lords, it is clearly far from ideal that some Members of this House, including the noble Baroness, have waited as long as they have for Written Answers. In ordinary circumstances, it would be completely unacceptable. I am sorry that it has happened. All departments have been under pressure during the Covid emergency; even so, I can tell the House that in January this year 84% of Written Questions from your Lordships were answered on time. It is perhaps worth my saying that it is open to any noble Lord who is unsatisfied with an Answer they receive to ask a follow-up Question.
Lord Reid of Cardowan (Lab) [V]
My Lords, I thank the Minister, but this is not just an isolated complaint; it has become more of an established pattern that is not confined to Written Questions, important though they are. Select Committee reports are now routinely overdue. I am afraid it cannot all be blamed on Covid-19; complaints about delays in Questions predate it, as do the consistent overruns in responses to Select Committee reports, from as far back as the 2015-17 Session. This is now a systemic problem. Will the Minister institute a thorough review into this matter and report back to your Lordships’ House?
Earl Howe (Con)
My Lords, I am grateful to the noble Lord and shall certainly take his comments on board and transmit them to members of my Front Bench and the usual channels. I am aware that there is concern about the matters he raised, which run more widely than simply Questions for Written Answer.
Lord Taylor of Warwick (Non-Afl) [V]
My Lords, a timely answer can be a strong enhancer of government policy. Will the Government further commit to using Written Answers as one of the important messages to counter any myths that anti-Covid vaccinations are dangerous to health, especially since these myths exist in certain sections of the BAME communities?
Earl Howe (Con)
The noble Lord raises a very important point. I can tell him that Ministers use a number of vehicles to dispel myths about the Covid emergency and the vaccination programme in particular. I thank him for his question, which I am sure will resonate with colleagues in the Department of Health and more widely.
Lord O'Shaughnessy (Con)
My Lords, there are a number of Ministers and former Ministers in this House. We all know how seriously they and their officials took and take the prompt and thorough answering of Written Questions. Surely, delays would have taken place only if there were more pressing matters at hand, and we have had to deal with the pandemic. While perhaps upbraiding them on their tardiness, should we not also recognise the service that our Ministers and officials have given during this time and the outstanding job they have been doing?
Earl Howe (Con)
My Lords, I am grateful to my noble friend. It is worth noting that, in the Session to date, Ministers for the Department of Health and Social Care—principally my noble friend Lord Bethell—have answered 100 Oral Questions and 22 Private Notice Questions, as well as handling more than 40 Statements. In this House, we have also debated 56 sets of health protection regulations. It is not just through Written Answers that the DHSC has been accountable to this House.
Lord Jones of Cheltenham (LD) [V]
I received a written response on 4 February, within the time limit, saying that
“The Department for Work and Pensions plans to respond shortly on this issue,”
which felt like a fob-off. Since then, nothing. What is the Government’s interpretation of the word “shortly”?
Earl Howe (Con)
My Lords, we have debated this matter a number of times in this Chamber. Clearly, the noble Lord is entitled to expect a substantive answer within the space of a few days of the Answer he received. I shall follow up the matter he has raised but, as I said earlier, Ministers take their obligations to Parliament very seriously. My noble friend the Leader of the House regularly speaks to members of the Government Front Bench about the importance of timely responses to Written Questions, and her office actively chases late Answers.
Baroness Rawlings (Con) [V]
What has the DHSC done to expand the number of people in its parliamentary branch to deal with the large increase in Questions tabled for Written Answer? I must admit, I put down a Written Question quite recently which was promptly answered, very impressively, by my noble friend Lord Wolfson.
Earl Howe (Con)
My Lords, the Department of Health and Social Care has done so: the parliamentary team has expanded from nine civil servants to 17 and its ministerial correspondence team has more than doubled in size to 111 members of staff. The effort has been huge. I am happy to report that it is making a difference. Four or five months ago, the average turnaround time for a Question in the department was 23 days; it is now seven days.
Viscount Waverley (CB)
My Lords, this situation goes back a long while; I understand that Mr Speaker has also expressed concern. While agreeing that timeliness is important—there is little point in belabouring that it took one year to answer a Question of mine—meaningful content would also be helpful. Does the Deputy Leader concur that it might be preferable if officials presented for ministerial sign-off the answer to a Question, rather than seemingly avoiding doing so? An example was the Question “Which francophone countries has the Trade Minister responsible visited to extol the undeniable virtues of British goods and services?”, to which the Answer was “Our Minister has visited Moscow, amongst other destinations”.
Earl Howe (Con)
My Lords, I am sure the noble Viscount’s question will be noted in the relevant department. I endorse his general point; your Lordships’ House has resolved that:
“It is of paramount importance that Ministers should give accurate and truthful information to Parliament”
and that they should be “as open as possible” in answering questions.
Baroness Smith of Basildon (Lab) [V]
My Lords, the noble Earl has been clear that he agrees it is fundamental to our democracy that all government Ministers be accountable to Parliament, which is the reason for these concerns. I put it to him that the noble Lord, Lord Frost, has been appointed to the Cabinet but is currently on leave of absence from this House and that three months’ notice is needed to return. The noble Earl will know that I have raised previously how helpful it would be for your Lordships’ House to hear from the noble Lord directly, and I have been disappointed that he was not here to do so. When will he return to the House? Can arrangements be made for him, at the very least, to answer Written Questions? Given the backlogs we have heard about, perhaps an extra pair of hands would be very welcome.
Earl Howe (Con)
My Lords, I am advised that an exception has been made in the case of the noble Lord, Lord Frost, to enable him to return to full duties in this House at an early date.
Lord Willis of Knaresborough (LD) [V]
My Lords, on 25 September last year I tabled a Question concerning deaths from Covid-19 in care homes. It was answered 131 days later, on 2 February. It revealed that in one six-week period some 11,155 elderly patients died, the equivalent of a small town such as Wetherby in Yorkshire. Was there a delay because the Government were not compiling statistics for care home deaths at the time, or was it a policy decision to delay publication of such a devastating policy failure? What assurance can the noble Earl give on ensuring rapid publication of data in future?
Earl Howe (Con)
My Lords, I have asked the Department of Health and Social Care specifically about very long-delayed Answers, which I agree are deeply regrettable. The number is coming down; I understand that there are only a handful. Often the reason for such a delay is either the practical difficulty of gathering data or the rapidity with which the policy environment is moving, precluding an accurate answer being formulated.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed.
Political Parties: Expenditure Limits
(3 years, 9 months ago)
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Lord Rennard
To ask Her Majesty’s Government, further to the Written Ministerial Statement by Lord True on 3 December 2020 (HLWS610), what representations they have received in support of their plans to increase the permitted expenditure limits for political parties at general elections; and what will be the uprating in line with inflation for national spending limits.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, the Government engaged with political parties on spending limits last year. A range of views were received and, following that engagement, we uprated candidate spending limits at local elections in England. We have committed to reviewing candidate and party spending limits at reserved polls this year with a view to uprating them in line with inflation. We will not comment on specific figures until after this planned review has been carried out.
Lord Rennard (LD)
The Minister knows that this Question does not relate to candidate spending or to local election spending. It relates specifically to national election spending. Perhaps I can help him. The figure for inflation since 2000 is approximately 69%. The figures published by the Electoral Commission show that increasing national party expenditure limits would benefit only the Conservative Party across Great Britain. Taking these together with other proposals under consideration, but not widely known, to allow national party spending to be targeted more easily at marginal constituencies, are the Government not now ending any concept of the level playing field in elections?
Lord True (Con)
No, my Lords. I am not certain whether the noble Lord speaks for his party in his Question or in the rather intemperate letter that he sent to the Minister for the Constitution on this matter. Spending limits have been unchanged for national elections since 2000. Failing to update them is actually changing policy by steadily reducing spending limits in real terms.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, with respect, the Minister did not answer the Question. What representations has he received in support of increasing national spending? Will he now try to answer that Question?
Lord True (Con)
My Lords, I did reply to the Question, saying that we were undertaking a consultation and that a range of views were received from different parties. When the time comes to make an announcement, we will be able to provide more details to the House.
Lord Tyler (LD) [V]
My Lords, given that the friend and family recipients of Covid crony contracts have already poured more than £8 million into Conservative Party coffers, does the Minister acknowledge that this huge increase in permissive spending will encourage more millionaires to think that they can buy government favours, including nomination to this House?
Lord True (Con)
No, my Lords. I strongly disagree; the noble Lord should think carefully before spreading such charges. If one looks at the record of donations that the Liberal Democrats have received, including those from convicted criminals, it is clear that charges of that kind should not be cast in that manner. The Government are reviewing the matter; local election limits were put up by the coalition Government, in which Liberal Democrats served, in 2014.
Lord Leigh of Hurley (Con) [V]
My Lords, as a party treasurer, I know that in 2000 the cost of a second-class stamp was 19p and it is now 66p. Therefore, does the Minister agree that the rules need to reflect reality? Given that all parties were fined after the 2015 election, there is clearly a need to simplify the rules. Perhaps he might point out to the Liberal Democrats that election spending is not necessarily the only issue: late filing of accounts six months after the 2019 election was also reprehensible.
Lord True (Con)
My Lords, I agree, but I would not want to give the House the impression that the Government do not think that there are matters that need to be addressed and considered. Notional expenditure is obviously one of them. I am grateful for the support that we received from the Labour Party on examining the rules on notional expenditure.
Lord Singh of Wimbledon (CB) [V]
My Lords, as we come out of the Covid-19 pandemic, it is important for all political parties to look to new priorities for recovery and for meeting the new imperatives of sustainable development. Does the Minister agree that any increase in political funding limits should not unduly disadvantage smaller parties committed to new and necessary forward thinking?
Lord True (Con)
My Lords, I certainly agree that any consideration of electoral law and, indeed, electoral practice needs to reflect on the position of smaller parties. The Government have been considering that specifically in relation to the May elections.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, have the Government considered introducing a mechanism to allow for the uprating of local and national spending limits for elections and donation-reporting thresholds at arm’s length from Ministers, which would provide protection for the Government and reassurance to others?
Lord True (Con)
My Lords, we think it important to engage with the political parties, and we do so. Obviously, the reporting of donations has to be and is transparent; I strongly agree with the noble Lord on that. That is the situation that obtains presently. So far as his broader question is concerned, I reiterate that cross-party discussion of these matters is important and we appreciate the input of the Labour Party on them.
Lord Roberts of Llandudno (LD) [V]
My Lords, why is £12,000 per constituency with an average of 70,000 electors not sufficient? Why is more money needed? What is it going to be spent on—or is it just that inflation has reached such levels under this Conservative Government that money is absolutely essential?
Lord True (Con)
My Lords, in our judgment, it cannot be right that the limits for parliamentary by-elections have not been updated in more than 20 years. By updating for inflation, as is currently under consideration, the limits would remain in line with the original intent of Parliament in 2000 when they were introduced.
Lord Truscott (Non-Afl) [V]
My Lords, this Question reminds me of my time as a political organiser in the 1980s. Of course, campaigning has changed a lot over the last decade or so: President Obama was one of the first politicians to use social media extensively to get elected in 2008. The use of social media, including Facebook, bots, online ads and political consultancies such as the defunct Cambridge Analytica, which accessed 87 million Facebook users, is currently unregulated. How do the Minister and Her Majesty’s Government intend to include social media use and abuse in election spending in the future?
Lord True (Con)
My Lords, the noble Lord touches on an important point in relation to digital campaigning. We have said that we will introduce a digital imprints regime and we published a consultation on the proposed regime in August 2020 that closed in November. We are taking forward a programme of work on electoral integrity that will ensure that it is fit for the modern age. It will address some of the issues to which he referred.
Lord Lancaster of Kimbolton (Con)
My Lords, is it not time to end the outdated distinction between borough and county constituencies? The latter attract a 50% premium for expenditure purposes per elector. In the age of modern campaigning, when people no longer walk the streets as much as use social media, should we not apply a single formula across every constituency in the United Kingdom?
Lord True (Con)
That is an interesting suggestion. As a former leader of a London borough, I am not sure where I should go in responding to it. It is certainly true that modes of campaigning are changing and may well continue to change. On my noble friend’s specific point, I will take it on advice and refer it to the Minister for the Constitution.
The Lord Speaker (Lord Fowler)
I call the noble Baroness, Lady Bennett of Manor Castle.
Baroness Bennett of Manor Castle (GP) [V]
Apologies, my Lords—I will try again. In recent general elections, the wealthiest and largest political parties have used their very generous national party spending limits—in 2019, it was close to £19 million—to cover a variety of non-national costs, including targeting a lot of individual constituencies with generic leaflets, billboards, et cetera. Independent candidates and smaller rising parties do not have this additional spending option. Will the Government be open to consider rebalancing the two types of spending limit in the interests of fairness as well as to prevent swing seats being barraged with messaging? Will they put far tighter limits on individual contributions to political fundraising, so that we do not all get the politics a few people pay for directed towards a small percentage of the population?
Lord True (Con)
My Lords, I have not noticed the Green Party fail to target its efforts on specific constituencies, but the noble Baroness may be able to advise me otherwise. I do not think it would be sensible practice to seek to reduce donations to levels that might be achieved by the least popular parties in the country. The truth is that many individuals—whether trade unionists or others—contribute a great deal of money to the larger parties, and I think their contributions should be welcomed and esteemed.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed. We now come to the fourth Oral Question.
Food-related Crime
(3 years, 9 months ago)
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Lord Rooker
To ask Her Majesty’s Government what assessment they have made of (1) the level of food-related crime, and (2) the resources available to address such crime.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Bethell) (Con)
My Lords, food crime is of rising importance to the public, our trade, our farmers and our climate. That is why the Food Standards Agency constituted the National Food Crime Unit in 2014; why the National Food Crime Unit published its assessment in September; and why Ministers have a dialogue with the NFCU, industry and the police about increasing its powers.
Lord Rooker (Lab) [V]
My Lords, does the Minister accept that the National Food Crime Unit is operating against organised crime with its hands tied? Investigations are being hampered. Does the Minister agree that investigation powers should be strengthened to include powers to collect the necessary evidence to a higher standard? In other words, will the Government agree that the Police and Criminal Evidence Act powers should be granted to the National Food Crime Unit? The National Police Chiefs’ Council agrees to this to remove the burden from local police forces, which actually agree that food crime is not a high priority.
Lord Bethell (Con)
The noble Lord entirely has a point. I completely agree with him that the National Food Crime Unit has a formidable task ahead of it and that its investigatory powers could be enhanced and its impact improved. That is the view of the Government, industry and the police, and that is why we are committed to the dialogue, first suggested by the Kenworthy review, on the enhancement to which the noble Lord refers.
Baroness Jones of Moulsecoomb (GP)
One of the food crimes I am told is increasing is that of stealing market-ready lambs. The people stealing them do not just load them on to a trailer and take them away—they butcher them in the fields and leave the debris, guts, blood and heads. I wonder whether the police have enough powers to deal with that particular crime, which is increasing.
Lord Bethell (Con)
The noble Baroness is entirely right: this is a very distressing crime. I was pleased to note the convictions and custodial sentences in March last year under Operation Stock, led by Northamptonshire Police, of three men for a string of such offences in the Midlands. The NFCU remains alert to the entry of meat from these offences into the food chain and works with policing rural crime networks to actively counter this practice.
The Earl of Caithness (Con)
My Lords, the better the NFCU does, the more cases will be reported to it. Could my noble friend tell me what the budget for the NFCU will be over the next three years? Could he also confirm, as the opportunity for reporting to the NFCU improves, whether there is enough anonymity for people, particularly those within the food business, to be able to make complaints without exposing themselves to retribution by criminal gangs?
Lord Bethell (Con)
My Lords, the NFCU’s head count is just over 80 staff in England, Wales and Northern Ireland, and its budget is £5.7 million. The NFCU has an anonymous reporting route available via the phone and the FSA website, and it welcomes contact from public-spirited people within the industry on wrongdoing. The unit also encourages engagement with industry through more overt routes, and I particularly thank the Food Industry Intelligence Network, whose members share over 50,000 anonymised authenticity sampling results with the unit each year.
Baroness Meacher (CB) [V]
My Lords, in the 1970s I wrote a book based on a survey on the consequences of benefit withdrawal and found that, typically, claimants were driven to crime. Have Her Majesty’s Government undertaken any recent research into the consequences of the very low universal credit rates, the sanctions regime and the deductions taken from benefits to repay loans early on in the claim? If not, would the Minister be good enough to ask the DWP to undertake such research into the crime effects—if you like—of the benefits system?
Lord Bethell (Con)
My Lords, I bow to the noble Baroness’s great expertise on the correlation between poverty and crime. But that makes no excuse for the kind of crimes we are talking about here. Many are either brutal—as the noble Baroness, Lady Jones, referred to—or crimes of fraud, for which there is no excuse.
Lord Clark of Windermere (Lab) [V]
My Lords, I am encouraged by the Minister’s response today, and I am sure that many Members of the House will wish him well in persuading his colleagues to give more power to the NFCU. As he does so, will he ensure that the new system is integrated completely with the more established direct farm-related food regulations and crimes?
Lord Bethell (Con)
My Lords, the NFCU has done an enormous amount in working with stakeholders. Although it is a relatively small unit, with just 80 individuals, it works extremely closely with trading standards officers in local authorities and with policing authorities up and down the country. It leverages its expertise, and we hope to be able to augment that expertise with investigatory powers so that it can relieve police forces from some of the application of justice in this area.
Baroness Bakewell of Hardington Mandeville (LD) [V]
My Lords, a steady supply of nutritious food is essential, not only for those recovering from Covid but for those who are struggling due to losing their job or having been furloughed. Queues at food banks are extensive. Food crime is very serious, so can the Minister provide assurance that it will not affect the supply of food to those who are most in need?
Lord Bethell (Con)
My Lords, the focus of the unit tends to be on either food that is unfit for human consumption, such as in the horsemeat scandal of 2013, which the noble Baroness will remember, or on the passing off of low-quality food with a higher-quality label. It is not involved in addressing the theft of food. However, I agree with the noble Baroness that getting good-quality food to all the population is a priority, and that is one of the Government’s priorities.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I applaud the work of the National Food Crime Unit. The main function of the Food Standards Agency is food safety and surveillance. We are currently in the midst of a salmonella outbreak through the import of chicken nuggets from Poland. Does my noble friend share my concern that this raises serious issues about the food safety and surveillance system and why this outbreak was perhaps not detected during the import of this meat into the UK?
Lord Bethell (Con)
My Lords, I am across the recent outbreak of chicken nugget salmonella poisoning across the UK. However, I point to the work of the European distribution fraud unit, which is very much focused on this kind of cross-border food crime. I will take back to the department the noble Baroness’s recommendation and will write to her if there is any update that I can provide her with.
Baroness Thornton (Lab)
I will be very quick because I am very keen that the noble Lord, Lord Krebs, is able to get in on this Question. Can the Minister commit to briefing parliamentary counsel to advise and bring forward these changes, and when can that happen? We on these Benches would welcome this commitment and would give appropriate support to the resulting legislative process.
Lord Bethell (Con)
I am enormously grateful to the noble Baroness for her support in this matter. I reassure her that we are focused and working on it, and I will bring forward an update as soon as I reasonably can.
Lord Krebs (CB) [V]
My Lords, detecting food crime often depends on trading standards officers and public analysts. Does the Minister consider that the current number of trading standards officers and public analysts is adequate to give the public confidence that food crime is being detected in a timely and comprehensive way? Could he also tell us what progress has been made on detecting honey fraud? It is estimated that about 15% of honey on sale in Europe is adulterated, and it is now over a year since Defra held a seminar on detection methods.
Lord Bethell (Con)
The noble Lord undoubtedly knows that, since January 2021, the FSA has been running a 12-month pilot of the new model of working with local authorities on trading standards in order to improve the work between the FSA and trading standards to address any gaps there may be in that collaboration. On the noble Lord’s question about honey fraud, I completely endorse his shock and outrage that the honey that we buy in the supermarket may be adulterated. It is sometimes said that there is 10 times the amount of manuka honey on sale than could ever be possibly made by the bees of New Zealand. There are challenges on nuclear magnetic resonance spectroscopy allocations, as the noble Lord undoubtedly knows. We are working extremely hard with both Defra and the Laboratory of the Government Chemist to put pressure on international authorities to align the data needed in order to investigate honey more closely.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed. That brings Question Time to an end.
Covid-19: Surplus Vaccine Doses
(3 years, 9 months ago)
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Baroness Sugg
To ask Her Majesty’s Government, further to the Prime Minister’s statement at the G7 Leaders Meeting on 19 February, (1) how, and (2) when, they plan to donate surplus COVID-19 vaccine doses to low-income countries.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the United Kingdom has committed to equitable access to safe and effective vaccines through multilateral collaboration. COVAX is the best way to deliver this. By pooling global resources, it enables the development, purchase and distribution of vaccines. We will be able to offer vaccines to COVAX only when we are certain that we have doses surplus to the needs of the UK population. That will be a decision for the Health Secretary.
Baroness Sugg (Con)
My Lords, I am grateful to my noble friend the Minister for that update. The Prime Minister rightly got credit after his announcement at the G7 meeting that the UK would donate its surplus vaccines. We know that one of the main issues is supply, but of course it is also cost. I appreciate the Government’s generous funding to COVAX, Gavi and other organisations, but I have just one question for the Minister. Can he confirm that the cost of the surplus doses for low-income countries will be met by the UK and that we are not just transferring the ability to buy the vaccine to COVAX?
Lord Ahmad of Wimbledon (Con)
My Lords, the details of how and when the vaccines will be shared are still being confirmed, but there are further discussions to be had on the point my noble friend raises with COVAX and vaccine manufacturers. She will be aware that we are contributing £548 million for global equitable access through the COVAX AMC. That remains the primary area of UK support.
Lord McConnell of Glenscorrodale (Lab)
My Lords, given the Government’s plan to reduce overseas development assistance by £4 billion—two-sevenths of the budget—there is a real worry that the Government might allow access to the vaccine without actually making any contribution to help developing countries provide it. For example, Malawi is already suffering from an education crisis and an economic crisis as a result of the lockdowns and the virus. Surely we should be helping such countries to deliver that vaccine if it becomes available and making sure that they can afford it, not just aiming for it and hoping for it but actually delivering it.
Lord Ahmad of Wimbledon (Con)
My Lords, I assure the noble Lord that that is exactly the objective of the COVAX AMC commitment, and it is why the UK Government have led on it. Not only have we led on it but the noble Lord will have seen the Prime Minister’s statement which led to other countries also committing to it. This is aimed at the 92 most vulnerable countries and will help to vaccinate more than 1.3 billion people.
Baroness Northover (LD)
My Lords, is the Minister aware that significant ODA funding to Oxford which initially paid for the Ebola vaccine gave us a head start in the development of the Oxford-AstraZeneca vaccine? Will the Government reconsider their short-sighted policy of cutting ODA funding?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Baroness’s second point, the Government have made their position clear. It was a difficult decision, but a necessary one. Nevertheless, it still guarantees £10 billion of support this year. On support to Oxford University, our commitment to UK science has been a major contribution to being where we are on the global stage when it comes to vaccine distribution and research.
Lord Crisp (CB) [V]
My Lords, I congratulate the Government on this initiative and on their positive support for COVAX. I note that other countries are making their own unilateral offers. Will the Government, with their influence as president of the G7, take two further initiatives? Will they seek a commitment from G7 countries, and others if possible, to offer a vaccination to all vulnerable people and health and care workers in those 92 countries by a target date of, say, July 2022? Will they seek an agreement to waive parts of the TRIPS agreement on intellectual property so that there are no barriers restricting access to Covid-19 medicines, tools, devices and vaccines?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Lord’s second point, Oxford and AstraZeneca have worked very closely on intellectual property. Indeed, close collaboration with the Serum Institute of India has allowed it to produce exactly the same vaccine in India. On his earlier point about COVAX and other countries, he will have noted that UK leadership—we used the first G7 summit led by the Prime Minister—resulted in major contributions to COVAX, not least $4 billion from the United States as well as from the European Commission and Germany.
Lord Polak (Con)
We are a charitable and generous country, but we can do more than just hand over our spare vaccines to save lives in the developing world. Perhaps the reduction, which has been mentioned, from 0.7% to 0.5% should be put on hold, with that £4 billion used in 2021 to buy vaccines to save lives in low-income countries. Can the Minister confirm whether the 0.2% reduction began in January or will begin in April at the start of the financial year? Will he also confirm that there will be a vote in both Houses before the 0.7%, which is enshrined in law, is cut?
Lord Ahmad of Wimbledon (Con)
My Lords, I am all too aware of the strong sentiments about the Government’s announcement on ODA spending. Of course, the Government are working through, and we have previously said we will come back to your Lordships’ House on the provisions we need to make in legislation. On my noble friend’s earlier point, I totally agree with him, but I assure him that it is not just our funding of COVAX and the AMC facility. My noble friend will also be aware of the commitment we have given to Gavi, CEPI and the World Health Organization to ensure equitable access not just in our fight against Covid-19 but in other pandemics as well.
The Lord Bishop of St Albans [V]
My Lords, approaches are developing that enable individuals to give into the COVAX fund in gratitude for having received their vaccination against Covid-19. How are Her Majesty’s Government encouraging the development of such initiatives? Will they support such approaches through match funding from the Foreign, Commonwealth and Development Office?
Lord Ahmad of Wimbledon (Con)
My Lords, our initial funding of the AMC was very much based on match funding. We have seen that coming through and there are valuable contributions that other key partners can make. We are working very closely with the Gates Foundation among others to ensure that support for Gavi, the AMC and, particularly, for those most vulnerable is something not just for Governments but for the private sector as well.
Lord Collins of Highbury (Lab)
My Lords, I must admit that I am a bit disappointed that the Minister was unable to give a straight answer to the question asked by the noble Baroness, Lady Sugg, in relation to what donation means. In the G7 statement made by the Prime Minister there was a welcome commitment to sharing technology. Can the Minister give us a bit more detail on what that means and, particularly, will the Government support the WHO Covid-19 Technology Access Pool?
Lord Ahmad of Wimbledon (Con)
First, and foremost, I am surprised that the noble Lord expresses disappointment. If anyone has led on this, particularly with the World Health Organization, within Gavi and on COVAX, it is the United Kingdom, and that is resulting in other countries stepping up. The reason I did not answer specifically is that we are having discussions in that respect. On the noble Lord’s general point, I assure him that we are very much committed to ensuring the success of the rollout and equitable access. As the COVAX facility makes further announcements in the coming few weeks, that will become all the more clear.
Lord Purvis of Tweed (LD)
My Lords, one of the core elements of the COVAX approach is to strengthen health systems in developing countries. Key to that is the bilateral support that countries such as the UK will provide them. Given that the Government’s intention is to breach the law and the undertaking to meet 0.7% support, there could now be cuts of up to 50% to the UK’s bilateral support for these countries. Instead of moving ahead with this, could the Government consider a moratorium on the cuts and guarantee that UK support to strengthen health systems in developing countries to distribute the vaccine will not be cut?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Lord’s first point, I have already made the Government’s position clear. On the noble Lord’s second point, of course supporting countries’ health systems bilaterally remains a key priority, but there are challenges ahead with the reduced spending on ODA. They are currently under review at the FCDO.
Lord Bilimoria (CB) [V]
My Lords, we welcome the Prime Minister’s announcement at the G7 that we will provide surplus vaccines to other countries. Is the Minister aware that India has already supplied over 10 million vaccines to other countries, including, in the announcement last week, the supply of 200,000 doses to UN peacekeepers worldwide? They are being manufactured by the world’s largest vaccine manufacturer, the Serum Institute of India, owned by the Poonawalla family. Does the Minister also agree that, when we increase our inoculations from 500,000 to 1 million a day, we can commence our own vaccine diplomacy as global Britain?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Lord’s first point about vaccine distribution, we welcome all countries that are helping to meet the challenge of the pandemic. The noble Lord will be aware of the central role that the United Kingdom played in facilitating early engagement between the Serum Institute and the United Kingdom, and between AstraZeneca and Oxford University, in ensuring the scaling-up of production that we now see in India. India is the pharmacy of the world, which is reflected in its mass production. The Prime Minister made it very clear that the UK’s excess vaccine will be aimed primarily at the COVAX facility, because we believe that it guarantees the most equitable distribution.
Lord Dobbs (Con) [V]
I also warmly welcome the Prime Minister’s commitment, which he gave at the G7. I think we can take some gentle pride in Britain leading by example, but can my noble friend say whether all our vaccine effort for poorer countries will go through COVAX or whether any of it will be direct? What preparations does COVAX have in place to ensure that the vaccines are distributed fairly and do not fall into the hands of elites and middlemen, with all the corruption that foreign aid has sadly, and all too often, entailed?
Lord Ahmad of Wimbledon (Con)
My Lords, I welcome my noble friend’s support. On his specific questions, we are not at the point where we can make specific pledges about excess vaccines, but I note what my noble friend said about support for particular countries. We will support primarily the AMC facility at COVAX, which we have led, to ensure the most equitable access. He makes an important point about distribution, which we will be monitoring closely with our key partners, including UNICEF, which is a key agency in the distribution of these vaccines.
Lord Harris of Haringey (Lab) [V]
The Minister continues to be suspiciously vague about whether the Government will simply transfer the right to buy vaccine supplies rather than pay for them themselves. No doubt this will be seen as an instrument of British foreign policy, so will the UK be claiming credit for its generosity in the recipient countries, if it does turn out to be generous, and will we be content to see these vaccines going to countries whose Governments are engaging, for example, in genocide or human rights abuses?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Lord’s second point, by working with key partners we will ensure that the most vulnerable communities receive the vaccine irrespective of where they are within countries. I am sorry if there are specifics that I cannot go into, because they are matters for discussion, and no Minister would provide that detail if it is yet to be determined. However, I challenge him. The UK Government have been leading the charge in our response to this global pandemic. The British Government, under this Prime Minister, have ensured that the facility that we now have, through the COVAX AMC, will provide for the most vulnerable around the world. That is something not to be proud of, but to recognise.
Lord Berkeley of Knighton (CB) [V]
My Lords, I am proud of and recognise the initiative, and I congratulate the Government on it. However, to reinforce slightly what I think the noble Baroness, Lady Sugg, was trying to say, given that we have had a cut in overseas development aid, it would be wonderful if we could make this a real gift and not one that needs to be underwritten by anybody else.
Lord Ahmad of Wimbledon (Con)
My Lords, I have already said where we are on ODA. As ever, I make note of the strong sentiments in your Lordships’ House.
Lord Lansley (Con) [V]
My Lords, I join in applauding the Government’s leadership in its support for the COVAX facility, but does the Minister recognise that only today the World Health Organization’s director-general expressed concern that COVAX is having problems trying to source early supply of vaccine, while at the same time some of the richest countries in the world continue to contract for early delivery of vaccine? We need to take an initiative to enable the rich countries to secure early vaccine supply to COVAX. I wonder if the Government can use their leadership in COVAX to secure that kind of initiative.
Lord Ahmad of Wimbledon (Con)
My Lords, I hear my noble friend, who speaks with great experience of the health sector. As he is aware, COVAX is explicitly designed to work for high-income, low-income and middle-income countries. That is why the Government led the AMC facility to ensure equitable access to the 92 most vulnerable countries. We continue to collaborate with other key partners through our influence at the World Health Organization, GAVI and CEPI to ensure that the COVAX AMC facility is fully supported by all.
The Lord Speaker (Lord Fowler)
My Lords, all supplementary questions have been asked.
Clerk of the Parliaments
(3 years, 9 months ago)
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The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, on 30 September I informed the House of Ed Ollard’s intention to retire from the office of Clerk of the Parliaments, with effect from 1 April. The recruitment process for his successor has now concluded.
The unanimous recommendation of the board was that Simon Burton should succeed Ed as Clerk of the Parliaments. His appointment follows an open and external competition, supported by employment consultants Saxton Bampfylde, which attracted a wide field of high-calibre candidates. A number of internal and external applicants were interviewed by a board consisting of me, the Lord Speaker, the Leader of the Opposition, the leader of the Liberal Democrats, the Convenor of the Cross Benches, and Dame Sue Owen—a former Permanent Secretary at the DCMS and Civil Service diversity and inclusion champion. I am sure that all noble Lords will join me in congratulating Simon on his appointment, and I very much look forward to working with him.
We will have an opportunity to pay tribute to Ed’s career in the House nearer the point of his retirement, when I will table a Motion in the usual way, enabling us to record our appreciation for his distinguished service. With Simon’s appointment, the post of Clerk Assistant will fall vacant, so an open recruitment process will now begin.
Baroness Hayter of Kentish Town (Lab)
My Lords, it is a particular pleasure to welcome in due course and to congratulate Simon Burton on his appointment as Clerk of the Parliaments, which, as the current incumbent knows, is a demanding job. All of us who have worked with Simon over the years know of his calm sense, tolerance of our foibles, expertise in the ways and means of this unique Chamber, knowledge of legislation and procedure, and wisdom in his advice. But it is not just us who think this: as the noble Baroness has said, those attributes were tested, for the first time, against external, and I gather very impressive, candidates. It was a challenging hurdle for our new Clerk of the Parliaments to jump, but he did so with flying colours.
We welcome him to his new role and wish him well. Life is always challenging in this place, but with Covid, R&R and no doubt other surprises to come, he will never be bored.
Building Safety
(3 years, 9 months ago)
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Lord Kennedy of Southwark (Lab Co-op)
My Lords, I declare my relevant interests as a vice-president of the Local Government Association, chair of Heart of Medway Housing Association and a non-executive director of MHS Homes Ltd.
Three and a half years on from the Grenfell tragedy, in which 72 people lost their lives, decisions made by the Government have left thousands of people trapped in unsafe homes and many more unable to move. The Government’s announcement has come far too late for many and is, sadly, a repeat of undelivered promises. It backtracks on a key promise that no leaseholders should have to pay for the cost of this scandal, which is not of their making. On 11 March 2020, nearly a year ago, the Chancellor of the Exchequer said that
“all unsafe combustible cladding will be removed from every private and social residential building above 18 metres high.”—[Official Report, Commons, 11/3/20; col. 291.]
But that has not happened.
The funds set up have been dogged with problems. It would be helpful if the Minister could tell the House how much of the money available has been spent so far. I believe there has been a major underestimation of this scandal—this problem—by the Government. Can the Minister tell the House how many buildings are unsafe, where they are and what danger they pose? Until the Government have credible answers to these basic questions, there will continue to be mistakes and the offering of piecemeal solutions that must be updated when they do not deliver. Can the noble Lord, Lord Greenhalgh, update the House and guarantee that the funding provided will cover all buildings over 18 metres high?
Will the Government set up an independent task force to prioritise buildings according to risk, with powers to get the funds out of the door and the ability to go after building owners when they fail to get the work done? That has been a consistent problem that we have raised again and again. Ministers have now promised 17 times—yes, 17 times—that leaseholders will not bear the cost of fixing a problem they did not cause; these were the promises made to the innocent victims of this scandal. But the Government have betrayed their promise that leaseholders will not pay for the building safety crisis. Three and a half years on from the Grenfell Tower disaster, hundreds of thousands of people cannot sleep at night because their homes are unsafe. On top of that, the Government have decided to pile financial misery on them. This is wrong; it is an injustice, and it is unacceptable.
Can the Minister tell the House why this arbitrary 18-metre height limit means the difference between a safe home and, potentially, financial ruin? What are the terms of the loan? What will the interest be? Will leaseholders be required to pay the interest as well as the main costs? On the point that the leaseholder will not pay more than £50 a month, if they sell the property, does the loan have to be paid at that point? Does it go with the former owner, or does it stay with the current owner? We need to know where we stand. How long will the scheme run for? Will it go up by the rate of inflation each year? What will the Government do if these homes remain unsaleable? How will they ensure that freeholders take up the loans? How will the Government speed up remediation, given that the current stalemate cannot continue?
Other properties do not have dangerous cladding, but these people have been charged thousands of pounds per flat to fix other safety issues. The Government should focus on securing our economy and rebuilding after Covid, not saddling homeowners with further debt. The Government should pursue those responsible for payment and prevent leaseholders and taxpayers carrying the can. The Government have announced a levy and a tax, which I welcome, but those responsible should bear the cost. How much do the Government anticipate the levy will raise? Will they pursue others, such as the cladding manufacturers, responsible for putting the dangerous cladding on in the first place? The Government have missed every target for removing ACM cladding and 50,000 people are still living in flats wrapped in it. This is the same cladding that was found on Grenfell Tower, and thousands more have other dangerous cladding on their buildings. When will this all be removed?
What about the skyrocketing insurance costs that innocent victims are being forced to pay? Can the noble Lord, Lord Greenhalgh, tell the House what he expects, on average, a leaseholder to pay? People cannot continue to live in unsafe, unsellable homes. Homeowners should not be faced with financial ruin—bankruptcy, even—to fix a problem they did not cause. Unfortunately, these proposals, instead of providing justice, will still leave too many people struggling and facing loans. This is a very poor Statement from the Government—they will have to come back to the table and do what they promised in the first place: ensure that no victim of this scandal will have to bear the cost of fixing a problem they were not responsible for.
Baroness Pinnock (LD) [V]
My Lords, I thank the Minister for the repeat of this important Statement on the Government’s response to the cladding crisis. I remind the House of my interests, recorded in the register, as a member of Kirklees Council and a vice-president of the Local Government Association.
I was pleased when I read the heading of the Statement, “Building Safety”, and the opening paragraph, which refers to the mission of the Secretary of State being that of “safety and fairness”. Unfortunately, the Statement then fails to live up to those laudable words. The first issue I have with it is that throughout, there is reference only to “unsafe cladding”. In fact, what has become clear, as the vast scale of the problem that the Grenfell tragedy exposed, is that the building safety failings go far beyond “unsafe cladding”. As flammable cladding is removed, in some buildings further significant construction failings are revealed: flammable insulation has been used; firebreaks have not been built into the structure as a way of slowing the spread of a fire; balconies are not made of fire-retardant material; and spandrel panels are also seen as a potential safety concern.
How do I know this? In January 2020 the Ministry of Housing, Communities and Local Government issued guidance note 23, relating to the seven building components under review, requiring building owners and managers to take urgent action on these. The question for the Minister, therefore, is: will the additional government funding pay for all the defects revealed when the unsafe cladding is removed? If, for instance, it becomes evident that there is an absence of firebreaks, will the funding cover the costs of installing them? If not, the leaseholders will still be faced with large bills to pay for failings in the construction.
The next fundamental question that I hope the Minister can answer is: why has 18 metres been chosen as the bar above which cladding removal is funded by the Government and below which the leaseholders and tenants are required to pay? Is the 18-metre figure an historic one that needs to be reassessed? Serious fires can occur in blocks of varying heights: for instance, the fire in a block called The Cube, in Bolton, was very serious—although fortunately, there was no loss of life—but the building was lower than 18 metres.
That leads me to the question of fairness. As noble Lords will recall, this is the mission of the department in respect of building safety. Can the Minister explain how it is fair for leaseholders in blocks below 18 metres high to have to pay for remediation? I recognise that low-interest loans are available and that the currently anticipated maximum payment is £50 per month. This will, no doubt, be added to the service charge and will be one of the costs that potential buyers will consider. It will make these flats less attractive to buyers and they will almost certainly command a lower value. How is it fair to require leaseholders to pay for building remediation which is not in any way of their making?
One of the roles of government is to ensure that safety regulations are appropriate to the task and that there is an inspection regime. The Government have failed to do this, so they are partly culpable, must bear the cost and recoup it from those who share culpability.
Then there is the question of building regulations. It is alleged that some of the buildings affected by this scandal failed to comply with building regulations at the time of construction. Can the Minister confirm this and provide some estimate of the numbers involved? Where breaches of regulation are involved, will the Government require full remediation costs to be met by the developer? This is what happens with the manufacturers of cars and white goods, for example. Surely it should also apply in these instances. Does the Minister agree?
Next, I turn to the total funding package. The additional funding provided by the Government is a start, but this £5 billion needs to be put into context. During the debate on the Fire Safety Bill, the Minister confirmed that the total cost of remediation was likely to be in the region of £16 billion. Does that imply that £10 billion or more will be paid for by leaseholders through the loan scheme? Perhaps the Minister will let us know whether this is what the Government have calculated.
It is proposed to recoup some of these costs from developers by raising £200 million per annum via a tax on the sector. The cost of the minority of the remediation to be recouped from developers is pathetically small. During the last four years, the five largest developers made profits of around £16 billion, which rather puts the proposed figure into context. Will the Government reconsider the level of this tax to make it fairer?
Finally, I hope that the Government do not need to be reminded of the terrible, personal cost of the cladding scandal. For instance, Laurel and Jonathan in Manchester are seriously considering bankruptcy as the only way out of their predicament. Hayley in Leeds has already been forced into bankruptcy. In an Inside Housing survey last year, 23% of respondents said that they had considered suicide. Such is the stress of living in an unsafe home and being forced to pay huge increases in insurance and service charges. For leaseholders and tenants, this building safety crisis is not in any way of their making, yet they are expected to pay the price while those who created it are not being similarly expected to pay in any significant way. Can the Minister explain how this adheres to the department’s mission of fairness? Will he press for a review of the current proposals as more information comes to light?
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
My Lords, around £3.5 billion in direct, additional grant has been committed. This is a significant amount of money which dwarfs the £1.6 billion previously promised. More than £5 billion has been committed to support the ending of the cladding crisis. The plans go a long way towards ensuring that affordability is not an issue for any leaseholders in medium-rise properties. It also ensures that, where there is no warranty outstanding or insurance available to protect the leaseholder, the taxpayer—through the Government’s additional grant—will step up and provide the funding necessary to ensure that the cladding system is removed.
The noble Lord, Lord Kennedy, asked about progress. Despite Covid, we saw 50% more starts in 2020 than in any other year. Workers were on site and, by the end of the year, 95% of high-rise buildings with the same sort of cladding as at Grenfell had either started or completed remediation. We know exactly where these buildings are. The vast majority of the remaining cladding will have been removed from them by the end of this calendar year.
The main thrust of the questions was around the scope of the fund. It is important to recognise that height is a huge factor when it comes to safety and the risk to life. The higher the building, the more risk there is to the residents. People who live in buildings between 18 and 30 metres high are four times more likely to have a fire involving a fatality or the need for hospital treatment. In buildings above 30 metres, this rises to 35 times more likely. We know that height is a factor. Eighteen metres is the cut-off point for the definition of a high-rise building. This has been part of building regulations for a considerable number of years. The definition that we are using for scope is above six storeys, so The Cube would fall within the remit of a building where an application could be made to the building safety fund to remove its cladding. The threshold is six or more storeys or a height greater than 18 metres.
The long-term safety advice makes it clear that the external cladding system acts as accelerant, helping the fire to spread. This is why the government money is focused on the removal of external cladding systems. Internal compartmentation, firebreaks and fire doors are designed to stop the spread of fire. It is right that taxpayers’ money should focus on the material that accelerates the spread of fire.
The £3.5 billion and the finance scheme will together help hundreds of thousands of leaseholders. For those in medium-rise properties, it will cover a significant part of their costs. For those in high-rise buildings, there will be no cost. To date, 13,000 leaseholders in ACM buildings have been supported by the government grant scheme. Between 70,000 and 90,000 leaseholders in buildings with non-ACM cladding systems will not bear any cost. A further 150,000 leaseholders in buildings between 11 and 18 metres high will also be helped.
It is important, however, that building owners step up to the plate to support remediation where the government grant is not available. We do not expect this cost to fall entirely on leaseholders. With the ACM fund, more than 50% of owners did the right thing and ensured that the cost did not fall on leaseholders. We expect to see that with the non-ACM buildings as well. Here, warranty schemes can often still be drawn on and protect leaseholders.
It is worth looking at the cladding manufacturers. I will take that point away because, as well as the developers, they are culpable for the situation that we find ourselves in—a point that has been made by both the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock. That is something that we can look at in due course.
This is a five-point plan looking at significant sums of money to support the removal of the external cladding systems. It is those systems that have accelerated the spread of fire and their removal makes it far more unlikely that Grenfell will ever happen again. We know that the future building safety regime will be focused on ensuring that the new buildings will be of far greater quality and then provide the greater confidence that is required in the housing market to ensure that it begins to function properly in future years.
The Deputy Speaker (Baroness Barker) (LD)
We now come to the 20 minutes allocated to Back-Bench questions. Questions and answers must be brief.
Lord Young of Cookham (Con)
My Lords, in welcoming the extra support for leaseholders, I commend my noble friend on the role that I know he personally played in shifting the Government’s position. On the developer levy, which I called for last year, can he explain why it is going to be levied on future developments—which, as he has just explained, will not have the same problems, and where indeed the developers may be new to the market—rather than on those developers that are responsible for the defects and that did very well on the proceeds?
Lord Greenhalgh (Con)
I thank my noble friend for recognising that this announcement includes a developer levy, which he was lobbying for. It will be on future buildings, but at the same time we recognise the role that a number of developers have played in creating the cladding crisis. That is why the Secretary of State also announced that a new tax would be introduced for the UK residential property development sector that will ensure that the largest property developers also make a fair contribution to the remediation programme. We think that these measures taken together will ensure that the industry does more to contribute to the remediation of historical cladding defects and will play its part in dealing with this crisis.
Baroness Finlay of Llandaff (CB) [V]
To
“make the industry pay for its faults of the past”,
how will the Government recoup the full cost from those resistant to undertaking remedial work before they close their companies? Are those who deliberately concealed evidence of the flammability of ACM panels to be subject to corporate manslaughter investigations?
Lord Greenhalgh (Con)
My Lords, we will continue to push very hard to ensure that developers make their contribution. As I pointed out, historically we have seen developers and building owners step forward and pay for the remediation and removal of unsafe cladding that is on their buildings, and we will continue to push developers to do the right thing. However, the levy and the new tax are set to raise significant sums of money. The tax itself is estimated to raise £2 billion over 10 years.
The Lord Bishop of Newcastle [V]
My Lords, many leaseholders in high-rise and medium-rise buildings are currently receiving insurance premium quotes for many times the previous annual cost. Much of the additional premium is a consequence not of cladding directly but of wider concerns regarding fire risk in their building, so removing and replacing deficient cladding will not in itself return premiums to a level of normality. Can the Minister tell us of any plans to make the representatives of leaseholders and the insurance industry agree a joint approach to alleviating this unacceptable burden?
Lord Greenhalgh (Con)
My Lords, I can say that we are meeting with representatives of the insurance industry and of the cladding groups to work on precisely that—a solution to make sure that there is a proportionate, common-sense approach to building insurance. I underline that increasing the pace of remediation is likely to see a return to more sensible policies regarding the setting of building insurance.
Baroness Warwick of Undercliffe (Lab) [V]
My Lords, I declare an interest as chair of the National Housing Federation. Can the Minister explain why this very welcome new funding will not be made available to remediate the homes of people living in social housing? Housing associations do not have profits to draw on and local councils cannot simply deplete their reserves, so to make homes safe they will have to divert rental income that would have been spent on the upkeep of tenants’ homes, investment in their communities or building much-needed new affordable homes. Does the Minister accept that the only way to resolve this problem once and for all is for the Government to provide up-front funding for the remediation of homes of all tenures and then claw back as much as possible from those responsible for creating these inadequate buildings in the first place?
Lord Greenhalgh (Con)
My Lords, I point out that the priority of this Government is to protect leaseholders from facing the costs of the removal of unsafe cladding, whether they are in social sector buildings or in private buildings. Where registered social landlords feel that they need to impose costs on leaseholders, access to grant funding is available as well as the new financing scheme. That protects the leaseholders in those properties, which is the priority of this Government.
Lord Shipley (LD) [V]
My Lords, I remind the House that I am a vice-president of the Local Government Association. Those in a flat 19 metres high will have unsafe cladding replaced at no cost, and that is welcome. Those in a flat 17 metres high will have to pay up to £50 a month for an unknown period. Why do the Government think that is fair?
Lord Greenhalgh (Con)
My Lords, I pointed out that height is a marker for risk. Those buildings greater than 18 metres are four times more likely to result in a fire-related fatality or someone needing to go to hospital for treatment. Above 30 metres, that rises to 35 times more likely. So the focus needs to be on removing the material that accelerates the spread of fire in buildings that in and of themselves, through height and being of residential use, are at greater risk of causing fatalities.
Lord Best (CB) [V]
My Lords, following the question from the noble Baroness, Lady Warwick, I understand that housing associations can apply for support from the extra £3.5 billion of additional funding for the rectification of these appalling building defects in high-rise blocks, but that help will be available only for flats sold to leaseholders for defects in housing association flats that are retained for letting. All the costs will fall on the housing association itself, requiring the diversion of funds intended for other purposes, particularly building new homes. Can the Minister give an estimate of how many new, desperately-needed social rented homes will be lost because of this?
Lord Greenhalgh (Con)
My Lords, I am not in a position to give an estimate of that kind, but I recognise that social landlords have significant resources that they can put into making sure that their buildings are safe, and many are proceeding to do precisely that. I do not think we can easily estimate the impact on new build, but we can say that the funds support those leaseholders who would face costs without access to grant funding or the financing scheme.
Lord Lancaster of Kimbolton (Con) [V]
The Government have secured a welcome agreement on EWS1 forms that will benefit thousands of home owners. Many other home owners, however, still need to secure such a form before they can move on with their lives. Can my noble friend outline what steps the Government are taking to make securing such forms easier?
Lord Greenhalgh (Con)
My Lords, I thank my noble friend for raising this significant issue. We are looking at how we can increase the supply of the professionals needed to carry out those EWS1 assessments, and we have provided £700,000 worth of funding to the Royal Institution of Chartered Surveyors, and that is looking to upskill around 2,000 building surveyors to be in a position to do that after about a month’s training. As well as increasing the supply, we are working closely with RICS and other parties to narrow the scope of when EWS1 is required. You should not need to have an assessment of an external wall system in buildings under 11 metres. There is less latitude in buildings above 18 metres, and a number of buildings between 11 metres and 18 metres will also not require an EWS1. It is only in the event that they are covered with some kind of external cladding system to a great degree—let us say, more than 25%.
Lord Campbell-Savours (Lab) [V]
Why do the Government not require every local authority to publish the addresses of all buildings falling under cladding fire risk categories? Is the FOI response from the DCLG of 12 March last year refusing such information still valid where it spuriously states that
“disclosing it would be likely to endanger the safety of individuals”
and
“could enable someone to identify particular buildings”,
usable by “those with malicious intent”? That could apply to any inflammable building, a chalet or indeed any temporary building.
Lord Greenhalgh (Con)
My Lords, it is sensible to be very careful about the dissemination of information about the precise locations of buildings with flammable material. We need to recognise that there are potentially people out there with malicious intent. It is right and proper that we keep information that would enable people to identify those buildings confidential as far as possible.
Lord McNally (LD) [V]
My Lords, much of the effectiveness of this legislation will depend on the power and vigour of the building safety regulator. Will that be a named individual or a committee? If it is a named individual, will he or she have the same powers as an ombudsman and receive complaints from individuals and community groups who have often complained and warned but never had access to a decision-maker?
Lord Greenhalgh (Con)
I share the noble Lord’s scepticism about the value of committeeism. I am pleased to announce that the leader of the new building safety regulator, the chief inspector of buildings, has been announced. I am delighted that Peter Baker, the acting chief inspector, has been confirmed as taking up the reins and ensuring that this new regime works. He will be accountable to ensure that that happens.
Baroness Altmann (Con)
My Lords, I welcome the gateway 2 developer levy and the new tax on residential building developers. I echo the calls for my noble friend to look carefully at recouping costs of remediation work from developers of past projects and not just those in the future, especially those who failed to comply with building regulations or cut corners at the time of construction, and the manufacturers of the cladding materials including ACM.
Lord Greenhalgh (Con)
I thank my noble friend for making the point. It would be fair to say that the new tax on developers, details of which will be announced shortly, will include a number of the major developers historically responsible for high rises. She makes an important point that we should also consider the role of cladding manufacturers in this crisis. It is fair to say that, while developers have made good solid profits in recent years, the cladding manufactures have had healthy profit margins too. It is important that they are made to contribute to the resolution of the cladding crisis.
Baroness Young of Old Scone (Lab) [V]
The Minister did not answer the question raised by the noble Baroness, Lady Pinnock. Post-Grenfell surveys have revealed other fire-related defects such as flawed fire separation. The leaseholders in these properties suffer the same problems of the inability to sell, high remediation costs and rocketing or no insurance. Yet the Government seem to be leaving it to leaseholders, building owners or somebody unspecified to pursue action against those who made the errors and omissions in the past. This is not good enough. What will the Government do to help these non-cladding victims?
Lord Greenhalgh (Con)
I did refer to the fact that other building safety issues, beyond the external cladding system, were breaks on whether a fire continues to spread—they are not accelerants. The scope of our intervention is designed to deal with the biggest contributor to the life safety risk. We would look to building owners to step up where possible and help with the remediation of faulty building works. We have focused the additional grant funding on precisely that which is going to protect and save lives.
Lord Taylor of Goss Moor (LD) [V]
My Lords, it is certainly welcome that the Government have taken action on properties over 18 metres, but the great majority of tenants are in properties under that height. I refer to my declared interests, primarily that I am a former chair of the National Housing Federation, which represents housing providers. It has huge numbers of tenants who have bought shared ownership properties, who are not well off and are currently in enormous difficulties. This is because, despite what has been said by the Government and RICS about EWS1 inspections and the flexibility around them, lenders are continuing to insist on EWS1 inspections in practice. These home owners are not well off, and inspections everywhere are getting valuations of £0, serious delays and uncertainty. Will the Minister speak to lenders about resolving this issue? Would he also accept that a bill of £50 a month is unaffordable for those in shared ownership, given that the reason they are in these properties in the first place is that they are not able to afford a home otherwise?
Lord Greenhalgh (Con)
My Lords, we have spoken to lenders and there were positive statements by Barclays and the chief executive of Nationwide in the announcements. They welcomed this and recognised that the additional £3.5 billion helps to provide certainty, admittedly in high rises. The financing scheme remains open to all, both social sector and private sector leaseholders, to ensure that they would not have to pay more than £50 a month towards the remediation of unsafe cladding. In the round, the announcements we have made will give confidence to the market to be more sensible on valuation in future, I hope.
Lord Moynihan (Con) [V]
My Lords, this Statement is welcome as an important contribution to the absolute priority of safety in our housing stock and building back better. Will my noble friend consider expanding the remit of the building safety regulator to whom he has just referred to take into consideration the need to continue to upgrade the least efficient social housing stock, reduce carbon emissions and bills, tackle fuel poverty and save the budget to help 600,000 households reduce carbon emissions by subsidising the costs of energy efficiency? All these have an impact on safety.
Lord Greenhalgh (Con)
I thank my noble friend for raising the issue of how we can ensure that we achieve our zero-carbon commitment. The building safety regulator has oversight of building control bodies and monitors their performance. We hope that oversight will improve the efficacy of building regulations across the board. I point out that climate change mitigation and adaptation are intrinsic components of building regulations and will remain so.
Baroness Whitaker (Lab) [V]
My Lords, some people need a different kind of safety guarantee. Will the Minister condemn recent death threats, including a petrol can left next to a property belonging to a Romany Gypsy mother of two going through cancer treatment and in the process of applying for planning permission for new housing?
Lord Greenhalgh (Con)
I will join the noble Baroness in condemning all such abhorrent incidences of hate crime. Hate crimes like that are completely unacceptable and will not be tolerated under any circumstances. My department has been informed that both the local authority and local police are dealing with the incident. As the police are investigating the specific matter she raised, it would be inappropriate for me to comment any further at this point. I am sure that she will understand that, as I would not want to prejudice their work.
Ministerial and other Maternity Allowances Bill
Monday 22nd February 2021
(3 years, 9 months ago)
Lords ChamberRead Full debate Ministerial and other Maternity Allowances Act 2021 View all Ministerial and other Maternity Allowances Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 172-I Marshalled list for Committee - (22 Feb 2021)
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, the Bill before the House today will for the first time enable Ministers to take paid maternity leave from their job for an extended period. Women who aspire to, and hold, high office will no longer be disadvantaged against other women in this respect. I am sure that representatives of all three parties that have been in government in the last 20 years will agree that this is long overdue.
It is well known that the occasion of the Bill—and the cross-party agreement to accelerate it, for which the Government are grateful—is the pregnancy of my right honourable friend the Attorney-General. I am sure that the whole House will join me in sending best wishes to her and her family.
This should not be a reproach to anyone, least of all to my right honourable friend. Sometimes it is an individual case, and the perception of injustice arising, that propels social advance, and let it be so here. The Bill sends out a vital message to encourage more women from every walk of life to enter politics, and to seek promotion in government without the fear of having later to choose between career and family.
I repeat how grateful I am to Her Majesty’s Opposition for their constructive engagement in the preparation of the Bill. Jointly, we have affirmed—and do here affirm again—that this will be the beginning, not the end, of a journey of reform. To date, within government structures, insufficient attention has been paid to the needs of pregnant Ministers, and there has been only limited progress to date. Yes, the Ministerial Code was changed in 2019 to confirm the ability of junior Ministers to take maternity leave, but this workaround—which several Members of the other place have used—relies on another Minister taking on additional responsibilities. We need to go further, and I will return to this issue later, as I know it is of importance to the House.
Clearly, this approach is simply unworkable for Secretaries of State or other holders of individual offices, such as the law officers or the Lord Chancellor, owing to their constitutional role and the volume and complexity of their workload, which gives rise to a pressing need for posts to be filled. The current law does not allow the Government to take on and pay another Cabinet Minister, or equivalent, as maternity cover, as happens in workplaces up and down the country. No fewer than three Acts of Parliament govern the issue of ministerial appointments and pay, and the restrictions on them. It is worth underlining the constitutional importance of these Acts, as they manage part of the delicate balance between the legislature and the Executive, ensuring that the payroll vote is kept in proportion to the overall size of the Commons. This is a serious consideration, and a balance that should not be adjusted lightly. However, we propose modest changes to prevent putting some women off holding high office for lack of adequate maternity provision.
Until now, for someone to be appointed to cover a Minister at this level, or one of the opposition officeholders covered by the Bill, and for that individual to be paid, the pregnant Minister would normally have to resign. The Bill ends this anachronistic and wholly unacceptable situation by providing six months’ paid maternity leave for all eligible Ministers and opposition officeholders.
Turning to the content of the Bill, Clause 1 allows the Prime Minister to designate a Minister who wishes to take maternity leave as a “Minister on leave” who remains part of the Government—able to be briefed on matters and to keep in touch with work, but not responsible for exercising the functions of the office from which they are on leave. It makes clear the conditions applicable to designation as a Minister on leave. It also sets out how the designation comes to an end, either automatically, six months after the Minister has been so designated, or earlier, should the Minister cease to hold that office—for example, due to appointment to a new ministerial role, resignation or dismissal.
Clause 2 sets out the methodology for calculating the amount of the allowance for the period of maternity leave, and how it is to be paid. It sets the allowance at six times the monthly salary of the Minister on leave’s previous ministerial office. The effect is that a Minister on leave continues to receive the same monthly amount in maternity allowance as they would have received had they still occupied their previous ministerial role. It will come from the same source, usually the relevant department in line with money provided for by Parliament. Finally, Clause 2 also sets out the arrangements that apply when the designation as a Minister on leave ends before the automatic expiry after six months, providing for a lump sum payment of the remainder of the allowance. That applies in all situations where the designation terminates earlier than the end of the six months, unless the Minister is appointed to another ministerial role, or has died.
In order to prevent double payment of a ministerial salary, Clause 3 provides that a Minister on leave cannot receive the maternity allowance provided for in this Bill at the same time as any salary set out under the Ministerial and other Salaries Act 1975. It also makes clear that, where they are a Member of this House, a Minister on leave cannot receive the so-called Lords officeholder allowance under Section 5(1) of the Ministerial and other Pensions and Salaries Act 1991. In addition, Clause 3 clarifies that, for the duration of the designation, a Minister on leave does not count towards the limit under the House of Commons Disqualification Act 1975 on the number of Ministers who can come from the House of Commons at any one time. However, once the designation ends, the Minister once again counts for those purposes.
Clauses 4 to 6 make provision for certain opposition officeholders, namely those listed in the Ministerial and other Salaries Act 1975, to take up to six months’ paid maternity leave. The arrangements contained are similar to those relating to Ministers in terms of duration, eligibility criteria, amount of allowance and source of the allowance. However, in contrast to Ministers, an opposition officeholder who is to take maternity leave would stay in post. The Bill authorises a payment to a nominated individual who, at the discretion of the Leader of the Opposition in the relevant House, is to cover the officeholder’s role, on similar terms as those for Ministers.
This difference in approach reflects the fact that opposition officeholders are not appointed by the Prime Minister and do not have statutory functions in the same way as a Secretary of State. It is therefore possible for an individual to provide the necessary maternity leave cover while the original officeholder remains in post. Only one person can be appointed to cover an officeholder’s post at any point during the period of leave. However, should the Leader of the Opposition wish to change the appointment, he or she may do so.
As is the case with a Minister on leave, where the opposition officeholder is a Member of the House of Lords, she is not eligible to claim the so-called Lords officeholder allowance provided under the Ministerial and other Pensions and Salaries Act 1991 while on maternity leave. However, the individual appointed as maternity cover, by virtue of these provisions, is entitled to claim that allowance for the duration of their appointment. This is because the allowance is paid to reflect work undertaken in the House.
The Constitutional Reform and Governance Act 2010 makes provision for both MPs’ and Ministers’ pension schemes. Both Ministers and opposition officeholders are entitled to pensions under the Ministers’ pension scheme. The original officeholder’s salary remains pensionable during their maternity leave. However, the Bill provides that the individual appointed to cover the post is entitled to the Ministers’ pension scheme for the period of their appointment, in relation to the allowance paid to them for this role. The Bill comes into force on Royal Assent, and thus will be of immediate benefit and effect.
I turn to some issues which the Bill has given rise to in the other place and outside. First, on future work to broaden this reform, I have already made clear that the Government recognise that the Bill does not go as far as most will desire. There will understandably be many who would have wanted to see a Bill to resolve wider issues of parental leave such as paternity, adoption and shared parental leave. The Bill also does not address absences for sickness and other reasons, or the question of unpaid roles, which I know is an issue of particular interest to Members of this House. These are complex issues that require careful further consideration, taking into account modern working practices and the wider constitutional context.
The House will be aware that the Government recently consulted on parental leave and pay for employees, and they are due to respond to that consultation in the near future. This work will provide us with a valuable perspective, and any future proposals for Ministers will be developed with those conclusions in mind. As my right honourable friend the Prime Minister has said, the Government have undertaken to look into broader proposals, both in the round and in detail. The Government also welcome IPSA’s recent announcement that it will be consulting on some of these issues. We look forward to working with them, and with Members across both Houses, on this work. The Government are committed to building more widely on the progress this Bill represents and will present an update to Parliament by the Summer Recess.
Several Members of the other place raised concerns about the use of the word “person” in this Bill in referring to pregnant women. I know that a number of noble Lords share that concern, and I have, of course, noted the amendment from my noble friend Lady Noakes, who I look forward to hearing shortly. I understand the strength of this feeling, but I will come back to this point in my closing speech in more detail so as to respond more completely to the points raised by all noble Lords on this issue in the course of the debate.
Briefly, I should point out that the language used in the Bill is in line with current drafting convention and guidance; it is legally accurate and achieves the aim of ensuring that female Ministers can take paid maternity leave. Of this there is no doubt. The Bill’s drafting also provides flexibility in the event that the future work programme that I have just spoken of gives rise to the need to revisit its provisions. Nevertheless, the Government have already responded to the concerns from both Houses that this drafting could be misinterpreted, and have updated the Explanatory Notes to the Bill, which now detail how the Bill is intended to support women, and explains the drafting practice. It will continue to be the policy of this Government to refer to “pregnant women” in government publications. As I said, I will reply to the amendment in full in my closing speech, when I have listened to all Members of this House, but I wanted to make this point clear at the outset, and to make clear that the Government are listening to the strength of feeling in this House on this matter.
For the reasons outlined above, I commend this reforming Bill to the House.
Baroness Noakes
At end insert “but that this House regrets that the bill is drafted in a way which does not respect the fact that only women can be pregnant.”
Baroness Noakes (Con)
My Lords, I beg to move the amendment standing in my name on the Order Paper. This regrets that the drafting of the Bill does not respect the fact that only women can be pregnant. Before speaking to my amendment, I would like to assure my noble friend the Minister that, while I deplore the language of the Bill, I fully support its proximate aim, which is to allow my right honourable friend the Attorney-General to take paid maternity leave. I join my noble friend Lord True in wishing the Attorney-General well and that her baby is safely delivered.
I had expected to be given an advisory speaking time of more than six minutes in view of my regret Motion, but this is not a time-limited debate, so I shall be taking a little extra time anyway. I shall, of course, comply with the Companion. My noble friend Lady Scott need not bother to do that Whip thing of head swivelling and jumping up and down when I do go over six minutes.
My Motion is about the drafting of this Bill, but it is set within a broader context of the erasure of women in society. Those of us who care about the position of women have been increasingly concerned about the dilution of the 2010 Equality Act with its protected characteristic of sex, not gender, which should protect women. Some organisations, deliberately or carelessly, conflate sex and gender. The Office for National Statistics, for example, has dug itself into this hole for the upcoming census, with the likely result that inaccurate statistical data about women will come from that.
The Equality and Human Rights Commission, which should have been vigilant in guarding all the protected characteristics of the 2010 Act, has itself caused problems, and its guidance has led directly to a loss of single-sex spaces. The NHS, which in the past had to be forced to abandon mixed-sex wards, now routinely admits to women’s wards on the basis of self-identification, regardless of the needs or wishes of women. Prisons operate like this, too. And do not get me started on so-called gender-neutral toilets.
There is an increasing use of language that eliminates women, such as the ludicrous use by the World Health Organization of “people who menstruate”. Only two weeks ago, the Brighton and Sussex University Hospitals NHS Trust declared that “breastfeeding” was to be replaced with “chestfeeding”, and “mother” with “birthing parent.” That might go down well in woke Brighton, but it will appal men and women in mainstream Britain.
People who challenge this in public are often labelled transphobic, as JK Rowling discovered when she poked fun at the WHO and its use of “people who menstruate” and was then publicly vilified. There is no malice in wishing to maintain the biological facts of womanhood and the lived experience of women, which includes menstruation, childbirth and menopause. That view happily coexists with respect and concern for transgender people. I am proud of my own record on LGBT issues, both in your Lordships' House and in the organisations with which I have been involved, but I am not prepared to be erased as a woman.
Let me turn now to the drafting of this Bill. Clause 1(3) uses the language of “the person is pregnant” and
“the person has given birth to a child”.
It is a biological fact that only women can be pregnant and give birth. That is why laws that relate to maternity issues have in the past routinely been drafted using the words “woman”, “she” and “her”. It is not good enough to just say that we have gender-neutral drafting now. When Jack Straw, as Lord Chancellor, announced in 2007 that the Government would use gender-neutral drafting, the context was the long-standing interpretation rule that words referring to the masculine gender include the feminine. This was thought to be demeaning to women, although I personally never felt demeaned by it. The Statement made it clear that this was not intended to outlaw the use of particular genders where only one is involved. It was not intended to prevent women from being mothers. It is ironic that Jack Straw’s generous gesture towards equality has now been turned against women.
Just three years after the 2007 Statement, the Equality Act 2010 was passed. That clearly uses female terminology to define the protected characteristics of sex and pregnancy. On 12 December 2013, your Lordships' House had a debate on gender-neutral drafting. The Minister, my noble friend Lord Gardiner of Kimble, said: “The guidance”— that is, the guidance from parliamentary counsel—
“also recognises that there must be some flexibility and that there will be some Acts where only gender-specific drafting can be usefully applied. In a case where a person has to be of a particular gender—male or female—gender-neutral drafting does not require drafters to avoid referring to the gender. I think your Lordships would agree that that would be the case for legislation about maternity.”—[Official Report, 12/12/13; col. 1014.]
I say “hear, hear” to that.
As far as I can tell, there has not been a ministerial Statement since 2013 that reversed the clear understanding of what gender-neutral drafting was about. The Minister may well cite some more recent primary and secondary legislation that has departed from that clear understanding, but, as far as I am concerned, that has slipped through below the radar. We have to put a stop to the practice. If this Bill passes unamended, there will be yet another precedent on the statute book for the elimination of women.
When this Bill was considered in the other place, the Minister asserted:
“It is not the case that we could legally and correctly use the word “woman” in this piece of legislation”.—[Official Report, 11/2/21; col. 594.]
I respectfully say to the Minister that this is garbage. There is nothing illegal or incorrect about using the word “women’ in relation to pregnancy. The only thing that appears to prevent the use of the word “woman” is a reinterpretation, by stealth, of the gender-neutral drafting guidance. In my view, it would be entirely legal and certainly correct to use the word “woman” in this Bill. Parliamentary counsel should be reminded that at the end of the day it is Parliament, and not civil servants, that decides how our laws are written.
I have spoken before about your Lordships' House being seen from the outside as a metropolitan bubble. This Bill speaks the language of a metropolitan elite who is unconcerned about its impact on the majority of our society, who are women, or about the view of the overwhelming majority of our citizens that women exist.
This is not a party-political issue, but it grieves me that a Conservative Government, who are bravely standing against all sorts of nonsense that has infested our public life, are abandoning women.
I beg to move.
Baroness Hayter of Kentish Town (Lab)
I thank the Minister for introducing this welcome Bill, and I take the opportunity to welcome my noble friend Baroness Hayman of Ullock to her first outing winding for the Opposition on a Bill. I also look forward to hearing from the first noble Baroness, Lady Hayman.
My honourable friend Rachel Reeves MP paid tribute to the noble Baroness last week, recalling that, back in 1976, she was first woman MP to have a baby while serving in Parliament. However, just 10 days after she gave birth, she had to turn up in the House to vote, as pairing had been suspended. Had the noble Baroness, Lady Hayman, realised, 45 years ago, how long we would have to wait for this first step, I do wonder whether she might have given up the will to fight, although knowing her, I think not. Where the noble Baroness led, others followed, and today we take another, albeit tiny, step forward.
For many of us, it is hard to believe it has taken so long to come even this far. When I published my first article on maternity leave—I think in spring 1971—in the industrial relations review and report, virtually no one apart from some very few in the public sector was able to get paid time off. Thas was 50 years ago. Thirty years ago today, my godson was born. Happy birthday, Freddy. Soon after, he became “famous for a day”, when we launched a campaign for maternity leave, contrasting the situation in the UK with that in the EU, showing how two pregnant MEPs—Carole Tongue from the UK and Kirsten Jensen from Denmark—had very different maternity rights. Young Freddy, I have to say, was just a PR prop, cradled by the then Shadow Employment Minister, a certain Tony Blair, but he given star billing in the Times.
So 50 years on from that first article, 30 years from when I launched that particular Labour campaign, I am, needless to say, delighted to support this Bill, even though it is a small, weak thing and fails to cover paternity leave, adoption or, more importantly, every working woman. But it does mean that the Attorney-General will be the first Cabinet Minister in UK history to take maternity leave with proper pay and cover. Where the Attorney-General leads, others will, and must, follow.
As Rachel Reeves also noted in the Commons, the first four female Labour Cabinet Ministers—Margaret Bondfield, Ellen Wilkinson, Florence Horsbrugh and Barbara Castle—were childless. Indeed, that was often the choice for women: have a career or have a child, but not both. Of course, many did succeed and heroically combined both. In my generation, apart from the noble Baroness, I think particularly of the right honourable Harriet Harman and the late Barbara Mills QC, who set up a nursery in her basement to solve her childcare problem. Under the last Labour Government, first Yvette Cooper, some 20 years ago, then Ruth Kelly and Meg Hillier had babies while serving as Ministers, although with no formal provision for maternity leave and with other Ministers having to cover for them; I assume that there was some pairing. Luckily, Yvette Cooper had chosen to live with the person now officially recognised as the “Celebrity Best Home Cook”—Ed Balls.
Here in this House, we have mostly arrived past childbearing age, although I am delighted that this is no longer the case. However, the amendment I want to see would add grandmother leave to the Bill. I am delighted that Lords Ministers will be covered—as is my noble friend Lady Smith of Basildon, although she has warned me off thinking I might step into her shoes for six months as the lovely Nigel has firmly put his foot down on that.
This Bill makes it clear that there need be no choice between motherhood and a career—at least in Parliament. However, elsewhere, most working women face a very different situation. While statutory maternity pay can be for 39 weeks, it is only for the first six weeks, not six months, that it is paid at 90% of average weekly earnings. For the remaining 33 weeks, it is just £151.20 or less. This leaves household incomes well down for a lengthy period, and that is before parents must start saving to meet the cost of childcare for when the mother returns to work.
It is true that many employers pay more than the statutory minimum, but it is in no way universal. Fewer than one in 10 private sector bodies sampled offered the same as in the Bill. Labour will hold the Government to their word to work on a cross-party basis to introduce comprehensive legislation in the coming months to extend this Bill’s coverage to all of Parliament, but we also want to press for the rights of women councillors and mayors—indeed, all working women—so that maternity rights become the norm, not the exception. We also want paternity leave for men to be similarly extended.
As we heard from the noble Baroness, Lady Noakes, there is one unusual choice of words in this Bill: the reference to a “person”, rather than a “woman”, being pregnant. The Minister has provided assurances that this is a drafting issue and does not signal any change of policy, but there is no doubt that it seems at odds with other legislation on maternity rights and protection, despite Friday’s letter from the noble Lord, Lord True. More surprising, as we heard from the noble Baroness—she actually called it garbage—was the statement made by his colleague in the Commons:
“It is not the case that we could legally and correctly use the word ‘woman’ in this piece of legislation”.—[Official Report, Commons, 11/2/21; col. 594.]
Why not, given that it is in the notes and the Minister assured us that
“it will continue to be the policy of the Government to refer to ‘pregnant women’ in broader Government publications”?
We look forward to what the Minister just promised us: his explaining a little more when he winds up about why this language was used and whether there is any chance of it conflicting with other relevant legislation.
Clearly, the wording in no way detracts from the intention of the Bill; maternity leave will indeed be available to the AG from later this week. We would in no way want to signify any lack of support for its provision. We wish the Attorney-General well for the future enlargement of her family and we look forward to working with the Government to ensure that maternity provision is extended to all MPs and working women so that it really does become the norm, not the exception. We hope that the Braverman Bill is, as the Minister just said, the beginning, not the end, of the reform and we look forward to the rest of the debate on this important Bill.
Lord Wallace of Saltaire (LD) [V]
My Lords, we on these Benches welcome the Bill and support its proposals.
It implements proposals made six years ago by the Women in Parliament APPG. As the Minister told us, the Ministerial Code was amended two years ago to accommodate ministerial maternity leave, so the Bill should have been introduced earlier—not rushed through now. I accept its use of gender-neutral language, as recommended in the 2007 legislative guidance, but I note the sensitivity of language at stake here. This clearly needs further discussion but I suspect that it would not be helped by dividing the House at the end of this debate.
The battle to improve maternity conditions for working mothers carries strong personal echoes for me. My wife was a lecturer at the University of Manchester Institute of Science and Technology when we were expecting our first child. At that time, there were no older married women on the academic staff and no arrangements for leave. Helen drove home every lunchtime throughout a university term to breastfeed our daughter. Thankfully, conditions for women giving birth while in work have improved immensely since then, particularly in the Civil Service. I welcome this further step in liberal improvements in the status of women.
However, this welcome comes with a number of critical reservations. As the Minister admitted, the Government are rushing this through to deal with the immediate situation that faces a particular Cabinet Minister. It is almost an ad personam Bill. It does not address parental leave for ministerial fathers. It does not cover adoption. It does not address the issue of sick leave for Ministers, even though this arose for a Cabinet Minister involved in one of the most delicate aspects of the Brexit negotiations—the Northern Ireland issue—in 2018. I regret the absence of these elements from the Bill. I thank the Minister for his pledge to set out the Government’s proposals for covering these other dimensions soon.
The Bill provides for maternity leave to enable a Minister to return to their responsibilities six months later. Such continuity offers an excellent principle for good government; it takes most Ministers a year or more to master the full complexities of their portfolio. Yet we now have a Cabinet almost none of whose members has held office for much more than a year. The current Attorney-General is the third to hold that office since 2015. She sits alongside the fourth Foreign Secretary, the fourth Chancellor and the fourth Secretary of State for Education, and the fifth Business Secretary, since 2015—and now there are rumours of a coming reshuffle. Will the Minister tell us whether his Government intend to allow Ministers to stay in their posts long enough to expect to return from six months’ leave to the same office? Ministerial churn at a rate of nine to 18 months per office is the opposite of good governance.
But my most fundamental criticism is that this is the only constitutionally relevant Bill that we have so far seen in this Parliament, apart from those on Brexit. The Prime Minister promised in the 2019 manifesto that
“After Brexit we also need to look at the broader aspects of our constitution”.
That commitment was widely welcomed across the political spectrum; think tanks even held meetings to discuss what this broad agenda should include. Instead, in the past year the Government have sacked senior civil servants, broken the Ministerial Code, disregarded the recommendation of the House of Lords Appointments Commission, attacked the Electoral Commission, strengthened the Executive at the expense of Parliament, and bypassed democratic local authorities in handling the pandemic. The constitution commission which the Government promised to set up in less than 12 months from the election has been shelved. The Minister has defended this slide from the manifesto commitment without hesitation. He has repeatedly told us that Conservative victory in last December’s election represented the “will of the people”, on 43.5% of the electorate. He has defended behaviour from this Government that John Major—whom he served—would never have contemplated as Prime Minister.
We have watched the US Republican Party slide away from constitutional democracy towards pluto-populism—rich men claiming to represent the will of the people, while breaking the spirit and the letter of constitutional democracy. We see the beginnings of a similar slide here. That is why we need to hold the Government to the manifesto commitment they want to forget.
While I welcome this Bill, I encourage colleagues across the House to hold the Government to account on their neglect of larger constitutional issues, not least because the relationship between England, Scotland and Northern Ireland has been shaken by Brexit, and will not be resolved without further constitutional changes.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, it is a great pleasure to follow the noble Lord, Lord Wallace of Saltaire, who made some interesting points. I thank the Minister for setting out the position in relation to this Bill. I support this short, focused Bill, and believe that nothing should be done to delay or thwart it, although I have sympathy with the points raised by my noble friend Lady Noakes on the language in it. I wish my right honourable friend Suella Braverman well with her maternity, and I hope with her maternity leave—as others have noted, this measure is long overdue. Like others, I note the massive contribution of the noble Baroness, Lady Hayman, who is speaking later in this debate. She was indeed a trailblazer.
With that said, there are wider interests which need to be considered, and I am grateful to my noble friend for admitting that these will be brought forward; the sooner, the better. Setting best practice for parental leave across the board for other employers and employments is something which has been neglected by successive Governments. We need to deal with paternity leave, to consider the position of adopted and surrogate children, and indeed to look at shared parental leave, as the Minister acknowledged. I am grateful that this is going to be part of the Government’s agenda. Something on the timeline for this would be welcome, as we do not want to lose the momentum as we are taking this first welcome step in relation to maternity leave. Good employers should be following practices set out by the Government and by Parliament, so we need to step up to the plate, as has been noted for sick leave, grandparental leave, carers, victims of domestic abuse, and so on. All these can be considered, I hope.
With the indulgence of the House, notwithstanding the importance of those issues, I will touch on another matter which is long overdue, and particularly relates to people in your Lordships’ House. That is the subject of unpaid Ministers. I had the great pleasure of being a paid Minister, and I hope that gives me some latitude to speak on this. It is said without in any way undermining our excellent Ministers, both paid and unpaid, but in this day and age it must not be right that we expect people to serve and not be paid. I certainly know of one potential Minister who was asked to serve but felt unable to do so because she was not going to be paid. That was not under this Prime Minister, I add, but it seems wrong in principle. Eight of our 25 Ministers in your Lordships’ House are unpaid, which is nearly a third. We should not expect people to serve but not get the rate of pay attached to the job. We would not expect that in industry or elsewhere in the public service; it is not right in a modern democracy. It should not be a condition of the job that you are unpaid; I hope my noble friend will undertake that this will be looked at by the Government.
I recognise that there is a legislative impediment to increasing the number of paid Ministers, and that this has impeded successive Governments of all colours; it is not particular to this Government by any means. But it would be a relatively simple matter, and I imagine non-controversial, to amend or repeal the measure. I cannot believe that it is right in the 21st century that we are not paying Ministers for doing the job. It seems like something which belongs to another age, such as quill pens or horse-drawn hansom cabs, perhaps more appropriate to the age of Trollope—Anthony, not Joanna—and it is high time that we moved on.
Baroness Gale (Lab) [V]
My Lords, while I welcome this Bill, I think it a shame that it has taken so long to acknowledge that maternity leave should be granted to Ministers, and that it is being rushed through both Houses, meaning there is not enough time to scrutinise the Bill.
I welcome the Bill, but even though it is very narrow there are some flaws. For example, there has been no equality impact assessment—why? Is it because it is being rushed though?
As the Government have recognised that women holding ministerial office should have paid maternity leave, this should be an opportunity to look at the wider case of improving paid maternity leave for all pregnant working women. I hope that there will be another maternity Bill before us soon so that we can look at improving the lot of all pregnant working women. The Bill should be an impetus to address low statutory maternity pay, which is around £151 per week, or lower in some cases—less than half of the national minimum wage, so the pregnant woman’s income is reduced at a time when she is preparing for the birth of her child. The Government have done the right thing by the Attorney-General and women Cabinet Ministers. I hope they will put things right for the rest of the pregnant women in the country.
It is surprising to me, and to many others, that the word “woman” is not used in this Bill but instead the word “person” is used, as the noble Baroness, Lady Noakes, explained so well. I certainly agree with her. Considering that only women can get pregnant and give birth, I cannot see any reason why “woman” cannot be used. I believe in using gender-neutral language where appropriate, but I do not believe it is appropriate in this Bill. In his letter to Peers, the Minister explained that “person”
“reflects modern drafting convention and guidance, in place since 2007, and common across much of our legislation”.
I note that the Minister says “much”, which I assume means “not all”.
Jack Straw, as Leader of the House of Commons, in 2007 made a Written Statement to the House of Commons dealing with using gender-neutral language in legislation. It was not debated, but this has become the guidance, and in many respects was good, as no longer in legislation would we see the male gender used when it should have referred to men and women.
But there are examples, such as in the Bill, when the word “woman” should be used rather than “person”. I give the example of the Equality Act 2010, which uses “woman”, not “person”, throughout and in all sections related to pregnancy, maternity and lactation. I refer again to the Minister’s letter:
“We recognise that a drafting convention that was originally designed to avoid denigrating women should not result in the erasure of women from our public discourse.”
As a result, the Explanatory Notes have been changed, using “Minister” instead of “person” in several places. I just wonder about that. The Minister recognised that it was not appropriate to use “person” and changed it to “Minister”, but why could it not have been changed to “woman”?
On the issue of language, at Second Reading in the Commons the Paymaster-General, Penny Mordaunt, said that she would provide further explanation in Committee but that she understood
“how offensive the word ‘person’ or ‘persons’ can be in this context”.
Commenting further, she said:
“I hope that we can make some changes, if not to the legislation then to the explanatory notes, that will address some of”
these
“issues.”
However, she said that the Government could put the word “Minister” in the Explanatory Notes and stated that:
“Although that is still gender-neutral language, it is a much less jarring term than ‘person’.—[Official Report, Commons, 11/2/21; cols. 559-94.]
When legislation is intended only for women and not for men, I hope that the Minister will accept that “woman” should always be used in place of “person”.
It is not too late for the Government to come forward and amend the Bill to right a wrong. I hope that the Minister will take note of the criticism and of how offensive it is to women, bearing in mind that this is the second Bill before us in recent months in which the word “woman” has been written out of the legislation, as in the Domestic Abuse Bill. Having said that, I support every other aspect of the Bill and look forward to the Minister’s response.
Baroness Hussein-Ece (LD) [V]
I, too, welcome the Bill, which is long overdue in seeking to right a wrong and an anomaly that has been ongoing for some time. However, as has been acknowledged, it is extremely narrowly focused. It ignores the lack of provisions for all MPs and throws up wider implications concerning the lack of protection for others. It is clear that it does not go far enough. The timing and political urgency have dictated that the Bill is rushed through, but there is disappointment that this opportunity was not used to put right other wrongs and anomalies, and it has highlighted the lack of protection for thousands of others.
The lack of an equalities impact assessment, as mentioned by the noble Baroness, Lady Gale, is very disappointing, given the subject of the Bill. This would have allowed further consideration and a wider assessment that could have included all MPs, parliamentary staff and, as has been mentioned, local councillors in the round. I look forward to that and the wider issues that have been thrown up today being addressed when the new legislation, which we have heard about, is introduced. It could also seek to address the need for greater and better representation in public life than we have at present.
The Minister in the other place admitted that the beneficiaries of the Bill are indeed very narrowly defined. She went on to say that, although adoption leave and shared parental leave were important provisions, they had not been included in the Bill, as they
“require further consideration in the wider constitutional context.”—[Official Report, Commons, 11/2/21; col. 528.]
That is disappointing. However, she said that the Government would swiftly bring back proposals to address outstanding parental leave issues. I was going to ask the Minister what “swiftly” meant, but he said in his introduction that such proposals would be brought back by the Summer Recess, and I welcome that.
It is right that the Bill will change the law to allow the Attorney-General to take maternity leave—I wish her well in the birth of her child—but I hope it will ensure that the Government show commitment to strengthening the employment rights of all pregnant women and new parents across the UK. The Government also need urgently to take a serious look at the unacceptably low basic rate of both statutory maternity pay and maternity allowance, which, as has been mentioned, are a paltry £151.20 a week—less than the national minimum wage for a 35-hour week—especially while thousands of pregnant women are losing their jobs during this pandemic.
The impressive speed with which the Government are acting to ensure that the Minister is able to take paid maternity leave is in contrast with the failure to act on previous commitments to enhance legal protections for pregnant women and new parents in the workplace, especially in the current climate. It is quite shameful that the United Kingdom ranks 22nd out of 24 European countries, lagging way behind many other countries.
The Government have yet to take action on their commitment back in January 2017 to strengthen legal protections against redundancy for pregnant women and new parents. When are these likely to be brought forward? It also remains an anomaly that the Bill requires a pregnant Minister to seek the Prime Minister’s permission or discretion in order to take maternity leave. It does not create a right to maternity leave. I would like some assurance that there will be concerted action to address questions around adoption, surrogacy and other issues that may well arise in the future.
It is good and positive that the Government have found time for a Bill for one woman, but they should be able to find time to follow this up and bring forward a Bill to help many thousands of others. This is particularly important in the current pandemic, when pregnant women are not covered by the furlough scheme, despite guidance that pregnant front-line staff, particularly in the NHS, are vulnerable to Covid-19 beyond the 29th week of their pregnancy. It is reported that many thousands of pregnant women are unlawfully being sent home on sick pay or unpaid leave. Last October, the TUC, Maternity Action, the Royal College of Obstetricians and Gynaecologists and the Royal College of Midwives called on the Chancellor to adapt the furlough scheme to protect working women who are more than 28 weeks pregnant. It has been reported that there has been no response, despite a reminder in January. Will this be taken back and responded to as a matter of urgency?
Concern has been expressed about the gender-neutral language used in the Bill. I have received correspondence about it, and I am sure that other noble Lords have as well. People are raising their concerns with us. All legislation is framed using gender-neutral language, as is this Bill. The Minister’s letter said that the guidelines had been amended accordingly to refer to the Minister in question and that “pregnant women” would continue to be referred to in government publications alongside gender-neutral language, as appropriate. The noble Baroness, Lady Noakes, said that that is not true, and others are also saying that that is not the case. There is some confusion over this, and I look forward to clarification when the Minister responds. Given that we expect gender-neutral language to be inclusive, I would be happy to be able to use “pregnant women”—we have used it throughout this debate—alongside other gender-neutral language as appropriate.
The Government have done the right thing for the Attorney-General and other Cabinet Ministers and opposition spokespeople. Now, they need to put right the completely wrong and unequal situation experienced by the rest of the women and new parents in this country.
Baroness Hayman (CB)
My Lords, I declare an interest, although not a current one, as the prospects of my being offered ministerial office are as remote as the chances of my becoming pregnant again. However, 45 years ago, I was pregnant and in Parliament when such a thing was, frankly, considered inconceivable, to coin a phrase. My son, Ben, was born when Jim Callaghan’s Government were hanging by a thread, with no majority in the Commons, running three-line Whips on Lords’ amendments, and with no pairing, following an incident involving Michael Heseltine—now the noble Lord, Lord Heseltine—and the Mace, which older Members might recall. Given the attitudes and circumstances of 45 years ago, it is perhaps not surprising that no arrangements for maternity leave were in place, so I ended up bringing the baby into the House with me two days after leaving hospital, as the noble Baroness, Lady Hayter, referred to.
The day after the first vote in which I participated, which the Government won by a majority of one, the front page of the Daily Express read, “Held Together by a Nappy Pin”, although I preferred the Sun’s headline, “Little Ben strikes”. I thank my lucky stars that my experience predated social media, so my hate mail was confined to those who put pen to paper and to those newspaper columnists who decided to accuse me of neglecting my child, of exhibitionism or of that terrible thing that women do—wanting to have it all.
Like all noble Lords who have spoken, I wish the Attorney-General well and applaud her decision to embark on a substantial period of full maternity leave. I welcome the provisions in this Bill to ensure that she can do so. But over the decades since 1976, many distinguished serving women Ministers and MPs have, I am happy to say, given birth. It is no longer an affront, nor a novelty, and I suspect the current doorkeepers in the House of Commons are no longer instructed by the Sergeant at Arms, as they were in 1976, as to the degree of force to be used to stop a mother bringing a baby into the Chamber.
After all those years and all that experience, I find it dispiriting that we need emergency legislation to ensure that appropriate arrangements are made to provide maternity leave for Suella Braverman. Even more worrying and depressing was to hear the contributions of MPs to the debate on the Bill in another place, their descriptions of the continuing abuse received by pregnant MPs and the many serious unresolved issues regarding cover for their constituency responsibilities. There is clearly much work still to be done.
Today, we are faced with this emergency legislation, which universally in this House is considered unsatisfactory because, by its nature, it lacks the consideration, equalities assessment in advance, and scrutiny to which it should be subjected before its presentation and during its passage through Parliament.
The fact that women parliamentarians have babies has been apparent to my certain knowledge for 45 years. The Attorney-General’s pregnancy has hardly been a state secret. We should record our concern at the lack of foresight and planning by the Government that has led to us having to deal with this Bill at breakneck speed. That haste and lack of time for consideration has meant—as the Minister accepted in his introduction—that we are in the uncomfortable position of putting on to the statute book severely limited legislation which leaves many issues unanswered and does not deal with important questions relating to paternity, shared parental and adoption leave, or the issues faced by non-ministerial parliamentarians.
I fear it also creates the impression that we can find time to legislate to address the needs of our own but not the needs of all the other pregnant women and new parents for whom current provision is far from adequate and for whom Covid has created its own problems, particularly in relation to furloughing, as the noble Baroness, Lady Hussein-Ecce, said. Only if this Bill is followed by comprehensive action in these areas will the Government have any credibility. I hope the noble Lord the Minister will be able to provide reassurance on this point when he winds up.
Finally, a word about language and the amendment in the name of the noble Baroness, Lady Noakes: I believe the drafters of this Bill have quite simply got it wrong in trying to Snopake the word “woman” from the legislative lexicon. The price of so-called gender neutrality in this Bill is an awkward and ugly distortion of the English language and an affront to common sense. Far from encouraging respect for language and the recognition of diversity, to which I am fully committed, it risks bemusing and alienating the public and damaging the very causes that passionate advocates of such language espouse. I look forward to debates in Committee on this issue but, even more importantly, I profoundly hope that this Bill can be the spur to do far better for pregnant women, new mothers and fathers, and their babies in the future.
Lord Randall of Uxbridge (Con) [V]
My Lords, it is a great honour to follow the noble Baroness, Lady Hayman. It is always so, but especially on this Bill. As we have heard, she has a special place in the history of mothers in Parliament and as a pioneer of what we are discussing today.
I welcome this Bill and will not detain your Lordships long. One may well argue that the measure is rather overdue, and it may come to many as a surprise that recent Governments have not acted on this issue before. As the noble Baroness, Lady Hayman, said, it is always interesting that, when Parliament has to act on things which seem to be in our own interests, we can do it in a hurry. I remember well an issue with election leaflets, when it was discovered that the then Home Secretary—Jack Straw, I think—had a whole stack of posters in his garage that were printed incorrectly. We quickly put through a Bill to make sure that those were not redundant.
I am delighted that we are moving bit by bit to aligning Parliament with current workplace practices. As we have heard, some may consider that this Bill should have a wider remit, but as it is being brought forward to address a particular case, legislative time is difficult to find. This is probably a wasted opportunity, but we are where we are, so let us go ahead with it.
One employment issue that was raised consistently by a former constituent of mine was job-sharing for MPs. While I understand some of the reasons why that may seem desirable or attractive to some—and as much as I try to think how it might work, as it does in other workplaces—I was never able to resolve the particular problem of voting being shared. That said, I am pleased that the Bill has a narrow remit and I hope that, as a result, it should have a relatively speedy passage through Parliament.
I am also aware—I could not be unaware—of the concerns we have already heard about some of the gender-neutral language in the Bill. I do not want to get into this controversial and complicated issue, nor do I think I am qualified to do so. I listened to my noble friend Lady Noakes and share some of her views on the excesses of language that we have seen recently, not least from Brighton. However, I fear that my natural inclination to avoid controversy may have deserted me. In times past, I may well have shared more of those concerns. On reflection, I have found myself to be always somewhat behind the curve and that the world has moved on, leaving me behind. Now, somewhat counter-intuitively, I do not see a problem with the language being used—language which has, after all, as we have heard, been a convention for a number of years. It is more inclusive and was originally introduced to enhance the status of women. I am satisfied that there is absolutely no intention on the Government’s part to write out the incredible role of women.
I thank my noble friend the Minister for his helpful letter to us, which I found reassuring, and for his opening comments today. I shall listen carefully to his closing remarks. All I will add is this: I find it quite common now when filling in forms and asked to put down one’s gender that there is a box marked “Prefer not to say”. I understand that some do not wish to identify their gender. Perhaps this language will help them. As I have said, I have no expertise at all in gender politics, but I am happy with the wording. However, I will listen carefully to other noble Lords who, I am sure, will put forward a contrary view—we have already heard several today. This is a good and necessary Bill and I support it fully.
Lord Hunt of Kings Heath (Lab)
My Lords, I too support the intent of the Bill and certainly wish the Attorney-General well. As other noble Lords have said, it is disappointing that the Bill provides for only a small number of what might be described as very privileged women when we know that in the workplace many thousands of pregnant women or new mothers face discrimination and risk losing their jobs. In fact, one of the striking facets of the debate in the House of Commons was the number of comments made by Members of Parliament about the impact on women of pregnancy and the insecurities in the workplace. The noble Lord, Lord True, acknowledged that the Bill could have been so much more. It is a missed opportunity. I accept what the Government have said about the work being done, but we are being asked to set up a two-tier system for maternity leave in this country and there is a feeling of discomfort about that.
This has been a very good debate so far and I listened with great attention to the comments of the noble Lord, Lord Randall. I must say I disagree with him about the issue of language; I do not see it as a technical issue. Fundamentally, a much more important set of principles lie behind the way language is used in the Bill. A colleague of mine counted the number of times “women” was used in the Commons debate and it came to over 300, yet the Bill makes no mention of women. Instead, we heard the rather inelegant terms “person who is pregnant” and “person who has given birth to a child”, which do not seem to add to what we understand as good English.
I have supported trans rights and gay rights over many years. I fought the iniquities of Section 28 and, as a Minister, I took the legislation through this House to allow for gay adoption. I have to say to the noble Baroness, Lady Noakes, whose speech I enjoyed, that, working in London and living in Birmingham, I am a fully paid up member of the metropolitan bubble and proud of it. However, I have become increasingly concerned that the hard-won rights of women over many decades are at risk of being watered down and marginalised as the single-sex spaces enshrined in the Equality Act 2010 come under increasing attack.
That is why this language is so important. Many public bodies are misinterpreting the Act, and many women’s sector organisations, especially those that seek to end violence against women and girls, fear loss of funding and commissioning if they want to provide single-sex exemptions. I am afraid that various government departments have weaselled down the words of the Equality Act in the guidance they have issued to public bodies. Local authorities have misinterpreted the Act and are threatening many small charities trying to provide these services at local level, and people there are frightened to speak up because they believe that they will be attacked and, if they are not careful on social media, accused of transphobia. The Government have remained silent because they themselves have a lot of this philosophy embedded in their advisory system. That is why the wording of the Bill is so important.
Work by Jane Clare Jones and Lisa Mackenzie has described the pattern of erasing sex in data collection and other areas of public policy. The ONS has caved into bullying—pathetic. The head of the ONS was interviewed, I think on the “Today” programme, and said that it was not going down the path it has now chosen. However, it has caved in, as many public bodies do, because they come under aggressive attack on social media and are accused of transphobia. The Government remain absolutely silent.
On the language, in her thoughtful contribution my noble friend Lady Gale talked about the fact that gender-neutral terms will often be appropriate. I agree with that. However, do we really want to see demeaning terms such as “menstruators”, “individuals with a cervix”, “birthing bodies” or even “chest feeders”? When the Brighton trust announced the use of the latter term, where was the Department of Health? It was absolutely silent, because it is cowed and frightened to speak up against this kind of absolute nonsense.
There are many parliamentarians who know that this is nonsense but they are frightened to speak up because of the abuse they will receive. Look at my honourable friend Rosie Duffield. What support has been given to her? Hardly anything, except from a few brave, dedicated people. It is shameful that we have allowed this situation to arise. That is why the Bill and its drafting are so important.
The justification was of course Jack Straw’s change in the convention and revised guidance. However, as the noble Baroness, Lady Noakes, said, that was designed to promote the rights of women because previously, “he” was always taken to mean “he and she” in legislation. For that to be used against women in this Bill is extraordinary.
I have looked up the parliamentary counsel guidance. The latest version was produced by the Drafting Techniques Group in 2020. This is a most worthy body but it is not one that should be at the heart of government decision-making. I noted the advice on page 2, which says:
“Clarity is helped by the use of short sentences … Tell your story in a moderate, level tone. Legislation should speak firmly but not shout … While brevity may be good, brusqueness is not.”
That is good advice but is it slavishly followed in all legislation? I very much doubt it. We understand that six pieces of legislation since the original guidance was issued have used the word “women”, including the seminal Equality Act 2010.
I have to say that six minutes is a guide; it is not something that can be enforced by anybody in your Lordships’ House.
Lord Hunt of Kings Heath (Lab)
I will carry on. This is a Second Reading debate. We do not have time limits.
Lord Hunt of Kings Heath (Lab)
Thank you very much—I do not usually get this support. After 23 years here it makes quite an unusual change.
Baroness Scott of Bybrook (Con)
My Lords, the six-minute limit is advisory but we have to get through this debate in a certain time.
Lord Hunt of Kings Heath (Lab)
With respect, we do not have to take the privileges committee report tonight. This is a Second Reading debate and I am afraid that advisory guidance on a Second Reading debate is highly inappropriate. But I shall not go on much longer.
The noble Lord, Lord True, was very helpful in arranging a meeting last week—we are meeting him again—and I am grateful to him. He must know that the Bill in the way it is worded is indefensible. If this had been a normal Second Reading, the Minister would have observed this debate, gone back and said, “We’re going to get an amendment and we’ve got to change it.” I know we have only four days to go but I urge him to think again. He should also say that this will never be used as a future precedent in legislation. He should ensure that parliamentary counsel changes the guidance, because it is not up to the mark.
Finally, this is my great appeal. Please will the Government defend women who speak up for the protection of women’s rights based on sex? I come again to the outrageous abuse that some of my parliamentary colleagues have received by stating in perfectly reasonable terms that they are not transphobic, just reasonable people seeking to do their job, yet they do not get support from the people who know that what is happening to them is wrong. Above all else, I hope the Minister will say something about that.
Baroness Grey-Thompson (CB) [V]
My Lords, I am delighted that we have the chance to give this Bill its Second Reading today. It is long overdue and I am sure that there are many outside your Lordships’ Chamber who would be surprised that we do not already have this in place. I congratulate the Government on bringing in this legislation but note the speed with which it is required.
Reading the Library notes on this Bill reminded me of the shock I felt when my grandmother told me she had to leave work when she got married, because she would be taking a job away from a man. That a Minister would have to resign her position to take maternity leave is ludicrous and not in keeping with the world we live in. It is unacceptable that a woman should have to choose between her job and career and having a family.
As an athlete, having to fit the birth of my daughter around my competition schedule because there were no maternity rights was not easy—that is still very much ad hoc in sport today. There is a great deal of similarity between being an athlete and being in Parliament. The reality is that many women have to take different decisions from men about how to make it work, and delay having children or walk away from a role they care passionately about and are good at because it is impossible to find the right balance and support.
This Bill sends out a strong message. I would like to see provision for paternity, shared parental and adoption leave, as well as wider issues of statutory maternity pay and leave for MPs and their staff, included in other legislation.
We should also consider your Lordships’ Chamber. As younger Peers are appointed, we must have increased flexibility. I agree with the noble Lord, Lord Bourne, on paying Ministers. I remember one occasion a couple of years ago when a returning Peer brought her baby to a Division, and because only a Peer can walk through the voting Lobby, the baby was passed down the line—fine for that one moment, but not a long-term solution to allow women to play a full part in political life. I know from the experience of being a parent of a young child in Parliament that, if you do not live in London, it can be very complicated. I know we choose to do this role, but I really think that Parliament can do better.
The six-month time limit is fine, but we should not stop looking for a greater degree of flexibility if required. I would also prefer it not to be a discretionary power for the Prime Minister to designate a Minister wishing to take maternity leave as a “Minister on leave”. It should be automatic. I have been thinking about whether they could be better described as a “Minister on maternity leave”, but I have concluded that I do not have a strong opinion on this form of language.
However, like others, I will raise the language used in this Bill. I support neutral language, and there are many benefits in terms of driving equality. Yet for so many we do not live in an equal society. The Equality and Human Rights Commission recently said—this relates to the pandemic—that pregnancy and maternity discrimination is the “most urgent and immediate” threat to equality. We should seek to correct this. The fact that we measure pay gap, employment gap, educational attainment and a whole set of other metrics shows us that our society is not equal.
I have been contacted by women and men who asked why the word “woman” is in the Explanatory Notes and not the Bill. I will be clear: I think the word “woman” and variations of it should be used in this Bill. I know there will be many who will not agree with me raising this, but I see my role as a Member of your Lordships’ Chamber as being to raise issues that challenge.
I do not hate or want to dehumanise anyone. As a disabled woman, I have experienced discrimination and received a significant number of emails about the many forms it takes. This is a contentious issue and in this debate there will be many views; we are probably not all at the same point on the continuum. We need to be able to have an open discussion, without fear of retribution, of being cancelled or shouted down for discussing terminology or having a different view. Mine may or may not be the majority view beyond the debate today, but that does not mean we should not debate it.
I thought long and hard about joining the debate today and whether I could deal with any potential backlash that may come my way for saying that the word “woman” should be in this Bill. Many from different viewpoints have said that I should be careful. This is not the time to debate the wider aspects of what freedom of speech means; that is for another time, but we must tackle the abuse that women face for having a public view on a whole range of issues. Being told what my opinion should be does not encourage sharing of views and is detrimental to the long-term goal of equality.
Language is important. I have always said that language is the dress of thought. As we know, the specific language used in legislation is incredibly important. It has far-reaching consequences. It is about providing rights and protection and it is our duty to find the balance in that.
I have spent most of my life fighting for inclusion for everyone that society chooses to label as different. I have spent most of my life being othered by language, attitude and a lack of physical access. Growing up, I was called handicapped or a crippled child; luckily, there has been an evolution in that language. Perhaps we need to find a new form of language to include those who feel othered, but it must not be at the expense of the word “woman”.
One thing I am certain of is that many in your Lordships’ Chamber, and those who have a different view from mine on the use of language, want to stop the denigration of women. Excluding the word “woman” from this Bill and other potential legislation does not help the cause of equality for everyone or anyone.
Finally, I wish the right honourable Attorney-General all the best when she becomes the first “Minister on leave”.
Lord Cormack (Con) [V]
My Lords, it has become almost formulaic to say that it is an honour to follow the previous speaker, but it is an honour to follow the noble Baroness, Lady Grey-Thompson. She is a woman of quiet courage and total determination; she spoke from the heart and I hope we will heed her.
We have all said, and meant it, that we wish the Attorney-General well and a safe delivery of a healthy child. It is totally fitting that we should be passing legislation that enables her not to have to worry about her job or future—unless the Prime Minister changes his mind about her appointment, but that is a wholly different issue—and we can all support the objectives of this Bill, narrow and late as it is. I associate myself with all the comments made by the noble Baroness, Lady Gale, and others on that.
Apart from my noble friend Lord Randall of Uxbridge, with whom I normally find myself in agreement, but certainly and emphatically not tonight, we are all concerned about the language, particularly the erasure of “woman”, “maternal” and “maternity”. We are very fortunate to have a glorious mother tongue—I use the words very deliberately. In our language there are some rich, marvellous and emotive words, none more so than “maternal” and “mother”. There cannot be a Member of your Lordships’ House who does not have fond memories of a mother or grandmother. For many—I include myself—a mother has been the most significant and important figure in their early life. I still think of her very fondly.
I believe it is completely wrong to have the ugly insensitivity of “person” in the language in this Bill. “Personhood and apple pie”—how wonderfully and trippingly it comes off the tongue. I disagree with what has been implicit in many of the fine speeches we have heard, led by my noble friend Lady Noakes: a sort of recognition that we cannot really do anything about it this time. We can. We have a Committee stage on Thursday. If my noble friend the Minister really recognises this, as he does to a degree in the changed Explanatory Notes, and if we can have a translation of that recognition into a free vote, which there should be—I believe all votes are free votes, but I know that is not a commonly held view—we should be able to change this Bill without delay.
If my right honourable friend the Attorney-General is great with child and could produce a child very soon, and this is one of the reasons for the hurry, we can forget that, because I shall introduce an amendment on Thursday which would make this possible for her, if the child is born between 22 February and the receiving of Royal Assent. We can certainly deal with this and make sure that the Bill emerges from our House, as so many Bills do, improved—improved in its language and its recognition of the importance of maternity and motherhood.
I beg my noble friend to talk to his colleagues in government, because the amendments that we shall move do not alter by one jot or tittle the thrust and content of the Bill. All they do, by using the words “woman” and “mother”, is recognise properly that the Bill is about maternity. If the Government were to accept that, the passage of the Bill would not be delayed by more than 24 hours at the very most. As I said, if the child were to be born in that period, and if we accept the amendment that I will have tabled or something like it, then there is not a problem at all.
We are guardians of many things in your Lordships’ House, and one of the things that we should guard with most jealous fervour is the English language. I hope that we will strike a small blow for that as we strike a big blow for motherhood when we come to dispose of this Bill in Committee. I accept the fact that we do not normally vote on Second Reading, and I am not calling for that. I know that my noble friend Lady Noakes, who made a very fine speech, is not calling for that either. I am, however, calling for common sense to triumph over the language of bureaucracy. I hope that we will make progress in the right direction here, just as we are making progress in acknowledging motherhood. We should not do so with a Bill that does not acknowledge motherhood.
Baroness Jones of Moulsecoomb (GP)
My Lords, I am going to use the formula: “It is a pleasure to follow the noble Lord, Lord Cormack.” He always makes me smile. The Government have got themselves into a real pickle on this one, have they not? The Minister might be surprised to hear that I am going to give him a bit of wiggle room, because I very much support what the noble Baroness, Lady Noakes, is trying to say here. The erasure of women in public life, in literature and in all sorts of ways has horrified me. The debate has become so toxic and so unacceptable that many of us keep our heads down and try not to engage at all. That is quite often what I do, simply because I work on so many issues, and that becomes difficult when I get distracted by the vileness and hate.
However, the noble Baroness, Lady Noakes, said that only women get pregnant. Legally, that is not true anymore because trans men have pregnancies and they have babies. I have held a baby by a trans man. Perhaps the Minister would like to put “women and trans men” into the Bill: that might be an acceptable way forward for all of us. The noble Baroness, Lady Noakes, spoke about “woke Brighton”. I come from Brighton; when I was living there, in the 1950s and 1960s, it was not woke. The whole thing about chest feeding was absolutely ludicrous because, of course, men have breasts; they get breast cancer. The whole thing is utter stupidity, and you have to wonder who thinks these things up. The noble Baroness, Lady Noakes, also made an interesting point about the wording being at odds with other drafting. That seems a little bit strange these days, but that is something that I gather the Minister is going to expand on.
Most of the speeches in this Chamber today have been very, very concerned with the depiction of women and how we are treated in our society. One thing that we can do is make misogyny a hate crime. That is something that we should do urgently, and we should raise it at every single opportunity so that people who treat women in that sort of way are actually brought to justice.
On the wider aspects of the Bill, it is, of course, utterly unfair. I can see why it is being brought in, but why is it not for all women? It is absolutely appalling that this is only for a tiny section of very privileged, elite women. It should be for all women. Why is there discretionary power for the Prime Minister? That is awful, because the Prime Minister is most often a man, so it has to be a man’s discretionary power.
In the other place, the MP Stella Creasy wrote to Penny Mordaunt, the Paymaster-General, and I will read a few lines from that letter because it exemplifies why this Bill is so inadequate. She wrote:
“The Equality and Human Rights Commission recently described instances of pregnancy and maternity discrimination as one of the most urgent and immediate threats to equality during the pandemic. A survey by Pregnant Then Screwed found that 46% of women who have been suspended from work because of their pregnancy have been suspended on incorrect terms, including 33% on furlough and another 13% on sick pay, or told to take holiday or to start maternity pay.”
We do not have equality in Britain. We are meant to be a foremost democracy in the world and we do not have equality for 50% of our population. It strikes me that there must be many, many women who have been held back by this because misogyny is so entrenched in our society that we do not even notice it; we do not see it when it is happening. Many thousands of women—millions—have been held back from doing all that they can to improve society. Again and again, we hear that when you have women on boards, for example, or when you have women as part of work teams, the work is better. The thinking is better because it is a different perspective.
Quite honestly, this Bill is perfectly acceptable in its very narrow, late way, and while we cannot blame the Minister for it being this late, we can perhaps blame him for it being so narrow, so that is a message that he could take back. The noble Baroness, Lady Hayter, said in her opening remarks that it is a tiny step. Dear me—it is a tiny step on the right path, but we really need to see a few more giant steps.
Baroness Morris of Yardley (Lab) [V]
My Lords, my comments are going to follow those that have been made by the majority of Members before me. I am not sure that I have anything particularly new to add, but this is an important issue. I very much hope that the weight of numbers will have some sort of influence on the Minister and the Government.
I welcome the Bill and share the comments that others have made. It is late and, to be honest, we should be leading in this field, but we are very much lagging behind. I remember that, when I was first elected a Member of Parliament in 1992, and when I looked round at my fellow new MPs in the Labour group, it was amazing how disproportionately most of us did not have children. That is what it has been at every stage: we have always been late at making it easier for women to be involved in politics and to have a family as well. Nobody could have explained that more strongly than the noble Baroness, Lady Hayman, has done. Let us not stop here: it is with some humility that we should say that this is good legislation. It is something to be proud of because the Government have got themselves out of a bit of a difficulty with one person, but it cannot rest here. I welcome the comments that the Minister made about ensuring that we look at the other issues as well.
The main reason why I put my name down to speak in this debate was to offer support for the reasoned amendment that the noble Baroness, Lady Noakes, very ably moved and that colleagues from across the House have spoken to as well. It might be argued that it does not matter: if you look at this Bill, what is going to change if we have the word “woman” rather than “person”? However, it matters and it matters a lot. My noble friend Lord Hunt really pressed this point and was right to do so.
More than anything, it is just common sense. We are not here to pass legislation that does not make sense to the public whom we represent. If we were to go out into the streets of our country and try to explain to the electorate—to our citizens—that we have got ourselves into a position where we are not permitted to use the word “woman” in a Bill that deals with maternity, they would not know where we were coming from. Yet that is the argument that the Minister in the House of Commons made, and it is the argument I thought that the Minister here made today. Common sense and clarity must mean that legislation that we pass makes sense in its language to the people whose lives it will affect.
Of course, this is even more important because of the wider cultural context in which this debate is taking place. There is a wider debate at the moment which risks denying that biological sex exists. I cannot sign up to that. It makes it far more difficult for women-only spaces and for the protection of women in certain circumstances, which has been hard fought for over the years, to actually be carried out. As my noble friend Lord Hunt said, you can see public bodies and areas of public policy where there is now a struggle with how much or how little gender-specific pronouns can be used. This must be sorted out. Equality of opportunity and gender-neutral language were never about making it difficult, embarrassing or awkward for us to use gender-specific pronouns when it is appropriate to do so. I accept and understand that this debate can be difficult as social mores change. As the noble Baroness, Lady Grey-Thompson, said, it is about finding a language where all feel comfortable—but it was never meant to be a situation where women were fearful of expressing a view they strongly held.
I think language does matter, and I welcome gender-neutral language where appropriate. I remember my first Bill in the House of Commons: I was involved in legislation about teachers and was told that the term “he” in it had to apply to female teachers as well, and “headmaster” applied to head teachers of any gender. That is what the legislation, in terms of gender-neutral language, was trying to overcome. We must be clear on that because we must defend it. We must not allow what was a good piece of legislation, or a good piece of advice, to muddy the waters on some of the key issues.
The last point I make—and this really is my plea to the Minister—is that I am not sure why the Government have used “person” rather than “woman”. I was not sure having read the debate in the House of Commons, and I am not sure having listened to the Minister today. I am pretty sure that the 2007 guidance did not require the Government to use “person”. Is he saying that if he presented legislation to the House today which talked about “women who get pregnant”, the Bill would not have the force of law? If he is saying that, I would challenge it merely on the grounds that legislation has been passed since the 2007 guidance—whether they were Bills related to maternity, pensions or equality of rights—that uses the term “woman”. If it would have been legal to use “woman” rather than “person” in the Bill, why did he not do so? If it was not compulsory, it had to be a matter of choice. If the Government chose to use “person” rather than “woman”, I hope that he will be able to explain that in his closing remarks.
Other than that, I think the Minister has been helpful, both in the meeting he had with some of us before this debate and with the open manner in which he introduced it. I hope he will continue to act in that way as we take the Bill through the House of Lords.
Lord Naseby (Con) [V]
My Lords, I agree wholeheartedly with the noble Baroness who has just spoken on the way she discussed the word “woman”, and I was pleased that my noble friend moved her amendment. I would go so far as to say that, if an amendment is tabled in Committee, I will support it. I am a very loyal Member—indeed, at least one of the noble Baronesses sitting on the Opposition Benches teases me about that. But on this issue I am quite clear: we should use the word “woman”.
I have had the privilege of being married for 60 years, and my wife and I have three children. My wife trained across the road at St Thomas’. The first child came quickly, but the second and third were planned, because my wife and I agreed when we were engaged that both of us would like to work in life and that she should work on whatever form of medicine she chose. She chose to be a full-time general practitioner for most of her working life and certainly when she had the third child. By then she was the senior partner and, as I recall, took only three or four weeks off after having that baby. Of course, in those days there was no formal maternity allowance—it was a matter of individual choice. The decision we made was that we would use our resources to appoint a nanny, child help and childcare, and all muck in. Times have changed, and that is good.
My problem is to try to set aside the individual and look at the strategy being followed. Here we have one of the key offices of state. Every key office of state is probably very demanding and very important in its impact on our economy and our country. It happens to be particularly important at this stage because of Brexit and the problems we all know about in its implementation—particularly Northern Ireland and the union. Somebody is leaving a key office for six months. I do not know what plans the Government have made on two aspects, but I imagine that the Prime Minister believes that the present incumbent is absolutely the key person to do the job. They are not a second choice, but for those six months there will have to be a second choice. That is a pretty tough call on whoever that person may be because, under the Bill as drafted, they know they are out in six months.
But it goes deeper than that, does it not? The civil servants, who are key to implementing law, are put in a difficult position because it is a challenge to their management. I wonder what thought has been given to that. This brings us back to one of the core criticisms of the Bill: that it did not encompass a whole breadth of issues raised in the Commons. Therefore, it is a bad stretch, in my view, to have emergency legislation caused by the situation of one person. Are we really saying that, if the Chancellor of the Exchequer turns out to be a woman who has a child due somewhere around Budget time, the woman can decide to take six months’ leave? In terms of the interests of the country, I would submit that that is a bit of a challenge. It is a bit of a conundrum, and I have some reservations about the way we are producing this emergency Bill when we have not, in my judgment, thought it all through.
I reflected a little further. I have the privilege to be a trustee of the pension fund. We work very hard to try to help pensioners of that fund who get into all sorts of “scrapes”. But we do not actually change the provisions of a Bill: we find methods to help them or advise them, whatever it may be. Basically, we have a problem here.
I asked my daughter, who is self-employed, “What is the maternity provision for you, my darling?” The answer came back: “None”. Then I did a bit of research. We are talking about 1.63 million women in our country who get nothing. Once again, I think somebody should have done a little bit of pre-thinking.
I have thought very long and hard about the Bill, and I am not going to oppose it. Nevertheless, two things come to mind: first, the ones I have raised on the managerial side, if you like, of somebody taking maternity leave from a very senior position in government, and, secondly, the word “woman”. For me, as a man, it is crystal clear that the word “woman” should remain. The Government will have to wrestle with the management dimensions, but if there is an amendment down on “woman” or “women” I—for once—will actually support it.
Lord Winston (Lab)
My Lords, let me declare an interest: I am the chairman of the Genesis Research Trust, which deals with research into women’s diseases and in particular with pregnancy problems, miscarriage, stillbirth and infertility among many other things including cancers. I am grateful to the noble Lord, Lord True. Should I have said “the noble person”? Perhaps not. I do not wish to behave in any way disrespectfully. He very helpfully listened to our problems beforehand and I hope that will continue before the next stage of the Bill.
Rather like the noble Lord, Lord Cormack, I have to say that every single one of us in this Chamber, every single person outside in the street and every citizen of the United Kingdom was born from a mother’s uterus. We forgive the muddled biology that we heard a little earlier in this debate. The fact is that only a woman can give rise to a baby. The environment in the womb is critical to our development until we finally die at the age of 70 or 80, if we are lucky. That is important. That defines so much of what makes our humanity. Michael Meaney, who is a very great biologist from Canada, showed very clearly in the studies he did in Toronto and later in Singapore, where I have been somewhat associated, that what happens during pregnancy at various stages affects the development of the baby, including its cognitive ability, its functions and the diseases that it might develop later on at the age of 40, 50 or 60, as have many other scientists. That is fundamental and that depends on the woman, her health and the way she is protected, so we are extremely grateful for the Bill. That the Attorney-General has this opportunity is terrific. The problem is that that does not always apply to some women who have stress with their hormones and all sorts of other problems.
Let me leave Singapore for a moment and come to domestic matters because this is critical. The noble Lord, Lord True, might like to hear from me that, in 2018, 2,943 babies were stillborn, and for 60% of them the cause was unknown. Birth defects were a very minor problem. In many cases, it was poor medicine. Sometimes this was avoidable, but in many cases the reason for stillbirth is completely unknown. These women leave hospital absolutely bereft, and many of them never recover after that loss of a pregnancy. That loss of life within them is critical to that person. If that is not enough, let me remind the House that something close to 200,000 women each year miscarry a pregnancy, and some of them will miscarry several times. I think my record was a woman miscarrying 19 times before she finally gave up being pregnant. One of the commonest things I heard during my professional career from these women when they sat in front of me in tears having had a miscarriage or a stillbirth was, “I do not feel that I am a proper woman.” That was a very common phrase in my clinic in the last 40 years.
If that is not enough either, let me remind the House that about one in 20 women is infertile and they strive hard to become women by being pregnant. That is a goal like none other in their lives. It is for them the most important thing they can do. This is not some aberrant mentality. It is natural. It is born as a result of our evolution as humans. It is part of our humanity, and it is essential. Most of them do not achieve it. For example, figures in Europe show that, after six cycles of in vitro fertilisation, only 43% of women get pregnant. We tend to forget that there is no treatment for them. That is very important.
We are rushing this Bill through for a particular reason, and nobody would doubt the need to get it thorough for the Attorney-General, but what message does it show to women who have lost babies or lost a pregnancy or lost the life within them? Most of them come from poorer, disadvantaged communities. That is true for most diseases that affect us, and it certainly applies to diseases of pregnancy. We have one of the highest stillbirth rates in Europe. We still do not understand why.
Finally, if the noble Baroness, Lady Noakes, decides to press her amendment to the Motion to a vote, I will join her because I think it is important to consider this. I think the Minister will see that there is a growing head of steam. I know he was left carrying the baby on this Bill. It was not something that he desires and he had nothing to do with the drafting. We understand that very well, but it is still a problem. Why would I want to go through the Lobby? I would go through the Lobby because I owe it to the hundreds of women who sat in front of me in tears saying, “I don’t feel a proper woman.”
Lord Pannick (CB) [V]
My Lords, it is always an education to listen to the noble Lord, Lord Winston. I declare an interest as an expectant grandfather. One of my daughters, Shula Markeson, is expecting her second child, my fourth grandchild, in a few weeks’ time. In this expectant state, I find it extraordinary that until the pregnancy of the Attorney-General, to whom I send my best wishes, no one in Government seems to have recognised that Ministers, like other women, get pregnant and are entitled to paid maternity leave. The fact that we are considering fast-track legislation today, with all the defects in parliamentary scrutiny that that involves—a point made by the noble Baroness, Lady Gale—tells the House everything it needs to know about the low priority historically accorded by successive Governments to issues of maternity. I agree with my noble friend Lady Hayman and others that the Government need to give priority to more general reform.
I also think it is regrettable that, in a Bill which belatedly recognises the needs of female Ministers, Clause 1 confers benefits only if the Prime Minister so allows at his or her discretion—a point touched upon by the noble Baroness, Lady Hussein-Ece. When he replies, can the Minister give an example of when the Prime Minister might refuse to allow a pregnant Minister to be designated in circumstances where she would be remaining in post but for her pregnancy? Why is this not a duty to pay maternity leave?
Also, can the Minister confirm that it is not intended by this discretionary benefit that the Prime Minister should ever be able to say to a pregnant Minister, “Very sorry but, because you’re pregnant, I’m going to sack you”? That is rightly unacceptable in all other walks of life. In his opening speech, the Minister said that the Bill sends out a “vital message” to women that they can pursue a political career, without needing to choose between that career and their family. Does the Minister really think that the conferral of the benefits on a discretionary basis is consistent with these laudable aims?
On the language of the Bill, Parliament has often referred to the person who gives birth to a child as a woman and, indeed, a mother. Examples have already been given and I add one—Section 33(1) of the Human Fertilisation and Embryology Act 2008 defines a “mother” as:
“The woman who is carrying or has carried a child”.
However, your Lordships should recognise that the noble Baroness, Lady Jones of Moulsecoomb, was correct to point out that there are trans men, who were born female, who have given birth. One brought legal proceedings in the Court of Appeal last year. A judgment was given, in which noble Lords may be interested, by the Lord Chief Justice, the noble and learned Lord, Lord Burnett of Maldon, in the McConnell case. It is reported in the third volume of the Weekly Law Reports for 2020 at page 683.
The Lord Chief Justice explained that the claimant had been registered at birth as female, but had transitioned to live in the male gender and had received a gender recognition certificate under the Gender Recognition Act 2004, stating that his gender is male. He then underwent artificial insemination, became pregnant and gave birth to a child. He brought legal proceedings complaining that the child’s birth certificate recorded him as the mother. He said that, because he had transitioned, he should be recorded as the father or as a parent. The Court of Appeal rejected his complaint and said that recording him as the mother was not a breach of his human rights.
The Lord Chief Justice said that, as a matter of common law and under the legislation governing the registration of births, the person who gave birth to a child is the mother, and the Supreme Court dismissed an application for permission to appeal. In light of that judgment, I do not think that there are any legal difficulties in referring to mothers or women in the Bill. The mother of Parliaments, in doing that, would be showing no disrespect to trans men.
Lord Dodds of Duncairn (DUP) [V]
My Lords, I thank the Minister for his opening statement and for clearly setting out the purpose of the Bill. It is narrow in its application, and I am happy to support it through all its stages in this House. I agree that it is wrong, in this day and age, that Cabinet Ministers who take maternity leave are required to resign. I welcome the extension of provisions to cover the position of opposition officeholders, as well. Women in Parliament and public life generally have faced massive challenges, and our ways of working must be brought up to date as quickly and comprehensively as possible.
However, like other noble Lords, it seems strange to me that it takes the circumstances of an individual case to prompt legislation of this nature. The public will find it very odd that this situation has not been legislated for long before now, rather than being rushed through to accommodate specific circumstances. I also take the opportunity to wish the Attorney-General and her family well, at this time.
I share the view that it would be far better for the Government to bring forward more comprehensive proposals than this legislation to cover paternity, shared parental or adoption leave. I cannot think of any real reason why they could not have included these. None of them is covered in the current legislation; nor is the situation of Cabinet Ministers who are affected by sickness and need to take leave. In recent years, we have had examples of Cabinet Ministers who have had to step down as a result of sickness. It would be good if there was legislation to cover those circumstances, as well.
I welcome the commitment by the Minister and the Government to give urgent consideration to issues such as this and to bring forward proposals to address outstanding parental leave issues in due course. I welcome what the Minister said about an update before the Summer Recess, and we look forward to that. It would also be useful to know how the legislation before us and the situation that has been presented compares to provision made in the devolved Administrations. It is important to have consistency across the United Kingdom.
There are a couple of specific issues that I want to highlight on the particular provisions of the Bill. The first is the time limit of six months for paid leave and the second is the discretionary nature of the provisions, whereby the Prime Minister is vested with certain powers that do not normally apply elsewhere—a matter just alluded to by the noble Lord, Lord Pannick. That Ministers are public officeholders, appointed by the sovereign on the advice of the Prime Minister using the royal prerogative, limits what can be put in statute. I recognise that. However, having to seek the permission of the Prime Minister of the day to take maternity leave, as provided for in the Bill, seems incredibly anachronistic. It leaves open the rather bizarre possibility that the Prime Minister could refuse such a request. Neither a Minister in such a position nor the Prime Minister of the day should ever be put in that position, however theoretical. I think that the six-month period is too restrictive; there is no good reason why it should not be for up to 12 months. The current law on statutory maternity leave is 52 weeks, after all, and it would seem reasonable to extend the period to that.
It is also important that the Government address wider, general issues concerning maternity leave and statutory maternity pay. No one should face discrimination or undue financial loss as a result of having a child and no one should ever be in the position of having to give up their job. The low level of statutory maternity pay or allowance generally in this country is cast into sharp relief by the provisions of this Bill, which allow six months’ maternity leave on full pay. As this legislation is brought forward today to deal with the position of Cabinet Ministers, it cannot be long before the Government address wider issues affecting mothers and fathers across the board in this country.
Finally, I fully support the noble Baroness, Lady Noakes, in her recent amendment. I wholeheartedly endorse the argument that she and other noble Lords have advanced in advocating their support for that amendment to the Motion, and I will certainly support her, if she presses it to a vote.
I have great concerns, as expressed in the other place and by noble Lords, about the use of the word “person”, as opposed to “woman”, in the Bill. I have yet to hear a satisfactory explanation from the Government for why this is the case. It is baffling, and not just to Members of Parliament—it is something that most members of the public will find utterly inexplicable. I hope that the Government listen to what noble Lords have said in this House and move to rectify the situation, as the Bill goes through its different stages.
Baroness Goudie (Lab) [V]
My Lords, I support all that my noble friends Lord Hunt of Kings Heath and Lady Morris of Yardley have said, so I will not go over those arguments. If the noble Baroness, Lady Noakes, wishes to press her amendment, I will go through the Lobby with her, because it is awful that the word “person” rather than “woman” is used in this Bill.
This Bill is either too little or too much. It is too much in the sense that it is extraordinary that the Government have found time to fast-track this measure while, at the same time, protesting that parliamentary time cannot be found for other urgent measures. For example, the Coronavirus Act allows local authority meetings to be held remotely. This is working well but, at the moment, operates only until 7 May. The provision should obviously be extended, but the Government say that this requires primary legislation, and parliamentary time cannot be found.
On this day, coronavirus is at the forefront of all of our minds. This Bill displays an odd sense of non-logical thinking in relation to public administration. It is also inadequate as a maternity and paternal rights measure. We have had maternity and adoption leave since 2002, and shared paternal leave since 2015, yet the Bill omits any reference to these and confines itself to maternal leave. The maternity leave period is far too short, and the measure is merely discretionary in nature and has shortcomings that would have been exposed by an equality impact assessment.
The Bill addresses the position only of Ministers and other officeholders, not Peers and Members of Parliament. It does not address the wider issues of statutory maternity leave and pay and redundancy protection. I welcome the letter that Stella Creasy MP in the other place has sent to all of us today, in which she sets out how things should be.
The Bill is welcome in as far as it goes, but it is a small, rushed step in an important area. I offer the Attorney-General and her family all my best wishes, and I hope that the Minister will come back to us at Third Reading with amendments.
Baroness Gardner of Parkes (Con) [V]
My Lords, my father was the world’s first Minister for Health and Motherhood in the New South Wales State Parliament in Australia. He introduced a child endowment, a form of family support, in the 1920s. I was a founding member of The 300 Group in 1980, with Lesley Abdela and others across the political spectrum, which encouraged equal representation of women in Parliament.
It is disappointing to see that, irrespective of the challenges women face getting into Parliament, we still have barriers such as these for women, should they choose to start or continue to have children once they are elected. Despite this, I welcome the intent behind the Bill, although I find it extraordinary that this issue is only being considered in the 21st century, with the Government lagging behind modern society. Most businesses adopted this approach long ago.
My concern runs deeper than merely timing, as the Bill does not go far or deep enough. The Minister made this point in his opening speech—to
“make clear that the Government are listening.”
I echo the view of Stella Creasy, MP for Walthamstow, that the right to maternity leave and maternity cover should extend to all MPs, and I would go further and say that it should also cover Ministers in the House of Lords. I am also sympathetic to calls for paternity, adoption and shared parental leave to be extended to both Houses—Ministers and MPs—so that they can, if they wish, spend precious time with their families while knowing that their jobs are being covered.
We all know the importance of family, and that those early days are formative. Once gone, you cannot turn the clock back. It feels wrong that we should be introducing a Bill at great speed for the benefit of one senior Minister when, with a little more time and effort, we could be benefiting many more without using up more parliamentary time. I urge the Government to give this benefit and choice to all parents in both Houses.
Lord Bhatia (Non-Afl) [V]
My Lords, Members of the House of Commons voted to give Ministers formal, paid maternity leave for the first time, and it was hailed as an important and long-overdue change. The Government pledged to bring forward more sweeping maternity protections before the summer recess. Many MPs made statements during the debate. Significantly, the Minister, Penny Mordaunt, said that the Bill will put an end to the “wholly unacceptable situation” of Ministers having to resign to take leave.
Two significant points were made: that the Bill fails to address adoption, and that it fails to address shared paternal leave. The most important statement was made by the mother of the House, Harriet Harman. She said that the Bill should be an impetus to addressing low maternity pay, and that the Government have “done the right thing”. She went on to say that maternity pay is £152 per week—less than half what you would get on the minimum wage. The Bill was passed without any opposition at Third Reading. I ask the Minister whether it might be wiser to see how private sector companies have provided maternity leave to their employees and paternity leave to males.
Lord Hain (Lab) [V]
My Lords, I am sure that we all wish Suella Braverman well in her forthcoming maternity leave, and this Bill is welcome. It is notable for both ensuring her income is fully protected, and for the actual cover it gives her, meaning that she can devote herself to caring for her child without worrying about being on demand 24/7, as is required for the post of Attorney-General.
The Bill is also a big improvement on the predicament faced by my Government colleague Yvette Cooper when she was a Minister, as she explained in the Commons on Second Reading:
“When I needed to take maternity leave as the Minister for Public Health in 2001, I asked the Health Secretary what I should do. He did not know, and said, ‘Ask the Prime Minister.’ He did not know, and said, ‘Ask the Cabinet Secretary.’ He had absolutely no idea, and as Ministers are Crown appointments, he said it was really a matter for the Queen, but nobody thought we should be asking Her Majesty”.—[Official Report, Commons, 11/2/21; col. 552.]
The fundamental problem is that the Bill benefits only a tiny number of women at a time when life is more difficult for mothers with babies than at any time in modern history. I wish to ask a series of questions, for which I would be grateful to have a reply from the Minister.
Does this Bill mean that maternity leave is merely a perk granted by an employer if only this legislation is passed? Thousands of women right across the country are having to leave work to care for a child. Stella Creasy MP has pointed out that during the pandemic,
“one in four women who are pregnant or a new mum have said that they have faced discrimination, and that they are losing their jobs or being furloughed”.—[Official Report, Commons, 11/2/21; col. 542.]
Surely this Bill effectively establishes a two-tier system for maternity leave. Where does it leave women MPs of childbearing age? Why does it not extend to them, or, for that matter, to all staff in this Parliament, as other speakers have said? Where does it leave women who are self-employed and who take maternity leave, some of whom have had to take the Government to court to resolve the injustice of the predicament they face? Where does it leave fathers over paternity leave, especially those partnered by women who wish to return to work straight after childbirth?
Surely we need a Bill to give at least every woman in the Palace of Westminster, if not in the country, the same rights that this Bill is giving to the Attorney-General. That being the case, can the Minister indicate whether any advice has been given about whether, once this Bill is enacted, the Government could be vulnerable to judicial review for not granting the same right more widely? As the former Conservative Cabinet Minister, Maria Miller MP, argued during the Commons Second Reading
“being forced to leave a job for being pregnant is exactly what happens to thousands of pregnant women. In righting this wrong for Government Ministers, will the Paymaster General also undertake to right it for women throughout our country? Codifying the protection of a pregnant woman’s job is exactly what thousands of women need now. The people we represent want to know that Ministers are being treated no differently from them. Routinely identifying pregnant women for redundancy is too familiar a problem … We cannot ignore the fact that for thousands, current legislation provides protection only in theory but not in practice.”—[Official Report, Commons, 11/2/21; col. 544.]
That, in a nutshell, coming from a senior Conservative supporter of this Government, is exactly the issue that I ask the Minister to address in his response.
Lord Craig of Radley (CB) [V]
My Lords, I am not the only Member of this House to have been lobbied about the wording of this Bill. I entirely approve of its practical purpose, but I too question the use of the word “person”, when “lady”, “woman” or “mother” would be normal usage in relation to maternity issues or pregnancy and childbirth. I understand the desire to avoid any insensitive use in legislation of gender-specific words, but that convention is not inviolate. We do not stop using the word “Lords” to include all who are Members of your Lordships’ House. The Government’s justification in the other place was that
“the convention that we are now operating under … was introduced by Jack Straw in 2007. The intention of the guidance on using gender-neutral language was to avoid demeaning women by implying that only men could undertake certain roles, and that drafting convention has remained.”—[Official Report, Commons, 11/2/21; col. 594.]
Jack Straw used a ministerial Statement, and a future Parliament is not committed to a convention; it is not law. My personal experience of this was a ministerial Statement by Jack Straw when he was Lord Chancellor in 2008, specifically drafted to enable me to withdraw an annulment Motion, which has since been set aside. In December 2013, answering a short debate about wording and grammar in legislation, the much-respected noble Lord, Lord Gardiner of Kimble, said from the very Dispatch Box in front of the Minister—it is worth repeating in full:
“The guidance also recognises that there must be some flexibility and that there will be some Acts where only gender-specific drafting can be usefully applied. In a case where a person has to be of a particular gender—male or female—gender-neutral drafting does not require drafters to avoid referring to the gender. I think your Lordships would agree that that would be the case for legislation about maternity.”—[Official Report, 12/12/13; col. 1014.]
Does that clear statement not say it all?
Common sense, reflecting the biologically unique role of a mother who bears a child in her womb and brings it to term, says there is no conceivable discourtesy or demeaning of a woman or womanhood by using the correct wording in Clause 1(3). Clearly the Government and the drafters of this sensible Bill have anticipated the unease over the use of the word “person”. The Minister in the other place called the word “jarring”. Why introduce a jarring word, particularly in Clause 1(3), when a totally accurate phrase is to hand to clarify? I thank the Minister for his letter, but I wonder whether he is able to produce any greater defensive explanation than already mentioned, and whether he is prepared to gainsay the words of his ministerial colleague? Espousing the Explanatory Memorandum misses the point.
If Parliament wills it, a convention which may be totally reasonable and sensible in other contexts does not have to be slavishly followed in this Bill. That would make it legally sound. How can there be any grounds for legal challenge in the courts? As drafted, it only invites ridicule of a delusional Parliament, apart from the distress already expressed by many who object to so sensitive a condition as maternity being depersonalised in this way. I look forward to the Minister’s explanation and hope for a reconsideration, but failing that, this should be a matter for debate in Committee.
Lord Morris of Aberavon (Lab) [V]
My Lords, given the number of speakers, I shall take very little of your Lordships’ time. I welcome the Bill to allow Ministers to take paid maternity leave while remaining in Government. The catalyst for the Bill, as we have been told, is the pregnancy of the Attorney-General, and I join other noble Lords in wishing her well.
The office of Attorney-General, which I had the privilege of holding, is unique in the constitution. Shortly after taking office, I swore an ancient oath, in full fig, in the Lord Chief Justice’s court—namely, the noble and learned Lord, Lord Woolf—that I would sue the Queen’s process “after our cunning.” I understand that to mean that I use my cunning in its better sense.
The law officers perform a wide range of duties in the public interest. In those roles, they are independent of the Government and are not bound by the doctrine of collective responsibility. Deploying my cunning, acquired in the course of 11 years in public office, from Cabinet down, I surmised, with the advent of a new Government in 1997, that there might be a gap in the Government’s legislative programme at that point. In short, the Government might not have enough ready-made Bills to hand. As it happened, there was a Bill gathering dust in the law officers’ chambers awaiting such an opportunity to allow the functions of the Attorney-General to be exercised by the Solicitor-General. The Law Officers Bill passed through both Houses without dissent and remains on the statute book as the Law Officers Act 1997.
The Explanatory Notes to the present Bill state that the “legal exercise” of a very senior office, such as a Secretary of State,
“cannot be ‘covered’ by another Minister”.
The Government argue that for these functions to be executed, another Minister may have to be appointed at the same rank. This is the ministerial ceiling problem that the Bill seeks to cure. That must be right for a Secretary of State, but the Bill is of general application and the notes appear to be the same. Will the Minister explain the necessity of the Bill for the role of the Attorney-General? In short, my specific question is: what is the practical effect—other than the payment of maternity allowance, which I strongly support —for the specific office of the Attorney-General, which I, like others, understand to be the trigger for the Bill?
I hope the Minister will assure the House that there is no intention to undermine the office of the Solicitor-General, which is also ancient, having been created in 1461. The Act that I shepherded through Parliament in 1997 to enable the Solicitor-General to exercise all the functions of the Attorney corrected an anomaly in the 1944 Act so that the Solicitor-General can now act without the specific authority of the Attorney-General. I hope the Minister will agree that, other than the payment of a maternity allowance to the Attorney-General, there was no need for this hurriedly introduced Bill to deal with the special needs of the Attorney-General. I look forward to the Minister’s reply. It may well be that the Act that I passed through Parliament was forgotten.
Baroness Hoey (Non-Afl)
My Lords, I thank the noble Lord, Lord True, for the time that he has given in speaking to many noble Lords on this issue in the past week. In my short period in this House, this is the first debate that I have sat through where there has been so much agreement among all noble Lords—agreement about the fact that we all accept that the Bill is being rushed through, and that perhaps it should have happened a lot earlier. Maybe Governments of all complexions tend not to push things until sometimes a particular incident makes that necessary.
It is of course a narrow Bill, which is understandable for the reasons that we have heard. We wish the Attorney-General great health and happiness in what she is going to be going through; I am sure she is looking forward to her maternity leave. There is something to be said for the amendment from the noble Lord, Lord Cormack. I doubt that it will now be taken, but it would have meant that we would not have had to have rushed quite so much to get this through in time for the Attorney-General’s maternity leave.
There have been some wonderful speeches today, demonstrating great expertise. I agree 100% with everything in the amendment moved by the noble Baroness, Lady Noakes. I thought it was a well-crafted speech that more or less said everything that I would have liked to have been able to say, although I would not have been able to say it in quite such a good way. I feel strongly that this today is something that your Lordships’ House has to show some genuine common sense over. I refer of course to the wording and the exclusion of the word “woman” from the Bill. Many people out in the public watching or listening to this or reading about it cannot understand how we in this House of Lords could be suggesting a Bill about maternity while avoiding the word “woman”. The noble Lord, Lord Winston, made many really sensible points about this.
I thought the noble Lord, Lord Hunt, was right in what was almost a condemnation of Her Majesty’s Government for not speaking out over the past years, when now it has somehow become almost unacceptable to say certain things. As the noble Baroness, Lady Jones of Moulsecoomb, said, it has become so that many women and men—perhaps even more so for men—do not want to speak out and say things that would lead to them being trolled on social media or treated as if they were somehow transphobic.
If we in this Chamber and this Parliament cannot start to make a stand then we are on a really slippery slope. The Bill gives us that opportunity. Yes, it could be in a much wider Bill and, yes, it could have brought in all sorts of other issues, but we are where we are, and we need to get it through.
I appeal to the Minister. I know he is not the Minister who will make the final decision, but I hope that today’s debate, showing unanimity on that particular aspect of the wording, means that we will see that change. If we do not do that this time and we leave the wording as it is, that will send a signal that even here, in this wonderful House of Lords, we are not prepared to stand up for what is right and decent and common sense.
Lord Lucas (Con) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady Hoey. Indeed, it is a great pleasure to be part of something that happens occasionally but is always wonderful when it does, which is people around the House, with their various experiences, intelligences and insights, joining together to urge on the Government a really sensible change in legislation.
To the suggestion that this cannot be done in time, I am sure there are others around the House who, as I have, have spent time in the City or in similarly pressured situations and have turned wording around overnight and got it right. Indeed, I know there are people like that in government or we would not have managed Brexit. This is merely an application of the skills that the Government have to this particular instance, and I urge my noble friend to get his friends to sort this out rather than thinking that this is something that can be shuffled through as an oversight.
In the matter of women’s equality, little things matter. Yes, there are big things and big occasions and, yes, there have been through history and are now women who have given their lives for this, particularly now in Iran, but generally progress has been made in little things. Getting the MCC to admit women did not count for nothing. It is a grain of sand but one that has landed on one side of the scales and will not come back. It is going to be a while—we have had about 150 years of progress and maybe it will be another 150 before we get where we want to go—but that does not mean we should flag, give up or let things like this Bill pass.
Motherhood is, I hope, something on which the next decade or so will see real progress. It is not an estate that we honour in this country in the way that we should. Yes, all of us are individually grateful for our birth and I think we all recognise that the estate of motherhood is good for society, but those who undertake it are treated miserably when they wish to come back into the world to take their place, having undertaken that duty for all of us. Are they accorded equality? Are they given the same chance and space as if they had stayed working? No. That will take a lot of change. It will not be easy and it will be argumentative, but it is an issue on which we must push.
The status of motherhood in the Bill, its denigration by the choice of the Bill’s wording, is not something that we should tolerate. As other speakers have said, the attempt to erase the word “women”, to remove all its meaning except to be human, is something that we should not tolerate. We have to stand firm against this. I am hoping that the Minister will hear the call of Millicent Fawcett,
“Courage calls to courage everywhere”,
gather his forces and get this Government to remedy the wrong that has been done. Indeed, I hope they will go further than that and get themselves into a position where they are happy to make it clear that women, women’s rights and single-sex rights have a place in society, and that that shall not be erased by the pressure group that must not be named.
Lord Triesman (Lab) [V]
My Lords, I will start with what I hope is obvious. Among many others, I consistently supported feminists who campaigned for a wide range of women’s rights including maternity rights. I always supported the rights demanded by the LGBT campaigners for same-sex marriage, adoption and many other entitlements to equality. I always abhorred and campaigned against Section 28. I am grateful for the education and clarity of all those involved for my own political development.
It follows that I wholly support the purpose of the Bill, though I wish it were addressing wider issues. I am also very critical of the language in it for good reason. I cannot accept the slurs levelled at women such as Rosie Duffield MP or JK Rowling for simply acknowledging biological facts. I strongly agree with the noble Baroness, Lady Noakes, and I will back an amendment. The vitriol is ghastly and intended to stop proper debate, to bully and to impose cult thinking on what can realistically be understood only through democratic dialogue.
I trust that nobody will repeat what is sometimes said, and is a slander—that those of us who take this view are transphobic or in the pay of some ultra right-wing organisation here or in the United States. The Government should say today that they will speak up for the people vilified for supporting women’s rights. My objections to erasing words such as “women” and “female” from the description of an individual’s biological sex and their replacement with the tortured formulations of the Bill are simple.
First, legislation must be intelligible and compelling to the people who read it or are affected by it. As the noble Lord, Lord Pannick, said, it is very good to know that the Lord Chief Justice understood this. This Parliament is not a private theatre using a private language intended to please a few zealous people. It is a legislature, and legislation belongs to citizens, not to a narrow circle of us. Citizens plainly know that it is women who give birth to babies. Babies are not born of euphemisms.
Secondly, I think most people will find efforts to erase “woman” or words relating to women or their biological sex laughable. We do ourselves no credit by using pretentious meaningless phrases, which nobody would use in their own lives. It patronises people who use plain language about known facts. The Bill, with its laudable purpose, is easy to support. How absurd it would be if its language became a boilerplate for drafting subsequent legislation.
Thirdly, it is an unavoidable and uncomfortable truth that when politicians start using words to describe real people as though they were simply objects—to speak of them as though they are “it”—we erode our sensitivity to the people involved. It was always the way of dictatorships and authoritarians. In our case, it is not what we intend. We probably all accept that it is women who have babies. They are the birth mothers, whoever brings the baby up. However, in this kind of formulation in the Bill, the women and their specific biology become devalued—expunging their recognisable human attributes. In this Bill, let us get rid of foolish metaphors, similes and ill-crafted figures of speech and replace them with everyday English. Our laws and words must never treat people as non-human things.
Finally, like many other noble Lords, I have read the Commons debate and the Minister’s letter to us. I listened carefully to what the noble and gallant Lord, Lord Craig, said today. I am sorry to say that the Government have been inaccurate in what they have told us. There was no new legislative edict from Jack Straw, with whom I worked. I will bet no one has even talked to him. He wanted gender-neutral words where possible. There is no need for a word such as “chairman” and it is sensible to use “police officer” or “firefighter” or terms which cover both sexes and any gender choice. In these cases, there is no need or purpose for gendered language. That is what Jack Straw intended.
However, the truth is that legislation on maternity rights, employment data, healthcare provision and many of the things the noble Lord, Lord Hunt, and others have spoken of, almost only ever refer to women precisely because there is a specific need and specific purpose. This is so that any normal person can read and understand the legislation.
I appeal to the Minister to be truthful about this. Do not hide in the thickets of the Explanatory Notes. Our excellent Library has provided copious evidence in legislation—no metaphors, no similes, no foolish figures of speech. We are not living in a regime which requires or writes its laws and explanations to obscure and confuse its citizens. Our sole aim here is to ensure that senior women politicians have maternity rights, just like other women. Many other rights should have been in the Bill as well, but it at least does that. It does so for their own well-being and that of their babies. It is that simple.
Baroness Fox of Buckley (Non-Afl)
My Lords, it is a pleasure to follow the noble Lord, Lord Triesman, because that was a brilliant speech. I have found the speeches today humbling, articulate and wonderful, and noble Lords will know that I do not often start my speeches in this manner. I think we have captured that this is not just a matter of words. There is something else going on and I hope that message comes through.
When I was a teenager, my working mother excitedly told me about the Employment Protection Act 1975, which introduced the first maternity leave legislation. She was thrilled that this would give me and my two sisters choices about work and change everything for future generations of women. In school, my radical English teacher enthusiastically showed me trade union and campaigning leaflets. She proclaimed that maternity leave was a key step for women’s equal employment rights. Her enthusiasm for political change was infectious and I have to confess that I caught the bug. We have to remember that, until then, every woman knew she could get sacked for getting pregnant and faced open discrimination, often related to maternity. I suspect that my mother and teacher would be delighted to know that things have improved so much for women that we can now focus on ensuring that women at the top of government will not be expected to resign because of pregnancy and will have six months’ leave on full pay.
As other noble Lords have noted, the Bill is rather narrowly focused on the women in Westminster. I rather wish that Parliament would show such speed and a sense of urgency in tackling the ludicrously low statutory maternity pay and weak employment protections for ordinary working women on maternity leave. Despite this, I see the Bill as a step forward for women’s rights.
But wait—as we have heard from so many today in the brilliant speeches, can we or the Government claim that it is a gain for women’s rights when the words “women”, “she” or “her” do not appear even once in the Bill? We are assured that this is merely a technical drafting matter. If so, can the Minister organise an urgent review of official drafting guidance so that we can explain that gender-neutral language is not appropriate for sex-specific issues?
The noble Lord, Lord Randall of Uxbridge, said that he did not see a problem with the language used. He implied that it was a bit like saying “chairperson”, but giving birth is not like chairing a meeting. Erasing women from public discourse on maternity is not ahead of the curve; it is regressive and demeaning. It is not people who get pregnant; it is women. It is women who give birth. It is women who benefit from maternity leave and it is women’s rights at work that we want to protect. If we erase the word “women”, the danger is that we erase the struggle for women’s rights that got us here.
I stress that, of course, not all women want to be mothers. Not all women can be mothers or are even good mothers. In my opinion, child rearing is well and truly not a mother’s natural job, but the words “woman” and “mother” have specific meaning. It horrifies me that it has become so contentious to say so. I have been gratified in this debate by how supportive people have been of the amendment. If anything shows that this House is far removed from the rest of society, it is that most of us would be cancelled if we said these things anywhere else but in this House. There is a toxic, nasty thrust to political life today. I would like to acknowledge the courage of the noble Baroness, Lady Noakes, and others for speaking out. This is because, as the noble Lord, Lord Hunt, explained, people here will be labelled TERFs and transphobes and will go on hate lists for speaking out. That is the reality.
I say to the Government, please do not be either naive or disingenuous. These language rows are not technical. As many noble Lords have articulated so passionately, we have to consider the political context. The day after the debate on the Bill in the other place, I watched a male Labour MP on BBC “Politics Live” repeatedly refuse to say whether maternity law should refer to the pregnant “person” or “woman”. Why was it so hard for him to say that? I am not making a party-political point; we see this across the political spectrum.
These new language codes and norms are mandating us to adopt doublespeak. Why do I need to describe myself as “cis woman”? I am a woman; that is it—enough. I am not a uterus holder, nor a person with a vagina nor a chestfeeder. These are linguistic abominations, but they are not harmless. Ultimately, these body part descriptions demean women and are a linguistic assault on the notion that biological sex exists at all. There are consequences of this. For example, in medical challenges specific to biological females, how can healthcare workers discuss the risks of mastitis infection if they have to replace “breast” with “chest”?
We can see how language is being weaponised in other areas deemed technical. You cannot get more technical than the census. As the noble Baroness, Lady Noakes, noted, there is now a huge furore about the politicised wording of the questions. The census is a hugely important inquiry to gather factual data and accurate statistics. Dr Debbie Hayton, a transgender woman, teacher and trade union officer, rightly points out that
“the gender-identity lobby has been working hard to obfuscate the issue by mangling sex with gender identity”.
This place is not a students’ union. On too many campuses, mangling and obfuscating language and linguistic policing are often used to undermine academic freedom and to smear and damage the reputation of feminist academics. Noble Lords should check out the new website, GC Academia Network, to read some horrifying tales. In some ways, we might expect this to go on in a students’ union, but this Parliament should not be like student politics or, much worse, even consider removing the word “woman” from this maternity Bill. We in this House—and even more so in the other place—are answerable to millions of women, men and transgender people—that is, transgender people as distinct from transactivist lobbyists. Those millions would expect, in plain language, that legislation expanding maternity leave would benefit women’s equality. I suspect that those millions of citizens would be horrified to think that any part of our legislative body was in thrall to the small—if loud—lobbying organisations which, make no mistake, are using language as a battering ram to march through the institutions and to eradicate the crucial distinction between biological sex and subjectively-defined gender identity, and which bully and intimidate anyone who refuses to repeat the mandated correct terminology.
I urge the Minister not to let the absence of one key word betray the embryonic gains of the 1975 maternity leave legislation and the hopes of my mother, my teacher and my teenage self. It would mean something for women’s freedom. Do not betray us now.
Baroness Brinton (LD) [V]
My Lords, I too support this Bill, even though it does not go far enough in giving Ministers who are parents the same rights that other workers have now come to expect. As others have already said, these include adoption leave, sick leave and shared parental leave. The last is particularly important and affects any Minister who becomes a parent and who is still missing out on the rights to share in the care of their new baby with their partner. I hope the Minister will remedy this urgently.
There is one other parental benefit that has not yet been mentioned—statutory parental bereavement pay and leave. I worked with the noble Lord, Lord Knight of Weymouth, for a number of years to win this right for parents, but it is omitted from this legislation for Ministers. I urge the Minister to ensure that it is added to the other forms of parental allowance and leave for future discussion. One hopes that it is never needed but it is vital to have it in place to cover such awful circumstances.
My former colleagues, Jo Swinson and Jenny Willott, both had their first babies while they were Ministers. No arrangements were made for them. They had to cover for each other without maternity pay at exactly the time when they were working in government for better rights for women and parents in the workplace.
I agree with my noble friend Lady Hussein-Ece about the lack of equality impact assessments. We need to remedy this and to reflect on why, as a society, we have moved over the years to gender-neutral language. The gender-neutral language in this Bill is inclusive. Changing it, as many speakers have asked, would make it exclusive—perhaps not to many, but to some people for whom it matters a great deal. No one is trying to erase women but rather to accept that, over recent years, there have been advances in medicine. I am grateful to the noble Baroness, Lady Jones of Moulsecoomb, for referring to trans men in Brighton. We also have to remember that non-binary and intersex people who were born women would be excluded. Both equality law and clinical care have kept pace with them and their circumstances. Medical care, in particular, has adapted in order to provide the best possible care for them in rare and difficult circumstances. That is why I would gently correct the noble Baroness, Lady Noakes, in her reporting of the Brighton hospital trust introducing “chestfeeding” and “pregnant people” and removing “breastfeeding” and “women” from its documentation. It is not. Snopes, that excellent debunker of myths, explains this carefully:
“A maternity department at a U.K. hospital announced in February 2021 that it was expanding terms it used in maternity care to include, for example, ‘chestfeeding’ and ‘pregnant people’, in order to be more inclusive of trans and nonbinary patients … To be clear, the NHS said that such language—like referencing ‘pregnant women’ and ‘breastfeed’—will not change for those who identify as such … Adding terms like ‘chestfeeding’ and ‘birthing parent’ was not intended to take away from women-oriented language already in use. Rather, the move was meant to be additional support that offers more inclusion for trans and nonbinary individuals.”
I was also moved by the remarks of the noble Baroness, Lady Grey-Thompson. Like her, I am disabled and have been on the receiving end of some pretty despicable hate crimes and trolling. Just like her, I am concerned that the trolls will descend on me this evening, but they will be those from the other side of her argument. However, that is nothing as to the daily abuse that trans and non-binary people suffer.
Over the years, your Lordships’ House has learned how to disagree well. In this sensitive debate, I hope that people who are not here with us in the Chamber will choose to watch and listen to those on both sides of the argument. I have heard from trans men that, even though there are currently no trans Members in either the House of Lords or the House of Commons, they think it is important that language used in legislation remains inclusive. Using the word “woman” excludes trans men and therefore removes their rights.
Finally, we must focus on the specific nature and the urgency of this Bill. I hope that the Minister can reassure the House not only that the Bill will proceed but that all Ministers who are new parents will benefit from the same parental rights as workers across the country.
Baroness Nicholson of Winterbourne (Con)
My Lords, I thank my noble friend Lady Noakes for her determined and timely action in flagging up the wording in this Bill. I thank the Minister for his sensitive and careful acceptance of the comments that several noble Lords have brought to his attention on the use of the word “person”, as opposed to “female”. As other noble Lords have noted prolifically in this important debate, the drafting of the Bill has eliminated females from the very act that only a female can carry out.
As a former Member of Parliament, of the European Parliament and of the Parliamentary Assembly of the Council of Europe, I have fought all my political life to bring females in to all aspects of politics and in to all circles of political power and responsibility at all levels of society. As a former director of the world’s largest children’s charity, a senior consultant to another six or seven of the world’s largest NGOs serving children, and a former World Health Organization ambassador, I know well that the child to be trafficked, abused, enslaved or sold is the one who has been successfully detached from its mother. In this Bill, this detachment begins before conception.
The knowledge that, both before and after birth, a mother is needed for the foetus to be safely developed in the womb and securely delivered with a safe birth, underpins the Children Act and all child’s rights enshrined in the United Nations Convention on the Rights of the Child, both of which were framed and intensively discussed, debated and agreed by our former, late, much lamented and loved colleague Baroness Faithfull, whose work for children seemed eternally enshrined in British law. This Bill betrays her heritage, as much as it betrays that of Professor Bowlby, with his attachment theory for babies and children throughout their beginnings.
This is something that successive British Governments have always known about and supported. Article 10 of the International Covenant on Economic, Social and Cultural Rights, signed in 1976 and ratified by the UK in the same year, states that:
“The States Parties to the present Covenant recognize that: The widest possible protection and assistance should be accorded to the family, which is the natural and fundamental group unit of society”—
that comes out of the European Convention on Human Rights, of course—
“particularly for its establishment and while it is responsible for the care and education of dependent children. Marriage must be entered into with the free consent of the intending spouses. Special protection should be accorded to mothers during a reasonable period before and after childbirth.”
The Government are right to put this Bill forward because, as Article 10 goes on to say:
“During such period working mothers should be accorded paid leave or leave with adequate social security benefits.”
Nothing could be more suitable than that. However, we also have CEDAW, ratified by the UK in 1986 to
“provide special protection to women during pregnancy in types of work proved to be harmful to them”,
and to
“ensure to women appropriate services in connection with pregnancy, confinement and the post-natal period, granting free services where necessary, as well as adequate nutrition during pregnancy and lactation.”
Nothing could be more appropriate for this Bill, which our Government have correctly put forward, save that both those great statements mention women—mothers, females, not persons. In the dictionary, “person” means man, woman or child.
Today this House is talking about a female activity. I find it astounding that half a million years of human knowledge, custom and practice is cast aside for the sake of today’s unwillingness to recognise reality; to discard “mother”, “female”, “woman” in favour of a mythical being, the neutral “person”, the very neutrality of the word negating females. Those successfully impregnated by males for conception are females. Maternity is not a male activity, nor can it be hijacked by a change of wording. While wishful at all times of supporting mothers at any stage of their responsibilities, I cannot sit silent while we wipe the female out of a piece of maternity legislation which is designed for her.
Of course, we want our laws to be understandable to the ordinary person. That means everyone who votes and those who are not yet old enough to do so. One of our most wonderful authors, Shakespeare, has a lot to say about motherhood and mothering. He refers to breastfeeding several times, for example in “Romeo and Juliet”, “Macbeth” and “The Winter’s Tale”, in which he presents the heavily pregnant Queen Hermione. In “Pericles”, Queen Thaisa vividly gives birth to a princess during a storm at sea. I will give an example, from Shakespeare, of what happens when you lose the word “mother” or “female” and replace it with “person”. It makes a very interesting distinction. This is from Sonnet III:
“Thou art thy mother’s glass and she in thee
Calls back the lovely April of her prime;”
Now let me use the wording of the Bill:
“Thou art thy person’s glass and it in thee
Calls back”—
what can it call back? It cannot be “the lovely April of its prime”. I suggest we can only offer that it calls back “the flat and gloomy February of our time”.
If, despite his kind words, the Minister is unable to offer any real sweetness to salve our strong concerns, would he be willing to accept a full debate on language used in legislative drafting, in other governmental organisations and institutions, and in those which are sustained by funding from the Government, such as schools? The concerns of this House today about language cannot be easily ameliorated, as the present debate so clearly shows. I deeply and profoundly regret the drafting and the misgendering of women in the Bill.
Lord Young of Norwood Green (Lab) [V]
My Lords, it is fascinating how such a small Bill has demonstrated the ability of the House of Lords to rise to the occasion and scrutinise every word and line. I welcome the Minister’s assurance that he was listening carefully to the debate. His recent letter gave some reassurance, but not enough. It did not deal with what most of the speakers today regard as a misinterpretation of the guidance.
The noble Baroness, Lady Noakes, started this debate with a bang. She used a colloquial term, “garbage”, to describe the failure of the Bill to recognise the role of women in motherhood, and she was right. As the noble Lord, Lord Hunt, reminded the House, we are privileged to have this debate in a non-toxic atmosphere, without being accused of transphobia. That would be ironic because, as he and many other noble Lords said, most of us have spent our adult lives fighting against homophobia, racism, anti-Semitism and Section 28. We do not need to be taught lessons on tolerance and being anti-discriminatory. No wonder there are mixed messages from the Government. The gender equality office takes advice from an organisation called Gendered Intelligence and carries its logo on its letterhead.
A number of noble Lords were right when they said that the Bill is less than perfect. In her moving contribution, the noble Baroness, Lady Grey-Thompson, demonstrated what it was like to experience discrimination; we felt for her. My noble friend Lord Winston showed how women struggle to achieve motherhood. The noble Lord, Lord Pannick, took the House through the legal minefield to arrive at the conclusion of women in the role of motherhood. As I have said, the Bill is too narrow, and I hope that the Minister will give an assurance that the Government will look at the wider issues.
We do not normally vote on regret Motions in this House, and I think the noble Baroness, Lady Noakes, indicated that a vote was not her intention. This is helpful, because it gives the Minister the opportunity to consider the overwhelming feelings of this House. The noble Lord, Lord Lucas, the noble Baronesses, Lady Fox and Lady Hoey, and a whole range of speakers from all the Benches demonstrated their support for the amendments. I know the Minister is in a listening mode; he has agreed to a further meeting with Peers, which I hope will enable him to reconsider his response to the amendment in Committee.
The noble Baroness, Lady Brinton, was wrong, I feel, when she said that if we used the word “women,” it would discriminate against trans men, as was demonstrated by the noble Lord, Lord Pannick. It is ironic that the recent decision by the Office for National Statistics to cave in to the demands to remove sex from the forthcoming census, and allow gender identification instead, will actually work against ensuring that services for transgender people will be provided.
I end my contribution by thanking the House for having this debate in a rational logical way, where Members did not worry about which party they would normally, if you like, support but looked at the issue carefully and rationally. The overwhelming majority of people who contributed to this debate saw the need for amendments. I hope that, in making his response, the Minister will recognise this strength of feeling.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I thank the Minister for providing the background to this short piece of legislation, and I wish the Attorney-General well with her pregnancy leave and her confinement.
There has been striking unanimity during this debate, and at the end of a long list of speakers certain themes have emerged, such as language and whether it is better to use the word “person” or “woman”. In my view, it is women who give birth, so I favour the use of the word “woman”. But I want to be clear that I am not opposed to other gender-specific areas.
Other issues were raised, and it became evident that the Bill is seen to be narrow in focus and needs to be widened. Therefore, there is an opportunity for the Minister, when he comes back later this week, to bring forward amendments to widen the scope of this Bill.
Notwithstanding that, I support this Bill, because the Government are addressing the realities of wider society. Many people in senior responsible positions are women, and the Government are helping to ensure public life is being made more accessible. It is a fundamental right to take time off to have a baby, and it is important there is financial protection to celebrate motherhood.
I support the general thrust of the legislation as a first step towards addressing working conditions for women in Parliament. It does, however, miss an opportunity to address pay and working conditions for ordinary women who earn low incomes and are forced to work long hours in advance of pregnancy and, often, to return to work a short period of time after the birth, endangering their health and preventing a proper early bonding relationship with their child. That issue requires urgent attention. As my noble friend Lord Hain said, in Covid conditions such situations become that bit more acute. So I would like to hear from the Minister how he and the Government intend to address these issues for all working women who face motherhood.
Because Ministers and their opposition numbers are appointed, there is not security of tenure in the employment, and they should be financially protected, and theirs jobs secure, during their pregnancy leave. The provisions in the Bill mean that Ministers and those holding principal opposition offices will not have to resign, and they create a discretionary power for the Prime Minister and the leader of the Opposition in the relevant House to grant certain office holders six months’ maternity leave. But it is important that this is extended to women MPs and MPs on paternity leave, shared parental leave and adoption leave—to widen the scope and remit of provisions of this Bill. I look forward to the Minister addressing these issues.
Both the Minister and Penny Mordaunt, who introduced the Bill in the other place, said the Government would bring forward proposals to address outstanding parental leave issues. When will this happen? What will be the extent and remit of such proposals? Will they be subject to legislative provision? Reference has been made to the fact that discussions have taken place regarding this matter. With whom, and for how long, have they been going on? Do they involve the Lords? Do they include provisions for maternity leave entitlement or for those seeking to adopt or those on shared parental leave? Will the new provisions include the need for the Government to strengthen the employment rights of pregnant women and new parents across the UK? Will it also include redundancy protection for pregnant women and new mothers?
The noble Baroness, Lady Brinton, referred to bereavement leave. I think that is a particularly important issue, and maybe the Minister could advise us on that. There is also the need to focus on: the wholly inadequate levels of maternity allowance and statutory maternity pay; the lack of employment protection for women on maternity leave; and the low level of take-up of parental leave by fathers because many cannot afford to take it.
I am happy to support the provisions in this Bill, as far as it goes. But I believe the remit and the strength of this Bill will be in the Minister bringing forward government amendments to widen the scope of the Bill to ensure it covers a wider spectrum of women.
Lord Tyler (LD) [V]
My Lords, first and foremost, I am sure all Members of your Lordships’ House will want to join me in offering our best wishes to the Members of Parliament for Fareham, Enfield North and Walthamstow. As we all now know, Suella Braverman, Feryal Clark and Stella Creasy are expecting babies in a few weeks’ time. Access to appropriate maternity leave is equally important for all three.
There has been a tendency for successive Governments to inflate the importance of Ministers at the expense of Parliament, and this Government are certainly not immune. But under our constitution, Ministers are accountable to MPs, who are themselves accountable to constituents—not all the other way around. It follows that it is vital for MPs and their constituents to be effectively reinforced for parental leave that they are encouraged to take.
It happens that the Member for Fareham is to be fully supported in her ministerial role, throughout the six months’ leave, by this Bill. What about her MP role? I am sure her constituency office staff would do an excellent job with her casework, and she would, presumably, be able to nominate a proxy to vote for her.
However, the electors of Fareham will be without a parliamentary voice for the period of leave, and that will also be true for the people of Enfield and Walthamstow. When I was shadow Leader of the House of Commons for the Liberal Democrats, I worked with Robin Cook and Sir George Young—now the noble Lord, Lord Young of Cookham—to seek ways to strengthen the role of Members who did not seek ministerial advancement. That led, among other things, to improved status and influence for committee chairs.
But the Bill provides the Government an opportunity to drive a further wedge between the treatment of Ministers and MPs. That cannot continue indefinitely. As my noble friend Lord Wallace of Saltaire pointed out, the gestation of this narrow Bill has been much longer than a pregnancy. It is disappointing that the opportunity to develop a much wider reform has not been taken. Indeed, as the noble Baroness, Lady Hayman, pointed out, with her memories of the inconceivable situation that arose in 1976, it is curious that this must be emergency legislation after decades of inadequate gestation.
There are other ways in which this ad personam Bill must clearly be followed by more comprehensive legislation, as my noble friends have been emphasising in this debate. There are serious inequalities to be addressed both inside Parliament and beyond. Better provision for all forms of parental leave has been a theme right through the debate. For all MPs would be a good start, but paternity, adoption, shared parental and child bereavement leave all need to be addressed urgently, not just for MPs but more widely. In that context, I was very moved by the contribution of the noble Lord, Lord Winston, whose professional evidence we all take so seriously.
The MP’s life is exceptionally demanding. I knew that, but it has become even more so since I was a Member. My wife was expecting when I defended a tiny majority in October 1974, only to lose it by a few hundred votes. In retrospect, we both agreed that this was a blessing in disguise, when the first months of 1975 were dominated by the arrival of our new son, to join a very lively two-year-old daughter. I do not think that I would have been able to give good service to my constituents then. If the constituents of Fareham, Enfield and Walthamstow—and many others in future—are not to be discriminated against, the Bill is addressing only a relatively minor problem. Ministerial duties can be undertaken by others, with a huge back-up of civil servants, but not so parliamentary duties.
I have no doubt that the Minister will have at his fingertips comparable maternity allowance provision, not just as recommended for MPs’ staff but for all the employees of the two Houses of Parliament, to set beside what we are considering simply for Ministers and a few others. If he does not, I am sure that in his usual way he will have the courtesy to let us see something to compare before the further stages of the Bill. Meanwhile, as all my colleagues have urged, and other Members right across the House, if the Government mean what they say about the need for generous parental leave, then they cannot give up on the process to provide it throughout the country once the Bill is passed. I hope that it will be passed—but words are significant, especially in legislation and especially in this place. Of course the semantic concerns expressed on all sides are important, and I do not envy the Minister’s job in squaring the circle to achieve plain speaking and accessible language in the context of the Bill, as he has been asked to do. Personally, my bafflement is very simple: I do not really understand how “women” is legislatively unacceptable but “maternity” can be used throughout the Bill from its Title onwards. The dictionary definitions seem equally restrictive.
Above all, we note the promise from the Paymaster-General, Penny Mordaunt. In the Commons Second Reading, on 11 February, having acknowledged pressure from all parties for a more comprehensive nationwide approach to parental leave, with legislative proposals, she said:
“I think we should be bringing this back to the House before the summer recess in order to address those other issues.”—[Official Report, Commons, 11/2/21; col. 559.]
As the noble Baroness has just said, a lot of us are looking for that—and the Paymaster-General was referring to legislation, not just consultation. That sounds to me like an expectation of inclusion in an early summer Queen’s Speech. On behalf of my Liberal Democrat colleagues, I ask the Minister to reiterate that promise. Our support for the Bill is not unconditional; we support it but we hope that it leads to the much greater, more comprehensive improvements to all parental leave which we are looking for. It would be totally unacceptable for Parliament to give special maternity entitlement to Ministers—and in Clause 4, to a small selection of Labour officeholders—without that firm commitment to make progress for wider parental leave to both MPs and the nation which they serve.
Baroness Hayman of Ullock (Lab) [V]
My Lords, I welcome the Bill. A maternity Bill to support parliamentarians has been too long in coming forward, and I add my best wishes to the Attorney-General, whose pregnancy has finally spurred the Government into action. My noble friend Lady Hayter of Kentish Town, who has spent so much of her exemplary career working to improve women’s rights, said in her speech that it is hard to believe that it has taken so long for us to have come this far.
Repeatedly, the Government have insisted that reforming maternity rights would take time, so it is disappointing that the Bill is being rushed through with such a narrow remit. I have listened carefully to the debate today, and the many important contributions as to how this Bill could be significantly improved. The Minister stated in his opening remarks that this is just the beginning of the journey of reform, so I hope that as well as listening he has heard, and that the Government will act on the well-needed improvements without delay. A number of noble Lords, including my noble friend Lord Hunt of Kings Heath in his passionate speech in support of women, and my noble friend Lord Winston, speaking from the heart about his extensive experience, have talked about the language used in the Bill, and particularly the use of “person”. As has been pointed out, this is at odds with other legislation covering maternity rights and protection, including the Equality Act 2010, which uses “her” and “woman” specifically. The noble Baroness, Lady Noakes, clearly explained why she is concerned about this in introducing her regret amendment. In his letter to noble Lords on this issue, and in his introduction, the Minister explained that the wording reflects modern drafting convention and guidance and looked forward to discussing it further at this Second Reading. My noble friend Lady Morris of Yardley was particularly informed on this issue, and I am interested to hear the Minister’s more detailed response in his closing speech.
There has been much discussion of the number of omissions in the Bill as it stands. As I know the Minister recognises, the proposals do not include any provision for paternity leave entitlement, premature baby leave, those seeking to adopt, or those on shared parental leave. It is a shame that the Government have not given more detailed consideration to a Bill which has such importance to women parliamentarians, and which has the potential to encourage more young women to take up a parliamentary career. With more thought and proper consultation, the Bill could have been so much better.
We should be encouraging more fathers to take up paternity and shared parental leave. The Bill sends out the wrong message by failing to make those provisions, and as drafted helps only a small number of women. I was especially interested to hear from my noble friend Lady Hayman about her experience of having a baby as a Member of Parliament in the 1970s, and how dispiriting it is that there has been so little real progress since then. Backbench MPs are able to take maternity leave, as we know, but have no guarantee that their constituency responsibilities will be covered in their absence. Following the debates on the Bill in the other place, IPSA published a consultation on funding MP parental leave and allowing MPs on parental leave to hire new staff to cover their constituency duties. The consultation closes shortly, and I hope that the Government will take swift action to bring in this much-needed support for all Members of Parliament. As my noble friend Lady Gale mentioned, it is concerning that no equalities impact assessment has been published. An EIA might have highlighted the Bill’s many deficiencies and brought a focus on wider paternity rights issues. Can the Minister assure us that the promised improved Bill will include an EIA?
As other noble Lords have done, I now draw the Minister’s attention to maternity leave pay. The Bill effectively provides for salaried Ministers and opposition officeholders to receive six months paid maternity leave. The Explanatory Notes explain that this is comparable to maternity pay in the Civil Service and Armed Forces. However, as has been pointed out, this is far more generous than the statutory rate of maternity pay and maternity allowance, which can leave many women in financial poverty. The Government need to address this—babies are very expensive.
Noble Lords have talked about the fact that the speed with which the Government are acting to make sure that the Attorney-General can rightly take maternity leave is in stark contrast to their failure to support pregnant women, who have faced discrimination and hardship throughout the pandemic. The Minister will no doubt be aware of the recently published report by the Women and Equalities Committee on the gendered economic impact of Covid-19. It specifically highlights the position of pregnant women who have been incorrectly put on statutory sick pay instead of maternity pay and those who have been denied furlough, even though they were entitled to it, because they were pregnant.
It is disappointing that the Government are yet to act on their commitment in the December 2019 Queen’s Speech to strengthen the legal protection against redundancy for pregnant women and new parents and introduce leave for neonatal care. Will the Minister confirm that the Government will act on the committee’s recommendations? Although it may be outside the noble Lord’s remit, will he provide an update on the Employment Bill, which could include provisions on such things as miscarriage leave, and leave for parents with a sick child?
It is clear from today’s debate that there is much work to be done to improve the Bill, but also that the proposals have strong cross-party support and a commitment to see improved legislation as soon as possible. It is vital that the areas that have been omitted and other issues are addressed. As the noble Lord, Lord Tyler, just said, when the Bill was debated in the other place, the Minister said that we should bring this back to the House before the Summer Recess to address those other issues. The Minister himself has referred to an update. Will he confirm that the Government’s intention is indeed to bring the Bill back before the Summer Recess? On the understanding that better legislation will be achieved by cross-party working, will he confirm that the Government are committed to this so that we can properly reform the narrow Bill before us today?
Lord True (Con)
My Lords, it is a privilege to respond to the debate, which I have listened to intently and with deep consideration for what everybody has said. If I may be allowed a personal comment, I too was moved by what the noble Lord, Lord Winston, said, because the reason there were seven years between my late brother and me was that my mother was one of the women to whom he referred and, of course, never forgot that. In my life, I have tried to follow the example of that remarkable woman. Part of that example was always that you should listen to the other person and that bullying and hatred have no place in personal life or public life. I echo very strongly what the noble Baroness, Lady Grey-Thompson, said on that in her intervention. No one should have fear in expressing any view. We have heard contrary views in this debate—although there has been an overwhelming voice on one side, we have heard countervailing voices—and I assure the House that I respect all those.
I thank everybody who has taken part. The contributions have been insightful if, from the Government’s point of view, sometimes challenging. I have rarely heard the House so unanimous, or near unanimous, in its expression of concern on the two main points that have come out of the debate: first, what we do next in broadening the work, which I spoke about in opening; and, secondly, the issue of language, on which many have spoken.
Before I come to that, I shall answer some of the other points raised in the debate. We could begin on one point on which I think we are all agreed: although the Bill is specific and limited, it is a significant reforming measure for women and points the way to wider reform. I welcome that that has been recognised by most of those who spoke. The Bill makes an important and long-overdue change to existing law by for the first time enabling senior Ministers to take paid maternity leave. The prior situation—that such a woman had to resign—was unacceptable and, frankly, shameful in the 21st century.
I am grateful to my noble friend Lady Noakes for her heartfelt contribution at the outset of the debate. The very fact that she has tabled an amendment demonstrates her feeling on the subject. If she and other noble Lords will permit, I will address some of the other concerns first and come to the language later in this speech.
I am grateful to the noble Baroness, Lady Hayter, for her support for the Bill. She rightly highlighted the past injustice of women having to make a choice between having children and pursuing a career. That is entirely wrong. It is why the Bill and what I hope will follow are so important. The Government acknowledge that the Bill does not resolve wider issues, and we will present a report to Parliament. I shall say more about that later, setting out considerations and proposals.
I turn to some other points raised in the course of the debate. On the constitutional aspects of the Bill, particularly the royal prerogative and how the Bill operates in that space, several noble Lords, including the noble Lords, Lord Wallace of Saltaire, Lord Hain and Lord Pannick, and the noble Baronesses, Lady Hussein-Ece, Lady Grey-Thompson, Lady Jones and Lady Hayman, asked why the Bill does not grant a right to maternity leave and why it remains within the Prime Minister’s discretion to appoint a Minister as a Minister on leave. As my right honourable friend the Paymaster-General said in the other place during the Bill’s passage, Ministers are not employees and therefore do not enjoy employment rights. They are officeholders appointed by the sovereign on the recommendation of the Prime Minister of the day. The Bill is careful to ensure that the arrangements put in place to allow Ministers to take maternity leave do not interfere with that prerogative in relation to the appointment of Ministers.
Noble Lords, including the noble Baronesses, Lady Hayter and Lady Grey-Thompson, and many others, said that while the Bill is welcome, it does not go far enough. I agree, as I said in my opening speech and just now. The Prime Minister has acknowledged that the Bill does not resolve wider issues such as ministerial adoption and parental leave, absences for sickness and other measures—we heard about some in the debate—or unpaid roles and that we should proceed to consider them too. I will come to that in more detail later.
Noble Lords, including the noble Baroness, Lady Hussein-Ece, also raised maternity provision for Members of the other place. I pay tribute to the noble Baroness’s work as part of the APPG on Women in Parliament, which advocated paid cover for Ministers in 2014. In respect of Members of Parliament, it is a matter for IPSA, which is entirely independent of the Government, and for Parliament itself. I note and welcome the fact that IPSA has launched a consultation on funding for MP parental leave cover and I encourage all those with an interest to make their views known to IPSA.
Others raised wider issues affecting pregnant women across the country. That was the gravamen of the wind-up speech by the noble Baroness, Lady Hayman, whom I welcome to her position on the Front Bench opposite. Pregnancy and maternity discrimination is already unlawful, but the Government have recognised that pregnant women and new mothers continue to face challenges in the workplace. They have consulted on this issue previously and published their response in the summer of 2019. We are looking to bring forward reforms to the current statutory framework, as was committed to in our manifesto. It will provide security for expecting and new mothers, and flexibility for employers.
I thank noble Lords, particularly my noble friend Lord Bourne, for their advocacy on behalf of unpaid Ministers in your Lordships’ House. I recognise that this is an issue, and, understandably, a number of noble Lords feel strongly about it. I am happy to confirm that the Written Ministerial Statement laid by my right honourable friend the Prime Minister specifically envisages the use of unpaid roles as being within the scope of further work that the Government have committed to, following the Bill. The Government will present a report to Parliament setting out considerations on this matter, alongside the other matters that I have explained. I paid careful attention to the remarks of my noble friend Lord Bourne and others, and I hope to be able to update my noble friend and the House on the progress of that work by the Summer Recess, as was stated by my right honourable friend the Paymaster-General in the other place.
I thank the noble Baroness, Lady Gale, who made a powerful speech, and others for their points on equalities impact assessments. It is absolutely right that the Government should give proper consideration to the equalities impacts of a policy underlying any legislation. Although the provisions of this Bill are of narrow scope, they apply to all ministerial offices and the opposition officeholders who are paid under the ministerial salary legislation to allow for maternity leave. This means that, for those women who are Ministers or are considering accepting appointment to ministerial office, there is now less of an impediment or barrier to doing so when considering starting a family at the same time. This improves equality and removes an injustice. It is part of the wider work that I have referred to before, which will look at, among other things, parental leave, adoption leave and the position of people in public life who are not Ministers. The Government have undertaken that, as part of that, they will take into account the equalities issues. The starting point will be to consider the impacts of the current legislation, as well as work from relevant Select Committees.
The noble and learned Lord, Lord Morris, raised the Law Officers Act 1997. He is of course right to say that, by virtue of that Act, which he helped steward through Parliament, the functions of the Attorney-General can be exercised by the Solicitor-General. That provides important flexibility on a day-to-day basis. However, I hope that the noble and learned Lord will recognise that that is not a solution for a planned and ongoing leave of absence.
In addition, the office of Attorney-General, as chief law officer for England and Wales and chief legal adviser to the Crown, is an important part of our constitution. Advice on the most serious and sensitive issues is provided to the Cabinet by the Attorney-General, who attends Cabinet. In those circumstances, it is not about the possibility of the Solicitor-General deputising but about ensuring that there is clarity about who discharges the role of Attorney-General.
I would now like to address the concerns raised in the other place and so strongly and repeatedly in this House today regarding the language used in this legislation. In the debate, almost all noble Lords raised the fact that the Bill refers to “persons”, rather than “women”, who are pregnant. What others see as neutral language, many of your Lordships have perceived as rejecting the special role of women in childbirth. Questions have been raised about whether this is the application of extreme gender ideology. It is not. The overriding drafting principle for all legislation is that we must create the legal conditions to deliver the policy intent.
I will address the specific issues directly and hope to be able to give the House some reassurance, but it is important to disentangle the broader issue of non-specific language on the one hand and how it is perceived and operates in the Bill. I submit that few would want to go back to the situation before 2007, when, for example, “he” was regularly used in legislation to embrace women. That, as many have argued, was seen as demeaning. The changes introduced by the then Labour Government and supported by successive Governments of all parties have sought to avoid gender-specific pronouns and usages when drafting legislation. Whatever the concerns expressed in this debate—I heard them and will come to them—I have not heard any call for the wholesale overthrow of the inclusive drafting conventions used since 2007. The Government continue to believe that that change was right.
I will come to the specific context of the language of this Bill. However, the Government do not—this reflects our discussions with the Official Opposition—propose to amend this Bill, for several reasons. First, the specific circumstances of the Attorney-General’s pregnancy mean that there is some urgency to secure Royal Assent to allow her to go on maternity leave. Secondly, in that context, the current drafting achieves its purpose in legal clarity and certainty.
As I said in opening, the Government have committed to return to the House with a report on furthering the reform begun in this Bill, looking into wider issues including adoption and parental leave, sickness and unpaid roles. If that review leads to this Bill being revisited, the way it is now constructed will facilitate further additions for other forms of ministerial leave.
The Bill is legally accurate and will allow women to take maternity leave. To disturb that by amendment now might lead to unfortunate delay or unintended confusion in drafting. I acknowledge, having heard the debate, that this is not a satisfactory position for this House, but we will return to these matters in due course.
Although the drafting of this Bill in the context of maternity has been criticised by many, I repeat that it was neither novel nor intended in any way to denigrate women. I and the Government have heard today the concerns of both Houses on the “erasure of women” from public discourse and legislation. It is not intended to do this. The overriding drafting principle is that we must meet the legal requirements to deliver policy intent. The use of “person” in relation to pregnancy or childbirth matters in legislation is in line with current drafting convention and guidance, but, having heard the debate today, I will make the following points in reassurance.
First, I repeat that it will continue to be this Government’s policy to refer to pregnant women in government publications. That point has been made very strongly by many who spoke. Secondly, the Government have already responded to concerns that this drafting could be misinterpreted, and have updated the Explanatory Notes, which now detail how the Bill is intended to support women and explain the drafting practice.
The Government recognise the continuing strength of feeling on this issue in both this House and the other place. We are clear that the drafting is accurate and effective, but we recognise the concern expressed today that meeting legal requirements in drafting legislation does not mean that there is only one drafting approach available. In addition to committing to make myself available to noble Lords who may wish to discuss this matter further before Committee—I express my gratitude to those noble Lords who have taken the time and engagement so far to enter into discussions with the Government and me—I also state that the Government are open to further discussions on this issue. I will reflect with colleagues whether we can commit to doing more on this wider issue as we approach the later stages of this Bill.
Following my undertakings on this, many noble Lords expressed a wish to see reform go further to resolve wider issues around ministerial parental leave. The Government acknowledge that the Bill does not resolve these wider issues. That is why we have committed to further consideration. These are complex issues which require careful further consideration, taking into account modern working practices and the wider constitutional context. While respecting the independence of IPSA, the Government will present a report to Parliament setting out considerations and proposals.
In answer to the noble Lord, Lord Tyler, the Government’s work will consider how the issues are resolved in other contexts, including for MPs, other officeholders, workers and employees, to draw up proposals for how they can be made to work in the context of ministerial office.
I would say to the noble Baroness, Lady Hayman, that as part of this work, the Prime Minister has asked the Cabinet Secretary to consult with the leader of the Opposition on the development of the proposals in advance of publication. The Government will continue the work following passage of this legislation with a view to laying the report before Parliament as soon as is practicable, and will in any event update Parliament before the Summer Recess.
I hope that I have been able to address some of the issues raised by noble Lords, including those raised by my noble friend Lady Noakes and others throughout this debate. I urge her to consider withdrawing her amendment, and repeat my offer to have further engagement between now and the next stages.
The Government agree that Parliament and Government should seek to lead from the front on working practices, providing as much flexibility as possible to officeholders to aid the effective discharge of their duties. As my right honourable friend the Prime Minister set out in his Written Statement on this topic two weeks ago, the Government have undertaken to look into considerations and proposals, both in the round and in detail.
Returning to the essential, this Bill will end the unacceptable situation where a pregnant woman would have to resign from Cabinet to recover from childbirth and care for her new-born child. For this reason and for the reasons outlined above, I again beg to move that the Bill be read a second time, and urge my noble friend to withdraw her amendment.
Baroness Noakes (Con)
My Lords, I thank all noble Lords who have supported my amendment. There have been some wonderful, strong speeches today, far too many for me to refer to individually. The Minister has been left in no doubt as to the strength of feeling on the matters raised by my amendment.
The vast majority of those taking part today supported my amendment, and I have had a number of messages during the course of this debate from other noble Lords offering their support. The Minister has absorbed the fact that many of us who have spoken have risked being targeted by activists as a result. It is not easy to support women nowadays.
We had 34 speakers on the list today, but I am sure that more would have spoken had they been aware of the issues. The plain fact is that the expedited process, coupled with the recess, meant that the majority of the House was not even aware that I had tabled my amendment, let alone seen the content of it, until well after the speakers’ list had closed. That is not good for the health of debate in your Lordships’ House, and I hope that the usual channels will look carefully at this going forward.
The Minister responded to the debate with his customary dignity, but I was disappointed on two counts. First, he did not agree to bring forward Government amendments to Committee on Thursday; I cannot say that I was surprised at that, but I was disappointed. Secondly, he did not agree to ensure that the recent gender-neutral drafting guidance, which has caused this problem, would be reviewed by Ministers and then by Parliament. We can do nothing in this House about revising the drafting guidance, although I am sure that we will be seeking to debate that further in due course, and my noble friend Lady Nicholson of Winterbourne raised that specifically.
So far as the Bill is concerned, we do have Committee on Thursday, and noble Lords across the House will want to speak to amendments which have already been tabled. Very little change to the Bill is required, and it would only add a day or so to the timetable for getting Royal Assent if that course were pursued. I have not given up hope that the Government will work with us, and I look forward to meeting the Minister with other noble Lords later this week.
If the Government will not work with us to amend the Bill—as I said, I hope they will—there is another potential obstacle to our ability to change the Bill in your Lordships’ House, namely the question of whether any vote would be whipped by our Front Benches. I cannot speak for other parties, but my party, in the other place, was given a free vote on this Bill, which is right and proper for an issue such as this. I very much hope that our Chief Whip will see the good sense of this on Thursday. With that, I will not seek the opinion of the House today and I beg leave to withdraw the amendment.
Arrangement of Business
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
My Lords, the Hybrid Sitting of the House will now resume. I ask Members to respect social distancing.
Procedure and Privileges
The Senior Deputy Speaker
That the Report from the Select Committee Further temporary suspension of the Standing Orders relating to hereditary peers’ by-elections, Terms of reference of the Secondary Legislation Scrutiny Committee, House procedures and Court Injunctions, Cessation of Membership and Revision of Standing Orders Relating to Public Business (6th Report, HL Paper 223) be agreed to.
The Senior Deputy Speaker (Lord McFall of Alcluith) [V]
My Lords, there are three Motions in my name on the Order Paper today. Should the House agree to the first Motion, which is to agree the recommendations of the Procedure and Privileges Committee’s sixth report, the further two Motions are resolutions which give effect to the report’s recommendations.
Before we get any further, I express my gratitude to the Government Chief Whip for providing this time promptly after the committee produced its report on 8 February. Such reports are usually presented to the House as brief business after Questions in hybrid proceedings, but given the interest that the issue of hereditary Peers’ by-elections has generated on previous occasions, and representations from a number of noble Lords who have indicated that they might wish to take part in a debate remotely and who would not currently be able to do so, I was keen to find a slot which would facilitate contributions as inclusively as possible.
I now turn to the committee’s report. The first issue it considers is that of hereditary Peers’ by-elections. Standing Order 10(6) states that by-elections must take place within three months of the vacancy occurring. On three occasions last year, the House agreed to suspend these provisions for short periods, most recently on 14 December 2020. During the short debate on 14 December, I undertook to return to the House early in the new year once the committee had had the opportunity for a further discussion and to produce a further report.
As the report before the House makes clear, there is a range of views within the committee about the appropriate point to resume by-elections, given the continuing and unpredictable impact of the Covid-19 pandemic. However, on balance, and in line with the previous recommendations the committee has made, we agreed to ask the House to agree further to suspend Standing Order 10(6).
In making this recommendation, the committee is aware that it is technically possible for us to hold by-elections if we used electronic means to do so. But, overall, the sense of the committee is that it would be difficult for by-elections carried out in this way to be satisfactory. In particular, we felt it was undesirable to restrict hustings to a virtual form when those candidates who are largely unknown to the electorate might be at a significant disadvantage if they are restricted to interacting virtually only.
In making this recommendation, which would be implemented if the House agreed to the second Motion on the Order Paper, the committee was very mindful of the legal position. This question attracted attention from a number of noble Lords on 14 December and I will take this opportunity to set out the position in a bit more detail.
We are clear that the House of Lords Act 1999 requires by-elections as a matter of law. Any suspension can therefore be only temporary, and at this time it is a response to the ongoing national pandemic. In discussion, we agreed that to reflect this position it was important that the suspension must continue to be subject to regular review and decision by the committee and the House, to ensure that the suspension remains proportionate and necessary in the situation to reflect the circumstances presented by the ongoing pandemic. With that level of caution, we have recommended only a short further suspension until after Easter 2021, at which point the position will need to be reviewed again.
I am of course aware that the noble Lord, Lord Trefgarne, has tabled an amendment which calls for by-elections to be resumed forthwith. I will not pre-empt the noble Lord, who will be asked to move his amendment when I conclude, but I hope that in setting out the position in some detail I have at least explained why the suggestion from the committee is as it is.
The report makes recommendations in four further separate areas. The first of these is to adjust the terms of reference of the Secondary Legislation Scrutiny Committee to allow it to fulfil the same important role in “sifting” any proposed negative statutory instruments laid under the European Union (Future Relationship) Act 2020. It has performed the same role with equivalent instruments under the European Union (Withdrawal) Act 2018. This is, I hope, an uncontroversial suggestion, and raising it gives me the opportunity to put on record my thanks to the noble Lord, Lord Hodgson of Astley Abbotts, and his colleagues on the committee for the outstanding work they continue to do for the House at a time when the parliamentary scrutiny of statutory instruments continues to be of critical importance.
The report also recommends a change to the Companion reminding all noble Lords of their responsibilities in exercising their rights under parliamentary privilege, in particular that in exercising our undoubted right to free speech we have due regard to the relationship between Parliament and the courts. This change recognises that, although the Companion gives clear guidance on the application of the sub judice resolution, it has not done the same for Members proposing to raise issues subject to court orders and injunctions. We hope that increased clarity will be helpful to noble Lords.
The report also invites the House to address an issue which could potentially cause confusion arising out of the House of Lords Reform Act 2014 and the cessation of membership of this House. Noble Lords will be aware that the Act provides that a Member who does not attend the House during a session of six months or longer ceases to be a Member at the beginning of the next Session. This provision does not apply to noble Lords who were suspended or disqualified from sitting or voting for the whole of the Session in question or to noble Lords on leave of absence for the whole or part of that Session. The Act defines a Member of the House as a person entitled to receive writs of summons to attend. This therefore includes new Members, and the committee was concerned that any new Members who receive their writs towards the end of the Session and are not introduced by the end of the Session could be caught by the provision inadvertently and would cease to be Members of the House. This issue was not raised during the passage of the Act in either House.
However, Section 2(3)(b) of the Act states that the non-attendance provision does not apply to a Member if the House resolves that it should not
“by reason of special circumstances.”
We believe that the situation of new Members who have not, for any reason, been introduced, falls within the “special circumstances” envisaged by the Act. The third Motion in my name would allow the House to clarify that provision and avoid an unintended consequence.
Lastly, the report asks the House to agree to an updated edition of our Standing Orders, reflecting changes agreed since the last edition was published nearly five years ago, as well as some stylistic changes.
I look forward to contributions in the short debate ahead and I beg to move.
Lord Trefgarne
At end insert “but that this House regrets the further suspension of hereditary peers’ by-elections, and calls for such by-elections to resume forthwith.”
Lord Trefgarne (Con)
My Lords, I think I owe your Lordships an apology, as I have caused some confusion by my decision not to move the amendment standing in my name on the Order Paper. I listened carefully to the noble Lord, Lord McFall—the Senior Deputy Speaker—and have had discussions with the Chief Whip, and I think it would be wrong to impose a tense debate on your Lordships this evening. For that reason, I have decided not to move the amendment I tabled. Of course I remain of the view that the by-elections are important and hope they will be resumed very soon. I hope that the noble Lord, Lord McFall, will take the matter back to the Procedure Committee immediately after Easter and that the by-elections will resume immediately thereafter.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
No apology needed, Lord Trefgarne. We have had a number of scratches so, to give everyone an opportunity to be ready, I will name the speakers who have scratched: the noble Lords, Lord Strathclyde and Lord Hunt of Kings Heath, the noble Earl, Lord Shrewsbury, the noble Lords, Lord Cormack and Lord Snape, and the noble Baronesses, Lady Fox of Buckley, Lady Altmann and Lady Hoey. I call the next speaker, the noble Lord, Lord Faulkner of Worcester.
Lord Faulkner of Worcester (Lab) [V]
My Lords, I congratulate the Senior Deputy Speaker on the way in which he introduced the sixth report from the Procedure and Privileges Committee. Although I am listed as a member of the committee, I shall not attend my first meeting of it until next Tuesday, 2 March, so I can claim no part in the authorship of this report—although I am 100% supportive of the proposals in it.
I will concentrate on just two subjects. First, the debate is an opportunity to congratulate all our brilliant staff on the extraordinarily successful way in which they have steered us through the implementation of all the new rules relating to the management of the hybrid House. Like most noble Lords, I cannot wait for us to return to normal times, but everyone concerned with getting us to where we are now deserves our heartfelt thanks for being able to help us keep the show on the road.
Recognition of what the House has achieved came this morning, rather unexpectedly, in a whole-page article in the Guardian entitled “Peer pressure: Lords embrace lockdown technology and set the pace for virtual reform”. I know we should not regard the other place as our rival, but the paper’s political correspondent offered the view that, compared with the Commons,
“it is the Lords—with an average age of 70—that has seemingly embraced the modern era more thoroughly”.
Paraphrasing the Senior Deputy Speaker, the article says
“the chamber has a commitment to inclusive participation, and the option to speak remotely assists this”.
That is a commitment he repeated in his opening speech this evening.
This brings me to my second point: how we handle consideration of Commons amendments—ping-pong. The guidance note from the Procedure Committee says:
“When the hybrid House considers Commons Amendments and there are no counter propositions to the Minister’s motion or to the Commons message, the only speakers will be the mover of the original Lords amendment, or another sponsor of that amendment with the mover’s agreement, followed by frontbenchers and a Crossbencher nominated by the Convenor. They can participate physically or remotely … When there are counter propositions to the Minister’s motion or to the Commons message, in addition to the members above, the movers of counter propositions may participate either physically or remotely. Any other member may participate physically, subject to usual seating arrangements and the capacity of the Chamber.”
It is therefore not possible for Members who have not signed the amendment, but wish to speak remotely, to do so.
I believe that this guidance should now be reviewed for three reasons. First, it conflicts with the House’s advice to Members to work from home. Secondly, it contradicts the statement made every day from the Woolsack by the Lord Speaker or one of his deputies:
“Some Members are here in the Chamber, others are participating remotely, but all Members will be treated equally.”
Thirdly, the rule can give rise to the highly undesirable situation where Members are denied the opportunity to participate in a debate on a Commons amendment which has not been discussed in your Lordships’ House previously. I cite the proceedings on the Fisheries Act 2020 last year as evidence of that. The Bill started in your Lordships’ House on 29 January 2020. It received our normal thorough scrutiny, with four days in Committee in March and two on Report in June. At some point, the Government decided that they wished to add a permissive extent clause—a PEC—which would give them the power to overrule the wishes of the democratically elected Governments of the Channel Islands on fisheries matters if they wished to. This was hugely controversial and caused great concern in Jersey and Guernsey. There is no need to go into the detail of that today as the arguments were extensively aired in our ping-pong debate on 12 November.
The crucial point as far as our procedures are concerned is that any Member who had not signed the amendment tabled by the noble Lord, Lord Beith, or who was not physically present in the Chamber, was not able to take part. This was even though there had been no reference to the new clause on the PEC tabled by the Government throughout any Lords stage on the Bill and indeed, during the Commons consideration at Second Reading and in Committee.
It is particularly regrettable that a Member who was most upset at being prevented from taking part—she was following medical advice and isolating at home—was my noble friend Lady Pitkeathley, the only Guernsey-born Member of your Lordships’ House. She was able to send me her views and I included them in a speech I made in the debate. It would have been much better had the House been able to hear from my noble friend herself. That is why this one aspect of the hybrid procedure really needs to change.
Baroness Miller of Chilthorne Domer (LD) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Faulkner of Worcester, and I certainly associate myself with his comments on the ability we have now of being a virtual House. I appreciate being able to take part virtually, and the staff certainly need congratulating on getting us to understand the technology and enabling it.
I want to speak on a narrow point this evening. This Motion talks about the revision of Standing Orders, and I want to ask about Standing Order 1(2). This defines who may sit in the Chamber, besides Peers, when Her Majesty addresses the House. They include diplomats and, as the Standing Order says at the moment, “Peeresses”. I suggest that this has escaped revision and has not kept pace with all the modern equality legislation that it should have, because “Peeresses” are defined as a woman who is the wife of a Peer. By definition, it excludes men who are husbands of Peers. It excludes men who are in marriages with a same-sex partner—although, interestingly, it possibly does not exclude the wife of a female Peer should they be in a same-sex marriage.
At the very least, this Standing Order needs to be urgently amended to be inclusive and reflect current equality legislation that should govern your Lordships’ House as well as the rest of the country. Maybe we will still have a lot of distancing when Her Majesty addresses the House for the next Session, but maybe we will have reverted to normal. I hope that, whichever way it is, this Standing Order can be amended so that our House will reflect the sort of equality we have come to expect the rest of society to follow.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
We have had one further scratch, from the noble Lord, Lord Mancroft, so after the noble Lord, Lord Foulkes of Cumnock, we will hear from the noble Lord, Lord Northbrook.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I am really grateful to my noble friend Lord McFall, the Senior Deputy Speaker, for arranging this debate today in a manner in which we can all participate—virtually, if we wish. I do hope that, given the announcement in the other place today, it will not be long before we are all able to come into the House and participate properly. I look forward to that opportunity. I must say I find it very strange today that speakers are dropping out; we have just had another. They seem to be falling out quicker than the English cricket team; it is really quite astonishing.
I greatly welcome this report, particularly in relation to the by-elections, and I hope it will be approved. Notwithstanding the article in the Guardian today that my noble friend Lord Faulkner referred to, I am afraid that the House of Lords has not had a good press recently. The explosion in the number of Members—which results from the Prime Minister being eager to use, or maybe abuse, his patronage—when the Lords had agreed, as Members will recall, to cut our numbers, has given our critics plenty of ammunition to start with. When our new Members include one rejected by the Appointments Commission, the son of a KGB agent and nearly all the renegades who backed the Tory Vote Leave campaign, and our numbers increase again to over 800, there are very few arguments with which we can mount a defence at the moment.
We in the Labour Party plead not guilty on this issue of numbers, in that we have been able to stick to the formula agreed to cut our numbers. Our new appointments number fewer than half the sad deaths and retirements among Labour Peers over the last couple of years, and our appointments are all new working Peers. These are anachronisms, but the greatest anachronism of all is the system of by-elections for hereditary Peers. It is bad enough that the hereditaries have a substantial place in the second Chamber, but the fact that they are the only group—now all men—able to automatically renew their membership through this discredited and farcical procedure rubs salt into an already open wound.
The House is in urgent need of reform and we could and should start with ending this farce, as my noble friend Lord Grocott, who will be speaking later in the debate, regularly and rightly urges us to do. Meanwhile, we can at the very least postpone any more by-elections while we are suffering this awful pandemic, which I hope will allow us time to consider ending them permanently.
Finally, I raise another issue while we are on the report from the Procedure and Privileges Committee. My good friend, the noble Baroness, Lady Miller, has just referred to the Queen’s Speech, and I ask whether the Senior Deputy Speaker will take this opportunity to inform the House as to whether the committee is now considering the arrangements for the end of the current Session and the start of the new one, including the Queen’s Speech, and what arrangements there might be, given the current circumstances? It is a very important issue; I would expect the Procedure and Privileges Committee to be considering it, and I hope that the Senior Deputy Speaker will confirm that and will be able to tell the House tonight what the current situation is.
Meanwhile, I say once again that I welcome this report, I hope it will be approved and I am most grateful —I have never said this before—to the noble Lord, Lord Trefgarne, for agreeing not to move his amendment.
Lord Northbrook (Con) [V]
My Lords, I listened carefully to the introduction from the noble Lord, Lord McFall, and his summary of the reasons of the Procedure and Privileges Committee, but I found them unsatisfactory. The committee’s recommended delay in reinstating these by-elections has gone on long enough. Whatever some noble Lords may think of them, even some of their fiercest critics, such as my noble friend Lady Noakes, believe that, as long as they are clearly set down in statute, they should still be held. There are now four vacancies and thus four seats in the House unfilled for no apparent reason, while the number of new life Peers—as the noble Lord, Lord Foulkes of Cumnock, wisely said—has expanded much more proportionately.
Last month, local council elections were reinstated for May, so there is no reason why we cannot go ahead with our by-elections in a Covid-secure way. With respect, I disagree with the Procedure Committee and the noble Lord, Lord Grocott, about their views on holding them, but first I congratulate the noble Lord on reaching his 80th birthday last November. He said, in last December’s debate:
“How on earth do you arrange Covid-safe hustings with 27 candidates and a potential audience of 800?”—[Official Report, 14/12/20; col. 1427.]
There is no requirement for hustings in the legislation, the House of Lords Act 1999. Each candidate could quite easily present himself on Zoom; the hustings have never had an audience of 800. Even if all the audience could not hear them at once, the proceedings could still be recorded. In summary, technology could easily be used to solve the problem of hustings and the voting system could be made entirely postal. At his young age, the noble Lord, Lord Grocott, still has plenty of time to pursue his abolition Bill.
If the Procedure Committee continues to recommend unnecessary delay, I see no reason why legal advice should not be taken on statute law being broken—namely, Section 2 of the House of Lords Act 1999.
Finally, I fully support the comments of the noble Lord, Lord Faulkner of Worcester, on revision to the consideration of Commons amendments.
Lord Clark of Windermere (Lab) [V]
My Lords, I am delighted to play my part in this debate and I admire the way that the Senior Deputy Speaker, the noble Lord, Lord McFall, introduced it in a cautious, concise and clear manner. It is a potentially quite divisive debate and there will be disagreements. I disagree with my immediate predecessor, the noble Lord, Lord Northbrook, but I cannot disagree with the way in which he put forward his argument, and I appreciate his argument. I was similarly impressed by the noble Lord, Lord Trefgarne, not moving his amendment. Again, that was a good example of the House at its best.
I declare my interests, as recorded in the register. I am a member of the House of Lords Appointments Commission, but I do not speak on behalf of that commission in any way. It is right and proper to draw that to the attention of colleagues.
Before I continue, I pay tribute to my noble friend Lord Grocott for his tireless campaign to abolish the by-election of hereditaries in this House. Anybody who listens to his speeches cannot help but smile. He speaks with humour, charm and a completely non-offensive manner. I look forward to his contribution to this debate, because he has already declared his position and expertise on the subject.
We all come into this House from various sources. Some of us are prime ministerial appointments to become Ministers. Others are nominated from a political party or are Cross-Benchers. Then of course there are the people’s Peers, and, finally, that group of people who have been here—or their families have—before any of us: the hereditary Peers. I happen to agree with my noble friend Lord Grocott, but I shall put forward a suggestion that might help us a little along the way. Four of the groups of people who have entered this House have done so in a similar way. Their backgrounds, credentials and suitability—not in a political or a personal sense or anything like that, but purely on the grounds of probity—are basically examined by the House of Lords Appointments Commission, and we very rarely disagree with the suggestion of a nominee that is put to us, usually by the Prime Minister.
It is not a real disadvantage to those of us who have come in and been adjudged clean; at least we know that our backgrounds have been checked as to whether we pay taxes in the UK, whether we are a threat to national security and so on. It is important that such things are closely examined. However, there is one group of people who enter this House who do not go through that process: the hereditary Peers. We should be moving along the route of making sure that at some stage individual hereditary Peers, when they have their by-elections, go before the House of Lords Appointments Commission. That that is not for us; it is something that the hereditary Peers themselves could do, and it would make their standing stronger with people who might be a little doubtful.
The Earl of Caithness (Con)
My Lords, I thank the Senior Deputy Speaker for his introduction to the debate. I had hoped that he might lift the lid a little more on the arguments going on in the Procedure Committee, but he followed his report almost word for word. I hope that when he sums up he will go into a little more depth.
There has been considerable concern in the last 12 months or so about our ability to hold the Government to account. Equally, there is concern about how the House is run and the role played by those who try to help us to run ourselves. The commission has come in for severe criticism, and is possibly an institution no longer fit for purpose. The Procedure and Privileges Committee is again urging your Lordships to suspend the law for reasons that are weak and rather poorly set out. That is something that we will need to return to and seriously consider in future.
I cannot help but feel sympathy for my old friend the noble Lord, Lord Foulkes of Cumnock, with his concern about the House of Lords Act 1999. Many of us disliked the Labour legislation but he was a member of the Labour Party, as was the noble Lord, Lord Grocott—and, as the noble Lord, Lord Grocott, was the Prime Minister’s bag carrier, they had it in their power to make the Bill better than they are now saying it was.
When one comes to consider the reasons why the Procedure and Privileges Committee is urging your Lordships to suspend hereditary Peers’ by-elections again, I wonder whether the Senior Deputy Speaker realises that, in the City and all around this country and in every other country, interviews are being held remotely to appoint people to company boards or jobs where they do not know anybody. The report, which was quoted by the Senior Deputy Speaker, states that
“it is unsatisfactory to restrict hustings to a virtual form where candidates largely unknown to the electorate might be at a disadvantage.”
Companies are choosing people they do not know by Zoom. I spoke to a director of a company two days ago, and he had not met a single other director of that company when he was appointed. If the City and other companies can do it, why can the House of Lords not? Are we that incapable? The reasons set out in the sixth report are—I shall use a phrase that the Senior Deputy Speaker will understand—just peely-wally.
I support what the noble Lord, Lord Faulkner of Worcester, said about consideration of Commons amendments. I have raised this with the Senior Deputy Speaker on the Floor of the House before. What further discussions has he had with the Lord Speaker about this? His committee gives us one lot of advice and the Lord Speaker writes letters to us telling us to stay away and abide by the rules. You cannot do both if you wish to speak on consideration of Commons amendments.
When one stands back and looks at the legal aspect of this, it makes one wonder whether the committee has not been swayed by the hegemony of those who are against hereditary Peers’ by-elections. The decision this time is not sensible but more of a political decision. Having said that, I was grateful for some of the words that the Senior Deputy Speaker used, and I hope that he will use his persuasive powers to get the rest of the committee to agree a change at the next meeting soon after Easter.
Lord Grocott (Lab) [V]
My Lords, I would certainly like to add my thanks to my noble friend Lord McFall for the way in which he has introduced this debate and for arranging for it to be at a time when we do not delay the normal proceedings of the House earlier in the day. I also thank my noble friends Lord Clark of Windermere and Lord Foulkes, who said such kind words about my Bill to abolish the hereditary Peers’ by-elections, for their continued support for that objective.
I need to correct the speech made by the noble Earl, Lord Caithness, in two respects. First, he said that we were suspending the law on these by-elections. We are not suspending the law at all; we are suspending our Standing Orders. He also said that the Procedure Committee’s report made a political recommendation. That is strange when the recommendation about the hereditary Peers’ by-elections made in December was carried by 13 votes from all parties in favour of their continued suspension to four votes against. That is pretty conclusive that there is widespread support for the suspension across the House.
That does not surprise me because it will soon be a year since the Leader of the House moved a Motion—it was the Leader who did it—to suspend the hereditary Peers’ by-elections. She did so for the persuasive and common-sense reason that we were experiencing huge challenges in operating the House and keeping people safe during the coronavirus crisis. The Leader recommended that the suspension should last for almost six months—quite a long suspension—from 23 March to 8 September. Since then, we have had two further suspensions, bringing us to today’s Motion—which I fully support—which further suspends the by-elections until after Easter. It implicitly repeats the same message that we heard from the Leader: that we are not out of the coronavirus woods; that holding by-elections requires hustings, which would clearly be impossible, unwise or both; and that the time and energies of our clerks’ department are far more thoroughly engaged in dealing with rather more pressing issues than the restoration of by-elections for four hereditary Peers.
Let us, therefore, take stock of what has been the effect of a 12-month suspension. Has anyone suffered as a result of it? The answer is no. Has it cost any money? The answer is no: in fact, it has saved several hundred pounds, which the elections cost to run. Has the suspension affected the workings of the House? The answer is no: if anything, it has helped us, because the House authorities have been able to concentrate on more pressing matters. What about the world outside Westminster? Has the press been chasing the story of why there have been no by-elections? The answer, of course, is no. Have the public been demanding, “Bring back the by-elections”? The answer is no. If anyone has had any correspondence on this, electronic or otherwise, please send any copies to me.
The noble Lord, Lord Trefgarne, gave no evidence whatever to suggest that restarting the by-elections would bring any benefit to the Lords, to the constitution or to the public. I noticed that none of the three Peers who have spoken this evening in favour of the by-elections returning had anything to say on this. The truth is that there have been no downsides whatever to the suspension, and we all know why. These elections are ridiculous; they are absurd; they are supported by no one, either in Parliament or outside, except for a handful of Members of this House. That fact, of course, is the elephant in the room in today’s debate: that without the opposition of a couple of Members—the noble Lord, Lord Trefgarne, and the noble Earl, Lord Caithness —who have used every procedural trick in the book to block any reform, these by-elections would have been scrapped years ago.
Three times in three Sessions of Parliament I have introduced a Bill to scrap these by-elections. Whenever votes have taken place, the majorities in favour of the Bill have been huge, with support from Members in all parties and in all parts of the House. If only the massive majority in favour had been respected, we would not have been having this debate today: the by-elections would be history. Now we have before us the report from the Procedure Committee. The only criticism that I would make is that the suspension until Easter is too short. I would have suspended the by-elections at least until July. By the way, that would also give the House sufficient time to consider my Bill, which received its Second Reading on 23 March last year.
I emphasise again that a further extension would not require any change in the law. All that it requires is a decision by the Procedure Committee to recommend to the House a further suspension of Standing Order 10(6). This is entirely within our legitimate powers to do. Like the Commons, we are unchallenged masters, and rightly so, of our own Standing Orders. As for today, I simply hope that the House will support the Motion in the name of the Senior Deputy Speaker.
Lord Balfe (Con)
My Lords, I thank the Senior Deputy Speaker for producing this report, and for being the Senior Deputy Speaker who is regularly criticised for not going as far as we would like but probably not as far as he can go anyway.
As usual, I will make myself somewhat unpopular with this side of the House, because I fundamentally agree with the noble Lords, Lord Grocott and Lord Foulkes. I do so on a very good, historical basis. Our noble friends the hereditary Peers have said that this was part of the 1999 settlement, and it cannot be undone until there is a final settlement, but there will never be a final settlement. We had the Lloyd George/Asquith reforms, the Attlee reforms, the Macmillan reforms of hereditary peerages, and the Blair reform. Let us not kid ourselves: the 90 hereditary Peers—we can discount the extra two who are royal warrant holders—were part of a deal which, if I remember rightly, cost the then Leader of the Conservative group his job. He fell out with William Hague, who was then the leader of the Opposition, because the latter felt that the deal should not have been done in the way that it was, but it was done, and we have now moved on 20-odd years. To my mind, it is now time for some more reform.
In the run-up to the last election, after it had been called, I spoke to a very senior member of the Labour Party in the other House about the Grocott Bill. I asked, “Do you think you’ll support it?” This person said, “We don’t need to support it. They’ll be gone within three months. It’ll be a great idea because we could even up the numbers of the House by cutting down the number of Peers in the Conservative Party, and no one is going to get up to defend the Lords. We’ll be popular all round.”
We need to step back. We keep going on about being a self-regulating House, yet we cannot even manage to get Bruce’s Bill debated. That is how self-regulating we are, and we need to look at that. It would be easy to abolish the 90, and to reform the Lords. The one thing I can project and predict is that this side of the House would not like it. We would be the ones who would lose out, because if we do not get down to reforming the institution in such a way that broadly commands support, we will find it thrust upon us, and there will be no hereditary Peers. As my friend—I still have the odd friend in the Labour Party—said, “We’ll have them all out within three months”.
I hope that the Senior Deputy Speaker continues with his zeal for reform, and I would make a practical suggestion. The Grocott Bill has never really been tested. I suggest that the Senior Deputy Speaker put it to the committee that by-elections be suspended until the Grocott Bill has been disposed of. It is as simple as that, and it is a challenge to the Government Front Bench to make it possible. We all know that it could be made possible. What have we been doing this afternoon? We have been debating the Suella Braverman maternity Bill, which came out of nowhere, because it is needed. If the devil drives, you can find solutions. That solution could be found. If we look at the numbers, we see that for the first full-House selection of an hereditary Peer on 27 March 2003 there were 661 eligible voters. By March 2017, the figure had gone up to 803. It then went down in January 2019 to 785 because of the restraint of Theresa May, but we are now back to 840.
There has got to be reform, and it will have to go much further than hereditary Peers. We must find a way of reducing the size of the House without stopping new people coming in. I see my noble friend Lord Hannan sitting next to me, and he is going to play a valuable role in this House, and we have to have a series of reforms which enable retirements so that the Benches can be refreshed. It is no good pulling up the drawbridge and saying that no one else can come in.
If we are a self-regulating House, let us get down to doing it, and let the Senior Deputy Speaker and his committee look at some creative ways of doing it. I have already pointed out to him that I have been given some very good legal advice that we could ration the entry of Members into the House. The Queen creates Peers, on the recommendation of the Prime Minister, but it is the House that seats new Peers. Let us explore it. It was done in Victorian England, incidentally, which is where the legal precedent comes from. I ask for some creative thinking. I applaud the Senior Deputy Speaker and all his work, and I hope that before too long we can get around to doing what we should be doing. A self-regulating House should be a “self-sort it out a bit better” House.
Lord Stoneham of Droxford (LD) [V]
I thank the Senior Deputy Speaker for introducing this debate. The hour is late. Fortunately, the arguments on all five issues in this report were properly discussed by the Procedure Committee, of which I am a member. Tonight, we have only discussed one issue, but I am not going to delay the House by raising the other four, which I agree with.
I agree too that the hereditary Peers’ by-elections should be delayed, as is recommended by this report; the answer is that public elections in the country at large have been postponed, and it would be perverse for us to call elections for us in the House of Lords when the country cannot have its elections. By April it should be clear whether we will have elections or not, and I know it is currently the Government’s intention to do so.
The only issue we have discussed, then, is hereditary elections, but there were two good swerves during the debate, by the noble Lord, Lord Faulkner, raising the issue of ping-pong procedures, and by my noble friend Lady Miller raising the issue of Peeresses in clause 1(2). I support both of them in hoping that we will look further at those issues in the Procedure Committee, particularly ping-pong. My noble friend’s point on equality seems long overdue for reform.
I hope that, in the coming months, we will also learn from the best features of the hybrid system of this House to see how might improve our procedures going forwards, when the pandemic and lockdown finally end. There have been some good features; the staff deserve due credit for taking us down the route they have. A year ago, none of us would have believed what we achieved over the last year in the most trying circumstances.
As the time is short, I thank the noble Lord, Lord Trefgarne, for withdrawing his amendment. I welcome this report, and hope the House will approve it, and give my thanks to the Senior Deputy Speaker for encouraging this debate and leading it.
Baroness Hayter of Kentish Town (Lab)
My Lords, I start with three thanks. First, I echo the thanks of my noble friend Lord Faulkner to all the people who have been involved—including the staff and back-up—who have allowed this hybrid House to continue and, indeed, to improve each time. It is working well, as are the votes. Secondly, I thank the Senior Deputy Speaker and the Procedures and Privileges Committee for their work in bringing us this report. Thirdly, I thank the noble Lord, Lord Trefgarne, who has made a wise and good decision not to press his amendment. He probably realises that it would be fairly inappropriate for us to take a view on that, when we have heard from the Prime Minister today that there may be a cautious staged way out of lockdown but it is still some way off. When there are still 120,000 families feeling the loss of a loved one, our talk of returning to normal would seem a little foreign to them. It was a correct decision, and was helpful to the House.
As the noble Lord, Lord Stoneham, just said, we are still focusing on how on earth we make the May elections work and making sure that every voter can take part. These are highly significant votes.
The noble Earl, Lord Caithness, is undermining his own position if he thinks that electing someone to this House is anything like electing someone to the board of a company. Frankly, electing someone to a legislature for the rest of their life is a serious matter. It does not strengthen the argument to compare it with what it is possible to do on Zoom for a company board.
I wish to make two or three other points. It is interesting that the noble Baroness, Lady Miller, talked about our maybe needing to alter our language to allow wives to sit here for the State Opening. Husbands already do, albeit that this is not in the wording. This would open the House up to more equality, whereas these by-elections are for men only; they bring only men into this House. It is questionable whether we are complying with equal opportunities legislation when we are able to take a view of appointing only men to a position of such importance.
Unlike some of my more radical friends to whom the noble Lord, Lord Balfe, referred, I have not wanted to get rid of the existing hereditaries. We love them. My noble friend Lord Grantchester was here until a moment or two ago. We are talking only about not having any more. We do not have an open door and a taxi waiting outside.
My noble friend Lord Clark of Windermere made the point that anyone standing in a hereditary by-election should be subject to the same scrutiny as other noble Lords. This should be looked at. The suggestion for reform made by the noble Lord, Lord Balfe, should go quickly to the committee or to the House authorities to see if it could be taken forward.
I do not like our second guessing a committee that we set up to do the work for us. It hears many more views; its members can talk in confidence and have a to and fro on the ideas. We asked the Procedure and Privileges Committee to carry on that work for us—to look at the ups and downs, the pros and cons, and to exercise its judgment on our behalf on choices that the House needs to make. We would be ungrateful if we tried to second guess and undermine its wisdom and thought and to substitute our judgment for that of its members. I may not like everything they come up with, but they would have to take leave of their senses to want to put my judgment before theirs. The committee has come up with the right bundle of proposals and we should give it our full accord.
The Senior Deputy Speaker (Lord McFall of Alcluith) [V]
My Lords, I thank all noble Lords and noble Baronesses who have taken part. We have had an excellent and wide-ranging debate.
I do not wish to detain the House much longer, but I will quickly respond to some of the points made. The noble Lord, Lord Faulkner, complimented the staff. They have done a terrific job on the hybrid House. I know from the feedback I have received from Members how generous the staff have been with their time and in their engagement with people. I shall certainly take these remarks back.
On ping-pong, the next meeting of the Procedure Committee is on 2 March. I have had quite a few exchanges with different Members on ping-pong; that will be an issue for consideration on 2 March. The noble Earl, Lord Caithness, the noble Baroness, Lady Miller, and the noble Lords, Lord Faulkner and Lord Northbrook, all brought that up, so I will put that issue forward.
On the issue of Standing Order 1 from the noble Baroness, Lady Miller, regarding equality and inclusiveness, the committee intends to do a wholesale review at some stage in the hopefully near future as well as updating the Standing Orders. I heard what she has said tonight and will put that to the committee.
The noble Lord, Lord Foulkes, made the point about arrangements for State Opening during the pandemic. The Procedure Committee may need to consider that and certainly will, but the timing of Prorogation is not within our remit or understanding. It lies elsewhere, so I cannot satisfy him on that point.
The noble Lord, Lord Northbrook, made a point about the unfilled seats; yes, we have four unfilled seats—two whole-House seats, one Conservative and one Labour. I have already taken legal advice on that and, if I remember correctly, the noble Lord, Lord Strathclyde, asked for it in the last debate. I sent him a copy of that letter and I think a copy was put in the Library, but for the sake of Members I will repeat it: under the Life Peerages Act, Her Majesty has the power to confer a peerage for life. That peerage entitles the holder
“to receive writs of summons to attend the House of Lords and sit and vote therein accordingly”,
so it cannot refuse to accept someone as a Member of the House by stopping their introduction.
The noble Lord, Lord Clark, made very good points about the House of Lords Appointments Commission. I know he is a distinguished member of that commission, along with others. I will refer to what he said here but, again, that issue is outwith the Procedure Committee agenda.
The noble Earl, Lord Caithness, also made the point about the Procedure Committee, and the noble Baroness, Lady Hayter, said that a lot of debate goes on in the committee. I can assure Members that the extent of debate is great and that I take anything said on the Floor of the House back to the committee and tell it exactly what was said. Everything said tonight will be taken back, but noble Lords should keep in mind that the range of views we heard tonight has been wide and deep—it is just the same on the committee itself.
I will take back the point from the noble Lord, Lord Grocott, that suspension until Easter is too short, but I do not know where that one will go. However, I admire the noble Lord’s campaigning zeal; he does it with enthusiasm, integrity and civility at all times.
The noble Lord, Lord Balfe, has raised the issue of suspending the by-elections with me before. He has also engaged with me on the issues of reform and reducing the size of the House. The Lord Speaker, having established the Burns committee, is really keen on that issue. The noble Lord, Lord Balfe, asked me if I would raise these issues in my weekly discussion with the Lord Speaker. I certainly will, and I will take the points he made back to the Lord Speaker; in fact, I have a meeting with him tomorrow.
The noble Lord, Lord Stoneham, is correct that we discussed valid issues in the committee. Ping-pong is a live issue. As mentioned, we will be discussing that on 2 March, and I assure Members that it will be an extensive debate. The noble Lords, Lord Grocott and Lord Balfe, made different suggestions of what may be legally possible. If they feel I have missed anything out on the legal aspect, they can write to me or contact my office and I would be happy to pass on information, as I did to the noble Lord, Lord Strathclyde, at the last meeting.
I hope that covers most of the points Members made tonight. I was delighted that we had an opportunity to have this debate. It arose from discussions I had with the Government Chief Whip, so I thank him again for that. I thank all Members for their contributions, for the way they delivered those contributions and for the positive engagement we have had in this debate. I commend the Motion to the House.
Hereditary Peers: By-elections
The Senior Deputy Speaker
Further to the Orders of 23 March, 7 September and 14 December 2020, that Standing Order 10(6) (Hereditary peers: by-elections) be further suspended pending a further review by the Procedure and Privileges Committee after any adjournment of the House for Easter 2021.
Cessation of Membership
The Senior Deputy Speaker
To move to resolve that, further to section 2(3)(b) of the House of Lords Reform Act 2014, section 2(1) of that Act should not apply to any member of the House who is entitled to receive a writ of summons but has not been introduced to the House.