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Oral Answers to Questions
(3 years ago)
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Fleur Anderson (Putney) (Lab)
Andrew Gwynne (Denton and Reddish) (Lab)
The COP26 President (Alok Sharma)
The Prime Minister’s 10-point plan sets out our blueprint for a green industrial revolution—a plan to invest in green technologies and industries, leveraging in billions of pounds of private sector investment, supporting up to a quarter of a million green jobs and levelling up across the UK. It is a clear plan to build back greener from the covid pandemic.
Fleur Anderson
The UK’s credibility as COP President rests on demonstrable climate action at home. The Government have set legally binding net zero targets but they are currently off track to meet their fourth and fifth carbon budgets, which are calibrated for previous, more lenient targets. Scrapping the green homes grant two weeks ago puts us into reverse. How will the right hon. Gentleman seek to progress local, national and international progress on energy efficiency and specifically on green homes in the run-up to and during COP26?
Alok Sharma
The UK has decarbonised its economy faster than any other G20 nation since 2000. We have met carbon budgets CB1 and CB2, we are on track to meet CB3, and of course we are pursuing plans to ensure that we meet CB4 and CB5. Ahead of COP26, we will publish a comprehensive net zero strategy.
Andrew Gwynne [V]
The COP President has talked confidently about British leadership, but the Prime Minister’s 10-point plan is full of big words and no real detail. The total impact, by the Government’s own admission, is that they will not meet the fourth and fifth carbon budgets. When we pull back the curtain, there is not much to look at, and we are running out of time. He has just said, in answer to my hon. Friend the Member for Putney (Fleur Anderson), that there will be a net zero strategy. We need it before the summer recess to make the Government’s word credible ahead of COP26. Does he agree with that, and if so, what is he doing about it?
Alok Sharma
As someone who was partly responsible for preparing the 10-point plan, may I suggest that the hon. Gentleman actually reads the detail of it? I have discussed the sector-specific points in it with individuals in different sectors of industry, who have found it quite compelling. Of course I agree that we need to be doing more, and that is why I have committed to publishing the comprehensive net zero strategy ahead of COP26.
Philip Dunne (Ludlow) (Con) [V]
What steps is my right hon. Friend taking, in his extensive discussions with leaders around the world on making progress at COP26, to develop a global standard or taxonomy of climate change impact in financial reporting and in green labelling investment products?
Alok Sharma
As my right hon. Friend will know, the UK has taken a leading role in climate-related disclosures by implementing a green taxonomy and, very importantly, by making TCFD-aligned disclosures—recommended by the Taskforce on Climate-related Financial Disclosures —mandatory across the economy by 2025. In the conversations that I have with Governments around the world, I am urging other countries to follow a similar approach on financial disclosures. My right hon. Friend talks about asset owners in the financial services sector, and we are also encouraging asset owners and asset managers to make net zero commitments.
Ruth Edwards (Rushcliffe) (Con)
The COP26 President (Alok Sharma)
When the UK took on the role of the incoming COP26 presidency, under 30% of the global economy was covered by a net zero commitment. The good news is that that figure has now increased to 70% and of course I am pressing all countries to come forward with net zero commitments. However, as colleagues in this House have acknowledged previously, the United Nations Framework Convention on Climate Change’s initial “NDC Synthesis Report”, published in February, showed that we have much more progress to make on the 2030 emissions reduction target, and I am pressing countries on that as well.
Ruth Edwards [V]
The UK is a global leader in protecting the ocean, as shown by the success of its Blue Belt and 30x30 programmes, but as my right hon. Friend will know, only 1% of international waters currently have effective protection. Will he commit the UK to taking the lead in pushing for a strong global oceans treaty at the United Nations, to establish an international framework for protecting marine biodiversity in international waters?
Alok Sharma
My hon. Friend raises a vital issue, and she will be pleased to hear that the UK is working hard to see negotiations concluded this year on a new UN convention for the conservation and sustainable use of marine biodiversity in areas beyond national jurisdictions. That will enable the establishment of marine protected areas and help to deliver on the 30x30 target.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
In a letter to all UNFCCC—United Nations framework convention on climate change—parties this week, the COP President rightly argued that we must halve global emissions by 2030 if we are to keep the goal of limiting global warming to 1.5° within reach, yet he will know that recent UN analysis makes it clear that current national pledges will reduce emissions by just 1% by the end of this critical decade. We need the major emitters to do much more if we are to close the gap. That means a need for deep cuts in American emissions and for Chinese emissions to peak by 2025, but it also means a need for tangible progress on the part of India. With the Prime Minister meeting President Modi later this month, will the COP President tell the House what the UK is willing to put on the table, particularly in terms of climate finance and technological support, to help to ensure that India feels able to increase its ambition markedly ahead of the summit?
Alok Sharma
I agree entirely with the hon. Gentleman but, of course, all countries need to make much more progress when it comes to ambitious, nationally determined contributions to the 2030 near-term emission reduction targets. I have spoken with large economies around the world. As he knows, I met Prime Minister Modi a few weeks ago and, of course, we are working on a number of initiatives with the Indian Government. When the Prime Minister goes to India, I am sure there will be further announcements.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The COP26 President (Alok Sharma)
We are working very hard to ensure that we deliver an in-person COP that allows all countries to participate on an equal footing. That is incredibly important, as many parties feel strongly that negotiations must be in person. We continue to explore how technology and other innovations can make the summit more resilient, safe and inclusive.
Martyn Day [V]
I am grateful for that answer. Many respondents to the Business, Energy and Industrial Strategy Committee’s survey of expert views, both academics and former COP attendees, highlighted the value of remote participation for otherwise excluded groups, and for reducing the conference’s carbon footprint. Will the COP26 President explore the possibilities of wider virtual participation at COP, in addition to physical attendance at the conference?
Alok Sharma
The hon. Gentleman raises an important point. I have said on a number of occasions that I want this to be the most inclusive COP ever. Absolutely, we are looking at how we can expand our digital programmes to allow for more virtualisation. I hope that, at the appropriate time, I will be able to update the House further.
Darren Jones (Bristol North West) (Lab)
A diplomatic source in the British Government is reported in the papers today as saying about the conference:
“No one in Europe thinks it’s going to happen and the US is increasingly sceptical that it can happen without a delay.”
I support the COP26 President’s aim for a physical conference of national delegations but, of course, many stakeholders are politicians, business leaders, NGOs and others. When will the Cabinet Office produce a contingency plan to give clarity to stakeholders about how engagement can take place in November?
Alok Sharma
The hon. Gentleman, again, raises an important point. He will have seen the letter I wrote to UNFCCC members on the progress we want to make over the coming months. COP26 has already been postponed by one year, and the urgency of the climate crisis has not abated. I do not sense any desire among parties for a further postponement, and we are working very hard to ensure that we have an in-person, physical COP, taking into account, of course, any covid-related contingencies.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Thank you, Mr Speaker. That is a new title. I was happy with international champion, but I am sure vice-president is acceptable, too.
The actions we are taking to tackle climate change support the delivery of a range of UN sustainable development goals. Through the Together for Our Planet campaign and Race to Zero, we are encouraging towns, cities and communities to drive climate action at a local level. This is supported by the COP26 UK mayors and regions advisory council, which includes West Yorkshire Combined Authority and Kirklees Council, and it has set itself an ambitious target of being net zero by 2038.
Mr Sheerman [V]
Will the Minister and, certainly, the COP26 President, in whom I have great confidence, support what we are doing in Huddersfield to make Huddersfield a sustainable town and a sustainable community by rigorously pursuing the sustainable development goals? We are building a network of towns across the United Kingdom. We are up to about 20, and we need to get to 50 and 500. What can the Government do to help us, because it is about grassrooting and making sure that COP26 is not cop-out 26?
Anne-Marie Trevelyan
It is important that we encourage and, indeed, provide the tools—and the Together for Our Planet campaign is one of those tools—to help our constituents, our towns and our cities to understand and take charge for themselves of the impact they can have in helping to meet our Paris agreement challenge. That involves everything from household choices through to changes in how we run our buses and trains. Every council and every community has a role to play.
Kim Johnson (Liverpool, Riverside) (Lab)
The COP26 President (Alok Sharma)
I have regular discussions with Cabinet colleagues about decarbonisation. My right hon. Friend the Transport Secretary is putting a green recovery for transport at the centre of his Department’s decision making in the run-up to COP26 and beyond.
Kim Johnson
Liverpool city region is developing a project to bring 20 hydrogen-powered double-decker buses to the streets, with the potential for further green investment to scale this up and achieve our ambition of being carbon net zero by 2040. Can the Minister tell us when the £30 billion in planned capital investment as part of the green recovery stimulus will be available to support our ambition?
Alok Sharma
I will ensure that the hon. Lady’s specific point is taken up with my right hon. Friend the Transport Secretary. She will know that, last month, the Transport Secretary launched a multimillion-pound scheme to enable local authorities to roll out zero-emission buses. This funding will deliver 500 zero-emission buses, supporting the Government’s wider commitment to introduce 4,000 such vehicles.
Deidre Brock (Edinburgh North and Leith) (SNP) [V]
There is no joined-up thinking on any issue with this Government, but we would all have hoped for some cross-Department thinking on this issue at least. We are, as usual, disappointed, with even the green homes grant gone after just a few months—so much for building back better.
There is increasing concern voiced internationally, too, about the UK Government’s lack of progress domestically on environmental commitments. Will the right hon. Gentleman show some real leadership and commit today to start seriously lobbying his Government colleagues to join up the dots and start delivering, so that we can look forward to environmentally sound investment, renewed support for a comprehensive charging framework for electric vehicles, real investment in hydrogen technology and marine energy, support for housing improvements and so on? Will he do that, or is he happy to leave us all embarrassed to be hosting COP26 while the UK seems to be striding off in the opposite direction?
Alok Sharma
I say to the hon. Lady that the role of the COP presidency is to ensure that we are working with all 197 parties to ensure that we are making progress on keeping the 1.5° C limit within reach. The UK, like any other country, needs to see what more we can do. I hope that she will acknowledge that we are seen as a leader in the world and that, since 2010, we have decarbonised our economy faster than any other G20 nation.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Climate change and biodiversity loss are inextricably linked, which is why the UK has made nature a core priority of our COP26 presidency. We pioneered and launched the leaders’ pledge for nature in September last year, and we are also driving global action to protect and restore critical ecosystems such as forests and accelerating our transition towards sustainable agriculture while mobilising the finance to support this.
Mr Dhesi
In order to tackle biodiversity loss, the convention on biological diversity, COP15, in May, will support new targets on nature. However, with the Environment Bill delayed yet again, how will the Minister ensure that the outcomes from this conference will feed into COP26 in November?
Anne-Marie Trevelyan
The Prime Minister and President Xi have agreed that the UK and China should work together, as respective hosts of the United Nations framework convention on climate change COP26 and the convention on biological diversity COP15, to reinforce and amplify those linkages between climate change and biodiversity loss and to achieve mutually supportive and ambitious outcomes at both summits. We are working closely with our Chinese counterparts and with the UN secretariat of the UNFCCC, the CBD and the United Nations convention to combat desertification to strengthen the links between these conventions to deliver the best outcomes for nature.
Virginia Crosbie (Ynys Môn) (Con)
The COP26 President (Alok Sharma)
I have so far engaged with Ministers and negotiators from more than 80 countries and briefed all parties to the UN on a number of occasions. This, of course, includes discussions with representatives of countries, including China, the US, the EU and India.
Virginia Crosbie
In the light of Germany’s coal phase-out Act, which states that it will not end the use of coal-powered energy until 2038, how does the Minister intend to use COP26 to promote nuclear power, particularly at key UK sites such as Wylfa Newydd on Anglesey, in order to meet the UK’s net zero targets?
Alok Sharma
My hon. Friend is a consistent and strong champion of both the nuclear sector and the Wylfa site in her constituency, and I commend her zeal. As I have said to her previously, nuclear power clearly has a role to play in our clean energy mix as we work towards net zero emissions by 2050. She will know that, in the 10-point plan that the Prime Minister set out, we are backing large nuclear as well as small modular reactors and advanced modular reactors.
Mark Fletcher (Bolsover) (Con)
The COP26 President (Alok Sharma)
I have engaged with hundreds of global and UK businesses through a combination of speaking at high-profiles events and bilateral meetings, and my COP26 business leaders advisory group. Businesses have a key role to play in tackling climate change, and I encourage them all to sign up to the Race to Zero campaign.
Mark Fletcher
Derbyshire County Council recently launched a £2 million green entrepreneurs fund for businesses that are interested in green energy and carbon reduction. Does my right hon. Friend agree that this is an excellent example of local government and businesses working together, and will he share my praise for county council leader Barry Lewis and his visionary leadership on this issue?
Alok Sharma
I commend both my hon. Friend and the leader of Derbyshire County Council, Barry Lewis, for championing this excellent initiative. This is precisely the type of scheme we want to see—supporting businesses, growth and jobs while cutting emissions.
David Johnston (Wantage) (Con)
Laura Farris (Newbury) (Con)
Suzanne Webb (Stourbridge) (Con)
The COP26 President (Alok Sharma)
I want COP26 to be the most inclusive ever. The voices of young people are vital to this process. That is why I have set up an international COP26 Civil Society and Youth Advisory Council, allowing for a regular dialogue with youth activists, NGOs, indigenous people and faith groups as we plan for COP26.
David Johnston
I have a pile of letters on my desk from children at GEMS Didcot Primary Academy and John Blandy Primary School, who have written to tell me what they have learned about climate change and what positive changes they saw in the environment during lockdown, and to give me their ideas of things they think the Government should be doing. Will my right hon. Friend tell me how children and young people will be able to feed into the preparations for COP26?
Alok Sharma
I thank my hon. Friend for championing the views of young people in his constituency. I pay tribute to the pupils of John Blandy and GEMS Didcot primary schools for their enthusiasm for climate action. I will be delighted to receive their letters and review their ideas; and, through him, I will respond in writing to his constituents.
Laura Farris [V]
My right hon. Friend and I both have the privilege of representing seats in Berkshire, where many young people are passionate about climate change and are active in local groups such as the West Berkshire Climate Action Network. This is their first real opportunity to see UK leadership in action. Will my right hon. Friend confirm how those young people can access the youth council that he just described and other mechanisms to feed their ideas into the COP later this year?
Alok Sharma
I thank my hon. Friend for the work that she does to promote climate action. I would be very happy to hear from young people and youth groups in her constituency. We will be engaging further with schools in relation to COP26 to unleash the enthusiasm and energy of young people across the UK and tackle climate change.
Suzanne Webb
We all have a stake in protecting our climate, particularly young adults in my constituency, who I hope will be the pioneers of change. As part of the UK-Italy COP26 partnership, what are the plans for the “Youth4Climate: Driving Ambition 2021” event to be held in Milan in September?
Alok Sharma
From 28 to 30 September, the Youth4Climate event will bring together 400 youth delegates from across the globe to discuss topics under a range of thematic areas. The event will culminate in a declaration and discussion between the youth delegates and Ministers attending the pre-COP26 event.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
COP26 President (Alok Sharma)
If we are to protect our planet from the ravages of climate change, we must support developing countries to respond, but without adequate finance the task ahead is well nigh impossible. That is why on 31 March, the UK presidency convened around 50 developing and donor countries and multilateral institutions to consider how we can get more—and more timely—public finance flowing into climate action. I am pleased that we have secured a range of commitments from the likes of the World Bank, the International Monetary Fund and donor countries to move this vital work forward. It is our moral duty to protect the most vulnerable communities from a climate crisis that they have not caused.
Debbie Abrahams [V]
How does supporting a new Cumbrian coalmine, giving new licences for oil and gas exploration, scrapping the green homes grant and reducing incentives for electric vehicles reflect the Government’s stated commitment to reach net zero carbon emissions by 2050—or is this more dad-dancing rhetoric by the Prime Minister, unconvincing and unco-ordinated?
Alok Sharma
The hon. Lady raises a number of points. In previous answers I have set out the ambition that the UK has and the progress that we have made. Specifically with regard to oil and gas licensing, the UK Government will introduce a new climate compatibility checkpoint before each future oil and gas licensing round to ensure that licences awarded are aligned with wider climate objectives, including net zero emissions by 2050.
Cherilyn Mackrory (Truro and Falmouth) (Con) [V]
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The COP26 nature campaign is driving ambitious international and domestic action to protect and enhance our environment, and this will be a high priority at COP26 in November. I commend the work that Surfers Against Sewage are doing on water pollution and water quality, which I hope to see first-hand when I visit Cornwall as part of the G7 summit in June. Protecting the ocean, including through nature-based solutions, provides multiple vital climate change adaptation and resilience benefits.
Edward Miliband (Doncaster North) (Lab)
Last month, the COP President wrote that the world is doing nowhere near enough to limit global warming to 1.5° C, and he is right. A green economic stimulus could make a huge difference to meeting the target, but while we have put it as the top item of the G7 agenda, the sum total of the Chancellor’s measures here in the UK promised just £12 billion of green spending over a decade, and he has already cut £1 billion from that. Our investment is 60 times smaller than President Biden’s green infrastructure plan. Is it not a very significant challenge for COP26 that when it comes to a green stimulus we are telling others to act but not doing so ourselves?
Alok Sharma
The right hon. Gentleman knows that we agree on many of these issues on tackling climate change, but when it comes to Government money, we have also ensured that we leverage in private sector money. It is not just about Government money; it is also about leveraging in private sector money. Ultimately, this is about not just cutting emissions but creating jobs for constituents across the UK.
Edward Miliband
As the right hon. Gentleman will know, as COP26 host, our actions face particular scrutiny, and I think he will know that the international community is increasingly concerned, and not just on green recovery. The Government call on others to power past coal but flirt with a new coalmine; say to others, “Adopt a net zero target”, but are off track on ours; and tell countries to support the world’s poorest but slash aid spending. Rachel Kyte, former special representative of the UN Secretary-General, said this week of our record on climate:
“What the UK is doing is like dad dancing…they are very uncoordinated.”
Is it not time the Government gave up the dad dancing on climate and showed some consistent leadership?
Alok Sharma
The right hon. Gentleman himself is obviously a very good dancer and therefore unlikely to take part in dad dancing; we should try it together at some point.
Of course every country, including the UK, needs to make more progress on cutting emissions. The right hon. Gentleman makes particular reference to coal. He will know that our energy mix with regard to coal has gone from 40% in 2012 to less than 2% last year, and we have been leading the Powering Past Coal Alliance, to which a large number of countries have now signed up. So we are making progress; of course, there is more that we can do.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Anne-Marie Trevelyan
We are working closely at many levels with international partners on preparations for COP26 and to accelerate climate ambitions. The COP26 President-designate has met large numbers of Governments. He is already out and about visiting many countries—15 in the past few weeks—and briefing UN member states on a regular basis. I am working with the most vulnerable countries to make sure that they are supported in their ambitions to meet their resilience challenges.
Hilary Benn (Leeds Central) (Lab)
Alok Sharma
I refer the right hon. Gentleman to the 10-point plan, which sets out clearly the progress that we want to make on decarbonising buildings and homes, and heat pumps will of course play a part. We have also set out there our plans on the use of hydrogen for home heating.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
The Prime Minister (Boris Johnson)
I know colleagues across the House will wish to join me in paying tribute to our dear friend and colleague, Dame Cheryl Gillan, who sadly died last week. MP for Chesham and Amersham for 29 years, she will be remembered for being a strong voice for her constituents, for being a brilliant campaigner, including her advocacy for autistic people and their families, and for being the first female Secretary of State for Wales. I also want to pay tribute to Baroness Shirley Williams, a pioneer for women in politics and in Government, and to our former colleague Peter Ainsworth, who was passionate about his causes, especially the environment.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Mr Mohindra
Dame Cheryl represented her constituents with considerable effectiveness for nearly 29 years and is already sorely missed in this place, especially by many of the newer Members, as she was so kind to us in our first months in Westminster. One of her passions was the protection of chalk streams, in particular the River Chess, which passes through my constituency of South West Hertfordshire. Many MPs are increasingly concerned about reports of partially treated sewage being released into our rivers, with knock-on health impacts for both humans and animals. Can my right hon. Friend reassure the House that this Government will actively protect our rivers and streams?
The Prime Minister
My hon. Friend is entirely right to raise the concern we fully share about sewage overflow into rivers such as the Chess. That is why we have set up the storm overflows taskforce to address the matter, working with the water industry, regulators and environmental groups. Last month, we announced plans for legislation to address that very issue.
Keir Starmer (Holborn and St Pancras) (Lab)
May I join the Prime Minister in his remarks about Dame Cheryl Gillan, who I worked with on a cross-party basis and remember with fondness? Ian Gibson also passed away this week. Both commanded respect on all sides of the House and will be sadly missed.
I also pay tribute to Shirley Williams. She was a great parliamentarian, and a formidable Minister and Cabinet Minister. She loved this House, the other place and, frankly, anywhere she could debate ideas and politics. For many years, she was Labour’s loss, but today she is Britain’s loss, and my thoughts are with her family and loved ones.
Does the Prime Minister believe that the current lobbying rules are fit for purpose?
The Prime Minister
I join the right hon. and learned Gentleman in what he said about Ian Gibson.
I share the widespread concern about some of the stuff we are reading at the moment, and I know that the Cabinet Secretary shares my concern as well. I do think it is a good idea in principle that top civil servants should be able to engage with business and should have experience of the private sector. When I look at the accounts I am reading today, it is not clear that those boundaries have been properly understood. I have asked for a proper independent review of the arrangements that we have, to be conducted by Nigel Boardman, and he will be reporting in June. If the right hon. and learned Gentleman has any representations he wishes to make on the subject, he should do so to Mr Boardman.
Keir Starmer
I know that the Prime Minister is launching an inquiry. That inquiry is not even looking at the lobbying rules; I am not sure it is looking at very much at all. Every day, there is further evidence of the sleaze that is now at the heart of this Conservative Government. [Interruption.] They can shake their heads. Let us just look at the latest scandal. A wealthy businessman, Lex Greensill, was hired as a senior adviser to David Cameron when he was Prime Minister. We have all seen the business card. After he left office, Cameron became a paid lobbyist for Lex Greensill. The next thing we know, Cameron arranged access for Greensill to Cabinet Ministers, Ministers and senior officials, and he lobbied for taxpayers’ money on behalf of Greensill Capital.
We also know that the Chancellor “pushed” officials. We know that the Health Secretary met Cameron and Greensill. We know that senior officials met Greensill Capital regularly, and now, even more unbelievably, we know that the Government’s former head of procurement, no less, became a Greensill adviser while he was still a civil servant. Does the Prime Minister accept that there is a revolving door—indeed, an open door—between his Conservative Government and paid lobbyists?
The Prime Minister
This is a Government and a party that have been consistently tough on lobbying. Indeed, we introduced legislation saying that there should be no taxpayer-funded lobbying and that quangos should not be used to get involved with lobbying. We put in a register for lobbyists. There is one party that voted to repeal the 2014 lobbying Act, and that was the Labour party in its historic 2019 election manifesto, which the right hon. and learned Gentleman has yet to repudiate. It did so because it thought the Act was unfair and restricted people’s ability to make representations to politicians. I think that that is absurd. Will he now say that it is absurd to repeal the 2014 lobbying Act?
Keir Starmer
The Prime Minister talks of the lobbying Act. Who was it who introduced that legislation? David Cameron. Who was it who voted for the legislation? Half the Conservative Front Bench. We said that it would not be tough enough, and where did that legislation lead? Two years later, David Cameron camping out in a Saudi desert with Lex Greensill, having a cup of tea. I rest my case in relation to that legislation.
Let me try another very simple question. Is the Prime Minister aware of any other Government official who had commercial links with Greensill or any other lobbying role while working in Government?
The Prime Minister
If the right hon. and learned Gentleman has any such information, he should of course make it available to Mr Boardman; that is the point of his review. It is an independent review. It will be coming to me by June, and it will be laid in the Library of the House of Commons.
The right hon. and learned Gentleman talks about lobbying. He is being advised by Lord Mandelson of Global Counsel. Perhaps in the interests of full transparency, so that we can know where he is coming from, Lord Mandelson could be encouraged to disclose his other clients.
Keir Starmer
I have not heard a defence that ridiculous since my last days in the Crown court. It is called the shoplifters’ defence—“Everyone else is nicking stuff, so why can’t I?” It never worked. I remind the Prime Minister that I not only prosecuted shoplifters; I prosecuted MPs over the MPs’ expenses scandal, so I stand on my record. That line just isn’t going to wash with me.
It was a former Prime Minister—and, I suspect, now a former lobbyist—who once said:
“This isn’t a minor issue with minor consequences… government contracts—worth hundreds of billions of pounds are potentially at stake.”
Can the Prime Minister now answer the question that the Chancellor has been ducking for weeks? How was it that Greensill Capital—a company employing David Cameron—got the green light to give hundreds of millions of pounds of taxpayer-backed loans?
The Prime Minister
While the right hon. and learned Gentleman was prosecuting MPs, I was cutting crime in London by 23% and cutting the murder rate by 50%. He asks about lobbying on behalf of Greensill. Again, I do not wish to embarrass the right hon. and learned Gentleman, but he does not have far to look. There was one person asking for Greensill bank to be able to use the coronavirus business interruption loan scheme, and that was the shadow Defence Secretary.
Keir Starmer
This just gets weaker and weaker. It does take me back to my defence days in the Crown court —just ridiculous. The shadow Defence Secretary—
Keir Starmer
It really was not a good point; if you think that is a good point, you have got real problems.
The shadow Defence Secretary was speaking for his constituents and for local jobs. That is a million miles away from being a paid lobbyist texting friends in Government. The Prime Minister says there is going to be an inquiry, but the person he has appointed worked for the same law firm that lobbied to loosen lobbying laws. You could not make it up.
What we need is to overhaul the whole broken system. This afternoon, Labour’s motion calls for a proper parliamentary inquiry into the scandal. If the Prime Minister is so concerned about this, he should welcome the motion. After all, to quote David Cameron, his old school friend:
“Sunlight is the best disinfectant”.
So, will the Prime Minister vote with Labour today for a full, transparent, independent inquiry?
The Prime Minister
I think the right hon. and learned Gentleman would have been better off supporting the lobbying Act and the Labour party would have been better off not campaigning to get rid of it. It toughens up our laws, and I think that his own proposal is simply to have, yet again, politicians marking their own homework. What the country wants—[Interruption.] That is what it is—a Committee of MPs to look at it. It will not do a blind bit of good. That is why we are having a proper, independent review. If the right hon. and learned Gentleman has any representations or allegations to make about what has taken place, he should make them to the eminent lawyer who has been asked to do this, who will be reporting to us by June.
Keir Starmer
The Prime Minister should be voting with us, not blocking a proper inquiry. The Greensill scandal is just the tip of the iceberg—dodgy contracts, privileged access, jobs for their mates. This is the return of Tory sleaze. It is now so ingrained in this Conservative Government. We do not need another Conservative party appointee marking their own homework. Actually, the more I listen to the Prime Minister, the more I think that Ted Hastings and AC-12 are needed to get to the bottom of this one.
We know the Prime Minister will not act against sleaze, but this House can, so can I urge all Members of the House to come together this afternoon to back Labour’s motion, and to start to clean up the sleaze and cronyism that are at the heart of this Conservative Government?
The Prime Minister
That is why we are putting in an independent review. That is why we have tougher laws on lobbying—a great shame that Labour opposes them. Yes, we are getting on with rooting out bent coppers. We are also appointing and hiring thousands more police officers. We are fighting crime. We are fighting crime on the streets of our cities while the Opposition oppose the police and crime Bill, which would put in tougher sentences for serious sexual and violent offenders—absolutely—and they then encouraged people who went out and demonstrated to “Kill the Bill”. We are getting on with protecting the public. That is absolutely correct. We are getting on with protecting the public of this country from crime of all kinds. We are getting on with the job of running this country, of rolling out a vaccination programme—
Mr Speaker
Order. Prime Minister, I think we ought to at least try and address the question.
Dean Russell (Watford) (Con)
The Prime Minister
Yes, indeed. I thank my hon. Friend for what he is doing. I thank everybody at Watford General Hospital for the support they have given throughout the pandemic, particularly the volunteers, who play a massive part in our vaccination roll-out programme. I fully support the NHS cadet scheme—part of our work to establish a volunteering legacy for young people following the pandemic.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Mòran taing, Mr Speaker. May I associate myself with the remarks of the Prime Minister and the Leader of the Opposition about Dame Cheryl Gillan and Shirley Williams?
The Scottish Government have passed landmark legislation embedding the UN convention on the rights of the child into Scots law, a real revolution in children’s rights. Every party in the Scottish Parliament supported it, even the Scots Tories; it has been welcomed everywhere except here in Westminster. Instead of supporting this new law, the UK Government are, shamefully, taking the Scottish Parliament to court in order to strike it down. Apparently, the only basis of the UK Government’s legal case is that the law constrains Westminster powers. So, Prime Minister, can you do everyone a favour by explaining how protecting children’s rights in Scotland threatens the Tory Government in London?
The Prime Minister
This is complete nonsense. The Government of the United Kingdom ratified the UN convention on the rights of the child 30 years ago. We all supported it. This is nothing to do with the rights of vulnerable children, which we all protect; this is simply an attempt by the SNP to stir up constitutional chaos and create another fictitious bone of contention between themselves and the rest of the country. If they really cared about the rights of the child, they would do much more to improve education in Scotland, where they are so lamentably failing.
Ian Blackford
The rights of the child—this is an Act passed by the Scottish Parliament and supported by every party, and yet the Prime Minister’s Government are taking our Parliament—our Government—to court. There is nothing technical about this, and the Westminster Government want to strip away the rights of children in Scotland. This is a tale of two Governments: we have an SNP Scottish Government delivering the baby box, doubling the Scottish child payment and providing free school meals to every primary school child; at the same time, this Tory Government are robbing children of their rights in Scotland. Quite simply, the SNP Scottish Government have worked, and will continue to work, to ensure that Scotland is the best place for a child to grow up. This legal challenge threatens that; it is wrong and it is morally repugnant, Prime Minister. Will the Prime Minister commit to withdrawing his legal challenge today? If not, we will see you in court.
The Prime Minister
The best thing the SNP can do, as I have said, for the rights of the child in Scotland is to improve their shameful record on education and to tackle the issues that matter to the people of Scotland: to tackle the tax regime they have put in place; and to do better on fighting crime and drug addiction in Scotland. They should be looking at the issues that really matter to the people of Scotland, but instead they are going into the elections next month yet again on a campaign to break up this country. That is all they can think of: break up this country—destroy our country—and call a referendum, in a way that I think is completely irresponsible at a very difficult time when we want to bounce back stronger together.
Mr David Jones (Clwyd West) (Con)
The Prime Minister
My right hon. Friend is completely right. Sir Peter Hendy has rightly identified the potential of the A55, and the best thing the people of Wales can do to guarantee these vital upgrades is elect a Welsh Conservative Government on 6 May.
Mr Speaker
We now go to Vicky Foxcroft. Vicky, I understand you are going to sign; can you speak and sign at the same time for the benefit of all?
Vicky Foxcroft (Lewisham, Deptford) (Lab)
The Prime Minister
I am grateful to the hon. Lady, and grateful for the way she has set out her question. I will revert to her as soon as I can.
Miss Sarah Dines (Derbyshire Dales) (Con)
The Prime Minister
I thank my hon. Friend. Yes, I certainly will encourage her and everybody else to shop local as we come out of lockdown, as I very much hope that we will be able to do. My right hon. Friend the Communities Secretary has announced that £830 million of funding from the future high streets fund has been allocated to areas, including my hon. Friend’s, to encourage that shopping that we all hope and want to see.
Ruth Cadbury (Brentford and Isleworth) (Lab) [V]
The Prime Minister
The honest truth—I cannot remember when I last spoke to Dave, but if the hon. Lady wants to know whether I have had any contact with him about any of the matters that have been in the press, the answer is no.
Sir Peter Bottomley (Worthing West) (Con)
The Prime Minister
My hon. Friend is completely right. This has been a colossal team effort. It has been led by the NHS, with GPs very often doing the lion’s share of the work, but they have been supported by the Army, by local council officials, who have also been absolutely magnificent, and, as colleagues have said, by volunteers as well.
Dr James Davies (Vale of Clwyd) (Con)
The Prime Minister
I thank my hon. Friend. We will look at what Sir Peter has to say. He has come up with some very interesting interim proposals, particularly about improving connectivity along the north Wales coastline—the routes into Merseyside. On the A55, I repeat what I said to my right hon. Friend the Member for Clwyd West (Mr Jones): there is a great opportunity to do that if people will vote Conservative and vote for a Welsh Conservative Government on 6 May.
Hywel Williams (Arfon) (PC) [V]
The Prime Minister
I have a high regard for the hon. Gentleman and, indeed, remember happy times with his colleague Adam Price. I do not remember the details of his Bill, but I think we would all concur with the basic principle that the hon. Gentleman has just enunciated.
Esther McVey (Tatton) (Con)
The Prime Minister
Well, I’ll do my best. I fully support what my right hon. Friend is doing and I congratulate Kash Singh on his work. It is incredible at this time that there are people who want to split our country up, rather than bring us together. That is what the SNP want. It is an absolute tragedy that they still think like that. I think they are going to change, but I wish everybody at OBON all the very best.
Kim Johnson (Liverpool, Riverside) (Lab)
The Prime Minister
Of course, when we look at and read the report in detail, the Government are not going to agree with everything, but there are some interesting observations and some interesting ways of looking at things. We will be responding in due course, but what we say is that nobody should be in any doubt as to the reality of racism and the struggle that too many people face. We will do everything we can to stamp it out, particularly to help young black people get the jobs and the education they need.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The Prime Minister
Engineers and scientists of all kinds have been crucial in the fight against covid, and this is the moment to become an engineer or work towards being an engineer. We are putting a huge £640 billion investment into the infrastructure of this country over the next few years. We will need skilled young people to go into engineering, and that is why we put in the T-levels. I congratulate my hon. Friend on his initiative, and I will do my best to support him.
Matt Western (Warwick and Leamington) (Lab)
The Prime Minister
I am afraid that the hon. Gentleman is simply wrong in what he says, particularly about my right hon. Friends the Chancellor and the Health Secretary; I do not believe that he should have spoken in those terms. What I will say is that there is one party in this place that brought in tough rules on lobbying, and another party that campaigned at the last election to get rid of those rules because of its relationship with the trade unions, because it wanted them to continue in the obscure, opaque way in which they were being run, and because it wanted people to be able to continue to lobby parliamentarians in the way that they always did. Look at the Labour manifesto from 2019. If the Leader of the Opposition repudiates it now, why does he not go ahead and do so?
Gareth Davies (Grantham and Stamford) (Con) [V]
The Prime Minister
I share my hon. Friend’s indignation about litter. I think that it is one of the things on which the whole of the country and, I hope, the whole of the House are united. That is why we are doing the Respect the Outdoors campaign to encourage people to follow the countryside code and pick up their litter. Obviously a lot of people are meeting outdoors at the moment because of the pandemic; they must obey the basic laws of respect for other people—pick up their litter. We are putting money into new litter bins and, yes, we are increasing on-the-spot fines for littering. I know there will be many libertarians in this place who think that is unfair and draconian. Personally, I think it is the right thing to do. I abhor litter, and I urge anybody who sees anybody throwing away a crisp packet to tick them off and tell them to pick it up.
Mr Speaker
I suspend the House for a few minutes to enable the necessary arrangements to be made for the next business.
Gambling regulation
Patricia Gibson (North Ayrshire and Arran) (SNP)
The petition states:
The petition of residents of the constituency of North Ayrshire and Arran,
Declares that there is significant concern about the recent collapse of the betting firm Football Index following the suspension of the company’s license by the Gambling Commission and its entry into administration; notes that customers collectively have over £90 million trapped in the company with average losses of around £3,000 per customer; further declares that the petitioners understand that the firm operated as a ‘football stock market’, offering customers the ability to buy ‘shares’ in footballers whose price would increase or decrease, and customers could be paid in ‘dividends’ based on player performances; further that, only a few days after the company ‘minted’ new shares in footballers and enticed customers to purchase shares, the company drastically decreased dividend payments by 82%, leading to a virtual market crash on the site which caused significant losses for customers; further that concerns have been raised that the firm operated like a pyramid scheme and that it had been admonished by the Advertising Standards Authority in 2019 for creating the impression that the product was a lucrative investment opportunity; and further that this scandal has called into question the adequacy of gambling regulation in the UK, given the Gambling Commission saw fit to give this company a license and apparently failed to ensure adequate oversight.
The petitioners therefore request that the House of Commons urges the UK Government to launch a full independent public inquiry into this scandal to ensure that gambling regulation is fit for purpose in protecting consumers.
And the petitioners remain, etc.
[P002656]
Return to work after the pandemic
David Linden (Glasgow East) (SNP)
I recently met Scope, the disability charity, which expressed concerns to me about a number of disabled people being compelled to return to work from furlough. We know, for example, that just 8.5% of people in the clinically extremely vulnerable category have received both doses of the vaccine, and the Government’s own figures show that 14% of disabled workers are employed in the wholesale and retail trade.
The petition has been presented to me, and it asks that the Government amend the coronavirus job retention scheme so that any disabled worker who is concerned about returning to work during the pandemic has the right to be put on furlough if they cannot work from home. The petitioners therefore request that the House of Commons urges the Government to consider ensuring that people with disabilities can make the decision on whether to return to work or remain on furlough. The onus should be on employees to decide, not the employer.
The petition states:
The petition of residents of the constituency of Glasgow East,
Declares that the COVID-19 pandemic has caused huge changes to the working patterns of many people across the UK, with the furlough scheme helping to support many businesses; further that restrictions across the UK are beginning to ease, with more businesses opening their doors, meaning that many people are returning to work; further that, despite the necessary safety precautions, some people with disabilities do not feel comfortable returning to work as of yet, and would rather wait until infection rates and COVID-19 cases have fallen further; further that the UK Government should ensure that nobody, particularly a person with a disability or health concern, is forced to return to work; further that the Government should commit to ensuring that the onus is on the employee to make the decision over their return to work, not the employer; further that if an employee wishes to stay on the furlough scheme they should be able to make this decision without repercussion and fear of losing their employment.
The petitioners therefore request that the House of Commons urge the Government to consider ensuring that people with disabilities are able to make the decision on whether to return to work or whether to remain on furlough and that this should be the employee’s decision, not the employer’s.
And the petitioners remain, etc.
[P002657]
NHS Pay Award (Report)
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
12:42 - The House divided: - Ayes: 222 / Noes: 0 - Question accordingly agreed to.
Carolyn Harris (Swansea East) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to lay before Parliament a report on any proposal to award NHS staff a pay rise for 2021/22 below 2.1%; to require the Secretary of State to move a motion in the House of Commons to approve any such report; and for connected purposes.
The last 13 months have impacted all of our lives, through illness, bereavement and financial worries, on top of learning to live with the fear of the pandemic and the limits on our freedoms. We have not all faced the same level of difficulties, but none of us have escaped without our lives in some way being changed by the experience. Some 127,000 people have tragically lost their lives—this is one of the highest death tolls in Europe —and in the past year more than 450,000 have been hospitalised due to severe covid symptoms.
For every one of those people, it has been our amazing NHS frontline staff who have cared for them, fought for them and either celebrated their recovery or held their hand as they took their last breath. Our NHS staff have kept this country going, risking their own health, isolating from their own families, working harder than ever, grieving the lives they could not save and comforting the bereaved. They are the very best of Britain and they deserve to be given the credit and the reward for everything that they have done and everything they have sacrificed to keep the rest of us safe.
Nurses and NHS staff were promised at least a 2.1% pay rise, but the Government have now retracted that and recommended 1% for all NHS staff, with the exception of junior doctors, GPs and dentists. The Government pretend that this is a rise, but they are fooling no one. With inflation forecast to reach 1.7% this year, our NHS staff, who have shown nothing but commitment this last year, are now set to receive a real-terms pay cut. Nurses’ pay has been falling in real terms since the Conservatives came to power 11 years ago, with pay awards consistently lagging behind inflation. Already that is unacceptable, but in the current situation the Government’s proposal to reduce that even further shows a complete lack of respect and gratitude.
For me, the thought of looking a nurse in the eye and telling them that they are worth less this year than they were before the pandemic is outrageously insulting. All of us across this House stood on our doorsteps and clapped for our key workers. We all took to social media to thank NHS staff and tell them what a wonderful job they were doing. We would have all been indebted to them if we had got sick and needed hospital care to help us against this undiscriminating virus, as some on these Benches indeed did. So was this just for show? Were the warm words and platitudes just a tick-box exercise? Or do the Prime Minister and his Government, hand on heart, truly believe that a rule-breaking, unapologetic aide is worth considerably more than the hundreds of thousands of NHS staff who have worked tirelessly and selflessly to battle this viral enemy and save lives?
The promise was clear: a 2.1% increase, as a minimum—it was not dependent on inflation rates or any other economic struggles. That promise has been broken, in yet another ill-judged U-turn by the Government. If the Prime Minister and his Cabinet colleagues have now rescinded that offer and replaced it with an inferior one, they need to come to this House with the revised recommendation and put it to a vote. When Opposition Members clapped on a Thursday evening and pledged our support to the NHS heroes, we meant it, and we still mean it. Those NHS staff have held up their side of the bargain, working diligently and doing everything in their power to save lives. Now it is our turn to hold up our side by voting in favour of a fair, long-term pay deal that reflects their commitment.
A recent survey by the Royal College of Nursing concluded that more than a third of the 42,000 people who submitted responses were considering leaving the NHS because they felt undervalued. These are staff who are exhausted from their efforts over the last year—they have worked unpaid overtime, forfeited their mental wellbeing and, far too often, put our families ahead of their own. The least they expected in return was recognition and fairness, but when it comes to a Government who have consistently failed to deliver on both, it appears that they were expecting too much.
We are on a cliff edge here: we already know that we entered the pandemic with a record 100,000 vacancies across the NHS. If we do not pay the staff what they deserve, we will struggle to retain those we have—let alone fill any vacancies. Even the 2.1% in the long-term plan was a minimum, and a cautious one at that, but 1% is not a pay rise—it is an insult. Trade unions and professional bodies are calling for improved pay offers at varying levels. They know that a fair pay rise would also help to boost staff recruitment and retention.
A 1% pay rise for an experienced nurse equates to £3.50 a week. That is £3.50 for a year of unpaid overtime, unwavering commitment and personal sacrifice—£3.50 for a year of turmoil; of fighting a virus that at times seemed unbeatable; of watching patients die, despite doing everything possible to save them; and of having to keep on going when beyond exhausted.
On the Opposition side of the House, we believe that our NHS is worth so much more. Under this Bill, the Government will be required to present their recommendations for anything below the already approved minimum increase of 2.1%, and to seek agreement from the House on any new proposals. That is the least that our NHS deserves. Our NHS staff have not faltered since the start of the pandemic, and they deserve to be rewarded for that. Unions and stakeholders know it, the public know it and we on this side of the House know it.
Question put (Standing Order No. 23).
Opposition Day
Lobbying of Government Committee
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:00 - The House divided: - Ayes: 262 / Noes: 357 - Question accordingly negatived.
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That the following Standing Order shall have effect until 31 December 2021:
Investigation into the Lobbying of Government Committee
(1) There shall be a select committee, called the Investigation into Lobbying of Government Committee, to consider:
(a) the effectiveness of existing legislation to prevent the inappropriate lobbying of Ministers and Government;
(b) the rules governing all public officials regarding conflicts of interest;
(c) the circumstances surrounding the appointment of Lex Greensill as an adviser in Government and the process by which Greensill Capital was approved for commercial arrangements with Government departments and other public sector bodies; and
(d) the role Government played in facilitating the commercial relationship between Greensill Capital and the Gupta Family Group Alliance.
(2) It shall be an instruction to the Committee that it:
(a) considers whether there are robust transparency and accountability procedures in place and whether existing rules are being adhered to;
(b) considers whether the Advisory Committee on Business Appointments’ regulatory framework and sanctioning powers are sufficient to enforce its advice;
(c) assesses the extent of undue influence that former politicians and advisers have on the policies and programmes of government departments and non-departmental public bodies; and
(d) that it makes a first Report to the House no later than 18th October 2021.
(3) The committee shall consist of 16 members of whom 15 shall nominated by the Committee of Selection in the same manner as those Select Committees appointed in accordance with Standing Order No. 121.
(4) The Chair of the committee shall be a backbench Member of a party represented in Her Majesty’s Government and shall be elected by the House under arrangements approved by Mr Speaker.
(5) Unless the House otherwise orders, each Member nominated to the committee shall continue to be a member of it until the expiration of this Order.
(6) The committee shall have power—
(a) to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place, and to report from time to time; and
(b) to appoint specialist advisers to supply information which is not readily available or to elucidate matters of complexity within the committee’s order of reference.
(7) The committee shall have power to appoint a sub-committee, which shall have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place, and to report to the committee from time to time.
(8) The committee shall have power to report from time to time the evidence taken before the sub-committee.
Mr Speaker,
“The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisers for hire, helping big business find the right way to get its way.”
That is how former Prime Minister David Cameron described the next big scandal to hit British politics, back in 2010. We might think that what David Cameron lacks in transparency he makes up for in fortune telling, except that he had inside information because the person exploiting the loopholes would be the very same David Cameron.
We had a Conservative Prime Minister giving Lex Greensill access to all areas of Government. He was brought in and given privileged access to the heart of Government with the title and the business card of a senior adviser in the Prime Minister’s office. Then—what a stroke of luck—when he was no longer Prime Minister, and just past the required period, when he no longer needed the approval of the Advisory Committee on Business Appointments, David Cameron joined Greensill to lobby the Conservative Government full of his friends.
Having refused to respond to any questions at all for 40 days, David Cameron chose a period of national grief, hoping that there would be less political criticism and less scrutiny. It is cynical and it is shabby, and the statement itself was toe-curling. He is not sorry for his conduct, for the texts and the drinks, but he is sorry he got caught and he is sorry that his shares are now worthless. This is not just a question of why he did not go through the correct channels; it is question of why he was doing this at all.
Let us be really clear: David Cameron was not working in the national interest; he was working in his own personal interest, with the hope of making millions of pounds for himself through the exercise of his share options. But questions cannot just be asked of David Cameron, when it is current Conservative Ministers who have paved the way for this scandal. When it comes to lobbying, it takes two to tango. For every former Minister lobbying, there is someone in power being lobbied. That is why this scandal is not just about the conduct of David Cameron during his time as Prime Minister and in the years afterwards. This is about who he lobbied in the current Government and how they responded.
Lex Greensill was awarded a CBE and was made a Crown representative by a Conservative Government, yet his company’s spectacular collapse now means that over 50,000 jobs are at risk around the world, including thousands in the UK’s steel communities, from Hartlepool to Stocksbridge, from Rotherham to Scunthorpe and to Newport. The steel industry is crucial and the Government must make it clear that our steel industry will not pay the price for the failures at Greensill and beyond.
This Government have set up an inquiry, but just about supply chain finance and Greensill. Such a review is wholly inadequate, and deliberately so. They do not want to explore what needs to change in lobbying or who currently gets access to power, or the wider issue of how to lift standards, which have fallen so far in the 10 years of Conservative Governments. They do not want public hearings. They do not want the disinfectant of sunlight, as David Cameron once urged. They just want this to go away, which is why they have chosen Nigel Boardman to chair the inquiry.
It is a fact that Nigel Boardman is a good friend—a very good friend—of the Conservative Government. Some may suspect that the son of a former Conservative Cabinet Minister might be unlikely to make waves, but let us look at his record. Mr Boardman has been paid over £20,000 per year as a non-executive director at the Department for Business, Energy and Industrial Strategy—a Department with a real interest in the British Business Bank, which lent to Greensill, and the British steel industry, where so many jobs are now at risk. Mr Boardman has already whitewashed the Government’s handling of public procurement during the pandemic and I fear that he will do the same again with this inquiry.
You will remember, Mr Speaker, that I jointly chaired the inquiry into the collapse of Carillion. The fact that Mr Boardman’s law firm made £8 million advising Carillion, including £1 million on the day before the outsourcers collapsed, leaves a terrible taste in my mouth as it should in the mouths of Members on the Government Benches. To cap it all, Mr Boardman was appointed to a prestigious role at the British Museum by—oh, by David Cameron! What is being proposed by the Government is not remotely fit for purpose. It is not an inquiry. It is not independent. It is an insult to us all.
The scope of this inquiry has to be bigger than supply chain financing. It has to be about lobbying, too, and bigger than what rules were broken. If the existing lobbying rules were not breached, that is a big part of the problem, surely. Had the Conservatives backed Labour’s amendments to the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill back in 2014, there would have been much more transparency, but they did not. David Cameron and his Government voted them down, and boy are they exploiting them now! We need public service in the national interest, not people viewing the state like some get-rich-quick scheme, with taxpayers treated as collateral damage.
We now learn that the Conservatives are joined in all this by the SNP, whose Rural Economy Secretary in the Scottish Government dined with Lex Greensill in one of Glasgow’s finest restaurants with no officials, no notes, no emails, no texts and no phone records about the meeting. Here in Westminster, we have witnessed the degrading of the ministerial code.
Brendan O'Hara (Argyll and Bute) (SNP)
We have absolutely no quibble with what the shadow Minister has been saying, but is she trying to draw an equivalence between what David Cameron did and what Fergus Ewing did in a meeting that was recorded and has been publicly available for a long time on the Scottish Government’s website? There was nothing untoward in what Fergus Ewing did, and in trying to conflate the two, the hon. Lady does a great disservice to herself and her argument.
Rachel Reeves
Well, the Scottish people can be the judge of that. If the hon. Member thinks that a Scottish Minister dining with Lex Greensill is okay, his party should put that on its leaflets in the elections in May.
Sir Alex Allan resigned as independent adviser on ministerial interests following the Prime Minister’s failure to take action on the Home Secretary’s bullying behaviour. That was five months ago. The Government have not replaced him. They have not even advertised the job. What does that say about how seriously this Government take standards?
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I just point out that, when Gordon Brown appointed his Prime Minister’s adviser on ministerial interests, that job was not advertised either because it is not advertised; it is a prime ministerial appointment. The motion proposes to set up a new Select Committee when there are many existing Select Committees. I am Chairman of the Liaison Committee. Why has the hon. Member not consulted any of us about this manoeuvre? I appreciate what Oppositions do, which is to try to embarrass the Government, but she is right that there are much wider issues to address. Should we not try to address those issues in a bipartisan manner?
Rachel Reeves
I thank the hon. Gentleman for his intervention. The point about Sir Alex Allan is that it is five months later and nobody has been appointed to this role. Whether we advertise the role or not, it has been vacant for five months. [Interruption.] A Member says from a sedentary position that it will happen shortly, but five months is an awfully long time.
I will come on to the issue of the composition of the Select Committee, but like the hon. Gentleman, I had the privilege of chairing a Select Committee. When scandals happened, we looked into them, as we did with the collapse of Carillion, and I know that the hon. Gentleman did so too. The problem is that there is no overarching inquiry planned into not just what happened with Greensill but more widely around lobbying, cronyism and sleaze. I am very happy to work on a cross-party basis to take this forward, and I welcome the comments from the hon. Gentleman over the last couple of days.
As well as the lack of an adviser on ministerial interests, there has been an absence of ministerial interests being published. They are supposed to be published twice a year, but they were published only once last year, in July, and not at all since then. These things matter—they are the foundations on which the standards of government rest, and under this Government, those foundations are being consciously removed. That is why this motion does what the Government should have done but chose not to: it gives the power to this House, not the Government, with a 16-strong Select Committee with clout to investigate this whole sorry scandal. It would have powers to call witnesses and examine them in public, like an effective Select Committee would. The investigation that we propose would look at inappropriate lobbying of Government and what needs to be done to prevent it. It would have the powers needed to demand witnesses and communications. It would examine the Advisory Committee on Business Appointments and whether it has sufficient powers, resources and the right remit. Put simply, this special new Select Committee would aim to tackle the problem staring us in the face, not cover it up.
Mr William Wragg (Hazel Grove) (Con)
I note the motion and thank the hon. Member for it. I just wondered why she thought it was appropriate that the membership of that Committee be nominated by the Committee of Selection? Why should it be filled with a load of Whips’ stooges?
Rachel Reeves
I will not comment on how Select Committee Chairs are sometimes elected in this place. But as a former Select Committee Chair, I know how seriously colleagues around this House would take this responsibility, as the hon. Gentleman does. We are prepared to make a concession to Conservative Members. We will accept that this Committee can be chaired by a Back Bencher from the governing party as long as there is cross-party representation on the Committee, as with other Select Committees.
The Conservative party is at a fork in the road. If MPs vote for this motion, a proper investigation can take place, led by a team with the confidence of this House, not someone handpicked from the board of one of the Government Departments embroiled in this scandal. But if they vote against it, as the Prime Minister has told them all to do, I am sorry to say that they too will be part of the Government’s attempt to cover up Tory sleaze. All Members here today should reflect on who they are here to serve: their constituents and their country, or their narrow party interests?
The stakes are high for our democracy and our public life. It was a past Conservative Government—embroiled in sleaze in the 1990s—who eventually recognised the need for standards to rise and to create the Nolan principles. The Nolan principles of public life have to live and breathe through all those in public office serving our great country. Yesterday we learned that the Government’s former head of procurement was an adviser for Greensill while still a civil servant. Incredibly, that was approved. The defence is that it was “not uncommon”. What on earth was happening at the Cabinet Office and at the heart of Government to allow these conflicts of interest to fester? Sir John Major, who witnessed the cash for questions scandal and other Tory sleaze in the ’90s when he was Prime Minister also believes that the rules need to be changed again.
One of the Nolan principles—as you well know, Mr Speaker—is leadership. With that in mind, where is the Chancellor of the Duchy of Lancaster today? Where was the Chancellor of the Exchequer yesterday? What have they got to hide? There is a wider pattern of behaviour with the Conservatives here, in the present as well as in the recent past: a Conservative Government who are more interested in private drinks with the owners of private jets than meeting the families bereaved by covid; a Government who gave a 40% pay rise to Dominic Cummings, but a pay cut to nurses; Tory politicians thinking that it is one rule for them and another for everybody else; personal attention lavished on friends of Cameron, while 3 million people are excluded from Government financial support and cannot even get a meeting with the Treasury.
Craig Williams
On the subject of leadership, the hon. Lady has touched on the Scottish Government. But the Welsh Government have of course been in place for 22 years and there is still no lobbying register, and the Advisory Committee on Business Appointments has recently taken the former Labour First Minister to task over an appointment to GFG. On leadership, may I draw the hon. Lady on those points?
Rachel Reeves
As far as I am aware, the First Minister of Wales has not appointed a financier as his adviser, nor does he have £30 million-worth of share options that he might fancy exercising. The hon. Gentleman has today abstained in a vote to give nurses a pay rise—put that on your election leaflet at the next general election.
Some £2 billion of public contracts in the last year have gone to friends and donors of the Conservative party, which has been rolling out the red carpet with a VIP fast lane for contracts. Supposedly independent reports have been rewritten by Downing Street. There are undeclared details on who has paid what for a luxury refurbishment of the No. 10 Downing Street flat. Relationships are undisclosed, and there are increasingly frequent breaches and casual disregard of the ministerial code.
Some have asked this week, quite powerfully, “When did we stop caring about honesty and integrity?” That is what this motion is about. What happens in the vote will say so much about our great country, but also about our current Government. That is why I urge all hon. and right hon. Members to do the right thing and back this motion today. Vote for a proper investigation to close the loopholes, to rein in the lobbyists and to lift standards in this great democracy in which we all have the privilege to serve.
The Minister for the Constitution and Devolution (Chloe Smith) [V]
I welcome the chance to contribute to this Opposition day debate. I am sure that you will appreciate, Mr Speaker, that it is appropriate and possible to do so virtually.
First, may I add my own tribute to those made earlier this week to His Royal Highness the Duke of Edinburgh, whose commitment to the service of this country and to the highest possible standards of conduct was exemplary?
During the extraordinary challenge of covid-19, the Government have worked with people and businesses of all sorts—from private citizens to key workers, from our brilliant small and medium-sized enterprises to multi- nationals. In that monumental effort to protect the public and save lives across the country, civil servants across Government, working under incredible pressure, have achieved extraordinary things.
Even away from times of crisis, this country can be proud of the standards that we uphold. In Transparency International’s 2020 index, which ranks countries, the United Kingdom was ranked above close European neighbours such as France and Ireland in 11th place. We are the first G20 country to establish a public register of domestic company beneficial ownership and the first G7 country to undergo an IMF fiscal transparency evaluation.
This Government value such reputation and will always uphold it. As hon. Members heard my right hon. Friend the Prime Minister say just now, we are concerned about some of what has emerged in recent weeks. Most of what this complex motion proposes is already being done. Indeed, as the policy Minister responsible, it is perfectly sensible for me to respond today on behalf of my Department. The hon. Member for Leeds West (Rachel Reeves) has shadowed me before—10 years ago—and it is good to see her again today in her place.
The motion seeks to establish in Standing Orders a Select Committee with a remit so wide-ranging as to cut across Parliament’s existing Committees and independent bodies that have responsibilities in this area. Let us take the elements part by part. Looking at the effectiveness of existing legislation on lobbying, the Government are already doing this and I shall explain more in a second. On the Greensill affair, an independent review was announced this week, before this motion was laid, and will be effected. On transparency measures and the ACOBA framework, the Cabinet Office is already working to strengthen the former and supporting the reforms of my noble Friend Lord Pickles to bolster the latter. We are opposing the motion today because it seeks to duplicate the work that is already in the gift of Parliament and its Committees and, as I will set out now, work that is already being undertaken by the Government.
Starting with the effectiveness of existing lobbying legislation, we are currently conducting post-legislative scrutiny of part 1 of the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014, which we all know as the lobbying Act. It is looking precisely at the scope and effectiveness of that legislation. The hon. Lady did not mention that—not one whit. That legislation introduced a new statutory register of consultant lobbyists and a requirement that those undertaking paid lobbying on behalf of any third party must register and make clear who they are representing to Ministers and permanent secretaries.
The requirement for consultant lobbyists to declare that work complements the system of self-regulation that lobbyists also adhere to through professional codes of conduct. It makes transparent otherwise hidden lobbying. It remains an important part of the framework, filling an accountability and transparency gap that existed prior to that point. We think that it operates effectively but, as I have said, we are looking at whether further improvements can be made, as is best practice through post-legislative scrutiny. Once that work is complete, we intend to deliver a memorandum to the Public Administration and Constitutional Affairs Committee for further scrutiny. Would it really be constructive for these workstreams to be undertaken in parallel by separate Committees, potentially cutting across one another, sowing confusion? We think that it would not.
While the creation of Select Committees is of course a matter for the House, there are already relevant Committees in Parliament with the powers and capacity to do such work as is proposed. I note that the Chair, and indeed the prior Chair, of PACAC have already spoken today. That Committee is responsible for the examination of the quality and standards of administration across the Government. In this Parliament, it has already undertaken relevant inquiries. Indeed, it has also called the chair of the Committee on Standards in Public Life to give evidence. It has the powers to send for persons, papers and records, and to report to the House—the powers proposed for the new Committee—so I question the necessity of an additional Committee. Indeed, that additional proposed Committee would also cost a quarter of a million pounds.
Her Majesty’s Government has a full framework in place to ensure that public money is spent efficiently, and that those who serve as stewards of those public resources act in accordance with the highest standards and in the public interest. The use of public money is overseen by the Treasury and, of course, Parliament, and the use of public position and information is overseen by the Cabinet Office and rightly held to account by Parliament and the public. Furthermore, all those who work across the public sector are expected to maintain the ethical standards embodied in the seven principles of public life, which underpin the respective codes for Ministers, for the civil service and for special advisors, as well as the code of conduct for board members of public bodies. That requirement to act with integrity means that public office holders must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work, and all holders of public office must declare and resolve any interests.
We are not complacent, neither about the scale of this challenge nor about taking action where necessary to uphold the public’s faith in what we should all stand for. Since 2010, under the coalition and then under Conservative Governments, we have significantly increased transparency on the workings of Government—which the public should rightly be able to expect—from publishing contracts and details of spending, salaries, tenders and meetings to launching that statutory register of consultant lobbyists, far more than ever published under the last Labour Government. This Government have banned the once-endemic practice of Government quangos hiring lobbyists to lobby the Government. They have ensured that taxpayer-funded Government grants are not then used to lobby the Government themselves. They have introduced greater transparency of trade unions and campaign finance controls on third parties seeking to lobby in our elections, so when the Government are being held to account—as is right—it is because a tougher regime of transparency has been in place for over a decade, and is now the norm.
We are going further still to uphold the covenant of trust with the public. I have already touched on the Government’s review of lobbying legislation. In addition, we are reviewing and improving business appointment rules, which I will return to in a moment or two. However, as the hon. Member for Leeds West dwelt upon at some length, the Cabinet Office this week has announced a review on behalf of the Prime Minister into the role in Government of Greensill Capital, the finance company that went into administration last month. The review will look at the development and use of supply chain finance associated activities in Government, and specifically the role of Greensill, including how contracts were secured and business representatives engaged with Government.
The review will be wide-ranging, and will also consider the issues raised by my noble Friend Lord Pickles regarding Mr Bill Crothers’ role at Greensill Capital. The public can be assured that Mr Nigel Boardman, the senior lawyer leading the review, who will pause his activities as a non-executive director at the Department for Business, Energy and Industrial Strategy for the duration, will have full access to the people who were in government at the relevant time and who made the relevant decisions. I would add that the information that has already emerged in recent weeks about Greensill Capital has done so in some part because the system in place is doing its job, and ensuring support for transparency and accountability.
I will not go into great detail further about recent events, because that inquiry will do so, but two further things can be said now about lobbying policy. First, the Registrar of Consultant Lobbyists conducted an investigation into Mr David Cameron’s activities, and has confirmed that those did not require registration under the current legislative framework. For good reason, these rules apply to consultant lobbyists, who may seek to influence policy making on behalf of a third party who would otherwise be hidden. Mr Cameron was working openly in-house as an employee. To complement this law, the meetings of Ministers and permanent secretaries with external organisations are published on a quarterly basis and are made available on gov.uk. That data describes both the purpose of the meeting and the names of the organisations or individuals who are met. That is very important. Regulation must of course balance the need for transparency by lobbyists while not preventing engagement by the voluntary and private sectors.
The second thing is to engage in the politics of today’s Opposition day, although it is a great shame to do so in a period of national mourning. The hon. Member for Leeds West failed to say that Labour now wants to repeal the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014. This was in its manifesto, alongside repealing the Trade Union Act 2016. Who is not to say that the Labour party would simply give favours to the union barons who bankroll it? After the EU referendum, Labour MPs called for tighter controls on third-party campaigning, but their official policy is to rip up these lobbying laws. Indeed, in 2014, at the time of making that law, the Labour party supported amendments that would have placed significant barriers on engagement and required thousands of businesses, charities, non-governmental organisations and trade bodies to pay a registration fee of £1,000 a year to write or speak to Ministers. This could have been detrimental to the public interest during the covid pandemic, when groups across civil society rightly wanted to put their case to Government.
However, I agree with the hon. Lady that transparency and probity are fundamental. I would like to cover one more area on business appointment rules. As I have mentioned, the Cabinet Office is working with Lord Pickles, who is the chair of the Advisory Committee on Business Appointments—ACOBA—to improve and extend the business appointment regime. That applies lobbying bans on former Ministers and civil servants, including special advisers. The business appointment rules seek to protect the integrity of the Government while allowing for people to move on to roles outside government. Although affording ACOBA statutory powers to enforce these rules would be out of line with the general principle of UK law that Ministers and officials are subject to the same legal system and statutory framework as everybody else, ACOBA is able to enforce a range of sanctions for non-compliance. That is very important. The Government support changes being introduced by ACOBA to improve the business appointment process. A framework with a risk-based consideration of cases aims to bring greater transparency and improve the reporting of any breach of the rules, increasing the moral and reputational pressure on those leaving public office. In addition, the Cabinet Office is leading work to improve the scope, clarity and enforcement of the rules, and how consistently and proportionately they are implemented across government. In short, we are taking action on a range of fronts to ensure that we maintain the highest standards in our politics and public life.
We should all condemn the kind of lobbying that gives politics and politicians a bad name in all parts of the House, but this motion does not achieve that. Instead, it sidetracks, proliferates and duplicates. I invite Labour to settle its own view, find its own position, and agree with us that transparency and probity are vitally important. I urge all hon. and right hon. Members to join us in this work to continue to scrutinise these critically important matters through the work of existing Select Committees, through the Committee on Standards in Public Life, and through the inquiry that we have now set up—among other ongoing, unstinting efforts that are of course accountable to this House—and to vote against this unnecessary and unconstructive motion that achieves so little extra. It is incumbent on all politicians to act with integrity as elected Members, as Ministers when we hold such positions, and in accordance with the principles of public life. It is incumbent on all of us in this House to ensure that important issues are carefully and effectively scrutinised. I have explained today how the Government are playing their part in this, and I urge all hon. Members to vote against the motion.
Brendan O’Hara (Argyll and Bute) (SNP)
Mr Speaker,
“I believe that secret corporate lobbying…goes to the heart of why people are so fed up with politics. It arouses people’s worst fears and suspicions about how our political system works, with money buying power, power fishing for money and a cosy club at the top making decisions in their own interest. It’s an issue that...has tainted our politics for too long, an issue that exposes the far-too-cosy relationship between politics, government, business and money.”
Wise words indeed, and I wish they were mine, but they are not. They were said by David Cameron in February 2010, just a few short months before he became Prime Minister. He became Prime Minister with a promise that:
“If we win the election, we will take a lead on this issue by making sure that ex-ministers are not allowed to use their contacts and knowledge—gained while being paid by the public to serve the public—for their own private gain.”
Today, David Cameron, that self-styled great reformer, is up to his neck in the same cronyism, corruption and sleaze that he promised to call out, expose and eradicate while in opposition.
The hypocrisy is breathtaking, and not simply because nothing has changed. We now know that far from taking on the corrosive culture of the nod and a wink and the old boys’ club favouritism, he actually took it into government. We now know that while David Cameron was Prime Minister, Lex Greensill himself became so embedded in Downing Street that by 2012, he even had an official No. 10 business card, describing himself as a “Senior Advisor”.
Almost 10 years to the day after delivering those stirring words and making those great promises, we discover that David Cameron directly lobbied the Chancellor of the Exchequer, the Secretary of State for Health and Social Care and senior Government officials, thereby securing 10 meetings in three months in an attempt to influence the UK Government’s covid corporate financing facility. He did it to benefit Greensill Capital, where he was then working as an adviser and lobbyist for the same Lex Greensill and where he reportedly held share options worth millions of pounds.
I invite Members to compare and contrast that level of access to the Chancellor and the powers that be at the centre of Government with that given to the millions of people and businesses left without any UK Government support during the pandemic, and in particular the group of the excluded—those 3 million self-employed people who have been left without a penny of Government support. What they would have given for just one of the opportunities that were afforded Mr Cameron, let alone the 10 that he got.
I wonder whether Mr Cameron recalled at any point while brokering those meetings his own hollow words of February 2010. He said:
“We all know how it works. The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisers for hire, helping big business find the right way to get its way.”
Of course, now it transpires that the Greensill influence in Downing Street during the Cameron years went even further and deeper than we could ever have imagined, with the astonishing revelation that in 2015, one of Britain’s most senior civil servants was given permission to work part-time as an adviser to the board of Greensill while still serving as the UK Government’s head of procurement.
How is it possible that the Cabinet Office gave the green light for the former Government chief commercial officer at the Cabinet Office to become part of Greensill Capital in September 2015 while still working as a supposedly impartial civil servant? Who authorised such a move? Who approved this appointment? Who thought that that was okay? What questions did the people at the Cabinet Office operating the internal conflict of interest policy actually ask to reach the conclusion that it was perfectly all right for one of the UK’s most senior civil servants to twin-track and work for a private finance company whose owner at that point was swanning about Downing Street, dishing out business cards describing himself as a special adviser to the Prime Minister? It beggars belief.
This is crony capitalism at its worst. It stinks. The closer we get to it, the more it reeks, and that is why we will be supporting a full independent and transparent investigation and why we will support this motion when the House divides this afternoon.
On its own, the Greensill scandal would be bad enough. Unfortunately it is far from being an isolated event. It is just the most recent example of the rampant cronyism that is at the heart and centre of this Government, who seem to be stumbling from one scandal to another as the details emerge of a network of those who have become fabulously wealthy during this pandemic not because of their skill or business acumen but because of their political connections. In November last year, the National Audit Office revealed that companies with political connections who wanted to supply the UK with personal protective equipment were directed to a high priority channel, where their bids were 10 times more likely to be successful that those from companies that did not have links to politicians and senior Government officials.
In and of itself, the existence of this high priority channel is quite remarkable, but it becomes far more sinister when we consider that the NAO also reported that there were no written rules for how this high priority channel should operate, meaning that the companies gaining political support had access to hundreds of millions of pounds of public funds, were not subject to the usual procurement rules and could bypass the essential paperwork that in normal times would be a prerequisite for safeguarding against the misuse of public funds.
No matter how we look at this, it is not a good look. I absolutely agree with Professor Liz David-Barrett of the University of Sussex when she said:
“It’s not clear to me why MPs or peers should have any special expertise on whether a company is qualified to provide PPE.”
She is absolutely right. She went on to make the entirely reasonable point that those who can be described as being linked to politically exposed persons are usually treated as being higher risk and therefore deserving of more scrutiny rather than less.
John Penrose (Weston-super-Mare) (Con)
I asked a parliamentary question about the standards being applied to people and companies on this supposed fast-track list versus others, to check that the same due diligence standards were being applied to both sides and that there was a level playing field. The answer that I got was that they were and that in this respect the playing field was level, so would the hon. Gentleman care to reconsider his point that the same processes do not apply?
Brendan O’Hara
What I would love to happen is for the Committee, when it meets, to examine that in detail to find out exactly whether it is true. What is inescapable is that a company is 10 times more likely to receive a Government contract through a political contact. That deserves careful scrutiny and has to be smoked out to the nth degree.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
However we collectively as the body politic got into this situation, may I suggest that it is damaging public trust in elected representatives? The one good thing about this Committee, if it were seen to be put in place, would be that it could restore some of that trust and repair some of the damage to democracy in the UK.
Brendan O’Hara
The hon. Gentleman is right. I think we all know from our postbags that, regardless of which side of the House we are on in this debate, we are all tainted by this. Anything that can shine a light on this —admittedly where some might not want it to be shone—would be a very good thing, and I wholeheartedly support it.
Chris Bryant (Rhondda) (Lab)
Is there not another point here, which is that whatever inquiry needs to be done must have the proper powers? For instance, it needs to be able to guarantee that anybody who gives evidence can do so without fear of prosecution, so that if there is a whistle that needs to be blown, it can be blown. It also needs to have subpoena powers, so that people who do not want to give evidence could be forced to do so. So far as I can see, those powers could be provided only by a judge-led inquiry—maybe we should go down that route, but I think it is unnecessary—or by a parliamentary inquiry.
Brendan O’Hara
The short answer is yes, and that is something that I will come on to in a moment. That is why this is so important.
It is not just Members of this House who are questioning the corrosive culture of cronyism at the heart of this Government; it has been attracting some fairly high-profile international attention too. At the end of last year, The New York Times decided to investigate how the UK Government managed what it described as the greatest spending spree in the post-war era. It concluded that of the 1,200 central Government contracts worth nearly $22 billion,
“$11 billion went to companies either run by friends and associates of politicians in the Conservative Party, or with no prior experience or a history of controversy.”
That is an incredible amount of money, and any hint that it has been spent at the behest of someone with close ties to Downing Street or for the benefit of companies that have political allies in Government is deeply worrying. It has to be examined—and examined fully, robustly and independently.
While people might understand and accept that things had to happen quickly in the circumstances, and perhaps that normal procurement rules were not sufficiently speedy, they will not accept that a Government have any right to rip up every rule, every standard, every safeguard and to start throwing about public money like a scramble at a wedding, particularly when it is their mates who are there waiting to pick it up.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Does my hon. Friend agree that the Committee should perhaps look at other activities that this Government get up to? There are things such as the Brexit contracts—I recall that they gave a contract to a ferry company that had no ferries—and all the appointments to external bodies and regulators, which are further examples of cronyism. We need to look at this in the bigger mix as well.
Brendan O'Hara
I absolutely agree with my hon. Friend, and I am sure that will not have escaped those on the Treasury Bench.
The Government’s inquiry, led by Nigel Boardman, simply will not work. It cannot be seen to be independent, as we have heard, because of the baggage and the back story that he has. Mr Boardman may have carte blanche to ask whatever questions he likes to whomever he likes, but they will have carte blanche not to answer those questions. If that is the case, what is the point? I have no doubt that this scandal will rumble on, and when it does, we must have a mechanism that is robust enough to see it.
Back in 2010, in his now risible speech, Mr Cameron said:
“We can’t go on like this…it’s time we shone the light…on lobbying in our country and forced our politics to come clean about who is buying power and influence.”
I wish he had meant it back in 2010. We have to mean it now, and that is why we will be supporting this motion.
Madam Deputy Speaker (Dame Rosie Winterton)
We have many speakers to get in in what is a fairly short debate, so I will impose a four-minute limit to start with—that will be on the clocks in the Chamber and on the screens of those participating virtually—but it will probably have to go down to three minutes fairly quickly.
I call the Chair of the Public Administration and Constitutional Affairs Committee, William Wragg.
Mr William Wragg (Hazel Grove) (Con)
May I thank the Opposition for tabling a motion to establish a Committee, but gently point out to them that one already exists; namely, the Public Administration and Constitutional Affairs Committee, which the House has given me the honour of chairing? I trust that the motion before us is not a vote of no confidence in either me or, indeed, the very independent-minded membership of that Committee.
I can forgive that oversight—momentarily forgetting the existence of that Committee—because, in a week of national mourning, and even on the day of tributes to His late Royal Highness, I did not think it seemly to be prattling about television studios. Nor, for that matter, did I think it was at all seemly for Mr Cameron’s statement to be released at that time. But rest assured that the Committee is and will be giving these matters proper consideration.
Perhaps to labour the point made by the Leader of the Opposition at Prime Minister’s questions—no doubt it will fall similarly flat when I say it—I am more than happy to take up the role of the AC-12 of Whitehall, but the motion proposed this afternoon could be taken from the script of Sunday night’s episode. For the benefit of the tape, I have full confidence in the members of the Committee to discharge their duties and do not require a reorganisation.
The House will note the Committee’s public session tomorrow morning with Lord Pickles, who, as chair of the Advisory Committee on Business Appointments, will doubtless have a vital contribution to make in illuminating matters. We also intend to have the Cabinet Secretary before the Public Administration and Constitutional Affairs Committee within the next fortnight. I ask the House to be assured that we will pursue every possible line of inquiry with our witnesses and shall conduct ourselves without fear or favour.
Without prejudicing these inquiries, I will offer a reflection on the crux of the issue. I wonder whether the attention given to the former Prime Minister, Mr Cameron, is somewhat of a red herring; it is no doubt a tasteless, slapdash and unbecoming episode for any former Prime Minister, but is it the central issue? After all, what is the key attribute of a former Minister or senior official? Surely we are all institutionalised and deskilled by public life; what possibly qualifies a former Minister or senior official? Food for thought.
There are four key areas of questioning ahead. First, the collapse of Greensill Capital has highlighted the shortcomings of the ACOBA rules and their applications. Secondly, does ACOBA’s oversight end completely two years after a former Minister or official has left their post? Thirdly, a senior official appears to have moved from a civil service position to join Greensill without application to ACOBA; is a secondment a technicality or at least a breach of the spirit, or indeed an actual breach, of the rules? Fourthly, Mr Greensill appears to have been a special adviser at 10 Downing Street; as a Spad, he would have fallen within ACOBA’s remit, and if so did he comply with the business appointment rules?
Jackie Doyle-Price (Thurrock) (Con)
The questions my hon. Friend is posing are accommodated within the rules, but what we are talking about here is behaviour, and does he agree that this is about principles, indeed the very Nolan principles, and if everybody involved in public service viewed them as a code of practice for life we could avoid a lot of this?
Sir Bernard Jenkin
I rise briefly to make the point that the 2017 Public Administration and Constitutional Affairs Committee report into the ACOBA rules recommended changes to the ministerial code and the civil service so there would be proper conversations about these conflicts of interest as they arise, which do not take place in the current atmosphere.
Chris Bryant
Of course, the Nolan principles are embodied in the code of conduct that affects all MPs, and all this does is raise the danger of bringing the whole of the House into disrepute, so I very much hope that the hon. Gentleman’s Committee will work with mine, the Committee on Standards, as we are reviewing the code of conduct to make sure that it really does work for the modern era.
Mr Wragg
I thank the hon. Gentleman for his intervention.
Hon. and right hon. Members should always be careful in using the privilege afforded to us in speaking in this House, but I find it odd that the leaked emails should be from the late Cabinet Secretary, which cannot be contextualised or challenged by a man who is dead. We must be mindful of scapegoating, especially when it appears too neat, but neither should we allow conspiracy theories to abound without challenge. In the debate that follows, difficult as it may be, I would ask my hon. and right hon. Friends not to unquestioningly defend the integrity of others if they have doubts or have been asked to do so. Whatever little or imperfect integrity we have ourselves—for we are all fallible—it is the only integrity we can seek to protect.
Karl Turner (Kingston upon Hull East) (Lab) [V]
I do not intend to detain the House for very long, as I know that many of my colleagues want to speak in this very important debate, and for very good reason.
The revelations reported in the press these past weeks of private messages between the Chancellor and the former Prime Minister David Cameron, private drinks between Mr Greensill and the Health Secretary, and a private network of connections between favoured businesses and Government Ministers are an absolute disgrace and a scandal. Sadly, they are just the tip of the iceberg of the cronyism and sleaze that are rife in the Conservative party, which it has now allowed into the heart of our Government. Many small businesses in Hull have had to fight tooth and nail to access financial support during the pandemic, so it is insulting that corporations that can afford a former Prime Minister on the payroll can have cosy fireside chats with those at the very top of Government.
My constituents in east Hull expect better. They expect, whatever party is in power, that the Government should be run on the principles of honesty, decency and commitment to public service—not government by WhatsApp and billions of pounds of public money dished out to the Tory party’s friends and donors. That is why we cannot allow the Government to mark their own homework through a whitewash review whose findings we know before it has even begun. We need a full parliamentary inquiry to get to the bottom of this scandal—an inquiry with power and teeth that will give taxpayers and the many thousands of people whose livelihoods are at risk because of Greensill’s collapse the explanations and the justice that they fully deserve. Those with nothing to hide would have nothing to fear.
Government Members need to think long and hard about which way to vote today. Will they vote to sweep all this under the carpet in the hope that things will just move on, or will they do the decent thing, put standards in public life in this country before their party’s interest, and vote for transparency and fairness? I sincerely hope that we see some backbone from Government MPs when the Division bell rings.
John Penrose (Weston-super-Mare) (Con)
There is widespread consensus across the House that this is a very difficult moment that is causing great concern, but widespread disagreement about how to take things forward. I was greatly struck by a point made by the Chair of the Public Administration and Constitutional Affairs Committee, my hon. Friend the Member for Hazel Grove (Mr Wragg): what is being proposed is something his Committee already has the powers to do, and he stands ready to fill in any gaps that his Committee feels might be left as a result of the announcement of an inquiry which has just been made.
In the light of those two things, I see no reason to support the motion. However, because there is such an important underlying issue and there are such important and central questions about the future of our democracy, and the probity and legitimacy of our system, there are some important points that need to be made. I hope the Minister will address them.
Today, I have put on my website my submission to the inquiry of the Committee on Standards in Public Life; the committee will make it public in due course, so I am not pre-empting anything. My submission contains a series of proposals for how we should improve things around lobbying and much else. The Minister for the Constitution and Devolution said earlier that post-legislative scrutiny work, which I have contributed to, is already going on around the lobbying Act, but I will briefly share some things that I believe could usefully be done to improve that Act. It has many strengths and does an enormous number of important things tremendously well, but it is now seven years old and it is time to review it and move it on. There are three or four things we could usefully do, and should do in any case, quite apart from the current concerns over Greensill.
First, as we have heard from several Members, disclosure of whom Ministers meet and when is tremendously important as the foundation stone of transparency. Such disclosures do not happen fast enough, they are not complete enough, and they are not mutually comprehensible, machine-readable and searchable enough. As a result, it is much, much too difficult to link up who Ministers have met, whom the lobbyists are working for and who is donating money to which political party. Those three things should be immediately understandable, immediately searchable and immediately identifiable in order for the system to work well—that is not the case at the moment. This is a sensible change and one we should introduce immediately.
The second thing we should do is capture more people in those disclosures. At the moment, they apply to Ministers, rightly, and to senior civil servants—permanent secretaries and the like. However, there are other people whose opinions matter and who will seek to be influenced by lobbyists no matter who is doing the lobbying. Such people include not only political advisers—Spads—but a slew of other civil servants below the rank of permanent secretary. Their meetings, and the topics, should all be disclosed in the same way.
People will have seen that it is proposed that everybody who is lobbying should be included on the register of consultant lobbyists, but that seems to be overkill, because if someone from Rolls-Royce comes to speak to a Minister, we all know on whose behalf they are lobbying—they are lobbying on behalf of Rolls-Royce. Simply putting them on the register of consultant lobbyists will not improve things, whereas disclosing what they talked about, why they talked about it and any conclusions that were reached would make a huge difference.
Equally, there should be disclosure in respect of foreign agents—people working on behalf of foreign powers who are not part of the diplomatic corps of that country.
My final point relates to the about-to-be-reappointed prime ministerial adviser on special interests. If they had the power to launch independent investigations as well, we would not need debates such as today’s because they would have already opined.
Ian Lavery (Wansbeck) (Lab) [V]
When David Cameron claimed in 2010 that cronyism was the
“next big scandal waiting to happen”,
I am not sure any of us thought he was quite so committed to making sure his predictions would come so true, yet the Greensill scandal emits a horrid stench, and Mr Cameron and all others involved must be held accountable. It is only a drop in the ocean in what is a tidal wave of cronyism and corruption among the upper echelons of this Conservative Government. This is not just about “dodgy Dave”, as the former Member for Bolsover rightly dubbed him; it is about the cancer of cronyism that has spread through the top level of the Conservative Government, as can be seen from the Arcuri affair, the covid-19 contracts, and now the parasitic lobbying that includes a former Tory Prime Minister. I must say this is hardly a red herring.
Over the past year, there has been a tale of two pandemics in this country, one involving the elites, which have siphoned off billions of hard-earned taxpayers’ money, and one involving the millions of others who have been shielding or working as key workers on the frontline of the pandemic, all to protect the health of this country, or who have lost their job. How did those elites get such a cosy seat at the table? Certainly not as a result of hard work and sacrifice, such as that we have seen from those key workers. The destiny of those elites was written as they walked the halls of their public schools and elite social clubs, making murky connections that propelled them into snug lobbying jobs or even safe Tory seats.
Contrast that with the position of a constituent of mine attending an underfunded local school with huge class sizes and becoming a key worker, toiling each day for an honest wage to keep the country on its feet, only to see their taxes being spent on contracts given to dodgy companies, with no competitive tendering. The very people who have been hit hardest by the pandemic—those who are being put on furlough—are expected to work twice as hard, while the avaricious public school clique see the opportunity to multiply their wealth further.
Today, hundreds of British Gas workers will lose their jobs for standing against a cruel “fire and rehire” scheme imposed by their employers, who seek to lower their wages and to worsen terms and conditions in midst of the global crisis, while those with close ties to senior members of the Conservative Government can simply pick up the phone, call a “jobs for the boys” hotline and bag a million-pound contract, despite having no qualifications so to do.
There are, quite simply, two realities being played out here in modern Britain—one for the elite and one for the rest of us. To get through this pandemic, the people of the country have pulled together and made huge sacrifices to see each other through, yet this Government are not in it together with our constituents. They are more concerned with protecting their lobbying clients’ financial interests than they are with the public health of this country. As a result, they—to put it bluntly—have a lot to answer for.
I support the motion because it is all about transparency. It is about probity, accountability, clarity, honesty, decency, integrity, fairness and equality. There are two sides to this country, and everyone must simply ask themselves, whose side are you on?
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind) [V]
Politics and big money are never happy bedfellows. The first question any politician should ask if they are offered financial incentives or hospitality is, what do the providers want in return?
Legislation in this field has always failed to make any meaningful impact on political corruption. The most recent attempt—the 2014 transparency of lobbying Bill, during the premiership of David Cameron—attempted to provide a narrative of propriety to decontaminate the Tory brand, but in reality, he had a hidden agenda, which was to neuter the trade union movement. I pointed out at the time that those measures would not have dealt with any of the great Westminster corruption scandals of recent decades—donations for dinners, cash for honours, cash for questions, and the ministerial cab for hire of the last Labour Government.
Half a decade on, Mr Cameron is himself embroiled in the latest great Westminster corruption scandal. These revelations raise all sorts of questions, yet again, about the incestuous and damaging relationship between big money and Westminster politics. I give a guarded welcome to the British Government’s decision to launch an inquiry on this case, but I fear the Prime Minister’s true intentions are to kick the issue into the long grass beyond the forthcoming elections, and to settle a personal score against Mr Cameron.
Any serious inquiry would surely have the wider remit of looking at how Ministers have handled all covid contracts, including investigating the National Audit Office’s concerns about the VIP list of suppliers that are 10 times more likely to get a contract. In that regard, I will support the Labour motion.
If Westminster is serious about addressing its tarnished reputation, there must be deliberate moves to reduce the cost of politics. The Americanisation of British politics has resulted in an expenditure arms race. Over recent decades, political parties have had to spend more of their time raising money to compete. If we are serious about addressing corruption in politics, spending caps must be introduced for political parties, drastically reducing the cost of electioneering, with an added bonus of creating a more level playing field and a more plural politics. A wiser person than me once said:
“Nothing in life is free, you always pay in the end.”
I fully support calls to expand the statutory register of lobbyists to include those working in-house, but the UK Government must go further. The Register of Members’ Financial Interests is an important innovation, but the onus is on electors proactively to search for information that should be readily available to them. New protocols could include requirements for BBC Parliament and Parliament Live TV to list details of Members’ interests on screen when they are making contributions. If there is no impropriety, why would anyone object? With slight mischievousness, I would even go as far as to recommend that Members should be required to emblazon their private benefactors on their clothing in the same way that snooker players proudly promote their sponsors on their waistcoats. I suspect such visual exposure might encourage restraint among those who use their role in the House to harvest coin.
I have long believed that Westminster is beyond repair. The time has come for us in Wales to forge a different path, where we can create an honest political discourse based on the noble aspirations of public service as opposed to the promotion of personal enrichment.
Huw Merriman (Bexhill and Battle) (Con)
Following the suggestion from the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) that like snooker players—I perhaps look like one right now—we should emblazon ourselves with any sponsors we might have, I am minded to say that I have absolutely nothing to declare in that regard, having never received a penny apart from my very generous MP’s salary since I have been in this place.
With the local elections coming up in May, I am concerned that we are in danger of playing party politics in this Chamber. I should not be naive; that is what this Chamber is always about. At the start of this week, this Chamber was at its very best, and, of course, that is why I am dressed as I am. We referenced the Duke of Edinburgh and warmly referenced how popular he was because he was direct, loyal and non-partisan, and here we are today talking about election leaflets and playing party politics.
Of course, there is a serious point behind this, and I want to make a point in defence of the Select Committee process. I am very fortunate to be Chair of a Select Committee, and I note, as I sit alongside the Chair of the Public Administration and Constitutional Affairs Committee, that we will be in very safe hands in any inquiries that are needed or for any changes that have to be recommended.
It is not very well known that Select Committees can now group together. We have done so for the COP26 scrutiny, so we have Select Committee Chairs all the way across. We have it through the Liaison Committee. We can also move members of one Committee to another, so if there is a great requirement to review across Government Departments or for Parliament to look at an issue, it can be done as the structure is in place.
The Select Committee on Transport met this morning, and it would be fair to say that for even the Under-Secretary of State for Transport, the hon. Member for Witney (Robert Courts), who was appearing before us, it would have been impossible to tell which party each MP came from, because we all united as one in wanting a particular approach. To make a Select Committee more partisan with a sole aim would be poisonous and would diminish the role of Select Committees in scrutinising Government, which, having always been a Back Bencher, I absolutely support.
It is not very political of me— it is perhaps a bit naive—but I am also a firm believer in loyalty. I touched on this at the start of my speech. I first became an MP in 2015 under David Cameron. I found him to be an inspired leader, a genuine man and someone who really wanted the best for his country and for his party. He modernised our party. He took the country from the very desperate economic position that he had inherited in 2010 and worked across the divide with the Liberal Democrats to try to make something better. He succeeded, as we see if we look at the 1,000 jobs a day that he created. There was much he did well, and he was a genuine, sincere and very public spirited man. It may be naive of me to stand up and say this as a politician, because we tend to bury those who go before us, but sometimes in life, loyalty—remembering virtues and trying not to bury those who are no longer here—is a good thing. That would serve us much better as a House than what others seek to do.
Claire Coutinho (East Surrey) (Con) [V]
I welcome the independent inquiry and the Government’s broader work on modernising procurement. I do not believe that anyone can say that a new Committee is needed, as proposed by the Opposition today, when an independent inquiry is under way and when many Committees, including the Committee on Standards in Public Life, serve to scrutinise the work of former officials and Ministers. The point was well made by the Chairman of the Liaison Committee, my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin), and by my hon. Friend the Member for Hazel Grove (Mr Wragg).
The Opposition’s proposition today is not about securing an independent and legally minded expert in procurement to look into the matter. We already have that, and we should hear what he has to say. It is, I am afraid, a rather cynical and desperate attempt to prejudge an inquiry that is happening and take the opportunity to make a party political attack. That is why the hon. Member for Leeds West (Rachel Reeves) persistently mentioned the ’90s in her opening remarks, but nothing about the period between 1997 and 2009. That, of course, was when we saw a long list of allegations about the Labour party—from Ecclestone, to cash for honours and the moniker of “Tony’s cronies” when it came to public appointments. It is also why, when the hon. Lady put forward a list of supposedly crony contacts, she included a Labour party donor. When she very much wanted us to secure PPE contracts, those contacts included a football agent company, an historical clothing company and a legal practice.
The Labour party does not want to wait for the facts but will continue with what I think is a rather contemptible policy of smearing people in public life, with scant regard for the truth or their reputations afterwards. That is what the Opposition did with Kate Bingham, until it turned out that she had done an outstanding job in procuring vaccines for this country—a job that she was not paid for, I might add. I am afraid that she has received no apologies from the Labour party for its smears when it tried to label her as a crony—and, indeed, no thanks for her work on the vaccine taskforce. Labour did the same with the race report; it has yet to criticise the Labour MP who likened those educational experts and public servants, who were trying to put forward solutions to improve the inequality situation in this country, to the Ku Klux Klan. It is desperate and quite cynical.
As people have rightly said today, this is a serious matter and it is right that it is being looked into. We should use the existing channels to get to the facts.
Sarah Olney (Richmond Park) (LD)
The overriding impression that one has received from following every new revelation in the Greensill case is of people making up the rules to suit themselves. First, we had David Cameron, the former Prime Minister, who passed an anti-lobbying Bill while he was in power, which conveniently did not cover the kind of lobbying that he himself then went on to do. Now we find that the Cabinet Office did not require its chief procurement officer to declare his part-time role advising a commercial company that wanted to bid for public contracts, and then—incredibly—did not require him to consult the Advisory Committee on Business Appointments about a full-time role with the same company when he left the civil service, because he was already working there.
As a member of the Public Accounts Committee, I have attended a number of inquiries on the Government’s approach to the pandemic. I have heard time and again about the necessity of circumventing the rules to deliver at speed during the last 12 months. I broadly accept that principle, but again we see that the people benefiting financially from these emergency provisions are close associates of those who decided that the rules could be circumvented.
There often seems to be an aversion to setting rules in our political life: a preference for assuming that a combination of personal honour and political pressure— or “moral and reputational pressure”, to quote the Minister—is sufficient to keep people in line. There is a debate longer than my four minutes will allow to be had about whether our political culture has fundamentally changed to the extent that these principles can no longer be regarded as sufficient. But suffice it to say that the lack of a robust system of rules to which everyone is subjected and for which the penalties are more than just damage to political reputation is a major weakness of our constitution. If there are no rules, or if the rules are made and remade and applied by those in power, there are no effective checks or balances on that power. If the rules can be easily changed or subverted to suit the circumstances, they are not rules and they have no discernible function.
For my own part, I think we are seeing a slippage of standards in public life. Our current Prime Minister has been sacked from two previous jobs for lying, and a former Prime Minister has been hawking his Government connections for personal enrichment. I believe that the behaviour of our elected Ministers has impacted our appointed officials’ perception of what is acceptable.
Doubtless the Government will respond by saying that Opposition parties have indulged in the same behaviour and that everyone is as bad as everyone else—and actually, that could well be true. At the heart of the Government and parliamentary machinery are human beings, and not bad human beings for the most part. But any human being asked to define how conduct should be judged will naturally seek to define that conduct in terms that favour their own actions and judgment. So let us not argue that everyone is as bad as everyone else and that the only arbiter should be the voter—or, if we do, let us accept that we are actually making the argument for a more robust system of rules. If everyone is dishonest, how can the voters use their votes to distinguish between us? If they cannot use their votes in that way, how can they be an effective check against self-interested behaviour?
I support the Labour party’s call for a Select Committee to investigate how Greensill became embedded to the extent that it did and to consider how the rules should be strengthened. Liberal Democrats supported the moves to bring in a lobbying register and rules to register ministerial meetings when we were in government, and we have previously tried to amend companies legislation to require annual company spends on lobbying of up to £1,000 to be declared in annual accounts. We will consider any recommendations carefully and back anything that can improve the current system.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
I am delighted to take part in this debate. This debate was called by the Opposition, I suppose one could say, to smear the Government by attacking a former Prime Minister. Lobbying certainly does need a proper investigation and that is why I back the Government’s plan for a full inquiry, but this afternoon I must tell the House a more disturbing true story about lobbying.
I represent a part of Somerset. In Somerset, the county council started lobbying the Government for a big change: it wanted to become a unitary council. It invested millions of pounds to run a campaign and found a receptive ear in the Secretary of State for Housing, Communities and Local Government. Of course, my right hon. Friend may have embarrassing experience of being lobbied, but I doubt Somerset County Council would ever stoop to taking money—it is not very good at hanging on to what it has got! One bit of lobbying led quickly to the Government’s decision to consider the idea for a Somerset unitary.
Somerset County Council reckoned it would be a shoe-in. More fool them, I am afraid, because it did not have the widespread support it claimed. The four district councils quickly devised an alternative and infinitely better plan for reform, which they submitted, quite rightly, and lobbied the Secretary of State. The next stage was meant to be a full consultation to discover if either proposal could command “A good deal of local support”. This pathetic and meaningless phrase can be interpreted by Ministers however they or anyone else chooses. The method for measuring local support was decided by my right hon. Friend. He chose an equally pathetic system of online questioning to lobby the local people. People can fill it in from anywhere in the world, with no requirement for the people who live in Somerset to have preference. You can legally respond to it from Beijing or Moscow, as probably they regularly do. I am sorry to say that this is a confidence trick.
The Secretary of State also asked the views of a very limited number of organisations in Somerset and lobbied them. The districts begged him to extend the list in order to be fair. Nothing, of course, happened. Therefore, the four district councils decided to let him know that they would arrange a referendum, with strict rules of participation to provide a meaningful addition to his consultation and lobbying. Instead of gracefully accepting this sensible suggestion, the Secretary of State has, I am afraid, thrown a wobbly. He has written to all four district council leaders rubbishing their idea and threatening them—threatening them, Madam Deputy Speaker—with the law! I have never read such a cold response. I am sorry, but it is not going to wash.
The Secretary of State has turned lobbying on its head. He appears to be using a big stick for those who have different ideas on upholding democracy and fairness. I will tell him straight and publicly right now that his actions should, must and will fail. The district councils represent all the parties we know—except, obviously, the SNP—and they are united against this. The referendum will go ahead and if he uses the law to stop it, then I am afraid lobbying has got a very much more sinister and nasty feel to it in this case. I urge anybody in Somerset to lobby to make sure that we have the voice of the people for the democracy they deserve. So, Madam Deputy Speaker, I say to the Secretary of State: see you in court, or come up and sue me some time.
Dame Angela Eagle (Wallasey) (Lab) [V]
After 11 years in power, this Tory Government have ended up like all Tory Governments end up—mired in sleaze. What is different about the scandal confronting us today is the sheer scale of the larceny being practised on the public purse by the donors, friends and beneficiaries of the Tory party.
The Greensill scandal, which is egregious and shocking, is only the tip of a very large iceberg. We have seen £2 billion of pandemic procurement contracts given without competition to companies that have donated money directly to the Tory party; VIP procurement lines specifically designed for Tory mates and, if you are the Health Secretary, your local pub landlord; a clutch of senior Government appointments awarded directly without competition to relatives of serving Tory Ministers; and now the announcement of an inquiry laughably described as independent into the Greensill scandal, led by a man who is the son of a former Tory Cabinet Minister and sits on the board of the Department for Business, Energy and Industrial Strategy, which is responsible for the British Business Bank—it was the British Business Bank that gave Greensill Capital access to hundreds of millions of pounds of taxpayers’ money.
This is just not good enough. We urgently need an inquiry that has the power to call for witnesses and papers, take evidence in public and publish its findings. There are many questions we need answers to. Why was David Cameron allowed by serving Cabinet Ministers to lobby so ferociously in his own personal financial interest? Why was Greensill given such untrammelled access to senior civil servants at the height of the pandemic? How did the Chancellor push the team to be more accommodating to Greensill Capital?
Why was Greensill—an unregulated shadow bank with a toxic business model—allowed access to the coronavirus large business interruption loan scheme? Was that pushed by Ministers, senior bank officials or civil servants? If so, at whose request? Did Greensill then exceed its lending authority and put even more taxpayers’ money at risk? Why was Lex Greensill allowed to roam so freely across Whitehall, pushing his financial chicanery? And why on earth was the Government’s senior procurement official, responsible for £40 billion of public contracts, allowed by the Cabinet Office to work part time for Greensill while he was still in the civil service?
The stench is growing. Only the disinfectant of a fully transparent and independent inquiry will deal with it, and that is what the motion before us would create. If Tory Members vote the motion down, as they have the power to do, they should know that they will be voting to try to brush this scandal under the carpet and treating British taxpayers with contempt.
Craig Williams (Montgomeryshire) (Con)
It is a privilege to speak in this debate. After the opening speech by the hon. Member for Leeds West (Rachel Reeves), I was tempted to go straight into a political attack and point out the failures of the Welsh Labour Government, such as not having a lobbying register after 22 years, or list the public bodies in Wales that are led by former Labour Assembly Members, former Labour MPs’ partners or former special advisers. But that will add nothing to public discourse, and it will not help this issue.
I was quite moved by what the Chairman of the Public Administration and Constitutional Affairs Committee, my hon. Friend the Member for Hazel Grove (Mr Wragg), said about his Select Committee. I can attest, as I am sure Members on both sides of the House can, that he will do no favours for the Whips or the Government, and that it is a robust Select Committee. As the Chairman of the Transport Committee, my hon. Friend the Member for Bexhill and Battle (Huw Merriman), said, our Select Committees in this House are robust. The membership is beyond reproach. I jested with my hon. Friend the Member for Hazel Grove about whether this debate was a vote of no confidence in him, but the debate really does not add anything.
My hon. Friend the Member for Weston-super-Mare (John Penrose) raised three pertinent questions, and there are some serious questions around this issue. I welcome the inquiry and the Minister’s tone. I do not want to disparage the many former Labour Assembly Members who chair health boards or are on the sports body. They have a lot to give to public life. Many of them are doing an excellent job. I welcome their positions after frontline politics and I support a lot of them, but in this debate, it is very tempting for people on both sides to start making churlish comments about cronyism, and we have heard other Members say, “Just because of somebody’s political affiliation.” I would of course love to see more former Conservatives appointed to public bodies in Wales. Perhaps not as many Conservatives are appointed as Labour—Labour has been governing for 22 years, so I am sure their contact books make it a lot easier to contact friends—but that does not take anything away from what they are doing in public life in Wales.
Before I sit down, I will echo what my hon. Friend the Member for Hazel Grove, the Chairman of the Public Administration and Constitutional Affairs Committee, said. This should not be about looking at our Select Committee process and saying that it is not independent enough; that will do nothing for it. We should get behind this inquiry. If Members are unhappy with the inquiry, they can go through the Select Committees that are already in place and have the powers. We all have Members on those Select Committees, and there are already avenues open to the parties in this House to take up these serious concerns.
I will conclude and give the final minute back.
Richard Burgon (Leeds East) (Lab) [V]
The scandal of the former Prime Minister lobbying the Government for his new boss has rightly captured the headlines. I must say that it is really a bit rich for some Tory MPs to attempt to ride their high horse in this debate, because the rot runs much deeper. The whole system is rigged in the interests of the super-rich, and the super-rich spend a lot of money making sure that it stays that way. In the Tory party, they have the perfect vehicle for that.
The pandemic has cast more light on some very questionable practices. While there are 37p benefit increases, wage cuts for millions of public sector workers and tax rises for millions, some, on the other hand, have had a very good pandemic indeed. Vast sums have been handed over to Serco and the like—funds that should have gone to our national health service. Companies with connections to top Tories have been 10 times more likely to get covid contracts than those without such connections. The Health Secretary’s mate, the landlord of his former local pub, won a covid test contract worth a small fortune. I could go on. Instead, I will quote the words of the former Government chief scientist, David King, who said that the process of distributing public money to private companies during this pandemic “really smells of corruption”.
But it is not just in a crisis that the Conservatives look to enrich the super-rich. There was the Housing Minister acting unlawfully over a £1 billion property deal that helped the developer to avoid tens of millions in local council charges. He got his approval from the Conservative Government and, two weeks later, donated £12,000 to the Conservative party. What about the Tory MPs raking in small fortunes on top of their salary—as if being an MP is not a full-time job—making many thousands of pounds doing private consultancy work in a second job during this pandemic? It is shameful and, frankly, it should be banned.
One in three of the UK’s billionaires have bankrolled the Conservative party since 2005, and boy, do they get their money’s worth! There have been tens of billions of pounds in corporate giveaways for the rich from the Conservative party. I will end on the words of David Cameron—himself something of an authority on these matters:
“We all know how it works. The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisers for hire, helping big business find the right way to get its way.”
The stench of corruption has grown ever stronger through this crisis and people across the country are quite rightly fed up to the back teeth of it. People are sick of it. It needs to be stamped out before it does untold damage to our democracy.
Julie Marson (Hertford and Stortford) (Con) [V]
It is interesting to follow the hon. Member for Leeds East (Richard Burgon). In talking about a serious issue with serious implications, he perhaps illustrates the problem for his party, particularly when he talks about the high horse. I, for one, find it impossible to take lectures from him or from his party. Labour Members have either served or evangelised a Labour leader who was famously a “pretty straight kinda guy”, but who exempted Bernie Ecclestone’s Formula 1 from a tobacco advertising ban after a tidy £1 million donation and has had, shall we say, some pretty profitable gigs since leaving office. Or they wanted for Prime Minister the right hon. Member for Islington North (Jeremy Corbyn), who was present but not involved in laying wreaths for Munich terrorists and who presided over an unlawfully antisemitic party. That is without mentioning Labour’s cronyism—union donations—and the fact that the shadow Defence Secretary lobbied for Greensill. As Ted Hastings said, “You’ve got a nerve, fella.”
On the substance of the motion, I absolutely commend the remarks of my hon. Friend the Minister for the Constitution and Devolution, who detailed the action the Government are taking, and of my hon. Friend the Member for Hazel Grove (Mr Wragg), who detailed the activities of his Select Committee.
In response to serious questions on this issue, the Government are acting, and have acted quickly. They are going above and beyond, for example, the information required under the Freedom of Information Act. I also welcome their commissioning of the independent Boardman review, which will thoroughly and transparently investigate the issues around Greensill. That is in addition to the British Business Bank’s review of Greensill’s compliance with the coronavirus large business interruption loan scheme. It is really regrettable that Labour Members seek to disparage and discredit that independent review. I welcome the fact that the Government have been clear that either Greensill’s requests were turned down or that no Ministers were involved in gaining access to coronavirus support loans.
The Government are answering legitimate questions and legitimate concerns and it is entirely right and proper for them to be transparent and accountable; we all want that. They are giving a serious response to serious questions and, at the same time, they are getting on with the serious job of supporting people and businesses through a global pandemic.
Karin Smyth (Bristol South) (Lab) [V]
The Greensill debacle is, in the truest sense of the word, unbelievable. It is unbelievable that David Cameron was able to lobby with such impunity, unbelievable that Cabinet Ministers were able to engage so freely with him and unbelievable that millions upon millions of public money was bound up in contracts connected with more than one Cameron client. Most of all it is unbelievable that, at this point in time, no actual rules were broken. That speaks to a system that has lost its way, a former Prime Minister who has lost his moral compass, and a general public who have every right to lose what faith they had in this Government. From the top to the bottom, those in government are thumbing their noses at the people and the institutions that they are meant to serve, all the while enabled and protected by the rules, regulations and legislation that they brought in. Instead of accountability —the once vaunted “disinfectant of sunlight”—we have deals done over tawdry text messages in darkened bars and, bizarrely, in front of those lavish lights and fires. Due process has been damned.
I am proud to have worked for the public service and I am old enough to remember the last lot of sleaze from the Tory Government. I am a firm supporter of the Nolan principles—selflessness, integrity, objectivity, accountability, openness, honesty and leadership. The Nolan principles apply to every public office holder and we do have thousands of decent, public-minded people across Government and the public and private sector who wish to see this country do better, and that is our task today. What we are learning goes too wide to be confined to a quick review by the Prime Minister’s nominee. For example, the issues around the NHS do require much more sunlight. Well before the pandemic, in 2018, we had the episode with Babylon. We have had a Secretary of State who clearly did not see the NHS and its public institutions as doing well enough and started to skirt the process with the appointment of Dido Harding, the totally opaque plans for Public Health England, and a new superbody—again, about which we know little—to be headed by the Prime Minister’s friend. It is time to call a halt to this.
We have also seen Mr Greensill’s company get into the NHS—to use its name and trusted reputation to allow staff who cannot wait for payday to get paid earlier. Frankly, if the Secretary of State supported the NHS and paid its staff properly, Mr Greensill would not have yet another money-making scheme on the back of those NHS staff.
I am a proud member of the Public Administration and Constitutional Affairs Committee, and I commend the comments made earlier by our Chair, the hon. Member for Hazel Grove (Mr Wragg). We are ready to serve. We have just completed three covid-19 reports, and all three reports highlight the fact that the governance arrangements have not been clear, and that senior accountability has not been clear. They are damning reports. There is a lack of clarity over the role of the Cabinet Office, covid committees, and the quad in decision making over the covid crisis. There is a lack of clarity over ministerial responsibility, particularly the role of the Chancellor of the Duchy of Lancaster. The scrutiny of the covid inquiry also highlighted issues with inter- governmental relations across the devolved Administrations.
On top of the dreadful loss of life, damage to our economy, and so much of our lives disrupted, people have made great sacrifices. We on the Committee are clear that any review of the Cabinet Office response to covid-19 should include examination of the governance arrangements, including Cobra, the C-19 daily meetings, and the quad and Cabinet committees. It is opaque. We on the Committee have struggled to get the appropriate Cabinet Minister in front of us, and to respond properly, but we will persevere.
Mark Fletcher (Bolsover) (Con)
As we operate in these covid times, we have an unusual setup, and we watch many Members from afar. Those of us who have dreamed of sitting on these green Benches, and the responsibility and honour that we have to live by and uphold when we sit on them, may wonder whether some of the contributions that have come from our screens today would have been made if the people making them had been in this room. It feels to me like some of the things I have witnessed on those screens while I have been sitting here have been horribly misjudged.
I think there is general agreement that some of the headlines in recent weeks have raised eyebrows, and that there is a level of concern that is shared across the House, but unfortunately, the Opposition and, in particular, the Members who I have been watching on the screens have decided to run with this in a way that is deeply unhelpful and does not help to solve any of the problems that they are highlighting. I therefore fear that this is much more about party political posturing than it is about clearing up the system, and I urge Opposition Front Benchers to consider that, and to think of ways in which we can work together to improve this system.
I listened to the tremendous contributions from my hon. Friends the Members for Montgomeryshire (Craig Williams) and for Weston-super-Mare (John Penrose). I thought that their speeches had an adult tone and gave something that was deeply needed, which was perspective. I commend both of them, but I commend even more my hon. Friend the Member for Hazel Grove (Mr Wragg), who I thought answered the Opposition’s point rather succinctly and did the Minister’s job for her by saying that what the Opposition are calling for in this motion already exists. The concerns that have been raised are also being independently investigated, and I think that that is what the public would expect. Again, I come back to my fear that what we are debating today is merely party political posturing, and we should be doing better than that.
I would add a note of caution. We as MPs are exposed to an awful lot of voices within our constituency, and that is right: we meet many charities, many individuals and constituents, many councillors, and yes, many businesses. Those conversations help us to know more, to empathise and to understand, and that is an incredibly important part of our job. There is always a concern, when this sort of series of events comes to the surface, that the first thing we should do is stop doing that: stop meeting people, stop hearing other concerns, and stop hearing the concerns of business. That would be a very unfortunate development.
I have worked with partners across the east midlands on our freeport bid, and one of the strengths of that bid has been the fact that we have had academics, businesses, our local enterprise partnership, and our county councils and MPs working together in unison. That sort of behaviour is what is needed to effect change in areas such as the east midlands, and we should not end up in a situation in which we put up too many barriers. I agree that we should have transparency, but not barriers, and it is important that we continue to have conversations with all groups so that we can make ourselves better informed. That is even more true if we happen to be in a position that does not allow us to meet with our constituents more freely, as Ministers are.
Madam Deputy Speaker (Dame Rosie Winterton)
I am attempting to get everybody in, but that does mean that after the next speaker, I will reduce the time limit to three minutes.
Sam Tarry (Ilford South) (Lab)
We have heard many contributions from across this House today and, frankly, I am disappointed that what we have heard makes an absolute mockery of democracy. The general public out there will be seeing not Parliament and government at their best but a revolving door of sleaze. As we have seen time and again, the Government have been rotten in their dealings. Every few weeks, a new shady deal emerges that reeks of cronyism and corruption.
Let us be clear what we are talking about. In the past 12 months alone, we have seen what this Government truly stand for: back-channel conversations, and multibillion- pound contracts awarded, with alarming regularity, to chums in the City with little or no scrutiny.
Let us start with the Health Secretary, who handed out a £30-million contract to his former neighbour and pub landlord, Alex Bourne—a man with no prior experience of producing medical supplies and whose company, Hinpack, was at the time producing plastic cups and takeaway boxes for the catering industry. Despite that, the Health Secretary saw fit to issue a multimillion-pound contract and put our nation’s health in the hands of that company by allowing it to produce millions of vials for the NHS covid test. This did not come about through a formal tender and procurement process. I remind the House that all that was required, by the Health Secretary’s own admission, was a WhatsApp message.
Let us move on to the Housing Secretary, who last summer admitted an apparent bias in reversing a planning decision against Tory donor Richard Desmond’s proposed Westferry Printworks housing development, overruling local officials and saving the property developer an estimated £45 million. Mr Desmond later donated—surprise, surprise—£12,000 to the Conservative party, just weeks after sitting next to the Housing Secretary at a Tory fundraiser.
Then there is the Prime Minister himself, who is also up to his eyeballs in the murky world of lobbying. His former lover Jennifer Arcuri’s firm, Innotech, was awarded £26,000 of taxpayers’ money while he was Mayor of London. Unsurprisingly, that scandal was also whitewashed by this Government.
And now we have former Prime Minister David Cameron, who knew very well what he was doing when he started lobbying for Greensill Capital. We heard from my hon. Friend the Member for Leeds East (Richard Burgon) about David Cameron’s full comments, but we must also remind ourselves that he said that exactly this type of thing was the next big scandal waiting to happen.
Despite that, Mr Cameron saw fit to conveniently forget his own advice when he stood to make £60 million after setting up a cosy drink with the Health Secretary, sending a string of private messages to the Chancellor and, in the process, helping those two Cabinet members commit at least three possible breaches of the ministerial code. It seems absolutely right that the former Member for Bolsover, who is sadly missed in this House, called David Cameron “dodgy Dave” in 2016. He was dodgy then and is dodgy now.
None of this will be taken seriously by our current Prime Minister, who just days ago revealed what he really thinks about the role of big business helping to oil the wheels of this Government, when he said: “The reason we have the vaccine success is because of capitalism, because of greed”. Government Members really are the Gordon Gekkos of the green Benches, who bleed to their very core that greed is good. As a former Conservative Minister told The Guardian:
“A little bit of money goes a long way.”
It is time for that culture to stop.
There now needs to be a Parliament-led, cross-party inquiry, with a new Select Committee formed to investigate the Greensill lobbying scandal, and it should have the power to compel witnesses to give evidence and restore what we need in this country, which is integrity to our democracy, and an end to the grip of corporate spivs and spinners once and for all.
Lee Rowley (North East Derbyshire) (Con)
Thank you for the opportunity to speak, Madam Deputy Speaker, although I am not sure exactly how to follow that. I remind the hon. Member for Ilford South (Sam Tarry) that I served on the Benches with both the current Member for Bolsover and the previous one, and I will take the current one—my hon. Friend the Member for Bolsover (Mark Fletcher)—any day, as, most importantly, will the residents of Bolsover, who determined that the 50-year tenure of the previous incumbent did not deliver the change they needed or the benefits of what he could have done since 1970.
The speech of my hon. Friend the Member for Bolsover addressed some difficult issues constructively and appropriately—something that we have struggled to see from some Labour Members today. I am disappointed in that, because I have worked with Labour Members over my two terms in this place and we have had some constructive and useful discussions about such issues, particularly on the Public Accounts Committee, on which I previously served.
I very much welcome what the Government are doing. If there is an issue, a challenge or a problem here, let us uncover it, work through it and learn from it. As the Minister said at the beginning of the debate, part of the reason we are even here to talk about this matter today is that the processes have highlighted some of these points. There is a point about due process, because Labour Members stand here today on a motion that states explicitly that they seek to understand this problem and potential issues in more detail, yet every single Labour Back-Bencher who has risen in the debate so far has made a speech that bears absolutely no relation to that motion, because they have already decided. They are the judge, jury and executioner; they know better than the inquiry that they are about to vote for, which is already being covered by a lot of other things that the Government are doing and the independent process that they have set up.
On a slightly broader point, I issue a note of caution, as has my hon. Friend the Member for Bolsover. As I have said, if there is an issue, let us uncover it and learn from it. But this should not be an excuse to say that all business is bad and to go on about Gordon Gekko and all that kind of nonsense, which is what we have just heard from north London. It should also not be an excuse for the hon. Member for Leeds East (Richard Burgon)—I can almost set my watch by him—to come along and tell us that business cannot achieve anything.
On the Public Accounts Committee, I have seen that there is a huge amount of experience and skills that we need from the business community. We need to work together better with business. I have seen where it has not worked and where there have been challenges, but I have also seen the benefit that business brings to our country, to this place and fundamentally to our society—to address the point made by the hon. Member for Leeds West (Rachel Reeves). Yes, let us find where the problems are, but let us not do what we have heard from the Opposition today; it is not an appropriate way of solving these issues.
Chris Clarkson (Heywood and Middleton) (Con)
It is a pleasure to follow my hon. Friend the Member for North East Derbyshire (Lee Rowley).
I welcome the announcement of the review into Greensill Capital and its links to the former Prime Minister and civil servants. It is absolutely the right way forward to address legitimate concerns about lobbying and this firm’s interaction with the Government. I also welcome the appointment of Nigel Boardman—an independent legal expert with extensive experience in investigating Government procurement—to conduct this review. I thank my hon. Friend the Minister for making it clear that the review will have full access to all the necessary documentation surrounding supply chain finance and full access to key decision makers during the process. For that reason, I have to say from the outset that I find the Opposition’s proposals today both troubling and typically opportunistic.
Important issues around standards and ethics in public life should not be subject to political committees packed with Labour MPs playing sixth-form politics. It is disappointing that the Opposition seem more interested in scoring political points than ensuring that Government engagement with business, charities and other organisations is conducted in an open and transparent way. There is very little point in replicating the work of the Public Administration and Constitutional Affairs Committee, chaired by my hon. Friend the Member for Hazel Grove (Mr Wragg), which already has the mechanisms available to bring this issue to light. The plans put forward by the Opposition today are yet more tawdry politicking, rather than a genuine desire to improve standards in public life; I will not be supporting the motion.
It is troubling that the Opposition seem to be pre-empting the findings of the review, particularly as they spent 13 years in government and did not once act on concerns raised about lobbying. Indeed, they even voted against the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, which required consultant lobbyists to register with a watchdog and placed restrictions on third-party campaigning groups; that is despite the hon. Member for Leeds West (Rachel Reeves) demanding that the legislation be strengthened this morning on her tour of the studios—more positions than the “Kama Sutra”, Madam Deputy Speaker.
Lastly, I want to acknowledge what the Prime Minister said—that lessons must be learnt from this episode. In this House there are politicians from all political parties who, when they leave the House, will still want to contribute to public life; and they should be able to do so, as many of them have much to contribute, whether it is sitting on the courts of our great academic institutes, serving on boards of charities or, indeed, entering into businesses, either in an executive or non-executive capacity. The vast majority do this with the best of intentions, abiding by the rules on lobbying and engaging properly with the Advisory Committee on Business Appointments.
The Greensill affair is deeply disappointing, not least for those of us who admire the former Prime Minister and his work, but we should now focus on learning lessons from this, not teaching them.
Catherine West (Hornsey and Wood Green) (Lab) [V]
It is a pleasure to contribute to this debate after the hon. Member for Heywood and Middleton (Chris Clarkson). He described elements of the debate as sixth-form politics, but I do not believe that is the case; I think this is a very serious matter. I hope that he, and all non-Government Members, will see their role in this House as extremely important in holding the Executive to account. Whether they are majority-party Members or Opposition Members, every single Member in this House plays a key role in holding the Executive to account. Our Executive are very strong and all of us must play our part in holding them to account.
The Greensill sleaze scandal and the “revolving door” influence of the former Prime Minister is the latest in a long line of questionable practices by the Government. In recent days, the former Government chief scientist Sir David King has warned that the Government are operating a chumocracy and a creeping privatisation of the national health service even as we continue in our communities to battle the covid-19 pandemic, day by painful day. There is the deeply concerning decision to hand London GP practices to the US health firm Centene: a decision that has incensed many of my constituents, who are rightly concerned about the quality of their local healthcare. Our constituents deserve better than this. Time after time, it is one rule for them, another rule for everyone else. While Tory donors and former Prime Ministers have privileged access, the Chancellor denies support for others, like my poor constituent who emailed in regarding their livelihood crumbling during lockdown and said that the Greensill sleaze affair
“is an insult to all self employed and freelancers”.
It is clear that the rules are not fit for purpose. Labour’s amendment to the 2014 lobbying Bill would have caught out David Cameron’s Greensill lobbying and would have ensured that any decisions to handle health contracts were made without the stain of cronyism hanging over financial decisions taken by Government. Ministers have been at pains to point to an inquiry into the sleaze scandal, but it only scratches the surface of what should be investigated, ignoring swathes of dealings worth billions of pounds of public money.
We desperately need to remove the stain of cronyism that hangs over the Government. Today, the Institute for Government has described the head of the Crown Commercial Service, or the head of Government buying, working for Greensill as “eyebrow raising”, and has suggested that following the Robert Jenrick affair—the property development referred to earlier in the debate—the “stench of sleaze” will take quite some cleaning up to be dispelled. We need an anti-corruption and anti-cronyism commissioner and an integrity and ethics commission to clean up, and we need urgent change.
Jackie Doyle-Price (Thurrock) (Con)
I do not know about anyone else, but when I stood for election to this House and was fortunate enough to be elected, I took very seriously the Oath that I made when I entered here. I stood for Parliament because I wanted to serve the public and do my bit. I did so because I believed in the integrity of this place and I believed in the integrity of hon. Members. I believe that everybody in this place actually wants to do their best for this country and for the British public.
I am very concerned about what we have learned about the Greensill affair over the past week, but I am even more disappointed by the reaction of Labour Members to this, because it does not just reflect on the Conservative party; it reflects on every single one of us. Those of us who care about the political culture of this country—and we all should, given that we have all stood for election to this place and made great sacrifices to do so—should all be working together to address the very real concerns that have been raised with us. When I drove in this morning, there was a sign attached to the railings outside Westminster that said: “Self-serving liars are destroying our nation”. I do not believe that any Member of this House is a self-serving liar.
I say to Labour Members very gently that we have structures in this House to look at these matters. If they had bothered to talk to my hon. Friend the Member for Hazel Grove (Mr Wragg), they would have learned that we have been reaching conclusions on these matters over the past year. We have realised that ACOBA has no teeth. We have realised that Members of this House are held to greater account for transgressions than Ministers who break the ministerial code. The Parliamentary Commissioner for Standards has more teeth. We have been looking at exactly those matters.
Tomorrow, we are having the chairman of ACOBA before us to look at these issues. We are taking our obligations to this House very seriously, so it is very disappointing not only that the Opposition view what we are doing with no confidence, but that they clearly have no confidence in Opposition Members who are members of that Committee either.
On the issue of whether the rules are strong enough, the fact of the matter is that sunlight is the best disinfectant. We all can reach our own conclusions about the behaviour not only of David Cameron, but other former Prime Ministers. Whatever the rules are, and whatever the limits of sanction are, the one thing that David Cameron will be concerned about more than anything else is the damage to his reputation that has been done by this episode. Frankly, that will be with him for a very long time. Let us be clear: we have some of the best standards in western democracies, we can always do better and we will be doing our bit to make sure we address some of these issues.
Ruth Jones (Newport West) (Lab) [V]
It is a pleasure to follow the hon. Member for Thurrock (Jackie Doyle-Price), who made some valid and genuine points, and I am grateful to her for those. I am also grateful for the opportunity to speak in this debate, but I am mindful of time pressures, so I will be brief.
Many people across Newport West have been in touch with me in recent days in the wake of the revelations of text messages between the right hon. Member for Richmond (Yorks), the Chancellor of the Exchequer, and the former Prime Minister, David Cameron. Truth be told, there is a really bad smell lingering around this Government and something has to give. The Greensill scandal is just the tip of the iceberg of cronyism rife in the Conservative party now. I welcome the speech by my hon. Friend the Member for Leeds West (Rachel Reeves) from the shadow Front Bench and I will be supporting the motion. Simply put, we can stand for nothing less than the establishment of a full, transparent, Parliament-run inquiry into the Greensill scandal.
I say to the Minister that that inquiry must be far more transparent and open than the Boardman investigation announced by the Conservatives this week—an investigation that has all the hallmarks of a cover-up. I do not think we need to dwell too much on the bullying cases associated with the right hon. Member for Witham (Priti Patel), the Home Secretary, or the Russia report, held behind closed doors and resulting in little or no action from the Prime Minister—a Prime Minister missing in action yet again.
It has been clear from the range of people across Newport West who have written to me about this issue that there is much concern in the community. It is also clear that they do not believe the Tories can be trusted to mark their own homework. My constituents are telling me that they believe all politicians are corrupt and that we all have our noses in the trough. That is what they are telling me on the doorstep and it is what they believe. I do not believe it for a moment, but there is a real danger that the poor standards of some reflect badly on all of us here in this place and that is not good. To open up the process for scrutiny, key players in this cronyism scandal, such as David Cameron, the Chancellor, the Health Secretary and the Prime Minister himself, should appear openly in front of Parliament to answer questions at the earliest opportunity. If they have nothing to hide, what is the problem?
The shadow Chancellor, my hon. Friend the Member for Oxford East (Anneliese Dodds), was clear yesterday that it is important to raise, as she did, that hundreds of millions of pounds of public money was put at risk when Greensill was given access to covid loans schemes. As Greensill has collapsed, thousands of jobs in Rotherham, Hartlepool and my hometown of Newport hang in the balance. Those workers and British taxpayers deserve answers.
It is 2021. We cannot sit back and stay quiet as a Government who supposedly represent our country cut corners, send texts and ignore the Nolan principles at every stage. It is time for a change of culture in this place.
Steve Double (St Austell and Newquay) (Con)
The revelations and allegations that have come to light in recent days are clearly concerning and raise a number of very serious questions. That is why I welcome the Government’s decision to initiate an independent and wide-ranging inquiry. I was deeply reassured by the comments of my hon. Friend the Member for Hazel Grove (Mr Wragg) about the role that the Committee he chairs will play in these matters. It is clear that, between the two, there will be robust and comprehensive scrutiny of these events.
I believe that that lays bare the true intention behind the motion: to play politics with the issue. When the Government have already initiated a full inquiry, the Opposition want to go further and establish a Committee to duplicate the role of the very capable Committee already in place, in order to grab a few headlines. Let us not forget that in its most recent manifesto the Labour party stated that it would repeal the legislation that was put in place in 2014 to limit the role of lobbyists. That is typical of what we have come to expect from the current Labour party as it turns somersaults to create a few headlines while trashing the reputation of this place.
We should be proud that our nation’s system of government is among the most open and transparent in the world. There are strict rules in place that Ministers follow. Accountability and openness are guiding principles of the ministerial code. That does not mean that things should not be kept under review and amended as appropriate, but I object to the cynical attempts by Opposition Members to constantly trash our country, our democracy and our Parliament. They do it almost with glee—they cannot resist the opportunity to drag down the great institutions of our nation.
Our nation, this Parliament and our system of government are respected around the world. According to Transparency International’s corruption index, the UK is ranked 11th of 180 countries, on a par with countries such as Canada and Australia. We should not settle for 11th—we should aim to be No. 1—but to suggest that our system of government is corrupt to the core, as Opposition Members seek to portray it, is simply wrong and does a disservice to the people of our country. I know that it fits the world view of the far left. We were told that this Labour leadership was new and different, but time and again we see the truth: it is the same old Labour that despises our country and its institutions.
If wrongdoing has gone on in these matters, I am confident that it will be brought to light. The systems are already in place for that. We do not need another Committee. I will not support the motion today.
Bob Seely (Isle of Wight) (Con)
I agree with much of what my hon. Friends the Members for St Austell and Newquay (Steve Double) and for Thurrock (Jackie Doyle-Price) have said.
There are two facts here that may appear contradictory, but are not. This is basically an honest place and the overwhelming majority of us are deeply honest and straightforward—there are flaws in politicians, but in this country corruption is not necessarily one of them. At the same time, it is sadly true that the UK is an influence peddler’s paradise. I will explain why; it has much to do not only with the weakness around domestic lobbying laws, but with foreign lobbying.
I will not spend much time on the points raised by Opposition Members; for a “loyal Opposition”, I am not sure that they seem particularly good at being either. I know that the Prime Minister wants to do the right thing, so I will make some suggestions, partly based on a report that I wrote earlier this year with the Henry Jackson Society about looking into foreign interference in the UK and models for a UK foreign lobbying Act.
The problem is that the current lobbying rules are not fit for purpose, because there are barely any lobbying rules. In fact, it is very difficult to break the rules, because they are so limited: they are built around a very narrow definition of what it is to be a lobbyist and what a lobbyist does. Most importantly, they do not look at the lobbying done by law firms and reputation managers—the sleaze launderers and reputation launderers. If we look at some of the most corrupting elements in our system and at the relationship that BT had for 10 or 15 years with Huawei, effectively, BT, a corporate entity that had high standards—
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
My hon. Friend raises Huawei. Does it not demonstrate his point that there are very strict rules in this country that many companies and individuals stick to, but when it comes to foreign influence in politics, we must go much further? For the Opposition to have made no reference to that in the motion is a matter of deep regret.
Bob Seely
I agree. I thank my hon. Friend for his point and hope to build on it. If we look at Huawei and its relationship with BT, effectively, BT became a front entity for Chinese state technology in this country. Another example is Lord Barker, a former Minister who is now in the other place—I think that is the correct expression. We found out about his extensive work for one of President Putin’s most loyal oligarchs, Oleg Deripaska, by reading the US media. Why? Because we have no foreign lobbying accountability laws in our own country, in much the same way as our domestic lobbying laws are very fragile as well.
My hon. Friend the Member for St Austell and Newquay (Steve Double) was right: a lot of us rely on a clean system because we are honest people, but the problem is that it is easy to abuse a system that is still largely based on trust, and it is often difficult to understand the ways in which it is being corrupted. That is perhaps the most significant problem.
We are talking about one individual politician, David Cameron. I am sorry to hear that he has done this, because actually I quite like the guy and hope he can in some way explain himself rather better than he is doing, but we are talking about one individual politician and one or two—a small number of—civil servants. However, the systemic threat of malign covert influence is not necessarily from specific individuals who may or may not be flawed, but is from states that use covert influence to try to manipulate laws and influence public opinion in other people’s countries, and we now have a mini-industry of that in the United Kingdom.
To sum up to ensure others have the time to speak, I will send, if I may, to the Minister my report on foreign lobbying in the hope that when we produce these laws the Government will take into account some of the things the Henry Jackson Society and I have worked on, so we can try to clean up our system and these occasions become even rarer, as they should be.
Shaun Bailey (West Bromwich West) (Con) [V]
This has been an interesting debate with thoughtful contributions from my hon. Friends the Members for Isle of Wight (Bob Seely), for Bolsover (Mark Fletcher), for Thurrock (Jackie Doyle-Price), for North East Derbyshire (Lee Rowley) and for Heywood and Middleton (Chris Clarkson).
Let me be clear at the outset: the Greensill affair raises serious issues that need to be scrutinised, answered and accounted for. However, what I say to the Opposition is if they want to talk about sleaze and corruption, they do not need a motion, they need a mirror. The fact is they need to go no further than the Labour-controlled Sandwell Council to find out exactly what that looks like, and what Labour in power is all about, because sleaze affects all my constituents day in, day out, such as the £300,000 spent on silencing a blogger who called out exactly the cronyism that we see the Opposition carping on about today, while we suffer from some of the highest levels of child poverty in the country.
I just say three words to the party opposite: the Wragge report. Perhaps some of them should take a read of it, because perhaps they will see then exactly what it looks like when they are in power, and the sleaze that is there. We know about the ongoing investigations and people should be in no doubt at all that some of the findings are truly shocking, including cover-ups, misuse of public funds, and reports being leaked and the use of private emails to cover-up. And those are not my words, but the words of the previous Labour leader of Sandwell Council.
So before the Opposition start carping on about sleaze, Tory sleaze or whatever else it might be, perhaps they need to look at their own ranks, and perhaps they need to come to Sandwell and see what it is like. As Julie from Tividale put it to me on the doorstep the other day, “Shaun, the only way we are going to sort this is by huffing them out.”
Returning to the points raised today, there has been a theme running through this debate: we in this place, as Members of Parliament, have the mechanisms to scrutinise issues such as this. It is as simple as that; the mechanisms are there. I pay tribute to my hon. Friend the Member for Hazel Grove (Mr Wragg) for the work he does. He has said that he is ready to serve and so is his Committee, and we know full well that he can step up in order to do that. And it is right that he does, because we are sent here to provide that scrutiny of the Executive. The hon. Member for Hornsey and Wood Green (Catherine West) was right: Back Benchers do have that role; we are here to scrutinise and to shed light on situations such as this one.
I am conscious of time and want to keep my remarks as brief as possible without repeating too many of the comments made by other hon. and right hon. Members across this House. We have the mechanisms in the House to scrutinise and to hold such situations to account, and the inquiry is very much welcome, which is why the Opposition should perhaps first also look at their own house and why I will be voting against this motion.
Olivia Blake (Sheffield, Hallam) (Lab) [V]
I am and always have been exceedingly concerned about value for money, conflicts of interest and the correct use of public funds. I sit on the Public Accounts Committee, and over the past year we have seen the workarounds and the flexibility to deal with the coronavirus pandemic. For me, that has exposed the weaknesses in our systems in the first place. It has exposed who the winners and losers are in our system.
When there is no competition, delayed contract publication or a lack of oversight, as we have seen this year, the fragility of the rules that we have in place is clearly exposed. When there are text messages, dark corners in our democracy and what can only be described as sleaze, the need for change is clearly exposed. This saga should shame us all. We should not have a system that allows individuals to interpret their actions as fair and allowed within the rules. We need to fix those rules and change the law.
Transparency International UK estimates that in-house lobbying could be as high as 80% in the UK. Labour’s amendment to the 2014 lobbying Act would have caught out David Cameron’s Greensill lobbying. We should be united cross-party on this motion. Every one of us has a duty to uphold the offices we are elected and appointed to, and we should never be afraid to answer the questions of colleagues in Parliament on these matters. That is why I support the motion today, and that is why many will view the inquiry as sweeping the issue under the carpet and fear a cover-up.
This issue also raises questions about where decisions should be made. If they were made closer to the people that they affect, would those involved have felt they were able to act in this way? Power and money can clearly be influential to some in this place, but we should remember that we are elected to represent the people, not private interests, and that those private interests should never view public finance as an easy-access cash machine.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a pleasure to speak in this debate. Before I proceed, I think I speak for the whole House when I say how nice it was to see the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), opening the debate. I am sure everybody sends her their best wishes, albeit virtually.
As my hon. Friend and so many others have said already, we all condemn the actions that are alleged to have taken place regarding Greensill and the involvement of the former Prime Minister. It leaves a bad taste in the mouth and, as so many have said far better than I could, it tarnishes us all. We need to ensure that we uphold the best possible standards in public life and that there is transparency in all interactions between companies, individuals and decision makers in Government.
However, that is not at all the aim of the motion in front of us today. The motion, if passed, would do no such thing. It is blatant, tawdry politics. It is ill-thought-through, but even worse than that is the stench of hypocrisy that remains in the air given some of the utterances from Opposition Members. I notice that the shadow Defence Secretary, the right hon. Member for Wentworth and Dearne (John Healey), is opening the next debate. It was he who wrote to the Business Secretary asking him to expand Greensill’s access to Government loans. The hon. Member for Leeds West (Rachel Reeves) opened this debate, speaking about how we should go further and faster in tackling corruption in lobbying. In December—just last year—she said:
“Democracy is deeper than sporadic elections, it is about what happens in between with citizens’ voice, rights and power. That requires guarding the independence and voice of civil society and is why measures in the Lobbying Act which mutes so many, really must go.”
The Opposition want to repeal the lobbying Act. It is frankly astounding.
As I have said, we need to ensure transparency and trust in politics. We need to ensure that the way companies and individuals interact with Government and decision makers is transparent. We must maintain standards in public life. However, the motion in front of us today would do no such thing.
David Simmonds (Ruislip, Northwood and Pinner) (Con) [V]
In 1998, I started my political career as chairman of the Uxbridge planning sub-committee in the London Borough of Hillingdon. The first requirement was to receive advice on how to deal with lobbying appropriately. An eminent member of the Labour party, Mr David Brough, at the time the council’s head of democratic services, gave the sage advice that although we cannot always manage what lobbying we will be subject to, what matters is that, in office, we act in line with the rules and in the public interest in the way we respond. Mr Brough’s advice was good then, and it is good today. The tone struck by my hon. Friend the Member for Bolsover (Mark Fletcher) was exactly right: the good governance of public affairs demands that we all pay good heed to those who want to bring matters to our attention, and that we exercise our judgment about how best to act in the light of this information.
People in office—in Government, in Parliament and in the public and private sectors—are continually lobbied on all manner of issues. Indeed, I first made the acquaintance of many current leaders of the education unions during the weekly meetings that the last Labour Government’s Ministers held with them. That access was not afforded to other key players in the education sector. So, privileged access for friends of Labour? Yes. But provided that Ministers put those union demands into context and acted in the wider public interest, that was not an abuse of process. I am happy, as a Member of this House, to extend the benefit of the doubt to those in the party opposite who lobbied for Greensill and on a huge range of other matters on behalf of other organisations, on the basis that they did so in the belief that they were genuinely acting in the public interest. The same courtesy deserves to be extended to all in public office while evidence is sought and considered.
In the spirit of the constructive suggestions set out by my hon. Friend the Member for Isle of Wight (Bob Seely), it might be helpful to look at the local government training as a model for us in Westminster, to provide some guidance for Members on how to deal with lobbying. In my view, however, the case has not been made by the Opposition for the motion before us today. Calling for cross-party unity on this issue has been a preamble for making unproven and unevidenced allegations against the Government, and that tells its own story. For that reason, I oppose the motion.
Mary Kelly Foy (City of Durham) (Lab) [V]
Five years ago, Dennis Skinner was ordered from this Chamber for calling the then Prime Minister, David Cameron, “dodgy Dave”. We already knew that David Cameron was callous: his social security and immigration policies showed that. We knew that he was incompetent: the damage that he caused to the Union showed that. And now, thanks to the Greensill scandal, we have further proof that he is indeed dodgy. There is no doubt that David Cameron behaved improperly, but we cannot let this scandal be reduced to the actions of a single disgraced politician. The Greensill scandal involves the Chancellor, the Health Secretary, two Treasury Ministers, a senior civil servant and God knows who else. It also shows just how lax the rules on lobbying are, and how this culture has infected the heart of Government. Greensill is the latest in a seemingly unending conveyor belt of cronyism scandals under this Government. In the past 16 months, we have had the Westferry development and the towns fund scandal. Government contracts have been handed to the Health Secretary’s pub landlord and to firms linked with Dominic Cummings and the Conservative party while billions have been wasted on a test and trace system run by the partner of a sitting Conservative MP. I could go on.
At the start of the pandemic, the Government promised to do everything they could. I assumed that meant everything that Ministers could do to defeat the virus, not everything they could do to make their rich mates even richer. In the Labour party, we listen to the voices of the workers and the disenfranchised. The Conservatives listen to the greed of their chums and their donors. For many of them, this pandemic was simply an opportunity. It makes me sick that the Chancellor pushed officials to help a wealthy ex-Prime Minister while ignoring the excluded. When I raised the struggles of a business in Durham, the Chief Secretary to the Treasury told me that not every single job would be protected. Did the Chancellor tell David Cameron that not every stock would be protected?
We cannot have another classic whitewash where the Government mark their own homework. It is time for a proper inquiry, not just into Greensill but into the culture of corporate lobbying that plagues politics. It is a sad fact that the public do not trust politicians, but when they see this scandal or any of the others overseen by this Government, who can blame them? We need to demonstrate a commitment to ending this lobbying culture that protects the interests of the few at the expense of many, and that starts with a proper inquiry.
I expect my protests will fall on the deaf ears of a Government who cannot hear me or the pleas of my constituents over the words of corporate lobbyists, but David Cameron’s actions have once again shown that Tory Ministers cannot be trusted, so in the absence of the Beast of Bolsover, I will still refer to our former Prime Minister as “dodgy Dave”.
Christian Wakeford (Bury South) (Con)
I do not know how to respond to that, really. I will try to be brief, and it is much easier when we take the petty and cheap politicking out of it. What we have here is an issue, and it is right that it is addressed fully, but the best way to do that is via the light of day—through transparency and having a full and frank investigation, which has already been launched by the Prime Minister. What we do not need is a further Committee when we already have one in place. We do not need to reinvent the wheel.
What we have seen today, as my hon. Friend the Member for North East Derbyshire (Lee Rowley) mentioned, is trial by judge, jury and executioner, with people already found guilty before an investigation has actually started, let alone concluded. I think we are now seeing the party of opposition no longer opposing, but just being the party of opportunism. Quite frankly, that is depressing. It is depressing for this place and depressing for politicians across the country, but it is also depressing for the public.
When I go out knocking on doors in the coming weeks in Radcliffe, Prestwich and Whitefield, I do not want to say that we do not trust politicians because of politicians. We do ourselves down, when actually we have done a good work over this year because of the pandemic, and we do a lot of good work because that is what we want to achieve. We want to achieve the best for our constituents and the best for our country, and we do so. However, that does not happen when politicians stop listening to the people they represent. We saw that before the last general election, and that is why we are in this position now. We are a strong Government with a large majority because we did listen to those workers and we did listen to business.
Business does need to be listened to. Business is not the enemy. Big business is not the enemy. Yes, it needs to be reined in every now and then; well, that is not a bad thing. We need to make sure that we do represent everyone, whether that is the shop floor worker in Morrisons, the care worker or, indeed, the chief executive officer of a large multinational. We are here to represent everyone, and we achieve that by working collegiately, not by calling out former Prime Ministers, former Members and former right hon. Members as being “dodgy” or guilty before we even know what they are guilty of. That does this place down.
It is a really depressing day to be having this motion. I will not support the motion, because it calls for something that is already in existence, so I support my hon. Friend the Member for Hazel Grove (Mr Wragg) in allowing his Committee to carry on the great work that it already does, and long may that continue.
Janet Daby (Lewisham East) (Lab) [V]
Over the past 13 months, correspondence and conversations with my constituents have shown how much damage the dodgy dealings of this Government have done to our public trust. The Greensill debacle is not the beginning or the end of the shameful behaviour of the Conservative party. From Dominic Cummings’s brazen breach of lockdown regulations to the Housing Secretary’s involvement with lobbying developers, it is hard to see what integrity this Government have when those awarded the highest positions of authority are allowed to get away with this. The Home Secretary was found in a report to have bullied her staff members, including swearing and shouting, but the Prime Minister determined that this was not an issue.
Now we are hearing that a former Prime Minister has been permitted exclusive access to some of our most senior Government Ministers to further his own financial gains. Journalism is uncovering this scandal, because the public really need to know what is going on behind the closed doors of Whitehall. Throughout the pandemic, again and again we have seen public money being handed out, through lucrative contracts, to the Health Secretary’s friends. We have seen the shambolic failure of the delivery of personal protective equipment after millions of pounds was misspent, not to mention billions spent on the failed test and trace service. Our poorest children have been going hungry because highly essential free school meal contracts were entrusted to a company that sought profits only. Now our Chancellor, the very person we have no choice but to trust with our country’s money, is implicated in these disgraceful underhand dealings.
We must have a parliamentary inquiry that covers the Greensill sleaze affair. The culture in the Conservative party that has allowed it to exploit its power again and again undermines its integrity in office. British taxpayers deserve a transparent investigation so that it is clear what those in high Government office have been doing with their money. After the farce of the Commission on Race and Ethnic Disparities report, named contributors to which said that their words had been twisted to show a racism-free Britain, we will not accept another Government-fixed pseudo-review.
Peter Gibson (Darlington) (Con) [V]
I am pleased to be called to speak in today’s Opposition day debate about the steps being taken by the Government to increase transparency while at the same time ensuring that businesses, charities and other campaign groups can raise their concerns with Ministers and that our Government can listen. The hypocrisy of the party opposite knows no bounds. Its own Front Benchers have continuously lobbied for companies such as Greensill at the same time as voting against measures to increase transparency and provide a proper legislative framework for lobbying.
Measures that the Government are taking include ensuring that lobbying takes place in a transparent and open way, voluntarily publishing more information than required under the Freedom of Information Act, ensuring that all consultant lobbyists are registered with an independent watchdog, and routinely publishing details of ministerial meetings and Government contracts. That is all being done while ensuring that Ministers are still actively listening to the businesses and charities that have been so badly affected by the pandemic.
I am glad that the Government, far from ducking difficult questions, are taking steps to further increase transparency following on from the 2014 lobbying Act and ensuring that the highest standards of openness and accountability are maintained at all times—steps that in 13 years of power, Labour refused to take. Indeed, in the last general election every Labour MP stood on a clear manifesto commitment to repeal the 2014 lobbying Act, yet the Leader of the Opposition is still taking advice from the former MP for Hartlepool, Peter Mandelson, who was twice forced to resign from the Labour Cabinet over cronyism. Thankfully, the people of Hartlepool will have the chance to elect a Conservative on 6 May and end the years of Labour taking that great town for granted. If we needed an example of Labour cronyism and its commitment to fairness and transparency, we need only look at the stitched- up candidate selection in Hartlepool.
I am glad that Nigel Boardman has been commissioned by the Prime Minister to investigate concerns about lobbying following the revelations of the last week. We are assured that Mr Boardman will have access to all the relevant documents and those people who were involved in decisions at the time.
Today’s debate is nothing more than yet another opportunist attack on the Government as Labour fall behind in the polls while this Government continue to support thousands of businesses across the country. The Opposition are seeking to score quick political points and generate soundbites while failing to address flagrant cronyism within their own ranks.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
What a pleasure it is to come down from the north of Scotland rather than Zooming in, Madam Deputy Speaker.
We are clearly in a spot of bother on Greensill, but I would certainly draw a couple of rays of hope from the debate. I have always had faith in the Chair of the Public Administration and Constitutional Affairs Committee, the hon. Member for Hazel Grove (Mr Wragg), and what I heard from him today confirms my belief that he is doing a good job. I was very much taken by the point made by the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) about the fact that training might be very helpful.
My colleague and good friend, my hon. Friend the Member for Richmond Park (Sarah Olney), made the point, if I picked it up correctly, that we are all in this together. That sentiment was echoed by the hon. Member for Thurrock (Jackie Doyle-Price). My intervention on the hon. Member for Argyll and Bute (Brendan O'Hara) was along the lines that, as others have said, such a besmirchment of democracy is not helpful. To see this happening and to hear people in the streets saying, “You’re all at it—you’re all letting us down” is not at all helpful, and it is dangerous to democracy, which, after all, this place is the mother of.
I am going to take a leaf out of the book of the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) and go local. With your permission, Madam Deputy Speaker, I shall return—mentally, at any rate—to the far north of Scotland. The damage and corrosion to faith in democracy needs to be taken with the local situation that we have up there. For whatever reason, unfortunately, in the vast area of the highlands, public appointments do not seem to reflect the far north. Local knowledge is essential to running services, as how things are done is quite delicate and detailed, and when people are appointed who are not from the area, that is counterproductive.
Finally, we have a Danish billionaire who buys estates in the far north of Scotland as you or I might buy household appliances, Madam Deputy Speaker—he just buys them one after the other. Other Members have heard me talk repeatedly about the great wish of the crofters in north Sutherland to take up the Government’s generous offer of our hosting one of Britain’s space launch sites. It went through planning nem con—unanimously—and all the crofters support it, yet this Danish billionaire who is not elected by anyone will do anything in his power to stop it. If we can get it right in this place on the Greensill front and restore public faith in us, there can be a knock-on effect that will only be good for wider democracy and people feeling that they are actually being heard.
Kate Osborne (Jarrow) (Lab) [V]
This is a scandal that goes right to the heart of Government and reaches deep into our public services. It is appalling that the ex-Prime Minister, David “Dodgy” Cameron, went looking to make a fortune via Government contracts. This happened at the same time as a senior civil servant started working for Greensill Capital while still the head of Government procurement, essentially wearing both hats for three months with the rubber-stamped approval of the Cabinet Office. This is not just a historical issue. Those caught up in the Greensill scandal include both the Health Secretary and the current Chancellor. They must now come before Parliament to provide full transparency and publish key evidence.
From PPE contracts dished out to drinking buddies to the US health corporation takeover of GP surgeries, Tory cronyism stinks, and interference in our health service stinks. The Health Secretary must face parliamentary scrutiny over his involvement in the Cameron Greensill lobbying scandal, and it must be made public how much access to NHS data and billing Lex Greensill gained during his period of special treatment within Whitehall.
The Prime Minister has said that Nigel Boardman, a former senior partner at the law firm Slaughter and May, will lead an independent review into the Greensill-Cameron affair. This is the same Nigel Boardman who, while working for Slaughter and May in 2018, was one of a number of financial advisers employed by the Government who were found by the Business, Energy and Industrial Strategy Committee to have squeezed money out of Carillion during the company’s dying days. Do we really think that Nigel Boardman is an appropriate or suitable person appointed by the Prime Minister to undertake the review of David Cameron’s behaviour in relation to Greensill? It is not acceptable to allow the Government to pick and choose who they get to lead an independent inquiry into this.
Besides the conflict of interests, the review does not have any legal powers, and it is not expected to come up with recommendations for tightening the system. It is another way for the Tories to sweep a scandal under the carpet in the hope that the British public forget. Whether it was the inquiry into the allegations of bullying against the Home Secretary, covid cronyism or institutional racism in the UK, Government inquiries have either been hidden or led to nowhere in recent times. I urge Conservative Members who wish to stop cronyism, which is rampant in their party and in Government, to vote for this motion, so that we can uncover the truth behind this scandal and put an end to this unaccountable, corrupt capitalist practice.
Claudia Webbe (Leicester East) (Ind) [V]
Systematic and structural corruption at the heart of Government. Despite being elected by the people, they govern for the billionaires and the corporate elite. In truth, I am not sure that any amount of transparency or personal integrity can change this culture of stench—I hope it can.
The Greensill scandal, with its implications for NHS privatisation, the former Prime Minister and current Ministers, is particularly shocking as it encapsulates the chumocracy of this Government, yet that scandal is just the tip of the iceberg of the cronyism that defines this Administration. This is a Government of the super-rich, by the super-rich and for the super-rich. Throughout the pandemic, the Government have given billions to private companies in shady deals that have led to accusations of corruption. A National Audit Office investigation of coronavirus procurement found that contracts worth many billions of pounds were given without scrutiny to private companies with little or no experience, and whose only qualification seemed to be a close personal relationship with a member of the Government.
My community of Leicester has been in lockdown or enhanced restrictions longer than any other area of the UK. For a full year, we have not been able to hug our loved ones or participate in anything resembling normal life. Given the immense suffering caused by the pandemic, it is absolutely appalling that some companies see the crisis as an opportunity to be exploited for financial gain. A select few with ties to the Government have profited immensely, while most people have suffered. Worse, the Government have facilitated an unscrutinised handover of public wealth to the pockets of wealthy shareholders. This is a Government who are frivolous when it comes to handing out public money to Tory donors or private companies, but penny-pinching when it comes to bailing out communities across the country.
The Greensill scandal cannot be swept under the rug. That is why it is so important that it is investigated by a full, transparent, Parliament-run inquiry. That is especially the case following recent revelations that the Government’s chief procurement officer started working for Greensill Capital while still employed at the Cabinet Office, with access to Government contracts worth billions. With the scandal likely much worse than it appears, the Government cannot be allowed to mark their own homework.
In recent weeks, we have seen the disastrous consequence of self-assessment with No. 10’s race and ethnic disparities report. Its conclusion that the UK is a world-leading bastion of racial progress was nothing short of state-sanctioned gaslighting. The Government’s investigation, in its current form, will kick the issue of corruption into the long grass. We cannot allow that to happen. The Government must be investigated and held accountable. If they do not want to support the Labour motion, I suggest we have a judge-led inquiry.
Justin Madders (Ellesmere Port and Neston) (Lab)
Every day, things get a little murkier. Every day, some new revelation appears that adds to the general whiff of sleaze that emanates from the Government. Rather than seeking to uphold higher standards, it seems that the Government want to underplay the importance of probity, sideline the principle of transparency, and behave as if the law does not apply to them. It starts with a friendly drink, then a cosy chat, and before we know it millions of pounds of public money is being siphoned off without any kind of open process being undertaken. Never has the phrase, “It’s not what you know, but who you know,” rung so true. Never has the path to riches been so open to a select few, and never has our democracy been so warped by an erosion of basic standards.
These revelations diminish us all in the eyes of the public. That should concern us all, regardless of political persuasion. I urge Conservative MPs who intend to vote against our motion to think about what message they are sending to their constituents. If their constituents are like mine, many will have faced massive financial hardship over the last year. I have written to Ministers about the issues affecting businesses and individuals in my constituency in relation to the covid response, but on far too many occasions I have received a disinterested generic reply six months later.
My constituents and I are disappointed when their concerns are treated with such disdain, but that disappointment turns to outrage when my constituents see that those who have the Chancellor’s mobile number have no such difficulty in getting an audience. The 3 million excluded, the health and social care staff scrabbling around for personal protective equipment, and the millions of people who have given their time to help in the fight against covid have all given so much. When they see that this crisis has been used as an opportunity by some with the right connections to line their own pockets, they are disgusted.
Ministers should remember that they are not only custodians of the public purse; they are responsible for the reputations of the Departments they oversee. One of the schemes that that special access led to was essentially payday loans for NHS employees. More thought should have been given to the implications of that. It is clear that Greensill wanted the credibility that comes from working with the NHS, in the hope that that would enhance its reputation, but what about the reputation of the NHS after being associated with such a scheme? If it is thought that pay is so low that salary advances are needed, perhaps the Government should think again about the real-terms pay cut that they propose for NHS staff.
If we are to have lobbying, we should lobby for the Prime Minister to buy a dictionary, because his definition of “independent” is very different from mine and that of most other people. There is now a pattern whereby anything tricky involving the Government sees them marking their own homework. We know what happens then: reports on bullying never see the light of day, and the breaking of the ministerial code is no longer seen as a reason for resignation. For this Prime Minister, no transgression is too big to ignore, so I say to him, show some leadership, allow independent scrutiny and clean up this rotten mess.
Rachel Hopkins (Luton South) (Lab) [V]
It is a pleasure to follow my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and his dictionary reference, because I am going to start with the “Cambridge Dictionary” definition of cronyism, which is
“the situation in which someone important gives jobs to friends rather than to independent people who have the necessary skills and experience”.
Cronyism: the modus operandi of the Conservative party—backdoor dealings, special favours and bending Whitehall to its will. The Conservatives make it more profitable to have the Chancellor or the Secretary of State for Health on WhatsApp than to have a robust, evidence-based case for economic support or a Government contract.
Over the past year, we have only scratched the surface of the Tories’ chumocracy. First, the report on bullying at the Home Office, then Westferry, where the Government rushed through a housing development to help a Tory donor to avoid a £45 million levy. Then there was the appointment of a Tory peer as head of Test and Trace, without real process. Now we have the shady, unregulated firm Greensill Capital exploiting informal channels by employing Government officials and previous Tory Prime Ministers to access taxpayers’ money.
The Government, again, put hundreds of millions of pounds of public money at risk by giving Greensill access to the covid loan scheme—and now thousands of jobs hang in the balance. No one should be able to dodge tax. The company that can deliver the best job should get the Government contract, and companies most deserving of Government support should receive it through the proper channels, but in Tory Britain, that does not seem to be the case, as we see the revolving door between the Government and paid lobbyists.
Many of us were shocked to discover that Bill Crothers was permitted to advise Greensill while in a pivotal Cabinet Office role, but also of interest is the fact that in December 2016, Bill Crothers became a subcontractor to lobbying company Francis Maude Associates—Francis Maude was, of course, a Conservative Cabinet Office Minister from 2010 to 2015. Who was joint founder of Francis Maude Associates? Simone Finn, the former Cabinet Office special adviser to Francis Maude, who is also the current Prime Minister’s deputy chief of staff.
Given that one of the revolving doors in the murky world of Tory lobbying leads directly to 10 Downing Street, will the Government ensure that Baroness Finn fully co-operates with any investigation, sharing all relevant communications? Will they ensure that the role of organisations such as Francis Maude Associates is examined in the inquiry? This Tory Government have ridden roughshod over each of the Nolan principles—the seven guiding principles for public service introduced to combat Tory sleaze in the ’90s. We need a full, transparent, Parliament-run, cross-party inquiry into the Greensill lobbying scandal.
Anneliese Dodds (Oxford East) (Lab/Co-op)
This afternoon, we have heard a story of endemic cronyism—cronyism that has persisted for years and spread right across this Conservative Government and previous Conservative-led Governments. Parallels with the Conservative Governments of the 1990s are clear for all to see: jobs for the boys, all over again. Conservative sleaze is back. But as my hon. Friend the Member for Wallasey (Dame Angela Eagle) said, there is a difference this time—a difference in scale. This time, we are talking about hundreds of millions of pounds of public money put at risk, and thousands of jobs.
What is staggering is the complacent and cavalier attitude of those involved, as so many have said today, not least my hon. Friend the Member for Lewisham East (Janet Daby). A former Conservative Prime Minister thought there was nothing wrong with texting the sitting Chancellor and two of his junior Ministers to ask for special treatment for the financial services firm that was paying his wages. A Chancellor thought there was nothing wrong with pushing his team to see whether they could amend a Government loan scheme to give Greensill access to hundreds of millions of pounds of public money. A Treasury and a Business Department thought there was nothing wrong with Greensill being accredited as a lender under one of the Government-backed schemes, even when it had been rejected by another, and this mere months before the firm collapsed altogether. All this took place when the vast majority of public servants, civil servants and, of course, key workers were working with integrity around the clock on the covid effort.
We know that before that, David Cameron thought there was nothing wrong with setting up Lex Greensill in the heart of Government, with a desk, business cards and his own No. 10 email address, and nothing wrong with giving him access to contracts worth billions of pounds. Indeed, a contract was lined up for Greensill to provide supply chain financing across the public sector, and it was pulled only a few days ago, when this scandal started to break.
Similarly, the Health Secretary thought there was nothing wrong with meeting the former Prime Minister for a drink with Lex Greensill to discuss how their firm could get access to NHS staff pay, packaging up loans as bonds to be sold to investors and trading on the good name of our NHS.
The Government’s former head of procurement thought there was nothing wrong with becoming an adviser to Greensill Capital while he was still a civil servant. I have never before heard of someone using the revolving door before they have even left the building. Ministers cannot wash their hands of that behaviour and say, “It was the civil service; it is nothing to do with us.” As my hon. Friends the Members for City of Durham (Mary Kelly Foy) and for Jarrow (Kate Osborne) made clear, successive Conservative-led Governments have set the tone and the culture that allowed the behaviour we have heard about today—an approach to public office whereby the accountability and transparency that we should all expect have been replaced by a tap on the shoulder here, a nudge and a wink there.
We need a thorough and genuinely independent investigation to get to the bottom of this, one that can take evidence, call witnesses and report publicly. Instead, as we have heard, the Conservatives propose an inquiry run by the son of a former Conservative Cabinet Minister who works for the law firm that advised the Treasury on the design of the loan scheme that David Cameron lobbied for Greensill to access.
As we know, the Chancellor continues to run scared. He has not been seen in the House since the day after Greensill collapsed. Yesterday, we called for him to come to Parliament, but the Chancellor was frit. He seems to have forgotten his enthusiastic communications about his loan schemes. Indeed, at one point he tweeted proudly about CLBILS—the coronavirus large business interruption loan scheme—with the hashtag #AskRishi. We would love to ask Rishi, but we would have to find him first.
In offering excuses for his absence, the Chancellor claims that neither he nor his Department had any oversight—any role whatever—in deciding who got access to the public lending schemes he announced. He must be the first Chancellor in history to go on the record as having no idea about who was getting access to hundreds of millions of pounds of public money and how they were obtaining it. He promised to level with the public, but I did not think that meant the Chancellor telling the public he did not have a clue what was happening with their money.
As the Minister for the Constitution and Devolution said earlier—it was very good to see her via video link—the use of public money is overseen by the Treasury.
Public money is not the Chancellor’s money, and it is not the Conservatives’ money: it is public money, and it should only ever be used in the public interest. It is simply not good enough for this Government to mark their own homework and hide from scrutiny, as my hon. Friend the Member for Luton South (Rachel Hopkins) has just said.
Mr Wragg
On the point about scrutiny, and following the speech made by the hon. Member for Luton South (Rachel Hopkins), who is indeed a member of the Committee that will be scrutinising all of these matters—of which it is my privilege to be Chair—I wonder if the hon. Lady could seek not to correct the record, but to explain? If she is seeking independence of scrutiny, the motion before us and on which we will vote is deficient, because in paragraph (3) it asks that the members of that Committee be nominated by the Committee of Selection, which is entirely in the control of the party Whips.
Anneliese Dodds
My hon. Friend the Member for Leeds West (Rachel Reeves) very ably answered that point earlier: she made very clear the basis upon which our demands are being made. I will be very open with the hon. Gentleman—for whom I have considerable respect—that as so many Members have said this afternoon, it is important for all of us that we clear this matter up and are able to call witnesses, including former Prime Ministers where necessary; that we can do so publicly; and that we can do so about the range of matters that this affair raises. I regret to say that the investigation that has been created by Government simply does not do that. That is why we are calling for the approach set out in today’s motion.
Anneliese Dodds
No, I will proceed with my remarks. The people of this country deserve answers, and they deserve to be treated fairly. That is a point that many of my hon. Friends have made very ably: the Members for Wansbeck (Ian Lavery), for Ilford South (Sam Tarry), for Hornsey and Wood Green (Catherine West), and for Ellesmere Port and Neston (Justin Madders).
Last year, I was contacted by someone I will call Jessica; I am sure that Members on the Government Benches will have been contacted by many people like her. Before this crisis, Jessica had a modest income, but it was a reliable income. She worked as a self-employed tour guide and in short-term, part-time roles. When the crisis hit, she lost all her income, but she did not quality for any of the Government’s support schemes, and as an owner-occupier, she was knocked out of most support from social security as well. She was angry, upset, and worried about how she as a single parent could support her family. Obviously, as we all know as constituency MPs, Jessica was not alone. The campaign group ExcludedUK suggests that there were up to 3 million people like Jessica: people who simply could not understand why the Government refused to fix support schemes so that they could get help. People like Jessica did not have the Chancellor’s phone number. Last year, Greensill got 10 meetings with Treasury officials; the group representing the excluded got one meeting.
Most of the excluded are still waiting for help, and our country is still waiting for a strategy to support those jobs put at risk by the collapse of Greensill. Indeed, our country has lacked a strategy for steel for 10 years. Last week, I visited the Liberty Steel plant in Hartlepool. I was incredibly impressed by the world-class technology and operation there; by the dedication of the workforce; and, in particular, by the enthusiasm and commitment of the two apprentices I met. Their work is good, decent work, manufacturing materials that British businesses need. It is a world away from the kind of complicated financial structures and share options that seem to have been par for the course for Lex Greensill and David Cameron, but jobs are at risk because of Greensill’s collapse and because of that lack of any strategy for the future of UK steel, as my hon. Friend the Member for Newport West (Ruth Jones) made clear.
To conclude, those steelworkers deserve better, and so do the British public. Government Members know that; they know that their constituents are appalled by new evidence of cronyism and the sleaze that seems to be emerging every day under the Conservatives. As the hon. Member for Hazel Grove (Mr Wragg) said, Members should question why they are being asked to defend these events. They should consider the impact that this will have on their integrity. The hon. Member for Bexhill and Battle (Huw Merriman) spoke of loyalty. Loyalty must be to the public interest, not to partisan friends, a point ably made by my hon. Friends the Members for Bristol South (Karin Smyth) and for Sheffield, Hallam (Olivia Blake). Government Members should, as my hon. Friend the Member for Kingston upon Hull East (Karl Turner) said, show some backbone. They should vote today for a full, transparent, Parliament-led inquiry to get to the bottom of this scandal once and for all.
The Parliamentary Secretary, Cabinet Office (Julia Lopez)
I thank all right hon. and hon. Members who have taken part in this afternoon’s debate for their very valuable contributions and for speaking with such passion on issues that affect us all in public life. The care with which we spend taxpayers’ money matters very deeply to public confidence in Government. The respect that we demonstrate for rules and regulations is rightly a benchmark for trust. The systems and structures of governance in this country must at all times serve, and be seen to serve, those whom we are elected to represent, and not be exploited for narrow, private interest. It is right that we in Parliament probe and scrutinise any concerns raised on such matters and, to be candid, it is in the Government’s interest, as much as anyone else’s, to be able to provide robust assurances. As my hon. Friend the Member for North East Derbyshire (Lee Rowley) said, if there is an issue, let us uncover it. It is for that reason that my hon. Friend the Minister for the Constitution and Devolution set out the existing framework for safeguarding and assuring the public interest. It should be restated that that existing framework, much of which has been brought in since 2010, has largely been very effective.
On the questions raised by the hon. Members for Argyll and Bute (Brendan O’Hara) and for Wansbeck (Ian Lavery) this afternoon about the interactions between Greensill and the Treasury, as the Chancellor set out in a letter to the hon. Member for Oxford East (Anneliese Dodds), the matter was referred by him to the relevant Treasury officials, and following proper scrutiny, Greensill’s requests were turned down. It was through transparency returns and declaration processes that meetings between Greensill and officials were highlighted. In other words, the system in that instance worked as it should, but it would be disingenuous to suggest that this existing framework has not been tested by the extreme circumstances of the pandemic and that the broader issues raised in recent days about Greensill have not posed questions that we are as keen as anyone to probe. Indeed, my hon. Friend the Member for Thurrock (Jackie Doyle-Price) highlighted that the scrutiny work has long ago begun.
Out of necessity and urgency, the Government have, over these past 12 months, interacted with thousands of individuals and organisations offering help. All claim to have had something to offer. Some do and some do not. Some have been referred by Conservative Members; others have been referred by Labour MPs, peers or those from other parties. Some are genuinely public-spirited; others only purport to be. Ministers and officials have had to take decisions that, at times, prioritise swift and decisive action over fulfilling the usual standards on timely and transparent contract publication, but we have been working extremely hard to rectify that latter shortcoming, about which I will say a bit more in a moment.
I also wish to assure you, Madam Deputy Speaker, that we have not been waiting around for the Opposition to table a motion on these important issues before making improvements to our existing propriety and transparency regime. We are currently conducting post-legislative scrutiny of part 1 of the lobbying Act, consulting a variety of stakeholders to get their views on the scope and effectiveness of the legislation. I welcome the contribution from the hon. Member for Weston-super-Mare (John Penrose) and his practical proposals.
Bob Seely
Does my hon. Friend understand that many of us want the Government to do the right thing, and are grateful to them for doing the right thing, but understand that the lobbying Act, both for domestic and foreign lobbying, needs to be much broader? We need to take in the law firms involved, the reputation managers and the PR companies. It is not just about a narrow definition of lobbying, but all this lobbying industry that we seem to have built up in this country.
Julia Lopez
I thank my hon. Friend for his question. It is important to understand that we are putting forward a package of things. Some of the changes that need to be made are not necessarily through the lobbying Act, and we are looking at some of the issues of foreign intervention that he has rightly highlighted today.
We are already working with the chairman of the Advisory Committee on Business Appointments, my noble Friend Lord Pickles, to improve the business appointments regime, which applies lobbying bans to former Ministers and civil servants. The committee has been actively seeking to increase the efficacy of the system by introducing a framework for the risk-based consideration of cases, greater transparency and better reporting of breaches of the rules. Members should note that some of the issues discussed in relation to Bill Crothers stem from the transparent publication of our correspondence with ACOBA on gov.uk.
On procurement—to reassure the hon. Member for Sheffield, Hallam (Olivia Blake)—we have published an ambitious Green Paper with legislation to be included in the Queen’s Speech, setting out how we will provide commercial teams with much greater choice in an emergency. It needs to be understood that, at the moment, the options are a direct award, which exposes us to the kinds of claims of cronyism that have been peddled today, or full fact procurement, which takes far too long to turn around in an urgent situation. In relation to this, last autumn, we commissioned an independent expert review into Cabinet Office procurement processes led by Nigel Boardman, probing particular contracts that were raised in the NAO’s report on this subject. The subsequent Boardman report was forensic in its analysis and very hard-hitting in its recommendations, and the Cabinet Office committed to taking forward all of them in full. Meanwhile, I set out with candour in a Westminster Hall debate the challenges that the Government had to navigate at the height of the pandemic and what went well and what, undoubtedly, could have been done better during the period in question. I recommend that debate to those hon. Members who have today raised concerns about the so-called VIP lane. It might make for a more compelling Labour press release to suggest that the story of procurement during the emergency has been one of Tory corruption, but I believe that it is vital that we understand what really happened so that we do not overlook what needs to change.
Far from being a secret referrals lane, officials dealing with the thousands of PPE leads coming in set up a separate mailbox to triage them. It allowed more credible leads to be sifted and it helped manage the correspondence that was coming in from Parliamentarians of all colours who themselves were being contacted by companies and individuals offering help. The Opposition like to suggest that those going through this mailbox were 10 times more likely to secure a contract. The most important thing to note, however, as the NAO does in its report, is that all PPE offers, no matter from where they came, went through the same eight-stage assurance checks. It should also be said that of the more than 400 offers handled by the high-priority inbox, only 47 were awarded contracts, which means that 90% were not.
In relation to the activities of Greensill, Mr Boardman has been commissioned by the Prime Minister once again to apply his scrupulous and dispassionate eye to the role of Greensill Capital. I am very glad to say that the letter from Lord Pickles regarding Bill Crothers will now also be considered. It is right that I do not seek to prejudge his findings. However, I want to address two assertions that have been made: that it will be too narrow in scope and therefore requires a broader Committee-led inquiry; and that Mr Boardman himself is a Government yes man. To those criticisms, I first say that it would be wrong to view this investigation in isolation. It is one work strand of several, which we hope, when pulled together, will make for a much more robust framework. Secondly, I have seen how effective Mr Boardman’s previous Cabinet Office review has been in spurring improvements and I have no doubt that any recommendations from his work on Greensill will not only be unsparing but lead to meaningful change should it be necessary.
It is worth reminding the House that, as soon as any of us are elected to this place, we become all too familiar with the trickiness of handling tactfully uninvited requests of a varying nature from associates, constituents and others. What matters is not necessarily that those requests have been made, but that we reach a decision on them, which is compatible with the principles of public life to which we all must adhere.
There have been claims today that current lobbying laws do not go far enough and should be extended, but I would guard against overly simplistic solutions that risk going too far in clamping down on avenues for interaction between Government and wider society. That point was made very powerfully by my hon. Friend the Member for Bolsover (Mark Fletcher) and others. This is particularly true when we reflect on the current emergency during which some of the most important contributions have come from those working outside Government. Indeed, one of my worries from this past year is that publicly spirited people who want to serve their country in an emergency will look at how the integrity of someone such as Kate Bingham was questioned and think twice before coming forward. What is important always, as I have said before, is that decision makers are able to test and interrogate the credibility of external inputs mindful of their own obligations.
Finally, in relation to the ministerial code, I hope that it will be of reassurance to Members that the appointment to the post of independent adviser on ministerial interests will be announced shortly.
Let me finish by returning to the Opposition motion, which will no doubt shortly be manipulated into a social media campaign that implies that Government Members are pro-cronyism and anti-transparency in imposing their convoluted solution to the issues raised today. There is no point in pushing for the creation of yet another body with a remit to scrutinise the rules on lobbying and, additionally, to look into the Greensill affair when we already have a number of—may I say?—very unforgiving Select Committees, the Boardman review and a whole series of efforts under way to improve our existing framework.
The Government are alive to the sincerely held concerns of part of the public, charities, non-governmental organisations and others about lobbying activities. They are looking precisely at the scope and effectiveness of existing legislation.
In the same vein, it is clearly wasteful for the vital scrutiny that is customarily carried out by PACAC and others to be undertaken by a second Committee. Indeed, my hon. Friend the Member for Hazel Grove (Mr Wragg) has already in this debate applied his sharp and ruthlessly inquiring mind to some of the most vital questions; I thought his contribution was superb. Lord Pickles will appear before my hon. Friend’s Committee tomorrow.
We should focus, as the Government are doing, on strengthening our existing framework to satisfy ourselves and others that the mechanisms in place are sufficiently robust with respect to the conduct of public servants and the stewardship of public resources, and that we uncompromisingly make those decisions in the national interest. Although the Government do not support the motion, today’s contributions have shown the strength of feeling across the House and I thank hon. Members for them.
Beyond the political froth, I do not think that we are in different places on this. We all believe in and want the same thing: transparent government and behaviour in accordance with the seven principles of public life. The Government will continue to engage with parliamentarians of all colours as we set about raising our standards, but we do not need another Committee to do that. That would risk undermining the process and reviews that are already in place and that we should allow to conclude, so I urge the House to reject the motion.
Question put.
Madam Deputy Speaker (Dame Eleanor Laing)
I will now suspend the House for three minutes in order to enable the necessary arrangements to be made for the next debate.
Strength of the UK’s Armed Forces
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 256 / Noes: 357 - Question accordingly negatived.
John Healey (Wentworth and Dearne) (Lab)
I beg to move,
That this House notes the Prime Minister’s 2019 election pledge that his Government would not cut the Armed Services in any form; further notes with concern the threat assessment in the Integrated Review of Security, Defence, Development and Foreign Policy, that threats from other states to the UK and its allies are growing and diversifying; calls on the Government to rethink its plan set out in the Defence Command Paper, published in March 2021, CP411, to reduce key defence capabilities and reduce the strength of the Armed Forces, including a further reduction in the size of the Army by 2025; and calls on the Prime Minister to make an oral statement to Parliament by June 30 2021 on the Government’s plans to reduce the capability and strength of the Armed Forces.
Our thoughts across the House today are with the Queen and the royal family as they prepare for the Duke of Edinburgh’s funeral on Saturday. His distinguished wartime career in the Navy was followed for decades by that same dedication to serving his country at the side of Her Majesty Queen Elizabeth.
We have called this Opposition debate for Members from all parts of the House to debate the Government’s defence and security plans as set out last month in the integrated review, the Defence Command Paper and the defence and security industrial strategy. Our starting point is the Prime Minister. He said at the launch of his 2019 election manifesto on behalf of all Conservative Members here:
“We will not be cutting our armed forces in any form. We will be maintaining the size of our armed forces”.
He may take the pledges that he makes to our armed forces and the public lightly; we do not. The integrated review confirms:
“State threats to the UK…are growing and diversifying”,
yet the defence review is a plan for fewer troops, fewer ships and fewer planes over the next three to four years.
I am disappointed that the Defence Secretary cannot be here to answer the growing chorus of concerns about his defence plans, but for today we entirely accept his attendance at the NATO special meeting on Ukraine. That in itself reinforces the warnings in the Defence Command Paper, which said:
“Russia continues to pose the greatest nuclear, conventional military and sub-threshold threat to European security.”
That heightens the widening concerns about cutting the strength of the UK’s armed forces in the face of growing global threats, instabilities and uncertainties.
There are so many serious flaws in the defence review and the industrial strategy. There is no assessment of current or future capability, no strategic principles or assumptions and nothing about how the Ministry of Defence should be structured or staffed in order to best provide national security. There is no recognition that the UK’s research capacity has been run down over the last decade by deep cuts to defence research and development, and no plan to absorb the £6.6 billion now pledged over the next four years.
There is no system for identifying and supporting the small companies that produce so much of our invention. There is nothing about what defence can get from greater advances in civil industry or what it can provide to civil industry and civil society. There is no explanation of how we will sustain the forward-deployed, front-footed, persistently globally deployed and engaged armed forces with so few ships and transport aircraft. There are no evident contingency plans to replace the losses of key equipment in conflict. There is nothing about mothballing equipment retired from service, like so many other countries do, rather than disposing of it on the narrow grounds that it saves money. I could go on, and I will on other occasions, but for today, our debate and our motion focus on the central concern about decisions to cut the strength of our armed forces in the face of growing threats and in breach of the Prime Minister’s personal pledge at the election.
In view of the interest—I am delighted to see that Members from all sides want to contribute to this debate —I want to make four main arguments and then look forward to what colleagues have to say. First, on numbers, with the threats to the UK growing and diversifying, there is a strong case against, not for, further cuts to the size of our armed forces. The Defence Secretary has announced that the Army’s established strength will be cut by 10,000 to just 72,500 over the next four years. That will be the smallest British Army for 300 years. Ministers can only promise no redundancies because all three forces are already well below the strength that the Government set out was required in the 2015 defence review.
Of course we must develop new technologies in domains such as cyber-space and artificial intelligence, but the British infantry—as the Minister knows better than anyone—has been the foundation on which the defence of the UK has relied for over 350 years. New technologies have always been harnessed to strengthen its capabilities, but they have never replaced entirely the need for boots on the ground.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I have some sympathy for the right hon. Gentleman’s position, because when I was the shadow Secretary of State for Defence, I spent a lot of time criticising the then Labour Government for cutting the size of the infantry and the Army. The clear implication is that the next Labour Government would be spending more than the present Government, so how much more money would a future Labour Government be putting into defence compared to what we are spending, which, of course, has increased already?
John Healey
Sadly we are nowhere near another election at this point. We are at this stage in the parliamentary cycle with these plans on the table, and our interest is in the Government getting this right. The decisions taken now will set the shape of our defence forces for the next 10 years. The decisions taken now will be the framework with which a future Labour Government, after the next election, will have to live.
John Spellar (Warley) (Lab)
Would my right hon. Friend care to remind the hon. Member for somewhere in Essex—the hon. Member for Harwich and North Essex (Sir Bernard Jenkin)—that one of the reasons there is a big gap is that a previous Conservative Government, in a fit of vandalism, sold off the married quarters estate, costing the Ministry of Defence billions?
John Healey
I would, but my right hon. Friend has just done so for me; I am pleased that it is on the record.
John Healey
I will give way one more time, but then—conscious that nearly 40 Back-Bench Members wish to speak—I will make some progress.
Mr Jones
The hon. Member for Harwich and North Essex (Sir Bernard Jenkin) mentioned budgets, but is not it a fact that the defence budget has been cut by nearly 25% since 2010? Even with the increase that has been announced recently, the defence budget is now 5% lower than it was in 2010.
John Healey
My right hon. Friend is right, of course. There has been an £8 billion real-terms cut to the defence budget since 2010. That is part of the reason that we have seen 45,000 full-time forces cut over the last decade. I will return to some of those points.
For now, I want to make this point: we can destroy enemy forces with technology, but we cannot seize and hold ground without troops. Drones and robots do not win hearts and minds; they do not mend broken societies; they do not give covid jabs. These deeper cuts now planned could limit our forces’ capacity simultaneously to deploy overseas, support allies, maintain our own strong national defences and reinforce our domestic resilience, as we have seen our troops do to help our country through the covid crisis. Other countries have expanded troop numbers even as they develop technology. They do not see this as a “manpower or machines” question, but as personnel and technology together. Although high-tech weapons systems are essential, highly-trained personnel are simply indispensable, and size matters.
These planned cuts are damaging for four reasons. Let us call them “the four Rs”. The first is resilience. Cutting Army numbers reduces the UK’s national resilience by reducing our capacity to react to unforeseen circumstances at home and abroad—not just major wars, but insurgencies such as Afghanistan, international interventions such as Sierra Leone or Kosovo, and emergency support operations such as post terrorist attacks or during covid.
The second “R” is readiness. The rapid response required to the unexpected also requires highly-trained, adaptable, cohesive combat troops, which even the best reserves, called up as last-minute reinforcements, cannot provide.
The third “R” is renewal. The fewer troops and full-strength battalions we have, the less able the Army is to sustain long campaigns. Northern Ireland, Kosovo, Sierra Leone, Afghanistan and Iraq all required the long-term rotation of troops. We are a leading member of NATO. We are one of the P5 countries at the UN Security Council. We may again be called on to deploy and sustain forces away from the UK. We may not seek a major crisis, but we may well face a major crisis that comes to us.
The final “R” is reputation. The current Chief of the Defence Staff said in 2015 that the ability to field a single war-fighting division was
“the standard whereby a credible army is judged”,
yet the fully capable division mandated then, including a new strike brigade, will not be battle-ready for another 10 years according to evidence that the MOD gave to the Defence Committee in the autumn. A former CDS, General Sir David Richards, has said that further cuts to the Army would mean that the UK was
“no longer taken seriously as a military power”
and that this would
“damage our relationship with the US and our position in NATO”.
My second argument is that this is not just about numbers. In the face of growing threats and the increasing ambition for the global role that our armed forces will play, there is a strong case against, not for, some of the Government’s short-term capability cuts. Taking two Type 23 frigates out of service in the next two years will reduce the Navy’s anti-submarine strength. Ending the RAF’s E-3 planes will leave a two-year gap in airborne early warning before the E-7 Wedgetails come into service in 2023. The Army is losing nine Chinook helicopters, 14 Hercules transporter planes and 20 Puma support helicopters.
The third argument is one that I am sad to have to make, and it is this: we are faced now with more of the same. After a decade of decline since 2010, which the Prime Minister called an “era of retreat”, the Defence Secretary promised that this defence review would be different from the last two Conservative defence reviews, which weakened the foundations of our armed forces. They were driven by finances, not by threats, cutting full-time forces by 45,000 and cutting critical defence capabilities and upgrades, alongside plans for full capability forces in the future that have not been fulfilled. I fear that this defence review simply makes the same mistakes of the past.
Fourth and finally, in November, when the Prime Minister announced the extra funding as part of a four-year funding settlement, we welcomed it as promising a long overdue upgrade of Britain’s defences, so we are dismayed now by more defence cuts, despite this £16.5 billion boost. But I guess it is not hard to see why. The defence budget was balanced in 2012, and the equipment programme was fully funded, but Ministers since then have lost control. The National Audit Office has now judged the defence equipment plan unaffordable for the last four years in a row and reports a black hole of more than £17 billion over the next 10 years. This black hole in the defence budget has grown by £4 billion in the last year, on this Defence Secretary’s watch. The MOD’s annual report and accounts suggest that the annual marginal cost for 10,000 Army personnel is around half a billion pounds. This deficit alone each year could cover the cost of maintaining Army numbers three times over.
The new defence budget is not all it seems. Ministers talk about the rise in capital funding but not the real cut in revenue funding over the next four years, which means less money for forces’ recruitment, training, pay and families. It means a possible cut of 40% to the budget of the Office for Veterans’ Affairs. Worse still, over half this year’s £16.4 billion defence equipment budget is revenue-based for equipment support and maintenance. This revenue cut is the Achilles heel of defence plans. No other Whitehall Department is projected to have a cut in day-to-day spending between now and 2024-25. The Defence Secretary should never have agreed it.
This defence review and the defence and security industrial strategy announce nothing new that Ministers are doing to get a grip of the MOD’s budget failings and to make the most of this big, one-off opportunity from the extra funding. So I say to the Minister: get to grips with the budget, consider the concerns raised, rethink the plans and report back to Parliament before the end of June. Britain was promised better, Britain deserves better and Britain needs better from its Defence Department.
Madam Deputy Speaker (Dame Eleanor Laing)
Before I call the Minister, I should tell the House that there will be an initial time limit on Back-Bench speeches of four minutes, but that will reduce quite soon to three minutes.
The Minister for the Armed Forces (James Heappey)
I thank the shadow Secretary of State for the tribute he paid to the Duke of Edinburgh—one with which I very much agree, and I know all of my colleagues in the Ministry of Defence do too. The military are taking great pride in their preparations for his funeral on Saturday, where they hope to give him the send-off he deserves.
I welcome this debate. We live in a new age of systemic competition where information, data and technology shape conflict every bit as much as ships, tanks and fighter jets. Military hardware can be undermined by cyber-attacks or by the severing of undersea cables, while the use of proxy forces and other covert and deniable activities makes it harder to determine when the threshold of war has been crossed. So we have to think about defence differently.
“The Integrated Operating Concept 2025”, published last year, changes the way we think about our response to conflict. No longer can we have a contingent force sat in the UK waiting for the fight. Instead we must be operating persistently around the globe in forging partnerships, building capacity, tackling insecurity and competing with our adversaries. Make no mistake, however: we recognise that we cannot be upstream of every potential conflict and that we must therefore not only be able to operate but able to fight.
We can all be nostalgic over the force structures that won the wars of yesteryear. Undoubtedly there is a comfort in looking out of the window and seeing row upon row of the capabilities that have kept us safe in the past. But as surely as hoof became wheel and sail gave way to steam, we should all be clear that technology is moving on quickly and industrial capabilities will no longer get the job done alone. We have a duty to the British men and women of our armed forces not to indulge in a game of military bingo, obsessed with the metrics of previous conflicts. Instead we must keep adapting to the threat, because the reality is that if we fail to change, we will be defeated.
Mr Tobias Ellwood (Bournemouth East) (Con)
My hon. Friend talks about adapting to the threat. We have the technological advantage in Afghanistan, yet Afghanistan has been seen as a failure—something he is more familiar with than many in this House. Now that the United States has declared that it is going to withdraw its troops, could he confirm what will happen to the British troops that are based there?
James Heappey
As the shadow Secretary of State noted, my right hon. Friend the Secretary of State is not able to respond to this debate in person because he is at the meeting of the North Atlantic Council, along with my right hon. Friend the Foreign Secretary. The decisions on this are being taken this afternoon in Brussels. I hope that my right hon. Friend will forgive me if I do not pre-empt that, but I am certain that either the Defence Secretary or the Foreign Secretary will want to notify the House with appropriate urgency if and when such a decision has been made.
John Spellar
The Minister was slightly dismissive of looking at the arrays of traditional vehicles. What does he think is now massing on the borders of Ukraine as a direct challenge to NATO?
James Heappey
If the right hon. Gentleman will allow, I will make some progress with my speech, because I had foreseen that such challenge may come.
Over the past 20 years, as we have been engaged in Iraq and Afghanistan, our adversaries have been watching and learning from how insurgent forces, hopelessly over- matched in a conventional sense, have still been able to impose enormous costs on our military and the militaries of our allies. There has been no sentimentality in the way that they have accelerated into new domains and experimented with new technologies.
The Defence Command Paper captures that reality. Last November, my right hon. Friend the Prime Minister laid the groundwork for the modernisation of our forces by granting defence the most generous settlement since the cold war, with a commitment to spend £188 billion on defence over the coming four years—an increase of £24 billion. Our Command Paper has taken that investment and used it to deliver a more technologically advanced, better integrated and therefore more deadly force that will underpin our nation’s firepower in this new age of systemic competition. Inevitably this has meant some hard choices, but it is worth reminding ourselves, especially given the rather pessimistic view of the inventory set out by the shadow Secretary of State, what is actually still in the inventory.
At sea, we have the best carriers, air defence destroyers and hunter-killer submarines in the world, and our Navy will be enhanced further by the best anti-submarine warships and new general purpose frigates already under construction at Rosyth and on the Clyde. The Royal Navy’s fleet is growing for the first time since the cold war and, with the renewal of our continuous at-sea nuclear deterrent, makes us the foremost naval power in Europe.
In the air, we will have updated Typhoons, brand-new F-35 Lightning stealth fighters, new unmanned systems capable of striking remotely and massive investment in the next generation of fighter jets and swarming drones.
On the ground, while our Army will be leaner, it will also be more integrated, more active and more lethal—pound-for-pound the most innovative and effective in the world, able to make the most of new Ajax vehicles, revamped attack helicopters, brand-new Boxer armoured fighting vehicles, state-of-the-art air defence, long-range precision artillery and new electronic warfare capabilities. It has taken far too long to get these updates, but we are going to have the best-equipped Army in Europe by the end of the decade.
Jim Shannon (Strangford) (DUP)
I know that the Minister is a friend of Northern Ireland, but recruitment in Northern Ireland has been at its highest level and recruitment to the Territorial Army has maxed out at this moment in time. Can the Minister give an assurance that extra recruitment and places will be made available for Northern Ireland, because more TA soldiers could be recruited?
James Heappey
The hon. Gentleman is entirely right that Northern Ireland is a rich recruiting ground for people wanting to serve in our armed forces, and especially our reserve. The reserve has an important part to play in the plans the Army, Navy and Air Force have for the future, and I have every expectation that we will be able to extend increased opportunity to Northern Ireland. The detail of that has yet to be confirmed, but I hope that within the next couple of months the hon. Gentleman will get a more detailed answer to his question.
Bob Stewart (Beckenham) (Con)
The Minister has outlined a concept predicated on the armed forces fighting an all-out war—a war where no holds are barred and we use everything. I get that; I understand grey-zone thinking—I am a strategist, too; I read it in great detail at university. However, for 70 years we have never fought anything like such a war; instead, we have had limited operations, we have had counter-insurgency operations, and we have had peacekeeping and peace- making, and this Government are preparing to cut the very people—the lifeblood—that carries out such operations, and that really worries me.
James Heappey
I thank my right hon. and gallant Friend for his intervention, but I do not agree with his analysis. In this part of my speech I am setting out the conventional war-fighting capabilities because the shadow Secretary of State set out a very pessimistic view of what they would be, but the reality is that the key change being made through the integrated review and Defence Command Paper is to enhance the capabilities my right hon. Friend rightly stresses will be in most demand as we address the challenges of tomorrow, and they are the ones that exist below the threshold of conflict. If he will indulge me, in a couple of minutes he will hear some of the things that I think might answer his question in more detail.
That is why we are investing heavily in the national cyber force, bringing together the resources of the Ministry of Defence and the intelligence community to deceive, degrade, deny, disrupt and destroy targets in and through cyber-space. It is also why we have established a new space command that will enhance our military surveillance and communication capabilities from space, assist in the co-ordination of commercial space operations and lead the development of new low and high orbit capabilities.
Moreover, we know that the threats to UK interests, both in space and in cyberspace, are not just from ones and zeroes. Our adversaries are investing in capabilities that put our undersea fibre-optic cables and our satellites at physical risk as well, so we need the ability to protect and defend our interests in the depths of the oceans and in the heights of space.
Nor are we alone in seeking to modernise. Our adversaries as well as our allies are making rapid headway, and some of the most cutting-edge capabilities are now commercially available, meaning that the highest grade technology is no longer the preserve of the best resourced militaries. So we are investing to stay ahead of the curve and recover our technological edge, putting aside at least £6.6 billion for research and development to supercharge innovation in the next generation of disruptive capabilities, from directed energy weapons to swarming drones.
But it is not just about what you’ve got; it is what you do with it. I have already set out the vision of the integrated operating concept, and over the next year or two the Ministry of Defence will be expanding our forward presence around the world as we shift from a contingent force waiting for the fight to one that operates and competes constantly. In the land domain, some of our most effective work is with small specialised infantry teams developing the capacity of partner forces in the parts of the world that cause us concern. We are reinforcing that success through the creation of the special operations-capable rangers and thus doubling the size of our partnering force. Our fighting brigades, meanwhile, will move to higher readiness so that they can deploy and operate more quickly. They will also gain capabilities that allow them to engage their enemy at greater range, thus reflecting the lessons on close combat learned from recent conflicts in northern Syria and Nagorno-Karabakh.
Mr Ellwood
I need to clarify the difference between what the rangers will do and what our Royal Marines do, because the Royal Marines are concerned that they are being put out of a job. Everything that my hon. Friend has just described could be done by the Royal Marines. Let us take an example in Mozambique. Were we to put this rangers brigade in, who would replace them after five or six months? Where is the endurance capability that our armed forces need to provide?
James Heappey
I am afraid that my right hon. Friend is not right in what he thinks the rangers will do. The distinction is that 16 Air Assault, the Parachute Regiment and 3 Commando Brigade, as high-readiness contingent forces who are there to fight at short notice in hostile contested environments such as the ones he describes, still do exactly that from the air or the sea, depending on whether it is 16 Air Assault or 3 Commando. The rangers will be a special operations-capable partnering force designed to train, advise, assist and accompany partner forces in conflicts around the world, not to be a fighting force in and of themselves. That distinction is one that we have observed from the success of the US Green Berets, which have been very successful, and we are looking forward to having that as part of the toolkit for the UK armed forces in the future.
Needless to say, in increasing readiness and being able to operate more quickly, there is still a requirement for war-fighting mass, and that leads to a long overdue revisiting of what we ask of our reservists. I am very much looking forward to the publication of the reserve forces 2030 review, and I am confident that in the discussion that follows we will come out with an exciting proposition of what it means to serve in the reserve and what value that can add as we generate war-fighting mass.
In the air, we have created a joint squadron with Qatar, and we are looking at how this concept can be extended further with other partner air forces, as well as offering world-leading flying training to helicopter and fast jet pilots from our allies around the world. Meanwhile, investment in the P-8 maritime patrol aircraft, in the E-7 airborne command and control, in the Protector uncrewed surveillance and strike platform and in a network of airfields from which we can operate the full range of RAF capabilities, enhances our capacity to understand our adversaries, find them quickly and strike them wherever they are, all around the globe.
At sea, we have had forward deployed ships in the Caribbean and the Falklands for a number of years, and I can announce to the House that last week HMS Trent arrived in Gibraltar, where she will now be permanently based in order to service the UK’s interests in both the Mediterranean and the Gulf of Guinea. Later in the year, a further offshore patrol vessel will sail for the Indo-Pacific, where she will also be permanently forward based. The maritime forward presence is further enhanced by the restoration of our high-readiness global carrier strike capability and the new littoral response groups providing an at-sea high readiness amphibious response force on NATO’s northern and southern flanks.
However, let there be no misunderstanding: we are clear-eyed on the realities of geography. We are a Euro-Atlantic power and deeply invested in the security of Europe. NATO is the cornerstone of our national security, so our priority is our partnership with other Euro-Atlantic nations and the security of our own backyard, but it is naive in the extreme to think that that means we can ignore insecurity and instability on Europe’s southern flank in sub-Saharan Africa and the middle east.
The UK interest is threatened by violent extremism in the Sahel, the Lake Chad basin and the horn of Africa, and so too is it threatened by Russian proxies massing in Libya and Syria, but those are not problems that would be solved by 10,000 troops on the ground in any one of those places. The lessons of the last two decades show that we must work intelligently to tackle instability upstream and through regional partners. We simply cannot muscle our way to a solution in those places with all-out hard power. Our contribution on those conflicts in the future must be smarter and must develop a capability that will endure even after our mission is inevitably over.
We should also be clear that meeting our global trading ambitions requires both the capacity and the will to protect our sea lines of communication and the wider UK interests in the Indo-Pacific. The Opposition have wrongly characterised that as a switch in emphasis from the Euro-Atlantic to the Indo-Pacific. Instead, it is a recognition that we have the capability, the capacity and the political will to flex hard power into a part of the world where the UK’s strategic interest is growing quickly, so that we can strengthen our alliances, protect our interests and promote adherence to a rules-based international system.
The integrated review and the Defence Command Paper represent the boldest change in foreign, defence and security policy for 30 years, and it is entirely right that we are here debating them today. I know that there is disagreement on both sides of the House about some of the judgments that we have made, but the requirement is to produce a force that is credible: one that can actually fight in the complex and highly digitised battlespace of tomorrow. Some capabilities have run their course, and there can be no room for sentiment in keeping them when they simply are not relevant any more.
Ultimately, this all comes down to two key questions: first, are we offering the men and women of our armed forces exciting opportunities and the equipment they deserve; and secondly, and most important, does all this make the UK safer? I have already looked servicemen and women in the eye and explained to them our vision for our armed forces and the way they will operate, and so too have my ministerial colleagues and the senior military leaderships of all three services. Our people get this: they understand the need for change, and they want it. The reality is that they can see, and I can see, that because of this transformation, our armed forces will be stronger, more capable and therefore better able to protect our country in the decades ahead.
Stewart Malcolm McDonald (Glasgow South) (SNP) [V]
I join the Minister and the shadow Secretary of State, the right hon. Member for Wentworth and Dearne (John Healey), in paying tribute to the Duke of Edinburgh. I pass on my condolences and those of my party to the royal family, and to those in the armed forces for whom he has undoubtedly been an inspiration, having left behind such a long and distinguished career as a member of the forces. As the Minister rightly says, they will be preparing to give the late Duke of Edinburgh the send-off he rightly deserves, and we wish the armed forces the best in their preparations for that.
Like the shadow Secretary of State, I think it would be normal to decry the fact that the Secretary of State has not responded at the Dispatch Box, but I too entirely understand why he has to be at the NATO meeting on Ukraine. It is worth pausing to reflect on the fact that here we sit, in the north-west corner of Europe, in relative peace, while an ally in the south-east corner of Europe, already annexed and at war, faces a further military build-up on its border. The Scottish National party supports entirely Ukraine’s right to its territorial integrity.
In every defence session we have had—whether Question Time, debates or a statement—all Members across the House have rightly thanked the members of the armed forces who have done so much for us during the pandemic in terms of resilience and, not least in more recent times, the roll-out of the vaccine, which we are all desperate to receive. They have put in some shift, as we would say in Scotland. It is curious that the Government have seen fit to thank the armed forces by telling them that they are going cut up to 10,000 places.
The context here is important, and not just that of the pandemic. Madam Deputy Speaker, you will know—not just as a keen watcher of political events in Scotland, but as a proud Scot yourself—that when it comes to the size of the armed forces, and in particular the things the Government say about them, many promises are made to Scots. That has been the case for quite a few years now, and each and every time, this Conservative Government renege on them. I have mentioned that many times before and I am afraid I am about to do so again.
As the Minister and the Government have confirmed—the Minister reiterated it today—that the cut will go ahead, may I ask the Government to outline to the House, if not today then at some point, and to the people of Scotland, to whom those promises were made, what the impact on the personnel footprint in Scotland will look like? Prior to the independence vote a few years ago, we were promised the permanent stationing of 12,500 Regular troops in Scotland. The Government have never come close to meeting that promise and that target, and it is now obvious that they have no intention of ever trying to, so what will the permanent footprint look like after the cut of up to 10,000 troops is realised?
More broadly on context, it is curious and entirely objectionable as far as I am concerned that the Government would announce such a cut in conventional capability— not just in personnel, but in many of the platforms the shadow Secretary of State mentioned—when they announced their intention to allow an increase in the nuclear weapons stockpile. Now, we could probably have an entire debate on that one issue, but given that this debate is about the armed forces, let me just say this. I am with the Chair of the Defence Committee, whose analysis was spot on. He and I do not agree on the nuclear deterrent and its presence, but he described that increase as an attempt to deflect attention from—indeed, it is a sweetener to allies to cover up for it—the fact that we are having such grave cuts in conventional capability. That is fooling no one.
I plead with the Government to drop the fallacy of trying to play one capability against the other. It is important that we invest in cyber, of course. The new threats that the Minister outlined are real and the Government have our support in trying to meet them, but the shadow Secretary of State was also right: people keep the peace, people deliver resilience, and people put covid jabs into arms—not drones, and certainly not nuclear weapons.
It is curious to see the Government now framing this as though those of us who are against the cuts are somehow old fashioned, and are incapable of assessing modern-day threats and developing an argument on how to meet them. The Minister said earlier that we must not—I think this was the phrase—play “military bingo” when it comes to developing the capabilities needed to meet the threats faced. Well, if it is a game of bingo, like the shadow Secretary of State I would like to read some words from the caller, and the caller is the Prime Minister. During the last election, he said that
“we will not be cutting our armed services in any form.”
During the last general election, he also said:
“We will be maintaining the size of the armed services”.
Why did he say that if he had no intention of delivering? Why did he say it if he knew it would not come to pass? Indeed, the Government have developed that habit when it comes to promises on troop numbers. As I said at the start of my speech, is it not curious that this is how we thank our armed forces after the year they have had, committing themselves to fighting the pandemic?
It is also worth noting that, just after that Defence Command Paper came out, we learned via the media—not via a statement to Parliament or anything we could read in the integrated review paper or its associated documents —that the Office for Veterans’ Affairs is to see a budget cut of up to 40%. It already has a tiny budget—of, I think, around £5 million—and it will be cut. That happened in the same week as the announcement, so why did not one single Minister from a Government who claim to be on the side of veterans come to announce that funding cut to the House? It is also worth noting that that announcement—or the news of the cut, rather, because there was no announcement—came in the same week that the Scottish Government announced that they would spend an extra £1 million on support for veterans who find themselves in Scotland.
The Government should cancel the planned cut in troops, and if that costs more money, so be it. Spend it, invest it. We could come up with a million ways in which the MOD could spend its money better, but I have always said to the Government that when they need more cash from Treasury Ministers and when that is sensible, they would have our support. Indeed, they would have the support of many around the House who do not think that this is a wise way to proceed.
We have talked a lot about how we treat the armed forces, and there is a lot of cross-party agreement on that, but amazingly, we cannot seem to get the Government to act. One thing we should do first is prise from the recruitment process the claws that Capita has sunk in so deeply. It is an expensive mess that does nothing for recruitment. The best people to do recruitment are the members of the armed forces themselves, not the share- holders of Capita, who are growing fat on a failing recruitment system.
Let us have a commission to look at pay and conditions. We know from recent National Audit Office reports that only 45% of serving personnel have any sense of job satisfaction—a staggeringly low figure. We also know that less than half of those living in armed services accommodation are happy with that accommodation. How can it be beyond the wit of the Government or the House to get those two things fixed? We have proposed in the past, and I propose it again today—I am sure you will remember, Madam Deputy Speaker, the Bill on the subject published in the last Parliament by my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes)—the introduction of an armed forces representative body that could be placed on a statutory footing and represent the interests of members of the armed forces to the Government when it comes to pay and conditions. At the moment, they have no such body. They rely on Members of Parliament so to do, and with satisfaction figures as low as they are, the answer clearly does not lie in lobbying MPs whom the Government are ignoring.
It is right that we are having a debate on the specific issue of cuts in the number of members of the armed forces and in other conventional capabilities. We will have plenty of time to dive into some of the other issues in the integrated review, I am sure. As I made clear when the Secretary of State came to the House for the publication of the Defence Command Paper, there is much in there that we understand and indeed support, but there are some things that we do not and cannot support. Such egregious cuts to conventional capability, especially service personnel, are something we cannot support.
When the Minister winds up, I wonder whether he would clarify two things. First, as the Government seek to pivot, in addition to their geographic pivot to the Indo-Pacific region, and to place more emphasis on cyber and on drones and other unmanned devices in theatres of conflict, and as they seek to do more to protect not just people, but data, which the Government rightly identify as an attack surface, where will be the proper democratic and human oversight? Where will be the ideas from Government on how we lead efforts internationally to design treaties and rules of engagement when it comes to cyber, the use of unmanned drones and the protection of data? That debate is woefully lacking. In fairness, it is lacking not just here but in the entire western democratic sphere. We have not heard much from the Government about how they will seek to put that right, and I think it is incumbent on them to bring forward a strategy on those things.
Lastly, if you will allow me, Madam Deputy Speaker—this relates more to current events than necessarily to the subject of the debate—might I tease out from the Government a clarification with regard to Ukraine? The Secretary of State is at the meeting of the North Atlantic Council right now, and rightly so. Will the Government clarify whether he intends to give a statement to the House following that meeting, and will he clarify what implications, if any, the current escalation in tensions might have for Operation Orbital, which is ongoing in Ukraine with United Kingdom armed forces?
The Minister said that he was able to look members of the armed forces in the eye and convince them of the merits of cutting jobs and places among them. That is good for him, but he still has a job to do in convincing voters—voters to whom he and his Government made promises, not just in the general election in 2019, but all those years ago ahead of the independence referendum. I am not sure he could look voters in the eye with the same degree of confidence that he came to the House and espoused today. I am afraid this is just one more example of Scotland’s security being ill served by a Government who do not place high regard on their own interests.
Madam Deputy Speaker (Dame Eleanor Laing)
We now have a formal time limit of four minutes. I call the Chairman of the Defence Committee, Tobias Ellwood.
Mr Tobias Ellwood (Bournemouth East) (Con)
I will not tire of saying this, but I feel there is a 1930s feel to the world today. The threat picture continues to grow, diversify and become more complex. We live in extremely dangerous times, and the integrated review confirms that—as did the Prime Minister when he answered questions at the Liaison Committee recently. Russia and China will continue to become more assertive; democracy will continue to decline across the world; the new domains of cyber and space pose ever greater challenges to our security, as does the threat from terrorism, not just in the middle east but now in Afghanistan and Africa; and the wider consequences of climate change will only grow.
During the cold war, defence spending was at 4% of GDP. Few would disagree that the threats today are different, but they are arguably more dangerous and more unpredictable, yet we remain on a peacetime budget of just 2.2%. It is simply impossible for the MOD to meet all the obligations spelled out in the integrated review, hence the sweeping cuts that are now taking place across our defence capabilities, something that has not gone unnoticed by either our allies or our adversaries.
The new US Defence Secretary will shortly be in town. I am sure that No. 10 will gloss over General Austin’s decision to visit Berlin and Brussels before London. We should read the signals: our special relationship requires work. General Austin’s public message in London is likely to be: “Well done on the integrated review. We like the global Britain thing and we welcome your investment in special forces, cyber and space resilience.” But in private, he will be more candid and is likely to say something very different: “Your Navy is now too small. Don’t cut your tanks, armoured fighting vehicles and 10,000 troops; you might be needing them sooner than you think. And please don’t reduce the F-35 order from 138 originally down to 48.” Why? Because the next decade is going to become very busy indeed.
Indeed, look at what the integrated review tries to achieve—help shape the international world order and deploy UK soft power; be a force for good for human rights; tilt to the Indo-Pacific; step up in Africa and the Gulf; lead NATO in Europe; stand up to China’s competition and Russia’s aggression, and create a space force and invest in cyber resilience. That is a formidable charge that we simply cannot achieve under a peacetime defence budget of just 2%, so I have huge sympathy with my hon. Friend the Minister for the Armed Forces, who is in the invidious position of having to make such tough decisions. We have heard about the impact: cuts to our frigates, with capability gaps because the replacement equipment is not ready in time, and similar effects on our land warfare capability and the RAF.
However we look at it, this is a dramatic cut in our conventional defence posture that will limit the UK’s options in stepping forward to assist in conflict prevention, stabilisation, peacekeeping and nation-building skills—things that we have been so good at in the past. I make it very clear that the real threat will come from China—not directly through going to war, but through our being nudged out from favoured nation status across the world. We need to re-engage with our allies, and that requires force presence and upstream engagement. We can do it only with the kind of hard power and the size of force that we had during the cold war.
Tony Lloyd (Rochdale) (Lab) [V]
May I place on record my sympathy for the family of Cheryl Gillan, our colleague? She was not in my political party, but she was somebody whom I both liked and respected.
Today’s debate is very important; I am grateful to my right hon. Friend the Member for Wentworth and Dearne (John Healey) for introducing it from the Front Bench. The Minister for the Armed Forces was absolutely wrong to pose it as technology versus the size of our armed forces. That is the wrong calculation to make. It is not about sentimentality, for those of us who have had the opportunity to see our armed forces in operation around the world, in conflict zones and in peacekeeping roles. They do a magnificent job—pound for pound, they are probably among the very best-trained and best operational armed forces on this planet—but they need numbers. We saw that in places such as Sierra Leone, where the numbers of people mattered. We saw it with the rotation of troops in Afghanistan, when our troops came back tired from their tours of duty—too tired, on some occasions. We need numbers there.
To pose the question as being about numbers of Army personnel versus technology is simply wrong. Yes, of course we need investment in the technologies of the future, in cyber, in space and in deep ocean activities, but that does not preclude the need for numbers in our armed forces. The significant reduction that my right hon. Friend pointed out—some 35,000 fewer personnel in our Army by the end of the process—is difficult to comprehend, because it means that we will end up making hard choices.
I put it to the Minister: will those hard choices mean that we cannot engage in a Sierra Leone of the future? Will they mean that our armed forces cannot fill the £17 billion-plus equipment deficit or go into conflict zones properly equipped? Those would be unacceptable hard choices. Will they mean that in future, because of our lack of personnel, we cannot do things we ought to do? As the right hon. Member for Bournemouth East (Mr Ellwood) said, they are choices that we simply should not be making in this period of enormous uncertainty around the world. I appeal to the Minister to appeal in turn to his Government colleagues to think very hard about these cuts.
At the height of the cold war and as we began to come out of it, one thing we learned was that making the world secure for our armed forces was also making it secure for those whom we saw as our adversaries. President Biden has offered President Putin a summit. I have no truck with President Putin and the malign way in which he operates his Government, but we do have to talk. We have to begin to see whether there is any capacity —there may not be—to revive the treaties on conventional forces in Europe and on nuclear deployments.
In the end, making the world a safer place, at least in those areas of activity, will make a material difference in easing some of the pressures on our armed forces and what they do. That is not a pipe dream and it is not pious; it is common sense to say, “Yes, we need the right numbers in our armed forces and we need technologies, but we also need to work to create a safer and better world.”
Dr Julian Lewis (New Forest East) (Con)
May I warmly endorse what the hon. Member for Rochdale (Tony Lloyd) just said about our late, dear colleague Cheryl Gillan?
It is often said, in the military context, that quantity has a quality all its own. That is perfectly true, but it does not mean that the strength of the armed forces should be measured by their size alone. A revolutionary advance in military technology in the hands of a few can defeat almost any number of assailants; think of the Somme and the mass slaughter of troops by limited numbers of machine guns with interlocking fields of fire—only other new technologies eventually broke that dreadful stalemate. After the end of the cold war, the threat picture finally shifted away from Europe and towards expeditionary warfare, based on carrier-strike, which is air power from the sea, and amphibious capability, which is land power from the sea. Such traditional technologies are still essential for those sorts of campaigns against opponents who are no match for us militarily. Yet against advanced peer opponents armed with hypersonic anti-ship missiles, for example, traditional assets such as surface ships are potentially very vulnerable. As we know, the pendulum has now swung back from countering insurgencies and their sponsors to state-on-state confrontation with major military powers.
As has been pointed out, at the root of our defence dilemma is one inescapable limitation: between 1988 and 2018, defence expenditure halved as a proportion of GDP. The most welcome pledge of an extra £16.4 billion spread over a four-year period should fill a “black hole” in the equipment budget and facilitate investment in critical new areas of technology. What it will not do, sadly, is prevent serious cuts in conventional armed forces. An estimated 2.2% or 2.3% of GDP defence budget is well short of the 3% recommended by Defence Committees past and present, let alone the 4.5% and above regularly allocated during the cold war years. Yet, even if all our dreams came true on the size of the defence budget, we would still be at the mercy of nuclear blackmail and attack if we had not voted in July 2016 to proceed with the renewal of the Trident missile submarine fleet. Given that the right hon. Member for Islington North (Jeremy Corbyn), a former Labour leader, and I have debated such matters good-naturedly for more than 20 years and he is up next, let me conclude with reference to the Government’s announcement that they will no longer reduce the total of our nuclear warheads from a maximum of 225 to a maximum of 180 by the mid-2020s. Instead, they will set a new overall ceiling of 260. This is predictably being denounced as a 40% increase; but the cancellation of a reduction is not an increase. Most probably, it is a recognition that advances in anti-ballistic missile technology might tempt an aggressor to think—probably mistakenly—that he could avoid a devastating response. Why, then, raise the theoretical maximum from 225 to 260? The Government have not said so, but my guess is that it is to cover any temporary overlap when the current generation of UK warheads are replaced by their successors. We have always followed a policy of minimum strategic deterrence, and long may we continue to keep ourselves safe by doing so.
Jeremy Corbyn (Islington North) (Ind) [V]
This is an important and obviously very timely debate—timely because of the Government’s review of security needs for the future, and because of the vote in the other place last night on the Overseas Operations (Service Personnel and Veterans) Bill. The Government were defeated over issues of ensuring that our political system, our Ministry of Defence, are held to account when allegations of serious offences such as torture or genocide are made against any British forces. We should never put ourselves above the law and should surely support international law, which is what all Governments have said they absolutely do.
The review that has just taken place seems to miss out a number of very important things. But the headline figure was the one about nuclear weapons. Contrary to what the previous speaker has just said, there is an increase in the number of nuclear warheads, which will go up to 260. That is contrary to our obligations under article 6 of the nuclear non-proliferation treaty, originally conceived by the Labour Government of the 1960s.
As one of the declared nuclear weapons states, we are required to take steps towards nuclear disarmament. The Government are proposing to move in absolutely the opposite direction—not just by increasing the capacity, the number of warheads and their firepower, but apparently by changing the strategic basis on which they may be deployed. They seem to be moving away from the “no first use” concept towards using them as a threat—or rather, when they believe there is a threat that has to be met.
Surely we ought to be joining the rest of the world in seeking a global ban of all nuclear weapons, rather than this huge expenditure on weapons that everyone obviously hopes will never be used and that, in effect, do not provide us with any credible form of defence on the real security issues that we face at present.
The coronavirus crisis has shown us how dangerous this world is when it comes to contagious diseases and when it is so divided by the poverty of the majority of the populations of the planet against the minority—and, of course, environmental disaster is coming down the line. Surely we need a strategic approach that deals with those issues—one that protects us from cyber-attacks, obviously, and ensures that we look at the causes of war and that we do not cut overseas aid expenditure but instead increase it, where appropriate, to improve developments around the world and cut down on the enormous gap between the world’s richest and poorest. Because the motor behind the conflicts of the past 30 years has often been human rights abuses, political instability and a fight for resources all around the world.
The last thing I shall say in the few seconds I have left is that instead of reducing the numbers of uniformed servicepeople, as we are, we should be looking at their pay, conditions and treatment over the past 10 years and recognising the enormous work that they have done in peacekeeping operations, as others have pointed out, as well as dealing with crises such as the Ebola outbreak in west Africa, where they performed heroically. Surely real strategic thinking is about making the world a more peaceful and safer place.
Dr Liam Fox (North Somerset) (Con)
Defence reviews and the subsequent spending priorities are not abstract events but relate to identifiable threats. Today the most serious threat to British and European security is posed by Russia. With the main aims of its modernisation programme over the past decade largely met, and with a sophisticated and ruthless cyber-capability and a huge nuclear arsenal, Russia is militarily stronger today than it has been for many years. Just as importantly, with its intervention to support the Assad regime in Syria, its continued occupation of Georgian sovereign territory and the brutal and illegal annexation of Crimea, with its continued threat to the security and sovereignty of Ukraine, there can be little doubt about the Kremlin’s willingness to deploy its military strength in pursuit of its national agenda.
If, in the face of that threat, we are to have a nuclear deterrent, as I believe we must, it must be credible. The increase in the warhead cap to 260 needs to be seen in the context of the French having declared numbers of around 300, the United States 3,800 and Russia some 6,800. I congratulate the Defence Secretary and his ministerial team on having the courage to take this decision.
Russia’s gangster regime under Vladimir Putin has poisoned and murdered opponents on its own territory and overseas, including on UK soil. It carries out a range of hostile activities, including information warfare and cyber-attacks aimed at democratic western states. In July, the United States, Britain and Canada accused a Russian hacking group linked to Russia’s SVR foreign intelligence service of trying to steal covid-19 vaccine research. So it is right that we increase investment in our own cyber-capability. However, cyber-attacks are the tip of the iceberg in Russia’s persistent attempts to penetrate western security, institutions and infrastructure, and it is sadly aided and abetted in some of its strategy by the policy of some of our own allies. I refer in particular to the German attitude towards the Nord Stream 2 project. That pipeline is a Russian geopolitical project intended to divide Europe and weaken European energy security. As President Biden put it, Nord Stream 2 is “a bad idea” for Germany, for Ukraine, and for our central and eastern European allies and partners.
We face many other Russian threats, including to undersea cables, that we simply do not have time to consider today, but the most urgent is the continued Russian aggression towards Ukraine. Russia’s military aggression against Ukraine in 2014, which was planned in advance, resulted in around 10,000 fatalities and over 23,000 people wounded, according to the UN. Over 1.5 million residents of Crimea and Donbass are now internally displaced persons after being compelled to leave their homes—and this on the edge of Europe. Today, large Russian military movements towards the eastern Ukraine border have been widely reported, including the movements of Iskander short-range missiles.
We must act with our allies now to stop Russian aggression before the situation spins out of control, as it so easily could. That is what our political, economic and military strength is for; that is what the Government’s priority must be.
John Spellar (Warley) (Lab)
First, may we record that on this day 70 years ago the great trade union leader, Labour Foreign Secretary and patriot Ernest Bevin died? Along with Prime Minister Clement Attlee, he created NATO, the Marshall plan and Britain’s independent nuclear deterrent—all, of course, opposed at the time by the ultra-left, in and out of the Labour party. That is why it was so welcome today that the speech introducing the motion was made by my right hon. Friend the Member for Wentworth and Dearne (John Healey), getting back to those Labour values, not ultra-left communist and Trotskyist delusions but real Labour values—supporting the defence of our country, demanding proper wages, conditions and equipment for our brave men and women in our armed forces, and supporting our own defence industry.
It is a shame that the Secretary of State is not here today, because frankly, his response to some of the criticisms recently has been rather petulant, and I was hoping we were going to get a reset back to a more reasoned debate. We do, of course, understand why he is not here—because of the crisis in Ukraine. Russia, in full soviet mode, is massing armour on the borders of Ukraine, having previously undertaken similar exercises on the frontiers with the Baltic states, and a massive re-equipment and militarisation of Kaliningrad. We also have to recognise, in some of those esoteric arguments that take place about quality versus quantity—we had some of that from the Minister—that mass has a quality of its own, and therefore we undermine that at our peril.
Yet in the face of this, the Government are running down our defences, both in armour and by cutting the number of troops, and also in other platforms, as was rightly identified by the right hon. Member for North Somerset (Dr Fox). At the same time, we have to recognise that previous Conservative Governments have had form in this respect. In the interwar period, the 10-year rule of anticipating no conflict in 10 years, driven by the Treasury, ran down our defences. That not only reduced our equipment and the number of troops, but sent a message that we lacked resolve, so we were lacking resources and resolve. Under Options for Change, we had a massive rundown of our forces. Soldiers were actually made redundant—an appalling problem, which took a long while to redress.
The removal of HMS Endurance from the Falklands—the withdrawal of resources—sent a very clear signal to the Argentine junta that we lacked resolve, and we know the consequences of that. We had the withdrawal from Germany. My right hon. Friend the Member for North Durham (Mr Jones) and I pointed out to Ministers at the time that they would not save any money, and now they are having to go back there. They are taking the forces for granted and running down their facilities.
We all recognise the need to review the increasing requirements for operating in the grey zone and for tackling challenges in cyber-space, but in the earlier stages of the review it was posited that changes had to be cash-neutral, so that dealing with those problems had to be at the expense of conventional military capability and of upgrading. That was a mistake and it should be redressed now.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I very much share the concerns expressed by the right hon. Member for Warley (John Spellar), but I very much hope that we maintain minimum recoverable capability in all these fields, because the new capabilities that have been brought in by the integrated review are equally or more important than the reductions in the overall size of the armed forces that we have seen. The big surprise in the review was the announcement of the increase in the warhead cap.
I want to reply very directly to the right hon. Member for Islington North (Jeremy Corbyn). May I remind him that, on 18 July 2016, when he was leader of the Labour party, the Government got through the House the maingate of the renewal of the Trident submarines on a vote of 472 to 117? There is no doubt, therefore, that the strength of consensus in this House does not reflect the views of the then leader of the Labour party.
John Spellar
The hon. Gentleman will recall that that vote was taken about five years later than it should have been because of dithering by his own Government.
Sir Bernard Jenkin
I think the coalition had something to do with that. I warned David Cameron about that before we even went into that coalition.
The right hon. Member for Islington North accuses his own country of proliferating weapons of mass destruction, and suggests that we are somehow escalating our numbers, but he does not even mention the fact that, as my right hon. Friend the Member for North Somerset (Dr Fox) said, Russia has—what was it?—6,800 nuclear warheads. They are modernising every single weapons system that they have got. They are in breach of the intermediate-range nuclear forces treaty. That is escalation, and the right hon. Member for Islington North has nothing to say about that whatsoever.
We all know that the British people will support the United Kingdom’s continuous at-sea deterrent for as long as other nuclear weapons states are keeping their weapons and there are other proliferators around. We just need to remind ourselves what extraordinarily good value the continuous at-sea deterrent system actually is. The Library produced a report last month, pointing out that the annual cost of our continuous at-sea deterrent is just 1% of the cost of social security and tax credits—just 1%. So the idea that this is a Rolls-Royce system that we cannot afford is mythical. Nothing could buy us the security and influence that the continuous at-sea deterrent gives us.
The doctrine of deterrence is just as valid as it ever was. Has the right hon. Member for Islington North ever asked himself why major state-on-state warfare stopped in 1945? Well, I can tell him why: it was because nuclear weapons were invented and that kind of warfare became too costly, too destructive, to contemplate. Does he want to go back to that world by getting rid of nuclear weapons altogether? I hope not.
We just need to remind ourselves that our continuous at-sea deterrent can attack any target at any time, so it is always ready to respond to threats. Its location is unknown so it cannot be pre-empted. It does not require to be deployed at a time of international tension and crisis. The technology is tried and tested. It is not in breach of the nuclear non-proliferation treaty; it is completely compliant. It is a sovereign capability, which, if we had to use it, we would. No alternative system could possibly provide all these benefits at such good value, and that is why we should reaffirm our commitment to our nuclear deterrent.
Madam Deputy Speaker (Dame Eleanor Laing)
We now go by video link to Marie Rimmer, with a time limit of three minutes.
Ms Marie Rimmer (St Helens South and Whiston) (Lab) [V]
The British military is currently engaged in its biggest ever—[Inaudible.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We cannot hear the hon. Lady. Shall we try audio only?
Madam Deputy Speaker
Order. I am sorry, but we will try to come back to the hon. Lady later, because the sound quality means that we cannot hear what she is saying.
Alun Cairns (Vale of Glamorgan) (Con)
The additional £24 billion in the defence resource needs to be recognised and comes after a number of years of challenging Budgets, not forgetting the £30 billion black hole legacy left in 2010. Along with the Defence Command Paper, it serves the vital need to respond to the ever-changing threats, ensuring a stronger and more secure Union. As a member of the NATO Parliamentary Assembly, I can confirm that it has been received very positively by our international allies.
The motion tabled by Labour expresses concern about the size of the Army. Having listened closely to the shadow Secretary of State, the right hon. Member for Wentworth and Dearne (John Healey), I would say that he can play his part, too, if he is genuinely committed in his support. I want to bring the House’s attention to a very local difficulty that the MOD is having in securing the long-term future of the St Athan base in my constituency. The Welsh Government are the landowners and have refused to extend the lease, in favour of a business park.
I ask Labour Members to influence their colleagues in the Welsh Government with regard to supporting the MOD’s plans to house a major Army unit at the site. I am concerned that the Welsh Government do not show the same interest in defence as the right hon. Gentleman does, and I ask for his help. The right hon. Member for Warley (John Spellar) talked about those on the left coming in and out of the Labour party, but it seems that they are alive and kicking in Wales.
The site has been subject to several initiatives. All have failed to materialise. The Red Dragon hangar, completed in 2005 at a cost of £113 million, for maintaining fast jets, was abandoned immediately on construction. The multibillion-pound private finance initiative tri-service technical academy was later cancelled on value-for-money grounds. Several plans to base a number of major Army units there have failed to materialise. To give credit to each Secretary of State since 2010, they have recognised the need to secure the future of that. The defence estate review in 2016 identified St Athan as their key site in Wales. The Welsh Government refused to extend the lease and anyone with local knowledge will know that the alternative sites suggested are wholly unsuitable. The result is that unless the Welsh Government negotiate with a common goal, the future of this base is precarious.
I wanted to get this situation on the record because I am concerned about the serious risks to the St Athan base. The site is hugely valuable to the armed forces and to the community that it is keen to support. In that spirit, I ask the shadow Secretary of State, the right hon. Member for Wentworth and Dearne, and his team to influence the Welsh Government. If they do that, they will, at the same time, improve the footprint of the Army and underline the fact that all parts of the UK play a prominent role in securing our Union.
Dan Jarvis (Barnsley Central) (Lab) [V]
Our withdrawal from the EU, the rise of China and the threat posed by Russia has meant that the strategic context in which our armed forces operate has shifted hugely in the decade since I left. The professionalism, resilience and adaptability of those who still serve has not. The Defence Command Paper rightly describes our servicemen and women as “our finest asset”. It is therefore incongruous for the Government to be stripping back the British Army to a level not seen for 300 years.
While the number of service personnel is set to reduce, it appears that what they are expected to achieve will not. The integrated review does not suggest that we will draw down on any of our commitments. The UK will remain the leading European partner in NATO and maintain our responsibilities in the middle east and Africa, while at the same time expanding our role in the Indo-Pacific. In my experience, trying to do more with less rarely works. When the Prime Minister pledged to maintain the size of our armed forces, he was right to do so. We are now being told that size no longer matters because the threat has changed, but as I put to the Secretary of State last month, if the threat has changed so much, so quickly, what is to say that it will not change again? In response, I was told that any future proposals to increase manning would be supported, but of course, it is not that simple.
Retaining talent is far easier and more inexpensive than recruiting it—a principle that is especially true when applied to our service personnel. We would do well to remember that technology evolves; the one thing that remains constant is people. We should also remember that our people are among the very best in the world. They are our ultimate insurance policy. Recent history is littered with examples, from Vietnam to Afghanistan, when technological superiority did not bring about success. Kit and equipment will never be an adequate substitute for strategy and leadership.
To conclude, following the collapse of the Soviet Union, leaders and experts predicted a new period of global peace and prosperity that never materialised. Thirty years on, the world is now more complex, more dangerous and more unpredictable. No one can say with any confidence what it will look like in another 30 years. We live in uncertain times. There are no easy answers, only difficult questions, but now more than ever, Britain must aspire to show leadership. Cutting the one thing that, above all else, gives us our edge—our people—will be to the detriment of our national security and our standing in the world. This decision is short-sighted—
Mr Deputy Speaker (Mr Nigel Evans)
Order. We have to leave it there; I am sorry, Dan. We will now return to Marie Rimmer.
Ms Marie Rimmer (St Helens South and Whiston) (Lab) [V]
The British military are currently engaged in their biggest ever homeland military operation in peacetime: the battle against covid-19. For the past 12 months, they have set up testing sites and vaccine centres and even administered the jabs themselves. Our armed forces have proven once again that they are our ultimate emergency service. I do not wish to pre-empt the inquiry into the covid-19 crisis, but I imagine that there will be a lot of praise for our armed forces. They are logistics and crisis experts—the best we have as a nation. The Government should always draw on this expertise, yet under the defence review, numbers are being cut. Not only are the Government reducing numbers; they are giving our troops a real-terms pay cut.
Since 2010, our armed forces have been reduced by 45,000. The recent defence review cuts come on top of this decade of decline. The size of the Army will be at its smallest since 1714, despite our population being 10 times bigger than it was then. The Prime Minister and Defence Secretary have laid out their reasoning for these cuts. I support modernising our forces, particularly the investment in cyber, and I am glad that the new centre will be based in the north-west, but we do not need to do these modernisations at the expense of armed forces personnel. The Government can invest in future technologies while maintaining the size of our Army. The Prime Minister, the Defence Secretary and all Government Members stood on a manifesto that committed to not cutting the armed forces in any form, but, quite frankly, what was the point? Promises and commitments are broken on a regular basis.
The world is a dangerous place: Russia has amassed close to 100,000 troops on the border with Ukraine; Myanmar is under military rule and innocent citizens are being butchered by the state; China is becoming increasingly bullish towards its neighbours; and the covid-19 crisis and economic woes that go with it have the potential to topple democracies. Maintaining armed forces numbers is essential to our security at home and abroad.
Retired British generals have said that further Army cuts mean that the UK is no longer taken seriously as a military power, and that it would damage our relationship with the US and our position in NATO. Worse still, Lord Richards—former Chief of the Defence Staff—has warned that we almost certainly would not be able to retake the Falklands or prevent genocide like we did in Kosovo.
The next pandemic or crisis that our nation faces could be much worse. The Government should not abandon expertise when we do not know what is around the corner. Now is—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Sorry Marie; we have to leave it there.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is galling that time and again we hear from the Secretary of State and his Ministers that our people—our forces personnel—are our best asset, yet when there is an opportunity to look after them, the Government cut and freeze their pay, deplete their numbers, and neglect their mental and physical health needs as well as their housing and welfare needs.
The cuts to our Army, Navy and Air Force come at a time of increasing global instability, emerging threats and increasing risks on the back of a decade of decline. There is an urgent need for strong defence, strong strategic direction and strong relationships with our allies—all of which this Government are failing on. Cuts are weakening our defences. The integrated review has rightly been derided by many as contradictory and incoherent, and this Government’s actions are distancing us from our allies. I completely understand the need for us to invest in cyber and new technologies because warfare is always changing. But in this ever-changing landscape, the one constant in warfare throughout history has been—and always will be—our brave forces personnel. To diminish their numbers would be a grave mistake. After all, it is people who will be needed to operate and monitor these new technologies. If not, the technology will be more susceptible to attacks. This is not sentimentality; it is plain fact.
Just yesterday in the Defence Committee, we heard that the integrated review’s promise of identifying, developing and deploying these new technologies and capabilities faster than our potential adversaries is unrealistic, because, as one of our witnesses stated, they “do not see” from this Government
“the pace and level of investment to live that statement”.
We have a Government who have not acted with sufficient pace regarding emerging technologies and cyber at the same time as they have depleted our existing capabilities, leaving us dangerously vulnerable.
Cuts do not strengthen our defence capabilities. Unclear direction does not strengthen our defence capabilities. Acting in ways that increasingly distance us from our allies does not strengthen our defence capabilities. Our forces’ strength lies in their people. That is why we are asking Members on the Government Benches to show today that they share our unwavering respect for and value our forces personnel just as much as we on the Opposition Benches do.
Damien Moore (Southport) (Con)
I welcome today’s debate, but I want Members in this Chamber, particularly on the Opposition Benches, to remember that it was the Labour party—MPs sat on the Opposition Benches, including the Leader of Her Majesty’s Opposition—that wanted to make the right hon. Member for Islington North (Jeremy Corbyn) Prime Minister, so no doubt those Members supported his world view. It was a world view that included abolishing the Army, scrapping Trident, withdrawing from NATO and casting doubt on our world-leading intelligence services.
Ironically, we have heard something different today from the shadow Secretary of State, who is much more positive about the armed forces. I really welcome that, but one of his colleagues on the Front Bench wanted to replace our armed forces with human security services, which would have made our defence policy not a statement of intent, but quite literally just a written statement. I cannot stress enough how important the safety and security of the United Kingdom and our people are. I pay tribute to the hard work of our armed forces, which keep us safe every day.
History has demonstrated that where we do not meet the changing nature of security with equal, robust and pragmatic changes in policy, we leave ourselves vulnerable and open to attack. In the current climate, must we consider not only the threat of newly emerging powers, requiring nuclear weapons, but that of non-state actors, who have shown their intention to cause atrocities on our streets. We must consider the changing nature of these demands. We must adapt to this change. We must ensure that our constituents are kept safe.
I welcome this Government’s commitment to spend £188 billion on defence over the next four years. It shows commitment and that we are protecting our people. We are building new ships for our Navy and new jets for our RAF. The funding will enable the Ministry of Defence to prioritise more than £6.6 billion for research on those new threats. We do not want our armed forces to be technologically disadvantaged. We want to build partnerships that sustain our economic advantage, our strategic advantage and our defence advantage. Right across the United Kingdom, our communities are benefiting from billions of pounds-worth of defence spending. Across this nation, I am proud that our investment in MOD spending is supporting more than 400,000 jobs and providing huge opportunities across British industry for our future.
It is only this party—the Conservative party—that can be trusted to keep our country and our people safe, and I pay tribute to this Government under my right hon. Friends the Prime Minister and the Defence Secretary. They have reaffirmed our commitment. This Government are committed to ensuring that our armed forces have the strength to protect our country.
Mr Kevan Jones (North Durham) (Lab)
In 1962, Dean Acheson, the former Secretary of State, said:
“Great Britain has lost an empire and has not yet found a role.”
In the 1960s, we concentrated our efforts in defence and foreign policy on protecting western Europe during the cold war and on our commitments to NATO. The integrated review was billed as a way of the Government defining what was meant by global Britain. The review is ambitious, but in a lot of ways, it looks backwards to an age with a certain amount of sentimentality and a rose-tinted view of Britain’s place in the world, without the resources to meet the ambition it outlines. In the maritime space, for example, we have a situation where global Britain is going to be projected by only 19 capital ships, and possibly fewer than that, throughout the mid-2020s. In order to have credibility, global Britain will also conduct operations in areas of the world in which we have never done operations before. We cannot do that without resources and without the people to do that.
I just ask the Government to be honest with the British people. If this integrated review is to be enacted, it needs the resources behind it, but I am concerned that in the race for the Government to meet this nostalgic view of Britain’s place in the world, they will take their eye off the real ball, which is our commitment to NATO and the north Atlantic and the main threat, which everyone agrees is there today—we have seen it today in Ukraine—which is from Russia. We cannot do that without the resources or the people.
Given this Government’s track record in coalition and in Government, the integrated review did not come from a standing start; it was from a start that has seen cuts to the defence budget that mean it is 5% lower than it was in real terms in 2010.
I will finish by saying this: we are all proud of our men and women in our armed forces, but we should not make them empty promises that we cannot deliver. We certainly should not have a situation where we ask them to do things without the resources and the capabilities that they rightly deserve.
Andrew Selous (South West Bedfordshire) (Con) [V]
The strength of our armed forces does not just rest in the capability of our military hardware. It relies on the skills, dedication and years of experience gained through the training and deployment of the men and women of the Royal Navy, the Army and the Royal Air Force. We do not just need to recruit enough of them to serve in our battleships, armoured personnel carriers and aircraft; we need to retain them for long enough to benefit from the experience and training, which in the case of highly skilled personnel, will have cost millions.
Those brave men and women love their country and the jobs they do to protect us and keep us all free, but they have families who are often massively impacted by the work they do. While service families take enormous pride in the work of their serving family members, it also the case that military personnel put their families through more separation, relocation and danger than any other public servant.
On top of that, when we add into the mix accommodation that is not always of the standard it should be, disruption to children’s education, health services that do not keep up with their frequent moves and the inability of their spouse or partner to keep their job as the result of frequent relocation, many service personnel, although wanting to stay in the armed forces, are not prepared to continue to put their families through those difficulties, so they leave, taking all their experience with them and often leaving major capability gaps as a result.
That is why I was so delighted to be asked by a previous Secretary of State for Defence to write a report on what could be done to improve life for armed forces families. Professor Walker, Dr Misca and I published the report, “Living in our Shoes”, last summer, with 110 recommendations. I am delighted that, at the end of last month, the Government accepted 86 of them in full and 20 of them in part, while only rejecting three, with one being for the armed forces charitable sector to respond to. The report and the Government response are both on gov.uk.
Overall, we called for the whole nation to take its responsibilities to the armed forces families more seriously, and we called for the Prime Minister to make the care and wellbeing of armed forces families a national priority. I am delighted that the Government have accepted that challenge—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am terribly sorry, but time is up.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I want to make two simple points. The work done by the armed forces during the pandemic was welcomed by all of us. In my constituency, the same as in everyone else’s, they did a great job on testing and vaccination, and I am deeply grateful. Talking to armed forces personnel, they told me how much they had enjoyed the work, and they felt they were fighting a real good battle against the virus. I also know, from my own limited service in the TA, that in armed forces life there is a lot of training and an awful lot of waiting, and doing something different can really make life a lot better. Indeed, the SNP spokesman, the hon. Member for Glasgow South (Stewart Malcolm McDonald), talked about the satisfaction of that. I also know that those armed forces personnel who helped rescue refugees found it very satisfying.
So my first point is this. In doing these jobs, the armed forces are actually indirectly saving other arms of Government spending money. I suspect—no, I am certain —that what is being suggested to us by the Government today is of course money-led. It is about the revenue budget. However, I would ask the Government to take a wider look at what is going on here, because I think what the armed forces are doing when they are not actually defending the country is saving other budgets.
In the time available, my second point is this. The shadow Secretary of State, the right hon. Member for Wentworth and Dearne (John Healey), spoke of four Rs. There is a fifth R, which has been touched on, and it is recruitment, but I would like to look at it from a different angle. In my working life, and indeed more recently, I have had a close connection with the oil and gas industry, and one of the biggest problems the oil and gas industry faces is recruitment. Why? Because, unfairly or not, it is seen to be a sunset industry, and young people are not particularly interested in joining as they think there are better careers elsewhere. If we reduce the armed forces by the numbers being suggested, we will take their number below a critical mass. That means people—the brightest and the best, the most capable, the fittest—who might otherwise think about joining our armed forces will think twice and go elsewhere. That would be a tragedy, and it would be the start of a downward spiral leading us on the high road to a very dark place indeed.
Mr Deputy Speaker
I ask Members who are participating remotely to keep an eye on the clock and have an independent timer as well just to make sure, as it is a bit messy when I have to cut them off, but I will cut them off to get more Members in.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Thank you, Mr Deputy Speaker; I will endeavour not to be cut off.
It is a pleasure to speak in this debate, which has been very interesting. It is actually a very thoughtful motion that we are considering—much more so than some of the other Opposition day motions we have been used to considering of late. Maybe that is why it has had such a sympathetic hearing from so many of my hon. Friends. We only have to look at what is happening on the Ukrainian border to see that even today, despite all the advancements that we have in technology, mass still matters.
Yet I cannot support the motion, primarily because of the very last sentence where it talks about the Government’s plans to reduce the capability of the armed forces. Unfortunately, that is simply not true. They are reducing the size—the overall manpower—of the armed forces but they are not reducing the capability. In fact, the £24.1 billion investment—the biggest increase in defence spending since the cold war—should be welcomed. The investment in new technologies and in accommodation, supporting forces’ families, is also something that we should all welcome. It is especially welcome in Scotland, where the review and settlement cement the armed forces footprint north of the border, guaranteeing the presence of the armed forces on the Clyde, at Lossiemouth and elsewhere across the country, investing in our shipyards by placing orders for 20 warships to be built on the Clyde, and providing jobs across the country in our world-leading defence industry sector at companies such as Leonardo in Edinburgh, which is providing the UK-led future combat air system.
I thank the Opposition for putting forward a very thoughtful motion. This has indeed been a very interesting debate with good contributions from all sides. However, because of the simple truth that we are not reducing the capability of the armed forces, I cannot—
Bob Stewart
I am sorry to have to disagree with my very good friend. We are reducing the capability of our armed forces. We are reducing their capability to do peacekeeping, limited operations, counter-insurgency and peacemaking. We have not got the men to do it. That is what we are doing.
Andrew Bowie
I thank my right hon. and gallant Friend—my very good friend—for his intervention. I would never seek to disagree with him on matters of defence, but on this issue, although not wrong, I think that the investment that we are making in technology will allow this country to be at the forefront of expanding our capabilities as a country in doing all the things that he spoke about, which we are very proud that our armed forces do for us and for our allies around the world. That is why I cannot support this motion.
Mohammad Yasin (Bedford) (Lab) [V]
I am grateful for the opportunity to speak in this very important debate.
I wish to urge the reconsideration of the decision to cancel the Warrior capability sustainment programme. Doing so in favour of the German-manufactured Boxer will have a devastating impact on our nation, my constituents, and the men and women in our armed forces. It is crucial that we provide our armed forces with only the very best protection. The Warrior upgrade would have been a significantly enhanced fighting vehicle equipping British Army infantry soldiers to be supported in the most demanding of battlefield environments. The Warrior is the only vehicle specifically designed to provide fire support, and because of its new 40 mm cannon it boasts unique close combat capabilities. The Government must outline what capability trade-offs will be made with the transition to the Boxer and how this may affect our soldiers on the frontline.
Not only are our armed forces put at risk by the Government’s decision, but our economy as well. The production of these armed vehicles would have brought an estimated £1 billion to the UK economy, with the supply chain being made up of 80% British companies. The contract itself would have secured nearly 2,000 jobs. The investment would have boosted the UK economy after covid-19. But instead these vehicles are now to be replaced by Boxer, which is produced by a German manufacturer. I am greatly concerned that this will not bring the same prosperity as Warrior would have done and will only result in a disastrous loss of income and job opportunities for the UK.
More locally, Lockheed Martin provides employment to about 900 skilled workers at its site in Ampthill, as well as offering apprenticeship opportunities to young engineers. The cancellation threatens the viability of this site. It has already been announced that up to 158 people will lose their jobs in the wake of the Government’s decision. The skills lost owing to job losses in this sector will take many years to rebuild. The Warrior programme represented significant investment in some of the UK’s best technology and it advances our capabilities as a military force. I am hugely disappointed by the cancellation of that programme. I am troubled by the damage that might do to our armed forces, the limits it could place on economic growth and the number of jobs at risk. I urge the Government to reconsider this appalling decision.
Darren Jones (Bristol North West) (Lab)
I will focus, perhaps slightly unusually in the debate, on the impact of climate change on our national security and, therefore, the resource allocation in the MOD. We know that, so far, the world has not made climate action plans bold enough to limit global temperature growth to 1.5° C above pre-industrial levels. Obviously, we support the COP26 President, the right hon. Member for Reading West (Alok Sharma), on achieving that at COP26 later this year, but the reality is that climate change will affect our national security irrespective of whether we hit the 1.5° C target. That will translate into a number of issues, ranging from significant global climate migration and shortages of food and water to new conflicts around the world and, potentially, a vastly different geopolitical order.
On some projections, if global warming reaches 3° C we will have a world in which most of the United States, and indeed China, as well as other countries along and near to the equator, no longer survive in their current form due to desertification. Russia could become the largest food-producing country in the world. If we turn our minds to Russia’s approach in leveraging oil and gas to meet political objectives, we can imagine what that would look like in a world in which Russia had a monopoly of fertile land for food production. The future management of the Antarctic, following the lapsing of the current treaty in 2041, and presumably with habitable land following the melting of the polar caps, would become a high-risk flashpoint in a desperate world. All those outcomes present risks to Britain’s national security, the rules-based order and the allocation of our defences.
I wish to focus on the Arctic circle because melting caps produce newly navigable seas. For trade, shipping goods from China to Europe through the Arctic region, as opposed to through the Suez canal, would reduce shipping time, fuel consumption and cost. On security, only last week it was reported that Russia is further expanding its military presence in the polar region, testing air missiles and utilising nuclear submarines to break through ice, and is continuing to build military bases along its Arctic coastline.
On access to natural resources, many countries are trying to claim legal jurisdiction in the area, for drilling purposes. The integrated review says that we will seek to maintain high co-operation and low tension in the region, ensuring the safe, sustainable and responsible management of natural resources. Although I support those ideals, I fear the Government are not fully anticipating the escalation of tensions in our own neighbourhood, not least because so little reference is made to the Arctic circle in the integrated review.
That is, of course, an issue for Scottish independence, because England needs Scotland as much as Scotland needs England in being able to respond quickly to threats in the Greenland-Iceland UK entry point to the north Atlantic. I do not wish to be pessimistic, but I fear that all the climate change signs point to an escalation of risk and to tension in the Arctic circle, yet little attention is paid to that in the integrated review and defence statements, or indeed Government policy. I hope that those on the Treasury Bench might give us more insight to their thinking on the issue later this evening.
James Sunderland (Bracknell) (Con)
It is a great privilege to speak in this key debate, Mr Deputy Speaker, although the concept of strength of the armed forces happens to be a misnomer. First, military force will only ever be as good as the way in which it is deployed. The long asymmetric campaigns in Afghanistan and Iraq, for example, were indicative of attrition, force protection and technology, more so than outright military power, but times have changed, even over this short period, and as the integrated review has made clear, we are now fighting in an era of “persistent engagement” against multiple threats, on multiple fronts and in new domains. It might be that conventional force, far from being the historical solution it was, is now just a solution.
Secondly, the word “strength” is in itself confusing. It is often used to describe disposition or size, so I would agree with the Opposition’s argument that our UK armed forces have shrunk, but that ignores the fact that “strength” can also mean availability of force, utility and, above all, potency. So, I would argue that reducing the size of our armed forces does not necessarily mean that the application of military force is any less credible. Let us be clear that the vast reduction in our armed forces since the second world war is not just a Conservative problem. It is something for which successive Governments must take responsibility.
I shall outline some facts if I may. In 2009, after over a decade of Labour government, there were 46,000 fewer service personnel than in 1997. Over the same period, the three services ended up 6,500 personnel short of the MOD’s trained requirement, a figure that is larger than the delta today. The reality is that HM forces fell in size by at least a fifth under Blair and Brown.
Before I am accused of being blindly partisan, let us not forget that the Conservatives did something similar in 2010. I spent a miserable two years in Andover doing my bit to cut the size of the Army from 102,000 to 82,000, and there were sweeping cuts, too, in the RAF and Navy.
Bob Stewart
I remember that in 2010 we cut the Royal Electrical and Mechanical Engineers hugely, and said we would do the job through civilian personnel. Then, in 2015, we cut those civilian personnel. Who will keep all these highly technical things going if we do not have the people?
James Sunderland
I could not agree more with my right hon. Friend, as a Corps man myself. It is imperative that we retain these specialist capabilities so that we can prosecute force using the logistical and engineering support we need.
A decade on, there is no doubt that the Government are serious about investing in defence in a way that has not been seen for years. The massive £24 billion boost over the next four years brings the total to over £188 billion before 2025. This is about military power and strength, particularly in the prosecution of force at range, and when the risks of becoming embroiled in another attritional campaign on land can be mitigated, whereby striking at the heart of enemy command and control is so important.
I am concerned about the 72,000 figure for the Regular Army. Every unit has its challenges with under-manning, the training margin, wider commitments and absence from work due to sickness, compassionate leave or maternity, and my sense is that the Army probably needs an establishment of 82,000 to mobilise a strength of 72,000. I am not convinced that the Army can generate a deployable division with those numbers, and I urge the Minister to do his estimate. However, that is the only note of real caution for me and I welcome the publication of the integrated review—an excellent bit of work.
The dilemma for me and for all of us in this place is whether our focus on coalition operations, higher dependence on technology and the perceived peace dividend since the second world war justify the risks of ever smaller armed forces. But none of us can predict the future—not even politicians—and only time will tell whether this is again a bridge too far.
James Wild (North West Norfolk) (Con)
I welcome the Opposition’s shift in wanting to have a debate on the strength of the armed forces that focuses on enhancing them rather than weakening them. It would perhaps have been better if the shadow Secretary of State, the right hon. Member for Wentworth and Dearne (John Healey), had been up front about the £38 billion black hole in the defence budget that the last Labour Government left behind—a shortfall that meant painful cuts were required in the 2010 review. I advised the then Defence Secretary on the 2015 strategic defence and security review, which was about investing once again with a budget that was growing. The integrated review and the Defence Command Paper together build on those reforms and highlight the intensifying threats we face, and the need to continue to modernise and adapt our forces, backed by a budget that matches the ambition.
Contrary to the motion, the plan strengthens our defence capabilities and the power of the armed forces, with major investments across the five domains. Opposition Members have spoken about election pledges, and it is fair to say that we have changed our plans. Instead of increasing defence spending by 0.5% above inflation every year, we are going further by committing to an additional £16.5 billion over the next four years on top of the existing plans. That extra funding is welcome to help to put the budget on a sustainable footing, because for too long MOD spending has involved short-term financial management and delays or deferrals that simply increase the budgetary pressure in future years. However, the opportunity to strengthen our armed forces that this multi-year commitment provides does not remove the need for choices, and how could it? The UK cannot do everything, and focusing on what we do best and working with our allies is at the heart of our global Britain approach.
During the debate, there has been an understandable, if slightly misplaced, focus on the arbitrary numbers in the Regular Army, given the changing picture of threat. In my experience, military chiefs are more interested in the ability to generate and deploy forces rapidly, and a more agile Army with technological advantage can have greater effect with fewer people.
This significant increase in defence spending provides an opportunity to deliver for our servicemen and women, as well as taxpayers, and there now needs to be a clear focus from the Ministry of Defence and the commands on implementing these plans. That means a more agile approach to procurement, with better control of costs and programmes. It means addressing the recommendations of the recent Public Accounts Committee report and having robust plans to deliver efficiency savings. Finally, it means an improved offer for everyone who serves our country, and their families.
Grahame Morris (Easington) (Lab)
I rise to support the motion on the Order Paper, not least because I believe that Conservative promises made to protect our armed forces have sadly been lacking and ring hollow now that they are in government, as is the case with so many of their other promises. At the same time that Ministers want to cut the size of our conventional armed forces, they propose to increase by 40% the UK’s nuclear stockpile. I ask the Minister, what is the strategic reason for that decision? How much will it cost? How will the UK be safer with 260 nuclear weapons compared with 180?
Breaking international law and treaty obligations sacrifices our moral authority when we are dealing with regimes such as Iran’s that threaten our allies in the middle east. Indeed, in 2015 Ministers promised that the strength of the Army would not fall below 82,000. In truth, we will never meet that target, with the Army’s strength standing at 76,350 soldiers. Since 2010, the Conservatives have overseen a reduction in the strength of our armed forces of a quarter, with 40,000 fewer full-time troops now compared with 10 years ago. The Government will weaken the Army further, reducing numbers to 72,500 by 2025.
In 2012, the MOD partnered with private outsourcing contractor Capita to deliver a £1.3 billion recruitment project. I am glad that the contract was not for a new sight for the Army’s rifle, because the number recruited since Capita’s involvement has not hit the target in any year since the contract was awarded. We should be angry about that wastefulness. Every pound lost in profit squeezed out of a failing contract means fewer soldiers, poorer equipment and fewer opportunities for people to make a career in the services.
Technology is important, but having spent time with veterans as a trustee of the newly formed East Durham Veterans Trust, I must agree with the former Chief of the Defence Staff, Sir Nicholas Houghton, who said:
“I would argue most strongly that it is our people that give the United Kingdom’s armed forces our qualitative edge”.
We have seen our military in action over the last year during covid, from reinforcing frontline services to building hospitals, delivering vital equipment and running test centres in my constituency. I know that there are Government Members who care passionately about the armed forces, and I ask that they work cross-party to ensure that our armed forces—
Chris Clarkson (Heywood and Middleton) (Con)
Mr Deputy Speaker,
“I hear it a lot on the Tory benches, this idea of a country that ruled the waves. Rule Britannia… I think that’s given way to a nostalgia rooted in the history of the Second World War that somehow says that we’re a small island nation that goes out punching above its weight, without ever really stopping to ask why on earth it is that we’re punching at all.”
Those are the words of the shadow Foreign Secretary, the hon. Member for Wigan (Lisa Nandy), praising a pamphlet that called for the abolition of the Army, its replacement with a gender-balanced security force and the abolition of our submarines.
This volte-face to become the tub-thumping, flag-waving party of our armed forces is about as Damascene as a conversion can be. Not all that long ago, Labour Members were abstaining on giving legal protections to our service personnel while on overseas operations—those who did not actively vote against that. So today’s motion again has the whiff of insincerity about it.
I grew up on JHQ—the joint headquarters—in Rheindahlen in the 1980s, and the size of the forces and the nature of military operations then was light years away from where it is now. At the time the Berlin wall was standing, the Soviet Union was the biggest geopolitical threat and in 1983 the film “WarGames” depicted the science fiction scenario of an automated weapons system being hacked for a nuclear strike. Today, China joins Russia as a pre-eminent threat, the longest remaining section of the Berlin wall forms part of the East Side Gallery, several members of the former eastern bloc are now in the EU, and cyber-warfare is conventional.
The simple fact is that the world has changed; the nature of warfare has changed and therefore the way in which we configure our military must inevitably change. We do not have cavalry officers charging into battle on horseback, swords drawn; the needs of the forces today have changed.
What has not changed is the Government’s commitment to ensuring the men and women who keep us safe have the best support in terms of training, equipment and logistics, and it would be breaking faith with them for them to be under-resourced by adhering to a model designed for decades past. But we are going further, because the comprehensive review rightly focuses on the UK military’s single most important asset, its people. We are enshrining the armed forces covenant into law, we are making improvements to the justice system, and we are delivering a pay and career review to ensure military careers are as competitive as those in the private sector.
Labour stood on a hard-left manifesto which would have seen us led by a man who wanted to scrap Trident and leave NATO altogether. Its nationalist neighbours on the Opposition Benches still want to scrap Trident and wanted to tax service personnel more than in any other part of the UK. Our forces deserve our gratitude and our assurance that their Government will work to the geopolitical realities of the day, not the carping rhetoric of a bunch of crypto-Stalinists dragged up as flag-waving patriots in an attempt to hide the fact that they are hopelessly out of touch with the people whose votes they ignored for so long.
Charlotte Nichols (Warrington North) (Lab)
One really positive advance that we have made this century has been our recognition of the obligations that the state and wider society have to the members of our armed forces for the work that they do for us and the sacrifices that they make. It was the Labour Government who first acknowledged the necessity of an armed forces covenant, although the Conservatives chose not to bring it into law.
Warrington North is the proud home of the 75 Engineer Regiment, based at the Peninsula barracks in Orford, as well as two historic RAF bases at RAF Burtonwood and RAF Padgate, a hugely important part of our town’s heritage and our nation’s success in defeating fascist tyranny in world war two. This morning I was pleased to meet with the Reserve Forces’ and Cadets’ Association for the north-west of England to discuss how I can sign the covenant as an armed forces-friendly employer myself. We should all do what we can to support the military that defends us and our armed forces communities.
However, the Government plan yet another real-terms forces pay cut: a lance-corporal in the Army will see a cut of £445 and a sergeant in the RAF will lose £610. And, unfortunately, while we have seen this progress in society, the Conservative Government have undermined our military capability, marching us back over 300 years in terms of the size of the Army and now proposing still further cuts. Despite assurances that decisions should be driven by threat analysis rather than budgets, this is the third time that the Tory Government have chosen to reduce our capability, breaking the Prime Minister’s election promise that he would not be
“cutting our armed services in any form.”
For him, apparently, a cut to the Army of 10,000 does not count—a worse use of 10,000 men, and indeed women, than the grand old Duke of York.
Ministers say that money is better spent on new technologies. Shiny new tech may be exciting, but leaving aside their repeated failures to deliver over the past decade and to have a procurement policy for defence spending that supports British jobs, tech cannot counter all challenges. In addition to the military threats that we have heard discussed today, in recent years we have needed our armed forces and their expertise as we have coped with increasing floods caused by climate change, and, yes, the covid pandemic as well. Are these strategic threats that Ministers think are either less likely in future or can be addressed with new kit? The first duty of Government is keeping their citizens safe, and reducing our capabilities by this level does the exact opposite.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Hull and east Yorkshire has always been a high recruitment area for the armed forces and I give my thanks to each and every one of them for their service, particularly those who have gone over and above during the covid pandemic. Yesterday I attended a meeting of the all-party group on apprenticeships and we heard about the number, breadth and variety of defence apprenticeships offered. Hon. Members will therefore understand my sincere disappointment at hearing of the 10,000 cut to armed forces personnel, denying people the opportunities that so many of my local residents have had previously.
Hon. Members will also understand why I found that particularly hard after the news of the closure of the BAE Brough site. The first aircraft factory was created in Brough in 1916. The site entered the service of the Royal Navy in 1959. It continued in active service with the Fleet Air Arm and the RAF over 30 years. It is best known for manufacturing the Hawk, seen the world over being operated by our fantastic Red Arrows aerobatic team. The Hawk T1 training craft is currently being retired, and Britain’s aircraft fleet has shrunk to its smallest in RAF history. Fewer F-35s are being ordered to replace those lost aircraft.
I must convey to the House the sincere disappointment that 104 years of aircraft manufacturing came to an end on Christmas eve 2020, under this Government’s watch. One hundred and four years of aircraft manufacturing; it kept going through both world wars, through continuous change and through Governments of different political persuasions, only to end on Christmas eve 2020. The only positive from this sorry tale is that I can give my thanks to Unite the trade union for the work it did in mitigating redundancies and saving people from losing their jobs during the pandemic. I give particular thanks to the Unite rep Jarrod Rex for the work that he did.
I ask the Government to do the right thing and learn a lesson from BAE, which was able to mitigate some redundancies by allowing people to be remote-based. It allowed people to be officially employed at various other sites around the country while still living in Hull and East Riding, because they could continue to work from home and be registered as employees. That helped save jobs, and BAE is now working with the trade unions to look at the future way of working and see whether more jobs can be offered as more permanent remote opportunities. I urge the Government to look into that in detail, because if it were expanded, it could bring more much-needed high-skilled jobs to areas such as Hull West and Hessle.
Suzanne Webb (Stourbridge) (Con)
The strength of our armed forces is in the people who serve in them, and of course this Government’s commitment to them. Any armed forces should seek to reflect the character of the nation, and ours do. They reflect our values of peace and protecting international law, they seek to deter aggression and maintain peace, they help people worldwide with aid at times of crisis, and they protect our trade links, with our Navy protecting shipping from modern-day pirates. Our armed forces fly the flag for UK interests. They reflect our huge soft power as a nation, not just our physical strength.
The discipline and professionalism of our forces is recognised throughout the world as second to none. The British Army has helped train armed forces all over the world, and countries have sent their future officers and leaders to our military training centres for hundreds of years. That ensures that our nation’s values are shared across the globe. That is the strength of our armed forces.
Defence is an ever-changing landscape, with battlefields no longer in trenches but in artificial intelligence technology and cyber capabilities. Importantly, as we face one of the UK’s biggest strategic landscape shifts—leaving the EU—as global Britain, our armed forces will again take the lead. That is not a nostalgic view.
The recent defence review is the widest-ranging and possibly the most significant since the end of the cold war. The review ensures that we will exceed our manifesto and NATO spending commitments. It is a modernisation programme that encompasses the new areas of cyber and space defence, reflecting future threats and future battlefields. It is a symbol that the UK has a global role and a global ambition. It represents a Government—this Government—that understand the nature of the world in which we operate, all backed by a £24.1 billion boost in defence spending, helping to create a stronger, more secure Union.
Compare and contrast that with Labour’s position. The last Labour Government oversaw the Territorial Army’s being cut by almost 40%. Opposition Front Benchers want to replace our armed forces altogether with human security services. I am not sure they respect or have any understanding of the importance of our armed forces. That is not forgetting that Labour had planned shamelessly to use our flag and our veterans to gain votes—it is shameful that it was using our armed forces as a campaign tool, while refusing to take our nation’s defence seriously.
This Government do take the nation’s defence seriously, and they have a proud tradition of protecting their people. Those values are the foundation of our security and prosperity. I thank all those who serve to protect and defend, particularly those from my constituency, for their sense of duty, and of course those I sit alongside on the Government Benches. The armed forces of this great and United Kingdom are one of our finest assets and one of our greatest strengths. Long may they continue.
Kate Osborne (Jarrow) (Lab) [V]
It has taken just 16 months for the Prime Minister to break his election promise not to reduce the size of the UK’s armed forces. For a party that likes to think of itself as strong on defence, it makes no sense for the Tory Defence Secretary to have announced last month that the Government are cutting the size of the Army, this time by 10,000. That comes on top of the 45,000 cut from the whole armed forces since 2010.
It is a slap in the face for our armed forces personnel, many of whom are recruited from working-class areas like Jarrow, here in the north-east. Under the Conservatives, our armed forces have seen a decade of decline. Forces personnel and their families have been forced to live in substandard accommodation while receiving below-inflation pay rises for the past seven years.
Hidden within the Government’s defence plans is a 2.7% cut in day-to-day spending over the next four years. That translates into a pay cut of £445 for a lance-corporal, with a sergeant in the RAF losing £610. Armed forces personnel deserve so much better. They have helped the country through this pandemic and played a key role in building Nightingale hospitals and assisting in the vaccine roll-out. At one point, 95% of mobile testing centres around the country were run by the military. We owe them a great deal.
There is no doubt that the threats that we face as a country have changed in modern times and that spending needs to be focused accordingly, but as the pandemic has highlighted, highly trained personnel are indispensable. On a wider industrial point, I agree with Unite the union’s response to the Government’s integrated review: the UK already has the skills, capabilities and ambition to be developing the cutting-edge technology needed to meet both today’s and future challenges; the only thing holding it back is a lack of vision, ambition and support from Government.
The Government must produce a long-term plan to boost Britain’s foundation industries, in steel, shipbuilding, aerospace and cyber-security as national assets. That is essential because the defence of the nation is linked with the defence of our national economy. The Prime Minister said in November that he was ending an era of retreat regarding the defence cuts made by previous Tory Governments. But after the integrated review and the defence Command Paper, yet again there appears to be a vast difference between what the Government say and what the Government do.
Bob Stewart (Beckenham) (Con)
I get the idea of grey-zone warfare. I studied strategy; I realise that we cannot fight the next war as we fought the last war—I get that, too. The real problem is that we are going to have to do the next war in a different way. I get that. But we have not fought a total war as envisaged, and on which the integrated review is predicated, for over 70 years. Instead, we have fought limited engagements. We have done counter-insurgency, peacekeeping and peacemaking. Some 99%—almost 100%, actually—of all operations have required us to put soldiers on the ground. Suddenly, we are saying that everything should be predicated on grey-zone warfare, and that leaves little else.
Having commanded men—and women, by the way—on peacekeeping missions, I can tell hon. Members that there is a real argument in favour of having enough of them. We are going to cut our Army by 12%. That is an enormous loss. I understand that tanks can be taken out from over the horizon. The Armenia-Azerbaijan conflict showed that: the poor devils in those tanks didn’t know what hit them. We have to redesign how we fight and where our tanks go—I get that. But it does seem odd that we are saying tanks are somehow obsolete when we have aircraft carriers that are 500 times bigger and marked from space by a red dot that an intercontinental missile could take out very fast.
I will end by saying how disappointed I am that my Government have cut the regiment I commanded in Bosnia, without even telling me about it in advance—not even one little word. It was dreadful, and it hits me personally. So if I am talking with emotion, so be it. The 2nd Battalion the Mercian Regiment did not deserve that, when you think that, per head of population, each Scot has three times as many battalions as each Englishwoman or Englishman—the Scots have three times more infantry battalions than we do in England.
Bob Stewart
And indeed, as my good friend says, they are Fijian. Increasingly, those battalions will have to be manned by Englishmen.
I will end on that point. I understand the logic; I disagree with the result.
Antony Higginbotham (Burnley) (Con)
It is a privilege to be called in this debate, particularly because Burnley and Padiham have a very long and proud history of service in the armed forces.
Our starting point with any defence review should always be the threats that we face. I have a huge amount of respect for my right hon. and gallant Friend the Member for Beckenham (Bob Stewart), who just spoke, but threats have evolved quite significantly in recent years. The grey zone is real, and it does require a very real assessment of what those threats are and how we need to address them. We need to move towards a much more agile, smaller type deployment. That is why it is positive to see in the defence Command Paper and the integrated review such things as the Army ranger regiment: small groups of better trained people who can detect, deploy and deter aggression. That is what we are seeing our adversaries do. That is what we are seeing the Russians do with increasing frequency, be it in Ukraine, Syria or other such locations.
There are two big capabilities advancements in the defence Command Paper that deserve a particular welcome and credit to the Government. The first is the National Cyber Force, because cyber-warfare is only going to increase. I am sure you will join me, Mr Deputy Speaker, in agreeing that placing it in the north-west is a very welcome development. The second thing that the Government deserve specific credit for is Team Tempest and investing in the next generation of combat aircraft. If we know one thing, it is that if we do not invest in aerospace manufacturing skills—I say this as a Member of Parliament who represents a proud aerospace manufacturing area—we will lose those skills forever. Tempest gives us the ability to work with allies across the world, currently Sweden and Italy, to develop an aircraft that will put us at the cutting edge of warfare and allow us to deploy manned aircraft surrounded by unmanned assets, building on those small deployments of Army rangers or special forces.
We have heard quite a lot in this debate about what is being cut, but I actually do not think the defence Command Paper and the integrated review are reductions in capabilities. They are actually new capabilities. The National Cyber Force is a totally new capability. Tempest is a totally new capability. The multi-role ocean surveillance ship is a new capability. Type 83 is a new capability. Artificial intelligence is a new capability. So if we are going to have a debate about what force structure we need in the armed forces in the next 20 or 30 years, we should do so.
I will end with the US—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Sorry about that, but time is up.
Matt Western (Warwick and Leamington) (Lab)
It is a pleasure to speak in this debate; I was not entirely sure that I would get the opportunity.
I am pleased that the right hon. and gallant Member for Beckenham (Bob Stewart) spoke today. His valued comments were missed in our last debate on the subject: it was a real shame not to hear from him on that day, although I cited him in my speech. It was also good to hear from the right hon. Members for Bournemouth East (Mr Ellwood) and for New Forest East (Dr Lewis) and the hon. Member for Bracknell (James Sunderland), all of whose voices I value greatly for the knowledge, expertise and experience that they bring to these debates.
It is not my specialist subject at all, but I have real concerns about where this is going. I have been extremely concerned for a couple of years now about recruitment numbers in our forces. I think that Serco has been managing it—it was almost as if it were being managed such that the numbers would fall, anticipating the Government’s position.
As I mentioned in the last debate, we are talking about an Army that will be as small as the US special forces. We are talking about the British Army! I once considered joining it, and I would have been very proud to represent the country. The notion that the UK could have a smaller force than the US special forces is quite extraordinary.
I hear the point about new technologies, but let us think back to the advent of the aeroplane and the birth of the Royal Air Force, or the introduction of tanks. Did we cut our forces then because of the new technology? No, we built on what we had. We have some fine forces and expertise, and we are well respected and well regarded around the world for them.
My point on this topic the other week was about peace-keeping and the importance of having people who can make the case, who can win hearts and minds, and who are actually trusted, as we saw in Sierra Leone, the Balkans and elsewhere. That is why we should be maintaining our forces and building on them with new technologies. We have to pay for our security—it is as simple as that. The threats are different from 10 or 15 years ago. We must invest in the new technologies, but keep what we have.
Jim Shannon (Strangford) (DUP)
I thank the Opposition for securing this important debate in which I have much interest—it is a matter of great concern to me. When I asked the Prime Minister in November about the physical forms of war and recruitment, his answer referred to our being “full spectrum capable”, so I want to speak briefly about capability.
What the news reports are saying is that the fat is cut and now we are cutting bone, as I believe The Economist put it. If that is what we are arriving at with the Army, the Navy and the Air Force, we have a real problem. I understand the need to focus attention on technological warfare; that is common sense. Our armed forces have the reputation of being the best of the best, and that has stayed true because of the bravery and intelligence of our personnel, but also because we are always moving forward and looking for better ways with less loss of life and more effective plans. But in my opinion, to allow our trained operatives’ numbers to fall is—I say this gracefully to the Minister—folly. If they determine that they will slog on without enough staff to carry out their workload, in time they will fail. Our armed forces are not a department in which we can accept failure.
I have also read, and defence sources have acknowledged, that the air force cuts would reduce logistics and supply capacity. If I have read it, others have read it. Our enemies will have read it and will be rubbing their hands, whether they be in Russia, China or wherever else in the world. I have great concerns about that.
I will conclude by putting on the record my thanks to the armed forces medics in Northern Ireland for their help during the most pressurised hospitalisations due to covid. Over the years, we in Northern Ireland have had 30 years of conflict. The past few months have indicated that unfortunately the shadow of conflict is never far away from both sides of the community. It is more important than ever, as the police force is put under pressure in Northern Ireland, to know that we have a British Army that we can call upon; the right hon. and gallant Member for Beckenham (Bob Stewart), who served in Northern Ireland, said that as well. I seek that assurance from the Minister today.
Christian Wakeford (Bury South) (Con)
Let me start by paying a few tributes. If my hon. Friend the Member for Hyndburn (Sara Britcliffe) was in her place today she would certainly mention the long history of the armed forces, especially the Accrington Pals, in Lancashire. Indeed, one of my proudest moments as an elected representative was in my role as a councillor in Pendle when we gave the Duke of Lancaster’s Regiment the freedom of the borough.
Members from all parts of this Chamber respect our armed forces—I do mean that sincerely—and we have a long history of doing so. We may differ on what we think is needed at a particular time, but we do have a strong respect for the defence of this nation, and rightly so, because that is one of the oaths that we make when we come to this place.
As has been said by many Members—I will try not to repeat what has been said—the nature of warfare is changing; it is constantly evolving. Every time we find a new defence, someone will find a new method of attack. The problem is becoming more global, more cyber and much more biological in its intent, so do we need the same number of forces as we once did? The answer, unfortunately, is no.
Bob Stewart
Forgive me for intervening yet again, but may I point out that, on most of our operations, we cannot win hearts and minds with a drone, with artificial intelligence or with a precision-guided missile? We must have men and women who talk to people.
Christian Wakeford
I thank my right hon. and gallant Friend for his point because it leads me on to what I was about to say. The nature of our armed forces has very much become part of our soft power in international realms, in that it is a peacekeeping force. We go out to offer support across the world when there are natural disasters and when it comes to peacekeeping in areas that need extra support, and we are proud to carry on doing so.
When we look at the support that we offer across the globe, I hope that we can consider maintaining that 0.7% in international aid. That is a very powerful tool in preventing some of these issues from arising in the first place. With peacekeeping, yes, I agree that we do not necessarily need drones, but we do need to find a way to attack some of these powers that are coming forward and that are increasing in their own nature of warfare. Whether we consider the cyber-attacks from Russia or Iran or the biological weapons from elsewhere, it is clear, unfortunately, that some of these places are not safe to send our soldiers. We must consider the safety of our armed forces. For many years, Governments of whatever party have not got that right. I am thinking specifically here of the war in Iraq.
It is right that we are considering this matter. Warfare is evolving and we need to change to keep up with that. We are increasing our expenditure on the armed forces, more than we have done since the cold war, and it is right to do so. It is right that we consider the safety of our nation, but we need to do so in a technological, biological and evolving way, which is why I will not be supporting the motion as it is today. I say that as a proud Member representing a regimental town. The armed forces have a long history there; long may that continue. It is very unfortunate that, again, we are debating not a motion of opposition, but a motion of opportunism. With elections coming up, I wonder why. We are proud of our armed forces on this side of the House, and that will continue for many years to come.
Stephen Morgan (Portsmouth South) (Lab)
I associate myself with the remarks and tributes made by the shadow Defence Secretary, the Minister and other Members of this House to the Duke of Edinburgh, who was a great friend of Portsmouth, the heart and home of the Royal Navy.
Let me start by echoing the contributions from across the House that have recognised and honoured the continuing commitment and service of our armed forces. From the imminent departure of the Carrier Strike group from my constituency in Portsmouth to supporting frontline services across the UK as they tackle the pandemic, our armed forces have risen to the unique operational challenges presented by the past year, and which continue to present themselves, with courage, integrity and resilience—something that I know we all admire.
We are here today as a direct result of this Government’s broken promises to our armed forces, and this has been an important debate. My right hon. Friend the Member for Warley (John Spellar) reminded us of a catalogue of examples of successive Tory Governments running down our defence numbers and capabilities, a point echoed by my hon. Friend the Member for St Helens South and Whiston (Ms Rimmer). The Chair of the Defence Committee, the right hon. Member for Bournemouth East (Mr Ellwood), also described sweeping cuts and the impact these will have in the busy decade ahead with new threats, and my hon. Friend the Member for Barnsley Central (Dan Jarvis) said so eloquently—as he always does—that retaining talent is so important, and that despite changes to threats, people remain constant.
This Prime Minister promised to end Britain’s “era of retreat”, and that no further cuts would be made to our armed forces. Instead, he has further eroded our fighting strength. Some 45,000 personnel have been cut since 2010; now, the integrated review and Command Paper have confirmed that the Army will be further reduced to just 72,500 by 2025, smaller than at any time since the 1700s. As many Members of this House have already said today, this will sever the historical and prosperous links our armed forces have with communities across the UK and reduce services and pay for those serving, points well made by my hon. Friends the Members for Warrington North (Charlotte Nichols) and for South Shields (Mrs Lewell-Buck). The hon. Member for South West Bedfordshire (Andrew Selous) also stressed the importance of supporting those who serve.
As ever for Conservative Governments, it is cuts today, with the ever-seductive, seemingly undeliverable promise of jam tomorrow in the form of new technology. There can be no doubt that our forces need to modernise, but that leaves our national defences concerningly vulnerable in the medium term. This is particularly worrisome at a time when the integrated review has identified a growing number of sophisticated threats to our national security. While these threats are undeniably evolving and increasingly operate in the grey zone, Russian military build-up on the Ukrainian border is a timely reminder of the need to maintain strong conventional capabilities today as well as to invest for tomorrow. However, the Government also remain silent on any future co-operation with European partners through the common security and defence policy.
As we have heard today, it is not just raw people power that the Army is set to lose; it is set to lose capabilities. Conservative cuts to the conventional strength of our forces with a promise of pioneering technology are nothing new. Tory Ministers promised the same thing in the 2010 and 2015 reviews, yet they failed to deliver. In 2010, they promised a future force by 2020, and in 2015, promised a warfighting division with a strike force by 2025. That is now being promised in 2030. In 2015, the Chief of the Defence Staff said that the ability to field a single warfighting division was
“the standard whereby a credible army is judged.”
However, a recent Defence Committee report on the Army’s armoured vehicle capability says that the division would be “hopelessly under-equipped” and “overmatched” by adversaries.
The integrated review has placed particular importance on carrier strike groups as a platform to project global Britain, yet at least two of the Type 23 frigates that will escort them and specialise in hunting submarines are due to be phased out before the replacements are built, as continued ambiguity around the number of F-35 fighters the Government will order means that we do not have nearly enough to fill both of our aircraft carriers, leaving them vulnerable to missile and drone attacks. In the meantime, as the Royal United Services Institute has pointed out, these sweeping cuts mean that the UK can no longer call itself a tier 1 or full spectrum military power. Despite the Prime Minister’s welcome injection of £16.5 billion in capital funding after a decade of decline, many of the decisions in the integrated review seem to have been driven by finances, as opposed to threats.
It is no secret that successive Conservative Governments have chronically mismanaged the MOD’s budget. The National Audit Office reports a black hole in the defence budget of up to £17 billion, and we are still not clear on how much of the extra money will be swallowed by the deficit in current programmes. After a decade of short-sighted, last-minute decision making and poor procurement practice, our capabilities have fallen behind our allies and potential adversaries, and it is our forces on the ground who will be vulnerable. As right hon. and hon. Members across the House have pointed out, all of this comes at a time when the threats we face are immediate, growing, and complex. My hon. Friend the Member for Bristol North West (Darren Jones) reminded us of the threat that our nation’s security faces from the climate crisis.
Defence of the realm is the first priority of any Government. From the publication of the integrated review and the Defence Command Paper, it is clear that this Government have not only broken their promises on fighting strength but taken a significant gamble with our national security in the medium term. Our adversaries will exploit the continuing holes in our capability, but Labour is determined to ensure that our country can protect itself properly now and in the future. The Government talk up their commitment to our armed forces, but the truth is that they have failed at every turn. Members from across the House have the opportunity to place their concerns on record by voting for this motion, and I hope they will consider our service personnel, still the core of our fighting forces, when they come to vote this evening.
The Minister for Defence People and Veterans (Johnny Mercer)
It has been an interesting debate. As you well know, Mr Deputy Speaker, I thoroughly enjoy any debates in the House on military or veterans matters, and today has been another one. There have been some enthusiastic contributions, which is fantastic to see. Some of them were slightly light on detail and facts, but I am not going to work through correcting all of those because I understand the premise of the debate and I will respond to a couple of the points that have been made.
I would just gently say that we must never treat our service people in this country like they are stupid. For Members to claim that everything under a Labour Government has been okay and that the Conservative Government have slashed and burned the military is to treat people who serve and people in this country like they are stupid. It is fundamentally untrue. There have been challenges over the years, and the really uncomfortable and embarrassing truth for Opposition Members who are so loud is that I was actually fighting in the compounds in Afghanistan when the right hon. Member for North Durham (Mr Jones) was a Minister in the Department, and I can tell the House that it was a deeply unpleasant experience that was made more unpleasant by the management and leadership of the Department at the time. So I will take no lessons in party politics when it comes to what has happened with defence.
We all agree that strong armed forces are essential to the wellbeing of our nation. As the Minister for the Armed Forces, my hon. Friend the Member for Wells (James Heappey), mentioned, the reforms we have set out in our integrated review and in the Defence Command Paper will enhance, rather than reduce, the strength of our military to meet future threats. One of my hon. Friends who is no longer in his place talked about the strength of the military and what that strength actually is. I think it was someone rather unpleasant who said that mass had a force of its own, and I am not going to deny that. To deny it would be to scream at the weather.
I have huge sympathy with my right hon. Friend the Member for Beckenham (Bob Stewart), who I have had deep feeling for over a number of years. I have huge respect for his service and for what he did during his time, but it is a truth—a truism—that our people are now more capable and we can do more at reach for a longer period of time with greater strategic effect than we could 20 years ago. That is a truism of global conflict. I totally understand the frustrations, and I apologise to my right hon. Friend that nobody spoke to him before the decision was made on his sub-unit. I will go and investigate what happened there. But it is a truism that we can be more capable and achieve more with fewer individuals in uniform now.
As for the idea that the military is being cut, we have to be honest with the British people. Yes, there are going to be fewer people in the military, but we can now deploy at a far faster rate and at a far greater global reach, and that is what matters today. So yes, mass has a force all of its own, and you will find no Minister in the Defence Department who does not want more money for the Defence budget and more people in the military, but the reality is, as the Secretary of State has said a number of times, that we have to operate within the envelope of our ambition in this country when it comes to the military. In that context, it is a very good and exciting review, and I will come on to talk about the people, because I know that a number of Members raised issues around how people are treated.
I will, if I may, briefly pay tribute to some of the contributions. My right hon. Friend the Member for New Forest East (Dr Lewis) spoke on his traditional theme of CASD. The commitment of those who maintain the continuous at-sea deterrent is extraordinary, and it is a commitment not only from them, but from their families. If we think about what it means to go away on those boats for a prolonged period of time, we realise that separation without any contact is extraordinary, and their commitment endures year after year. We owe them a huge debt for the ongoing security they provide in this country.
The right hon. Member for Warley (John Spellar) again went on about all the mistakes Tory Governments have made over the years. I have addressed that. I think it is disingenuous, and I am not going to say any more on that. My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) again talked about CASD and the commitment—
Mr Kevan Jones
On a point of order, Mr Deputy Speaker. I will take your advice, but is it in order to call a Member disingenuous?
Mr Deputy Speaker (Mr Nigel Evans)
If I had heard anything that was out of order, I would certainly have called it into order. It is part of the debate.
Johnny Mercer
Thank you, Mr Deputy Speaker. I am getting used to it now.
The hon. Member for Barnsley Central (Dan Jarvis) made some really important points. I know that he spent a long time on such operations, as I did, and he actually made a really critical point, which is that there are no easy answers to these debates. None of them is binary: they are calibrated decisions about where the threat is, how we are going to meet it, and what equipment or people we are going to meet it with. I appreciated his contribution.
When it comes to armed forces families, I pay tribute to my hon. Friend the Member for South West Bedfordshire (Andrew Selous) for the important work that he consistently does in the family space and the people space. On that one issue, I can tell the House unequivocally that this review process has put people at the heart of defence. For the first time, we have produced a document that outlines what the offer is to attract and retain this country’s most talented individuals to a career in defence. I would encourage all Members of this House to go and read that, understand the opportunities that are now available, and then go and speak to the people who are serving.
While we will all have a view on defence—based on what we have been briefed on and what intelligence and secret information we have privileged access to—we will all have a different view, including those who have retired. I respect all those who have retired of senior rank and so on, but the crucial things is to go and speak to the people who serve and ask them what they think about the opportunities that are going to be afforded to them with careers in cyber, space, technical training and operations of the sort that were conducted by a very small specialist cohort in the military only 10 or 15 years ago. It is important to speak to them about the opportunities afforded by the future accommodation model or about mental health care now, where they can access a single front door and be totally confident that they will have a secure and coherent care pathway through NHS mental health services.
These lines—these campaign lines—are trotted out, and I understand that. I understand how this place works, but I am afraid I will draw the line when it comes to saying things that are simply not correct about our military, because we already have enough challenges. Everybody knows that I have come to this place to try to reset the relationship between the military and the nation, so I will be honest with colleagues when that line is broken, but this review puts people at the heart of defence. It is a good piece of work, and I am proud of it. I think we can honestly look young people in the eye today in all of our constituencies and maintain that defence remains the No. 1, premier choice of career for our young and talented people in this country.
I thank all Members for their contributions to the debate today. As I say, it has been very interesting and very passionate, and there were a lot of fair points. There is not one school of thought on this, but we do have to operate within the envelope we have been asked to operate within. In that respect, it is a good review. We should get behind it, and be proud of the UK’s armed forces, which remain the finest armed forces in the world.
Mr Deputy Speaker
I am now going to put the Question, and you will be expected to vote the way you are shouting. Clearly, if I hear one audible and persistent voice, you will have a vote, and a vote is expected.
Question put.
Business without Debate
Petitions
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Patricia Gibson (North Ayrshire and Arran) (SNP)
The petition states:
The petition of residents of the constituency of North Ayrshire and Arran,
Declares that there is significant concern about the recent collapse of the betting firm Football Index following the suspension of the company’s license by the Gambling Commission and its entry into administration; notes that customers collectively have over £90 million trapped in the company with average losses of around £3,000 per customer; further declares that the petitioners understand that the firm operated as a ‘football stock market’, offering customers the ability to buy ‘shares’ in footballers whose price would increase or decrease, and customers could be paid in ‘dividends’ based on player performances; further that, only a few days after the company ‘minted’ new shares in footballers and enticed customers to purchase shares, the company drastically decreased dividend payments by 82%, leading to a virtual market crash on the site which caused significant losses for customers; further that concerns have been raised that the firm operated like a pyramid scheme and that it had been admonished by the Advertising Standards Authority in 2019 for creating the impression that the product was a lucrative investment opportunity; and further that this scandal has called into question the adequacy of gambling regulation in the UK, given the Gambling Commission saw fit to give this company a license and apparently failed to ensure adequate oversight.
The petitioners therefore request that the House of Commons urges the UK Government to launch a full independent public inquiry into this scandal to ensure that gambling regulation is fit for purpose in protecting consumers.
And the petitioners remain, etc.
[P002656]
David Linden (Glasgow East) (SNP)
I recently met Scope, the disability charity, which expressed concerns to me about a number of disabled people being compelled to return to work from furlough. We know, for example, that just 8.5% of people in the clinically extremely vulnerable category have received both doses of the vaccine, and the Government’s own figures show that 14% of disabled workers are employed in the wholesale and retail trade.
The petition has been presented to me, and it asks that the Government amend the coronavirus job retention scheme so that any disabled worker who is concerned about returning to work during the pandemic has the right to be put on furlough if they cannot work from home. The petitioners therefore request that the House of Commons urges the Government to consider ensuring that people with disabilities can make the decision on whether to return to work or remain on furlough. The onus should be on employees to decide, not the employer.
The petition states:
The petition of residents of the constituency of Glasgow East,
Declares that the COVID-19 pandemic has caused huge changes to the working patterns of many people across the UK, with the furlough scheme helping to support many businesses; further that restrictions across the UK are beginning to ease, with more businesses opening their doors, meaning that many people are returning to work; further that, despite the necessary safety precautions, some people with disabilities do not feel comfortable returning to work as of yet, and would rather wait until infection rates and COVID-19 cases have fallen further; further that the UK Government should ensure that nobody, particularly a person with a disability or health concern, is forced to return to work; further that the Government should commit to ensuring that the onus is on the employee to make the decision over their return to work, not the employer; further that if an employee wishes to stay on the furlough scheme they should be able to make this decision without repercussion and fear of losing their employment.
The petitioners therefore request that the House of Commons urge the Government to consider ensuring that people with disabilities are able to make the decision on whether to return to work or whether to remain on furlough and that this should be the employee’s decision, not the employer’s.
And the petitioners remain, etc.
[P002657]
Hammersmith Bridge
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Fleur Anderson (Putney) (Lab)
I thank Mr Speaker for granting the debate, because this issue is of such interest to my constituents and to people in many other constituencies surrounding mine throughout south and west London. Hammersmith bridge has been closed for over two years. In that time, we have had a pandemic, moved billions of pounds around the country, and vaccinated half the country, yet we still have not fixed Hammersmith bridge. My constituents are really frustrated by that.
Hammersmith bridge is an early prototype of the suspension bridge. It has a unique historical value, as well as being a major London artery, and we need a unique funding solution to enable a temporary bridge to open urgently, and for the restoration and the future of the bridge to be secured. Hammersmith bridge is not in my constituency, nor in the constituencies of some Members attending the debate, but that shows the wide-ranging impact of the bridge’s closure on hundreds of thousands of Londoners and why its reopening is so important and so urgent.
Our health in Putney is being damaged by the increase in pollution on our high street from the additional 4,000 vehicles a day that are being diverted. Journeys to school, to work and to healthcare appointments are very long. Businesses are suffering. This cannot go on. Time and again, we have put the case to Ministers. I have raised the matter in Westminster Hall debates, at Transport questions and business questions, in written questions, through a public petition and in letter after letter, yet here we are again, and the bridge is still not open.
Felicity Buchan (Kensington) (Con)
Does the hon. Lady agree that the primary responsibility for the upkeep of the bridge lies with Hammersmith and Fulham Council, which owns the bridge and has responsibility for its maintenance? My borough has two bridges: Albert bridge and Chelsea bridge. It takes full responsibility for those bridges. Over the last 10 years, it has invested £12 million to £13 million in Albert bridge, and it is about to do work on Chelsea bridge.
Fleur Anderson
I am grateful for the hon. Lady’s intervention. It has been said many times in many places that it is up to Hammersmith and Fulham Council, but that is absolutely not the case. Hammersmith bridge is a unique historical structure with a unique bill—£141 million. No council in London could afford that. Therefore, this issue needs a unique funding solution. I will talk about that and the bid that Hammersmith and Fulham Council has made to the Government, but now is the time for the Government to step up, because Hammersmith and Fulham Council cannot do this on its own.
I was on Putney embankment on Easter Saturday on what would have been boat race weekend, but the race could not run on the Thames because of the danger to the boats of going under the bridge. I teamed up with local rowing organisations and hundreds of constituents to protest the continuing inaction about Hammersmith bridge and to call on the Government to step up, play their part and fund its restoration. There were boats from the London Rowing Club, Wandsworth Youth River Club and Putney High School Boat Club out on the water, all of which are affected by the closure. Hundreds of local people came by, and it was not necessary for me to persuade anyone to sign the banner and send a clear message to the Secretary of State for Transport to open the bridge.
Last week, I went out on my first canvass since the start of the pandemic. I knocked on my first door in Roehampton, eager to speak to constituents again, and asked, “What issue is important to you?” The first thing they said was, “Hammersmith bridge.”
Sarah Olney (Richmond Park) (LD)
The hon. Member is making an excellent speech, and I am extremely grateful to her for bringing the matter back to the Floor of the House for debate once more. I wonder whether she would mind me taking the opportunity to highlight the massive impact that the closure has had on the residents of Barnes in my constituency. She mentioned the difficulties that people have had in getting to work and accessing healthcare. The biggest growing issue that we have had since the reopening of schools at the beginning of March is children getting to school. They have all already suffered massive disruption to their education, but many are finding that, where they could previously walk to school in 10 to 15 minutes, it now takes them upwards of an hour on crowded public transport during the pandemic.
On top of the pressures those children are already experiencing—some with exam stress, and all the uncertainty and disruption that they have faced—they now have the additional anxiety of how to get to and from school in a way that they have never experienced. I want to highlight the massive impact that the bridge’s closure is having on young people on both sides of the bridge and the really difficult experience they are having, and to urge the Minister to come to the table and find a solution.
Fleur Anderson
I thank the hon. Lady for highlighting the impact on young people. I have had an email from a sixth-former in my constituency who said that they formerly left from home at 7.30 am but now have to leave at 6 o’clock in the morning. This is having a really bad impact on students across the constituency.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I, too, congratulate my hon. Friend on securing the debate and on her excellent speech. My constituents are also impacted, particularly by the additional road traffic that is finding its way through Chiswick as a result of the closure of Hammersmith bridge—2 or 3 miles away.
May I highlight the concern for the businesses and operators that use the river and have been unable to gain access upstream and downstream of Hammersmith bridge? They may not go under Hammersmith bridge unless the RNLI is on an emergency call, or they have to book in advance for very restricted opening—it has been on Sundays. This has had an impact not only on the RNLI’s training, maintenance needs and refuelling, but on businesses such as boatyards and the commercial tour operators, whose core business is travelling up and down the river. There is effectively a block on that at the moment, and that will continue until Hammersmith bridge is made safe.
Fleur Anderson
I agree absolutely, and I thank my hon. Friend for sharing the impact that the closure is having on so many businesses and organisations, and even on the RNLI, in London.
As the Minister will know, the bridge, which is one of the oldest suspension bridges in the world, was closed to cars two years ago and then fully closed to all vehicles in August 2020. The impact that is having in my constituency—and, clearly, in neighbouring constituencies —is catastrophic. However, I am not here to make the case for why the bridge needs urgently to reopen. That is so obvious, and I think it is something the Minister and I can agree on. I am here to spell out to the Minister and her Department that the biggest obstacle to progress at the moment is funding, and that only the Government have the funds, resources and legislative ability to make the changes needed to reopen and restore the bridge and to get south-west London moving again.
I want to make three points: first, about the taskforce; secondly, about Hammersmith and Fulham Council; and finally, about solutions. The taskforce, which was set up in September last year, seems to have morphed into a significant barrier to any sort of progress, instead of making the urgent progress that we need. It is little task and no force. Hammersmith and Fulham Council, Richmond Borough Council and Transport for London have carried out the actions detailed for them in the taskforce meeting, but the Government have not brought the action needed from their side.
Andy Slaughter (Hammersmith) (Lab)
My hon. Friend is making an excellent case, but I think she is being slightly too generous towards the taskforce. A letter from the Hammersmith Society, which is a strictly non-political and very civilised body, to the Prime Minister two weeks ago ends by saying that
“the communities on both sides of the river are unified in their anger, their disappointment and their despair at the failure of their government.”
I held a debate identical to this a year ago when the Minister was engaging with the issue and looking at bids. We have actually gone backwards in the past year, and silly political games are being played, as typified by the intervention from the hon. Member for Kensington (Felicity Buchan). What we need is a solution and funding for this major project.
Fleur Anderson
I thank my hon. Friend for so eloquently sharing the frustration we are feeling. I think you can understand that, Mr Deputy Speaker, and that you are feeling it from all the interventions this evening.
The taskforce has come up with no workable solutions, although the ferry will be opening in the summer. It has simply trotted out tired statements and has not discussed financing, which is why funding is the focus of the debate.
My second point concerns the financial role of Hammersmith and Fulham Council. Many people have said to me, “Why can’t the council pay for the bridge?” To expect the council to fund the restoration of the bridge and any temporary measures is unfair and unreasonable—and in fact impossible. Hammersmith bridge is extremely expensive to fix compared with other London bridges, as was mentioned earlier, in part because it is London’s earliest remaining example of a suspension structure over the river, and because of the unusual materials it is built from—cast iron, which can shatter, wrought iron and wood—and its suspension mechanisms are unique. That puts the cost of repair at an eye-watering £141 million, which is unaffordable for Hammersmith and Fulham Council, as for any council.
Fleur Anderson
I will continue to explain and address the point the hon. Member made earlier.
Since 2010, the Government have cut the council’s annual net budget from £180 million to £124 million this year. Even taking a loan would cause significant cuts to local services or huge rises in council tax, so the cost of repairing the bridge would be more than the council’s entire budget.
Andy Slaughter
My hon. Friend is being most generous in giving way. In fact, both Hammersmith and Fulham Council and Transport for London have contributed a sum of about £25 million. The Government have not contributed a penny towards the repair of Hammersmith bridge so far. Hammersmith has come up with schemes for a new temporary bridge, and so has TfL, and for stabilisation and repair. It is all there. The only people who will not engage with this are the Government, and they are doing that for deliberate political reasons.
Fleur Anderson
I thank my hon. Friend, and I hope that when the Minister has her opportunity to speak she will not ask again for Hammersmith and Fulham Council to fund an unprecedented 50% contribution to the bridge’s repair. That is clearly unreasonable, especially when the precedent for contributions from councils to national infrastructure projects is 15%. That makes me question whether the Government are genuinely interested in resolving the situation, or are just going to leave it.
Instead, the taskforce suggested in October 2020 that Hammersmith and Fulham Council come up with a financing plan. The council, together with TfL, had made funding applications to the Government in December 2019, February 2020 and June 2020. All three bids were rejected by the Government, and we do not know why. Instead, Hammersmith and Fulham Council went away, talked to experts and came up with a new plan—the “Outline Financial Plan”—which it submitted on 19 February.
I want to pre-empt any answer that the Minister may be ready to give about waiting for Hammersmith and Fulham Council to do more, or any repetition of the response of Baroness Vere of Norbiton to a joint letter from me, my hon. Friend the Member for Hammersmith (Andy Slaughter), the hon. Member for Richmond Park (Sarah Olney) and my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury). The Baroness’s response was:
“I suggest that it would be most beneficial for you to support the local authority in developing its preferred funding option so that we can progress the business case.”
The funding option was submitted on 19 February, seven weeks ago, and we are still waiting for a response. This is not the urgent action we need.
Any response will need the Government to agree to set up a special company or trust fund. It will need Government legislation, financial underwriting and an assurance of future revenue from Government funds or from a toll. The council needs to have that input from the Government to continue. The ball is now firmly in the Government’s court, not that of Hammersmith and Fulham Council. To say that would be to play the type of party politics that local residents are absolutely fed up with.
That brings me to my third and final point, about solutions. I hope that the Minister will shortly announce how the Government will take responsibility for the Government’s vital role in restoring the bridge. The ferry service is a partial solution—it starts in the summer—but it will not address vehicles going through Putney and it will not stop the long bus journeys for Roehampton residents.
Sarah Olney
Briefly, does the hon. Lady agree that one of the significant disadvantages to the ferry service, welcome though it is, is that local residents will have to pay a fare to use it, as opposed to being able to use the bridge perfectly freely?
Fleur Anderson
I thank the hon. Member for mentioning a disadvantage of the ferry. I am concerned that that the taskforce will say, “We’ve done the ferry, and now we are not going to fix the bridge.” Putney residents are concerned about that.
A proposal to build a temporary truss bridge inside the current bridge—so, a double-decker bridge—has been given the green light as feasible, and could be built within a year, as soon as it is funded. We need that funding. The “Outline Financial Plan” was developed by Hammersmith and Fulham Council with a series of sector-leading consultants. That plan would not only see Hammersmith bridge repaired, but offer value for money to national and local taxpayers for the long-term.
The “Outline Financial Plan” was submitted on 19 February. I would like to hear whether the Government agree with the plan and are going to get on with it, or do not agree with the plan and are going to come up with one of their own. Either way, we need urgent funding solutions. It is important that these plans are engaged with and taken forward.
To sum up, my asks of the Minister tonight are fivefold. A lot of Putney residents and constituents from across south-west London will be listening tonight. First, the Government must urgently provide up-front funding for the temporary bridge, so that the original bridge can be restored and re-opened as soon as possible and the traffic diverted out of Putney High Street. Secondly, they must drop the requirement for Hammersmith and Fulham Council to provide 50% of the funding—that is not feasible, and the Minister knows it.
Thirdly, the Government must expedite action on the funding proposals submitted by Hammersmith and Fulham Council on 19 February; they present workable and realistic ways forward and must not be left to simply sit and gather dust. Fourthly, I would like reassurance that the taskforce will start delivering and co-operating, so that Hammersmith and Fulham and Richmond Councils, Transport for London and the Government work together to come up with urgent solutions. Fifthly, I ask that the Secretary of State and the leader of the Government taskforce meet me and other concerned parliamentary colleagues as a matter of urgency.
Enough talk. Our constituents want action. The Government know what they need to do. It is time they delivered on the funding agreement to finance the temporary bridge urgently and the restoration and re-opening of Hammersmith bridge.
The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
I congratulate the hon. Member for Putney (Fleur Anderson) on securing this important debate on funding for the restoration of Hammersmith bridge and on her detailed speech this evening. I agree with her on the issues that she highlighted, setting out the devastating impact on the physical and mental health of residents and local businesses on both sides of the river, due to the long-standing catalogue of failures and lack of action by Hammersmith and Fulham Borough Council.
The hon. Lady led a protest that took place on Easter weekend, and I commend her for doing so. I want to acknowledge her passion for getting the bridge reopened.
Rachel Maclean
I will just make some progress.
I assure Members that the Government wish to see the bridge reopen as soon as is safely possible. [Interruption.] I will take interventions, but I need to correct a number of inaccurate statements before I do.
We want to make sure that Londoners can move around the capital easily by public transport, through active travel and on our roads and rivers. Therefore we want Hammersmith bridge to be reopened, despite having no statutory responsibilities for the bridge—particularly because it is wholly owned by the London Borough of Hammersmith and Fulham. The Government have stepped in to try to work collaboratively to find a solution. That is why we established a taskforce in September, led by Baroness Vere, bringing together all the relevant organisations to agree the best way forward and unblock any challenges.
I reiterate that Hammersmith bridge is owned by the London Borough of Hammersmith and Fulham. That means that the responsibility for maintaining the bridge and making decisions on its repairs and funding lies solely with the borough and not the Government. It is a travesty that we have got to a situation where the bridge has to be closed altogether, given that the council could have prevented the serious safety concerns through regular repairs and maintenance.
I would like to ensure that Members in the House and those watching are clear about what funding has been provided by the Government and what action has been taken. Since the structure was closed to vehicles in 2019, and to pedestrians, cyclists and river vessels in 2020, funding for maintenance and repairs has come from a variety of sources. The London Borough of Hammersmith and Fulham is the highway authority for the section of the A306 that runs over the bridge, so it has funded the acoustic monitoring and temperature control systems to the bridge. Those alert the borough to potential changes and allow it to take informed decisions about the safety of the bridge.
I will correct the first inaccuracy that has been stated. As part of the TfL deal on 31 October 2020, the Government ensured that £4 million—much more than a penny—was committed to start immediate mitigation works on Hammersmith Bridge during the 2021 financial year. That has funded the blast cleaning and a visual inspection of the western pedestals, giving the borough a better insight into the condition of the bridge. That is a vital step before any other engineering works can be undertaken. Members and residents need to understand that.
The funding means that risk mitigation works can begin so that the full repair programme is in the best possible position on cost, schedule and technical risk. As well as that, we have made the ferry service a condition of the TfL bridge deal, so that people, prams and bikes can cross the river safely.
Rachel Maclean
I want to address one further inaccuracy. If I have time after that, I will take an intervention.
As with any local infrastructure project, the Government expect the local authority to take the lead in promoting the scheme. We have heard from the leader of the council, who does not believe that the borough has the capital funds available to meet the costs of repairing the bridge. Indeed, on several occasions he has said that his residents are not users of the bridge and should therefore not be liable for the works.
In discussions with the leader of the council and my right hon. Friend the Secretary of State, various options for contributions for funding the project have been discussed. Unfortunately, the council seems to look to the national Government with gold-tinted lenses, not understanding that we cannot and will not hand out a blank cheque for the works. How would that be fair to taxpayers up and down the country and to those who have been responsible, such as the constituency of my hon. Friend the Member for Kensington (Felicity Buchan)? This is what councils all over the country have to do when they are carrying out major infrastructure works.
Rachel Maclean
I am afraid I cannot, because I need to clarify a number of inaccuracies.
It has been reported in the press by the hon. Member for Putney that my right hon. Friend the Secretary of State for Transport has asked the London Borough of Hammersmith and Fulham to contribute 50% of the cost. That option was discussed. All that was requested of the borough was that the leader send a plan for the borough’s funding proposal. So far, the so-called bids that have been sent in amount to nothing more than letters asking for an unsubstantiated amount. It is simply not appropriate to ask for funding from central Government on that basis. The Borough of Hammersmith and Fulham should have taken the time to understand what is required to submit a bid to the Government. We stand ready to help. There is plenty of help available for officials to put these bids together, but that has not been happening.
When evaluating any temporary crossing solution, the complexity of procurement and requirement of various consents must be considered. Given these challenges, the borough and the taskforce determined that a ferry service would provide an immediately available alternative river crossing for pedestrians and cyclists. That has been provided and we are very grateful to the London Borough of Richmond upon Thames for its support.
The closure of the bridge has affected not just those who need to cross it, but those who travel along the river beneath it. The taskforce is an essential first step. Contrary to statements earlier, the taskforce has met regularly. It stands ready to meet any Member who would like to meet my noble Friend Baroness Vere in the other place; she is more than happy to discuss in full the detailed complexities that we cannot possibly air in a 30-minute debate in a political environment such as we have here tonight.
These are serious and complex engineering works. I am afraid that it is completely inaccurate to make the point in this House that there is no action from the Government. I will not stand here and let Opposition Members say that. We have taken on additional responsibilities—well over and above our statutory responsibilities—as Opposition Members know. We have gone out of our way to help.
Andy Slaughter
I am most grateful to the Minister for giving way. We need £4 million towards investigation work and there is a bill of over £140 million for repairs. Where does the Minister think that money is going to come from? She knows that it cannot come from TfL or from the London Borough of Hammersmith and Fulham. Her speech will be greeted with absolute dismay by people across London and beyond who use this major arterial route. The issue is simply not being addressed, after two years. It is a wholly irresponsible position for the Government to take. Where is that £140 million going to come from?
Rachel Maclean
I suggest to the hon. Member that his comments tonight are wholly irresponsible, because they have not reflected the work on the Government side to engage constructively with the London Borough of Hammersmith and Fulham in order to understand its funding position and what it can afford. The borough has not come back on any of the engagements and discussions that we have extended to it regarding realistic sums of money. If it cannot afford that amount of money, it should come back and tell us what it can afford. That is how infrastructure projects up and down the country are conducted. The hon. Member knows that very well.
Sarah Olney
I am grateful to the Minister for giving way. She referred earlier to fairness to taxpayers. Does she think that this is fair to the taxpayers of Richmond upon Thames, who are the most affected by this bridge closure? Their lives are being ruined, their businesses are closing, they cannot get to school or work, they cannot access medical services, and they have no say over what the London Borough of Hammersmith and Fulham does with its budget, but they understand that £140 million is more than that borough can afford. They are looking to the Government for assistance, and all they ask for is a commitment for the funding. The Minister stands here and talks about all the administrative barriers that are in the way. All we ask for is a commitment.
Rachel Maclean
I thank the hon. Lady for her comments. It is not fair to taxpayers in any part of the country that that London borough should think that, due to its lack of a maintenance programme on this bridge over the years, people from outside the borough should be expected to stump up for its failure and incompetence. No, it is not fair to them.
In summary, as we have heard tonight, the closure of the bridge has affected not just those who need to cross it but those who travel along the river beneath it. The taskforce has enabled an agreement between the Port of London authority and the borough to allow limited and controlled river transits from 12 April when work is not being undertaken on the bridge. That is a very important point. It is welcome news for commercial river users, who can now continue operations as national lockdown restrictions ease.
Rachel Maclean
In a moment. I have given way several times already.
I reassure Members that the Department continues to work closely with all parties involved to reach a funding solution that is fair to national taxpayers. As I have said many times, there are demands on the public purse from all over the country for all kinds of things.
We must ensure that this bridge is reopened as soon as is safely possible. In all genuineness, I encourage the Members on the Opposition Benches to work constructively with the local council to get it to engage with the Government, who are going outside their statutory responsibilities to help to get this bridge reopened so that commuters, people listening tonight, residents on both sides of the Thames, users of the river, emergency services and wider businesses can make use of the crossing and ease pressures on Putney and Chiswick bridges.
We cannot do any more without a detailed funding solution. The buck stops with Hammersmith and Fulham. It needs to present that case to the Government and then we can take action.
Question put and agreed to.
Members Eligible for a Proxy Vote
Member eligible for proxy vote | Nominated proxy |
|---|---|
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab) | Bell Ribeiro-Addy |
Debbie Abrahams (Oldham East and Saddleworth) (Lab) | Chris Elmore |
Nigel Adams (Selby and Ainsty) (Con) | Stuart Andrew |
Bim Afolami (Hitchin and Harpenden) (Con) | Stuart Andrew |
Adam Afriyie (Windsor) (Con) | Stuart Andrew |
Imran Ahmad Khan (Wakefield) (Con) | Stuart Andrew |
Nickie Aiken (Cities of London and Westminster) (Con) | Stuart Andrew |
Peter Aldous (Waveney) (Con) | Stuart Andrew |
Rushanara Ali (Bethnal Green and Bow) (Lab) | Chris Elmore |
Tahir Ali (Birmingham, Hall Green) (Lab) | Chris Elmore |
Lucy Allan (Telford) (Con) | Stuart Andrew |
Dr Rosena Allin-Khan (Tooting) (Lab) | Chris Elmore |
Mike Amesbury (Weaver Vale) (Lab) | Chris Elmore |
Sir David Amess (Southend West) (Con) | Stuart Andrew |
Fleur Anderson (Putney) (Lab) | Chris Elmore |
Lee Anderson (Ashfield) (Con) | Stuart Andrew |
Stuart Anderson (Wolverhampton South West) (Con) | Stuart Andrew |
Caroline Ansell (Eastbourne) (Con) | Stuart Andrew |
Tonia Antoniazzi (Gower) (Lab) | Chris Elmore |
Edward Argar (Charnwood) (Con) | Stuart Andrew |
Jonathan Ashworth (Leicester South) (Lab) | Chris Elmore |
Sarah Atherton (Wrexham) (Con) | Stuart Andrew |
Victoria Atkins (Louth and Horncastle) (Con) | Stuart Andrew |
Gareth Bacon (Orpington) (Con) | Stuart Andrew |
Mr Richard Bacon (South Norfolk) (Con) | Stuart Andrew |
Kemi Badenoch (Saffron Walden) (Con) | Stuart Andrew |
Shaun Bailey (West Bromwich West) (Con) | Stuart Andrew |
Siobhan Baillie (Stroud) (Con) | Stuart Andrew |
Duncan Baker (North Norfolk) (Con) | Stuart Andrew |
Harriett Baldwin (West Worcestershire) (Con) | Stuart Andrew |
Steve Barclay (North East Cambridgeshire) (Con) | Stuart Andrew |
Hannah Bardell (Livingston) (SNP) | Owen Thompson |
Paula Barker (Liverpool, Wavertree) (Lab) | Chris Elmore |
Mr John Baron (Basildon and Billericay) (Con) | Stuart Andrew |
Simon Baynes (Clwyd South) (Con) | Stuart Andrew |
Margaret Beckett (Derby South) (Lab) | Chris Elmore |
Apsana Begum (Poplar and Limehouse) (Lab) | Bell Ribeiro-Addy |
Aaron Bell (Newcastle-under-Lyme) (Con) | Stuart Andrew |
Hilary Benn (Leeds Central) (Lab) | Chris Elmore |
Scott Benton (Blackpool South) (Con) | Stuart Andrew |
Sir Paul Beresford (Mole Valley) (Con) | Stuart Andrew |
Jake Berry (Rossendale and Darwen) (Con) | Stuart Andrew |
Clive Betts (Sheffield South East) (Lab) | Chris Elmore |
Saqib Bhatti (Meriden) (Con) | Stuart Andrew |
Mhairi Black (Paisley and Renfrewshire South) (SNP) | Owen Thompson |
Ian Blackford (Ross, Skye and Lochaber) (SNP) | Owen Thompson |
Bob Blackman (Harrow East) (Con) | Stuart Andrew |
Kirsty Blackman (Aberdeen North) (SNP) | Owen Thompson |
Olivia Blake (Sheffield, Hallam) (Lab) | Chris Elmore |
Paul Blomfield (Sheffield Central) (Lab) | Chris Elmore |
Crispin Blunt (Reigate) (Con) | Stuart Andrew |
Peter Bone (Wellingborough) (Con) | Stuart Andrew |
Andrew Bowie (West Aberdeenshire and Kincardine) (Con) | Stuart Andrew |
Tracy Brabin (Batley and Spen) (Lab/Co-op) | Chris Elmore |
Ben Bradley (Mansfield) (Con) | Stuart Andrew |
Karen Bradley (Staffordshire Moorlands) (Con) | Stuart Andrew |
Ben Bradshaw (Exeter) (Lab) | Chris Elmore |
Suella Braverman (Fareham) (Con) | Stuart Andrew |
Kevin Brennan (Cardiff West) (Lab) | Chris Elmore |
Jack Brereton (Stoke-on-Trent South) (Con) | Stuart Andrew |
Andrew Bridgen (North West Leicestershire) (Con) | Stuart Andrew |
Paul Bristow (Peterborough) (Con) | Stuart Andrew |
Sara Britcliffe (Hyndburn) (Con) | Stuart Andrew |
Deidre Brock (Edinburgh North and Leith) (SNP) | Owen Thompson |
James Brokenshire (Old Bexley and Sidcup) (Con) | Stuart Andrew |
Alan Brown (Kilmarnock and Loudon) (SNP) | Owen Thompson |
Ms Lyn Brown (West Ham) (Lab) | Chris Elmore |
Anthony Browne (South Cambridgeshire) (Con) | Stuart Andrew |
Fiona Bruce (Congleton) (Con) | Stuart Andrew |
Chris Bryant (Rhondda) (Lab) | Chris Elmore |
Felicity Buchan (Kensington) (Con) | Stuart Andrew |
Ms Karen Buck (Westminster North) (Lab) | Chris Elmore |
Robert Buckland (South Swindon) (Con) | Stuart Andrew |
Alex Burghart (Brentwood and Ongar) (Con) | Stuart Andrew |
Richard Burgon (Leeds East) (Lab) | Bell Ribeiro-Addy |
Conor Burns (Bournemouth West) (Con) | Stuart Andrew |
Dawn Butler (Brent Central) (Lab) | Bell Ribeiro-Addy |
Rob Butler (Aylesbury) (Con) | Stuart Andrew |
Ian Byrne (Liverpool, West Derby) (Lab) | Chris Elmore |
Liam Byrne (Birmingham, Hodge Hill) (Lab) | Chris Elmore |
Ruth Cadbury (Brentford and Isleworth) (Lab) | Chris Elmore |
Alun Cairns (Vale of Glamorgan) (Con) | Stuart Andrew |
Amy Callaghan (East Dunbartonshire) (SNP) | Owen Thompson |
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP) | Owen Thompson |
Sir Alan Campbell (Tynemouth) (Con) | Chris Elmore |
Mr Gregory Campbell (East Londonderry) (DUP) | Sir Jeffrey M. Donaldson |
Dan Carden (Liverpool, Walton) (Lab) | Chris Elmore |
Andy Carter (Warrington South) (Con) | Stuart Andrew |
James Cartlidge (South Suffolk) (Con) | Stuart Andrew |
Sir William Cash (Stone) (Con) | Stuart Andrew |
Miriam Cates (Penistone and Stocksbridge) (Con) | Stuart Andrew |
Alex Chalk (Cheltenham) (Con) | Stuart Andrew |
Wendy Chamberlain (North East Fife) (LD) | Mr Alistair Carmichael |
Sarah Champion (Rotherham) (Lab) | Chris Elmore |
Douglas Chapman (Dunfermline and West Fife) (SNP) | Owen Thompson |
Bambos Charalambous (Enfield, Southgate) (Lab) | Chris Elmore |
Joanna Cherry (Edinburgh South West) (SNP) | Owen Thompson |
Rehman Chishti (Gillingham and Rainham) (Con) | Stuart Andrew |
Jo Churchill (Bury St Edmunds) (Con) | Stuart Andrew |
Feryal Clark (Enfield North) (Lab) | Chris Elmore |
Greg Clark (Tunbridge Wells) (Con) | Stuart Andrew |
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con) | Stuart Andrew |
Theo Clarke (Stafford) (Con) | Stuart Andrew |
Brendan Clarke-Smith (Bassetlaw) (Con) | Stuart Andrew |
Chris Clarkson (Heywood and Middleton) (Con) | Stuart Andrew |
James Cleverly (Braintree) (Con) | Stuart Andrew |
Dr Thérèse Coffey (Suffolk Coastal) (Con) | Stuart Andrew |
Elliot Colburn (Carshalton and Wallington) (Con) | Stuart Andrew |
Damian Collins (Folkestone and Hythe) (Con) | Stuart Andrew |
Daisy Cooper (St Albans) (LD) | Mr Alistair Carmichael |
Rosie Cooper (West Lancashire) (Lab) | Chris Elmore |
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) | Chris Elmore |
Jeremy Corbyn (Islington North) (Ind) | Bell Ribeiro-Addy |
Alberto Costa (South Leicestershire) (Con) | Stuart Andrew |
Robert Courts (Witney) (Con) | Stuart Andrew |
Claire Coutinho (East Surrey) (Con) | Stuart Andrew |
Ronnie Cowan (Inverclyde) (SNP) | Owen Thompson |
Sir Geoffrey Cox (Torridge and West Devon) (Con) | Stuart Andrew |
Neil Coyle (Bermondsey and Old Southwark) (Lab) | Chris Elmore |
Stephen Crabb (Preseli Pembrokeshire) (Con) | Stuart Andrew |
Angela Crawley (Lanark and Hamilton East) (SNP) | Owen Thompson |
Stella Creasy (Walthamstow) (Lab) | Chris Elmore |
Virginia Crosbie (Ynys Môn) (Con) | Stuart Andrew |
Tracey Crouch (Chatham and Aylesford) (Con) | Stuart Andrew |
Jon Cruddas (Dagenham and Rainham) (Lab) | Chris Elmore |
John Cryer (Leyton and Wanstead) (Lab) | Chris Elmore |
Judith Cummins (Bradford South) (Lab) | Chris Elmore |
Alex Cunningham (Stockton North) (Lab) | Chris Elmore |
Janet Daby (Lewisham East) (Lab) | Chris Elmore |
James Daly (Bury North) (Con) | Stuart Andrew |
Ed Davey (Kingston and Surbiton) (LD) | Mr Alistair Carmichael |
Wayne David (Caerphilly) (Lab) | Chris Elmore |
David T. C. Davies (Monmouth) (Con) | Stuart Andrew |
Gareth Davies (Grantham and Stamford) (Con) | Stuart Andrew |
Geraint Davies (Swansea West) (Lab/Co-op) | Chris Elmore |
Dr James Davies (Vale of Clwyd) (Con) | Stuart Andrew |
Mims Davies (Mid Sussex) (Con) | Stuart Andrew |
Alex Davies-Jones (Pontypridd) (Lab) | Chris Elmore |
Philip Davies (Shipley) (Con) | Stuart Andrew |
Mr David Davis (Haltemprice and Howden) (Con) | Stuart Andrew |
Dehenna Davison (Bishop Auckland) (Con) | Ben Everitt |
Martyn Day (Linlithgow and East Falkirk) (SNP) | Owen Thompson |
Thangam Debbonaire (Bristol West) (Lab) | Chris Elmore |
Marsha De Cordova (Battersea) | Bell Ribeiro-Addy |
Mr Tanmanjeet Singh Dhesi (Slough) (Lab) | Chris Elmore |
Caroline Dinenage (Gosport) (Con) | Stuart Andrew |
Miss Sarah Dines (Derbyshire Dales) (Con) | Stuart Andrew |
Mr Jonathan Djanogly (Huntingdon) (Con) | Stuart Andrew |
Martin Docherty-Hughes (West Dunbartonshire) (SNP) | Owen Thompson |
Anneliese Dodds (Oxford East) (Lab/Co-op) | Chris Elmore |
Michelle Donelan (Chippenham) (Con) | Stuart Andrew |
Dave Doogan (Angus) (SNP) | Owen Thompson |
Allan Dorans (Ayr, Carrick and Cumnock) (SNP) | Owen Thompson |
Ms Nadine Dorries (Mid Bedfordshire) (Con) | Stuart Andrew |
Steve Double (St Austell and Newquay) (Con) | Stuart Andrew |
Stephen Doughty (Cardiff South and Penarth) (Lab) | Chris Elmore |
Peter Dowd (Bootle) (Lab) | Chris Elmore |
Oliver Dowden (Hertsmere) (Con) | Stuart Andrew |
Richard Drax (South Dorset) (Con) | Stuart Andrew |
Jack Dromey (Birmingham, Erdington) (Lab) | Chris Elmore |
Mrs Flick Drummond (Meon Valley) (Con) | Stuart Andrew |
James Duddridge (Rochford and Southend East) (Con) | Stuart Andrew |
Rosie Duffield (Canterbury) (Lab) | Chris Elmore |
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con) | Stuart Andrew |
Philip Dunne (Ludlow) (Con) | Stuart Andrew |
Ms Angela Eagle (Wallasey) (Lab) | Chris Elmore |
Maria Eagle (Garston and Halewood) (Lab) | Chris Elmore |
Colum Eastwood (Foyle) (SDLP) | Ben Lake |
Mark Eastwood (Dewsbury) (Con) | Stuart Andrew |
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind) | Stuart Andrew |
Ruth Edwards (Rushcliffe) (Con) | Stuart Andrew |
Clive Efford (Eltham) (Lab) | Chris Elmore |
Julie Elliott (Sunderland Central) (Lab) | Chris Elmore |
Michael Ellis (Northampton North) (Con) | Stuart Andrew |
Mr Tobias Ellwood (Bournemouth East) (Con) | Stuart Andrew |
Mrs Natalie Elphicke (Dover) (Con) | Stuart Andrew |
Florence Eshalomi (Vauxhall) (Lab/Co-op) | Chris Elmore |
Bill Esterson (Sefton Central) (Lab) | Chris Elmore |
George Eustice (Camborne and Redruth) (Con) | Stuart Andrew |
Chris Evans (Islwyn) (Lab/Co-op) | Chris Elmore |
Dr Luke Evans (Bosworth) (Con) | Stuart Andrew |
Sir David Evennett (Bexleyheath and Crayford) (Con) | Stuart Andrew |
Ben Everitt (Milton Keynes North) (Con) | Stuart Andrew |
Michael Fabricant (Lichfield) (Con) | Stuart Andrew |
Laura Farris (Newbury) (Con) | Stuart Andrew |
Tim Farron (Westmorland and Lonsdale) (LD) | Mr Alistair Carmichael |
Stephen Farry (North Down) (Alliance) | Mr Alistair Carmichael |
Simon Fell (Barrow and Furness) (Con) | Stuart Andrew |
Marion Fellows (Motherwell and Wishaw) (SNP) | Owen Thompson |
Margaret Ferrier (Rutherglen and Hamilton West) (Ind) | Stuart Andrew |
Katherine Fletcher (South Ribble) (Con) | Stuart Andrew |
Mark Fletcher (Bolsover) (Con) | Stuart Andrew |
Nick Fletcher (Don Valley) (Con) | Stuart Andrew |
Stephen Flynn (Aberdeen South) (SNP) | Owen Thompson |
Vicky Ford (Chelmsford) (Con) | Stuart Andrew |
Kevin Foster (Torbay) (Con) | Stuart Andrew |
Yvonne Fovargue (Makerfield) (Lab) | Chris Elmore |
Dr Liam Fox (North Somerset) (Con) | Stuart Andrew |
Vicky Foxcroft (Lewisham, Deptford) (Lab) | Chris Elmore |
Mary Kelly Foy (City of Durham) (Lab) | Bell Ribeiro-Addy |
Mr Mark Francois (Rayleigh and Wickford) (Con) | Stuart Andrew |
Lucy Frazer (South East Cambridgeshire) (Con) | Stuart Andrew |
George Freeman (Mid Norfolk) (Con) | Stuart Andrew |
Mike Freer (Finchley and Golders Green) (Con) | Stuart Andrew |
Richard Fuller (North East Bedfordshire) (Con) | Stuart Andrew |
Marcus Fysh (Yeovil) (Con) | Stuart Andrew |
Sir Roger Gale (North Thanet) (Con) | Stuart Andrew |
Barry Gardiner (Brent North) (Lab) | Chris Elmore |
Mark Garnier (Wyre Forest) (Con) | Stuart Andrew |
Ms Nusrat Ghani (Wealden) (Con) | Stuart Andrew |
Nick Gibb (Bognor Regis and Littlehampton) (Con) | Stuart Andrew |
Patricia Gibson (North Ayrshire and Arran) (SNP) | Owen Thompson |
Peter Gibson (Darlington) (Con) | Stuart Andrew |
Jo Gideon (Stoke-on-Trent Central) (Con) | Stuart Andrew |
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op) | Chris Elmore |
Paul Girvan (South Antrim) (DUP) | Sir Jeffrey M. Donaldson |
John Glen (Salisbury) (Con) | Stuart Andrew |
Mary Glindon (North Tyneside) (Lab) | Chris Elmore |
Mr Robert Goodwill (Scarborough and Whitby) (Con) | Stuart Andrew |
Michael Gove (Surrey Heath) (Con) | Stuart Andrew |
Patrick Grady (Glasgow North) (SNP) | Owen Thompson |
Richard Graham (Gloucester) (Con) | Stuart Andrew |
Mrs Helen Grant (Maidstone and The Weald) (Con) | Stuart Andrew |
Peter Grant (Glenrothes) (SNP) | Owen Thompson |
James Gray (North Wiltshire) (Con) | Stuart Andrew |
Chris Grayling (Epsom and Ewell) (Con) | Stuart Andrew |
Damian Green (Ashford) (Con) | Stuart Andrew |
Kate Green (Stretford and Urmston) (Lab) | Chris Elmore |
Lilian Greenwood (Nottingham South) (Lab) | Chris Elmore |
Margaret Greenwood (Wirral West) (Lab) | Chris Elmore |
Andrew Griffith (Arundel and South Downs) (Con) | Stuart Andrew |
Nia Griffith (Llanelli) (Lab) | Chris Elmore |
Kate Griffiths (Burton) (Con) | Stuart Andrew |
James Grundy (Leigh) (Con) | Stuart Andrew |
Jonathan Gullis (Stoke-on-Trent North) (Con) | Stuart Andrew |
Andrew Gwynne (Denton and Reddish) (Lab) | Chris Elmore |
Louise Haigh (Sheffield, Heeley) (Lab) | Chris Elmore |
Robert Halfon (Harlow) (Con) | Stuart Andrew |
Luke Hall (Thornbury and Yate) (Con) | Stuart Andrew |
Fabian Hamilton (Leeds North East) (Lab) | Chris Elmore |
Stephen Hammond (Wimbledon) (Con) | Stuart Andrew |
Matt Hancock (West Suffolk) (Con) | Stuart Andrew |
Greg Hands (Chelsea and Fulham) (Con) | Stuart Andrew |
Claire Hanna (Belfast South) (SDLP) | Ben Lake |
Emma Hardy (Kingston upon Hull West and Hessle) (Lab) | Chris Elmore |
Ms Harriet Harman (Camberwell and Peckham) (Lab) | Chris Elmore |
Mark Harper (Forest of Dean) (Con) | Stuart Andrew |
Carolyn Harris (Swansea East) (Lab) | Chris Elmore |
Rebecca Harris (Castle Point) (Con) | Stuart Andrew |
Trudy Harrison (Copeland) (Con) | Stuart Andrew |
Sally-Ann Hart (Hastings and Rye) (Con) | Stuart Andrew |
Simon Hart (Carmarthen West and South Pembrokeshire) (Con) | Stuart Andrew |
Helen Hayes (Dulwich and West Norwood) (Lab) | Chris Elmore |
Sir John Hayes (South Holland and The Deepings) (Con) | Stuart Andrew |
Sir Oliver Heald (North East Hertfordshire) (Con) | Stuart Andrew |
John Healey (Wentworth and Dearne) (Lab) | Chris Elmore |
James Heappey (Wells) (Con) | Stuart Andrew |
Chris Heaton-Harris (Daventry) (Con) | Stuart Andrew |
Gordon Henderson (Sittingbourne and Sheppey) (Con) | Stuart Andrew |
Sir Mark Hendrick (Preston) (Lab/Co-op) | Chris Elmore |
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) | Owen Thompson |
Darren Henry (Broxtowe) (Con) | Stuart Andrew |
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op) | Chris Elmore |
Damian Hinds (East Hampshire) (Con) | Stuart Andrew |
Simon Hoare (North Dorset) (Con) | Stuart Andrew |
Wera Hobhouse (Bath) (LD) | Mr Alistair Carmichael |
Dame Margaret Hodge (Barking) (Lab) | Chris Elmore |
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab) | Chris Elmore |
Mr Richard Holden (North West Durham) (Con) | Stuart Andrew |
Kate Hollern (Blackburn) (Lab) | Chris Elmore |
Kevin Hollinrake (Thirsk and Malton) (Con) | Stuart Andrew |
Adam Holloway (Gravesham) (Con) | Stuart Andrew |
Paul Holmes (Eastleigh) (Con) | Stuart Andrew |
Rachel Hopkins (Luton South) (Lab) | Chris Elmore |
Stewart Hosie (Dundee East) (SNP) | Owen Thompson |
Sir George Howarth (Knowsley) (Lab) | Chris Elmore |
John Howell (Henley) (Con) | Stuart Andrew |
Paul Howell (Sedgefield) (Con) | Stuart Andrew |
Nigel Huddleston (Mid Worcestershire) (Con) | Stuart Andrew |
Dr Neil Hudson (Penrith and The Border) (Con) | Stuart Andrew |
Eddie Hughes (Walsall North) (Con) | Stuart Andrew |
Jane Hunt (Loughborough) (Con) | Stuart Andrew |
Jeremy Hunt (South West Surrey) (Con) | Stuart Andrew |
Tom Hunt (Ipswich) (Con) | Stuart Andrew |
Rupa Huq (Ealing Central and Acton) (Lab) | Chris Elmore |
Imran Hussain (Bradford East) (Lab) | Bell Ribeiro-Addy |
Mr Alister Jack (Dumfries and Galloway) (Con) | Stuart Andrew |
Christine Jardine (Edinburgh West) (LD) | Mr Alistair Carmichael |
Dan Jarvis (Barnsley Central) (Lab) | Chris Elmore |
Sajid Javid (Bromsgrove) (Con) | Stuart Andrew |
Mr Ranil Jayawardena (North East Hampshire) (Con) | Stuart Andrew |
Sir Bernard Jenkin (Harwich and North Essex) (Con) | Stuart Andrew |
Mark Jenkinson (Workington) (Con) | Stuart Andrew |
Andrea Jenkyns (Morley and Outwood) (Con) | Stuart Andrew |
Robert Jenrick (Newark) (Con) | Stuart Andrew |
Boris Johnson (Uxbridge and South Ruislip) (Con) | Stuart Andrew |
Dr Caroline Johnson (Sleaford and North Hykeham) (Con) | Stuart Andrew |
Dame Diana Johnson (Kingston upon Hull North) (Lab) | Chris Elmore |
Gareth Johnson (Dartford) (Con) | Stuart Andrew |
Kim Johnson (Liverpool, Riverside) (Lab) | Chris Elmore |
David Johnston (Wantage) (Con) | Stuart Andrew |
Darren Jones (Bristol North West) (Lab) | Chris Elmore |
Mr David Jones (Clwyd West) (Con) | Stuart Andrew |
Fay Jones (Brecon and Radnorshire) (Con) | Stuart Andrew |
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) | Chris Elmore |
Mr Kevan Jones (North Durham) (Lab) | Chris Elmore |
Mr Marcus Jones (Nuneaton) (Con) | Stuart Andrew |
Ruth Jones (Newport West) (Lab) | Chris Elmore |
Sarah Jones (Croydon Central) (Lab) | Chris Elmore |
Simon Jupp (East Devon) (Con) | Stuart Andrew |
Mike Kane (Wythenshawe and Sale East) (Lab) | Chris Elmore |
Daniel Kawczynski (Shrewsbury and Atcham) (Con) | Stuart Andrew |
Alicia Kearns (Rutland and Melton) (Con) | Stuart Andrew |
Gillian Keegan (Chichester) (Con) | Stuart Andrew |
Barbara Keeley (Worsley and Eccles South) (Lab) | Chris Elmore |
Liz Kendall (Leicester West) (Lab) | Chris Elmore |
Afzal Khan (Manchester, Gorton) (Lab) | Chris Elmore |
Stephen Kinnock (Aberavon) (Lab) | Chris Elmore |
Sir Greg Knight (East Yorkshire) (Con) | Stuart Andrew |
Julian Knight (Solihull) (Con) | Stuart Andrew |
Danny Kruger (Devizes) (Con) | Stuart Andrew |
Kwasi Kwarteng (Spelthorne) (Con) | Stuart Andrew |
Peter Kyle (Hove) (Lab) | Chris Elmore |
Mr David Lammy (Tottenham) (Lab) | Chris Elmore |
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con) | Stuart Andrew |
Robert Largan (High Peak) (Con) | Stuart Andrew |
Mrs Pauline Latham (Mid Derbyshire) (Con) | Mr William Wragg |
Ian Lavery (Wansbeck) (Lab) | Bell Ribeiro-Addy |
Chris Law (Dundee West) (SNP) | Owen Thompson |
Andrea Leadsom (South Northamptonshire) (Con) | Stuart Andrew |
Sir Edward Leigh (Gainsborough) (Con) | Stuart Andrew |
Ian Levy (Blyth Valley) (Con) | Stuart Andrew |
Mrs Emma Lewell-Buck (South Shields) (Lab) | Chris Elmore |
Andrew Lewer (Northampton South) (Con) | Stuart Andrew |
Brandon Lewis (Great Yarmouth) (Con) | Stuart Andrew |
Clive Lewis (Norwich South) (Lab) | Chris Elmore |
Dr Julian Lewis (New Forest East) (Con) | Stuart Andrew |
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) | Stuart Andrew |
David Linden (Glasgow East) (SNP) | Owen Thompson |
Tony Lloyd (Rochdale) (Lab) | Chris Elmore |
Carla Lockhart (Upper Bann) (DUP) | Sir Jeffrey M. Donaldson |
Mark Logan (Bolton North East) (Con) | Stuart Andrew |
Rebecca Long Bailey (Salford and Eccles) (Lab) | Bell Ribeiro-Addy |
Marco Longhi (Dudley North) (Con) | Stuart Andrew |
Julia Lopez (Hornchurch and Upminster) (Con) | Stuart Andrew |
Jack Lopresti (Filton and Bradley Stoke) (Con) | Stuart Andrew |
Mr Jonathan Lord (Woking) (Con) | Stuart Andrew |
Tim Loughton (East Worthing and Shoreham) (Con) | Stuart Andrew |
Caroline Lucas (Brighton, Pavilion) (Green) | Bell Ribeiro-Addy |
Holly Lynch (Halifax) (Lab) | Chris Elmore |
Steve McCabe (Birmingham, Selly Oak) (Lab) | Chris Elmore |
Kerry McCarthy (Bristol East) (Lab) | Chris Elmore |
Jason McCartney (Colne Valley) (Con) | Stuart Andrew |
Karl MᶜCartney (Lincoln) (Con) | Stuart Andrew |
Siobhain McDonagh (Mitcham and Morden) (Lab) | Chris Elmore |
Andy McDonald (Middlesbrough) (Lab) | Chris Elmore |
Stewart Malcolm McDonald (Glasgow South) (SNP) | Owen Thompson |
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP) | Owen Thompson |
John McDonnell (Hayes and Harlington) (Lab) | Bell Ribeiro-Addy |
Mr Pat McFadden (Wolverhampton South East) (Lab) | Chris Elmore |
Conor McGinn (St Helens North) (Lab) | Chris Elmore |
Alison McGovern (Wirral South) (Lab) | Chris Elmore |
Craig Mackinlay (South Thanet) (Con) | Stuart Andrew |
Catherine McKinnell (Newcastle upon Tyne North) (Lab) | Chris Elmore |
Cherilyn Mackrory (Truro and Falmouth) (Con) | Stuart Andrew |
Anne McLaughlin (Glasgow North East) (SNP) | Owen Thompson |
Rachel Maclean (Redditch) (Con) | Stuart Andrew |
Jim McMahon (Oldham West and Royton) (Lab) | Chris Elmore |
Anna McMorrin (Cardiff North) (Lab) | Chris Elmore |
John Mc Nally (Falkirk) (SNP) | Owen Thompson |
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) | Owen Thompson |
Stephen McPartland (Stevenage) (Con) | Stuart Andrew |
Esther McVey (Tatton) (Con) | Stuart Andrew |
Justin Madders (Ellesmere Port and Neston) (Lab) | Chris Elmore |
Khalid Mahmood (Birmingham, Perry Barr) (Lab) | Chris Elmore |
Shabana Mahmood (Birmingham, Ladywood) (Lab) | Chris Elmore |
Alan Mak (Havant) (Con) | Stuart Andrew |
Seema Malhotra (Feltham and Heston) (Lab) | Chris Elmore |
Kit Malthouse (North West Hampshire) (Con) | Stuart Andrew |
Julie Marson (Hertford and Stortford) (Con) | Stuart Andrew |
Rachael Maskell (York Central) (Lab) | Chris Elmore |
Christian Matheson (City of Chester) (Lab) | Chris Elmore |
Mrs Theresa May (Maidenhead) (Con) | Stuart Andrew |
Jerome Mayhew (Broadland) (Con) | Stuart Andrew |
Paul Maynard (Blackpool North and Cleveleys) (Con) | Stuart Andrew |
Ian Mearns (Gateshead) (Lab) | Bell Ribeiro-Addy |
Mark Menzies (Fylde) (Con) | Stuart Andrew |
Johnny Mercer (Plymouth, Moor View) (Con) | Stuart Andrew |
Huw Merriman (Bexhill and Battle) (Con) | Stuart Andrew |
Stephen Metcalfe (South Basildon and East Thurrock) (Con) | Stuart Andrew |
Edward Miliband (Doncaster North) (Lab) | Chris Elmore |
Robin Millar (Aberconwy) (Con) | Stuart Andrew |
Mrs Maria Miller (Basingstoke) (Con) | Stuart Andrew |
Amanda Milling (Cannock Chase) (Con) | Stuart Andrew |
Nigel Mills (Amber Valley) (Con) | Stuart Andrew |
Navendu Mishra (Stockport) (Lab) | Chris Elmore |
Mr Andrew Mitchell (Sutton Coldfield) (Con) | Stuart Andrew |
Gagan Mohindra (South West Hertfordshire) (Con) | Stuart Andrew |
Carol Monaghan (Glasgow North West) | Owen Thompson |
Damien Moore (Southport) (Con) | Stuart Andrew |
Layla Moran (Oxford West and Abingdon) (LD) | Mr Alistair Carmichael |
Penny Mordaunt (Portsmouth North) (Con) | Stuart Andrew |
Stephen Morgan (Portsmouth South) (Lab) | Chris Elmore |
Anne Marie Morris (Newton Abbot) (Con) | Stuart Andrew |
David Morris (Morecambe and Lunesdale) (Con) | Stuart Andrew |
Grahame Morris (Easington) (Lab) | Chris Elmore |
Joy Morrissey (Beaconsfield) (Con) | Stuart Andrew |
Wendy Morton (Aldridge-Brownhills) (Con) | Stuart Andrew |
Dr Kieran Mullan (Crewe and Nantwich) (Con) | Stuart Andrew |
Holly Mumby-Croft (Scunthorpe) (Con) | Stuart Andrew |
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con) | Stuart Andrew |
Ian Murray (Edinburgh South) (Lab) | Chris Elmore |
James Murray (Ealing North) (Lab/Co-op) | Chris Elmore |
Mrs Sheryll Murray (South East Cornwall) (Con) | Stuart Andrew |
Andrew Murrison (South West Wiltshire) (Con) | Stuart Andrew |
Lisa Nandy (Wigan) (Lab) | Chris Elmore |
Sir Robert Neill (Bromley and Chislehurst) (Con) | Stuart Andrew |
Gavin Newlands (Paisley and Renfrewshire North) (SNP) | Owen Thompson |
Charlotte Nichols (Warrington North) (Lab) | Chris Elmore |
Lia Nici (Great Grimsby) (Con) | Stuart Andrew |
John Nicolson (Ochil and South Perthshire) (SNP) | Owen Thompson |
Caroline Nokes (Romsey and Southampton North) (Con) | Stuart Andrew |
Jesse Norman (Hereford and South Herefordshire) (Con) | Stuart Andrew |
Alex Norris (Nottingham North) (Lab/Co-op) | Chris Elmore |
Neil O’Brien (Harborough) (Con) | Stuart Andrew |
Brendan O’Hara (Argyll and Bute) (SNP) | Owen Thompson |
Dr Matthew Offord (Hendon) (Con) | Stuart Andrew |
Sarah Olney (Richmond Park) (LD) | Mr Alistair Carmichael |
Chi Onwurah (Newcastle upon Tyne Central) (Lab) | Chris Elmore |
Guy Opperman (Hexham) (Con) | Stuart Andrew |
Abena Oppong-Asare (Erith and Thamesmead) (Lab) | Chris Elmore |
Kate Osamor (Edmonton) (Lab/Co-op) | Bell Ribeiro-Addy |
Kate Osborne (Jarrow) (Lab) | Bell Ribeiro-Addy |
Kirsten Oswald (East Renfrewshire) (SNP) | Owen Thompson |
Taiwo Owatemi (Coventry North West) (Lab) | Chris Elmore |
Sarah Owen (Luton North) (Lab) | Chris Elmore |
Ian Paisley (North Antrim) (DUP) | Sir Jeffrey M. Donaldson |
Neil Parish (Tiverton and Honiton) (Con) | Stuart Andrew |
Priti Patel (Witham) (Con) | Stuart Andrew |
Mr Owen Paterson (North Shropshire) (Con) | Stuart Andrew |
Mark Pawsey (Rugby) (Con) | Stuart Andrew |
Stephanie Peacock (Barnsley East) (Lab) | Chris Elmore |
Sir Mike Penning (Hemel Hempstead) (Con) | Stuart Andrew |
Matthew Pennycook (Greenwich and Woolwich) (Lab) | Chris Elmore |
John Penrose (Weston-super-Mare) (Con) | Stuart Andrew |
Andrew Percy (Brigg and Goole) (Con) | Antony Higginbotham |
Mr Toby Perkins (Chesterfield) (Lab) | Chris Elmore |
Jess Phillips (Birmingham, Yardley) (Lab) | Chris Elmore |
Bridget Phillipson (Houghton and Sunderland South) (Lab) | Chris Elmore |
Chris Philp (Croydon South) (Con) | Stuart Andrew |
Christopher Pincher (Tamworth) (Con) | Stuart Andrew |
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op) | Chris Elmore |
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con) | Stuart Andrew |
Rebecca Pow (Taunton Deane) (Con) | Stuart Andrew |
Lucy Powell (Manchester Central) (Lab/Co-op) | Chris Elmore |
Victoria Prentis (Banbury) (Con) | Stuart Andrew |
Mark Pritchard (The Wrekin) (Con) | Stuart Andrew |
Jeremy Quin (Horsham) (Con) | Stuart Andrew |
Will Quince (Colchester) (Con) | Stuart Andrew |
Yasmin Qureshi (Bolton South East) (Lab) | Chris Elmore |
Dominic Raab (Esher and Walton) (Con) | Stuart Andrew |
Tom Randall (Gedling) (Con) | Stuart Andrew |
Angela Rayner (Ashton-under-Lyne) (Lab) | Chris Elmore |
John Redwood (Wokingham) (Con) | Stuart Andrew |
Steve Reed (Croydon North) (Lab/Co-op) | Chris Elmore |
Christina Rees (Neath) (Lab) | Chris Elmore |
Ellie Reeves (Lewisham West and Penge) (Lab) | Chris Elmore |
Rachel Reeves (Leeds West) (Lab) | Chris Elmore |
Jonathan Reynolds (Stalybridge and Hyde) (Lab) | Chris Elmore |
Nicola Richards (West Bromwich East) (Con) | Stuart Andrew |
Angela Richardson (Guildford) (Con) | Stuart Andrew |
Ms Marie Rimmer (St Helens South and Whiston) (Lab) | Chris Elmore |
Rob Roberts (Delyn) (Con) | Stuart Andrew |
Mr Laurence Robertson (Tewkesbury) (Con) | Stuart Andrew |
Gavin Robinson (Belfast East) (DUP) | Sir Jeffrey M. Donaldson |
Mary Robinson (Cheadle) (Con) | Stuart Andrew |
Matt Rodda (Reading East) (Lab) | Chris Elmore |
Andrew Rosindell (Romford) (Con) | Stuart Andrew |
Douglas Ross (Moray) (Con) | Stuart Andrew |
Lee Rowley (North East Derbyshire) (Con) | Stuart Andrew |
Dean Russell (Watford) (Con) | Stuart Andrew |
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op) | Chris Elmore |
Liz Saville Roberts (Dwyfor Meirionnydd) (PC) | Ben Lake |
Selaine Saxby (North Devon) (Con) | Stuart Andrew |
Paul Scully (Sutton and Cheam) (Con) | Stuart Andrew |
Bob Seely (Isle of Wight) (Con) | Mark Harper |
Andrew Selous (South West Bedfordshire) (Con) | Stuart Andrew |
Naz Shah (Bradford West) (Lab) | Chris Elmore |
Grant Shapps (Welwyn Hatfield) (Con) | Stuart Andrew |
Alok Sharma (Reading West) (Con) | Stuart Andrew |
Mr Virendra Sharma (Ealing, Southall) (Lab) | Chris Elmore |
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) | Chris Elmore |
Alec Shelbrooke (Elmet and Rothwell) (Con) | Stuart Andrew |
Tommy Sheppard (Edinburgh East) (SNP) | Owen Thompson |
Tulip Siddiq (Hampstead and Kilburn) (Lab) | Chris Elmore |
David Simmonds (Ruislip, Northwood and Pinner) (Con) | Stuart Andrew |
Chris Skidmore (Kingswood) (Con) | Stuart Andrew |
Andy Slaughter (Hammersmith) (Lab) | Chris Elmore |
Alyn Smith (Stirling) (SNP) | Owen Thompson |
Cat Smith (Lancaster and Fleetwood) (Lab) | Chris Elmore |
Chloe Smith (Norwich North) (Con) | Stuart Andrew |
Greg Smith (Buckingham) (Con) | Stuart Andrew |
Henry Smith (Crawley) (Con) | Stuart Andrew |
Jeff Smith (Manchester, Withington) (Lab) | Chris Elmore |
Julian Smith (Skipton and Ripon) (Con) | Stuart Andrew |
Nick Smith (Blaenau Gwent) (Lab) | Chris Elmore |
Royston Smith (Southampton, Itchen) (Con) | Stuart Andrew |
Karin Smyth (Bristol South) (Lab) | Chris Elmore |
Alex Sobel (Leeds North West) (Lab) | Chris Elmore |
Amanda Solloway (Derby North) (Con) | Stuart Andrew |
Dr Ben Spencer (Runnymede and Weybridge) (Con) | Stuart Andrew |
Alexander Stafford (Rother Valley) (Con) | Stuart Andrew |
Keir Starmer (Holborn and St Pancras) (Lab) | Chris Elmore |
Chris Stephens (Glasgow South West) (SNP) | Owen Thompson |
Andrew Stephenson (Pendle) (Con) | Stuart Andrew |
Jo Stevens (Cardiff Central) (Lab) | Chris Elmore |
Jane Stevenson (Wolverhampton North East) (Con) | Stuart Andrew |
John Stevenson (Carlisle) (Con) | Stuart Andrew |
Bob Stewart (Beckenham) (Con) | Stuart Andrew |
Iain Stewart (Milton Keynes South) (Con) | Stuart Andrew |
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) | Mr Alistair Carmichael |
Sir Gary Streeter (South West Devon) (Con) | Stuart Andrew |
Wes Streeting (Ilford North) (Lab) | Chris Elmore |
Mel Stride (Central Devon) (Con) | Stuart Andrew |
Graham Stringer (Blackley and Broughton) (Lab) | Chris Elmore |
Graham Stuart (Beverley and Holderness) (Con) | Stuart Andrew |
Julian Sturdy (York Outer) (Con) | Stuart Andrew |
Zarah Sultana (Coventry South) (Lab) | Bell Ribeiro-Addy |
Rishi Sunak (Richmond (Yorks)) (Con) | Stuart Andrew |
James Sunderland (Bracknell) (Con) | Stuart Andrew |
Sir Desmond Swayne (New Forest West) (Con) | Mr William Wragg |
Sir Robert Syms (Poole) (Con) | Stuart Andrew |
Sam Tarry (Ilford South) (Lab) | Chris Elmore |
Alison Thewliss (Glasgow Central) (SNP) | Owen Thompson |
Derek Thomas (St Ives) (Con) | Stuart Andrew |
Gareth Thomas (Harrow West) (Lab/Co-op) | Chris Elmore |
Nick Thomas-Symonds (Torfaen) (Lab) | Chris Elmore |
Emily Thornberry (Islington South and Finsbury) (Lab) | Chris Elmore |
Stephen Timms (East Ham) (Lab) | Chris Elmore |
Edward Timpson (Eddisbury) (Con) | Stuart Andrew |
Kelly Tolhurst (Rochester and Strood) (Con) | Stuart Andrew |
Justin Tomlinson (North Swindon) (Con) | Stuart Andrew |
Craig Tracey (North Warwickshire) (Con) | Stuart Andrew |
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con) | Stuart Andrew |
Jon Trickett (Hemsworth) (Lab) | Bell Ribeiro-Addy |
Laura Trott (Sevenoaks) (Con) | Stuart Andrew |
Elizabeth Truss (South West Norfolk) (Con) | Stuart Andrew |
Tom Tugendhat (Tonbridge and Malling) (Con) | Stuart Andrew |
Karl Turner (Kingston upon Hull East) (Lab) | Chris Elmore |
Derek Twigg (Halton) (Lab) | Chris Elmore |
Liz Twist (Blaydon) (Lab) | Chris Elmore |
Mr Shailesh Vara (North West Cambridgeshire) (Con) | Stuart Andrew |
Martin Vickers (Cleethorpes) (Con) | Stuart Andrew |
Matt Vickers (Stockton South) (Con) | Stuart Andrew |
Theresa Villiers (Chipping Barnet) (Con) | Stuart Andrew |
Mr Robin Walker (Worcester) (Con) | Stuart Andrew |
Mr Ben Wallace (Wyre and Preston North) | Stuart Andrew |
Dr Jamie Wallis (Bridgend) (Con) | Stuart Andrew |
David Warburton (Somerset and Frome) (Con) | Stuart Andrew |
Matt Warman (Boston and Skegness) (Con) | Stuart Andrew |
Giles Watling (Clacton) (Con) | Stuart Andrew |
Suzanne Webb (Stourbridge) (Con) | Stuart Andrew |
Claudia Webbe (Leicester East) (Ind) | Bell Ribeiro-Addy |
Catherine West (Hornsey and Wood Green) (Lab) | Chris Elmore |
Matt Western (Warwick and Leamington) (Lab) | Chris Elmore |
Helen Whately (Faversham and Mid Kent) (Con) | Stuart Andrew |
Mrs Heather Wheeler (South Derbyshire) (Con) | Stuart Andrew |
Dr Alan Whitehead (Southampton, Test) (Lab) | Chris Elmore |
Dr Philippa Whitford (Central Ayrshire) (SNP) | Owen Thompson |
Mick Whitley (Birkenhead) (Lab) | Chris Elmore |
Craig Whittaker (Calder Valley) (Con) | Stuart Andrew |
John Whittingdale (Malden) (Con) | Stuart Andrew |
Nadia Whittome (Nottingham East) (Lab) | Chris Elmore |
Bill Wiggin (North Herefordshire) (Con) | Stuart Andrew |
James Wild (North West Norfolk) (Con) | Stuart Andrew |
Craig Williams (Montgomeryshire) (Con) | Stuart Andrew |
Hywel Williams (Arfon) (PC) | Ben Lake |
Gavin Williamson (Montgomeryshire) (Con) | Stuart Andrew |
Munira Wilson (Twickenham) (LD) | Mr Alistair Carmichael |
Beth Winter (Cynon Valley) (Lab) | Bell Ribeiro-Addy |
Pete Wishart (Perth and North Perthshire) (SNP) | Owen Thompson |
Mike Wood (Dudley South) (Con) | Stuart Andrew |
Jeremy Wright (Kenilworth and Southam) (Con) | Stuart Andrew |
Mohammad Yasin (Bedford) (Lab) | Chris Elmore |
Jacob Young (Redcar) (Con) | Stuart Andrew |
Nadhim Zahawi (Stratford-on-Avon) (Con) | Stuart Andrew |
Daniel Zeichner (Cambridge) (Lab) | Chris Elmore |
Draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021
Draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021
(3 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I remind Members to observe social distancing and to sit only in places that are clearly marked. I also remind Members that Mr Speaker has stated that masks should be worn in Committee. Hansard colleagues will be most grateful if Members could send their speaking notes to hansardnotes@parliament.uk.
The Exchequer Secretary to the Treasury (Kemi Badenoch)
I beg to move,
That the Committee has considered the draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021.
The Chair
With this it will be convenient to consider the draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021.
Kemi Badenoch
It is a pleasure to serve under your chairmanship, Mrs Murray. The two draft instruments relate to the UK emissions trading scheme or ETS.
At the end of the transition period, the UK ceased to participate in the European Union’s emissions trading scheme. However, the Government remain committed to maintaining an ambitious carbon price to ensure that polluters continue to pay for their emissions, as they should. At the start of the year, we launched the UK ETS, which has been legally established under the Climate Change Act 2008. It is a UK-wide greenhouse gas emissions trading scheme designed to encourage emissions reductions when most cost-effective. It applies to energy generation, energy-intensive industries and aviation.
Reducing emissions while supporting UK industry is central to the Government’s mission to deliver our world-leading net zero target. The UK ETS is key to achieving that goal. The new scheme provides a smooth transition for businesses while reducing our contribution to climate change from day one.
Emissions trading schemes work on the cap-and-trade principle. A cap is set on the total amount of greenhouse emissions covered by the scheme and, within that cap, participants receive or buy emission allowances, which may be traded with other participants as required. The cap is reduced over time, so that total emissions fall. Participants are required to monitor their emissions and to surrender one emission allowance for every tonne of carbon dioxide equivalent emitted. An ETS is therefore underpinned by the creation of a market for emission allowances. Auctioning and trading such allowances leads to the discovery of a market price for greenhouse gas emissions.
The UK ETS was established by the Greenhouse Gas Emissions Trading Scheme Order 2020. That GGETS order was made under the Climate Change Act 2008 on 11 November 2020. It set up a UK-wide emissions trading scheme, as launched on 1 January 2021. The GGETS order regulates the emission of greenhouse gases in the United Kingdom, permits the creation of allowances to emit 1 tonne of carbon dioxide equivalent and sets a cap on the number of allowances that may be created in any scheme year.
The draft regulations we are debating today relate to the auction of emissions allowances as part of the UK ETS. The first of the statutory instruments is the draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021. It creates an oversight role for the Financial Conduct Authority, the FCA, in the UK ETS and emission allowance market. It was laid under the European Union (Withdrawal) Act 2018 and makes consequential amendments to financial services law and related matters to provide for the safe and effective operation of the market for UK emission allowances as part of the UK ETS.
The SI amends existing financial services legislation so that it works in the context of a UK-only ETS. In doing so, it ensures that the Financial Conduct Authority can oversee the auctioning and trading of emission allowances and can ensure the soundness and integrity of the market. The instrument has been introduced now so that it may receive parliamentary approval in time for the first auctioning of UK emission allowances in May 2021.
The draft SI establishes the activity of bidding in an emission allowance auction as a regulated activity and establishes UK emission allowances as financial instruments. That means that the FCA has oversight of bidding in allowance auctions, and ensures that the allowances themselves are subject to the appropriate regulatory treatment with regard to issues such as market abuse. The instrument also amends financial promotion legislation, so that the promotion of investments in UK emission allowances can be undertaken only by persons with the correct permissions.
To properly empower the FCA to oversee the regime, the SI also updates rules around the disclosure of confidential information so that the FCA can correctly discharge its functions with regard to the disclosure of information relating to the UK ETS and emission allowance holdings. It ensures that the FCA has the investigation and enforcement powers to fulfil its duties with regard to preventing financial misconduct in the context of the auctioning and trading of emission allowances.
Finally, the SI amends the UK market abuse regulation, known as UK MAR, so that it covers the primary and secondary market trading of UK emission allowances and the secondary market trading of EU emission allowances when those activities are within the territorial scope of UK MAR. In summary, the instrument will ensure the integrity of the UK carbon emission allowances market, in turn facilitating the contribution that the new UK ETS will make as the UK’s leading carbon pricing policy instrument. That will encourage cost-effective emission reductions, and therefore help us to achieve our net zero goal.
Alongside the draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021 are the draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021, which were laid before the House on 11 February 2021. A correction slip was laid on 15 February 2021 for a minor amendment clarifying that the UK ETS will have an auction reserve price of £22 per tonne of carbon dioxide equivalent, as announced alongside the publication of the draft regulations on 11 February.
The instrument provides for the auctioning of emission allowances to emit 1 tonne of carbon dioxide equivalent under the UK emissions trading scheme and introduces mechanisms to support market stability in the new scheme. The draft regulations are made under the power in section 96 of the Finance Act 2020 to make regulations on the allocation of emission allowances in exchange for payment. The draft regulations make provision under the Act for auctions of allowances to emit 1 tonne of carbon dioxide equivalent created under the Greenhouse Gas Emissions Trading Scheme Order 2020.
Part 1 contains the interpretation provisions. Part 2 provides for the products to be auctioned and sets out how bids are to be submitted and withdrawn, and how the auction clearing price is to be determined. Part 3 makes provision for the auction calendar and when the calendar may be adjusted. It sets out what happens to the volume of allowances at cancelled auctions, what volume of allowances are to be auctioned annually, and provides for a cost containment mechanism, enabling the Treasury to adjust the distribution or volume of allowances to be auctioned in any one year if the carbon price exceeds specified limits.
Part 4 provides for access to auctions. Parts 5, 6 and 7 provide for the appointment and functions of the auctioneer and the auction platform, and their appointment requirements. Part 8 provides for the reporting of transactions. Part 9 provides for the payment and transfer of the auction proceeds. Part 10 provides for the delivery of the auctioned allowances. Part 11 provides for the management of collateral. Part 12 provides for fees and costs.
Part 13 provides for monitoring of auctions, remedial measures and sanctions. Part 14 provides for the publication of auction results and protection of confidential information. Finally, Part 15 makes provision for a right of appeal and the correction of errors. The instrument therefore provides the rules covering both auctions and secondary markets for emission allowances as part of the UK ETS. It also introduces mechanisms to support market stability.
The two instruments will ensure the functionality and integrity of the auctioning and trading of emission allowances due to begin next month, thereby preserving the soundness of the UK ETS market. Together, they are fundamental to the Government’s ambitions to encourage cost-effective emission reductions and ultimately to achieve our goal of net zero.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the Minister for providing an overview of the regulations. As she has said, the regulations take further steps to establish a UK ETS by setting out more detail on how the auctions will operate. The second set of regulations amend financial services legislation to allow the functioning of the new UK ETS and to continue the Financial Conduct Authority’s role in regulating aspects of it.
We do not oppose the regulations, but I wish to make a couple of points and ask the Minister some questions. There has been a long-running debate, not least among the Government themselves, about what should replace the EU ETS as the UK left the EU. Until relatively recently, the Government were considering three options: a stand-alone UK ETS, a linked scheme or a carbon tax. The uncertainty about carbon pricing left many UK businesses in a state of confusion last year. It is welcoming that some clarity is now being given by the Government, but it is far from ideal that they are bringing forward this detail after the UK ETS has already been in existence for over three months. Once again, businesses have been left in the lurch. I am afraid that this sort of last-minute policy making, which does not recognise the long lead-in times that businesses need to operate, is typical of the Government.
We welcome the Government’s decision to stick with the cap-and-trade principles rather than pursue a carbon tax, and we support the creation of a UK ETS. However, we believe it is critical that the UK ETS is linked with the EU ETS. I am sure the Minister agrees that the only way to address climate change is to do so in partnership with countries around the world, and that we need an international approach to reducing carbon emissions. I hope that the Government will not let political or ideological aversion to working with the EU get in the way of doing what is best for the environment.
The Government’s energy White Paper, published last December, said:
“The UK is also open to linking the UK ETS internationally in principle and we are considering a range of options, but no decision on our preferred linking partners has yet been made.”
Can the Minister update us on whether negotiations have started with the EU on this issue? Can she tell us whether the Government are considering linking with other schemes around the world? If so, which ones? We really need some clarity on this vital issue.
I turn now to some specific points about the regulations, which set the auction reserve price at £22 per tonne of carbon. That is an increase from the Government’s previous proposal, but the Minister will know that the EU ETS price has increased considerably in recent months and is currently around £44. Do the Government intend to make any further changes to ARP in the light of this? The auction reserve price must be set at a level that creates a robust market and ultimately drives down emissions.
There is also an issue of market volatility, which has the potential to be especially problematic, given the smaller size of the UK ETS versus the EU ETS. A report by the Climate Change Committee said that
“a standalone UK ETS faces potentially significant challenges in achieving market stability and liquidity.”
Clearly, linking with the EU ETS would mitigate the risk, as would expanding the range of sectors covered by the ETS. It has recently been reported that the Government are considering extending ETS to the agriculture sector. Can the Minister update us on the Government’s thinking on this issue, and can she set out what steps the Government will take to ensure the market functions correctly?
A well-functioning and ambitious emissions trading system will clearly be a critical tool in our path to net zero. It is extremely important that the Government get that detail of the system right, and I hope the Minister can provide some reassurances on this today.
Kemi Badenoch
I thank the hon. Lady for her contribution to the debate and for the Opposition’s broad support for carbon pricing and the draft instruments. She asked whether we are still interested in linking the UK ETS to the EU ETS. The UK is open to linking the UK ETS internationally in principle. We are considering a range of options, but no decisions on preferred linking partners have yet been made. We are already looking to innovate and create schemes suited to the UK and our climate commitments. We have started by reducing the cap on emissions by 5% compared with what it would have been within the EU, and we will set out further plans ahead of COP26. Having our own scheme means that we can be flexible, now that we are a sovereign nation, and can go further and faster than the EU.
Regarding which option we took, whether a stand-alone UK ETS, a carbon emissions tax and so on, the Government carefully considered the important economic and environmental aspects of each policy ahead of making a decision for a UK ETS. That included the certainty of carbon price, simplicity of the policy and the cost to business. On balance, however, the Government felt that the UK ETS—with a cap on emissions, which we will consult on to enable it to align with net zero, and the continuity it offers participants—offers a better basis for businesses to decarbonise. It is right that, at the moment of leaving the EU, we took the time to prepare properly and consider both a UK ETS and a carbon tax, given that the chosen mechanism will be crucial to meeting our climate ambitions over the coming decades. Preparations for a carbon emissions tax were already advanced due to the contingency planning that took place for the scenario whereby the UK left the EU without a deal and thereby ceased to participate in the EU ETS. As such, additional costs to develop this option further were minimal. I remind the hon. Lady that payment will not be due until April 2022, so I do not accept the assertion that businesses have been left with uncertainty; we have actually given them quite a lot of time to prepare for changes.
The hon. Lady also asked what we will do with the auction reserve price. We have set a floor for that. The Government would be prepared, should prices become exceedingly high, to intervene, but at the moment we will let the market run its course. She also asked about the tax implications for sectors such as agriculture. I say to her that the Treasury keeps all taxes under review.
The draft Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021, laid under the European Union (Withdrawal) Act 2018, will make amendments to financial services law to provide for the safe and effective operation of the UK emissions allowances market, as part of the UK ETS. The draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021, laid under the Finance Act 2020, will provide for the auctioning of emissions allowances under the UK ETS. It will also introduce mechanisms to support market stability in the new scheme. Together, these two instruments will ensure the integrity of the market that will underpin our carbon pricing goals and are vital to ensuring that the UK ETS can function as planned.
I thank the hon. Lady for her contribution, and I greatly appreciate the support that has been shown for the draft instruments, which will ensure that the UK has a domestic carbon pricing policy that is fit for the net zero future we have committed to.
Question put and agreed to.
Draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021
Resolved,
That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021.—(Kemi Badenoch.)
Bank closures in North Ayrshire
Advanced Research and Invention Agency Bill (First sitting)
(3 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I have a few preliminary announcements. Hon. Members will understand the need to respect social distancing guidance. In line with the House of Commons Commission decision, face coverings should be worn in Committee unless Members are speaking or medically exempt. Hansard colleagues would be grateful if Members emailed their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent mode. Tea and coffee are not allowed during sittings. Date Time Witness Wednesday 14 April Until no later than 10.25 am Nesta; UK Research and Innovation Wednesday 14 April Until no later than 11.25 am Professor Philip Bond, University of Manchester; Professor Mariana Mazzucato, University College London; Professor James Wilsdon, University of Sheffield Wednesday 14 April Until no later than 3.00 pm Defense Advanced Research Projects Agency; Wellcome Leap; Professor Pierre Azoulay, MIT Wednesday 14 April Until no later than 3.45 pm Professor Dame Anne Glover, Royal Society of Edinburgh (formerly); Tabitha Goldstaub, CognitionX Wednesday 14 April Until no later than 4.30 pm The Royal Society; Royal Academy of Engineering; Confederation of British Industry Wednesday 14 April Until no later than 5.00 pm David Cleevely, Focal Point Positioning Ltd and the Cambridge Science Centre; Campaign for Science and Engineering
Today, we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence sessions. In view of the time available, I hope that we can take these matters formally, without debate. The programme motion was discussed yesterday by the Programming Sub-Committee for the Bill.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Wednesday 14 April) meet—
(a) at 2.00 pm on Wednesday 14 April;
(b) at 9.25 am and 2.00 pm on Tuesday 20 April;
(c) at 11.30 am and 2.00 pm on Thursday 22 April;
(d) at 9.25 am and 2.00 pm on Tuesday 27 April;
(2) the Committee shall hear oral evidence in accordance with the following Table;
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clause 1; Schedule 1; Clauses 2 to 7; Schedule 2; Clauses 8 and 9; Schedule 3; Clauses 10 to 15; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 27 April.—(Amanda Solloway.)
The Chair
The deadline for amendments to be considered at the first two line-by-line sittings of the Committee, on Tuesday 20 April, is the rise of the House tomorrow.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Amanda Solloway.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Members by email.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Amanda Solloway.)
The Chair
Q
Tris Dyson: Good morning. My name is Tris Dyson. I am the founder and managing director of Nesta Challenges, which was set up in 2013 by the UK Government in partnership with the innovation foundation Nesta. Its explicit purpose is to develop UK expertise in challenge prizes as a funding model for frontier innovation. We have grown significantly over that period of time and are now something of an export; we design and develop challenge prizes for Governments around the world in North America, Europe, Africa and so on, and for companies and foundations. Essentially, the model looks at where you can stimulate innovation and new activity to create new markets, new opportunities and to solve important societal problems.
The Chair
Q
Professor Leyser: Thank you. My name is Ottoline Leyser and I am the CEO of UK Research and Innovation, which is an arm’s length body of the Business, Energy and Industrial Strategy Department. We are the major public sector funder of research and innovation for the UK. We fund right across the disciplines and sectors that conduct research and innovation.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Q
I welcome our two witnesses. I have one general question for both of you, given your broad range of experience in research and development: what is the problem that the Advanced Research and Invention Agency is fixing? Professor Dame Ottoline, do you have a clear understanding of the proposed working relationship between ARIA and UK Research and Innovation, and should that be put on a formal footing to provide clarity? Mr Dyson, Nesta Challenges is based on challenges, so what is the role of challenges and missions with regard to the work of ARIA in driving high-risk, high-reward research?
Professor Leyser: I do not actually see ARIA as being about fixing a problem; I see it as adding something new and extra to an already very high-quality research and innovation system. As I have said, UKRI is the major public funder for research and innovation. We invest £8 billion of public money every year in research innovation, and we have a major responsibility to act as stewards for the whole system in the UK to ensure that it has the right capabilities and capacity to conduct the research and innovation that we need for the kind of inclusive and sustainable knowledge economy that is so important for our country.
As CEO of UKRI, I have to think about all parts of the system. I have to think about the people—do we have the right kinds of people in the system, the right mix, the right diversity, the right set of skills, and the right career trajectories and pathways through the system? I have to think about infrastructures—do we have the right balance of institutes, universities, catapults and national facilities, as well as high-quality equipment within institutions and universities, for example? Are we funding the right mix of ideas, starting from the really high-risk, high-gain research, which will be the focus of ARIA? It is also our responsibility to fund the really important work that perhaps does not fall into that transformative, high-risk, high-reward category, but without which the benefits of that high-risk, high-reward research will not be realised and the foundations for the next transformative ideas will not be built. I also have to think about the connectivity in the system, how to join it up and make it all work effectively. Then I have to think about how we can take that and focus it on particular challenges that we face in the country. The work that UKRI does seeks to balance all of those needs and support all of them to create a really high-functioning system for the UK.
I hope that ARIA will do what you might call an extreme or particularly transformative, visionary version of that focus activity, so it will work in a different way from the way in which we typically work. Because of our incredibly broad responsibility for the system, we tend to work in a way that asks the system, in a very broad and open way, how it can best deliver the things that we think need to happen, whereas ARIA will work on the programme manager model, so it will identify a small cadre of visionary leaders who will have extraordinary ideas, we hope, to drive forward the edge of the edge, transformative, visionary ideas, and they will hopefully be empowered to work in very different, agile ways to take forward those kinds of ideas. That is quite experimental. They should be able to experiment with different ways of funding research, including, for example, the challenge model, which Tris is such an expert on. There is a whole range of opportunities. That is how I see it working. It is a small, agile agency that will bring together these visionary individuals to add something on top of a very high-functioning system. It is not about fixing a problem; it is about adding something new at the edge of the edge to push forward those frontiers.
I absolutely agree that it is very important that activity is properly rooted in the research base for which I and UKRI are responsible, because it will depend totally on that research base. The people employed at ARIA will absolutely need to understand deeply what UKRI is doing and what the opportunities are across that research base in order to deliver their vision. I would expect a very close working relationship with ARIA to allow that to happen.
Tris Dyson: I would agree with quite a bit of that. Nesta Challenges produced a report in the summer called “The Great Innovation Challenge”, which we should share with you. We looked at the funding ecosystem. The current funding ecosystem is pretty good and our main funding mechanisms work quite well. It is not wasted. It includes direct financial support through bodies such as UKRI and also the Small Business Research Initiative. It also includes research and development tax credits and the effect that has.
There has, however, as I think the Government have recognised, been an overall need to increase funding in research and development, which is why the target of 2.4% and the promised increases in Government funding are so welcome. In that context, we think that there is an opportunity to explore new avenues and do things slightly differently. Some of the opportunities that that presents, both through ARIA and more generally, is around boosting the diversity of people involved in frontier technology and innovation and improving geographical reach. If we do have a long-standing problem in the UK, it is perhaps with that feed-in to commercialisation and the connection between university R&D and patenting and things that get picked up by the private sector, so that might be something to look at. We do not think that there is a problem, but I guess that this does present, as Ottoline has said, an opportunity for a new, smaller, dynamic agency to add to the current ecosystem.
We think the advantage of ARIA would be that, because it is smaller, it might be able to generate a culture that is a bit more nimble and a bit more agile, take some more risks, look at things about diversity of innovators, and engage with types of innovation and types of innovation funding that ordinarily might be perhaps a little too high risk. It can also be a little more focused and entrepreneurial, but—to consider the second part of the question—it can also look beyond just grants and R&D tax credits, which are overwhelmingly the main way of funding innovation in the UK.
On the role of challenge prizes, challenges get used quite loosely to mean a lot of things, but what we mean by them is outcome-based funding, where you use the combination of technology foresight and insight with some creativity and understanding of how markets evolve and develop, and what opportunities might exist in the future, in order to identify quite specific problems, where there is a real ability to push things forward in innovation but where it is unclear where the most promising innovation is going to come from. For ARIA, I think that this might be quite a useful tool, because, comparatively speaking, you are dealing with relatively small amounts of money, and outcome-based challenge funding gives you a degree of focus but also allows a degree of payment on results. So, you have milestone payments on the basis of ability to solve problem A, B or C, or of demonstrating some traction in the market.
They have other benefits as well, which go beyond the non-financial. You can use relatively smaller amounts of money in a challenge prize model because you might be building up a deal flow for investors, customers and other people who you want to crowd in and bring in additional funding. They are also quite high-profile because of the nature of the competition or the race towards solving x. That means that the publicity and the promotional opportunities for innovators can be quite significant, above and beyond just the financial reward.
Chi Onwurah
Q
Both of your responses referred to the role of ARIA in looking at new areas, particularly having new areas of focus that may have been missed and addressing them in different ways. The document of intent that the Secretary of State published leaves the choice of areas of research or the overall mission to the programme managers rather than the chief executive of ARIA, whoever that might be. How will that address our country’s research needs, and do you think that the Secretary of State should have responsibility for identifying the overarching missions that ARIA looks at?
Dame Ottoline, there has been controversy with you over exempting ARIA from meeting freedom of information requests. UKRI meets freedom of information requests. Do you find them to be burdensome in going about your objectives, and what proportion of your budget is taken up by them? I will go to Tris first this time, if that is okay.
Tris Dyson: I think that the question about leaving it up to the team that is put together at ARIA is a very good one. When you ask people about the US Defense Advanced Research Projects Agency, the US Advanced Research Projects Agency and so on, you get quite different answers as to what they do—that is probably because they do so much—but one of the common responses is that they have very empowered programme managers who understand and know their fields and are able to pursue agendas with a degree of freedom.
I think that has got to be a model that an agency like this—if it is going to be higher risk-taking and a bit more agile, and is going to look at funding innovation that you might ordinarily overlook—needs to be able to pursue, but it does mean that you need to get the right team in place and empower them appropriately. That means that you need a combination of, obviously, people who understand frontier science and technology; but then you also need a degree of creativity and insight as to what the opportunities might be. You need people also who understand the strengths and abilities within the UK, in order to build on that. So, yes, we are significant advocates of the idea that you would have a small, dynamic, empowered team; but they will also need to be relatively ruthless to stop funding things that do not work quite early on, and stick with things that do. That will have to be a mindset, or a regimen, that is baked in from the start.
Professor Leyser: I absolutely agree with what Tris has said. I think it is widely acknowledged that the success of ARIA—and in many ways the rate-limiting factor—is going to be finding those people. The whole ability of this organisation to operate in this edge-of-the-edge really visionary way that we are all very excited about is critically dependent on those people; and they are in very short supply. So I think the idea of leaving it open to that team of people to decide their focus, to pick the projects that are at the edge of the edge, as it is described, is a really important element.
I also view the notion of this small, agile additional agency as having that freedom in a very positive way. The needs of the country—the priorities that the Government and Ministers set to solve particular challenges for the nation—fall very much within the UKRI remit, and indeed we have very successful programmes doing exactly that, including in a challenge-led model. Those programmes tend to operate on a slightly different basis in the more traditional open call route that Tris describes with grant applications and so on. Again, I would see ARIA as an additional small, agile, free agency that can creatively identify and capture those transformative opportunities that, indeed, are not necessarily thought about in the broader system, and reach parts of the system that our current system does not as successfully reach. It needs to be very experimental and I suppose from that point of view it is not the place where you invest the responsibility for delivering major national priorities.
We are very committed to our freedom of information responsibilities. We get about 30 requests a month and we have a team who deal with those requests and also the other data access requests, and so on, that are part of our responsibility. I am happy to be able to do that. I think that is important for public money, and there is a judgment call about the burden of administration of that, relative to the benefits in transparent use of public funding.
The Chair
I will go to the Minister, and then to Stephen. Can I have an indication—will Members put their hands up—of how many there are? That is four. If you want to ask another question, do you want to ask it now, or come back a little bit later?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
Q
Tris Dyson: We put together a document in the summer, which we can share with you, that has examples both from Nesta Challenges and particularly from the United States of outcome-based challenge prize funding. That is obviously mainly the space that we occupy. There were some great examples of where it stimulates and creates whole new industries and sectors. There were also some examples of where there can be quite big mistakes, because you go off down the wrong course.
I know there has been quite a lot of inspiration from DARPA and from the US. One example would be the driverless car in the early 2000s. DARPA ran a series of challenge prizes in the desert around the development of driverless cars. It was literally an annual race where teams from universities would compete to develop vehicles that would outperform one another, and there was prize funding associated at the end of it. That is more or less where driverless cars began. The teams that came out of those universities and the individuals have now been picked up by Google, Uber, Apple and everybody else. It is why a lot of that frontier technology is now being developed on the west coast and the rest of the world is playing catch-up.
Another example would be the Ansari X prize, which was about building a privately funded spaceship that would carry two passengers. It had a very specific target about how high a sub-orbit it needed to reach within a two-week period. That created an enormous race for people to build privately funded spaceships, again in the early 2000s. You can see now what has happened in the private space flight industry in the US. The team that won that is now Virgin Galactic and we see every day in our newspapers what has happened to them.
We are a bit newer to this in the UK, but we also have some examples. We concluded a challenge prize just before Christmas that was looking at lower-limb paralysis. It was essentially saying that there have been dramatic improvements in the fields of artificial intelligence, robotics and sensory technology but why has the wheelchair not changed very much in the last 100 years, except for electrification? That was a global challenge in partnership with Toyota that resulted in some amazing breakthrough systems and products for people with lower-limb paralysis all around the world. A Scottish team called Phoenix Instinct won. They developed a wheelchair that moves with the user, anticipates movement using AI and sensory technology, and has a very lightweight alloy frame that is quite revolutionary from the perspective of a wheelchair user. Those are some examples.
Whether you do a challenge prize or not, I think you would need to do the same thing with ARIA, which has got to focus on areas where there is the most opportunity and where you have a decent hypothesis that technology pathways can be developed in order to solve that problem and encourage activity around that singular thing. That is the whole premise of missions or challenge prizes.
Amanda Solloway
Q
Professor Leyser: Absolutely. I think that the kinds of examples that Tris has just talked about are quite illustrative from that point of view. Typically, the way the current system works is that we would put out a call for applications in a variety of contexts. It might be a completely open call; right across UKRI we run these so-called response-paid funding competitions where people with ideas about what they want to do can apply for funding to do them, whatever they might be. On the whole, those kinds of applications are the sort of bread and butter of really established research organisations: universities, institutes and, through Innovate UK, businesses. A lot of them are also collaborative with industry. It is that kind of grant application process that then goes through peer review, and we try to pick the projects that, as an overall portfolio, will best deliver what the UK needs, both in the short term and, absolutely, in the longer term, building that capacity and capability.
It tends to be established organisations that know the system and how to apply for those kinds of projects, and which have the structures available in their organisations to do that. With ARIA, however, I think there is the opportunity to test a much wider range of models, such as those kinds of competition-type prize approaches that Tris described—he is an expert in those. There is also a fairly well-established system called Kaggle for coding competitions, for example. That potentially reaches a much wider range of people. You do not have to apply; you do not have to have a system that can support that kind of application process. The funding flow is very different: it is a response to the results; it is the winner of the competition. As a result, it may be possible to reach a much wider range of people. In that coding space, for example, there are really extraordinary people working in their homes as freelance coders who would find it very difficult to access the classical UKRI and most of the funders that there are currently.
I very much hope that we would be able to tap into some of the talent right across the UK that is not in the more established places. That would be one really exciting outcome from this with that prize model. Where you have a really clear objective—so it is really clear who has won the money, so to speak—it is possible to do that in a way that does not automatically engage the kind of financial management systems that we have to use. For example, are we sure that this money is being spent on what the applicant said it would be spent on? If you are giving somebody the money for having done the research or having delivered the outcome—the car that goes across the desert—you are in a very different situation.
I do think there is a very interesting possibility for ARIA to reach those people who are talented and can contribute in ways that it is much harder to with the standard systems. I hope that we would learn from that and be able to import some of that expertise into the standard system when it was established and really clear that it was providing good value for money in a robust way.
Stephen Flynn (Aberdeen South) (SNP)
Q
Tris Dyson: Well, more money is better. I think this money needs to be deployed intelligently, so being quite clear on the missions and the focuses is really important. It is even more important with a still significant amount of money but relatively smaller sums. Getting those areas right is really important. The examples that were just given about Kaggle and databased approaches are potentially a useful avenue for some of this, because the R&D investments and sunk costs are relatively low as opposed to building spaceships or something like that. That would be the sort of calculation you might need to make.
You can also use leverage. One of the areas that the UK has been pioneering is around regulatory sandboxes, for example, through the regulators’ pioneer fund, which is administered through UKRI. But some regulators, off their own backs, have also been setting up and developing sandboxes that allow innovators to play with datasets in an environment where the regulator is giving them a little bit more permission than they might have had otherwise. That in itself is an incentive, particularly when you are playing around with datasets.
You can think of examples where we have got significant strengths. One of the things we have talked about a lot during the pandemic—more recently, at least—is the UK’s strengths in genomics research. That means we have got an enormous range of data that could be made available to people through the likes of Genomics England, which in itself is an inducement or an encouragement above and beyond the financial. So being clever—boxing clever—with the money is important.
In terms of ruthlessness, part of this comes to the culture. The ARIA team will have to establish a culture where they trial things out, set targets and objectives and have constant reviews where they get together and decide whether to kill things off. That is clearer when you have defined missions or objectives that you are working towards. It is much harder when you are fostering lots and lots of different things—it is hard to compare X with Y.
Professor Leyser: From my point of view, the question I would ask is not so much how much money should ARIA have but what proportion of the public sector R&D spend should go into this way-out-there, high-risk, transformative research-type project and, of that, how much should be in ARIA. It is a proportionality question and, as Tris said at the beginning, at a time when there is an aim to drive up UK investment in R&D to 2.4%—hopefully beyond that, because 2.4% is the OECD average and I think we should aim to be considerably better than average—that is quite a stretch target for us. We do incredibly well—the quality and amount of research and innovation in this country is extraordinary—given that we currently invest only 1.7% of our GDP. So I think the opportunities to build that really high-quality inclusive knowledge economy, given how well we perform in the R&D sector with such a small proportion of R&D, are incredibly high.
On that rising trajectory, with us aiming for that 2.4% and beyond, I think spending a small proportion of that on this edge-of-the-edge research capacity and capability is the right thing to do. I would look at the budget in that context as a percentage of the overall R&D spend. People have been comparing the current ARIA budget with the budget of organisations such as DARPA, but if you look at it as a percentage, you get a very different number because, obviously, the US spends a much higher proportion of their—anyway—bigger budget on R&D than we do. That is the important question from that point of view.
How will we know that it has succeeded, and what would one expect the percentage failure to be? I agree with Tris that it is incredible difficult to predict. There is also serendipity and other things to factor in. If you set yourself a fantastic target of solving a particular problem or producing a particular new product and you fail to do that, none the less, along the way you might discover something extraordinary that you can apply in another field.
That high-risk appetite feeds into the question, again, of how much money or what proportion of the overall R&D portfolio should be invested in that way. One has to think about risk in R&D in that portfolio way. It is considered generally in investment markets that really high-performing investment portfolios are a portfolio. You invest in stuff that you know will deliver in an incremental sort of way, and then you invest in the really high-risk crash or multiply parts of the system. That is very much how one has to think about ARIA.
In that domain, where you have a very high probability of failure—that is what high risk means—but also an extraordinary probability of amazing levels of transformative success, it is a dice roll. The total number of projects will be relatively small, so it is very hard to predict an absolute number or proportion that one would expect, and one should not need to—that is what high risk, high reward means.
The Chair
Thank you, Dame Ottoline. We have just under 20 minutes. Members need to be around the horseshoe to ask a question—there is a microphone on the corner. I will tell you the order in which I will ask questions, so those who are not in the horseshoe can get there. I will go to Daniel Zeichner first, Stephen Metcalfe second, Dawn Butler third, Aaron Bell fourth, Virginia Crosbie fifth and Chi Onwurah at the end. If anyone else would like to ask a question, please indicate.
Daniel Zeichner (Cambridge) (Lab)
Q
Professor Leyser: That is an excellent question. Clearly, the economic circumstances of the pandemic have made the choices the Government have to make about where to spend the money extremely challenging. Having said that, the opportunity thrown up by the pandemic and the instabilities put into the system as a result of the extraordinary circumstances make now an extremely good time to invest in that R&D-led recovery and to build that inclusive knowledge economy that I have mentioned several times, which creates long-term, sustainable, high-quality jobs right across the country for everybody.
In terms of taking that chance to invest in R&D—to reach 2.4% and beyond—and having the £22 billion public sector investment that has been discussed, now is the moment to do that. That is a really sound investment for the future. It is a lot of money, but it is how we are going to re-establish that stable, more productive economy that we need to fuel and to fund all the kinds of underlying public services, and so on, on which the country depends, so I think it would be a really wise investment.
I am avoiding the question, because I would rather focus on driving up that investment in R&D than work on the pessimistic assumption that it is not going to happen and therefore that we are going to have to be more conservative in our approach to R&D investment than is optimal for building that overall high-quality system that we need for the UK.
Daniel Zeichner
Splendidly diplomatic answer. I will pass you over to colleagues.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Q
The question that I would like to ask is, what role do you believe that ARIA and UKRI have in ensuring that ARIA-funded research becomes a tangible service or product and actually supports the UK economy? If we are investing £800 million, we need to make sure that there is a benefit. I fully accept the high-risk, high-reward model—I think that is an important part of it—but we need to make sure that we support that innovation and that research along the technology-readiness scale to make sure that it turns into something tangible that adds to our overall wealth. How do you see that role playing out?
Professor Leyser: To me, a key question in our R&D system altogether is connectivity. We have a spectacular international reputation for the quality of our R&D base right across the disciplines and in both the public and the private sectors, and we have some fantastic innovative companies creating extraordinary products and services for the UK. However, there is an acknowledged weakness in our system in the middle, so to speak, which is sometimes referred to as the valley of death. There is a lot of analysis as to what is going on there. It is partly to do with getting the right pathway of funding that supports activity across that gap.
I personally think that a bigger problem is our relatively balkanised R&D system. I think that we need to focus very hard on building much higher-quality connectivity and networking, right across the system and across that gap. We tend to think of this as a very linear, translational process, and it does not work that way. It is about joining up all the parts in a way that information, ideas, skills, know-how and, crucially, people—all those things are carried best by people—flow to and fro across that system.
One of the major priorities for UKRI is to consider the dynamic career pathways that people need to follow to connect that system up better and to support researchers in different parts of the system moving to other parts of the system—so from academia into industry and, crucially, from industry back into academia, which our current incentive structures in academia do not adequately support.
I think that that “bridging the valley of death” part is a key role for UKRI. That is exactly what we can do, because we bridge all the sectors and we have some levers on a lot of those incentives that are currently driving balkanisation. If we add ARIA into that properly connected system, then the ideas and innovation that emerge from ARIA will feed into that system in an entirely productive and creative way.
It is not ARIA’s job to think about the system and to build bridges across the valley of death; its job is to push those transformative ideas to try to drive step changes in particular areas and technologies where the experts in ARIA think the best opportunities lie. If those seeds are sown on fertile ground, they will transform into that knowledge economy that I keep talking about. My job is to make sure that the ground is fertile.
Dawn Butler (Brent Central) (Lab)
Q
Professor Leyser: It is an interesting question as to the extent to which that needs to be written into legislation. In my experience, the kinds of relationship that one wants to have with key players across the system are not things for which you necessarily legislate. They are about maintaining open lines of communication and building high-quality personal relationships with different actors in the system. There are a lot of players in the R&D system. I spend a lot of my time talking to people who run other agencies—for example, in the charity sector and those who run R&D activities in businesses— connecting them up, understanding what people’s needs are, what the opportunities are and building the joined-up system I have talked of about before.
So I think the personal relationships are going to be almost as important as anything that one can write into legislation. None the less, possible tools for connection, such as seats on each other’s boards, are certainly worth considering, as is observer-type status, rather than formal status, given that high-quality boards tend to be small. Our board worked really well where people were not representative but bringing their skills and expertise round the table. One does not want to bog down the governance structures for a light, agile and out-there organisation with representative requirements. As I have said before, active and engaged communication is going to be essential for ARIA, because it needs to understand the breadth of opportunity in the system to work well. It will be in everybody’s interest for those activities to work well. Because of that, they will happen naturally, in the same way that I spend a lot of time talking with other funders of research and innovation already in the public and private sectors.
Dawn Butler
I agree with you that there needs to be a close working relationship. I do not think we can count on it happening naturally. I have two quick questions, if I may, Ms McVey?
The Chair
Dawn, I am mindful of time. We have seven or eight minutes. I have another three questions and Chi Onwurah to come back. Is it a quick one?
Dawn Butler
Q
Professor Leyser: At the moment, most of our funding opportunities require people to apply for a research grant. People coding at home have a hard time applying for research grants, because it is a system with financial checks and so on. Applying for a research grant is a non-trivial activity, whereas winning a research prize, where there is no application process and you just get on with it, is doable. We are very interested in that wider range of funding mechanisms and in how we can learn from the work of Nesta, and, in the future, the work of ARIA to reach a wider range of people. But at the moment, we work on a largely open-call process; it is really effective because it is completely open, but it none the less creates barriers for people who do not have the infrastructure and administrative support to help them submit those kinds of grant applications.
Aaron Bell (Newcastle-under-Lyme) (Con)
Q
Following on from Dame Ottoline’s answer to Ms Butler, obviously, the purpose is to expand ARIA to cover areas that are not already well covered, but it also seems to be to try to pick up the pace of research and innovation. We have seen that that is possible through crises such as coronavirus. Can you explain how the pace can be picked up by some of the things that you do at Nesta and whether that would carry across to what ARIA is going to do?
Tris Dyson: I think it helps to pick things, to say, “We want to achieve x within the next two or three years” and to give people a degree of certainty about what outcomes you are going to fund and why. It happens naturally, anyway. Coronavirus is a crisis that has created a rush for R&D. It has also shown, on the drug development or vaccine side, what a combination of funding and relatively agile thinking, including from regulators in conjunction, can do in order to improve outcomes and achieve things. A challenge prize creates that in a positive sense; it essentially says, “We are going to solve for x and award funding on that basis.” That helps speed things up.
Related to the previous question, with a grant model approach, you are funding inputs and costs primarily. People put in a proposal for half a million pounds and say, “We are going to do x and this is what the associated costs are going to be.” Inherently, your risk threshold is going to be different, because you are anticipating whether this an investment that means they are going to be able to spend that money well and achieve x. You are going to look at track records, their financial history and their institutional strengths. You are going to make a judgment on whether to fund A versus B. That lends itself more towards funding the usual suspects than an outcome-based model, where you say, “It is not important to us who solves for x as long as somebody does.” In reality, you tend to blend these models. It is not like there is a pure challenge prize model that does not involve other types of funding mechanisms as well.
Aaron Bell
Understood, thank you. I had better hand on, as we are running out of time.
Virginia Crosbie (Ynys Môn) (Con)
Q
The Chair
If you are both answering, you have about a minute each.
Professor Leyser: I think it is crucial for the success of ARIA—it is everything. We need to go into the search process with absolute resolve to wait until we find the right people, and not appoint people just because there is a vacancy.
Tris Dyson: I agree with that. I would also say that the primary thing would be the mindset and agility, rather than necessarily focusing on a private sector background, a science background or whatever. You need people with the right creative and entrepreneurial mindset.
Chi Onwurah
Q
Professor Leyser: I did not say that it would be too small. My point is that if it is really working on the edge of the edge, it is about capturing the extraordinary opportunities that these people see in the system. Those cannot be straightforwardly dictated. They are not to do with those outside requirements; they are to do with what the opportunities are. The smallness of the agency is to do with what proportion of your R&D spend you put into that activity, given that we have major national priorities that need substantial investment, where the target is driven by those national priorities. It is an opportunity—
The Chair
Order. I am sorry, but I am going to have to stop you there. They had both been concise answers. I am sorry that we did not finally get to hear your further answer, Tris. Thank you both very much indeed for your time, Dame Ottoline and Tris Dyson.
Examination of Witnesses
Professor James Wilsdon, Professor Mariana Mazzucato and Professor Philip Bond gave evidence.
The Chair
Q
Professor Mazzucato: I am a professor at University College London, where I am the founding director of the Institute for Innovation and Public Purpose.
Professor Bond: Good morning, everybody. I have very unstable internet, so if I vanish, that is why and I apologise. I am Professor Philip Bond and I work as a professional problem solver and inventor. I am the professor of creativity and innovation at the University of Manchester, and I have visiting professorships at the University of Bristol in the computer science department, and also in engineering and mathematics. I am also visiting professor in the applied mathematics department at the University of Oxford.
Professor Wilsdon: Good morning. I am James Wilsdon, and I am professor of research policy at the University of Sheffield, and also director of a thing called the Research on Research Institute, which is based at the Wellcome Trust and does research on research systems, cultures and decision making.
The Chair
Again, I will start with Chi Onwurah, move across to the Minister, and then go side to side between the parties. After I have been to Stephen Flynn, I will ask Members to indicate whether they want to ask a question. I think we will get through everybody, as we were quite successful last time.
Chi Onwurah
Q
Professor Mazzucato: Thank you so much for the question and for inviting me to give evidence. Without going into the history of the DARPA model—I am sure you have done that already—I think the really important thing is to ask what it is about the UK system that an ARIA could give benefit to. We need to remember that the whole point of having a DARPA or ARIA-type institution is actually to provide that kind of purpose-driven approach to innovation. It is not a replacement for blue-sky research, funded in the United States by the National Science Foundation or in the UK by the research councils. It is precisely that kind of rare moment where you can do high-risk, high-bet research, very much linked between the basic and the applied; it is neither basic nor applied.
Fundamentally, where it has been successful—let us not forget that other countries have also tried this and it has not always been successful—is when it is on the back of a strong system. For example, DARPA in the US would have failed miserably had there not also been a strong military and defence system.
Secondly, it has to work across Government. DARPA in the US, for example, works with the small business innovation research programme, a procurement programme across all the different Departments, which set aside about 3% of their budgets to do purpose-driven research that brings in, for example, small and medium-sized enterprises. Again, that procurement side means that it is fundamentally linked to how Government works; it is not separate from Government.
Thirdly, it has always been linked with a vision or mission of what is to be done. Again, in the wartime scenario, it is clear that the DARPA model was mainly about military goals, but the Advanced Research Projects Agency – Energy, or ARPA-E, is about renewable energy and a green transition, and the Advanced Research Projects Agency – Health is about strengthening the health system and going after big health innovations.
What questions are we asking in the UK that an ARPA-H and ARPA-E or an ARIA would actually resolve? If we think of one of the biggest successes of DARPA, which is of course the internet, they did not obsess about the internet. They were not saying, “Oh, we need a technology.” They needed to solve a problem. The problem at the time was getting the satellites to communicate, and the internet was a solution for that. There were also many other experiments being done at the time, some of which failed. It is about that kind of willingness to take risks, but those being purpose-driven and problem-oriented.
The first question we should be asking in the UK is: what are the big problems? What questions are we asking that would even require an ARIA? If we do not have enough of a national debate on that, and if we do not have enough of a rethink in Government on things like procurement—the everyday of what Government does—and if we do not have strong systems underlying an ARIA, such as health and energy systems and so on, it will be really hard for this agency to be successful.
Chi Onwurah
Thank you. Professor Wilsdon?
Professor Wilsdon: I agree with everything that Mariana has just said. The one thing that many of us have been calling for since this idea was floated as an option for the UK system is more clarity on its purpose—its mission, in Mariana’s language. It is regrettable, in a way, that it has reached the stage of a Bill without that question having yet been properly answered. There are multiple dimensions to why it is regrettable.
First, it is a recipe for confusion. When it does finally decide what it is for, it has to then negotiate and haggle for space in the wider system, as Mariana said. That is time-wasting and is a source of bureaucracy, which this thing is supposed to avoid. Secondly, the Bill and the debate around it sort of vests the choices about purpose and function in the leadership of ARIA. I agree with Mariana that the role of Government in setting up a new agency is surely to undertake and co-ordinate with the public and wider society a discussion of what this would be for—what big priorities we have as UK society to which a new agency can be directed.
I am fully in favour of a new agency. I think there are lots of arguments, as we have heard already from Ottoline Leyser and Tris Dyson, that in a system that is expanding and doubling its budget over a short period of time, there is definitely scope in the budget to do new things, and I would be wholly in favour of that. Without that clarity, we essentially run the risk of setting it up and then there being a delayed period before it actually does anything very effective.
The final point I would make is that in relying on appointing the leadership as the route to answering the question, all you do is move the source of the problem. If the Government have not been able to resolve the question of what it is for, how do we identify who the right leaders are? We have not yet decided what this thing is for and where it operates in terms of the scale of basic to applied. Does it have domain focuses? I don’t see how you can find the right people. If you do find people, how do you avoid it simply becoming a tool, a plaything, of their prior interests and priorities?
In today’s line-up of witnesses, you are going to hear a number of compelling visions from different people for what this thing could do. I do not have a particular vision to sell you, but those visions map on to the prize and the things that you would expect the CBI or the Royal Academy of Engineering to argue for. If you set something up without resolving that first, you are moving it to the site of the leadership. It is a recipe for capture by particular interests in the system, which I think would be regrettable and quite distorting of the role that this thing is supposed to play, which is to be added to existing things.
I worry generally about the process, as someone who is perfectly happy to support the idea. I don’t think it is being executed in an optimal way to achieve the outcomes that the Government wish to see.
Chi Onwurah
Thank you very much. Professor Bond?
Professor Bond: I thank the previous speakers. I think that the idea is about having radical innovation, which is different from grand missions and grand challenges. Certainly the budgets that have been talked about fit an agency doing radical innovation, rather than some very large-scale grand challenges. The discussion over the need for a directed mission is an interesting one. You can do it both ways. The original ARPA started off with the rather nebulous but powerful mission statement of, “Develop strategic advantage”. That is acceptable if you have a good director who understands what that means. DARPA, for example, or IARPA and so on, have somewhat narrower remits, but that does not necessarily make things easier. A really good director can overcome issues around narrowness of mission statement by using the opportunity to do things that span across many domains. In fact, I think it is a rather liberating thing. The fact that we have not at this point had utter clarity on things I regard as extraordinarily good, not bad.
A defining characteristic of all of the US ARPAs is that they have a strong focus on rotating people in and out—about 80% from industry and 20% from academia, or some balance like that—and they do a lot of work with both. I entirely agree with what was said about a link between applied and more fundamental research, but I want to strengthen that statement by saying that with the industry base there is a focus on getting things done as opposed to publishing papers, and it is important to remember that.
On risk tolerance, a lot has been said about DARPA and taking a lot of risk. I personally think that talking about taking a lot of risk is a poor framing of what they do. What they aim to do is have a significant multiplicative effect on what they achieve. In other words, radical innovation simply says, “We want step change. We want to do things that would create a tremendous impact were they to be done.” What DARPA—all the ARPAs probably, but let’s talk about DARPA in America—has always been good at is managing that risk tremendously well. A large part of the reason they have succeeded is their extraordinarily good management of risk.
In terms of deciding what it is for and whether one should necessarily have a public engagement with that, for some things that is very valuable. For others, opacity is surprisingly effective. Most of the US agencies have some degree of opacity, partly because they work on defence and security, but partly because you are going to ask people to stick their neck out and try to do things that they start out by viewing as probably impossible. Step 1 for an ARPA mission specialist or programme manager is to try to get some evidence that it is not impossible and might be possible. If you are asking people to work like that, shining a spotlight on them is more or less placing them under pressure to step back from that plate and become more conservative. I do not think that is a good thing.
Chi Onwurah
Q
Professor Mazzucato: I just want to clarify what I understand in terms of challenge orientation, because I think there is also a bit of confusion there. Challenges globally are the sustainable development goals. Every country is actually signed up to them, including the UK, so we should hear a bit more about the SDGs in the UK national debate.
Let us just bring it back to the DARPA or NASA kind of model. Broadly defined, DARPA is, of course, challenge-oriented. The key thing is how it can translate those challenges into missions. Take the moon landing, which I wrote about in my recent book. I talked about both what to copy and what not to copy from it—most of it was what not to copy. The challenge was the space race, the cold war, Sputnik—NASA did not have much to do without that. They transformed that into a mission, which was to get to the moon and back again in one generation, so it would be wrong to say that DARPA and NASA are not challenge-oriented.
The point is that how they are structured is much more specific than that. Those are problems that need solving. They did not just say, “Oh, let’s go and compete in space with the Russians.” Again, it was very specific: getting to the moon and back in one generation. You can actually answer the question, “Did you get there: yes or no?” Lots of different sectors got involved; it was not just one big isolated project—that is the whole picking winners problem. It required innovation in nutrition, textiles, materials, electronics, and the whole software industry can, in some ways, be seen as an output of that. Again, how did they organise the thinking and the purposefulness of the organisation? One of the first things they did was change their own internal structure to be much more horizontal, with project managers, precisely to be purpose-oriented.
I just think there is a bit of a false dichotomy between whether you need a challenge or whether it is about a big radical innovation. DARPA has always been challenge-oriented, and that is why they needed those radical innovations to actually confront those challenges. The questions they were asking were much more specific and were framed in a targeted way, so you could actually answer the question, “Did we achieve it or not?”
In terms of the risk, I absolutely agree that it is not about risk for the sake of risk. In a conference I organised back in 2014, called “Mission Oriented Innovation”, I invited Cheryl Martin, who back then was the second director of ARPA-E, and she said that they actually structured ARPA-E in such a way as to welcome as much high-risk thinking, and that the whole point was to matter in the economy. They would actually measure their success both on whether they took those risks, because if they were going for easy things, they were not doing their job, and on whether their successes, of which there would only be a few—they accepted that there would be lots of failures—would have a big impact in the economy. For example, they ended up being very important for battery storage.
ARPA-E is very different from DARPA. It has a tiny budget of about only $300 million a year. One of its problems—it is also really important for the UK to learn about the problems—is that it has been too wedded to industry. It has focused too much on asking industry what it needs and then it ends up almost being this massive technology office, compared with DARPA, which had a very clear Government customer—basically, the Department of Defence. It is important to ask again who the obvious customer for ARIA is and how that is linked to different Departments, so it does not just become a matter of bringing geeks into government—the line Dominic Cummings mentioned. Yes, you want experts in government, but geeks in and of themselves are not what you want to strive for; you want to solve problems that different Departments of a democratically elected Government put out there.
We should also make sure that those problems are not told to Government by experts like ourselves on this Zoom call, or other Zoom calls, as James rightly said, when everyone will just put forward their own pet project. We need to think about the democratic forums and the different types of the debate that are needed in a country, precisely so that the problems and purpose are shared as widely as possible. That includes winning the war, back in the cold war days.
Chi Onwurah
Q
Professor Mazzucato: I am holding the 2017 industrial strategy, which Greg Clark’s team put together. We very much advised on that and one of my roles was to say stop just making lists of sectors. You will remember that under David Cameron’s team there were five sectors: automotive, aerospace, life sciences, finance/financial services and the creative sector. I said not to make a list of random sectors, which can easily get captured by those sectors with the loudest voice, but to think about what their problems were. They solved that in the industrial strategy—they listened, and I was very happy—and decided on four challenges, namely, healthy ageing, clean growth, the future of mobility and the opportunities that AI and the data economy provide to us.
In terms of identifying the missions underneath those, I set up a commission co-chaired with Lord David Willetts entitled the Commission for Mission Oriented Innovation and Industrial Strategy. We worked very closely with the different challenge teams in BEIS precisely to answer your question. It is definitely not the role of an economist, academic or business person to tell you what the missions are. That must be co-created within Departments alongside different stakeholders, but surely the first answer is that those missions must be those that respond to those four challenges.
On clean growth, the answer must be carbon-neutral cities all over the UK; or take a global challenge such as clean oceans—sustainable development goal 13—and getting the plastic out of the ocean. What is the UK’s contribution to that? What about the digital divide, under the challenge of AI and the data economy? Just think back to when the BBC had a mission. Back in the 1980s, it wanted to get every kid to code, before it was sexy—today it is very sexy to talk about coding. The BBC was doing that back then, and its own procurement strategy helped to deliver that by producing the BBC Micro computer. The BBC did that not because it was obsessed by technology but because it needed it to fulfil that mission. So, this strategy is not completely new to the UK, but we should not pursue it as a siloed project; it must answer the big questions such as the digital divide, carbon neutrality, health ageing and so on. But you have the 2017 industrial strategy, so start there; we cannot keep rethinking from scratch each time.
Chi Onwurah
Q
Professor Wilsdon: I do not have a mission in my back pocket that I want to push. My argument is simply that the thing needs to have more clarity. I do not really mind what it ends up doing, as long as we go into it with a better sense of what we are trying to get out of it, as Mariana said. It is worth going back to some of the other strategic documents that operate and run the UK system, including the industrial strategy, as Mariana says.
In July last year, the UK Government published its draft R&D roadmap. Again, that is a good idea and it is something that many other countries do. It set out a longer-term planned direction for the system, and tried to explain to the system and to wider stakeholders how the different parts fit together and their different functions. To me, the logical sequence of events would have been to conclude that process—I realise it has been a difficult year for everyone for obvious reasons—and then to identify the particular gaps and priorities to which a new funding mechanism could be directed. What we have done is fixate on a particular institutional model, imported from the US in the late ’60s, and dumped into Britain today, as the way in which somehow, magically, we are going to cut through all sorts of real or perceived barriers and obstacles in our existing research and innovation system. I just think that is a very flawed way to do this.
We are where we are. The Bill is in front of Parliament. We need to focus at this point on how we can amend it, or you can amend it, to improve it. I think that trying to bring more clarity, or at least a sense of how this issue will be addressed through the governance of this new thing, is really important. Otherwise, you or your successors, and we or our successors, will be back here in a few years’ time, asking ourselves why it did not work. I know that it has a tolerance of failure—we are all in favour of that—but the thing has to at least succeed in some respects, alongside its appetite for failure.
The Chair
Professor Bond, did you want to comment?
Professor Bond: I just want to make a remark, if I may, on scale. Talking in the same breath of putting man on the moon, which cost up to 5% of US GDP, so roughly 60% of UK GDP, and ARIA, for which the figure is £200 million a year, is, I think, an issue.
I agree that there is confusion about challenge. The grand challenges are really better structured in different ways, which is why NASA has a director and why the Manhattan project had very strong, firm leadership. I want to use that to emphasise, first, that ARPA/DARPA mainly does not use challenges. There are some fields where it has done—robotics, autonomous vehicles and a few others—but that is not its main way of doing things. The issue about the word “challenge” is that for some things, particularly in computer science, it can be a very good way to bring together people in different teams that would not normally operate in that way, but it is just a mechanism for doing that.
The question you have asked me is about the mission for ARIA. I totally agree, by the way, with what was said: it is much easier in life if you have a customer. But if a really good director is picked, they are going to go out and get some customers—probably within Government. There is so much that can be done in government; there are so many good things to be done that if you have an imaginative and intelligent director—I am sure that will happen—that person can find plenty of sensible things to do. I therefore think you do not need to be overly prescriptive; you can try to leave it open.
I was also involved in the structuring around the industrial strategy grand challenges. First, they are another step up in scale. Secondly, I do not think we should be binding anyone to having to focus on those at all. It is rather obvious that there are many interesting and important problems societally. It is obvious that there are many, many ways in which somebody could look to do things, whether with education and helping kids to learn better, or with the NHS or anything else. I would leave it up to the director and the mission folk to do. The whole point of a DARPA is really to leave it open.
What you want these people to do is one thing: you want to demand of them that they make their best attempt to do radical innovation—to do things that, were they to work, would mean a step change in what should be done. It is going to be easier if that can get implemented in some efficient and effective way, so how that is done is a great question, especially as it will be a small office. That is somewhere that the office is clearly going to have to work with Government and find customers within Government, and do things that are so impressive that that will work. That is a challenge, but that is why you get a director.
Amanda Solloway
Q
Professor Bond: I would probably have a board and another structure. Certainly one of the super-important things that works in the US ARPA is that the programme managers are challenged in a sort of dragons’ den. It is a friendly dragons’ den, but they have to convince very capable, technical people that they can do what they do. That is one structure that would need to be slotted into place.
As for the board, I think you could have a slightly unusual board. I do not think it needs to be big; it could be very small. It could be less than 10 people, for sure, but you could also expand it a little bit with something that is a bit like a non-executive director, or NED—somebody from a different area with a rather different take on things. The balance will be important. You want a balance of people; I think you want some very radical thinkers in there, some people who know how things work in industry and some people who know how things work in academia, and so on.
As for the autonomy, I am personally a big believer in giving the chair and the director enormous amounts of autonomy. You pick people you are willing to bet on and then hand them a lot of trust. In fact, if you want to define the ARPA model at some level, it is this: it is a different model of trust. Bureaucracies occur because although we like to trust people, we have to throw up lots of rules and regulations to make sure that things work the way we feel they should work. What you are doing in creating this kind of model is handing trust to people. You want people with high integrity who are brilliant, and then you let them get on with it, and you trust that they will do something that reflects their character.
I do not think the board needs to be big; I think it needs to be very good. There should be a small number of outstandingly good people, who can tap into a broader network and bring in people to give a different vision and view from that which you will only ever get with a small number of people.
The Chair
Before I go to Stephen Flynn, can I just have an indication of who wants to ask questions? I have got Sarah, Daniel, Aaron, Jane—okay. Thanks very much indeed.
Professor Mazzucato: Can I make one super-quick point on what Philip just mentioned?
The Chair
Absolutely, and then I will go to Stephen.
Professor Mazzucato: One of the things that DARPA is very good at is not only turning the tap on, in terms of funding the things that we have been talking about, but knowing when to turn it off. Knowing how to pivot and to be flexible and agile is absolutely necessary. Not only should this agency be free from burdensome bureaucracy, it needs to proactively get an agile and flexible structure, and the metrics that tell you when to turn the tap off, because this is the challenge. You want to be long-termist—going for the difficult things and not the easy ones, which you do not need an ARIA for—and also to have the metrics internally to tell you when things are not going right and when you actually have to stop.
Stephen Flynn
Q
I have a question for James and Mariana, and then one for Mr Bond. James and Mariana, you both clearly want to see a mission. However, I do not think we should necessarily kid ourselves that the Government will be minded to agree to any amendment in line with that. Do you have any other wider concerns about the Bill whatsoever, or around ARIA as an entity? Do you see any positives at all? In a previous evidence session, we heard about the good prospect of it being small and agile. Is that something that you would see as a positive?
Mr Bond, you are placing a lot of emphasis on the director—I think you used the words “people with high integrity who are brilliant”. That is pretty vague, to say the least. I am sure we could all pick people who we think are brilliant and have high integrity, so are there any definitive qualities, or anything at all with a little more substance, that individuals should have, perhaps in relation to scientific merit, or their background and commercial activities?
Professor Wilsdon: You are specifically thinking about aspects of the Bill that can be tightened and improved, accepting that there is only so much that can be done at this stage. The National Academy of Sciences—the Royal Academy—has published a very good and detailed set of probing amendments to the Bill just this week, and I would certainly endorse several of them. They include inserting a clause that requires ARIA to complement the work of UKRI. That would go at least some way to dealing with the concern that persists over boundary skirmishes, shall we say, or fuzziness at the edges of what the big public funding agency is there to do and what this new thing is there to do.
Accepting that it is going to be hard in the middle of the Bill to define the mission—it is the wrong way to go about it—I wonder whether tightening up some explanation in the legislation of how the process of defining the function and orientation will work, whether on a cyclical basis, for example, choosing particular things to focus on over a five-year cycle or whatever, would also help.
I worry greatly about the touching faith that Philip and others seem to place in the capacity of the chief executive and chair to be these sort of omniscient, wise characters and, indeed, in the Government to choose the right people. It is very important when we are spending £800 million of public money that we establish proper mechanisms of transparency and accountability. I do not think that has to inhibit innovation. I do not think there is any supporting evidence that freedom of information or other measures that currently exist are inhibitive of effective innovation. I do not recall any discussion of that coming up during the passage of the Higher Education and Research Act 2017, three or four years ago, which Committee members may have been part of, and when UKRI was being created. It was not a problem to which any discussion was directed, so I am confused. Such provisions apply to DARPA and other bodies in the US system.
When it comes to people, I hope very much that the Government manage to secure talented people. I hear Lex Greensill is available and has impressed many senior figures in Government in the past with his innovative and disruptive approach to various financial mechanisms. That is the point: if we want this thing to survive and persist and be a valuable addition, it needs to be set up in a way that will avoid capture by anyone—by me, by Mariana, by Philip, by anyone. That is the reason why we have the structures. It really is incumbent on Parliament now, through this process, to try to put more of those mechanisms in place. I just do not see the evidence that they will inhibit its effectiveness.
The biggest barrier to effective, creative, high-risk funding of research and development in this country over the past 10 years has been lack of investment, period. That is the issue: lack of investment. It is great—it is wonderful—that the Government are tackling that with its doubling of public R&D by 2025, if they get there. As I said at the start, that creates the space in which new initiatives such as ARIA can thrive—I hope they do—but there is no evidence that I am aware of for some of these unsupported assertions that are being bandied around about bureaucracy in the system and transparency being the problem. I just do not see it. In terms of the legislation, it is very important to try to tighten those provisions.
Professor Mazzucato: I would agree with a lot of what James said on investment. It is very important to remember that the UK continues to have a below-average GERD—gross R&D spending—over GDP, but also a below-average BERD—business investment in R&D. One of the key things that the DARPA model did in the past was precisely through being ambitious in areas that were market creating, not just market fixing, and also really cheap to crowd in business investment. Again, as I mentioned before, we need metrics to make sure that is happening—in other words, that it is actually creating additionality and getting investment to happen that would not have happened otherwise.
Coming back to the big question, which is a very important one, there are three big things we need to make sure we are doing. One is to have a very clear idea of the innovation landscape in the UK and exactly the gap that this new agency would be filling, because even though it might be exciting to form a new agency, if it is not filling a real gap and is just creating a bit of confusion and repetition, or creating something we do not need, that is a huge problem. Personally, I think it is a good idea, especially if we structure it in the right way.
One of the things I did in the European Commission was put forward this idea of mission-oriented innovation. On the back of that, missions are now a new legal instrument within the European Horizon programme. What that does is ensure that the part of the European budget that used to be challenge-oriented in a very vague way now has the concept of missions to guide it. I argued that we needed to make sure we know what we are talking about when we use the word. I argued that five different conditions had to be there.
The first was that missions be bold and inspirational with wide societal relevance. The second was clear direction—targeted, measurable and time-bound. That is the point before: making sure you can answer “Did you achieve it or not?” The third was to be ambitious but realistic, supporting existing research and innovation actions as well as applying them to those difficult new areas, and, again, areas where there is actually a customer basis. The fourth was that they have to be cross-disciplinary, cross-sector and cross-actor. I gave an example where it is not just about going to the moon—a carbon-neutral city would also require all sorts of innovation across multiple sectors. So it is making sure this does not replace a sectoral approach, but really fosters that inter-sectoral approach. The fifth was that it has to stimulate multiple bottom-up solutions. That is where we need to make sure we are not confusing the concept of missions with projects—often pet projects.
Third is the whole point about expertise in Government. Of course we need expertise in Government and we often have that expertise. When we do not have that is also when you are most open to capture. In my recent book “Mission Economy” I dug out some really interesting documents in NASA, during the Apollo programme, where they said “If we stop investing within our own brain, our own R&D, we are going to get captured”—by what they called “brochuremanship”. At the time, businesses did not have sexy PowerPoints, like, say, PwC, Deloitte and so on: companies came in with brochures to argue why they should be working with NASA. They said, “We need to be working with the best businesses out there, and in order to know how even to write the terms of reference with the businesses and know which ones to work with, we ourselves have to be knowledgeable.”
This comes back to the point, do we have a Government who have been, over the last decades, investing within their own dynamic capabilities within the public sector? I think, here, we need to look at what has been recently coming out in the news. Lord Agnew argued that we have been infantilising Whitehall by the over-use of consulting companies. So the lack of investment within Whitehall, within Government, in their own capabilities, is the biggest opener to the possibility of getting captured; because they do not necessarily then know what they are doing in different landscapes.
Lastly, I would argue that one of the things that most distinguishes the UK innovation landscape from the US one, even taking size into consideration, and everything else, is the lack of confidence. Since I have lived in the UK, for the last 20 years—I am now proudly a UK citizen—there has been constant change in names, whether it is the Technology Strategy Board becoming Innovate UK or what is now the Department for Business, Energy and Industrial Strategy having changed its name four times in the past 20 years. If Government do not know what innovation is for, and if they have these constant consultations with others telling them what to do, that exudes—it kind of reeks of—lack of security. I am not saying you should be confident for the sake of it. I do not even think that is necessarily a value to be held; but this idea that actually we do not even know what we are talking about in terms of what the role of BEIS is, or what the different types of institutions are, what their role is and how they can work together with a dynamic, innovative division of labour, instead of constantly changing the names of existing institutions or bringing forth new ones: that is just something that someone is going to have to deal with.
The Chair
Professor Bond?
Professor Bond: I think the question I was asked was about the qualities I might look for in someone. I think that the principal quality that you want in a director, and in the programme managers, is divergent thinking. We have a tremendous system for educating people to become extraordinarily good convergent thinkers. That means they are very good at solving problems in a specialised domain; and that is a valuable set of skills. Here, you need something that goes beyond it. We have heard a lot about NASA. NASA famously realised this in the early days and set about looking for divergent thinkers—and had a test for divergent thinkers. You want someone who shows the ability to be both a very good convergent thinker—a conventional thinker—but also a very good divergent thinker. That is a much rarer thing.
I think you want someone who has shown that they have a real interest in cross-cutting by having done it much of their life. A lot of people talk about it but do not do it. So you want someone who does. When I say cross-cutting I mean across different disciplines—someone who has actually done more than one discipline and someone who has actually worked with industry and academia. That is what I think would be ideal—someone who has an insight into science but also engineering, because you are going to need engineering know-how, and engineering thinking is not the same as scientific thinking. I have worked a lot with Formula 1, for example, and with Rolls-Royce, and it is a different form of thinking.
It is a little closer to what Professor Mazzucato was referring to when she said that you want to combine the thinking of fundamental research with really pushing the limits and boundaries of things. I think you want someone like that. Someone phrased it to me recently as not wanting to see the usual suspects; that is probably one way you can frame it. I think you want somebody who is clearly respected, because people who know them know that at least they have solved some hard problems.
I would like to address the point about avoiding capture. You can talk about people having special interests. Lots of people have come out and said what they think this should do. I have tried rather hard to say exactly what I do not think it should do. I do not think it should do this, that or the other and I do not think that you should necessarily say that it should do this, that or the other, so I am not someone who would want to end up capturing it, in that sense. I want to firmly assert that you put trust in people. When you put trust in people, those people will have some ideas, expertise and background, so you will be making choices. Making choices does not equate to capture, and it is entirely possible to put trust into excellent people and let them do things. We do that with democracy and with Parliament.
In terms of the level of transparency, transparency is a good and wonderful thing in most areas, but if you are asking people to go out on a limb to really push the envelope, I would assert that there is an argument, which has some validity, that you make it psychologically much easier for them if they do not feel that they are under a microscope. Many people tend to step back when they are there. Unless there is some overarching reason for it, I think that they can absolutely be over the size of what is done—they should be and will be—but I do not think it needs to be excessively burdensome in terms of the transparency of what is happening. Again, it comes back to the trust model that you have. The trust model I have is that I believe you can find people you can put trust into, even with £800 million.
The Chair
Thank you very much. I am just going to give the timing because I do not want to run out of time and we have less than 15 minutes left. I have the list of people wanting to speak and I will take it in this order: Daniel Zeichner, Jane Hunt, Sarah Owen and Aaron Bell. Did I miss anybody out? No. I move now to Daniel Zeichner.
Daniel Zeichner
Q
Then I have a question for Professor Bond, which was actually posed by Professor Wilsdon in an article he wrote a while ago. He asked:
“What empirical evidence is there of the problems in the UK’s R&D system to which the Aria bill is the solution?”
Professor Mazzucato: Talking about innovation policy without an industrial strategy or an industrial strategy without an innovation policy are equally futile. The problem is what do we even mean by an industrial strategy. I have already mentioned that I think that the wrong kind of industrial strategy is one that makes a random list of sectors, technologies or types of firms, to find SMEs and so on. It is more one that focuses on problems and then gets all sorts of different sectors to solve those problems together and then, for example with SMEs, it gives them extra support because they are small. The support they get is not because they are small, as though small is great quality, but because they become an active member of a transformation strategy in which both the industrial and the innovation side are equally important.
It has been talked about that the UK Government are abandoning their industrial strategy; I do not think that is actually true. I speak to very able civil servants working today in BEIS and I think action on an industrial strategy is going forward. My question is, why have we decided that it is no longer called an industrial strategy? That actually comes back to my previous point about the lack of confidence—perhaps someone decided that it sounds too ideological, although I am not sure why because it is not at all. The US Government are reviving their industrial strategy. Many countries have industrial strategies. The reason that Denmark is the No. 1 provider of high tech green digital services to China, which is spending more than $2 trillion greening its whole economy, is because it has had an industrial strategy.
One thing is to name things for what they are. The UK continues to have an industrial strategy. Wonderful documents have come out about the innovation policy from BEIS, but if we are not calling things what they are, that creates confusion. The way to attract top people to Government is to be clear, as I said before, about what Government are for.
Let us look at the way that the US Government managed to hire a Nobel prize-winning physicist to direct the Department of Energy, Steve Chu. He set up ARPA-E back in 2009, where the first director was Arun Majumdar, who then went on to direct the energy programme for Google. He was not told to come in because he was a geek, or to incentivise business for the sake of it; he was told to come in to help Obama direct the stimulus programme, which was $800 billion, in a green direction. That sounded incredibly exciting and, of course, he was willing to leave Stanford for some years to do that.
The best way to bring top thinkers and experts with different types of expertise into Government is to make it exciting in terms of what Government are there to do. That has to be not just fixing market failures but being actively part of the co-creation and co-shaping, alongside business, of the markets of the future. DARPA has been really good at doing that within its space. It does not matter what the budget is—I would argue for a larger budget for innovation in general in the UK, but even with a fraction of that budget, what is the remit of that organisation? If it is just fixing problems along the way, or asking business what it needs, or being a clear, proactive, mission-oriented shaper of markets, that will definitely impact its success, but especially who will want to work in it with high expertise.
Professor Bond: I was asked, what evidence is there of issues in UK R&D to which ARIA is a solution? First, we have a wonderful science base but it has largely become incentivised to publish papers in fancy journals—that is how you make your mark and get promoted and respected. That is a fabulously good thing, but ARIA can do something quite different. When you work in industry, your goal is to build or make something or move something forward, not worry about publishing it. In fact, usually you do not bother to publish it. For all that we are a tremendous scientific nation, there has been such a focus on that, but we could focus a lot more on doing things rather than feeling that there should be publications. I am not saying that there should not be publications, but that certainly should not be the focus.
A lot of what happens in academia, for perfectly good reasons, is to move things to some low-level prototype at most. There is often a lack of the kind of engineering that companies are required to do. That is not to wave a finger at academia—that is not what it is there to do. You need to do things differently when you are in industry. There is a role to be played by a group that can do those two things very well. Industry also does not necessarily do everything as well as one would like. There are exemplars where everything gets done very well, I hasten to add. It is absolutely possible, as Professor Mazzucato put very well, to link applied research to develop things and to bring in deep expertise when you need it. We can do more of that, and I think this can be an exemplar of a good way of doing it. If you want evidence, it is that the Americans have done that with ARPA and have been really successful at it. We have not had one. I will use that as the evidence.
Jane Hunt (Loughborough) (Con)
Q
Professor Mazzucato: Wow, that is a fantastic question, and of course it also goes back to the education system. This may be too broad a point, but the more unequal an education system is, the less able a country is to access the full range of potential innovators, so we should always be linking up the two. Education should really be the great leveller. There is this big distinction between private and public, and even within the public and state system there are huge differences. One could even look at the whole A-level system. I once asked myself how many people in the UK study mathematics. Only a few do an A-level in maths. Do you even study calculus? In most countries, everyone, whether they become a poet, an engineer, a geologist or an English teacher, studies calculus as part of their training. Going back to the education system and looking at how it is distributed, in terms of the high quality within a country, but also regionally and by class, is a big point.
On the other part of that question, the first point that I made today is that the discussion about ARIA should not get confused with the fact that we always need curiosity-driven research. The National Science Foundation funding or the Research Councils UK funding in the UK really should reward great ideas because they are great ideas, whether or not they are talking about some big societal challenge. That should always be properly funded. Again, if you compare us with some other OECD countries, we are not necessarily on par with that.
We should have a conversation at the same time about what institutions galvanise the mix of thinking between basic and applied. That is why Vince Cable set up the catapult centres, which were modelled on the Fraunhofer institutes. The difference between Fraunhofers and catapults is not only that the German Government spend 10 times as much on Fraunhofers as we spend on catapults, but also that the same person—the same individual human being—goes from being a civil servant to being a businessperson within the Fraunhofers. There is a much less fuzzy distinction that we tend to make in the UK between the bureaucrat and the entrepreneur. That itself is a really interesting function of an agency, coming back to Professor Bond’s point that we should not have these siloed areas, with academies just doing the academies and then businesses on the other side. Finding those interesting corridors, where there is a basic needs supply but the same person breaks down the false dichotomy between bureaucrat and entrepreneur, is something that is perhaps missing in the UK’s innovation landscape.
The Chair
Thank you. Can I just interrupt and say that there are three minutes left and I have two questions left? Can people be to the point?
Professor Bond: I think ARIA cannot and will not address every creative mind that we have in invention, but we can do more as a nation for inventors. We can do something like Kaggle, which is a fabulous way of bringing people together. We can do more easy seeding of things, and we can have a lot more Makerspaces. Those are a couple of ideas. I could keep going on, but we do not have time.
Sarah Owen (Luton North) (Lab)
Q
We have heard a lot of evidence in the two sessions about the need for ARIA to identify what it is for. We should also be clear about what it is not for. Professor Wilsdon, do you think that moral and ethical boundaries need to be placed on ARIA?
Professor Wilsdon: You mean in terms of the research areas it would work in?
Sarah Owen
Yes.
Professor Wilsdon: I am not sure whether one would need to legislate for that. I would expect that most provisions in those areas would apply, but it is a good question and one that bears more thought. It links a bit to my point about accountability mechanisms. As I have said already, the nervousness is that you combine an institution with a fuzzy, ill-defined purpose with very loose mechanisms of accountability. That is a recipe for all sorts of problems down the line, as well as potentially for great things—who knows? It is a model that has very obvious potential flaws. It is not going to work in the defence arena, which is clearly the one, as I understand it at least, that would raise the most issues in that respect. The key thing is the governance structure for this entity, which I see as too loose.
The Chair
I think we are going to hear your question, Aaron, but we will not get the reply.
Aaron Bell
Q
Professor Bond: Sorry, when you say “new people”—
Aaron Bell
Q
Professor Bond: Yes, I think so.
The Chair
Perfect. We have come to the end of the time allocated for the Committee to ask questions, and indeed for this morning’s sitting. I thank our witnesses on behalf of the Committee for their evidence. Professor James Wilsdon from the University of Sheffield, Professor Mariana Mazzucato from University College London and Professor Philip Bond from the University of Manchester, thank you very much indeed.
Ordered, That further consideration be now adjourned. —(Michael Tomlinson.)
Advanced Research and Invention Agency Bill (Second sitting)
(3 years ago)
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The Chair
Q
Dr Highnam: Thank you very much for the invitation. I look forward to your questions.
Professor Azoulay: Good afternoon. Thank you very much for inviting me to testify in front of the Committee. I look forward to the exchange.
Dr Dugan: I am Regina Dugan, the CEO of Wellcome Leap. I look forward to your questions.
The Chair
Thank you for coming to this important evidence session. You are all very welcome. We will start the questions with our shadow Minister, Chi Onwurah.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Q
Dominic Cummings said:
“The purpose of ARIA ought to be to sample in this broader design space, to do things differently, and to learn from the things that have been super-productive in the past. That means in very simple terms extreme freedom.”
Dr Highnam, does DARPA have “extreme freedom”? What does that mean in cultural terms? Does complying with, for example, US freedom of information laws or procurement regulations—it is proposed that ARIA would be exempt from them—impact on that freedom?
Dr Highnam: That is a great question. DARPA is an agency in the Department of Defense in the US Government. We have a number of regulations and laws that of course we operate within. We have a number of special authorities that allow us to operate a little faster and with a little more independence, but with oversight. It is a place that moves quickly. As you are probably aware, when you show up at DARPA, you have an expiration date on your badge, as we say, so you move fast and the whole place is geared to do that. The agency now has a record of 63 years of production—again, with oversight at all times. It gets the job done, in that context.
Chi Onwurah
Q
Dr Highnam: I can speak only to how DARPA operates. We have very rigorous review processes—technical, financial and others. We have conflict of interest rules and so on that we all follow. There are robust processes and independent looks at those processes. Again, we could not operate any other way.
Chi Onwurah
Q
Professor Azoulay: If I might add one element to the question that the hon. Member asked, the programme managers at DARPA and also at ARPA-E—the Advanced Research Projects Agency-Energy—have a fixed expiration date, which means they will need to go back to academia or to the venture capital firm or large firm that they left, and generally they want to do so with their head held high and their reputation intact. I think that that has created over time a norm of correct behaviour, if you will, and the absence of cronyism. That norm element is also very important, in addition to the formal regulations.
Chi Onwurah
Q
Dr Highnam: No.
Chi Onwurah
That is very clear.
Dr Dugan: I served as the 19th director of DARPA and echo Peter’s statements that there are indeed oversight and regulations that govern the behaviour at DARPA. We have free and open competitions. One of the things it is important to understand is that part of the reason that innovation is so robust at DARPA is that there is a sense that there is an equal opportunity for many to apply to the programmes and to be fairly judged. As a result, many bring their ideas to DARPA. That is part of the robustness of the ecosystem that has developed around the agency. It is a very important element of the work.
Chi Onwurah
Q
Dr Highnam: Honour in public service is top of the list.
Chi Onwurah
Honour?
Dr Highnam: Yes. You join a place like DARPA to change your field and make a difference for defence. We are a defence agency. When you come to DARPA, we give you the lever arm, we help you position the fulcrum, we give you the mass to make things happen, and we give you the processes around you to make sure, as Regina said, you do it fairly, openly and robustly. We do exit interviews when people leave DARPA, and one of my favourite quotes is, “If you don’t invent the internet at DARPA, you get a B.”
Chi Onwurah
Fabulous.
Professor Azoulay: I second that entirely, but I would also say credibility in both the scientific world and the business world. It is a relatively rare breed of individuals who have credibility in both domains at the same time, but that is to quite a large extent the X factor in the typical DARPA or ARPA-E programme manager.
Chi Onwurah
Q
Dr Dugan: Let me take the questions in order. I would add that DARPA and ARPA-like organisations are optimised to create breakthroughs. Those breakthroughs happen at the intersection of some science and engineering that we are pulling forward in service to a new capability or a new problem solution. We design the programmes such that we have a very clear and ambitious goal that is also measurable and testable. Programme directors have a finite period in which they collect a group of performers from a mix of organisations and disciplines in service to that goal, and there is passion, spirit and urgency that comes with that. It cannot be created in the abstract; it has to be real in order to engender the kind of genius and collaboration that is characteristic of these programmes.
The programme directors are themselves scientific or engineering experts. They are great musicians, as you might think, but they are not playing an instrument at the time of conducting the programme; they are rather conducting an orchestra of expert musicians who together make a symphony. That is very important.
What I can tell you about diversity from my own experience, both in Silicon Valley and at DARPA, is that for decades we have known that specificity of goal and outcome is a good way to get more equality and diversity in assessment of ideas and in people conducting or pursuing those ideas. We know that across academic institutions and across companies. One of the things that is important is to set crisp and clear goals, because the ideas are then measured against them, and they can come from many different individuals and organisations. As I said previously, I believe that is central to building that ecosystem out, and for that ecosystem to be diverse and more equitable.
Chi Onwurah
Thank you very much. I know that others have questions to ask so I will leave it there, but I just want to say how inspiring it is to hear such positive reference to the power of public service, science and research, and to oversight as being an enabler rather than a burden.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
Q
I am going to start with Dr Peter Highnam. How do you ensure evaluation and scrutiny of DARPA’s programmes outside what is mandated in legislation? What information do you gather to assess when to start and stop projects and programmes, and how are these decisions made?
Dr Highnam: That is a surprisingly big question. The p in DARPA stands for “projects”, which is critical for a place like DARPA. We are not doing technology area x or y just because, and we do not do it for the long term. We have projects that are well defined at the beginning. A case has to be made. They are monitored, they have metrics and all manner of independent evaluation associated with them before we go out to find the best teams we can to participate and to be funded to work on that research. Then that project ends. That is very important: things begin, and they end.
To make the case for a project to get off the ground, we use a structure called the Heilmeier questions, named after the DARPA director in the mid-70s, George Heilmeier. They are five very important questions. They look easy, but they are very hard to answer well. In my view, that is the creative act in the DARPA model—to answer those questions well and make that case. Once the project is approved and teams are onboard, you then have regular evaluations. As things change in the world around us, in science and technology, with us in defence, and in other aspects of our environment, they may be overtaken by events. That is very rare, but it would be grounds for no longer continuing. Were we too ambitious in certain aspects of the programme? Do we need to change it or change some of the people participating in the teams? And so on.
This is a constant process. It is not about starting it up and letting it run until it finishes. It takes a lot of effort to make sure you know what you are doing when you start with taxpayer funding and the opportunity cost that comes with that. Then you keep an eye on it, especially during the transition of the results to our national defence.
Amanda Solloway
Q
Dr Dugan: The story of Wellcome Leap actually dates back to about 2018, when the Wellcome Trust, from its unique position in the world, asked, “Is there more we could do to have greater impact?” It did a pretty careful analysis of innovation as it happened in larger organisations in the venture world and also at DARPA. The assessment was that in global human health, there is indeed this innovation gap. That innovation gap is characterised by larger programmes with higher risk tolerance, which are not driven by consensus peer review. This is very much the way we conduct programmes at DARPA—the intersection of a goal and the science and engineering that need to be pulled forward in order to attain that goal. That effort—those large programmes—are what Wellcome sought in the formation of Wellcome Leap. What I have observed in the last year of operation is that, in fact, there is this innovation gap in human health. It is same one that was identified after Sputnik that led to the formation of DARPA. The coronavirus is showing us just how much work needs to be done in human health across policy, equity and the economics, but it also shows us the power of a breakthrough and how tough it is to get one.
I was the director of DARPA when the pivotal investments in mRNA vaccines were made. Many others came to the table to create this success for the world in this time, but we need more breakthroughs like that, and we need them faster. That is why Wellcome Leap was formed.
Amanda Solloway
Q
Professor Azoulay: Absolutely, it is essential and I think it happens at multiple levels. It happens in the relative administrative autonomy that those ARPA-like agencies have, relative to their Government Departments of reference, whether it is the Department of Energy for ARPA-E or the Department of Defense for DARPA.
It definitely also happens at the hiring level and in the fact that one can hire programme managers in ARPA-like agencies from very diverse backgrounds, not necessarily a background in the civil service, and pay them according to rules that might not be those of the traditional civil service.
Focusing on programme managers, that matters because they themselves have quite a bit of autonomy in the way in which they delineate and orchestrate their programme. They have a lot more discretion in choosing what projects to fund and assembling the teams that will perform those projects than would be the case in a traditional science funding agency, such as the National Institutes of Health or the National Science Foundation in the United States context or, I would think, UK Research and Innovation in the British context.
Stephen Flynn (Aberdeen South) (SNP)
Q
I would like to pick up on a comment made by Dr Dugan, I think, in respect of the intersection of a goal, and using science and engineering to achieve that goal. It would appear, from looking at what is front of us, that the ARIA Bill does not have a goal. There is no mission or bright light that we are trying to get to. What is your collective view—all three of you—in relation to that? ARIA has no mission: is that a good thing or a bad thing?
Secondly, and hopefully briefly, do you think that the UK needs ARIA in order to compete globally when it comes to science and technology research and development?
Dr Dugan: Let me start by clarifying. From its beginning, the mission of DARPA has been very simple: to both create and prevent strategic surprise. Its connection to national defence has been important to its success. The particular goals that I spoke about were related to the programmes themselves. The programmes are constructed such that we have a clear way of measuring success or failure for the programme at the end of the programme. It is those two things that fit together: the programmes with individual ambitious measurable and testable goals, in service to the overall mission.
I have said in previous testimony that there is some wisdom in thinking about ARIA as directed to specific areas of interest in the UK; I think that is worthy of some thought. There is a strong base of expertise in the UK related to health and the life sciences. Therefore, that could be an area of focus within the resources that you have available to you.
To answer your second question with respect to the UK on the global stage, I believe that at this moment there is a historic opportunity in front of your Government to take a position on the global leadership stage. My particular area of focus has been in human health over the last year—that might be a way for the UK to come from the perspective of both national efforts and multinational efforts, in service to a global vision for what we want the world to look like post pandemic and post Brexit.
Professor Azoulay: If I may, I would like to answer the first part of the question. I read the Bill carefully, and I too was looking for a mission, because DARPA and ARPA-E are mission-oriented agencies. Having a high-level mission is very important to define the programmes with the specific goals that Dr Dugan was talking about, which will fit in the overall mission. It is entirely possible that ARIA will be something new in the innovation funding landscape—a UK model that will blaze a new trail. But if we compare it explicitly to something such as DARPA or ARPA-E, in its current form it is lacking a high-level mission. To give an example, for ARPA-E that high-level mission is to overcome the long-term and high-risk technological barriers in the development of energy technologies. It is quite high level. Having that front of mind for everyone in the agency channels the energy and lets people animate or catalyse a community to allow the portfolio of projects to be more than just the sum of its constituent parts.
Dr Highnam: DARPA: defence and national security. Clear mission; clear scope in which to work. Of the ARPA-like entities around that I am aware of, the only one that very closely follows the DARPA model would be the Intelligence Advanced Research Projects Activity in the US intelligence community. When you change what I would regard as the key elements—ephemeral or temporary people, project based, and no fixed assets—that have made DARPA nimble and forward leaning for 63 years now, you get something else. That may be more appropriate for what you need, but if the objective is to mimic or replicate, there is only one example that I know, and there are three key ingredients.
Within that model, DARPA is a very shallow place in the managerial sense. Three layers deep: there is a front office, some tech offices and the programme managers. The overall mission provides the context, but the frequent hiring of office directors and PMs, and front office people too, means that there is always exploration—looking for that advantage. Part of our mission is to impose and avoid technological surprise. That is why we are here. It focuses everything.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Q
Dr Highnam: If I may, I will take the first shot at this one. It is the first two: we do not rely on the churn, as you say, of people for transition, but when you show up—when you come here—you come to make a difference. So you are always focused on transitioning the knowledge that is discovered in a more systems-oriented research programme—the thing or the entity—across into service of the nation. It is part of what you do. I think, as someone said earlier, it is that intersection of managerial and technical expertise, and a passion: those are the people you want at DARPA at any given time to frame and to drive—and not just to drive to discover, but to drive to transition as well. We watch that very carefully and the responsibility belongs to all of us in the agency.
Dr Dugan: We used to say at DARPA—and this is, I think, generally true of most organisations—transition is a full-contact sport, always has been and always will be. It is very difficult. Transitions of breakthroughs that are showing what is now newly possible, or a solution that did not previously exist, require a tremendous amount of effort. I think that it is important to recognise that there are many transition paths that grow out of an organisation that is ARPA-like. Some of the programmes, in the case of DARPA, transition to our military counterparts. Some of them transition to the commercial sector and then are bought back by national security or military. There are many different pathways. In some cases, programme managers go to other Government organisations to help in those transitions. In some cases, they rotate out and go to new things entirely.
It is important to recognise that the breakthrough itself is not sticky through the organisation that it was created in. The breakthrough then gets transitioned to impact and scale in the most suitable organisation in order to create that ultimate impact. I would add, in addition to the passion that many programme managers and directors feel, they are also impact junkies. They really come to make a difference. So the ultimate transition—the ultimate scaling and impact—is the goal. Make the breakthrough, and then transition it to scale.
Professor Azoulay: I want to note that there is a distinction between DARPA and other ARPA-like agencies in different contexts. I am sure Dr Highnam and Dr Dugan will think that it is an oversimplification, but to some extent there is one customer for the projects that come out of DARPA, whereas for something like ARPA-E it is a much more diverse and scattered ecosystem. The breakthrough needs to latch on to the energy system, and there are lots of different actors with lots of different interests. At ARPA-E that has meant that they have created explicitly a tech-to-market group, to try to get ahead of the translation problem of the project that has come out of the agency. I want to say that this is not independent of the mission. To create a good tech-to-market group, you need a certain scale within a certain scope, and to the extent that your projects are too scattered, it is going to be a lot harder to create that scale, and so harder to create the transitions.
Stephen Metcalfe
Just to follow up briefly, thank you for that; it is comprehensive and helpful. It highlights the fact that you are looking for more than just individuals with some inspiring ideas. They have got to have the ability to own the research and inspire the next stage in its progress. I just think we should put that on record—that programme managers have to be multi-skilled in a number of different areas. So thank you for that.
Dawn Butler (Brent Central) (Lab)
Q
Dr Highnam: We do—I am very proud of this—full and open competition to the greatest extent possible. The process is approximately like this. A programme manager has framed a programme, using the Heilmeier questions, and received approval to launch. They put out various announcements in different places. They organise industry days—these are more virtual than in person, but we do both. We put it into the various mailing lists in all manner of technical communities. We push it out through small business and make sure the universities and the vice-presidents for research and development are all aware. We make the maximum push that we can, certainly for unclassified activities.
Then, when proposals come in—we are very clear on what we expect to see in a proposal, which is how we then evaluate proposals; we are very transparent on the requirements for that—we take a look and, surprisingly often, to respond to your point, you will find a technology or a small business had an idea that meets the goal. We do not over-engineer the request for proposals. We say, “Here’s what we want to do. Here are the boundaries, if you like, in terms of technical elements we are interested in. It’s up to you guys. Come back with the best team that you can and the best approach that you can for solving this.” And there is always a surprise. From a PM perspective—Regina and I have both been PMs at DARPA—you always find yourself saying, “Oh, I didn’t think of that. That may be the one that actually wins; we don’t know.”
Dawn Butler
I can see Professor Azoulay nodding.
Dr Highnam: On your second point, about transparency, we have, again, very rigorous processes. These are all fully documented, and feedback is provided in order to engender better proposals next time from those who happen to be unsuccessful in a particular programme.
Dawn Butler
Great—thank you. Dr Dugan, I saw you nodding as well.
Dr Dugan: If we want to get down to some specifics, I think it is important to recognise that the evaluation process for us is very much about separating the abstracts or the proposals into two baskets: those that are responsive to the call and could potentially help us to meet the goal; and those that are not. But it is not an explicit, peer-reviewed consensus rank ordering of those proposals, and the reason why we do not do it that way is that rank ordering tends to favour the most conservative of the proposals. What we seek instead is to take those that could contribute to the goal and, from them, construct a programme, with the appropriate pieces, the right risk profile and the right disciplines and mix of organisations, to achieve the goal.
In this respect, I want to be clear. There are practices and principles that we use here. We can write down some of the rules that we use and give you some elements of the playbook, but there is here a certain mastery of practice and principle that it is necessary to understand, and in that respect the programme construction is fair and equitable but also designed to take the elements of the proposer’s work that most substantively contribute to the goal, even if they are potentially high-risk. That is how you construct a programme that is optimised for breakthroughs.
Dawn Butler
Q
Professor Azoulay: I think that those two modes of funding are complements, not substitutes. It is very important to have an ecosystem of funding. In the US, we are blessed with a very diverse ecosystem. Lots of domains, such as health—there are many, such as agriculture—in some sense are missing the ARPA-like elements, when they have a lot of those other elements.
It is important not to put those two agencies in competition; they both have a role to play. Of course, there is a perfectly legitimate debate about the relative levels of funding, but they would both be doing things that are tremendously important and that would complement each other in the long run.
Dawn Butler
Thank you. Dr Dugan?
Dr Dugan: Pierre makes a very good point. These are important elements of a robust and functioning ecosystem. We talked about the advances in mRNA, which have been so important in the corona pandemic. That relied on basic science, curiosity-driven research that happened mostly through NIH, pivotal investments in this breakthrough mode, this Pasteur’s quadrant style of work that DARPA is famous for, and also the private sector, which was instrumental in bringing it to scale, use and impact.
To Pierre’s point, these things have to fit together in order to create the breakthroughs—that is the innovation gap that is often filled by an ARPA-like organisation—but you must have a foundation of science from which to draw and you must have a mechanism of transitioning to scale, if all of it is going to make sense in impact.
It is very important to understand those things and in appropriate measure. Just to give you a sense of it, DARPA has operated with about 0.5% of the DOD budget for its entire 60-plus-year history. Small investments, relatively speaking, in these breakthrough-focused activities can make a big difference.
Dawn Butler
Thank you. Dr Highnam?
Dr Highnam: I am afraid that I do not know enough about your structures to be able to give a sensible answer.
Aaron Bell (Newcastle-under-Lyme) (Con)
Q
I have two related questions for the panel. First, notwithstanding your responses to Mr Flynn about the need for a mission, which it seems is going to be delivered by the chair and the chief executive of ARIA, how important is it that ARIA remains autonomous and free to pursue whatever its aims are, without interference from Government Ministers?
Secondly, what advice can you give the Committee about the funding methods ARIA might use? The Bill envisages potentially grants, loans, prizes, grant-prize hybrids, investments in companies. Could any of you give us advice on what has worked well in other settings? I would like to start with Dr Highnam, please.
Dr Highnam: On the funding mechanisms, we are an agency in the Department of Defense in the US Government, and we have a number of options available to us, which we make use of depending on the context. Of those that you listed, the only one that we do not do is take investment positions in companies. That is not what we do. You can make a proposal to us for research. You may offer a cost-share, depending on whether it is a major company and very systems-oriented work, all the way to a standard research grant to a university or small business, or a combination of those things.
We have a number of other options in between, including a modified form of commercial contract called an OTA—other transaction authority. They are referred to as OTs and are a very useful tool. DARPA was the first user of that about 20 some years ago. It is a great way of doing business.
To the first question, we are an agency in the US Government. We work in the Executive branch. We work and deal closely with Congress on all manner of things. We have flexibilities as an agency. We have ways of doing business and we are very careful to make sure that the wins that we achieve are well-known, and that we work within those boundaries. Again, the Administrations and Congress over the years have watched and helped DARPA, and have been incredibly supportive. The agency—Regina and I can both say this—keeps delivering as a culture and a mission place, because back in ’57,’58, they got a good recipe, and that culture persists despite 25% or higher personnel turnover. It is part of the Government, with all the benefits. All the—“constraints” is the wrong word—rules that come with that are there for a reason, and DARPA gets the job done.
Aaron Bell
Q
Dr Dugan: I want to attach independence and autonomy to desired goals and outcomes here. The reason the agency sits so independently with respect to its decision making is to find this intersection, and get through the Heilmeier questions, as Peter has talked about. I would often refer to it as figuring out how to get a project inside Pasteur’s quadrant—the idea of having a very specific outcome in mind and having the science and engineering to support the idea that you could achieve it. That is a difficult analysis. That is the creativity that Peter is talking about.
You cannot mandate that from outside the agency. That work happens on the part of the technical teams inside the agency who are assessing the state of the science and the engineering. They are working in service to the mission of the organisation with an understanding of national security goals, and they are finding that intersection. It is the single hardest thing that we do in the agency: forming programmes in that spirit. It is not possible to do that by mandate outside the organisation.
That independence of decision making and the crafting of those programmes in that spirit are coupled, and that is part of the reason why the agency has been so successful over years. I think independence is in service to those outcomes and those breakthrough objectives.
Aaron Bell
Q
Dr Dugan: Much as Peter described, we use a variety of strategies. As you may have seen over the last year, one of the things that we did was to build a health breakthrough network, which now has almost 30 signatories on six continents. The goal there is to speed contracting, so that we can move down to days or weeks what would more typically be months or even as long as a year in contracting. The particular way that we work is through contracts; we do not actually do grants. I also think that this position of not taking equity is important, because the non-profit element of it is part of the differentiation, and we have an entire commercial sector that is good at assessing value and figuring out return on investment. That is not what is pivotal or differentiating for the organisation—neither for Wellcome Leap nor for DARPA.
Aaron Bell
Q
Professor Azoulay: Yes, absolutely. First, I second what my colleagues have said and agree wholeheartedly. I would say that in terms of the modes of investment, the track record of Government agencies taking investment positions in companies is not very good, to put it mildly. It is interesting that it is something that neither ARPA-E nor DARPA actually does.
At the same time, it is important to point out that one way for an ARPA project to transition is to give birth to a start-up company. I know for a fact that in the context of ARPA-E, at least, that is something that is happening on a fairly regular basis, and that is actually tracked as one of the outcomes that one could look like, in addition to maybe much more traditional intermediate outcomes such as scientific papers and patents.
The more general point about autonomy is very important. It is really difficult. It requires forbearance on your part because the kinds of missions and impacts that you are trying to achieve at a very high level are long-term goals fundamentally. I might be overdoing it, but I have a sense that if you start ARIA today, you will not know if it has actually fulfilled its high-level mission for at least 15 years, and that might even be too optimistic.
Daniel Zeichner (Cambridge) (Lab)
Q
Dr Highnam: I said in my previous comment that I am aware of only one example that replicated DARPA intact, and that was the intelligence ARPA in the US, where I served for about six and a half years. It is very true to DARPA as it stands. Others depend on context, which includes the context of discussions like this one where there is certainly the framing of an organisation. It is being pulled and pushed and moulded by many different forces and interests. What you get coming out will, I am afraid, naturally reflect that. In intelligence here, it was a straightforward thing. We wanted something very similar to DARPA. A number of us had come from DARPA and knew what that was.
Daniel Zeichner
Professor Azoulay?
Professor Azoulay: ARPA-E is not identical to DARPA, but we certainly try to inspire it to a very large extent. I think the difficulty here is that it is a tight bundle of practices that fit together, so one open question is to what extent can you pick and choose in terms of the menu of practices? What can you undo until you in some sense undo the entire model? It is important for us to level with you that we do not really know the answer to this question, because fundamentally there has been one DARPA, and that is the one we have been able to see for 60 years. One possibility that we might want to have in mind is that it does not take a lot of changes in the model to undo its effectiveness.
Daniel Zeichner
Dr Dugan?
Dr Dugan: I agree with what Pierre just said. I might use an analogy if you will permit me. I think most would agree that Guardiola is a great coach. We could ask him how he has achieved the track record of wins and successes that he has. How has he envisioned a new style of play, constructed a team, coached the players, made decisions on the way in? He could write down some of the principles associated with that. On a day-to-day basis and across the duration of a season, he makes countless decisions, which are in service to these basic principles that create such a winning team. It is those detailed decisions that come from intuition and experience—the mastery of the practices and principles as Pierre would say—that are important to success.
At Wellcome Leap, for example, our first rule is to make as few rules as possible. Part of that is recognising that we have these practices and principles and we need to adjust a lot as we go along in the process. In setting up Wellcome Leap, I think Wellcome did a very good job of saying, “We are going to do the few things that we think are central. We need independence and governance. We need an experienced team to lead it. We need to free it from a profit motive, and then we need to let it do what it does.”
So there is this combination of a few principles that we can write down for you and then many other things that are about the practice of that come from the intuition and experience of leading these types of programmes to breakthroughs.
Daniel Zeichner
Q
Dr Dugan: The organisations that create the breakthroughs own the intellectual property in the case of Wellcome Leap, and that is usually the case in DARPA. Now we usually also have a backstop, which says we have march-in rights if the entity either chooses not to commercialise it or to transition it to impact. Then we would go and say, “We need to take this in service of national security,” but at its core the intellectual property belongs to the inventor of the breakthroughs.
Dr Highnam: One addendum to that is that we have a notion here of Government purpose rights. Yes, the invention is owned by the creator, but if you receive DARPA funding and the appropriate terms are in the paperwork and the arrangement that we have with you then there are limited rights available to the US Government for those inventions.
Dr Dugan: Just to clarify what Peter is saying, those limited rights are about making sure the invention can be practised in service of national security.
The Chair
I am afraid this will probably have to be the last question to this set of witnesses. I call Jerome Mayhew.
Jerome Mayhew (Broadland) (Con)
Q
Dr Dugan: One can look at any set of processes and ask, “Are they optimised for the outcomes?” I think ARPA-like organisations are very much optimised for the outcome, which is to catalyse breakthroughs. It is not optimised, as my colleagues have said, for multi-decade-type funding that supports basic research that is foundational and builds a body of knowledge and extends incrementally our understanding of the world. Neither is it optimised for commercial success. I think those things are okay, and there are other organisations and other funding mechanisms that are optimised for those types of activities.
Part of what we see is that the programmes very much take on the character of the programme directors. That is good from the perspective of speed, agility and getting the work done. Sometimes people do not agree with all the things the programme director says. That is the nature of the type of work we do, which is high-risk and breakthrough-oriented. We used to say that the good and the bad of DARPA is that it has no institutional knowledge, which means that we can take a shot at something that has been tried before, and most of the people who tried it before are no longer at DARPA. That is good, as it gives us multiple shots on goal in a changing science and engineering landscape.
Jerome Mayhew
Q
Professor Azoulay: I think there are two elements. One is rules—conflict of interest rules are very important in this regard—and the second, which I mentioned at the beginning, is norms. It is a lot about whom you choose to put in those roles. They typically have credibility and a reputation that is established in the world that they come from—it could be academia or the private sector. Serving as a programme manager at DARPA or ARPA-E is a wonderful opportunity to have an impact—
The Chair
Order. I am afraid that brings us to the end of this session, I am sorry. It is a perfect end to the session, but it is the end of the time allocated to the Committee to ask these questions. I thank our witnesses on behalf of the Committee for that evidence. Thank you very much.
Professor Azoulay: Thank you. It was a pleasure.
Examination of Witnesses
Professor Dame Anne Glover and Tabitha Goldstaub gave evidence.
The Chair
Q
Professor Glover: I am Anne Glover. I have just finished my three-year term as president of the Royal Society of Edinburgh, so I am no longer president of Scotland’s national academy. I am a molecular biologist by background. I have researched how we respond to stress at a molecular level, and I have looked at the diversity of microbes in the environment. I am very interested, and have worked in translating knowledge gained from research into policy making, and as such I was chief scientific adviser for Scotland from 2006 to 2011 and chief scientific adviser to the President of the European Commission from 2012 to 2015. I am currently at the University of Strathclyde.
Tabitha Goldstaub: I am Tabitha Goldstaub, the co-founder of CogX and the chair of the UK Government’s AI Council. We are an independent council created in 2018 as part of the industrial strategy’s AI sector deal. We support the Government via the Office for Artificial Intelligence, our secretariat, in offering independent expert advice, as well as community engagement. I am really here to share the thoughts of those I polled and workshopped with from that AI community. Thank you very much for inviting me.
The Chair
Thank you very much, both, and welcome. Our first set of questions will be from shadow Minister Chi Onwurah.
Chi Onwurah
Q
There is some confusion about what ARIA should be. Should it be focused on cutting-edge research, should it be about the transformational translation of existing research, or should it bring the two together? What I would like to know from both of you, with your wide experience, is what you think ARIA’s goal or purpose should be. What problem should it fix?
Ms Goldstaub, you have experience of artificial intelligence, which could be a critical area of research. Do you think it is going to change the nature of research, how we research and how scientific research occurs? How should we envisage ARIA responding to that?
Tabitha Goldstaub: First and foremost on your point around focus, really it needs to be about imagining how funding is done to find the breakthroughs that others describe as being at the edge of the edge, with freedom—testing, for example, things like the lotteries, the grants, the speed of contracting, loans, prizes and all the things that we have heard about throughout the whole of today. I really think that ARIA is about exploring these ideas.
If you are looking for a single focus, I believe wholeheartedly in Mariana Mazzucato’s mission-driven approach to innovation. The AI community was incredibly catalysed by the industrial strategy grand challenges. And of course there are these urgent missions. Alondra Nelson said in her first speech post being nominated by Joe Biden that all science should address social inequality. That said, it is still unclear to me if there needs to be one challenge enshrined in law or whether the programme managers should have the freedom; I think we will hear more from others on what their decision is there. The most important thing is that I just kept hearing time and again from the community I spoke to, similarly to what the gentleman from DARPA said, that this is a time to serve. People really want to find a place to do research that saves people’s lives, especially in the AI eco-system.
I think that your question about the impact that AI has on research is a very good one. AI is impacting research, just as it does all areas of the economy, both in disrupting the fabric of its own self and advancing research. We have seen AI create state-of-the-art information-retrieving capabilities, sift through vast amounts of data and speed up the publishing process, so it is changing the process of research, but also in itself it is obviously making discoveries and scientific advancements.
Three per cent. of all peer-reviewed journals are now AI-related and this new trend of AI plus another science is really booming. So biology is currently experiencing its “AI moment”. We saw in the State of AI report that there is a 50% year-on-year increase in papers; 25% of the output since 2000 is a biology and AI collaboration. DeepMind’s AlphaFold is a really good example of that. Demis Hassabis has publicly said that one of the drivers at DeepMind is AI that could win a Nobel prize, so he has already set the bar for an ARIA.
Chi Onwurah
Q
Professor Glover: You were asking if the UK’s ARPA or ARIA should have a single purpose, or focus, and in terms of subject area, I would argue not, because you do not know where the good ideas are coming from. It would be really valuable to have quite a wide and informed debate from a very broad spectrum of interests as to where the calls should come from regarding ARIA. Therefore, when they are looking for a call for research, what are the big areas? In a way, this is quite similar to looking at the grand challenges, which Tabitha has already mentioned.
However, there is an opportunity here in looking at grand challenges, because who decides what those grand challenges are? Voices that are very frequently missing in that debate are citizens’ voices. If I think of some of the big grand challenges—certainly a number of those were funded at the European Commission—often they would be narrowed down, so that there would be three absolutely superb proposals in quite different areas of research, which would have come through the review process. Then it would be a decision about which one we should fund. And that is an ideal time to say to citizens, “What is it that you’re interested in?”
Of course that makes the research very relevant; it would tend to make it translatable into the economy, the life/wellbeing environment and so on; it also then has a substantial buy-in from citizens. That is not unimportant, because at the moment we are enjoying a big buy-in from citizens around science, as they see the relevance of what funding science over a period of years actually does, in being able to deliver us—in this case—from a pandemic, and of course there is climate change there, as well. So that is important.
The focus of the purpose needs to be crystal clear, so that there is no confusion with other funding agencies. That would just lead to mini-chaos, or things falling through the gaps and being shuffled around, which is not at all helpful.
The last thing I would say in this context is that there is an opportunity to look at how you fund. For perhaps quite understandable reasons, current research funding is quite formulaic; it is box-ticking to get the funding. What sort of projects will be funded? Normally, low risk. There is an opportunity to look at high risk, high reward. I would hope that the leadership of ARIA considered that, to fund things that are really innovative, you yourself have to be innovative. We will need to think and be imaginative about how you go about sourcing and funding projects, so that we do not just get a modified version of what we are currently seeing, but can fund in a way that is more bespoke. By doing that, we are opening up what I hope would be exciting possibilities.
Chi Onwurah
Q
Ms Goldstaub, you say that AI is changing how research happens, and also the scale, I would say. Is it possible that we can find five or six great people who know all the different potential areas of research, who can make these kinds of choices on behalf of the British people, using public money, and can integrate the changing nature of research, while at the same time being innovative and having, we would hope, diversity of thought and hopefully also of gender, region, discipline, etc? Is it possible to find five or six people like that? What elements of the structure of ARIA are important to promote that?
Tabitha Goldstaub: It is totally possible to find those people. I cannot speak across all science, but I definitely feel there is a generation of young, mid-career AI talent that feel they are in a sort of gap—the fuzzy middle, as Andy Hopper calls it. They are asking themselves, “What am I doing? The planet is burning, I don’t want to work at the big banks or the big tech giants.” They want the academic freedom of the universities but they do not want to work alone. They see the financial reward of successful start-ups, but they want to take long-term bets. Generally, they want to make the world a better place.
It is people like that who fit into the mould that we are looking for. I worry also about the lone genius model. We are well beyond individual success being seen like that. This is all about community. One of the things I have heard time and again is that people do not want to be funded as individuals but as groups of people. It is a community that would come together around a programme manager that is really important.
Yes, we have to find four or five of those individuals, but it is the people who work with them who make a huge difference. It is the open science, open data and spirit of openness that will go a long way to finding those people who will culturally fit and enable us to engage well beyond just those five individuals and find the edge-of-the-edge breakthroughs that we really need. I hear people saying, “I have ideas that I just don’t even put forward right now; they are unthinkable, because they are unfundable.” Once people can come together, you start to unlock that, which saves you from this lack of diversity where you are just funding individual after individual and effectively asking people to compete with each other.
Chi Onwurah
Q
Professor Glover: Just for easiness, can I ask Committee members to just call me Anne? Otherwise it is a bit of a mouthful.
On the idea of five or six individuals, I would caution on that slightly. I am partly bought into the idea, but if you are identifying five or six individuals, you have already pinned your colours to the mast in what you want. You have already prejudged the areas you want to work in or the ideas that you are interested in.
Where the five or six people might be really important to identify is for the running of ARIA itself. Whether it is the overall director of ARIA or the research leaders in the different themes that might be funded in ARIA, they will be key people and they need to be credible, trusted, very effective at communication and really open-minded. In my view, a large part of the success of ARIA will come from having quite inspirational leaders throughout.
In terms of how you fund and who it is that you are funding, I would go back to what I was alluding to earlier. There needs to be a big conversation about this. There are often older men who have got a reputation in research, so they are naturally the ones we go to, but as I know from bitter experience, as you get older, sometimes your thinking closes off in particular areas and you are less open to ideas. I am thinking of Professor Donald Braben, whose comments the Committee would probably be very interested in. He set up a venture research unit in BP, back in the ’90s I think, and has written several books about this kind of blue skies research area.
What Braben said is that we should look for “irreverent researchers and liberated universities”. Do not look for people who have a research area that we think is really important and we must go there. Debate widely among researchers, of course, but also Government Departments, devolved Administrations, foresighters, businesses, citizens. Let us imagine the future. ARIA could be the stepping stone, if you like, to inventing that imagined future. For a future to exist, you have to imagine it in the first place and you have to convert it into what you would like. There are lots of different ways of doing that. With inspirational leadership, you can move towards that. You can probably increase dramatically your chance of getting it right by having an irreverence around what you do, and not the usual measures of success.
Amanda Solloway
Q
Professor Glover: I would argue that there is huge value in that. Obviously, the funding is coming from Government, but by giving it freedom from Government you might also be giving it the freedom to fail in many ways, and that is exceptionally important. If it is seen as very close to Government—whichever Government is in power—it potentially becomes a bit like a political football, either in what is being funded or in the direction suggested for where ARIA funding should go.
If there are notable failures of funding, which you would expect if it were a high-risk, high-reward funding agency, political opponents will also say, “Well, look, this is a complete disaster under your custodianship. Here are all the failures.” You just want it to be separate from that. It is also part of trying to embrace the unthinkable, if you like, in terms of the research we do and the areas we go into. Necessarily, those will sometimes be difficult areas, and not ones that you should expose Government to either. In the spirit of opening everything up, I would say that keeping that independence is extremely valuable.
Tabitha Goldstaub: I totally agree with what Anne just said—I would have said exactly the same thing. I think that the separateness and independence are really vital to the success of ARIA. The only thing that I would really think about adding here is how important it is that ARIA does have a relationship with Government, because it will need to have many customers, both private sector and public sector. The programme managers will need to create those bonds with central Government Departments individually.
I think that a commitment from Government to remain independent but to become good customers is very important. The health and transport sectors are good examples of where that might work. What is different is that a surprising number of these next big scientific fields, and these next big breakthroughs, such as artificial intelligence, are going to depend on systemic transformation, where you cannot separate the technology from the policy and regulation.
So yes, ARIA has to be independent, but it also needs to ensure that it works really closely with central Government and with regional and local government. Local government spends about £1 billion on procurement, and cities are key investors in infrastructure, so finding a good link with local government, as well as with central Government, is important. This will hopefully end up creating, as Anne suggested, a way that people feel part of this. Regional strengths deliver benefits to actual localities. Even if it is within the next 10, 15 or 20 years, it is really important that government feels part of that, even though ARIA is independent.
Stephen Flynn
Q
On independence from Government, from looking at your bio, Anne, I can see that you have worked for a few public agencies. If ARIA does not have the public contract regulations and freedom of information in place, will that free it to do what it needs to do? Should we see that as a positive as opposed to a check imbalance, given that we are referring to public money?
Professor Glover: I will deal with that point first—it is an exceptionally interesting point. Initially, when I saw that it might not be subject to FOI, I was thinking, “What are the pros and cons of that?” There is one thing that needs to be fundamental in ARIA, and that is an openness and transparency about what it is funding and why, and how it is doing it. For most things—UKRI would be similar to this—what you provide information on obviously cannot be something that would break the General Data Protection Regulation or that would be commercially sensitive. That should hold exactly true for ARIA as well.
There needs to be some thinking around the whole aspect of openness and transparency, because that brings along with it trust and engagement. If there were any suggestion that Government funding was going into ARIA and it was being syphoned off into particular areas, and we could not find out what those areas were, there would be nervousness. People would, quite rightly, object to that, so there would have to be some greater thought given to how the agency is able to be open and transparent. It might be writing its own rulebook in that area, about what it will provide information on and what it should not.
On whether £800 million is enough, you are asking a scientist and a researcher here, so no, it is never going to be enough, but we have to start somewhere. I cannot make a direct comparison with DARPA’s funding, which is about $3.5 billion or $4 billion per annum, but I might be a bit out of date on that. It does not seem unreasonable to me to start at that level of funding and to start off on the journey to see what is and is not working, where there is greater demand and where you might need more funding to meet it. What you would want to see is that this was such a success that there was substantial demand for funding.
On the other hand, you do not want to get into the situation that standard research funding has—I have certainly visited it many times during its lifetime—where you are putting in 10 research proposals to get one funded. That is an enormous waste of everybody’s time, including the agency that is funding the research. There needs to be a balance between how much money is available and what you hope to do with it.
The last thing I would say is that how that funding is apportioned needs to be carefully thought out, because there needs to be some security of funding. Traditionally in the UK, we have normally had three-year tranches of funding. Long before the end of the three years you have to try to think about how you get continuation of funding. You might hope that ARIA could look at a different model of funding, which might span different timescales depending on what the nature of the project was.
Many projects, particularly ones that are quite disruptive in thinking, will not deliver in a short period—two or three years—of time. Some could do, but some will not, so there needs to be that security of funding over different annual budgets to allow the investment over a period of time.
Tabitha Goldstaub: I will start with the amount of funding. I see the £800 million as just a start. I think that £800 million is sufficient as long as ARIA works in partnership with Government Departments, the private sector and other grant makers. ARIA should not be restricted in matching or exceeding the Government funding with funding from the private sector. There are people in the community that I have spoken to who think that for true intellectual and financial freedom, ARIA should be able to more than double the Government funding. It was good to see in the Bill that the potential for ARIA to take equity stakes in companies and start-ups in a venture fashion could lead to increasing that part over time and making more funding decisions. I see the £800 million as really just a starting point.
On freedom of information, I agree with Anne that openness is key. Transparency fosters trust, and I do not think there is any need to stop freedom of information. We need to keep freedom of information to help with the efforts for connectivity. If the community are going to feel part of ARIA and will it to do good things, they need to be able to use freedom of information. I cannot see any argument against this for the administration costs. Earlier this morning, we heard Ottoline Leyser say that UKRI gets 30 requests a month. If ARIA is 1% of the budget of UKRI, perhaps it could get 1% of the requests, which would be fewer than four a year. I cannot see it, for that reason.
The other reason why there is a desire for secrecy and no FOI is that people traditionally are not comfortable to innovate and fast fail in the open, but that is changing. DeepMind has teams. I have spoken to Sarah Hunter, who is at Google’s moonshot factory, X. She explained how they started in secret and everything felt so appealing, to protect people from any feeling of failure, but what they learned is that there are so many other much better ways than secrecy to incentivise people and to give them the freedom to fail. Actually, allowing for more transparency builds much more trust and encourages more collaboration and, therefore, better breakthroughs.
Anne has spoken about the community. I definitely will speak again about the community, but in addition to the community engagement, ARIA will need to have a press department and media engagement teams that are separate from BEIS, separate from the grid and separate from the Government, to enable it to be agile in its communication and foster a two-way conversation. In order to answer your question, I really think this is the key point: openness and transparency create more trust and more breakthroughs.
Stephen Metcalfe
Q
Professor Glover: How we measure success in the early years is a very important question. I am not going to give you an exact answer, but what I might say is that maybe we should not try. That would be unusual, wouldn’t it? That is what I meant earlier about not just following the formula of, “You need to tick these boxes to demonstrate success.” Of course, you would hope that whoever is leading ARIA would have an idea of how you are developing the innovation ecosystem that will be supported by ARIA. They might have some ideas about numbers of applications, where they are coming from, and having a good look at and analysing that, and looking at the amount of interdisciplinary or multidisciplinary research that comes forward. That is always quite hard to fund. Historically, when I have been involved in such things, interdisciplinary research tends to get kicked around different agencies: “This is more for you.” “No, this is more for you.” Everybody is worried about their budget and thinks, “If you fund it, we won’t have to fund this from our budget.” Thinking about the number of applications that could come from a broad range of different disciplines—that would be good. I am not answering your question directly. I am just saying that it is very easy to say, “Let’s have a way of measuring success,” but sometimes that can be stifling.
It is a bit like—perhaps not in the years timescale of ARIA—how it is around the time of year when we plant seeds in our garden or wherever. If you want to measure how well a seed is germinating, if you keep pulling it up and having a look at it you are really going to set it back, so sometimes you just need to think, “I’m hoping that in four or five months’ time this is going to be a broad bean plant with broad beans on it. I just need to wait and see.” I know that that is difficult to do.
The second thing you asked is about commercialisation. I cannot for the life of me remember who said this, but someone once said that there are two types of research: applied research and research not yet applied. That is quite true. There might be some areas where you think that there is a very easy market for this, but if we look back and learn from experience we find that an awful lot of research has been developed. The whole area of medical diagnostics, for example, was pure research. There was no commercialisation; it was just a fundamental biological problem that was being investigated. Some of the outcomes of that research led to molecules called monoclonal antibodies. It is quite a beautiful specific diagnostic—supremely sensitive—that can pick out particular molecules of interest that might tell you if you have a particular disease or have been exposed to a particular compound or whatever.
In renewable energy or an area around that, you might understand that there will be a lot of potential commercial partners and opportunities. In some other areas, perhaps not. This might be an opportunity to think about what the relationships would be like between ARIA and existing research funding, because it might be part of an ecosystem. I would hope that there were distinct roles for UKRI and ARIA but very good communication between the two, as well as very many other stakeholders, in order to identify areas that might not be suitable for UKRI funding but that might have a strong commercial or development potential that ARIA would be much more adept at supporting.
Sarah Owen (Luton North) (Lab)
Q
Professor Glover: On the citizen buy-in, I think that would be reasonable to consider achieving. I do not think that it would be insurmountably difficult in many ways. If I give you the example of some of the grand challenges that were funded at European Commission level, it was getting down to three brilliant projects. Which one will we fund? If the European Commission made the decision about which one was going to be funded, inevitably different member states would complain: “Why is that getting funded in that member state? This other project was just as good.”
All sorts of problems can arise. Whereas, if you asked European Union citizens which one they would like to be funded, they would say what matters most to them. That is quite an interesting insight into the mind of the European citizen, or it would have been, in that particular instance.
I do not think you are in any way betraying confidences; you are talking about whether it is a project looking at delivering limitless amounts of sustainable energy, or a project in mapping the functioning of the human brain, so that you might be able to exploit that in other ways. You are not saying how you are going to do those things; you are not revealing confidences or information that would be inappropriate or undermining of those doing the research. I think we might be worrying needlessly about that.
As to the ethical baseline, of course this has to be ethical. Tabitha and I are probably agreeing too much with each other, or perhaps we are going back to the same thing. If you are not open and transparent, you will have problems. That is just not rocket science. For example, there are many agencies that are not part of Government but that might receive governmental funding. Scotland’s National Academy, the Royal Society of Edinburgh, is one of those. We are completely independent from Government. We get funding from the Scottish Funding Council, which gets its money from Government. We are not subject to FOI requests but we voluntarily behave as if we are. If we did not do that, people would say, “They’re being directed by Government, so the reports that come out of the RSE will be influenced by Government.”
If we say, “This is how we approach it,” and if somebody comes to us and asks for information, we behave as if it were an FOI. It has never been too onerous. The only onerous time for me with FOI requests was when I was chief scientific adviser to the President of the European Commission, when it became unrealistic, because I had such a small team and there was such a lot of FOI requests. Generally, that is the direction we should be moving in. You do not want to hobble a new agency by making it seem that any aspect of it is secretive. To be able to demonstrate ethical compliance, you need that transparency.
Tabitha Goldstaub: Ethical transparency is key, but we also have an opportunity with ARIA to set a robust, rigorous ethical review process that is fit for the AI era. We do not currently have that.
There has been a tremendous amount of attention on the public-facing ethical principles and frameworks for assessing AI products, but relatively little on the frameworks and practices for assessing research, or how to launch and manage a data science and AI ethics review board, in any way that would cut across disciplines, organisational, institutional or national boundaries, as ARIA would need to.
If ARIA can work with others, such as the Health Foundation, which is in collaboration with the Ada Lovelace Institute, or the Alan Turing Institute, on this problem, ARIA could achieve its mission responsibly, become a beacon for other ARPA-like programmes, and tolerate failure much more safely; because ultimately we need to break new ground and to do so with an ethics review, specifically with research that has anything to do with artificial intelligence. It would enable us to set real international standards, if we can get that right. It is both a risk and a huge opportunity for ARIA.
The Chair
Virginia Crosbie. I am afraid this will have to be the last, very quick question.
Virginia Crosbie (Ynys Môn) (Con)
Q
Tabitha Goldstaub: Anne made it so clear that it has to be about engaging with citizens—directly with citizen scientists, but also with citizens who do not care about this yet; we have a real opportunity to excite them. A lot of people say it is really hard, but my answer to that is that it cannot be harder than protein folding. Ultimately, the big challenge for ARIA is to engage with those citizens.
Professor Glover: Briefly, of course I agree with that, but the biggest challenge might be—this will help in engaging with citizens—being up front right at the very beginning that we expect failure, and that failure is part of the measure of success for an agency like ARIA, because if you were not taking any risks, you would not get any failure. The challenge is that, culturally in the UK, and quite differently, I think, from North America, we see failure through an emotional lens, not a scientific lens, whereas I think the opposite is the case in North America. We need to think about that. In a way, just talking about it and saying that that is the case makes it easier for people to understand that we need to fail in order to get the big rewards.
Tabitha Goldstaub: I have heard Anne say in the past—
The Chair
Order. I am really sorry, but I am afraid that that brings us to the end of the time allocated for the Committee to ask questions of this panel. I thank the witnesses on behalf of the Committee for their evidence.
Tabitha Goldstaub: Thank you. Good luck.
Examination of Witnesses
Adrian Smith, Felicity Burch and Professor Sir Jim McDonald gave evidence.
The Chair
Q
Adrian Smith: I am Adrian Smith, president of the Royal Society, and I have a day job as director and chief executive of the Alan Turing Institute, the national institute for artificial intelligence and data science.
Felicity Burch: I am Felicity Burch, director of innovation and digital policy at the CBI.
The Chair
Thank you very much. I think we are still trying to get Professor Sir Jim McDonald online. We will start off with Chi Onwurah, our shadow Minister.
Chi Onwurah
Q
Felicity Burch: That is a really important question. It is definitely the view of the business community that ARIA needs to be designed with the business community and the private sector in mind. When we think about some of the challenges that we are trying to solve in the UK, as well as the science superpower ambition and the goal of spending 2.4% of GDP on R&D, we will not hit any of those targets unless businesses are involved and engaged. The design of ARIA will be quite important to whether it will work for businesses or not.
The wording of the Bill is less important than the design and make-up of who is involved in ARIA and in thinking about what challenges the institution is trying to solve. Thinking about the individuals for a moment, we would very much like to see industry represented alongside the science base. Thinking about the design of it, we would be making sure that we do not focus too much on whether we are looking at basic or applied research or commercialisation, but flipping that on its head and thinking about what market problem we are trying to solve, who the end customer is, and then working back and thinking about who you need to engage along the way.
Chi Onwurah
Q
Felicity Burch: Definitely. It is great to hear an even bolder ambition for R&D investment. I am sure the majority of the business community would support that as well.
Thinking about the role that ARIA can play, particularly in the role of missions, what is really exciting about a mission, a problem statement or a challenge is that it not only does gives an opportunity to bring together cross-sectoral players—we just heard about the role that AI and biotechnology can play when you combine them, and having a really clear mission helps to bring together those cross-sectoral players—but it also helps to advertise what you are doing.
One of the really exciting things for me about ARIA is that it is a big play—a big investment—that the UK is saying we are now making in science and innovation: “This is a change in the way that we are doing things, and this is the problem that we are trying to solve.” I do not think it matters, necessarily, if that problem is defined now or by the challenge director, but we need to think quite carefully about what the problem or challenge might be, and about some of the criteria that sit around that.
For me, there are probably two things that stand out as vital. The first is the sense of a market for a product at the end. One of the strengths of ARPA and DARPA in particular in the US is that customer relationship and an end customer saying, “This is the challenge that we need to solve, and probably we will buy it in the end if you do that really well.” The other thing that we want to think about is what challenges we need to solve as a society. What are the really thorny issues, where we know we need some game-changing steps forward in technology and where potentially Government can play a big role and have a big lever? A couple of areas that stand out in conversations with businesses are things like net zero and health, where clearly we have some big commitments that we want to reach as well.
Chi Onwurah
Q
For Adrian Smith and Professor Sir Jim McDonald: we have, very recently indeed, achieved some clarity on this year’s science budget. I know that that was a matter of concern for both the Royal Society and the Royal Academy of Engineering. There has certainly been a sense, and I wonder whether you would echo that sense, that we need long-term funding certainty—that it helps in the support of science and research more generally. Where do you see ARIA sitting in providing that long-term funding certainty, and how do you feel it can or should fit into the wider research environment? I will first ask Adrian Smith, please. It is nice to see you.
Adrian Smith: Thank you. Going back to the allusion to recent uncertainty about next year’s funding and where the Horizon Europe fee would come from, I stress that we need a coherent narrative and plan, not chopping and changing, and creating uncertainty. Uncertainty is bad, both within the community and for those who have to plan in the UK, but also for what we hope and assume will be our narrative of the UK being a global science and innovation player. Clarity of narrative and sticking to the plan is fundamental.
Where does ARIA fit? The starting point that most have accepted and signed up to is that having a new kid on the block in the high-risk and high-reward long-term space is welcome. Even though we have a plethora of agencies in the current ecosystem, there is nothing that sets out defines itself in that way. However, if this is to work, there are a number of things still to be clarified. I will mention a few, and Jim can pick up on this. ARIA has to have operational independence, if we are in the high-risk and long-term space, but it also has to have high focus. If we are aiming for £22 billion by 2024-25, £800 million is not a large sum of money, so if we have a plethora of missions, then I think we will go wrong. ARIA has to have focus of mission and a commitment to the model over the long-term, but also, and fundamentally, leadership.
This is an incredibly difficult agency, given the multiple stakeholders out there, and it will only work if it has the image and the street cred to attract and retain talent. I welcome the addition to the landscape. We need long-term commitment, but the recent experience of uncertainty about next year’s funding, the chopping and changing, and the lack of clarity about Horizon, would not bode well for this. We need absolute clarity on the plan and how this is going to fit into that.
Chi Onwurah
Q
Professor McDonald: Just to echo what Adrian has been saying, I welcome Felicity highlighting net zero and health. The additional funding is absolutely welcome. As you have pointed out, there was great concern about the uncertainty around the funding generally. The Government’s commitment to making the UK a science, engineering and innovation superpower is exciting. It is built on what is a genuinely world-class research base here in the UK, but of course traditionally we have not done the D in research and development terribly well, so ARIA coming forward to fit into the landscape is key.
To Adrian’s point on longevity, it would be good to get a planning horizon that was long—10 years de minimis and hopefully even longer, because many of the technological developments that come through these accelerated high-risk, high-reward programmes can take decades to come to fruition. Felicity mentioned the concept of a customer, and I could not agree more. The customer might be a Government Department but, for this acceleration of technology for solving challenges of scale at pace, we would increasingly need to see agencies, companies and industry sectors that can take these technological advances into practice. Late-stage R&D, which costs a lot of money, would be counter-productive. In fact, it would be even more damaging if we start the journey to have this innovation acceleration, this high-risk, high-reward agency, only to discard it within a few short years. I think that would damage business confidence, and we would also miss out on the opportunity to get the translational ability to feed out from the UK’s great research base to create new technologies.
Of course, there are a number of schemes that are suggested—Felicity touched on them—and there is the exciting legal commitment that the UK Government have made to net zero. There is an economy and opportunities to build around that. Healthtech, and the whole piece around global health and how we deal with that, is another great opportunity for the UK to mark out its capability.
ARIA should fit and integrate within the existing landscape. It should be a disruptive innovator, but it should not necessarily damage the existing system, much of which is working well, but there are gaps that ARIA can hopefully fill in the coming years.
Chi Onwurah
Can I follow up briefly with Adrian and Sir Jim? Thank you very much for your responses—[Interruption.]
The Chair
Order. The sitting is now suspended. I shall resume the Chair at 4.9 pm. I apologise to the witnesses; it is how this place works. If you can just hang on, we will see you in 10 minutes.
The Chair
This session will now be slightly extended, for another 10 minutes. It should finish at 4.40 pm. We will start where we left off, with shadow Minister Onwurah.
Chi Onwurah
Q
I have three very specific questions. Adrian represents the Royal Society; Jim represents the Royal Academy of Engineering. We have had some discussion about whether ARIA should be looking at blue-skies research or transformational translation. I assume that you both think it should do both. Or maybe not—will you let us know?
Secondly, the Bill makes provision for public sector R&D funding to be spent by ARIA internationally. I understand that there might need to be collaboration —collaboration drives research—between UK and international bodies, but do you think it would be appropriate for ARIA to fund exclusively international research programmes?
Thirdly, do you think the UK should get some kind of tangible return from this level of investment in high-risk, high-reward research?
Adrian Smith: The answer is both, of course. If there were no research element, it would be something we completely understood and all that was left would be to deploy it, in which case this does not seem to be the right kind of agency to do it. I think it starts off with a substantial element of R, but that is perhaps pointless if it does not end up with the D.
Internationally, it is hard to think of anything really, at scale—even if it were only in terms of being a magnet for global talent of one sort or another, an international dimension is almost inevitable and appropriate, but if it were all offshored, that would make nonsense of the agency.
I have now forgotten what your third question was.
Chi Onwurah
Should the UK get a return on this investment?
Adrian Smith: High risk, high return is the mantra, isn’t it? So I think an expectation of substantial transformational return is implicit.
Professor McDonald: First and foremost, ARIA should be a funding mechanism that delivers innovative solutions to ambitious, real-world challenges, bringing together and developing breakthrough research and technology. It is worthwhile reiterating that. Of course, that has to be driven by substantial funding. The flexibility—I am sure we will come back to this—the independence and autonomy for this agency are going to be fundamental to its success.
Adrian has mentioned skills a few times. I absolutely agree with that. While the fundamental research is not viewed as the primary focus of ARIA, it should be keying into a rich base to draw from in the UK research base. Of course, there is an opportunity here for international collaboration as we drive development towards application. However, it is not unreasonable to imagine that ARIA could commission basic research work that emerged as it sought to solve some of these major challenges.
The international connectivity is important, even at the highest level. Telling the world about our ambitions around being a science superpower and trying to become one of the world’s most innovative nations is not something that we should keep to ourselves. We should be promoting that, showing confidence in the UK that we are building on our outstanding research base but we now have another mechanism through which we can drive technologies, find solutions and indeed build economies. So I echo Adrian’s point: this could be a great magnet for talent into the UK and those excellent international individuals who want to come here, some of them pursuing research but many of them also engaging in that exploitation, in that high-risk, high-reward programme. So I would encourage international connectivity, but, speaking as an engineer, I would like to see good outcomes that impact on the economy positively, build industry, support the creation of supply chains, support indigenous supply chains and create new ones around new technologies, whether in net zero, health tech or AI, to build an industry through which we can drive the economy to keep that virtuous circle of driving economic strength so that we continue to invest in science, research and innovation. There is a circularity here, and I would suggest that we do not fragment and see these things in a systems perspective—that is what engineers will propose in any case—but see ARIA as part of a larger system. But driving that through to economic and societal benefits is key for me.
Amanda Solloway
Q
Felicity Burch: As I know you are aware, I think having a long-term approach to funding R&D matters hugely. From the perspective of the business community, having institutions that are in it for the long run that they know they can come back to and that they are aware exist is really important for their own confidence to invest.
Thinking about the agency slightly more specifically, when it comes to its own patience, one of the things that CBI members have highlighted to me as a particular benefit of the DARPA model is the commitment to funding their programmes for significant periods of time. For example, there might be 10-year funding with three-year gates to check if the project is working. Those commitments, with that 10-year view—so long as everything is going more or less according to plan—is hugely important for bringing business funding alongside that. So if we can bake a long-term view and patience into ARIA from the start, it will certainly help it to be successful.
Amanda Solloway
Thank you. Sir Jim?
Professor McDonald: It is nice to see you, Minister. There is a requirement here to have a significant cultural change—that is embedded in your question—to move away from the value-for-money concept that is deeply embedded in the UK Research and Innovation funding structure. That is important, but of course we would need to innovate the funding model, which is what is being sought here. Value-for-money assessments for disruptive innovation may not be assessed, as you indicated, until decades later, so we will need a longer-term outlook or alternative approaches to assessing value, such as a means of building capability and capacity in both technology and skills.
Of course, projects that were deemed unsuccessful in achieving their goal may produce value in terms of people, skills and lessons learned, so we must take a long-term view. I think we see that notion of patience, but it is about the ability to have that highly driven, focused approach that the executive officers and the board of ARIA will take and—we may come on to this—the ability to fail fast and elegantly and not be punished for failure as long as the process has been driven openly, transparently and with excellence underneath it.
I would say, absolutely long-term vision and drive forward. If everything worked and everything was successful, we should challenge ourselves and think maybe the questions were not quite as challenging as we thought they might be. Failure is not something we should be discouraging—it is about risk and collaborative approaches to driving problems to a solution—but long-term vision is absolutely essential. That is why, as you have heard from Adrian and Felicity, that patience and that long-term view is key. It should become a very natural part of the UK landscape, so that it is something that we boast about and that acts as an attractor for business and investment, and to attract and retain talent.
Adrian Smith: Let me echo everything that Jim said. The scale of mission that we would hope to see from such an agency means that the timescales will be long and we will need to build new research capability over those timescales, in so far as we are interacting with technologies, and perhaps new supply chains. If those are to come out of the woodwork, they need to believe that we are in it for the long term and that there is patience on the part of the funders and others. The timescales are really important, not just in terms of if it is a hard problem, it will take a long term to solve; if it is a hard problem, we will need to build all sorts of new capabilities and capacities. To have the courage to invest in those, we need to know we are in it for the long term.
Amanda Solloway
Q
Adrian Smith: Is that a question for me? It is probably a better question for Felicity. Going back to the earlier comments, a fundamental is to trust long-term commitment from the Government that we are really in this, and we have a plan with clear funding milestones and we will stick to that plan. That is what will give the international community the message that we are in it to be really serious. That serves two purposes: for the narrative of the UK, and as an attractor for brilliant people, whether they are in research or industry around the world, to come and join in this long-term challenge.
Professor McDonald: How do we attract them? The scale of the ambition will be a major attractor to someone, with that executive excitement and experience that they will bring. Large-scale ambition and, as we said earlier, a commitment to the long term to making this work for the UK, in that it is a long-term integrated approach. I suggest that the CEO would have to have experience beyond academia; preferably, as you have suggested, Minister, including industrial experience—that ability to take the journey from concept through to proof of concept, demonstration at scale and deployment. Ultimately, commercial exploitation is key.
I can assure you that the engineering community will be well engaged with this as we help to bring forward individuals of the right stature. Industry expertise and understanding should be a prerequisite for ARIA personnel. An interesting example, which many of our colleagues in the Committee will be familiar with, is the vaccine taskforce: bringing together industrial expertise—traditionally competitive companies large and small within their supply chain—with Government officials and the National Institute for Health Research. That was a fantastic microcosm of large-scale, high-risk and ultimately high-reward outcomes. In many ways, that gives us a precursor for some of the approaches and cultural changes that would be needed to take that forward. For the chief executive or chair of the board, it would be great to have industry-relevant background, a commitment to innovation and excitement about the scale and potential impact of the work that they are taking on.
Felicity Burch: I listened to a number of the earlier sessions, and I was delighted to hear about the focus from so many stakeholders on the need to build a diverse team within ARIA, but also thinking about the diversity of the community that we engage in it. One of my reflections is that we are trying to build something that looks a bit like US DARPA, but we are 60-plus years on now, and the international, national and social picture is completely different. We have an opportunity to build something that really excites, for the next generation of researchers and business people.
If you look at businesses that are trying to achieve those same goals and the practices they put in place to try to recruit brilliant people, you will see that, first and foremost, purpose really matters. Clearly defining the mission of what ARIA is trying to achieve when we get the team in place, making sure that it is something that excites people, having a clear market, and also solving national and international social problems will help encourage really bright, brilliant people to get involved.
Secondly, it starts with the senior team. We are building this team from scratch, and we need to make sure when the team is being recruited that it is diverse in the broadest sense possible—that we see women, ethnic minorities, and those with disabilities represented on the senior team for ARIA to really send a signal that the way we want to innovate in the UK is diverse and that we want to make the most of all our talents around the country.
Aaron Bell
Q
Felicity Burch: One of the really exciting opportunities from ARIA is the potential for joint ventures and engagement. Essentially, my answer here is pretty short. Go ahead and do it, but make sure you engage with business communities a bit further down the line in exactly the design of how those funding mechanisms might work. Different businesses at different stages of their journey will be interested in different funding mechanisms.
Aaron Bell
Q
Adrian Smith: I was not expecting that question. The problem with the kind of mission that we would like to see in ARIA is probably that there are very few precedents. So where we are going to get our prior information from to deploy my wonderful Bayesian analysis, I am not quite sure. Let me use that to point out something else. It will be very interesting to see how we creep up on a mission and why ARIA would be appropriate for that mission. There are two things that you will all know about and I am involved in. I am on the board of the UK Atomic Energy Authority, and fusion, you could say, is the ultimate mission of all time. The mechanism there is with an authority and long-term Government funding in a different model. Solving the problem of batteries you could say would be an absolute fundamental mission, but there we have set up the Faraday Institution. I suppose the question as we go along is: what makes ARIA the right kind of place for what mission, given that we have lots of missions and lots of other ways of trying to solve them?
Aaron Bell
Perhaps we need someone with particular expertise in portfolio management as well, because it seems the risk/reward of these missions is so key. I will leave it there.
Stephen Metcalfe
Q
Felicity Burch: I have not talked to them directly about this in the context of ARIA, but I can reflect on conversations about business and university collaboration more generally. I think our members do see value in seconding people to research teams to learn new skillsets. Likewise, we would love to see more people from university sectors being seconded into businesses. Were there a world-leading agency like ARIA, being able to say, “My people have worked on one of these teams” would be quite a prestigious thing for businesses. I guess the flipside of that is this: how do we make sure that we build ARIA to be that prestigious body that businesses feel comfortable seconding their people to?
I think that time and again we hear businesses saying that that fluidity of people between the business sector, the university sector and the research sector more generally is really important for successful innovation and building an ecosystem. I am sure that if any business pointed to any one individual, they might not want to lose them, but I think this is much more about how we build a really flexible and really brilliant innovation ecosystem, and to that extent I think that businesses would be really happy to see those moves.
Stephen Metcalfe
Q
Felicity Burch: In the sense that it would encourage businesses to second people on to ARIA?
Stephen Metcalfe
Yes. You said that we have to build an ARIA that encourages that kind of collaboration. What is your advice about doing that? Where are the risks and rewards from an employer’s point of view?
Felicity Burch: One of the challenges is making sure that ARIA has its own clear purpose, so that businesses know why they would second people to it. The truth is that we have a lot of other institutions in the research/innovation landscape, as we have already referred to throughout this conversation, and as you have heard from the previous panels today. However, once ARIA is up and running, has a clear mission, and has some really great people on it who you can point to as being leaders in their field and really pushing the boundaries—when you can tell a clear story about what the organisation is set up to do—it will become a lot easier for a business to make the case that, “Yes, it makes sense for me to put a person on there; they are really aligned to what I am doing,” or not.
Daniel Zeichner
Q
I have a second question. Through the day, we have heard from different witnesses mainly a view that there needs to be a mission but also some difference of opinion as to who should set that mission. Who do you think should be setting it? Maybe I can go to Sir Adrian first.
Adrian Smith: In terms of new money or old money, I think the key thing is really to look at the big picture. The aspiration—the 2.4% aspiration—is aiming at the average of the OECD, which has probably crept up now in any case to 2.5%. In the meantime, the United States is around 3% and Israel is around 4.7%. The big picture stuff is the total amount of investment in the R&D landscape. So I think there would be less warm support for this body if it were at the expense of that wider investment.
As for who sets the mission, I think it is an extremely interesting question. There is an interesting tension between what most of us would see, which is that if this agency is to have real street cred, it needs tremendous operational independence, but on the other hand the thinking behind it is that the mission will be of great benefit to the UK. Clearly, therefore, Government and a multitude of stakeholders have an interest in what the mission will be, and how the leadership of the new organisation will satisfy the desire on the part of all those stakeholders to have a finger in the pie of influencing the mission. I think that will be very interesting to see.
Daniel Zeichner
Q
Felicity Burch: Similarly to Adrian’s response, support for this body comes alongside the fact that it is new money, and we need the new money in order to grow the level of R&D in the UK. The level of Government spending on today’s level—obviously, there are longer-term plans, but at today’s level—would not hit the target. I think we do need new money in the system, and it makes sense that ARIA is one of the places to which that money is directed. But we do not want to undermine other institutions, such as UKRI and Innovate UK, and catapults in particular are hugely important to businesses. We do not want to undermine that, and this is definitely about building up a coherent system.
One other thing to note is that we have tried to create something that looks like ARIA quite a few times before. For a long time, there has been a sense that we needed to do something like this. Initially, when what was the Technology Strategy Board was founded, people talked about it looking like a UK version of ARPA. When we established the industrial strategy challenge funds, people also talked about them being a UK version of ARPA. The difference with ARIA is the legislative approach and the creation of an independent body, which means we are genuinely doing something different. This is a really exciting way to leverage some of the Government’s R&D investment. As to who precisely sets the mission, I understand that BEIS would like the ARIA team to do that. There is a lot of sense in that, but they cannot do that in a vacuum; it needs to make sense to a wider science innovation community, and to society in fact. That comes back to the importance of a long-term market and the social issue that we might want to address with ARIA. We will be looking out for it to do those things.
Daniel Zeichner
Sir Jim?
Professor McDonald: Thank you. Coming back directly to the question, this must be new money to enhance the credibility of what is sought to be done. As you know, we said earlier that the UK’s research, science and innovation base is an absolute national asset. We cannot exploit that research base if it is underfunded and not attracting the very best talent with the very best facilities. This has to be additional investment to complement existing funding.
I agree with some of the implicit elements of your question that that investment must sit within the system perspective, so although this will be a new funding model that brings a new type of leadership into the research and innovation landscape, there must be plenty of dialogue between ARIA leadership and UKRI, BEIS and other entities that Adrian mentioned. There might be some competition, which would be healthy, but there may be some articulation in complementarity that will emerge if we are doing the right things. It needs new money and long-term commitment.
As to who should lead this, I buy into the model of greater independence and autonomy. The customer will exert influence; to go back to the comment about the customer being a Government Department or Departments, and industry as well, they will have an influence and try to prioritise where the CEO and the team and board will take the direction of travel for ARIA. I would like to see it exercise independence and autonomy going forward.
This may have been raised earlier, but I think public communication will be critically important. Let us have the public understand why this is important, and give a voice to the science, engineering and innovation community. They should be accountable for ensuring that the idea is understood by the nation. I am not suggesting that the public would be directly involved in the agenda, but that public engagement would raise awareness of what science innovation is all about and turn some of the Government’s superpower commitments into a reality for individuals out there in society.
New money, please, and a long-term commitment, and let us give this entity independence and autonomy but the accountability that sits behind it should respond to our customers’ drive for new technological solutions. That should be done in a way that drives value into the UK economy.
The Chair
Thank you. We will have a very quick sneaky question from the shadow Minister, Chi Onwurah.
Chi Onwurah
Q
Adrian Smith: Whoever is chosen to be the chief executive and whoever surrounds that person in governance must be people the rest of us will trust. They will have the stature to be trusted. Without that, I think we are in trouble.
Chi Onwurah
Q
Adrian Smith: I think it is an essential element. As I said earlier, I think genuinely that whoever is going to lead this and oversee the governance has to think very hard about how you interact with both the hard-nosed stakeholders and, as Jim and others have alluded to, the public, in terms of taking them along with the idea that this is a mission that is ultimately for the good of all of us.
The Chair
Thank you very much. If there are no further questions from Members, then we are dead on time. May I thank the witnesses for their evidence before we move on to the next panel? Thank you very much.
Examination of Witnesses
David Cleevely and Bob Sorrell gave evidence.
The Chair
Q
David Cleevely: I am David Cleevely. I am a serial entrepreneur with a background in telecoms and biotech. I have done a lot of work on Government policy, been a board member of the Ministry of Defence and founded networking organisations, including the Centre for Science and Policy at the University of Cambridge. I am glad to see that Bob, who helped me get that off the ground in the early days, is on the panel with me. I am currently chair of the Enterprise Committee at the Royal Academy of Engineering and, for my sins, I am chair of the Cambridge Autonomous Metro Technical Advisory Committee.
Bob Sorrell: Good afternoon and thank you for inviting me to the Committee. My name is Bob Sorrell. I am the chair of the Campaign for Science and Engineering, which is the UK’s leading independent advocate for science and engineering. I come into that with quite a lot of experience in research and development, and I also served two terms on the board of Innovate UK, as well as being a non-executive director in a start-up company, so I have a variety of experience.
The Chair
Thank you very much. I will start the questions with Chi Onwurah, the shadow Minister for the Opposition.
Chi Onwurah
Q
David Cleevely: Thanks, Chi. I would like to start by saying three things rather briefly. First, serendipity does not happen by accident, so we need systems and processes to enable the network diversity and uncovering the unexpected. I am hoping that the new agency will do all of that.
To begin to address some of your other points, we need to improve the whole of the national innovation system. That means not putting in late stage R&D, translation and, in particular—this is something of a bugbear of mine—procurement. If you do not have revenue and if you cannot get product into market, no amount of R&D at the front end will necessarily get you anywhere. If we do not do that, we are always going to be trapped into saying that we need more and more R&D and simultaneously mourning our inability to translate this into economic growth and productivity.
I have one other thing to say, which is slightly cheeky, but I have been listening to the proceedings so far, and they are extremely interesting—it is one of the most interesting sessions I have ever attended. All the examples given of contributions that make a difference have all been, it strikes me, about engineering, so I suggest that we rename this the “Advanced Research and Engineering Agency”. To be honest, “invention” strikes me a bit like something in the 1950s, with somebody emerging from a shed with a gadget that has just blown their hair off. Peter Highnam pointed out “projects”, so we might actually consider it to be the “Advanced Research and Engineering Projects Agency”. No doubt we will get on to why I might say that. The point is that we need to think about this, as Felicity said, in a coherent way, including all the way through to procurement.
Chi Onwurah
Q
Bob Sorrell: Thank you very much. Picking up on David’s comments and your question, I am very excited about the potential creation of ARIA. Having something that can respond to the types of challenge that we face, which quite frankly do not respect sector or skills boundaries, is really important today. In particular, there are real opportunities to learn off the back of the covid experience, which has allowed us to really accelerate innovation at quite an incredible pace. If we can take some of that and operationalise that within an ARIA-type environment, that would be a very positive thing.
One thing I have heard, because I have also been listening to the sessions through the day, is mention of crossing the valley of death. For me, there needs to be a matching market pull for the wonderful research products that will come out of ARIA. To get that in place would mean having a really good dialogue between academia and industry and all parties involved to understand what those challenges really are. I also suggest, looking at the DARPA model, that we should back this up by having a really strong public procurement model. Again, we have seen that in covid, and we could see it here, providing a first customer and enabling some of these technologies to be developed. That would be really key.
The final thing I will say is about the personnel involved in this, because that has also come up several times. They really need to have autonomy; they need the ability to make the decisions and choices on what projects they pursue. Equally, they need to be able to start and, critically, stop things. I have much more to say, but I will stop there.
Chi Onwurah
Q
David Cleevely: I notice that this came up in the previous session. I think the answer is, in one sense, very straightforward. I think it is for the Government to set the priorities where they feel that there are specific challenges. We have talked about climate change, for example. That is one, and there may be others that one would want to address, either in health or in other topics. That is the point at which the handover occurs and whoever is running ARIA takes that particular domain or challenge. I have been involved, for example, in the Longitude prizegiving, and it was very interesting how we focused down on antimicrobial resistance and testing. A lot of interesting things came out of that. By the way, all the solutions were engineering.
The point is that we should listen to Peter Highnam’s testimony really carefully. Honestly, that was one of the most interesting insights into DARPA that I have had. He talked about the way in which there is autonomy within DARPA to do things within a general area set by Government. Then, within that, there is a peer-review system that enables us to overcome some of the cronyism that you talk about. The more open you are about what you are doing, the less easy it is to hide the fact that you have let particular contracts and so on, so there ought to be a mechanism within the governance structure of the agency to do that.
There is a two-level thing here, but it is up to the Government to decide where the UK’s priorities are. Are we, for example, really concerned about climate change? Can we specify challenges within climate change that will make a difference? In the same way, for defence it was to not be surprised by innovation and to make sure the technology was available for defence in the United States. Within that, DARPA went ahead and looked for things that met that overall goal.
Bob Sorrell: I think there needs to be an overarching structure set for the areas ARIA pursues. In identifying these grand challenges, there is a list that we could reel off right now that would fit the scope. Earlier, I heard conversations about having six wise people who would make these decisions and cover these areas. I worry about that approach. I think you need people who are really up for engaging people to understand the nature of the problems and translating them into meaningful challenges.
The other part that is often missed in this is the social science aspect, because there has to be a level of public acceptance around the things that people are developing on their so-called behalf, and that part is also incredibly important. We need to have a very open process for how we decide on those projects so that we avoid, as you say, falling into the traps of vanity or pet projects. If you have clear criteria from the outset and stick to them, you will be fine in that regard.
Chi Onwurah
Thank you. I could ask you lots more questions, but I will stop there and hand over.
Amanda Solloway
Q
Bob Sorrell: That is a great question. If you compare and contrast us with the Americans, there is a definite culture in the UK that failure is something that you hide under the carpet, put away and forget, but science is all about failure and pushing the boundaries. If you are not failing, you are really not challenging those boundaries. I think it is about establishing a culture in which we can accept failure and move on.
The problem comes, in both industrial and academic environments, in facing that day, because there is a tendency to keep things creeping along because you have invested so much effort to get them to this particular point. You do not want to kill it, because then you have to stop the project, and people feel emotionally involved in it. That creates a whole series of issues associated with it. It is about making the hard decisions and learning from failures. We describe them as failures, but actually they are some of the most valuable learning experiences that we gain, and they stop us reinvesting in making the same mistakes in the same areas if we are really careful about what we extract from them, and do not just try to shut them off in a box, in a rather embarrassed way, and say, “That’s something that we will leave to one side.”
Amanda Solloway
Q
David Cleevely: As well you know, I am very keen on establishing networks of individuals and making sure there is lots of exchange. Part of the essence of putting an agency like this together is to ensure that you get a lot of cross-fertilisation. There should be a great deal of exchange going with that, and you would, of course, have to have in place the conflict of interest and various other peer-review processes.
It is very important that an agency like this would work closely with the private sector. My first encounter with DARPA goes back to 1977. At that point, I was working for Post Office Telecommunications, which shows how long ago it was. We were discussing the idea of funding this funny thing where you cut information up into packets. A lot of the collaboration that was done on all of that involved a great deal of what was then a monopoly, though a commercial entity, helping to fund those things. That kind of stuff is extremely important and needs to be built into the processes by which this agency operates.
Can I just pick up on the notion of failure? There are two kinds of failure. There is the kind of failure that we have seen with SpaceX, where you send a rocket up and you land it and it crashes or burns up after about 12 minutes because it is leaking fuel. That is one kind of failure. Quite honestly, the private sector got involved in replacing NASA because NASA became too cautious about dealing with that kind of thing.
There is another kind of failure where you have picked the wrong technology—the wrong way of approaching a problem. I think we are talking about the second kind, and about recognising how to stop that. That is a peer-review process; that is a way of making sure you do things. What we need to avoid is reacting to failure where the rocket is crashing on touchdown. That is not really failure; that is simply experimentation.
Amanda Solloway
Q
Bob Sorrell: I would say three quick things. First, ensure that there is a real partnership between industry, Government and academia, in actually shaping the agenda for ARIA. I would have flexibility; we heard that earlier, I think, from a colleague from the CBI talking about models in which we could second people into the ARIA organisation. I think there is an opportunity to do that, and we have had experience of doing that previously.
The other thing is that ARIA provides some really important learnings, and it should be able to integrate those back into UKRI, and vice versa. UKRI has some valuable learnings that it can impart to ARIA. This is an evolutionary process through which both parties will definitely benefit, and it should be framed in that light.
Daniel Zeichner
Q
David Cleevely: What is the big problem? The big problem is that we do not have procurement systems that buy enough stuff from small and medium-sized enterprises. Half the employment growth in this country comes from 7% of the SMEs that are fast growing. If you look at a place like Cambridge, as you well know, Daniel, we have 20 $1 billion companies. Companies that have come into existence that were not even a glimmer in somebody’s eye in 2014 and are now about to be floated.
That is the kind of process we need to understand, and why we do not have more of those successes. In particular, if I may blow Cambridge’s trumpet, we need to understand why we have those things happening in Cambridge, and why they are not being replicated elsewhere. From my personal point of view, having sold a company to an American buyer last November, which, as you can imagine, was an interesting experience, it was because it had innovative technology. We were absolutely the best in the world and hardly anybody from the UK bought anything from us. The majority was being bought by Americans—American defence and security stuff.
It is a great disappointment to me that we do not have the ability to nurture and bring on. The way the Americans do it is that they have that complete system. They have an awful lot of money and effort going into procurement. Somebody spoke earlier about the infantilisation of Government Departments, and the way in which that expertise is not there. I will mention engineering again here. We need more engineers in Government, who can take those kinds of decisions and understand what we need to procure to be able to do things. That strikes me as so important. It is not to detract from AREPA, as we might call it, but in order for it to be as functional and effective as possible, we need to look at the entire system.
Bob Sorrell: That was a great answer from David. I will just pick up on a couple of things. I go back to the fundamental issue of matching the research that is coming out of ARIA with the market pull for it. It is important to define what the challenges are up front. The role of public procurement, as David raised, is critical, as is supporting the growth of the so-called Mittelstand—the mid-sized companies—and understanding what is behind the culture that leads to so many of those companies being sold at around the £50 million level, as opposed to growing to the hundreds-of-millions-of-pounds companies that they could be. How do we support them through that whole growth cycle? There is much more that I think we could do in that space.
Daniel Zeichner
Q
David Cleevely: It is fine tinkering around with the engine and putting another turbocharger on it, but if the chassis, the transmission system and the wheels will not deliver what you need, all that energy and power is going to go somewhere. In an international system, all we will do is to help to accelerate other countries that are willing to buy our stuff from us. That is fine; I am all for international co-operation, but I really would like to see a bigger contribution to economic growth and productivity improvements in the UK.
Bob Sorrell: To pick up on what David is saying, ARIA is part of the solution. We need all the things that we have, effectively, to put us in a position to lead against the challenges that we face. We would not be in this position if we did not have such a brilliant research community in the UK to start with. It is fantastic that we are having a conversation about how we capitalise on that. It is not just £800 million for ARIA, which is just seed money to start it, but the investment in the overall infrastructure that will make many of these things possible. We need to commit to doing that as well, if the UK is really going to lead and be the test bed and demonstration centre for the technologies that it can lead in and deploy globally.
David Cleevely: I think Bob and I are absolutely in agreement on that.
Chi Onwurah
Q
David Cleevely: The general thrust of what AREPA—if we are going to adopt that word—is trying to do is right. There are a number of things going on in bits of defence, for example. You have DASA and various others playing around with projects within the different services, for acquiring different kinds of technology. I think the phrase “a bit more coherence” was used by Felicity. I think we need to understand what the map of that innovation system looks like.
I am pretty convinced that people are pretty smart—they will make the right decisions. You just need to give them the right structure, hence my point that serendipity does not happen by accident. These kinds of things happen because you have constructed systems and processes so that people bump into and talk to each other, and will exchange ideas. ARIA is fine as it stands, but it sits within quite a complex system. I would like to see much more recognition within Government about how complex that system is, and how it actually operates. I completely agree with you that it has been far easier, in all my companies, to sell stuff into the United States—particularly into the United States defence market—than it has ever been to sell into the UK.
Bob Sorrell: To build on that, I did a couple of terms at Innovate UK and we tried stimulating public procurement during that period. I think a lot of it is about the culture and getting it right, to allow people to invest in those smaller companies and different technical solutions, to move them away from the existing ones. We got that to work during covid. We managed to get it to work, and we managed to get ourselves investing and procuring things in a different way. That is why I keep coming back to that and looking at what we did differently then that allowed people to make those different choices. I think we have to take some of that learning to see how we can get public procurement to work in a better way going forward.
Sarah Owen
Q
Bob Sorrell: If you are to get trust, you need to be transparent about the choices that you are making and how you are making them. Then, when you move to the execution phase, you need to allow the programme managers and the people who are driving the programme scenario to make the choices flexibly and in the quickest way possible. I understand in part what you are perhaps playing into, but I think you just need to strike the right balance between transparency on how choices are made and holding to account on that, and allowing people to get on with executing against those programmes once those choices have been made.
David Cleevely: I think the acid test is whether you can explain something to someone who is independent and is one of your peers. If you are happy explaining it back to somebody like that, that is fine. That is the way in which the system works. If you listened to Peter Highnam talk about how DARPA was organised, that was built into the DNA.
Sarah Owen
Q
David Cleevely: I think it is essential. I would be very uncomfortable if you had an agency that did not have some degree of—accountability is not exactly the way to describe it, but you have to have a group of independent people reviewing what you are doing, not quite in the same way as you would do an audit, but it is basically that kind of principle. If I have to explain something, as I am having to do for this Committee, it is a lot clearer and more straightforward, and I feel a lot more comfortable about the way in which I can rely on the ideas and what I am doing. I think that process is very, very important.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence. The Committee will meet again on Tuesday at 9.25 am to begin line-by-line consideration of the Bill.
Ordered, That further consideration be now adjourned. —(Michael Tomlinson.)
Written Statements
Mortgage Guarantee Scheme: Notification of Contingent Liability
(3 years ago)
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The Economic Secretary to the Treasury (John Glen)
It is normal practice when a Government Department proposes to undertake a contingent liability in excess of £300,000 and for which there is no statutory authority, for the Minister concerned:
to present a departmental minute to Parliament, giving particulars of the liability created and explaining the circumstances; and
to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.
I am writing to notify Parliament of a contingent liability that has been created by the Government from the introduction of the new mortgage guarantee scheme. The scheme will be open to new mortgages submitted by participating lenders from 19 April 2021, but the liability will not be incurred until lenders start to submit mortgages to the scheme, which is not expected until May at the earliest.
By way of background, the mortgage guarantee scheme was announced at the Budget on 3 March 2021. The scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of 5% on homes with a value of up to £600,000. Under the scheme all buyers will have the opportunity to fix their initial mortgage rate for at least five years should they wish to. The scheme, which will be available for new mortgages up to 31 December 2022, will increase the availability of mortgages on new or existing properties for those with small deposits. The guarantee will be valid for up to seven years after the mortgage is originated.
Exposure against this contingent liability would take place in the event that the sum of commercial fees paid by lenders would not be sufficient to cover calls on the guarantee. There will be a cap on the size of the Government’s contingent liability under the scheme of £3.9 billion.
Authority for any expenditure required under this liability will be sought through the normal procedure. HM Treasury has approved this proposal.
I will also lay a minute today on this matter.
[HCWS915]
Events Research Programme: Cancellation Compensation
(3 years ago)
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The Secretary of State for Digital, Culture, Media and Sport (Oliver Dowden)
I am tabling this statement for the benefit of all Members of this House to bring to their attention the departmental minute issued today that provides the House with notice of a series of small contingent liabilities created by my Department. This is in relation to a policy to compensate event organisers participating in phase one of the events research programme in the event of their cancellation if public health concerns were to give rise.
The events research programme is running its first phase of 10-15 pilots in April and May to inform decisions around the safe removal of social distancing at step four of the roadmap. The pilots will be run across a range of settings, venues and activities so that findings will support the full reopening of similar settings across multiple sectors.
The Government will provide compensation on a discretionary basis to event organisers should a pilot event be cancelled due to public health reasons.
This compensation will be capped at £300,000 per event and will cover costs incurred in relation to participation in the programme only (e.g. admission of spectators), recognising the fact that these events would have taken place in line with roadmap restrictions should the programme not exist. In the case of the Liverpool events, as these have been put on specifically as part of the programme, the Government will compensate organisers in full should an event be cancelled, but this will be capped at £300,000 in total across the Liverpool events.
The Government do not intend to cancel any event in the programme. However, public safety comes first and therefore it is prudent to provide this assurance to the organisers assisting the Government in reopening the economy.
A copy of the departmental minute is being placed in the Libraries of both Houses.
[HCWS916]
Covid-19 Vaccination Update
(3 years ago)
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The Secretary of State for Health and Social Care (Matt Hancock)
I wish to inform the House of actions we are taking to improve uptake of vaccines across the adult social care sector.
In February 2021, we published the UK covid-19 vaccines delivery plan setting out the significant programme of work under way to drive vaccine uptake, including actions to improve access and to address the concerns of those who may be hesitant to receive the vaccine.
We have been working to make the vaccination accessible to people living and working in care homes. Vaccination teams have visited all older-age care homes in England and are running a minimum four-visit schedule for each. For those workers who may not have been present when the vaccination team visited the home, access via other vaccination services has been available. We also opened the national booking service for seven weeks so that frontline social care workers could book their own appointments, and care home workers can now arrange vaccination directly through their GP.
We have worked hard to address concerns among the adult social care workforce by delivering an extensive communications programme, running targeted advertisements and issuing a stakeholder toolkit containing regularly updated Q and As, guidance and communications materials. Positive messaging using influencers, leaders and care home workers who have already been vaccinated has boosted confidence and tackled misinformation, as have briefings with different faith groups who have become ambassadors for getting a vaccine.
We continue to do everything we can to increase vaccine uptake. We have targeted support at older adult care homes where vaccine uptake is low, such as in London. As of 4 April 2021, vaccine uptake among eligible workers in older adult care homes in London is 68%, compared to 82% in the south west. Local efforts, by employers, local authorities, public health teams and others, supplement this Government’s support.
Despite efforts, vaccine uptake among care home workers is not consistently at the level that we know from SAGE advice is needed to minimise the risk of outbreak: a minimum vaccination rate of 80% of staff and of 90% of residents in each home—that level must be maintained. Only 53% of older adult homes in England are currently meeting this recommendation.
It is imperative that together we now take every step necessary to reduce the risk of spreading the virus to those most at risk from covid-19 and those who care for them. We must protect people living in care homes, and we must protect the workforce who perform such a vital role.
Vaccination is a safe, effective way of preventing the spread of covid-19. It is therefore right that the Government act now to ensure that those working and assisting in older adult care homes are vaccinated to protect everyone in these settings.
From today, we are consulting on taking steps to require care providers to deploy only staff who have been vaccinated within older adult care homes. This measure would be intended to protect the people most at risk in our society—around 90% of those who died from covid-19 were people over 70.
Making vaccination a condition of deployment in older adult care homes in this way would help to further protect older people living in care homes, who are among the most vulnerable to covid-19, and ultimately save lives. A five-week consultation launches today to help inform decision making around how the change could be implemented and whether respondents think it will be beneficial. This will include areas such as potential impact on staff, safety and who could be exempt. Staff, providers, stakeholders, residents and their families are being urged to take part to have their views heard with an outcome expected by this summer.
I will provide an update to the House, following the completion of the consultation.
[HCWS917]
Domestic Abuse Bill
(3 years ago)
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The Parliamentary Under-Secretary of State for the Home Department (Victoria Atkins)
This Thursday— 15 April—the House of Commons will consider the Lords amendments to the Domestic Abuse Bill available on the following link https://publications.parliament.uk/ pa/bills/cbill/58-01/0281/200281.pdf. As we are approaching the end of the Session and further consideration of this Bill is likely to proceed at pace, I am issuing this written statement to set out for the benefit of MPs, peers and others the Government’s position on the various Lords amendments.
The Domestic Abuse Bill will be a groundbreaking piece of legislation. Building on the strong suite of measures already in the Bill as agreed by the House of Commons, the Government proudly welcome many of the Lords amendments (namely, amendments 4 to 8, 10 to 32, 34 to 36, 39 and 44 to 82 and 84 to 86) and worked closely with peers to achieve them. In particular, we support the Lords amendments:
creating a new offence of non-fatal strangulation (Lords amendment 36);
extending the offence of disclosing private sexual photographs and films with intent to cause distress (known as the “revenge porn” offence) to cover threats to disclose intimate images (Lords amendment 35);
extending the controlling or coercive behaviour offence to cover post-separation abuse (Lords amendment 34);
stopping vexatious family proceedings that can further traumatise victims by clarifying the circumstances in which a court may make a barring order under section 91(14) of the Children Act 1989 (Lords amendment 32); and
prohibiting GPs and other health professionals from charging a victim of domestic abuse for a letter to support an application for legal aid (Lords amendment 39).
In addition, as further evidence of our commitment to community-based services, the Government have committed to consult on the provision of community-based domestic abuse services in the upcoming victims’ law consultation to be launched this summer.
We have also listened closely to concerns about misogyny and attitudes towards women and girls, and will ask police forces in England and Wales to record, on an experimental basis, any crimes of violence against the person, including stalking and harassment, and sexual offences where the victim perceives it to have been motivated by a hostility based on their sex.
That being said, there are other amendments made in the House of Lords which the Government are unable to support (that is, amendments 1 to 3, 9, 33, 37, 38, 40 to 43 and 83). These amendments apply to England and Wales only.
Abuse by carers (Lords amendments 1 to 3)
We fully recognise that abuse of disabled people perpetrated by carers is wholly unacceptable and needs to be tackled along with all other forms of abuse. The Government’s definition includes husbands, wives, partners and relatives who act as “carer” for the victim whom they abuse.
These amendments, however, would bring the relationship between a disabled person and a paid or volunteer carer who is not a partner or relative within the meaning of “personally connected”. Extending the scope of the Bill in this way would undermine the common understanding of domestic abuse. Central to this understanding is the manipulation of the emotional bond between intimate partners or family members.
Further, the Government’s approach is consistent with international definitions. The explanatory report to the Istanbul convention declares that domestic abuse or violence covers “intimate-partner violence between current or former spouses or partners and inter-generational violence which typically occurs between parents and children”.
Nevertheless, we are determined to act on the concerns that have been raised in this debate. Accordingly, we are pleased to announce that as part of the Government’s ongoing commitment in this sphere, the Home Office and Department of Health and Social Care, with input from the Ministry of Justice and Cabinet Office, will undertake a review to examine the protections against carer abuse and the support available to victims. The review will apply to England.
Judicial training (Lords amendment 33)
The Government acknowledge the importance of effective domestic abuse training for judges and magistrates involved in family proceedings. Training in domestic abuse for the judiciary is a priority and is included in all family law courses run by the Judicial College both for newly appointed judges and magistrates and as part of their continuous professional development.
Judicial training on domestic abuse is kept under constant review and is updated to reflect key developments. The senior judiciary (including the president of the family division and chair of the Judicial College), have already made clear commitments to further develop domestic abuse training, taking into account this Bill, as well as the recommendations of the harm panel report, and findings from the four recent Court of Appeal judgments in domestic abuse cases (handed down on 30 March).
While the Lord Chancellor will continue to support the judiciary in this area, the provision of training is properly a matter for the Lord Chief Justice, as head of the judiciary, working through the Judicial College. By conferring functions on the Lord Chancellor in relation to judicial training this amendment is fundamentally at odds with the constitutional principle of judicial independence.
Reasonable force in domestic abuse cases and statutory defence of previous domestic abuse (Lords amendments 37,38 and 83)
The Government understand the motivation behind these amendments, but we are clear that the existing full and partial defences are sufficient.
Full defences, such as self-defence, are defences to any crime which, if pleaded successfully, result in acquittal. In the circumstances of domestic abuse, the partial defences relating to “loss of control” or diminished responsibility can also be argued. Additionally, the fact that an accused is also a victim of domestic abuse will be considered throughout the criminal justice system process from the police investigation through to any Crown Prosecution Service charging decision, to defences deployed at trial under the existing law and as a mitigating factor in sentencing.
Moreover, these amendments are open to abuse by those seeking to evade justice, including potentially by a perpetrator of domestic abuse.
Migrant victims (Lords amendments 40,41 and 43)
We agree that all victims of domestic abuse, regardless of their immigration status, should be treated first and foremost as victims and that they should not be deterred from seeking support. We have emphasised this throughout the passage of the Bill.
To recap, migrant victims of domestic abuse who live here on a spousal visa receive help and support through the destitute domestic violence concession scheme. For those victims who are on other types of visa, such as student, visitor or work visas, or who are here illegally, and who are not eligible for existing support schemes such as the national referral mechanism, we have announced a pilot support scheme. The game-changing £1.5 million support for migrant victims scheme will provide access to safe accommodation and specialist services for these victims, who have previously not been eligible for other support. As well as providing immediate support within safe accommodation for those who need it, our new scheme will also provide us with clearer evidence of the needs of victims, so that we can build a sustainable programme of support.
Migrant victims should not be treated as a homogeneous group with similar, if not identical, circumstances and needs. We want our longer-term work to recognise migrant victims as individuals with complex and diverse needs. The scheme for migrant victims will help achieve this.
In relation to data sharing, we are committed to considering existing data-sharing procedures following the publication, on 17 December 2020, of Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services’ (HMICFRS) report in response to a super-complaint about the police sharing immigration data. HMICFRS recommended that the Home Office conduct a review of the legal and policy framework governing the sharing of information about vulnerable victims of crime, including domestic abuse, and to report on the outcome of the review within six months. We have accepted this recommendation and the review is now underway. This amendment pre-empts the completion of that review which we have commenced in good faith.
Accreditation of child contact centres (Lords amendment 9)
The Government recognise that provision of child contact centres is vital in supporting families and enabling parents to have contact with their children and that these must provide a safe environment for children and parents alike. The existing regulatory framework ensures that this is the case.
High level data provided by the National Association of Child Contact Centres indicates there are up to 400 contact centres, fewer than 15% of which may be unaccredited. However, this figure includes contact centres which may be commissioned by local authorities and which are already subject to extensive safeguarding provision and regulation.
In private law family cases, the judiciary and the Children and Family Court Advisory and Support Service (CAFCASS) have protocols in place to ensure that they only refer parties to child contact centres accredited by the National Association of Child Contact Centres.
In public law family cases, where children are in the care of the local authority, or under their supervision, comprehensive statutory provisions are already in place and emphasise that contact should not undermine the welfare and safeguarding of children. All plans and decisions regarding contact, including the use of contact centres or services, are made by social workers on a case-by-case basis, with detailed safeguarding risk assessments and taking full account of any child protection plan and/or contact order. All local authority activity in relation to child contact must be in the best interests of the child and subject to the relevant statutory provisions, including sections 22 and 34 of the Children Act 1989, the Care Planning, Placement and Case Review (England) Regulations 2010 and the Children and Families Act 2014.
We are also concerned that the definition of contact services would be so broad, that it may create duplicative burdens on a wide range of local authority services, which goes beyond child contact centres.
Management of perpetrators (Lords amendment 42)
The Government agree that high-harm domestic abuse perpetrators need to be effectively monitored and supervised. The current legislation in the Criminal Justice Act 2003 already provides for serial and high harm domestic abuse offenders to be managed under multi-agency public protection arrangements (MAPPA) on either an automatic or discretionary basis. Adding a new category of offenders automatically eligible for MAPPA would add complexity to those arrangements without delivering clear benefits.
There is already significant work in train to improve the operation of MAPPA. As well as strengthening the statutory guidance that supports MAPPA, we are pleased to announce the envelopment of a new multi-agency public protection system (MAPPS). MAPPS, as a modern and efficient subject management system, will facilitate more effective and automated information sharing between MAPPA responsible authorities and their partner agencies, thereby improving the multi-agency risk management of all offenders managed under MAPPA, including those domestic abuse perpetrators whose risk is such that they need to be managed under the MAPPA frame- work. The target is for the new system to be piloted in 2022. Once MAPPS is deployed, it will allow ViSOR (the existing subject management system) to be decommissioned. In addition, the Police, Crime, Sentencing and Courts Bill includes provisions to further strengthen the legal framework governing information-sharing between MAPPA partners and others.
In relation to a domestic abuse perpetrator strategy, we have already committed to bringing forward such a strategy later this year as part of the domestic abuse strategy. We have tabled Government amendments to enshrine this commitment in law (Government amendments 42 (a) to (c).
Tackling domestic abuse is a key priority for the Prime Minister and this Government. Our landmark Domestic Abuse Bill will help to better protect and support victims and their children and bring perpetrators to justice.
[HCWS918]
Covid-19 Local Support Measures: Extension
(3 years ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The covid-19 winter grant scheme has enabled local authorities in England to provide targeted support to families and individuals, keeping them warm and well fed over the winter period, with the principal focus being on disadvantaged children.
The initial scheme was issued at £170 million and was due to conclude at the end of March 2021. In the first two months of the scheme, covering December 2020 and January 2021, local authorities spent over £86 million, with 94% of that awarded to support families with children and 96% used on the provision of food and support with utility bills. In the same period, nearly 2.4 million awards had been made to vulnerable households through the scheme. The scheme was subsequently extended with an additional £59.1 million of support and was due to conclude this Friday, 16 April.
Recognising that some restrictions on the economy continue, we are extending the scheme until 20 June 2021 with funding of £40 million and re-naming it the covid-19 local support grant. This brings the scheme into line with the Prime Minister’s road map out of lockdown as on 21 June, provided we continue to pass the four steps needed to progress through the road map, most of the remaining restrictions will be lifted.
All conditions of the grant continue, as does the allocation methodology.
[HCWS914]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I ask Members in the Room to respect social distancing. If the capacity of the Committee Room is exceeded, or other safety requirements are breached, I will immediately adjourn the Committee. This is the first time there has been almost enough to have capacity in the Room. If there is a Division in the House, the Committee will adjourn for five minutes. I reiterate that before you speak you should press the red button. Once you see a solid red, you will be heard—otherwise you will be very quiet indeed.
Inclusive Society
(3 years ago)
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Baroness Lister of Burtersett
To move that the Grand Committee takes note of the case for building an inclusive society in the post-pandemic world; and the steps that national and local government will need to take to achieve an inclusive society in the United Kingdom.
Baroness Lister of Burtersett (Lab) [V]
My Lords, I am grateful for the opportunity to introduce this debate. At a time when talk is of a gradual return to some semblance of normality, there is a danger that what is often called the “new normal” simply reverts to an old normal. In the old normal, thanks to austerity, our threadbare public services left our society, and in particular its most marginalised members, acutely vulnerable to Covid’s impact. The pandemic has caused so much suffering; we have to learn lessons from it. It is therefore time to start a national conversation about what this new normal should look like and how we build a more inclusive society.
As shown by a comprehensive evidence review conducted for the Government Office for Science by the British Academy—I declare an interest as a Fellow—the pandemic has, like a barium meal,
“exposed, exacerbated and solidified existing inequalities in society.”
That is what Sir Michael Marmot called a “slow burning injustice”, fuelled by socioeconomic inequality and intersecting structural inequalities, notably of race, ethnicity, gender, disability, class and age.
These intersecting inequalities are reflected in shocking poverty statistics, as the work of the Social Metrics Commission and others has demonstrated. The latest pre-pandemic figures, published conveniently just before Recess, reveal not just a further increase in the number of children in poverty to nearly a third but also, as CPAG points out—I declare an interest as honorary president—that two-thirds of those children are living in deep poverty. Recent analysis from Leeds University shows how children from black, Asian and other minority ethnic communities have been hit hardest as poverty has deepened in recent years.
It is surely troubling that research conducted for the Joseph Rowntree Foundation found that even before the pandemic, 2.4 million people were living in destitution, unable to afford the essentials needed to eat without recourse to food banks and to keep warm, dry and clean. Together with Crisis and the Trussell Trust, it has written to the Prime Minister, saying:
“The time is right for a new national and political vision for a country without poverty and homelessness”.
This speaks to a growing sense that we are at a fork in the nation’s road—a “critical juncture”, as the Public Services Committee put it. As the most reverend Primate the Archbishop of Canterbury warned in his Easter sermon
“we have a choice … We can go on as before Covid, where the most powerful and the richest gain and so many fall behind … Or we can … choose a better future for all.”
In thinking of a better future, there is much talk of a need for a new Beveridge. It is worth remembering Beveridge’s advice:
“A revolutionary moment in the world’s history is a time for revolution, not for patching”.
It felt almost like a revolutionary moment when the Financial Times editorial board, referencing Beveridge, observed:
“Radical reforms—reversing the prevailing policy direction of the last four decades—will need to be put on the table … Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.”
As the latest Marmot review makes clear, this has to mean tackling the multiple inequalities and injustices exposed and exacerbated by Covid through looking upstream at their social structural determinants, together with an emphasis on the prevention of social ills, to echo the Public Services Committee. Moreover, if the Government’s flagship policy of levelling up is to contribute to building a more inclusive society—and so far, it is little more than a slogan—it has to be about levelling up people and not just a few politically significant places.
As a social policy analyst, I have been critical of how successive Governments have looked to the US for their social policy inspiration—well, now it truly is an inspiration. President Biden has reasserted the importance of government at all levels. He understands that building back better from a society riven by inequalities and insecurity is not just about building the physical infrastructure. It must also mean investing in the social infrastructure of caring services and what his Administration have called the “human infrastructure” of financial support for children and people in poverty.
For the UK this means, as a start, both short and long-term reform of our social security system, the importance of which has been demonstrated over the past year. I pay tribute to the staff who coped so well in the face of the unprecedented increase in universal credit claimants. Nevertheless, the Covid Realities project, in which academics have worked alongside low-income families and CPAG to understand the impact of the pandemic, has shown the struggle faced by those reliant on UC even after the welcome £20 uplift. Its findings support those calling for the uplift to be made permanent, for its introduction was a tacit recognition that benefits are too low for a decent life, especially after a decade of cuts and freezes. Just how low is reflected in government data showing that, even before the pandemic, more than two-fifths of UC households experienced high or very high levels of food insecurity in the previous 30 days.
Other necessary short-term reforms include the extension of the uplift to legacy and related benefits, including carer’s allowance; ending the benefit cap and two-child limit, with an increase in financial support for children; addressing the five-week wait, either through non-repayable advance payments or rethinking monthly assessment; reform of statutory sick pay; recalibration of local housing allowances; and ring-fencing funds for local welfare assistance schemes, which local authorities should be required to provide and which should no longer count as public funds for those subject to the “no recourse to public funds” rule.
In the longer term, as insecurity has marked the lives of a growing number of our fellow citizens, we need to put the security back into social security. This requires a review of benefit levels to ensure that they are sufficient to allow “life in dignity”, as recommended by the ILO, and structural reform aimed at ensuring an income that people can rely on. As the Economist noted recently, in an article on universal basic income, the experience of the pandemic has
“changed the tone of discussions about radical reforms to welfare states.”
The inability of existing schemes to provide comprehensive protection in the face of income shocks means that a basic income scheme is, for many organisations, very much “in the mix”, as the Financial Times put it. This does not necessarily entail a big bang reform that throws everything up in the air, but it could herald some kind of universal, unconditional income floor that provides a modicum of security for each individual.
Of course, this all costs money. The Government may have dropped the word austerity, but the indications are of further cuts ahead, with local government still particularly vulnerable, and there is no sign of a willingness to invest in the human infrastructure, following Biden’s lead. This serves as a reminder that taxation has an important role to play in an inclusive society. It is time that we stopped talking about taxation as a burden and instead see a progressive tax system as the price that we pay for a civilised society. Even the IMF has called for increased spending and higher taxation of the wealthy, to
“enable all individuals to reach their potential”,
and a group called Patriotic Millionaires is proposing higher taxation of the rich to fund benefits and public services, and to tackle inequality.
One group that has been ignored regarding social security support during the pandemic is children. The universal credit uplift was the same regardless of family size, and the benefit cap has meant that many families did not even benefit from the uplift, as the numbers capped have risen dramatically over the past year. Not surprisingly, the evidence suggests that families with children have found the struggle particularly difficult. We badly need the restoration of a comprehensive child poverty strategy.
Moreover, the needs of children more generally have been largely overlooked during the pandemic. Yes, there has rightly been a focus on their education and the likelihood of a widening of the educational divide, with longer-term implications for unequal life chances, but this has meant a preoccupation with children as “becomings” at the expense of them as “beings”, vulnerable to mental health difficulties and a childhood scarred by Covid. The opportunity for all children to enjoy a flourishing childhood is one test of an inclusive society; 152 organisations have called on the Government to embrace a new vision of childhood and to put children at the heart of the recovery. This is very much the message of the new Children’s Commissioner for England, who wants children to be
“right at the top of the Government agenda”.
To this end, there is growing support in civil society for a Cabinet-level Minister for children. I would be grateful if he Minister could undertake to raise this crucial demand with the Prime Minister.
Because of the continued skewed gendered division of labour, women have had to pick up most of the pieces of inadequate support for children, including, according to the Women and Equalities Committee, the buckling of a childcare system already suffering from underinvestment. As the Committee observes,
“a reliable and affordable childcare system is a prerequisite of a gender-equal economy and a gender-equal recovery from the pandemic.”
This raises wider questions as to what constitutes an inclusive economy; inclusive not just of women but also of racialised minorities—including Gypsies, Travellers and Roma—young people and disabled people. An inclusive economy, again as recognised by Biden, must provide good, secure work at decent wages, accessible to all. It must also be, as the Commission on a Gender Equal Economy argued powerfully, “a caring economy” defined as
“an economy which prioritises care of one another and the environment in which we live.”
In recognition that we all need care at times during our lives, the commission explained:
“A caring economy ensures that everyone has time to care, as well as time free from care.’
It “respects people’s multiple roles” in families and communities
“alongside their roles as paid workers.”
The notion of a caring economy asks us to think not just about the shortcomings of our care services—and we are still waiting for the Government’s social care strategy—but the value we place on care through formal carers’ wages and informal carers’ benefits and support services. It opens up debate about the gendered division of care responsibilities, parental leave policies and working time. All these must be on the agenda for building an inclusive economy. The idea of a caring economy also raises fundamental questions about means and ends because it is saying that the economy must serve social and environmental well-being ends whereas too often these ends are subordinated to narrow GDP-focused economic goals. Important in this context are calls for a green new deal and the Dasgupta Treasury review of the economics of biodiversity, which calls for transformative change in government economic thinking.
By cementing what is sometimes called an “ethic of care” into the foundations of an inclusive economy and society, we open up a number of other important dimensions, which I can only touch on. One, highlighted in the British Academy review, is the enjoyment of culture, in the broadest sense of the term, and of beauty, including in the natural environment. As well as appreciating the arts’ intrinsic value, an inquiry by the APPG on Arts, Health and Wellbeing demonstrated their value for a range of health challenges and their potential importance for marginalised groups. Typically, these groups have less access to the arts and natural beauty. Yet as observed by a low-income parent, with whom ATD Fourth World UK—a human rights anti-poverty organisation—worked, “even though I live in an area which isn’t beautiful, I can still appreciate and create beauty. The right to beauty is part of my right to dignity.” That right, I argue, must be upheld in an inclusive society.
The right to dignity speaks also to fundamental questions about how we treat each other in every dimension of an inclusive society, including politics and public services. Marginalised groups, including people in poverty, often talk about feeling disrespected and humiliated. One woman involved in the Covid Realities project mentioned earlier talked about this when describing the changes she would like to see in the social security system: “We’re asking for a fundamental change in the way we are seen and treated within the system. We want to be respected enough to not have to prove ourselves at every single turn … We want to be met with dignity and respect, as equals … Not scroungers. Not lay-abouts. Not uneducated. But as human beings, just like you, trying to do the best for our families, just like you.”
An important dimension of being treated with genuine dignity and respect is being listened to. One of the first steps the new Children’s Commissioner is taking is to launch The Big Ask, which seeks to listen to children nationwide so as to relay to government what they believe they need to live happier lives. The Public Services Committee report on lessons from Covid notes:
“The pandemic has shown that designing public services without consulting the people who use them embeds fundamental weaknesses such as inequalities of access … and involving user voice in service design increases the resilience of those services.”
Building an inclusive society post pandemic, perhaps through a new Beveridge, cannot be a top-down exercise but must involve a public conversation with those who live in that society and, in particular, its most marginalised members, who have suffered most over the past year. At this fork in the road, can the Minister tell us what steps the Government are taking to ensure that in seeking to build back better they will be listening to those who have fallen behind time and again?
To conclude, I have outlined in broad terms some of the building blocks for an inclusive society but am conscious of many gaping gaps, including the responsibilities of an inclusive global Britain to the wider world, with implications, for example, for policies on immigration and asylum, the climate emergency and the control of pandemics. I hope that colleagues from across the House will fill in some of the gaps and I look forward to hearing their contributions in the hope that this debate might mark the start of a conversation on the kind of society we want to build post pandemic. To that end, will the Minister undertake to relay key messages from the debate to his colleagues in other departments? Building an inclusive society is the responsibility of every government department and every local authority. I beg to move.
Baroness Walmsley (LD) [V]
My Lords, I thank the noble Baroness, Lady Lister, for introducing this debate, which promises to be important and wide-ranging. As she said, to ensure a more equal society we need to build back better and learn lessons from the pandemic. I will raise four issues where there is great potential to do just that.
First, we need to build back greener. It is clear that, in coming years, there will be a demand for large numbers of new jobs in industries contributing to reaching our goal of zero carbon by 2050. This has already begun and must only accelerate—indeed, the sooner the better, as it is cheaper to act now than later. But there are thousands of workers, many of them young, in industries such as retail and hospitality, which may never reopen. Is this not an opportunity for a massive retraining programme to help equip us to tackle climate change while offering sustainable, well-paid jobs to those who have been hit hardest by the pandemic? Do the Government have a strategy to achieve this change of direction?
Secondly, the evidence that health inequalities have contributed to Covid-19 deaths is strong, and obesity has been a major factor in susceptibility to serious disease and death. The Government have published their obesity strategy but there is much more to do. I would like to see the Government mobilising the food industry to reduce the obesogenic environment which surrounds us. During the pandemic behaviour scientists have worked on the most effective messaging, both in content and delivery, to persuade us to adjust our behaviour to protect ourselves and others from the virus. I would like to see these advisers given the task of developing the messages which will help people reach and maintain a healthy weight in order to avoid non-infectious diseases, such as heart disease and diabetes, and to build resistance to future infectious diseases such as Covid-19.
There is a lot more to health inequality than obesity. Poverty is a factor as people are forced to choose cheap, high-calorie, less nutritious food when money is tight. We have seen children going hungry during the pandemic, relying on the goodness of local people and food banks. Will the Government ensure that they respond positively to the forthcoming food strategy to ensure that we are no longer a country in which children do not get enough nutritious food?
My third point is also about children. Abused or neglected children will struggle to achieve their potential in life. During the pandemic, social workers who monitor children at risk have had to do so remotely. Recently the Government laid a statutory instrument to extend this arrangement until September. This is undesirable—remote monitoring is much less effective, and we know that there has been an increase in child abuse during the stress of the pandemic—and entirely unnecessary. If you can go to a pub for a pint, why can you not meet a child at risk face to face in the open now and indoors as restrictions are lifted? Will the Government please withdraw this SI?
Finally, during the pandemic local councils were able to take homeless people off the street using empty hotels and student accommodation. Valuable lessons were learned. In tackling the many problems of homeless people, such as substance misuse, poverty and ill health, it has long been known, and it was reinforced during the pandemic, that getting them into stable housing is a very effective first step. Will the Minister say what plans the Government have to provide a sustainable solution to the problem of homelessness, learning the lessons from the pandemic?
Lord Best (CB) [V]
My Lords, I thank the noble Baroness, Lady Lister, for initiating this important debate and for her powerful opening speech. I draw attention to my housing interests on the register.
Perhaps I could preface my comments with a word of appreciation for the little-known but invaluable housing role played by His Royal Highness the Duke of Edinburgh. As patron and then the very active president of the National Housing Federation throughout the 1970s and 1980s, he gave the housing association sector much needed credibility and status. He chaired our AGMs, opened innumerable housing developments and chaired our rural housing inquiry in 1976 and then the influential inquiry into British housing from 1984 to 1992. His unsung support for better housing deserves widespread recognition.
Covid has certainly exposed the housing divide. Those of us in secure homes with space for home working and home schooling, with gardens, or at least balconies, and some green space outside, can hardly imagine life during the pandemic in insecure, overcrowded, claustrophobic flats, month after month.
Covid has also identified how housing circumstances cause poverty and increased inequalities. In particular, the pandemic has magnified the problems of the much-enlarged private rented sector—its lack of security, its higher levels of unhealthy conditions and overcrowding and its rent levels that can drive families into poverty.
Unsurprisingly, with so many PRS tenants paying over 40% of their pre-pandemic income in rent, several hundred thousand have now fallen into debt and rent arrears. A national homelessness disaster created by Covid has been only temporarily averted by the Government regularly extending the ban on evictions, not least because of the huge backlog of repossession cases in the courts.
In recognition that the PRS is simply not suited to housing all those who must now turn to it, the Affordable Housing Commission has called for a rebalancing of rented housing to enable social landlords, councils and housing associations to buy the properties of private landlords now wanting to exit the market and to pursue a programme of new, truly affordable homes of around a third of the Government’s overall target of 300,000 homes a year. Sadly, the £2.5 billion per annum in direct grants for more affordable homes cannot achieve the scale needed.
This may seem the worst time ever to be seeking a major increase in government investment in affordable housing. Government has never been deeper in debt. The decarbonisation of existing properties and the rectification of cladding and other defects are both requiring billions more from housing budgets. But this may also be the best time. Long-term government borrowing has never been cheaper. Investing in the rebalancing of rented housing pays back handsomely in health and social care savings, in an end to housing benefit costs rising exponentially, in improved productivity and economic revival and, most of all, in redressing the inequalities and miseries that Covid has so starkly laid bare. This is the way literally to build a more inclusive society.
Lord Dobbs (Con)
My Lords, on inclusion, I want to start with the Sewell report, which was long in preparation and deep in analysis. It concluded that, although of course there is still much we need to do, we are more tolerant and inclusive than some pretend. Yet even before the ink was dry, let alone read, the professional intolerants—the muck-spreaders—piled in to demean and diminish both the report and its excellent authors.
Everywhere that decent democratic people gather, the extremists try to infiltrate: into the Black Lives Matter movement; into Extinction Rebellion; into our schools and universities; even into our vaccination programme. The militants and wreckers—for that is what they are— are the real racists. They are the ones who try to divide, not include. They do not care about the facts. They simply insist on their truth, supported by nothing but their ignorance and opportunism. How long before our vaccination programme is accused of being institutionally racist? Forgive me: of course, it already is.
This country is changing. It is getting better. It is growing more tolerant and more inclusive. Anyone with a memory that goes back further than yesterday’s breakfast has seen the evidence with their own eyes. Is there more to do? Always, but work is in progress—and what progress since the days when ignorant racial commentary was used wholesale in our pubs, playgrounds and places of work. We were not being wicked; we simply did not know any better. Now we do.
Today, the biggest exploiters of racism are those who accuse everything in Britain of being institutionally racist—even the Royal Family, even though Her Majesty the Queen is the hugely successful head of the multiracial Commonwealth. Britain is one of the most generous nations on the planet in terms of foreign aid and charitable giving, yet apparently—allegedly—we are institutionally racist. It is a very strange way of showing it. This is a tolerant country. This is a compassionate country. During the past 15 years, 9 million immigrants have come here. They did not come here because they believed that they would be attacked, abused and tormented; that is what they were fleeing from.
The biggest threat to inclusion in this country is good men and women remaining silent and passing by on the other side. That is why I am so grateful to the noble Baroness, Lady Lister of Burtersett, for facilitating this debate. We will not remain silent while zealots try to pull our country to pieces. We will succeed. They will fail. To lean on the words of a very great man, I look forward to the day when our children and grandchildren can look into the eyes of their neighbours and judge them not by the colour of their skin but by their character and conduct. I believe that that day is closer than we think and I welcome it.
The Lord Bishop of Gloucester
I am grateful to the noble Baroness, Lady Lister, for moving this Motion. I want briefly to touch on three areas: children and young people; churches and faith communities; and those living in the shadows.
First, I turn to children and young people. Last month, I hosted an online youth forum in the diocese of Gloucester, bringing together more than 100 people so that adults in different spheres of influence, including our MPs, had the opportunity to listen to young people. Prior to that event, I spent many hours listening to young people speak about the impact of Covid-19 on their lives and I will share a few quotes. “Lockdown’s been so isolating.” “I feel like there should be more knowledge about mental health, not just depression and anxiety, and we should be taught how to deal with them.” “There’s been no direction. We don’t know what’s going to happen next. It’s hard for us to try and adapt to all these different situations.” “We haven’t had the chance to say how we feel about things.” “I really hope that sometimes we can be taken more seriously, and that our views can be put across.” “I just want people with influence to understand that there’s a wider range of issues than just the small subsection that they look at.”
There are, of course, many stories of resilience and creativity, but we cannot ignore the unseen pandemic of poor mental health and anxiety and the impact of loss of so many different sorts. My challenge would be to keep listening to children and young people and to include them in the decision-making. One way to do this is to have a dedicated Cabinet role for children and I stand with those in your Lordships’ House and the other place who are calling for that.
Secondly, there is the role of churches and other faith communities. They have certainly not been the sole distributors of hope in this crisis, but as well as chaplains in places such as hospitals and prisons, people supporting the dying and conducting funerals, there have been many worshiping communities, Christian and of other faiths, co-ordinating and accommodating community initiatives and continuing to create social capital, and indeed spiritual capital, which will be much needed as we emerge into the next season. How can central and local government help and not hinder these connections? One thing that I hope for is that there might be a vision for true partnership between the public sector and the third sector as needs and hopes are addressed.
Lastly, I turn to those living in the shadows. As a Christian, I am passionate about an inclusive society. I believe that this pandemic has heightened awareness of exclusion and inclusion—and I am not simply talking about different people’s experiences of Zoom. Perhaps this pandemic has made us more aware of the issue of many people being hidden—yes, those on their own behind locked doors, but also the abused, the unemployed, those with mental health issues, those in poverty, those in prison et cetera. Who has been seen and heard and who has been hidden and silent? We need to be asking those questions intentionally. Some of the big awakenings in our country over the past year have been around exclusion diminishing and the sort of world we want to be. Black lives matter. Violence against women and girls is to be challenged. It is for those of us with some influence to keep returning to those shadowy places to shine a light into the darkness.
There is much more that I could say, but I leave noble Lords with the three headings of children and young people, churches and faith communities and those hidden living in the shadows.
Lord Mandelson (Lab) [V]
My Lords, I express many congratulations to my noble friend Lady Lister on this debate. Events test a country and this pandemic has revealed that we need to be far more resilient both as a society and as an economy. Resilience means the state and its services being capable of protecting people who are not self-made or self-sufficient, but we will not build that resilient, more equal society unless it is underpinned by a prosperous, resilient economy.
Successive UK Governments have sought to build a resilient economy by supporting high-growth, technology-led enterprise. My efforts were in 1998, with my White Paper Building the Knowledge Driven Economy, and then after I returned to the Government in 2008. Since then, the best expression of policy has been Greg Clark’s industrial strategy, with its focus on decarbonisation and clean growth, AI, the future of mobility and the benefits to health and ageing of bioscience and genomics. I regret the Government’s recent decision to jettison this strategy.
The simple point that I want to make today in my short contribution is this: technological change is not like the weather. It does not just happen around us. It can be supported and shaped through an innovation system that draws on public and private funding, major international research partnerships, helpful government regulation and the fostering by the Government of supply chains, individual entrepreneurship and business growth.
This was achieved in the recent development of the Covid vaccine, which was born out of necessity in a time of national crisis. The Government staffed up and invested in a portfolio of high-risk technology ventures through a taskforce led by a venture capitalist. It was based on substantial public funding of research, invention by Oxford University, nimble, accelerated regulation by the Government, manufacture by the private sector and then distribution by our own NHS. The successful vaccine rollout is the result.
One thing this was not was a model of pure capitalism. It demonstrated the power of public procurement and co-ordination across the board, inside government and across the public and private sectors. We should adapt this model, where government has a role, to similar market opportunities arising from the profound transitions under way, of digitalisation, AI and clean energy. Those transitions and the associated technological change will almost certainly require around 75% of the country’s workforce to be retrained and reskilled during the coming decade. Government should identify where it can act to ensure that innovation, investment and production—the whole supply chain—cohere in the United Kingdom and be willing to take some risks in doing this and to act at scale.
However, if we want the whole country to benefit, we need a clear focus on the geographical dimension. The Government talk about levelling up; they do not seem to realise that you cannot level up from the top down. Local foundations of growth and inclusiveness need local powers, people and money. I say just this: it requires coherence. My fear is that, with their short attention span, we will see instead a series of politically influenced, disjointed interventions by the Government that will fail to convince markets and investors and will not bring the deep and durable economic change the country needs. I hope that I am wrong, but where the Government have ideas, they need scaling. Where a policy is working, it needs continuity. The Government, as well as the Labour Party in its own thinking, have to approach this with vision and vigour, and to do so consistently.
Baroness Tyler of Enfield (LD) [V]
My Lords, I pay tribute to the noble Baroness, Lady Lister, for securing this vital debate and refer to my social work interests in the register.
This has been a global pandemic, so I start my remarks at a global level. The World Bank has recently said that the current health crisis has
“put the spotlight on deep rooted systemic inequalities”
within societies, particularly for some of the most marginalised groups. Crucially, the bank has argued:
“The crisis is also an opportunity to focus on … rebuilding … more inclusive systems that allow society … to be more resilient to future shocks, whether health, climate, natural disasters, or social unrest.”
Our debate focuses on the UK. In March, the British Academy produced a series of reports addressing the long-term societal impacts of Covid-19. Its evidence report listed nine interconnected areas, which included: worsened health outcomes and growing health inequalities and the greater awareness of the importance of mental health.
In responding to this new opportunity and trying to reshape the way we do things, we must recognise that the pandemic has had a disproportionate impact on certain groups, particularly black and minority ethnic communities and disabled people. It has exposed deep inequalities in our health and care systems. In February, the Marmot 10 Years On report was published and made for sober reading. In short, it showed that life expectancy in England has stalled for the first time in more than 100 years and even reversed among the poorest people in certain regions: the more deprived the area, the shorter the life expectancy.
Professor Marmot says that the worsening of our health cannot be written off as the fault of individuals for living unhealthy lives; rather, their straitened circumstances and poor life chances are to blame. His institute’s work has established that healthy lives depend on early child development, education, employment and working conditions, adequate income and a healthy and sustainable community in which to live and work. Surely these are all things that an inclusive Covid recovery plan should prioritise.
The Government’s commitment in their 2019 election manifesto to extend healthy life expectancy by five years by 2035 and to narrow the gap between richest and poorest is to be welcomed. However, as the Lords Public Services Committee recommended in its first major report on the impact of Covid on public services, the Government should now publish their strategy to achieve that manifesto commitment and their response to the prevention White Paper. Can the Minister say when the Government plan to do that?
As we have already heard, many children have been particularly badly affected by the pandemic, and life was already difficult for many vulnerable children. In 2017, the all-party group for children, of which I am co-chair, published two reports looking at the state of children’s social care. In brief, they found that children often have to reach crisis point before social services step in and that decisions over whether to help a child—even in acute cases—are often determined too largely by budget constraints. I join others in calling for the £1.7 billion lost from the early intervention grant since 2010 to be restored.
I turn finally to mental health. Recent Centre for Mental Health modelling predicts that up to 10 million people in England will need either new or additional mental health support as a consequence of the crisis. Some 1.5 million of those will be children and young people under 18. It is abundantly clear that the pandemic is taking a huge toll on children’s mental health and that the current system—already under great strain pre-pandemic—simply will not cope with the scale of demand coming down the track. Without the right mental health support in schools, the significant investment that the Government have rightly made in academic catch-up risks being undermined. While the extra £79 million announced in March for mental health in schools is welcome, it simply will not be sufficient to keep up with urgent need. Tackling this unprecedented mental health crisis will need more ambitious action, including every school having access to counselling services. I look forward to hearing the Minister’s response on this point.
Baroness Bloomfield of Hinton Waldrist (Con)
I intervene at this juncture to remind noble Lords that there is a four-minute speaking limit. I would be grateful if people could try to observe this so that everybody gets the chance to speak.
Baroness D'Souza (CB) [V]
My Lords, my thanks go to the noble Baroness, Lady Lister, for raising such an important issue and indeed provoking such important questions. Of course, we all want to have a more unified and more equal society, but where should we begin? Well, how about starting by working towards a more joined-up government and more strategic policies to build back better?
For some months now, many of us in this House, in the other place and from among a concerned public more generally have argued for a strategic plan to ensure the welfare of children. We know that children have suffered disproportionately during the last year, and there is now, given the Government’s reassessment of budget distribution and their wish to build back better, a chance to contribute to a new settlement for children and the integrity of the family.
I do not apologise for yet again going back to the issue of a Cabinet-level Minister for children to oversee, protect, direct and promote all aspects of child welfare—one of the central pillars being family life. There are at least four different departments that assume responsibility for children, ranging from free school meals though early education to eating and obesity issues and budget support for families in need. If we are at all serious about a unified and more equal society, surely it must begin with detailed and focused polices for children who are, after all, this country’s future. I feel strongly, too, that we must allow children of many different ages, who we all know hold trenchant and forward-looking ideas, to participate in decision-making that will affect their lives and livelihoods via a dedicated senior-level Minister.
To my mind, the excellent Vicky Ford does not as a junior Minister have the necessary resources to do the task before her. Indeed, the UK’s fifth periodic report on the UN Convention on the Rights of the Child, which is due in January 2022, will have to address the clear recommendation, among many others, that the UK Government appoint a high-level Minister for children and children’s affairs and
“Allocate sufficient human, technical and financial resources”
to co-ordinate and evaluate implementation of the convention at national level.
Finally, will the Minister commit to letting the House have an exact breakdown of all the additional resources now available for all aspects of children’s welfare, to which ministries these funds have been allocated, and for what programmes?
Baroness Royall of Blaisdon (Lab) [V]
My Lords, I am grateful to my noble friend for tabling this important debate and for her excellent introduction.
The need to build an inclusive society has been exacerbated by the pandemic and by 10 years of cuts in our public services and underinvestment in our communities. Even before the pandemic, the fabric of our society was torn. Now, it feels ripped apart, ravaged by fear and insecurity. The inequalities in our society have been exposed, and this very morning we heard evidence from the Resolution Foundation that young black people have been hit hardest by the pandemic.
I hope that Covid has made us as a society re-evaluate our priorities and made us value people for what they contribute to society rather than for what they earn. The extraordinary dedication of our health and social care workers, our teachers, our police, the amazing volunteers and the new sense of community that we have also gives us hope, but hope is not enough. As Michael Marmot has said:
“There is now an urgent need to do things differently. We must build a society based on the principles of social justice; reduce inequalities of income and wealth; and build a wellbeing economy that puts achievement of health and wellbeing, rather than narrow economic goals, at the heart of government strategy.”
The government mantra of “build back better” should be replaced by “build back fairer”. I live and work in Oxford, which has one of the strongest economies in the UK and tremendous assets, including research and innovation, but it is ranked as the second most unequal city in the UK. Housing affordability is a critical long-term issue, along with poor educational attainment, health outcomes and food poverty. As in every other part of the UK, both urban and rural, and despite the fact that we have a first-rate council which responded swiftly to the needs across the city, it is the disadvantaged who have been hit hardest by Covid.
There is, however, a great determination to bring about an inclusive economy, which I would argue is fundamental to the building of an inclusive society. In 2019, as chair of the Oxford Strategic Partnership, and with the support of the city council and the LEP, I had the privilege to moderate and participate in a series of seminars which brought together key national policy thinkers, anchor institutions, including the university—I remind noble Lords of my interests in the register—and the NHS, major local employers, city and county council representatives and community groups to explore solutions to ingrained inequality.
This led to the establishment of an inclusive economy partnership to take forward action to create a more equal city. Our work was delayed by Covid, but now we are working towards turning words into actions. Our ambition is to hard-wire inclusivity into the economy so that it delivers economic and social outcomes that benefit the whole of the community. We have working groups with a timeline for action on social value and procurement—my noble friend Lord Mandelson talked about the power of public procurement—inclusive employment and enhancing access to affordable commercial property and workspace, education and skills so that there is improved educational attainment, skills-based training and access to jobs in the new economy, and place-based interventions in targeted areas.
We are striving to engage a wide and diverse spectrum of the community so that we are responding to need and so that there is ownership by the whole of us as a society. The actions of the city, county and district councils are key, both the elected representatives and officers, who are also catalysts for action in this shared endeavour. However, we also need action by national government. We need increased local powers and flexibilities to work at the local and regional level, along with devolved funding from central government to test and scale up promising programmes. New forms of finance from complementary sources, including community crowdsourcing, social impact bonds and the private sector, are vital and require innovative design, investment and leadership.
I am confident that the Inclusive Economy Partnership will make a real difference, with public, private and third sectors all working together with community-based organisations, the universities, and colleges. There is a real understanding of the need for investment in our economic and social infrastructure—in our people. There is understanding of the benefit of collaboration and coherence and that the well-being of our society is dependent on the ability of all to have access to good education, health, well-paid work and a home; to live with dignity and respect without poverty in a sustainable environment; to thrive. I hope that this sort of initiative is taking place in cities and towns all over the United Kingdom.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, I reiterate the point about timing. It is very important in a debate such as this that we stick to our times in order to allow all speakers to participate.
Baroness Eaton (Con) [V]
My Lords, I declare an interest as a vice-president of the Local Government Association and add my thanks to the noble Baroness, Lady Lister, for initiating today’s debate.
Local government’s delivery of public services during the response to Covid-19 demonstrates the value of place-based leadership. The recovery from the pandemic will look different in different communities and areas. A locally co-ordinated response will be the most effective way of rebuilding from Covid-19. I strongly believe that a reformed approach to devolution should form a central part of the national recovery strategy. The Government need to move away from fragmented and short-term interventions that may not be sustainable and are driven by Whitehall silos, and move towards a localist settlement that gives councils the ability to drive green and inclusive growth that meets the needs of their communities.
Covid-19 has also exposed deep inequalities in our health and care systems. Long-term reform of adult social care is urgently needed. The LGA is calling on the Government to publish the proposals for reform before the parliamentary Summer Recess. Greater funding for local public health teams is also essential if we are to build back fairer from the pandemic and better protect ourselves from future outbreaks. Covid-19 has displaced from the labour market many people who will need to find work and reskill as a result. The Government should back the trialling of the LGA’s Work Local model. This should be used as a blueprint for a skills and employment devolution that works for all people and places.
Finally, councils have been instrumental in supporting all schools throughout the pandemic and will play a critical role in supporting children and young people as they catch up on lost learning. It is also crucial that mental health support is on an equitable footing with education when we look at recovery. Additional support should be made available to vulnerable children, who have been disproportionately impacted by Covid-19. The Government should consider investing more in the early intervention grants.
In bringing my remarks to a close, I pay tribute to the crucial work that councils have done throughout the pandemic to keep our communities safe, and the work that they will continue to do to drive recovery from Covid-19.
Baroness Drake (Lab) [V]
My Lords, advances in technology have allowed millions to work from home, and businesses to adapt to the pandemic, to a far greater extent than would have been possible 20 years ago. However, while much of the nation pivoted their work and lives online, for a large proportion this was not possible. Certain sectors and geographies suffered much more than others, the young paid a high price and the pandemic heightened disparities in well-being.
The World Bank describes inclusion as
“the process of improving the terms on which individuals and groups take part in society”.
To me, that must embrace digital inclusion and a renewed social contract. In the current industrial revolution, the digital divide exacerbated by the pandemic is life-defining. Addressing it is integral to a more equitable basis for employment and economic growth. The barriers, such as acquiring digital skills, building infrastructure, securing connectivity and accessibility to services, all need to be overcome.
The Lloyds UK Consumer Digital Index reveals that two-thirds of jobs need digital skills of some kind and 52% of the UK workforce are not yet fully digitally enabled. We have a way to go. The index exposes the regional disparities that exist. As businesses recognise that resilience includes cybersecure working from home, anecdotal evidence reveals employers considering making dedicated access to home broadband a condition of employment, and not just for higher-skilled workers. The digital divide has exposed children to unequal access to virtual schooling.
We witnessed the state deploy measures unimaginable 15 months ago and saw the compelling evidence for mutual insurance, an effective welfare system and collective economic security. To make our socioeconomic system more inclusive, resilient and sustainable, a renewed social contract is needed. The pandemic is a wake-up call for purpose in business as societal inequalities and risks have been thrown into sharp relief. To quote Blueprint for Better Business,
“business will need to refresh its credentials as a genuine contributor to society in order to underpin its licence to operate and re-establish trust”.
Prior to the pandemic, household financial resilience was declining, not just among those with the lowest incomes. Each year millions of working-age people suffered an income shock because of ill-health, job loss, the death of a partner or other life events. Employment benefits, state benefits, private insurance, savings, affordable credit and fewer pre-existing debts strengthen financial resilience, but all those factors are weakening, shifting greater responsibility on to the individual, who may be ill prepared to bear it.
One in six people was self-employed, one in 12 had contracts with reduced protection, and 73% of people in regular jobs faced significant fluctuations in monthly earnings. More were in employment, yes, but there was a long-term decline, in both coverage and value, in employer provision of occupational benefits such as sick pay, redundancy pay and death benefits. Means-tested benefits had fallen in real terms; 11.5 million adults had less than £100 in savings; and 65% had no form of life or protection insurance. On home ownership, adults in their 30s and 40s are now three times more likely to rent than 20 years ago.
Declining household financial resilience, so exposed in the last year, is an unrecognised consequence of socioeconomic and public policy changes which need to be addressed. My noble friend Lady Lister argued the case most powerfully and I hope the Government will reflect, recognising what has happened in the last year, on the need for a radical change in the social contract.
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
I call the next speaker: the noble Lord, Lord Whitty. Are we Whittyless? You are muted, Lord Whitty—not only muted but invisible. We may return to the noble Lord, Lord Whitty, in due course. Let us move on to the noble Baroness, Lady Grey-Thompson.
Baroness Grey-Thompson (CB) [V]
My Lords, I thank the noble Baroness, Lady Lister, for tabling this debate today. I draw attention to my register of interests and that I am chair of ukactive and sit on the National Academy for Social Prescribing.
The pandemic has been tough, and we must recognise the ongoing risk not just from the virus but to the mental and physical health of our population. The impact of Covid has not been equal: 60% of those who have died have been disabled. In the last year, health inequalities have grown across all age groups. Those who are vulnerable have suffered the most and will continue to do so unless we act. Our NHS has demonstrated resilience of heroic proportions in the face of unprecedented pressure.
While sports stadia fell silent and the shutters fell on pools, gyms, leisure centres and clubhouses in every community, there has been a huge amount of resilience in the sector as so many have sought to support the public to carry on being active. There have been amazing examples of online workout classes and social events, and I also hear amazing stories of gym instructors delivering food parcels.
As Professor Greg Whyte OBE—Olympian, sports scientist and chair of the ukactive scientific advisory board—says, there is a clear correlation between physical inactivity and your risk from Covid-19, meaning that those not meeting the recommended guidelines for activity are at even greater risk than those with underlying conditions. He continues:
“Prior to the COVID-19 pandemic, the average UK working adult sat down for nine-10 hours per day”,
and in lockdown, 42% admit to sitting for at least 14 hours longer per week. He said:
“The COVID-19 pandemic has had a profoundly negative impact on health and wellbeing. If we are to avoid an ongoing public health catastrophe, we need to urgently address the legacy of lockdown inactivity.”
This is not a new phenomenon. We have known about the physical inactivity crisis for years, but perhaps the pandemic should be the wake-up call for our nation’s physical activity levels. We know that physical inactivity is one of the greatest causes of death and disease globally. The UK’s activity levels are not where they should be, which weakens us against Covid-19.
On 13 April, The Times reported that the Royal College of Physicians of Edinburgh said that people aged 16 to 24 could struggle with paying fees to participate and that the Government should consider support in this area. Across the UK, we must be smart about how we roll out social prescribing to enable GPs and healthcare professionals to be creative so that medication is not the first port of call.
The Government are facing difficult times and will no doubt spend a great deal of energy reflecting on this health crisis, assessing how resilient we were to combat this pandemic, and propose change and reform. The scale of that change and reform, especially around public health, must take its place centre stage in our national debate on the future of our nation.
There is an opportunity for the Government to prioritise physical activity through both greater investment and taxation and regulatory reform, and to begin to improve our national well-being following this crisis. We require a national ambition to get all communities active and healthy again as swiftly as possible and to ensure a fitter, more active and resilient population.
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
We now return to the noble Lord, Lord Whitty.
Lord Whitty (Lab) [V]
My Lords, my apologies. I thank my noble friend Lady Lister for introducing this debate in such a comprehensive way and for pointing out that the multiple and self-reinforcing cumulative inequalities in our society have increased during this period of the pandemic. I would argue, contrary to the noble Lord, Lord Dobbs, that they have been increasing over a longer period.
Those inequalities have been spelt out by many of my colleagues. The noble Lord, Lord Best, spelled out the housing inequalities. There are inequalities of employment and income, inequalities of geographical space, and inequalities in educational attainment and access. As others—particularly the noble Baroness, Lady Tyler—have emphasised, there is much more evidence now of both physical and mental health inequalities.
My noble friend Lady Drake has stolen the point I was going to make most forcibly—that, on top of this, the pandemic has revealed a serious digital and technological inequality. During this pandemic, many of us have come to rely increasingly on having access to the internet for conducting our shopping, dealing with our health problems and social relationships. Those who have no, or very limited, computer skills or access have lost out. But they lost out before the pandemic and, if we are not careful, they will lose out after the pandemic as well. As my noble friend Lady Drake said, it is a significant proportion of the population.
Some two years ago I conducted a consumer assessment of the customers of energy companies, which, by and large, insist on you going to their website to get complaints dealt with, and other satisfactions. Those who were unable to do that were unable to get satisfaction as consumers. Some 25% of over-60s do not have any access to the internet and another 25%, approximately, have only limited understanding of it. Often, they cannot find other means of communication because of deafness or other reasons, and so they are excluded from major aspects of our modern society and our modern economy.
During the pandemic, this exclusion has related not only to the elderly tranches of our society but to the very youngest. Access to education for our children has largely been through the internet during this period. Even in households where there may be some equipment, it is not necessarily available to all the children; for example, if there are two or three siblings and only one computer. If one or both parents are working from home on the computer, the children will not have access to it. The legacy of that for many of them is missing out on education during the pandemic. Therefore, at both ends of the age spectrum, particularly for the poorer sections of society, one of the legacies of the pandemic will be another form of division: the digital or technological divide. Put crudely, to minimise the divide, we must provide every child with a laptop and every non-computer-literate oldster also needs help and alternatives. We will not become a more inclusive society unless we do that.
I say to the noble Lord, Lord Dobbs, that while it may or may not be true that society in one sense has become more tolerant, tolerance does not deliver equality of esteem and equality of outcome, and frankly, in our society, tolerance of inequality is not a virtue.
Baroness Jolly (LD) [V]
My Lords, I join others in thanking the noble Baroness, Lady Lister, for introducing this excellent debate.
I hope that once the pandemic is behind us, commissioners and funders of care services will look at the commissioning process as a way of ensuring that the financial exchange with providers is for more than hotel services—bed, board, warmth and safety—whether we are discussing the care of older people or that of people with a learning disability. Many policy decisions about social care are automatically made thinking about the needs and care of older people. Often there needs to be a reminder that soon the number of adults with a learning disability will be greater than the number of adults who have reached the age when they can no longer care for themselves.
We all want to be part of an inclusive society, even if not everyone can articulate that wish. For three years I was the chairman of a charity that supported several thousand adults with a learning disability across England. Many live in regular houses in regular streets, supported by a team of carers who work night and day to give those in their care a fulfilling life. Trips to the shops, visits to a bowling alley, an evening at a pizza restaurant and annual holidays are all part of their lives. Many keep in touch with their families, but sometimes, confident that their children are being cared for well, families are not as regular as hoped for with their contact. All who can have a job, from working in a garden centre or waiting at table in a café to working in the maternity unit at one of Yorkshire’s largest teaching hospitals. All potential employers are vetted and have nominated a member of staff responsible for the well-being of these special employees. At the end of the day, when they go home, they have earned their pay. They do what their parents do: they hold down a worthwhile job and are a small part of the inclusive society to which we all aspire.
This is not cheap, and nor should it be. An accident of birth is no reason to deny the pleasures of life to someone who has cognitive problems; nor is it a reason to deny them the opportunity to be part of society and hold down a job. For the most part, their care is carried out by care workers on the basic minimum wage, who see the humanity in their charges, not the problems, and get huge job satisfaction from little successes.
Of course, working across many local authorities poses difficulties. Different commissioners work in different ways. Some look at an individual’s needs and commission accordingly; others put an amount on a year’s care without taking into consideration the nature of the care. To complicate things even more, a home’s residents will not all have the same commissioners but will all receive the same standard and level of care.
In the much-awaited care Green Paper, the Government need to ensure that local authorities have the funds to commission meaningful lives for those in their charge. This means that commissioners should be imaginative and willing to listen to different conversations about services delivered. If this can be delivered by good working relationships between providers and commissioners, both partners will ensure that those for whom they are responsible will live in as near to an inclusive society as possible. I hope that the Minister agrees.
Lord Griffiths of Burry Port (Lab)
My Lords, poverty lies at the heart of what I want to contribute to this debate. My noble friend Lady Lister is publishing a second edition of her seminal work on this very subject, and we must be grateful to her for securing this debate at such a critical time. The second step in the road map that will see us emerge from Covid inevitably begins to focus our minds on the future. Her book is a clarion call to all policymakers to recognise the factors that lie at the heart of poverty, and to assess programmes and proposals that will deal with them adequately as we prepare ourselves for the post-pandemic future. By the way, she and I share a huge respect for and admiration of the work done on this subject in the past by Peter Townsend, whose memory we cherish.
In her book, my noble friend emphasises the need to go beyond the measurable when discussing the meaning of poverty. It cannot be a matter simply of listing a number of deprivation indicators, for example, or identifying a percentage of median income. Quantitative factors must have their place, but mere statistics will not tell the whole story on poverty. It is important to set alongside the idea of an “insecure economic condition” the experience of a “corrosive social relation”; those are my noble friend’s terms. It is necessary to assess how people in poverty exercise, or are unable to exercise, their agency as social actors. There is a psychosocial dimension to poverty. People who suffer poverty must not be dismissed with lazy stereotypes as passive, victims or welfare dependants. A radical look at the broader aspects of poverty is of the utmost importance, especially now.
It is with all this in mind that I read the report published earlier this week by the Office for National Statistics. It indicated, as the Guardian states, that
“41.6% of black people aged 16-24 were unemployed … Unemployment among white workers of the same age stood at 12.4%.”
It went on to say that in the nine months since the outbreak of the pandemic
“the unemployment rate among young black people had shot up by 64.4% compared with 17% for their white counterparts”.
We may not be systematically racist—the noble Lord, Lord Dobbs, who is normally cheerful, was rather splenetic in his outburst on these points—but we have a problem to consider. These figures should ring alarm bells. The average age of noble Lords means that almost all of us remember what happened in the early 1980s when we faced a similar statistical situation.
However, we must go beyond mere statistics. Young black people are much more likely to have been in less secure employment before the pandemic, with zero-hour or fixed-term contracts or cash-in-hand employment with little or no contractual certainty. These will be people who have been less protected by schemes such as furlough; no one can tell how things will turn out for them once the present crisis is over.
On Monday, so many people in this House paid tribute to the late Prince Philip, Duke of Edinburgh. Those tributes will not be worth a bean if we cannot find ways to ensure that the work done by him and his son, the Prince of Wales, in creating opportunities for young people—especially young black people—continues and intensifies. If not, we are storing up trouble for ourselves if we fail on this matter. It is of the utmost importance that black lives matter to those of us who are not black as much as they do to those who are.
Baroness Chakrabarti (Lab) [V]
My Lords, far from being the leveller that someone once naively suggested, the pandemic has been a magnifier of every inequality and injustice so I am grateful to my noble friend Lady Lister of Burtersett for convening this debate when so many of us seek a 1945-style new settlement after the hardships of the last year. These many sacrifices, including the ultimate one, have not been distributed with an even hand.
It is now over two years since the UN special rapporteur on extreme poverty published his damning report on the state of our nations. Professor Alston described the removal of our social safety net with “the systematic immiseration” of so many as the tragic consequences. This has only worsened as a result of Covid-19, despite the United Kingdom being one of the wealthiest places in the world. Millions of parents, including many in work, will skip at least one meal today in order to feed their children. I will use the remainder of my time to call for legally enforceable food rights in the United Kingdom, with corresponding duties and powers for national, regional and local government.
If charity alone were considered a sufficient guarantee for basic human needs in the UK, previous generations would not have legislated for universal state schooling or our National Health Service after the horrors and privations of World War II. Here are some modest initial ingredients of a right to food. Every child in compulsory education should be provided with a nutritious, free school breakfast and lunch. If we accept the universal and compulsory requirement that all children under 16 be in school, why break from that principle of care in relation to their meals during the day?
Universality avoids the bureaucracy and stigma of means-testing school-age children. If school kitchens are to be engines of better nutrition for our children during the day, why should they not be employed as community kitchens at other times for dining clubs, meals on wheels and cookery clubs so as to fight loneliness and isolation alongside food poverty and obesity?
To tackle the invidious choice that too many have to make between food—
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
I am going to interrupt the noble Baroness because we have a Division coming. I shall suspend proceedings for five minutes to allow voting to take place.
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
The Grand Committee is back in session. I return us to the noble Baroness, Lady Chakrabarti.
Baroness Chakrabarti (Lab) [V]
My Lords, to tackle the invidious choice that too many have to make between food, fuel and other essentials, the Secretary of State should be under a duty when setting minimum and living wages and any social security benefit on which people are expected to live to state how much has been notionally apportioned for food. This transparency will aid public and parliamentary scrutiny and ultimately legal accountability. There should be a duty on the Secretary of State and the devolved Administrations to ensure food security and to take it into account when setting competition, planning, transport, local government and all other policy. There should also be powers to issue compulsory directions in the context of anticipated food emergencies or deserts in food standards or supply, and there should be independent enforcement of these rights and duties. Noble Lords are by definition privileged people. We owe it to our fellow citizens to abolish hunger in these islands for good.
Baroness Prashar (CB) [V]
My Lords, I too thank the noble Baroness, Lady Lister, for securing this debate. I agree that we need a national conversation on how to build back better and not revert to the old normal. This pandemic has not only laid bare disparities and inequalities but has highlighted complex structural inequalities and exposed deep-seated flaws in our public policy. It has had a disproportionate impact on minorities, people with disabilities and women, and has affected the mental health of many. It has also shown the disparities that have emerged differently across places, groups, communities, regions and the UK as a whole.
The British Academy, to which the noble Baroness, Lady Lister, referred, pointed out that the pandemic will cast a long shadow into the future. The academy warns that a failure to understand the scale of the challenge and to deliver changes will result in a rapid slide towards more extreme inequality and the fragmentation of society.
Crises also present opportunities. This is an opportunity to reshape society. It will require vision, bolder action, collaboration between national, regional and local leaders and a rethink of social policies. The British Academy’s impressive review highlights seven strategic goals for policymakers, which deserve serious consideration. They suggest building multilevel partnerships, improving knowledge data, prioritising digital infrastructure, the better use of urban spaces, creating agile education and training systems, strengthening community-led social infrastructure and building trust and cohesion and promoting shared purpose—that is, learning from people who work together to build on this enhanced collective sense of social purpose. It is a comprehensive and joined-up approach which will require a different mindset and a major shift in local and central government relationships, in the way resources are allocated and in how we engage communities rather than setting them apart by negative narratives and divisive policies.
The pandemic brought out some of the best features of a co-operative and innovative society driven by a shared purpose. These need to be harnessed and turned into a strategy. The local delivery of public services during the pandemic demonstrated the value of place-based leadership and reinforced the need for policies for growth, not short-term and fragmented interventions. We need to tackle health and housing inequalities, to think creatively about the employment and skills agenda and, as the Local Government Association has said, we need to rethink local. Local councils must now be equipped and trusted to build better. The key part of the recovery from Covid will be the delivery of quality, affordable homes, as highlighted by the noble Lord, Lord Best. The Local Government Association rightly argues that local councils should be provided with tools and powers to deliver social housing, which could result in a boost to the economy. Harnessing voluntary activity to build social capital, tackling the digital divide and establishing internet access as a crucial tool for delivering public services, rethinking social security systems and redirecting resources should be very high on the agenda.
Building back better will require the devolution of power, responsibility and accountability, the engagement of local civil society organisations to build trust, and, above all, adopting policies—and, if I may say so, the tone—which will not set one community against another but bring them together. This is an opportunity to build on their social fabrics. Will the Minister tell the Committee whether the Government are listening and will take a comprehensive and radical approach to building back better and building on the lessons learned during the pandemic?
Lord Beith (LD)
My Lords, this debate has rightly covered the range of inequalities, deprivations and disparities that have contributed to the vulnerabilities that Covid-19 has shown up. We have to address them, but we also have to recognise that an inclusive society must be an inclusive democracy in which people feel a sense of involvement and ownership in the decisions which affect their lives. Despite the emergency, freedom and civil rights should not disappear or be diminished. Their absence will make our society a more exclusive one—one that is enjoyed only by those who prosper when arbitrary power and centralised authority operate; that is something they will welcome.
In the time available I can mention only a few of the issues and dangers which this analysis raises. We need to remember that emergencies can take a lot longer than we expect—that has certainly happened in this case—and that there will be plenty more of them. Climate change may bring us floods, droughts or mass migration. Any of these would call for some kind of urgent action. So we need to review how we legislate for emergencies so that we learn from the mistakes of this episode. If we want our democracy to be genuinely inclusive, there are things we will have to curb.
One is lawmaking by ministerial decree without proper parliamentary scrutiny—a totally exclusive process. Another is confusion between what is law and what is advice, with the unacceptable pressure on police officers to enforce what is not law. Then there is government purchasing and contracting excluding those who do not have privileged access or the right contacts or email addresses; and treating local democratic institutions —local government—as an afterthought rather than involving them from the beginning.
There are the dangers that would emerge from a Covid passport if it became a document on which freedom depended in many circumstances, thus excluding a lot of people. There is also the inadequate legislative framework. It is interesting that in this crisis the Government did not use our emergency legislation—the Civil Contingencies Act—or even make much use of the Coronavirus Act, reverting instead to the Public Health Act 1984.
We all know some of the weaknesses that our democracy has. We should start now to prepare a legislative structure and general approach equal to the needs of an emergency on a basis that is inclusive, not exclusive, and recognises that freedom, constrained though it is when there is a risk of harm to others on a sound John Stuart Mill principle, remains the right of all our citizens.
Lord Farmer (Con) [V]
My Lords, I add my thanks to the noble Baroness, Lady Lister, for the opportunity to debate this important issue. I will focus, as did my noble friend Lord Dobbs, on the report from the Commission on Race and Ethnic Disparities. I declare my interest in that currently two-thirds of my grandchildren are of mixed race.
I was disappointed by the shrill, vituperative inaccuracies of many of the criticisms of this report. They contrast starkly with the calm, nuanced and reasoned tone of its conclusions. At the heart of the controversy are different expectations as to what will drive change and improve outcomes for the disadvantaged and excluded. As the BBC reported:
“While the Left ‘emoted’ on race, the prime minister wanted a data-driven report”
which recognised the complexities driving disadvantage, and for the commission to make practical recommendations.
The Cabinet Office’s Race Disparity Unit, set up in 2016, built a comprehensive database on race and ethnicity which the commission is the first major independent body to use to investigate how ethnicity and other factors impact on outcomes and deeper underlying causes of key disparities. Surely it would be more surprising if access to this rich new seam had not generated new insights and a more productive narrative. Ideology cannot be allowed to negate these, as Trevor Phillips explained in the Times:
“Depressingly, a minority want the debate about race to continue as a medieval contest of faith, in which the catechism—‘institutional racism’, ‘white privilege’—is mouthed unthinkingly, without understanding. Those who deviate are lashed as heretics … it is the self-proclaimed radicals who are, in fact, least keen on change. For the zealots to justify their revolutionary aims … ethnic minorities must remain in suffering.”
Specifically, this report’s data-driven conclusion was that family structure contributes more than racism to outcomes. One commissioner described the key moment in the whole process as when all 10 said, with one voice, that family was what distinguished the success stories from the failures. This was the first government-commissioned report to engage seriously with the family, and it does so respectfully but unapologetically, rejecting
“both the stigmatisation of single mothers and the turning of a blind eye to the impact of family breakdown on the life chances of children.”
Father absence is linked to criminality and imprisonment, and family breakdown to gang membership of both girls and boys. The great attraction of gangs is that they provide families, albeit highly dysfunctional ones that can be lethal.
Sadly, such insights are not new. A thematic review by Croydon’s safeguarding children board found that fathers of over two-thirds of children of concern did not live at home and a father walking out was frequently the turning point in a child’s behaviour. Three-quarters of the boys were involved with gangs and over half the girls known by police to be violent, with almost two-fifths suspected of knife crime.
To conclude, ignoring or vilifying this report will not build a more inclusive society. Getting behind its practical, evidence-based recommendations will, however, enable us to build on the hard-won progress of generations of ethnic minorities, many of whom came to our four nations seeking a better life. Can my noble friend the Minister confirm that the Government will further support family hubs and give the green light to the important “support for families” review, as the commission recommends?
Baroness Sherlock (Lab) [V]
My Lords, I congratulate my noble friend Lady Lister on her brilliant introduction to this important debate.
This pandemic has revealed some unpalatable truths about the way we have been living. The first one we spotted was the positive impact on the environment of the first lockdown. Others took longer to surface. Michael Marmot drew a comparison with Hurricane Maria, which hit Puerto Rico in 2017. The storm killed 64 people, but the longer-term impact on the infrastructure led to thousands of deaths. After two months, mortality had risen sharply for the poorest people, somewhat for those on middle incomes, and least for the highest group. A huge external shock had thrust the underlying inequalities in society into sharp relief.
That is what the pandemic has done to us. Covid did not strike equally. It disproportionately hit disabled people and many minority ethnic communities. It hit those living in poorer areas or in overcrowded housing. It hit those whose jobs or finances meant they could not stay home in relative safety. The aftermath will not be spread evenly either. Examples of inequality abound, but I will highlight just two. The first is employment. The Resolution Foundation report mentioned earlier by my noble friend Lady Royall showed that 16 to 24 year-olds account for nearly two-thirds of the fall in payrolled employment. Within that group, there was further inequality. Before Covid, 25% of economically active black young people were unemployed, versus 10% of their white counterparts. By the end of 2020, that had opened up, with 34% of black young people unemployed and 13% of white.
The second example is debt. A report from the Joint Public Issues Team, representing a group of churches, estimates that some six million people in the UK have been swept into debt as a result of Covid. Low-income families with children seem to have been especially badly hit, seeing their wages falling fastest while the cost of living increased. So they were pushed further into debt, while higher-income families could pay off debts and save more. Has the Minister read that team’s report, Reset the Debt, and its proposal for a jubilee fund to help address pandemic debt? If so, what does he think of it?
Like Hurricane Maria, the pandemic hit unevenly because of pre-existing inequalities. People tended to do better if they were already privileged—if they had chosen their parents with care, if they lived in the right area, and if they had a secure job they could do from a safe and comfortable home. For all the levelling-up rhetoric, unless we change course, we are heading back to the old normal but worse: to a world where poor countries suffer the worst effects of the climate damage they did not create; to a Britain where a man living in Warfield Harvest Ride in Berkshire can expect to live to 90 while one in Bloomfield in Blackpool is likely to die at 68, where poverty is rife and where racism is—yes—still widespread. While we are here, when I hear past wrongs, from discrimination to slavery, defended on the grounds that in those days we did not know any better, it brings to mind a quote I saw recently from the writer Teju Cole, who asked: “We who?”
We all agree that a good country is one which enables its citizens to flourish. We should have learned by now that a good society is one which recognises that the flourishing of each depends upon the flourishing of all, and that a society structured to enable some people to flourish at the expense of others is ultimately bad for everybody. It is not surprising that the poor do better in more equal societies; what is more interesting is that the rich do too, according to the evidence, as does society as a whole.
Surely the time has come for us explicitly to recognise our interdependence and pursue the common good, to tackle inequality and to invest in the infrastructure of our shared life—our communities and public services—and in a revitalised welfare state fulfilling its original ambition to be a companion service to the NHS, which pools risk across the population and across our lifetimes. I look forward to the Minister’s reply.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The noble Baroness, Lady Gardner of Parkes, has withdrawn, so I call the noble Lord, Lord Razzall.
Lord Razzall (LD)
My Lords, the noble Baroness, Lady Lister, rightly wants to build an inclusive society in the post-pandemic world. The Raoul Wallenberg Institute defines the inclusive society as
“empowering and promoting the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion, economic, or other status.”
Noble Lords will know that this reads very like the preamble to the Liberal Democrat constitution, and it touches on the principle of community politics so dear to many of us. Noble Lords have concentrated on different aspects of inclusion—or our current lack of it—from housing to poverty to children’s problems, to name a few. I have three suggestions which will change our lives, increasing inclusiveness, if the Government have the courage to implement them.
First, as the noble Baroness, Lady Eaton, said, and the noble Baroness, Lady Royall, implied, we should take power away from Whitehall and transfer it to our communities. When I was first elected to Richmond Council in 1974, 75% of revenue was raised locally and only 25% came from central government. This is now reversed, with inevitable Treasury control over spending and much central funding to local government being ring-fenced. Do we really believe that this trend has meant better government and more inclusivity?
Secondly, if we want to provide proper inclusiveness for the elderly, who, after all, ought to benefit from what we want to achieve, surely we must now have a solution to social care. The Dilnot report was over 10 years ago. The coalition Government legislated before 2015, but those proposals were scrapped when the Tories had an overall majority. Boris Johnson said he had a plan for social care in 2019. Where is it?
Thirdly, nobody has touched on the problems faced by small and medium-sized enterprises in our economy, which are so much the lifeblood of our communities. Destroy SMEs and you destroy the inclusiveness of many of our communities, and Brexit is doing that. The Government say that there will be short-term teething problems in the trade that so many SMEs are trying to do with the European Union. Tell that to the SME selling second-hand combine harvesters, which has to pay inspectors to produce complex certificates for the machines, causing significant costs and delay. Tell that to the SME bike manufacturer struggling to cope with different VAT regimes across 27 countries. Tell that to the Scotch whisky producers; labelling requirements often require small companies to set up a distribution company in Europe, significantly reducing profit. Tell that to the Nottingham company making synthetic hairpieces for cancer patients whose essential just-in-time supply chain in Germany has now collapsed.
These examples are not indicative of teething problems; they are examples of real damage that Brexit has done to many small and medium-sized enterprises without any apparent economic advantage, and of the serious damage done to the inclusiveness of our society in so many of our communities.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The noble Lord, Lord Desai, has withdrawn, so I call the noble Lord, Lord Pendry.
Lord Pendry (Lab)
My Lords, I welcome the opportunity to raise an issue which some 12 months ago would hardly have been considered a major concern within society. I refer to the mounting problem of loneliness, which the Covid-19 pandemic has led to. I hardly need tell that to colleagues in this Committee, who have in their own way suffered from the consequences of the pandemic, either because it has inhibited our ability to carry out the work that we would like to do or because of the self-isolation imposed on us.
Loneliness is indeed exclusionary and, as such, needs to be dealt with to make society more inclusive in the aftermath of the pandemic. The reports that have come out throughout the pandemic have all come to similar conclusions: more people worry that something will happen to them and no one will take any notice; people feel lonelier since lockdown; and more people believe that loneliness will get worse. These sentiments have recently been backed up by an Office for National Statistics report expressing concern at the increased levels of loneliness in our society. It found that the number of people feeling lonely has doubled. Similarly, the British Red Cross found that loneliness was on the rise, especially among the young in urban areas.
It was Aristotle who pointed out that we are social animals. We need to be part of the community. As we come out of lockdown, a priority of both national and local government should be to rebuild our communities by alleviating the causes of loneliness. The consequence will be the building of a more inclusive society at large. Before the crisis, most people would try to overcome loneliness by traditional means, such as exercising in gyms, swimming and other recreational pursuits. At least two of those have been alleviated by the easing of lockdown, but more still needs to be done.
The Loneliness Annual Report published in January also has some strong ideas to start tackling loneliness. For instance, over £30 million of funding has been awarded to charities tackling loneliness, including 1,157 awards to small or medium-sized charities supporting those who feel lonely and £4 million coming from the National Lottery Community Fund. However, I can see some fundamental flaws in that report; for instance, the causal relationship between financial difficulties and loneliness. By contrast, the British Red Cross highlighted the impact of financial difficulties on loneliness. I feel that this has been ignored by government and by our own cross-party group. The pandemic has hit employment dramatically and drastically. Those between 16 and 24 have been hit the hardest, where the reduction has been 300,000, with a figure of 200,000 for those below 25. Surely this should be a major priority for government now. I could expand on this and go on, but I need to hear that this is a problem for national and local government to counter.
Baroness Campbell of Surbiton (CB) [V]
My Lords, I thank the noble Baroness, Lady Lister, for giving us this opportunity to reflect on the past year and to offer advice for a more inclusive and resilient society.
The Covid-19 crisis has tested us all, but for some disabled people each day was a battle for survival as the common daily barriers of general inaccessibility, poverty, lack of public transport and lack of public support services became magnified. Isolating was not an option for those needing human support, either at home or in residential care. Many lived in fear that, if they caught the virus, they would be denied life-saving treatment.
Knowing that 60% of Covid-related deaths were among disabled people, we must now address the deep health inequalities exposed during the pandemic. Disabled people demonstrated huge resilience and a determination to thrive, so now is the time to draw on their lived experience and knowledge to advance towards a more inclusive society. For example, many disabled people found being able to work from home absolutely liberating. Free from inaccessible transport and inflexible hours, their productivity increased. Working from home, so long regarded as impossible, became the norm for many of us. Embracing the virtual workplace as a mainstream, inclusive option has now been proven to work and should remain in future.
As my noble friend Lord Best said, safe homes with adequate space and good design were lockdown lifesavers during the pandemic. However, this was not the experience of many, especially the disabled and older people. One of the unhappy legacies of the pandemic has been debilitating long Covid, creating significant numbers of newly disabled people. Some have been sent home to find that their living conditions no longer meet their needs. A recent survey by Habinteg revealed that disabled people were three times more likely to have their well-being compromised during lockdown because they lived in unsuitable houses or homes. To achieve an inclusive society in a post-pandemic world, inclusive design must be at its heart. Can the Minister say when the Government will publish the outcome of last year’s accessible homes consultation? Can he assure us that all new housing will be adaptable to people’s changing needs?
This week, many pubs, restaurants and cafés are reopening, making use of pavements as outdoor spaces for al fresco eating. I welcome this, but businesses and councils must consider the safe inclusion of all disabled people. Blocked walkways and narrower pavements come at a cost for disabled people, representing no-go zones for some, especially blind people. That is why I am pleased that the Centre for Accessible Environments is now offering training to local authorities in London to ensure that, as we reopen public spaces, we do so with disability access in mind. The “new normal” must not sacrifice access for all in favour of a much-needed return to business.
Finally, can the Minister assure us that the Government’s new disability strategy will include a road map out of the social exclusions that have been magnified for disabled people throughout the pandemic? Lessons learned are crucial to its success.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The next speaker, the noble Lord, Lord Sheikh, has withdrawn, so I call the noble Lord, Lord McKenzie of Luton.
Lord McKenzie of Luton (Lab) [V]
My Lords, I congratulate my noble friend Lady Lister on her introduction to this debate. There can be no one better placed to make the case, as we have heard earlier today, for a society that challenges the persistence of differences—of race, gender, class, generation and geography—and ensures inclusion and equality of opportunity for all.
The focus has been on the post-pandemic world and, although we can see the ravages that the pandemic has visited on countries and communities thus far, it is surely a bit premature to talk about a post-pandemic world. Even if we can feel confident of progress in the UK, we should be mindful of what is happening elsewhere in the world.
The UK economic landscape has had not only to endure the pandemic but to face the consequences of Brexit, the effects of which are now beginning to come home to roost. Before that, we also faced, as the noble Lord, Lord Razzall, said, a period of 10 years of austerity, the effects of which have fallen disproportionately on the poor, the disabled and the disadvantaged. This has given slow growth in trade and investment and a shrinking economy as we enter 2021. Building an inclusive society requires action, not only on the economy but on a whole range of policy areas.
The British Academy’s second report identifies seven policy goals that, if pursued together, will provide a strong foundation for effective policy in the UK. The academy offers seven strategic, interconnected goals around which to form policy, including prioritising investment in digital infrastructure. It also advises the creation of a more agile and responsive education and training system. How does the Minister respond to these prescriptions?
The academy cites evidence from local volunteers, community and mutual aid groups as significant to the Covid-19 response. This brings with it local and community knowledge, including from local councils. But, unfortunately, as the academy points out, this potential has been negated in large measure by savage cuts to funding in the local authority area.
The pandemic has exacerbated the incidence of inequality and poverty in our own country and internationally. So far as the UK is concerned, it has accentuated levels of poverty, because those who can afford to self-isolate obviously will, but those for whom it is difficult lose a wage. Most of all perhaps, it has exposed the differential access to housing provision referred to by the noble Lord, Lord Best.
The British Academy focuses in part on trust in government—that is, our government institutions—and media. Low levels of trust have implications for the propensity of the public to follow guidance. Things might have improved since the relative success with vaccinations, but the behaviour of government can very directly negate the benefits of this. The record on this is not good.
Baroness Fox of Buckley (Non-Afl)
My Lords, I too welcome the challenge from the noble Baroness, Lady Lister. How do we build a fairer, more inclusive post-pandemic world? One prerequisite in my opinion will be how urgently we rebalance the relationship between the state and the individual. Whether you think lockdown legislation was disproportionate or totally necessary, I think we can all agree that individual freedoms and rights have been suspended. Focusing on tackling poverty should not blind us to the devastating impact of impoverishing citizens by any continuation of an assault on individual agency or on people’s moral autonomy to make choices. The new normal should not mean less freedom or fewer rights.
Yet despite lockdown restrictions slowly being rolled back, there are some worrying signs that government, both national and local, seems keen to cling on to its new powers and retain control over people’s lives. Look at the debate over domestic Covid passports and certificates that the noble Lord, Lord Beith, referenced. These proposals would mean citizens requiring permission papers to participate in society before being able to go to the cinema, concerts, football matches, gyms, nightclubs or even to get jobs. People potentially would have to obtain official clearance. This would equate to the Government declaring every person a risk to others, unless they prove that they are Covid-secure. Let alone considering the ethics of pressurising people to undergo medical procedures to participate in civic life, it could create the potential of a second-class citizenry with two sets of rules and two sets of rights.
I am delighted today to see that many in hospitality have signed a new charter named Open For All. I hope the Government will take note and think carefully before embracing this biomedical, digital-permit society as it can only be exclusionary, discriminatory and less free, and I do not want it as the new normal. I have also watched with dismay at how authorities have taken advantage of lockdown to impose contentious policy changes without the inconvenience of democratic scrutiny.
Take the example of road closures and the controversial low-traffic neighbourhoods—LTNs. While citizens were confined in their homes under lockdown, up sprang bollards, giant flowerpots and barriers to block off residential roads. These and schemes such as bike lanes and wider pavements were boasted about by politicians as examples of building back better, but better for whom? LTNs are sold as introducing green travel habits but I think opportunistically citing unprecedented levels of walking and cycling during the pandemic to push for a new normal of less car use is pretty despicable. The Department for Transport talks of LTNs as helping to
“embed altered behaviours and demonstrate the positive effects of active travel.”
This is a top-down new normal, with the state deciding what is good for people, whether they know it or like it or not and it can be tone deaf, unfair and create new victims. For example, LTNs have not eradicated pollution or congestion, just moved them to less well-off areas. The impact of these schemes on those who use the vehicles for their livelihood has been devasting. Care workers dashing from home to home, delivery van drivers, plumbers and electricians now have 20-minute drives turned into hours in endless traffic gridlocks. Even in those quieter, traffic-free streets, many elderly and disabled residents complain that they feel stranded.
Myriad rank-and-file protest groups have sprung up. Have the local politicians listened to their complaints? No—instead, I am afraid, they have demonised them as selfish car rats on rat runs and as macho gas-guzzlers, even though most of them are women and many of them use their car to help their neighbours. As one activist notes, politicians
“underestimate … cars as a community resource.”
My main point for the Minister is this: can we ensure that when politicians promise to build back better this will not be an imposed vision of what people want but they will be asked and then listened to?
Lord Grocott (Lab) [V]
My Lords, I welcome this debate, not least because although it talks specifically about the post-pandemic world, in truth the issues it raises would apply to almost any time in our lifetime. The Motion refers to “building an inclusive society” and a more inclusive society means a more equal society. We know that there are large inequalities in so many parts of our national life—referred to by many previous speakers—in housing, education and health. However, in the short time available I will focus on one area where we need to build more equality and that is in respect of our political system, in access to power, to government and to politics.
2021 marks the 300th anniversary of the office of Prime Minister. During that time, we have had 55 Prime Ministers. Of these, 20—yes, 20—went to one expensive public school: Eton. What is more, seven more went to Harrow, so just two public schools have provided 27 out of Britain’s 55 Prime Ministers. That is almost exactly half. To put it into context, there are 3,500 secondary schools in England alone. What a colossal waste of talent this represents: to recruit to the top job in politics from such a tiny, unrepresentative source. That is just one example of gross inequality in access to power.
Greater equality is needed right across the political system—in the Executive, the legislature and the judiciary. Achieving greater inclusivity in the operation of our democracy is not just right in itself—it is an essential building block towards achieving greater inclusivity in society as a whole.
In the post-war House of Commons in the second half of the 20th century, a rich variety of occupations was represented—most obviously the miners, but also steelworkers, people in manufacturing and people directly from the shop floor. Now, of course, there are no pits and no miners, but where are the 21st-century equivalents in our legislature?
In a piece of research after the 2010 election, the Smith Institute said that
“our Parliament is becoming less representative in terms of education and occupation, and continues to attract similar types of people from a rather narrow professional base.”
Political parties should do far more to remove the barriers that exist to people from lower incomes, for example, to meet the cost of running for a seat in Parliament. As for this House, in the Lords we should do more to make our membership more representative, in terms of both occupation and social class. Whether it is the law, education, the police, the Civil Service, retailing, the Church or the military, we tend to have people who have reached the top of their various professions. They make a huge and valuable contribution, but would we not be enriched and more inclusive if there were more people currently working on the front line, in our schools, police forces, public services and factories—from the coal face, if you like?
If our society is to be more inclusive, we must avoid a situation where the people who attain positions of political power are disproportionately those who are already in powerful positions. I do not intend to reopen old divisions, but if the Commons and the Lords had been more socially representative, perhaps there would not have been such a mismatch between the balance of opinion in the country and the balance of opinion in Parliament in our interminable debates on the European Union.
There are huge inequalities in access to power in our country, and a consequent huge waste of talent. If power were distributed more equitably, other inequalities —in health, education and housing—would surely be much more likely to be addressed, as more and more people with direct, current living experience would be able to speak to them. That would be for the benefit of us all.
Baroness Benjamin (LD) [V]
My Lords, I too congratulate the noble Baroness, Lady Lister, on securing this important and timely debate.
When we think about the post-pandemic world, we must consider what this means from the perspective of children and young people. Our youngest citizens have suffered disproportionately over the last year, especially those from diverse backgrounds, including the Traveller community. It is our duty to make sure that we build a better and more inclusive society for all our children’s futures. As I always say, childhood lasts a lifetime, so the experiences that children have in those precious early years will set the course for the rest of their lives.
Will the Government appoint a Cabinet-level Minister for Children to ensure that children and young people are at the very heart of future policy? I campaigned for 20 years to create a Cabinet-level Minister for Children. This was put in place in 2003 but, over the years, that position has been shamefully downgraded. We need one now more than ever, because it is important not to underestimate the scale of the challenge facing us as we emerge from Covid.
The children’s charity Barnardo’s—I declare an interest as vice-president—led a consortium of more than 80 charities with government funding to help children facing new challenges during the pandemic. The programme See, Hear, Respond reached more than 100,000 children and young people. Sadly, that funding has now ended, so we worry where these children can now turn to for help. Many children have suffered unimaginable trauma in recent months, missing out on school, with the most disadvantaged falling further behind. More children are living in poverty with families struggling to afford the cost of food. Mental health needs have rocketed. One in six children now has a mental health disorder and, crucially, more children are at risk of harm, including online harm.
For many years I have spoken about the growing dangers that the internet creates for children and young people. During the pandemic, children were groomed and abused online at an increasing rate. One-third of children supported by Barnardo’s child sexual abuse services were first groomed over the internet and more and more often we see the pattern of perpetrators befriending children on apps or chat forums. We must also acknowledge the dangers of access to online pornography. Experts agree that, shockingly, many children now first learn about sex and relationships online. Children as young as nine often see extreme and violent pornographic content. This is what shapes young minds. If we are in any doubt of the outcome, we need only read the 15,000 harrowing testimonies of young girls, and boys as well, on the Everyone’s Invited website.
The Government have rightly taken a first step by asking Ofsted for an immediate review, but we know that while children are taking their cues from the most harmful and inappropriate websites we will struggle to drive real change. It is like trying to cure a cocaine addict while at the same time feeding them cocaine. The Government need to take other actions to build a better future for vulnerable children online. One of the first must be to bring forward the long-awaited online safety legislation that is so desperately needed to keep children safe online. While we wait for this delayed Bill, will the Government take urgent action and implement Part 3 of the Digital Economy Act now to ensure that children cannot easily access harmful, violent online pornography? After the year we have had, we must send a clear message that in the UK in 2021 we do not accept that anyone should live in fear of harm and abuse, especially our children.
Lord Brooke of Alverthorpe (Lab) [V]
My Lords, like other noble Lords, I am most grateful to my noble friend Lady Lister for this debate and for the strong speech that she gave at the beginning to get us going. I have torn up much of my speech because most of my points have been covered, but I particularly want to thank the British Academy for the work that it has been doing. My noble friend Lord McKenzie covered quite fully many of the points that it has made.
My one remaining point is worth repeating. The British Academy identifies a range of changes that we will need: a new, sharper array of public interventions than we have had in the past. It is making an important point. It also makes it in terms of internationalism, the national operation of the Government, local activities and local communities. This has been an enormous shock for us and it is good that we have people setting out how we might address it over coming decades, but I am one of those who believe that this is—I have said this before—a rehearsal for more difficult times ahead, which will come with climate change unless we are prepared to start addressing and changing the way we run our economy. If we try to grow in the way that we have done in the past instead of moving in a new direction, we will be hit much harder with climate change right across the board than we have experienced previously. This is an opportunity for us and we should be looking for ways in which we can address issues in quite different ways from the past.
I digress from the main topic to reflect, in the week when we have all been paying tribute to His Royal Highness the Duke of Edinburgh, that the biggest change that took place during his lifetime was not the Second World War or other wars, or AIDS or other pandemics on a smaller scale, but the fact that the world’s population has grown from 1.8 billion when he was born in 1921 to 7.4 billion in 2021, and is projected, unless we do something about it, to rise to 10 billion. That will create enormous troubles in so many other areas, enormous inequalities and enormous numbers of deaths unless we start paying more attention to it than we have done so far.
I have been trying to engage the Government on this. There is no point me asking the Minister to respond to my questions because I am sure he will not. I have had so many written responses that have said nothing. Why is this—the world population growth and how we should start to address it—not on the agenda of COP 26 in November? Why do the Government find it so difficult to talk about this subject? Why do we find it so difficult to engage with the faiths—and I am a man of faith—about the fact that there are very big responsibilities held by the different churches to do with how our numbers continue to grow in a way that is damaging God’s planet in a way that none of us wants? I take a different angle from that taken by others so far, but this is all part of the same piece. What we need is an inclusive and joint approach to finding solutions that will benefit all in society and not just the rich, as we have seen in recent years.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The next speaker, the noble Baroness, Lady Wheatcroft, has withdrawn, so I call the noble Baroness, Lady Ritchie of Downpatrick.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I congratulate the noble Baroness, Lady Lister, on securing this important debate on how government, both central and local, and the community and voluntary sector should work with the public to achieve a more inclusive society in this pandemic world. I agree with the noble Baroness, Lady Lister, that now is the time to go back to Beveridge and update it and create that “better place for all” as we learn the lessons from the pandemic.
The noble Lords, Lord Brooke and Lord McKenzie, referred to the British Academy policy document published in March, which is instructive because it provides all of us with a structural framework for how that rebuilding should take place and how the reshaping of our society should take place.
However, to be clear, prior to the pandemic we did not have an inclusive society, with a growing percentage of people with a dependency on food banks, piercing levels of austerity, poverty, marginalisation and a social security system that seems fixated with penalising those least able to pay. The Government talk about levelling up—surely this should mean the development of greater levels of equality through the location of services, and addressing unemployment and investment issues, outside London and working with the devolved Administrations to bring about better levels of social inclusion and cohesion.
It is worth noting that attendees at a United Nations summit more than 25 years ago defined an inclusive society as a “society for all”. Policy responses have been introduced in the years since, although questions remain about how progress can be measured. The Covid-19 pandemic has represented a setback towards realising that goal in many areas, but there is now a compelling need to address the further development of a more inclusive, cohesive and fairer society as we move out of the pandemic, with the implementation of the vaccination programme, intensive testing and tracing programmes, and the government’s policy objectives for the levelling-up agenda.
UN Secretary-General António Guterres has noted that the Covid-19 pandemic is
“affecting every aspect of our societies”.
It is also revealing the extent of exclusion that the most marginalised members of society experience. In that March report, the British Academy looked at the long-term societal impacts of Covid. It covered several areas: increased importance of local communities; low and unstable levels of trust; widening geographical inequalities; exacerbated structural inequalities; worsened health outcomes; and growing health inequalities. More importantly, the report stated:
“The pandemic offers an opportunity to adapt and improve the resilience and responsiveness of our economic structures. A different economic structure could be more inclusive, sustainable and green.”
In view of the challenges set down today by many noble Lords, including the noble Baroness, Lady Lister, can the Minister indicate what the Government’s real policy and operational objectives are in terms of the levelling-up agenda for the location of resources and investment to bring about social inclusion and cohesion?
Baroness Mobarik (Con)
My Lords, it is universally stated that we are living in an interconnected world, but the sad reality is that we are not yet living in an interconnected country. While as a nation we stand tall, and I agree with my noble friend Lord Dobbs that as a country we have done a great deal, having passed more legislation on race relations and equal opportunities than most other countries, we must admit that we have struggling communities and a dangerous undercurrent of disenfranchisement and social marginalisation.
The pandemic has changed many things and many voices are emerging on what may change as we adapt to this new normality. I will not hypothesise on what may change, but instead, with your Lordships’ indulgence, I will focus on what must change if we are to live up to the ambition of creating a truly inclusive society.
The rising rate of unemployment and the significant changes to labour markets of recent months cannot be ignored. I therefore welcome the Government’s programme of economic support, including the highly praised Kickstart Scheme, which is doing sterling work across the country to create new and, hopefully, long-lasting employment for young people.
This moment in our history will be marked by how we face up to the harsh realities exposed by the pandemic. The statistics speak for themselves and require our immediate attention. In June, we witnessed a blow to gender diversity, with all-male boards returning to the FTSE 350. Gender diversity at the top is fundamental to an inclusive society and I would therefore welcome an update from my noble friend the Minister on what work the Government are doing here to rectify a problem that, if left, will see us slip back into the unsavoury habits of old, and to consider what more could be done to ensure that more women take up trusteeships and stand for election to local councils, so that more women from all backgrounds take up community leadership roles.
We know that those from ethnic minorities have suffered the most, as temporary work and zero-hour contracts ground to a halt throughout the national lockdown, and we know that white males from low-income families are the group least likely to be offered places at university. So, as businesses start to consider how they will operate differently in the future and stand up to these issues of inclusion and diversity, as legislators we must now do the same.
All too often, we try to fix problems such as unemployment retrospectively. I have sat through countless meetings and debates on how we get people back to work, when the conversation we should be having is about how we ensure that future generations have the skills needed for jobs that may not even exist yet. We must move from the band-aid approach on jobs before the wounds in our society become too deep to cover.
All us of know that the bedrock of a truly inclusive society lies in our ability to close the widening skills gap. I ask the Government for an update on what is being done to make sure that we equip our workforce with the right skills to embrace the jobs of the future. Perhaps my noble friend may give further thought to how we can mobilise local government to prioritise future skills needs when considering locally significant commercial planning applications and infrastructure projects.
When I evaluate the digital transformation that we have seen in recent months and our progression through the fourth industrial revolution, I am excited by the opportunities that are waiting on the horizon which will see the United Kingdom become a global leader in areas such as space technology, AI and the green economy. But here lies the challenge: if, for example, we are to develop world-leading space ports in Scotland then we must now turn our attention to upskilling and retraining, particularly in areas such as STEM, so that, when these jobs of the future come, it is the local workforces which stand ready to embrace them.
Finally, as we use phrases such as “build back better”, we should pause and ask ourselves who we are building back better for. We need a fundamental shift in mindset, in which government, local government and the private sector work hand in hand to enable everyone, regardless of their ethnicity or background, to have a stake in society and thus a chance to contribute to the wider good.
Lord Bruce of Bennachie (LD) [V]
My Lords, I thank the noble Baroness, Lady Lister, for this debate. As we emerge slowly from a global pandemic, it is very timely, as all noble Lords have said. Domestically and globally, lives have changed. Many people have suffered the loss of loved ones, livelihoods and opportunities. Society has shown a capacity to respond in unexpected ways, but we must learn from that. The world is more interconnected than ever; we cannot defeat a global pandemic by national measures alone. But surely now is the time for measures to make society more inclusive at home and abroad. That is why, for me, the savage cut in the UK aid budget is such an unconscionably bad decision. The UK signed up to the SDGs with their clear aim to eradicate absolute poverty and “leave no one behind”. Yet, knowingly and deliberately, the UK Government are pursuing a policy that will leave millions behind. The Government know perfectly well that the 0.7% contained its own economic corrective. The downturn in the economy reduced the measure of 0.7% and prompted cuts of almost £3 billion. So reducing the proportion from 0.7% to 0.5% is leading to a slash-and-burn retrenchment, with deeply damaging consequences at home and abroad.
At a time when the world needs vaccines and the poor need support to survive and rebuild, we should be increasing aid, not cutting it. The development and distribution of vaccines is an international effort, in which the UK has played a leading, but not isolated, role. It is welcome that the UK supports COVAX and will offer surplus vaccines to poorer nations, but that headline obscures the fact that many aid programmes are being cut or cancelled. The Government face challenges in the Commons, which is why they are avoiding a vote, and may face a judicial review of the aid decision. So it is no wonder that it is reported that the Chancellor and the Prime Minister are at odds over when and how to reverse the cuts. Announcing at the G7 that 0.7% would be restored next year would set a good example and perhaps avoid the most damaging cuts to research and ongoing programmes.
At home, Covid-19 has, of course, caused disruption and setbacks not witnessed in our lifetimes, but these have fallen unevenly. Those who can work from home can do so only because many of their fellow citizens provide essential services at a risk to themselves, not always with a fair reward. Health and social care workers in the front line have carried a heavy burden and it is reported that many will leave the profession, which we will have to rebuild in a fairer and more balanced way. While millions have benefited from furlough, millions have also been left out and struggled. All this has taken a toll on the nation’s mental health, which was already in crisis before the pandemic began.
What furlough and other measures have shown is that, when they choose, Governments can find the funds for survival. That is why I believe the time is right to roll out universal basic income. Universal credit has proved itself to be cumbersome, bureaucratic and unfair. We still need a benefit system for certain short and long-term purposes, but providing a universal basic income, even at a modest level, would give everyone a minimum below which they could not fall. It would not by itself eliminate poverty, but it would prevent destitution and provide some peace of mind. I do not accept the argument that it would deter people from working. It would not be enough for that for a long time, and people know that aspirations require prudence and work, something explicitly acknowledged by Beveridge. To be universal, everybody should get it but, just like child benefit, UBI could be taxable.
As we face the digital age, artificial intelligence, robotics and the challenges of climate change, millions could be left behind. With vision, aspiration and a spirit of altruism, we could lay the foundations for a more inclusive society.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The noble Baroness, Lady Goudie, has withdrawn, so I call the next speaker, the noble Baroness, Lady Healy of Primrose Hill.
Baroness Healy of Primrose Hill (Lab)
My Lords, I thank my noble friend Lady Lister for securing this debate and for her powerful introduction on how to build an inclusive society in the post-pandemic world. I want to take the opportunity to highlight a timely book, to be published on Friday: The Dignity of Labour, by Jon Cruddas MP. I must declare an interest: he is my husband.
The pandemic has taught us hard lessons: we all need each other, and rights and freedoms cannot exist without a shared state of being that involves obligations on how we live together. Without a concerted effort by government, too many will face job losses, food poverty, insecurity in housing, permanent disadvantages in education and income for the young, especially among young and ethnic minorities, and a bleak future for the vulnerable in the post-pandemic world.
The pandemic has also taught us that all types of jobs should be respected equally, as we witness the dignity portrayed by carers, health workers, bus drivers, refuse collectors, supermarket staff and all those young gig workers delivering food. But what about those worker’s rights, their future and their dignity at work? Why, in this age, do vulnerable workers have to go to court to try to get basic rights to sick pay, holiday pay and safe working conditions, as those Deliveroo couriers recently had to? The Government have a moral duty to protect their citizens, including in their employment.
Last week, US President Biden announced a jobs plan that includes massive federal investment in transport, housing, the environment and social care, paid for in part by reversing Trump’s 2017 tax cuts for companies and the wealthy. Some 18 million jobs created over the next four years would be, Biden promised,
“jobs that you can raise a family on”
and which
“ensure free and fair choice to organize and bargain collectively.-
Jon Cruddas argues powerfully that we must recognise the centrality of work in the politics of the common good. Now, as we plan for the post-pandemic, we should make the world of dignified work the backbone of an ethical appeal for a national fair deal, crossing economic class and geographical divides. National and local government need to ensure that standards are met.
The Dignity of Labour proposes a democratic transformation of the lives of those doing low-paid, insecure but vital jobs. A new “good work covenant” would start from the assumption that all labour, not just knowledge work, should be both fulfilling and a source of self-esteem. New national colleges for skilled work could turn social care, for example, into the respected and well-rewarded vocation that it should be. Among other proposals is a special covenant for key workers, encompassing new entitlements to housing, travel and public services. To protect rights, a new statutory single definition of “worker”, decoupled from contractual status, should be instigated. This would align the rights of all employees and other categories of worker with day-one protections, including sick and holiday pay and post-pandemic full PPE and the ability not to work in unsafe environments—the right to stop the job.
Jon Cruddas argues for a new pandemic reconstruction force for jobs and growth in every region, which could oversee a new, one-year jobs guarantee with accredited training, living wage or the union-negotiated rate. This would be funded by national government but delivered at regional and local levels by councils, unions, business and Jobcentre Plus. Special emphasis would be placed on community-action programmes, especially ecological regeneration. This book sets out a practical way forward to build an inclusive society in the post-pandemic world.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The noble Baroness, Lady Miller, has been temporarily disconnected, so I call the noble Lord, Lord Hendy.
Lord Hendy (Lab) [V]
My Lords, I thank my noble friend Lady Lister for initiating this debate and for her powerful, comprehensive speech in opening it.
I want to emphasise one essential dimension of an inclusive society: democratic participation. Democracy is not limited to general and local elections. An inclusive society requires democracy in every important sphere of human activity. In the 1970s, there was much debate about industrial democracy. Members of the House as old as I am will recall the 1977 Bullock report proposing the representation of workers on company boards. The principle received widespread support, but there was no consensus as to the best blueprint. This was at a time when the working terms and conditions of 86% of British workers were determined by collective agreement, a percentage that has been consistent since the middle of the Second World War.
Since the 1980s, legislation and government policies have led to a collapse in collective bargaining coverage to less than 25% today. Within that figure, pay has been excluded from collective bargaining in large swathes of the public sector, where collective bargaining coverage is highest. The figure of 25% is one of the lowest percentages in Europe; in fact, a recent draft EU directive for a minimum wage takes particular aim at the few countries where collective bargaining has fallen below 70% of the workforce.
Industrial democracy in this country amounts to this: three-quarters of the UK’s 32 million workers have no say whatever over the terms and conditions of their working lives. They are forced to agree whatever their employers unilaterally determine, on a take-it-or-leave-it basis. The current economic crisis has exacerbated this with “fire and rehire”, where employers dismiss their workforce and offer re-engagement on significantly reduced terms and conditions. One in 10 workers has been subjected to this, even where there is nominally collective bargaining.
Research has shown that one consequence of the suppression of a collective worker voice is a rise in the levels of inequality, about which so many have spoken this afternoon. Now, we need to heed the advice of the OECD in successive annual employment outlook reports and fulfil our commitments to the ILO. We must reintroduce sector-wide collective bargaining arrangements, as we did after the First World War with the Whitley committees and again with the wage councils, which blossomed after the depression of the 1930s.
In the EU-UK Trade and Cooperation Agreement, the Government undertook to promote social dialogue at work, although they reject the TUC’s call for a national recovery council. They must now act on that undertaking. Without sectoral collective bargaining, there can be no industrial democracy and no inclusive society, and the crisis now upon us will become a social catastrophe with unpredictable consequences.
Lord Bhatia (Non-Afl) [V]
My Lords, as the Monitor states:
“We live in unprecedented times. The global community has been broadsided by a pandemic that has upended our lives socially, physically, psychologically, and financially … The impacts of COVID-19 are so profound that even re-emergence … won’t look like 9/11. It won’t look like the 2008-09 global economic collapse. This time it’s different, because it’s intertwined with a global public health threat that … re-centres the public good. The old paradigm that prioritized economic growth above population and community wellbeing has become a massive casualty of the pandemic. COVID-19 exposed an already fragile ecosystem COVID-19 has exposed what many of us already knew: public health is the key driver of everything, from community wellbeing to a thriving economy. If ever there was a time to embrace a Health-in-All-Policies approach to government decision-making, it is now. COVID-19 has exposed the short-sightedness of austerity budgeting, where governments prioritized tax cuts over needed investments in public services—in health and mental health, education, child care, social supports, affordable housing, public transit, long-term care, and more.”
This is not the time for political parties’ views. Maybe the time has come for a national unity Government, as in 1945, when both political parties came together and agreed to deal with the crisis.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
I call the previous speaker, who has now reconnected: the noble Baroness, Lady Miller of Chilthorne Domer. Lady Miller? No. We will move to the next speaker, the noble Baroness, Lady Whitaker.
Baroness Whitaker (Lab) [V]
My Lords, my noble friend Lady Lister, who has done so much to bring real poverty into the limelight, has indeed started an important conversation.
I shall focus on education. I declare an interest as chair of a DfE stakeholders group, patron of the Runnymede Trust and holder of several positions in Gypsy, Traveller and Roma organisations. But first I want to say that the equality which we have enshrined in law is a purpose of inclusivity, but it cannot be achieved without specific measures to overcome specific disadvantages. The old mantra that equality means treating everyone the same is one of the causes of massive inequality in the UK—the unfair society. It is inclusivity which can remedy the unfair society.
One of the most long-lasting effects of the pandemic has been the impossibility of children excluded from digital technology being able to catch up with their education, as my noble friend Lord Whitty pointed out. A post-pandemic world will still have done nothing to reduce the number of exclusions from school, driving children to worlds outside what a proper education can help them achieve—into county lines selling drugs, into gangs and into exploitation; nor will it have it done anything to increase the self-respect that comes with recognition at school of the value of different cultures and heritages.
The Government point to their general investment, but this does not yield a true account of what is happening in the unfair society. It ignores the clear disparities between outcomes for different ethnic groups, also ignored or misunderstood by the widely discredited recent report by the Government’s commission. The pattern continues in further and adult education, including apprenticeships. As former chair and current fellow of the Working Men’s College, I ask: where are the access requirements that are tailored to those so ill-served by their secondary education that they cannot meet the current standard of entry, even though they are capable of doing a good job and earning a living?
The underlying principle for change must be to target policies at those groups which are losing out. This means proper research. It means post-Covid catch-up arrangements which work for disadvantaged groups. It means liaison structures with the parents of children who are vulnerable to failure. It means school libraries and teaching with items which celebrate the different cultural heritages of their pupils. Anti-bullying policies must match the specific race hatred experienced by children. The Government must empower local authorities to get a grip on the disaster of home education carried out by parents who cannot properly educate their children.
Another way to describe this is to inform any drive to level up with compassion and understanding; otherwise, the Government will continue to exacerbate the unfair society, to the great detriment of its citizens and leading to damage to the economy, safety and security of all of us.
Viscount Thurso (LD) [V]
My Lords, I congratulate the noble Baroness, Lady Lister, on securing this debate on a matter of what should be, and I hope is, vital national importance: the need for positive policies to increase social inclusion post Covid. In addition to the many excellent points which she made in her speech, the effects of the pandemic have brought into sharp relief a trend that has been growing for a number of years: the increasing divisiveness in societies in many countries, with growing populism and nationalism, which create barriers to inclusion.
One of the first debates I took part in in your Lordships’ House in 1996 was on social cohesion and wealth creation. I have long believed that a just and inclusive society is essential for social cohesion and fair wealth creation, which are the hallmarks of a civilised society. In the short time available I want to make three quick points: first, on the importance of primary education; secondly, on the danger of the widening disparity in earnings between those at the top and those at the bottom; and, thirdly, on the increasing intolerance in society being reinforced by social media.
My noble friend Lady Benjamin, in a powerful contribution, underlined the challenges facing children. Divisiveness and prejudice are learned behaviours. Young children are naturally inquisitive and inclusive. That is why I believe that investment in early years education, particularly primary schools, is so important for creating the right opportunities for their future. My son teaches in a primary school in an area with many disadvantaged children. He has often told me that his biggest difficulties stem from poor parenting inherited from previous generations. Breaking that chain and encouraging inclusivity in young children, which requires investment, would be a major contributor to increasing opportunity and lowering prejudice.
Secondly, many in this debate will know of the Gini coefficient and its relevance to inclusivity. I have expressed in previous debates my real concern about the disparity between those at the bottom of pay scales and those at the top, and it is a gap that is getting larger with the years. Further, it now appears that the gig economy is reinforcing rather than improving that trend. This area deserves our serious attention.
However, the main point I wish to make in this debate is the need for tolerance to maintain an inclusive society. The relentless drive for all things to be online certainly brings many conveniences—indeed, our proceedings today would not be possible without them—but as the noble Baroness, Lady Drake, and the noble Lord, Lord Whitty, observed, for many disadvantaged households it amplifies their challenges. It is those households where children have been unable to get online learning in lockdown and those households who cannot access online support.
All the definitions of an inclusive society include the need to build trust and the need for mutual understanding. I have always believed that tolerance is one of the most important values in all truly liberal democracies. For me, tolerance is far more of an active value than simply being bothered by what others do; it demands an understanding of what others believe in order to create an active desire to tolerate their views and beliefs, ensuring plurality of thought in the great market of ideas.
Internet media outlets feed like opinions and bar differing opinions, reinforcing held views which are translated through social media into silos of mutual intolerance. The web cannot be uninvented but its effects need to be understood and regulated. Perhaps we should be teaching that in our primary schools.
Baroness Miller of Chilthorne Domer (LD) [V]
My Lords, one of the results of the pandemic is that an already very poor literacy rate in schools will have worsened further. Adults with poor literacy skills are more likely to be unemployed or in low-paid jobs and there is a link between low levels of literacy and shorter life expectancy, depression and obesity. Nine million adults in the UK are functionally illiterate.
All my younger working life was involved with the book trade, publishing and bookselling. Books were fundamental to my world, so it came as a shock when, in my 20s, I began to realise just how many adults could not read. For some time, I volunteered for what is now the excellent National Literacy Trust. As I got to know my students, it shocked me just how excluded from normal everyday life they were. Illiteracy equals exclusion.
The underinvestment in our libraries is a national disgrace. Funding for public libraries has fallen so much in a decade, from £1 billion in 2009 to under £750 million 10 years later—so it has fallen by a quarter. Before the Minister blames local government for those cuts, let us remember that central government has cut funding for local government at a lethal rate. Let us also remember that the public libraries Act 1964 requires central government to oversee and improve public library services. The cuts have meant public libraries having a quarter less books to lend, fewer professional staff and fewer libraries.
School libraries are extremely important in getting children interested in books and reading. The Sunday Times recently revealed that 2,000 pupils are set to enter secondary school unable to read properly, so I really welcome the UK Children’s Laureate’s campaign. Cressida Cowell is the Children’s Laureate at the moment, and it was previously Michael Rosen—who is also working on this campaign and, of course, has had very severe Covid—Michael Morpurgo and Jacqueline Wilson. They are all campaigning to get the Government to commit £100 million to restore and refurbish primary school libraries, because literacy is the surest way to build the foundations our children need to develop their knowledge and imagination and to grow a brighter future.
OECD research found that childhood reading ability was a more certain predictor of future success than a family’s socioeconomic status—in other words, it is the key. Children’s literacy is the key to inclusion throughout their life. Literacy is not a cost to the economy or a luxury to be considered when times are good; it is the key to inclusion and a fundamental part of personal achievement and national economic success.
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
I am glad that we could make that work. I now call the noble Lord, Lord Jones.
Lord Jones (Lab) [V]
My Lords, I thank the noble Baroness, Lady Lister, and acknowledge her steadfast work on poverty.
Newly Prime Ministerial Mrs May made a heartfelt and sincere reference to those “just getting by” from her lectern in Downing Street. That is a thoughtful phrase, but what of those not getting by? How many are not getting by? How many millions? Where is their inclusivity? When shall they get by? Who shall champion them? One recollects the late Lord Dahrendorf’s haunting phrase, “the underclass”—that is not woke but an accurate description.
More than a generation ago, Matthew Parris, the distinguished Times commentator, holed up in the north-east—classic red wall territory—and tried to live on, I think, £70 per week. It was very grim; he managed—just. Today, those at the fringes of our communities and those in hopelessness need our help. The gap between those of us “just getting by” and those of us enjoying prosperity and luxury has become huge. This is a major challenge to the statecraft of Governments.
The Palace of Westminster has lost status. We, swathed in ermine, supported by servants and surrounded by paintings, carvings, statues, silken wallpapers and gilt, talk most concernedly of social justice, poverty and its antidote: inclusivity. But what action might we engender, especially for youth and for black and Asian citizens, as the noble Baroness, Lady Lister, implied?
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
We seem to be getting a bit of feedback from the noble Lord, Lord Jones, so we will carry on to the next speaker, the noble Baroness, Lady Massey of Darwen, and then, because we have time, we will try to come back to the noble Lord for his conclusion. I call the noble Baroness, Lady Massey of Darwen.
Baroness Massey of Darwen (Lab) [V]
The noble Baroness, Lady Lister, has secured this very important debate and introduced it forcefully. I shall focus on children, who have been mentioned by several noble Lords. All children must be included and given a voice in any post-pandemic action affecting them, as they should have been during the pandemic. I hope we will learn from the experience of Covid and have the confidence to explore ideas and implement changes where necessary.
I ask the Government to develop and introduce a children’s charter based on the UN Convention on the Rights of the Child. Such a charter could build on what we know and have learned. We have evidence on children to do this, from parliamentary work on children, from the efforts of the former Children’s Commissioner, from the voluntary sector—which is brilliant on children —and from teachers and other people who work with children. An inclusive dialogue on such a charter between all agencies and including children from diverse backgrounds would be a useful and inclusive exercise in itself and could clarify future needs and commitments to our children. Such a charter would be a sign of our commitment to respect and implement the best interests of the child, as set out in the UN convention. Wales has worked on this, and Scotland is doing so.
The UN Convention on the Rights of the Child was ratified by the UK Government in 1991, but it is not part of our domestic law. Every five years, our Government are required to report to the UN committee on the progress they have made on implementing the UNCRC. The UN committee responds and our voluntary sector responds, led by the Children’s Rights Alliance for England. It is a useful and critical dialogue. The next one will be in 2022. The last called on the UK to provide better co-ordination of all activities for children across relevant sectors of government and therefore of all structures at national, local and international level to work with children. I strongly support, as others do, the growing enthusiasm for a Cabinet-level Minister for children and for greater co-ordination of services for children at national and local level.
The UNCRC has 45 articles, and I shall highlight but a few. They are all issues we would as parliamentarians believe are important to keep under scrutiny for children. Some we would now wish to enhance as things have changed; for example, concerns about children’s involvement in the internet and other media and some of the dangers, issues of climate change, and issues of aid to children in less developed countries. Other articles of the UNCRC promote the concept of the welfare of the child—that is, all those under 18—as paramount; the right of children to protection from all forms of violence; the right of children to express views on issues relevant to them; the right to a social life; the right to education which develops all talents and abilities, the right to health and learning about health; the right to good adoption practices; the right to family life; the right to support for refugees and immigrants; the right to leisure and play; the right to protection from drugs and other illegal substances; the right to youth justice; the right to benefits through social security, and the right to accurate information from all sources, including the media.
Many of those issues were raised by my noble friend Lady Lister as post-Covid priorities: childcare, fiscal support for children, funding for local authorities, poverty and inequalities. Other noble Lords have also entered this debate on children.
This very well-respected convention, the UNCRC, could be a basis to work from. How better to create an inclusive society than to involve children, parents, local communities, politicians, the new commissioner for children in England and other commissioners and all those who work with children in developing a charter for children? I believe that this will be a vibrant, exciting and powerful initiative. I believe there is an appetite for developing such a charter and the talent and imagination to do so. How will the Government respond?
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
We appear to have identified the problem with the feedback affecting the noble Lord, Lord Jones, so we will try him again.
Lord Jones (Lab) [V]
Mr Tony Blair’s foundational mantra is the place to start: education, education, education—especially north of Greater London. Surely we can fashion, in the 2020s, a skills and apprenticeship programme that properly meets the needs of youth and nation. Prince Bismarck did quite some time ago, so why not have an all-party collaboration to fashion the first national living wage? The minimum wage has been a trailblazer, not least in my own homeland, the lovely land of Wales.
I believe that sport can be a positive for inclusivity. I have met Mr Muhammad Ali and I have watched Sir Viv Richards strike an imperious ton at Old Trafford—and has not Red Devil Mr Rashford kicked open the 10 Downing Street door for the inclusivity of vacational meals for our youngsters? Those are role models indeed. Dame Ellen navigated the oceans, steely-armed Rachael won the Grand National, and a feisty young woman from Britain won and gained Olympic gold.
To conclude, surely a boost to sports provision in northern townships would engender more inclusivity, an alternative to broken glass, empty tubes and spent syringes. Northern Astroturf can rival the playing fields of Eton College.
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
Thank you, Lord Jones—that was well worth waiting for. I call the next speaker, the noble Lord, Lord Roberts, who will be followed by the noble Lord, Lord Haskel.
Lord Roberts of Llandudno (LD) [V]
Another voice, and this time a loud one, from Wales. What I see from here is the terrible toll that the pandemic has taken on the human family. So many millions have died and so many millions are in terrible straits, but there are one or two positive things as well. I hope that we have learned to avoid some of the mistakes made this time round. If we face a similar challenge, we might be better equipped to meet it. However, there are also positive lessons that could continue. As my noble friend Lord Thurso mentioned, where would we be without virtual communication? Our Parliament would be silent, nobody could continue with their legislation, our councils would have come to a halt, and our churches would not be able to have their Zoom services. Without this new device, for many of us—without Zoom services, and so on—we would be in a world of silence.
Families who have been unable to touch or hug each other have been able to talk together and see each other. I am so grateful, and I am hopeful that being able to see each other virtually will continue, enlarge and strengthen, so that if we ever have another pandemic of this sort, we will know much better how to tackle it. I have friends from Sydney and Toronto, as well as from many places in the United Kingdom, who now do not have to travel to committee meetings but can tackle them from home. A hybrid solution in the future could well be a positive consequence of this pandemic. We will be able to see each other, to travel the world. Is it time that we thought about preparation—although I hope that it is never needed—and prepared people to use this to the utmost in any other similar situation? We must use every possible means to prepare and instruct.
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
The noble Lord, Lord Sikka, has withdrawn.
Lord Haskel (Lab) [V]
My Lords, my noble friend introduces a broad topic: inclusion—religious, racial, social and economic. They are all important, but I will speak about economic inclusion. To me, economic inclusion means the ability to participate, to contribute and to share in the benefits of our economy.
Central to participating in the economy are skills, education, training, retraining and, yes, attitude. We have heard many fine words, particularly about further education, plus a White Paper pledging pioneering reforms to reshape the landscape. At the centre of this agenda are the colleges of further education. Many of them were in financial difficulties before Covid, and the decision by the Treasury to claw back funding from colleges which delivered less than 90% of planned courses—largely because of Covid—makes a mockery of the Government’s fine words. This action undermines the Government’s own policies and makes inclusion after Covid less likely.
When we had an industrial strategy council, it could have held the Government to account over this, but it was disbanded. An industrial strategy gives a sense of national purpose that we can all get behind, but this has been replaced with a plan for jobs, which some have described as mainly a list of existing policies with broad ambitions and few targets. This will do nothing for inclusion after the pandemic. Indeed, it will lead to a loss of skills, a continuing unproductive economy, and a resulting loss of competitiveness.
As far as participation in the rewards is concerned, we seem to be going backwards. Work is becoming more precarious, with some one in 10 workers facing losing their job and being rehired on worse terms. “Fire and rehire” is growing and will expand when the furlough period ends. This, along with bogus self-employment and employment through agencies after you have signed your rights away all make for a less inclusive society, which seems to be on the horizon, not a more inclusive society, especially regarding young people at work, where a special effort is needed. Fortunately, a growing number of companies believe that making employees feel they belong and are included makes for a stronger and better-performing business. There has been talk of an employment Bill in the Queen’s Speech next month. Inclusion should be central to it. The IMF and others forecast an economic recovery, but one with widening and enduring inequality. Surely inclusion must be a major part of our response.
Lord Touhig (Lab) [V]
My Lords, I congratulate my noble friend Lady Lister on the powerful and comprehensive way in which she introduced this debate. I declare an interest as a vice-president of the National Autistic Society. I begin by paying tribute to a good friend, Dame Cheryl Gillan, who died last week. Cheryl was chair of the All-Party Group on Autism, the pioneer of legislation on autism and the person who persuaded the Council of Europe to investigate the impact of autism on families across our continent. We owe her a great debt.
What is an inclusive society? In an excellent Library paper, we are reminded that at the World Summit for Social Development it was defined as “society for all”, a point made by my noble friend Lady Ritchie, but if you are autistic the world does not seem that inclusive. Awareness of autism and understanding autism are not the same thing. Poor public understanding has profound consequences for autistic people. Polling carried out by the National Autistic Society shows that while 99% of people know about autism, just 16% of autistic people feel that the public understand what it means to be autistic. Some 80 out of every 100 autistic people have felt socially isolated because of a lack of public understanding. However, not all is despair. The Government will publish their autism strategy in May and so much hope is being invested in this. I hope that the strategy commits to creating and properly funding a long-term national autism understanding campaign, aimed at shifting the attitudes and behaviour of millions of people.
I will concentrate my remarks today on two aspects of living with autism: employment and social care. Not all autistic people will be able to work, but three-quarters of unemployed autistic people want to do so. Despite this, the Office for National Statistics report shows that 22% of autistic adults are not in employment of any kind. Sixty Members of our House signed up to take part in this debate. If we were all autistic, just 13 of us would ever have had a job in our life. The National Autistic Society’s research has uncovered some of the barriers to getting into employment. Only four in every 100 autistic adults said Jobcentre Plus staff have a good understanding of autism. It is vital that staff have the knowledge and understanding required adequately to support autistic jobseekers. Some 40% of autistic adults need employment support, but just 12% receive it. What is more, most employers have a poor understanding of autism and the support that autistic people will need. This lack of understanding was identified as one of the key barriers to closing the employment gap. Many employers lack the confidence to employ autistic people, believing that an autistic person would require too much support.
It is vital that we see clear actions in the forthcoming autism strategy and the national disability strategy on what the Government plan to do close the autism employment gap, especially following the Covid pandemic. For many autistic people, social care is the difference between being able to leave the house or not, being able to wash, dress and eat or not and being able work or not. Prior to the Covid outbreak, the provision of basic care for autistic people was already dangerously low, but the virus has reduced care provision further, leaving many parents and carers feeling abandoned. Seven out of 10 autistic adults are living without the support they need. One in five family members have reduced their work due to caring responsibilities for their youngsters. The Covid outbreak has uncovered fundamental problems with the social care system and highlighted the significance of its underfunding. Years of underfunding have left councils and providers struggling without the resources they need. The Care and Support Alliance is calling for immediate and sufficient funding to stabilise the social care system to ensure that it does not collapse in the worst affected areas. Looking to the future, we need the Government to put forward a long-term plan for social care that creates a fair, effective and sustainable care system for autistic people and their carers. That would be a real step towards creating an inclusive society for all.
Baroness Brinton (LD) [V]
My Lords, I declare my interests as a vice-president of the Local Government Association and a recent former trustee of UNICEF UK.
I start by congratulating the noble Baroness, Lady Lister, on securing this important debate and Members of your Lordships’ House on their excellent, wide-ranging contributions. The noble Baroness referred to the Beveridge report and the Sunday Times editorial. I always think that we should go back to John Stuart Mill and his liberal safety net, to which noble Lords have referred.
My noble friend Lord Beith reminded us that crises often last longer than we expect. He rightly focused on the use during the pandemic of powers that seem to be creeping into our lives afterwards, with an impact on our human rights. Freedom remains the right of all our citizens. The noble Baroness, Lady Fox, also reminded us of the importance of that. I disagree with her views about LTNs and creating new ways of travel, but LTNs should not be made in isolation. We should also increase public transport, with buses and minibuses in those communities as well as wider pavements for pedestrians and wheelchair users.
My noble friend Lady Tyler reminded us that the World Bank has put us on notice to make our society more resilient in future from whatever shocks of whatever nature. The noble Baroness, Lady Ritchie, linked to the United Nations’ warning of the explosion of inequalities across the globe. She and the noble Lord, Lord Brooke, reminded us of the difficulties facing the economy after needing to spend at such high levels to manage the crisis and that this is likely to continue. We say that austerity may look attractive to get the books back in order but, for all the reasons that most other speakers have given, balancing society is as important as balancing the economy and we may have to bear this for some time longer.
The noble Baroness, Lady D’Souza, rightly pointed out that we need a more joined-up government plan. Where is the big plan for children—a theme much repeated this afternoon? The noble Baroness, Lady Chakrabarti, was right to say that the pandemic is not a leveller but in fact has highlighted every weakness in our society. The noble Baroness, Lady Prashar, warned us that if we do not tackle social policies now, the current inequalities will grow rapidly. Virtually every speaker has made that point on an area that they feel strongly about. However, until we have a strategic overview that is grasped by government, it will not become a shared purpose for us as a nation.
The whole-life approach is absolutely a post-pandemic tool. The noble Baroness, Lady Sherlock, reminded us of the Marmot review, which ran in parallel with Hurricane Maria. The effects of the pandemic on our society will still be emerging for some time. Issues such as the missing of serious, life-threatening illnesses because of disruption to the NHS for more than a year, with the subsequent mortality rates, will shock us all. My noble friend Lady Tyler said that the Lords Public Services Committee’s report needed a government strategy to be published. Can the Minister tell us when that will happen?
The treatment of paid and unpaid carers over the past year, during the pandemic, has highlighted a problem with social care. Many of our unpaid carers are saving the country billions, but at what cost to them, their safety and their families?
Much has been said about food banks, the cost of renting properties and cliff edges for those living in or on the edge of poverty. The noble Baroness, Lady Chakrabarti, spoke of food rights for everyone. She talked about the need to provide a free, nutritious meal to all schoolchildren and said that these facilities should also be used for other services. There are some innovative projects going on, particularly in Cornwall, where this is beginning to happen, such as with the use of meals-on-wheels services in local school dining halls.
The universal credit £20 uplift must be made permanent. But perhaps now is the time we need to pilot a universal basic income, as happened in California, where local mayor Michael Tubbs, the then mayor of Stockton, introduced it in 2019 with astonishing results.
A child poverty strategy is definitely needed, and well beyond education. Youth services need to be restored. They have been cut for far too many years. Delays to access to children’s specialist health services, especially those such as speech and language therapy and child and adolescent mental health services, where there are often extremely long waiting lists, impact severely on all our children’s lives.
The right reverend Prelate the Bishop of Gloucester rightly set out the important role that faith communities have played in this pandemic. They are key to helping to strengthen the third sector as we come out of the pandemic. As someone who normally sits in a church pew, I have been delighted with the streaming of services online and the many steps that different faith organisations have taken to bring their services and activities into people’s homes, such as talking to elderly people who have seen virtually no one face to face for months with telephone trees to make sure that that contact is made regularly. At one church, the audio-visual team copies the services on to discs and hand delivers them to the elderly members of the congregation for whom YouTube is a step too far.
The noble Baroness, Lady Walmsley, talked about nudge theory behavioural scientists and had some excellent proposals that we should learn from for the future. Let us use those techniques to reduce obesity and diabetes, as well as infectious diseases.
The noble Lord, Lord Pendry, talked about the loneliness of many, especially the elderly, during the pandemic. We humans are social beings and we have a stark reminder that each of us needs to reach out to those we know—and to those we may not know—who may be lonely.
The noble Baroness, Lady Benjamin, spoke movingly about the problems of young girls and boys and of the inappropriate and harmful websites that have also been another problem in lockdown. I am afraid that is cyberbullying, and that also needs to be tackled when we see the online harms Bill. The noble Baroness, Lady Miller, reminded us of the important link between literacy and lifespan. Lack of literacy equals exclusion. The noble Baroness, Lady Massey, laid out very clearly why we should implement the UN charter on the rights of the child.
On the Sewell report, I am afraid I disagree with the noble Lords, Lord Dobbs and Lord Farmer. I understand where they are coming from but until every member of our society—particularly those who have protected characteristics—can say that they are not discriminated against, we as a society have to remove those barriers and keep working on it. I agree with the noble Lord, Lord Griffiths of Burry Port, that the data does not lie. The noble Baroness, Lady Whitaker, and the noble Lord, Lord Grocott, spoke movingly of what needs to happen, not just to shift that data but also the culture of those who are not equal, whether through gender, race, disability or social inequality.
The noble Baroness, Lady Grey-Thompson, set out the importance of sport and physical activity as part of the recovery as well as mentioning the volunteering roles that sports and gym staff took during the pandemic.
Homelessness has become a real problem over the last year. We must find better mechanisms to get the homeless into accommodation, especially single, young, disadvantaged people and vulnerable single, young people coming from care. We have a national problem now with rent levels and lack of security in the rented sector. The Government need to act to make changes here.
The noble Baroness, Lady Walmsley, spoke of building back greener. Sustainable housing is absolutely essential, and it is not just about insulation and energy but also building for a lifetime. All that is needed is an extra £2,000 spent on a new build now with slightly wider doorways and the underlying plumbing to make it easier to turn to a bathroom into a wet room for somebody who cannot get into a bath later in life. When will those appear in the Part 3 planning regulations?
The noble Baroness, Lady Campbell of Surbiton, told us how disabled people have fared during the pandemic and how things for which they have fought for years are now normal for everyone, such as working from home. Let us learn those lessons and not just let them be a temporary issue during the pandemic.
The noble Baroness also spoke about long Covid, which at last is being taken seriously by the medical profession. For many of us with underlying conditions who have to live with chronic fatigue and other autoimmune disease problems, what people with long Covid are facing is not news, but a large number of new people stranded by long Covid and facing the medical and employment problems resulting from this serious condition might be helpful as it will provide the reset that we need in the way that we approach chronic illness. My noble friend Lady Jolly spoke movingly for those with learning disabilities living in supported accommodation and about the trials of being separated even further by the pandemic. The noble Lord, Lord Touhig, set out the problems faced by autistic people trying to get into work. It is not just autistic people; most disabled people find it very difficult to get into work. The care Green Paper is long overdue, and the Government must find mechanisms for funding it properly and imaginatively, because it is vital that these citizens deserve the standards that we just take for granted.
There has been considerable lack of support for disabled people in the pandemic in access to basic and essential services, PPE for them and their carers, and do not get me started on the do not resuscitate orders. Those wanting a children’s Minister need to know that there is real worry in the disabled community that the Minister for Disabled People, Justin Tomlinson MP, is totally invisible, so I warn that a title alone is not enough and there must be funding and support for any such Ministers, whether for disabled people or children, to deliver their roles.
My noble friend Lady Walmsley made a very important point about social workers working remotely regarding children at risk. It is vital that we get services back to normal, even if it is a new normal, as soon as possible. The most vulnerable children in our society deserve that risk assessment and support.
The noble Baroness, Lady Eaton, talked about the importance of devolution with the local settlement and we agree with that, but I am looking forward to the Government delivering it. On business, my noble friend Lord Razzall supports more localism. The power and funding of local government has diminished over the past four decades, and that must be remedied. Tinkering with council areas, unitary bodies and elected mayors is not going to change services after cuts in front-line funding. As the noble Lord, Lord Bhatia, outlined, public health and social care reforms are urgently needed. One part of the 2012 health reforms that worked is the vital role of local directors of public health. Let us learn the lesson of how that has worked and take it forward.
I shall end on a point about international aid. My noble friend Lord Bruce outlined the problems of the cuts. It is important that we listen to UNICEF and other organisations. UNICEF delivers the largest number of vaccines in the world year on year. The work it does will support the WHO, which tells us that not one country is safe until we are all safe. That is true for Covid-19, but it is also true for our worldwide society.
Baroness Wilcox of Newport (Lab) [V]
My Lords, I declare my interest as a vice-president of the LGA. What a tremendous debate has been brought here today by my noble friend Lady Lister, a leading expert on poverty and social policy. Her powerful opening speech demonstrated knowledge and experience in a devastatingly accurate way. It was inspirational, thought-provoking and an opening for many noble Lords to speak from their own expertise on these most important subjects. I am sure we will return to these topics time and time again as our country tries to recover from what has happened to us and we build back a better and more inclusive society—a society for all, as noted by my noble friend Lord Touhig.
This pandemic has shown us all who we truly are as countries. The sheer determination of people to help others in need has shone a light on the community spirit found in every town, village and city across our nations and regions. The kindness of not only nurses and doctors but of all key workers, such as supermarket staff, teachers and delivery drivers, has made us all aware of who really keeps our four nations running. The vaccine, from the scientists of Oxford to all the workers and volunteers involved in the rollout, has shown us the tremendous success we can find if we unite behind a common purpose.
However, the pandemic has also made it all too clear that we live in an unequal society. As my noble friend Lady Chakrabarti said, it has been a magnifier of every inequality and injustice. The IFS estimates that, during the pandemic, black Caribbean deaths are 1.8 times those of white British; Pakistani deaths are 2.7 times as high; and black African fatalities three times higher. The same study also found that Bangladeshi men are four times more likely than their white counterparts to have jobs in industries which have been closed. On top of this, research by the BMA revealed that almost double the proportion of BAME doctors have felt pressurised to work in settings with insufficient PPE, compared with their white counterparts. The comments made earlier by the noble Lord, Lord Farmer, referring to Trevor Phillips were somewhat partial when talking about racism and racial inequalities. The point Trevor Phillips made was that racial inequalities are a feature of UK society, but they are being exploited in different ways by people with extreme views and those wishing to exacerbate cultural divisions in society. The noble Baroness, Lady Brinton, summed it up perfectly just now when she said that protected characteristics need to continue to be protected in our unequal society.
Women too have been disproportionately impacted by the effects of the pandemic, especially since they are more likely to work in sectors which have been hit hardest by lockdowns. According to the Autonomy think tank, over 77% of “high risk” roles during this crisis are occupied by women. The closure of schools and nurseries has impacted millions of parents’ ability to work. This particularly affects women, who are more likely to have unpaid caring responsibilities.
The Committee will also no doubt be aware of the impact of the pandemic on disabled people, who have made up around six in 10 of all deaths involving Covid-19, with the risk of death three times greater for more severely disabled people. In addition to this, disabled people have had significant reductions in the support they need to live independently. Last August, Mencap found that, during the first lockdown, 69% of people with a learning disability had had their social care cut or reduced.
There is also a class divide, which has been brutally exposed. The number of fatalities in the most deprived areas is proportionately far higher than in more affluent ones. On top of this, living with restrictions has been more difficult for those on lower incomes, due to digital exclusion and smaller living spaces, as powerfully expressed by my noble friends Lord Whitty and Lady Drake, who noted that adults are three times more likely to rent, rather than buy, houses than 20 years ago. Both emphasised the huge digital and technological gap, with limited skills and access to technology. We have seen problems across our school systems, with pupils being unable to access blended learning provided by their teachers. Schemes produced to adjust this imbalance have been woefully inadequate.
While it is true that, at times, the pandemic has shown the absolute best of our countries—as a kind, compassionate and determined society—we must also recognise the brutal inequalities which have been laid bare. These divisions intersect: we know, for instance, that black and disabled women are overrepresented in precarious labour. To truly understand how unequal our society can be, we must look at how inequalities connect and relate to each other, rather than considering them as stand-alone issues. Instead of accepting these inequalities as an inevitability, as this Government so often seem to, we need to use this moment to confront them.
My noble friend Lady Sherlock likened the pandemic to the effects of Hurricane Maria, with the longer-term impact of the storm causing a huge shock. Covid disproportionately affected the poorer in our society and will continue to do so. Some 6 million people have been swept into debt, seeing wages fall fastest among lower-income families. I was so struck by her comment about those children who have “chosen their parents with care”. That was a typically understated line from my wise and compassionate noble friend, who always gets to the heart of the matter when supporting those with the greatest need in our society, and she is right when she says that the flourishing of each depends on the flourishing of all.
As the United Kingdom exits from the pandemic, we have an opportunity to ask ourselves who we want to be as a country. We cannot afford to rebuild Britain on the same foundations of inequality which have left so many people vulnerable. We must instead build a more inclusive society, reflecting our values as a country. My noble friend Lord Mandelson offered good advice to the Government when he said that policies require coherence rather than disjointed ventures and that government ideas need scaling and continuity with vision and vigour. My noble friend Lady Royall spoke expertly about the need to build back better and the great determination to bring about an inclusive economy in the work done in Oxford with the Inclusive Economy Partnership, as an ambition to hardwire into the economy.
As a former council leader, I am acutely aware—as I am sure the Minister himself will be—of the power of public procurement. However, the Government need to divest themselves of some of their powers, as indeed the Welsh Government have done in their local government Act, and move them to local authorities. Provisions in that Act, particularly the introduction of a general power of competence and corporate joint committees, will enable Welsh councils to build on the innovation and joint working which have been instrumental in and successful for dealing with the pandemic in Wales.
My noble friend Lord Hendy spoke powerfully about the need to heed the advice of the OECD and fulfil the commitment to reintroduce collective bargaining and social dialogue at work, which will bring opportunities to develop an appropriate and respectful work environment. We have seen during this pandemic the utter dependence upon so many of our key and front-line workers, and they must be rewarded appropriately and dealt with fairly.
My noble friend Lady Lister noted, among her many excellent and thoughtful points, that in her work as a social policy analyst she had previously been critical of how successive Governments had looked to the USA for their social policy inspiration. However, she said that her view had now changed significantly with the new presidency of Joe Biden, who has reasserted the importance of government at all levels and who understands that building back better from a society riven by inequalities and insecurity is not just about building the physical infrastructure; it means investing in the social infrastructure of care services and what his Administration have called the “human infrastructure” of financial support for children and people in poverty. It is indeed inspirational.
When my noble friend Lord Griffiths referred to my noble friend Lady Lister’s published work on the topic of poverty, he found the most apposite idea, that mere statistics will not tell the whole story of poverty. However, one statistic that I believe is worth repeating is that of my noble friend Lord Grocott, who reminded us that 27 of the past 55 Prime Ministers of the UK have been educated at one of only two schools. That is a tiny, unrepresentative source, and indeed is a waste of talent from across many of our wonderful schools in the UK. I can assure the Committee that no former or current First Minister of Wales was educated at either of those two schools, but instead at Colwyn Bay Grammar School, Whitchurch Grammar School, Brynteg Comprehensive School and Queen Elizabeth Grammar School, Carmarthen—a much wider range and balance of intake and demographic.
The nub of the challenge is: how do we change? What can we do to rebalance our society? To make a standing start we need to begin the following initiatives as a matter of urgency: a new race equality Act to end structural inequalities, as well as a proper strategy to address health and social care inequalities. We need equal pay reporting to be brought back immediately to monitor the impact of the pandemic, and we also need to tackle the violence against women and girls that has become endemic in the UK. Above all, we need a UK Government who acknowledge that the inequalities which exist in Britain today must be addressed, and if that means taking direct inspiration from the American playbook, then let us do so.
Of course, local government is also an essential part of physical, social and human infrastructure, and I am pleased that Labour candidates across the country are determined to make this happen and have demonstrated how local government leads in practice despite the savaging cuts in services over the past decade. As many noble Lords have said, the effects of the pandemic have not been felt equally. I am glad that Labour in local government is taking note of this as it works to rebuild our country. My noble friend Lord Haskel noted the precariousness of work, with some one in 10 workers facing losing their jobs and being rehired on far worse terms with this fire and rehire syndrome that will inevitably expand when the furlough ends. This is inequality in practice.
We sincerely hope that the restrictions we are currently living under will soon end and never return, but at present there is little hope that the inequalities brought to the surface by the pandemic will similarly disappear. I reiterate the call by my noble friend Lady Lister, at the conclusion of her speech, for the Minister to relay these key messages from this debate to his colleagues in other departments and ensure that they understand that it is all our responsibility in every Government and in every local authority. We are indebted to her for bringing these vital issues for debate to this House today. Let us use this moment to confront these issues, which have always existed but have now become more apparent than ever before. Let us build back a better Britain, which is confident enough to confront these inequalities, rather than accept them as inevitable.
I will conclude with a favourite line from the playwright JB Priestley, from a text that I taught to hundreds of school children over many years, and one that we must keep remembering in these uncertain times. We are a community, and
“We are responsible for each other.”
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
My Lords, I join in the chorus of noble Lords thanking the noble Baroness, Lady Lister of Burtersett, for securing this important debate. We have had a truly insightful and wide-ranging debate, and the contributions from across the Committee have been valuable and reflect our strong collective will to provide opportunity to all those who live in this great country. It has also been an opportunity to float some extremely big ideas, and I thank my noble friend Lady Eaton and the noble Lord, Lord Razzall, for calling for a magna carta for localism, the decentralisation of power and responsibility and the ability to be financially independent. I strongly support that direction of travel. I also note the noble Lord, Lord Grocott, on the inequality of access to power. Unfortunately, I did not go to the school which has yielded so many Prime Ministers.
The pandemic has shone a light on our society. It has shown us where we are strong, where communities have come together and where national and local government have stepped in together to great effect. However, it has also demonstrated areas of concern. There has been an increase in loneliness and isolation among many. Some communities have been more affected than others during this pandemic, and latent inequalities have come to the fore. The Government are aware and are taking action. From this devastating virus we can see that there is an opportunity to forge an even more inclusive society. We are doing this by strengthening our public services and enriching the ties that bind each of us to the other and to our nation. I will use my time to outline a few of the ways in which we are working to do this and, in so doing, will address a number of the points that have been raised.
First, I point to the issue of racial inequality, raised by the noble Lord, Lord Griffiths of Burry Port, and by my noble friend Lord Dobbs, whom I thank for recognising that this country is becoming more inclusive and more tolerant. As a Government, we are committed to ensuring that Britain is a fairer society. We will tackle racial and ethnic inequalities where they exist. That is why we established an independent commission on race and ethnic disparities to explore these issues. As my noble friend Lord Farmer pointed out, its evidence-based report builds on the work of the Race Disparity Unit and previous race-related reviews. It goes further to understand why disparities exist, what works and what does not and has presented 24 recommendations for action across government and other public bodies. It is now time for the Government to consider the commission’s independent recommendations in detail and assess the implications for future government policy, including the future provision of family hubs.
With regard to health inequalities, as raised by the noble Baroness, Lady Walmsley, new data is beginning to show the adverse impact that Covid-19 has had on life expectancy figures. It has also shone a light on the differences in health outcomes between communities. We remain committed to levelling up health outcomes so that everyone can enjoy a long, healthy life. The noble Baroness, Lady Grey-Thompson, raised health inequalities as they relate to disability. In June 2020, the Prime Minister and Health Secretary asked the Minister for Equalities, Kemi Badenoch, to lead cross-government work on the health disparities seen during the pandemic, and she will continue to work on ensuring that we address this. The Government have invested £4.5 million in research to underpin that work.
With regard to equalities, creating the conditions where people are given equal access to opportunity is a fundamental part of the Government’s vision for an inclusive society. We have therefore created an integrated, joined-up Equality Hub in the Cabinet Office, at the heart of government, which will report to Ministers who have other portfolios outside the Cabinet Office, led by the Minister for Women and Equalities. In response to the noble Baronesses, Lady Lister and Lady Fox, I will ensure that the Government listen to the issues raised in this debate. The hub will have a key role in driving government priorities on equality and opportunity. It has a particular focus on improving the quality of evidence and data about disparities and the types of barriers that different people face.
As part of this, the equality data programme will link and analyse government datasets, identifying where individuals have multiple barriers to opportunity and informing policy work in the Equality Hub and across government. This includes statutory protected characteristics but also other aspects of inequality, including socioeconomic and geographic inequality. That gives an opportunity for the Equality Hub to consider the points raised by the noble Lord, Lord Touhig, on autism and employment and wider issues about access to employment as well as the issues that my noble friend Lady Mobarik raised about widening opportunity and improving the skills agenda and the points raised by the noble Baroness, Lady Sherlock, who spoke about the Reset the Debt report—I have not yet read that, but I am sure that the Equality Hub will look into it in great detail. This will also be an opportunity to learn the lessons from the book by the husband of the noble Baroness, Lady Healy, The Dignity of Labour, as well as potentially to invoke some of the Bismarckian solutions raised by the noble Lord, Lord Jones.
The noble Baroness, Lady Ritchie of Downpatrick, and many other noble Lords raised the Government’s commitment to levelling up. This approach to inclusivity drives up our levelling-up agenda. The UK Government are committed to levelling up across the whole of the United Kingdom, between and within areas, to ensure that no community is left behind, particularly as we recover from the Covid-19 pandemic. We have therefore established a £4.8 billion funding pot for investments in infrastructure to improve everyday life across the UK. This includes regenerating town centres and high streets, upgrading local transport and investing in cultural and heritage assets. In addition, we are launching a community ownership fund to help ensure that communities across England, Scotland, Wales and Northern Ireland can support, and continue benefiting from, the local facilities, community assets and amenities most important to them.
Beyond levelling up, we are also committed to integration and ensuring that people across the UK feel a connection to society and one another. We have developed innovative programmes to address the issue, working closely with local authorities and community partners. The United Kingdom is generally regarded as well integrated; 84% of people report belonging strongly to Britain, and 81% say that their local area is a place where people from different backgrounds get on well together. Of course, there is always more work to be done, and we have forged a partnership approach between national and local government on our integration area programmes, testing a localised approach that supports partners in local areas across England to work together to build more united communities and places.
English language teaching is also a crucial part of promoting inclusivity and integration and, indeed, was a core manifesto commitment. We know that a lack of English presents a clear barrier to social and economic mobility. The Government are proud of their record in this space, which includes our ESOL for Integration Fund, supporting highly localised, community-based English language learning in areas of greatest need.
The noble Baroness, Lady Lister, also called for an increase in the welfare safety net, and the noble Baroness, Lady Brinton, invoked the spirit of John Stuart Mill. The Government are committed to delivering a modern, fair and affordable welfare system. This is especially important as we come out of the pandemic, which is why we will spend more than £57 billion on benefits to support disabled people and people with health conditions in 2021-22. That represents around 2.6% of GDP. This is a significant chunk of total welfare spending in Great Britain, which will be £241 billion in 2021-22. That is 23% of total government spending and around 10.7% of GDP.
The noble Lord, Lord Roberts of Llandudno, raised and highlighted the importance of digital connectivity. The noble Baroness, Lady Drake, and the noble Lord, Lord Whitty, also highlighted the digital divide that affects marginalised communities. To tackle the digital divide and support connectivity, the Government have worked closely with providers to ensure that social tariffs that provide low-cost landline and broadband services for those on means-tested state benefits are in place. DCMS has launched a £2.5 million Digital Lifeline Fund that will provide devices, data and support to 5,000 adults with learning disabilities. On 10 March, the Secretary of State for Digital, Culture, Media and Sport announced 10 technology priorities to support the digital tech sector and drive digitally-enabled growth, both in the context of Covid-19 and into the future.
My noble friend Lady Eaton, the noble Baroness, Lady Jolly, and the noble Lord, Lord Razzall, raised adult social care. The Government are committed to sustainable improvement of the adult social care system and will bring forward plans for reform later this year. Our objectives for adult social care reform are to enable an affordable, high-quality adult social care system that meets people’s needs while supporting health and care to join up services around people.
The right reverend Prelate the Bishop of Gloucester, the noble Baronesses, Lady Lister and Lady Tyler, and a number of other noble Lords raised the issue of children. As a Government, we are investing £84 million in the strengthening families, protecting children programme and £17 million in the investing in practice programme. Since 2014, our innovation programme has invested almost £200 million in 98 projects that are enabling local authorities to test new approaches to supporting children in the social care system. We have provided an additional £12.4 million in 2021 to support 14 innovation programme projects to continue delivery and extend their evaluations to capture further learning.
The noble Baronesses, Lady Benjamin, Lady Massey of Darwen and Lady Lister, and many others called for a Cabinet member for children. As a humble Minister, I am all for Cabinet inflation, and I will do my best to lobby for my friend—a university contemporary of mine—who is the incumbent Minister for Children and Families to see what we can do about ensuring that there is a Minister of Cabinet rank for children.
The noble Baroness, Lady Benjamin, raised Part 3 of the Digital Economy Act. In October 2019, the Government announced that they would deliver the objective of protecting children online through the online harms regulatory framework instead of Part 3 of the Digital Economy Act 2017. The online safety Bill will be ready later this year and, in answer to the noble Baroness, Lady Brinton, I am sure that we will address the issues of cyberbullying within that context.
A number of noble Lords, including the noble Baronesses, Lady Whitaker and Lady Miller of Chilthorne Domer, and the noble Viscount, Lord Thurso, raised the issue of education. Education is a big piece of the puzzle when it comes to inclusivity and represents a significant challenge, with schooling so disrupted during the pandemic. To tackle this, the Department for Education recently announced a £700 million package for the expansion of one-to-one and small-group tutoring programmes, as well as supporting the development of disadvantaged children in early years settings and summer provision for those pupils who need it most.
We also recognise the important role of out-of-school settings such as extracurricular clubs, youth organisations and tuition centres, in providing enriching activities, giving children the opportunity to socialise with others and promoting their well-being. This remains a priority for the Government. Therefore, as of 12 April, in line with the commencement of step 2 of the Government’s roadmap, out-of-school settings can offer provision to all children, without restriction on the reasons for which they may attend.
This is all part of the Government’s recognition that levelling up and pursuing socioeconomic equality is a cross-government endeavour. The Social Mobility Commission plays a major part in this and has recently moved to a team in the Cabinet Office, to ensure that this is led from the heart of government.
The noble Baroness, Lady Walmsley, and other noble Lords raised the issue of homelessness. We know that this continues to be a scourge on our society. In 2020-21, we put in place a total of over £700 million on homelessness and rough sleeping, as well as an unprecedented level of support to tackle these over 2021-22. This includes £676 million in resource funding, a 60% increase compared to the spending review in 2019. The Government will be spending over £750 million to tackle homelessness and rough sleeping this year, further demonstrating our commitment to end rough sleeping during this Parliament and to fully enforce the Homelessness Reduction Act.
The noble Lord, Lord Best, raised the issue of social housing. The Government are committed to increasing the supply of affordable housing and are investing over £12 billion in it over five years. That is the largest investment in affordable housing in a decade. This includes £11.5 billion in the affordable homes programme, which will provide up to 180,000 new homes across the country, should economic conditions allow. In answer to the noble Baroness, Lady Campbell of Surbiton, we are still analysing responses to the consultation on raising accessibility standards for new homes. I am sure that our response will follow imminently.
Turning to arts and culture, the Government are committed to equal rights for all, and firmly believe that everyone, regardless of their background, should have the opportunity to build a successful career in the creative industries. To this end, we have invested over £2 million in the creative careers programme in partnership with industry, leading to over 113,000 student interactions with over 1,000 creative sector employers. We also recognise the value that apprenticeships play in enabling people of all backgrounds to progress in work, earning as they learn, and the Government are committed to further levy reform.
Last year’s £1.57 billion support package for the culture sector by the Government was unprecedented. To date, £1.2 billion has been allocated from the Culture Recovery Fund, reaching over 5,000 individual organisations and sites. These range from world famous heritage sites such as Canterbury Cathedral to the great Glastonbury festival, and from West End theatres to the Wolverhampton Grand. Museums will continue to play a key community role as places that bring people of all backgrounds together for learning, enjoyment and inspiration, as well as providing a space for civic activities and reflection.
Beyond the important work being undertaken by the Government, I would like to take a few minutes to focus my final remarks on what my department is doing, and what I am doing within my portfolio, to build an inclusive society. We have discussed the many impacts of Covid—not least the disproportionate impacts felt by some groups, which has been a constant theme of the pandemic. I thank the noble Baroness, Lady Lister, for asking me specifically what steps the Government have taken to listen to marginalised groups who have suffered most during the pandemic.
Through the community champions scheme, the Government are providing almost £24 million for local authorities and voluntary groups to support those who are most at risk from the virus. This includes providing people with targeted public health messaging as well as information on the vaccination programme to allay the fears of those who might be unsure about getting a jab. The communities involved in the community champions scheme are varied and include: black and minority ethnic communities; at-risk young people; Gypsy, Roma and Traveller communities; groups with disabilities; the elderly; the homeless; asylum seekers; and refugees. We are rightly very proud of this scheme because it represents the best of national and local partnerships.
I agree with the right reverend Prelate the Bishop of Gloucester on the importance of our faith communities. We cannot expect to make progress on fostering an inclusive society without them. They represent fundamental pillars of civil society engagement. Throughout the pandemic, faith communities and places of worship have provided solace to many people, not only for spiritual well-being but also by offering a multitude of support services, often in partnership with local authorities. These are collaborative efforts that I want to see continue in the post-pandemic landscape.
We are working closely with the Gypsy, Roma and Traveller communities; the noble Baroness, Lady Benjamin, highlighted some of the issues faced by Traveller communities in particular. We know that they face challenges in terms of educational, social and health outcomes, which can lead to greater societal exclusion. We have been working to improve these outcomes, but we recognise that we need to go further. We will soon publish a cross-government GRT strategy.
Unfortunately, we know that hate crime continues to undermine efforts across the United Kingdom to make our country a prosperous and inclusive place to live. The latest figures show that hate crimes are increasing. There is an upward trend in these figures, partly fuelled by people’s confidence to step forward to report these crimes. I am appalled at the attacks that Chinese and east and south-east Asian communities have endured during the pandemic. I convey my sympathies to all those who have suffered discrimination and abuse. I could not be more adamant that all forms of hatred, including that based on race, are unacceptable and will not be tolerated. We have one of the strongest legislative frameworks in the world to protect communities from hostility, violence and bigotry and deal with the perpetrators of hate crime.
Finally, I want to take this opportunity to put on record formally that we wholeheartedly welcome Hong Kong British nationals (overseas) into this country. We are delighted that Hong Kongers are choosing to come to this country. Facing restrictions on their freedoms, they have taken up the British Government’s generous offer of providing a pathway to live in the United Kingdom. I am delighted that Hong Kong families coming here on the basis of the Hong Kong BNO visa route will benefit from a dedicated £43-million package of support to help them settle successfully into life in this country. As my right honourable friend the Communities Secretary said recently:
“We are a champion of freedom and democracy and will live up to our responsibilities to the people of Hong Kong, so that these families will come to find the UK a place they can call home.”
I could talk for far longer on the need to build an inclusive society following the pandemic and what the Government will continue to do to ensure that we build on the work already taking place. By ensuring that communities have every opportunity to succeed, there is a clear route to an inclusive society where all citizens can achieve their aspirations, no matter their background. We do not underestimate the scale of the task. Indeed, it is one of the biggest long-term challenges that we will continue to face, but we stand ready to tackle it and we will do all we can to continue to make the United Kingdom an inclusive place to live.
The Deputy Chairman of Committees (Lord Lexden) (Con)
I call the noble Baroness, Lady Lister of Burtersett, who initiated this important debate, to bring it to a conclusion.
Baroness Lister of Burtersett (Lab) [V]
My Lords, I thank everyone who has spoken, as well as the noble Lord the Minister. I have written a lot of notes but now I cannot read them, so my response may not be as coherent as those of the noble Baroness, Lady Brinton, and my noble friend Lady Wilcox, both of whom very skilfully summed up what had been said by noble Lords. I will not try to replicate what they did because they did it so well.
I thank the Minister; I feel that he drew the short straw because this is such a difficult debate to respond to, given the breadth of issues covered. However, I could not help but feel that he painted a rather rosy picture of where the Government are at. He did, at the end, acknowledge that there is a lot to do to build an inclusive society. A lot of the time, as is only to be expected, he was there to justify the Government’s position. I will come back to that at the end of my remarks.
Overall, I felt that there was, with one or two exceptions, a shared analysis of the intersecting inequalities and injustices that, as one noble Lord put it, have been “magnified” by the pandemic. Clearly there is a difference in the positions taken on the Sewell report. A number of noble Lords quoted evidence published this week from a couple of sources showing the systemic inequalities faced in particular by black and minority ethnic youth in terms of unemployment. I wonder how that squares with the picture painted in that report and I hope that noble Lords will not dismiss what some colleagues have called the work of zealots—it is hard data.
It was, as I expected, a wide-ranging debate, but a very useful one. A number of the points that I made were enriched by the perspectives that colleagues were able to bring. I was struck by the number of people who drew on the Marmot report and the British Academy review which, together, provide the Government with a compass to help them think about an inclusive society. I do not know whether the Minister has read those reports but, if not, I hope he will and that he will recommend them to his colleagues.
In terms of colleagues strengthening my arguments, a number of people talked about children and made a very strong case for putting children at the heart of building an inclusive society. I am grateful to the Minister for saying that he will lobby on behalf of the idea of a Cabinet-level Minister for children. This is an idea that is gaining ground—there was once a Minister for Children, but it got relegated to sub-ministerial level. The noble Baroness, Lady Brinton, warned us that just having a Minister does not make any difference if they are invisible and do not have any resources, which is partly why the demand is for a Minister to be at Cabinet level. If children are to be at the heart of the recovery, there has to be someone at Cabinet level with an understanding of children’s needs across the board. I hope that the Minister will lobby hard on our behalf and perhaps report back at some point to your Lordships’ House as to what the response has been.
I am very pleased that a number of people emphasised the importance of how disabled people have fared during the pandemic and the kinds of policies that we need to make sure that an inclusive society works properly for disabled people.
One of the gaps in my speech—and I am so glad that a number of people addressed those gaps—was housing and homelessness. That relates so closely to poverty, as the noble Lord, Lord Best, pointed out. It also links with themes of sustainability raised by a number of people. We need to build sustainable as well as affordable homes.
I am also very pleased that a number of noble Lords raised digital exclusion. The importance of that has been brought home so clearly during the pandemic, and addressing it has to be part of building an inclusive society.
On international perspectives, a couple of noble Lords spoke about the drastic cuts to international aid, but there was also an international flavour to a number of other points made. We cannot be an inclusive society and shut out the rest of the world; we have to think about what we do and the implications that has for the wider world.
Going from the international to the local, again, I did not address the role of local government adequately in my opening remarks, but a number of noble Lords did so very well. Noble Lords also raised the need to devolve more power and resources to local government, and the relationship of local government and national government to the third sector, community groups and so forth. Of course, although the focus of the debate was on the role of local and national government, we must also remember the role played by such groups.
I was disappointed that the Minister did not address what I said about levelling up. I said, and others echoed, that levelling up is not just about investing in physical infrastructure. We have to level up individuals if we are going to create the more equal society that so many noble Lords talked about. That means investing in what the Biden Administration call the “human infrastructure”, as I said. I hope the Minister will take that message back, because it is a very important one.
A number of noble Lords raised questions about democratic inclusion. That is really important because it links to what I and a number of other noble Lords talked about in terms of listening to what people have to say, and particularly listening to marginalised groups. They talked about democratic inclusion in terms of both politics and industrial democracy, and that links with questions about the meaning of good and dignified work. I would argue—and I am sure that it is argued in Jon Cruddas’s book—that part of the good work agenda is listening to workers so that they have a say in what goes on in their workplace. The Minister did say that the Equality Hub and making money available through local authorities to marginalised groups was about listening. Making money available to local and marginalised groups is of course welcome, but it is not the same as listening to those groups and what they have to say about what needs to change. I am not sure that that message got through, but a number of people echoed it—when it comes to service development or whatever, we really need to listen to what those whose voices are not normally heard have to say.
Overall, I feel that a rich tapestry has been woven in today’s debate. So many important points were made, and I really appreciate my colleagues’ knowledge, experience and wisdom. I hope that the Government are listening. Again, I do not think—forgive me if I missed it—that the Minister picked up on my request that key messages from this debate be relayed to his colleagues in other departments; some other people said that as well. I hope that he will consider that because there is no point in us having this debate for the sake of it; we may be more powerful than some of the people I am speaking about, but we want to be heard as well. Noble Lords have put in a lot of work and thought a lot about what they wanted to say today.
My final plea to the Government is to listen to what has been said today. Virtually every department has some role to play in building an inclusive society. As I said in my opening remarks, I hope that this debate will mark the beginning of a conversation rather than the end.
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, that completes the business before the Grand Committee this afternoon. I remind Members to wipe their desks and chairs before leaving the Room.
House of Lords
Arrangement of Business
The Lord Speaker (Lord Fowler)
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, and others are participating remotely, but all Members will be treated equally.
Tributes: Baroness Williams of Crosby
(3 years ago)
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Lord Newby (LD)
My Lords, I first met Shirley as a teenage student. I served with her on the Labour Committee for Europe. I was at her side as she chaired every session of every SDP conference. Latterly, I worked with her closely in the Lords where initially she was my leader and, more recently and improbably, I was hers. Over these 50 years, Shirley did not really change. She continued to be passionate about the things she believed in, principally social justice and Europe. She was always fearless in advocating these things and was prepared to take political hostility head-on to promote them.
Shirley had a long political career, which began as general secretary of the Fabian Society. She was MP for Hitchin and then Stevenage, and held a series of ministerial posts in the Wilson and Callaghan Governments, culminating in the position of Secretary of State for Education. In 1981 she left the Labour Party as one of the gang of four founder members of the SDP. Leaving the Labour Party was particularly hard for her because she remained popular within it, was an elected member of the National Executive Committee and could have expected further promotion, possibly even the leadership. But, having made the break, she never questioned her decision. She also quickly realised that good relations with and an eventual merger between the SDP and the Liberals was a political necessity. Her role in creating the Alliance and then the Liberal Democrats was crucial because she was able to build rapport and trust between parliamentarians and members of both parties.
Her victory in the Crosby by-election in November 1981 was critical in sustaining momentum for the SDP in its early months. Her eloquence, directness and popularity guaranteed her regular media appearances, which provided a vital part of the oxygen necessary for our future successes. Having lost Crosby in the 1983 general election, Shirley was nominated to the Lords by Paddy Ashdown in 1993. She combined many of her early years in your Lordships’ House with being professor of electoral politics at Harvard University. She took over from my noble friend Lord Rodgers of Quarry Bank as leader of the Lib Dem group in 2001, a position she held for three years, and from 2004 until her retirement in 2016 she used the bully pulpit of this House to promote her principal causes, and, appropriately, used her final speech to argue for Britain’s continued place within the EU.
But Shirley was no ordinary politician. What set her apart from any other politician I have met was her empathy and charisma. She was genuinely interested in other people, their ideas and their lives. She had a special magnetic charm which meant that people warmed to her and were energised by her.
Two episodes summed this up for me, one personal and one political. In the early days of the SDP, Shirley invited my wife and I to stay overnight at her Hertfordshire house to break a journey up to Yorkshire. Our political discussions with fellow guests went on well into the night. She had all the enthusiasm of a student. But next morning, at 8 o’clock, a knock at our bedroom door heralded Shirley bringing us a cup of tea. It was impossible not to be infatuated.
In the 1981 Warrington by-election, Shirley took part in a cavalcade in support of Roy Jenkins. She stood on the front seat of the car, her head poking through an open sunroof. As the cavalcade progressed down the road in a council estate, we passed a man lying on his back underneath his car repairing it. On hearing Shirley’s voice through the loud-hailer, he looked up and beamed. “Hello Shirley”, he said, as if he had been expecting a visit from a dear friend. To generate that kind of warm response from strangers was as commonplace with Shirley as it is rare with the rest of us.
Shirley gained something of a reputation for disorganisation and was frequently late, but this was borne out of the mistaken belief that she could moderate the passage of time to allow her to fit in an impossibly large number of tasks to which she committed herself. She was immensely energetic and, in a crisis—of which I have seen a number with her—she demonstrated a steely nerve and a razor-sharp focus.
As one of the earliest female Cabinet Ministers, and a single mother, Shirley faced widespread prejudice, but this never embittered her. She simply got on with it. It did, however, make her particularly keen to support young women who wanted to go into politics, and to persuade them that this was an honourable calling—which she fervently believed it was. I know that many of my female colleagues in the Lords and Commons, as well as councillors and activists across the country, were inspired by Shirley to take up politics. This in itself is a powerful legacy.
More generally, in an era when politicians are widely distrusted, Shirley maintained popular affection. She was trusted and admired by millions. As I was writing this tribute, the phone rang on my office desk. The caller had never met Shirley, but had rung to express his condolences for someone he described as “a legend”. He was right: she was—and we will miss her.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, I do not think that any of us were in any doubt about the impact that Baroness Williams had on our political life, or the huge affection so many felt for her. But it brings it home to hear a close friend and colleague articulate them, as the noble Lord, Lord Newby, has just done so well.
Our paths crossed in this House for just a short time, so I did not have the privilege of learning first-hand from someone who has been described to me as one of the most talented speakers in this House. However, I did have the honour of winding up the debate when Baroness Williams made her valedictory speech in January 2016. As a relatively new Peer and Whip at the time, it was a nerve-racking occasion for me, but it gave me the opportunity, albeit briefly, to see some of her many qualities, which others will recall.
Of course, I was well aware of the impact that Baroness Williams had on the politics of this country. Our politics may have been different, but a passion for education and advocacy on behalf of women are areas of interest we shared. As we have heard from the noble Lord, she served as a Labour MP from 1964, and held various ministerial posts before landing her first Cabinet job in 1974 under Harold Wilson, and subsequently Jim Callaghan, culminating in her appointment as Secretary of State for Education and Science.
There is no doubt that Baroness Williams’s decision to leave the Labour Party and create the Social Democratic Party with the gang of four was one of the boldest moves in recent political history. Her by-election victory for the newly formed SDP in Crosby in 1981 was a great achievement for the fledgling party, overturning a 19,000 Conservative majority. By-elections are never easy, but her success showed what a formidable campaigner she was. Whether it was for her intellect, her wit, or her down-to-earth sincerity, it is not difficult to see why the voters of Crosby wanted her as their voice in Parliament. Although the SDP achieved record highs for a new party in the opinion polls, that was not translated into winning seats at the subsequent general election, so her time as a representative of the party in the other place was short-lived. However, as the noble Lord said, she was made a life Peer in 1993, and appointed Leader of the Liberal Democrats in the Lords in 2001.
Baroness Williams was often spoken of as a potential leader of her party and a future Prime Minister—for many, perhaps, the best we never had. What is clear is that she had a remarkable ability to communicate, whether on the stump, on television or in the House. When I asked colleagues on my Benches for their memories of her, many recalled her as one of the most fluent and formidable debaters. One said, “She was never with a note—spellbinding sometimes. She could hold the House in the palm of her hand.” Perhaps just as importantly, all agreed that she was gracious and courteous, even to those she fundamentally disagreed with. As the Prime Minister has recalled:
“Even when we disagreed—as we often did—she had the gift of sounding so completely reasonable at all times.”
Even when Baroness Williams was away from Parliament, she was making a lasting impact on policy and politics abroad. Her ideas were transported internationally when she became a professor at Harvard’s Kennedy School of government, where no doubt she planted the seeds of her brand of liberalism in a generation of students over the 13 years of her tenure. She also left her mark in multiple countries when she assisted in drafting the constitutions of countries around the world.
What is clear is the respect she commanded, but also—as is not always the case—the huge affection, particularly in this House. Indeed, the esteem in which she was held was demonstrated when she was made a Companion of Honour for services to political and public life. We on these Benches send our best wishes and sincere condolences to her daughter, her family and all her friends and former colleagues. She was a remarkable woman. She will be much missed.
Baroness Smith of Basildon (Lab)
My Lords, despite being made a life Peer in 1993, Baroness Williams of Crosby was nearly always publicly referred to as Shirley Williams—not in ignorance, but in affection. She was of that generation of multi-skilled intellectual politicians who could easily have taken a different path in life from politics. Perhaps if Elizabeth Taylor had not pipped her at the post for the lead human role in the 1944 film “National Velvet”, she might never have returned home to the UK and a life of public service. But, like many others of her generation, she managed to combine her other interests with a passion for politics, always believing in it as a force for good and a route to social, political and economic advances.
She proudly described herself as a feminist. Her grandmother had been a suffragist, and she said that her feminism was instilled in her by her mother, Vera Brittain, supported by her father. In a 2015 interview for the book 100 Leading Ladies, she recalled that until she became a teenager she had never encountered anything that made her feel inferior to her brother and simply took that for granted. Her feminism was a constant throughout her life, especially in her politics.
She was pretty dismissive at having been tipped, as a Labour Minister, to be the first female Prime Minister, saying that
“there were then … so few women in politics that if you were quite good at your job and were a good speaker, you were almost inevitably going to be tipped for the job”.
But the feminist in her also claimed that she had
“learnt that politicians, especially male ones, tend to overestimate their own capacities, and so I am careful not to overestimate mine”.
Instead, she described her character as “tremendously involved and energetic”. She felt that whatever you had to do, you had to “throw yourself into it”—and she certainly did.
Having been raised in a strongly political and intellectual home, she brought an academic rigour and energy to all she took on. She was the first woman to chair the Oxford University Labour Club, and her degree in PPE and Fulbright scholarship led to a career first in journalism and then as general secretary of the Fabian Society. She was radical, pragmatic, articulate and enthusiastic. As a Labour MP and Minister in the 1960s and 1970s, she would energise debates in the House of Commons and, in the days of well-attended public meetings, delight audiences around the country. She was a passionate supporter of European integration in the days when it was a divisive issue in the Labour Party.
In 1979 she earned the admiration of many as throughout the election campaign she travelled the country supporting colleagues in marginal seats. As many of us witnessed in this House, she was a naturally engaging, authentic speaker who drew in audiences. On the eve of poll, she was miles away from her own constituency, supporting one of the youngest members of the Government, Ann Taylor—now my noble friend Lady Taylor of Bolton—who was defending a majority of just 900. Although Ann was returned to Parliament, unfortunately Shirley lost her seat. Some attributed her defeat to the overly hostile press coverage of her visit to the Grunwick picket line to hear from those who were on strike.
However, she remained one of the country’s most popular characters and returned to Parliament, as we have heard, in the 1981 by-election, but this time as one of the leaders of the newly created SDP. Splits in political parties are painful for all and, while the Labour Party suffered as a result, the SDP never achieved the success that some predicted. I had not long been politically active, but I recall that time vividly. Whatever the views of individual Labour Party members, the loss they felt most sadly was that of Shirley, for whom they had enormous affection.
Despite those differences, the warmth of the tributes paid to Baroness Williams by her former colleagues is testimony to her character. She was always generous with her time and passionate about her beliefs. Her commitment to the issues she cared about never wavered. As a Member of your Lordships’ House and leader of the Liberal Democrats, she was a force to be reckoned with. She never stopped working and hoping for a better world. My colleague and noble friend Lady Royall—now principal of Somerville College, which Baroness Williams attended—said:
“She was a … feminist, a woman of great intellect who cared deeply and worked tirelessly to bring about greater social and economic justice … I never spent a moment in her company which I did not appreciate or enjoy.”
Shirley Williams lived a long, eventful and productive life. On behalf of these Benches, I send our condolences to her daughter, her family, her friends and her party.
Baroness Neuberger (CB)
My Lords, I too rise to pay tribute to Baroness Williams, whom I always knew as Shirley. Others have focused on her political career and I can certainly echo that, but I will pay particular tribute to her for two very distinct but sometimes closely interrelated qualities and achievements.
For me and many women of my generation, Shirley was a profound influence. She encouraged us in the 300 Group, formed to get 300 women into the House of Commons, and encouraged us as individuals. She did that by acknowledging the real problems that women often face in political life, particularly parliamentary life and particularly those trying to combine small children and a parliamentary career. She was very kind to lots of us. Indeed, my noble friend Lady Hayman has just asked me to record her kindness to her. She was kind to us all.
She was unfailingly supportive of women who wanted to make a difference, as she always described it, and she was unflinchingly honest about how hard it would be. I have particular reason to be grateful to her. I had known her slightly as a child, but she was particularly kind to me as a student at Cambridge, as her marriage to Bernard Williams was coming apart. I was then membership secretary of the Labour Club. There was one of the usual internal scandals, and my college room was broken into to collect the membership records for said Labour Club. I was terribly upset by this, but Shirley was immensely comforting. She assured me I was right to make a real fuss about it and egged me on in doing so. I have been making a fuss about things ever since, thanks to Shirley.
Shirley would ask many of us younger women thinking about political interests and careers to work out what we really minded about. She would also always argue that party politics was not the only way we could influence things—though for her it was the main route—and that we should think about academia, as of course she herself did so successfully as a professor at Harvard for 12 years when married to the wonderful Dick Neustadt. She said that we should also think about NGOs.
She influenced many of us. Talking to a group of much younger women yesterday, I heard that many of them, in their 30s, also traced their willingness to enter politics, both local and national, to her straightforward way of talking with them, to her popularity with women voters—“Shirl the Pearl”, if people remember that—and to her immense personal kindness.
Of course, you could not go anywhere with Shirley without lots of people, often women, coming up to her and paying tribute. It was somewhat inconvenient. A group of us would go walking regularly in the Chilterns, and quite often people coming in the other direction would go past us, then realise they had just walked past Shirley Williams, turn back and come and pay tribute. It was wonderful, but slow.
Her obituaries have focused to a considerable extent on her encouragement of women, but they have not really focused on her immense personal kindness. Members of staff in this House have been telling me how kind she was to them, but we as a family have one particular, unforgettable example among many. A friend, Ralph Skilbeck, the former diplomat who became a headhunter, was dying of a very aggressive cancer in his early 40s. He told us how he desperately wanted to meet Shirley but never had. I rang Shirley, and immediately—without hesitation and without knowing him at all—she agreed to come and meet him, which she did a few days later. He was over the moon. He died a few weeks later, talking to the end about how amazing she had been.
I could give this House many other examples of her immense kindness; she was a profoundly good person. I believe her legacy will be memories of her immense strength of character; her inspirational qualities, particularly for younger women; the fact that she became a national treasure; and her legacy of kindness and goodness to so many people. She was a wonderful mother, and particularly grandmother, to her family, and I know they have been amazing to her in these past few years. I officiated with a blessing at her marriage to Dick Neustadt and said a blessing at Dick Neustadt’s funeral. I do feel that I can now say, “May she rest in peace”.
The Lord Bishop of Gloucester
I find myself rising again to give a tribute on behalf of the Lords spiritual from these Benches and wondering what I can add to all the wonderful things that have been said. However, as the first female Lord spiritual in this House, it is a privilege to pay tribute to an amazing person who, as we have heard, was something of a trailblazer for women in politics.
As a comparative newcomer to this House, I did not have time to get to know Baroness Williams, but now, as Anglican Bishop to Prisons, I was pleased to learn that she had once been a Prisons Minister and had a particular interest in improving the experience of women in prison. This may be an apocryphal story, but I believe that at one point she even asked to be locked up in Holloway to see what the experience for women was like. I am only sad that I never had a conversation with her about women in the criminal justice system.
As we have heard, Shirley was one of the iconic figures of British politics, shaped by the post-war world and one of those rare politicians known in public simply by her first name. Although she often seemed to struggle to acknowledge her own brilliance, from the outside others saw her talent and razor-sharp mind.
So much has already been said, but I wish to draw attention to her faith. She came from the tradition of politics of people grounded in internationalism, Catholic social teaching and social justice. Often found at Lambeth Palace, she was prepared to work across parties without fear or favour, with people of all faiths and none, to develop ideas and policy to the betterment of British society. Her Catholic faith and belief in universal values were central to her politics. In her final speech to this House, she called on us as the institutional memory of the nation to protect universal values of human rights, to play our significant part in the world and to think globally, not simply nationally. I can think of no clearer call from Baroness Williams to this House, and it is one shared by the Church: a commitment to social justice, protecting the vulnerable and being committed to global thinking.
After her many decades of faithful public service, I wish to end with the prayer: may she rest in peace and rise in glory.
The Lord Speaker (Lord Fowler)
My Lords, I will just add this very briefly. I saw Shirley Williams in action both in the Commons and in the Lords. When I was in the Commons as a member of Margaret Thatcher’s Cabinet, I did not get the impression that she was one of our natural supporters. She was in fact a formidable critic, but I will say that she was always fair in her criticism. When she came to this House, as we all remember, she retained that fairness of judgment. I remember with gratitude her support for my campaign on phone hacking, for example.
Above all, I will remember her for one thing: in an age when politicians are criticised, rightly or wrongly, for being more interested in what they can get out of politics, she was entirely motivated by what she could give, what contribution she could make to the public good—and her contribution was vast. I will remember her as a true politician and an example to us all.
Arrangement of Business
The Lord Speaker (Lord Fowler)
My Lords, Oral Questions will now commence. Please can those asking questions keep them short and confined to two points? I ask that Ministers’ answers are also brief.
UK Citizenship: History
Lord Wallace of Saltaire
To ask Her Majesty’s Government when they plan to revise the historical section of the Life in the United Kingdom handbook for people applying for United Kingdom citizenship.
Lord Parkinson of Whitley Bay (Con)
My Lords, the Life in the United Kingdom handbook is for all UK residents who need to meet the knowledge of life in the UK requirements when applying for either settlement or citizenship. New impressions are published regularly to keep it up to date, most recently in February, and plans to review the handbook are due for consideration later this year.
Lord Wallace of Saltaire (LD)
The Minister knows very well the sharp criticisms that professional historians have made of the rewriting of the historical section some eight years ago, changing its interpretation of the slave trade, of imperial history and of domestic political controversies. In the next major revision, will the Government consult outside and cross-party advisers, particularly over the portrayal of Britain’s engagement with the countries from which so many of our new citizens come, such as the United States—my American daughter-in-law has just taken the test—the Indian subcontinent, the Caribbean and Africa?
Lord Parkinson of Whitley Bay (Con)
Yes, I am well aware of the letter from historians; I had an interesting exchange about it last summer with Professor Frank Trentmann, its lead author. Criticism of the history sections of these tests is perennial. The first edition, written by the late Professor Sir Bernard Crick, was criticised by historians, as was the more recent edition, which was published under the coalition Government. We are grateful to the historians for their thoughts. They made some valid and thought-provoking comments that will certainly be taken into account as we review the handbook, but we do not agree with all the criticisms that they made and are wary of history by petition, no matter how eminent the petitioners.
Baroness Mobarik (Con)
My Lords, in acknowledging the importance of having a robust and fair mechanism by which citizenship is awarded, does the Minister agree that the life in the United Kingdom test should only ask questions of applicants that those who already hold citizenship could reasonably answer? If my noble friend agrees with that, what actions is the Home Office taking to ensure that the questions in place value and reflect the contribution that the applicant may already have made to both their community and British life more generally prior to their bid for citizenship?
Lord Parkinson of Whitley Bay (Con)
My noble friend is absolutely right. People who come to this country and settle here or become citizens make a valuable contribution even before they may take citizenship. The first part of her question allows me to explain that this is a 24-question test with multiple answers. People need to get only three-quarters of them right, and the recent pass rate of 79% suggests that it is a test that people are able to pass.
Baroness Wheatcroft (CB) [V]
My Lords, the French citizenship test involves an interview that puts the candidate in an everyday situation; a friend of mine had to imagine that he was buying a washing machine. Does the Minister think the UK test is relevant? Does he believe that the following questions for British citizenship are relevant, and can he answer them? When was the time of growing patriotism? When were the last Welsh rebellions defeated? How many colonies were granted independence in 1947? I look forward to his answers.
Lord Parkinson of Whitley Bay (Con)
My Lords, I believe Standing Orders say that only two questions are allowed in Oral Questions. More pertinently, as I explained, the questions that are put are multiple choice. They are not, as the noble Baroness frames them, designed to catch people out; they are there to encourage people to engage with the story of our nation so far, before they help us to write the next chapter of it. Previous versions of the Life in the United Kingdom handbook did not examine people on the history section, which meant inevitably that lots of people skipped it. I hope she will agree that it is beneficial to check that people have engaged with the glorious past of our country before they help us to write the next chapter, as I say.
The Lord Speaker (Lord Fowler)
I do not think the noble Lord, Lord Morgan, is here, so I call the noble Baroness, Lady Ludford.
Baroness Ludford (LD) [V]
My Lords, the Minister talked about a review later this year. I assume that is the review that was announced in October 2018. Can he confirm that it will be a public consultation? In reviewing the test, will the Government look at a report by Thom Brooks, professor and dean at Durham Law School, who, originally being American, took the test himself? He said that people had to learn the height of the London Eye in feet and metres but not about the UK Supreme Court or how many MPs there are. Does the Minister agree that the review must be thorough and radical?
Lord Parkinson of Whitley Bay (Con)
My Lords, the previous Home Secretary announced the intention to review the handbook. As I say, the handbook is constantly reviewed to make sure that it is up to date. We want to consider that more carefully, particularly in light of some of the criticisms and points that have been raised. The noble Baroness mentioned another academic. I understand that Professor Brooks is an adviser to the Labour Party. He has certainly made his representations on the citizenship test well known.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, the test is not the only barrier that people can face to accessing citizenship. The High Court has recently upheld a ruling that the exorbitant fees that children are charged are unlawful, as they are set without consideration for the best interests of the child. The Home Office has said that this will be reviewed in due course. Has work started on this review, or is the issue still sitting on the shelf waiting to be looked at? Families are left with this grossly unfair charge with no end in sight.
Lord Parkinson of Whitley Bay (Con)
The Government will consider the implications of the court’s judgement carefully and will review child registration fees in the light of the court’s judgment. We believe that it is important to strike the right balance by ensuring that people can obtain status in the UK and access appropriate services, without burdening the UK taxpayer.
Lord Lexden (Con)
Do not our prospective fellow citizens need, above all, a clear account of our constitutional development over the centuries? Without that, it is impossible to understand the role of our much-loved monarchy, of which we are particularly conscious at the moment, our multi-nation state and our parliamentary institutions and take pride in them—which all of them deserve.
Lord Parkinson of Whitley Bay (Con)
I completely agree with my noble friend. The history of this nation is a long, complex and evolving one. It is important that people are given a brief overview of it, so that they can engage with the country as it now is and understand things such as our proceedings here in your Lordships’ House.
The Lord Bishop of Leeds [V]
My Lords, I am grateful for these answers and glad that this document will be revised in due course. It is a concise, often masterful, précis of some quite complex areas of our history, but surely a confident country can cope with complexity and with where we have failed—it is not just our glorious past. History matters. For example, in relation to the role of the Soviet Union during the Second World War, much of what is regarded as glorious standing alone by the western allies would not have been possible without the role of the Soviet Union, which lost 20 million people. Will the rewriting be open to a wider scrutiny, in order that history is perhaps taken more seriously?
Lord Parkinson of Whitley Bay (Con)
I certainly agree with the right reverend Prelate that a confident country engages with its history in all its complexities, including those parts which might be uncomfortable to recall today. I do not fully agree with the way that he characterises the current text. I do not think it gives a misrepresented view of history; it includes some of the darker moments of our history as well. In the three editions of this document, historians have made their views well-known and long may they continue to do so.
Lord Jones of Cheltenham (LD) [V]
Will the rewriting delete references to ancient battles which caused the deaths of so many innocent people and kings like Henry VIII, who is not an example of how a person should behave if they want to live in the United Kingdom?
Lord Parkinson of Whitley Bay (Con)
I think it is important that we understand history, and monarchs such as Henry VIII were hugely consequential, not least in the establishment of the Church of England. It is important that we know all of these things.
Lord Flight (Con)
My Lords, there is widespread agreement that the life in the UK test needs thorough revision and updating. It has been repeatedly criticised for its random inaccuracies and the irrelevance of much of its content to life in the UK today. I trust, however, that we will not end up with a document which is even more biased in the other direction. I studied history at Cambridge many years ago, where one excellent tripos was on the expansion of Europe—introduced to counter previous left-wing bias in writing about UK history. When Britain’s involvement in slavery is addressed, I trust it will include the facts that slavery was imported from west Africa and, between 1500 and 1800, 2 million British citizens from the west coast were enslaved by the Morocco of the time—
Lord Flight (Con)
My question is: who will be writing the revised historical section of the handbook? The open letter from 180 historians looks to have its own substantial bias.
Lord Parkinson of Whitley Bay (Con)
I also studied history at Cambridge, a little after my noble friend, but I think that some of the papers were still the same when I was there. The point he makes illustrates how difficult it is for any single person to write a history that does not spark debate, and the purpose of it is to do just that. History is a process of constant inquiry, of re-evaluation and of reconsidering the past and the lessons it can teach us. The history section of the life in the UK test is a starting point for people to engage with the past before they make their valuable contribution to our nation in its future.
The Lord Speaker (Lord Fowler)
My Lords, all supplementary questions have been asked and we now move to the next Question.
Initial Teacher Training Market Review
(3 years ago)
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Lord Knight of Weymouth
To ask Her Majesty’s Government what consultation they have undertaken with providers about the market review of initial teacher training.
The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con)
My Lords, the initial teacher training market review is focused on how the sector can provide consistently high-quality training in a more effective and efficient market. An expert advisory group has been appointed to make recommendations to the Government. Ian Bauckham is the review chair and has held early discussions with ITT network chairs and others. We have committed to wider sector engagement in late spring, and your Lordships are the first to be told that we are now going to conduct a public consultation on final proposals before they are implemented.
Lord Knight of Weymouth (Lab) [V]
My Lords, I thank the Minister for her Answer and welcome the latter part of it in particular. I also remind the House of my education interests in the register. I hope that this review is truly independent, unlike the Commission on Race and Ethnic Disparities. So far, it appears to have alienated virtually every provider of teacher training in the country, with the likes of our top universities now questioning whether they will continue with initial teacher training because of the potential infringement on their academic freedoms and issues of financial viability. Can the Minister assure the House, in the context of that consultation, that the evidence and principles upon which the review might proceed will be properly consulted on so that, as a sector, we can properly debate how the service of teacher training might be revised in future?
Baroness Berridge (Con)
My Lords, the review chair Ian Bauckham is a man of great integrity who has conducted a number of tasks for the department, so we have every confidence that he will engage widely with and receive views from across the sector. The core content framework is a structure, so the curriculum is developed by universities and therefore academic freedom is retained.
Lord Lancaster of Kimbolton (Con)
The Government have, rightly, long identified service leavers as being ideal candidates for teacher training. With predicted end of service dates being based on age and length of service, many start retraining up to three years before leaving. My concern, though, is that much of the support is not available until after they leave. Will my noble friend consider making that support as flexible as possible so that they can access it before they leave?
Baroness Berridge (Con)
My Lords, the expertise of former members of the Armed Forces is an important supply for teacher training, and many initial teacher training providers do offer their courses part-time so current personnel can make that transition. In shortage subjects, such as chemistry, bursaries are available of £24,000.
Lord Watson of Invergowrie (Lab) [V]
My Lords, although the initial teacher training market review group has been meeting since the autumn, its deliberations have been shrouded in secrecy. What has leaked out is the suggestion that the Government will introduce a new system of short-term contracts following the review, which has led, as my noble friend Lord Knight has said, to many universities warning that they may withdraw their teacher training provision as a result. I welcome the Minister’s announcement just now of consultation later this year. Can she explain why the so-called expert advisory group undertaking it does not contain a representative from a university, despite that sector currently producing around one-third of newly qualified teachers?
Baroness Berridge (Con)
My Lords, it is important that we conduct this review to ensure that the market provides for the 25% increase this year of those applying for initial teacher training. Professor Samantha Twiselton is actually on the staff of Sheffield Hallam University, and I can assure noble Lords that, as universities are involved in providing, I think, 47% of initial teacher training, they will of course be key in the review’s progress.
Lord Storey (LD) [V]
My Lords, the Minister is clearly impressed with initial teacher training in this country, judging by her detailed reply to my Written Question on this subject, for which I thank her. As the Minister’s department is publishing an international strategy for exporting English initial teacher training as the gold standard, does she now think that there is a quality problem, or not?
Baroness Berridge (Con)
My Lords, I am grateful for the noble Lord’s comments about the Written Answer, which is also informed by the right honourable Nick Gibb, the Minister whose portfolio area this is. In relation to quality, we want to ensure that every person who goes to initial teacher training has that joined-up experience gained from the academic path and being in the classroom. We want to build on the good quality and have asked that the review look at the sufficiency of teacher supply, which is an issue in some parts of the country.
Baroness Coussins (CB)
My Lords, over four years ago, at the Government’s request 15 universities developed a modern languages pathway to qualified teacher status, alongside the languages degree. In the light of the current shortage in this subject, are these programmes part of the market review, and is their future, along with school-centred MFL training, to be safeguarded and continued?
Baroness Berridge (Con)
My Lords, this review covers the full breadth of the initial teacher training market, so that we can build on the quality that we have. The institutions that the noble Baroness refers to will be able to make their views clear during the public consultation on any recommendations from the review, and there will be stakeholder engagement during the spring. I will take back the noble Baroness’s comments about those institutions and write to her on whether they are part of that process.
Baroness Altmann (Con)
My Lords, I congratulate the Government on their aim of ensuring more standardisation in initial teacher training programmes so that we have consistent standards of basic training for all our teachers. Does my noble friend agree that good quality teaching has been at the core of trying to help so many children through a difficult year, and that our teachers have risen to an exceptionally difficult challenge over the past year?
Baroness Berridge (Con)
My Lords, good quality teaching is not the only, but the single most important, determining factor in the quality of education, particularly for disadvantaged students. At a time when not only are we reviewing initial teacher training but, as of September, £130 million will be invested annually to provide two years of professional development after initial teacher training, it is key to put teachers’ professional development on a parity of esteem with that of accountants and lawyers, for example.
Baroness Janke (LD) [V]
My Lords, there are concerns that the market review will recommend a less diverse, highly centralised provision of initial teacher training. What assurances can the Minister give that specific and diverse local needs will be addressed and respected in any future ITT provision?
Baroness Berridge (Con)
My Lords, maintaining a good quality and efficient market for initial teacher training is a key part of the review. Some 240 organisations are accredited by the department at the moment; we are aware that in all, some 1,000 organisations deliver programmes. We have therefore asked that the review look at these aspects, and in particular teacher sufficiency across England.
Baroness Stuart of Edgbaston (Non-Afl) [V]
My Lords, I draw attention to my interests as recorded in the register. I understand the Government’s desire for an efficient and effective market. That, however, does not guarantee that regional inequalities are addressed. I urge the Minister to make a risk assessment of the quality, supply and regional needs of initial teacher training and to publish the outcome.
Baroness Berridge (Con)
My Lords, the recommendations will be published and consulted on, and, as I have outlined, teacher sufficiency across England is a key part of the review. As to the early introduction of the early career framework, 1,900 teachers were part of the first rollout in the north-east, Greater Manchester, Bradford and Doncaster, so we are particularly aware of the need to ensure the best quality of teaching across England.
Lord Lucas (Con) [V]
Will the Government put in place a system to ensure that students interested in entering ITT have a clear view of the quality and reputation of the provider as perceived by schools that have employed their graduates?
Baroness Berridge (Con)
Ofsted will be reintroducing its inspections following the introduction of a new framework for initial teacher training, which is the main quality mark for people considering initial teacher training. School-centred initial teacher training is now a vibrant part of the market. Teachers are trained by multi-academy trusts and others, and we are in an age where it is much easier to find out about the reputation of the institution, people’s experiences of it and other peer-to-peer comparisons through LinkedIn and other platforms.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed. We now come to the third Oral Question.
Undercover Policing Inquiry
(3 years ago)
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Baroness Clark of Kilwinning
To ask Her Majesty’s Government what assessment they have made of the progress of the Undercover Policing Inquiry into police surveillance, established in 2015.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the inquiry’s investigations are independent of the Home Office, and I welcomed the commencement of its evidential hearings in November 2020. The department maintains regular liaison with the inquiry on sponsorship issues such as progress and expenditure. We remain of the view that it is important for the inquiry to report as soon as practicable, as set out in its terms of reference.
Baroness Clark of Kilwinning (Lab)
I thank the Minister for that answer. As she is aware, one of the reasons why the inquiry was established was that a number of women had dishonestly become involved with undercover police officers in quite an abusive way—some of them, indeed, having children by those officers. One of the calls from many of the participants in the inquiry was for the inquiry to be public and live-streamed. One of the reasons for that is that there may be many more women who have been dishonestly treated in this way—and more children whose fathers are undercover police officers. Will the Minister look at live-streaming the inquiry and at how it can be made public, so that the images and names of the undercover police officers are more readily available and activists can see whether they have been impacted in some way?
Baroness Williams of Trafford (Con)
The inquiry chair has already opined on the publication of a list, and the noble Baroness will know what his comment on that issue was. I understand her point about women being involved with undercover police, and some of them getting pregnant and having children. On televising proceedings, she would need to go to the inquiry chair to request that; the inquiry is independent of government.
Lord Morris of Aberavon (Lab) [V]
What is the cost of the inquiry to date and what is the target date for its report? It is acquiring the aura of the Saville inquiry. How many immunities have been granted by the Attorney-General? Since it has been said that the legitimacy of the inquiry is bound up with the full co-operation of its participants, is it diminishing?
Baroness Williams of Trafford (Con)
The cost to date is £36.2 million. The report to the Home Secretary is due before the end of 2023.
Lord Mackay of Clashfern (Con) [V]
My Lords, will my noble friend say whether there is any mechanism to ensure that an inquiry as important as this will report in a reasonable time?
Baroness Williams of Trafford (Con)
My noble friend makes a very pertinent point because, of course, some of the inquiry goes back to 1968, so timeliness is very important. As members of the sponsor department of a statutory inquiry, both the Home Secretary and the Permanent Secretary have sponsorship responsibilities that are set out in the inquiries management statement. I have personally engaged with the chair in my capacity as sponsor to discuss the progress of the inquiry and stress the importance of learning lessons promptly.
Lord Paddick (LD)
My Lords, given that the Covert Human Intelligence Sources (Criminal Conduct) Act was recently passed by this House with Labour and Conservative support—giving the police the ability to give CHIS participating in protests immunity from prosecution, with no specific prohibition on CHIS acting as agents provocateur—what reassurance can the Minister give to the House that police CHIS were not involved in recent protests against the Police, Crime, Sentencing and Courts Bill?
Baroness Williams of Trafford (Con)
HMICFRS published a report just last month on policing protests. It concluded that there was no use of undercover officers in protest policing, which appears proportionate to the nature of criminality inherent in protests generally. It makes only brief reference to the ongoing undercover police inquiry.
Baroness Jones of Moulsecoomb (GP)
My Lords, the chair of the inquiry has ruled that the Special Branch registry files, which could give more information about the work of undercover officers, will not be part of the inquiry. That means that the truth will be very filtered, which makes it hard for core participants, who feel that they will not get justice. Would the Minister agree to a meeting with me and perhaps a member of each of the opposition parties to discuss the major flaws in the inquiry and why the core participants are so upset?
Baroness Williams of Trafford (Con)
Just before Questions, I said to the noble Baroness that I would look into what I could and could not do because, of course, the inquiry is independent, and rightly so. Parliament would expect it to be independent and therefore would not expect interference from the sponsoring Minister—but I will take back her point.
Lord Rosser (Lab) [V]
Can the Government give an assurance that, following the conclusion of the Mitting inquiry, any people who were actively spied upon by the police, including individuals who may have been tricked into intimate relationships with undercover officers, will be made aware of what occurred and will not be denied access to justice?
Baroness Williams of Trafford (Con)
My Lords, I am sure that the rationale would not be to deny people access to justice. Clearly, the revelation of any names would be a matter for the chairman of what is an independent inquiry.
Lord Moylan (Con)
My Lords, the inquiry was set up in 2015; over five years passed before opening statements were delivered. Some 90 staff are directly engaged, and, as my noble friend has said, the cost, so far, exceeds £36 million, but that excludes very considerable expenditure by police forces responding to the inquiry. I estimate that the inquiry’s total cost to the public purse, by the time it reports—well into the current decade—will be in excess of £100 million. Can my noble friend the Minister tell me if that is a reasonable forecast that the department is budgeting for?
Baroness Williams of Trafford (Con)
I am not sure whether it is a reasonable forecast, but, responding to my noble friend’s points, I can say that the inquiry needs to deliberate promptly and with an eye properly on its use of public funds in order to do so.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, could the Minister confirm what the direct role of the inquiry is around undercover policing with other police forces, given that infiltration took place in organisations with a UK-wide reach?
Baroness Williams of Trafford (Con)
I assume that the noble Baroness is referring to Northern Ireland. It is probably inappropriate to comment on that at this point, while judicial proceedings are ongoing.
Lord Mann (Non-Afl)
An inquiry cannot request files where it does not know that they exist. Can we be assured that there are no files within the Home Office that have not been sought out, retrieved and provided to the inquiry?
Baroness Williams of Trafford (Con)
If the Home Office is asked for files that it has, it would most certainly have to provide them to the inquiry.
The Lord Speaker (Lord Fowler)
My Lords, all supplementary questions have been asked, and we now move to the fourth Oral Question.
Global Minimum Corporate Tax Rate
(3 years ago)
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Baroness Bennett of Manor Castle
To ask Her Majesty’s Government what plans they have to support the proposal by the government of the United States of America for a global minimum corporate tax rate (1) as part of the United Kingdom’s Presidency of the G7, and (2) in other fora.
The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)
My Lords, the UK has an established record of being at the forefront of initiating global action on international tax. It is no different here: during our G7 presidency, we are leading the way to ensure the delivery of G20 commitments that we secured in January 2019 for a comprehensive global solution based on two pillars. Pillar 1 would deliver on ensuring that businesses are taxed where they make their profits, and pillar 2 would deliver a global minimum tax.
Baroness Bennett of Manor Castle (GP) [V]
I expect that the Minister will acknowledge that, with their plan to raise the UK corporate tax rate, the Government have, at least implicitly, acknowledged that the 30-year-long global race to the bottom on corporate tax rates has led to major multinational companies not paying their way, while reeling in profits, building inequality and starving public services of essential funds. I also expect that the Minister will know that the recommended and UK-planned 25% minimum rate, as recommended by the Independent Commission for the Reform of International Corporate Taxation, would raise more than £22 billion for the UK Exchequer. Given that, and given that Germany, France and the Netherlands rapidly supported the US intervention, why is the UK not at the forefront, as the Minister said, but trailing well behind? Why have we not stepped in and backed this plan?
Lord Agnew of Oulton (Con)
My Lords, we have always been a Government who want to reduce taxation wherever possible. However, the Government have been very active in dealing with the abuse of corporate taxation over the last few years—for example, with the corporate interest restriction rules, which prevent multinationals from avoiding tax using financing arrangements, raising £1 billion a year since 2017. Other examples are the diverted profits tax, which has led to an additional £5 billion by countering aggressive tax planning, and the tax charge on offshore receipts in respect of intangible property, which is forecast to raise £1 billion a year.
Lord Empey (UUP) [V]
Since we left the European Union, the Government say that we must retain control over our money and laws. Is there a danger that we could end up replacing one group of people who are able to tell us what we can and cannot do with our money and laws with another group, other than the European Union? In such circumstances, is there a risk that the United Kingdom actually restricts its freedom and ability to control its own economy?
Lord Agnew of Oulton (Con)
I am not sure whether the noble Lord is referring to the move by the American Government to put forward their own propositions on international tax reform, but it is important to clarify that the US Government are following the G7 work that has been done on pillars 1 and 2. It is rather good news that they are engaging in a much more front-footed way than happened under the previous Administration.
Baroness Noakes (Con)
My Lords, I hope that my noble friend will agree that the suggestion from the US that the minimum tax rate might be as high as 21% has no chance of global agreement. However, do the Government think that there is any level at which a global deal might be done?
Lord Agnew of Oulton (Con)
I can only speculate on what that might be, but the important thing is to try to get as much harmonisation on rules for large multinational companies. That is why we were always keen on pillar 1, which ensures that the profits of large digital businesses are taxed in the countries where they make their sales. It is important because, as one of the largest economies in the world, we believe that these international companies should not be able to just come here and take all the advantages of the infrastructure that British taxpayers are contributing to the creation of.
Lord Bilimoria (CB) [V]
My Lords, the CBI, of which I am president, welcomes the United States’ renewed commitment to engage with the OECD multilateral process, which, after a decade, has two pillars. One is a new regime for the largest companies; the other is on setting a minimum tax rate, which the US aims to see at 21%. Do the Government agree with this rate of 21%? Do they agree that we want to avoid a patchwork of unilateral action—for example, digital services taxes?
Lord Agnew of Oulton (Con)
My Lords, the Treasury is assessing the statements recently made by the US Government on that tax rate, so we are not in a position to opine on those yet. We agree on the patchwork point: we introduced the digital services tax as an interim to plug at least some of the gaps and problems that exist, but we will certainly review that if we can reach an international consensus.
Lord Sikka (Lab) [V]
My Lords, I draw attention to my entry in the Members’ register. A strong, global, minimum tax on multinationals would recover much-needed billions for this country and others. Does the Minister agree it is essential for such a tax to provide a fair balance of taxing rights to all countries, based on allocation factors reflecting the real activities in each country, with a high minimum such as the 21% proposed by the US Administration?
Lord Agnew of Oulton (Con)
As I answered to an earlier question, we are not yet in a position to announce whether we support that specific rate. Our policy has always been to put the emphasis on pillar one, which is the allocation of profits in the countries in which they are generated. To go back to my earlier point, if a company is going to use the infrastructure of a country in terms of its affluent, well-educated population, and take profits from it, it must contribute to it, too.
Baroness Kramer (LD)
My Lords, do the Government understand, having listened to the international response to the Biden Administration and Janet Yellen’s proposals, that pillars one and two hang together and that there is no serious prospect of getting a solution to the right of countries to tax multinationals appropriately for the activities in their country unless there is also a common agreement on a minimum global corporate tax? Do the British Government accept that underlying principle, even if they dispute the rate?
Lord Agnew of Oulton (Con)
The overriding position is that we welcome the American Government’s re-engagement in this process. As realists, we accept it will not happen without full American support. We agree with the noble Baroness that these things hang together, and it will be a cohesive result that will work.
Lord Hannan of Kingsclere (Con)
My Lords, international tax competition is an important constraint on big government. You can raise the rate only to a certain point before the revenue and jobs begin to flee to friendlier jurisdictions. For that reason, it has always chafed with people who want a very large state. Will the Minister accept that the logic of the Laffer curve is not an academic theory but an empirically observable reality—that every cut in corporation tax, down to our current rate in this country, led to an increase in revenue? Will he further accept that having a competitive rate of corporation tax is an important growth strategy for a developing country? The formula that worked for Singapore, Hong Kong and eastern European countries would be cut off if we created a global high-tax cartel.
Lord Agnew of Oulton (Con)
My Lords, we did not plan to increase corporation tax in the way we have had to do in the last few months. It is only as a result of the appalling crisis we have suffered through Covid and having to address the financial impact of that. I agree with my noble friend that lower corporation tax rates are broadly a good thing. Personally, I do not like to see tax on productive activity, employment or any of the things that make a country prosperous. Therefore, I support his comments that we should always aspire to lower tax rates, particularly on corporation tax. We will try to set it still at a competitive rate, so the US, Canada, Korea, Japan and Germany will all have higher rates than the one to which we are moving.
Lord Collins of Highbury (Lab)
My Lords, the UN high-level panel published its final report on the impact of financial integrity on sustainable development. The panel called for a UN tax convention and a UN body for international tax rules. The report also includes proposals for the automatic exchange of information, beneficial ownership transparency and country-by-country reporting. Do the Government support the high-level panel’s conclusions, and will we address this issue at the G7?
Lord Agnew of Oulton (Con)
My Lords, the Government do support increased transparency, and we have done a great deal over the last five years to improve on that, but I accept there is more to do.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed, and it brings Question Time to an end.
St Vincent: Volcanic Eruption
(3 years ago)
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Lord Boateng
To ask Her Majesty’s Government what assessment they have made of the (1) humanitarian, and (2) environmental, impact of the recent volcanic eruption on the island of St Vincent; and what representations they have made to the government of St Vincent and the Grenadines regarding aid.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, I am sure I speak for the whole House in saying our thoughts and prayers are with those impacted and affected by the shocking volcanic eruption in St Vincent. We, the United Kingdom, have pledged, and I have personally approved and ensured, £200,000 to the Caribbean Disaster Emergency Management Agency—CDEMA—to help to address the immediate humanitarian impact. This will be used for emergency supplies and other immediate needs, including to allow technical experts to support relief efforts on the ground, support emergency telecommunications and restore critical lifeline facilities. We stand ready to look at further support.
Lord Boateng (Lab)
My Lords, while thanking the Minister, we can and must do more. I have been in touch with St Vincent and Barbados overnight. The position is that ash continues to fall, and there is a shortage of water. The reality on the ground is of the loss of livelihoods and a continuing threat to life. This is a major environmental and humanitarian emergency, and £200,000 will not cut it. The CDEMA needs technical support. I hope the Minister will authorise that a team go out from the UK to assess the needs. It needs help with the field hospital. Barbados is taking a lead, and is responsible for the emergency relief in the area, but it is hard pressed, and the time has come for this country to act. After all, the prosperity of these islands was based on the labour and sugar of those islands. They deserve more than £200,000.
Lord Ahmad of Wimbledon (Con)
My Lords, first and foremost, let me assure the noble Lord that I, too, am in touch with the authorities. Even this morning, I spoke to the high commissioner of St Vincent and the Grenadines and assured him of the initial support we gave, which, as I outlined, is specifically for emergency support. The noble Lord rightly articulates the importance of technical support. We are already providing that; we are working closely, including with some of our overseas territories. The noble Lord will be aware of the challenges that Montserrat faced two decades ago and, based on that experience, we are working directly with the Montserrat authorities. We have a volcanologist already on the ground supporting relief efforts, and we are providing technical support. This was the initial, immediate response that we gave last week. There has been some negative press. The only reason why we have not articulated the number of steps we are taking, as the noble Lord would expect, is the current respect and reverence we owe to the demise of the Duke of Edinburgh. However, we are supporting fully the authorities on the ground in St Vincent and the Grenadines and stand ready to offer further support.
Lord West of Spithead (Lab)
My Lords, we have a ship based in the Caribbean specifically for disaster relief. Ships, of course, can make fresh water and they have engineers and all sorts of things needed for disaster relief. I am amazed that it does not seem that this ship, HMS “Medway”, is working in the Grenadines at the moment. Of course, because she is not a destroyer or a frigate, she does not have an organic helicopter, which is very useful in disaster relief circumstances. Are we going to airlift out a helicopter for her and when will she be working in the islands, assisting those who need so much help?
Lord Ahmad of Wimbledon (Con)
My Lords, the noble Lord is right to point out that we have a permanent presence in the Caribbean and work very closely with the relief organisation CDEMA. We have invested, since 2017, on specific relief efforts, not just for the overseas territories but for the Caribbean. I note what he has said and we stand ready to provide whatever assistance is required, not only to St Vincent and the Grenadines but to Barbados as well. On the specific issue of aircraft and helicopters in the area, the volcanic ash over both islands at the moment is causing an added challenge. But I assure all noble Lords that we are working closely with the authorities on the ground to see what further assistance can be provided.
Baroness Northover (LD)
My Lords, we understand that only those who have been vaccinated are being evacuated, potentially leaving behind children, young people and others. What engagement are we having with the Government of St Vincent and the Grenadines, and the WHO, to ensure that all who are vulnerable can be evacuated?
Lord Ahmad of Wimbledon (Con)
My Lords, the noble Baroness is right to point to the issue of vaccinations. Currently, about 12% of the population in St Vincent has been vaccinated and there is a lot of reluctance to have vaccinations. She may be aware that Prime Minister Gonsalves announced on 12 April that their Government will not be looking at evacuating through cruise ships. There are green zones on the islands, which are currently being used to house about 3,700 people who have fled their homes, while about 16,000 are being sheltered by families and friends. There is now a significant number of vaccines on island; the great challenge—and again, in my conversations this morning, I offered any learnings we could bring to address the issue—is the reluctance of the population to be vaccinated.
The Earl of Shrewsbury (Con)
My Lords, is my noble friend aware that as a teenager I lived in St Vincent, at Calliaqua? It is the most magical place, with delightful people. I experienced a hurricane there and was nearby when La Soufrière blew her top last time. It is not a wealthy area by any means. The main sources of income are agriculture and tourism; both have been devastated by this natural disaster. It will take a long time for the place to recover, as it will the islands around there. Agriculture, especially, will take a while to recover, because of the thick covering of volcanic ash. We must help these islands in every way we possibly can, whether financially or with military personnel, or a combination of both, but we must help them all.
Lord Ahmad of Wimbledon (Con)
My Lords, I welcome the insights that my noble friend has provided. I reassure him that we are working very closely in any support we can provide. The noble Lord, Lord West, asked about HMS “Medway”. To be quite specific, prior to the volcanic eruption that vessel was undergoing routine operational updates and repairs. That is why it has not been immediately deployed, but I assure him that it is one of the immediate questions I have raised. I emphasise again that we are working directly with the authorities on the ground, whether it is with technical or long-term support. I have visited Montserrat and seen the impact of a volcano that erupted more than 20 years ago; the fact is that its impact is still felt today. We seek to provide long-term support and, I assure noble Lords, we will do just that.
The Earl of Devon (CB) [V]
My Lords, what direct contact have the Government made with any NGOs working on the ground in St Vincent, particularly local churches working with evacuees, such as Marion House in Kingstown and St Vincent Girls’ High School?
Lord Ahmad of Wimbledon (Con)
My Lords, our primary contact is through the relief efforts of the International Committee of the Red Cross. As for specific liaisons on the ground, we are working directly with CDEMA and the St Vincent and the Grenadines government authorities.
The Lord Bishop of St Albans [V]
My Lords, the diocese of the Windward Islands is linked with my diocese here in St Albans and I have been in touch with the bishop, Bishop Leopold Friday, overnight. The churches are already doing a huge amount of work and stand ready to help in any way they can, not least because here in my diocese, in Luton, we also have a large Vincentian population and this matter is affecting people’s families. If there are people who are forced to evacuate from the country, will the Government consider a temporary resettlement scheme for those with family links here in the UK?
Lord Ahmad of Wimbledon (Con)
My Lords, I fully acknowledge what the right reverend Prelate says about the important role that church authorities play. Indeed, on the question raised by the noble Baroness, Lady Northover, about the vaccine rollout, I suggested to the high commissioner this morning how the churches can also assist. On the right reverend Prelate’s wider question about long-term impacts, we will obviously remain engaged with the authorities of St Vincent and the Grenadines about their medium and long-term requirements.
Lord Collins of Highbury (Lab)
My Lords, I share my noble friend’s concern at the amount of the initial response on the humanitarian effort but, of course, it is not just a humanitarian effort. At the request of Prime Minister Ralph Gonsalves, the UN Environment Programme is now developing and implementing a debris management plan to clean up ash and promote environmental health and safety in the longer term, so that we are getting the economy back on track as soon as possible. Are we working with the United Nations Environment Programme, and have we offered professional support to that programme in the near future?
Lord Ahmad of Wimbledon (Con)
My Lords, we are working with all international agencies, including the United Nations, but I reiterate that the lead agency on disaster response is CDEMA. We are working constructively on all elements including immediate responses, medium-term responses and additional responses that will be required.
Lord Randall of Uxbridge (Con) [V]
My Lords, I declare my interest as a vice-president of Fauna & Flora International. While I completely understand that the priority must be the safety of the islanders and their economy, may I gently remind my noble friend of the unique endemic wildlife, such as the St Vincent parrot? Will Her Majesty’s Government consider what assistance they can offer in due course to the various NGOs to ensure that the endemic wildlife of the island is conserved and protected from any potential accidental introduction of non-native species by those providing much-needed relief to the island?
Lord Ahmad of Wimbledon (Con)
My Lords, I always welcome gentle reminders from my noble friend. I assure him that we recognise the importance of biodiversity, especially in the context of climate change and our chairmanship of COP26. He made some notable suggestions and recommendations and I certainly look to take them forward.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, the Minister mentioned Montserrat. When Montserrat was devastated by that volcanic eruption, I was the Minister at DfID dealing with it and we sent out emergency relief teams immediately to help. Why is that not being done now? We also committed long-term help, not of thousands of pounds but of millions. Are these poor people going to be the first victims of the cuts in DfID assistance?
Lord Ahmad of Wimbledon (Con)
My Lords, while I also welcome the valuable insights of the noble Lord, first and foremost, I assure him that we have given an immediate response, as I said to the noble Lord, Lord Boateng. What we have announced thus far is immediate support. The reason we are not sending out direct support is because we have invested, since 2017—I can speak with some insight and expertise—in CDEMA and in the structures in the Caribbean and the region to ensure that the response can be as effective and co-ordinated as possible. The noble Lord talks about Montserrat, which I continue to support. Indeed, it is this Government who have provided close to £30 million of capital spending to continue to help Montserrat. We are also supporting, through the Caribbean Development Bank, specific projects including roadbuilding in St Vincent. That kind of long-term infrastructure support will also continue.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, I am happy to say that all supplementary questions have been asked and answered.
Environment and Climate Change Committee
The Senior Deputy Speaker
The Senior Deputy Speaker (Lord McFall of Alcluith)
In December 2020, the Liaison Committee published a final report resulting from its extensive review of House of Lords committee activity. The report, which was subsequently agreed by the House in January, recommended the creation of five new sessional committees focused on the built environment; the environment and climate change; European affairs; industry and regulators; and justice and home affairs. These committees, which build upon our earlier recommendations and changes, will give the House a new thematic committee structure which allows for more effective and comprehensive scrutiny of all major areas of public policy.
The Motions before us today are to appoint members to the new committees. It is expected that the European Affairs Committee will, at one of its early meetings, also appoint a sub-committee focused on the operation of the protocol on Ireland/Northern Ireland, completing the structural changes recommended through the review of committees.
In recent years I have received representations from across the House regarding the relatively low number of committees chaired by female Members of the House. With that in mind, I am pleased to note that three of the five committees that we are appointing today are to be chaired by women. Across all committees as a whole, excluding those chaired by office holders and Joint Committees chaired by MPs, one-third of our committees will now have female chairs, which represents good progress on recent years.
Today’s appointments also mark the end of an era, as the new committees will effectively take the place of our previous European Union Committee and its sub-committees, which published their final reports late last month and have now concluded their work. European Union Committee reports, whether before, after or during Brexit, have demonstrated a depth of inquiry, a level of expertise and comprehensive scrutiny that has not been matched elsewhere. I have previously paid tribute to the work of the noble Earl, Lord Kinnoull, and his colleagues, but wish once again, on behalf of the House, to thank them for the service they have performed in recent years.
Lastly, I remind the House that the review of committees has established a firm but flexible framework within which our committees will operate. We are in a position to consider future adjustments to our committee structures as and when the need arises, particularly during our annual reviews, the first of which is expected in the autumn. In this way, our comprehensive review, including the Motions before us today, should provide committees with a firm foundation for many years to come. I beg to move.
Lord Balfe (Con)
I have one question, and a couple of observations, on what will probably be the Senior Deputy Speaker’s last outing in this House. I am sure we all admire the work that he has done in his many years in the job.
The withdrawal agreement from the EU provides for the establishment of a joint parliamentary committee between the British Parliament and the European Parliament. I wonder whether the Senior Deputy Speaker can give us any information as to how the House of Lords is to be represented in that committee, and whether we will be taking one of either the chair or the three vice-chairs of that committee. I happen to know, because I wear several hats in this game, that the European Parliament has already decided on its chair and vice-chairs, so I just wonder what we are doing, who is leading for us and how it will fit into that structure.
My second point is that we seem to have again arrived at this position through some sort of magical mystery tour. We are told that the Committee of Selection has done this, but who has it approached? I have not seen anything. I have not been asked whether I would like to serve on a committee. How do these names come forward? I suggest that they come forward because all that we say about this being a self-regulating House is basically a load of old rubbish. The leadership runs this House. We are pushed around in whatever way a very small group of people chooses. It really is as simple as that.
I would like the Senior Deputy Speaker to follow the great tradition of leaving a note for one’s successor. He does not need to leave a note saying that there is no money left, but I think he could well leave a note saying that there is a call from some quarters—they may be unrepresentative, but I would certainly like to see it—for much greater democratisation.
In the other place, the chairs of committees are allocated to the political groups and then elected by the whole House on the basis that it can look and decide what the competencies are of those committees and the chairs can have the confidence of the House. They are not plucked out of some magical hat somewhere. I would like to see that procedure extended to this House. Clearly it cannot be done in this resolution, but I am getting a bit fed up with constantly going on about this. If the issue comes back yet again, with another series of committees and no movement whatever, I might just be tempted to divide the House—although I would lose—to prove that there are probably at least two people who support what I have got to say.
Baroness Smith of Basildon (Lab)
My Lords, I had not intended to speak but will say just a brief word. I cannot speak for the noble Lord’s party, but I assure him that we on these Benches have a very open process of selection for committees. All Members are notified of committee vacancies; they are asked to apply and, in consultation, the Chief Whip makes a decision and our group discusses it. He obviously has grievances with his own group, for which I cannot speak, but I am looking at my colleagues behind me and know that they do not share those grievances.
The Senior Deputy Speaker (Lord McFall of Alcluith)
I thank the noble Lord, Lord Balfe, for that question on the European area. It was the joint parliamentary committee that was to establish the partnership assembly and already I have had informal discussions behind the scenes on that. I will write to the noble Lord further and put the letter in the Library for people to see.
The process of committee nominations is left to the usual channels of the parliamentary parties. It is for the parliamentary parties to engage with their members, and I assume that they are doing that. The Committee of Selection then gets those nominations and decides, at the end of the day.
Writing a note is quite good idea. The only thing that I would say are these two words: “Bye-bye”.
Greensill Capital
(3 years ago)
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Baroness Smith of Basildon (Lab)
My Lords, the government response fails to grasp the seriousness of this issue. Not only did the former Prime Minister lobby his mates through the backdoor for Greensill Capital but it now emerges that the Government’s chief procurement officer, Mr Crothers, a full-time civil servant, was also an adviser to the Greensill Capital board, apparently en route to becoming a director. I have here his letter to the noble Lord, Lord Pickles, in which he says he was given approval to transition back to the private sector, that it was not contentious and, he says, “not uncommon”. At best this is sloppy governance; at worst it is dodgy in the extreme. I have two questions: who gave that approval and how many other cases are there across Whitehall? The Minister should have that information. If he does not, I will settle for him writing to me. The Minister is known to be an honourable man. Is he really comfortable defending this?
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan)
I thank the noble Baroness for her questions. She will be aware that the Prime Minister has asked Nigel Boardman to conduct a review that will look into all the decisions that were taken around these developments and the questions of supply chain finance, which was the original point of the question that was posed. I say to the noble Baroness that I think it is a good thing that there is some cross-fertilisation between civil servants and the private sector. It is wrong for people to have experience purely in the public sector. These are long-standing arrangements. It has happened under Governments of all political persuasions.
Baroness Kramer (LD)
My Lords, I hope very much that the Minister will rethink his response to the noble Baroness, Lady Smith. But my question is focused on the UQ itself. There are many press reports that the British Business Bank is now taking a look at the loans that Greensill made under the CBILS programme, but what investigation is going on to understand how on earth a company with as many red flags as Greensill was accredited to the CBILS programme in the first place? We all know that the British Business Bank told us, when we questioned why there were such long delays in many of the challenger and alternate lenders getting approval to make loans under CBILS, that it was a very thorough accreditation process, so we need some proper answers to that. Can he also tell us whether Greensill was put at the front of the queue for getting accreditation, along with any other companies that came with recommendations from Government or Conservative Party members, in the same way as the VIP system for procurement of PPE worked earlier in the year, which the Government have acknowledged?
Lord Callanan (Con)
The noble Baroness makes a number of allegations that are not supported by the facts. Greensill’s applications for accreditation to both CBILS and CLBILS were assessed independently by the British Business Bank on the basis of the separate criteria for those schemes, which were designed to be accessible to a range of lenders in accordance with the goal of supporting lending to businesses impacted by Covid-19. A number of similar companies went through the same process and were also accredited to the schemes.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I agree with the noble Baroness, Lady Kramer, about the surprising nature of the Minister’s response to the noble Baroness, Lady Smith. Is the Greensill scandal not a sign of a systematic problem going back decades through successive Governments, arising from an ideological desire to bring for-profit business ideologies into what should be decision-making for the public good? Is it not now clear that business and the Civil Service should be two separate schemes of employment, without a revolving door between them? Given the current level of embarrassment, will the Government consider legislation so that Ministers, particularly Secretaries of State and Prime Ministers, are limited by statute not to take any paying role that enables them to use for personal enrichment the knowledge and contacts acquired during what should be a period of public service?
Lord Callanan (Con)
I just do not agree with the fundamental point the noble Baroness makes. Of course it is important that all decisions taken by Ministers and civil servants are taken independently, but I return to my original point that it is a good thing that people have experience of the private sector—and that people in the private sector have experience in the public sector. There should not just be two distinct career paths which never meet. As long as the appropriate propriety and transparency are followed, it is a good thing.
Lord Sikka (Lab) [V]
My Lords, early last year three of Greensill’s major clients—NMC Health, BrightHouse and Agritrade—collapsed. This provided a reminder of the precariousness of its business model. We know that Greensill was not subject to capital adequacy tests by the FCA or the PRA, so how did the Government perform due diligence checks before approving it as a lender? Can the Minister give a firm commitment to publish all documents relating to Greensill’s designation as a lender?
Lord Callanan (Con)
I remind the noble Lord of the answers I gave to earlier questions. These decisions were taken not by the Government but by the British Business Bank, and there were also other non-bank lenders accredited under CLBILS. These were loans which the Government put in place in emergency conditions to save viable businesses. The whole object was to try to preserve jobs and employment in the economy. I am sorry if the Opposition do not think that is a good thing, but I think it is good that jobs are being preserved.
Lord Mackenzie of Framwellgate (Non-Afl) [V]
My Lords, the Greensill affair was a scandal waiting to happen. Lobbying has tainted our politics for too long—those are not my words, but those of former Prime Minister Cameron 11 years ago. He even described how it works: the lunches, the hospitality, the quiet word in your ear, the ex-Ministers and ex-advisers for hire. It has worsened since then, as it appears that current civil servants can now be hired also. This is an opportunity to do what the former Prime Minister should have done: shine a light on the whole sorry business. Can it really be true that Bill Crothers, who worked in Whitehall for eight years and founded the Crown Commercial Service, controlling more than £15 billion of purchases, was at the same time employed by Greensill Capital? It beggars belief and needs to be rooted out. Can the Minister assure your Lordships’ House that all documents and records involved in this serious allegation of high-level cronyism will be published in due course?
Lord Callanan (Con)
The Prime Minister has announced a review into this matter. I have seen the media reports the noble Lord refers to, but the Boardman review will cover all available facts. The Government will provide all necessary documentation to that review, and all participants have said that they are willing to provide the appropriate information as well. The noble Lord should give him a chance to do his work and see what he comes up with.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, the Prime Minister has said that the Greensill inquiry has carte blanche, so could the Minister assure the House that it will be able to look into the Scottish Government’s failed deal with Gupta and Greensill for the Lochaber smelter, which has lost the taxpayer half a billion pounds? Will it also look into the private meetings over dinner which Scottish Minister Fergus Ewing had with them, of which no records were kept and which were not reported to the Civil Service? The Cameron sleaze seems to have crossed the border to the Scottish Government.
Lord Callanan (Con)
The noble Lord is nothing if not firm in the points he makes. I can speak only for the British Government on this, as I suspect he knows very well. I cannot comment on or speak for the Scottish Government on their dealings. Our review will examine matters for which the UK Government are responsible. Perhaps he could take up his concerns about what happens in Scotland with the First Minister.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, once again, all supplementary questions have been asked and answered.
Chinese Government Sanctions on UK Citizens
(3 years ago)
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Lord Collins of Highbury (Lab)
My Lords, I believe that all sides of the House stand in solidarity with the UK nationals—including Members of both Houses—who have been sanctioned by the Communist Party of China as a consequence of calling out the genocide and horrendous human rights abuses. In standing in solidarity, we must also offer support. I understand that a number of individuals have been subject to cyberattacks; can the noble Lord tell us what support we are giving on that? Is our infrastructure sufficiently resilient to any further such attacks? Can he also say why at this time the Government are reopening the two UK-China government investment forums, which were closed when Beijing introduced the Hong Kong national security law last summer?
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, I agree totally with the noble Lord, Lord Collins, about our solidarity and our support for Members of both Houses of Parliament, and equally those beyond it, who have been sanctioned. Ironically, those who have stood up for human rights are having their rights suppressed for speaking out. We absolutely support them. On the specific areas the noble Lord raised about support being given to Members of both the House of Commons and the House of Lords, as well as those outside Parliament, the Prime Minister and the Foreign Secretary have met with parliamentarians who have been sanctioned by the Chinese Government. Equally, I have led on direct engagement with those individuals outside Parliament, including organisations, who have been impacted. We have direct points of contact in the FCDO to offer them whatever support they require. There is active engagement and we are ready to support whatever concerns or issues of security, cyber or otherwise, they may have. On our trading relationship with China, no active trade agreement is currently being negotiated. On the specifics of the investment forum, if there are further details I can share with the noble Lord I will of course do so.
Lord Forsyth of Drumlean (Con) [V]
My Lords, given that the major parties in the European Parliament have said that until sanctions against their MEPs are listed they will not ratify the EU comprehensive investment agreement with China, is it to be business as usual for us while UK parliamentarians are being sanctioned for exposing genocide in Xinjiang? Will my noble friend confirm for the record that this country would never make bilateral trade agreements with any country guilty of genocide?
Lord Ahmad of Wimbledon (Con)
My Lords, first, let me assure my noble friend that, while acknowledging that we have important trade between the UK and China, we are not currently negotiating a trade agreement with China. On the issue of genocide, which has been debated in your Lordships’ House as well as the other place, we have already made the Government’s position absolutely clear: that is a determination for the courts and there is a due process to go through before that determination is made. But I can share with my noble friend the actions we have taken, notwithstanding that issue being determined or otherwise. We have acted and led on action against China, both with direct sanctions, as we have imposed recently against senior government officials in Xinjiang, as well as in multilateral fora such as the Human Rights Council, where we have seen increased support for the United Kingdom’s position and statements.
Lord Alton of Liverpool (CB) [V]
My Lords, the Minister will know that the Chinese Communist Party’s sanctions against parliamentarians should always be seen in the context of the harrowing evidence of genocide and human rights violations given by courageous witnesses to the All-Party Parliamentary Groups of which I am an officer. Parliamentarians must not be cowed or intimidated into silence or losing focus on those substantive issues because of sanctions. In a week in which young Joshua Wong, who has spoken in your Lordships’ House, has seen his prison sentence extended, did the Minister also see that 75 year-old Koo Sze-yiu, a pro-democracy campaigner who has already served 11 prison sentences, said when defending himself in a Hong Kong Court that he would not seek mitigation or leniency for treatment of his cancer as he fully intended to continue protesting? He said:
“The next time, I will deliberately break the National Security Law. Do not be lenient or take pity on me.”
Does not such courageous dignity demonstrate to the CCP that it has united East and West, young and old and parliamentarians from all political traditions? Was not Liu Xiaobo, who suffered at the CCP’s hands, right when he said:
“Freedom of expression is the foundation of human rights, the source of humanity and the mother of truth”?
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I remind noble Lords of the need for brevity.
Lord Ahmad of Wimbledon (Con)
My Lord, in agreeing with much of what the noble Lord said, let me assure him that we totally and utterly condemn China’s attempt to silence those highlighting human rights abuses, be they at home or abroad.
Baroness Blackstone (Ind Lab)
My Lords, I am grateful to the Government for the support they have given to those who have been sanctioned by China. It is vital that we defend the right to freedom of speech, by parliamentarians in particular but by academics and others as well. Last time the Uighurs were discussed in the House, the Minister agreed to write to me about why the head of the Communist Party in Xinjiang province, who has overseen the atrocious abuses there, was not included in the UK’s list of those sanctioned. As I have not received a letter, will he answer my question now?
Lord Ahmad of Wimbledon (Con)
My Lords, first, on the letter and the response to a specific question, I shall of course follow up on that with my officials. Without speculating on future sanctions, an evidence threshold needs to be met that is tested robustly before we apply sanctions to any given individual.
Lord Campbell of Pittenweem (LD)
My Lords, the Minister will recall that yesterday I asked him a question based on a passage at page 63 of the Integrated Review, which said:
“We will not hesitate to stand up for our values.”
Is that not exactly what our colleagues in this House and the other place have been doing, which, as a consequence, entitles them to our unanimous and unfailing support?
Lord Ahmad of Wimbledon (Con)
My Lords, I agree with the noble Lord, and that is exactly what the Government are doing.
Lord Polak (Con)
My Lords, on 23 February I said in this House that the Uighurs were calling out for justice and freedom. Our colleagues have been sanctioned by the same Chinese authorities who deny the Uighurs justice and freedom. The Minister in the other place, Nigel Adams, said yesterday:
“The Prime Minister has made it clear that freedom of parliamentarians to speak out … is fundamental”—[Official Report, Commons, 13/4/21; col. 165.]
and that the Government will stand firmly with them. So what does “standing firmly” actually mean, and how does it translate into real action against the Chinese authorities—not nice words, but real action?
Lord Ahmad of Wimbledon (Con)
My Lords, first, the solidarity that has been shown in your Lordships’ House and the other place with colleagues across both Houses and beyond reflects the unity of purpose and action in support of those who have been sanctioned. The Government are offering direct support, as I said in response to an earlier question, to all those organisations and individuals who have been sanctioned, and we will continue to do so. Because there is ambiguity in what the sanctions actually mean for those individuals, we continue to press the Chinese authorities for that further detail.
Lord Walney (Non-Afl) [V]
While these outrageous sanctions persist, is it not incumbent on Ministers—and, indeed, all parliamentarians—to formally suspend any co-operation in the various bilateral mechanisms that we have between parliamentarians in the UK and China, such as the people to people dialogue and the UK-China young leaders bilaterals?
Lord Ahmad of Wimbledon (Con)
My Lords, I can speak from my experience as a government Minister, and we have been very clear in calling out the human rights abuses in China. We have called out the issues within Hong Kong. However, equally, I recognise, as we do in multilateral fora, that there are issues such as the environment and conflicts such as the situation in Myanmar which require direct dialogue with the Chinese authorities, because they are part of the solution. There are many things we disagree on but, equally, we recognise the important role China continues to play in the international community.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I declare my position as the co-chair of the All-Party Parliamentary Group on Hong Kong. The sanctions on UK citizens make it very clear that the Chinese Government are seeking to silence democratic dissent and free speech around the world. They are also doing that more and more in Hong Kong. I am sure the Minister is aware of reports of plans to criminalise any collective call to leave ballot papers blank or otherwise spoiled in internal elections. Are the Government taking any steps to make representations on this, to highlight it or take any action regarding it?
Lord Ahmad of Wimbledon (Con)
My Lords, the noble Baroness is right to raise the recent decisions taken by the Chinese authorities about the future operation of the legislative bodies within Hong Kong. She also rightly raises a number of other concerns, and I can assure her that we are raising them directly. The implications are such that the democratic right and will of the people of Hong Kong is being totally and utterly diluted and denied, and we will continue to defend that right. Let us not forget that China is also party to an agreement to protect the democratic will of the people of Hong Kong. It should stand by that international agreement. It is lodged with the UN. I assure the noble Baroness that, whether it is in international fora or directly with the Chinese, we will continue to raise that, because the rights of the people of Hong Kong matter to us all.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, the time allowed for this Question has now elapsed, and I apologise to the noble Baroness, Lady Helic, that there was not time to take her question.
We now come to questions on a Statement made in the House of Commons on Tuesday 23 March, on the new plan for immigration. I first call the Front Bench speakers, starting with the noble Lord, Lord Rosser.
Immigration
(3 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Rosser (Lab) [V]
The Statement is apparently geared to what the Government describe as “illegal immigration”. In the Commons, the Home Secretary referred to “a broken system”—the Government’s words. After nearly 11 years in office, it is this Government who are responsible for the present system and its consequences, and it is time that the Government accepted their failings.
In 2010, the Government’s policy was to reduce net migration below 100,000. That policy—whether one agreed with it or not—was not implemented. We have never had an explanation from the Government as to why, nor will we have one today, because they will not wish to admit that it would have damaged our economy. It was certainly nothing to do with membership of the EU and free movement, because that was a known factor at the time when the policy was drawn up. That policy was clearly not drawn up with the intention that it would be implemented; it was simply because the Government wanted to attract headlines for sounding tough on reducing the number of people coming to this country. Time will tell whether the real purpose of this Statement falls into the same category.
We have a broken system because, over the last decade, the Government have been more interested in sounding tough to secure headlines than in addressing the broken system over which they now admit they have presided for some years and continue to preside. The Statement says that the Government’s current broken system
“limits our ability to properly support others in genuine need of protection. This is manifestly unfair to those desperately waiting to be resettled in the UK.”
It also refers to the system being overwhelmed, and to the
“persistent failure to enforce our immigration laws”.
Who exactly do the Government think is responsible for that failure which they have now recognised? The Statement also refers to the
“pathway to citizenship to enable over five million people in Hong Kong to come to the UK.”
We welcome this. Five million is somewhat larger than the 16,000 unauthorised arrivals detected in the UK in 2019 and which apparently
“limits our ability to properly support others in genuine need of protection.”
This assumes that none of the 16,000 is also in need of protection because they are fleeing war and persecution or, in the Government’s view, even worthy of protection simply because of the way in which they have reached this country.
The Hong Kong pathway is evidence of the need for safe, legal routes for those in need of refuge. Can the Government say how many of the 5 million eligible people in Hong Kong they expect to come to the UK? The policy statement says that
“an estimated 320,000 people [may] come to the UK over the next five years.”
How was that estimate arrived at and how many is it estimated may come from Hong Kong to the UK after the first five years? Can the Government also confirm that there is no restriction on the numbers of people in Hong Kong who are rightly allowed to come to the UK being able to do so?
The Statement says that, under the Government’s broken system, 109,000 claims are sitting in the asylum queue. No doubt, this is—at least in part—because the Government have allowed the share of applications receiving an initial decision within six months to fall from 87% in 2014 to just 20% in 2019. Why did the Government let that happen? Why are so many appeals successful? Are the Government going to tell us that it is all the fault of “leftie lawyers” or will they at last accept responsibility for the system which they now describe as “broken” and “collapsing”?
The Government have previously told us about pending agreements with France to stop criminal gangs involved in the terrible crime of human trafficking. What has happened to those promised agreements? The Statement is silent on that issue, though the policy statement tells us that, in 2019, 32,000 attempts to enter the UK by unauthorised groups were prevented in northern France.
The Government have previously referred to those who have arrived here through non-recognised routes being returned to the first country in which they could have sought asylum, or to another country. With which countries have the Government reached agreement to take back those seeking asylum who have arrived here through non-recognised routes? Is it their view of the provisions of international law and of the Refugee Convention that refugees fleeing war and persecution have to claim asylum in the first safe country through which they pass, and that they have no right to transit through another country to get to this country to claim asylum? Many would disagree with this stance is correct or right, but is it the Government’s position?
What safe and legal routes currently exist by which refugees, including children, can reach this country, following our departure from the EU and the ending of the Dublin arrangements? This is on top of the earlier abrupt cessation of the Dubs scheme. Is there any limit on the number of refugees who can come to the UK by safe and legal routes? If so, what is it? If there are no, or minimal, safe and legal routes, that is only going to make dangerous and unauthorised entries to this country, including through traffickers—whether by small boat, air, in the back of a lorry or a shipping container—more, not less likely.
The Government claim that, since our departure from the EU, we have control of our borders. Does that mean that implementing what is set out in the Statement is not dependent on reaching agreements with any other countries? Does claiming that we have control of our borders mean that, at all our ports of entry, the level of checks will be such that the likelihood of successful, unauthorised entry into this country is minimal?
Finally, how will success or failure of the policies set out in the Statement be judged? What will be the criteria, yardsticks and statistics against which the Government will make this assessment?
Lord Paddick (LD)
My Lords, the Statement claims to have taken back control of legal immigration by ending free movement. Not only can EU citizens continue to enter the UK without a visa, using the e-passport gates at UK airports, but rather than taking back control of legal immigration the Government have extended the use of these e-passport gates to a further seven countries. Before, citizens of those countries had to have a valid reason for entry, enough money to sustain them and evidence that they would leave again. As a result, thousands were turned away at the UK border every year. Can the Minister say what checks are now done on these visitors?
The Statement says that people are dying at sea. Is this not because safe and legal routes for genuine asylum seekers are inadequate or non-existent? How many safe and legal routes are open to genuine asylum seekers? Can the Minister explain how vulnerable people in a war zone can apply under such a scheme? What advice does she have for legitimate seekers of sanctuary in those parts of the world with no safe and legal routes to the UK?
The Statement says that the UK’s asylum system should be based on need. Yet the Government propose to set up a two-tier system, based not on need or the validity of someone’s claim but on how they got to the UK. Are the Government aware of Article 31 of the 1951 UN Convention Relating to the Status of Refugees? It states:
“The Contracting States shall not impose penalties, on account of their illegal entry or presence, on refugees... provided they present themselves without delay to the authorities and show good cause for their illegal entry or presence.”
Are the Government’s proposals to penalise those who do not use safe and legal routes—routes which do not currently exist and for which the Government have no firm plans or timetable—not in contravention of its international obligations?
The Statement talks about someone illegally entering the UK from France. Can the Minister say on which piece of legislation the Government rely when they claim that asylum seekers who travel through a safe country to get to the UK can only claim asylum in that safe country? Even if they had claimed asylum in an EU country, what mechanism will the Government use to deport them, now that the UK is no longer part of the Dublin regulation?
The Statement claims that the immigration system “is collapsing” under the pressure of asylum applications. In the early 2000s, around 100,000 people a year were claiming asylum in the UK. In 2020, it was 36,000—a reduction of almost two-thirds, despite an increase in the number of people crossing the channel in small boats. Is the reason that the system is collapsing not channel crossings but Home Office mismanagement? Is the reason for the increase in channel crossings not due to the fact that people can no longer claim asylum from outside the UK?
Can the Minister confirm how many of the 42,000 failed asylum seekers who have not left the country are in the process of appealing a Home Office decision, when, on average, 50% of those claims are usually successful? Of those who have exhausted the legal process, why has the Home Office not deported them?
This is not a common-sense approach to controlling immigration. This Statement highlights a catalogue of government failures, along with an illegal proposal to discriminate against those legally seeking sanctuary in the UK and a hollow promise to help the most vulnerable at some unspecified date in the future. The policy has thrown open the UK border to even more countries while slamming the door shut on genuine asylum seekers. I have the greatest respect for the Minister—even though she rises in an attempt to defend the indefensible.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
I thank both noble Lords for their questions. I found them quite interesting. I always find the questions of the noble Lord, Lord Paddick, interesting. However, in a funny way we agree on some of the issues, although it would not seem so on the face of it. The last question that the noble Lord asked was: why has the Home Office not deported people who have exhausted their claims? In the proposals is the idea of a one-stop process in order that people do not keep on bringing claims, including on the steps of the plane or whatever the mode of transport might be, when being returned to their country of origin. The noble Lord asked why there had been an increase in channel crossings. It is due to criminality. There is a commonality within this House and the other place that we want to stop that criminality. All that it does is feed human misery and cause deaths, quite often in the English Channel. The criminals are the only ones who profit from it.
The noble Lords, Lord Paddick and Lord Rosser, asked a totally fair question: what are the legal routes? The legal routes are not being proposed but asked about in the consultation process, in which I hope a lot of people will engage. In fact, thousands have done so already in relation to what legal and safe routes look like. Resettlement, whereby we have given refuge to more than 45,000 people since 2010, has been an incredibly efficient way in which to get to this country from the regions really vulnerable people who need our refuge. Obviously, if someone has a visa and the situation changes while they are in this country, that is another legal route. A good example of that might be Myanmar at the moment. If there is no visa regime in place in the country of origin, people can travel to the UK to claim asylum. But, as I say, there are the three obvious routes, including resettlement, and a consultation process is under way, which will elucidate the answers for the Government to consider.
The noble Lords, Lord Rosser and Lord Paddick, talked about controlling our borders and leaving the EU. Yes, we make absolutely no bones about that. One of the reasons why the British public decided that they wanted to leave the EU was so that we could take control of our borders. The noble Lord, Lord Rosser, is right; it is not necessarily any more about numbers but about having control over who comes in and out.
The noble Lord, Lord Rosser, also talked about the BNOs. The estimate that about 320,000 people will come here is correct; there is no restriction on them. He also talked about people from war-torn countries. Of course, they are the very people we want to give refuge to. That was the origin of the resettlement scheme: so that people in Syria and the MENA region could get our refuge. We have now extended resettlement to include anywhere in the world where people might be vulnerable as a result of either persecution or war.
The noble Lord, Lord Rosser, also talked about successful appeals. That goes back, again, to the one-step process. Appeals are frustrating the whole process of giving genuine people asylum, and it is important that we do not allow gaming of the system. We want the most vulnerable to be able to avail themselves of our asylum.
The noble Lord, Lord Rosser, asked about pending agreements with France. Yes, discussions continue with EU partners and he will know that I do want to go into the details of that on the Floor of the House. He and the noble Lord, Lord Paddick, asked whether we are complying with the refugee convention. Yes, we are. On the issue of first safe country, the system was established under Dublin. It is nothing new that people who arrive in safe countries should not then seek to come to this country if, in fact, they have been given refuge in a safe country. The noble Lord, Lord Paddick, also raised the issue of inadmissibility rules. They are of long standing and existed under Dublin.
The noble Lord, Lord Rosser, talked about the abrupt cessation of the Dubs scheme. The number of people under it was based on the ability of local authorities to take asylum seekers. We made it very clear to Parliament at the time—and Parliament was in agreement—that we could not commit to bringing people here if we could not house them within local authorities.
In terms of e-gates, the noble Lord, Lord Paddick, is absolutely right. The ability to get into this country via the e-gates has been extended to include seven countries. However, if you have not signed up to the EU settlement scheme and, therefore, cannot prove your right to work or rent, your journey is very restricted thereafter. The noble Lord asked how someone in a war zone applies. This is why I keep talking about resettlement—someone in a war zone should be picked up within our resettlement schemes. I repeat: some 45,500 people have been given refuge since 2010. The noble Lord posited that we were going to penalise people who do not use safe and legal routes. The people we really want to penalise are the people traffickers, the criminals—those who make money out of other people’s misfortune and, quite often, death.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, we now come to the 20 minutes allocated for Back-Bench questions. There are only eight questioners, so if noble Lords exercise their normal discretion, we should be able to hear from everybody. We start with the noble Baroness, Lady Hooper.
Baroness Hooper (Con)
My Lords, we must all deplore the tragic consequences of people smuggling and recognise the need to turn the tide of illegal immigration. Looking ahead, since primary legislation will be required to implement the new plan, I ask my noble friend the Minister to expand on chapter 9 of the policy statement, concerning the consultation process that started on 24 March. She has touched on this, but can she give us some examples of the stakeholders involved and that will be involved? In particular, can she tell us whether the IMO—the International Maritime Organization—is to be included in the consultation? I think it is the only United Nations body to be based in the United Kingdom with responsibilities for security, among other things.
Baroness Williams of Trafford (Con)
I took the opportunity this morning of seeing how many people have, thus far, replied to the consultation. You can see the rolling number on the website, and it is well over 7,000 to date. As for telling my noble friend who might have replied, I could not see a list on the website. I probably cannot see that until the consultation is complete, but I will look into it for her. I take her point about that one body based in the UK and will see if I can give her any further information on that.
The Lord Bishop of Durham [V]
I begin by declaring my interest as a trustee of Reset and a member of the RAMP Project, as in the register. The Minister knows that I have deep respect for her work, and I am extremely grateful for the co-working we have done on a range of issues over the last few years. There is much that I welcome on the refugee side in the Statement and the policy statement. However, I have some very deep concerns around the asylum side of this. I would almost divide it into one half good, one half bad. The specific question I would like to ask today is this: under the Government’s proposals, the route by which people seeking asylum arrive in the UK will be indicative of the leave they are granted and the support they receive throughout their time. What basic support package, even if less generous, will be available to those granted temporary protection for two and a half years, to ensure that they do not face destitution? How will such temporary systems enable effective integration, which is one of the things that the Statement and the policy statement seek to achieve? I look forward to some robust discussions with the Minister in the future.
Baroness Williams of Trafford (Con)
I have been most grateful for the discussions that the right reverend Prelate and I have had on this subject, particularly around integration and community sponsorship. For all that we talk about the laudable Dubs scheme, very few people—the right reverend Prelate excepted—have made reference to this. It will integrate people into communities very quickly and smoothly; it is such a commendable scheme. I thank the Church of England, and indeed the Catholic Church, for the role they have played in it.
As for accommodation and destitution, of course we are not a country that would legislate to enable people to be made destitute, but what we seek through the consultation is quite broad. We do not want to pre-empt what the consultation might throw up. For accommodation, we have Home Office accommodation that we have used, and we have had to use temporary accommodation throughout the pandemic. I will be very interested, as I am sure the right reverend Prelate will, in what the consultation yields for us to consider.
Baroness Ludford (LD) [V]
My Lords, if, as the Home Secretary asserts, the UK asylum system is collapsing, why is there such dysfunction in the Home Office that it cannot process an annual 20,000 to 30,000 claims—which is not overwhelming—efficiently and fairly? Is not the only outcome of penalising asylum applicants arriving irregularly—which is not illegal, so it would be a breach of the refugee convention—to create an insecure, impoverished group of vulnerable people who cannot be removed? How can that possibly help the situation?
Baroness Williams of Trafford (Con)
The answer to the second question is that criminality is what yields the worst outcome for people genuinely claiming asylum. Either they do not get here because they drown at sea, or their money gets taken from them and they are left in a very precarious position. Therefore, the safe and legal ambition of the Home Office is to try to come down hard on criminals, while also protecting people who genuinely need asylum here. The noble Baroness asks about the claims, and why we cannot process them quickly. That is exactly what we are aiming to do through our new asylum system—through the one-step process—so that people cannot bring vexatious claims time and time again, including on the steps of a plane. We will be able process people much more quickly. This House has constantly pressed me on this, and I do not disagree: why can we not deport people quickly and why can we not process claims quickly? That is precisely what is outlined in our new plans.
Baroness Verma (Con)
My Lords, does my noble friend agree that it is really time now to rethink how we spend money in countries where there is need for investment—whether in development or through the Foreign Office in relationship building—so that people do not feel desperate to leave their shores to come across dangerous channels? Maybe a real rethink needs to happen across government and all sectors involved in supporting refugees when they do get here. For those who have come here, will my noble friend the Minister consider, rather than not helping, skilling them up so that when they are returned home they have a skill to offer in the countries they come from, are not minded to leave their countries of origin, and instead stay there and build those countries up?
Baroness Williams of Trafford (Con)
My noble friend makes two very important points. There is an assumption sometimes that asylum seekers are poor and without skills—that is absolutely not the case. Many are incredibly skilled. One of the conversations I had with the right reverend Prelate the Bishop of Durham was about how people can get straight into the immigration system should they have the skills we require. Also, on my noble friend’s point about spending money in other countries, not only is it a good idea to help people in their country of origin, many of them want to stay in their country of origin and do not want to come here. A pound spent in a country of origin is spent far more efficiently in terms of the number of people you can help.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, we should perhaps reflect on the comments just made by the Minister in the light of the cut to overseas development aid. I am sure the Minister is aware that asylum applications fell by 18% in 2020 and, in the year ending September 2020, the UK received 31,752 asylum applications from main applicants. The comparable figure for Germany is 155,000, for France 129,000, for Spain 128,000 and for Greece 81,000. Does the Minister agree that the UK is taking less than its fair share of people fleeing war and political turmoil—often related to our foreign policies—and people fleeing areas from which, during its colonial history, Britain extracted huge amounts of wealth? Perhaps the scheme has been affected by Covid-19, but are the Government looking to significantly step up the number to what might be said to be a fair share compared to other European states?
The Refugee Council briefing on this Statement, which I am sure many Members of your Lordships’ House have seen, is expressed in very careful, factual language, but it can be described only as a cry of horror about the policies contained in this Statement. I turn to just one area, that of age assessments.
Lord Parkinson of Whitley Bay (Con)
My Lords, the noble Baroness is taking a bit too long. Perhaps she would ask her question.
Baroness Bennett of Manor Castle (GP) [V]
Okay. On age assessments, how can the Minister say that it is fair to put 18 years of age as the cut-off point when it is obvious that people coming from war zones, having grown up and spent their whole lives in them, are not going to look like 18 year-olds who have been brought up in comfortable circumstances in a safe environment?
Baroness Williams of Trafford (Con)
I will answer two of those questions. Eighteen is the cut-off age because 18 is the age of an adult, and we do not want adults sharing classrooms with young children, for example. It is important to assess people’s ages, and we will try to do so on a more scientific basis. The noble Baroness is absolutely right that applications fell in 2020. We had a pandemic and everything fell in 2020—so did returns. I am sure that the applications will be back up this year.
Lord Dubs (Lab) [V]
In the recent past, the Government have closed down two safe and legal routes for unaccompanied child refugees to reach this country from the continent—the Dubs amendment and the provisions under the Dublin treaty. How can the Minister reconcile closing down those routes with the claim that the Government want only safe and legal routes for people to come to this country? She has made that virtually impossible. Are not the Government getting very close to saying that family reunion will depend on the method by which somebody arrived in the UK, not the merits of their case? Surely we are turning the clock back in a most retrograde manner.
Baroness Williams of Trafford (Con)
I disagree that we have closed down routes. The Dubs scheme specified a number, which was subsequently increased to 480. It was based on the ability of local authorities to take children—the noble Lord shakes his head, but he knows that. We did not close it down; we successfully completed it. As for Dublin, we left the European Union, so we were never going to continue it. As I said during the passage of the immigration Bill, all the routes would continue to be open and we are now in consultation on what our new sovereign borders and immigration system will look like.
Lord Cormack (Con)
My Lords, I hope that my noble friend will forgive me for being specific and parochial, because I am sure that she will agree that any long-term immigration policy must allow for the free movement of people who have legitimate work to do for British employers. Those who grow our fruit and flowers have this year not been able to get the regular supply of labour on which their industry depends. I am particularly mindful of south Lincolnshire. The local television programmes night after night during the Easter period showed fields of rotting daffodils. This is a tiny thing in comparison with what many of my colleagues have raised, but it is important. Can she assure me that everything will be done to ensure that a genuine free movement of labour of people who have regular jobs to do will be able to continue?
Baroness Williams of Trafford (Con)
My Lords, our new immigration system is skills-based. Free movement obviously ended under our leaving the EU. I empathise with my noble friend’s point, but the whole world is about to enter a period of economic challenge. It behoves employers in this country to employ people from this country to do the jobs needed in this country.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
Lord Forsyth of Drumlean, are you there? We have had problems contacting you.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I know, but he dropped off the call. I do not think we have the noble Lord, Lord Forsyth, sadly, in which case all the supplementary questions have been asked.
Financial Services Bill
Wednesday 14th April 2021
(3 years ago)
Lords ChamberRead 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-R-III Third marshalled list for Report - (14 Apr 2021)
15:52 - Division conducted remotely on Amendment 15 - Ayes: 249 / Noes: 279 - Amendment 15 disagreed.
21:18 - Division conducted remotely on Amendment 21 - Ayes: 273 / Noes: 235 - Amendment 21 agreed.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, I will call Members to speak in the order listed. Short questions of elucidation after the Minister’s response are discouraged, but any Member wishing to ask such a question must email the clerk. The groupings are binding. A participant who might wish to press an amendment other than the lead amendment in a group to a Division must give notice in debate or by emailing the clerk. Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely wants their voice accounted for if the question is put, they must make that clear when speaking on the group.
Amendment 14
“Regulated activities and application of Consumer Credit Act 1974
(1) This section applies on or at any time after the making of an order under section 22 of the Financial Services and Markets Act 2000, after this section comes into force, which has the effect that a relevant credit activity becomes a regulated activity for the purposes of that Act.(2) Section 107(6) of the Financial Services Act 2012 (power to make provision about the application of the Consumer Credit Act 1974) has effect as if—(a) the reference to an order of the kind mentioned in subsection (1) of that section included an order of the kind mentioned in subsection (1) of this section, and(b) the references to a transferred activity included a relevant credit activity which is the subject of an order of the kind mentioned in subsection (1) of this section.(3) “Relevant credit activity” means the activity of—(a) entering into an agreement described in article 60F(2) or (3) of the Regulated Activities Order (certain borrower-lender-supplier agreements for fixed-sum credit or running-account credit) as lender, or(b) exercising, or having the right to exercise, the lender’s rights and duties under such an agreement,so far as the activity is not a transferred activity (as defined in section 107(1) of the Financial Services Act 2012).(4) “The Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) as it has effect on the passing of this Act.”Member’s explanatory statement
Section 107(6) of the Financial Services Act 2012 provides that the Treasury may disapply provisions of the Consumer Credit Act 1974 in relation to an activity previously licensed under the 1974 Act, or exempted under specified provisions of that Act, where the activity has become a regulated activity for the purposes of the Financial Services and Markets Act 2000. This amendment extends that power to certain other activities of lenders.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, the Government have brought forward Amendment 14 to ensure that buy now, pay later products can be brought into scope of regulation in a way that is proportionate to the risks that they pose to consumers. As noble Lords will recall from previous debates, to which the Government listened carefully, on 2 February following the publication of the Woolard Review into the unsecured credit market, the Government announced their intention to regulate interest-free buy now, pay later products. Following that announcement, the Government have been working at pace to ensure that this can be done in a proportionate and timely manner. Amendment 14 is the next step in this process. Many noble Lords were keen to see progress on the issue, so I hope that they will welcome the amendment today.
The Government recognise the concerns that exist with these products as the market continues to grow in the United Kingdom. We are therefore acting decisively to address the risk of detriment to consumers. The Government intend to bring buy now, pay later products within the scope of the regulatory framework, which includes the application of the Consumer Credit Act 1974. However, as noble Lords have previously heard, it is important to note that those products are interest-free, and thus are inherently lower-risk than most other forms of borrowing. Used properly, they can provide a lower-cost alternative to mainstream or high-cost credit. The Government’s view is that they can therefore be a useful part of the toolkit for managing personal finances and tackling financial exclusion, a topic that I will return to later in the debate. It is therefore essential that when buy now, pay later products are brought into regulation, it is done in a way that provides robust consumer protection, while ensuring that it is viable for firms to continue to offer these products. Amendment 14 will ensure that that can be done.
Some of the provisions of the Consumer Credit Act could be disproportionate, given the short term, interest-free nature of buy now, pay later products. They could also materially impact the way in which consumers are able to access these products. As a result, this amendment seeks to provide the Government with the power to ensure that the provisions of the Consumer Credit Act 1974 that will apply to buy now, pay later products are proportionate to the risks that the products present. This will allow the Government to apply only the provisions of the Act that have been determined to be proportionate to the risks posed by buy now, pay later products.
The Government intend to publish a consultation later this spring where the views of consumers, buy now, pay later providers and the retailers that offer these products will be sought on this matter. We will carefully consider these views to inform our approach to creating a proportionate regime, including decisions on which provisions in the Consumer Credit Act should apply to buy now, pay later agreements. Following this, we will take forward the necessary secondary legislation to bring buy now, pay later agreements into regulation. That secondary legislation will be subject to the affirmative resolution procedure, meaning that noble Lords will have the opportunity to further scrutinise and comment on the Government’s proposals. I therefore ask that your Lordships support this amendment to ensure that the regulation of buy now, pay later can proceed both at pace and in a proportionate manner. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow the Minister. In doing so, I declare my financial services interests as set out in the register. I would like to be the first to offer my support for Amendment 14 and what it seeks to achieve. I congratulate my noble friend on the decision to use the affirmative procedure to bring these powers into force.
I will now speak to Amendment 35 in my name. The thinking behind it is quite straightforward: financial exclusion has dogged our nation for decades, ruining individual lives and putting down potential. Solutions exist and thousands of people are working so hard in this area, but we need to do more and we need more innovation: hence the two elements in Amendment 35. It seeks to give the Bank of England—our central bank—a more significant role when it comes to financial exclusion. The Bank has an enviable brand, respected right across the UK and revered around the world. This brand could be well put towards solving the problem of financial exclusion.
The first part of Amendment 35 seeks to give the Financial Policy Committee of the Bank of England an objective to monitor financial exclusion. As noble Lords know, the FPC is responsible for financial stability in the UK. I believe there are 407 billion new reasons to take this opportunity to reconsider financial stability and include financial exclusion within the remit of the FPC.
The second limb of the amendment seeks to suggest the opportunity for the Bank to offer basic bank accounts to those who find themselves financially excluded. The take-up of bank accounts for those financially excluded is not just a measure of what is currently available from retail providers. The history of those individuals also plays a key part, so, again, the brand and the central place of the Bank could play a critical role here. If we considered some of those accounts potentially being digital accounts—perhaps central bank digital currency accounts or digital pound accounts—the Bank might play a critical role in addressing digital as well as financial exclusion.
The Old Lady of Threadneedle Street could be not just lender of last resort but potentially, through Amendment 35, provider of first support for those individuals en route to financial inclusion. Provider of first support is certainly worth a thought. Does the Minister agree?
Baroness Noakes (Con)
My Lords, I shall speak only in respect of Amendment 35. My noble friend’s amendment is very well intentioned, covering financial exclusion and basic bank accounts. Despite basic bank accounts having been in existence for nearly 20 years now, there remain problems with take-up. The know-your-customer rules, about which my noble friend Lord Holmes of Richmond raised concerns in Committee on this Bill, also make life difficult for individuals trying to access them. It is no secret that the banks regard basic bank accounts as a costly burden that they have to bear, which is probably at the heart of some of the issues.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
The noble Baroness, Lady Tyler of Enfield, has withdrawn, as she is speaking in Grand Committee, so I now call the noble Baroness, Lady Bennett of Manor Castle.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I welcome the government amendment in this group. We are seeing regulations catching up with financial innovation. As ever, it seems that the regulator is being forced to chase after advances that are screaming into the future with potentially very disturbing results.
However, I chiefly wish to speak to Amendment 35, in the name of the noble Lord, Lord Holmes of Richmond, and to offer my support for it, or at least for its principles. As the noble Lord said, we are talking about innovation, but innovation that is actually for the common good—innovation that works for people, and particularly, innovation that works for the most vulnerable in our society. The figures really are deeply shocking: estimates of 1 million unbanked people; 8 million people with debt problems; 9 million people with no access to mainstream credit. One thing that is not adequately recognised is the poverty premium: the fact that not having a bank account or access to mainstream credit means much higher costs for everything from utility bills to borrowing and very well documented impacts on health and wellbeing.
This seems like an apt time to ask the Government whether they have given further consideration to the recommendation from the Select Committee on Financial Exclusion, which reported in March 2017. It called for a Minister responsible for financial exclusion. Is this something that the Government are really going to focus on by means of this Bill? The noble Baroness, Lady Noakes, may have concerns about the structure of this, but the intentions of the noble Lord, Lord Holmes, are very clear. Are the Government going to take action?
Baroness Neville-Rolfe (Con)
My Lords, I offer a few words of caution on the subject matter of Amendment 35 in the name of my noble friend Lord Holmes of Richmond, who has done so much to promote financial and digital skills since we joined the House together in 2013. The amendment is concerned with the very real problem of the “financially excluded”, in today’s jargon. This problem is of long standing. Under the description of the poor, the New Testament informs us that “they will always be with us”, and similar quotations can be made from the Old Testament. More recently, as just mentioned by the noble Baroness, Lady Bennett, we have had good reports on the subject from our own committees.
Experience shows that another ancient saying is also relevant and helpful. I refer to the injunction on doctors when seeking to treat disease—“first do no harm”. Unfortunately, this latter injunction was not followed when the United States authorities sought to improve the lot of the financially excluded, which arguably led to the subprime crisis of 2008 in the United States, or at least made that crisis much worse than it would otherwise have been. Noble Lords will recall that, when it came to the attention of the federal authorities in the United States, some communities, called marginalised groups, received fewer house loans per head than others. The lenders concerned were threatened with prosecution under federal laws on discrimination. That was a major factor behind many subprime loans being made, which those receiving them had no real likelihood of being able to repay. Such loans were included in bundles sold to investors, which in many cases inevitably defaulted. The end result was a crisis in which some of the worst affected were those who had received the subprime loans in the first place—namely, the financially excluded, whom we are trying to help.
None of this argues against the amendment before us proposed by my noble friend Lord Holmes, although I note that my noble friend Lady Noakes has some reservations. We always need to listen to her because of her great expertise in this area. However, it shows that, in efforts to improve the lot of the financially excluded, we need to proceed with as much prudence and attention to the risks to them and more broadly, as we do in pursuing other wider objectives.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to support government Amendment 14, and congratulate my noble friend and the ministerial team on listening to concerns expressed across the House, and in particular, in echoing my noble friend Lord Holmes, for introducing the follow-up provisions under the affirmative procedure. I will also address, perhaps more supportively than other noble Lords, my noble friend’s Amendment 35. I must say that I am increasingly envious of my noble friend Lady Noakes and, in particular, the rather splendid account that she had previously with the Bank of England. She must be torn, not wanting to destroy her rather splendid cheque book. For security purposes, she might err on the side of caution and do so.
My noble friend Lord Holmes of Richmond has done the House a great service by raising this issue. Yes, we can debate whether it should be a Bank of England account, which I understand no longer exists; perhaps this is not the right time to revisit that. I have become increasingly concerned—as, I know, have many in consumer circles with much greater knowledge than I about this—by the way in which one’s credit score can be disadvantaged. All sorts of extraordinary things seem to be happening at the moment, without us even knowing. We are apparently encouraged to do regular credit checks; I did, and was delighted to see that on one, the Experian account, my credit score was sound. But apparently the Government have discontinued Experian, so I do not know to whom to address that in future.
This raises the issue of those who have a poor credit score and are having trouble finding a bank account. My noble friend Lord Holmes has identified the difficulties in doing so. If it is not the wish of the Government to support the terms of Amendment 35, I hope that the Minister responding to this debate will nevertheless look carefully at the circumstances by which it is becoming increasingly difficult for those with poor credit scores to access even the most basic banking services.
I understand what my noble friend Lady Noakes said about how we are coming under increasing commercial pressure to make banks’ retail services financially viable. This is causing great concern for those of us in rural areas, because it is increasingly difficult to keep small rural branches open. To me, they perform a social function as much as anything, particularly for local shops, in banking their cash, allowing them to access bank accounts and, for example, banking their money when there has been a local mart. My noble friend has identified these very real concerns and I hope that the Government look on them sympathetically.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I will speak briefly on government Amendment 14 and say a few words in support of the noble Lord, Lord Holmes, because of his ongoing campaigns and successes in making us think harder about financial inclusion and the use that could and should be made of fintech, in reaching out to those who are not provided for by the financial system. Government Amendment 14 has our support because, as seems obvious from the Woolard review and other comments, there is an issue around this new-technology approach to purchasing.
Buy now, pay later has all the ring of a scam around it although, having talked to some providers and looked at their business plans in more detail, it seems to be a well worked-through and carefully crafted approach to the process of trying to buy goods, mainly. It may also apply to other services. Those on reasonable budgets who are unable to pay, with confidence, the amount for the goods that they are purchasing get the benefit of the opportunity to spread the payment over more than one month—the majority are for three months—largely at the expense of the retailer. The amounts are small and the sanctions applied by the providers are severe: you get dropped if you miss a payment or two.
There does not seem to be a sense of some of the fringe approaches that were available in other schemes that the House has looked at and which we have read about in the papers. In a sense, this may not be quite the scam and worry that we thought it was when the Woolard review came out, but the Government are right to ensure that the regulatory book is in order and that there is an opportunity to keep a close watch on this, and to act, as and when required.
Therefore, although it is unusual for the Opposition to offer powers to the Government in this way, we are reassured by the way that they have approached this, having brought us into the discussion and debate. We are aware that any regulations brought forward will, in practice, be under the affirmative basis and therefore open to scrutiny within your Lordships’ House and elsewhere in Parliament. We support this approach, even though to do so is slightly unusual. We think that doing it this way is a good move by the Government and hope that it will not be necessary, in the sense of some of the scare stories that we have read about. But if it is, at least the powers are banked.
Lord Naseby (Con) [V]
This is an important Bill and I record my formal thanks to my noble friends on the Front Bench for the way that they listened to the earlier debates. Here, we have evidence in this first set of amendments, certainly Amendment 14, that not only have they listened but we are getting a positive response.
Amendment 14 is good and I support it. I am delighted to hear that we will have a consultation with stakeholders. I wonder whether Her Majesty’s Government could produce a list of those whom they think they are going to consult, because a number of us know a fair amount about the fringes of the financial world and there may be a section missing.
On buy now, pay later, I remember that when I started buying things that I could not afford there was a technique called hire purchase. That was very similar and there were all sorts of arguments when I got into politics, while HP was still active, on the nuances of the HP world. The same applies now, so I say well done on Amendment 14. I look forward to seeing the consultation and hope to take part myself. As someone who has sat in the chair, I will welcome enormously having an affirmative resolution when it comes back. I also ask my noble friend the Minister to make sure that the Financial Ombudsman Service and claims management companies fall within the circumference of this consultation, because they are important to this large market. It is buy now, pay later, in a sense, but not the modern version; it was historically called home-collected credit.
Baroness Kramer (LD)
My Lords, the two amendments in this group are significantly different from each other, so I am afraid that I will have to address each one separately, starting with government Amendment 14. We obviously support this step, but some comments need to be made. First, the very fact that legislation has to be passed for these financial transactions to be captured by the regulator demonstrates some of the flaws in the whole approach of using a regulatory perimeter as the mechanism for deciding which activities are regulated or not.
The buy now, pay later industry has been growing at an astonishing rate over the last several years. The largest player is Klarna, which I think was valued in its last funding round at $31 billion—three times its value six months earlier. That gives noble Lords the idea of the pace. Anybody who wants to look up buy now, pay later on the internet will find company after company. This issue has galloped away without the regulator becoming involved. It suggests to the Government that some real rethinking needs to happen, given the pace of innovation that we now see generally in finance.
Secondly, I was concerned by some of the language the Minister used when talking about this as a relatively low risk and rather benign form of financing. There is no free lunch. There is no such thing as a delayed payment that does not have an interest cost embedded in it. I understand that with buy now, pay later, it is the retailer that pays fees to the intermediary providing the advance payment. Those costs then fall on everybody buying products from that particular company. We get to the point where you are a fool if you pay up front, because within the cost of the product is embedded an element of financing that is falling on you. If you are a bit like me, you see the price and you pay it, but I know that I am paying more than I should because I am picking up the cost of financing that has been given to other people using the buy now, pay later product. There certainly is cost embedded in all of this; it is not a free lunch.
Martin Lewis gave evidence to MPs in December, pointing out that this is a product very much targeted at the under-30s, although I know that Klarna disputes this. It is having the impact of getting them into debt. Again, I looked to a quote from Jane Clack, a money adviser at the debt advice firm PayPlan. She was talking about what had happened over the two-year period. She said:
“This form of introduction to credit … supports the ‘I want it now’ purchases of items people may not be able to afford. We have seen a worrying increase in the number of young people contacting us for free debt advice. It now makes up more than a fifth of our total client base.”
This is a mechanism that is getting a lot of young people into overpurchasing and consequently into debt. Indeed, the advertising on websites directed at retailers, encouraging them to sign up to buy now, pay later firms, tells them that the average spend will go up by 20% if they sign up to a buy now, pay later scheme because individuals feel, “My goodness, if that’s all it costs I can spend even more.” Noble Lords can see the pattern that is developing. Frankly, there is a lot of risk associated with all this, and I hope it is with that perspective that the whole consultation will go forward and regulation will be structured.
I say this because we went through the same process in this House of saying “it is largely benign” when we looked at payday lending. That was the argument made by the regulator. If this House remembers, the regulator had the power to take action in a serious way against abusive payday lenders. It showed a light touch because it saw payday lending as relatively benign. It was only when this House forced the regulator’s hand by passing regulation that required it to start using interest rate caps that that industry was brought under control. Indeed, most of the players instantly disappeared, because without the abusive part of their activities the other part could not be sustained. This issue should be taken very seriously by the regulator, which should not get caught up in the idea that this is low risk or in some way benign. I am always troubled when I hear that something is interest free. No, it is not; the interest is differently packaged.
On Amendment 35, I continue with apologies from my noble friend Lady Tyler, who is the former chair of the Lords Select Committee on Financial Exclusion. As the Deputy Speaker said, she is speaking in Grand Committee and has had to scratch here. She very much appreciates the spirit of the amendment of the noble Lord, Lord Holmes, but I will quote a sentence from the speech she wrote that I think captures the fundamental issue: “What is still missing is an overarching strategy and responsibility across government, regulators and industry proactively to promote financial inclusion.” In a way, that is the issue that the noble Lord, Lord Holmes, is picking up and addressing and that I hear echoed in the words my noble friend would have used.
The noble Baroness, Lady Noakes, made the case that the Bank of England is really not the place to have a basic bank account, and I want to pick up on this important issue. The current high street banks that provide basic bank accounts do so, as the noble Baroness said, reluctantly. It does not make any sense in the context of their business plan, their overheads or the clientele that they want to build.
There is an important strategy that could be addressed, certainly by the PRA, along the lines of, “As a condition of your banking licence, perhaps you don’t have to provide a basic bank account, but you do need to support the civil society groups that can service this excluded community”—because that is a community that often needs a detailed helping hand. That is one of the reasons why opening a basic bank account at the Bank of England would not get people in that community very far. Typically, they are people who need particular services and particular kinds of support to become financially included, and to get the advantages that come with being financially included in our modern society.
That takes me to the issue raised by the noble Baroness, Lady Neville-Rolfe; it is a canard that needs to be captured very quickly. The Community Reinvestment Act in the United States, to which she referred, was passed in 1977. It was not a play into the sub-prime mortgage crisis. I lived in Chicago in those years, so I know that it came about as a civil rights Act, because disadvantaged communities—primarily black ethnic communities—had been literally red-lined by all the major banking players, which would take deposits from them but would never lend back to support mortgages or businesses. It was a crucial Act that completely changed the nature of financial inclusion in the United States, and it was probably one of the most important pieces of legislation there. I have always regretted that we have not picked up its themes and extended them here, because it created a layer of community banks and credit unions that serviced this community, and did so very well throughout the years of recession.
The sub-prime crisis was, on the one hand, sheer fraud—as I think the noble Baroness, Lady Neville-Rolfe, knows—and, on the other, the packaging up of fraudulent loans into portfolios against which securities were then issued on the grounds that diversification within the portfolio removed the risk. This was not a case of lending into communities in the responsible way driven forward by the Community Reinvestment Act. I hope that we will pick up the lessons of that Act, because in the United States people are not unbanked and excluded to the extent and breadth that they are here in the UK.
Lord Tunnicliffe (Lab) [V]
My Lords, the Government’s response to the Woolard Review was swift and positive. As doubts remained over exactly when and how Ministers’ promises on buy now, pay later products would be delivered, this Bill appeared to us to be the perfect vehicle—although, sadly, the Treasury initially disagreed with that view. In Grand Committee the Minister stressed the complexity of the issue, and the need to work with the industry to get the scope of future regulation right.
Of course we agreed on the necessity for the Treasury and the FCA to get this correct, and we are realistic about the difficulty of striking the right balance. As I have said before, we would not wish forthcoming regulatory changes to impact on the availability of certain short-term payment agreements, such as for gym membership or sports season tickets, which have proved to be relatively low risk. We also recognise that there is a growing market for buy now, pay later, and that many of the people using such services experience no problems with them. Indeed, we are grateful to the providers that have engaged with us in recent weeks and shared their ideas on next steps.
In March the boss of Klarna expressed disappointment about the concerns voiced about buy now, pay later products. He said he was “emotionally upset” by comparisons with the former payday lender Wonga. I am sure that this was not aimed at your Lordships’ House, but let me be clear that we recognise the differences. However, just because two business models vary, that does not mean that we cannot and should not learn lessons from past regulatory failure. These products may not have interest charges attached to them, but that does not mean they are risk free. That was recognised by Chris Woolard in his review when he warned that there was significant risk of consumer detriment if the market continued to grow at pace without the implementation of appropriate consumer protections.
In his recent comments, Klarna’s boss acknowledged that his firm had made mistakes, particularly in relation to how it had advertised its products in the past. Such self-reflection is hugely important, and I am sure that advertising is one of the areas that will feature in the future regulatory framework.
Lord True (Con)
My Lords, nearly 190 years ago, the great Duke of Wellington came into a new House and famously commented, “I never saw so many shocking bad hats in my life.” Looking round today, I have to say that I never saw so many magnificent new haircuts in my life—and I look forward to seeing many more in the next days and weeks.
I thank all those who have contributed to the debate, on a subject that I assure noble Lords we shall continue to consider very carefully, as the noble Lord, Lord Tunnicliffe, asked. I am grateful for the general support that has been given, and the generous remarks made by the noble Lord. I am sure I speak for my noble friends the noble Earl and Lady Penn when I say how much we have appreciated the constructive engagement of Peers on all sides with this legislation. I assure the noble Lord that, through the consultation and leading forward to the affirmative instrument we have promised, we will continue to give the most careful consideration to all ideas.
For my noble friend Lord Naseby, I can again confirm that there will be a full public consultation as soon as possible after Royal Assent. That will allow input from all interested parties, as my noble friend asked.
I thank the noble Baroness, Lady Kramer, for her broad support. She criticised the product, albeit that it is a lower risk than some other types of credit. We certainly agree that a proportionate approach to regulation is the right goal, and that is what I set out. The Government are engaging with stakeholders and will, as I say, consult in the spring to ensure that regulation provides the appropriate degree of consumer protection. I assure the noble Baroness that the Government are not complacent. Indeed, that is why we are taking action and are open to continuing consideration and discussion on this matter. All in all, I am very grateful for the response from your Lordships to government Amendment 14.
I will now address the second amendment in the group, Amendment 35, from my noble friend Lord Holmes of Richmond. I join others in paying tribute to his indefatigable work in this regard, which we all so much admire. His amendment similarly deals with products that aim at increasing financial inclusion.
Amendment 35 would make the Financial Policy Committee of the Bank of England responsible for monitoring financial exclusion and reporting on progress on offering basic bank accounts to financially excluded individuals. The Financial Policy Committee has responsibility for addressing systemic risks and protecting and enhancing the resilience of the UK financial system. As my noble friend Lady Noakes has argued, I am afraid the Government do not believe it is an appropriate body for this task. By the way, I hope no one listening to our debates will draw from the fact that the Bank took away my noble friend’s cheque book any conclusion about her creditworthiness, nor indeed start a run on the Bank of England. It is a question of principle, and we do not believe the body is appropriate.
However, I reiterate that reducing financial exclusion remains a key priority for the Government and one we continue to drive forward. I think we in this debate are all agreed on that, albeit with due caution, as expressed by my noble friend Lady Neville-Rolfe and others. We are committed to ensuring that everyone can have access to useful and affordable financial products and services. This has also been a particularly important part of our work during the pandemic.
Noble Lords asked for examples. One way we are doing this is through the biannual Financial Inclusion Policy Forum, of which the Economic Secretary is co-chair. Just a few months ago, in November, the Treasury published its latest annual Financial Inclusion Report for 2019-20. It sets out all the recent work on financial inclusion. Not only this, but the Treasury’s Basic Bank Accounts report came out in January this year.
Access to a bank account is the first step on the path to financial inclusion and capability. Basic bank accounts are an important product and allow those who are financially excluded in the United Kingdom to access mainstream banking services, providing people with a way to receive their income and manage their money securely and confidently. To my noble friend Lady McIntosh, I can say that this includes those with low credit scores.
In 2014 the Government negotiated a voluntary agreement with the banking industry on the establishment of basic bank accounts, in which industry agreed to the publication of basic bank account data. Indeed, since 2016 the Treasury has published data on basic bank accounts annually, including data on firms’ basic bank account market shares. We have made progress on this issue. The most recent report shows that, as of June 2020, there were 7.2 million basic bank accounts open in the United Kingdom.
I do not in any way underestimate the importance of the points put forward by my noble friend Lord Holmes of Richmond, but the Government are confident that Amendment 35 as drafted would not do more than what the Government are already doing to tackle financial exclusion or to monitor financial inclusion and report progress on basic bank accounts. Though we admire its intent, it bears a significant risk of duplication of effort, and the Government therefore cannot accept it. Having listened carefully and undertaken to continue to listen carefully to my noble friend, I ask him not to press his amendment.
The Deputy Speaker (Baroness Fookes) (Con)
We now come to the group consisting of Amendment 14A. Anyone wishing to press this amendment to a Division must make that clear in debate.
Amendment 14A
Baroness Penn
“Retention of personal data under the Market Abuse Regulation
In Article 28 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (data protection), omit “Personal data is to be retained for a maximum period of five years.””Member’s explanatory statement
This amendment removes the prohibition, under the Market Abuse Regulation, on retaining personal data for more than five years.
Baroness Penn (Con)
My Lords, Amendment 14A makes a minor change to the market abuse regulation to ensure that the Financial Conduct Authority is able to continue to effectively identify, investigate and prosecute complex cases of market abuse.
The market abuse regulation, commonly known as MAR, aims to increase market integrity and investor protection, which enhances the attractiveness of the UK market for investors. It contains prohibitions on insider dealing, unlawful disclosure of inside information and market manipulation, and provisions to enable the FCA to identify, investigate and take action against such market abuse.
Article 28 of MAR provides that personal data collected for the purposes of MAR is to be retained for a maximum period of five years. The market abuse regulation was introduced as an EU regulation in 2014 and so forms part of retained EU law in the UK following our withdrawal. Article 28 applied from July 2016 and so, without this amendment, from July 2021 the FCA would be obliged to begin deleting five year-old personal data collected under the regulation.
This requirement in MAR is inconsistent with other references to data protection in EU financial services regulation and the approach to personal data retention in data protection regulation, particularly the general data protection regulation, or GDPR. An obligation to delete personal data after five years would cause problems for the FCA when carrying out its market monitoring and enforcement duties.
The FCA needs to retain personal data for longer than five years for three reasons: first, to investigate complex market abuse such as that carried out by organised criminal groups, which can typically occur over a prolonged period of time; secondly, to prosecute those complex cases—prosecutions will draw on evidence from longer than five years ago; and, finally, to enable the FCA to discharge its disclosure duties in prosecution cases by providing relevant information to the defendants that may support their case.
In some cases, the obligation to delete personal data after five years could obstruct the FCA and prevent it carrying out investigations and commencing prosecutions. This is of particular concern when it comes to preventing, investigating and prosecuting complex market abuse undertaken by organised crime groups, which can often take place over five years. For example, in a well-publicised recent case a conviction of insider dealing was confirmed on appeal in December 2020, resulting in custodial sentences and £3.9 million in confiscation. During the 2020 appellate proceedings, the FCA had to disclose information from 2013. The conviction may not have been secured if the FCA had been forced to delete the personal data relating to the case.
The Government therefore consider that it is appropriate to remove the requirement in MAR to delete personal data after five years. If it is removed, the FCA will be required to adopt a GDPR-compliant retention policy for data collected under MAR, consistent with its treatment of personal data collected for other regulatory, compliance and operational purposes. This will enable the FCA to keep personal data so long as it is necessary for the enforcement of MAR, including identifying, investigating and then prosecuting these cases of complex market abuse.
I recognise that this amendment has been tabled at a late stage of the Bill, and it would have been preferable to include it earlier. After such a large body of EU legislation was transferred to the UK statute book at the end of the transition period, the Government have been working closely with the FCA to identify any issues. This issue was identified as one that requires urgent attention to ensure the FCA is able to effectively pursue its investigations into potentially criminal conduct.
I know that the importance of investigation and addressing potential market abuse was raised by many noble Lords during debates in Grand Committee. I therefore ask that noble Lords support this amendment to ensure that the FCA is not prevented from using personal data that would support it in identifying, investigating and prosecuting cases of market abuse. I beg to move.
The Deputy Speaker (Baroness Fookes) (Con)
I understand that the noble Lord, Lord Stevenson of Balmacara, has withdrawn, so I call the noble Baroness, Lady Kramer.
Baroness Kramer (LD)
My Lords, we do not oppose this amendment, particularly as we have the safeguard of the GDPR in place. However, I want to make one comment. One of our major frustrations with the regulator is how slow it has been to pick up on issues—how much information seems to have come its way that there is wrongdoing, yet all its actions seem to be delayed. We went through example after example of that in Grand Committee, Blackmore and London Capital being just two of the latest examples, and I think I have even missed two more scandals that have occurred in the last couple of weeks. I hope there are some other ways in which we can put pressure on the regulator to act and to do so in a more timely manner, and that it will not see this extension as an opportunity to relax and allow more time to pass before it begins to take action when it is needed.
Lord Eatwell (Lab)
My Lords, this seems to be an entirely sensible modification of an overly restrictive time limit on prosecutions for market abuse, and the Minister has certainly made a strong case.
I have one question associated with the Government’s note that accompanied the amendment. The Government stated that they had not found any clear rationale for the five-year limit applying in EU law and could see no reason for maintaining it in UK law. They said they understood that it had also been raised as an issue by EU regulators and they were considering a change to their law. Given that the EU is also considering a change, why have the UK Government not co-ordinated the change in our law with theirs? Is it not the Government’s “go it alone” approach that has been so damaging in the quest for equivalence? Could the Minister outline how the Government’s current stance on this change fits with the Memoranda of Understanding on trade in financial services with the EU?
Baroness Penn (Con)
My Lords, I thank noble Lords for their remarks in support of the amendment. As I have said, I recognise that the amendment has been tabled at a late stage of the Bill and that it would have been preferable to have included it earlier. However, as it seems the House agrees it is important that the FCA is able to effectively pursue its investigations into potentially criminal conduct, it is right that we make this minor change to ensure that it can continue to effectively identify, investigate and prosecute complex cases of market abuse. I reassure the noble Baroness, Lady Kramer, that this will not be seen as an opportunity by the FCA to take its foot off the pedal in such cases, but where it is undertaking this work it is essential that it is able to continue if the case spans a period of longer than five years.
To the question asked by the noble Lord, Lord Eatwell, the Government are committed to co-operation with the EU but it is now responsible for its own law and is aware of this issue and we are responsible for ours. As I set out in my opening remarks, without action now in this Bill the time limit would come to bite in July this year, and there is therefore an urgency with which we need to act. While we will continue to co-operate with the EU, it is right that we take this opportunity to address what we view as an unnecessary restriction on the retention of data.
Lord Sharkey
“Access to Sharia-compliant financial services including student finance
(1) Within six months of the passing of this Act, the Treasury must make provision by regulations to facilitate the availability of Sharia-compliant financial services in the United Kingdom, including availability to students who are eligible for the Government’s student finance provision of Sharia-compliant finance products for paying tuition fees and for student maintenance on equitable terms with students accessing the Government’s student finance provision.(2) Regulations under this section are subject to the negative procedure.”
Lord Sharkey (LD) [V]
My Lords, Amendment 15 is in my name and those of my noble friends Lady Sheehan and Lady Kramer, and I am grateful for their support.
The amendment addresses the issue of the provision of sharia-compliant student finance, of which there is none. Because Islam forbids interest-bearing loans, that prohibition is a barrier to our Muslim students going on to attend our universities. We debated this extensively in Grand Committee so I will not rehearse the arguments in detail, but I will remind the House of the timescale involved.
The problem became clear in 2012 when tuition fees were significantly increased, and it became worse when maintenance grants were replaced by maintenance loans. In 2014, the Government published their report on the consultation that they had undertaken. That consultation had attracted 20,000 respondents, a record at the time. The Government acknowledged that the lack of an alternative financial product to conventional student loans was a matter of major concern to many Muslims. The report also identified a solution: a takaful, a well-known and frequently used non-interest-bearing Muslim financial product. The Government explicitly supported the introduction of such a product.
That was seven years ago. There is still no sharia-compliant student finance available, nor have the Government ever offered a detailed reason for this long delay or indicated when it might come to an end. As I mentioned in Grand Committee, I have repeatedly asked the Government the reasons for this lack of action. I have never had a substantive response. There was no substantive response from the Minister in Grand Committee a month ago and no explanation for the delay nor any indication of a date by which the takaful would be available. There was absolutely no sense of urgency. It was as though the plight of these Muslim students was not really important or worth taking seriously.
I made the point that I had written to the Minister on 4 January this year asking for a report on progress and making some suggestions. There had been no response by then, and there was no response until 5.15 pm yesterday evening, 14 weeks after my email. The Minister of State for Universities apologised for the three-month delay without offering an excuse or an explanation and her reply was completely formulaic, containing no substantive answers. It contained no indication of when sharia-compliant student finance would be available. I was struck by the casual contempt for our Muslim community that this response so clearly signalled—an absurdly unfriendly and unfeeling response with no attempt to reassure or comfort the Muslim community. In fact, if you look at the Government’s record on all this, it is very hard to see it as anything other than discrimination against our Muslim community—not just discrimination but a failure to engage and to explain.
Our amendment would oblige the Government at last to fulfil the promise they made to the Muslim community in 2013. It would oblige the Secretary of State to facilitate the availability of Sharia-compliant financial services for students who are eligible for conventional student finance on equitable terms with students accessing these conventional products, and to do so within six months of the passing of this Act so that the next Muslim student cohort did not have to face a conflict between faith and education.
I very much hope that when the Minister responds he will be able to do better than Minister Donelan. I hope he will be able to tell the House when the Government will introduce the sharia-compliant student financial product. I hope he will set a date that will allow the next cohort of devout young Muslims to go on to university. If the Minister cannot do that—if he cannot say when he will fulfil his Government’s 8 year-old promise to our Muslim community—I will seek to test the opinion of the House. I beg to move.
The Deputy Speaker (Baroness Fookes) (Con)
My Lords, the noble Lord, Lord Stevenson of Balmacara, has withdrawn so I call the noble Baroness, Lady Sheehan.
Baroness Sheehan (LD)
My Lords, I rise to speak in support of Amendment 15 in my name and those of my noble friends Lord Sharkey and Lady Kramer. I felt it only right and the very least that I could do, as the only Muslim speaking in debates on this Bill, to thank my noble friend Lord Sharkey for his determined resolve to ensure that all students, including devout Muslims, can access finance in order to go to university.
Parents who think that it is haram—forbidden—to take out an interest-bearing loan will try to save money to pay for their children to go to university. This has become inordinately expensive and, in many cases, unachievable now, in these financially straitened times. An important point to raise here is that boys will be favoured over girls when money is tight. Access to sharia-compliant student finance will make it easier for all bright boys, and girls, to access higher education.
I note the 2014 BIS consultation—which, as my noble friend Lord Sharkey said, had a remarkable 20,000 responses—and the subsequent report, which identified takaful as a suitable, frequently used non-interest-bearing sharia-compliant financial product. In its response to the report, the Government accepted its findings and put forward an alternative finance product based on the takaful model, which would, in the interests of equity, be available to everyone. It was designed so that repayment after graduation and debt levels must be identical to those of a traditional loan, with all repayments to be made directly through the UK tax system. In addition, the alternative finance product must be applied for in the same way as a traditional loan, through the Student Loans Company.
That was six and a half years ago. The enabling legislation has been implemented in the Higher Education and Research Act 2017, but, since then, there has been no further action. In the meantime, a sharia-compliant version of Help to Buy took only five or six months to launch, from start to finish—so the delay in offering a similar scheme to students is quite inexplicable. I hope that the Minister will be able to give categoric assurance that there will be no further delay. In the absence of such assurance, I would be pleased to support my noble friend Lord Sharkey, should he seek a Division.
Baroness Kramer (LD)
My Lords, I will be very brief. In Grand Committee I gave a precis of some of the experiences of would-be students who had been deterred from going on to higher education or who had done so but then had to limit their life and activities as students because every single penny was hard to come by. As a consequence, they really did not benefit from so much of what is on offer in higher education.
I do not think that I can add anything to the incredibly powerful words of my colleagues, my noble friends Lord Sharkey and Lady Sheehan. I completely support the action that they contemplate but do so in the great hope that the Government will now make a statement that will make it unnecessary for the House to divide.
Lord Tunnicliffe (Lab) [V]
My Lords, I am grateful to the noble Lord, Lord Sharkey, for moving this amendment, with support from my noble friends. As I noted in Grand Committee, the Labour Party has long supported facilitating access to sharia-compliant financial services, and we therefore backed previous powers for the Government to act on the provision of appropriate forms of student finance.
As outlined both in Grand Committee and again today, the wait for the introduction of sharia-compliant finance products has been lengthy. I will not repeat the timeline cited by others but will say that we were unconvinced by the Minister’s response to the earlier amendments of the noble Lord, Lord Sharkey. Of course, we accept that there is complexity involved, but, in my experience, such challenges can be overcome when there is genuine ambition to find a solution.
The Minister previously said that the Department for Education is faced with designing a system in which students
“do not receive any advantage nor suffer any disadvantage through applying for alternative student finance.”—[Official Report, 8/3/21; col. 558GC.]
That is indeed a challenge, but it is one that I am sure can be met.
Lord True (Con)
My Lords, I am grateful to all those who have spoken in this short debate. As has been said, Amendment 15 seeks to require the Government to make regulations to facilitate the availability of sharia-compliant financial services in the UK, including a sharia-compliant student finance product, within six months of the passing of the Bill.
Institutions across the United Kingdom have been providing sharia-compliant financial services for nearly 40 years, and the United Kingdom is the leading western centre for Islamic finance. I do not believe that anyone would dispute that the United Kingdom is a world leader in this area. This Government continue to promote the growth of this sector, supporting domestic financial inclusion and our connections with key markets abroad. With respect, I think that, in this context, the charges from the noble Lord, Lord Sharkey, of “casual contempt” for the Muslim community and of discrimination were a little misplaced.
Student finance is not regulated by the FCA. I did, however, listen very carefully and respectfully to the noble Baroness, Lady Sheehan, who spoke from a position of personal commitment. I can assure the noble Baroness and the noble Lords that the Government wish to extend the reach of the student finance system so that everyone with the ability to benefit from higher education can do so. That is why we have legislated to make a system of alternative payments that is compatible with Islamic finance principles possible.
As I said in my remarks in Committee, a range of complex policy, legal and systemic issues need to be resolved before a Sharia-compatible product can be launched. Despite these challenges, the Department for Education has been working with specialist advisers to establish an appropriate product specification that meets the requirements of Islamic finance.
I also heard the concerns raised in Committee, and by the noble Lord, Lord Sharkey, again today, that it is not clear enough when the Government will take the next step. Since Committee, when I was concerned to hear those criticisms, I have discussed the matter with the relevant Minister in the Department for Education. Based on this, I can report that this matter is being considered as part of the wider review of post-18 education and funding.
I hope, therefore, that noble Lords will appreciate that it is not the right time to act until the wider strategy on post-18 education has been settled. I appreciate that some noble Lords, including those who have spoken, would like to see faster progress here—the question of when was put. I am able to reassure the House that there will be an update on this work as part of the review of post-18 education and funding when it is published, which will be at the next multi-year spending review. The Government will conduct the next spending review later this year. Further details on the nature of that spending review will be set out in due course.
On that basis, and with the commitment to progress as part of the review, I hope that the noble Lord will accept the assurance that the Government are committed to making progress on this very important issue and feel able to withdraw his amendment.
Lord Sharkey (LD) [V]
I thank all noble Lords who have spoken in this brief debate and I thank the Minister for his response. I point out, however, that we legislated to take powers to do this four years ago. Nothing has happened since. I remind the Minister, too, that the Help to Buy system was up and running within five or six months—and that was Islamic finance.
I also note that references to the post-18 education review seem to me—and have always seemed to me, as I said in my letter to the Minister, to which I did not get a response—completely irrelevant. We want students, Muslim or not, to be treated equally. If there is a change, after the post-18 Augar review, to the way that student finance happens, it should apply to Muslim and non-Muslim students equally: there should be no need to wait to establish the principle that Muslim and non-Muslim students should have equal access to finance. There is no need to wait.
I note, finally, that the promise of an update is not a promise to do anything at all, and does not even come close to setting a date by which these cohorts of Muslim students can gain access to finance and go on to university. In the Minister’s response there was no promise and no clarity, just talk of commitment. But after 13 years of this promise, talk of commitment is not enough, and I wish to test the opinion of the House.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, we come now to the group beginning with Amendment 16. Anyone wishing to press this or anything else in the group to a Division must make that clear during the debate.
Amendment 16
Baroness Meacher
“Regulation of bailiffs and bailiff firms for the purpose of taking control of goods
In section 22 of the Financial Services and Markets Act 2000 (regulated activities), after subsection (1B) insert—“(1C) An activity is a regulated activity for the purposes of this Act if it is an activity described by Part 3 of the Tribunal, Courts and Enforcement Act 2007 (enforcement by taking control of goods) performed as a service by way of business specified in an order that may include provisions in respect of—(a) defining the people, organisations and activities under Part 3 of the Tribunal, Courts and Enforcement Act 2007 which may or may not be regulated under this section;(b) delegating some or all of the functions of the FCA in respect of this regulated activity to another person or body, either existing or established by an order under this section;(c) setting out which parts of this Act may or may not apply in respect of activities regulated by this section;(d) making such supplemental provisions as necessary to carry out the functions of the regulator.(1D) If an order under subsection (1C) has not commenced within 2 years of the passing of the Financial Services Act 2021, an activity of the type described in subsection (1C) is to be a regulated activity notwithstanding the lack of an order under subsection (1C).””
Baroness Meacher (CB)
My Lords, I thank the noble Baroness, Lady Morgan, the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Stevenson, for putting their names to this amendment and for their tremendous support throughout the discussions we have had since.
Perhaps, I should begin by reminding the House what this amendment is all about, although I do not intend to repeat what I said in Committee. For many years, I have been aware of grave concerns about the operations of some bailiffs and certain bailiff companies, and the appalling experiences of some vulnerable individuals when they find themselves in debt and need help to solve their problems. I recognise that the law must support creditors in order to recover money owed; however, there has been inadequate protection of vulnerable people in financial difficulty.
I think the Government recognise that the 2014 regulations have failed to incentivise affordable repayment and to ensure consistently fair treatment of people in vulnerable situations. The MoJ review of the bailiff issue, set up in 2018, was most welcome but we are now in 2021 and, sadly, the review has not yet reported. Amendment 16 seeks to break the impasse on this issue, and I pay tribute to the Centre for Social Justice and the enforcement oversight working group for the support they have provided.
It is a remarkable first that the leaders of the enforcement and debt advice sectors have come together as part of this group, with the CSJ, to design a new oversight body for the enforcement industry. This cross-sector initiative is an important and historic breakthrough, and the group has made significant progress in developing the principles, objectives and functions of the new body, the enforcement conduct authority.
Crucial to the effect of an enforcement industry regulator is some statutory underpinning, as I know the Minister knows we feel strongly. Our amendment is designed to focus minds and take forward that vital element. All sides agree on the importance of giving the body real authority and teeth. I want to thank the noble Lord, Lord Wolfson, his colleagues and the noble Lord, Lord True, for our helpful meetings, the second meeting in particular. I also thank the Treasury and the Ministry of Justice for their constructive response to this amendment, and their commitment to build on the good faith of the industry and the advice sector and to work with the group on independent regulation.
I know that Ministers welcome the EOWG’s initiative; however, we accept the Treasury’s view that the Financial Services Bill is not the ideal vehicle for this amendment. We have also heard concerns from Ministers about putting this body on a statutory footing. I want to address that important point in a moment, but first, I want to assure Ministers that I will not be taking the amendment forward at Third Reading. We have listened to concerns about the FCA backstop, and I would be very happy to for the Government to come forward with an alternative amendment, maybe to another Bill, that removes the offending article.
I would also like to reflect briefly on how this initiative fits with the progress the Government have made in Clause 34—on the debt respite scheme—in improving protections for people in financial difficulty. This House strongly welcomed the Government’s initiative in 2018 to lay the powers for breathing space in statute through the Financial Guidance and Claims Act. It will not have passed Ministers by that they were pleased to do this before the policy framework was fully worked out, which is what we want to happen in relation to the regulator.
Let me now turn to the vital need for statutory underpinning for a new regulator. We are now two and a half years into the Government’s review of bailiff regulation, and my hope is that our amendment will have helped to focus minds on an idea whose time has come. Colleagues from across the House and across the sector are strongly united in the view that the current situation is unacceptable. We also believe that the establishment of an enforcement industry regulator without any statutory underpinning would be totally inadequate. I want to set out the reasons why statutory underpinning is so important for this industry. The enforcement industry itself is saying that statutory underpinning is essential, which should surely be sufficient proof of the veracity of this crucial point. The whole point of this initiative is to constrain the activity of offending bailiffs and bailiff companies and improve practices to a universally high standard. The EOWG has recognised that this will be much hindered without statutory oversight. Any new regulator will lack the necessary powers to achieve effective regulation without this statutory support.
I appreciate that time has been short for Ministers to consider the initiative for this Bill, but I urge the Government to reflect on what industry leaders are saying and think again. The powers to enforce firms’ compliance with regulatory standards and to sanction firms and agents who are in breach of the standards—or prohibit them from operating—are essential to protect the public from the inappropriate practices we still see. Without statutory underpinning, the independent authority of any new enforcement industry regulator threatens to be undermined. Funding for the body; access to intelligence; acceptance of standards and decisions: these all continue to be heavily dependent on voluntary consent and compliance, which is very difficult to achieve in this industry. Ministers may say, “Let’s see how voluntary regulation works”—in fact, I think that is what they are saying. I am afraid that argument does not hold water, for the reasons I have set out.
Finally, it is worth noting the strong precedent for statutory underpinning in the Ministry of Justice and Treasury spheres. To take one example, the Legal Services Act 2007 provided for the Legal Services Board to oversee approved regulators and established an independent complaints body. Given the extraordinary and necessarily intrusive powers of the enforcement sector, there is an overwhelming case for a regulator backed by statute.
To conclude, this amendment would put in place the necessary framework for the Government to make a real breakthrough to resolve a long-standing issue. The amendment has cross-sector, cross-party support; this has nothing to do with politics. All sides agree that any new body requires statutory underpinning to be effective. It is crucial that this moment of opportunity is not squandered, and I really mean a moment of opportunity. Leaders of the industry may change in a few years and we would have lost that opportunity.
I have no wish to test the will of the House on my amendment. We have listened to Ministers about having a more palliative legislative option. The Police, Crime, Sentencing and Courts Bill is coming down the track and we believe that it may offer a more suitable vehicle for reform of the enforcement industry regulatory system. However, I hope that the Minister, in winding up, will assure the House that the Treasury and the Ministry of Justice will work together with the EOWG on the necessary statutory underpinning for an enforcement industry regulator. I ask Ministers to commit now to using the PCSC Bill to build on the talks we have had on this Bill and returning to the House with their own amendment on this issue. I know colleagues will listen to the remarks of the Minister very carefully before deciding whether any further Back-Bench parliamentary involvement is needed. I beg to move.
Lord Leigh of Hurley (Con) [V]
My Lords, I congratulate my noble friend the Minister on Amendment 14, as I raised that issue at Second Reading and it was very good to see it today. It shows that the Government are listening, which is very welcome. I thank him for his kind opening remarks on a number of Peers’ appearances: it was very perceptive of him. I will not repeat the sorry tale that he heard last time around, which is the reason for this amendment. He will recall that it was in response to an attempt to commit a fraud by sending me a credit card I had not requested, and that I was unable to progress matters with FOS because I was not a customer of the credit card company concerned. I had a letter from FOS, which says the following:
“The Financial Ombudsman Service must follow the rules stipulated by the Financial Conduct Authority handbook. The relevant section concerns dispute resolution—DISP—and DISP states that there are limitations to when FOS may investigate a complaint.”
This is the rule that stipulates that FOS may look at complaints only from “an eligible complainant”, and DISP 2.7.3 states:
“An eligible complainant must be a person that is … a consumer”.
The regulations go on to say that FOS may investigate a complaint from a consumer or “a potential consumer”, and that this consumer or potential consumer must have a relationship with the regulated busines. There is a full explanation set out in DISP 2.7.3 and 2.7.6 of the FCA handbook. As I did not genuinely attempt to make a credit application, I did not fit the description of consumer or potential consumer in the handbook. In his reply to me at Second Reading, the Minister said that
“it is already the case that potential customers of a firm can seek redress through the FOS scheme under the FCA’s existing rules, notably the FCA dispute resolution handbook rule. The relevant rule states that, to be an eligible complainant, a consumer must be, or have previously been, a potential customer, payment service user or electronic money holder of the firm that they are raising a complaint against”.—[Official Report, 8/3/21; col. GC 552.]
This is completely contrary to the email sent by FOS, and there is clearly misunderstanding and confusion.
My noble friend the Minister was kind enough to suggest that I could report this matter to Action Fraud, and reports received by Action Fraud are then considered by the National Fraud Intelligence Bureau. Frankly, none of that need have been necessary or would be necessary in future if my Amendment 26, the only amendment I will speak to, were adopted. I seek for it to be adopted so that, from here on in, FOS can take action against credit card companies which do not seek to verify recipients of credit cards before they are sent out. At the moment, there is no redress for anyone who receives a credit card and no one for them to complain to. I do not think they can complain to Action Fraud because the fraud was never consummated, as it were. I very much look forward to listening to his remarks at the Dispatch Box later this afternoon, given that the Government are in listening and action mode.
The Lord Bishop of St Albans [V]
My Lords, I shall speak to Amendment 16 and then address my own Amendment 27. The introduction of a regulatory body to oversee the rules governing the behaviour of bailiffs would greatly strengthen complaints handling for the victims of practices that fall outside the national guidelines. The FCA reported in its Financial Lives 2020 Survey that 3.8 million people in the UK are currently experiencing “financial difficulty”. It is a terrible situation that takes a significant toll on people’s health and relationships. This amendment seeks to address an important concern: the fair treatment of people by enforcement agents who collect debts, often from vulnerable people who are in grave financial distress.
The absence of an independent regulator means that, when breaches of national standards occur, any complaints will be dealt with through the company or a trade association, before possibly being passed on to an ombudsman. This is an arduous process that prevents complaints from being adequately actioned. Furthermore, these national standards are not legally binding, which obscures the extent to which an individual can seek redress. No industry is exempt from poor practice. While most enforcement agents will probably abide by national standards, nevertheless we need to make sure that they are properly regulated.
Breaches do occur, and I will quote one example provided by the charity Christians Against Poverty of a single mother of two children. This woman was living under police protection and was a regular at a food bank, and her abusive former partner had taken out £20,000-worth of debt in her name. All of this was compounded by the fact that she was caring for her critically ill mother. When visited by a bailiff on account of a parking fine that had escalated, she attempted to contact CAP so that it could explain the situation to the bailiff. At this point the bailiff became intimidating, aggressive and threatening. That is a breach of rule 21 of the national guidelines, which states:
“Enforcement agents must not act in a threatening manner when visiting the debtor”.
We need to get a balance of powers that allows enforcement officers to undertake their tasks while also protecting debtors and ensuring they have significant mechanisms to air complaints impartially and without fear.
Debt charities are already reporting rising numbers of people in financial crisis and behind on household bills such as rent and council tax because of the Covid pandemic. Given the possible upturn in the number of individuals being referred to bailiffs in the near future, now is a suitable time to explore how we can introduce a regulatory body. I hope the Government will look closely at the content of this amendment and work to correct the current imbalance.
I now turn to Amendment 27 in my name. I am grateful to the noble Lord, Lord Sikka, and the noble Baroness, Lady Bennett of Manor Castle, who have also signed it. I tabled this amendment because I believe in the positive difference that gambling blockers can make in reducing gambling harms and empowering individuals to control their own addictions. The amendment would mandate the providers of debit and credit accounts to offer opt-in gambling blockers to block gambling transactions.
As things stand, gambling blockers have widened coverage over the past three years, currently reaching around 90% of current accounts and 40% of credit card accounts. This is an achievement in its own right and should be welcomed as a positive technological aid to reduce problem gambling. While there is a still a need to close that 10% in debit card coverage, the majority of which will come from smaller banks and building societies, it is of secondary concern to the far larger gap that exists in the credit account market, where 60% of accounts are not covered by blocking options.
In April 2020, the Gambling Commission banned the use of credit cards for gambling purposes, but this is only enforceable on licensed operators. The lack of gambling blockers on credit accounts is particularly problematic as it can provide a back door for individuals suffering from gambling-related harms to use credit cards on unlicensed sites. This undermines the Gambling Commission’s own rules and unfairly benefits unlicensed operators. Even more worryingly, this blind spot provides a direct avenue for the expansion of harmful and addictive behaviour, and the accumulation of gambling debt that would not ordinarily be allowed.
With the Government’s gambling review ongoing, the emphasis should be on preventing harm, and provisions for gambling blockers would be a welcome aid in achieving this goal. Admittedly, they are not perfect; they rely on accurate merchant categorisation codes to identify gambling transactions. But this should not discount the positive part they can play. Furthermore, through greater co-operation between account providers and payment processors, a robust and data-driven system of reporting could be developed to identify unlicensed operators hiding behind incorrect merchant categorisation codes to block future transactions. With no legal requirement to provide blockers and no obligation on payment processors to diligently review the merchant categorisation codes of unlicensed operators, gambling blockers will suffer from pitfalls that could be effectively remedied through either a legislative or regulatory approach.
There are also issues this amendment does not directly deal with but deserve highlighting. Due to the entirely optional provision of blockers, there are currently no minimum standards for functionality. This is an issue when it comes to the so-called “cooling-off” or “friction” period—the time between deactivating the blocker and once again being allowed to transact for gambling purposes. As a tool that assists those suffering from gambling addiction, the ability to activate and deactivate at will renders a blocker redundant.
Of the gambling blockers currently on offer, friction periods range from instant reactivation to 48 hours. The results offered by Monzo highlight the success of stricter cooling-off periods. Its blocker, with a 48-hour cooling-off period, block around 585,000 gambling transactions per month and is active on nearly 300,000 accounts. According to its data, once it is activated, fewer than 10% of customers deactivate it. Monzo, driven by its own success, has called upon the Government to mandate that banks provide blockers and would no doubt support this amendment. However, as I have shown, it is not merely their provision that renders them successful but their architecture. A minimum cooling-off period of 24 hours would make them far more effective tools to deal with addictions.
Finally, I will add that, in a data-driven world fuelled by digital payment systems rather than the cash we used in the past, individuals should have more autonomy over how they spend their money. Aside from their benefits in combating addiction and containing the unlicensed market, gambling blockers are an example of giving customers control over their own transactions. Actions and decisions are increasingly dictated by data that is controlled, analysed and dissected by global corporations and increasingly removed from the individual. Optional transaction blockers such as those related to gambling re-empower individuals and give them a stake in this new data-driven environment.
I thank the Government for their helpful work in encouraging the major banks to introduce gambling blockers—an endeavour that has been very successful in relation to debit cards. I know from discussions I have had with the Government that they see the benefits of blockers and continue to support a voluntary rollout. This is very encouraging and I hope that as they move forward with these efforts they will take on board some of the comments made here and find ways to promote greater data sharing between payment service providers and processors to tackle the unlicensed market. However, I remain of the opinion that for products as potentially harmful as gambling there should be not only a statutory obligation to provide opt-in blockers, as stated in this amendment, but minimum design requirements so that the positive results provided by Monzo can be emulated by other account providers.
Lord Young of Cookham (Con)
My Lords, my noble friend Lord Leigh of Hurley made a powerful case for his amendment, as did the right reverend Prelate the Bishop of St Albans for the two amendments to which he spoke.
I will speak to amendment 37C, in my name and that of the noble Lord, Lord Blunkett. It seeks to release child trust funds worth less than £5,000 held by children with learning disabilities, without the need to go through the daunting, lengthy and at times cumbersome Court of Protection process, while at the same time offering strict safeguards to prevent abuse.
Child trust funds were launched in January 2005, and 6.3 million children in the UK born between September 2002 and January 2011 were eligible to receive vouchers from the Government to invest in the scheme. Families with children who had a disability were offered additional payments to make it more attractive for them to join the scheme and to compensate them for the additional costs that they would face.
Lord Foster of Bath (LD)
My Lords, I refer to my interests as set out in the register. We have heard some very powerful cases for other amendments in this group, but I will confine my remarks to supporting Amendment 27. I am grateful to the right reverend Prelate for tabling it.
As the chair of Peers for Gambling Reform and a previous member of your Lordships’ Select Committee on gambling, I have spoken to dozens of people who have been affected by problem gambling. We know that there are at least a third of a million problem gamblers in the UK—probably far more. We know that, on average, very sadly, there is one gambling-related suicide every single day. We know that for every problem gambler, six other people are adversely affected by gambling-related harm, which causes huge problems for families, individuals and society, as well as huge costs to society through lost tax receipts, welfare and benefit claims and costs to the NHS and the criminal justice system. With the growth of online gambling, unless action is taken, the problems will get even worse.
I am therefore enormously supportive of the Government’s decision to conduct a review into the Gambling Act 2005, but we should never forget that, while gambling companies have no incentive to drive customers to financial ruin, they have every incentive to keep them gambling even when problems are looming. The greater the problem, the greater the profit to the gambling company.
Baroness Altmann (Con) [V]
My Lords, I should like to speak first to Amendment 26, to which I have added my name, which was so excellently and comprehensively spoken to by my noble friend Lord Leigh. I support its aims and thank the Minister, my noble friend Lord True, who has spent time engaging with us on this matter. I urge the Minister to look carefully at the arguments laid before your Lordships this afternoon so well by my noble friend Lord Leigh.
There perhaps seems to be some confusion in the interpretation of “potential consumer”, because it would appear that in the FCA handbook there is a definition of that term. It gives the impression that potential consumers are covered and can complain to the Financial Ombudsman Service. However, as always, looking a little further along at the so-called small print, those potential customers must already have a relationship with the provider under complaint. In the case that was explained by my noble friend Lord Leigh, a speculative offer of a credit card does not constitute any relationship between, in this case, my noble friend and the consumer credit card company.
Nevertheless, we need to protect the consumer here, and the Financial Ombudsman Service is designed to be able to look into such matters. The aim is not to give redress to someone who did not lose out because they managed to spot the problem but to ensure that redress is available to prevent other consumers falling for the same problem and that action can be taken against a firm in anticipation of future problems that will inevitably arise—because not everybody will be able to spot the problem that my noble friend discovered in advance of any issues arising.
The idea of reporting to Action Fraud sounds, in theory, attractive. However, Action Fraud tends to be an information-gathering service; it cannot introduce any reforms. If one were to say, “I am calling you about something but have not suffered any loss”, it is unlikely, given the number of scams going on and the scale of complaints often received, that the matter would get any further, and certainly not in any timely manner. I therefore hope that my noble friend Lord True might satisfy us with some promises on looking further into this matter and taking it seriously. The Financial Ombudsman Service clearly recognises that it does not have the required powers, and there may well need to be some changes to the FCA handbook or the regulations behind it.
I was very much impressed with the arguments made on two other amendments in this group by the noble Baroness, Lady Meacher, and the right reverend Prelate the Bishop of St Albans, who clearly explained the importance of Amendment 16 on bailiffs treating customers fairly, not being quite as aggressive and having some controls, and Amendment 27 on introducing gambling blockers to help people avoid the terrible problems of losses accrued by gambling and the impact that it has on society. I hope that my noble friend Lord True will listen sympathetically on those issues. Interestingly, they revolve around trying to redress the balance between financial services providers and consumers. All too often, the provider may have more power than the ordinary consumer, who may unwittingly or sometimes innocently be caught up in problems that providers have been too heavy-handed with.
Finally, I should like to speak strongly in support of Amendment 37C, again so excellently and comprehensively explained by my noble friend Lord Young of Cookham, which addresses an issue that is the opposite way round. In this instance, providers would like to help their customers—in particular, parents of children with disabilities—to access money that otherwise would stay with that provider. The law is preventing that from happening in any timely fashion. We have an opportunity in this Bill to redress that problem, which has only just arisen and which, as my noble friend explained, was an oversight in the original legislation.
I was involved in some of the discussions on the introduction of the child trust fund, which aimed to help children have a capital sum by the time they reached age 18. All children born after 1 September 2002 received either £250 or £500 from the Government to be paid into a fund for maturity on their 18th birthday. Therefore, from September 2020, those first funds reached maturity. Many children up and down the country have been able to take that money. Unfortunately, we have a situation where, if the child is judged not to be sufficiently competent to manage their own money, their parent, who handles thousands of pounds for them in other ways, is unable to release that money.
Perhaps I may add a further example to that which was given by my noble friend Lord Young of Cookham. It is from a father called Andrew, whose son Mikey turned 18 last September and has a life-limiting condition. Andrew explains:
“We started saving money in his Child Trust Fund before we were aware that accessing it in the future would be a problem. We were encouraged and incentivised by the government to invest in a Child Trust Fund.”
The parents wanted,
“to use the money in the Child Trust Fund to purchase equipment and fund life experiences for Mikey, however, we cannot access the funds…Our time with Mikey is precious and we should not be having to spend time on this type of legal activity just to access money that ultimately belongs to Mikey.”
That sums up the problem we face.
I understand that we must be careful not to allow children with learning disabilities and disabled children to have money taken away from them under false pretences—there needs to be some protection. However, I pay tribute to my noble friend Lord Young, who has relentlessly pursued this issue time and again in your Lordships’ House through Oral and Written Questions, meetings and briefings. Perhaps my noble friend the Minister can give us some comfort that we might be able to introduce measures in the Bill such as those outlined in Amendment 37C—whether at Third Reading or in another place when the Bill goes back.
This would potentially be considered a financial application, and there are significant delays at the Court of Protection, which has understandably prioritised applications in favour of health and welfare. The problems facing the parents of these children need to be urgently addressed. Sadly, many of them have little time left with their children. This Financial Services Bill also has the support of the providers of these child trust funds. My noble friend is concerned about this issue and has generously given his time and expertise to try to help us understand the particular problems. He has suggested that the issue revolves around a legislative roadblock. If we can free up the roadblock within the Bill, we will be doing a great service to many disabled children.
Baroness Coussins (CB)
My Lords, I support Amendment 16, in the name of my noble friend Lady Meacher and others, and I remind the House of my association with the debt advice charity the Money Advice Trust.
Anyone who has been involved with debt policy knows that the issue of bailiff regulation is a long-standing concern. Bailiffs have significant powers, including being able to enter people’s homes and take possession of their goods. Unfortunately, despite plenty of good intentions and existing voluntary national standards and codes of practice intended to govern bailiff behaviour, widespread problems remain in practice. These include bailiffs misrepresenting their powers, the failure to offer affordable repayment plans, and unfair treatment of vulnerable people or people in vulnerable circumstances. As my noble friend Lady Meacher has outlined, independent oversight would be an enormous step forward in helping people in debt to cope with, manage and overcome their predicament without unnecessary and unjustifiable additional pressures.
Noble Lords will be aware of the promising discussions currently taking place between representatives of the debt advice sector and the enforcement industry, facilitated by the Centre for Social Justice, to explore the potential for an independent oversight body. The aim of such a body—which would be funded by the bailiff industry—would be to address these problems and to raise standards. For the first time, both the bailiff industry and the debt advice sector are agreed that, for such an oversight body to be effective in raising standards, it must have statutory underpinning.
The amendment in the name of my noble friend Lady Meacher and others provides an opportunity to do just this. Of course, there are challenges to the parliamentary timetable, and relevant Bills in which to include issues such as this can be few and far between. The perverse and worst-case scenario would be to have a fully developed and agreed proposal for an independent oversight body which could not be put in place because the Government did not have the necessary powers. If the Government miss the opportunity to take action in this Bill, meaningful change is likely to be delayed much longer, with harsh consequences for people in debt.
So would it not be better for the Government to be proactive now and to accept this amendment—or, at the very least, come back with a similar version of their own at Third Reading? We cannot escape the fact that, despite the welcome support that has been put in place, debt problems will increase as a result of the pandemic. More people may face the prospect of bailiffs at their door and it is only right that the industry is properly governed and regulated, as other debt collection companies are. The Government have previously stated that they want to see practice in this sector improved and regulation strengthened. This amendment gives them the opportunity to do so. I hope that the Minister will accept it, or commit to coming back at Third Reading with something just as good or better.
Lord Blunkett (Lab)
My Lords, this group of amendments contains issues of profound importance. It is not surprising, therefore, that our progress this afternoon has somewhat slowed. I can be blissfully short, because the noble Lord, Lord Young of Cookham, spelled out in his usual eloquent and detailed fashion why Amendment 37C should be taken very seriously and that a solution must be found to the challenge that he laid out. Like the noble Baroness, Lady Altmann, I pay tribute to the noble Lord for his dedication and commitment. I have been proud to work alongside him. One of the great pleasures of this House is that it is possible to work effectively—I hope effectively—across party. The case that he made this afternoon, which he has been making for the last few months, is in my view unanswerable. The issue, therefore, is what progress can be made and what can be done.
The noble Lord, Lord Wolfson, has taken this issue seriously and to heart since he joined the House and took up his present position. Forgive me if I call the noble Lord, Lord Young, my noble friend. As he has spelled out, it is surely not beyond the wit of woman or man—working groups that do not meet or address issues aside—to be able to unlock funds that are essential, albeit small, for those for whom they were intended. My noble friend kindly indicated my history in this area. It was blighted by not having spotted that the Mental Capacity Act, which succeeded the decision to introduce child trust funds, would inadvertently lead to those funds being blocked for the most vulnerable.
I still regret very strongly that the early part of the coalition Government abolished child trust funds—driven, it has to be said, by the then Chief Secretary and not by the leading party in the coalition. But that is water under the bridge. The paradox of course is that, had the child trust funds continued and been delivered in the way originally intended—including continuous top-up funding—we would have been in a more difficult position in releasing these funds for those with learning disabilities, because the funds would have been much greater. Sometimes there are twists in life which you do not see and sometimes there are those you wish you had not.
This is a simple issue here, whether it is about Holly who was highlighted by my noble friend Lord Young, or Mikey, highlighted by the noble Baroness, Lady Altmann. I originally heard Mikey’s father outlining these issues on “Money Box”. He was also mentioned by the now leader of the Liberal Democrats in the other place. Those young people demonstrate the wider issue of access to modest but important funding that can help them at a crucial time of transition into adulthood, as was originally intended. There is also the profound issue of the growing capital asset divide in our country. With house prices accelerating as they are now, this divide will increase still further.
So I will make a very simple appeal. The noble Lord who is leading on this amendment will not press it to a vote. However, I think that the feeling of this House—both on the numerous previous occasions on which the issue has been raised and again this afternoon by noble Lords both online and present in this Chamber —is that a solution must be found, and found quickly. My experience during eight years in the Cabinet was that there were very good civil servants who explained, quite rightly, why something could not be done. I always valued them because they prevented me putting my foot in it more often than I did. But the best civil servants were the ones who highlighted the problem and then came up with a solution.
Viscount Trenchard (Con)
My Lords, the noble Baroness, Lady Meacher, spoke powerfully in favour of her similar Amendment 136F in Committee on 3 March. The noble Baroness has now brought forward Amendment 16 with the same purpose. It is supported by the noble Lord, Lord Stevenson of Balmacara, my noble friend Lady Morgan of Cotes and my friend the right reverend Prelate the Bishop of St Albans. I support all their arguments.
There is a weight of evidence of unreasonably aggressive behaviour by enforcement agents even before the onset of the pandemic. Your Lordships should be pleased that the Ministry of Justice launched a call for evidence as part of its second review of the reforms introduced by the Taking Control of Goods (Fees) Regulations 2014. It is understandable that that review is taking longer than expected in current circumstances. My noble friend Lord True explained that resources had to be moved to bring about the passage of the Corporate Insolvency and Governance Act, which was intended to help businesses survive the lockdowns. I would be interested to hear from my noble friend the Minister whether the Act is working as the Government intended, and how many companies have successfully applied for moratoria under the Act.
As the noble Baroness explained, her amendment allows the FCA to outsource the powers it would assume under this amendment to another unspecified person or body. I think this is far from satisfactory, and that the FCA should not be burdened with responsibilities in this area. The FCA is going to be busy enough with its new regulatory responsibilities and with what will rightly be an onerous system of oversight by your Lordships’ House and another place.
The FCA is not the right regulator to become involved with issues relating to non-payment of utility bills, for example. I am surprised that the noble Baroness is apparently unwilling to accept the assurance of my noble friend that the Government’s response to the review of bailiff regulation will be issued within this year. I expect that the Government will recognise that something needs to be done to control overaggressive behaviour by bailiffs, balancing such control against the need to retain an effective enforcement process. In view of my noble friend’s assurance, I am unable to support this amendment.
However, the FCA is the right regulator to protect potential customers of regulated financial services firms as well as contracted customers. Every contracted customer is a potential customer before entering into a contract to purchase supplies from a supplier, or to purchase services from a supplier, and thereby becoming an actual customer. I therefore support Amendment 26 in the name my noble friends Lord Leigh of Hurley and Lady Altmann.
The right reverend Prelate the Bishop of St Albans has made a powerful case for his Amendment 27, requiring debit and credit card providers to offer an opt-in option for gambling blockers. Research by GambleAware published in July 2020 found that only eight financial services firms offered blockers on certain products and ranges, estimated to cover 60% of personal current accounts. The research also examined the effectiveness of blockers currently available and found that they needed to be improved. Of the eight banks that offered blockers, three banks’ blockers could be immediately turned on and off, meaning that they functioned more like a light switch than a lock. I would like to ask my noble friend the Minister whether he agrees with GambleAware’s recommendation that the FCA, in its guidance, should require banks to include gambling blockers as standard on debit and credit cards.
The FCA already recognises that all banks’ customers are capable of becoming vulnerable, but it does not recognise that those with a gambling addiction are included in the categories it already recognises, such as those who have a cognitive impairment, low resilience to financial shocks or poor numeracy skills. It is of course very difficult to define what is a gambling addiction, and it also begs the question of how far we want the state to go in protecting us from all the risks we may encounter in our lives. However, the right reverend Prelate’s amendment calls for an opt-in option and therefore has some merit. I look forward to hearing the Minister’s views.
Lord Sikka (Lab) [V]
My Lords, it is a great pleasure to participate in this Bill. I strongly support Amendment 27. In view of the passionate speeches by the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Foster, my contribution will be relatively short, as they have said almost everything that I wanted to say.
In this technological age, it cannot be very difficult for any provider of bank accounts, credit cards, debit cards, store cards and other electronic payment systems to offer customers an opportunity to block payments to certain providers of services. As has already been said, the blockers actually increase consumer choice. The blockers would be of enormous help, as has been said, to those addicted to gambling or other ruinous addictions—of course, gambling is not the only one. It would certainly help their families too, because it would safeguard the family budget, which then cannot simply disappear by the swipe of a card or the click of a computer key.
I would urge that such blockers should be a necessary condition of the authorisation to trade in financial services in the UK. Other regulators, such as the Gambling Commission, should also insist that anybody who is licensed provides such facilities. The blockers obviously would not prevent people from indulging in gambling and other ruinous addictions. Nevertheless, they would really help vulnerable people in our society and I completely support this amendment.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in this group of amendments and I declare my interests as set out in the register. I will speak to a trio of amendments and I will endeavour to do it in a trice.
First, I very much support the intention behind Amendment 16. I ask my noble friend the Minister, over and above what is set out in the amendment, what reports the Government have received of bailiffs entering properties during the Covid period, both in breach of their guidance and the Covid regulations, and what action all relevant authorities will be taking in this respect.
Secondly, on Amendment 26, I very much support my noble friend Lord Leigh of Hurley, who set out the arguments perfectly and succinctly. Would my noble friend the Minister agree that there is clearly a loophole, and what will the Government do effectively to close said loophole?
Thirdly, and perhaps most importantly, I give full-throated support to Amendment 37C, so perfectly introduced by my noble friend Lord Young of Cookham. It seems one of those amendments where, for want of a small legislative change, a huge material difference could be made to so many people’s lives. It is a funds-releasing, anxiety-relieving amendment. I ask my noble friend the Minister: if not this amendment, will the Government bring forward one of their own at Third Reading? If not this Bill, what Bill?
Lord Addington (LD)
My Lords, while sitting here listening to this debate, I could not help but get the feeling that there had been a drawing of lots in the Government Whips’ Office when they were preparing to take on these amendments and the noble Lord, Lord True, lost. All of the issues here are good and real issues. If these amendments were accepted and brought forward, they would probably make our lives that little bit better.
Before I bring my full attention to the amendment brought forward by the noble Lord, Lord Young, I will say that we deserve to hear at least about a plan of action to deal with all these issues. If the Minister cannot provide that now, giving some idea of when they will be considered is very important. They are real issues; please deal with them. That is what we are here for. The only justification for us being in this Chamber is to deal with them, so can we hear about that?
When the noble Lord, Lord Young, first raised the issue in his amendment, I said that he had put his finger on an absurdity. I have not changed my mind. I think that the noble Lord, Lord Blunkett, basically said that the cock-up school of history is alive and functioning. The rest of us who were in Parliament at the time and involved in those Bills take our share of the blame because we did not spot it either. Can we change this?
The noble Lord, Lord Young, made about half a dozen arguments in his speech for why the amendment should be accepted or acted on. The most convincing one was that, for a comparatively modest sum of, say, £3,000, you have about four or five days-worth of paperwork. That is paperwork that you might not be very good at and which you might have to repeat, over and again, to get the money out—and usually the person doing the paperwork to get the money to support the child put that money in the bank in the first place. This is beyond belief; it is Kafkaesque. Will the Minister make sure that the people who put the money in to support a child can take it out to do so? What method are the Government taking? The law does not allow it at the moment, but we change the law all the time—we are doing it now. Please can he give us a plan of action on this?
The noble Lord, Lord Young, said that he did not expect to vote on this. The ball is of course firmly in his court on this one, but, dependent on what the Minister says, I hope the noble Lord will decide whether that is the correct approach here. I know it will annoy the Whips if we have a vote on this, but if the Minister cannot give him something that is at least in some way positive, I will certainly herd my colleagues through to support it.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I will speak to Amendment 37C in this group. I declare that I chair the National Mental Capacity Forum. I hold the noble Lords, Lord Young of Cookham and Lord Blunkett, in the highest esteem, and I am most grateful to the noble Lord, Lord Young, for the time he spent talking through my reservations about this amendment as drafted.
The discussions relating to child trust funds have come about through the best of motives: trying to ensure that money can be accessed easily when a fund matures if the person for whom the fund was established lacks the mental capacity to access it and manage their money. Around 55,000 funds matured monthly since last September. To date, about 7,000 of these are held by young adults aged 18 who lack mental capacity. Some 80% of these funds are for amounts of under £2,000. The Court of Protection processes may seem daunting to many parents and so, in trying to resolve this, a process has been developed by some but not all providers.
As the noble Lord, Lord Young, said, the amendment is modelled on the 1997 Law Commission report that was behind the original Mental Incapacity Bill—a Bill which did not proceed. That report suggested a small payment scheme, which was not progressed because there were concerns that it could be stretched more widely to cover other financial products and that it would not respect the requirement that there should be proper judicial authority to act on behalf of another person in handling their affairs if they have not been able to designate that authority themselves.
Following the important work of noble Lords on child trust funds, the Court of Protection has been looking at its rules processes and is due to meet shortly, on 20 April, to explore ways to simplify the application forms. It is important to note that the application fee has already been waived and that any form marked for urgent business goes before the urgent business judge on the same day. There is no need for a solicitor to be involved, and there have been seven applicants to date whose applications have gone through successfully without using a solicitor, so there is no need for any costs for the applicant, nor should there be delays. I hope that the noble Baroness, Lady Altmann, will assist Mikey’s parents to apply under the urgent provision, as it should be processed very rapidly as he is terminally ill.
However, there is a fundamental principle here. One person cannot access another adult’s money or possessions without their permission, or, if the person lacks capacity, can access funds only with legal authority. Although this money is called a child trust fund it is not accessible to the person until they turn 18—in other words, when they become in law an adult. That means that we are talking about somebody else accessing an adult’s money. The role of the Court of Protection is to ensure that the money accessed is limited to this fund and possibly other clearly identified funds that are the property of the 18 year-old, and to guard against misappropriation of the money.
Let us take the case of a child who has been hit by a car and sustained catastrophic head injuries. On turning 18, the trust fund money is there and there may also be a settlement for very large sums in compensation to provide for their future care. I do not see how this amendment, as drafted, would prevent larger sums than the trust fund being drawn in, and therefore how it could prevent larger sums of money being misappropriated and used by others for purposes other than the care of the person. The amendment would not restrict who can apply for this money as it does not specify that only parents or responsible carers can apply under the proposed scheme. Could cousins, siblings or others who pretend to have the person’s interests at heart access money?
Another difficulty is what happens if the person later regains some capacity. Take, for example, a person with a catastrophic head injury acquired at the age of 16 and who, with rehabilitation, may have regained enough mental capacity by the time they are 20 or 21 to be able to be involved in their own financial decisions, particularly over smaller sums of money.
Sadly, these instances that we have heard about and that have received press coverage should never have happened in the first place. In my role as chair of the National Mental Capacity Forum I have been working to raise issues around transition, highlighting the need for planning to happen when a young person is in their mid-teens, so that when they have reached the legal age of majority at 18, everything is in place to allow future decision-making to happen, with the oversight of the Court of Protection through a court-appointed deputy.
This amendment would affect Scotland and Northern Ireland, as well as England and Wales. Therefore, I wonder what discussions have happened with the devolved Governments over this amendment. Across the UK, young people, on turning 18, rightfully have access to their trust fund, currently under judicial oversight it they lack capacity.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady Finlay of Llandaff, and her—as always—expert contribution, which has made me think again about that amendment. I put my name down for this group chiefly to speak to Amendment 27, in the name of the right reverend Prelate the Bishop of St Albans, also signed by the noble Lord, Lord Sikka, and me. The reasons for this amendment have been broadly canvassed, notably by the noble Lord, Lord Foster of Bath, well known for Peers for Gambling Reform, which I was recently pleased to join. I do not feel that I need to make this case again, but there is a useful reflection to make—drawing also on what the noble Baroness, Lady Finlay, just said, and sharing the frustration of the noble Lord, Lord Addington—about how, in this group of apparently disparate amendments, we see a real problem in the nature of our lawmaking in the difficulty of making progress. What we have here, as we had earlier with the sharia-compliant student loan, are apparently small, easily fixed issues, on which some very expert, knowledgeable, extremely capable people have spent years working, without progress being made. This particularly applies to Amendment 16 in the name of the noble Baroness, Lady Meacher. Something clearly needs to be tackled and dealt with, and it looks simple; we need to see regulation, oversight and protection, but it is not happening.
In the interstices of what has been a rather hectic day for me, I was looking at the Law Society briefing for the National Security and Investment Bill, which is coming tomorrow. The Law Society does not have any party-political issues to raise on that, but it has looked at the Bill and has seen that we are creating huge problems. Somehow, our legislative process is not identifying issues. With commendable frankness, the noble Lord, Lord Blunkett, earlier identified his role on the issue that arises in Amendment 37C. Somehow, things are not coming together and delivering us workable laws. We need to think, as a House and as a society, about how we can end up getting more workable laws. I suggest that we need more co-operation, listening and input at the early stages, rather than a sudden decision by the Government to do something, which then results in a Bill.
We are not sure that there will be any votes on any of these amendments, but we clearly need action and I commend to your Lordships’ House the need for action on all of these, particularly Amendment 27, to protect vulnerable people.
Lord Naseby (Con) [V]
My Lords, Amendment 37C is an issue of fundamental importance to young people who are disabled and have taken up child trust funds. The amendment before us is key. We had a thorough and competent speech from my noble friend Lord Young of Cookham, but I have just listened to another speech from the noble Baroness, Lady Finlay of Llandaff, and we have to find common ground between the two.
I declare a past interest as, when I joined the Commons in February 1974, I took an interest in the friendly society movement, which I continued until I left in 1997. I was then asked to become chairman, which I was from 1998 to 2005, of the Tunbridge Wells Equitable Friendly Society. That interest was declared at that point. In the days of the child trust fund, the Tunbridge Wells Equitable Friendly Society traded under the brand of the Children’s Mutual. It is my recollection that the Children’s Mutual was a brand leader, and we put a huge amount of effort into it. We liaised with the authorities involved at the time—not just the Government of the day but others. I am saddened and disappointed that, somehow or other, this issue got through the net. Unfortunately, the coalition Government tragically decided—George Osborne was one of the key players, of course—to wind it up. That was a great error, in my judgment.
We come to the current position, and I am pleased to hear the industry’s concerns, but I am disappointed that there has been no mention of the Association of Friendly Societies. I am sure that the majority of child trust funds were sold by the friendly societies, and I would advise those involved to make sure that the Association of Friendly Societies is involved now. On my own initiative, I will contact the Tunbridge Wells Equitable Friendly Society to suggest that it helps and is involved.
I am not sure why we have the same problem with junior ISAs. I declare an interest here, because I contribute to the junior ISAs of my four grandchildren, who are eligible. I am disappointed, although I was not involved in the legislation on junior ISAs in depth, that the same problem appears. I do not want to add to the concerns of my noble friend on the Front Bench, but, until recently, a large number of grandparents had been buying National Savings certificates, and I wonder whether the same problem is lying there and has not been raised by anybody else.
This is a serious problem. I have faith in my noble friend on the Front Bench, and I hope that he and those involved will look at it seriously. If there is anything that I can do to help resolve this issue, I will do my best to, because it is important.
Lord Lucas (Con) [V]
My Lords, I shall speak to Amendment 16 and I thoroughly support its intent. I have been chair of the Enforcement Law Reform Group for more years than I care to remember, and for all that time I have been aware that every side of the industry wants statutory regulation. It is not a suitable case for voluntary regulation. You need the powers that go with being set up by statute to deal with all the difficulties and conflicts that are inherent in the business of getting money out of people who do not want to give it to you.
I fully understand the Government’s caution about the drafting of the amendment, but I very much hope that everyone involved in it will hold their feet to the fire to get a suitable alternative through as soon as possible. I have one piece of advice for the Government on the amendment as drafted. It is important that whatever we create can bite on creditors. A lot of the problems in this industry have their roots in the delinquency and bad behaviour of creditors and in the disorganisation of the systems that they operate. The privilege of being able to use a bailiff should be granted only to creditors who are well set up, who have done their preparatory work, who know who is vulnerable, who have found out the right addresses, who have properly offered payment holidays or plans before involving the very expensive, onerous and sometimes distressing option of a bailiff.
When we come to have this in statute, we need some way in which a local authority, for instance, which is trying to recover debt due on council tax must demonstrate that it has done what it should in order to be allowed to use the bailiff system. There may be some other way of doing it—but not to have that connection through to creditors and think that you can regulate just by putting pressure on bailiffs would be a considerable mistake and would, in the end, result in the system not working.
Baroness Kramer (LD)
My Lords, I think my noble friend Lord Addington put his finger exactly on the problem here. These are a series of amendments, all of them good and strong, that tackle really significant issues that seem to affect a particular selection of our population who find themselves constantly recognised but pushed into the long grass, so that we do not get regulation of the underlying problem. I hope that today we can collectively as a House ginger up the Government to say that this really must be dealt with—not just given to working groups or consulted on yet again but put on a track to get resolution quickly.
On Amendment 16 in Grand Committee we discussed bailiffs and the need to improve their behaviour and get it within the right statutory context, so I will not add more, other than to say that with Covid and the consequences for so many people who will find themselves out of work or in debt, this becomes more urgent than ever. The noble Baroness, Lady Meacher, should know that, if she finds an appropriate vehicle, we would be very willing to support on this. It must be dealt with. It would be lovely if it were in the form of a government amendment, but somebody will have to move on this very quickly or a lot of people will be paying a sad price.
On Amendment 26, in the name of the noble Lord, Lord Leigh, sometimes a personal experience leads to identifying a real problem, and he has put his finger on another problem. If I were a regulator, I must say that anyone who could get my attention and show me that we are getting abuse and misbehaviour within the financial services sector ought to be welcomed. If the definition of eligible customers makes it difficult or impossible to use as broadly as it should be, a look at that definition is urgent. If I were the ombudsman or the FCA, I would certainly want to know that someone was out there attempting to scam the public. I can assure the Government that the scammers know all the loopholes and weaknesses in the definitions, so plugging them as rapidly as possible makes obvious sense.
Lord Tunnicliffe (Lab) [V]
My Lords, the issues covered by this group are wide-ranging in nature but all important. Amendments 16 and 25 return to issues that we explored in Grand Committee, while the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Young of Cookham, have found interesting ways to bring important issues to our attention.
The noble Baroness, Lady Meacher, made a convincing case for the need to reform how bailiff activity is regulated. One interesting thing about the Covid-19 pandemic has been its ability to make us look at long-standing issues in a new light, and issues of personal debt are no exception to that. It is promising that both sides of the argument—bailiffs themselves and charities providing advice to those with problem debt—seem to agree on the need for change. This is not a common occurrence, and it provides an opportunity that I hope the Government will seize in the weeks and months ahead.
I know that my noble friend Lord Stevenson, working alongside the noble Baroness, Lady Meacher, has been pushing on this in the background in the hope that the Ministry of Justice can provide a more meaningful response than we had in Grand Committee. What we really need is for the department to identify an appropriate legislative vehicle for this matter. We very much hope that this will be signposted in the document promised for later this year.
Amendment 26 seeks to broaden the scope of the Financial Ombudsman Service to allow potential customers to submit complaints against financial services firms. This is a fair question to ask: clearly the noble Lord, Lord Leigh, is not satisfied with the previous answer to it. On day 1 of Report, we passed an amendment that would enable the FCA to impose on regulated financial services entities a statutory duty of care towards customers. We hope that, despite their misgivings, the Government take this forward, as we believe that new consumer-centric working practices could negate the need for a proportion of complaints to the ombudsman.
Amendment 27, tabled by the right reverend Prelate the Bishop of St Albans, is not only an impressive interpretation of scope, but raises important questions in relation to the tools available to those experiencing issues with problem gambling. Labour has previously been critical of the Government’s lack of urgency in launching reviews and introducing legislation and regulation. That process is now under way—indeed, I believe that the initial call for evidence has now closed. It is clear to all colleagues that the current regulatory regime has serious shortcomings. Without seeking to pre-empt the outcomes of the DCMS-led review, I hope that the Minister can demonstrate that the Government will take the right reverend Prelate’s suggestions on board.
Finally, Amendment 37C raises what looks to be an important issue in relation to certain payments made from child trust funds or junior ISAs on behalf of children with learning difficulties. I do not believe that we have touched on this issue previously, so I hope that the Minister will commit to a future discussion with the noble Lord, Lord Young of Cookham, and my noble friend Lord Blunkett.
Lord True (Con)
My Lords, this has been a long and important debate, which I found to be of great interest. As many will know, I am not responsible for the grouping of amendments. That is not a matter for the Executive; it is a matter for the House. However, following on from the noble Lord, Lord Addington, I feel a little like the “MasterChef” hopeful who presents his dish to the judges and is told that there are too many things on the plate. There are different issues conjoined here: the important issue of the behaviour of bailiffs—as, being an old boy, I still call them—credit card applications, gambling protection and child trust funds in the case of incapacity. It is a diverse group of amendments, but they all relate to the protection and fair treatment of consumers and, as we have heard today, of the most vulnerable people in society. I will try to respond to each of them, but I am not certain that I will be able to satisfy every hope of everyone who has spoken. I hope, however, because I am confident from the discussions that I have had with colleagues in different departments—I come as an outsider to this—that I can assure your Lordships that my perception is that the Government are positively engaged on all these fronts and are listening, have listened and will listen.
Amendment 16, from the noble Baroness, Lady Meacher, and others, would commit the Government to making the activities of enforcement agents—also known as bailiffs—in relation to taking control of goods a regulated activity under the Financial Services and Markets Act 2000. The Government understand the importance of debts being enforced in a fair and proportionate manner. Since Committee, I have had the great advantage of speaking directly to the noble Baroness and others, including the noble Baroness, Lady Morgan, and the noble Lord, Lord Stevenson of Balmacara, along with my colleague, my noble friend Lord Wolfson from the Ministry of Justice, which is the department with responsibility for the regulation of enforcement agents. I know that my noble friend Lord Wolfson and the Minister of Justice have heard the arguments of noble Lords. I can reassure the House that the Ministry of Justice is currently reviewing the case for strengthening the regulation of the enforcement sector. As we have heard, that would be widely welcomed, as representatives from the enforcement and debt advice sectors have united to form a working group, led by the Centre for Social Justice, to consider how an independent oversight body could raise standards in the sector. The Government welcome this.
The Ministry of Justice recognises the important momentum of this development and looks forward to continuing to engage with the working group on its proposals for an enforcement conduct authority. The Ministry of Justice has also assured me that it would want to work closely with the working group to monitor the operation of the enforcement conduct authority and will review its operation within two years. At that point, it will consider whether there is a case for legislation to provide statutory underpinning to the body if necessary, as some noble Lords have argued. I stress that the Ministry of Justice will look to work with the enforcement authority as soon as it is established to assess what can be done to improve standards on the ground. It does not see the two years as a target: it would be willing to review the authority operation and consider legislation before the two years if necessary. I hope that that has reassured noble Lords that the Government take this offer from industry very seriously.
On the amendment itself, it would by default require the FCA to act as the regulator of enforcement agents unless its functions were delegated to another body within two years following the passage of this Bill. As I set out in Committee and in the valued exchanges that I have had with noble Lords involved, I think that there is now agreement—indeed, that has been expressed by the noble Baroness, Lady Meacher, and others—that the FCA would not be the right body for such a function. I must underline that the Government’s view on this will not change between now and Third Reading. We do not believe this Bill to be the right legislative vehicle for any changes to the regulation of enforcement agents. I hope that, having heard the assurances that I and my noble friend Lord Wolfson have given, noble Lords will withdraw the amendment and continue to engage with the Government as we go forward.
My noble friend Lord Trenchard asked about the use of the Corporate Insolvency and Governance Act moratorium to give UK companies a formal breathing place in which to pursue a restructuring plan in case of indebtedness. The power is working as intended. A handful of firms have already successfully applied to use the moratorium under the Act. As government support and regulatory easements come to an end, we expect the number of firms using the moratorium to increase. The new restructuring plan is also being used to good effect with Virgin Atlantic and other large firms using the new tool to recapitalise balance sheets.
Amendment 26 from my noble friend Lord Leigh of Hurley seeks to expand the jurisdiction of the Financial Ombudsman Service to include potential customers. I am grateful to my noble friend for his characteristic persistence on this important issue and I know that he is keen to make sure that the regulatory system ensures that others are not faced with the same potential risk of fraud that he experienced. As I sought to reassure noble Lords in Committee, it is already the case that both customers and potential customers of a firm can seek redress through the FOS scheme under the FCA’s existing rules, notably rules in the FCA dispute resolution handbook.
If we have understood the specific case correctly, my noble friend was the unfortunate victim of attempted fraud and did not intend to be a customer of the firm. He was therefore not a potential customer as defined by the relevant rules that cover people seeking to be a customer. As I said in Committee, I assure the House that had this incident led to financial loss or to my noble friend being pursued for a debt that was not his, he would have had recourse to the FOS and been supported by the current regulatory framework.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I have received one request to speak after the Minister from the noble Lord, Lord Young of Cookham.
Lord Young of Cookham (Con)
My Lords, I thank my noble friend for stretching the constraints that we understand are forced on him as far as we could reasonably expect. I ask him, without trampling on the independence of the judiciary, to convey to the Court of Protection before the next meeting the strength of feeling on all sides of the House about the need to streamline, accelerate and simplify the process.
In not ruling out legislation, does he understand that, in the next Session, if I, and others who have been good enough to speak, believe that progress has not been sufficiently speedy, we will be back with the first possible legislative vehicle to press the issue again, having taken on board some of the reservations expressed during the course of this debate?
Lord True (Con)
My Lords, I am confident that your Lordships’ Official Report is breakfast-time reading for every member of the Court of Protection, as indeed for every other citizen in this kingdom. I assure my noble friend that we will make sure that all those interested are made aware of the arguments that he and others have put before the upcoming meetings that have been referred to.
On going forward, I assure my noble friend that the Government will be happy to provide updates on progress on this matter to Parliament. We are very happy to continue the conversation with him, particularly on the issues that he has just raised.
Baroness Meacher (CB)
My Lords, I thank the many noble Lords who spoke so powerfully in support of Amendment 16. I also note the powerful speeches in support of the other significant amendments in this group, as has been pointed out. I reassure the noble Viscount, Lord Trenchard, that, in fact, we are very clear that the Financial Services Authority is not the right vehicle to become the regulator for the enforcement industry—we made that very clear to Ministers in our meeting, as the Minister knows, and I tried to make that clear in my speech. I am also very grateful for his response to Amendment 16 and the other amendments in the group.
Of course, the Minister will not be surprised that the many people involved in Amendment 16 will continue to work with the noble Lord, Lord Wolfson, and others to try to achieve statutory underpinning for the enforcement regulator from the start because the industry regards this as absolutely essential. We will look to the PCSC Bill as a possible vehicle for that. On that basis, I beg leave to withdraw my amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
We come now to the group consisting of Amendment 17. Anyone wishing to press this amendment to a Division should make that clear in the debate.
Amendment 17
“Bills of Sale Act 1878 and Bills of Sale Act (1878) Amendment Act 1882
(1) The Bills of Sale Act 1878 and the Bills of Sale Act (1878) Amendment Act 1882 are repealed.(2) In consequence of the repeals made by subsection (1), the following are also repealed—(a) the Bills of Sale Act 1890;(b) the Bills of Sale Act 1891;(c) section 23 of the Administration of Justice Act 1925;(d) in Schedule 11 to the Constitutional Reform Act 2005, in paragraph 4(3), the entry relating to the Bills of Sale Act 1878;(e) in Schedule 13 to the Tribunals, Courts and Enforcement Act 2007, paragraphs 17 to 19;(f) in Schedule 9 to the Crime and Courts Act 2013, paragraph 15.”Member’s explanatory statement
Bills of Sale are mainly used for “log book loans”, one of the last sources of high cost credit. They are governed by two Victorian statutes which the Law Commission recommended in 2017 should be repealed. This amendment is to further probe the Government's plans to review that recommendation.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I am speaking to Amendment 17, which has been retabled in the same form in which it appeared in Committee. I am grateful to the noble Baroness, Lady McIntosh of Pickering, for her support, and I look forward to her contribution and that of the noble Lord, Lord Holmes, in due course. I also thank other noble Lords who have spoken on various amendments we have considered over the passage of this Bill that all relate to the devastating impact that high-cost credit can have on those who borrow from such providers. We are gradually reducing the number of these providers, which is a good thing, but we still need initiatives for the growth of low-cost credit sources, which are urgently needed to replace them.
Baroness McIntosh of Pickering (Con)
It gives me great pleasure to follow the noble Lord, Lord Stevenson of Balmacara, and lend my support, with my co-signing, to an important follow-through from the Law Commission’s conclusions and recommendations. I echo the remarks I made in my support in Committee, and I believe the contribution from the noble Lord, Lord Stevenson, has been modest today. We are seeking reassurances, and I echo his concern about a definitive timescale.
It is interesting to note, as a non-practising Scottish advocate, that bills of sale do not apply in Scotland, so the Act does not extend to Scotland, and the provisions only really apply to England and Wales in this regard. Bills of sale, being mainly used for logbook loans, relate mostly to vehicles. But this is an opportunity, in supporting the amendment before us this afternoon, to probe my noble friend and the Government a bit further about what their plans are to review the recommendation.
Law Commission reports do not come along that often, and they come along often at the invitation of the Government. I would like to ask my noble friend about his intentions to give effect to the recommendations of the Law Commission report of 2017. In the consultation paper, it was proposed that the Bills of Sale Acts should be repealed in their entirety and replaced with new legislation to regulate how individuals may use their existing goods as security while retaining possession of them. Out of the 32 consultees who expressed their views, 24—75%—agreed to that.
I entirely endorse the Law Commission’s opinion that:
“The Bills of Sale Acts are written in obscure, archaic language, using words such as ‘witnesseth’ and ‘doth’.”
That sounds a bit like “the Leith police dismisseth us”. In the interests of modernising the legislation and making it more transparent, the purpose of Amendment 17 is entirely clear, and I take this opportunity simply to nudge and press my noble friend on what the Government’s intentions are now, four years on from the Law Commission’s recommendations.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow my noble friend Lady McIntosh, and to congratulate the noble Lord, Lord Stevenson of Balmacara, on all his efforts in this respect. The Law Commission’s recommendations seemed pertinent and on point in 2017; four years on, they seem similarly pertinent and on point. Will my noble friend the Minister set out the pathway and the timetable for consideration of those arcane statutes, and tell us what issues and other legislation, which he alluded to, may also be under consideration along that pathway?
Baroness Kramer (LD)
My Lords, I shall be extremely brief. It is absolutely clear that bills of sale legislation is fraught with problems both legally and practically, including allowing goods to be repossessed on a single default, and giving no protection to purchasers who unwittingly buy goods subject to bills of default. The Government promised us reform, and they had a draft Bill from the Law Commission in 2017, but then they changed their mind and decided not to legislate. If they can change their mind once they can change it twice, so I hope they will now change their mind again, and take action.
Lord Tunnicliffe (Lab) [V]
My Lords, I shall be brief in responding to the amendment, which was ably introduced by my noble friend Lord Stevenson of Balmacara. We are grateful to the Minister and officials for their time discussing this and other consumer issues during the passage of the Bill. Those meetings have been useful, particularly for better understanding the numbers of people affected by financial agreements enabled by the antiquated bills of sale Acts referenced in the amendment. We understand that the Government cannot simply accept the amendment, because of the complexity of the issue and the scope for unintended consequences. Normally we would roll our eyes on hearing that phrase, but, as my noble friend noted, this amendment was tabled as a means of starting a conversation. We hope the Minister can give a strong commitment from the Dispatch Box that the Treasury will undertake a proper review of this part of the credit market, and will have regard to the earlier Law Commission recommendations when deciding on a policy response.
Lord True (Con)
My Lords, again I thank all those who have spoken in this slightly shorter debate. I thank the noble Lord, Lord Stevenson of Balmacara, very much for his continued engagement with all aspects of the Bill and with the underlying issues of credit—on which he has long been such a distinguished advocate—and for his interest in this issue. I hope I will be able to give him an assurance that he will find satisfactory.
First, however, I must respond to my noble friends Lady McIntosh of Pickering and Lord Holmes, who asked about the Law Commission report. The noble Baroness, Lady Kramer, also alluded to it. I set out in Committee the reasoning behind the Government’s decision not to take forward their proposed goods mortgages Bill, which had followed from the Law Commission report, in 2018. That Bill would have repealed the bills of sale Acts and replaced them with a new goods mortgages Act, and it was the result of the Law Commission’s report on bills of sale, to which my noble friends referred.
However, when the Government consulted on the proposed goods mortgages Bill, the consultation responses—not all of them, I confess, but the serious responses—showed that while there was broad support for the proposed approach set out in the Bill, some stakeholders raised significant concerns about the degree of consumer protection afforded by the proposed regime. Furthermore, there was a risk that a more modernised, streamlined regime for consumers could lead to more consumers using goods that they already owned as security for a loan, which is inherently a higher-risk form of borrowing. Given the concerns raised in the consultation and the shrinking size of the market, the Government decided not to take forward the goods mortgages Bill. Still, I highlight again that the use of logbook loans has fallen substantially and continues to decline: the number of bills of sale registered at the High Court has fallen from 52,000 in 2014 to just 3,758 in 2020—and a little higher the previous year. Obviously, we will watch this figure.
A number of other points were also raised in Committee. The noble Lord, Lord Stevenson, raised the cost of logbook loans. It has been suggested that some of these loans have very high interest rates. There is already a power for the FCA to cap the cost of all forms of credit, including logbook loans. It will use that power where it thinks it is necessary to protect consumers. Most recently, it capped the cost of rent-to-own products in March 2019.
My noble friend Lady McIntosh questioned in Committee why a model that used hire purchase could not be used for logbook loans. Hire purchase is a financing option that allows borrowers to hire a car and then gives them the option to buy it by the end of the contract. This model would be inappropriate for borrowers who already own their vehicle, as ownership of a vehicle should automatically revert to the borrower when they have repaid their loan.
I turn to the amendment itself. As I explained in Committee, it is likely to have unintended consequences that could lead to a greater risk of detriment, particularly to borrowers. The repeal of the bills of sale Acts would not necessarily prevent this type of credit being offered. Rather, it would remove the statutory framework that governs this type of credit, which could inadvertently lead to a greater use of such lending through the removal of some of the frictions to which some who have spoken have alluded—“frictions” is a polite Treasury word—that the bills of sale Acts impose. Given that, the Government do not believe that repealing the bills of sale Acts would be an effective way of increasing protection for borrowers. Furthermore, the Government do not believe that it would be proportionate to introduce new legislation to specifically implement a replacement for the bills of sale Acts, given the continued decline in their use.
However, I recognise the strength of the feelings of the noble Lord, Lord Stevenson, on the subject of logbook loans, and I have heard the echoes that his resounding voice has provoked. I understand that he wants to know what plans the Government have to review the regulatory treatment of logbook loans. I have had the opportunity to discuss this issue with the noble Lord. As we look beyond the Covid-19 crisis, the Government are keen that work should progress to consider reform of the broader consumer credit regulatory framework to ensure that it remains fit for purpose. That is a substantial piece of work. As part of it, I can give the noble Lord the specific assurance that he asked for: the Government will consider the extent to which that regulatory framework can provide robust protections for logbook-loan borrowers and third parties who may unknowingly buy a car subject to a logbook loan. On that basis, I hope the noble Lord will feel able to withdraw his amendment. I have every confidence that, even if he does, he will continue to knock at the Government’s door.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank all those who have spoken on this amendment and those who spoke in Committee on this issue. It must be obvious that I think the case for reform here is unanswerable and that we need to move forward as soon as we can. The Minister made a kind reference to my assiduous pursuance of this over the last four years; I can assure him I have only just warmed up. I have plenty more capacity now that I have stepped back from the Front Bench and this remains one of my main targets—so I will be calling again in the near future.
I was slightly struck by the rather defensive notes in the early part of his speech, because I do not honestly think there is much you can say about bills of sale other than that, ironically, when they were first introduced—although not in Scotland—they were in essence an early form of consumer protection. What has gone wrong, of course, as he mentioned, is that the considerable collateral damage to subsequent purchasers of goods subject to bills of sale has been devastating for many people. Yes, it is true that the numbers are down, but I do not buy the argument that it is okay to let this egregious behaviour carry on simply because there are not very many. Every single person affected by this is affected in a most extraordinary way, and it should not happen.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
We come now to the group beginning with Amendment 18. Anyone wishing to press this or anything else in the group to a Division must make that clear in debate.
Amendment 18
“Undertakings from regulators
The FCA and the PRA must each give and publish the modes and timing of the provision of information and responses to Parliament concerning their activities and rule-making.”Member’s explanatory statement
This amendment would require the FCA and PRA to give undertakings about liaising with Parliament.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I have tabled three similar amendments in this group, with increasing levels of requirements. Although they were drafted before we had the letters from the regulators, the correspondence from the Minister and today’s letter from the Economic Secretary, the amendments still have currency. Along with other amendments in this group, they allow us to explore current provisions and the adequacy of assurances regarding Parliament’s rights. I remain concerned that there is not even the slightest recognition on the face of the Bill that increased scrutiny must come with wider powers for the regulators. It requires very substantial on the record commitments to make up, even temporarily, for that absence.
In Grand Committee we debated amendments that covered wider aspects of Parliamentary scrutiny than just rule making, as we did on day one of Report, but the heavy focus on rule-making powers is because they are changing right now. EU democratic scrutiny is gone, and the middle statutory instrument layer and formal parliamentary scrutiny are being diminished or removed. Therefore, Parliament’s role needs shoring up. The Minister can be in no doubt about the consensus on that matter, not just in this House but in industry, from replies to the consultation. However, he and the Economic Secretary seem to be maintaining the fiction that, despite the front running in this Bill, change is not actually happening until the end of the consultation.
In the recent reply to the noble Lord, Lord Tunnicliffe, which Labour colleagues have shared with us, the Minister states the caveat that the primary purpose of consultations is to consult industry, practitioners and consumers. That caveat further demonstrates why it is very necessary to have Parliament’s role explicitly reserved.
My family of Amendments 18, 19 and 20 is aimed at finding whether there is something that the Government can accept or modify. Failing that, it is a progressive list around which I ask the Minister to specify whether Parliament, including relevant committees of this House, has these rights already, and whether the regulators must co-operate even if it takes more time, effort, appearances and resource than they are used to at present. That is needed because of the significant change that is already happening—and now, not at a future date.
It did occur to me that perhaps it was necessary for there to be at least a line in legislation giving authorisation for regulators to use more resources, or to remove excuses based on resources, and that the Minister might perhaps be tempted by what is the baby of my amendments, or something similar, which requires merely an undertaking from regulators about timing, provision of information and responses to Parliament concerning their activities and rule making. The resources point is not just my concern. A former regulator, albeit not of financial services, has also wondered, in conversation with me, whether there is authorisation to expend additional resource. That concern is further heightened by the Minister’s caveat on the primary purpose of consultation.
So my question to the Minister is: will he categorically say that there is no reason, including that of resources, for the regulators to ration their appearances before committees and other engagements with Parliament? Can he assure us that, even if there is a lot going on, busyness is not an excuse for regulators to delay appearances before committees or to delay provision of information? Indeed, does he agree that it may well be the opposite, and a lot going on can be a reason for additional engagement?
If we look at what is already being front-run, in terms of Basel and investment firms and then, starting in a week or so, an abbreviated consultation on matters relating to the Hill review, with plenty more to follow, it looks as if many, even most, important changes are going to happen well before we get to the end of the review on the future regulatory framework and that moment when it is suggested that legislation concerning Parliament may be appropriate to fit the anointed changes.
If I were a cynic, I would say the Government have conveniently timed all the front running so that the big work is all done before Parliament’s role has been modified to fit—and that is an insult to parliamentary democracy. Therefore, will the Minister confirm that the regulators must provide high-level witnesses and evidence when requested, and not just to committees but also to APPGs and other parliamentary activity that is all part of wider scrutiny? Speakers are provided to industry conferences: why not to parliamentary ones? Is not engagement with Parliament an important part of communication with the public, including in the context of consultations that the Minister has said are aimed primarily at the public, as well as industry?
The second of the amendments adds a list of documents that must be provided to Parliament no later than they are provided to the public. It might seem trivial, but this is saying that Parliament is not just another consultee. The Minister’s caveat says Parliament is not the primary purpose of the consultation: in that case, there is all the more reason why separate engagement must be assured. I am very disappointed that the Economic Secretary has taken a different view by saying that the response could just be in the general consultation response.
My second amendment would also add in that there must be
“due regard to recommendations made by … Parliament.”
This “due regard” is important. It is explicitly said in the letter from the PRA, but it is not explicit in the FCA letter and it is a key commitment sought in the cross-party Amendments 45 and 48. In this matter we all await confirmation from the Minister that the regulators must—I say “must” rather than a conditional “should”—have regard to Parliament’s views. The Economic Secretary seems to agree with this, even if not specifying a dedicated response.
I turn now to my third amendment. This is definitely daddy bear porridge and no doubt too hot for the Government, but it is based on real life and is just a small part of what is in the interinstitutional agreement that I negotiated between the European Parliament and the European Central Bank concerning eurozone bank supervision. Maybe the Minister can confirm whether most of what I suggest does or can already happen, but I want to run through the thinking and culture behind the additional elements.
First, there is
“a principle of openness and sincere co-operation.”
By that I mean not being defensive and saying the minimum that can be said. We all know that there is a great deal of coaching of officials, whether from departments or regulators, before appearing at committees about how to deal with awkward questions and not to say too much. We have all suffered the “talk long, say little and use up all the available time” strategy. That is not openness and sincere co-operation, and there is a culture issue here that needs to change. I am not so naive as to think that it can be changed by a legislative amendment, but I want to make the point for the record that it is an issue.
My third amendment would also add in “regular updates” on principles and the kinds of information and indicators used in developing rules and policies. This would, of course, include policy on supervision and enforcement, as well as rule-making. Here, I want to pick up on another point that the Minister put in his reply to the noble Lord, Lord Tunnicliffe. I will read it because not everyone has seen it. The Minister says:
“And we would be comfortable about agreeing that Parliament has the principal role in terms of the broader matter of scrutiny and oversight of the regulators’ activities”.
The Economic Secretary also states a unique and special role, but we can scrutinise only what we are allowed to access. It is necessary to see the ingredients, not just the baked cake.
During the years that I was immersed in EU legislation, one of the refrains that I constantly heard from HMT and regulators was how the EU Commission and the ESAs were so reliant on information from the UK in order to calibrate rules, and that was why the UK regulators could do a better job on their own for the UK. This information, so it was claimed, was fundamental to rules and therefore it should be sufficiently available to show how the case is made, and confidentially when appropriate. So, do we, Parliament and Parliament’s committees, have access to it?
Confidentiality of data is sometimes used by regulators as a reason to be very approximate in public answers in committee. It has been my experience that, once that excuse is removed because a private briefing can be requested, it tends to be used less as an excuse during the public stage. Will the Minister therefore confirm whether all this kind of information is within the rights of Select Committees in this House, as well as the Treasury Select Committee, to require, and if not, why not?
Finally, although it is not in the amendment, can the Minister confirm that Ministers must attend committees when requested? Much is made in the future regulatory framework consultation about regular accountability of Ministers; it is at the top of page 27, for example. My recent experience on the Economic Affairs Committee has been of difficulty in getting timely—sometimes any—attendance from Ministers.
Everyone is trying to do a good job; that is what these and other amendments in this group are trying to ensure. But if Parliament is restricted from doing a proper job on all the front-run legislation, responsibility for that from this Bill forward lies clearly at the feet of the Minister and the Government. I beg to move.
Lord Blackwell (Con) [V]
My Lords, I should like to speak to Amendment 37A in my name and remind the House of my former interest as chairman of a regulated bank until the beginning of the year.
As the noble Baroness, Lady Bowles, set out, within the group there is a range of amendments that seek to serve the same purpose and there is a lot of common ground, as indeed there is in the letter of the Economic Secretary that was circulated today. All the amendments reflect a broad consensus, as expressed in previous stages of the Bill, that with the new rule-making powers post Brexit, there is a need to establish more formal parliamentary scrutiny. There has been consensus in the debate that scrutiny requires a committee charged with that role and appropriate technical support. I and others have made the case that that should involve a joint committee of both Houses, although that is not for this legislative stage.
There is also agreement in all these amendments that where regulators precede their regulation with a public consultation, the information should be provided to Parliament at the same time to allow time for it to comment and its views to be taken into account before the rules are finalised. There is also common ground that regulators should take note of Parliament’s views and respond in some form.
I therefore have some sympathy with the amendment, and Amendments 19 and 20, moved and spoken to by the noble Baroness, Lady Bowles, but I prefer mine because those amendments, particularly Amendment 20, are overly prescriptive on the nature of the information and the interaction between the regulator and a parliamentary committee. It should be up to the committee charged with this responsibility to set out exactly the information it wants and how it should interact, as a parliamentary, rather than legislative, matter.
My amendment also adds the requirement for Her Majesty’s Treasury to set the regulations through secondary legislation, to take note of the parliamentary scrutiny and to bring forward statutory instruments to change the secondary legislation that provides the legal framework for rule-making, which may be a necessary response to the comments made. That is also fully consistent with the Economic Secretary’s letter.
The big divide is between my amendment and Amendments 45 and 48, which introduce a requirement for parliamentary approval of rules before their introduction, other than in exceptional circumstances. Such a requirement would fundamentally change the relationship and role of regulators, originally established as independent, apolitical experts acting under parliamentary laws. Of course, regulators should be subject to scrutiny in their role but for Parliament to approve rules before they are enacted removes the independence of the regulators, effectively thereby making Parliament the operational rule-maker and those rules more subject to political views and intervention. We do not impose that ex-ante approval of rules on any other regulator in any other sector, so far as I know. I cannot imagine that our expert regulators in the financial services sector would be comfortable operating under those straits, whereby anything they did had to be pre-approved by Parliament.
The case for parliamentary oversight is unanswerable, but the proper regime is for Parliament to charge the regulators with independently operating the legal framework that it sets up, and then for Parliament to scrutinise how they operate those responsibilities and to change the legal framework if it wants to change the outcome, rather than Parliament seeking to supervise and approve the detailed rule-making on a day-to-day basis. Rather than wait for future legislation, I hope my noble friend the Minister will find it possible to support my amendment. Failing that, I hope the House will clearly reject Amendments 45 and 48 and the huge —and, in my view, undesirable—shift in the relationship between regulators and Parliament that they would represent. I look forward to my noble friend’s response.
Baroness Noakes (Con)
My Lords, I have added my name to Amendments 45 and 48 in the name of the noble Lord, Lord Eatwell. I also support the intent behind the amendments in the name of the noble Baroness, Lady Bowles of Berkhamsted, and I know that she too supports his amendments. As has been said, these amendments concern one of the key issues that emerged during scrutiny of the Bill: the parliamentary accountability of regulators and the scrutiny of their actions. As already noted, there was widespread agreement around the House at Second Reading and in Committee that Parliament should have a role in scrutinising the rules that the FCA and PRA may make under the new rule-making powers created by the Bill.
Of much greater importance will be what happens when the Government expand the rule-making powers of the FCA and the PRA, as they have outlined in their consultation document on the review of the financial regulation framework. What we do in the context of the Bill is clearly important in signalling what we expect in the context of a larger shift in rule-making powers, if that is what the Government decide to do following consultation. This is particularly important because the Government’s analysis of parliamentary scrutiny in their consultation document was not encouraging; it was largely a defence of the existing committee activities in each House, with no regard to the new circumstances created by the extensive new rule-making powers. The Government—somewhat surprisingly, given their excellent Brexit credentials—seem not to have taken on board that the scrutiny context has changed significantly with the repatriation of financial services regulatory powers from the EU. That context should drive how we see the way forward.
Since our debate in Committee, my noble friend Lord Howe has made available to us the texts of letters from the PRA and the FCA which broadly say that they will do whatever Parliament decides, which is only right and proper. I do not think the letters add much to the analysis of the issues we debated in Committee, but they nevertheless demonstrate a constructive willingness to co-operate with parliamentary scrutiny. When my noble friend responded to our debate in Committee, I was not filled with confidence that the Government really understand the dimensions of the issues around scrutiny and accountability in the context of these additional rule-making powers. I have seen the rather late-in-the-day letter from the Economic Secretary which landed in our email boxes this afternoon. I shall be kind and say that the direction of travel is positive, but we have not yet reached a satisfactory landing point for this debate. I expect we will continue to pursue this issue well beyond the passage of the Bill.
As my noble friend Lord Blackwell knows, I do not support his Amendment 37A because it is a rear-view mirror amendment. I strongly believe that Parliament should have the opportunity to get involved with the rules made by the FCA and the PRA in time to influence their final shape. It is not satisfactory to think that ex-post scrutiny is an effective mechanism for parliamentary involvement. I do not believe the independence of the PRA and the FCA is threatened by this intervention in how rules are made, given the context of the very significant new regulatory rule-making powers expected to be devolved to them. That is why I support the amendments in this group in the names of the noble Lord, Lord Eatwell, and the noble Baroness, Lady Bowles of Berkhamsted, which provide a much better basis for Parliament’s future involvement in additional rule-making powers.
Lord Davies of Brixton (Lab) [V]
My Lords, these amendments are all on the same broad theme. As the previous speaker mentioned, there is a broad consensus that something needs to be done to provide a formal role for parliamentary scrutiny in the work of financial regulators. I do not want to detain the House, but I will take the opportunity to emphasise points that I have made at earlier stages. The basic question, to me, is: who regulates the regulators? The question is why we should trust the regulators; the answer is openness and engagement. Clearly, we have a particular interest here but can, I believe, contribute massively to the work of the regulator.
For us to raise these issues is not to question the expertise or good will of the people who serve on the regulators’ boards or work in their offices. It is simply wrong to assume that, once appointed, they can be left to get on with the job. As is apparent in the debate, there is clear consensus about the need for scrutiny. That is not contested. Obviously, there are clear reasons why they would benefit—the expertise of this House is a factor—but my particular concern is to establish systems that minimise the risk of regulatory capture. This is the experience, widely found, whereby regulators tend to become dominated by the interests they regulate and not by public interest.
I emphasise that this is not about corruption; it is more, in my mind, a social and cultural problem. I do not think the concept, in theory, is contested. The answer is to strengthen and develop the widest possible involvement of all sorts of bodies in the work of the regulators. Clearly, Parliament has a particular role and these amendments explore possible approaches to it. I hope the Minister can say a bit more than what was in the letter. Does the Minister consider regulatory capture to be something that occurs, and where the systems that are established address it and minimise the risk?
Lord Sharkey (LD) [V]
My Lords, I will speak to Amendments 18, 19 and 20 in this group. I support them all but prefer the more prescriptive Amendment 20. In these matters, it seems to me that ambiguity is not our friend. Wide latitude in interpretation can easily frustrate intent. As my noble friend Lady Bowles has so forcefully explained, that intent here is to ensure that Parliament has some effective scrutiny role in the activities and rule-making of the PRA and the FCA, by requiring that the information Parliament may need to do this is properly supplied. At present, this is absent or insufficient or likely to be post hoc and ineffective.
This is a specific example of a much larger problem in the relations between the Executive and the legislature. There is an increasing tendency for the Executive to bypass, or try to bypass, Parliament or to reduce scrutiny to formulaic rituals with no real influence on outcomes, such as our SI procedures. The seriousness of this tendency has been commented on fairly widely and frequently in the past few years.
Lord Naseby (Con) [V]
I thank the noble Baroness, Lady Bowles, for raising these issues. All three of the amendments that she has tabled are important. They are to do with the FCA and PRA regulators, and I agree with them. However, I am particularly concerned about the FCA and its linkage to the Financial Ombudsman Service, the FOS, and how that is reported to Parliament. There seems to me a particular concern in this area.
I will take just one key case history. The leading company in the home-collected credit market has been around for 150 years. It has basically produced a credit product of choice for working-class communities for all that time. It is small-scale. It is now suffering from regulatory indifference. There is a model here for home-collected credit that works. It is flexible and forgiving and is the right design for consumers on a low income. The FCA has traditionally supported it and given it a tick all along the line. To put what has happened bluntly, the Financial Ombudsman Service has ignored the understanding of this market, which is part of the consumer credit loan market, and lumped it all together.
The net result is that the FOS is basically taking a summary judgment approach to complaints involving all HCC firms. It is therefore faced with a huge volume of complaints manufactured by the claims management companies. To get round this huge volume, instead of playing its statutory role and looking at each claim on its merits, it is taking a short cut. It is saying, “Okay, we’ll look at 25 properly; anything above that, we won’t”—and so it goes on. That is quite wrong—so wrong that there must be some parliamentary means of ensuring that the FCA carries out its role in relation to what the FOS should be doing, in the knowledge, of course, that the FOS is an independent body. So there is a lack of linkage somewhere in this, which should be another area for parliamentary scrutiny.
That was only a shorthand case history, but it demonstrates that what is behind the amendments tabled by the noble Baroness, Lady Bowles, has great value. I shall think very seriously about supporting them, depending on what my noble friend on the Front Bench chooses to say in his closing words.
Lord Bruce of Bennachie (LD) [V]
My Lords, I am happy to speak briefly to the amendments moved by my noble friend Lady Bowles. I am grateful to her and to my noble friend Lord Sharkey for their expertise both in drafting the amendments and in explaining in detail why it is important for the Government to consider the points behind them.
As a member of the EU Financial Affairs Sub-Committee and, until last month, of the EU Services Sub-Committee, for the last four years, I have been involved with scrutinising the financial services sector. Nobody should doubt the importance of this sector to the UK economy; it is worth reminding people of that, even though this is a technical amendment. I will not rehearse the statistics on the share of the economy, jobs, tax revenues, the balance of payments and so on. Apart from that, it is also the lubricant of the whole economy, and when it goes wrong, a few people make a fortune but most people suffer—some severely.
The regulation of the sector has been subject to the scrutiny of this House and, importantly, as has already been mentioned, the resources of the European Parliament, with British MEPs taking the lead in many instances. My noble friend Lady Bowles was one of the most distinguished of them in that department. Yet the financial crash was the consequence of light-touch regulation and there are concerns that this Bill may be creating a framework for similar mistakes. Certainly, without effective accountability to Parliament there is a danger that regulators might—intentionally, but more likely otherwise—allow financial services to be regulated in ways that could put individuals’ pensions and savings at risk and prejudice the viability of businesses, especially SMEs.
Outside the European Union, it is more important than ever that financial services regulation is effectively scrutinised. Without the resources of the European Parliament, we need a dedicated committee, with the necessary resources and expert support, to ensure that regulation is understood and fit for purpose. We all know that the Government want flexibility in the post-Brexit age in order to compete globally. Of course, that is not wrong in principle, and the sector repeatedly argues that its ability to do so will depend on transparent and effective regulation, because that is what gives confidence to the users of financial services. Get it wrong and, as we stand alone, it could have disastrous consequences.
I also support the argument that requiring financial regulators to engage with Parliament as part of the process of implementing regulation is not obstructive. It actually serves the regulators’ and the Government’s interests much better, because it ensures a better understanding of their purpose and helps highlight whether or not there may be consequences which had not been thought through and which could have negative implications for the sector.
By positive contrast, if the Government, regulators and Parliament can work together as partners, we can consolidate and enhance our world lead. We have been one of the most important financial sectors in the world and we all want that to remain the case, but we have created a challenging and difficult circumstance for ourselves. If we get this wrong, we could suffer a great deal. We need to get it right and it is important that the Government acknowledge that these amendments are designed to support the regulators and the Government in ensuring that our financial sector still has the confidence of the world market it seeks to serve, and is not subject to a closed, unconsulted, unscrutinised form of regulation that, without intention—or maybe with intention, if some Ministers wish to push it—could compromise the integrity of the sector. That will serve nobody’s interests, and I hope the Government recognise that.
The Deputy Speaker (The Earl of Kinnoull) (Non-Afl)
I call the noble Baroness, Lady Bennett of Manor Castle. We are having difficulties with the noble Baroness, Lady Bennett. We shall move to the noble Viscount, Lord Trenchard.
Viscount Trenchard (Con)
My Lords, Amendments 18, 19 and 20 seek to create obligations for the regulators to report to Parliament on what their policies are and what rules they intend to introduce or change. Amendment 18 is the simplest, Amendment 20 is the most prescriptive and Amendment 19 is somewhere in the middle.
These three amendments are all rather strangely worded as undertakings from regulators. Amendment 20 almost implies that it is not taken as a given that there will be a principle of openness and sincere co-operation in assisting a relevant select committee in the conduct of any inquiry. As a member of the EU Financial Services Sub-Committee, and later the EU Services Sub-Committee, I can say that we have often examined senior officers of the two regulators and it has never even crossed my mind that they would not apply a principle of openness and sincere co-operation in giving their evidence.
These three amendments refer to the provision of undertakings from regulators and cover the whole of their activities and rule-making, which is rather too broad and gives the impression that Parliament will act in a direct supervisory role. They do not specify, moreover, how and in what form the undertakings will be given to Parliament.
Contrary to the experience of the noble Baroness, Lady Bowles, the Economics Secretary has been willing on, I think, two occasions in the past year to speak to the EU Services Sub-Committee and has, as far as I know, been very willing to accept the committee’s invitation. Under the excellent chairmanship of the noble Baroness, Lady Donaghy, my noble friend Lady Neville-Rolfe, who is in her place, the noble Lord, Lord Bruce of Bennachie, and I have struggled with these issues and put in a considerable number of hours thinking about them. That experience has certainly informed my remarks today.
Amendments 37A, 45 and 48 seek, similarly, to establish a formal basis for parliamentary scrutiny of the regulators in the exercise of their new rule-making powers under the Bill. I rather prefer Amendment 37A, in the name of my noble friend Lord Blackwell, because that does not require prior parliamentary approval, which would tend to undermine the independence and authority of the regulators.
Amendments 45 and 48, in the name of the noble Lord, Lord Eatwell, and others, are much more prescriptive and beg the question as to precisely how a “relevant” committee of each House, or indeed a joint committee of both Houses, is to be charged with scrutinising proposals. These amendments compromise too much the regulators’ ability to exercise their powers, and there are at present no parliamentary committees that could effectively perform these duties with sufficient resources.
I very much hope the Minister will tell your Lordships the Government’s proposals as to how parliamentary scrutiny of the regulators’ exercise of the delegated powers should be carried out and how they think the present committee structure will be able to cope with that.
Baroness McIntosh of Pickering (Con)
I find I have a great deal of sympathy with the amendments in this group. Before I address them, what has concentrated my mind as to how I will vote is that I understand there is a business Motion to be considered tomorrow that Standing Order 44, that no two stages of a Bill be taken on one day, be dispensed with on Monday 19 April to allow the Financial Services Bill to be taken through its remaining stages that day, and that therefore under Standing Order 47 we will not have the opportunity to amend on Third Reading. If that is the case, we have to decide today how we are going to deal with this group of amendments and will not have the opportunity to return to them at Third Reading. I wonder whether my noble friend the Minister, in summing up, can confirm that my understanding is correct in that regard.
I am always full of admiration for the noble Baroness, Lady Bowles, and support the main thrust of her Amendments 18, 19 and 20. For once, I find myself in good company with my noble friend Lady Noakes; I hope this trend will continue. As yet I have not persuaded my noble friend Lord Trenchard to join us in this venture, but I believe the noble Baroness, Lady Bowles, has identified reasons for us to support this proposal. Of course it is right that the Government should consult industry, practitioners and consumers, but what is missing—it is the major omission addressed particularly by those amendments I am minded to support in this group—is any opportunity for Parliament to scrutinise what will be major changes to our law in this Bill.
I was most interested to hear the noble Baroness, Lady Bowles, ask at the end whether Ministers would attend committees when required. I always thought it was the case that they had to have a very good reason not to attend parliamentary committees, but I stand to be corrected when we hear the summing up.
I could not put it any better than my noble friend Lady Noakes as to why I cannot support my noble friend Lord Blackwell’s amendment: it appears to be looking through the rear-view mirror. If anything, we need the opportunity to look at these regulations and provisions before they come into effect. There was a full complement of signatures so I was not able to sign Amendment 45, but I have lent my signature to Amendment 48.
I believe that, whether we adopt Amendment 45 or 48, or Amendments 18 to 20, they have a great deal of merit. As I said earlier, it is an extraordinary omission for the Bill not to provide for advance parliamentary scrutiny and, in the words of my noble friend Lady Noakes, parliamentary accountability of very important regulators in this field. We need only to look back at the financial crisis and subsequent moves to see how important the role of financial services is in the whole economy.
I conclude by responding to my noble friend Lord Trenchard. I do not believe that it is a very good argument to say that we cannot scrutinise the role of regulators because committees do not have sufficient resources. If anything, that is an argument to have more members. Many of us are not able to serve on committees at this time because they do not have enough places, so, if anything, I would support his call for more resources for these committees to ensure that we can. Whichever amendment we adopt—I am sure that this a subject close to the heart of the Deputy Speaker—we must provide the resources and the time to perform a proper scrutiny role in this House. With those few remarks, I am tempted to support Amendments 45 and 48 or Amendments 18 to 20 this afternoon.
Baroness Shafik (CB) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady McIntosh, and all the previous speakers, who have added a great deal of expertise and judgment to the debate so far. I am grateful for the opportunity to speak on this important group of amendments, which would make sure that there is sufficient parliamentary scrutiny of the regulators, who are the ultimate referees in determining whether financial markets are fair, effective and serve the public interest.
The key question is how to make sure the referees are doing a good job, and there were many excellent proposals put forward today on how to enhance scrutiny, including Amendments 18, 19 and 20 from the noble Baronesses, Lady Bowles and Lady Kramer, Amendment 37A from the noble Lord, Lord Blackwell, and Amendments 45 and 48 from the noble Baronesses, Lady Bowles, Lady Noakes and Lady McIntosh, and the noble Lord, Lord Eatwell. Those amendments all focus on putting in place reporting requirements to Parliament. I want to focus on who is best placed to receive this reporting, given its highly specialised nature.
I realise that this is an issue not of legislation but of how Parliament chooses to organise its affairs. But what we put in legislation also depends on the institutional structures that are in place, and meaningful scrutiny needs to be adequately supported. I support the recommendations of the All-Party Group on Financial Markets and Services, which argues that to enable effective scrutiny of regulators there needs to be a new Joint Committee of parliamentarians from both Houses with a specific remit for financial services, supported by expert advice—something to which the noble Lords, Lord Blackwell and Lord Bruce, have also referred, as well as the noble Baroness, Lady McIntosh.
I know from my time as Deputy Governor of the Bank of England how technical some of these regulatory issues are. A dedicated joint committee would be able to draw on independent advice and respond flexibly to issues that arise to ensure the public interest is well served. Such an institutional structure would be in the spirit of a principles-based regulatory regime, rather than relying on more detailed legislative approaches. It would also be consistent with the welcome letter sent today by the Economic Secretary to the Treasury to the chief executives of both the FCA and the PRA seeking to have proper parliamentary oversight of financial services regulation in future.
One area where potential parliamentary scrutiny of the FCA and the PRA could be useful is around how their work supports UK competitiveness. I know this is an issue that has already been covered at some length and with great expertise by this House, and I know that many have argued for strengthening the competitiveness objectives for the FCA and the PRA.
I would prefer to stick to the current language for four reasons. First, in my many years of doing surveys of investors at the World Bank, I have never seen easier regulatory standards featuring as a factor that makes a country more competitive. Instead, macroeconomic and financial stability, a skilled workforce and good infrastructure were what mattered most across the world. Secondly, just as you do not want a weak referee in order to have a good game, markets operate best when they are fair to all players. Thirdly, we have been able to support innovation in areas such as fintech through the use of things such as regulatory sandboxes, which allow experimentation while containing risk. Finally, there are many others who do a very good job of promoting financial services in the UK, including Her Majesty’s Treasury, the lord mayor and the many industry associations.
I also suggest that, for the moment, climate change is an area where parliamentary scrutiny, rather than legislation, might be useful. Central banks and regulators around the world are moving quickly to address climate risks. We are in a moment of great innovation, with climate stress testing, improved disclosure requirements, scenario planning, looking at climate exposures on both sides of the balance sheet and enhancing accountability for senior managers. All of this is wonderful, and I especially welcome the move to setting regulatory requirements for all market participants based on agreed definitions and rules, rather than relying on voluntary approaches and inconsistent criteria.
For now, I am comfortable with requiring regulators to have regard to climate issues—the recent remit letters are a good example of this—with appropriate parliamentary scrutiny of how that is happening. However, we should definitely return to this issue as part of the future financial framework once we have more evidence and experience from current innovations, so that we can codify in legislation the best possible approaches to addressing climate risks. Here as well, having a Joint Committee with access to relevant expertise would only enhance the quality of scrutiny around issues of climate change.
In conclusion, I very much hope that the Minister will be able to further reassure the House of how expert parliamentary scrutiny will enable Parliament to play a key role in future oversight of the regulators.
Baroness Kramer (LD)
My Lords, I will pick up some of the comments that have been made during the course of this absolutely outstanding debate on this series of amendments.
The noble Baroness, Lady McIntosh, said that she had never heard of Ministers not attending or coming before committees. I was on the Finance Bill Sub-Committee of the Economic Affairs Committee when we dealt with the loan charge, and, on several occasions, the Economic Secretary, Mel Stride, refused point blank to come and speak to the committee. We were then informed that committees have absolutely no power to summon Ministers; they come only at their own discretion. Mel Stride’s successor, John Glen, took a very different view and came before a combined committee of the Economic Affairs Committee and the Finance Bill Sub-Committee. I make it clear that there certainly are Ministers who very strongly take the view that they can be asked to come before the House but are not required in any way to say yes.
I also pick up a concern that the noble Baroness raised about whether we have to make an absolute decision today. If she looks at the Marshalled List, she may notice Amendment 37F, in my name and that of my noble friend Lady Bowles, which will come up on Monday. In fact, it is deliberately placed to give us the opportunity to listen in full to the Minister and consider this issue but still have an opportunity to make a decision on it if we decide that the Minister’s contribution does not meet the needs of the House. As such, there is an opportunity, should we decide to do so; some may wish to act today, and others may decide that they are satisfied by what the Minister says.
I also pick up the comments of the noble Lord, Lord Blackwell, and the noble Viscount, Lord Trenchard, on the advance parliamentary scrutiny of rules. I very much challenge what they said because, for many years, in the European Parliament and the European Council, parliamentarians had the opportunity to scrutinise both directives and the rules that would flow from them in a very thorough and extensive manner and with the support of a great deal of specialised expertise in the form of specialised and experienced staff.
Lord Eatwell (Lab)
My Lords, I would like to begin by acknowledging the considerable efforts that have been made by the noble Earl, Lord Howe, to provide greater insight and information in the form of letters from the CEOs of the FCA and PRA, and to encourage the Economic Secretary to the Treasury to provide his letter today, all of which have enhanced and coloured this debate. These letters have been quoted by many speakers. I am most grateful to the noble Earl for his strenuous efforts and commitment to making this legislation useful.
In Committee, we had some valuable debates on parliamentary scrutiny and the activities of the financial services regulators that dealt with the important point that those activities are now entirely repatriated from the European Union. It is clear, as Sam Woods, the CEO of PRA, states in his letter to the noble Earl, Lord Howe, that
“it would seem natural to us that, if some rulemaking responsibilities previously conducted at EU level move to us, Parliament might choose to evolve the way it scrutinises that activity.”
Mr Woods is entirely correct, as the debate this evening has demonstrated.
The role the European Parliament has in the development of financial regulation reflects the EU’s preference for embedding high levels of technical detail in EU primary law. It has been made clear by the Treasury, notably in the consultation document on the regulatory framework review, that the approach to be developed in the UK is to be quite different. It is to be a principles-based approach, in which
“the setting of regulatory standards is delegated to expert, independent regulators that work within an overall policy framework set by Government and Parliament.”
However, it is also evident from that consultation document that in respect of parliamentary scrutiny, there has been an important—shall I say—oversight or error. As was made clear in that document, the FCA and the model of regulation introduced by that legislation continue to sit at the centre of the UK’s regulatory framework. However, it is FiSMA that sits at the centre. FiSMA is the model of regulation that was introduced, but it was produced in 2000, when the UK was a long-standing member of the European Union and UK politicians participated in the scrutiny of financial regulation at EU level. The noble Baroness, Lady Kramer, has emphasised this point.
The Treasury has failed to take into account the need for a different domestic approach to democratic scrutiny now we have left the European Union. Simply reproducing the structures that have worked for the past 20 years, as is done in chapter 3 of the consultation document, is just not good enough. This was the key issue debated on Second Reading and in Committee.
Powers returned from Brussels need to be redistributed between Parliament and the regulators. The nature of that redistribution is at the heart of our discussion. In the regulatory model adopted by the UK, an increase in the powers of the independent regulators is inevitable and necessary, as I agree they are best placed to take on the many technical functions previously handled at the EU level. But the inescapable conclusion is that this increase in regulators’ powers will need to be accompanied by new checks and balances. The role of Parliament in this new setting is what is at issue in these amendments.
Earl Howe (Con)
My Lords, it is a pleasure to turn once again to the issue of parliamentary accountability of the financial services regulators, and I thank all noble Lords who have contributed to this good debate. This is an issue of considerable importance to many in this House and, indeed, has been a central topic of debate during the passage of the Bill.
Each amendment in the group proposes different things but I know that at the heart of them all is a desire for reassurance from me, as Minister, that the Government agree with the regulators that Parliament has a unique and special role in relation to the scrutiny and oversight of the financial services regulators. I therefore take this opportunity to give the House that assurance. It is Parliament that ultimately sets the regulators’ objectives and, of course, right that it has the appropriate opportunity to scrutinise the work of the regulators and their effectiveness in delivering the objectives that Parliament has set them. This most certainly includes the way in which the regulators exercise their rule-making powers but also encompasses their wider work on supervision and enforcement across the financial services sector.
Noble Lords will, I hope, have had a chance to read the letters of 19 March from Nikhil Rathi, the CEO of the FCA, and Sam Woods, the CEO of the PRA, that I have deposited in the House Library and the Royal Gallery. Those letters can properly be interpreted as a commitment to the openness and sincere co-operation which the noble Baroness, Lady Bowles, said she sought. I do not in the least detect the complacency that the noble Baroness, Lady Kramer, said she detected in the letter from Nikhil Rathi. Perhaps I may quote the sentence that she cited. He said:
“We are committed to ensuring that Parliamentarians have the information they need to scrutinise our policy and rule proposals, particularly during consultation”.
I do not detect any shadow of qualification to that commitment. Sam Woods, chief executive of the PRA, wrote:
“When we publish consultations, we always stand ready to engage with Parliament.”
So the regulators have clearly demonstrated that they have heard the views expressed by noble Lords during the passage of the Bill. Despite the reservations of my noble friend Lady Noakes, I hope noble Lords accept that these letters take us forward in a meaningful and material way.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, we have had a long and interesting debate, showing unanimous appetite for scrutiny by Parliament, recognising at least from Parliament’s side that there are changes happening now and that therefore this enhanced scrutiny also has to happen now. As the noble Baroness, Lady Noakes, has said—echoed by my noble friend Lady Kramer—this is still a work in progress and, yes, perhaps the direction of travel is going in the right direction.
I thank the noble Lord, Lord Eatwell, for giving us the new vocabulary of the “New Scrutiny”, which certainly makes it easier to identify what we are talking about. I agree with the noble Lord that it is up to Parliament to decide the mechanisms of its own scrutiny. To some extent, that is why I phrased my amendment as I did in the context of undertakings from the regulator. I think I gave the game away in the sense that I said it was to induce discussion about the points I had put in. That we have had.
The Deputy Speaker (Baroness Henig) (Lab)
We now come to the group beginning with Amendment 21. Anyone wishing to press this or anything else in the group to a Division must make that clear in the debate.
Amendment 21
Lord Sharkey
“Interest rates for mortgage prisoners
(1) The Financial Services and Markets Act 2000 is amended as follows.(2) After section 137FD insert—“137FE FCA general rules: interest rate for mortgage prisoners(1) The FCA must make general rules requiring authorised persons involved in regulated mortgage lending and regulated mortgage administration to introduce a cap on the Standard Variable Rates charged to mortgage prisoners and to ensure that mortgage prisoners can access new fixed interest rate deals at an interest rate equal to or lower than an interest rate specified by the FCA.(2) In subsection (1)— “mortgage prisoner” means a consumer who cannot switch to a different lender because of their characteristics and has a regulated mortgage contract with one of the following types of firms—(a) inactive lenders, or firms authorised for mortgage lending that are no longer lending; and(b) unregulated entities, or firms not authorised for mortgage lending and which contract with a regulated firm to undertake the regulated activity of mortgage administration;“new fixed interest rate deals” means the ability for the consumer to fix the rate of interest payable on a regulated mortgage contract for periods of 2 years and 5 years;“Standard Variable Rate” means the reversion rate which is a variable rate of interest charged under the regulated mortgage contract after the end of any initial introductory deal.(3) The general rules made under subsection (1) must set the level of the cap on the Standard Variable Rate at a level no more than 2 percentage points above the Bank of England base rate.(4) The general rules made under subsection (1) should make new fixed interest rate deals available to mortgage prisoners who meet the following criteria—(a) are up to date with payments or have aggregate arrears of no more than one monthly payment in the past 12 months,(b) have a remaining term of 2 years or more,(c) have an outstanding loan amount of at least £10,000, and(d) have not received consent to let the property.(5) When specifying the interest rates for new fixed interest rate deals required by subsection (1) the FCA should specify rates for a range of Loan-To-Valuation (LTV) ratios taking into account the average 2-year and 5-year fixed rates available to existing customers of active lenders through product transfers.(6) The FCA must ensure any rules that it is required to make as a result of subsection (1) are made not later than 31 July 2021.””Member’s explanatory statement
This new Clause would require the FCA to introduce a cap on the Standard Variable Rates charged to mortgage prisoners and, under specified circumstances, ensure their access to fixed rate interest deals.
Lord Sharkey (LD) [V]
My Lords, Amendments 21 and 37B are in my name and those of the noble Lord, Lord Stevenson of Balmacara, and my noble friend Lady Kramer, and I am very grateful for their support. I declare an interest as co-chair of the APPG on Mortgage Prisoners. The plight of these mortgage prisoners was discussed extensively—
Baroness Penn (Con)
My Lords, due to the technical issues that the noble Lord, Lord Sharkey, is having, I suggest that we adjourn for five minutes until a convenient moment after 8.28 pm.
Lord Sharkey (LD) [V]
I was saying that we have made no progress in Committee on the mortgage prisoners problem, and the situation seems frozen. On the one hand, there are 250,000 mortgage prisoners, subject to real, undeserved and unwarranted financial pressure, which is likely to increase when Covid concessions lapse or are withdrawn. On the other hand, the Government and the FCA seem intent on minimizing the problem and are engaged in what seem to me to be futile and unproductive arguments with the mortgage prisoners over exact figures.
The alleged 0.4% premium paid by mortgage prisoners above the average SVR illustrates the point. We do not only believe the figure to be wrong for the reasons that I set out in Committee, which were not refuted by government; we also believe that such discussions are very largely a distraction and lead nowhere. SVRs are not the norm in mortgage lending but are the literally inescapable norm for most mortgage prisoners. Only around 10% of customers with active lenders pay these high SVRs, and more than 75% of those who do switch to new and much lower fixed rate deals within six months of moving to an SVR. Mortgage prisoners have been stuck with usurious SVRs for over 10 years.
Solving the mortgage prisoner problem certainly requires reducing this usurious SVR, but it also requires giving the mortgage prisoners access to normal fixed-rate mortgage deals. I regret to say that there has been no real progress in either of these areas. In all the discussions about the problem, I have never heard the Government admit responsibility for causing it in the first place. I have heard repeated assertions that the Government are trying to find a solution. I have heard John Glen, the Economic Secretary to the Treasury, say that he remains open to considering practical solutions, and I know that the Chancellor told Martin Lewis that he would keep working on the issue and was committed to finding a workable solution.
However, I have heard no admission from the Government that they caused the problem in the first place—and no admission of moral responsibility for devising a proper, just and timely solution. Certainly, nothing so far proposed or actioned has delivered effective relief to the 250,000 prisoners. I again make the point that these people are not the authors of their own misfortunes: the Government are.
Baroness Penn (Con)
My Lords, once more we will need a brief adjournment due to technical issues. I beg to move that we adjourn until 8.30 pm. Or do we have the noble Lord?
Lord Sharkey (LD) [V]
Thank you. I think I was talking about Amendment 21 being prescriptive; it sets out exactly what must be done and by whom.
It has two sections. The first reduces the currently usurious SVR paid by mortgage prisoners by capping it at two percentage points above the bank rate. This is what, in the end, Martin Lewis thought was necessary. He said:
“Yet in lieu of anything else, I believe for those on closed-book mortgages it is a good stopgap while other detailed solutions are worked up, and I’m very happy the All-Party Parliamentary Group on mortgage prisoners is pushing it.”
He also said:
“This would provide immediate emergency relief to those most at risk of financial ruin … No one should underestimate the threat to wellbeing and even lives if this doesn’t happen, and happen soon.”
This is all necessary, but not sufficient. SVRs are not the normal basis for mortgages, as I have already mentioned. What is needed is access to fixed-rate mortgages, as provided by normal active lenders to 90% of mortgagees. The second part of Amendment 21 sets out how that is to be done.
This is, of course, all very prescriptive, and we understand the Government’s reluctance to write such details into the Bill. That is why we have also tabled Amendment 37B. This amendment takes a simpler and non-prescriptive approach. It places the obligation to fix the problem squarely on those who caused it—the Treasury. It is explicitly fuelled by the overwhelming and undeniable moral responsibility that the Treasury has for the terrible situation in which mortgage prisoners have long found themselves. The amendment sets out what must be achieved to relieve mortgage prisoners, by whom and by when, but it does not say how. It leaves that entirely for the Government to work out.
Amendments 21 and 37B give the Government a clear choice. Amendment 21 prescribes a detailed method of solution; Amendment 37B says what the Government must achieve but leaves the mechanism to them. The Government caused the mortgage prisoner problem, which has caused and continues to cause much suffering to many families. I hope that the Government will recognise their moral responsibility and adopt Amendment 21 or Amendment 37B.
This has all gone on much too long, and it has caused, and continues to cause, far too much misery and desperation. If the Minister is not able to adopt either amendment, or give equivalent assurances, I will test the opinion of the House. I beg to move Amendment 21.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I speak in support of the amendments just proposed by the noble Lord, Lord Sharkey, which I have signed. One’s heart goes out to him—it must be very difficult to make a speech of this complexity and passion with all these breaks. Despite the technical difficulties, however, he has made the case for action very well, and as co-chair of the all-party parliamentary group on these issues he is very well briefed on the situation faced by these fellow citizens of ours, and the extra costs that they face. It is indeed a very difficult situation, and one hears a lot of despair when one talks to these people.
I am sure that when he responds the Minister will, as the noble Lord, Lord Sharkey, hinted, dwell at length on the numbers of this group in various categories. There is of course a debate on how the prisoners can be split up—I think that the only thing that we agree on is that the total is probably about 250,000. As with the noble Lord, Lord Sharkey, however, my argument is not about the numbers. Simply put, it is clear that a significant number of people, through no fault of their own, cannot exercise the choices about their mortgage that the rest of us can. While some would argue that this is the direct fault of the Government, I think that someone needs to take responsibility for providing a fair outcome for those who are in a position to take advantage of it.
As the noble Lord, Lord Sharkey, says, this group of amendments offers two options: one that focuses on what the FCA might do within the parameters set by the Bill and another—37B, a late amendment that we drafted for Report—that suggests that the Treasury might wish to take powers to act in the way that is most suitable for it. Both have merits, in their ways. As the noble Lord, Lord Sharkey, said, they have detailed implications that need to be followed through carefully. My preference would be for Amendment 37B, for the very good reasons set out by the noble Lord, Lord Sharkey. If, as he said he might, the noble Lord decides to test the opinion of the House, we will support him.
Baroness Noakes (Con)
My Lords, the amendments in this group are misconceived, for a number of reasons that I shall explain. I have much sympathy with the plight of mortgage prisoners, who find themselves in a difficult position as a result of taking on debt when market conditions and regulation allowed mortgage lending in ways that are not generally possible now. We have to remember that many of the borrowers we are talking about would not qualify for a mortgage in today’s environment, either because of the type of mortgage that they have or their own financial circumstances. This is not to blame them, but it is a relevant fact.
Mortgage prisoners are not the only groups who are facing financial problems. Covid-19 has brought financial stress for many individuals and families, and indeed the problems of mortgage prisoners may have increased during the pandemic. Any solutions for mortgage prisoners need to be put in the context of all who are facing debt problems, and we must be careful that solutions for one category of financial distress are fair and proportionate.
Covid-19 has also caused delays in the implementation of the FCA’s initial solution, which relaxed the regulatory affordability rules. We do not, therefore, know how effective those will be in solving the problems of mortgage prisoners, and we should be wary of leaping to further solutions until existing remedies have had time to take effect.
Although a number of statistics have been cited by the supporters of the amendments, hard data on the mortgage prisoner population are not readily available. This was underlined in last year’s report by the London School of Economics, and the FCA has never claimed to have a perfect picture. Although the report by the group UK Mortgage Prisoners purports to offer a definitive analysis, its membership is only a fraction of the number potentially within the mortgage prisoner net, so its report should be treated with appropriate caution. It is hard to make policy in this environment.
The amendments include a cap on standard variable rates—SVRs—for all mortgage prisoners with inactive or unregulated lenders, plus two approaches for making new fixed-rate deals available to those who are basically good payers. The proposal to cap SVRs responds to a fairly vociferous demand from lobby groups. Amendment 21 would cap SVR rates at 2 percentage points above base rate. The result would be a rate broadly aligned with the competitive rates available in the active mortgage market, but those rates are available only to low loan-to-value ratios, and to borrowers with the most robust financial profiles. The market rates for riskier high LTVs are probably twice that level, even if the personal financial profile of the borrower is resilient. In addition, there is not an unlimited supply of fixed-rate deals. Many lenders simply do not offer fixed-rate deals on high LTV loans, especially when combined with weaker personal financial profiles.
The amendment says that mortgage prisoners with inactive or unregulated lenders should have rates that are available only to other mortgage borrowers who have completely different loan and borrower characteristics, and it would apply to them even if they did have opportunities to switch mortgages, which the FCA estimates is roughly half the total population. It is unsurprising that the LSE did not recommend this, and noted that it could create market harm. The FCA’s own analysis, comparing the rates paid by mortgage prisoners who are stuck on SVRs and cannot switch, indicates that the real problem is only about 40 basis points, if the correct comparator is used. I do not accept the assertion of the noble Lord, Lord Sharkey, that that is an incorrect calculation. Those 40 basis points are no proper foundation for market intervention.
As the noble Lord, Lord Sharkey, explained, the proposals for the availability of fixed-rate mortgages for good payers in Amendments 21 and 37B take slightly different approaches. Amendment 21 says that FCA rules should
“make new fixed interest rate deals available to mortgage prisoners”,
while under Amendment 37B the Treasury must provide for them to be offered fixed-rate mortgages. Neither amendment says how this can be achieved.
In the case of Amendment 21, it would be a startling new direction for regulation if the FCA could tell regulated lenders that they were obliged to offer particular deals to people who by definition are not their own customers. As for Amendment 37B, clearly the Treasury will not itself be providing loans, as it is not in the business of retail lending. The Treasury also has no power to tell banks or building societies to make any particular loans. If either of the amendments resulted in regulated mortgage providers being told that they had to lend to certain groups of non-customers, the impact on the financial services industry would be chilling.
It might be possible for the Treasury to procure that regulated lenders offered fixed-rate deals if the Treasury itself guaranteed all or part of the debt, as it does for some first-time buyers. But that is not what Amendment 37B says, and it would not be a plain reading of the proposed new clause to cover such an intervention.
As if telling lenders what products they should offer and to whom were not bad enough, both amendments go on to try to cap the price of these fixed-rate deals. Amendment 21 would do this at a rate to be fixed by the FCA, using LTV ratios and average rates available to customers of active lenders. This ignores the basic fact of life that mortgage prisoners who have not remortgaged are not like other borrowers, and do not satisfy the lending criteria of most mortgage lenders—whether that is because the LTVs are too high or because the other financial characteristics of those borrowers place them outside the risk appetite of active lenders. For some borrower circumstances there is no market rate at all, and it is not right to assume otherwise.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part on this group of amendments. I declare my financial services interests and say just this: the borrowers are not to blame, but they bear the burden. Does my noble friend the Minister agree?
In agreeing to a large extent with my noble friend Lady Noakes, with regret I am not convinced that these are necessarily the amendments to resolve the issue. Can the Minister set out what action he believes the Treasury and FCA are taking in this area? There clearly is an issue even if we accept that the numbers may be disputed, or that there are different categories and specific circumstances. These are all important points to be considered, but they still leave issues to be addressed. Will the Minister set out anything he can about what actions the Treasury will take and what the approach of the FCA will be to address these points?
Baroness Bryan of Partick (Lab) [V]
My Lords, it is a great honour to participate in this group of amendments, and particularly to support the noble Lord, Lord Sharkey, who has worked tirelessly to support mortgage prisoners. I feel I am in a similar place to my noble friend Lord Griffiths of Burry Port when he spoke in Committee. I will speak as someone inexperienced in high finance but who understands the importance of having a home—not as a financial asset or investment, but as somewhere safe and secure to live. To make this most basic need a pawn in the machinations of greed-driven financial transactions, as demonstrated by the financial crash of 2008, is an absolutely unacceptable face of capitalism.
Every Government since 1979 have encouraged people to see home ownership as a sign of virtue. When the noble Lord, Lord Heseltine, was Secretary of State for the Environment, he said:
“Home ownership stimulates the attitudes of independence and self-reliance that are the bedrock of a free society.”
But for many people, the period of their mortgage is a rollercoaster ride of anxiety, always dependent on matters far outside their control. The day the mortgage is paid off must rank among the best days of people’s lives. Many mortgage prisoners fear they will never see that day.
The FCA reported in July 2020 that around a quarter of a million people have their mortgages held by inactive firms. The majority of these people were up to date with their payments and, in any other circumstances, would have been able to adjust their mortgages and repayment patterns to suit their individual needs. No one would choose to remain on the SVR for years on end, so to compare their entrapment on that rate to those who may be on it temporarily, while they seek an alternative, is disingenuous. These people have been denied that opportunity, not through any decision they made or any fault on their part, but because of the way the Government chose to sell off mortgage loan books. It was not just people’s mortgages that changed hands, it was people’s lives—they were being bought and sold.
This Bill was viewed with real optimism among some mortgage prisoners. They thought amendments relating to SVR would help transform their lives, but how often have they been here before? Last year, there was hope that the FCA’s more lenient affordability checks would help some escape, but very few succeeded. For many more, their lives were made even more difficult by the impact of Covid-19. The report from the LSE in November 2020 makes the point that the FCA has now reached the limit of its powers. This means that only the Government can help to free mortgage prisoners. Instead, while Parliament was considering amendments aimed at protecting mortgage prisoners, the auctions continued. All the warm words and expressions of concern from Ministers meant nothing. The Treasury’s sole concern was that these people must deliver value for money for the Government.
These amendments are considered and cautious. Their implementation would not undermine capitalism or fundamentally damage the whole system of mortgage delivery, but would give some safeguards to a specific group of mortgage prisoners who have struggled for more than 10 years as victims of the failure of the very system the Government are defending. If it is not to be these amendments, what help will the Minister offer? Unless there is a clear alternative, I hope we will be given the opportunity to vote on at least one of them. I would be very pleased to give my support.
Lord Lucas (Con) [V]
My Lords, it is clearly acknowledged that there is a problem. It is evident to me that this is exactly the sort of problem that the Government ought to sort out because, as my noble friend Lady Noakes said, we have no business landing this on the lending community. It is our responsibility. The Bill is an opportunity to make sure that something is done, and I very much hope that we take it.
Baroness Kramer (LD)
My Lords, I think the case has been extremely well made. I usually really respect the opinions that the noble Baroness, Lady Noakes, puts forward, but it seems to me that she completely fails to understand the circumstances that led these people into being mortgage prisoners. They took out loans under credit checks and it was entirely appropriate, but the banks from whom they borrowed the money crashed in the 2008 financial crisis, largely through poor regulation, which lies at the Government’s door, not the door of those who took out mortgages. People with absolutely identical credit profiles who took out their mortgages with a bank which did not crash have had many opportunities to refinance, which is normal in the life of the mortgage. A standard, typical bank knows that it will vary the characteristics of its mortgage over the life if that option is sought by the mortgagee.
The group of people who took out their mortgages with banks that crashed in many cases found that those mortgages were stripped out as part of the asset rescue process that the Government went through, and the Government then sold those mortgages to completely inappropriate buyers under inappropriate terms in order to get the maximum return. I understand their motivation—maximum return for taxpayers—but they removed all of the normal relationships and embedded rights in those relationships that a mortgagee has when they take out a mortgage with a viable financial institution.
The noble Baroness treats many of those mortgage prisoners as people who are now of poor credit. These are people who have aged—we all do that. The mortgage that we take out at the age of 30 is not the same one that we would be able to take out at the age of 55, because we have got older and our career profile is different. Some of them have become ill, and therefore had reduced earning capacity. Any standard bank dealing with a mortgagee in those circumstances makes adjustments. Mortgage prisoners are not able to seek such adjustments and they have been left in dire circumstances.
The fault lay with the Government when they sold mortgages under inappropriate terms to inappropriate buyers to manage them. It treated them as though they were abstract assets, rather than a special category which has a lot of convention embedded in it, in order to maximise their sale. I very much hope that the Government will realise that they have a responsibility. They took those additional revenues, they took the benefit of selling off those mortgages under terms and conditions that they should never have permitted, and they now need to offset that by stepping forward and making sure that those mortgage prisoners can have the same access to flexibility that would have been theirs had they taken that loan out with a financial institution that did not collapse in 2007-08.
Lord Tunnicliffe (Lab) [V]
My Lords, this is an emotive issue for a lot of people. Although we recognise that the Government have taken steps to help a proportion of so-called mortgage prisoners to access alternative products, so far, we have not been satisfied with either public or private assurances received on this matter. We are familiar with the Government’s view of the importance of market freedoms and the need to keep interventions to a minimum. However, despite the initiatives that we will hear about from the Minister shortly, the fact is that the market is failing a substantial number of people.
Lord True (Con)
My Lords, I thank those who have spoken. I have to say to many of them that, with great respect, I will disagree that these amendments are appropriate or effective. I must make absolutely clear that there is no prospect of the Government changing their position between now and Third Reading.
I want to start by emphasising, however, that the Government take this issue extremely seriously. I believed that that was understood in the private conversations that I felt privileged to have with Peers from all around the House and that the earnestness of Ministers in this area was understood and respected. I hope that that is the case, even if we disagree today.
We have a great deal of sympathy for mortgage borrowers who are unable to switch to new deals, which is why we and the FCA have carried out so much work and analysis in this area. The FCA has determined that there are around 250,000 people whose mortgages are currently held by inactive firms. That figure has been used by the noble Lord, Lord Sharkey, and others. The noble Lord, Lord Stevenson of Balmacara, said that I might detail different categories of people within that number and implied that that would not change the position. However, as my noble friend Lady Noakes observed, Parliament must surely legislate on the basis of actual numbers and evidence of the reality of the problem overall. While that figure is the total number of customers whose mortgages are held by inactive firms, not all those people are “prisoners”. Half of them, 125,000 mortgage holders, could switch to an active lender if they chose to. They could do so right now, without any action or intervention from government at all.
The Government have sought to make it as straightforward as possible for customers with inactive firms to switch. Whenever we have sold loans back to the private sector, we have included protections to ensure that customers’ ability to remortgage is unaffected. For example, the customer protections in previous sales of Bradford & Bingley and NRAM loans have included restrictions on the ability of lenders to impose financial barriers to remortgaging such as early repayment charges.
This means that there are around 125,000 borrowers with inactive firms who cannot switch, and the Government fully accept that that remains a significant number. Within that number, every household is a household of people. However, around 70,000 of those borrowers are currently in arrears. The Government do not underestimate how stressful it can be to be in arrears, but it is important to note that borrowers in arrears with inactive firms are in a similar situation to borrowers in arrears with active lenders. In both cases, it is not possible to move to a new fixed rate deal and it is not possible to switch lender. Customers in arrears with either inactive firms or active lenders have the same protection under the FCA’s conduct rules, whereby firms are required to make all reasonable efforts to explore arrangements to resolve the situation.
Around 55,000 customers are up to date with their payments but are also unable to switch. These consumers are constrained from switching because they do not meet the risk appetite of lenders in the active market. This is not to blame or accuse people in this position—of course, the Government do not do that, and I repudiate any such implication—but it is a simple point of fact that these borrowers have risk characteristics meaning they are unable switch to the active market. However, FCA analysis has found that, despite this, on average the 55,000 borrowers with inactive firms who have characteristics that would make it difficult for them to switch but are up to date with payments are paying around 0.4 percentage points more than similar borrowers with active lenders who are now on a reversion rate, which will normally be their lender’s standard variable rate.
There has been considerable scrutiny of this figure, and the noble Lord, Lord Sharkey, simply claimed it was wrong, so I will take a moment to explain the analysis that underpins it. The FCA used its regulatory data returns, information from the third-party administrators who service these mortgages, and credit reference agencies to compare the interest rates paid by borrowers with inactive lenders to borrowers with similar characteristics in the active market. As my noble friend Lady Noakes stated, consumers with these kinds of risk characteristics would not be able to easily access new fixed rate deals in the active market. It is not the case that borrowers with similar high credit risk characteristics can access the lowest rates in the active market. Where they can access new fixed rate deals with active lenders, these will tend to be specialist lenders who will charge much higher rates than the major lenders.
My noble friend Lord Holmes of Richmond reasonably asked what the Government are seeking to do. Importantly, the Government, working with the FCA, have created additional options for some of these 55,000 borrowers who are with inactive firms but are not in arrears. This involves a new process, for which I believe time should be allowed, that permits active mortgage lenders to waive the normal affordability checks for borrowers with inactive lenders who meet certain criteria, for example not being in arrears and not wishing to borrow more. This is called the modified affordability assessment.
Inactive firms have been contacting borrowers who have been struggling to switch, setting out that new options may be available for them in the active market. I am pleased to tell the House that a number of lenders, including major lenders like Halifax, NatWest and Santander, have also come forward with options specifically for these borrowers. I encourage all borrowers with inactive firms to consider whether they may be able to take advantage of this new switching process. While this may not be a silver bullet for all borrowers with inactive firms, it represents a significant change for borrowers with inactive firms who may previously not have been able to switch.
The Government have taken other action in the period of Covid to help and support borrowers. In October, the FCA confirmed additional options to support borrowers, including guidance to allow borrowers who are up to date with their payments with a recently matured or soon-to-mature interest-only or part and part mortgage to delay repaying the capital on their mortgage while continuing to make interest payments. This guidance is in place until October 2021. The FCA also confirmed, as I have explained, that it is making intra-group switching easier for borrowers with an inactive firm; that is, the same lending group as an active lender. Furthermore, in September the Money and Pensions Service launched online information and a dedicated phone service for borrowers.
We have also considered the regulation of customers with inactive firms. It is important to be clear that all borrowers with regulated mortgages must always have their mortgages administered by a regulated firm—this is the case for both inactive firms and active lenders. Some inactive firms, such as Landmark Mortgages and Heliodor Mortgages, are also regulated by the FCA already.
As the Economic Secretary to the Treasury and we have explained, the Government are always open-minded about whether further regulation would deliver greater protection, but we are yet to see evidence to suggest that there are borrowers who are currently being harmed by the current regulatory regime in relation to borrowers in the active market, and who would therefore be helped by extending the FCA’s remit.
Amendments 21 and 37B seek to provide additional protections for borrowers with inactive firms through direct price intervention by the FCA and the Treasury. Amendment 21 seeks to cap standard variable interest rates for borrowers with inactive firms. My noble friend Lady Noakes spoke powerfully on the implications of this policy. As I have discussed, borrowers with similar characteristics in the active market are unlikely to be able to secure new fixed-rate deals in the active market. As my noble friend argued, a cap for borrowers in the inactive market would be deeply unfair to higher-risk borrowers or those in arrears with active lenders, who would continue to pay normal reversion rates, which would be higher than the cap proposed.
Capping SVRs on mortgages with inactive firms would also have an impact on their financial stability because it would restrict lenders’ ability to vary rates in line with the market conditions. I know that some in the House found my noble friend’s speech uncongenial, but this is a fact. This concern was supported by the London School of Economics’ recent report on mortgage prisoners, which stated:
“Capping SVRs at a level close to the best rate for new loans could create harm in other parts of the market, and we do not recommend it.”
Both Amendments 21 and 37B would also require inactive firms and unregulated entities to offer new fixed-rate deals. On Amendment 21, it is not clear how the FCA should take account of the range of features and characteristics that inform interest rates in the active market—for example, product fees or borrower characteristics. Amendment 37B seeks to require the Treasury to implement regulations that provide fixed-rate deals to customers with inactive firms that are in line with deals available to borrowers in the active market with broadly similar creditworthiness characteristics.
As I have noted already, FCA analysis has made clear that borrowers with inactive firms who are up to date with their payments but unable to switch on average pay just 0.4 percentage points more than customers in the active market with similar characteristics who are now on the reversion rate. Therefore, it is not clear that this amendment would lead to materially lower rates for most consumers with inactive firms.
Being with an inactive firm does not stop a consumer from applying for mortgages in the active market. Consumers in the inactive and active market applying for new credit are assessed in the same way. Consumers in the inactive market are already able to access mortgage products available to consumers in the active market with broadly similar creditworthy characteristics.
Finally, both Amendments 21 and 37B would require firms that do not currently have the expertise, systems or regulatory permissions necessary to offer new mortgage products to do so.
I reiterate that the Government do not underestimate the stress that being unable to switch your mortgage can cause. I also reiterate that the Economic Secretary has stated the Government’s concern and interest in seeking ongoing solutions to this problem. However, in making policy we must be guided by the evidence, which demonstrates that consumers with inactive firms are not in fact significantly disadvantaged versus their peers in the active market, and we must be fair to those borrowers—to all borrowers—in any steps we take. In view of this and the proportionate range of interventions that the FCA has already taken, some of which I set out in the earlier part of my speech, I ask that the amendment be withdrawn.
Lord Sharkey (LD) [V]
I thank everybody who has taken part in this extensive debate. I particularly thank the noble Baroness, Lady Bryan, for her powerful contribution and her clear understanding of the problems that mortgage prisoners suffer, and have suffered for so very long.
I was sorry to hear the Minister again talk about the 0.4 percentage points and assert that it was a meaningful figure. At this point in the debate and at this time of the night, all I can do is say that we disagree fundamentally with his analysis. We think it is completely wrong and we think we have the evidence to show it is.
In some ways, more important than all that is that the tenor of the debate, or the tenor of the contributions made by the Minister and the noble Baroness, Lady Noakes, was notable for the fact that they do not assume any kind of responsibility on the part of the Government for the situation these people find themselves in. There is no hint of moral responsibility and no sense that, really, it is up to government to find the solution. As it happens, the noble Baroness, Lady Noakes, finished her speech, I think, by recommending that we leave all this to the FCA and the Treasury to find a solution. The fact is that we have left it to the Treasury and the FCA to find a solution, and they have not found a solution at all.
Nothing in the Minister’s speech suggests that a solution is on the horizon. He talked about the loosening of the affordability checks, but I repeat what I said in my speech: so far, the loosening of those affordability checks has helped 40 households. He had the opportunity to try to correct that figure; he did not take it. It is 40 households so far. This is not the solution, and nothing else is proposed by the FCA or the Treasury to solve the problem that still exists.
I conclude by saying that it is the Government who have caused this problem; it is the Treasury. There is a moral responsibility. People’s lives are ruined, have been ruined and will be ruined if this situation continues. It may be that the proposals we have put forward are not perfect—although I certainly dispute that they amount to significant market distortion, if any—but, nevertheless, they would bring relief to these people. There are a lot of them, they are in bad shape and their lives are difficult, and it is no fault of their own. I would like to test the opinion of the House.
The Deputy Speaker (Baroness Fookes) (Con)
My Lords, we now come to the group beginning with Amendment 24. Anyone wishing to press this or anything else in this group to a Division must make that clear in the debate.
Amendment 24
Baroness Neville-Rolfe
“Requirement to report to Parliament on impact on businesses
The Treasury must publish an annual report on the impact of measures taken by the FCA, PRA and the Government to regulate financial services, particularly on small business, innovation and competitiveness.”
Baroness Neville-Rolfe (Con)
My Lords, I shall speak to my Amendment 24 on reporting. I remind the House of my interests as a director of Secure Trust Bank and Capita plc.
The amendment would require the Treasury to publish an annual report on the impact of measures taken by the FCA, the PRA or the Government to regulate financial services, with a particular focus on small business, innovation and competitiveness. While there has been a great deal of excellent discussion during the passage of the Bill on holding financial services operators to account, we can lose sight of the value of smaller operators, including those based outside London. Moreover, innovation can bring huge value to consumers: just think, in our own lives, of online banking, money transfer overseas and customer share trading. Moreover, our strained economy will not recover without a proper focus on the competitiveness of the UK’s financial sector, which provides the veins and arteries of our economy.
I know from my experience in intellectual property how valuable an annual report to Parliament of this type can be in focusing ministerial and staff attention. Writing the report is a complement to the usual in-tray, the relentless focus on short-term risk and the avoidance of political banana skins; I am afraid these often exercise public servants to the detriment of more strategic thinking, and I speak as someone who used to be one. I believe that a strategic look once a year would raise thinking above the proverbial parapet and help the financial services sector to stay ahead in the new world, but can I persuade the Minister?
I will leave others to speak to their Amendments 25 and 37, but I will say that I took some comfort from the Minister’s reply to me on impact assessments in Committee, which is why I did not retable my amendment. He confirmed that both regulators, the FCA and the PRA, have a disciplined routine and a proper approach to impact assessment, and they understand that the sunlight of transparency must shine through. What is less clear is how easy it is to access those assessments, those nuggets of judgment and estimation. Could the Minister reassure us that there will be a decent system of signalling new proposals and that PRA and FCA impact assessments will be available to Parliament, perhaps through the public websites? We need to see and understand their proposals, and we need to do that routinely if we are to exercise our parliamentary scrutiny function properly, which has been an issue of great debate throughout the passage of the Bill. I beg to move.
Amendment 25 (to Amendment 24)
Lord Sharkey
Lord Sharkey (LD) [V]
I will be brief. Amendment 24 continues the themes underlying Amendments 18, 19 and 20, proposed by my noble friend Lady Bowles. The amendment concerns the provision of vital information, as did those amendments. The noble Baroness, Lady Neville-Rolfe, has explained the purpose of her amendment with her usual force and clarity, and I agree with every word she said.
The assessment of impact is essential to proper scrutiny, but it seems to me that there is an omission in the noble Baroness’s amendment. Amendment 24 requires the Treasury to
“publish an annual report on the impact of measures taken by the FCA, PRA and the Government … particularly on small business, innovation and competitiveness.”
The amendment does not include consumer protection in this list. My Amendment 25 simply inserts this alongside the other particularised areas.
Consumer protection is already an objective of the FCA. The Financial Services Act 2012 inserted new Section 1C, which sets out that the “consumer protection objective is”, rather unsurprisingly,
“securing an appropriate degree of protection for consumers.”
The same Act also imposes an obligation on the FCA to promote competitiveness, one of the specified categories in Amendment 24 of the noble Baroness, Lady Neville-Rolfe. This obligation is qualified and, in some ways, secondary to the consumer protection objective. The Act says that the promoting competitiveness requirement has to be “compatible with the advancement” of consumer protection. Both are important and seem to me to merit the same standing in Amendment 24.
I recognise that the PRA has no such direct obligation to consumer protection. However, its general objective is set out in Section 2B inserted by the 2012 Act, and it clearly implies an element of consumer protection. The Government themselves have a clear interest and involvement in consumer protection directly, if they consider it necessary.
Consumers need protection, perhaps now more than ever: scams multiply, malfeasance grows and people lose their pensions and life savings. The resourcefulness and inventiveness of the dishonest seems to know no bounds. Just as it is important to know the impact of measures taken to regulate financial services in general, and on small businesses, innovation and competitiveness in particular, so it is important to know the impact of measures taken to protect consumers. There are already many of these measures and there will be more as new ways of fleecing consumers are devised. We need to know what we are doing in combating them all—what works and what does not. Amendment 25 would enable this in the way proposed by Amendment 24. I beg to move.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I apologise for the need to withdraw from the previous two groups, but I return to speak to Amendment 37 in my name, which was also kindly signed by the noble Lord, Lord Sikka. I look forward to his contribution to this debate.
I hope noble Lords recall that I had a similar amendment in Committee, in a debate rather truncated by the pressure of time. At that stage, I circulated an associated briefing addressing what is commonly called the finance curse or the problem of too much finance—the subject of growing and now extensive academic and policy commentary, which prompted this amendment. That briefing discussed, as I canvassed then at some length, the cost of too much finance, which was calculated for the UK between 1995 and 2015 as £4,500 billion, or 2.5 years of average GDP across the period, by Professor Andrew Baker and colleagues at the Sheffield Political Economy Research Institute.
I will not go through all that again, but I will go back to the exchange that I had with the noble Earl the Minister through Committee about the source of the Government’s figure, stated as the value of the financial sector to the UK and set at £76 billion in tax receipts. As was acknowledged, that includes £42 billion borne by customers in the form of VAT and by employees in the form of income tax and national insurance contributions.
The noble Earl kindly acknowledged to me by letter, after my initial question, that the source was PricewaterhouseCoopers, clearly not an independent source without an individual interest in playing up the financial sector of which it is part; although, to be fair to PwC, it does not claim, in that figure, to count costs. It is looking at only one side of the equation and adds the rider that it has
“not verified, validated or audited the data and cannot therefore give any undertaking as to its accuracy.”
I wonder, given that I raised this question in Committee, whether the Minister has given any more thought to, or asked any more of his officials about, how they might look at the complete equation—the costs and benefits of the financial sector. Perhaps if the Government are not prepared to accept this amendment, or write one along their own lines, they could look into this in other ways. That is the key question I put to the Minister tonight.
I provided Members last time with that one calculation —one massive cost—but surely, if the Government are making decisions that will impact on the size of the financial sector and, in consequence, other areas of the economy, they have, or at least plan to have, a methodology for doing that. As your maths teacher might have said, you need to be able to show your working and have a result you arrived at yourself—or at least that you can source to an independent, respected reference.
When we talk about finance, people often feel daunted and concerned about apparently technical matters, so I shall draw a parallel with something many people in communities around the land are well familiar with: the planned arrival of a new out-of-town supermarket that promises 100 or so new jobs and growth for the town—a calculated economic benefit. Permission is given, the supermarket is built and then the residents notice, a bit later, that one week the greengrocer closes down. A few weeks later, the butcher’s goes. Then the stationery shop that supplied lots of small businesses also closes down. Spending has not increased but shifted. There is a limited market, a limited amount of resources, and they have been shifted to one central location.
That analogy works rather well for the financial sector, not just because, as I talked about last time, a maths PhD graduate going into finance is not going into manufacturing, agricultural research or considering education statistics, but because the financial sector, particularly the most lucrative parts of it, is overwhelmingly concentrated in London—indeed, within the City of London that is often used synonymously with the financial sector, even if a huge percentage of the actual money is held offshore in tax havens. I am sure that some Members of your Lordships’ House will leap up to point out that there are jobs in cities around the land. That is true, but that is not where the real money is.
It was clear that from the noble Earl’s answer in Committee that the drafting of my amendment then was unclear, so I have attempted to tidy it up somewhat. I have clarified the reference here to inequality, to explain that I am talking, at least chiefly, of regional inequality: that is something, of course, that, with the Government’s levelling-up agenda, I would expect them to be greatly concerned about. After Committee, I also honed the reporting areas, taking out references to risks that were not the major aim of the amendment.
I hope that the meaning is clear now, for in his answer in Committee I am not sure the Minister, although I acknowledge that the pressure of time undoubtedly truncated his answer, grasped a major point of the “too much finance” argument. He referred to the Bank of England’s Financial Policy Committee having the responsibility to identify, monitor and take action to remove or reduce systemic risks, and the Office for Budget Responsibility producing and presenting a fiscal risks report to Parliament every two years. In his answer in Committee, the noble Earl said that
“the FCA and PRA are required to prepare and lay annual reports before Parliament, assessing how effectively their objectives have been advanced. These objectives are set by Parliament”.—[Official Report, 10/3/21; col. GC 733.]
However, what this amendment aims to do is to produce the information that could inform those objectives, to see whether the finance sector, as the SPERI report suggests, and as I would contend, is too large. How can those objectives be set in a fog, relying only on a clearly partisan source of data not presenting a complete picture?
The Buddhist text Udāna, dating back to about 500BC on the Indian subcontinent, refers to a group of blind men each touching part of an elephant. That produces a great deal of disagreement, as they debate what it actually is. I have my own view of the financial sector—I doubt that Members of your Lordships’ House have much doubt about what that is—but I am not asking your Lordships’ House, or the Government, to take my view, but just to have a complete, full view of the costs and benefits.
For the avoidance of doubt, I am not planning to push this amendment to a vote this evening. This is, as I think my speech has made clear, a continuing discussion which I plan to continue to push the Government on, which I also invite opposition parties to do—and, indeed, Members from the Government’s side, including the noble Baroness, Lady Neville-Rolfe, who in her Amendment 24, as she often does, calls for a cost-benefit analysis or impact assessment, an approach that would be improved and strengthened by Amendment 25 in the names of the noble Lord, Lord Sharkey, and the noble Baroness, Lady Kramer. Both speakers thus far have stressed the need for information for proper scrutiny. I ask them to join me in thinking about the need for a full and complete view of what is undoubtedly the financial sector elephant stomping across the British economy.
Viscount Trenchard (Con)
My Lords, my noble friend Lady Neville-Rolfe is a tireless advocate of impact assessments. I support her proposal to require the Treasury to provide an annual impact assessment of the regulators’ activities. Some of our existing financial services regulation, such as AIFMD, Solvency II and parts of MiFID II, has already had a devastating effect on small business, innovation and the competitiveness of our financial markets. My noble friend’s Amendment 24 will mitigate further damage that might otherwise be done by the application of disproportionate or unduly burdensome rules.
The FCA’s first operational objective is consumer protection, so I do not understand the purpose of the noble Lord, Lord Sharkey, and the noble Baroness, Lady Kramer, in Amendment 25, which I think would make my noble friend’s amendment read rather strangely. It is a pity that the Minister is not willing to raise the importance of competitiveness of the markets as an objective of the FCA, but, in any event, I hope he will agree that the consumers’ interests are not assisted by measures that damage competitiveness, innovation and small businesses.
Amendment 37, in the names of the noble Baroness, Lady Bennett of Manor Castle, and the noble Lord, Lord Sikka, also refers to impact assessments in its heading. But it is too wide in its coverage. It is not reasonable to make the regulators responsible for matters such as poverty, regional inequality and economic development. Market distortions such as those which would be created by the adoption of this amendment would have an adverse effect on prosperity and economic development across the country, creating more poverty and reducing the scope for the alleviation of regional inequality such as the Government are championing through their levelling-up campaign.
Lord Sikka (Lab) [V]
My Lords, I congratulate the noble Baroness, Lady Bennett, on her amendment and her speech. I would like to speak to Amendment 37. The amendment requires the FCA and the PRA to embrace social responsibility by considering the impact and costs/benefits of the financial services industry. Currently, that receives little attention. There are such obligations on companies—in other words, they have to embrace social responsibility—so why not on regulators?
The noble Baroness has drawn attention to the finance curse upon the UK, which has inflicted at least £4,500 billion-worth of damage to the UK economy. It would be helpful to hear from the Minister about the limits of this negative impact on the UK and whether there are any limits to the growth of the finance industry, which can drive out other industries. After all, other industries also have to compete for resources.
For far too long, the social effects of the finance industry have been dismissed as externalities, and little weight is attached to them in any annual report of the FCA or the PRA. Under the Financial Services and Markets Act 2000—FSMA—the FCA is required to
“promote effective competition in the interests of consumers in the markets for regulated financial services and services provided by a recognised investment exchange”
in carrying out certain regulated activities.
The FCA website states that one of its duties is to
“make markets work well—for individuals, for business, large and small, and for the economy as a whole.”
What analysis supports the claim that the FCA actually does this? It is hard to see how any of its statutory objectives can be met or demonstrated to have been met in the absence of any cost-benefit analysis, especially relating to the disappearance of bank branches or the very restricted access to financial services by the masses. This point was raised earlier by the noble Lord, Lord Naseby; I reuse it as an example to illustrate the failures of the FCA.
The absence of bank branches has a direct impact on poverty, regional inequality, economic development, production, distribution and the consumption of goods and services. The FCA acknowledges that 27.7 million adults at the moment are experiencing vulnerability to poor health, low financial resilience or recent negative life events. This is an increase of 15% since February 2020, when 24 million people were considered vulnerable. Yet no formal assessment is offered by the FCA as to why this is, what the role of the finance industry is and how these negative impacts can be alleviated.
I return to the issue of bank branches. Bank branch networks are a vital part of the financial infrastructure, but they have been shrinking at an accelerating rate, with many town centres and districts having no bank branches at all. Some banking services began to be provided by post offices—or bank branches moved into them—but they are closing too. Cash machines are also vanishing and increasingly require a fee, especially those located in the poorest areas. I have seen cash machines charging up to £4.99 for a withdrawal in a relatively poor area of London.
Branch closures result in exclusion from access to financial services. Many citizens, especially the elderly and those in low-income groups, do not have access to fast broadband connections or a computer. Computers in local libraries and homes are not necessarily secure and online fraud is a major risk. Strong signals for smartphones are not available throughout the country and there are too many blackspots. People without computers and smartphones cannot easily access any financial service. This cannot easily be reconciled with the government policy of reducing exclusion from financial services, and the FCA has not really said much about it.
The closure of bank branches means that the banking market is not working well, as many individuals and businesses are unable to access timely and effective financial services. Maybe the FCA interprets the “competition objective” given to it in very narrow economic terms and neglects the social dimension of making markets “work well”. It has done little to address the consequences of branch closures.
The closure of bank branches has severe consequences for financial services, local economies and the erosion of local competition. Bank branch closures impose costs on people, such as going to the next town for your banking: that is, the money spent on transport, the time taken up, extra pollution emanating from travel to the next town, road congestion and searching for the nearest suitable financial services facility—and, of course, there are cyber risks as well.
Some people may well trek to another town with a bank branch, but affordable and efficient transport from many locations, especially in rural areas, is not necessarily available. Trekking to another town is not an easy task for the elderly, the infirm, women with small children, or local entrepreneurs just keeping their head above water. A trader cannot afford to close business for a day, or half a day, to visit a bank branch in another town. In any case, the additional travel generates extra pollution and damages the environment. When people visit another town for their banking services, they end up doing their shopping there, which means that the local economy in the place where they live is also damaged.
Without local bank branches, local shopkeepers, traders and the self-employed cannot easily bank cash takings and cheques. This then increases the risks that they face. Without a local branch, banks cannot easily build an intelligent picture of local businesses, risks and opportunities, and thus cannot provide required financial support for local economies. One study has estimated that bank branch closures dampen SME lending by 63% on average in postcodes that lose a bank branch. This figure grows to 104% for postcodes that lose their last bank branch in town.
The closure of local bank branches increases commercial decline, as I indicated earlier, because people end up shopping in the town where they go for their banking. This accelerates economic decline and has effects on the local housing market, as well as on the provision already made for schools, healthcare and other facilities.
In the absence of local banking facilities, many people, especially the low-paid, may become victims of the payday lenders who charge exorbitant interest rates.
The amendment tabled asks the regulators to discharge their duties because, currently, it is one-way traffic: traffic from the state, taxpayers and people to the banks, and very little in return. On behalf of citizens and taxpayers, the state has bailed out banks; provided quantitative easing to lubricate their liquidity; acts as a lender of the last resort; provides almost free raw material—that is, cash with very low interest rates; protects bank deposits of up to £85,000; and bolsters the bank customer base, and thus the ability of banks to sell services to newer customers, because the state insists that social security payments are made through banks. What exactly is it that the banks offer the public in return? It is hard to see what we are getting in return. We are not getting competition in financial services; we are not getting bank branches that are open and accessible to the masses. There appears to be no quid pro quo from the finance industry. All that people are getting is shrinking access to financial services.
The FCA, as a regulator, has a duty to see that the markets work well for everybody. It has not done so. How can it deliver that duty when people simply do not have access to financial services or have very restricted access?
It is quite likely that, in meeting the objectives of the proposed amendment, the regulators might actually talk to normal people and ask how they are affected by changes in the financial services industry. If this amendment was to be enacted one day, I hope that it would make the regulators more people-friendly.
Baroness Noakes (Con)
My Lords, at this late stage of the evening I shall not try to emulate the previous speaker’s length of contribution—indeed, I shall deliver a slightly shorter version of what I had originally intended to say. I speak in favour of Amendment 24, in the name of my noble friend Lady Neville-Rolfe.
Amendment 24 focuses on ex post analysis of the impact of changes introduced by the regulators or the Government. It therefore gives us a different lens on the impact that interventions have had in practice. My noble friend normally focuses on impact statements, which are ex ante evaluations and often suffer from highly questionable assumptions and confirmation bias. When we deal with ex post analysis, however, we can rely on outcomes and facts. That kind of analysis is really important when helping to shape policy going forward or correcting any mistakes in policy already introduced, so I support this amendment. I personally would not have gone for an annual report, because the ability to see the cumulative impact of changes is quite important but difficult to track in an annual report. However, a report is an extremely good idea.
The noble Lord, Lord Sharkey, has tried to add a consumer focus to the report that my noble friend Lady Neville-Rolfe has proposed. I think it is better focused on small business, innovation and competitiveness; to add consumer matters would dilute the focus of that report. I am not against a report on consumer protection but it would not help to stick it in the middle of something focusing on issues such as competitiveness.
The noble Baroness, Lady Bennett of Manor Castle, will not expect me to support her Amendment 37. The analysis we got from her and the noble Lord, Lord Sikka, seemed to be of a world I do not really recognise. I believe the financial services sector is a great success story for this country and makes a big contribution to our economy. A number of the things that noble Lords cited seemed to be clinging to an outdated bricks-and-mortar vision of what banking is really about; frankly, that is not the world we live in today. Just as we have seen that bricks-and-mortar retail is not the way forward, it will not be for banking either. We must not keep tying ourselves to the way things were in the past.
Baroness Kramer (LD)
My Lords, given the hour I shall also be very brief, but I have to say I rather like the amendments in this group. I like Amendment 24, as amended by Amendment 25—I do not care if it is a separate chapter. But it is quite dangerous to get tangled into issues around competitiveness without making sure there is a lens on consumer protection at the same time. Many small businesses fall into the consumer category in reality, certainly the micro end of small businesses.
What I like about this amendment is: what you measure, you manage. We are so constantly focused on change, new regulation and new rules, without ever going back and looking at the consequences of what we have done and trying to identify what worked, what did not and where the gaps are. It seems that this proposal goes absolutely in the right direction.
There is something interesting in Amendment 37 because one of the big questions that has never been answered is: how does our financial services industry impact on the real economy, in contrast to something much more circular within the financial services economy? I do not think that one is good and the other bad but they are very significant questions, particularly in a country where we have such a dominant investment banking culture, which does not necessarily provide a wide range of relevant services to a great deal of our economic base—particularly our small business base. There is a very interesting question wrapped up in all of that. The approach of saying “We need to look at this in a serious and consistent way, perhaps regularly” strikes me as important when feeding the strategy which then informs the way in which the regulator, the Treasury and the Government behave.
Lord Eatwell (Lab)
My Lords, Amendments 24 and 25 develop the notion of an information system—the information that will be provided by the FCA, PRA and the Government to feed into an assessment of the performance and impact of the financial services sector and the regulators. Amendment 37 goes much wider, as one might have gathered from its presentation, seeking to make, or ask for, a general economic assessment of the role of financial services generally within the UK, particularly the impact of the various regulators and the Treasury.
One of the themes particularly around the discussion of Amendment 37 was that this is not done. There are shelves of academic books that do this, and there are libraries of this material, but what has not happened is that it has not been brought together and assessed in a decision-making environment on a regular basis. The problem with Amendment 37 is that it asks the FCA and the PRA to—to use a phrase that has become popular today—mark their own homework. They are not really the right people to assess themselves; there are plenty of research institutes around this country that do a first-class job of assessing exactly these issues. However, we have not brought them together very well. What is so valuable about Amendments 24 and 25 is that they are targeted on that bringing together—bringing information into what I have called the “New Scrutiny”.
I would be interested to hear the Minister reflect, when he sums up, on the information role that is represented by the amendment of the noble Baroness, Lady Neville-Rolfe, and the role that that sort of information system will play in our regulatory future.
Earl Howe (Con)
My Lords, Amendments 24, 25 and 37 return to an issue that I know is of keen interest to many in this House. They seek to introduce requirements to publish reports on the impact of financial services regulation and to undertake assessments of the impact of the financial services sector on the UK more broadly.
The noble Baroness, Lady Bennett of Manor Castle, many not feel able to assent to what I am about to say, but, as we consider this topic, we should remind ourselves of the vital role that the financial services sector plays in our economy, employing more than 1 million people nationwide. It is also a critical source of tax revenue, which has proved especially important during these difficult times. We can argue about how we should calculate the precise amount of such revenue, but, by any measure, it is very substantial. We also should not forget the role that the sector plays in enhancing the nation’s standing abroad. The UK exported over £50 billion-worth of financial and insurance activities in 2019, a trade surplus of £41 billion.
Amendment 24 would require the Government to publish a report on the “impact of measures” taken by the FCA, PRA and the Government to regulate this most important financial services sector. In particular, it seeks understanding of the impact of measures on small businesses, innovation and competitiveness. Amendment 25 would add “consumer protection” to the list of things that the Government would be required to report on.
Lest there be any doubt, the Government are wholly committed to ensuring that the financial services sector supports competition, innovation and competitiveness. I hope that this is evidenced by the last set of remit letters issued to the FCA and the PRA by the Chancellor, which requested that the regulators have regard to these three priorities when advancing their objectives and discharging their duties.
In respect of reporting, the FCA and the PRA both have a statutory objective to promote effective competition. What does that involve? It involves promoting a financial services framework that supports new firms to enter the market and grow, promotes innovation and allows successful, innovative firms to grow and thrive. Those, surely, are the key aims for the sector when we talk about effective competition.
I remind my noble friend Lady Neville-Rolfe that both regulators are obliged to prepare annual reports that analyse the extent to which their objectives, including this competition objective, have been advanced that year. Those reports are in turn laid before Parliament for scrutiny. Moreover, I should say to her that, under the Financial Services and Markets Act, the FCA and the PRA are required to publish cost-benefit analyses when proposing new rules. The regulatory initiatives grid, a relatively recent innovation, sets out the regulatory pipeline that allows the financial services industry and other interested parties to understand and plan for the timings of initiatives that may have a significant operational impact. The grid is published at least twice a year, so Parliament has a forward look at upcoming proposals in a material and transparent way.
Turning to my noble friend Lady Neville-Rolfe’s point about small firms, in my letter to her of 2 March, I set out the Government’s actions to support smaller innovative firms to grow to their full potential, including through the FCA’s regulatory sandbox and our support for the fintech sector. The amendment would therefore duplicate reporting obligations and arrangements that already exist.
I should also note the new accountability frameworks that the Bill puts in place for prudential measures. These require the FCA and PRA to have regard to UK competitiveness, among other things, when making rules to implement Basel or the investment firms prudential regime. Furthermore, the regulators will then be required to report on how having regard to competitiveness has affected their proposed rules.
On consumer protection, which is the subject of the amendment, let me first reassure noble Lords that the protection of consumers is at the heart of our existing regulatory framework. The FCA has an operational objective to secure an appropriate degree of protection for consumers and is required under the Financial Services and Markets Act 2000 to consult a consumer panel on the impact of its work. The panel ensures that consumers play an integral role in the regulator’s rule-making and policy development.
The FCA has repeatedly demonstrated its commitment to consumer protection. One of the key areas of focus in the FCA’s Business Plan 2020/21 is,
“ensuring…that the most vulnerable are protected”.
The FCA has also recently published guidance on how firms can treat vulnerable customers fairly. As consumer protection is one of the FCA’s statutory objectives, as set out in FSMA 2000, the FCA must already report on how consumer protection has been advanced in its annual report, as outlined earlier. Therefore, as with a previous amendment, the amendment would duplicate reporting that already exists. As regards the PRA, it is important to remember that it already has an important role in protecting consumers indirectly by promoting the safety and soundness of PRA-authorised firms. This means that consumers are protected from the significant distress and suffering caused by disorderly bank failures.
I now turn to Amendment 37, which would require regular reports on the impact of the financial services sector on a range of topics, including economic development and regional inequality. I have already set out some examples of the overwhelmingly positive impact that the sector has on jobs, productivity and tax revenues across the whole UK.
Lord Sharkey (LD) [V]
My Lords, I find myself agreeing with both the noble Baroness, Lady Neville-Rolfe, and the noble Earl, Lord Howe, and so I have nothing more to say except to beg leave to withdraw Amendment 25.
Baroness Neville-Rolfe (Con)
My Lords, I thank all noble Lords who have taken part in this debate. I also thank the Minister for reminding us of the contribution of the financial services sector to our economy, and for his summary of the remit letters. I particularly thank the noble Lord, Lord Sharkey, for Amendment 25, and am grateful for the support across the House for the idea of ex-post reporting—perhaps bringing things together a little bit better than the existing system of reporting, which has been outlined, currently does.
I emphasize, however, that I am very flexible and would be happy to have a report less often than once a year. As my noble friend Lady Noakes said, that could encourage more depth. We should also look at some of the difficulties; my noble friend Lord Trenchard reminded us of collateral damage, for example in the case of MiFID.
In any annual report that the Treasury might bring forward—if we were able to persuade it—I am also content to see consumer protection considered and assessed, although it might perhaps be better as a separate report. I know from my own experience in banking that, at present, this is not the main problem area. There is, rightly, a focus by the regulator—particularly the FCA—on protecting the consumer. However, especially in the medium to longer term, other things matter as well: the buoyancy and dynamism of smaller firms; innovation—whoever its parent—and innovation in fraud, as we have been reminded; and competitiveness. They all feature in my amendment. If we fail to think about these things properly, the consumer—and consumer protection—is the loser.
Amendment 37 in the name of the noble Baroness, Lady Bennett, is much broader in focus, but I think it has sparked some useful reflections about the benefits as well as the costs, about opportunity costs and indeed about how we cope with the great change in the financial services landscape brought upon us by the ups and downs of the internet.
We will come back to this in a future Bill. In that context, I would encourage the Treasury to listen to some of the things that noble Lords have said today, to be flexible and perhaps come forward with proposals that encourage these very important dynamics for the future. In the meantime, of course, I beg leave to withdraw my amendment.