Draft Registration of Marriages Regulations 2021
(3 years, 9 months ago)
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The Chair
Before we begin, I remind hon. Members that they can only sit in the places that are clearly marked, that Mr Speaker has stated that masks should be worn in Committee, unless, of course, you are speaking, and that Hansard colleagues would be most grateful if Members could send their speaking notes to Hansard’s email address.
The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)
I beg to move,
That the Committee has considered the draft Registration of Marriages Regulations 2021.
It is a pleasure to serve under your chairmanship, Mrs Miller. The regulations amend the Marriage Act 1949 and will reform the way in which marriages are registered in future. They can be moved thanks to the Civil Partnerships, Marriages and Deaths (Registration etc.) Act 2019, which my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), who has joined the Committee today, so successfully piloted through Parliament.
The regulations enable the introduction of a schedule system for the registration of marriages in England and Wales by allowing powers to reform some quite elderly primary legislation. For background, a schedule system is already in place in Scotland and in Northern Ireland. When civil partnerships were introduced in England and Wales in 2005, the opportunity was taken to modernise the registration process and use a schedule-based system.
For clarity, couples will sign a marriage schedule at their marriage ceremony instead of a paper marriage register, and all marriages will be registered by registration officers in a single electronic marriage register. That will remove the requirement for the 84,000 paper registers currently used in registry offices and around 30,000 religious buildings across England and Wales.
The regulations provide the opportunity to modernise not only the registration process from a technical point of view, but the marriage entry itself to allow for the details of both parents of the couple to be recorded instead of just the father’s name and occupation, as is currently the case. Moving to a schedule-based system is the most cost-effective way to achieve the change and will make the system of registration more secure and efficient.
The regulations also amend the seldom used Marriage of British Subjects (Facilities) Acts 1915 and 1916 so that they no longer apply in England and Wales. They also make a consequential amendment under section 5 of the Immigration and Social Security Co-ordinations (EU Withdrawal) Act 2020 to amend the 1949 Act to specify the evidence that must be provided by an individual when giving a notice of marriage for immigration purposes.
Much of the regulations relate to the technical process of switching to a digital register, but the most talked-about aspect will be the change to what is actually placed on the register of marriage. The significance is not lost on me as a Minister or personally. When Hazel and I married in June 2017, we sadly could not be joined at the service by my mother or her father as they had both passed away a few years before. My dad and Hazel’s mum could be part of the day by sharing it with us physically. Hazel’s dad was part of it by appearing on the marriage certificate. There was, of course, one person missing. Once the regulations are in force, no one else will be missed out on their children’s wedding day.
Jess Phillips (Birmingham, Yardley) (Lab)
Not for the first time in my political career, it is a pleasure to serve under your chairship, Mrs Miller. It is certainly a pleasure, following the Minister’s comments, to have a working mother in the Chair.
The Opposition welcome the modernising of the system that allows a couple’s mothers’ and fathers’ details to be documented, alongside the flexibility for changes when they are needed in future. Modernising, from a technological perspective and a value perspective—the changes mean a marked decrease in costs—is welcome, but when it comes to gender equality, we do not just welcome it; we are very happy to see it.
For me, I suppose that this means that I will appear, if my children ever get married, on their marriage certificates. I did not think that that mattered to me particularly until I was told that I would not be on them and that my husband would, especially when I think my job is better—I want it on their marriage certificates. The change is much welcomed.
On Monday, it was International Women’s Day, a day when, across the globe, we celebrate the progress made in the quest for gender equality, as well as remember how far we have to go. The delegated legislation means that both parents’ names and occupations will be recorded as part of the marriage. That omission until now reminds me of a fundamental of policy and politics—that we only make a note of, a legal record of, or count the things that we care about. I presume that the old marriage registration system did not require or make note of the name or job of the mother because, as a society, we saw it as not important, not worth acknowledging and not worth the paper it would have been written on. I am sad to say that this fundamental still rings true in other areas. There are many examples where we do not count, record or make note of the lives and experiences of women adequately. I hope that today begins progress in other areas.
I also want to flag the length of time it has taken to respond to the pressure from the public to bring forward the reform. The online petition from 2014 attracted 70,000 signatures. The delay of seven years again reminds me of the slow progress in so many areas in the fight for gender equality and justice. In December 2018, the World Economic Forum reported that it will take 202 years to close the gender pay gap, but of course we are not currently bothering to count that either.
The Opposition do not oppose this legislation. We welcome the digital modernisation and immigration alterations and of course the progress on making mothers’ lives and work matter. This Opposition mother just wishes that it did not always take so long for us working mothers to be noticed.
Tim Loughton (East Worthing and Shoreham) (Con)
It is a pleasure to be here on the latest stage of the journey that started with my private Member’s Bill, which reached the ballot in 2017, and I am grateful to the Minister for namechecking it. I was slightly disappointed not to be told about the Committee, let alone not to be put on it. It is only through the courtesy of one of the civil servants who dealt with my Bill that I found out it was happening today, which is odd.
I will make some general points and then specific queries about the regulations. The first question, which was also raised by the hon. Member for Birmingham, Yardley, is: why has this taken so long? The four main elements of the Bill came together in 2017, but there has long been a campaign to change marriage registration for the first time since 1837 in England to enable both parents to be included on a marriage register. That is not radical; most people asked, “Doesn’t that happen already?” The trouble is that most people do not find out until the parents, usually with some nice music playing in the background, are invited by the presiding vicar to go to wherever the register is being signed. Then the mother is—in some cases, physically—restrained from adding her signature to the marriage document and is told, “Sorry, you’re not allowed.” Fortunately, when I got married, we were forewarned, but there was a double insult: my father’s signature appeared twice on my marriage certificate because he was also the presiding vicar. That doubled the insult to mothers and mothers-in-law.
The position needed changing and we all agreed that it was an anachronism. However, the Bill became an Act in February 2019 and law after Royal Assent last May. The position should have changed soon after that. Indeed, the Act includes a sunset clause, which provided that if the changes were not made in just over a year, the legislation would fall and we would have to start all over again. Why, therefore, has this taken so long? The legislation is not new and has been round the houses, helped by the former Member for Meriden, our colleague Dame Caroline Spelman, the Bishop of St Albans, who had a parallel Bill in the House of Lords, and others.
There are four main sections of the Civil Partnerships, Marriages and Deaths (Registration etc.) Act 2019. The regulations deal with only two and put them into law.
I am delighted that the extension of civil partnerships to opposite-sex couples became a thing on 31 December 2019. Fifteen months on—I gather on 4 May—the second element of the Act will come into law. There are two outstanding elements and I wonder if the Minister can comment on that.
There is a commitment to amend the Coroners and Justice Act 2009 so that stillbirths can be investigated by a coroner. There is widespread support for that. It is a cross-departmental function, but despite our constantly badgering the Ministry of Justice and the Department of Health and Social Care, there is still no sign of that coming forward. Yet the case of babies dying in questionable circumstances in hospitals has become more urgent. That is why, with a lot of support, coroners will, I hope, be given that power to investigate. Perhaps we can have a progress report on that.
The fourth element of the legislation was a baby loss review, which the Department of Health and Social Care commissioned. I sat on the working party with the hon. Member for Gateshead (Ian Mearns) and many professionals. That Committee has not sat for two years and the report has never been published. We considered whether we could register children who were stillborn before the arbitrary and artificial existing 24-week threshold. Anybody who is born before 24 weeks just does not count. If the Minister can tell me about progress on that, I will be grateful.
The Minister rightly said that at last we can have mothers on the marriage certificate. Where do the regulations state that? I have been through the heavy-duty documents—and I am no expert—but which regulations actually give authority for wedding registers to contain the names of mothers and for hard copies to be signed by mothers of the happy couple?
Let me deal with the detail of the regulations. In part 3, regulation 5(3)(1) states that
“the superintendent registrar to whom notice of marriage is given must display in some conspicuous place in their office, for 28 successive days beginning with the day after the day on which the notice was recorded in the marriage register… the notice of marriage,…the particulars given in the notice, in an approved electronic form”.
I do not quite understand that. We are making the register electronic, so where does a hard-copy notice still have to be displayed? Why cannot it all be done electronically, given that we are moving into the 21st century with some of our procedures? There seems to be a paradox there.
The regulations refer to Scotland and Northern Ireland. Scotland does not have to pass such regulations because such details have sensibly been recorded there for the last couple of centuries. For some reason, England and Wales have been out of kilter with the rest of the United Kingdom. Do the regulations bring us completely in line with the existing procedures in Scotland and Northern Ireland? Is there some difference or nuance? How would it apply? There are some fairly opaque details in the regulations about how they apply to somebody from Scotland marrying somebody from England. If the couple gets married in Scotland as opposed to England, are there potential anomalies? Could we find that a Scottish mother-in-law at a wedding in York of an English son-in-law will be told, “Sorry, you’re Scottish so it doesn’t count”? I am sure that that is not the case, but after all the effort and such a long campaign, I want to make sure that no anomalies involving certain parts of the United Kingdom will crop up at a crucial moment during a wedding ceremony.
In regulation 7, new section 53B of the 1949 Act—I am sure it is at the Minister’s fingertips—states:
“Before the marriage document is signed, the clergyman by whom the marriage is to be or has been solemnized”—
Will the Minister give a definition of “clergyman”? Again, I could not find it in the regulations. Who exactly is a “clergyman”, or a clergywoman—we have many of those these days, even in the Church of England? We need a definition of exactly who is covered by that definition.
New section 53C contains the first of many references to
“according to the usages of the Jews”.
I am sure it is my inexperience, but can the Minister explain that term? Does it apply to all traditional Jewish ceremonies or only some? I assume it is regularly used for proceedings in synagogues, but can we have some clarification, because it is not clear?
New section 53D covers how the procedure now happens physically. I think that was one of the sticking points with the Church of England. According to my understanding, in a wedding service in a Church of England church, when the wedding party moves to the signing ceremony, there will still be a hard-copy register, which lots of people can now sign. That is great. A certificate will be produced and it still has to be delivered to a registrar. An electronic record is made in parallel. Loosely, I think that that is now what happens. However, there was some dispute about the document still having to be delivered to the registrar or superintendent within a short time. I think, initially, a space of eight days was contemplated.
In normal circumstances, a bride and bridegroom might have better things to do in the first eight days of their marriage. Indeed, they may well be on honeymoon elsewhere. I hope that the position has now been rectified and that a couple are not expected to delay or cut short their honeymoon to deliver a piece of paper, which is still required even though we have moved to an electronic system. I think—again, it has not been explained to me, which would have been nice—that somebody can be nominated to deliver that piece of paper. Perhaps the Minister will clarify how someone can be nominated and the timescale for completing that process. Subsection (10)(a) uses the phrase
“as soon as reasonably practicable”,
but subsection (8)(b) says “within 8 days”. Again, some clarification would be helpful.
In terms of obligations on the church, place or body performing the solemnisation of the marriage, new section 53E(3) refers to the “relevant church official” on whom there are obligations to ensure that registration is made and notified. Who is the relevant church official? In most cases, people who are involved in churches other than the vicar are volunteers. Does the provision refer to a churchwarden? Does the relevant church official have to have a certain status? How are they nominated? What happens if they mess up? Who is responsible? Again, I could not find that in the explanatory memorandum.
I realise that I have given the Minister quite a few questions to cope with, so this is probably the final question. What happens to the existing hard-copy registers? We discussed the practical problems of moving to such a radical system of electronic records and mothers being able to sign a marriage certificate with clergy and others. Many churches—certainly old churches—have marriage register books that are sometimes centuries old. They are historical documents. I presume that they can still be used and will still be part of those churches’ fabric. I gather that in some cases, while we were waiting on these regulations, some vicars in the Church of England were forward looking and a nod was given from Lambeth Palace that mothers could sign the hard copy of the certificates and the register in church, even though there was no place for them. I think that practice has been going on in some cases, even though the regulations do not come into force until 4 May.
Is there any facility for this registration to be retrospective, at least going back to when the Bill itself became law, for those mothers who have signed a register, but, I presume, will not now be part of the new electronic record? That might be particularly poignant and touching—the Minister referred to his own case—where the mother is no longer with us. Can there be some sympathetic and pragmatic retrospective approach to enabling mothers to sign the register, at least to the time when the legislation went through, after which there was a good expectation that the Government would get on with producing the regulations, which are not that hard?
What will happen going forward to those registers? Churches can still use their hard-copy register, but it now has to be backed up with a specific certificate, it has to be presented to the superintendent and it goes on the electronic register in parallel.
There are many other questions I could raise, but in the interests of not detaining the Committee for too long—I am only too aware I have given the Minister quite a plateful—I will leave it there.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mrs Miller. The Minister will be relieved to hear that the hon. Member for East Worthing and Shoreham has raised a number of the issues that I wanted to raise, so he will be spared a long speech.
The Minister covers the General Register Office, which is the same role I had 11 years ago when I was Minister. I was proud then to change the birth registration so that parents who are same-sex couples could be listed as parent/mother and parent on the register. Changing marriage registration is long overdue. I hear the frustration from the hon. Member for East Worthing and Shoreham, and I commend him for his work on this issue, but I am aware that in the corridors of Whitehall, trying to get legislation to change marriage and birth registration is quite difficult, because nobody else sees it as a priority. It is really great that we are today finally getting mothers on the register.
I have a couple of quick questions about paper registers, which pick up on what the hon. Gentleman highlighted. The challenge of going digital is that, in terms of archiving, it can be very difficult. That recently came up when the Public Accounts Committee was looking at private finance initiatives, which are not that old. Some of the documents for those were on CD-ROMS. There are members of that Committee who do not know what a CD-ROM is. Will the Minister advise whether he has had any conversations with the National Archives about a plan to make sure that the digital register will be accessible for the long term? For those who do not have physical registers—some will not, because of where they choose to get married—there will not be a record. The hon. Gentleman highlighted the issue about existing paper registers. It would be helpful to have that as well.
The explanatory notes say that there has not been a formal consultation, but that the General Register Office has consulted the established churches across the UK and other religious groups. Could the Minister advise which other religious groups that applies to? Just to be clear, at the moment only certain churches—simply put, those with a hierarchy—allow their celebrants to be registrars. I assume that that has not changed; I have not been able to find that in the complex legislative documents, which amend many other Acts. Can the Minister confirm that point?
There is also an element of time to take into account. If a certificate is lost or destroyed, it looks as if there is an eight-day period for it to be replaced. If anyone has ever tried to get a copy of a registration document for birth, marriage and death, eight days is quite optimistic. As the hon. Gentleman highlighted, that could be done by volunteers. We may be dealing with something from some time before. It is not often that I have to produce my marriage certificate, but that is now nearly 25 years old—unbelievably—and my birth certificate is now, I fear, more than 50 years old. Birth certificates may be easier, but it also applies to baptism certificates and so on, and trying to track those things down. Anything to do with churches can be challenging because there are changes of personnel. Records and sometimes church buildings can go; that applies similarly to registry offices. The public sector is often very good at keeping records, but there are things that can go astray. I am slightly worried about the challenge of eight days. It could be quite difficult.
I represent a constituency that has many people who have come from across the world and who have had challenges in life. Often, finding the right document to prove something is one of the biggest barriers to their getting access to the public services they need. So it is more important than it may seem in one or two lines of the regulations. I hope the Minister can pick up those points and the others that have been raised.
Kevin Foster
I thank my hon. Friend the Member for East Worthing and Shoreham and the hon. Member for Hackney South and Shoreditch for such comprehensive contributions. I welcome the speech from the shadow Minister. It is pleasing to have the Opposition’s support for the regulations. Obviously, the core of what we are looking to do is not a matter of particular contention.
I start with the remarks made by the hon. Member for Hackney South and Shoreditch. We recognise that registers have two roles: one is the day-to-day need for people to prove their status or their identity, and the second is for historical records and genealogical research. I take her point about particular churches or places of worship that rely on volunteers. The quarterly returns process in the Church of England can be quite cumbersome; it is a process first started back in the 19th century.
One reason why we want to move to a digital register is to remove the need to get hold of paper documentation. That leans into wider work to allow statuses to be automatically checked by digital systems talking to each other in public services. The hon. Member will appreciate, given her previous role, that that sounds simple, but there are the challenges of making sure that appropriate data protection is in place, and that records will be accessed for legitimate purposes and with people’s consent.
The concept of a church or a religious building continuing to hold a physical register will disappear. They may well keep their historical records and parish registers, but they will no longer be getting someone to fill out a physical certificate. As we have discussed, we have had some lengthy conversations with the Church of England.
On the questions asked by my hon. Friend the Member for East Worthing and Shoreham, people will still sign a document on the day. It will be similar to now, in that the priest who celebrates the marriage will take responsibility for sending that document off to be placed on the electronic register.
Dunkerton parish church is in a small rural Dartmoor community, in the west of Devon. Marriages have been conducted there for about 700 years. It has no running water, no electricity and certainly no wi-fi. In order to provide a solution that means people can still get married in that ancient church with a wholly electronic register, we came to an appropriate position with the Church of England, which I understand it is happy with and which is as close to the current position as possible. It makes it clear that for those married in that church, the priest is responsible for sending back the form to the registrar, for it to be entered on to the digital record.
People will not see a particular difference on their wedding day, but they will not sign paper certificates on the day. That is where we need to be clear in our own minds. It is no longer about the paper being the record of the marriage. To be clear, this is about recording the event. The moment of marriage is not when it is entered on to the register; sometimes people can be confused and think that signing the register is the moment that they become married. It is not. The certificate is a record of a marriage that has taken place in the church.
Meg Hillier
Is it possible for people to be provided with a paper document? Some people frame their marriage certificates; they are proud of the moment. Will that be prohibited?
Kevin Foster
Absolutely not. There is nothing to stop that. As the hon. Member will know with baptism, which is not recorded in a secular sense by the GRO, certificates are issued by churches. I think the language on them usually says they are to be used “when the child is presented to the Bishop for confirmation.” That is true in the Anglican tradition and there is nothing to stop that. It will not be a legal document of the marriage, but electronic statuses and transactions are becoming increasingly common for most people, and this will be an easy-to-access digital status when needed—for example, to prove a marriage to a bank or someone else—rather than, necessarily, as the hon. Member says, something that someone might want to have on the wall as a record of their relationship.
Jess Phillips
Just to clarify and potentially answer one of the points, nowadays anything can happen, ceremonially, in a church, or even in a registry office, where I got married; churches can, if they want, still keep old books, make records and keep the history of that church. Nothing in the draft regulations bars that—is that correct?
Kevin Foster
That is correct. The only things churches should not use are the current marriage certificates issued under the Marriage Act 1949. That is the thing that changes. Parish registers, which some Church of England parishes have kept literally since medieval times, can continue to be kept. There is no reason why a church cannot give something to people to mark their marriage there. However, people who attend the wedding perhaps will not see that the form that is signed is then sent by the priest back to the registrar to be entered on to the digital record.
We discussed at some length with the Church of England how we can provide a practical solution. It has thousands of priests and marriage venues that have stood for centuries, where a computer solution cannot realistically be installed in any sense, or even a mobile one, so that details can be directly entered into a digital register. This was the solution that we came to. It seems both fair and reasonable, and to be clear, the Church is perfectly happy with it.
Tim Loughton
On a practical point, many churches have a whole supply of marriage certificates, which may be part of a marriage register book. The Minister quite rightly says that they will effectively have no status post 4 May, because there will be the electronic record, but can they not still be used in place of the voluntary thing to give to the happy couple to frame? They will not have a legal status, but it would be a waste to have to throw them all away, would it not?
Kevin Foster
Once we get beyond 4 May, the paper registers will close. Effectively, certificate books will then need to be returned to the GRO to register the final weddings that have taken place under the previous registration system. It would not be appropriate to issue documentation that once had legal status beyond the point at which it has legal status. The current certificate books that people sign will be required to be returned and to cease being used.
Meg Hillier
The Minister talked just now about proving status to a bank or someone. There is a challenge here. Who has access to the register? What are the cyber-security issues around that and who gives permission for that? I am already married, but if I were to get married after 4 May, would that mean that the Minister could look up my marriage? Who in a bank would have the power to do that? Could it be done only with my permission? What are the data protection controls around this hugely important database, which could be used for all sorts of nefarious reasons, as well as benevolent ones?
Kevin Foster
The hon. Member will know that one reason we are moving to a digital system, away from paper, is that paper is far easier to forge or produce copies of, particularly in the modern era, than in the 19th century, although it has to be said that the register is actually a public document. It is not like the census document, which is kept for 100 years. The registers are actually public and can be consulted, as she will be aware of, given her previous time being responsible for the GRO. I think that we can put that particular concern slightly to one side.
We are also looking at digitising some historical records, to make them far easier to search for those looking to do family history and research. As the hon. Member will know from her time with the GRO, family history, especially discovering dates of marriage, can be quite interesting, particularly when going back to grandparents’ or great-grandparents’ generations. When going through a family tree, someone may discover that the great-grandparents who swore blind they got married in 1919 actually got married in 1920, and then realise that grandad was on his way a couple of months later. There is a general part that we are looking to digitise
Kevin Foster
I will give way once more, and then I will make some more progress.
Meg Hillier
Forgive me, but this is an important point. There is a difference with a physical register that someone can look at. The register has people’s addresses and the names of their parents, which are security questions when signing into a bank account. Who gives permission for the register to be checked? Is it completely open to the public, or is there some brake on that to ensure that it is not used inappropriately to mine IDs and to be used for nefarious reasons? That is absolutely fundamental.
When we were looking at introducing identity cards, which of course were not introduced, there were huge debates and discussion of detailed legislation about the security of the data and who would give permission to access it. Although this data is already out there, that is not in the same way as being in a parish register, rather than actually online.
Recently, my local authority suffered a major cyber-security attack, and was very much helped by Whitehall to sort it out, but it will take a year to resolve some of the issues, and important data was stolen and put on the dark web. The issues are therefore very serious and pertinent. I hope that the Minister will address that before we pass the draft regulations.
Kevin Foster
First, one of the most common ways of creating identities at the moment is to forge outdated paper certificates, hence why we are keen to move away from paper certificates, which are easily forged and used for nefarious purposes. Clearly, therefore, we want to move to a digital register.
As the Committee may have picked up, another private Member’s Bill is before the House on Friday, relating to birth and death registration where, similarly, we want to move away from the paper certificate process towards a more secure online register as the final arbiter. That is of course out of the scope of the Committee, but it shows the general thrust of the Government’s plans to modernise a pretty outdated system of registration, emphasised not only by the fact that mothers’ details are on marriage certificates but by the process still being heavily rooted in the past.
The position on access to the register will be the same as it is today. I accept that it is slightly different when someone is checking on a computer, rather than walking down to Somerset House, although a lot of that can be done online already, via records already digitised.
To come to some of the other points, my hon. Friend the Member for East Worthing and Shoreham stated that he cannot see a mention of mothers’ names on marriage certificates. As he will be aware from our long discussions of his private Member’s Bill that is now an Act, a lot of the purpose was to remove much of the specification in primary legislation that we would not put there today. The actual content will be prescribed in regulations made by the Registrar General, with the approval of the Secretary of State. However, the draft regulations to amend primary legislation will remove the more outdated requirements and then allow the new certificate to include mothers’ names and occupations. To be clear, that is where that will be specified finally, but allowing this to go forward will be the core part.
In a couple of other questions, my hon. Friend asked why a Bill that became an Act in late 2019 is being acted upon in 2021. Originally, we were hoping to launch the new system last year. I hope that the Committee will understand why the middle of a global pandemic, when registrars were urgently having to adapt their birth and death registration systems to cope, was widely viewed as not the appropriate time to introduce a brand new system of marriage registration. We would very much have liked to move forward with it last year, but we wholly accepted the points made by the registration system, that the middle of a pandemic was not an appropriate moment. However, with a lot of weddings delayed to this summer due to the impact of the social distancing regulations last year, now is the time to take the new system forward.
Kevin Foster
I will not now, but I will cover in writing the points about the baby loss review and about coroners and stillbirth—that is perhaps a more appropriate way to update my hon. Friend.
With that, I commend the draft regulations, which will finally bring our marriage law into the 21st century.
Question put and agreed to.
Resolved,
That the Cttee has considered the draft Registration of Marriages Regulations 2021.
Draft Financial Reporting Council (Miscellaneous Provisions) Order 2021
(3 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I remind Members about social distancing. Spaces available to Members are clearly marked—that will not be a problem today. I also remind Members that Mr Speaker has stated that masks should be worn in Committee, obviously when you are not speaking. Hansard colleagues will be grateful if you could send any speaking notes to hansardnotes@parliament.uk.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I beg to move,
That the Committee has considered the draft Financial Reporting Council (Miscellaneous Provisions) Order 2021.
It is a pleasure to serve under your chairmanship, Sir Charles. The order was laid before the House on 8 April. It aims to ensure that the Financial Reporting Council, the public body that regulates auditors, accountants and actuaries, follows the same rules as other regulators on access to information, how it exercises its regulatory functions and promoting equality.
The order serves three purposes. First, it designates the Financial Reporting Council a public authority for the purposes of the Freedom of Information Act in respect of specific public functions. Secondly, it ensures that all the FRC’s regulatory functions are subject to the regulators’ code, which sets good practice for regulators. Thirdly, it will add the FRC to the list of public authorities subject to the public sector equality duty.
I should stress that the FRC is already partially subject to those duties, and otherwise voluntarily adheres to those rules at the moment. However, it is more effective, more transparent and more consistent to apply those duties and rules in law comprehensively, as the draft instrument does.
Following the collapse of BHS and Carillion in particular, it has been a priority of the Government to understand and address shortcomings in the UK audit environment, including the role of the FRC as regulator. That is why, in April 2018, the Government commissioned Sir John Kingman to conduct an independent review of the FRC, which reported on 18 December 2018.
The FRC review identified the need for a new, strengthened regulator. It emphasised the need for the regulator to be held to the standards and obligations expected of all public sector bodies and to be more transparent, and recommended that it should be subject to the Freedom of Information Act and the regulators’ code. Those findings were supported by the Government and welcomed at the time by the Business, Energy and Industrial Strategy Committee.
The FRC, under new leadership, has already taken significant steps to strengthen its capabilities and to begin building the additional capacity needed to deliver on the ambitious mandate set by the FRC review.
The order builds on the progress in implementing the review’s recommendations on the FRC’s internal workings, which include full compliance with the “Managing Public Money” handbook, streamlining governance structures and enhancing stakeholder engagement. Those measures represent another step forward on the path to transforming the FRC into a new, strengthened regulator.
Let me deal with the application of the FOI Act to the FRC. At the moment, only some of the FRC’s statutory functions are subject to the FOI Act. The FRC has since voluntarily adopted compliance with its provisions. The order will designate the FRC a public authority for the purposes of the FOI Act, so that all its public functions are covered by the Act. The FRC was consulted on the application of the Act to its public functions and was supportive of that. Since the FRC is a public body, it is right and proper that the order applies the FOI Act to its public functions, helping to underpin public confidence and trust in the regulator.
I turn to the regulators’ code measure. The FRC already applies the code to some of its regulatory functions. The order will now apply the regulators’ code to all the FRC’s regulatory functions, save those that it has delegated to the relevant professional bodies.
The code encourages trust, open dialogue and accountability between the regulator and those that it regulates. Application of the code by legislation will make the FRC more accountable, in line with other regulators. It will encourage greater transparency in the way regulation is delivered and enable the FRC to target its resources better.
The Government have worked closely with the FRC and the relevant professional bodies and consulted them on this matter. All the consulted parties supported the application of the code to the FRC.
The third measure is the public sector equality duty. It will add the FRC to the list of public bodies that are formally subject to the duty. Currently, the FRC is only subject to the duty with respect to its public functions.
Those subject to the equality duty must eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by or under the Equality Act 2010. They must advance equality of opportunity between people who share a protected characteristic and those who do not. They must also foster good relations between people who share a protected characteristic and those who do not.
The FRC sets the UK corporate governance code, which the UK’s largest companies are required to apply on a “comply or explain” basis. The code promotes diversity reporting. It is therefore only fair that the FRC itself is subject to the highest public duty with respect to equality considerations in its role.
In March 2019, in publishing an initial response to the FRC review, the Government committed to replace the FRC with a new independent statutory regulator with stronger powers. The new regulator, the Audit, Reporting and Governance Authority, will be a regulator with teeth, backed by legislation, funded by a mandatory levy on industry, with stronger enforcement powers.
The Government will legislate to create the new regulator when parliamentary time allows, but the measures in the draft instrument do not need to wait and should not wait. They will ensure that the FRC’s position is consistent with those of other public bodies and make it more transparent and more accountable to the businesses and professions that it regulates.
I hope that the Committee agrees that the three measures in the instrument will improve the UK’s audit, accounting and corporate reporting regulator by making it more accountable and transparent.
I commend the order to the Committee.
Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship for the first time, Sir Charles, and to be back in Parliament with my SI buddy, the Minister. We seem to do a double act on these things.
As hon. Members know, the Financial Reporting Council is an independent regulator responsible for regulating auditors, accountants, and actuaries and setting the UK’s corporate governance and stewardship code. However, as Sir John Kingman’s review in December 2018 made clear, it was an institution that “leaked and creaked” and required fundamental reform. As the Minister said, its days are now numbered, and it is to be replaced by a new Audit, Reporting and Governance Authority, but it appears that the Government are dithering on this, given that Ministers have promised us year after year that audit reform will be introduced. We now hear that it will happen in early 2021, although that looks questionable too. Does the Minister know when we can expect audit reform for sure and the replacement of the FRC with the new authority? Will it mean more than just changing the letterhead?
The order imposes specific duties on the FRC related to freedom of information, the regulators’ code and the public sector equality duty. The role of the FRC has developed over time, and in 2017 the then Department for Business, Energy and Industrial Strategy concluded that the FRC’s work should comply with all the relevant public body guidelines. In 2018, the Government commissioned an independent review, which recommended that the regulator should be subject to the FOI Act.
A couple of years ago, the FRC voluntarily adopted compliance with the codes, so this statutory instrument will not fundamentally change the FRC’s approach. Although it is welcome that compliance is to be put on a statutory footing, I wonder why it is happening now, when we are about to disband the organisation and replace it with a new one. Why could not we have passed the SI, which is fairly straightforward, two or three years ago?
We support the changes, but we wonder why they are being made now and when we can expect the proposals for the new Audit, Reporting and Governance Authority to come forward.
Paul Scully
I appreciate the hon. Member’s comments and constructive contribution to the debate. We do not want to delay the FRC’s replacement in any way, but the new regulator will require primary legislation and, as I said, the Government intend to introduce it when parliamentary time allows.
In the meantime, the Government are committed to putting in place the right degree of transparency and oversight of the regulator. The order, which applies to the current regulator, is an important step in achieving that. Yes, the FRC has voluntarily covered a lot of what is in the measures, but we want to ensure its good standing until we get to the point of setting up its replacement. Reliable audit and corporate reporting are vital to well-functioning markets, business investment and growth. An effective regulator is essential to help the UK economy realise those benefits.
The measures will help ensure that the UK maintains and advances its status as a place of the highest standards in audit and corporate reporting. The Government are committed to acting on the findings of Sir John Kingman’s independent review of the FRC. The measures are steps towards that goal.
I thank hon. Members again for their valuable time and contributions to the debate. I hope that the Committee will approve the SI.
Question put and agreed to.